Gaelectric, one of the largest wind and renewable energy companies in Ireland, is winding down. Staff numbers have been slashed from 100 to 20. In 2016, the company sold part of its wind farms to a Chinese Nuclear firm. The proceeds were used to pay off their debt of €350 million. A second sale to the same Chinese company fell through last year which has triggered the wind down. Shareholders are only expected to be repaid a portion of the funds they put in. The Chinese firm expected Ireland to commit to a new renewable fixed tariff scheme, which has still not materialized.
The accounts show a profit in 2017, but when gain on disposal of € 105m is discounted, there was a trading loss of € 44m. Cost of sales and admin expenses totaled € 50m exceeding sales of € 38m. Loan interest trebled to € 31m since 2016.
Irish 2020 Targets in Trouble?
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Is the winding down of Gaelectric an indicator that international investors are losing their taste for Irish wind farms now that the REFIT subsidy is about to be succeeded by RESS? A further casualty is likely to be the proposed compressed air energy storage (CAES) facility in Co Antrim, leaving Ireland with Turlough Hill as the only electrical energy storage facility on the island.
In a separate piece, the Kerryman reported on 27 January 2018 that leading Kerry construction firm Denis Moriarty Civil Engineering Contractors have been placed in examinership on January 15. Moriarty Civil Engineering Contractors are a major wind farm construction company who have been responsible for around 20% of all Irish wind farms to date.
Despite the decision by the Minister (see below) to extend the required "connected" date from 31 December 2017 to 31 December 2019, a number of proposed wind farm developments in inappropriate locations remain unresolved within the planning system.
https://www.dccae.gov.ie/documents/REFIT%202%20extension%20version%20for%20website.pdf
The blinkered wind-only vision of the Department of Energy for the past twenty years appears to be coming home to roost; when coupled with the exponential rise in electrical consumption by data centres promoted by the Department of Business, Enterprise and Innovation, there is scant chance that Ireland will meet its much vaunted 2020 targets!
I take no delight at any man's misfortune, but the events at Gaelectric should serve as evidence that the green energy skeptics were correct all along. The well-being of a company is measured by its historical financial accounts. They are usually a year (at least) behind the events they record. Quantitative methods, principles of costing and management accounting are established tools which appear to have been ignored by world governments, the EU and Irish Governments in protecting their publics from exorbitant electricity prices and environmental damage.
ReplyDeleteAt the supply end, lenders and investors appeared oblivious to the existence of such accounting tools and at the company end, it was bite off as much as you can chew. Eddie O'Connor managed to build and sell, but it was a model which could not last for ever.
In addition to dodgey wind farms, Gaelectric swallowed all the baloney ever dreampt up by energy dreamers exemplified by the Antrim compressed air generation idea. Did they ever stop to ask where air compressed to several tones per square inch could be persuaded not to leak out?
Some of Gaelectric's wind farms were sold off to the Chinese giving a welcome sigh of relief to the Bank of Ireland, but its failure marks the end of companies dedicated to re-inventing the electricity wheel. 92 million euros from the National pension reserve fund were thrown into it a few years ago. Who will take responsibility for that? Don't hold your breath!
Gaelectric's demise is now measured by accounts looking back, it could have been measured by accounts looking forward, but no one would listen.
Val,
DeleteGaelectric is not the only one who swallowed the baloney exemplified by the Antrim compressed air generation idea. The DCCAE is not far behind with electricity storage a core tenet of the all-wind mantra.
However, it is questionable whether the capacity exists to supply "wind-only" electricity to the raft of data centres being promoted by the DBEI, which as reported in the press, are working in partnership with the IDA to identify sites around the country that would be suitable for large data centres.
http://www.thejournal.ie/ireland-data-centres-3656728-Oct2017/
There is much scope here for even more baloney, as all of these data centres require green certificates for their electricity supply to underpin their climate-friendly credentials - primarily from wind because the loads are beyond the current capacity of Irish solar PV.
The rub is that if the Irish wind generation capacity factor is 35%, it follows that the capacity of the contracted wind must equal three times the connected data centre load (assuming lossless energy storage for supply during periods of no wind).
