Electricity Prices have gone Bonkers !

Bonkers.ie rightly point out that Ireland has one of the highest electricity prices in the EU :

 But they fail to point out that this was not always so, an assumption one would make from their second tweet. If Ireland was always an island, then surely we always have had high electricity prices ? (Yes, I also hear you say but surely we don't have to import as much fuel now with all the windmills we've built - unfortunately bonkers.ie does not address this point either)

It's just a fact of life, they say, everything is expensive here in Rip Off Ireland ! 

Well the truth is that during the 1990s and early 2000s, Ireland had comparatively cheap electricity, even cheaper than the UK as economist Colm McCarthy has often pointed out.  Irish Economy.ie wrote this back in 2009 :

What puzzles me, however, is that Irish electricity costs were not always particularly high relative to our trading partners. In fact, a chart (figure 3) in the Department of Enterprise, Trade and Employment paper shows that electricity prices for industrial users in Ireland were well below those paid in the EU-15 for most of the 1990s, and were still no higher on average than in the rest of the EU-15 in 2002-2004. Yet in 2008 Ireland was the second most expensive country for industrial users in the EU-15. According to IBEC, Irish companies have seen industrial electricity prices rise by 70% since 2000.

We can see that Richard Tol and Colm McCarthy have been proved correct in the comments underneath the article :

Richard Tol

The fuel costs of wind are indeed zero. The capital costs are not. Without subsidies, wind barely competes — even in Ireland where the climate is favourable and other electricity is dear. Wind also has negative externalities for other power generators, first and foremost in its demand for reserves but perhaps also in higher cycling costs. 

colm mccarthysays:

As for wind penetration targets, there is only one question worth asking – is the Government’s very high target justifiable as a component in the least-cost abatement strategy?

The main things that have changed between the 1990s and the 2000s/2010s is the construction of 4,000MW of wind farms and supporting network infrastructure, funded both directly and indirectly in electricity bills, carbon trading and the growth of energy hungry data centres.  We are now paying the price for all of these ideological policies which have been implemented without any cost benefit analysis. There was also the change to the euro. 

It certainly has nothing to do with the importing of fossil fuels, most of which has been very cheap throughout much of the 2010s. 

Wind Taken Out of Government's Plans - NAMA for Wind Beckons

by Owen Martin

All Island Wind (in green) Vs Demand (in red) for the past two months - above and below graphs

The capacity factor for wind was 13% over the past two months according to data taken from Eirgrid's dashboard

There have been unprecedented low levels of wind energy in the past two months as the two charts above reveal.  The unusual hot and calm weather is due to a large area of high pressure in the Atlantic Ocean which is blocking the prevailing south westerlies :

High Pressure region in the Atlantic

Some green campaigners are saying that this is caused by "more energy in the climate" due to climate change, but actually in this case there is less energy. Cloudless skies, no wind, no rain, it looks like a climate devoid of energy to me. 

There is now around 4,500MW of wind installed on the island of Ireland, enough capacity to meet almost all summertime demand. However, as can be seen in the graphs above, wind has had a dire performance with a capacity factor of about 13% over the past two months. In other words, they've only performed at 13% of potential output. Historically, they have a capacity factor of 27% in Ireland. Most, if not all, wind farms will be making large losses. The longer this calm weather continues, the closer we get to a bailout for wind, or as Colm McCarthy put it, a NAMA for wind.

How much would a NAMA for wind cost ?

A megawatt of wind energy capacity costs somewhere in the region of € 1-2 million. So 3,500MW of wind (in the Republic of Ireland) would cost about  €5 billion to bail out. If we take a discount of about 50% for serviced debt and a haircut for shareholders, this means the cost to the taxpayer would be €2.5 billion.  This is roughly equal to the total wholesale cost in electricity bills, which comprise 50% of an average bill. So a NAMA for wind could cost the consumer about half of an average annual electricity bill. 

Canadian Company Sell a Loss Making Wind Farm for a Profit to State Backed Investors

A wind farm sold for a profit in the region of €7 million last year made a net loss of € 4 million in the latest accounts filed with the companies office for 2016.

The wind farm, Knockacummer, in Cork, has a capacity of 87.5MW, was commissioned in 2013 and has thirty five 2.5MW turbines. It was sold by Canadian company Brookfield Renewables.

It paid interest of € 12m (at 7.5%) in 2016, which was 54% of it's turnover. The interest was higher than it's operating profit which turned the profit into a net loss. It also made a net loss in 2015. 

At 31st December 2016, it was carrying Accumulated Losses of € 5.7m.

It's outstanding loans stood at €145m at end of 2016. €3.8m of which was written off by Brookfield during the year. The company was financed by loans from Brookfield, which in turn was financed by external loans. 

The buyer was Greencoat Renewables. Last year, the Irish State, through ISIF and AIB, acquired a 33% stake in the company. Which could potentially rise to 49%. 

