Tag Archives: wind power

The Chaos of German ‘Renewable’ Energy

I have been detailing the disaster of Germany’s dash for renewables, and the problem is now spilling over to Germany’s neighbours. I picked up this story from a translation of a Die Welt article at GWPF:

Germany considers itself the environmental conscience of the world: with its nuclear phase-out and its green energy transition, the federal government wanted to give the world a model to follow. However, blinded by its own halo Germany overlooked that others have to pay for this green image boost and are suffering as a result.

For example, Germany’s ‘eco-miracle’ simply used the power grids of neighboring countries not only without asking for permission but also without paying for it. Now Poland and the Czech Republic have pulled the plug and are building a huge switch-off at their borders to block the uninvited import of green energy from Germany which is destabalising their grids and is thus risking blackouts.

The problem is detailed further here, under the catchy title of ‘German Renewables Run Amuck’:

Germany allows any family to put a solar power unit on its roof and start feeding its output into its own house and thereby replace public power supply. Initially, the panels on the roofs fed cheap electricity into the grid and brought down the costs. But soon there were too many. On bright, sunny days, those families were generating anything up to 30 gigawatts of electricity and feeding it into the grid. The result was massive surges in the grid. There was not enough demand for the power, and Germany exported power to Poland at such times. That destabilised the Polish grid, and Poland is now installing equipment to stop power inflows from Germany. In Germany itself, the midday surge in power reduced the demand for power from conventional plants, which are no longer profitable, so no one is prepared to invest in conventional power plants.

And more detail again here:

One impact from rising intermittent German wind power generation in the north of the country is of electricity spilling into neighboring networks en route back into southern Germany or Austria, called loop flows.

Another is of rising exports of cheaper, intermittent power, undercutting the economics of baseload power in Germany’s neighbors.

The interesting point here is that the undercutting has been spun as being a result of cheaper German energy prices as a result of them shifting to renewables:

Moreover, by blocking the German access to their grid, they prevent Germany companies from selling their electricity, which is cheaper than that of the Central Europeans, to Austria.

“This is what it’s really all about,” says Rainer Baake, director of the think tank Agora Energiewende and former high-ranking official in the German environmental ministry. “Germany’s increase in clean energy has led to Germany’s wholesale electricity prices becoming cheaper and cheaper. Now it’s less expensive to import electricity from Germany than to produce it in coal fired power plants in Eastern Europe – let alone to build new nuclear power plants.”

I took a look at a translation of the Agora website, and they are a think tank dedicated to advocacy for renewable energy. This is the situation of German energy costs in relation to the rest of Europe:

The global average for the cost of one megawatt hour of electricity is around 23 euros ($31). In Germany, the same runs about 45 euros ($60) – making electricity here the second-most expensive in Europe (after Denmark).

As a note, Denmark has also rushed into wind energy. So it not that Germany is creating cheap electricity, but rather that intermittent energy leads Germany to simply dump their excess on their neighbours, as they absolutely have to remove it from their own grid, or risk a collapse of their own grid. This then exports the problem to other countries, who then have to deal with the consequences of power peaks from Germany, as well as the impact of their dumping on the economics of their own energy sector. It is no wonder that these neighbours are up in arms over the issue. It is a very simple issue; they are importing problems of intermittency that are not of their own making. It seems that if Germany wants to go down their own mad route to renewables, those who are following their own policy of generating reliable energy should not pay the price.

In addition to the fundamental problems of renewables again becoming evident, the reaction of renewable energy advocates is revealing. The claim that the reason for the problems being ‘cheap’ German renewable energy is simply laughable. Nevertheless, it appears in a report on the issue without any reference to the sky high energy prices within Germany. The high energy prices in Germany are now really starting to develop acute problems for the German economy. This is a passage from one of the articles cited earlier:

The path toward an energy policy that everyone can agree on is a bumpy one, which particularly economists are increasingly worrying about. The German industrial sector accounts for 24 percent of the gross domestic product; many of its businesses have high electricity consumption.

Every second one of these businesses associates the ongoing energy sector with a decline in competitiveness, according to Hans-Heinrich Driftman, a businessman and head of the Federation of German Chambers of Industry and Commerce.

Driftman said almost all businesses should expect higher electricity bills for 2013, compared to 2012. He said passing on to the consumers the costs for funding renewable energies his company’s bill will increase from 300,000 euros ($398,000) to 450,000 euros ($598,000).

“With these amounts of money, as a businessman I have to think about where I can make some cuts,” Driftman said.

Indeed, I have posted on this subject several times. In many of the posts, it is apparent that there is increasing alarm over the cost of Germany’s renewable energy policy by businesses in Germany. I recently posted on renewable cost exemptions being made to certain businesses, but this just hides the kind of business closures that garner headlines, rather than the gradual erosion of competitiveness that comes with renewable energy. For every Euro not paid by the exempted businesses, someone somewhere is making up the difference:

Since Spenner’s company is registered as an “energy-intensive business,” his electricity bill is exempt from the rollover costs of renewable energy production. These costs are made up of government-guaranteed reimbursements to the energy producers based on the amount of electricity they feed into the grid coming from renewable sources.

