I really am insulted by the analogy. All I said is that painting a 3% drop as trivial and not worth thinking about is completely ignoring that that could be the entire profit margin for the wind mill installation in the first place and thus the financing and capital investment math could have been done incorrectly and push the profitability negative. Pretty sure I presented a clear description of what my issue with such a glib dismissal is.
The difference between a wind farm being barely barely profitable and barely barely losing money doesn't really matter when we're building these in bulk.
No, I'm saying that lots of different projects will have different levels of profitability and if one or two flip over that magic line it doesn't really matter. The difference between 83 wind farms built in a year being profitable and 87 being profitable, with the 4 that changed being basically breakeven either way, is not very meaningful.
Especially because a more realistic answer is it'll be profitable either way but it'll change whether the return is higher than AAA bonds or not. It's not important. It only affects very marginal projects.
Lol, you'll money on every MW, but make it up on volume.
I find people who advocate for renewable energy projects are almost always the same people who argue in favor of energy subsidies, too. Perhaps they know something about energy economics, the rest of us don't...
In the capitalist environment it does. At least if we do not want state intervention. In general money does not get invested in known unprofitable ventures. There might be bets on profitability. But profit is always expected.
A couple farms that barely make profit are already going to be unattractive to investors. It really doesn't make much difference to future investment. There's not a massive sea change between 1% profit and 2% loss, they both suck. Investors are going to focus on the higher profit farms no matter what, ones that would still be positive if they lose 3%.
Other things can go right or wrong and change the numbers by a couple percent. That risk is pretty normal. It's not something wild.
And any farm that's already running or even half-built is still going to be finished and maintained and make as much power as it can. Once you already spent a big percent of the budget you're not getting it back, and the ROI on the remaining spending is very high.
The challenge is that your neighbor building a wind farm next to you changes your profitability. That uncertainty isn't priced in. I think you're really assuming someone here is saying "stop building wind farms" vs "this is a problem investors in the space will need to account for as this scales up more"
I don't disagree with your description of the problem in this comment. But the OP was perfectly fine if it's just something "to account for" on the scale of 3%.
Your strong dismissal of OP, and talking about how it "could be the entire profit margin", made it sound a lot more serious than it is, and that's why I disagreed with how you were commenting earlier and posted a counterargument.
