Offshore wind

Irish 10-year bonds are at 7.6%

The Minister for Energy has just launched a plan for a drastic expansion of offshore wind, wave, and tidal power.

Power generation is a capital intensive industry, renewables are particularly capital intensive, and offshore wind comes top.

There are not enough jobs in Ireland and capital is exceedingly expensive. We need projects that create jobs but don’t take a lot of capital.

Minister Ryan said “Every megawatt of renewable energy that goes onto the Irish national grid reduces our €6 billion annual fossil fuel bill [..].” Government subsidies for import substitution do not stimulate economic growth.

The plan that was put up for public consultation mostly concerns things that will be decided by the Dail after next. It does propose a REFIT for offshore wind: 14 cent per kilowatthour. That’s above the retail price of electricity.

125 replies on “Offshore wind”

Never a fan of wind energy for various reasons.
However it beats making more houses.

The capital thingy is a bit of a red herring as we do not need to look externally for debt to create capital.
We can create credit.
The remaining state pension fund can be redirected towards the creation of a state industrial bank for example.
The pension fund can become a deposit base which will become the collateral to justify the creation of credit.

@Richard
Sarcasm will get you nowhere but the Kilkenomics festival.

It amazes me we give monopoly control of credit creation to a group of banks that would have been thrown out of Angola for criminal negligence.

Such is life in this great republic of ours I guess.

“That’s above the retail price of electricity.”

I dont know that much about this sort of thing, but surely it could be argued that it is above the current retail price, but is less than the likely future retail price.

@Richard
Why don’t we harness all that wasted energy from gym treadmills up and down the land – cheap electricity and a fitter heathier population… well it’s not as capital intensive is it?

Thanks for that, Richard. Have you heard anything on whether REFIT for new onshore wind will be extended beyond this year?

“That’s above the retail price of electricity.”

Depends on which retail price. Above prices to business but below prices to households. One third of electricity sold to the residential sector.

It appears that the Mnister is determined to add to the legacy of deadweight costs imposed in the energy sector that he inherited until they match the annual deadweight costs of the bank system bailout. It is scary that the joint and individual lust of the coalition partners to retain power allows them to do so much economic damage.

@ Prof Tol

I’d be interested to hear what policies you think the Minister for Energy, Marine and Natural Resources should be pursuing, if you have the time to respond or point me in the right direction. Thanks.

@BigEnd,

Are you including the cost of distribution and supply to the consumer to the price paid to the generator?

Ireland has legally binding targets under the Renewables Directive. Therefore the question is now one of cost effectiveness at achieving those targets.

There is no suggestion that planned refit addresses any of the concerns about wind energy, and its impact on balancing etc. This is surely something that the ESRI should look into. It is also something that DCENR and (more likely) Eirgrid should fund. It might also be relevant to examine whether there are elements of the market design in Ireland which lead to excess costs for integrating wind.

The greater the collapse in Irish sovereign credit, the more deluded and messianic our politicans become. Thank god it is game over for these loons, we won’t have to suffer their ridiculous ravings much longer.

Where is the downfall parody when you need one?

I was at the conference today where Minister Ryan launched this report. I have not had the time yet to read the document. However, the theme of the conference was about “pathways to 2050” in energy terms and the Minister spoke of ocean energy in terms of it being the work of successive government administrations.

Indeed, he was followed by the President of the European Ocean Energy Association who clearly spoke of the huge need to invest in demonstration-scale projects if we are to get from the innovation stage (5,000 patents in existence!) to implementation. Her projections on what would need to be spent were unquestionably significant on a standalone basis. Equally, in a context where the Executive Director of the IEA had already spoken of the need to invest 46 trillion dollars in energy over the next 30 years, the investment needed in the next 5-10 years in ocean energy was truly a drop in the proverbial.

Now, I understand what you mean about making capital investment decisions that have short- to medium-term benefits and which creates jobs. In broader terms, I concur entirely. We need domestic economic growth and we need it yesterday. However, with some notable exceptions, short-termism in policy-making has equally been a blight on this country and I feel that Minister Ryan is right to speak about road-maps that traverse the next 10 to 30 years of infrastructure development in this country.

Equally, the future is yet unwritten. Therefore, I would share Holbrook’s curiosity above in terms of what energy policy that you would have us pursue over the next 30 years and why.

The week has been full of original thinking. Best idea of the week goes to Brendan Smith for his innovative ground breaking suggestion: agrarian quantative easing

Seems what you do is tap the EU for funds to buy up cheese which you then give away for free to needy citizens – now if only we had enough cheese.

Wonder if Brendan’s read Who Moved My Cheese ?

@ bill hobbs

I don’t think your comment has much to say about offshore wind – do you have anything constructive to say? Do you think the Minister’s idea is good or bad? Have you read it? I see your blog says you provide commentary and analysis. I would be interested to hear what analysis you have about the proposed plans for Offshore renewable energy development.

@ James S

Thanks for bringing some bringing some substance to what is being discussed. As I understand it the OREDP is going to examine the feasibility of developing offshore renewables over the coming decades and sets out a structure to assess its development and encourages consultation. The Press Release also discusses how Ireland is working with other European countries on developing a grid to trade renewable power. As you have said I think this is good long term thinking. As for the REFIT price for offshore wind – am I right in saying that this is set higher than the cost of electricity to encourage the development of wind power? Prof Tol says that “Government subsidies for import substitution do not stimulate economic growth.” – but is this just a short term perspective – what about supporting the long term stability of the country? Sometimes I think we are replacing gombeens with cynics.

Here we go again – more windy stuff.

On-shore is preferable to off-shore. Forget the money cost – you MUST be able to get to the installations for maintenance, repair and renewal – easily! My sailing experiences of Irish costal waters is that they were a tad bumpy most of the time!

Cost: Forget the money cost, its the total embedded and future energy costs that determine energy generating proposals. Energy in v energy out. This ratio is 1:n where n must be greater than 3; then you are good to go.

No 1 priority is to go on a conservation novena. Then think v carefully about what you really need by way of electricity. Minister has it back-to-front.

Brian P

@ HF

Indeed. Pity Prof Tol wasn’t around in Copenhagen in the early 1980s. No doubt he and his henchman in chief Paul Hunt would have cost-benefited the ass out of the Danish government supports for wind, and pilloried the associated “deadweight costs” (incidentally I note Paul Hunt is now comparing Ireland’s energy policy to the cost of servicing a €35 billion debt, could the cynics please get serious??).

If they had been around they could have saved the Danes from developing more than 200 companies in the sector and from manufacturing 35% of all wind turbines in the world;not to mention an industrial cluster in clean energy sector including the world’s two largest producers of enzymes to bio-ethanol (covering a combined 70% of the world’s market) and Europe’s largest producer of thermal solar energy (SolarCAP), located in Denmark.

@Holbrook
I’d put a price on carbon and on other externalities.

I’d subsidize world-class research by rewarding proven excellence.

That’s all, really.

