The Canadian foray into Carbon Capture and Storage is quite a money waster. Why do we keep pursuing it? From EUReferendum.com, Energy: CCS – the fantasy continues
There should a special place reserved in Hell for the government officials and politicians who waste public money by employing the likes of Ashley Ibbett, the Director of the Office of Carbon Capture and Storage (CCS) at the Department of Energy and Climate Change (DECC).
It is there, at DECC, that Mr Ibbett is the Senior Responsible Officer (SRO) for the CCS Commercialisation Programme, a multi-billion pound programme which aims to develop the first CCS-equipped power generation in the UK.
One could, of course, rail against the huge waste on expenditure on the CCS programme, but it is easier to direct one’s loathing at a named individual – which is one of the reasons why we have politicians, to act as lightning conductors for public disaffection.
But in this case, Mr Ibbett has broken cover in the DECC blog with a gushing and ultimately dishonest report of a jolly to Canada (at taxpayers’ expense).
This was to visit the Boundary Dam coal fired power plant in Saskatchewan, Canada, and witness “the historic moment” when Brad Wall, Premier of Saskatchewan, switched on a $1.4 billion coal-fired generator, fitted with CCS which will “capture more than 90 percent of the carbon dioxide that would otherwise escape to the atmosphere”.
Says the gushing Ibbett, this demonstrates to sceptics that CCS can be deployed at scale. Several pilot scale capture facilities have operated in the past, but this is the first time carbon capture has operated on a commercial scale on a power station anywhere in the world.
Where the dishonesty comes in here is by omission. Ibbett is very keen to point out that the plant will capture around one million tonnes of carbon dioxide each year – equivalent to taking 250,000 cars off Saskatchewan roads annually, he says – but is extremely reticent about revealing the costs of this fantasy project.
In fact, of the total $1.4 billion plant cost, the reports put the actual cost of upgrading the 30-year-old plant at $400 million,putting the CCS at a cool billion, tripling the capital needed to provide a modest 110MW generating capacity.
But the omissions don’t stop there. The original plant was rated at 139MW so, for the expenditure of $1.4 billion, the Canadians have ended up with an overall reduction of 29MW capacity. Here, Ibbett’s dishonesty is compounded by that of the plant operator, SaskPower, which tells Reuters that the loss of the 29MW capacity represents an “energy penalty” of around 20 percent.
We have to go to a local report, however, to find that the upgrade, including a new, high-efficiency boiler and steam turbine, cranked up the nameplate capacity to 162MW. But the CCS unit needs about 34 MW to operate, resulting in a “parasitic loss” of about 21 per cent of plant’s power. Then, another 18MW are needed for other systems, reducing the net output to 110MW.
This cost of 52MW represents a loss not of 20 percent, as the plant operator is stating, but 32 percent, just one point short of a full third loss in capacity. Effectively, therefore, efficiency is cut by a third, for a tripling of the capital cost.
Going back to the Reuters report, it tells us that most modern ultra-supercritical coal power plants can achieve a thermal efficiency of up to about 45 percent. Retrofitting such a plant would reduce its efficiency to around 35 percent, a penalty of around 25 percent.
But for less-efficient supercritical and sub-critical power plants, with initial thermal efficiencies of less than 40 percent and in some cases less than 30 percent, the penalty could amount to 40 percent or even 50 percent of the plant’s total electrical output.
Even a 20-30 percent energy penalty, Reuters says, is enormous and would radically affect the operations of coal-fired power plants in North America and the rest of the world if all power plants were retrofitted with CCS systems. Retrofitting all coal-fired plants in the United States would increase coal consumption by 400-600 million tonnes per year, or cut their net electrical output by 75-100GW, more than the peak demand of California.
Even then, there is no direct comparison between different sites. The majority of the captured gas from the Boundary Dam site is being sold to operator Cenovus for enhanced oil recovery (EOR) at its Weyburn oilfield. Cenovus has set up injection wells and built a 40 mile-long pipeline connecting Weyburn with Boundary Dam. Many CCS sites will be much further than 40 miles from an injection site.
Yet this is the technology we are paying Mr Ibbett to gush over, a madcap scheme that will massively increase the amount of fuel we will have to use in order to generate electricity at massively increased cost. Is this really what we want our civil servants to be doing?
Higher costs for construction, loss of output for CCS and loss of thermal efficiency. This CCS thingy is really a great idea, yet the pols keep pushing it. This facility was covered by Junkscience earlier, but I thought this article was worth doing again. A special place in Hell…
Many Warm Thanks to Carmen Krogh, and Dr. McMurtry, for their ongoing efforts, to bring some resolution to the problems residents are having, because of their proximity to Industrial Wind Turbines.
Diagnostic criteria for adverse health effects in the environs of wind turbines
In an effort to address climate change, governments have pursued policies that seek to reduce greenhouse gases. Alternative energy, including wind power, has been proposed by some as the preferred approach. Few would debate the need to reduce air pollution, but the means of achieving this reduction is important not only for efficiency but also for health protection. The topic of adverse health effects in the environs of industrial wind turbines (AHE/IWT) has proven to be controversial and can present physicians with challenges regarding the management of an exposure to IWT. Rural physicians in particular must be aware of the possibility of people presenting to their practices with a variety of sometimes confusing complaints. An earlier version of the diagnostic criteria for AHE/IWT was published in August 2011. A revised case definition and a model for a study to establish a confirmed diagnosis is proposed.
