Why Subsidised Wind & Solar Are Sending South Africa’s Power Prices Into Orbit

Rocketing power prices and grid instability are two inescapable consequences of subsidised wind and solar. While sunshine and breezes might be free, attempting to run your power system using nature’s gifts, brings with it a raft of other costs which RE zealots tend to gloss over.

The electricity generation and distribution system – which wind and solar power are meant to completely replace – is one that was designed to work all on its lonesome; no mythical mega-batteries; no load shedding when the wind drops or the sun sets; no prayers to the wind gods; no fuss; and no failures that can’t be fixed in an engineering jiffy.

The same can’t be said of the unreliables, which always and everywhere depend upon the system as it was – one built on ever-reliable coal, gas, nuclear and hydro (where its available). But STT is referring to a system that works, always has and always will. On the other hand, those seeking to profit from the wind and solar scam claim keep talking about a new ‘system’; when, in reality, all they’ve got to offer is chaos. And chaos costs.

Rob Jeffrey takes a look at how South Africa’s obsession with subsidised wind and solar is laying that cost squarely at the feet of South African power consumers and taxpayers.

Weaknesses of solar and wind, Myths and Questions that require an answer
Watts Up With That?
Rob Jeffrey
3 July 2020

It is claimed that wind and solar are the cheapest sources of electricity and these sources should dominate future electricity supply. This paper focuses on known additional costs and subsidies which are not taken into account in the costs of wind and solar put forward by their advocates.

Advocates of wind and solar claim a cost of 0.62 rand (about 3.6 US cents) /kWh. This is, however, the price at the gate of the supplier. It does not include all the costs of supply necessary to convert this electricity from non-dispatchable electricity supply at the gate to dispatchable electricity supply at the point of supply to the customer. These are in effect direct subsidies to solar and wind suppliers, whereas they should be added as a cost to the renewable energy suppliers.

Renewables, such as hydro, biomass and thermal have different qualities and are not considered in this paper. In any event, Hydro and thermal are not options as they are not available in quantity domestically in South Africa. Gas is another fossil fuel, which at this stage, is not found in significant economic amounts in South Africa. The critical issues are that solar and wind have very low load factors and are variable, intermittent and unpredictable. In other words, they are not dispatchable. In the case of wind, the load factor is an average of 35% or less and solar 26% or less. Their supply is weather dependent, and therefore backup must be available 100% of the time 24/7.

Coal has a load factor on average of approximately 80% and nuclear an average of 90%. Their load factors are affected by predictable maintenance requirements and generally to a lesser extent by unpredictable repair requirements. A reserve margin (or backup) of 20% has traditionally been considered sufficient to cover for both these events. Methodologies and more realistic estimates of the real costs of solar and wind, including back up, can be calculated using the load factor alone. This gives the cost of wind at R1.77/kWh and the cost of solar at R2.38/kWh. These costs must be compared to a coal cost of R1.31/kWh and nuclear at R1.44/kWh. More complex methodologies taking risk and uncertainty of outages into account and using variance or standard deviation as the estimate of risk put the costs of wind at R2.52/kWh, solar at R3.83, coal R1.10/kWh and nuclear R1.33/kWh.

Added to the claimed costs of 62cents/kWh for solar and wind should be the following items:

Additional grid costs: Transmission lines will have to be built, yet used for less than 35% of the time. This low usage suggests that at the minimum grid costs of wind must be at least approximately 3x the grid costs of dispatchable power units if not more. The capital cost per kWh and the running cost per kWh must be approximately 3x that of reliable dispatchable power supply.

Efficiency loss of backup and alternative electricity supply: Due to low utilisation, backup facilities would typically be running approximately 40% below their optimal efficiency. Their efficiency loss is in effect a direct subsidy of the solar and wind.

Excess supply of electricity: Because electricity supply from solar and wind is variable, there will be periods where a surplus of electricity will be generated. In terms of the power purchase agreements (PPA), Eskom must pay the renewable producers for the excess power being produced. All these are additional costs that at present are passed on to the utility (Eskom) or other electricity producers or consumers.

Insufficient electricity supply as a result of technology being unable to close the gap between supply and demand immediately: Because electricity supply from solar and wind is variable, unreliable, unpredictable and intermittent there will be periods where a shortage of electricity supply will exist. The economy will suffer as a result of the Cost Of Unserved Energy (COUE).

