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Tuesday, 8 May 2012

“Sustainable energy” just isn’t …. well, sustainable

April 25th: At the Vaasa event with Romana Jordan MEP (Slovenia). Very sound on nuclear
I’ve just returned from a flying visit to Vaasa, Finland, with the European Energy Forum.  The delegation was led by Slovenian MEP Romana Jordan.  Vaasa boasts an “energy cluster” of cutting-edge companies in the energy field, and we spent a very solid day with Wärtsilä, a global Finnish company developing and making very large internal combustion engines.  These have been widely used in shipbuilding, where the company has a substantial market share, and has production and assembly operations around the world, including key ship-building nations like China and Korea.
But increasingly, engines of this type are also used for power generation, especially as back-up for wind.  I’d always assumed that conventional gas-fired generation was the natural back-up for wind, but it seems that these machines are also ideal for the purpose.  They can run on heavy or light fuel oil, or natural gas (think shale gas), and on bio-fuels and some oil wastes.  They ramp up rapidly as the wind drops, and can switch instantly — literally instantly, we saw it done — from gas to diesel.
Wärtsilä has made a rational commercial decision to market these machines as back-up for wind, given the commitment of European governments to renewables.  But the message I took away was that wind, as a significant contributor to power generation, absolutely requires back-up.  Otherwise, when the wind drops, the lights go out.  We were shown a series of graphs clearly demonstrating the need for additional conventional back-up capacity in the mix, given the typical pattern of wind speeds.  (We also saw a graph that destroyed the myth of the Greens, that intermittency can be solved with a European super-grid because “over such a big area, the wind is always blowing somewhere”.  No it isn’t.  We saw a graph of aggregate wind output over a month in Spain plus Denmark plus Germany, which showed massive variation day-by-day and hour-by-hour, absolutely requiring back-up).
We are hearing in the media that the cost of wind-generated electricity is coming down, and may reach parity with coal and nuclear (although not gas).  David Cameron, speaking on April 26th, reaffirmed his faith in renewables and called for prices to come down.  “I really believe that renewables can be among our cheapest energy sources in years, not decades”, he said. I mean no disrespect to our Prime Minister, but the level of ignorance and complacency shown by his remarks is truly frightening.
Let’s get back to reality.  If you want wind to deliver, say, a megawatt, you need four megawatts of installed capacity (because the load factor is likely to be around 25%).  But you also need to build a megawatt of conventional back-up, either Wärtsilä’s internal combustion engines, or conventional gas.  You’ve paid the capital cost twice, for the same generating capacity.
But it gets worse.  Whichever back-up you use, it will run much less efficiently when it’s substituting variable wind, than if it ran continuously.  So its output will cost more, and create higher emissionsA couple of recent reports indicated that the emissions saving of wind plus back-up might be trivial or zero.  We’re spending double the money, yet saving little or no CO2.  A Wärtsilä presenter put it well, and I wrote down his phrase: because the back-up would be run occasionally, not continuously, its output in relation to capital investment was “not investment feasible”.  In other words, you’ve got to pay way over the odds on the output of the back-up, because you’re not just buying electricity — you’re buying insurance against the wind dropping.  You’re paying a huge premium for continuity, to prevent black-outs.
Let me offer you an heretical idea: why not just build the back-up, and forget the wind?
Neither government planners nor those who calculate the relative costs of wind and other generating technologies seem to have got a grip on the back-up issue.  Estimates of the cost of wind generation make no allowance for double capital requirements, nor for the enhanced costs of intermittent running.  And our government, while planning that 30% of our generation by 2020 should come from wind, to meet the EU’s risible emissions targets, seems unaware of the back-up issue.
The best answer you get is that “We have lots of gas, so we can use that for balancing the grid”.  But with nuclear power stations phased out with age, and coal-fired power stations being banned by EU regulations, we’ll need all the gas we have just for base-load.  We’ll need 30% extra capacity for back-up, otherwise the lights will go out, and we’re not building it.  This is a disaster in the making.
The huge costs of capital, and excess production costs from conventional back-up run intermittently, will eventually be passed on to business and domestic consumers.  Meantime China and India build cheap coal-fired power stations (no EU regulations there), and America is enjoying a shale-gas bonanza.  Energy intensive industries will simply move out of Britain, and out of the EU, to lower-cost areas.  Renewables will ensure that the UK economy is no longer economically sustainable.  Sustainable energy is not sustainable in economic terms.
Coalition energy policy is a double-whammy.  It will destroy the competitiveness of the British economy, while ensuring that black-outs become commonplace by the end of the decade.  That’s what the Greens call “Sustainability”.