By Post Author

@jc
You’re right! All we have to do is copy what they’ve done and do it better than them for less… what could go wrong?

Or perhaps we should be looking at something else… rain power maybe?

@Brian Woods.

I agree with you regarding offshore – the maintenance costs must be huge.

But even onshore locations baffle me – OK highland dispersed wind farms have access to more energy yet they must be costly to integrate with the grid.
I always imagined a highly flexible if expensive to run Gas fired power station lets say in the midlands surrounded by a vast wind farm of many thousands of hectares.
This mass installation on one site would reduce the construction costs per unit and also reduce the pressure on the Grid and infrastructure as gas fired turbines are so easy to turn on and off.
Even if there is a substantial reduction in energy production per wind turbine my gut tells me the logistics and ergonomics of this arrangement would be much more preferable to captain nemo and Sherpa ten zing like engineers risking themselves for the greater good of green dogma.

@ Richard

The last time I checked 9% of Danish manufacturing goods exports come from clean tech sector, mostly wind turbine. They have created a new highly innovative industrial cluster which was first developed in response to generous rents provided by government. They have now started inventing new products and modifying existing products that other people want to purchase, for money and stuff. How does that not constitute wealth creation?

@ Hoganmahew

Your calumny will no doubt be appreciated by the many. I am not suggesting that we should try and do something that the Danes have done already 30 years ago (when our own Department, incidentally, was decrying “aero-generators” as “potentially posing a risk to persons and property”). I’ll leave it to you to figure out what I am saying.

@ Richard

Are you sure that your proposed solution above have us meet our legally binding 16% target for TPER by 2020? That’s a rhetorical question to which we both know the answer.

You seem to have a tenuous relationship with reality, ignoring the bits you don’t like, but that’s probably not a luxury Eamon Ryan feels that he can afford.

@jc
Reducing the price of a product from far above the choke price to somewhat above the choke price does not create wealth.

Wind is subsidized, heavily in many places. Receiving subsidies is not productive. It is a transfer payment.

The Danish wind industry is a success story in rent-seeking.

I’m looking forward to the day that they’ll put a competitive product on the market.

By Post Author

@ Prof Tol

Thanks for replying. If you have time could you expand on what you mean by “subsidizing world-class research by rewarding proven excellence” ? Could you give an example of what that might look like? My interpretation is that you would give funding to researchers who have already developed products or services that have been commercially successful – would that be a correct interpretation of what you mean? My interpretation of the Minister’s policy is to subsidize the development of wind energy and the development of a grid – something that I assume requires large scale capital investment that is usually provided by governments. To me it seems sensible, in a world that is facing increased energy costs and risks, to develop energy independence.

@ Brian Woods

I think you raise interesting points about energy in/energy out costs – I wonder over what time horizon these should be considered. Offshore maintenance would have to be included. In an effort to put some figures on this in my non-expert way I did some googling and came up with this quote:

“A study carried out in the UK (IEA, 2006) has estimated the future costs of offshore wind generation and the potential for cost reductions. The cost of raw materials, especially steel, which accounts for about 90 per cent of the turbine, was identified as the primary cost driver. The report emphasised that major savings can be achieved if turbines are made of lighter, more reliable materials, and if major components are developed to be more fatigue-resistant. A model based on 2006 costs predicted that costs would rise from approximately 1.6 million £/MW to approximately 1.75 million £/MW (2.37 to 2.6 million €/MW) in 2011 before falling by around 20 per cent of the total cost by 2020.”

Source: http://www.wind-energy-the-facts.org/en/part-3-economics-of-wind-power/chapter-2-offshore-developments/development-of-the-cost-of-offshore-wind-power-up-to-2015.html

I couldn’t find much on off-shore maintenance costs.

Here’s more info (admittedly from an interested industry player (- or a rent seeker as Prof Tol would characterise it – I don’t mean that snidely – I just want to preempt the comment!):

Mick McBennett, President of the National Offshore Wind Association of Ireland (NOW Ireland:

“We are talking to companies who want to invest in Ireland but who say they need clarity that Ireland is serious about offshore wind. We are sitting on an opportunity to build a multi-billion euro industry, supplying not only the €60bn Irish Sea market, but also a €250bn North Sea market.

“These offshore supply chains are being built from scratch and Ireland can be a big part of it, providing several thousand jobs in the process. It will be of great credit to the minister if he can ensure that the Irish Sea sector in particular has a significant Irish involvement. Announcements like today’s show potential investors that we are serious about this industry and about the jobs it will provide.”

http://www.siliconrepublic.com/green-tech/item/18761-irelands-offshore-wind/

I know these are scattergun comments – but I am a fan of this blog and would love to see some detailed debate on the pros and cons of policy and not just slagging off of views. By throwing out some figures and opinions I would hope to see some interesting debate. It’s a learning process for me and hopefully for other readers and commenters.

@ Richard

OK LOL. But don’t tell Vestas (Market Cap €4.5 billion) – you might cause a run on their shares.

Are you sure you haven’t overdosed on free cheese tonight or something?

Richard Tol writes:

I’m looking forward to the day that [the Danish wind industry] put a competitive product on the market.

I reckon sorta ditto for Ireland.

The big question: are wind energy companies chomping at the bit to invest in unsubsidized wind energy production off the Irish coast? If not, forget it — only fools and governments rush in where the private sector fears to tread.

Economics 101, not rocket science.

@ Paul Hunt
Retail price is retail price. The original comment by Richard didn’t mention anything about distribution costs.

Richard in his introduction stated “14 cent per kilowatthour. That’s above the retail price of electricity”

I was simply qualifying a misleading statement.

@jc
I did not read your note to hoganmahew in the way you seem to have intended it. So, if we should not aim to get into the manufacturing business, what should we be doing?

What do the Irish do best? Use this to your advantage instead of making windmills. Wind is soo in-efficient and expensive.
I recommend Ireland has this in their favour:
1. Water, it rains a lot due to the locality, and the water is not comtaminated.
2. Make Water a food source. Green fresh water from Ireland, Use it to make your stout/whisky etc. Greqater exports maybe?
3. Milk, you can rival what New Zealand has done for milk products. If you make more value added products from milk, the emerging countries will devour as they get richer. In NZ there is a push to go into value added products as demand in China is increasing rapidly as they are getting richer.
Keep high tech inds etc but go back to the Punt, it will free you from the EURO tyranny.

We have a dubious history of making grand announcements and failing to deliver.

It may be a good thing but at this stage, it’s an aspiration to become a big exporter of electricity.

It looks as if Eamonn Ryan has made this launch now to be in a position later to claim some credit for developments in the sector.

“This Government has begun an energy revolution,” Ryan said on Friday.

We could do with a revolution somewhere but this ain’t it.

Hyperbole comes easy and the report says “much work needs to be done on the economic modelling to show how we can benefit from that resource.”

