Thursday, 24 February 2011

An argument for why subsidy makes economic sense. - Ayn Rand Libertarians can get stuffed

I'll try to keep them accurate - but my best info is based on 2004 figures (

from here:

Cost per KWh coal about 2
Cost per KWh wind onshore about 4

the fuel cost for wind = 0
the fuel cost for coal is about KWh 1.4 

unfortunately this is behind a paywall (i've read the print edition version)

but it is well commented here


coal prices are going up and up and up. Over 20 year life of the coal plant, that cost/kwh can only go up. Within only a few years it will probably exceed wind power by a large amount unless the economy has tanked.

So clearly some of you are complaining about subsidy for ideological rather than practical reasons.

The subsidy enables our energy policy to match future expectations rather than current market delusions. 

FROM DECC Gov uk site.
In 2009 we imported approx 40 Million Tonnes of Coal

at approximately £100/tonne, that is a cost to the UK economy of, £100/tonne x 40,000,000 tonnes
= £4,000,000,000
£4bln per year current

And that is set to grow and grow - because global production of coal in MTOE has not grown for 10 years despite high prices and nations claiming vast reserves.

Reality check means we're very likely in an energy crunch situation. And if libertarian interweb protesters-jesters get in the way, we just have to run them over under the wheels of progress! :-)

basically it currently worthwhile at current prices (or rather, 2004 prices! And now its even more favourable, to pay upto £4 billion in subsidy,

and perhaps £10 bln or more when you take into account future fuel costs- because you win it back by improving the nations trade balance.

So if you imagine that subsidy level, quite rapidly replacing coal (which i gather, is the plan - then that level of subsidy is acceptable)


the telegraph, not a very friendly site to honest reporting gives this figure:

currently £1 billion a year.

So its a big number, but it potentially caps the import cost to our economy, and in the end will reduce it.

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