Electricity Retailers Increase Prices

Most electricity retailers are increasing their prices this month and the blame is been put on wholesale prices. However, gas prices are no higher than 2005 levels. 

Figure 1: Gas prices since 2000

I have been keeping track of my own electricity bills since 2012. I wanted to see if the reduction in wholesale prices and gas prices have been passed on to the consumer. The result can be seen in Figure 2.

Figure 2 shows little correlation between gas prices and unit price of electricity

The result is clear. The large fall in gas prices has not been matched by a similar fall in the unit price of electricity.   There has been a reduction in gas prices of about 50%. The reduction in the unit price of electricity has been about 7%. If we compare the energy payments or the annual market value of the electricity wholesale market with the gas prices we do see a better correlation (Figure 3).

Figure 3 shows good correlation between Annual Energy Payments (in orange) and Gas Prices(in red)

This means that when the gas prices are low, generators receive lower prices from the market. But these savings in wholesale prices are not passed on to the consumer in any meaningful way.

The hidden force in these graphs is wind energy. It has increased every year since 2012 now making up about 23% of the electricity mix. While we are constantly told that wind energy reduces the wholesale price of electricity, there is no evidence in the actual data.   With this increase in wind energy, there has been a parallel increase in system costs - grid and transmission infrastructure, back up costs, new interconnectors, and high wind penetration feasibility programmes (known as DS3). 

All these costs make up the unit price of electricity. After that, the PSO Levy gets added on, another component that only ever increases (an increase has also been announced this month).

The Energy Regulator seems to be toothless in the face of an electricity sector with out of control costs, government interference and regulation. His name is now redundant, and increasingly appears more like something out of Orwell's novel 1984 where Government Departments like the Ministry for Truth do the opposite of their name.       

Energy Minister Bluffers - Pat Rabbitte

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. 

Danish Electricity Exports worth just € 31 million last year

Wind energy could contribute an additional €5 billion per year to gross domestic product (GDP) in the next decade if Ireland exports renewable power, according to a new report. 

The report by global engineering firm Pöyry Management Consulting was compiled for the Irish Wind Energy Association (IWEA), the national association for the wind industry. The findings were presented at an IWEA conference in Dublin yesterday - Irish Times, March 2014.

The idea seems simple on the face of it - build lots of windfarms in the Irish midlands and export the wind energy to Britain at a large profit. What could go wrong ? Well, for those who don't do their analysis, a lot could go wrong. The main problem is that wind exports are not as valuable a commodity as is often made out (oddly enough by the wind industry).

Let's look at Denmark. As you can see, in 2010, exports were worth € 215 million while in 2015 they were worth just € 31 million. Exports (in GWh) reduced each year, reflecting the fact that wind penetration increased at the same time - hence there was less surplus wind to export. But the wholesale price for exports dropped by two thirds in the same period. This reflects lower wholesale prices around Europe as gas and oil prices fell aswell as the huge surpluses created by the current over capacity.  As a result, more and more subsidies have now become required to keep power stations open and renewable generators viable.

Net export	2010	2011	2012	2013	2014	2015
GWh	4,229	3,224	1,620	2,967	2,661	1,908
millions_€	215.766	155.297	50.097	88.965	61.969	31.679
€/MWh	51.02	48.17	30.93	29.99	23.29	16.60

Denmark: total export for all hours with net export. Other hours had a net import (PF Bach).

 € 31 million is only about 0.015% of the wholesale electricity market in Ireland. An amount that is hardly worth building a new industry around here in Ireland and certainly very far from the € 5 billion alluded to above.

Wind Energy and Wholesale Price - Part 2

Wind Energy is Not Reducing the Wholesale Price of Electricity

This article compares the impact of wind on the wholesale cost of electricity in the years 2010 and 2015. The results show that the price of gas remains the single biggest influence on wholesale electricity prices in Ireland, while wind energy has very little effect, if any.

From SEMO	2015	2010	Difference
Energy costs	1,854,589,637	1,752,491,743	102,097,894
Constraint costs	155,810,069	119,184,928	36,625,141
Total Wholesale Costs	2,010,399,706	1,871,676,671	138,723,035

Figure 1: Wholesale Electricity Costs for Irish Electricity Market : 2010 and 2015

The Irish electricity market year runs from October to September.  The wholesale price of electricity is made up of energy payments and constraint payments (I'm excluding capacity payments because that is influenced by the number of generators in the system so will distort comparisons between years). We can see from the above diagram that wholesale electricity costs were higher in 2015 than 2010 by about 7%. 