Ryan says he will meet his UK counterpart Chris Huhne and the report says that the North Seas Offshore Grid initiative was established last Dec and Ireland is one of the participating countries (which consists of 9 EU Member States and Norway). The ministers concerned declared their interest in discussing the development of an offshore grid in a common and co-ordinated way.

“By 2030, an export industry for electricity from renewable sources could be flourishing.

Maybe or maybe not.

There is no assessment of the output plans of other countries and the UK as the only potential director customer in terms of cabling connections, is not going to pre-commit.

The report says: “Wave energy technology is still at research, development and pilot deployment stages. The commercial and technical feasibility of the technology is therefore not proven and will require a considerable level of research and testing. On a global basis, there are currently only a small number of pilot-scale tidal and wave devices that have developed to the level of generating electricity output.

There is now an opportunity to develop, over time, an indigenous wave and tidal energy sector, both on the manufacture and development of the devices themselves and also on the downstream services with resultant economic benefits to the ports and engineering sectors.”

Again, statements like this are easily made without giving consideration to what’s happening elsewhere.

We could manufacture a lot of things but we don’t for good reasons.

@holbrook fields. Thanks for visiting my blog. Now maybe someone will explain how after ploughing billions into building acres of offshore wind farms on the atlantic coast and harnessing the power of atlantic rollers we can use the stuff on the east coast or store it for export the balance of this natural resource eslewhere? And while they are at this they might explain where the money comes from.

And what’s wrong with the other form of wind – a gas much more useful and exportable but sitting unusable as unreconstructed greens ideology eggs on the locals?

@ bill hobbs

Good point on Corrib gas and the remnants of the Greens may well be found manning NIMBY blockades of onshore wind facilities in future years.

The Greens blather about making hard choices in response to climate change, but they are pastmasters at jumping on passing bandwagons.

In Jan 2008, Minister Ryan called for an “urgent public debate in Ireland on nuclear energy, coinciding with the announcement by the UK government of plans for new generation of nuclear power stations.

The debate must have been held in a Trappist monastery.

About one fourth of all energy consumed in Finland is generated utilising nuclear power.

Of course we always want to have our cake and eat it!

@Michael H
“much work needs to be done on the economic modelling to show how we can benefit from that resource.”

Is that code for “economic models need to be much revised before they would show benefits”?

@ Prof Tol

I posted a comment last night – but it has not been published yet. Can you let me know if there is a technical hitch?

@ BIll Hobbs
You query how to transport the energy from west coast to east coast and how it could be exported. Improvements to the grid are required and I understand plans are in place to develop this and the OREDP launched by the Minister aims to map out how a international grid can be developed with other countries to trade energy. As for where the money comes from, my understanding is that the REFIT price for electricity is set at a guaranteed price to encourage private investment – a subsidy for a long term investment that can ensure energy independence. As for Corrib – the Green Party in government has worked to develop this energy much to the chagrin of some of its supporters. Also on the national grid I watched a CNBC documentary on energy recently – it stated the Chinese who are developing a lot of wind farms in west China face the same problems with linking these up to their grid and that it will take ten years for this to happen – we are not the only country that faces that problem.

@ MF
Ryan called for a debate on nuclear – I agree it is a pity it wasn’t followed up on. I don’t know of any other politicians who have called for it but I accept as Minister for Energy he should have led this. Possibly it was his decision not to expend too much political capital on this.

@bill hobbs

And what’s wrong with the other form of wind – a gas much more useful and exportable but sitting unusable as unreconstructed greens ideology eggs on the locals?

I see. Even if no actual greens are doing it, their ideology is.

@Richard

I’d put a price on carbon and on other externalities.

Which price you estimated at 1.1cents/litre of petrol on the eve of the Copenhagen conference, a figure widely at variance with other estimates.

The oligopoly of energy is in full swing, it will be Siemens and GE from here on. Costs at around Euro 3.5 million per megawatt offshore capacity are reality.

Oh, btw, the british installed capacity is now at 1,340 megawatt, and the germans plan up to 25,000 megawatt in the next decade.

The US turbine manufacturer Clipper sold 43 turbines to date in 2010, down from 127 compared to the he same period in 2009.

Vestas closed their production on Isle of Wight last year, no orders!

The currently largest off shore installation in England has round about 300 MW capacity at euro 3,5 million per MW, tendency of costs goes up, NOT down! London Array with 340 turbines is supposed to go live in 2012 starting with 175 turbines.

Apart from the fact that Germany and UK have already a competitive advantage, apart from the question where on earth you will find the risk capital required, apart from the fact that we are not specialist in this technology by any stretch of the imagination, I suppose Ryan is more than happy to add the resulting high energy costs onto the Irish consumer in the near future.

With regard to manufacturing we are already too late. With regard to generation for export…well we have to connect to something….Good luck with that – it is Eirgrid after all!

@jc

“You seem to have a tenuous relationship with reality, ignoring the bits you don’t like, but that’s probably not a luxury Eamon Ryan feels that he can afford.”

Bond yields near 8% and rising. Do you know what that means? Do you think this is a good time to share 100Bn euro offshore fantasies with the bond market?

Eamon Ryan and his ridiculous groupies decoupled from reality long ago.

[my last post was chopped in half!]

Check out http://www.ocei.gov.ie/en/DecisionsoftheCommissioner/Name,12832,en.htm
It was an AIE request to the DCENR for info behind the original REFIT scheme plus other issues.

“However, the Department states that it holds no records on justification of prices of other forms of proposed REFIT categories such as offshore wind, ocean, anaerobic digestion/ HE CHP for which State Aid approval has yet to be obtained.”

@George R. Baumann
“The currently largest off shore installation in England has round about 300 MW capacity at euro 3,5 million per MW, tendency of costs goes up, NOT down!”

FLUOR took a big hit recently on the Greater Gabbard Offshore Project in the UK

see http://investor.fluor.com/phoenix.zhtml?c=124955&p=newsarticle&id=1483526

“Fluor Corporation (NYSE: FLR) today announced that its third quarter results will include a charge of approximately $163 million, or $0.90 per share, for estimated cost increases on the Greater Gabbard Offshore Wind Project.

During the third quarter, the project experienced a variety of execution challenges, including material and equipment delivery issues, primarily relating to the installation of wind turbine generators and subsea cabling.”

“Execution challenges” …

@jc
“Your calumny will no doubt be appreciated by the many. I am not suggesting that we should try and do something that the Danes have done already 30 years ago (when our own Department, incidentally, was decrying “aero-generators” as “potentially posing a risk to persons and property”). I’ll leave it to you to figure out what I am saying.”
I am a total loss to what you are saying.

“The Danes did it thirty years ago and it was a success, look at the industry they got out of it” on a thread that is about what a bad idea it is to do government subsidised offshore wind.

Would that be a fair summary?

So what are you talking about?

@hoganmahew
JC is repeating Green dogma.

The Danes heavily subsidized their wind power industry. It was a logical choice as it build on pre-existing industrial strengths. They were, however, losing money until Juergen Trittin decided to on a large transfer from the German electricity user to the Danish wind industry.