This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 3.0 License (http://www.creativecommons.org/licenses/by-nc/3.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page(http://www.uk.sagepub.com/aboutus/openaccess.htm).
The great wind power fraud depends on a few gullible land owners signing up to host turbines for charming wind power outfits like Thailand’s RATCH (see our posts here and here and here).
No turbine hosts; no wind industry.
Lured by annual licence fees of around $10,000 per turbine, farmers who do sign up are obviously happy to destroy the ability to live in and enjoy their own homes – if they live on the property concerned; and are quite prepared to draw the eternal damnation of their neighbours for their responsibility for introducing a constant source of annoyance and misery to once happy and peaceful communities.
When the question is asked fair and square, the great majority of those in places where wind farms are threatened are bitterly opposed to having giant fans speared into their rural communities: and when we say “great” majority we mean 90% or more (see our posts here and here).
No wonder then that turbine hosts often end up as social pariahs.
Not only are turbine hosts prepared to earn the opprobrium of whole communities, they’re happy to side with outfits like near-bankrupt, Infigen – an outfit run by a bunch of thugs – that’s quite prepared to threaten and intimidate its potential turbine hosts when they have (quite reasonable) second thoughts about remaining in their contracts.
A little while back at Flyers Creek, 3 potential turbine hosts pointed to their lapsed contracts and told Infigen that they were no longer willing to host turbines. Instead of accepting the freely formed (and legally correct) decisions of the landholders concerned, Infigen adopted a course of legal threats, bullying and harassment (see our post here).
And so harmonious are the relationships between Infigen and its turbine hosts that David and Alida Mortimer (farmers and turbine hosts for Infigen at Lake Bonney, SA) have spent the last few years taking every opportunity to tell the story of their self-inflicted acoustic misery – and to warn rural communities around the globe about the very real impacts on sleep and health caused by incessant turbine generated low-frequency noise and infrasound (see our posts here and here).
So much for all that warm and fuzzy support for wind farms – if those that pocket a handy sum for hosting them have nothing but tales of woe to tell.
And it’s not just humans that cop a belting from turbine noise emissions.
Productive grazing operations often depend on a team of happy, healthy and well-rested working dogs.
Last time STT worked with sheepdogs it was pretty clear that they can hear a pin drop at 500 paces.
If human ears are affected by low frequency noise, infra-sound and the enormous air pressure fluctuations generated by giant Vestas V112s each with 3 x 56m blades, with their outer tips travelling at over 350km/h (seeour post here) – then it’s a pretty fair bet that young Rex’s ears are copping a belting too.
In addition to its Macarthur disaster, AGL operates another non-compliant wind farm called Oaklands Hill, near Glenthompson in Victoria – where the neighbours began complaining about excessive turbine noise the moment it kicked into operation in August 2011.
Complaints from neighbouring farmers included the impact of turbine noise on hard working sheepdogs.
One local farming family – whose prized paddock dog goes ballistic every time AGL’s Suzlon s88s kick into action – complained bitterly about the noise impacts on them and their 5 working dogs: one of them became disobedient and extremely timid, hiding in her kennel whenever the turbines were operating. In an effort to provide a little respite to the affected Kelpies, AGL stumped up $20,000 for a deluxe, soundproof dog kennel. AGL doesn’t give money away without a reason, so you’d tend to think there was something in it. It’s just a pity that AGL doesn’t treat its human victims with the same kind of respect (see our post here).
And it’s not just dogs that cop a belting from turbine noise, horses cop it too (see our post here).
Michelle Edwards is an Irish-born thoroughbred horse trainer who operates from her property right next to Origin’s Cullerin windfarm, NSW. Where 15 RePower MM82 and MM92 turbines have been driving her and her horses nuts since 2009. Her horses are quite apparently bothered by noise from operating turbines (located on the range behind their property) and, in response to it, graze the paddocks they roam in as far away from the fans as possible – whenever the turbines are running.
Horses are often spooked by loud noises (police horses are trained to remain calm during crowd control duties by repeatedly exposing them to noises like fireworks and sirens) so it’s little wonder that Michelle fears for her safety when working her racing horses next to operating turbines (for a taste of what Michelle’s horses have to put up with – listen to the video in this post).
Having worked with horses all her life (first in Ireland, and now, Australia) Michelle knows a thing or two about horse psychology and behaviour.
Trying to work thoroughbred horses in the acoustic hell created by 15 giant fans has been a nightmare – with a serious impact on her ability to safely train winners, as Michelle put it: “I can’t have track work riders ride either because under occupational health and safety, I have to ensure that the environment that people are riding in, is safe.” Michelle features in this ABC 7.30 Report video at the 2:45 mark.
Far from being a benign source of cash for turbine hosts, the destruction of the acoustic environment can soon become a misery for horses, hounds and humans alike.