Electricity Demand was still somewhat higher in 2010 as the effects of the recession had not fully bottomed out at that stage. Also, the very cold winter of 2009/10 increased peak demand for that year. Yet, wholesale prices were still lower in 2010, which as we shall see was likely due to lower average gas prices.

Figure 2: Electricity Demand in Ireland

The Impact of Gas Prices on wholesale price

The National Balancing Point, commonly referred to as the NBP, is a virtual trading location for the sale and purchase and exchange of UK natural gas. The Irish electricity price normally follows the NBP (the green and purple lines below) :

Source : European Commission

The Irish wholesale electricity price generally follows the price of gas because gas generators 
are normally the last generators to be called on after wind, coal and peat as explained in a 
previous blog article.

The NBP i.e. price of gas in the UK, in the latter part of 2015 had dropped to 2010 levels :

• European hub prices showed a slightly decreasing trend as low oil prices, steady LNG supply and increasing pipeline imports put downward pressure on prices. Gas prices have reached new lows. Excepting the temporary price drop in the summer of 2014, the average NBP price in October 2015 was the lowest since 2010 (European Commission).

So gas prices were similar in both years but 2010 had lower average prices over the whole year : 

The above graph declines sharply at the end (not shown) as gas prices fell further in September and October of 2015. So this leaves us with slightly higher wholesale prices in 2015 when compared to 2010 and explains Figure 1. But what about wind energy ? 2010 was a bad year for wind and haven't we had much more wind energy since then ?

Wind Energy

By the end of 2010, according to the SEAI, there was 1,440 MW of installed wind capacity. By the end of 2015, there was roughly 2,300MW. So we have had a 60% increase in wind farms between the two years. The Irish Times reported recently that :

Wholesale electricity prices were down 21 per cent in November 2015 compared to the same month last year, or 7.5 per cent when compared with October. Vayu said the drop was attributable to strong wind generation and lower prices for gas.

While Vayu are right about lower gas prices, strong wind generation doesn't seem to make any difference to wholesale prices. If it did, we should see lower wholesale prices in 2015 when

compared to 2010, but instead we see the opposite.

Indeed, it's quite possible that more wind energy contributed to higher wholesale prices because it led to increased reliance on expensive fast acting back up plant that otherwise would be rarely used.

Conclusion

Despite having wind capacity equal to half of our peak demand, we still have an electricity system almost entirely dependent on fossil fuels, mainly gas. These gas generators recover their costs by setting the wholesale price of electricity. Despite large investments in wind energy, Ireland is still exposed to fluctuations in the price of gas in the UK. With gas prices at their lowest since 2010, we should be availing of cheap electricity. Instead, wind energy is still receiving a fixed price above the low wholesale prices keeping electricity prices higher than they should be.

Gas Prices Hit Six Year Low but still Electricity Bills rise

The above diagram gives a good indication of where gas prices in the EU are at. It reveals that gas prices have hit a six year low i.e gas prices have not been this low since 2009. Gas power is usually the last generator called on by the National Grid in Ireland so this is the one that sets the wholesale price of electricity for all generators (under the merit order system).

If we look at a recent wholesale price (SMP) profile we can see that it is well below € 50 / MWh, at about € 30 / MWh :

Indeed, we can see that back in February this year it was up around the € 50 / MWh mark :

But still electricity bills are not getting cheaper. This amounts to an abuse of the free market, a market all consumers should be entitled to participate fairly in. The excuse of rising prices for fossil fuels is often used as a justification to hike bills but the opposite doesn't happen here in Ireland, the land where the electricity consumer can be milked till the cows come home.

The guy supposed to be regulating this can be contacted at info@cer.ie

Gas Vs Wind - more inaccuracies

Joanne Daly, senior energy analyst at Vayu, said the continuing integration of wind energy onto the grid is assisting in reducing the amount of gas-fired generators used to produce electricity, which is typically more expensive than that generated from renewable sources.