For some reason, JC and others think that if you subsidize an industry for long enough then in the end the Germans will give you a big bag of money.

In the case of offshore wind (and electric cars), the thought is that if we subsidize FOREIGN industry enough, we’ll all become rich.

@Richard Tol
“In the case of offshore wind (and electric cars), the thought is that if we subsidize FOREIGN industry enough, we’ll all become rich.”
Well, it has worked so well with FDI… perhaps if the construction was here, but it would need to be more than just assembly line, it would have to set up parts manufacture too.

But then we might as well just pay them to mine for stuff…

@all

Why no fuss on this site for the €600m price tag for the interconnector and the 100 or so jobs that are created (or if there was i missed it)?

Do you not think the above subsidies will be responsible for 0.5% of our continuing high bond yields while the property bubble/bank crisis and out of control state/semi-state running costs account for about 50% and 35% respectively?

Who knows what will be viable in terms of energy generation in 30yrs time, maybe its wise to keep the options open…

> Gas is very fuel-price sensitive and increasing recovery costs are not unlikely, also a couple of valves can always be closed off or pipelines sabotaged

> Coal + CCS is likely to be heavily technology-dependent and comparatively pricey as it will require major capital investment also

> The advocates of nuclear in Ireland should update their economic models (particularly for small countries with no prior nuclear experience) and reflect on the fact that very complex systems are dependent on their weakest points

As I’ve said before if the subsidies apply for too long to any particular technology or if they are applied over and above a certain appropriate annual GWh generation threshold then they are not good but otherwise I think they are worthwhile.

As mentioned by @grumpy and others there are plenty of subsidised industries out there.

@ Tim

Few interesting points you make:

> Re Gas, I’d say it’s the best medium term option. Reasonably low carbon (compared to coal), and lots of flexibility for load management. If the UK gets more gas in through Milford Haven that will help a lot I’d say.

> CCS Coal, agree it might be a stretch economically. I’ve heard a carbon price of over €30/tonne might do it. Don’t know how much truth there is to that though.

> Nuclear – I reckon it’s absolutely crucial for the UK to get building asap. Doubt it would make sense for Ireland though. With all the wind we have (/will have apparently), we need something more flexible to secure peakload.

One thing that confuses me about the wind investment in the west is the consequences for distribution. I’ve heard the infrastructure we have in the west involves low voltage long distance transmission, which is silly. Does anyone know if much has been done to improve transmission in recent years?

I think the entire carbon debate in Ireland and elsewhere the most farcical display of stupidity I have ever seen or heard.
Can Irish austerity offset Chinese Industrial consumption even if we front load the pain !
Jesus come on.
The global monetory system as presently constructed is based on increased consumption period – if that stops the system breaks down.
The whole green movement as currently constructed is a product of the club of Rome dogma.
Their foot soldiers have no understanding of debt dynamics and simply wish to impose a religious belief system on the rest of us.
I consider myself a passionate environmentalist but this creed is a fake religion which uses distorted science to forward their deindustrialisation adgenda.

@Tim
Agree with you regarding nuclear in second world countries such as Ireland which have no experience in this complex field.
But if we are going to issue debt anyway sometime in the future would it not be in our best interest to obtain credit from a country like France which can supply Nuclear expertise on condition we buy debts off their treasury or host banks.
It would at least be better then building more houses via external credit as we can do that ourselves in this Bob the builder economy.

@ Bill Hobbs

Agreed. Nuclear just wouldn’t suit Ireland unless we built extra peakload generation. An inter-connector would make more (though maybe not enough) sense.

@Bill
If so Ireland would never have a capital base and would forever be dependent on foregin wealth for its sustenance.
Although my ideas are perhaps obsolete in a corporate world and of mere symbolic nation states.
However if Europe and the world experience a period of deglobalisation would it not be better to train Irish graduates in nuclear engineering who perhaps over time could gain some independence from EDF and other French nuclear corporations.
You do need some revenue after all to pay for external debts.

@bill hobbs
“why not just build a connector to France and import its nuclear power?”

There is a simple technical reason for this see http://www.eirgrid.com/media/Renewable%20Studies%20V3.pdf

“state of the art wind power plants (as well as imports via interconnectors) do not contribute to the inertia of the system. In fact, wind power and imports replacing synchronous machinery reduce the system inertia. An increasing wind share in instantaneous generation may make the system more vulnerable.”

But who cares about the technical aspects – nobody in Ireland ever bothers with the detail – never mind the cost – it just sounds good and green.

@Marcus OC
I do not see why we should not be making plans to replace Money point now with a Nuclear plant of perhaps 1.5 to 2 times its electrical load – this could easily supply the bulk of the base load for this country.
And as Money point is not in its first flush of Youth, the 10 to 15 year time frame to install nuclear should be appropriate.

@Richard
If need be you can extend the lifetime of Moneypoint – upgraded coal plants of late 1950s vintage are still operating in the US – another 10 year life extension should be possible.
In this environment expediency will gain the upper hand over the best laid plans.

@ Keith/Richard (ha!)

Keith, you’re right that nuclear would be fine for baseload. However, daily peakload requires extra power. Nuclear can’t scale up and down on a daily basis and wind blows whenever it likes, so you need some sort of flexible generation – coal can do it (but it’s dirty), or else gas… Having a nuclear baseoad and a load of wind is a bad idea because you get so little control.

Richard, 15 years is a bit on the pessimistic side, no? The delays are really political rather than technical or economic.

@Marcus OC
Yes I accept that but our base load generation capacity needs replacement too and Gas fired plants no matter how efficient would be a terrible option.

I have stated that I am no fan of wind given its various flaws but a very large concentration of windmills adjacent to gas fired power plants may give some advantages to grid load and distribution while saving gas consumption although their individual effeciencey would be effected by a non optimal location.

@Tecumseh:

“But who cares about the technical aspects – nobody in Ireland ever bothers with the detail – never mind the cost – it just sounds good and green.”

I agree with you fully. But the extract you quote is perhaps a bit too technical, even for the educated public. Problems such as intermittency and the stochastics of wind power can be explained in a more comprehensible manner.

For an excellent overview of the fundamentals of renewable energy, I’d recommend a detailed article (“The Fake Fire Brigade – How We Cheat Ourselves about our Energy Future”) published some months ago in The Oil Drum:

http://www.theoildrum.com/node/6641

Here’s an extract to tempt you to read further:

“We are running out of traditional energy sources, which can be compared to our house being on fire. While that happens, many people linger around the burning building and pretend to be firemen, mimicking their actions, carrying some equipment, shouting commands – but actually they have no real water, no real skills, no appropriate tools. That way your house will burn to the ground because the “real” firemen never showed up, as everybody thinks there are more than enough firemen on site.” This is exactly what it is: when taking a closer look, most – almost all – of the renewable energy technologies promoted today won’t solve any of our future energy problems. ”

@CG: Ah! Another OD nerdie! The more the merrier!

