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Wind Power May Have Value Without Subsidy | Microsoft Buy

Posted by Lee Kirkby on Wed, Nov 16, 2016 @ 08:11 AM

Recent announcements about Microsoft contracting for massive amounts of wind generated power to run several of its data centres causes me to think that this kind of  Smoky_Hills_Wind_Farm.jpgrenewable energy just may have a good life without massive government structured subsidies.  

There are tons of articles available throughout the media indicating that the highly subsidized generation of green energy through solar and wind in Ontario is one of the key factors that has driven our electricity rates up to unsustainable levels.  The rationale for this political decision appears to have been it is the only way these generation capabilities would be developed because they would not be commercially viable otherwise.

The recent announcements that Microsoft has bought over 237 Megawatts of wind generated power for use in data centres in the US seems to indicate that it is possible to develop this capability as long as you can find a user  who sees a competitive advantage to purchasing the output of the green generation at a competitive price.

The article referenced from Fortune, indicates that not only is the electricity being purchased by Microsoft but an agreement has been developed in one contract for the electricity supplier to be able to tap into the generating capacity of the back up generators at the Microsoft centre as a security for out put to other customers.  This saves the utility from having to build its own backup capability for low wind output days.

Commercial viability, not politics

It seems reasonable to suggest that it is this kind of commercial viability which should be behind rates and the way that green generation is contracted rather than a philosophical bias which introduces false subsidies and in the end costs everyone on the electrical grid more money.

At one point Ontario was a jurisdiction which attracted industry through its stable and low electricity rates, the whole premise behind Adam Beck's original vision for Ontario Hydro.  Unfortunately this is an advantage we no longer seem to enjoy and finding a path back to this situation may be pretty difficult.

Perhaps modeling purchasing agreements like these that Microsoft has created rather than relying on false subsidies might be one way to begin.

Lee K

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