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Overpricing Renewable Power Is Dangerous

November 28, 2017

Via: Forbes

An old Soviet-era joke goes like this: Stalin wakes up in a hospital and is informed that glorious Soviet medicine has resurrected him, and it is now 2047. “You will be pleased to hear, Comrade First Secretary, that the entire world is Communist except for New Zealand.” “Why not New Zealand?” Stalin asks. The doctor shrugs, “Someone has to tell us what prices are.”

Unfortunately, there are too many politicians and regulators who believe that it is their job to decide prices, particularly for renewable power. Regulators often set feed-in-tariffs, or the purchase price for wholesale power, at aggressive levels for renewable projects in order to encourage “progress” in the sector. It sounds like a good idea, unless you happen to know a little history.

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