Greencoat also bought another loss making wind farm, Lisdowney, last month. 

One has to question as to why the Irish State is helping to purchase loss making wind farms. Are we looking at another NAMA in the making ?

New Report: The Costs of Wind Energy in Ireland

The new report by Wind Aware Ireland is now available to read online :

https://neilvandokkum.files.wordpress.com/2017/11/he-cost-of-wind.pdf

Total annual costs due to wind have been calculated at € 1.2 billion. I would say this is an under estimation. Other costs such as ancillary costs and maintenance costs for conventional generation are missing from this report. Ancillary costs are now over € 70 million per year. Some of those are required without wind, others like synchronous compensation are a direct consequence of wind energy. 

I have to agree with economist Colm McCarthy when he says "It should not have been left to this voluntary group to raise these vital policy questions. "

Event Announcement: The Costs of Wind Energy in Ireland

Wind Aware Ireland will be launching their new report “The Costs of Wind Energy in Ireland” in Buswells’ Hotel, Dublin at 11.15 on Wednesday (15th November). This report may precipitate the latest scandal in public spending.

The report shows that the Irish State and consumer are spending approximately €1.2 billion per year on wind energy and no one has done the sums to justify this spend.

The Irish Academy of Engineering found that focusing mainly on wind to reduce emissions would create the highest technical risk, would generate the lowest amount of reliable electricity and had lowest public acceptability compared to using biomass or carbon capture and storage. They said “A detailed analysis needs to be carried out of the costs and socio-economic implications of reducing emissions”.

Economist Colm McCarthy noted “It is time for Government to acknowledge that Ireland has enough wind farms, that they cost too much in subsidies and that promising routes to cut emissions lie elsewhere.”

All legally mandated checks and balances for wind energy have been bypassed; no costs benefit analysis, no strategic environmental assessment and no regulatory impact analysis has ever been undertaken to justify this spend.

This sheer lack of accountability and the capture of policy by wind developers should be grounds for a national scandal.

Paula Byrne (PRO)

Wind Aware Ireland

www.windawareireland.com

Phone:  057 86 27048

Mobile: 086 8241523

Email:  paula@windawareireland.com

Rise in PSO Levy Angers Irish Industry

It appears that reality is beginning to bite at The Irish Times in view of the many large industries (some of the biggest employers in the country) complaining about the rise in PSO Levy to fund more wind farms. 

Full Article Here.

In a submission to the CER before it arrived at its final decision, tech giant Microsoft, which employs 1,200 people in the Republic, said this penalises large energy users who are holding energy capacity in reserve to meet anticipated growth.

The multinational also points out that the rate at which the PSO has increased over the last five years represents a “rate shock” for large energy users and “puts the Ireland energy market at a disadvantage”. In a similar vein, Irish food and ingredients giant, Kerry, which employs 4,000 people here, warns that the charge will damage its competitiveness.

Irish Energy Blog has been warning about this for years now, but the warnings have fallen on deaf ears. The Irish Times have been calling for more renewable energy for a long time now and have allowed the wind industry to spread their propaganda far and wide. To be fair, they were not the only ones. 

The only journalist that is going to come out well of this is Colm McCarthy. Of course, there will be no accountability for what will happen in the next few years. An exodus of large companies coupled with a hit from any prolonged Brexit negotiations will see us well back in recession and rising unemployment once again. At a time of record low oil and gas prices.

Will we ever learn....

Poor winds see wind farms make losses

Bad news for wind farm investors - poor winds in the past month see wind farms make losses

The weather for the past 30 days was characterized by quite a lot of high pressure activity, dry weather and low winds. Total output for wind farms in the Republic of Ireland for this period was 280,329 MWhrs. Data from SEM-O for the year 2013/14 shows that wind farms earned € 83 per MWhr and had costs (including depreciation) of € 24.9 million per month.

This means when one does the maths, wind farms suffered a loss of € 1.6 million over the past 30 days.  Bad news for investors and the green energy revolution.

With a couple more months like this, we could be seeing, as Colm McCarthy once predicted, a NAMA for windfarms.



Sources: 

SEM COMMITTEE Generator Financial Performance in the Single Electricity Market (SEM) 19th December 2014

Eirgrid Smart Grid website

Coherent energy policy needed says economist Colm McCarthy

Ireland’s weak political institutions, unassertive public administration and populist media expose taxpayers to regular raids from predators posing as creators of jobs or saviours of the planet. This is most vividly illustrated in the continuing windfarm bonanza. Ireland has an enormous surplus of electricity generation capacity but an entire pseudo-green industry of self-styled entrepreneurs continues to prosper through farming, not the wind, but the taxpayers’ pockets.

There is a terrific article by Colm McCarthy in this week's edition of The Farmers Journal that can be found here (it only takes a few seconds to register) :

http://www.farmersjournal.ie/coherent-energy-policy-needed-183178/



The only problem is I'm not sure if our government understand the word "coherent".