Keen to avoid the misery foisted on turbine hosts like the Mortimers, Binalong grazier Marilyn Garry has told wind power outfit, Epuron “thanks, but no thanks” – rejecting its offer of $30,000 a year for hosting three turbines and other infrastructure on her family’s property, North-West of Yass, NSW.
Farmer rejects wind turbines – and $30,000 carrot
The Canberra Times
John Thistleton
29 September 2014
Marilyn Garry has rejected wind farm proponent Epuron’s offer of $30,000 a year for hosting three turbines and other infrastructure on her family’s grazing property near Binalong.
Wind farm hosts generally welcome an opportunity to host turbines because the cash flow counters drought and volatility in agriculture.
Epuron proposes a $700 million wind farm with more than 130 turbines on the peaks of Coppabella hills and Marilba hills. The two ranges sit on either side of Mrs Garry’s property “Mylora”.
Mrs Garry’s husband John died in April. She said while he considered hosting wind farm infrastructure following a meeting six years ago between Epuron and surrounding farmers, he eventually rejected them, too.
“They are just hideous. They will make sheep and cattle sterile,” Mrs Garry said. “The government is paying subsidies, if they don’t pay, if they pull the rug, the turbines will be left here to rust.
“We have an airstrip on our property. Our son flies down twice a year from Toowoomba with his wife and children. Everyone around here uses the airstrip for spreading aerial super, they pay $1 a tonne. It is also used for fire fighting,” Mrs Garry said.
She said turbines and powerlines would prevent aircraft from using the landing strip.
Mrs Garry has written to NSW Planning saying despite her rejection of Epuron’s turbines, they were still shown on maps, along with infrastructure.
Neighbour Mary Ann Robinson said NSW Planning had been led to believe Mrs Garry was to be a host, which meant Epuron was not required to do as many impact assessments.
Epuron says it will not discuss agreements it has with individual landholders.
Construction manager Andrew Wilson said even when a wind farm project had planning approval, infrastructure could not be built on any land without the consent and agreement of the landowner.
“Wind farms are not like other resource projects such as coal-seam gas as it can only proceed with the consent of the landowners and also involves the establishment and annual contribution to a community enhancement fund,” Mr Wilson said.
Epuron lodged a development application in 2009 and says the project has been on public exhibition twice, in 2009 and a preferred project report in 2012.
NSW Planning is now preparing an assessment report, which should be released soon, Mr Wilson said.
“The benefits of renewable energy and wind farms in particular are well established, not just for the landowners who lease part of their land to the wind farm company, but also for the surrounding community,” Mr Wilson said.
Epuron told the Renewable Energy Target review panel in June it had spent $470 million and, with certainty over the RET, would invest several billion dollars more in renewables. The Canberra Times
Marilyn Garry is alive to the rort with her keen observation that: “The government is paying subsidies, if they don’t pay, if they pull the rug, the turbines will be left here to rust.”
Spot on, Marilyn!
While $10,000 a year might have sounded like easy money at the beginning, getting rid of a rusting turbine is going to cost a whole lot more than that (think crane hire at $10-30,000 per day, heavy haulage, de-construction specialists and dumping costs) – and don’t expect the wind farm operator to be around to pick up the tab.
The entities that developers use for their land holder agreements are invariably $2 companies, with no fixed assets. In the highly likely event that the parent company goes belly up, the entity that holds the land holder agreement would be wound up in a heartbeat and the turbines would remain rusting in the top paddock as reminders of a moment’s short-sighted greed.
Greed and stupidity are often found in the same bed: see if you can find a turbine host who had the foresight to obtain a decommissioning bond from the developer – backed up by some kind of valuable security, like an irrevocable performance bond, say.
Wise move, Marilyn.
Implicit in Marilyn’s rejection of Epuron’s overtures, is a rejection of the great wind industry lie about wind turbines “drought proofing” agricultural properties.
If a farming or grazing operation – like Marilyn’s – wasn’t viable over the long-term, then $10,000 per turbine per year wasn’t going to remedy that.
The Australian climate cycle is – as Dorothea Mackellar told us – built around “droughts and flooding rains”.
Competent farmers and graziers plan for dry spells with adequate fodder reserves (or ready access to same) and modify cropping programs or stocking rates to fit the rainfall that’s actually delivered: none of which depends on hosting wind turbines.
In reality, the wind industry pitch about “drought proofing” just points to the obvious: that a little additional and regular income can help pay the store account, irrespective of whether the heavens open.
In that respect, hosting turbines is no different than earning income “off-farm” – sons going out shearing to earn cash elsewhere; or having a wife working as a nurse or teacher in town, for example – activities which aren’t called “drought proofing”. However, none of those activities generate the deep seated animosity of (former) friends and neighbours that comes with hosting turbines (see our post here).
To consider that a paltry $10,000 per turbine amounts to just compensation is to overlook the $600-800,000 in annual income that the operator will collect from it (which includes $300-400,000 in RECs).
And it’s the REC cost to power consumers that has Victorian Farmers up in arms.
Farmers are power consumers too – and can fairly chew it up, depending on the type of operation.
