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It took a little under a decade, but the message is finally getting out: THESE THINGS DON’T WORK – on any level.

There are 3 electricity essentials – that the power source and its delivery to homes and businesses be: 1) reliable; 2) secure; and 3) affordable.

Try to skimp on any one or more of those essential elements and you’re no longer talking about an energy ‘system’, you’re condemning your economy to social and economic ‘chaos’.

Reliability and security mean that power is delivered precisely when and where it’s needed; without exception – satisfying those critical requirements means the supplier doesn’t get off the hook by glibly claiming the wind didn’t blow, the Sun didn’t shine, or the dog ate my homework.

As to affordability, you can have the most reliable and secure system on Earth, but if the cost of what’s to be delivered is beyond the reach of households; or puts power hungry businesses to the wall, then reliability and security become irrelevant: suppliers without customers don’t last for very long, before they too are out of business.

Passing the ‘reliability’ ruler over wind power draws an obvious blank; so too with the idea that a wholly weather dependent power source could, somehow, earn the tag ‘secure’.

Then, on the totally unpredictable occasions when some of its capacity might become available, the cost to Australian retailers sits at over $110 per MWh (AGL, in its capacity as retailer, locked in a fixed price for all of the wind power produced by its suppliers at $112 per MWh, for which it collects a REC as part of the bargain, currently worth $72). That figure (the whole of which is added to retail power bills) compares with an average wholesale price of $35-40 per MWh.

In South Australia – Australia’s ‘wind power capital’, futures contracts on the ASX Energy market for electricity delivered in 2016-18 are between $86 and $90 a MWh. That compares to between just $37 and $41 MWh in Victoria and between $43 and $48 per MWh in NSW. Both NSW and Victoria draw the vast bulk of their power from coal-fired plant. And South Australia draws heavily on Victoria’s and NSW’s coal-fired plant via the Heywood and Murraylink interconnectors. Heywood has a notional capacity of 460MW and Murrylink a notional capacity of 220MW. A recent wind power collapse in SA overloaded the interconnectors, which shut down to avoid a thermal melt-down, and resulted in an almost State-wide blackout (see our post here).

Australia’s Large-Scale RET will add a further $45 billion to retail power bills in wind power subsidies and/or retailer fines between now and 2031 – all designed to be directed to wind power outfits (see our post here).

Already, tens of thousands of Australian households can no longer afford power (see our post here).

In SA, the number of permanently disconnected homes exceeds 50,000 (see our post here).

And one of its biggest employers, Port Pirie’s Nyrstar Smelter is considering its future, due to the phenomenal cost of wind power and the insane cost of running banks of highly inefficient Open Cycle Gas Turbines to cover wind power output collapses: when the wind drops out, on a totally unpredictable basis, the spot price rockets from around $50-70 per MWh (on average) to over $2,000 and often hits the regulated cap of $13,800 per MWh – all borne by power consumers, of course (see our post here).

Nystrar’s completely justified complaint about South Australia’s energy debacle is directed at all 3 of the fundamentals – thanks to its 17 wind farms and the haphazard delivery of any fraction of their notional capacity of 1,477MW – SA’s power supply is no longer reliable, secure or affordable.

And it’s the same 3 essential rules for a meaningful power supply that has Scots demanding an end to its government’s bizarre fixation on wind power; and, instead, has them pushing for reliable, secure and affordable nuclear power.

Former Dana oil chief urges Scot-Govt. to build new nuclear stations for baseload power and end its ‘fixation’ with wind power
Scottish Energy News
30 December 2015

A former North Sea oil company boss and now independent energy advisor has called on the Government to curtail its ‘fixation’ with wind power and to drop its moratorium on building new Scottish nuclear power stations to provide carbon-free baseload electricity generation.

Stuart Paton, former chief executive of Dana Petroleum, publishes his ‘new Scottish energy policy’ in a pamphlet due to be issued in January 2016 by the pro-market Edinburgh-based think-tank, Reform Scotland, where board members include a former Tory MSP.

In his chapter for “Reforming Scotland”, Paton says: “Scotland has to develop its energy policy beyond a fixation on wind power and point scoring with Westminster.

“The challenge of climate change does require a de-carbonisation of energy, but support for nuclear power, unconventional gas, and increased emphasis on reducing energy usage, are all required to meet the challenges of the coming decades”.

Paton is explicitly critical of the Scottish Government’s ‘un-democratic’ policy of continued expansion of wind power, stating that:

“The increase in wind generation is essentially increasing the amount of electricity that will be exported from Scotland.

“Although local campaigners against wind farms often use the ‘we are already generating more than we use locally’ argument, the national question of should we be building more windfarms in Scotland, with the impact on the natural environment, to export power to England has not been asked.

“This is a major energy policy that has been progressed without an explicitly democratic mandate.”

Geoff Mawdsley, Director of Reform Scotland, welcomed Paton’s contribution. He said: “With the challenges we face to our North Sea oil industry, as well as recent substantial changes to UK government support to the renewable sector, this is an ideal time to stand back and consider new approaches to our energy policy.

“Stuart Paton is a recognised expert in his field who makes a powerful argument for a new approach. His contribution to “Reforming Scotland” is a real challenge to this generation of energy policy-makers.

Paton recommends a four-pronged approach to strengthening Scotland’s energy policy, with a focus on alleviating climate change, reducing fuel poverty, establishing security of supply and continuing technological development.

The following policies are extracts from the forthcoming Reforming Scotland pamphlet.

Climate change

First and foremost there should be a focus on achieving the target on carbon free electricity production.

However the Scottish government’s current approach which relies on onshore and, to a lesser extent, offshore wind farms is far too narrow. This does not provide base load capacity, is expensive and is re-distributive to wealthy land-owners.

Further, the huge pressure there is now on any new onshore wind farm development, both from an economic point of view given the removal of Renewable Obligations and local pressure, means this cannot be a significant further contributor to electricity generation.

The government should change its stance and support the construction of new nuclear power stations, most likely at the existing sites at Torness and Hunterston.

This will likely have to follow the British government’s approach and largely be dependent on foreign investment. However, the necessity of providing base load capacity makes support for nuclear electricity generation essential.

Continued use of gas for electricity generation and domestic heating is likely to be inevitable as a ‘bridging’ technology until alternative sources are found. However, support for carbon capture and storage (CCS) development in Scotland for the country’s own use and also as a basis for international leadership is important.

Given the removal of the UK government’s support for the CCS project at Peterhead, the Scottish government should step in with its support.

As discussed above, the challenge of climate change requires changes in domestic heating, domestic insulation and transportation as well as electricity generation. The Scottish government is already playing an active role in this area, through support for local generation, domestic heat generation and improved insulation.

This should be extended. These initiatives will also play a significant role in dealing with fuel poverty both through providing cheaper sources of power and allowing households to use less energy.

Fuel Poverty is a key issue for Scotland, particularly in rural areas where households often rely on oil for heating. Fuel poverty can be alleviated through some of the same approaches as for reducing carbon emissions.

Security of supply

Many of the issues and proposals identified above not only target the challenges of climate change and address fuel poverty, but also address issues of security of supply. Building two new nuclear power stations and the development of shale gas improve security of supply both in terms if reducing requirement for importing power but also in terms of base load supply.

Technological development

Within the framework outlined above, there should be three focus areas for technological focus. Onshore unconventional development and CCS development can benefit from existing expertise in the offshore oil and gas industry and the existing supply chain. In addition to the local impact, both technologies could generate significant export earnings. Thirdly, the construction of nuclear power stations in Scotland could invigorate the expertise already existing at Dounreay”.

Scottish Energy News