Britain’s biggest wind farm companies are to be paid not to produce electricity when the wind is blowing.
Published: 9:00PM BST 19 Jun 2010
Energy firms will receive thousands of pounds a day per wind farm to turn off their turbines because the National Grid cannot use the power they are producing.
Critics of wind farms have seized on the revelation as evidence of the unsuitability of turbines to meet the UK’s energy needs in the future. They claim that the ‘intermittent’ nature of wind makes such farms unreliable providers of electricity.
The National Grid fears that on breezy summer nights, wind farms could actually cause a surge in the electricity supply which is not met by demand from businesses and households.
The electricity cannot be stored, so one solution – known as the ‘balancing mechanism’ – is to switch off or reduce the power supplied.
The system is already used to reduce supply from coal and gas-fired power stations when there is low demand. But shutting down wind farms is likely to cost the National grid – and ultimately consumers – far more. When wind turbines are turned off, owners are being deprived not only of money for the electricity they would have generated but also lucrative ‘green’ subsidies for that electricity.
The first successful test shut down of wind farms took place three weeks ago. Scottish Power received £13,000 for closing down two farms for a little over an hour on 30 May at about five in the morning.
Whereas coal and gas power stations often pay the National Grid £15 to £20 per megawatt hour they do not supply, Scottish Power was paid £180 per megawatt hour during the test to switch off its turbines.
It raises the prospect of hugely profitable electricity suppliers receiving large sums of money from the National Grid just for switching off wind turbines.
Dr Lee Moroney, planning director of the Renewable Energy Foundation, a think tank opposed to the widespread introduction of wind farms, said: “As more and more wind farms come on stream this will become more and more of an issue. Wind power is not controllable and does not provide a solid supply to keep the national grid manageable. Paying multinational companies large sums of money not to supply electricity seems wrong.”
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866
I see you have not considered many compressors into one reservoir
And without quantification, the rest of your post is handwaving.
DirkH: ” This would in the longer term lead to a breakdown of market mechanisms and some regulation -or redistribution of profits- is necessary beforehand to maintain competition between different forms of energy generation.”
Agreed and well put.
We all dislike subsidies, but the lesser evil is that we need to accept some form of support mechanism to secure diversity of supply. The question is how best to handle that issue and to get public sign-on.
Thanks for your constructive reply BTW.
kadaka (KD Knoebel) says:
June 22, 2010 at 9:39 am
I liked your list of windmill manufacturers:
2. Enercon (Germany) 19,000 MW[2]
Says it all really doesn’t it?
Jordan says:
June 22, 2010 at 10:42 am
[–snip–]We all dislike subsidies, but the lesser evil is that we need to accept some form of support mechanism to secure diversity of supply. The question is how best to handle that issue and to get public sign-on.
I disagree most vehemently!
The only valid way of ensuring diversity is via the antitrust mechanism.
And anyway: Why should anyone be made to ‘subsidize’ —pay for— someone else’s wants/needs?
A business venture is just that: Either it works, or it does not.
899: “I disagree most vehemently!
The only valid way of ensuring diversity is via the antitrust mechanism.”
disagree all you like but the threat of antitrust action will not attract investment in a wnner-takes-it-all Market
Ideology is the path to failure in this case. So try to let go and understand the issues.
Jordan says:
June 22, 2010 at 12:31 pm
899: “I disagree most vehemently!
The only valid way of ensuring diversity is via the antitrust mechanism.”
disagree all you like but the threat of antitrust action will not attract investment in a wnner-takes-it-all Market
Ideology is the path to failure in this case. So try to let go and understand the issues.
So, no competition, then?
How well did that work out for Americans when Rockefeller used his vast power to drive other competitors out of the marketplace?
Just as soon as the U.S. Congress broke up his trust, the price for oil plummeted to reasonable levels.
899 there are two issues at stake here.
Firstly, if we rely solely on the market, all we will ever get built will be CCGT. There is no investment case for other technologies – they simply cannot compete on cost, firmness and flexibility.
Threatening the Market on antitrust issues will not get the investment we need for a diverse portfolio of generating assets. So we’re gonna have to come up with something to fix the Market failure.
Secondly, when your power supply is dependent on a single fuel type, there are serious Market issues which you cannot control. If Germany threatens its eastern neighbours on antitrust issues, what good do you think it’s gonna do?