These extra costs, which shall be passed on to consumers, are estimated to amount to 23 billion euros ($31 billion) for 2013. This means that each electricity consumer will pay an extra 5.28 cent per kilowatt hour.

But Spenner wonders how long the government can afford sticking to its promise of exempting businesses such as his from the extra costs. “We’re worried when we see how private households are being maneuvered into opposing energy-intensive sectors. This should not be the case, because if we weren’t exempt, we’d be facing an existential problem.”

In addition to Germany facing problems, the problems are broader than Germany. The push towards renewable energy and the anti-fracking policies throughout Europe are now seeing interest from European companies to relocate to the US, where the fracking revolution has seen diving energy costs. This from the New York Times:

LONDON — On Dec. 19, Voestalpine, an Austrian maker of high-quality steel for the auto industry, announced that it would build a plant in North America that would employ natural gas to reduce iron ore to a kind of raw iron that would then be used in the company’s European blast furnaces.

Asked whether he had considered building the plant in Europe, Voestalpine’s chief executive, Wolfgang Eder, said that that “calculation does not make sense from the very beginning.” Gas in Europe is much more expensive, he said.

High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.

“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.”

Both consumers and the industry are upset about high energy costs. Energy-intensive industries like chemicals and steel are, if not closing European plants outright, looking toward places like the United States that have lower energy costs as they pursue new investments.

Germany has now grabbed the lead in the transition to renewable energy. Unlike a country like New Zealand, they have been able to export their problems to their neighbours, at least for the moment. New Zealand has no such neighbours. However, in addition to Germany’s neighbours bearing the price of the intermittency of German energy, they have to deal with their own problems; an increasingly uncompetitive energy industry in Europe overall. This is down to the ‘green’ objections to fracking and renewables policies, and they will pay a price in jobs and their manufacturing output.

As I have said in previous posts, the ‘green’ renewables future is not now just in the future, but is becoming a reality. That reality is very straightforward. It is an increase in the cost of living and a declining economy. It is folly beyond belief, and New Zealand is endorsing this madness in its own dash for ‘renewable’ expensive, intermittent, and economically damaging energy. When is the New Zealand government going to wake up from its disastrous and politically correct dash for renewables? I simply despair.

German Wind Energy

I have unusually added a second post today, and if you have not seen it, you may wish to see my post on the Monckton-Doha affair. The article that has prompted this post is one I have just stumbled upon at Spiegel, in which Spiegel interviews Stephan Kohler, the head of the German Energy Agency. I will quote the early part of the interview:

SPIEGEL: Mr. Kohler, according to the government’s plans, the last German nuclear power plant will go offline in 2022. What will the domestic power supply look like at that point?

Kohler: It will be interesting. It’s easy to shut down a nuclear power plant, but that doesn’t mean you have something to replace it with. We know today, for example, that we don’t have enough reliable power plant capacity in southern Germany to be able to offset the loss of nuclear energy.

SPIEGEL: Solar and wind aren’t enough?

Kohler: According to the generally accepted opinion, the transition to renewable energy sources means that we will give up nuclear power and rely on wind and solar instead. The reality is that we’ll need conventional power plants until at least 2050, even if we do create massive renewable energy sources. Many people dispute this. They say that we could replace power plants operated with fossil fuels by adding more renewable energy sources. My response to them is: It won’t work.

SPIEGEL: What’s the problem?

Kohler: When a new wind farm is opened and we’re told how many thousands of households it can supply with electricity, that number applies to only a quarter of our demand. In Germany, 75 percent of electricity goes to industry, for which a secure supply — that is, at every second, and with constant voltage — is indispensable. Neither solar nor wind power are suitable for that purpose today. Both fluctuate and provide either no secure supply or only a small fraction of a secure supply. Solar energy has a load factor of about 1,000 hours a year. But there are 8,670 hours in a year.

SPIEGEL: But on some days solar power is already enough to supply all of Germany with electricity.

Kohler: Photovoltaic systems are distributed across hundreds of thousands of small power plants, which sounds nice. But when the sky is blue over Germany, these hundreds of thousands of decentralized plants act like a single, large power plant. All of the sudden we have 30,000 megawatts coming into the grid, which, in many cases, we can’t use.

SPIEGEL: Is that so dramatic? It’s better to have a surplus than a shortage.

Kohler: I don’t want to bore you with the details, but a surplus and fluctuations lead to very unpleasant systemic effects. We have voltage fluctuations within the grid that create problems for industry. Or we overload the grids in neighboring countries. Poland is in the process of installing technical equipment to protect its grids by keeping out surplus German electricity.

SPIEGEL: So far the prognoses that anticipated possible blackouts during peak load times have not come true. Weren’t the concerns, including yours, exaggerated?