The above was published in the Irish Times recently. It is a claim that has been stated so many times in Irish media outlets that people are actually believing it is true. Gas does not receive a fixed subsidy, renewable energy does. Gas receives on average €50 - €55 MWh, wind receives about € 80 MWh.

The Irish market works in such a way that all generators receive the same wholesale price. Then on top of this wind now receives about € 180 million from the PSO while gas receives about € 30 million :

http://irishenergyblog.blogspot.ie/2015/06/pso-levy-wind-energy-prevents-consumers.html

So where is the evidence for Ms Daly's claim above ? 

Does wind energy reduce wholesale prices ?

Definitions 

SMP : System Marginal Price from which the wholesale price of electricity is derived
System Load : Electricity Demand for All Ireland system

All sorts of claims are made by all parties on the effects of wind energy on wholesale prices. Let's have a look at two recent days - 2nd and 23rd February - to see what impact, if any, wind energy has on wholesale prices. We can see that the demand for both days is very similar with a slightly higher peak on the 2nd.

Demand Profiles for both days for the Republic of Ireland only (information not available for All Ireland)

Wind generation was very high on the 23rd but very low on the 2nd. So we would expect lower wholesale prices on the 23rd.

Wind generation profiles for both days (Republic only)

On the 2nd, we can see that the average price was around € 50 with a peak price of about € 260 

(Data taken from SEMO market data).

On the 23rd, the average price was also about € 50 with a lower peak price of approx € 210. The higher peak price on the 2nd may well be due to the higher peak demand (load) or lower wind 

on the 2nd or indeed a combination of the two.

But the important thing is that on average, prices for both days were remarkably similar at about €50 per MWh. What has happened in both cases is that the cost of gas generation, rather than wind, has determined the price. The ESRI graph below confirms that the price of gas comes in around the € 50 mark.

Let's take 2 different days - one with wind providing 1,000MW and another with zero wind. Demand is 4,000MW for both days. The marginal cost of generating a MW of gas power at 3,000MW on the windy day is the same as the cost of generating the last MW at 4,000MW on a calm day. So what we
will see is that both days, like in the above case, will have very similar or same market prices.


ESRI explain how the wholesale electricity price is determined :

The most expensive plant needed to meet demand sets the marginal price,
which is paid out to all generators producing electricity during that period.
The marginal price essentially reflects the cost of fuel and carbon needed to
generate the last MWh of electricity.
Since wind generation is assumed to have a short-run cost of zero, more
wind tends to put downward pressure on electricity prices, up to a point. Wind
generation is by its own nature variable. When wind dies down thermal plants
(typically fuelled by natural gas or coal) must be available to pick up the slack
in order to maintain a reliable electricity system. It takes several hours for a
thermal plant to warm up to the point where it can generate electricity. To
take this feature into account, we assume that a certain number of thermal
plants must always be on at their minimum stable capacity. The number of
plants that are constrained on depends on the time of the year and the level of
electricity demand and is determined on a monthly basis by the model. When
thermal plants are constrained on and would not otherwise have been dispatched 
by the market, they do not bid their marginal cost into the market;
rather, they are compensated for this generation through constraint payments
which equal their marginal cost, regardless of market prices. At times the
need to constrain on thermal plants to maintain reliability might also cause
the curtailment of available wind generation. Wind curtailment is recognised
by the system operators to be a likely event (EirGrid and SONI, 2010).

The above diagram shows the merit order with which each type of generation is taken.
If gas becomes cheaper than coal, then it will move down the merit order and be chosen before
coal. But at the moment mid-merit gas usually generates the last MWh of electricity. Hence, why
the market price is usually based on the gas price.  We can see from the below Eirgrid document 
that the System Marginal Price (SMP) does indeed follow the Gas Price :

The Energy Regulator agrees with Eirgrid on the impact of gas prices on wholesale
prices (PSO Paper) :

The lower estimated wholesale price for next year is reflective of a trend in recent months

in the SEM of lower spot and forward contracting prices, related to lower gas prices.

  But there may well be situations where high wind penetration coincides with peak demand during 
winter months. In this situation, wind could prevent peaking units from been used. Peaking units 
include oil and open gas cycle generators and are the most expensive form of generation hence why 
they are last in the merit order. In this situation, wind will bring down the wholesale price as it would prevent 
the market price from been derived by the high price bid by these peakers. 