We need the econs to log on to OD also. They might get a bit of a shock if they saw the supply/demand plots.

Brian P

@Brian

Ta. Before economists wade into TOD, they might benefit from reading some Entropy 101 stuff, such as this essay by Nicholas Georgescu-Roegen (“Energy and Economic Myths”):

http://dieoff.org/page148.htm

Some of NGR’s proposals at the end of the essay are a bit on the teenager side (“the production of all instruments of war, not only of war itself, should be prohibited completely…”) but apart from that it’s an eye-opener.

@ Richard Tol

“For some reason, JC and others think that if you subsidize an industry for long enough then in the end the Germans will give you a big bag of money.”

Farming.

Why would anybody not think that?

On the nuclear option, I thought there was a general view that the reserve capacity needed to supplement a nuclear base, would be so big as to make the combination very very capital intensive. Capital is very cheap around the world at the moment, but not in Ireland.

@Richard
Eurostat collects gas and electricity price under Commission Decision 2007/394/EC of 7 June 2007 amending Council Directive 90/377/EEC with regard to the methodology to be applied for the collection of gas and electricity prices charged to industrial end-users.

The methodology is explained in the Decision but essentially member states collect data from supplier asking them what their total revenue was in the semester for a particular consumption band and also the corresponding sales in kWh. Dividing one into the other gives a true average price being paid by consumers (retail) for the electricity or gas. Then the overall average unit price is weighted by each suppliers volume.

In Ireland SEAI collects this data for transmission to Eurostat.

This link should work http://appsso.eurostat.ec.europa.eu/nui/show.do?query=BOOKMARK_DS-052780_QID_6F2C574_UID_-3F171EB0&layout=TIME,C,X,0;GEO,L,Y,0;PRODUCT,L,Z,0;CONSOM,L,Z,1;UNIT,L,Z,2;TAXE,L,Z,3;CURRENCY,L,Z,4;INDICATORS,C,Z,5;&zSelection=DS-052780TAXE,TTC;DS-052780UNIT,KWH;DS-052780CONSOM,4161903;DS-052780INDICATORS,OBS_FLAG;DS-052780PRODUCT,6000;DS-052780CURRENCY,EUR;&rankName1=TIME_1_2_0_0&rankName2=CONSOM_1_2_-1_2&rankName3=PRODUCT_1_2_-1_2&rankName4=CURRENCY_1_2_-1_2&rankName5=TAXE_1_2_-1_2&rankName6=INDICATORS_1_2_-1_2&rankName7=UNIT_1_2_-1_2&rankName8=GEO_1_2_0_1&rStp=&cStp=&rDCh=&cDCh=&rDM=true&cDM=true&footnes=false&empty=false&wai=false&time_mode=ROLLING&lang=EN

Prices quoted in your links are not the full retail cost to the consumer as they don’t include standing charges, levies, and in the case of business customers capacity and demand charges.

Remember the original statement was in relation to ‘retail price’. To my mind retail price is the full price that the final consumer pays taking everything into account. For that the Eurostat data are the most relevant.

@BigEnd
Thanks for the clarification. Standing charges etc are immaterial for this case. Prices, by the way, are defined at the margin.

Anyway, the current proposal is to buy power for 14 c/KWh and either sell it at a loss or raise the retail price.

Ireland in its present position of dead man stumbling toward the grave is in no position to incur more debt. One option is design, build, operate projects entirely contracted out to the private sector without gov’t cash up front or at any time in the future. These would normally be confined to public transit, roads, railways, energy, airports, sea ports, hospitals, schools, colleges, universities, unemployment schemes, pension plans. Naturally if a project is not commercially viable with a reasonable prospect of a decent ROI it would not get off the ground. Discipline replacing fantasy what an earth shaking concept. When the IMF makes our gov’t offers it will be unable to refuse, all and more of the issues above will be on the table.

@ Carolus Galviensis:

Nicholas Georgescu-Roegen??? Now that wouldn’t be the same chap who wrote ‘The Entropy Law and the Economic Process’ – ??? Oh dear! It is!

And why is this text not on any of my undergrad reading lists I wonder? Might be he rubbishes the ‘scientific’ baloney that many contemporary econs subscribe to? There is a tad of a difference between the immutable laws of physics and chemistry and the axioms and logical arguments of economics which are posited to be ‘laws’.

Regrettably, the ‘laws’ of finance seem to have been given ‘scientific’ status also. Some persons are in for a most disaggreable suprise when they are confronted by a real law! As in – “There are no free electrons!”

Check out Frederick Soddy if you are not already familiar with same. Guy was a genuine Nobel Laureat – not a Sverige Bank Memorial Prize winner! Wrote a little ditty, ‘Wealth, Virtual Debt and Debt’ back in late 1920s.

Love the bit of Latin.

Brian P

@ Big End
Thanks for your link – interesting. You seem to know a lot about this topic. As I understand it Minister Ryan is applying to Europe to propose a guaranteed price of 14c per KW hour for offshore wind projects. The price in the chart you provided was between 18c to 20c per KW hour for 2007 to 2010 but includes a standing charge that Prof Tol has stated is not relevant to offshore wind projects. Any idea what the standing charge cost is? Is the 14c per KWh overpaying for electricity that we could get elsewhere? Is it not nececsary to provide certainty for private investment?

As I understand it the idea of an international grid should mitigate the problem of the unreliability of wind power management. So, again the plan seems like a good idea to pursue in the long term. I realise bond prices are through the roof, but surely that should not prevent the Minister for setting out a long term plan for energy security.

@ Richard

“JC is repeating Green dogma”.

I would like to believe that I have an open mind on most issues. I am favorably disposed to nuclear, for example, and have no problem with GM (as long as IP isn’t used as weapon against the poor).

“The Danes heavily subsidized their wind power industry. It was a logical choice as it build on pre-existing industrial strengths. They were, however, losing money until Juergen Trittin decided to on a large transfer from the German electricity user to the Danish wind industry.”

Good. We are making progress. It’s now OK for the Danes to subsidize stuff.

When you say they were loosing money you mean that they could have been generating power cheaper from coal? What I’m saying is that target medium term government supports have given rise to a large industrial cluster. Of course supporting wind meant that someone had to build the mills, and other spinoffs and clustering effects arise – I know that’s hard to model, but (a bit like the financial crisis you failed to predict when you when you projected economic growth in excess of 3% to 2020 in summer ’08) it’s very real and can have very profound economic impacts. As previously stated, the Danes are now leaders in several technologies which they are selling for money, but somehow this money isn’t god enough for you? You contend that somehow inventing new technologies and selling them to others is not wealth creation?

This has nothing to do with Juergen Trittin. Nor does it have anything to do with comparative advantage- Ireland’s wind resources are far superior to Denmark’s. It has more to do with a comparative political or societal advantage one might say. While we were swinging from our smokestacks in response to the second oil crisis (in fairness Ireland took this sort of approach with financial services, agri-business etc at that time), Danish leaders and wider society acknowledged the end of the oil era and bought into a vision for the future which they are now well on the path to realizing.

