Saturday, January 21, 2012
Is capitalism the solution for Global Warming?
T. Boone Pickens made a smart investment. Electric rates averaged $89 per MW-h in the US in 2006. The current spot price is $93. The article does not state whether the 4000 MW are peak or average power. One has to ume that Pickens did his homework and the wind turbines will operate at peak at least half of the time. This means at least $1.8 billion in revenue at current prices. That is enough to cover the cost of capital and there is a lot of upside. The wind won't cost any more in 5 years, but the price of energy could be a lot higher than it is now. The US needs about 780,000 MW to cover peak demand at present. Pickens 4000 MW is a step in the right direction but 200 similar projects are needed to solve the problem. If Pickens makes a good profit, more investors will follow his example and the 200 projects needed will get built.
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