Irrigators, horticulturalists, pig, poultry and dairy producers use tonnes of the stuff, so any increase in power prices means a hit to wafer thin margins; and their bottom line.
Far from wind farms “drought proofing” farming operations, the mandatory RET (upon which all wind farms critically depend) is “profit proofing” them. Here’s a Media Release from the Victorian Farmers Federation.
Renewable Energy Targets costs farmers millions
Victorian Farmers Federation
Friday 5 September, 2014
VICTORIAN farmers have called on the Federal Government to abolish the Renewable Energy Target (RET), arguing it costs them millions of dollars in higher electricity bills.
“The RET is simply unsustainable as it forces all of us to pay millions more for electricity to subsidise everything from solar hot water systems to wind farms and solar power stations,” Victorian Farmers Federation president Peter Tuohey said.
VFF analysis has shown horticulture, dairy, chicken meat, egg and pig producers are paying up to 10 per cent more for electricity as a result of these charges.
“We’ve got rid of the carbon tax, now let’s get rid of the RET,” Mr Tuohey said.
The RET charges appear on farmers’ bills as:
The SRES (Small-scale Renewable Energy Scheme), which forces electricity consumers to subsidise small-scale renewable energy systems in homes (solar water heaters, solar panels and small-scale wind and hydro systems.)
The LRET (Large-scale Renewable Energy Target), to cover large-scale investment in renewable energy projects, such as wind and solar farms.
Mr Tuohey said the Federal Government’s Expert Panel Report on the RET Scheme had already warned it would cost Australian’s $28 billion and 5000 jobs to ensure at least 20 per cent of Australia’s energy is from renewable sources by 2020.
“The RET is a high cost approach to reducing emissions, given it simply focuses on electricity generation, not efficiency,” he said. Victorian Farmers Federation
A leading human rights charity has alleged that the World Wildlife Fund (WWF) is causing the displacement of traditional tribal people by funding squads who “beat and kill” natives for living in newly established “conservation zones” designated to protect wildlife.
The accusations made by Survival International relate to the displacement of the Baki Pygmie people in Cameroon, whose ancestral lands have now been designated “protected areas” to defend wildlife from poachers. Although the Baki have coexisted with the forest and it’s wildlife for “countless generations”, government poaching squads have treated the tribesmen harshly over the past decade, and the WWF stands accused of complicity in the abuse of their human rights.
The United Nations requires the WWF to prevent or mitigate “adverse human rights impacts directly linked to its operations”, but as Breitbart London was told by a Survival spokesman: “the facts suggest the WWF just haven’t put measures into place to prevent these abuses”.
According to Survival, the squads, which put the rights of animals above the rights of ancient tribes, wouldn’t be able to operate without the extensive funding and administrative assistance provided by the WWF to the Cameroonian government. As we were told: “the WWF has known about this for ten years or more”, and have until recently failed to act.
A Baka man told Survival, “The forest used to be for the Baka but not anymore. We would walk in the forest according to the seasons but now we’re afraid. How can they forbid us from going into the forest? We don’t know how to live otherwise. They beat us, kill us and force us to flee to Congo.”
Survival also told Breitbart London: “Many Baka have now asked us to publicise their plight as widely as possible, and to tell WWF’s supporters so that they can take action”
Both parties are now participating in a Human Rights Commission inquiry, but this has only come after months of the WWF dragging their feet, say Survival. A press release by the WWF claimed they were “disturbed” by the claims and had been offering assistance since March, but the Survival spokesman told us: “the investigation WWF suggested to us was entirely biased… there was no intention to publish the results.”
“The WWF has claimed Survival has to initiate this enquiry, but that isn’t true. They could have done it themselves at any time over the past ten years – it’s shocking”.
For the duration of the inquiry, which is being chaired by WWF funding recipient the Cameroon government, the wildlife charity will continue to pay for the squads which have caused the controversy. Meanwhile therefore, the purportedly illegal eviction of the tribal people from their homelands in the name of “conservation” will continue unabated.
President Barack Obama raised a lot of eyebrows last week when he declared in his United Nations climate change speech: “Over the past eight years, the United States has reduced our total carbon pollution by more than any other nation on Earth.”
That’s absolutely true. And it’s remarkable because we as a nation didn’t ratify the Kyoto Treaty, pass a carbon tax, or enact Mr. Obama’s cap and trade agenda.
It’s all the more remarkable because Americans have been scolded nearly every day for being a major source of all these satanic gases that are allegedly burning up the planet. Instead, since 2005, our emissions are down by roughly 10 percent and almost twice that amount on a per capita basis. Not bad.
How did that happen? If you think the answer is that we’ve transitioned to green energy, you are completely wrong.
The game-changer for the U.S. has been the shale oil and gas revolution over the past six years brought about through new smart drilling technologies. The U.S. is now the largest natural gas producer in the world. And as America has produced more natural gas, we have shifted away from coal.
This, according to the Energy Information Administration, accounts for more than 60 percent of the carbon emission reductions in the United States. Mr. Obama never mentioned that.
Here’s the real stunner: if we want to reduce carbon emissions further, investing in natural gas is a far more efficient strategy than going all in for so-called “green renewable energy” sources.
