Shock, Horror! Wind Power Output Depends on Wind: Infigen Blames ‘Lack of Wind’ for Losses

The Wind Gods punish Infigen … again and again…

***

Australia’s publicly funded, green-left megaphone, the ABC has a hard time dealing with tough things like facts and consequences. So it must’ve been a rude shock to find out that the fortunes of wind power outfits depend upon … ahem … the weather.

Lack of wind a big blow for Infigen
ABC News
Stephen Letts
23 June 2017

If electricity consumers were not already being squeezed by the closure of Victoria’s coal burning Hazelwood power station, an extraordinary lack of wind in the past few months has certainly compounded the problem.

The large wind-focussed generator, Infigen Energy has been forced to downgrade its full-year profit forecast due to what it says has been the least windy period it has endured put its current capacity together in 2012.

“Production for the 4th quarter is expected to be … approximately 40 per cent below the previous corresponding period and 30 per cent below the historical 4th quarter average,” it told investors in a statement to the ASX.

“The current quarter is expected to include two of the lowest production months for Infigen’s current Australian operating assets.”

Infigen’s 4th quarter started on April 1, a few days after Hazelwood closed.

Principal at energy consultants ITK, David Leitch says he is not surprised given the recent weather pattern on the east coast.

“Unfortunately, it has played a part in the recent spike in wholesale power prices,” Mr Leitch said.

“Prices are currently around $90 per megawatt hour (MWh) when they would be typically be around $75MWh,” Mr Leitch observed.

Infigen Energy’s production is down 40 pc on a year ago due to the lack of wind. (Supplied: Infigen Energy)

***

With wind power operating well below its capacity, more expensive open cycle gas has been setting the prices in times of shortage on the east coast and South Australia.

Infigen noted some of its lower production would be offset by higher prices, particularly in South Australia, and from large-scale energy certificates.

Overall, Infigen said its full-year pre-tax earnings would be down around $10 million — or 7 per cent — from the $147 million guidance it gave in April when the doldrums set in.

Infigen said its guidance was given on the basis of past production and analysis of weather forecasts.

“Infigen had expected its east coast wind farms to benefit from weather patterns that typically result in high wind speeds and solid production in the second half of June,” the company said.

“These customary seasonal weather patterns have passed to the south of mainland Australia, resulting in below average wind conditions at Infigen’s wind farms in South Australia and New South Wales.”

Infigen owns 557 megawatts of generation capacity in wind farms in New South Wales, South Australia and Western Australia, or roughly a third of what was Hazelwood’s 1600 MW capacity.

Investors didn’t take the profit downgrade kindly with Infigen shares down 4.5 per cent to 74.5 cents per share at the close of trade.
ABC News

Let’s unpack a few of the facts that the ABC conveniently ignored. Starting with Infigen’s spin on, yet another, woeful weather-dependent performance, this is the quote picked up by the ABC from Infigen’s media release:

23 June 2017

DOWNGRADE TO FY17 UNDERLYING EBITDA GUIDANCE

Infigen Energy (ASX: IFN) advises due to poor fourth quarter wind conditions to date and the remaining 7 day production forecast that FY17 underlying EBITDA is expected to be between $136 million and $138 million compared with the $147 million guidance provided on 3 April 2017.

The current quarter is expected to include two of the lowest production months for Infigen’s current Australian operating assets since they came on line as a portfolio in FY121. It will also be Infigen’s lowest fourth quarter and lowest second half year historical average production outcomes for its operating Australian wind portfolio since FY12. …

Infigen had expected its east coast wind farms to benefit from weather patterns that typically result in high wind speeds and solid production in the second half of June. These customary seasonal weather patterns have passed to the south of mainland Australia resulting in below average wind conditions at Infigen’s wind farms in South Australia and New South Wales. Production at the Alinta wind farm in Western Australia for the fourth quarter was significantly higher than the prior corresponding period.

Infigen will release its Quarterly Production and Revenue on Monday, 31 July 2017 and its FY17 full year financial results on Thursday, 24 August 2017.

For STT followers, Infigen’s excuses about wind power that should have been produced (had the Wind Gods been kinder) is a case of déjà vu, all over again.

Infigen backed up a $55 million loss in 2011/12 with an $80 million loss in 2012/13 and kept losing money: booking a $9 million loss in 2013/14; and racked up a whopping $304 million loss for 2014/15.