Kohler: We were lucky in the winter of 2012. By 2015, we will manage to secure the current power supply with old power plants. Then a number of large power plants in southern Germany will gradually go offline, starting with Grafenrheinfeld in Bavaria. If we don’t act very quickly now, the reality will show us that we face real problems.

And so the article goes on, detailing the problems associated with intermittent energy provision, and making points that skeptics have been making for so long. The simple and plain fact is that these so-called renewable sources of energy are simply a disaster. An expensive and pointless disaster. I have written on several (e.g. see here) occasions about the dangers of the move to renewable energy, and German experience trumps the sunny and rosy predictions given for a ‘renewable future’. If Germany cannot make it work, what on earth makes people think it can work in New Zealand. After all, we are looking at the example of Germany, which is famed for great engineering and efficiency.

More on the Reality of Living with Wind and Solar Energy

A while ago, I discussed that the future has arrived, and that we can see the real cost of ‘green’ energy policies in the case of Germany. If you are a business owner, or just and ordinary electricity bill payer, you should read the earlier post. The sudden retreat in Germany from nuclear power has left the country reliant on renewables, and energy shortages, energy unreliability and skyrocketing energy costs are the result. Just to serve to emphasise the point, Spiegel online has yet another news story that tells of the many problems being experienced in Germany. All the ingredients I long ago discussed are there.

  • Problems concerned with the intermittent power provision
  • High costs associated with connecting renewables to the grid
  • High costs associated with storage of energy
  • Hight costs associated with keeping backup online from conventional sources for when the wind does not blow / sun does not shine, including inefficient use of conventional capacity
  • High costs of investment from the necessity to build conventional plant backup for each renewable sources (capital expenditure)
  • Rationing of power, in this case, having large business energy users being paid to shut down their factories – paid to produce nothing

I may have missed a couple of points, but I am sure you get the picture. The consequences of renewable energy in Germany are now not the bright hypothetical future painted by ‘green’ propoganda, but are now very real and dismal. I have long admired Germany as an industrial power, but even Germany cannot be immune from the consequences of their mad ‘green’ energy policy. If the quotes I give below later are not enough, read the whole article. It is very clear and very simple to see the consequences of moving to ‘green’ energy.

Countries that follow a green energy agenda are putting an economic gun to their own heads, and pulling the trigger. In the case of Germany, the abandonment of nuclear has made the future now. We have yet to see the full consequences of energy based upon renewables; they will be seen in the next few years, but right now, the situation for energy provision is already dire. It is already very, very bad. It is a disaster, and even the ‘green’ Germans are starting to choke on the consequences. I will now quote at length from sections of the Spiegel article and let the quotes speak for themselves.

With the government driving up the price of electricity, Rösler seems to feel an urge to make himself useful by dispensing advice on how to save money and energy. On Monday, grid operators announced a significant increase in electricity prices in Germany, prices that are already the second-highest in Europe.

The price hike is the result of an assessment under the Renewable Energy Act (EEG), a sort of green-energy solidarity surcharge that is automatically added to every consumer’s electricity bill. Under the agreement reached in the last round of negotiations, the assessment will increase from 3.6 cents to 5.4 cents per kilowatt hour.

With the new rates, German citizens will be paying a total of more than €20 billion ($25.7 billion) next year to promote renewable energy. This is more than €175 for an average three-person household, a 50 percent increase over current figures. And then there are the additional charges a consumer pays for the electricity tax, the cogeneration assessment, the concession fee and value-added tax.


The rising cost of electricity is also a burden on businesses. According to Oettinger, energy costs now represent the biggest liability for Germany as a place to do business, especially in light of the marked increase in the number of blackouts and voltage fluctuations in the grid.

Consumer advocates view the electricity price as a social issue, not unlike the price of bread in ancient Rome. The Paritätischer Gesamtverband, an umbrella association for social-welfare groups, estimates that about 200,000 recipients of benefits under the Hartz IV welfare reform program for the long-term unemployed saw their power shut off last year because of unpaid bills. The VdK, Germany’s largest welfare organization, uses the term “electricity poverty” and is sharply critical of what it sees as a “glaring violation of basic social rights.” According to the VdK, it is unfair that citizens are being asked to bear much of the burden of costs and risks associated with the energy turnaround.


Unfortunately, the electricity is not needed as urgently along the thinly populated coast, but rather in the distant southern states of Baden-Württemberg and Bavaria. The two states have large populations and industry, as well as a number of nuclear power plants scheduled to be shut down soon. For this reason, the federal government’s decision to expedite the expansion of offshore wind power means that new power lines will have to be built, at a cost of €20 billion to €37 billion — the most expensive infrastructure project since German reunification.


Franken is part of the so-called cold reserve of the German energy supply. As long as there isn’t enough storage capacity, virtually every solar plant and every wind turbine has to be backed up by a conventional power plant. Without this double structure, the power supply would collapse.