Over the last seven years, the U.S. government has spent almost $70 billion in tax, regulatory, and spending subsidies to the renewable energy sector. But wind and solar energy after this avalanche of government support account for only about three percent of electricity production.
By contrast, the shale gas explosion has been almost entirely devoid of subsidies – yet its output has exploded.
That’s great news for the environment because natural gas emits only about half the carbon as coal, even though coal is much cleaner than it once was.
So one would think the climate change marchers who descended on Washington last week and all their green allies would be beating the drum for shale gas and hydraulic fracturing as an environmental godsend. No.
The one common theme of the green marchers these days is they hate fracking, even though it has done more to reduce greenhouse gases than all the government subsidies to wind and solar power combined.
The Sierra Club and other environmental groups which once saw natural gas as a valuable “bridge” fuel to the future, now denounce this wonder fuel. A new study making the rounds on the Internet says natural gas “won’t do much to reduce U.S. greenhouse gas emissions and might even raise them slightly.”
This is bad economic and environmental advice. Shale gas is a wonder fuel because it is clean-burning, abundant, domestically produced, and cheap. The price of natural gas has fallen by more than half over the last six years and we have at least 150 years of supply in the Marcellus Shale and elsewhere.
The Left’s unhinged objections to natural gas exposes their real aspirations. They aren’t fighting to stop global warming or the rise of the oceans; they’re fighting to stop growth itself.
Americans better wake up to that reality, before the greens actually succeed.
NASA Scientists Puzzled by Global Cooling on Land and Sea
(iStock)
Monday, 06 Oct 2014
The deep ocean may not be hiding heat after all, raising new questions about why global warming appears to have slowed in recent years, said the US space agency Monday.
Scientists have noticed that while greenhouse gases have continued to mount in the first part of the 21st century, global average surface air temperatures have stopped rising along with them, said NASA.
Some studies have suggested that heat is being absorbed temporarily by the deep seas, and that this so-called global warming hiatus is a temporary trend.
But latest data from satellite and direct ocean temperature measurements from 2005 to 2013 “found the ocean abyss below 1.24 miles (1,995 meters) has not warmed measurably,” NASA said in a statement.
The findings present a new puzzle to scientists, but co-author Josh Willis of NASA’s Jet Propulsion Laboratory (JPL) said the reality of climate change is not being thrown into doubt.
“The sea level is still rising,” said Willis.
“We’re just trying to understand the nitty-gritty details.”
A separate study in August in the journal Science said the apparent slowdown in the Earth’s surface warming in the last 15 years could be due to that heat being trapped in the deep Atlantic and Southern Ocean.
But the NASA researchers said their approach, described in the journal Nature Climate Change, is the first to test the idea using satellite observations, as well as direct temperature measurements of the upper ocean.
“The deep parts of the ocean are harder to measure,” said researcher William Llovel of NASA JPL.
“The combination of satellite and direct temperature data gives us a glimpse of how much sea level rise is due to deep warming. The answer is — not much.”
Remember all that huff and puff put out over the last few months by the Clean Energy Council and near-bankrupt wind power outfit, Infigen about wind power becoming so cheap as to be competitive with coal and gas fired generators?
You know, the fantastic tales about wind power causing a reduction in Australian retail power prices?
Never mind, that nowhere in Australia have retail power prices decreased; and that – thanks to its ludicrous efforts to “rely” on wind power – South Australians pay the highest retail power prices in the world (see our post here).
In a “hey, quick look over there” approach to media manipulation, the CEC and its clients bang on about the effect of wind power on the wholesale market (on those rare occasions when the wind happens to be blowing, of course – see our post here) – while steering well clear of the actual cost of wind power to retailers.
These hucksters never talk about the prices fixed under Power Purchase Agreements with retailers – set at $90-120 per MWh versus $30-40 for conventional power – and recovered from retail customers, irrespective of the wholesale price (see our post here); and they run a mile from any mention of the Renewable Energy Certificates that get directed to wind power outfits; that have added $9 billion to power bills already; and that will add $50 billion to Australian power bills over the next 17 years, if the Large-Scale RET remains in place (see our post here).
No, the wind industry’s main pitch over the last few months has been that it’s delivering a “stand-alone” product at a price which is lower than its conventional generation “competitors” (see our post here).
Now, if there was a just a whiff of substance to the wind industry’s spin, then you’d think the industry would welcome the chance to stand on its own two feet – and jump at the opportunity to finally take on coal and gas generators in a head-to-head battle that the wind industry (with its abundant source of “free” fuel) is just bound to win, right?
But, hold the phone. It seems all that wind industry talk was … well …, just “talk”.
Despite all that chest-thumping and “big-boy” posturing, the wind industry turns out to be a sooky little mummy’s boy, after all. Here’s The Age stripping away a little of the wind industry’s false bravado.
Pacific Hydro write-down
The Age
Tim Binsted
6 October 2014
Heavyweight fund manager IFM Investors has taken a $685 million write-down on its Pacific Hydro renewable energy business due to the adverse impact of the Abbott government’s Warburton review, weaker electricity demand in Australia, and tax changes in Chile.
