Should national governments manage and pay for large power system projects?

[CraigD]

Should national governments manage and pay for large power system projects, such as increasing available electrical energy to power electric cars as replacement for gas-powered ones?

This poll comes from the post “Government funding of big investment projects” in another poll thread, “to bailout, or not to bailout”

[Buffy]

I say yes, but predominantly in the stages where private companies consider it "too risky" to do it themselves. Classic example is the space program (which is still risky, but at least there are privately funded entrants in the market, thus justifying *continued* government "investment and management" in it), but in the area of "power systems" I think both taking the electrical grid to the next generation of technology as well as "better, less polluting nukes" both qualify. There are other technologies that private ventures are active in *managing* but can't find the investment resources that deserve government funding, like batteries, new solar conversion tech, and waste recycling tech (some of which produces energy....).

The primary fallacy I'd like to slay on this topic is the notion that private investors will always invest if there's a real potential for returns. The fact of the matter is, even in the "high-risk" Venture Capital community, there is actually a huge aversion to risk. If you've got a startup, I can guarantee that the most likely response you will get from VCs in the early rounds is a variation of "if you can get 2 other VCs to say yes, then I'm interested." (Unfortunately, when they all say that, you still have no funds!).

Government has a very important role in moving very early stage R&D forward: No, this is not advocating that "incompetent government run everything," just that people with money are often to scared and too stupid to see when there's something that's really important out there that's useful, and government money *accelerates* achievement of these capabilities. It can often also create a level-playing field with non-proprietary discoveries that can by pass nasty "standards wars" by resolving them early.

I am hoping that the era of Reagan's "the government is the problem" is finally over...without government investment in Green Tech, American VC's are going to cooperate with more forward looking foreign governments to ensure that the rest of the world leads....

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well,
Buffy

[JMJones0424]

If you look at the history of large infrastructure investments, is there one example of a privately funded project? TVA, intercontinental railroads, telephone, interstate highways, the Hoover Dam, the list goes on. Transaction costs for large-scale projects become economically inefficient. How many toll-booths would be required to pay for the road that passes in front of my house? I am not the only beneficiary of that road. My employer benefits, the people I purchase products from locally benefit, my neighbors benefit, automobile manufacturers benefit... how is one to fix a dollar amount and charge each beneficiary accordingly. Public funding is usually the only efficient way of supporting large-scale infrastructure projects.

[Michaelangelica]

Historically, they have here.
Yet lately State Governments have been flogging off power companies & public assets to balance the books. Perhaps they can't, or don't want to, finance new projects. A friend said the NSW government has not put aside enough money to pay for superannuation or LSL for its employees. I don't know if that is true. They recently tried to flog of all power assets but the outcry of public opinion stopped them. However they are now "selling' electricity retailers".

A huge post war (WW2) project The Snowy Mountains Hydroelectric Scheme was also mooted for sale but again there was major public opposition. It also involves public ownership of a lot of water over two-3 States. Water,here, is publicly owned. I think there would be a revolution if they tried to sell that huge infrastructure. Though water rates just keep going up and up, especially in outer, sprawling(think LA) , Sydney (over $1,000 PA and tipped to double). Nearly all S. capital cities have de-sal plants (traditional, high energy use) plants being built.

Really, when Governments sell off public assets, it is just another form of taxation.
Australians don't have the same paranoia about "socialism" as Yanks and in the past many Government business such as banks and insurance and health insurance were run well by the public service. certainly no worse, than they are now. Many regret the selling of Telstra our national telecommunications provider- run now by a Yank/Mexican R. Sol Treheio (sp?)