I believe that the green energy and green tech sector is part of that answer for Ireland, and with one in three startups in Ireland now in this sector, our entrepreneurs would seem to concur. I understand other might not agree.

@Richard

“Anyway, the current proposal is to buy power for 14 c/KWh and either sell it at a loss or raise the retail price.”

How did they calculate 14c/kWh ?

@jc
Wealth is not created by transferring money from A to B, even if B gets very wealthy as a result.

Wind power will start creating wealth as soon as it can compete without government support.

Wind power is an illusion—-it is built using fossil fuel and backed up using fossil fuel—-it is really the transformation of energy from high quality multi-useful fossil fuel into a low quality form of energy to wit an electrical output, that is highly variable and unreliable.
When there is no more fossil fuel left, wind power will be shown to have been a gigantic scam and a waste of priceless resources, that has not added any net energy to the world.
Other so called alternative energy systems, that rely on the mechanical extraction of energy from the natural environment, will also be shown to be unable to contribute any net energy gain.
This can be shown by conducting a rigorous energy accounting analysis known as energy return on energy invested —-EROEI for short.
This analysis has already been misused by the wind industry, to give highly erroneous results with which to prove the efficacy of their products.
I appeal to engineers and research students, to aquaint themselves with this energy accounting system, and to set up programs to standardise this invaluable investigative method of really finding out the truth about the wild claims being made by Government and Industry in the field of alternative energy.

@ denis

It always amazes me how people make such authoritative claims likes “wind power is an illusion”. Perhaps you are right, but I think things are rarely as simple as some people like to present them. I came across a study on Wind and EROI that states wind energy is

“in a favorable position relative to conventional power generation technologies in terms of EROI.”

this is taken from a study by Cutler Cleveland, a Professor at Boston University and Ida Kubiszewski’s in “Energy Return on Investment (EROI) for Wind Energy” that i found on The Oil Drum website, link below:

http://www.theoildrum.com/story/2006/10/17/18478/085

As I’ve said already, you may be right and wind power may be a gigantic folly – I would be interested to hear what criticism you may have of the study I have cited above that states that wind energy is “in a favorable position relative to conventional power generation technologies in terms of EROI” and if you point me in the direction of any studies that support your claim.

The government has not launched a plan to invest masses of state money in untested offshore renewable energy at a time when its borrowing costs are high. It has instead published a draft policy allowing for regulation of offshore energy.

This is just an exploration of the potential for a future offshore European Grid as proposed by the EU. Ireland is one of nine countries taking part in this project with Norway likely to join soon.

Any future capital investment in such a project is likely to use private rather than public money. I don’t understand the idea that capital is ‘exceedingly expensive’ right now. International interest rates have never been lower. The ML U.S. Corporate Master Index of average borrowing costs for American companies is at an all time low since the 1980s.

Tens of billions of euros are arriving in Ireland by FDI again following our regained competitiveness. At a time when nine of our neighbours are planning to build an offshore grid next to our extensive, windy, choppy waters, it would be silly not to at least regulate to allow investment in offshore renewable energy. This is a low cost modest government action.

@ Holbrook—you are of course quite right to question authoritive claims made by the likes of me concerning the viability of wind power, however, in this case, I do attempt to explain these claims and where I get them from, and I also tender a methodology to test my claims.
This is totally unlike this Government, which has no research or hard evidence to prove that their current energy policy has any chance of working.
I know this, as a colleague has repeatedly requested the Dept of Energy and Natural Resources to furnish him with the information on which they are basing their claims to be able to supply 40% of Ireland`s electricity supply from wind turbines in the near future, and has to date not received any of the evidence requested.
In fact, they have admitted that they actually have no evidence, which is tantamount to saying that it is all coming off the top of the Minister`s head.
The article on EROEI in TOD, is an excellent introduction to the subject, but the conclusions of the good professor as to the EROEI of wind turbines, leaves a lot to be desired, as he does not perform the calculations himself, but relies on data that probably came from an old wind energy source, and is therefore suspect as to the quality and depth of the study.
I can recommend a later and more in depth analysis of EROEI by another contributor to the excellent TOD site, http://www.jeffvail.net/2009/07/renewables-hump-8-concluding-thoughts.html.
If you have a look at his essays, you will see that he has valid concerns about the accuracy of these previous EROEI calculations.
The comments are also interesting.
I think after reading this, you will appreciate why I am so alarmed by the cavalier attidude of our Gov towards alternative energy, and will see the necessity of much further thought and research into any course of action that we may take, especially as so much money is involved.

To get back to wind power again, the mere fact that it has to be backed up by a fossil fueled energy source should ring alarm bells—are we not trying to get away from the use of fossil fuels as they are running out, and should not be used anyway due to their CO2 output ?
It would seem to me that the use of windpower only cements the necessity of using fossil fuel, as long as the wind turbines last.

@denis

during the bubble, an aggressive building industry lobby made it difficult for government to make rational policy choices even if it had wanted to.

Likewise, generous subsidies and supports for renewable energy have created an almost fanatical wind power vested interest. Wind power uber alles, doesn’t matter what it costs etc etc.

The world has changed. For energy policy, 8% bond yields mean promoting technologies because they are cheap and because they work. We must stop pretending that even greater subsidies for non-viable technologies makes any sense.

@ Denis

thanks for the reply. My first impression is that the article you cite is by Jeff Vail, a litigation lawyer, whereas the one I cited was by a Professor of Geography and Environment. I’m not saying one is right and the other wrong, but what strikes me is that many people, myself included, don’t have the time to read up on all the complexities of these issues and therefore I rely on experts in the field to provide guidance. Given the choice between a Professor and a business litigation lawyer, I’m inclined to believe the Professor.

@bg

What makes you say wind power is a “non-viable” technology? Also the plan launched by Minister Ryan is very long term, stretching out over the next four decades – I don’t think such long term plans should be shelved because of the current bond rates. The current crisis has left a huge burden on current and future generations – I think Minister Ryan’s policies have potential to lessen the burden on future generations by capitalising on Ireland’s comparative advantage in wind resources.

@ Holbrook
I wouldn’t say I know a lot about the subject but I do find the Eurostat data very good and is very useful for comparing across countries – in the EU at least.

BTW the 18c/kWh is the vat inclusive price, the vat exclusive price is about 15.9c. Now if you take the prices that Richard quoted in his links at about 14c then you could deduce that the standing charge for householders, on average, is about 2c/kWh.

I suppose I’m just trying to put the 14c/kWh proposed for offshore wind in context and it struck me, admittedly in very simplistic terms, that one third of the electricity market in Ireland is already paying at least 14c/kWh plus standing charges and vat in retail terms for electricity.