Attempting to ‘explain’ its losses in 2013/14, Infigen pointed to …. wait for it … the wind – as the reason for a massive drop in revenues (faithfully recounted by wind worshippers, ruin-economy).

The same ‘explanation’ was deployed, as Infigen tried to brush off its monumental $304 million loss for 2014/15 – once again levelling the blame on “particularly poor wind conditions” (the same mantra also appearing on the pages of that august journal, ruin-economy).

So what was it that caused the latest disappointment? Assuming wind power output to be a reasonable proxy for wind speed, could it have been the wind?

Here’s the output of every wind turbine connected to Australia’s Eastern Grid, thanks to the boys over at Aneroid Energy, for the final quarter of FY2016/17 – the one that dashed Infigen’s hopes of raking in even more Renewable Energy Certificates.

Bear in mind that the combined (notional) capacity of the turbines hooked up to the Eastern Grid is 4,395MW.

So, when wind power output dips below 200MW (an event that occurs 32 times in the last 3 months), that ‘effort’ represents a piddling 4.5% of total capacity; dropping below 100MW amounts to a woeful 2.2% (as it did on 19 occasions); and, on at least 4 occasions in the last three months, the combined output of every wind turbine spread across NSW, Victoria, Tasmania and South Australia represented a big fat doughnut.

Anyone for shares in Infigen? No?

About stopthesethings

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

Comments

  1. estherfonc says:

    Hi,

    here’s the link to the Petition on the Federal Government website for Australia to Withdraw from the Paris Climate Agreement.

    Please Sign it by clicking on the link below and please also share it with everyone you know. There are only 1401 signatures to date, so it needs to move FAST !

    Petition closes in 2 weeks on 19/7/17.

    http://www.aph.gov.au/Parliamentary_Business/Petitions/House_of_Representatives_Petitions/Petitions_General/Sign_an_e-petition?id=EN0264

    Thankyou.

    Esther

  2. Can everybody please turn the conversation to sturdy and reliable, cheap and secure, emissions and subsidy free, nuclear power?
    It’s the ultimate answer and it’s time has come.

    • STT has published dozens of articles in support of nuclear power. In Australia it is like banging your head against a brick wall. No political party has the wit or temerity to start so much as a discussion, let alone a reactor.

  3. Jackie Rovensky says:

    Just a thought. Could the lack of wind be the beginning of the end, will we be hearing next that the world is running out of wind because it has been recklessly used to a point we will need to consider finding an alternative energy source?

  4. Jackie Rovensky says:

    It seems AEMO has mandated a capacity constraint on production for SA of 1200MW to prevent problems for the Grid. With them over the 2nd and 3rd of this month July auctioning the constraint mandated. This is even though SA has an installed capacity of 1697MW’s.
    So they forced 3 projects to cut back on their production causing a sudden dive in production with an alarmingly immediate rise again with all the physical and mental health shocks such occurrences cause the those suffering nearby.
    With what it seems the other sites then having to level off their production during the high winds being experienced, this obviously included those belonging to Infigen – poor ol’ them – profits being hit again.
    Interestingly the 3 sites they did this to did not include Hornsdale 1 and 2, which just happen to have a contract with the ACT Government.
    They noted this action caused energy prices to rise. Just what we needed.
    Another interesting thing with this is that AEMO admits that battery’s will/would not help the situation.
    So it seems we can be assured they are doing a grand job of juggling with our energy supplies well in to the future all the while hoping they don’t drop ‘the ball’.
    That is until SA builds not 1, 2 but 4 gas fired plants they believe are needed to provide base-load backup in SA.
    But they don’t say how much it will cost to be reliant on gas under the current RET, REC and mishmash of a scheme they are currently working under.
    My bet it will cost us even more unless regulations, processes and minds are changed dramatically.

  5. Terry Conn says:

    Yet ‘they’ still believe! Including Finkel and the new chief of AEMO (US citizen, Renewables princess) Aubrey Zibelman who single handedly pushed onto New York citizens as a result of her ‘renewables’ fetish a price for electricity for New Yorkers 55% above the rest of the US for the years 2013-16. The record states she and Finkel are ‘great mates’ – shame about that wind ‘ay’.

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  1. […] Shock, Horror! Wind Power Output Depends on Wind: Infigen Blames ‘Lack of Wind’ for Losses […]

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