Friday, 19 May 2017

Does Wind Energy Provide A Good Return on Investment for the Consumer ?

by Owen Martin

When we spend money to have our electricity generated by wind, how much are we saving on not having to import fossil fuels ? One might expect that € 1.00 spent on wind is € 1.00 less that has to be spent on fossil fuels. 

In 2015, wind energy received € 426 million in energy payments. Energy payments are what generators receive daily in the electricity market and are normally set by the price of gas. On top of this, wind receives a subsidy from the PSO Levy. For 2015, this amounted to about     € 85 million. Wind also receives 7% of its revenue in capacity payments so about € 35 million and 5% of wind energy has to be shut down for security reasons for which they receive about € 20 million in curtailment payments.  

 That's a total of € 566 million in direct payments to wind generators. 

According to the SEAI, wind energy displaced € 233 million in fossil fuels for 2015. That means that we have to spend € 1.00 on wind energy to replace 40 cents worth of fossil fuels. If we include the increased grid and system costs to accommodate all this wind, then of course the savings are even less than that. 

It's not the best value for money for the consumer but for greens value for money is not a priority and for the wind companies of course it provides a great return to shareholders.



REFERENCES

1) SEMO total energy payments for 2015 equals € 1.8bn

http://www.sem-o.com/pages/MDB_ValueOfMarket.aspx

Wind provided 23% of electricity according to SEAI, this means wind received € 426 in energy payments.

http://www.seai.ie/Publications/Statistics_Publications/Energy_in_Ireland/Energy-in-Ireland-1990-2015.pdf

2)  PSO Levy for 2015 :

https://www.cer.ie/docs/000967/CER14361%20PSO%20Levy%20Decision%20Paper%20%202014-15%20(New).pdf

Assumed that wind made up 90% of PSO payments to renewables.


3)  "Capacity payments accounted for between 7% (for wind) and 30% (for peaking plants) of generators’ revenue in 2013".

http://ireland2050.ie/questions/what-are-capacity-payments/

426m + 85m = 511 / 93% = 549m  * 7% = 38m

4)  "In Ireland, the dispatch-down energy from wind resources was 348 GWh: this is equivalent to 5.1% of the total available wind energy". 

http://www.eirgridgroup.com/site-files/library/EirGrid/Annual-Renewable-Constraint-and-Curtailment-Report-2015-v1.0.pdf

Based on what wind received in energy payments ( €426m / 6823GW = € 62.40 MW/hr) they received roughly € 21m in curtailment payments ( 348GW * €62.40)



4 comments:

  1. The S.E.A.I. Has no credibility on any thing. Their reports and figures should be thrown in the bin. Reports using padded irrelevant permeate their reports. Independent International research says that the Maximum penetration of the domestric market by wind energy production is 20%. Wind turbines loose up to 50% of their capacity every 6 years The whole renewable program HAS FAILED. Most sensible people would have abandoned it by now.

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  2. It would be interesting to see where this alleged saving was made. Money point was burning 5,000 tones of coal in 2010, I wonder what is burned last year.

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  3. As wind turbine density increases the amount of wind energy available for conversion into electricity decreases. As there are only 2 types of energy potential and kinetic. Once wind energy is used it cannot be reused. Wind turbines spaced too close together loose up 40% of their capacity factor due to wind wake. The Irish wind developers do this in spades . Over intensive commissioning of wind farms in specific area leads to an up to 86% drop in the wind energy available for conversion into electricity. For down wind wind farms. So as you add capacity, in such a manner as Irish wind developers do, output will drop. But they still have to pay back the capital investment used when commissioning the wind farm. So unless normal business practise applies and these investments go bankrupt. To keep them in business subsidies have be increased continually as output will be doubly decreased. As large wind turbines can loose 50% of their capacity factor, every 6 years, due to ageing. Therefore Irish consumers will obtain less value for their wind investments over time. The chances of meeting the EU CO2 targets are ZERO. Therefore you have to add in the fines in to get the true negative impact of the wind program. Only crazy people would continue to invest in wind energy. In such circumstances.

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