July 9th 2011

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EDITORIAL: Timely review of Australia's defence posture

DEFENCE I: 100th anniversary of the Royal Australian Navy

DEFENCE II: Contemplating the RAN's next 100 years

CANBERRA OBSERVED: The enduring legacy of Rudd's autocratic style

CLIMATE CHANGE: Lack of sunspots points to global cooling

WATER: Two inquiries lambast Murray-Darling Basin plan

ENERGY I: The cost of trashing base-load power generation

ENERGY II: Renewable energy drive "economically counter-productive": Spanish study

WAR ON TERROR: Terror threat undiminished after Bashir verdict

FOREIGN AFFAIRS: Vietnamese clash with Beijing over South China Sea

UNITED STATES: Mitt Romney’s White House bid under attack

UNITED KINGDOM: Children now given instructions on suicide

UNITED NATIONS: Anti-Israel bias sets back women's rights

ISLAM: More examples of creeping sharia

SOCIETY: Link between teen sex and subsequent divorce

POPULATION: UN in denial over "demographic winter"

BOOK REVIEW Never far from disaster

BOOK REVIEW Counter-cultural book for our times

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The cost of trashing base-load power generation

by Joseph Poprzeczny

News Weekly, July 9, 2011

Increasing reliance on solar and wind-generated electricity will mean the costly trashing of coal-fired generators, since the latter operate at peak efficiency when producing electricity at full speed over long uninterrupted durations.

By contrast, electricity input from wind and solar “farms” fluctuates, sometimes wildly and unpredictably, with the variations in wind speed and sunlight intensity. This means that base-load coal-fired units must be constantly idled-down or revved-up to offset these fluctuations.

Even worse is when the wind ceases or clouds intermittently block out solar rays that can only be accessed during a handful of daylight hours.

This drawback, well-known to electrical engineers but seldom if ever acknowledged by ardent wind and solar-power usage advocates or politicians, was highlighted recently in data presented to the Senate select committee on the scrutiny of new taxes, which is investigating the impact of the Gillard Government’s planned tax on carbon-dioxide emissions.

The lead witness, Shirley In’t Veld, is managing director of Verve Energy, the Western Australian government-owned power-generating corporation. Verve is the state’s biggest electricity supplier with 21 coal- and gas-fired generators, plus a handful of wind and photovoltaic (PV) solar units.

Ms In’t Veld warned the committee that Verve’s CO2 gas emissions were unlikely to fall should the emissions tax be introduced.

She said: “We are … bearing the brunt of the increased renewable energy [solar roof-top panels and wind-generated power] coming into the system.

“For example, when the Collgar Wind Farm is fully commissioned, our modelling shows that it will increase our operating costs by $26 million or $27 million a year because we are the balancer in the market, and that means that we have to cycle our base-load plant, which was not designed to be cycled, and that means that you are increasing your maintenance and wear-and-tear costs. …

“… [T]he difficulty with the solar and wind is that it is highly intermittent and unfortunately in WA a lot of the wind blows over night when we do not need it.”

The Collgar Wind Farm is a giant wind-turbine array, subsidised to the tune of $750 million and located at Merredin, some 300 kilo-metres east of Perth in Western Australia’s central wheat-belt. On completion it will cover 18,000 hectares, have 111 turbines and generate up to 206 megawatts output.

It will be more than twice the size of the state’s next two biggest wind “farms”, which are at Walkaway near Geraldton, and Emu Downs near Cervantes, both well north of Perth.

Collgar is 60 per cent owned by the Swiss-based international investment bank UBS, and 40 per cent owned by the Retail Employees Superannuation Trust, with financing provided by the ANZ, NAB, Westpac and Commonwealth Bank, as well as by the German commercial bank WestLB and the Danish export credit agency, Eksport Kredit Fonden (EKF).

Not highlighted in the company’s literature is the fact that Collgar will cost WA taxpayers, via higher electricity tariffs or taxpayer subsidies, nearly $30 million annually. If electricity tariffs aren’t raised to cover this added cost, the WA state government must meet it using more taxpayers’ money.

In addition, the operational lifetime of Verve’s generators is bound to be shortened, because fluctuations in the electricity output of Collgar (as well as that of Walkaway and Emu Downs) must be compensated for by Verve’s base-load generation.

Ms In’t Veld said that the intended Gillard Government’s CO2 emissions tax, at $25/tonne, would add $200 million to Verve’s annual costs.

And because Verve will be required in this way to subsidise these privately-owned and otherwise uneconomical “clean” power-generating entities, such as Collgar, Walkaway and Emu Downs, this will add to Verve’s already heavy debt burden.

She said: “… [W]e are still carrying in excess of $1 billion in debt, so it will … mean that we will neither be in a position to start paying down that debt nor be in a position to pay the dividends to our owners, the state government. Also, depending on how high the tariff goes, there could be potential impairment issues, which would mean that we would need to be bailed out by the state.”

But Western Australia’s situation isn’t unique. All of Australia’s privately-owned wind-powered electricity generation is similarly subsidised, as indeed are homeowners with roof-top solar panels. And the never-ending increase in this sort of subsidisation is placing ever greater burdens on state budgets.

Ms In’t Veld’s warnings of increased wear-and-tear and higher maintenance costs for base-load coal-fired power stations have relevance far beyond WA as two giant solar “farms” are planned for eastern Australia, at Chinchilla in Queensland and Moree in New South Wales.

Both financial groups backing them are set to receive huge government financial gifts under what is called Round One of the Gillard Government’s $1.5 billion federal government solar program.

Canberra will give $306.5 million to the Moree venture that’s valued at $923 million, and $464 million to the Chinchilla project that’s valued at $1.2 billion.

The Australian Greens have claimed credit for earmarking this $770.5 million of taxpayers’ money to bankroll what will be the world’s two largest high-cost solar power stations. Greens leader Senator Bob Brown said that this was due to his party’s efforts. “They would not exist if we weren’t there,” he said.

Equally elated was federal Treasurer, Wayne Swan. “Projects like this will help kick-start the clean-energy jobs of the future,” he said.

Neither politician, however, addressed the questions of the real cost of electricity to Queensland and NSW consumers from the heavily subsidised solar power stations at Chinchilla and Moree, or whether this will mean trashing coal-fired generators in their respective states.

Nor were they courageous enough to broach the crucial question of how many jobs will be destroyed because of the switch to high-cost solar and wind-generated power.

Joseph Poprzeczny is a Perth-based political commentator.



Shirley In’t Veld, managing director, Verve Energy: testimony at public hearings on carbon pricing mechanisms before the Senate Select Committee on the Scrutiny of New Taxes (Commonwealth of Australia), April 29, 2011, pp.1-11.
URL: www.aph.gov.au/hansard/senate/commttee/s14.pdf

URL: www.collgarwindfarm.com.au/

URL: www.moreesolarfarm.com.au/

URL: http://elementalpower.com.au/news/?tag=chinchilla-solar

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