At the same time, however, the boom in subsidized renewable energy is ensuring that conventional power plants are no longer profitable. Since the law requires that preference be given to green energy, if it’s available, gas-, oil- and coal-fired power plants frequently have to be shut down to avoid overloading the grid. This reduces their revenues while increasing costs because powering plants up and down consumes a lot of fuel and inflicts additional wear and tear on the equipment.

In the past, power plant operators were able to charge higher electricity prices around midday. But now there is more competition from solar plants at this time of day. On days when there is a lot of wind, the sun is shining and consumption is low, market prices on the power exchange can sometimes drop to zero. There is even such a thing as negative costs, when, for example, Austrian pumped-storage hydroelectric plants are paid to take the excess electricity from Germany.

The prospects are so poor that energy providers have little interest in building new power plants. Under current conditions, even the most modern and efficient combined steam and gas power plants are not recovering billions in investment costs.


With extremely cold temperatures gripping large parts of Europe, there was a spike in power consumption. Hamburg was on the verge of a blackout, says plant manager Lutz Bandusch. To keep the lights from going out in the city, he shut down the blast furnaces and rolling mills in Finkenwerder.

Instead of making money by producing steel, the plant operator was compensated for not producing it. It was a profitable arrangement for the steel mill. “It has to be worthwhile from an economic standpoint,” Bandusch admits, even though he felt that it was somewhat odd to be getting paid to do nothing.


Batteries are also part of the government’s plans, and €400 million in public funds have already been earmarked for related R&D. The industry also has high hopes for battery technology. But it this realistic?

For the fun of it, Florian Schlögl, director of the regenerative power plant department at the Fraunhofer Institute for Wind Energy and Energy System Technology (IWES) in the central German city of Kassel, calculated how large a battery would have to be to supply a city like Munich (pop. 1.38 million) with electricity for two or three days.

The answer, says Schlögl, depends on which battery technology is available. A cube-shaped lithium ion battery, such as the ones used in cell phones and laptops, would be 53 meters (174 feet) long on each edge. This would make it as tall as the roof of the Allianz Arena, where FC Bayern Munich plays its home games, and it would weight 250,000 metric tons. The dimensions would be even larger in the case of a lead acid battery, such as those used in cars. A cube-shaped battery would be 93.3 meter long on each edge — and Munich would have a new signature landmark.


In the next few years, electricity consumers will pay for more than €100 billion in subsidies for solar power. Additional billions will follow. Like its predecessor, the current CDU/CSU-FDP government has also bowed to the solar lobby. The latter’s business model is still based on collecting as many subsidies as possible rather than on feeding as much usable electricity as possible into the grid.

This is not the future. It is the ‘now‘ in Germany. It is the future being embraced by most of the major political parties in New Zealand. They are embracing economic decline, and telling you the future is bright. It is not bright, but a future of darkness in which the lights go out, and you pay ever more for an ever less reliable energy system. It is job losses, a lower standard of living, and energy poverty. It is time to wake up. We can now see the future. When you hear ‘green’ platitudes and arguments, point their attention to Germany. When you hear a politician wittering about the benefits of going ‘green’ point the politician’s attention to Germany. When you hear the ‘green’ platitudes and arguments for the wonders of renewables, paint the picture with the now of Germany.

Wind Energy: The Future Has Arrived

One of the sites that I visit quite regularly is the Global Warming Policy Foundation (GWPF). As of late, there have been a deluge of articles and links on the subject of wind energy, many of which are focused on the UK and EU. Whilst this blog is primarily looking at New Zealand, the experience of the UK and EU may be seen to be useful in understanding wind energy in general. This latest story grabbed my attention and prompted the post:

THE amount of electricity produced from “green” energy sources in Scotland fell by almost half for a period earlier this year – because it was not wet or windy enough.

• Murdo Fraser voices concern despite 13 per cent rise in green power over first half of year

• 35 per cent of Scottish electricity demand met by renewables

• Renewable energy down 20 per cent in second quarter

The figures prompted opposition concerns that Scotland could be left in the dark if the “wind isn’t blowing”.

First Minister Alex Salmond wants to pioneer a “renewables revolution” by generating the equivalent of all the country’s electricity needs from “clean” sources, such as hydro, wind and wave power.

But, according to government figures, renewable electricity fell to 2,498 gigawatt hours (GWh) between April and June from 4,596 GWh the previous quarter, the most dramatic fall in mainland Britain. There has been a 600 GWh drop from the same quarter last year.

For those who view wind as a source of power as near to useless, this may come as no surprise. However, it is a story that only serves to emphasise the problems inherent in wind power. How is it possible to plan power supply with such huge variability? Despite such a stark example of the risks of reliance on wind energy, I can confidently predict that this will not derail the Scottish dash for more renewable energy. The mounting evidence pointing to the problems of reliability of wind energy just seems to have no impact. And then there are the real costs of wind energy, which is starting to be felt in one of the homes of wind energy; Germany. When Germany shut down its nuclear industry, it found out what a ‘green’ future starts to look like. This from Reuters:

Germany must rein in the runaway costs of subsidising electricity from renewable sources or risk overburdening consumers, European Energy Commissioner Guenther Oettinger said on Tuesday.

