Alan Moran: Wind Power’s a Costly Failure

alan pic

Alan “The Terminator” Moran.

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Alan Moran has been out to “terminate” Australia’s pointless and ludicrously expensive Renewable Energy Target for some time (see our post here).

Well, you can’t keep a good man down and Alan’s back – this time dishing it up in the lefty business rag, the Australian Financial Review.

Renewables are just a power failure
Australian Financial Review
Alan Moran
23 January 2014

Much has been written about the contribution that wind and solar have made to Australian energy supply, especially in the recent hot spell. About 10 per cent of electricity supply comes from renewable sources, two-thirds of this being unsubsidised hydro-electricity, with one-third from wind/solar which needs subsidies to cover more than half of its costs.

During heatwave conditions in the five days to January 18 this year, wind actually contributed 3 per cent of electricity supply across the Australian National Electricity Market. Nobody knows the contribution of rooftop solar but it could not conceivably have been more than 1 per cent.

Overall, wind facilities amount to 3300 megawatts of capacity, somewhat less than the Loy Yang brown coal power stations in Victoria or Macquarie Generation’s black coal facilities in the Hunter Valley. Windmills produced at an average of 23 per cent of their capacity during the January heatwave. This was below their year-long average of about 30 per cent because the hot spell, as is often the case, was characterised by still air. Fossil fuel plants are available 95 per cent of the time. Gas plants (and hydro-electricity) can be switched on and off at very short notice to fill the peaks in demand. As a result they generally earn more than the average plant on the electricity spot market.

The below-par performance of windmills in high-demand periods means they not only require a subsidy but are also less valuable than other plants because their availability is reduced when they are most needed and when the price is highest. Accordingly, windmills actually earn less on average than other plants in the electricity spot market. Indeed, during the recent heat wave, wind power earned an average of $123 per megawatt hour in Victoria and $182 in South Australia while the average price was respectively $209 and $285 in the two states.

Subsidies are expensive

Investments in wind and other subsidised electricity generation, according to the renewable energy lobby group the Clean Energy Council, has been $18.5 billion. By contrast, the market value of comparable generating capacity in Macquarie Generation coal plants is said to be only $2 billion and a brand-new brown coal plant of 3300 megawatt capacity would cost less than $10 billion.

Wind aficionados claim that such costings do not take into account that wind is free whereas fossil fuel plants have to pay for their energy. But that is also untrue. Wind plant maintenance is about $12 per megawatt hour which is more than the fuel plus maintenance costs of a Victorian brown coal power station.

Subsidies to renewable energy were once touted not only as a key to reducing emissions of carbon dioxide but also as paving the way to a future source of electricity that would become competitive in price and reliability with fossil fuels. After two decades of increasing subsidies, this optimism has proven to be unfounded. Instead we have seen subsidised renewable energy sucking capital into worthless investments.

On present plans, a nominal 20 per cent of electricity is to be sourced from renewables by 2020. By that year the excessive cost burden on the economy will be $5 billion a year and rising. This entails crippling subsidies paid by consumers and businesses. The imposition has been a factor in the foreshadowed plant closures of Holden, Electrolux and the aluminium smelters at Kurri Kurri and Point Henry.

Because of our readily available coal and gas Australian electricity costs are intrinsically among the lowest in the world. This was formerly crucial to attracting highly competitive energy-intensive industries like smelting. Australia could once again benefit from low-cost electricity if deregulation freed energy supply from its renewable obligations. The benefits would be especially welcomed across all agricultural and manufacturing industries that are subject to international competition.

Subsidies on existing Australian renewable plants are planned to run for 15 years. But Spain, previously the poster child of renewable subsidy excesses, has shown the way forward by eliminating all previously promised subsidies. Australia needs to abandon its own renewable schemes and allow the energy market to operate on commercial terms.