But likewise, there will also be times when wind output will fall off quickly resulting in the need 
for quick acting peaking units like oil or ocgt to step in pushing the market price upwards. 
This is what may well have happened on the 15th January 2015 :

So to conclude, there will always be some form of gas generation in the system regardless of how
much wind is allowed in (due to system and balancing constraints). There may be slight reductions in 
the wholesale price where mid merit gas plant is prevented from been taken but as can be seen in 
the example above even with circa 1,700 MW of wind, mid merit plant is still required to balance 
the grid.  There may be occasions when wind prevents expensive peaking plant from been taken 
but there will also be occasions when sudden fall offs in wind power require expensive fast acting 
expensive plant to fill the gap.    

If anybody wants to submit an article on how wind energy does reduce wholesale prices, then please 

send to irishenergyblog@gmail.com and I will be happy to publish it.

But I will finish with an interesting question - what will happen the wholesale price if say, 75% 
wind is allowed into the system ? At this level, back up gas plants will be running on low loads, and 
potentially burning more fuel than if running more efficiently at higher loads. This will mean that 
the cost of providing the last MW of gas power will be more expensive than in the little or 
no wind scenario.

So will we see upward pressure on the wholesale price in this case ?     

Whats In Your Electricity Bill : Part 6 Conclusions

Diagram 1: Energy Prices by component (Source ESB and Eurostat)

The above diagram shows in very simple terms the factors which are driving up our bills. Energy and Supply is basically the cost of generating the electricity including wholesale costs of fuel, operation costs etc. As ESB noted, only 40% of the electricity price is subject to the competitive market; the balance is set by policy measures and regulated prices. So Energy and Supply makes up 40% and if the costs come down in the wholesale market as they have recently done then this cost comes down. The problem then lies with the 60% - Networks and Taxes and Levies. The main driver in these costs is government policy. 

One of the things to note is that when wholesale costs come down, the cost of energy and supply comes down but levies goes up. This is explained in this blogpost :

http://irishenergyblog.blogspot.ie/2015/01/pso-levy-set-to-soar-this-year.html

So next time you hear about rising electricity prices been blamed on the wholesale cost of gas going up, you will know that this is only 40% of your bill, and so does not fully explain what is going on. Taxes and Levies must be increased to pay for additional wind capacity and network costs must also be increased as explained below. But the situation is even worse when wholesale costs come down, as just like in a weighing scales, taxes and levies must then increase further to make up the larger gap between the market price and subsidy price for peat and wind etc.

Network Costs

While there was always an issue in Ireland with dispersed houses and buildings, thus requiring a larger network than other countries, we can see from Diagram 1 that something else has impacted on this cost since 2008. Between 2008 and 2012 we added about 700MW of wind, driving network costs up to bring this wind energy from remote regions to where it is needed. Two new gas plants were also built in Cork but these were built nearby existing power plants which meant that minimal transmission infrastructure was required. 

We can refer to Eurostat to see what has happened network costs since 2012 (click to zoom in):

Network Costs for domestic customers 

Network Costs for industrial customers 

For households, the cost has gone up from € 0.0669 in 2012 to € 0.0697 in 2014. For industry,
the cost has gone up from € 0.0446 in 2012 to € 0.0455 in 2014. 

For industry, they have had a 47% increase since 2008.

Taxes and Levies

For industrial consumers, taxes and levies have more than doubled since 2012. Hence, why we have industries complaining that they are been unfairly levied. For households, levies have gone up by 35% since 2012. Levies comprise the ever increasing PSO Levy which was discussed in Part 5.

Taxes and Levies for households

Taxes and Levies for industrial customers with consumption between 2,000MWh and 20,000MWh

Taxes and Levies for industrial customers with consumption between 500MWh and 2,000MWh

Taxes have remained static i.e. VAT at 13.5%

Other Costs

Other costs include supplier profit and admin costs to run the electricity market. Of course, the suppliers do make good profits and engineers and staff are paid higher than most of their European counterparts. But anyone that has followed this blog, should know that it is a mistake to blame the high electricity bills coming through your door entirely on capitalism. It is socialist interventionist policies that fixes the price above a certain level.