High Economic Cost Of Unserved Energy: The IRP estimates the COUE at R87.85/kWh. This is as per the National Energy Regulator of South Africa (NERSA) study. A senior energy expert estimated that load shedding cost South Africa more than R1-trillion over the previous decade or about 1.5% GDP growth per annum.

Insufficient electricity supply as a result of extended periods of weather-related conditions:

The Higher the penetration of low load, high variable intermittent technologies, the higher the Cost Of Unserved Energy: Models invariably are only as good as the assumptions used. Most models assume the certainty of output and do not take into account risk and uncertainty. The fact is that the real world is subject to risk and uncertainty.

Reduction in sales by Eskom as a result of artificially low prices offered by renewable suppliers: Installation of renewable power direct at customers’ or potential customers’ premises of Eskom reflect finally as a lost demand or sales at Eskom

Cost of backup for installation directly supplied by solar and wind: If there is a reduction in such customers’ electricity supply, Eskom is expected to provide immediate backup supply. Eskom must have the necessary substantial backup readily available. This is extremely costly.

Cost of purchasing electricity from customers who have their own renewable installations: The trend is that customers can sell their surplus electricity supply to Eskom. Invariably, there is a commitment to purchase, which in return reduces the perceived backup required. However, this is not true as backup is still necessary for regular backup requirements but also the full installation of the renewable supply at the customer’s premises. Either way, customers are paying for the additional costs involved.

Destruction of industries and political, social-economic impacts: The move to solar and wind as set out in the IRP would result in South Africa’s coal industry shrinking by 46%. Coal mining accounted for 26.7% of the total value of mining production in 2015, making it the most valuable in terms of sales of the 14 primary mining commodities. Several previously prosperous communities in Gauteng and South Africa would become ghost towns with rising unemployment and increasing poverty levels. Social benefits would increase dramatically.

Lack of permanent job creation: Renewable energy sources do not give rise to permanent jobs being created. Most jobs created by solar and wind relate only to the construction phase. Most jobs, mainly skilled jobs, are generated overseas in countries supplying equipment. These countries would primarily be Germany in the case of wind-related equipment and China in the case of solar equipment.

Export of jobs and Loss of energy sovereignty: The move towards solar and wind will mean that South Africa loses it energy sovereignty, primarily to Germany for imports of technology and equipment related to wind and China for equipment related to solar. South Africa will effectively export its skilled jobs overseas and suffer a loss of skills. Instead of South Africa being an energy exporter, it will become an energy importer as a result of losing coal exports and becoming dependent on gas imports. Any current account deficit caused should be factored into the cost of solar and wind.

Creation of a current account deficit and not utilising valuable natural assets: Coal is one of South Africa’s most significant commodity products and the country’s largest export. The importation of gas and loss of coal exports will result in an increasing and substantial current account deficit. Coal mining accounted for approximately 26% of the total value of mining production in 2015, making it the most valuable in terms of sales. Potential uranium reserves are also substantial. The drive for wind would deprive South African citizens of these benefits.

Levelised Cost of Electricity (LCOE) is not a sound methodology to compare highly variable and interruptible electricity technologies with electricity supplied by reliable dispatchable electricity-generating technologies: A report entitled ‘Critical Review of The Levelised Cost of Energy (LCOE) Metric’, by M.D. Sklar-Chik et al., South African Journal of Industrial Engineering December 2016 concludes that “LCOE neglects certain key terms such as inflation, integration costs, and system costs.” The work of Paul Joskow et al. of the Massachusetts Institute of Technology published in February 2011 wrote a paper entitled Comparing The Costs of Intermittent and Dispatchable Electricity Generating Technologies. They note “Many international reports prove that such electricity supply is costly due to its variability, interruptibility, inefficiency and its requirement of 100% backup”.

The test of global reality: There is nothing like the test of global reality. In 2016, the prices paid by industry in Germany were approximately 52% higher than France (nuclear) and 86% higher than Poland (coal). The average estimates discussed above result in costs that are close to this global reality.

The above costs are absorbed by Eskom or other suppliers or directly by customers. They can be measured in R billions /annum and should be added to the costs of solar and wind.

Emerging economies need to focus on those technologies which are efficient and effective. In South Africa, mining, manufacturing and industry need security of supply of electricity at competitive prices. The only two electricity generation sources of Energy available in South Africa that can achieve these objectives in this country are High-Efficiency Low-Emissions (HELE) coal, otherwise called ‘clean’ coal and nuclear.