Alan Moran is the director, deregulation, at the Institute of Public Affairs.
Australian Financial Review

Where Alan talks about Australian wind power capacity of 3,300 MW, he’s including the roughly 450 MW of capacity in Western Australia.  The combined capacity of the fans located in South Australia, Victoria, Tasmania and NSW is 2,660 MW.

Western Australia runs a completely separate electricity grid – a large proportion of which runs on gas – which the Sandgropers have access to in growing abundance.

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Woodside’s LNG plant on the Burrup Peninsula.

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Discoveries of huge reserves of easily accessible gas on the North-West Shelf and onshore in the Kimberly mean that Western Australia’s power needs will increasingly come from cheap, clean gas – which will largely immunise it from the power price spiral that’s well underway in Australia’s wind power capital, South Australia.

Alan throws some pretty solid numbers behind his charge that wind power is just an expensive failure, but he falls for the trap of talking about “average” wind power output.

As we pointed out in this post – for most of us – electricity consumption is a here and now kind of proposition – such that “averages over time” don’t cut it.  Next time you’re in the Intensive Care Unit, ask the bloke on life-support whether he’s happy to wait a few hours for his present power needs.

ICU Respiratory_therapist

What’s that mate? Not that keen on getting
your power needs tomorrow instead of now?

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And for all that chaos and uncertainty – as Alan points out – Australian power consumers are paying wind weasels $5 billion a year on top of their already crippling power bills.

That gravy train is all set to roll until 2031, with the worst of it to hit home (literally) by 2020 – every household will end up paying $500 in REC subsidy each year – Renewable Energy Certificates are a Federal Tax on all Australian power consumers.

And that’s just the direct cost to fund wind weasels’ lust for subsidy – power punters still have to stump up for the INSANE costs of peaking power when wind-watts go missing hundreds of times each year and the dispatch price skyrockets from $40 per MW/h to the regulated cap of $12,500 per MW/h.

But this circus won’t last much longer.

STT hears the Action Man is taking a direct interest in the RET review and is all set to appoint the boys from the Productivity Commission (who make no secret of the fact that they want the RET scrapped outright) over the howls of the wind weasels’ last line of defence, Ian “Macca” Macfarlane.

As Tony Abbott has clearly picked up – Australia’s future energy policy is just far too serious to leave to clowns like Macca and his mates from Infigen – aka Babcock and Brown.

circus_clowns-30541

That’s right Ian – Infigen can deliver free power to every Australian
home and business 24 x 7 using magical fans that last forever.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Jackie Rovenksy says:

    So much has been achieved in the past year. Now people in positions of influence are taking notice and beginning to act, and profess the mistakes of following like sheep to the slaughter while ignoring the cries of the suffering.

    The work of STT, Waubra and others is finally dispersing the drivel written and spoken about by supporters of this crumbling industry.
    Those who can call a halt to this social and financial disaster are beginning to form a process whereby those suffering can see an end to this industry of false hopes, lies, denigration, and environmental damage, loss of community, division, and spiralling costs.

    The more the media speaks out, explaining the truth that has for so long been smothered, the sooner peace will return. Once again we will hear the bird song, and the desperation of paying energy bills, that has far exceed the capabilities of so many to pay, will be in the past.

  2. Would you purchase a VCR, and put it on a 20 year payment plan, at exorbitant fees? Of course not, but this is what our government is forcing us to do! Time for a full investigation!!! Heads need to roll, for this horrific greed-scam! (certainly not green!)

  3. Stand against wind says:

    Thanks to Alan Moran for a fantastic article – you are the boy who yells out to everyone else that the wind farm emperors are butt naked – and In a Fairfax paper – next thing we know the ABC may even wake up to the wind fraud!

  4. You start to have faith in mankind again when you hear of men and women like Alan and Sarah (and there a lot more men and women, too many to mention, who are putting themselves out there, getting the facts about the fraud of these useless and expensive fans that don’t work for the betterment of this great Nation of Australia.

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