“We need a speed limit,” Oettinger said, referring to the accelerating cost of funding electricity produced from sources such as wind and sun at above-market prices – a course Germany has chosen to become a low-carbon economy.

And for ordinary consumers, there are the costs of the subsidies for renewable electricity:

The rise to above 5 cents will work out as an additional 70 euros on the 900 euros ($1,200) average household power bill paid in 2012, of which 150 euros already go towards green power.

And then there is this from Christopher Booker on renewables in Germany:

Now the problem for the German grid has become even worse. Thanks to a flood of subsidies unleashed by Angela Merkel’s government, renewable capacity has risen still further (solar, for instance, by 43 per cent). This makes it so difficult to keep the grid balanced that it is permanently at risk of power failures. (When the power to one Hamburg aluminium factory failed recently, for only a fraction of a second, it shut down the plant, causing serious damage.) Energy-intensive industries are having to install their own generators, or are looking to leave Germany altogether.

Die Welt has reported the risk of blackouts in Germany, with the following a summary from GWPF:

Last winter, on several occasions, Germany escaped only just large-scale power outages. Next winter the risk of large blackouts is even greater. The culprit for the looming crisis is the single most important instrument of German energy policy: the “Renewable Energy Law.” The economic cost of a wide-scale blackout are measured in billions of Euros per day.

This is from Spiegel:

At other industrial companies, executives at the highest levels are also thinking about freeing themselves from Germany’s electricity grid to cushion the consequences of the country’s transition to renewable energy.

Likewise, as more and more companies with sensitive control systems are securing production through batteries and generators, the companies that manufacture them are benefiting. “You can hardly find a company that isn’t worrying about its power supply,” said Joachim Pfeiffer, a parliamentarian and economic policy spokesman for the governing center-right Christian Democratic Union (CDU).

And there is more from the same article:

The problem is that wind and solar farms just don’t deliver the same amount of continuous electricity compared with nuclear and gas-fired power plants. To match traditional energy sources, grid operators must be able to exactly predict how strong the wind will blow or the sun will shine.

But such an exact prediction is difficult. Even when grid operators are off by just a few percentage points, voltage in the grid slackens. That has no affect on normal household appliances, such as vacuum cleaners and coffee machines. But for high-performance computers, for example, outages lasting even just a millisecond can quickly trigger system failures.

This is exactly what people, including myself, predicted would take place. As it is, in Germany, there is now a boom taking place for companies to have back-up systems for an unreliable power supply. I have found no figures for the cost of this, but it would be reasonable to expect that it is very high. The cost that is not so visible will be the companies that might consider packing their bags and moving to a country that can provide reliable energy. It is bad, very bad, and I will quote at length from another Spiegel article (emhasis added):

Energy prices are rising and the risk of power outages is growing. But the urgently needed expansion of the grid, as well as the development of replacement power plants and renewable energy sources is progressing very slowly. A growing number of economic experts, business executives and union leaders are putting the blame squarely on the shoulders of Merkel’s coalition, which pairs her conservatives with the business-friendly Free Democrats (FDP). The government, they say, has expedited de-industrialization.


In macroeconomic terms, the impending demise of heavy industry is all the more worrying, because the job losses will not be offset elsewhere. There is no sign yet of the green economic miracle that the federal government promised would accompany Germany’s new energy strategy.


The price of electricity is moving in only one direction: steeply up. For the Krefeld plant, the cost of a kilowatt hour of electricity has tripled since 2000.

And there is no end in sight. When Merkel’s new energy policy was introduced last year, says plant manager Behmenburg, planning for the future became virtually impossible. Behmenburg says that it is impossible now to know what will happen to the supply situation and the price of electricity in the coming years. The mill, steeped in tradition, didn’t stand a chance of surviving, he says.

Voltage Fluctuations and Power Outages

Other companies could suffer a similar fate. Berlin’s energy policy affects all classic industrial sectors, from the steel and aluminum industry to paper and cement manufacturers, as well as the chemical industry. The metal industry, long an important sector in Germany, is already migrating to countries with cheaper electricity.

The Düsseldorf-based conglomerate GEA closed its zinc plant in nearby Datteln. Aurubis, the Hamburg-based company that is Europe’s largest copper producer, is critical of higher energy costs and has announced plans to invest abroad, especially in Asia and South America. According to a recent survey by the DIHK, almost one in five industrial companies plans to shift capacities abroad — or has already done so. The study also finds that almost 60 percent fear power outages or voltage fluctuations in the power grid, because wind and solar power are still too unreliable.

“The promotion of renewable energy has led to substantial displacement effects on employment in the conventional energy production sectors, as well as in downstream industries that are particularly energy-intensive,” concludes the report on a conference held at the Federal Ministry of Education and Research last year. The political opposition has also recognized the importance of the issue. Some believe that the green economy is everything, warns Sigmar Gabriel, chairman of the center-left Social Democratic Party (SPD). “But they forget that they can’t make a wind turbine without steel, plastic, mechanical engineering and electrical engineering.”