Nobody here likes subsidy. But something has to intervene to help other generating technologies to compete with CCGT if we want security of energy supply in our homes and businesses.
Like I said, this is not the time to cling to ideology on this issue.
GTG
Tim:
“The robust answer may be worse than you thought.”
Well, I’m not the one to prove anything. You are, as it is you who claim that big government is bad. I say it is neither. It can be good or bad or somewhere in between. The European countries you have hand picked happens to be some of the weakest economies in Europe. Why don’t you do the same calculation with Denmark, Sweden, Finland, France and Germany?
Or does they not provide the robust answer that you’re looking for?
“Offhand for wind turbines in the US, looks like most of the money is not staying in the US, since the main components are likely not made in the US. Unless, of course, if the bulk of the money is spent on the installation, using “local” installers and supplies. Which would indicate installation costs that are very very high.”
Firstly the numbers you have are global historical installed capacity and hence are not valid for the US. The ones you should look for is market share in the US for 2009. As I recall, I believe that Vestas, GE and Siemens are the main players. GE is American, Siemens is also noted on NYSE and Vestas has international owners but are traded on the danish stock exchange.
It is a valid concern. Obviously today we live in a global economy and the goods are shipped around the world. However most turbines manufacturers (if they have sufficient local market share) have production in the region (as North America), because transport expenses makes their products less competitive. A modern turbine is maybe 300-500 tons of steel and the finished blades, tower, nacelle and hub does not fit in the cheaply shipped containers and being mostly steel they are not light either. Vestas and GE has manufacturing in the US and also relies heavily on local suppliers. Siemens has a blade factory, buys towers local and will soon commission a nacelle plant.
Another point is that the quality requirements for the parts are rather high, why the Chinese and other LCC are not as competitive as parts of lower quality.
Justa Joe,
“How does your commitment to “individual freedom” co-exist with your desire to ram your self enriching “renewable” energy” schemes down public’s throat at the public’s expensez?”
Enriching? Plueeeeaze.
I’m not getting rich. Sorry. And I’m not for green energy as such, read what I have written above. Yes I belive that we should have diverse and independent energy suplies, but not at any cost.
“Their wealth doesn’t come from tax payer subsidized “green energy” schemes. That’s for sure. From what I’ve read these 2 small countries’ relative wealth appears to come from good ol’ fashioned capitalism and industrialization.”
And that’s not the case for Denmark? How do you know?
Jordan says:
June 22, 2010 at 2:36 pm
899 there are two issues at stake here.
Firstly, if we rely solely on the market, all we will ever get built will be CCGT. There is no investment case for other technologies – they simply cannot compete on cost, firmness and flexibility.
Threatening the Market on antitrust issues will not get the investment we need for a diverse portfolio of generating assets. So we’re gonna have to come up with something to fix the Market failure.
Secondly, when your power supply is dependent on a single fuel type, there are serious Market issues which you cannot control. If Germany threatens its eastern neighbours on antitrust issues, what good do you think it’s gonna do?
Nobody here likes subsidy. But something has to intervene to help other generating technologies to compete with CCGT if we want security of energy supply in our homes and businesses.
Like I said, this is not the time to cling to ideology on this issue.
GTG
Any business which relies upon a government subsidy isn’t a private business. Rather it’s nought but an appendage of government.
Subsidies tax the citizen TWICE:
[1] The fact of the tax money being paid out to subsidize
[2] The fact that that citizen pays again when using the product or service.
“And that’s not the case for Denmark? How do you know?” -Trolls Halken
Denmark’s relative wealth is greatly contributed to by their exploitation and exportation of North Sea fossil fuels (I commend them for it). It sounds like you’re a denier in regard to this verifiable fact.
“Justa Joe says:
June 23, 2010 at 4:58 pm
“And that’s not the case for Denmark? How do you know?” -Trolls Halken
Denmark’s relative wealth is greatly contributed to by their exploitation and exportation of North Sea fossil fuels (I commend them for it). It sounds like you’re a denier in regard to this verifiable fact.”
And pretty substantial. I just checked in the CIA world factbook – 100,000 barrel / day net export of oil, 2.5 billion cubic meter of natural gas net export per year if i interpret the numbers correctly, for a population of 5.5 million. Numbers from 2008.
The UK has become a net importer of both.
Wait… OIL:
Denmark: 5 Mill people, 100,000 barrel a day net export.
Russia: 160 Mill people, 5 Mill barrel a day net export. 80 times the people, 50 times the oil exported.