If we look at the French decision to create a civilian nuclear Industry in 1973 we can begin to understand the failure of the current monetory system. – its scale and ambition was frowned upon by the Anglo establishment.
In effect I believe the French realized that the new fiat regime just created needed a fiscal counter to monetory creation withen commercial banks.
This policey increased the wealth of France yet its cost was expressed as a loss until the recent oil rise of the last decade.
Therefore if a monetory system cannot recognize capital wealth creation withen its books then it rather the fiscal spending which express a nominal loss that is flawed.
In effect the monetory system underpriced and indeed still does under price fossil fuels expressed in dollars.
So therefore we cannot engage in strategic decisions regarding Industrial development with reference to a flawed monetory system. Therefore even if a endeavour expresses a loss at present as long as it increases general wealth then it is net energy positive.

@ Holbrook—-Jeff Vail has a BS in Engineering and is actively involved with The Institute for the Study of Energy and our Future.
If you want to learn more about energy and EROEI, I would recommend that you take the time to read his articles.

@denis
Due to a technical hitch with the site my comment isn’t being accepted – so you can find it at the link below:

https://docs.google.com/document/d/14GrtyQWdOc1FTeolJ-VuTt9KCmG7rAWWaSRYa0WFraw/edit?authkey=CLXAtoEC#

@Prof Tol

I get the error message below when trying to post my comment:

Not Acceptable

An appropriate representation of the requested resource /wp-comments-post.php could not be found on this server.

Additionally, a 404 Not Found error was encountered while trying to use an ErrorDocument to handle the request.

There’s no reason why wind power must be backed up by fossil fuels. Hydro and pumped storage can handle peaks in generation and demand. Large electricity customers can reduce/increase demand to do the same thing. And since Ireland is ideal for electric cars (short trips) an installed base of electric cars could also do the same thing.

Ireland is also ideal for data centres due to climate and location – a stable energy supply unaffected by fossil fuel price shocks could be a tempting source of investment.

@Ossian
Government bonds are at 7.6% Recall that banks have been effectively nationalized. The cost of capital will remain high for at least 5 more years.

Your list of greenfield FDI is telling: the Poolbeg incinerator is top.

The issue, however, is credibility. The bond markets believe that Ireland may not get its act together. They now observe a senior Government Minister propose a plan that is hugely ambitious and expensive and, given the recent track record of offshore wind, doomed to fail.

@Richard

So the Danes are making money by exporting wind power equipment to Germany, but you argue this is somehow invalid because the Germans are losing money. It’s a very peculiar argument. Why should Denmark care whether their export customers are making money or not?

Full marks for noticing Covanta in the list of greenfield FDI projects!

Unless I’m misreading the press release, there is no plan for the government to borrow money to invest in offshore wind, rather there is a plan to regulate to allow others to do so in the future.

Capital is expensive to the Irish state and Irish banks right now but not for those who invested $20bn last year in Ireland.

@Kevin Lyda

“There’s no reason why wind power must be backed up by fossil fuels. Hydro and pumped storage can handle peaks in generation and demand.”

Who told you that ? The Spirit of Ireland people ? How much will this back-up cost – is it “free” like the wind ???
Please read http://www.eirgrid.com/media/Low%20Carbon%20Generation%20Options%20for%20the%20All%20Island%20Market%20(2).pdf

It states
“Storage, by itself, is insufficient to manage intermittent renewable generation because of its power and energy capacity constraints”

Why does the Irish public just accept the green mantra ?

It never ceases to amaze me that people in the pro-wind lobby continually refer to other sources of backup such as large scale pumped storage or interconnectors but never actually read the published literature in these areas and never understand the constraints and limitations (or cost) of these technologies.

@Ossian
If this is a private initiative, then why was it announced by the government? The Minister did not simultaneously announce a divestment of the state-owned energy companies. He did announce further subsidies to the sector.

By Post Author

It never ceases to amaze me that economists think that today’s interest rates will last forever and that oil is not a finite resource so why plan for alternatives.

It does not amaze me that humoungous amounts spent on nuclear R&D have made it commercially viable and that miniscule amounts spent on renewable R&D have made it marginally competitive.

@Tecumseh First, you’d do well to not make assumptions about people. I neither listen to or care about the Green Party. I’ve met a few, I roll my eyes at their policies and I think they’re a very dumb political party (I’ve only lived here 12 years and even I know what happens to small parties in coalition with FF).

Second, you’d do well to actually read what I wrote. You should also learn to read the links you point out to people. The rest of the sentence you “quoted” read as follows: “but it can make a contribution towards managing intermittency as part of a portfolio with interconnection and flexible generation.”

I’m shocked – there’s no one single solution to replace our current multi-solution energy infrastructure? Well colour me amazed. You’ll note that in my initial post I didn’t just say storage systems – which you might have noticed if you’d, like, read it. The future will have many solutions. Heck, if we could demonstrate an ability to run 19th century technology like railroads I’d even support nuclear.

Lastly, url shorteners. Look into them. Your link is both long and wordpress isn’t guessing it correctly. For people who want to read your pdf, it’s here: http://bit.ly/aHIVwW You might give it a read again as well.

@Kevin Lyda

Wriggle all you want but “flexible generation” is OCGT i.e. fossil fuels.

Glad you’re now reading up on the subject even if you find the Eirgrid url a little cumbersome to deal with.

@Tecumseh

Bemusing – how is this possible?

How can carbon intensity of production increase when wind generation increases as proportion of generation?

1120gCO2/kWh is very high, impossibly high when 95% coming from wind.

Simply must be an error….

@KL: Kevin, just a small correction re- dependency on fossil fuels.

The ref would be to the mandatory use of liquid transport fuel as part of the embedded energy cost of building out the turbine and transmission infrastructure and also as part of routine maintenance, repair and renewals. These cannot be done with electricity.

It may be possible to construct all the bits and pieces of the turbines using electricity (I doubt this, but just assume it for the moment). The parts have to be trucked to site and erected (after you dig the foundations and pour that concrete!).

Anyone not fully familiar with theOilDrum. You must read down through the many comments following an article. The techie bloggers will straighten out most errors and fill in any omissions. Sort of instant Peer Review feedback!

Brian P

@jc

It could well be an error but if true then the folks at Eirgrid will need to explain (good luck with that !).

When it comes to CER/DCENR/Eirgrid/SEAI providing numbers you’ll be in for a big surprise – plenty of spin – but no data.

@Brian Woods:

Brian, you write:

The ref would be to the mandatory use of liquid transport fuel as part of the embedded energy cost of building out the turbine and transmission infrastructure and also as part of routine maintenance, repair and renewals. These cannot be done with electricity.

To that I would add the much-ignored issue of scaling up from toytown pilot projects to real world magnitudes. For example, it is not inconceivable that the increase in demand for fossil fuel inputs created by subsidized massive alternative energy projects will drag fossil fuel prices upwards to such an extent that the net outcome will be worse than useless. As in the case of bioethanol, I suspect that many AE projects may at best be described as fossil fuel energy sinks that do little more than give entropy a shot in the arm.