Admin costs would have also gone up in recent years due to the increased complexity in the market with increased wind and interconnection. What has happened is that the market has now become imperfect. If everyone had perfect foresight, the system would run smoothly i.e. be "perfect". But because nobody can have this level of foresight and can only know what will happen after the fact (i.e. when the wind rushes in unexpectedly or doesn't blow at all), the system runs imperfectly and as Eirgrid point out "less optimal".

To be fair to one supplier, they are not too happy about this situation. After all, one of the benefits of wind energy and interconnection that we were sold by our politicians was that it would reduce energy costs :

Concern was raised by a respondent in which they expressed their disappointment ‘that despite growing levels of wind and recently introduced TSO incentives to reduce dispatch balancing costs, the overall charges are increasing. This increase and the fact that the supplier have no control over these increases does not bode well for consumer perception of increasing energy bills.’

And the CER Response: 

 The RAs expect the TSOs to continue to seek mitigation measures to reduce constraint costs for the betterment of electricity consumers.

In other words, we will keep trying to keep the costs down. Just don't expect it to happen anytime soon.....

Lower fuel costs does not mean lower bills

The year 2008 saw record prices for fossil fuels (see page 8 of this document). 

The SMP is the market price paid to generators and is influenced by international gas prices. So we can see from the below that the SMP was highest in 2008 and in 2013 was lower reflecting the fact that gas prices never recovered fully since 2008. So we would expect that our electricity bills would be lower in 2013 than 2008. 

In 2008, electricity prices were € 20.33 per 100kWh (see also diagram here on Page 15 confirming this figure does include taxes)

But in 2013, electricity prices were higher at € 22.95 :

So despite lower fuel prices, electricity prices were higher.  It was other factors apart from fuel - network costs and taxes and levies - that drove the price of electricity up.

Five Reasons why we have reached saturation point with wind energy

To any impartial analyst, Ireland has reached saturation point with wind energy and it should now be time to put a pause on new wind development and consider our options. No damage was ever done down through history by pausing before deciding what to do next. Think of how many billions of euros we could have saved if this was done in 2006.

1. Dumping of wind power and the 50% limit on wind - recent evidence shows that during periods of high winds we have to dump more and more of available wind energy to maintain a safe secure supply of electricity.  On the 30th March, at least 26% of available wind energy was dumped. 
2. Over capacity - We now have generation capacity equivalent to double our peak demand and three times that of our average electricity demand needs. Let's use up this excess capacity before we start building any more. No new generating units (including wind) need to be built unless they are replacing retired units.
3. Baseload plant minimum load requirements - there is a requirement for 5 large generating units to be running at all times for "dynamic stability". These comprise combined cycle gas turbine plants and Moneypoint coal plant. This means they can never be completely switched off. Increasing wind penetration further will exacerbate the inefficiencies inherent in running these plant on low loads, thereby negating any additional savings due to adding more wind.
4. Electricity bills are one of the highest in Europe - government policy has locked society into high electricity prices with the preference towards subsidized forms of generation meaning savings from falls in wholesale prices can never filter down to consumer's bills. Another factor is that an over supply of generation capacity results in units requiring subsidies and capacity payments to recover their high fixed costs as payments for energy generation become insufficient and staggered due to low demand and more intermittent wind on the system. There are also extra costs due to new infrastructure required to carry the wind power.
5. Impacts on other sectors - The tourism and equine industries are two of the largest industries in Ireland supporting many direct and indirect jobs. Chances are if you live outside any of the main cities, your job is dependent in someway on either of these industries.  Planting wind farms and associated pylons near scenic and horse breeding locations will have a negative impact on these important industries.  The Irish Hotels Federation recently warned that the location of energy infrastructure should not diminish the natural beauty of the landscape because this is an important element of the Irish tourism product. Already, this impact is being felt with one castle owner recently saying "The tourists can't believe it. They said we're mad. They said we're ruining our heritage. They say it's disgusting to go around Ireland now"

Response to Irish Times article by Joseph Curtin

One and one equals two, six less four equals two, four by three equals twelve - can you do the maths ?

