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Tuesday, December 27, 2011

The strange economics of wind farms

Today's Telegraph reveals a previously unheralded subsidy for wind farms that not many people knew about. Opponents of turbines often complain that their output is unpredictable and that they cannot be relied on to generate electricity when it is most needed.

However, it transpires that the opposite is also true. The paper says that 17 operators were paid nearly £7 million for shutting down their farms on almost 40 ­occasions between January and mid-September. They add that continuing to make payments at that rate would lead to householders shelling out £9.9 million in 2011 for operators to disconnect their turbines from the National Grid.

The explanation is that payments are made when too much electricity floods the grid, with the network unable to absorb any excess power generated. The money is ultimately added on to household bills and paid for by consumers.

The fact that some renewable energy companies were paid more to switch off their turbines than they would have received from ordinary operations is bound to feed the debate on how we are tackling climate change, especially in the light of cuts in feed in tariffs for community based generation.
Why does too much electricity from wind farms 'flood' the national grid ?

We have Stwlan and Denorwig pump storage. The real issue is ownership and control. There appears to be two main west to east transmission lines, one in the north and one in the south, with another west to east transmission line planned in mid Wales. Surely, a solution for 'too much electricity' being generated from wind farms at low demand, is to connect the Cefn Croes wind farm and it's periphery wind farms up to the Trawsfynydd interconnector (already exists) to allow the existing pump storage operations originally designed for 'always on' nuclear load balancing. Any excess power generated for Welsh wind farms could be stored for times of peak demand.

Just a thought.
There are ways of converting electrical energy into a form that can be stored for later transformation back into electricity or used for other purposes.

Hydrogen from water being one. Pumping water up hill to an elevated storage reservoir being another.

Compressing gas still another.

Storing energy in rotating discs another.

But such energy transformation/storage systems cost money but for some reason we believed the global warming people that by magic wind farms will prove to be efficient from the get go when in fact they are often next to useless as the technology to transform and store electricity, while available, was not deployed.

Hydrogen can be used to power vehicles, generate heating for community based heating systems, or converted back into electricity. But we need a 'hydrogen grid'. cw
It always flabergasted when I see such opposition to windfarms; there was a piece in the Glamorgan Gazette about the windfarms planned for the top of the Llynfi Valley and the Afan Valley; but very little is written in opposition to Fracking at the St John's Colliery Site in Maesteg.
Anon (11:20PM) ... wind farms are costing ordinary households a packet. Fracking is a commercial venture which does not end up as an extra charge on household utility bills. Wind farms are VERY inefficient, often not producing electricity when needed or too much when not needed. Methane gas from fracking can be used to generate power on demand rather than when the wind blows. Marine turbines are a better bet as we know the tide schedule.
Fracking has huge environmental costs associated with it; granted there won't be much of a "cost" on people's electrical and gas bills, but how much is it going to cost to clear up the mess after they have finished?? In addition there's going to be a cost associated with lost opportunities in the Llynfi Valley due to the fact that no one will be willing to set up a factory in an area that has fracking and earthquakes.
This is turning into 'a battle of the anons'; don't worry Anon (1:17 PM), the UK won't have to worry about powering British industry because much of it will be located in China, the place where coal is still king and creating lots of pollution to manufacture goods which are then shipped back to the UK!
Bottom line: there are ALWAYS environmental issues with any energy technology including wind turbines which ruin rural areas - just ask Glyn Davies, MP about that.

Fracking is no more an issue than coal mining ever was and doesn't result in huge slag piles.

As to earthquakes - this is a red herring. They are so small as to be of zip consequence and won't match the subsidence caused by close-to-the-surface NCB underground mine shafts caving in.

I rather a few 2.0 to 3.0 earthquakes than living in a society dominated by China.

You may not have noticed, but the UK is not exporting enough goods leading to a HUGE trade deficit with countries like China - we thought this was OK, but now we see massive unemployment particularly among citizens who would normally find employment in factories.

While you take the high road, they are living the low road and they are not happy about that situation.
PS absent a 'hydrogen grid' or its functional equivalent we should ditch the highly subsidized and VERY inefficient wind turbine technology and concentrate on energy generation that is affordable and makes more sense to the British public who I'm sure now realize the folly of wind-farms and hate the way they are paying for it in their utility bills in turn causing widespread fuel poverty.