The country must focus on raising its economic growth rate by ensuring it has a sustainable, secure supply of electricity at the lowest economic and financial cost. Any decision must be accompanied by the necessary supporting condition fostering domestic and foreign investment into its economy. The arguments above show clearly that renewables in the form of solar and wind in particular, almost certainly have substantial additional costs which are not fully accounted for in the current costs being utilised by their advocates. This also means that the so-called least cost optimum mix recommended by them is wrong. As a result, this methodology as currently defined and used is severely flawed. The technique and methodology recommended uses statistical calculations based on variable estimates utilising the variance and mean of each technology to calculate the COUE. Current models do not utilise any such statistical and analytical technique.

The above arguments and estimates lend force to the evidence that solar and wind, in particular, are unaffordable in the current economic situation in the country. The estimates strongly suggest that the least cost methodology is severely flawed and that going forward the renewable technologies of solar and wind should play a marginal role in any future technology mix for the country.

The final nail in the coffin for South Africa is that increased penetration of wind will lead to a rapidly rising import bill for gas imports and the demise of its coal mining industry, if not the entire mining industry. These are catastrophes which could ensure that the future of South Africa will move towards rising unemployment, increasing poverty and increasing social and political instability. South Africa needs to focus its energy plans on HELE or ‘clean’ coal, nuclear, domestic solar and limited gas.
Watts Up With That?

About stopthesethings

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

Comments

  1. Peter Pronczak says:

    A gaping hole in the renewables argument is the definition of ‘natural habitat’. Environment is not ecologically static and historically, is in a constant state of flux; the only constant is change. Arguments for man-made climate change are invalid. The only known factual reality is water displacement due to constant weathering.

    Were the above to be understood by scientists, rather than political money controlling bludgers who care nothing for life, then all effort would be put toward building land mass. As in large islands and returning the displacement of everything that is deposited in the oceans causing sea level rise. Is water displacement still considered only a theory? Apparently so!

    Greening deserts that is accomplishable, given that humanity can affect the environment on a large scale, would lower the ocean level as the end of the last ice age approaches; regardless of ‘armchair experts’ concentation on glacial maxima.

    Stability of climatic conditions, as topography affects weather in the opposite direction of planetary rotation. This intends a smooth surface of static weather variability, (excluding minimum effect of temperature variation) is the greatest experiment of all time.

  2. Reblogged this on ajmarciniak and commented:
    Rocketing power prices and grid instability are two inescapable consequences of subsidised wind and solar. While sunshine and breezes might be free, attempting to run your power system using nature’s gifts, brings with it a raft of other costs which RE zealots tend to gloss over.

    The electricity generation and distribution system – which wind and solar power are meant to completely replace – is one that was designed to work all on its lonesome; no mythical mega-batteries; no load shedding when the wind drops or the sun sets; no prayers to the wind gods; no fuss; and no failures that can’t be fixed in an engineering jiffy.

    The same can’t be said of the unreliables, which always and everywhere depend upon the system as it was – one built on ever-reliable coal, gas, nuclear and hydro (where its available). But STT is referring to a system that works, always has and always will. On the other hand, those seeking to profit from the wind and solar scam claim keep talking about a new ‘system’; when, in reality, all they’ve got to offer is chaos. And chaos costs.

    Rob Jeffrey takes a look at how South Africa’s obsession with subsidised wind and solar is laying that cost squarely at the feet of South African power consumers and taxpayers.

  3. The author of this article seems to be unaware of the meaning of capacity factor and load factor .The statement : “wind, the load factor is an average of 35% or less and solar 26% or less”, demonstrates that.
    The load is where the electricity is used while the capacity factor, which I think he means, is the amount of electricity actually generated divided by the amount of electricity that would have been generated had that generator output at 100% over a long period such as one or more years. That is the capacity factor!
    The load varies depending on the users whims & needs and the supplier must be able to adjust generation to equal that, adjusting the various inputs to achieve it.
    I really can’t imagine what a load factor might be?
    Capacity factor must be calculated over a long period, a year or multiple years, to include the various seasons and maintenance etc.
    The capacity factor for coal-fired electricity in Australia is severely compromised by the renewables that have priority on the grid. In this case the poor capacity factor of coal-fired generators is a result of that favoritism.
    John

  4. Eskom is the piggy bank for corrupt politicians and their helpers in the private sector. So-called renewable energy is just another opportunity for kleptocrats.

