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Billonaire T. Boone Pickens has made a fortune in the oil industry, now he plans to apply his financial skills to the wind power business.  (Source: AP)
Billonaire T. Boone Pickens bets big on wind energy

In a world that has been fossil fuel dependent for decades, many people and companies are finally realizing the financial, social, and environmental benefits of alternative energy and are going green. Alternative-energy is by no means a new idea. Albert Einstein received the Nobel Prize in Physics in the year 1921 "for his services to Theoretical Physics, and especially for his discovery of the law of the photoelectric effect," and in his research he discovered how solar energy to be converted into electricity.

While solar power projects such as adhesive solar panels may be getting the majority of attention, wind power is being put to use for everything from converting salt water into drinking water to generating electricity. This concept of "going green" is so contagious that you might be surprised who decides to join the bandwagon.

Oil billionaire T. Boone Pickens decided to go green by investing in alternative energy. To start out, he’s already bought 667 1.5 megawatt wind turbines from GE and plans to put them in a massive stretch of land in Texas, which could quite possibly enable the wind farm to become the world’s largest, producing power to maintain 1.3 million homes.

Pickens’ project is scheduled to start construction in 2010, spanning the Texas counties of Roberts, Gray, Hemphill and Wheeler. The massive project would encompass 200,000 acres of land and the number of active turbines could be as high as 2,000. Some of the larger turbines will put out around 2.5 megawatts of power each. Keep in mind that that each megawatt can provide energy to 250 Texas homes as stated by American Wind Energy Association’s Susan Williams Sloan.

So why is the Pickens so interested in wind power? He believes wind power to be both stable and available. He states, "The Department of Energy came out with a study in April of '07 that said we could generate 20 percent of our electricity from wind. And the wind power is -- you know, it's clean, it's renewable. It's -- you know, it's everything you want. And it's a stable supply of energy." 

What do the landowners have to say in the matter? Pickens' spokesman Mike Boswell says, "We have entered into a limited number of agreements with a limited number of landowners to put in some test towers." Boswell also states that the deal with the landowners should be finalized by the end of summer.

While it hasn't been built yet, Pickens financial expertise should get his wind farm off the ground and running. This project definitely looks like it's off to an interesting start. Will Pickens be as successful in the alternative energy industry as he was in the oil business? Only time will tell.



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RE: The real benefit...
By geddarkstorm on 5/27/2008 12:56:41 PM , Rating: 2
Until you start selling that wind farm energy back into the grid, and over time you'll pay for the project and start making quite a bit of money. My average monthly electric bill over the year is roughly 150 bucks. Even if the electric company only gives him 75 bucks of that, put over a million homes in a high temperature environment (lots of AC), and you're going to be making an impressive lot--near or over a billion per year with this low maintenance system.

The man obviously plans for the long term. Subsidies make it a lot easier to set up, but I wouldn't think that'd be the only thing he's looking at. And yes, maybe tax payers are paying for the wind farm, but it helps everybody so it's all good as long as it's not more tax payer money than a government wind farm project would take.


RE: The real benefit...
By Ringold on 5/27/2008 4:51:58 PM , Rating: 2
If its so clearly profitable, why the subsidy at all? Startup costs are of little concern to billionaires. Internal rates of return, that's different -- but you are suggesting they are favorable either way.

I did a quick Google to look at what subsidies were, but I struck a gold mine here:

http://www.powermag.com/ExportedSite/BlogArticles/...

I bet Boone loves environemtanlists. If you check out those subsidies, they're handing him an amazing near-zero risk government-backed money tree.

Can I have one of those? I don't need billions, I'll be content with a million bucks.


RE: The real benefit...
By MadMaster on 5/28/2008 9:59:42 PM , Rating: 2
Subsidies have been helping many energy companies get off the ground. Coal, hydroelectric, natural gas, and nuclear have all enjoyed numerous subsidies in the past.

Even natural gas is getting a $500 million subsidy in Canada...
http://www.adn.com/news/alaska/story/418493.html

quote:
Startup costs are of little concern to billionaires.


LMAO!

