This is not ‘leading the world’. It’s economic suicide
Story by Neil Record • 18h
This morning the Government announced the results of the latest round of bids for renewable generation capacity. What does a ‘round of bids’ mean?
The way the system currently works is unlike normal capital investment. In almost every other large capital project, investors take the risk of the price and demand for their project. This is true when, say, a manufacturer builds a new plant, and (obviously) when a developer builds a new estate of homes – the builder has to sell the homes to householders to get their return!
Investors commit their money because they believe that they will get a good return on their investment, but they can’t be sure. So investors have to accept the risk that investing involves, and in return they sometimes, but not always, get higher returns than are available in secure investments like Government bonds.
For wind and solar powerplants in UK jurisdictions, a different regime applies. Investors are offered a guarantee from the Government of both the price, and the amount, of electricity that they will be able to sell.
How do these guarantees work?
https://www.msn.com/en-us/money/markets/this-is-not-leading-the-world-it-s-economic-suicide/ar-AA1pVKH1?ocid=msedgdhp&pc=HCTS&cvid=cd1f6a3469a5473cbcb57aaba786a177&ei=31