As David MacKay points out, it’s a question of ‘numbers, not adjectives’:

http://www.withouthotair.com/

@Paul Hunt

How much should you pay for a new car than turns itself on and off at random?

Common sense and Paul Joskow say very little.

Eamon Ryan says says 2-3 times the price of a ordinary reliable car. Gullible punters mistake this madness for visionary thinking.

@ PH, BW, BG, TE, CG, RT, DE

So what’s it to be then? What mix is going to work in 30yrs time? and how is its development curve going to take place?

Intermittency is an obvious factor in RE particularly when capacity in Ireland reaches the 3GW mark and the challenge will be to deal with this. I think the solution will be a certain amount of excess thermal capacity, combined with some pumped storage and demand management (including real-time pricing) as well as interconnectors. This is of course going to add to the cost but in a predictable way.

The EROEI calculations are important to consider but I would be surprised if the newer large wind turbines were not in the 20+ range in an Irish offshore setting.

Of course they need to be installed and maintained using fossil fuels but I don’t think anyone (except SOI) makes claims to having complete energy independence with renewables.

With regard to the public money spent on the sector a lot of this would be passing through the hands of Eirgrid in setting up the necessary transmission system so value for money is an important issue here.

Can’t the 14c/kWh just have a certain timespan and apply to a certain annual GWh threshold and if so what’s the big problem?

Biofuels is a separate topic and reference to toytown in the context of offshore wind is foolish

@ Tim M.—–the EROEI of offshore wind turbines, will most likley be much worse than onshore turbines.
The cause of this will be a combination of the higher costs of maintainance due to much more complex methods and machinery required to service the turbines, the greater downtime of same due to the inability to reach the array during bad weather, the much greater costs of installation, and the over engineering of the towers and blades to withstand the forces and corrosion of the sea.
The load factor will surely be lower due to downtime, and the installation being probably on the Eastern seaboard where the turbines will lose the advantage of West coast turbines getting the full force of the prevailing SW winds.
The EROEI of a wind turbine with a 30% load factor looks far more likely to be from 3 to 5 to one, than your 18 to one figure.
The truth is that rigorous calculations have not to my knowledge been yet conducted—-lazy calculations from the wind energy industry have given the 20 to one figure that has been mentioned.
Here is a good project for an open minded Phd student.
In 30 years time I don`t think we will be burning fossil fuels—-where is the backup to come from then ? Anyway it won`t matter— by then the wind turbines will have been long abandoned to common sense and corrosion, and we will be getting our electricity from nuclear power stations purchased from the Chinese.

@ Denis

You’ve mentioned a few negative aspects of EROEI in relation to offshore wind but how about a few positive ones. The diameters of the blades are bigger leading to greater power densities and the fact that water is a great weight-carrying medium with no space restrictions means that turbines can be installed in a few quick steps. Don’t forget that waiting for weather windows does not really affect EROEI even though in reality it can be very expensive.

I don’t get your point about the east coast as the wind maps I’ve seen have favourable average velocities in this area.

The benefits of RE may be overhyped in some quarters but companies like Vattenfall and Iberdrola are no mugs and they are investing heavily in this area.

Structural strength, corrosion resistance and biofouling are big issues in the marine environment and Ireland should be embracing these challenges as part of a comprehensive r&d programme as innovations in these areas will have widespread applications across all marine sectors.

You can place all your bets on future cheap Chinese nuclear power but I think this is unlikely to be as cheap as you think it will be and will be dependent on its weakest link.

As a very rough illustrative example there is approx. 19GW of installed nuclear in the UK. Lets give it a 25yr lifespan and an 85% load factor. Total lifetime power produced (GWh) is 19 x 8760 x 0.85 x 25 = 3536850

At present the decommissioning costs for nuclear in the UK are about £70bn so dividing one by the other gives an approx. cost of €23 per MWh – just for decommissioning.

@Tim

“Lets give it a 25yr lifespan and an 85% load factor.”

25 years ??? How convenient.

The old Sizewell A Plant operated for 40 years (1966-2006).
Dungeness A operated for 41 years (1965-2006)

Hinkley Point A 35 years (1965-2000) etc etc etc.
Hinkley Point B still in operation 34 years + (1976-present)

Sizewell B is targeting 60 years.

It really would be useful if those who believe that a 14c/kWh REFIT is good value for money would present the facts regarding alternatives in a truthful manner.

@Tecumseh
“25 years ??? How convenient. ”

Doubling it to 50 years gives €11.50/MWh just for decommissioning. Still makes REFIT look good or what am I missing??

@ Tecumseh

I did say a very rough calculation but since you pounced on me I actually checked my references and I mixed up the percentage of the market (19%) with the nuclear capacity (12GW) so that doesn’t improve the situation for you. I also just checked Sizewell ‘A’ lifetime load factor and it comes out at about 75% and Heysham 2 was 77% for 2009 – 8.32TWh with 1230MW capacity.

@BigEnd

“Doubling it to 50 years gives €11.50/MWh just for decommissioning. Still makes REFIT look good or what am I missing??”

That £70bn figure contains about £30bn just for Sellafield plus you have all the issues with waste from the early sites. However it is what it is (or “we are where we are” !).

When you convert REFIT to MWh it works out at €140/MWh !

“The benefits of RE may be overhyped in some quarters but companies like Vattenfall and Iberdrola are no mugs and they are investing heavily in this area.”

They are businesses taking advantage of generous subsidies and tariffs. It is free money from the consumer. What else do you expect them to do?

Take away the tariffs and none of this junk would be installed.

@Tim—Companies investing in alternative energy technologies are not interested in saving the world through providing us with renewable electricity, but rather in their bottom line—-making as much money as possible for themselves and their shareholders.
They are able to do this by means of gullible governments believing the green sales hype that they put out, and providing the alternative energy promoters with large and favourable subsidies.
They are hardly going to calculate unfavourable EROEI values for the industry now are they?
However EROEI is the only valid way of ascertaining whether or not any energy producing system is really going to give a net energy gain, that can supply the grid and provide the surplus energy required to build and maintain another unit of the energy producing system, within a reasonable time frame.
If the system can not do this, we are truely wasting our precious dwindling resources on a fools errand.
Nuclear power must also be subject to this EROEI analysis.
Wind power in my opinion, is off to a very bad start by having to be constantly backed up by fossil fuel—-without this backup, wind power would be virtually usless.
If no energy producing system can be shown to give a net energy gain, then we would be very wise to husband our remaining fossil fuels, and keep them for absolutely essential items, but we should most certainly stop burning them, as soon as possible.

@ bg

How long will these generous subsidies you talk about last?

These companies are in it for the long haul and the subsidies are acting as risk alleviation in the early years. While you might take the hardshaw Alfred P Sloan approach, neither you or I or anyone knows for sure what will be viable in 30yrs time. Either way unsubsidised offshore wind will not be far off the mark as part of a wider integrated network.

One thing’s for definite and that is nihilism won’t be powering anything.

Comments are closed.