Saturday, 17 March 2012

The winds of change

3 March 2012
  The government has finally seen through the wind-farm scam – but why did it take them so long?
To the nearest whole number, the percentage of the world’s energy that comes from wind turbines today is: zero. Despite the regressive subsidy (pushing pensioners into fuel poverty while improving the wine cellars of grand estates), despite tearing rural communities apart, killing jobs, despoiling views, erecting pylons, felling forests, killing bats and eagles, causing industrial accidents, clogging motorways, polluting lakes in Inner Mongolia with the toxic and radioactive tailings from refining neodymium, a ton of which is in the average turbine — despite all this, the total energy generated each day by wind has yet to reach half a per cent worldwide.

If wind power was going to work, it would have done so by now. The people of Britain see this quite clearly, though politicians are often wilfully deaf. The good news though is that if you look closely, you can see David Cameron’s government coming to its senses about the whole fiasco. The biggest investors in offshore wind — Mitsubishi, Gamesa and Siemens — are starting to worry that the government’s heart is not in wind energy any more. Vestas, which has plans for a factory in Kent, wants reassurance from the Prime Minister that there is the political will to put up turbines before it builds its factory.
This forces a decision from Cameron — will he reassure the turbine magnates that he plans to keep subsidising wind energy, or will he retreat? The political wind has certainly changed direction. George Osborne is dead set against wind farms, because it has become all too clear to him how much they cost. The Chancellor’s team quietly encouraged MPs to sign a letter to No. 10 a few weeks ago saying that ‘in these financially straitened times, we think it is unwise to make consumers pay, through taxpayer subsidy, for inefficient and intermittent energy production that typifies onshore wind turbines’.
Putting the things offshore may avoid objections from the neighbours, but (Chancellor, beware!) it makes even less sense, because it costs you and me — the taxpayers — double. I have it on good authority from a marine engineer that keeping wind turbines upright in the gravel, tides and storms of the North Sea for 25 years is a near hopeless quest, so the repair bill is going to be horrific and the output disappointing. Already the grouting in the foundations of hundreds of turbines off Kent, Denmark and the Dogger Bank has failed, necessitating costly repairs.

In Britain the percentage of total energy that comes from wind is only 0.6 per cent. According to the Renewable Energy Foundation, ‘policies intended to meet the EU Renewables Directive in 2020 will impose extra consumer costs of approximately £15 billion per annum’ or £670 per household. It is difficult to see what value will be got for this money. The total carbon emissions saved by the great wind rush is probably below 1 per cent, because of the need to keep fossil fuels burning as back-up when the wind does not blow. It may even be a negative number.
America is having far better luck. Carbon emissions in the United States fell by 7 per cent in 2009, according to a Harvard study. But the study concluded that this owes less to the recession that year than the falling price of natural gas — caused by the shale gas revolution. (Burning gas emits less than half as much carbon dioxide as coal for the same energy output.) The gas price has fallen even further since, making coal seem increasingly pricey by comparison. All over America, from Utah to West Virginia, coal mines are being closed and coal plants idled or cancelled. (The US Energy Information Administration calculates that every $4 spent on shale purchases the same energy as $25 spent on oil: at this rate, more and more vehicles will switch to gas.)