IFM Investors has $50 billion in assets under management and is owned by 30 pension funds with more than 5 million Australian members, including funds such as AustralianSuper, Cbus and HostPlus.
The hefty valuation changes to Pacific Hydro – which has hydro, wind, solar and geothermal projects in Australia, Brazil and Chile – were driven partly by businessman Dick Warburton’s review into the renewable energy target. His report is with the government for its consideration.
IFM Investors chief executive Brett Himbury said the review had undermined confidence for renewable energy investors.
“There’s two primary factors [impacting the Australian assets]: a lowering of energy demand and uncertainty around the current laws,” he said.
“It’s a great shame that at a time when the likes of President Obama are saying there’s no bigger challenge for the globe than climate change, we’ve got this policy uncertainty.”
On August 28, the Warburton RET review made two recommendations to the government: either allow the large-scale RET to continue to operate until 2030 for existing and committed renewable generators, but close it to new investment, or modify the fixed target for 20 per cent renewable energy by 2020 to a “real 20 per cent” of actual electricity demand.
Both of these outcomes would be negative for the renewable energy sector. Pacific Hydro has assumed a “20 per cent real” RET in its valuation.
The “real target” would reduce the annual production of renewable energy in 2020 from 41,000 gigawatt hours to about 27,000GWh.
Compounding the sector’s woes, the Australian Energy Market Operator in June made big cuts in its annual forecasts for electricity demand over the next decade.
The combined impact of lower anticipated energy demand and assuming a “20 per cent real” RET have hit the valuation of Pacific Hydro by $220 million.
“We’d like to see continued commitment to the current bipartisan agreed target and more broadly as investors we’d prefer to see a relatively certain [regulatory] environment,” Mr Himbury said. “As long-term investors you’d like to think that there is economic value in renewable energy, but what we need is clarity and certainty.”
Infigen Energy boss Miles George has previously warned that an overhaul of the target would be “disastrous” for the industry and push investment overseas.
Infigen, one of Australia’s biggest wind farm operators, has warned it could breach its debt covenants within three months if the RET is wound back without compensation for investors.
The renewable energy industry has warned any moves to scrap the target would jeopardise $15 billion in renewable energy investment.
The RET review also contributed to a further $60 million write-down on the value of the company’s development portfolio in Australia and South America.
“Under the current environment it wouldn’t be economic to bring the development book to market. There’s a knock-on effect that could impact thousands of construction jobs,” Mr Himbury said.
Grattan Institute energy director Tony Wood said the proposed Warburton RET changes were not just a headache but entering “serious migraine territory” for anyone exposed to renewable energy investments.
“It’s not like a slight change in the offside rule in AFL or NRL. This is changing the game,” he said.
“Existing projects are almost certainly not making money at the moment. The REC [renewable energy credit price] is suppressed because there is an oversupply of credits, and renewable energy itself has suppressed the wholesale [energy] price. It’s good for consumers but it hurts the return on capital.”
Underscoring the dangers of regulatory change, Pacific Hydro’s Chilean assets have taken a $210 million hit after tax reforms proposed by Chilean President Michelle Bachelet were approved by the country’s congress.
The reforms include a rise in the base corporate tax rate from 20 per cent to 25 per cent by 2017 and an increase in the stamp tax payable on financing proceeds from 0.4 per cent to 0.8 per cent.
Chilean hydro generation has also been hurt by prolonged drought in that country.
Primarily as a result of the Pacific Hydro write-downs, IFM’s mammoth Australian Infrastructure Fund is expected to decline in value by about 5 per cent for the September quarter. This is a major hit given infrastructure investments are supposed to be stable, defensive assets for the long term.
IFM will host an investor briefing, with a special focus on Pacific Hydro, on October 7.
The fund manager is undertaking a strategic review of Pacific Hydro called Project Primavera that is expected to be completed by the end of the year.
The RET was introduced with bipartisan support by the Howard government in 2001 and was expanded by the Labor government in 2009.
According to its 2013 report, Pacific Hydro has 18 operating assets, employs 294 people and generates annual revenues of $224 million. The Age
There. Pac Hydro’s write-down proves it: wind farms don’t run on wind, they run on subsidies (see our post here).
The wind industry was created by the mandated target set by the LRET – and the $billions worth of RECs directed to wind power outfits at power consumer expense, issued under it.
Without the guaranteed transfer of $billions worth of RECs, wind power outfits would be out of business in a heartbeat – which explains the wind industry’s desperation to maintain the mandatory LRET at all costs.
It also explains why wind industry rhetoric never seems to match reality. Or, as the Americans put it, why “money talks, and bullshit walks.”
Wind Turbines: Even Worse Than We Feared
Russell Lewis
Most of the criticism of wind turbines until now has, with every justification, been directed at their economic folly and spectacular inefficiency. They only work when the wind blows above 7 mph; in a good year they typically operate at a quarter of their stated capacity, and they shut down when the wind blows too hard – typically in excess of 50 mph. And for the vast tracts of land they take up, they also have a low power density, producing only 1.2 watts per square metre – compared with 53 watts per square metre for a gas power station. In a small country like Britain, what a criminal waste of space!