Welcome to the world of renewable energy. Germany has followed this path towards its conclusion, and words like ‘deindustrialisation’ start to appear. This is the future of the countries that stake their future on renewable energy. For years we have had the ‘green’ advocates, politicians and pressure groups promising and promising that ‘green’ energy would create jobs, and that all would be good with the world. Well, the experience of Germany is not a forecast, not a hypothetical scenario, not an imagined future; the future has arrived, and it is high prices, deinstrialisation, and a grid that does not work.

Germany is an economic powerhouse. It is an economy that has even managed to survive relatively unscathed whilst much of the world economy has been in a dire state. However, for the German economy to prosper, it needs reliable and affordable power. No wonder to find then that Germany is rapidly reversing course and is building 23 coal power stations.

Here in New Zealand, as I have discussed in previous posts, there is similar enthusiasm for wind and renewables as in Germany. It is an enthusiasm that is promoted by a narrow group of green fanatics, and a renewables industry that has enjoyed subsidy and growth on the back of building useless and expensive energy.

Throughout the last few years, claims for wind energy as a solution have been made, and we can read argument after argument from the ‘green’ advcacates proclaiming a bright future for those who pursue the renewables future. Well, if a bright future is sky-high energy prices, companies fleeing from expensive and unreliable energy provision, rising unemployment, and the most vulenerable living in energy poverty, then the future is indeed bright. It is no longer an imaginary ‘bright’ future, but a future that has come to Germany.

How long until we see it in New Zealand? It is a question of politics. It is a question of when politicians finally stand up to the green lobby. Renewable energy is not the foundation for economic prosperity, but is instead a policy of economic decline. We can see the results in Germany. Quite frankly, I am simply baffled that nobody has the guts to stand up and say ‘enough’.

Wind-Power: The Real Price Emerging

First of all, sorry for the lack of posting. I have had a very hectic few months, and something had to give. Apologies.

Having said that, today’s post will also be very short. There have been several posts in blogs which have been of interest, but one that stood out directed me to a story about wind-power in Germany. Here are some key quotes:

Sudden fluctuations in Germany’s power grid are causing major damage to a number of industrial companies. While many of them have responded by getting their own power generators and regulators to help minimize the risks, they warn that companies might be forced to leave if the government doesn’t deal with the issues fast.


At other industrial companies, executives at the highest levels are also thinking about freeing themselves from Germany’s electricity grid to cushion the consequences of the country’s transition to renewable energy.

Likewise, as more and more companies with sensitive control systems are securing production through batteries and generators, the companies that manufacture them are benefiting. “You can hardly find a company that isn’t worrying about its power supply,” said Joachim Pfeiffer, a parliamentarian and economic policy spokesman for the governing center-right Christian Democratic Union (CDU).

Behind this worry stands the transition to renewable energy laid out by Chancellor Angela Merkel last year in the wake of the Fukushima nuclear disaster. Though the transition has been sluggish so far, Merkel set the ambitious goals of boosting renewable energy to 35 percent of total power consumption by 2020 and 80 percent by 2050 while phasing out all of Germany’s nuclear power reactors by 2022.

The problem is, of course, the intermittent and unpredictable nature of solar and wind power. The real cost of renewables becomes apparent in the necessity for companies to invest in back-up power sources. Germany is on the leading edge of the transition to renewable energy, in particular in consideration of their retreat from nuclear power. As such, we can see Germany as pointing the direction as other economies come to rely on ‘renewable’ energy sources.

The question is this; does New Zealand want to continue down this path? As I have pointed out in previous posts, New Zealand is rushing down the road of wind energy, and the further it goes down this path, the more likely that similar problems to those of Germany will emerge here. The cost, as in Germany, will be less competitive industries, and/or the movement of industry out of New Zealand. In pragmatic terms, this can only mean the loss of jobs.

At what point will the idiocy of wind-power finally be acknowledged by politicians? As more and more evidence mounts to say that it is a complete waste money, no notice is being taken. Nobody, it seems, wants to risk upsetting the green lobby.

The Madness of Wind Energy

It did not take me long. Typing ‘wind energy’ into the New Zealand Herald search box produced a string of ‘hits’, including this from a piece about Genesis Energy:

While Genesis began seeking resource consents for a major new wind farm in the Wairarapa, called Castle Hill, during the period, it considers the market is currently “saturated” with new generation proposals that will more than meet weakly growing electricity demand in the near future.

Yes, like many others in the world, New Zealand is rushing down the wind energy route, and doing so in the face of a mounting body of evidence that this route is  a complete waste of money.