GAS:
Denmark: 5 Mill people, 2.5 billion cubic meter net export
Russia: 160 Mill people, 200 billion cubic meter net export. 80 times the people, 80 times the export.
All in all, Danes export more hydrocarbons than Russians per head.
Very green 😉
So that explains how they can afford the windpower…
“899 says:
[…]
Any business which relies upon a government subsidy isn’t a private business. Rather it’s nought but an appendage of government.”
Fundamentally you’re right but it doesn’t help – gas would drive the other energy sources out of business under current circumstances. You can just let it happen, or you can make a policy decision to help the disadvantaged technologies to keep some of that capacity alive. Germany has decided to do the latter long before solar and wind came into being; for instance coal mining has been subsidized. On one hand, that’s politicians buying votes of the people in the coal mining areas; on the other hand it was a strategic decision after the oil price shock of 1972. It’s an insurance policy.
When i said that a monopoly would come into being i thought about a technological monopoly. There might still be several providers in a gas-only energy infrastructure but it’s a technological monopoly, like a monoculture in agriculture, and it would be life-threatening for an economy if its only fuel source would suddenly become scarce or very expensive, whether through political blackmail or through market forces.
DirkH says:
June 23, 2010 at 5:44 pm
[–snip–]
All in all, Danes export more hydrocarbons than Russians per head.
Very green 😉
So that explains how they can afford the windpower…
Yeah, and be pretentious as well as condescending with the rest us at the very same time!
Denmark
Capitol city: Jokenhagen.
DirkH says:
June 23, 2010 at 6:02 pm
[…]
Any business which relies upon a government subsidy isn’t a private business. Rather it’s nought but an appendage of government.”
Fundamentally you’re right but it doesn’t help – gas would drive the other energy sources out of business under current circumstances. You can just let it happen, or you can make a policy decision to help the disadvantaged technologies to keep some of that capacity alive. Germany has decided to do the latter long before solar and wind came into being; for instance coal mining has been subsidized. On one hand, that’s politicians buying votes of the people in the coal mining areas; on the other hand it was a strategic decision after the oil price shock of 1972. It’s an insurance policy.
When i said that a monopoly would come into being i thought about a technological monopoly. There might still be several providers in a gas-only energy infrastructure but it’s a technological monopoly, like a monoculture in agriculture, and it would be life-threatening for an economy if its only fuel source would suddenly become scarce or very expensive, whether through political blackmail or through market forces.
Before any government steps in and attempts/pretends to decide anything in the name of its people, there needs to be FAR more than just a ‘national consensus.’
Let the PEOPLE decide what’s best for them.
Government should just GET THE HELL OUT OF THE WAY of private decisions!
If the PEOPLE decide to go with a more expensive solution, then it is for THEM to decide and NOT some government CONTROL FREAK sitting behind a desk and DICTATING matters of what is, what will be, or not.
In a FREE country, FREE ENTERPRISE rules supreme.
“899 says:
[…]
Before any government steps in and attempts/pretends to decide anything in the name of its people, there needs to be FAR more than just a ‘national consensus.’
Let the PEOPLE decide what’s best for them.[…]”
I sympathize with your opinion. And i would love if Germany scaled the subsidies back because it would make for cheaper energy, and that’s something i like. But i also think that Jordan has a point; a mixture of energy sources must be preserved to a certain extent. It’s difficult to find the right balance, but no need to get outraged.
899 says: “Any business which relies upon a government subsidy isn’t a private business. Rather it’s nought but an appendage of government.”
That’s probably true, especially in the case of power and energy supply. But then again, if you did not have any power or energy supply for even just a few days, your lifestyle would be nothing like the lifestyle you presently take for granted.
Governments never really take their hands off any industry when you stop to think about it. Intervention and regulation is commonplace.
I’m not saying these things because I have a problems with markets – but we should let the facts speak for themselves.
“Government should just GET THE HELL OUT OF THE WAY of private decisions!”
Like private decisions to exploit child labour, prostitution, manipulation of the disadvantaged and infirm, selling goods on false trade descriptions (cheating), food poisoning, chemical poisoning, management of controlled susbtances, causing death and injury to employees or the general public, etc, etc – the list of regulation for public protection is too long. Markets operate alongside all of this – but the market is subordinate. Firms can take their chances in the market, but they suffer penalty for breach of regulation.