What then is the point of building them?
The answer is that their installation is entirely subsidy- and penalty-driven. Power-producers are required by law to produce a growing percentage of their output from renewables or pay someone else to do so. Some may shrug their shoulders and accept the official explanation that this is the price we pay for preventing future global warming, through the reduction of carbon emissions. This is based on the mistaken assumption that intermittent renewables are a better way to reduce CO2 than gas or nuclear power. But as the penetration of intermittent renewables rises, the only way they can be accommodated for backup when the blades are not turning requires an unseen armada of mobile and dirty diesel generators to quickly match power demand, whose emissions make a joke of the professed aim of CO2 reduction.
The good news is that the tide is turning. The Prime Minister – or someone close to him – made a famous outburst about ‘green crap’ and seems finally to have realized that people don’t like ballooning fuel bills. Some also have the most powerful of reasons for hating them in terms of pounds, shillings and pence. There is mounting evidence that the proximity of wind turbines threatens the value of your property. Not long ago, a study by the London School of Economics showed that the value of homes close to wind farms could be slashed by 11 per cent.
There may be even more extreme consequences. There have been cases in America where an individual possessing a home near a wind farm found that it was unsellable. All this is without even considering the report that claims that only one in ten wind farm fires are reported. The real number has been about 1500, including one in North Ayrshire in 2011 in which a 300 foot turbine was burnt out. In general, the report says, these fires tend to be ‘catastrophic’ – ie the end of the turbine and a total loss to the taxpayer and the investor.
There are other very good reasons why people don’t fancy having a wind turbine near their home.
Scientific studies have shown that wind farm noise harms sleep and health, causing headaches, anxiety and stress. Apparently it is not what you can hear that does the damage, but what you can’t. Known as the infrasound, or low frequency noise, is what does the physiological damage.
This is perhaps the main factor in the rise of anti-wind energy groups of which there are now 400 in Europe. They are well represented even in Denmark – often considered the Mecca of wind energy enthusiasts. The consensus among the opponents of wind turbines is that they should be located at least two kilometres from any residence. No such requirements however exist in the UK.
Wind turbines are not merely damaging to humans paradoxically for environmentalists, they are lethal to wildlife. According to the research group SEO/Birdlife in Spain alone, these avian death traps kill 18 million birds and bats every year. Of course it’s not that easy to measure, because to use the jargon, you can’t account for ‘scavenger removal’ – and offshore at sea, well, pick a number.
The unfortunate thing is that birds, particularly rare-ish soaring birds like eagles, disorientated by the artificial change in air currents from wind turbines, or migrating flocks blindly following each other and a magnetic field, are very prone to get the chop.
In America there has always been official concern about protecting rare and valuable species of birds like the bald eagle. The Obama administration, which has been active in prosecuting oil, gas and other businesses for harming protected bird species, has turned a blind eye to the deaths of the same creatures caused by wind turbines.
It’s a tragedy then that the Royal Society for the Protection of Birds is far too committed to policies aimed at protecting the planet against global warming at the end of the century to make a fuss about the appalling massacre of birds by wind turbines in the present day. The situation is even worse for bats, for which there is much protective legislation to conserve them as they breed very slowly. That is why the finding that German turbines slay three million bats a year is particularly worrying for nature lovers. For bats, their final moments are different to birds and this type of death is known as barotrauma. They are attracted to turbines as they think they look like tall trees from which to attract a mate. But on approach, the dramatic change in air pressure near the turbine blades gives them the bends and may cause their lungs to explode.
As if all that wasn’t bad enough, wind turbines are not only dangerous but ugly and ever more of a blot on the landscape. The latest extra-large version is as
tall as the London Eye!
Studies show that they are driving tourists away from the loveliest parts of our countryside. Over two-thirds of those surveyed were put off visiting Scotland by wind farms. The Scottish Nationalists have particular reason to be worried because it is their announced intention to produce 100 per cent of Scotland’s electricity from wind power. The trouble with this policy – apart from its economic insanity – is that, since the wind farms are generally at a long distance from their market in the urban areas, their pernicious growth must mean swathes of the countryside being populated with pylons, making the landscape even more unappealing to visitors and odious to the locals.
One might expect that all landowners would heartily welcome the boon offered them by the hugely subsidised wind farms. However The Duke of Northumberland, the biggest landowner in England, who owns 100,000 acres, has no time for wind farms and refuses to have a single wind turbine on his domain. The Crown Estate also has large acreages suitable for wind farms, but Prince Philip has expressed strong opposition to them. He told a wind farm developer that wind farms were absolutely useless, completely reliant on subsidy and an absolute disgrace. ‘You don’t believe in fairy stories do you?’ he asked Mr Wilmar of Infinergy, who expressed surprise at the Prince’s very frank views.
I really can’t think of anyone I’m happier to have trumping my detestation of these evil, misbegotten and inhuman machines.
