Two years ago, Energy Minister Pat Rabbitte justified the building of more wind farms by claiming they would be a hedge against high oil prices. But oil prices have since fallen almost as fast as support for the Labour Party. And the PSO for wind has shot up from € 50 million to € 180 million.
It's the extra wind farms that have kept energy prices high when instead we should all be availing of cheap electricity.
Now the justification for more wind farms is the threat of fines from Big Brother. When that threat is lifted (and we all know it will), another irrelevant one will be thrown out. Every justification will be given but the only one that matters - the benefits outweigh the costs (in this case it looks like they don't).
The Labour Party have bluffed their way into and throughout their term in Government. Now it looks like they will pay the price in the upcoming general election.
Haha brilliant, hindsight is truly a wonderful thing! Who could have envisaged back then that the US would have an oil boom producing at levels not seen since the 70's...
ReplyDeleteAdditionally, you could take the view that the reason OPEC is keeping oil so low is due to the threat that the renewable revolution poses in the long term. Saudi Arabia have too much oil that wont ever be sold now so i bet they want to get rid of as much of it now to make as much money as possible..to do this they need to get the US producers out of the market to increase their share. Hasnt gone aswell as they thought I think.
Also 180 million? two thirds of which is paid by industry and business. €33 per household on wind subsidy..Thats truly a burden the Irish people!
It only has the benefit of hedging against volatile oil and gas prices!
Money kept in the economy..jobs..transition to better environment..
The main reason for the low oil price is because of new technology in fracking.
DeletePat Rabbitte refused to listen to dissenting voices,to "look before you leap" before buying into the latest fad.
Not sure where you're getting your 2/3 figure, but its irrelevant who has to pay anyway. Industry costs get passed on.
The cost for households will be €227 per year by 2020 :
http://irishenergyblog.blogspot.ie/search/label/costs%20of%20electricity
industry costs get past on? most of our largest industry are only here for tax benefits and are exporters...
ReplyDeletehad a read of the your €227 assumption, you clearly have an understanding of the market but not enough to comment accurately or you potentially choose to ignore information that dosen't agree with your overall agenda..
every point is flawed and most contradict each other...some are completely inaccurate..OCGT costing 1 billion? 100 million for 2 plant 100 mW each at best but makes no difference as would be a private investment replacing another generator in the market and collecting revenue. yes it would get more balancing/reserve payments but this falls under your other criteria
Cost of OCGT is £0.6m per MW as per NOAK. Eirgrid plan to accept 4 ocgt connections as fast act back up for wind so cost understated.
DeleteGeneration costs of OCGT are much higher than CCGTs, over 3 times higher :
http://www.iea-etsap.org/web/e-techds/pdf/e02-gas_fired_power-gs-ad-gct.pdf
We dont need OCGT, we have more than sufficient modern CCGT capacity but you need fast acting inefficient plant during high penetrations of wind, so it is an associated cost of wind.
Cadburys were selling their goods here. What is the cost of pushing out industry to Poland and elsewhere ?
Over capacity financed per force is a cost. That cost has to be met and that leaves 2 questions 1) how much is it and 2) who pays? The formula in simple terms for 1) is full capacity less required capacity = excess cost nationally. 2) average consumer annual bill with a system with actual capacity less average consumer bill with required capacity. Example if the average consumer bill in a system with no wind energy is 1,000 Euros per year annually and in a system with wind is 1,500 then the cost is 500 annually per bill. Irish capacity is 10,300 mw, required capacity is 6000 mw therefore 10,300 / 6000 = 1,71% . My own household cost per unit in 2009 was about 14 cent per unit and then there was wind but not too much, the bulk has been added since. The present cost is 24.5 cent = an increase of 70%. This means I am paying 10.5 cents too much. (allowing for inflation it is about 8 cents too much).
ReplyDeleteIn the town of Bailieboro three years ago, there were 3 filling stations plus on shop with only a diesel pump = 3.5 Then Tesco open one as part of their new store bringing the total to 4.5. This was overcapacity in the market. Now 2 have closed leaving only 2.5. Only government intervention can keep over capacity going and that is done by forcing consumers to buy it.
The electricity market is captive except for home generation. It is one of the few services which is completely captive for now at least and it is inelastic too. I think my usage is 5000 kwh bringing my bill to (24.5 X 5000) = 1225 euros when it should be about (17 x 5000)= 850 so the renewables is costing me 375 euros per year. Usage is a little above average due to electric cooking.
Remember with conventional plant extra capacity can be added to floor space without the need to extra permanent staff. That cannot be done for wind, Each wind farm stands on its own and has its own cost base where facilities cannot be shared. Maintenance crews can occasionally be shared. You will see that my costs are higher than those given above, I attribute this to the cost of grid and administration with overcapacity and the fact that wind does not actually contribute anything by way of fuel savings and never allows the shutting down of conventional plant. In a normal market wind would be forced out long ago.
It must be remembered in considering my figures, that Energy Minister Eamon Ryan transferred 3% of the cost to industry to me, and that must be may partly account for the difference in my bill and those given above.
Government plans for 15,000 mw in total, none can be shut down. As we move towards that, we will arrive at 12,000 mw. Twice requirements, then consumers will pay double, about 34 cent, Denmark is currently on 32 cent. The upshot of all this is the the over capacity is not normal overcapacity as it was in the Bailieboro. the wind element relies on the fossil element and does not fit the category of a competing good or a substitute good in economic terms. Its best described as a passenger good, or a parasitic good. It is not symbiotic.
At the risk of being accused of hogging this, how could Pat Rabbitte's claim be true and what sort of mind calculates that way. He claimed that doubling capacity without doubling demand would reduce prices. He probably thought that adding supply would reduce prices, in the same way that a glut does so. Did he not have the brains to realise that the entire glut most still be kept as a going concern by enforced purchases of wind and curtailment payments for all unwanted supply, plus capacity payments to unused generation? He might have been advised by civil servants, Weird thinking by someone with the benefit of a good education.
ReplyDelete