“If the PEOPLE decide to go with a more expensive solution, then it is for THEM to decide and NOT some government CONTROL FREAK sitting behind a desk and DICTATING matters of what is, what will be, or not.”
But nobody will invest in the more expensive generating techology 899. If one generating technology costs $700 per kW, who is going to get private investors to put their money into another which costs (say) $900 per kW. Fact of life – it simply doesn’t happen!
If we leave it to the unfettered market, things will drift along until one day there will be a horrendous loss of supply. This will result in loss of lifestyle, loss of businesses and even loss of life. And then what happens – Government step in where the market failed. So what does it achieve? We’d have to be pretty stoopid to let it go that far.
“In a FREE country, FREE ENTERPRISE rules supreme.”
I’ll need to come visit your planet for a look around. I expect to see an economy with absolutely no regulation of any economic activity where you live? Or is it just that you haven’t noticed?
In the real world we do need to be pragmatic.
Jordan says:
June 24, 2010 at 10:11 am
[–snip propaganda–]
In the real world we do need to be pragmatic.
Your favored way of deciding things for others —the old Soviet Union 5 year plans— went the way of the dinosaur for a reason: The marketplace, unfettered with artificial manipulations by people who pretend to know better, is the only REAL option.
You talk about U$700/Kw for power —a straw man argument of the worst sort— but the marketplace would never tolerate such an egregious price, and so both the people and business would seek other solutions.
More than likely others would step in and provide those other solutions at far more reasonable prices and better service to boot.
Government is not any kind of answer; it never has been, and it never will be. For the largest part it speaks to the highest bidder, i.e., the ones whom behind the façade who fill the pockets of the anointed appointed to reach a predetermined decision.
And if THAT isn’t obvious by now with the current state of ‘official weather’ prognostications, then you’ve either been asleep, or you’re a part of the problem.
899 – I can see this is all above your head, do let me explain.
A brand new shiny combined cycle gas turbine power station might cost in the region of $700 per kW (note … NOT kWh). That means a 500 MW (500,000kW) generating station will cost around $350M. Gas has low operating costs and high efficiency (50%).
A coal fired unit will be more like $900 per kW. So a 500MW generating station will cost more like $450M (extra $100M needed – see any possible problems?). Coal fired generation has higher operating costs and lower thermal effiiciency (low-to-mid 40’s).
So when you go to the bank to raise capital for your new 500MW power station, one requires $100M more up-front capital than the other. And fuel input prices don’t cover the difference. The coal fired option gets thrown out every time. Over time, we become increasingly dependent on gas.
And much of Germany’s gas comes from Russia – so no point in arguing with them about antitrust issues.
Did you get that? The market doesn’t deliver diversity: “Houston we have a problem.”
It is not my “favored way of deciding things for others” – there is an obvious and foreseeable issue here. We need to think forward about the consequences of our present direction. Linking that to “old Soviet Union 5 year plans” is just emotional claptrap.
Now I mentioned a number of areas where you seem to have failed to notice the interfering hand of regulation in your life. The purpose of regulation (including law) is to anticipate serious issues and to keep things within certain rules for the general public welfare. I agree that it can go too far – but complaining about the extremes does not justify the abolition of good regulation.
I’ll give you another example – food standards. When you go into the store to buy a sandwich or a burger (or whatever), you do so in the relative comfort that you are not going to be poisoned. There’s a problem with salmonella, listeria, botulism, mercury, cadmium, and all sorts of nasty things: you can’t always tell that they are in your food. And you don’t want to find out that your food was contaminated when it is in your gut. It’s a bit too late to find out that there is an issue when you are already sick. So the answer is to have good regulation of the food industry.
But anyway 899 – your rantings are becoming tiresome. I’ll sign off now, with the friendly suggestion that you step off the ideological pedestal. Take a moment to try to work out how the world around you really works.
Jordan says:
June 25, 2010 at 5:01 am
899 – I can see this is all above your head, do let me explain.
Why, yes, Jordan!
Should I address you as ‘Your Assholiness?’
Heaven forbid that I even challenge You Assholiness’s proclamations, lest I be summarily consigned to the trash heap of life!
Meanwhile, back in reality: The PEOPLE make decisions for themselves.
.
Can’t have that, now, can you?
899 says: “Should I address you as ‘Your Assholiness?’”
Oh dear.
Political ideology followed by ad hominem attack. At least you have been consistently poor in your arguments.