So even if you accept the most alarming predictions of climate change, those turbines that have ruined your favourite view are doing nothing to help. The shale gas revolution has not only shamed the wind industry by showing how to decarbonise for real, but has blown away its last feeble argument — that diminishing supplies of fossil fuels will cause their prices to rise so high that wind eventually becomes competitive even without a subsidy. Even if oil stays dear, cheap gas is now likely to last many decades.
Though they may not admit it for a while, most ministers have realised that the sums for wind power just don’t add up and never will. The discovery of shale gas near Blackpool has profound implications for the future of British energy supply, which the government has seemed sheepishly reluctant to explore. It has a massive subsidy programme in place for wind farms, which now seem obsolete both as a means of energy production and decarbonisation. It is almost impossible to see what function they serve, other than making a fortune from those who profit from the subsidy scam.

Even in a boom, wind farms would have been unaffordable — with their economic and ecological rationale blown away. In an era of austerity, the policy is doomed, though so many contracts have been signed that the expansion of wind farms may continue, for a while. But the scam has ended. And as we survey the economic and environmental damage, the obvious question is how the delusion was maintained for so long. There has been no mystery about wind’s futility as a source of affordable and abundant electricity — so how did the wind-farm scam fool so many policymakers?
One answer is money. There were too many people with snouts in the trough. Not just the manufacturers, operators and landlords of the wind farms, but financiers: wind-farm venture capital trusts were all the rage a few years ago — guaranteed income streams are what capitalists like best; they even get paid to switch the monsters off on very windy days so as not to overload the grid. Even the military took the money. Wind companies are paying for a new £20 million military radar at Brizlee Wood in Northumberland so as to enable the Ministry of Defence to lift its objection to the 48-turbine Fallago Rig wind farm in Berwickshire.

The big conservation organisations have been disgracefully silent on the subject, like the Royal Society for the Protection of Birds, which until last year took generous contributions from the wind industry through a venture called RSPB Energy. Even journalists: at a time when advertising is in short supply, British newspapers have been crammed full of specious but lucrative ‘debates’ and supplements on renewable energy sponsored by advertising from a cohort of interest groups.
And just as the scam dies, I find I am now part of it. A family trust has signed a deal to receive £8,500 a year from a wind company, which is building a turbine on land that once belonged to my grandfather. He was canny enough not to sell the mineral rights, and the foundations of the turbine disturbs those mineral rights, so the trustees are owed compensation. I will not get the money, because I am not a beneficiary of the trust. Nonetheless, the idea of any part of my family receiving ‘wind-gelt’ is so abhorrent that I have decided to act. The real enemy is not wind farms per se, but groupthink and hysteria which allowed such a flawed idea to progress — with a minimum of intellectual opposition. So I shall be writing a cheque for £8,500, which The Spectator will give as a prize to the best article devoted to rational, fact-based environmental journalism.
It will be called the Matt Ridley prize for environmental heresy. Barring bankruptcy, I shall donate the money as long as the wind-gelt flows — so the quicker Dave cancels the subsidy altogether, the sooner he will have me and the prizewinners off his back.

Entrants are invited forthwith, and a panel of judges will reward the most brilliant and rational argument — that uses reason and evidence — to gore a sacred cow of the environmental movement. There are many to choose from: the idea that wind power is good for the climate, or that biofuels are good for the rain forest, or that organic farming is good for the planet, or that climate change is a bigger extinction threat than invasive species, or that the most sustainable thing we can do is de-industrialise.
My donation, though significant for me, is a drop in the ocean compared with the money that pours into the green movement every hour. Jeremy Grantham, a hedge-fund plutocrat, wrote a cheque for £12 million to the London School of Economics to found an institute named after him, which has since become notorious for its aggressive stance and extreme green statements. Between them, Greenpeace and Worldwide Fund for Nature (WWF) spend nearly a billion a year. WWF spends $68 million a year on ‘public education’ alone. All of this is judged uncontroversial: a matter of education, not propaganda.
By contrast, a storm of protest broke recently over the news that one small conservative think-tank called Heartland was proposing to spend just $200,000 in a year on influencing education against climate alarmism. A day later, the William and Flora Hewlett Foundation, with assets of $7.2 billion, gave a grant of $100 million to something called the ClimateWorks Foundation, a pro-wind power organisation, on top of $481 million it gave to the same recipient in 2008. The deep green Sierra Club recently admitted that it took $26 million from the gas industry to lobby against coal. But money is not the only reason that the entire political establishment came to believe in wind fairies. Psychologists have a term for the wishful thinking by which we accept any means if the end seems virtuous: ‘noble-cause corruption’. The phrase was first used by the Chief Inspector of Constabulary Sir John Woodcock in 1992 to explain miscarriages of justice. ‘It is better that some innocent men remain in jail than the integrity of the English judicial system be impugned,’ said the late Lord Denning, referring to the Birmingham Six.