One of my earliest posts on the blog was a discussion of the utter uselessness of wind energy, and you may want to take a look at it. It gives an analogy which explains the uselessness of this method of energy production in simple terms. More recently, I posted on a Civitas (a UK ‘think-tank’) report on wind energy, which slammed both the economics of wind power, and the ‘green’ credentials of wind power. As it is, a new report has been released by the Global Warming Policy Foundation (GWPF). It is written by an Economics Professor, Gordon Hughes, and points out the same problems with wind energy that can be found in my earlier post and the Civitas report. I will quote from the forward of the report:

The total consumer bill for wind subsidies by 2030 is estimated to amount to a staggering £130 billion. A recent analysis of UK wind farms revealed that a dozen of the biggest landowners will between them receive almost £850 million in subsidies, a huge amount of funding that will be paid by ordinary
families through hidden taxes on their household electricity bills.

The forward notes that these huge expenses and subsidies have been hidden from the consumer. As is always the case, Hughes identifies that the fundamental problems with wind (and many other sources of ‘renewable’) energy is the intermittent nature of the generation, which means that back-up generation capacity is needed for the wind farms. The report also questions whether the use of wind farms will even reduce CO2 emissions, which is one of the fundamental reasons that wind energy has been promoted so heavily, and is in receipt of so much subsidy. If you have ever wondered about the economics of wind generation, I strongly recommend reading the report in full, or at least reading the summary.

The report goes against one of the great green causes, and it is therefore no surprise to see the limited coverage of the report in the press. I found no coverage in a search of Stuff, but a Google news search found coverage in several countries, also including this from The Australian:

The British study warns of the rising cost to consumers of wind power subsidies on the grounds that governments could achieve the same environmental benefits by other means at much lower cost.

Comparing a pound stg. 13 billion ($19bn) outlay on a combined-cycle gas plant against a pound stg. 120bn outlay on wind farms, Professor Hughes found the renewable energy option was too expensive by any standard.

Wind power would cut emissions at an average cost of pound stg. 270 a tonne, he estimated, but meeting Britain’s greenhouse targets in this way would cost about pound stg. 78bn a year or 4.4 per cent of the nation’s GDP.

Note the last figure for the cost in GDP. To say that this is complete madness would be an understatement. As the report in the Australian points out, wind characteristics may vary between countries, making direct comparisons difficult, but the principles of the study carry over. I therefore have several questions about wind power in New Zealand:

  1. What is the real cost of wind energy in New Zealand, including indirect subsidies of wind power?
  2. How much is this going to cost businesses?
  3. How much is this going to cost consumers?

It may come as no surprise to find that the New Zealand Wind Energy Association has given a report arguing that wind power is a wonderful solution to New Zealand energy requirements. However, as is always the case with such reports, and as is pointed out in both the Civitas and GWPF reports, the pro-wind energy reports all have in common that they make completely unrealistic assumptions. As it is, the report was criticised by the New Zealand Climate Science Coalition, in a press release that can be found here:

“The report uses an economic model of New Zealand which is totally unsuited to analysing the effect of 20% energy generation from wind. Any model that does not take into account the intermittent and seasonal nature of wind and its effect on power prices and the fact that, in a dry year, hydro cannot backup wind, is worthless. The model makes no allowance for the fact that over peak demand periods, only about 10% of the wind generation can be relied on. It also does not consider the need for extra transmission lines and the poor efficiency of the gas fired power stations that must be built to back up wind. For example, one study in the United States showed that, in Texas, a large amount of wind energy results in a tiny reduction in carbon dioxide emissions.

“This flawed report reflects little credit on the Infometrics and on the New Zealand Wind Energy Association. It does not alter the fact that wind is expensive, requires backup, and has only a small effect on reducing emissions of carbon dioxide–which is, in any event, an entirely beneficial gas that causes plants to grow,” Mr Leyland concluded.

Notwithstanding this critique, where is the debate on wind power in New Zealand? Where is the equivalent of Civitas? The UK is slowly waking up to the idiocy of wind power, with this from Matt Ridley in the UK’s Spectator:

Even in a boom, wind farms would have been unaffordable — with their economic and ecological rationale blown away. In an era of austerity, the policy is doomed, though so many contracts have been signed that the expansion of wind farms may continue, for a while. But the scam has ended. And as we survey the economic and environmental damage, the obvious question is how the delusion was maintained for so long. There has been no mystery about wind’s futility as a source of affordable and abundant electricity — so how did the wind-farm scam fool so many policymakers?

One answer is money. There were too many people with snouts in the trough. Not just the manufacturers, operators and landlords of the wind farms, but financiers: wind-farm venture capital trusts were all the rage a few years ago — guaranteed income streams are what capitalists like best; they even get paid to switch the monsters off on very windy days so as not to overload the grid. Even the military took the money. Wind companies are paying for a new £20 million military radar at Brizlee Wood in Northumberland so as to enable the Ministry of Defence to lift its objection to the 48-turbine Fallago Rig wind farm in Berwickshire.