In this context, the Irish data centre load projections up to 2020 in the 2015 report by O'Callaghan Engineering makes for interesting reading.
http://www.iwea.com/industryreports
Select -> Data-Centre Implications for Energy Use in Ireland
Table 1 Existing Capacity
________________________________
BT 10MW
Citadel100/HP 20MW
ConfidentialClient(1) 140MW
DataPlex 10.5MW
DRT 3MW
Eircom 20MW
Google 80MW
IBM 22MW
Interexion 8MW
Microsoft 80MW
Telecity(Equinix) 19.5MW
________________________________
Total (Known) 414MW
Table 2 Planned Capacity (2015)
________________________________
Apple 300MW
BT +30MW
ConfidentialClient(2) 360MW
DRT +12MW
Eircom +120MW
EMC 16MW
Facebook 46MW
Google +120MW
Microsoft +125MW
Telecity(Equinix) +6.5
________________________________
Total 1136MW
EBay - Unknown
Vodafone - Unknown
Yahoo - Unknown
Basic Calculations
● The assignment of wind energy to data centres at 2015 was 1242MW (414 x 3).
● The projected total data centre load in 2020 will be 1550MW (414 + 1136).
● The projected assignment of wind energy to data centres at 2020 will be 4650MW (1550 x 3).
The EirGrid Generation Capacity Statement 2017-2026 states that in 2016 there was 2900MW of wind generation in the Republic of Ireland. Simply put, the deficit of 1750MW (4650 - 2900) means that at least 583 new 150m/3MW wind turbines must be installed by 2020 in order to power the existing and planned data centres.
http://www.eirgridgroup.com/site-files/library/EirGrid/4289_EirGrid_GenCapStatement_v9_web.pdf
That is before a single megawatt of wind generation is applied to achieving the Irish 2020 renewable energy commitments and assumes that there is sufficient system storage capacity to supply the data centres when wind speeds are too low. Had Gaelectric's CAES project gone ahead, and assuming that low wind periods last less than 48 hours, it would have needed a maximum power output of 1550MW and a storage capacity of 74400MWh for data centres alone!
Turlough Hill has a maximum power output of 300MW and a storage capacity of 1800MWh (6 hours at full output). Either Ireland builds 41 new Turlough Hills or it looks like Moneypoint is going to be busy for years to come.
The wind program should be abandoned immediately.No Feasibility Study, no Cost Benefit Analysis or Strategic Environmental Assessment was carried out to justify it. The application of Spatial Planning to what is an Energy Production program is absurd. The use of wind turbines to generate electricity could be shut down because of increasing doubts that they comply with the Machinery Directive. Read the 2 Swedish Reports. The EU Commission has already said that wind turbines are machines to which the Machinery Directive applies. Wind Energy companies should be making provision in their accounts to cover possible court awards for damages caused by infrasound Low Frequency Noise. Continuing to build wind farms in these circumstances is crazy
ReplyDeleteThe Irish Strategic Investment Fund invested millions in Gaelectric (I dont know exact amount). That's taxpayers money we wont get back.
ReplyDeleteMore wasteful spending by the State. And no accountability.
As Ian Dury sang "What a Waste"
https://www.youtube.com/watch?v=d57CjU62qYs
ReplyDelete"Chief Specialist Hans S. Møller, COWI, characterized the way we now control the state of main and wing bearings as "a completely wrong track." He explained that the particles in a single gram of a bed (Danish: “leje”) can tell truth about the turbine operating condition and therefore portend the risk of an imminent breakdown. "Everyone knows it, but the industry needs to use its knowledge, said Hans S. Møller, specifically accused Vestas and Siemens for only measuring particles of a specific size, instead of measuring all sizes. Everything else characterized Hans S. Møller as "disingenuous" because the methods of assessment may give up to 20 times too low results and thus misrepresent the bearing condition. He urged the mill owners to require real measurements."
http://www.naturlig-energi.dk/cms/ (Membership journal for the Danish Windmill Association, nov -15)
This is not a Danish Fairy Tale.
Yes definitely "What a waste"
Definitely not "Reasons to be Cheerful 1, 2,3,"
https://www.youtube.com/watch?v=qcjh1a9Yoao
The Capital Cost to construct capacity to produce the first megawatt of output from an Irish Wind Farm, particularly those now being built in the midlands, will be in excess of 10 times that of a combined cycle gas plant. But as the density of wind farms in the midlands increases the available wind energy for conversion into electricity will drop dramatically. Research carried out in Kansas in USA, by a number of American and European universities and Institutes, shows as density of wind farms increases wind energy availability for conversion drops from an expected 7 watts per meter squared to less than 1 watt per mweter squared . An over 90% drop. It then can be expected that wind generation capital costs to produce the first megawatt of output , in certain situations , will be close to 100 times that of a combined cycle gas plant . How theses amounts of capital cost can be recovered on the current feed in rate is pretty difficult to see. So it difficult to see how current or proposed wind farms in the midlands can be financially justified. Particularly if the current unsuitable spatial planning system is used to locate them. In planning production a system called Production Planning is used. In most normal places
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