Politicians are especially susceptible to this condition. In a wish to be seen as modern, they will embrace all manner of fashionable causes. When this sets in — groupthink grips political parties, and the media therefore decide there is no debate — the gravest of errors can take root. The subsidising of useless wind turbines was born of a deep intellectual error, one incubated by failure to challenge conventional wisdom.
It is precisely this consensus-worshipping, heretic-hunting environment where the greatest errors can be made. There are some 3,500 wind turbines in Britain, with hundreds more under construction. It would be a shame for them all to be dismantled. The biggest one should remain, like a crane on an abandoned quay, for future generations to marvel at. They will never be an efficient way to generate power. But there can be no better monument to the folly of mankind.

The Matt Ridley Prize for Environmental Heresy

Saturday, 21 January 2012

Slowly the Penny Drops

Institute for the Study of Civil Society
6 January 2011
Media Information:
EMBARGO: 00.01 hrs, Monday 9 January 2012

Wind-power: inordinately expensive and ineffective at cutting CO2 emissions

Energy experts warn that unwarranted support for wind-power is 
hindering genuinely cleaner energy

The focus on wind-power, driven by the renewables targets, is preventing Britain 
from effectively reducing CO2 emissions, while crippling energy users with additional
 costs, according to a new Civitas report. The report finds that wind-power is unreliable
 and requires back-up power stations to be available in order to maintain a consistent
 electricity supply to households and businesses. This means that energy users pay twice: 
once for the window-dressing of renewables, and again for the fossil fuels that the energy
 sector continues to rely on. Contrary to the implied message of the Government's approach,
 the analysis shows that wind-power is not a low-cost way of reducing emissions.

Electricity Costs: the folly of wind-power, by economist Ruth Lea, uses
 Government-commissioned estimates of the costs of electricity generation 
in the UK to calculate the most cost-effective technologies. When all costs
 are included, gas-fired power is the most cost-efficient method of generating 
electricity in the short-term, while nuclear power stations become the most
 cost-efficient in the medium-term.

All that wind takes a lot of gas

Wind-power is acknowledged to cost more than traditional fossil fuel power stations
. But estimates from Government-commissioned reports suggest that, when the cost 
of CO2 emissions is included, onshore wind-power becomes one of the more 
cost-effective means of generating electricity. Offshore wind does not however.
 [See p. 12 - p. 23] Unfortunately, these estimates fail to factor in all the costs
 of wind-power. These costs are due to the fact that energy output from wind
 is unpredictable and rarely occurs in areas of most demand:

... wind-power is unreliable and requires conventional back-up generating 
capacity when wind speeds are, for example, very low or rapidly varying... [p. 14]

This means that wind farms need to be supported by conventional capacity 
including gas-fired power stations that can be switched on whenever the 
available wind fails to match demand for electricity. Lea cites research by
 Colin Gibson, former Power Network Director at the National Grid Group, 
who has produced some of the most comprehensive estimates for these 'add-on costs'.