Wind energy is not a small issue. It is, in fact, an issue that can have profound and serious impacts upon every New Zealand family, and every New Zealand business. Look again at the figures for the cost of wind power in the UK, as measured in GDP. If the cost of New Zealand’s wind energy is even as low as half of the UK figure, it is an issue that impacts the whole of the New Zealand economy.When is New Zealand going to wake up from this madness that is so economically ruinous?

What really worries me is that there appears to be no will to take on anything which has a ‘green’ label attached to it. It is a situation in which no politician dares to go against anything that might be seen as anti-green. As such, rather than taking on a ‘green issue’, I suspect that the New Zealand politicians will remain silent, and allow this economically mad and economically ruinous policy of encouraging wind energy to continue.

More on Wind Power

I have posted a few times on the use of wind power (here and here) and a new report from the UK think-tank Civitas, adds fuel to the fire of cynicism about the utility of wind power. However, before looking at the problems of wind power, it is notable that they provide estimates of the increases in power costs of the UK’s green energy legislation, with different estimates based upon fossil fuel prices. I will provide the central estimates here:

Year 2020: Domestic +27%, Medium-sized business + 34%, large energy intensive large industry +8-28%

As they reasonably argue, these increases in costs will simply make the UK less competitive, and will simply encourage businesses to move overseas to locations where there is no similar legislation. Even if accepting that carbon dioxide is a problem, the move of businesses to other locations makes no impact upon the total emissions.

Moving back to the subject of wind power, some selected quotes are given below:

As we have already pointed out the estimates by Mott MacDonald flatter wind-power as they made no allowance for any add-on costs. One of the main reasons is that wind-power is unreliable and requires conventional back-up generating capacity when wind speeds are, for example, very low or rapidly varying, which increases the overall costs of wind-power.

MacDonald assumed load factors of just 25-31% for onshore wind and 35-45% for offshore wind.4
However it should be noted that even these figures for load factors can give an impression of greater reliability than is actually the case. In spells of very cold weather associated with high pressure areas, when there is enhanced demand for electricity, there tends to be very little wind. This analysis was confirmed by BBC weatherman Paul Hudson, who wrote in January 2011:5
“…during the recent intense cold weather, it’s been our traditional coal and gas fired power stations that have been working flat out to keep our homes and businesses warm. And for the third winter running, the intense cold has gone hand in hand with periods of little or no wind. This should come as no surprise since prolonged cold is invariably associated with areas of high pressure”.

The following chart (chart 3) was included in this BBC report. Wind’s contribution to total electricity output (53,020 Megawatts) on 21 December 2010 was, according to the BBC, 0.04%. This insight is a useful answer to those who say “the wind is always blowing somewhere” in defence of wind-power. In Britain on very cold days it effectively is not. Twenty Megawatts of generation should also be seen in the context of the estimates for plant capacity.

They go on to cite research that finds that maintaining back up power for wind costs between 30-45% onto the costs of wind power. Their conclusion on the real costs of wind power is very clear:

The costing of wind-power electricity generation is clearly very complex. But one conclusion can safely be drawn and that is that wind-power is expensive – especially offshore. Under these circumstances it seems unwise to be embarking on a huge programme of investment in wind generated electricity, especially when the country is facing grave economic challenges. This analysis also ignores the perceived environmental costs of wind-power, especially onshore wind turbines.

Although I am not concerned with carbon dioxide emissions, it is still interesting to read this in the report:

In a comprehensive quantitative analysis of CO2 emissions and wind-power, Dutch physicist C. le Pair has recently shown that deploying wind turbines on “normal windy days” in the Netherlands actually increased fuel (gas) consumption, rather than saving it, when compared to electricity generation with modern high-efficiency gas turbines.7,8 Ironically and paradoxically the use of wind farms therefore actually increased CO2 emissions, compared with using efficient gas-fired combined cycle gas turbines (CCGTs) at full power.

In other words, even if looking at the ‘green’ justification for wind power, it seems that wind power is at best a dubious solution to energy provision.

For those that read my earlier posts on wind energy, this should all be familiar material. Problems of reliability of wind, need for back-up generation, and the location and connection of wind energy into the grid; they all make wind power  expensive. This is the conclusion of the report:

It is expensive and yet it is not effective in cutting CO2 emissions. If it were not for the renewables targets set by the Renewables Directive, wind-power would not even be entertained as a cost-effective way of generating electricity or cutting emissions.

From my perspective, the most interesting aspect of the report is the way in which wind power is in receipt of indirect subsidy, which are often not considered in the official reports and statistics. It is something that has (as far as I know) not been the subject of analysis in New Zealand, and I would be interested to see how wind power ‘stacks up’ here if such a study were undertaken. Perhaps such a study is overdue, as there is a big push for yet more wind power here.

At the very least, the economics of wind power are extremely questionable, and the potential costs are loss of competitiveness, and higher bills for consumers. Those higher bills, of course, will have greater impact upon those on low incomes, who spend a greater proportion of their income on necessities such as power for heating.

Note: If you have not seen it, there is a very good post on the manipulation of temperature data on the Climate Conversation Group. Well worth a read.