"To think that two and two are four, and neither five nor three, the heart of man hath long been sore, and long tis like to be" - A.E. Housman

Critics of Ireland's current energy policy have now been told by Mr Curtin of the Institute of International and European Affairs in Dublin that they can't count in an Irish Times article  :

Critics of Irish wind energy have got their sums wrong - Irish Times

So lets see who has the deficiency in mathematics.

The reason is not wind but rather the cost of importing gas. 

The problem is that more than half of Ireland’s electricity is generated from gas – the fourth highest share in the EU – leaving us more exposed than other countries to gas price increases. When gas prices increase, electricity prices here increase more, and Ireland’s competitiveness declines.

Wind replaces more expensive generation options, reducing their operational and fuel costs. The final net impact on consumer bills is minimal. 

 The Academy of Engineering point out the fuel price differentials in their July 2014 report :

 SEAI’s recently published analysis of the” Benefits of RenewableElectricity in 2012”  indicates that in the Republic of Ireland the 4.09 TWh of wind generation is estimated to have saved €177 million in fossil fuel imports i.e. €43.2 per MWh and reduced CO2 emissions by 0.37 tonnes per MWh - indicating that wind almost exclusively displaced highly efficient gas-fired CCGT generation. Wind generators received in excess of €80 per MWh for wind output in 2012. This means that wind generation added almost €40 per MWh to the electricity sector cost base in 2013 i.e. €165 million. This does not include the impact of wind-related transmission cost increases or system operation cost increases.  

So if faced with a choice of paying € 43 MWh or € 80 MWh , which would you prefer to pay ? I don't know about you but personally I would like to pay € 43 MWh. So if we stopped all fuel imports and powered our electricity completely by wind (which is impossible), we would have to pay almost € 40 per MWh extra in our bills. This is because gas does not receive a subsidy while wind does.

Simple Maths Sum # 1

Cost of gas  ---   € 43 per MWh

Cost of wind --- € 80 per MWh

Difference  ---  € 37 per MWh --- which is the additional amount we must pay when wind displaces gas

The reason is not wind but rather the cost of importing gas. Between the summers of 2009 and 2013 wholesale gas prices almost doubled across the EU. Analysis by the International Gas Union shows that between 2007 and 2013 prices increased consistently in all regions except North America.

2009 was the last time a crash occurred in oil and gas prices. So obviously prices increased after that.

So gas (and oil) prices hit a peak in 2008. There then was a dip in 2009 and a slight rise after that. This is reflected in the Annual Energy Payments (The market price per MW sold per half hour) below provided by SEMO :

As you can see Energy Payments, which are a direct reflection of wholesale prices, hit a peak in 2008 of € 2.7 billion and have not come anywhere close since. So our electricity bills should have come down since then by Mr Curtin's logic. But instead our bills have gone back up again and now exceed 2008 prices :

So Energy Payments (which gas prices determine) fell by about half of a billion euros between 2008 and 2011 but our electricity prices continued to rise in this period. So can you do the maths ? What else could be pushing up our bills ?

Lets look at the electricity bills in 2014. Have they come down yet ? Do you know how numeracy works - € 24.05 (2014) is greater than € 20.33 (2008) i.e. electricity was more expensive in 2014 than 2008 , but Energy Payments were higher in 2008 (€2.7bn) compared to 2014 (€ 2bn) (click on each table to zoom in) so the bills should have come down by Mr Curtin's calculations.

From SEAI

From SEAI

So what else could be pushing up our bills ?

Well, the answer is we are in the middle of an energy bubble that is really indefensible :

http://irishenergyblog.blogspot.ie/2015/01/energy-bub.html


All this additional capacity must be financed through electricity bills, whether that capacity is used or not. Excess capacity is financed through capacity payments and the PSO Levy. Most of this excess capacity is due to the € 4 billion investment in wind generation - it's not an anti-wind position to state this, it's simply a statement of fact.

Another factor is Ireland’s lower population density. We need about 70 per cent more metres of cables per person than the average, which feeds into higher prices.

This was always the case in Ireland. As can be seen from the below graph, it didn't prevent Ireland from having a very competitive electricity price during the 90s before they started this renewable gig :

In 2015 electricity prices will decline further, driven again by lower forward gas prices. The correlation is as clear as day.

Has anyone seen these lower electricity prices ? Last time I checked my bill the PSO Levy was going up once again. Can anyone find one of these bills with lower prices ? Please do let me know.