The UK plc is going down the tubes, energy costs are so high now that manufacturing investment (and jobs) are going overseas. Young people who would normally be occupied working are now without jobs.

India and even Russia are going to overtake the UK economy - Brazil did a few days ago.

While some abstract thinkers want to take the high road our less fortunate are living the low road and they don't like it.
What amazes me about the global warming/wind-turbine community is their often pedantic view of life.

There's always a trade-off, a concept that seems to pass then by.

There's a lack of objectivity and what is really amazing is their re-mouthing of global warming/climate change double-speak and yet most don't understand basic science and still more don't understand science concepts Le Chatelier's principle.

They don't seem to recognize that elevated energy costs simply shifts production and manufacturing to countries that, e.g., burn millions of tons of coal to generate electricity to run the factories from which goods are imported back to the UK via super-large container ships which burn LOTS of dirty fuel oil.
Anon 1206 again. Peter did not answer my question so I did a bit of research on the topic. The converting excess wind generated electricity to Hydrogen is extremely inefficient but it is done on Shetland and on the Isle of Lewis in Scotland. Council vehicles there have been converted to hydrogen, ironically, from technology developed by the University of Glamorgan. Obviously, the cost/benefit on exporting/importing electricity from Islands plays a role in making this viable.

As far as the more efficient pump storage suggestion : This is already being done in Valencia, Spain, by the wind farm company Iberdrola. They have built one 635 MW pump storage unit La Muela and another one La Muela2, planned which is another 852 MW, of pump storage. These are directly integrated into wind farms.

Although Wales is blessed (or otherwise) with wind farms and pre-existing pump storage facilities, such schemes as that Spain is unlikely to happen, as although wind farms are decided by the Welsh Government, grouping them as larger generating units and using pump storage is not a devolved responsibility. This was confirmed, last month, by they the ConDem government in Westminster. Looks like the 'switch them off but keep paying the subsidy' policy will continue until energy policy in Wales is completely devolved. Any thoughts Peter ?
Anon (8:52PM)> interestingly Spain pumped a HUGE amount of money into renewable energy supplies in the strange non-market belief that it would generate jobs - the opposite happened. Spain's unemployment didn't just break through 10%; nope: 20%!

When governments re-route spending power from the market place to government pet projects inevitably leads to overall job losses. Reminds me of the time the Soviet era leader of a USSR dominated country built a steel plant at a location near his old town rather than at a location based on objective merit.

The amount of UK spending being re-routed to pay for stupid wind-farms will lead to job losses overall.
PS former First Minister Rhodri Morgan shared the incorrect belief that throwing money into 'green jobs' will create jobs overall. nope no negative -ve no siree not on your life ... then again perhaps we should excuse the old socialist - he actually said that Wales will improve on its GVA rating during his time as FM - Nope no negative -ve no siree not on your life ... then again ...
Anon ((8:52PM)> transforming energy into another form of energy leads to energy losses - a reflection of the laws of Thermodynamics - so welcome to the world of science! At least you went to the bother of looking up stuff.

Transforming, e.g., coal (chemical energy) into electricity (electrical energy) is probably about 30% efficient, but if we use the heat by-product to heat communities if we had a heat energy grid this would mean less wasted energy loss. If I recall, the Netherlands has such a system (combined heat/power generation). So it can be done but costs $$$ in infra-structure costs and in the middle of the current recession is probably not practical. But in 'good times' we should go for it, imho.