There's a good reason you're not a Billionaire. (much less a Millionaire)


RE: The real benefit...
By Ringold on 5/28/2008 10:25:22 PM , Rating: 2
Why would they matter?

Obviously a good example why you aren't a billionaire either; you should know that only the return matters.


RE: The real benefit...
By MadMaster on 5/29/2008 1:42:28 AM , Rating: 1
Both matter a great deal! And a heck of a lot more matters...


RE: The real benefit...
By Ringold on 5/29/2008 6:13:08 PM , Rating: 2
One line empty attacks get old. What are you, 12?

http://en.wikipedia.org/wiki/Internal_rate_of_retu...

That, along with NPV and MIRR (do I need to link to all 3?), are the basic tools anybody would ever need, all of which measure return of efficiency thereof.

My basic assumption was that billionaires are not capital restrained, so as should be obvious with all of the above, if one is not capital resrained all that matters... is return (versus opportunity cost, ie, forgone investments elsewhere). Given that banks allow billionaires to leverage up to insane amounts, I think it's a sound assumption for sake of argument.


RE: The real benefit...
By MadMaster on 5/29/2008 9:51:41 PM , Rating: 2
No, I'm just too lazy to argue with ignorance.


RE: The real benefit...
By Ringold on 5/30/2008 5:24:29 AM , Rating: 2
Do me a favor and troll other people in the future, eh?

Or maybe call the Hate Hannity Hotline, might make you feel better.


RE: The real benefit...
By ICUSandman on 5/31/2008 5:53:36 PM , Rating: 2
>"If its so clearly profitable, why the subsidy at all?"

Look at how profitable oil has been with record profits and they get billions in subsidies every year. If we are going to subsidize anything it should be renewable or at least a product of the US and not imported.


RE: The real benefit...
By masher2 (blog) on 5/27/2008 4:57:23 PM , Rating: 1
> "Until you start selling that wind farm energy back into the grid, and over time you'll pay for the project "

If the project could stand on its own and pay for itself, no government subsidies would be needed. Point of fact, the only reason wind is generating venture capital interest is because these investors want a portion of the massive government subsidies being slung around.

> "maybe tax payers are paying for the wind farm, but it helps everybody"

Large-scale wind farms are not going to help our energy problems. Especially in Texas, a state that, the hotter it gets, the more likely it is for the wind to stop blowing. So when you need the power the most -- it's not there. There was already a large blackout in Texas due to this.


RE: The real benefit...
By smitty3268 on 5/27/2008 8:42:46 PM , Rating: 2
I don't think anyone is talking about relying on wind power - that would just be silly.

Anyway, I don't think you would see many people investing they're money here if they didn't think there was a chance it would be profitable. The rub is that it's pretty risky and no one knows what's going to happen. The government subsidies just reduce that risk, they aren't actually paying anyone to take the wind mills or anything.


RE: The real benefit...
By phxfreddy on 5/27/2008 11:37:14 PM , Rating: 4
Its ludicrous to factor in Einsteins photoelectric effect the way you did in this article.

Wind power is a dilute energy source. If you calculate it all the installed power base does not match APS's Palo Verde Nuclear plant by 1000 in terms of capacity.

Yet I heard James Cramer say 10% of American steel was going into towers for wind generators. Makes you think if we press much harder into wind power steel prices will be the limiting factor for wind in a way analogous to corn prices limiting ethanol!

I have to add that Boone is playing the business game the way he should. He sees the nonsense that passes for energy policy in terms of making drilling in ANWR off limits. He see energy is going up and that he will be able to sell all his power at a profit when soon the time arrives with higher prices.

However wind is not a good energy decision for the country. Not because of steel but because it diverts public attention from the one source that could do the heavy lift....and have you guessed it yet? It is nuclear.

There will come a day soon people will wail at the prices. And believe you me. We fill the energy gap by burning environMENTALists at the stake and driving steam turbines with the waste heat.


RE: The real benefit...
By FITCamaro on 5/28/2008 2:11:20 PM , Rating: 2
quote:
We fill the energy gap by burning environMENTALists at the stake and driving steam turbines with the waste heat.


Why wait? Al Gore alone has enough fat to burn for at least a year.


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