The situation is exacerbated by the fact that Ireland must import its gas from the UK through interconnectors, and Irish consumers bear this additional cost.

Funny then that we once had lower electricity prices that the UK during the 90s when we still were reliant on UK fuel imports :

Others have identified “hidden” network costs they argue are necessary to facilitate wind. It is true that Ireland is currently modernising an electricity network that for many years suffered from chronic underinvestment. Current investments also support traditional generation, increased demand in the regions, and indeed a more responsive, intelligent and modern grid generally.

It is now accepted by almost everyone that Grid 25 is required to facilitate renewables, including Eirgrid :

The implementation of GRID25 is essential if Ireland is going to meet its targets for generating electricity from renewable sources (link). 

Next we are told:

Current investments also support increased demand in the regions

There is no expectation for "increased demand in the regions". In fact, there are gas plants lying idle in the Western Region for example, Tynagh which ran for the equivalent of 2 months in 2013 (link here) and Rhode oil plant in the midlands which ran for a total of 17 hrs in 2013 - "A further trend of decrease for the stations total running hours is predicted for the coming years. This is attributable to a lower demand from the National Grid" (link here). 

Current investments also support traditional generation

Current investments in the grid have nothing whatsoever got to do with traditional generation. This shows a very poor misunderstanding of how power generation and grid infrastructure works. Traditionally, power stations were placed close to towns and areas of large population. The grid infrastructure was larger at the power stations and towns and then progressively smaller as it reached remote regions. With the advent of wind generation, grid infrastructure now has to be built inversely i.e. larger cables in remote locations are required to bring the energy to the towns and cities.


There are also other hidden costs which are directly attributable to wind such as constraints payments for conventional plant which I have written about here :

http://irishenergyblog.blogspot.ie/2014/12/whats-in-electricity-bill-part-2.html

You can see that they have risen every year since 2010 as wind penetrations got higher and the smooth running of plant got ever more interrupted. The Energy Regulator accepts that "More and more wind on the system adds extra costs."

Total investment in wind will reach €3.5 billion by 2020. This is a frightening number, leading several commentators to make the simplistic assumption that consumers will have to foot this bill.

Simple Maths Sum # 2

4,094MW onshore @ € 2 million per MW = € 8.1 billion

555MW offshore @ € 3 million per MW = € 1.6 billion

Total investment = € 9.7 billion not € 3.5 billion

External Sources for these figures can be found on this blog 
http://irishenergyblog.blogspot.ie/2015/02/20-billion-committed-under-irelands.html
and this one
http://irishenergyblog.blogspot.ie/2015/02/cost-of-renewables-infrastructure-in.html

Since we are engaging in simplistic argument, it is not the Irish consumer but the king of Norway who will pay. We import the largest proportion of our gas from Norway, and investment in wind will reduce coal and gas imports by nearly €300 million per annum by 2020. Consumers will benefit by not having to pay for these imports.

Why deal with simplistic arguments when one can actually look at the detail ? Could it be that simplistic argument is the coinage for a propaganda machine ? Dr Fred Udo has done an analysis using SEAI and Eirgrid data and found that running our CCGT in an efficient way would save more fuel than the investment in wind did.

http://irishenergyblog.blogspot.ie/2015/03/wind-turbine-build-outs-and-co2.html

That's right, using modern CCGT in an efficient way saves fuel - thats the rationale behind using fuel efficient generators whether its the engine in your car or the generator in a power plant. The King of Norway in no way feels threatened by 13th century technology. In fact, wind power is very reliant on gas for its own house load needs.

The deployment of wind creates economic growth in Ireland and investing in Irish wind instead of Norwegian gas boosts activity in the local economy. Analysis suggests that GDP would be boosted by €500 million per annum by 2020, creating thousands of jobs in the process.

Airtricity operate 25% of Irish wind farms - owned by SSE, a British company

Energia operate 25% of Irish wind farms - owned by Veridian plc, a British company which is ultimately owned by Arcapita Bank based in Georgia, USA.

Bord Gais operate 15% of Irish wind farms - owned by Centrica plc, a British company. It was rumoured in July last year that Qatar were attempting to buy a large stake in the company.

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