Wind-turbines often don't generate electricity when we need it so a LOT of standby plant has to be kept 'warmed up' ready to make up for the shortfalls. It would be better to use the electrical energy and convert it into e.g., mechanical energy which can be used to later generate electricity, but yes, there will be energy losses - as per 'Thermodynamics Directive'.
cw, PhD
I have also looked up the economic effects (Eurostat regions) and found that the Valencia region of Spain has actually overtaken Wales in GDP per inhabitant, between 2000 and 2007. There is therefore no suggestion that investment in renewables causes unemployment, in fact the reverse. The statistic shows that the Valencia region has prospered as a result of jobs and economic activity, most notable in energy exports to the richer neighbouring region of Catalonia. Investment in revewables actually appears to act as a dampener of unemployment that is caused by other events. Domestic solar investment is much higher in Spain, and this is to do with climate. It is true that fossil fuel standby is required to augment wind generation for times when demand is high or wind is low. But that's just the way we've designed the distribution. Connecting in pump storage to a wind farm lattice is an obvious way to overcome this. Wales has both but is not able, currently, to use it efficiently.
Anon. O levels.
Anon (12:17): your analysis is wrong because at least in part because it is too narrow in scope.

The issue is overall job losses.

Here is a quote from the Spanish study/report: on average every renewable job in Spain "destroyed 2.2 jobs in the broader Spanish economy".

It is the overall impact; this money spent on renewable energy has to come from somewhere - in the case of UK wind farms, the money is coming out of Joe publics purse - from additional charges on UK households added to their utility bills.

So householders have less money to spend, so buy less things, which means fewer jobs overall. You can't seriously say that Spain's employment levels improved overall - how can you given that Spain's unemployment is 20% or so.

Yes, twenty percent or so.

If the former Spanish government's massive spending on renewable energy projects created jobs overall then how come that government got wiped out in the recent Spanish election and resulted in 20% unemployment in Spain?
The idea that unemployment in Spain is due to investment in renewables is pure fantasy. The reason why unemployment is high in Spain is due to unsustainable economic growth in the domestic construction sector being blown apart by the global banking crisis as the subsequent credit crunch. There are two places in Europe where renewables investment correlate with employment. The Baltic triangle and north east Scotland. The Baltic boom was a bringing together of Finnish fabrication, Danish economic policy, Swedish ingenuity and German engineering. This is why most wind turbines are built there. In North East Scotland there has been government support for diversification of high tech companies from the offshore oil industry, which is flatlining, into offshore wind farms. As a result of these offspring ventures, there has been a boom in this part of Scotland, and this is where there has been both private and public investment in renewables. The unemployment rate in Aberdeen is 1%. A similar 'greenprint' policy is needed in Wales.
Anon. Key Stage3.
Anon> again there is that awkward analysis/conclusion from the Spanish study/report: on average every renewable job in Spain "destroyed 2.2 jobs in the broader Spanish economy".

Will you kindly address that finding.

You keep on harping on about specific areas within a country.

It's the overall impact, is there a net increase in jobs as a whole (not just in one region that benefits from the subsidies). Answer: No.
Addressing the finding : The King Juan Carlos University report asserts that the results derived from the ratios above represent job loss as a result of public investment in renewable energy. This is based on an ASSUMPTION that every Euro spent subsidizing renewables represents a reduction of one Euro in private-sector investment AND an ASSUMPTION that every Euro spent in the private sector will generate jobs equally.

This is nonsense.
You'd have to spend an awful lot of money on say, a nuclear power station, to say that a job is 'purchased'.

It is for this reason that it is not accepted anywhere else in the academic world and represents a significant divergence from traditional methodologies used to estimate employment impacts from renewable energy. In fact, the methodology does not reflect an employment impact analysis. Accordingly, the primary conclusion made by the authors – policy support of renewable energy results in net jobs losses – is not supported by their work.


The reason why it is important to address the issues within a country, rather than sovereign boundaries is because that is how GVA, unemployment, and electricity consumer price indexing is calculated and consequently reported by EuroStat. Also, in many cases such as Scotland, the government policy regarding capital investment subsidy is decided at that level.

100m Swimming badge, UniGlam.
and Spain did so well out of its investment in renewable energy ... with 20% unemployment.
British families faced with expensive utility bills are cutting back on spending making it hard for the private sector to invest and generate jobs. British utility bills are inflated due to charges to subsidies wind-farms/renewable energy which is also driving up the cost of energy to British industry. A similar thing happens in the USA, when ‘gas prices’ (meaning petrol prices) go up at the pumps Americans cut back on spending out of proportion to the gas price increase, and industry shifts production (and jobs) overseas. Doesn’t need an academic report to state the obvious that higher utility bills have a depressive impact on consumer spending.
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