  5. Peter Pronczak says:

    As much as RE proponents and government want to keep information at a local level, they ignore they are state-federal funded and exclude additional costs such as overdue road upgrades.

    The following QLD wind farm ‘proposal’ was only announced in December 2019 after concerns about sufficient power being available for the NIOA-Rheinmetall munitions factory.

    The “report'” mentioned includes 3 years of secret government-private company ‘negotiations’.

    The bird study? A recent ScoMo Tassie report into 7 new projects said there would be no birds affected.
    Migratory shorebirds? It’s an inland project already stated by Forest wind “to be on ridges higher than birds fly.”

    Like the COVID-19 sports led financial recovery, solar panels are advertised by a cricketer, but none can tuck a turbine under their arm.

    The list of 16 additional costs STT identifies sound to be common.

    From the fully digital Fraser Coast Chronicle since the end of June – there are three state forests involved and contain an asset income pine plantation:
    (sic)
    By Stuart Fast
    25th Jul 2020 3:30 AM
    Subscriber only

    QUEENSLAND’S peak timber industry body has flagged forest fire fears should the planned Forest Wind Farm Project go ahead.

    In a report to Queensland Parliament, Timber Queensland concerns about the risk associated with construction and operation of turbines in the Tuan Forest are noted.

    “There are concerns around those activities on the plantation in that you may increase fire risk with machinery and all sorts of things,” the report reads

    “Having better fire management capability from the proponent or an arrangement with

    HQ Plantations for us is critical to be able to detect those fires early.”

    A spokeswoman for Forest Wind told the Chronicle the company “recognises the importance of fire risk management and is committed to deliver its responsibilities under the Queensland Fire and Emergency Service Act”.

    The spokeswoman said the latest fire mitigation technology had been incorporated into the project such as transformer isolation, arching avoidance design and fire proof materials.

    “A detailed Fire Hazard Impact Assessment for Forest Wind has been undertaken, identifying potential hazards within the wind farm and the forest operation,” she said.

    A spokeswoman for HQ Plantations said the Plantations’ fire management was primarily based on prevention, early wildfire detection and weighted suppression.

    “We aim to work collaboratively with all stakeholders in fire management and will do so with Forest Wind Holdings as their project unfolds,” the HQ Plantation’s Spokeswoman said.

    By Stuart Fast
    15th Jul 2020 5:00 AM
    Subscriber only

    THE government department and company behind a proposed mega wind farm near Maryborough have defended their consultation efforts.

    A spokesman for the Department of State Development addressed claims that residents had not been consulted about the green energy project plans.

    The concerns came to light in a parliamentary committee report.

    “Since the public announcement of the project, Forest Wind Holdings has widely consulted with the community, timber industry, environment groups, regional councils, local businesses, and traditional owners,” the spokesman said.

    “The wind farm was assessed against State code 23: Wind Farm Development.

    “The assessment of the proposal concluded that it complies with the assessment benchmarks of the wind farm code subject to a detailed suite of conditions.”

    Forest Wind, the company behind the project, responded to resident concerns regarding lack of communication and environmental concerns.

    A spokeswoman for Forest Wind said “the Forest Wind team has undertaken a wide range of community and wider stakeholder engagement activities.”

    She said this included sending introductory letters and brochures to 992 residents and property owners within 5km of the wind farm location.

    Community information sessions and online information sessions were held, to work around the COVID-19 crisis.

    Direct communication with residents through an inquiry line was also undertaken, she said.

    The spokeswoman said Forest Wind had been conducting an ecological assessment over the past three years and this process continues.

    “We have currently completed 225 bird utilisation surveys in 25 bird survey locations of which seven are reference sites,” she said.

    “The studies have been conducted in accordance with state and federal regulatory requirements, using approved best practice methods.”

    She said no migratory shorebirds were observed within or flying over the project area on any of the bird surveys.

    The spokeswoman said Forest Wind took impacts to birds seriously and had developed a preliminary Bird and Bat Management Plan, including temporarily shutting down turbines, potentially using acoustic devices to deter birds and slowing rotor speed.

    Both the Department of State Development and Forest Wind promoted the roughly 400 jobs the project would create for the region.

  6. Reblogged this on uwerolandgross.

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