When these add-on costs are included, the resultant levelised generating costs 
(£ per megawatt hour) for the main electricity generating technologies are, for medium-term projects:

  • Nuclear pressurised water reactors (PWR): £67.8 per MWh.
  • Gas-fired combined-cycle gas turbines (CCGT): £96.5 per MWh.
  • Gas CCGT with carbon capture and storage (CCS): £102.6 per MWh.
  • Coal (ASC) with CCS: £111.9 per MWh.
  • Advanced supercritical (ASC) coal-fired power plants: £133.2 per MWh.
  • Onshore wind: £146.3 per MWh (including 'add-on costs' of £60 per MWh).
  • Offshore wind: £179.4 per MWh (including 'add-on costs' of £67 per MWh).

(Note: one megawatt hour can run approximately 1000 desktop computers for 8 hours)

The most cost-effective technologies are nuclear and gas-fired. Onshore, and especially 
offshore, wind technologies are inordinately expensive.

Pumping out more CO2

Besides the prohibitive costs, the report shows that wind-power, backed by
 conventional gas-fired generation, can emit more CO2 than the most efficient gas
 turbines running alone:

In a comprehensive quantitative analysis of CO2 emissions and wind-power,
 Dutch physicist C. le Pair has recently shown that deploying wind turbines on 
"normal windy days" in the Netherlands actually increased fuel (gas) consumption, 
rather than saving it, when compared to electricity generation with modern high-
efficiency gas turbines. Ironically and paradoxically the use of wind farms therefore
 actually increased CO2 emissions, compared with using efficient gas-fired combined 
cycle gas turbines (CCGTs) at full power. [p. 30]

This means that the cost of having wind is not just carried by consumers but by the
 environment as well.

Caught in a cross-wind

The report explains how two competing environmental policies have generated a
 perverse set of priorities. The renewables targets have forced the energy sector to
 focus on more expensive, less reliable power sources, rather than those most likely
 to reduce emissions while keeping costs to the rest of economy competitive:

  • The Climate Change Act 2008 requires that Britain's greenhouse gas (GHG)
  •  emissions be cut by 80 per cent by 2050 compared with the 1990 level and 
  • by 34% by around 2020.
  • The EU's Renewables Directive (2009) commits the UK to sourcing 15% of 
  • final energy consumption (FEC) from renewables by 2020. Renewable energy 
  • sources include wind, hydro and biomass, but not nuclear power. [pp. 4-5]

This means that UK legislation separately specifies an outcome (reduced CO2 emissions)
 and a process, more renewable energy.

The outcome itself is substantial and threatens many Britons' standard of life and 
employment prospects if not achieved efficiently:

... consultants Redpoint Energy point out "…meeting these targets will mean a 
radical change in the way the UK produces and consumes energy over the coming decades." [p. 4]

Unfortunately, the legislated process is ineffective at reaching its supposed outcome.
 The result of forcing unreliable renewables on the energy sector is higher costs to
 consumers as well as more CO2 emissions than are necessary for maintaining the
 electricity grid.

One outcome of this micro-managed approach is that commercial and public sector 
energy users are, paradoxically, charged under the Climate Change Levy for their 
use of electricity generated by nuclear power stations (nuclear plants emit no CO2 
after construction). The CCL is designed to encourage greater use of renewable
 energy sources even though wind-power can result in higher CO2 emissions than
 efficient gas turbines. [pp. 6-7]

The report concludes:

[Wind-power] is expensive and yet it is not effective in cutting CO2 emissions.
 If it were not for the renewables targets set by the Renewables Directive, 
wind-power would not even be entertained as a cost-effective way of generating 
electricity or cutting emissions. The renewables targets should be renegotiated
 with the EU. [p. 30]

For more information contact:

Ruth Lea, Director of the Manufacturing Renewal Project, 07800 608 674

Civitas on 0207 799 6677

Notes for Editors

i. Ruth Lea is Director of the Manufacturing Renewal Project at Civitas
and an economic adviser to the Arbuthnot Banking Group.

ii. Electricity Costs: The folly of wind-power is available to download here.

iii. Civitas is an independent social policy think tank. It has no links to any
 political party and its research programme receives no state funding.