Russell Lewis was a journalist on the Daily Mail. Picture: whirlopedia.com:wind-turbine-accidents.htm
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Important letter date august 10th 2014 from Waubra Fondation to Ms Katarina Dea Zetko,
Civil Initiative for the Protection of Senožeška Brda (Slovenia): http://www.senozeska-brda.si/
“In my opinion, based on my first hand knowledge of what has happened to wind turbine neighbours in Australia and elsewhere internationally, this is a recklessly irresponsible and dangerous plan and will inevitably result in serious adverse health effects for citizens of Slovenia who are neighbours of such turbines, out to significant distances. This is happening around the world, and I know of no reason why Slovenian citizens will not have the same adverse health impacts being reported internationally. Breaches of UN Convention Against Torture
Decisions made by public officials to approve such an unsafe development, or to allow a development to continue to operate in spite of directly causing adverse health consequences such as sleep deprivation and “sensory bombardment from noise”, could be held to be breaches of the UN Convention Against Torture. Both “sleep deprivation” and “sensory bombardment from noise” have been acknowledged as methods of torture by the Physicians for Human Rights. The UN Committee Against Torture has also specifically acknowledged that sleep deprivation is used as a method of torture”. Download letter here
Why the oil majors are backing away from renewable energy
David Ferris and Nathanial Gronewold, E&E reportersEnergyWire: Friday, October 3, 2014
Chevron Corp.’s new solar and geothermal business seemed to be having a great year. In January, after just one year in operation, it had established projects with returns of 15 to 20 percent and had plans to build several geothermal plants in Europe.
Then Chevron changed its mind. In a series of transactions, it sold off the unit, as well as others that do smaller solar installations and energy efficiency upgrades, and canceled a pair of giant solar farms in Hawaii, according to reports fromBloomberg Businessweek. With that, the oil majors have beaten a near-final retreat from solar power.
Why? It is a puzzling question for those who have watched the oil majors bestow their dollars and attention on clean energy and a few years later abruptly walk out the door.
Three of the supermajors — BP PLC, Chevron and Royal Dutch Shell PLC — have since 2000 taken on ventures in wind, biofuels and geothermal. All took big positions in solar, sometimes more than once. They were positioned to compete or even dominate.
Now, as solar is gaining market momentum like never before, the oil majors are nowhere to be found.
Analysts who cover the industry say it isn’t that oil and gas companies want to kill their brood of adopted low-carbon children, or that they even perceive them as a threat. They have a straightforward answer: The oil business is changing, and times are tough. Projects that made sky-high profits are a little lower in the sky.
“It’s not their strong suit to be spending a lot of money and time on [renewables] when they are definitely challenged in their core industry,” said Lysle Brinker, an oil and gas equity analyst at IHS.
Even those depressed profits tower over the margins earned in renewables, where projects are slow, bureaucratic and hard-won. If there are any profits to be had, they are too meager to impress an oil executive.
But there is yet another explanation.
An executive who has worked with both Chevron and the solar industry says that although the oil company was happy to nurture solar power with seed money, it lost interest when the investment began to require real money — real money for a business that, at its heart, it didn’t understand.
It’s all about the core
When talking to experts about why the oil industry has turned away from renewables, the word “core” comes up a lot. An oil industry buffeted by change has needed to return to the basics, even though the basics are a lot more exotic than they used to be.
In recent years, the major oil players have been absorbed with searching for and extracting fuels from a bewildering array of new places.
A growing portion of oil companies’ portfolios these days is in the “unconventionals” — the oil sands of Alberta, the natural gas formations of the Marcellus Shale, the ultra-deep waters of the Gulf of Mexico, the frigid Arctic, and the tight oil reserves that underlie South and West Texas and western North Dakota.
They require new techniques that are extraordinarily risky and expensive, and so the companies have turned their venture dollars away from “clean” technology and toward innovations in drilling, subterranean mapping and hydraulic fracturing.
The supermajors were “caught quite unaware of the potential of shale,” said Chirag Rathi, an energy analyst at Frost & Sullivan. A flood of shale gas has upended America’s fuel markets in recent years, and it took a lot of investment to get there. “All those trends kind of meant that it was important to focus on the core again,” Rathi said.
Meanwhile, the big oil firms are finding themselves less welcome at the foreign oil fields that have been mainstays for decades. National oil companies like Aramco of Saudi Arabia and Petronas of Malaysia are renegotiating old contracts and exerting more control over their turf, Rathi added.
The Arctic Circle provides just one example of the difficulties. Shell has so far spent $6 billion on setting up drilling rigs in the Chukchi Sea between Alaska and Russia but has been beleaguered with safety and equipment problems (EnergyWire, July 18). Two weeks ago, Exxon announced it would scuttle plans to drill in Russia’s Kara Sea because of Western sanctions against Russia related to its aggressions in Ukraine.
Shell is in trouble with investors for stagnant production figures and rising exploration and development costs that are eating away at company revenues. In response, the company is in the midst of a major restructuring effort, vacating much of the U.S. shale oil business and focusing investments instead on offshore exploration and production and other projects that could help the company make major gains in its global oil and gas output figures.
Meanwhile, as venture dollars have become more precious, those earlier investments in renewable energy projects often struggled or floundered.
KiOR Inc., a once-promising maker of biofuel from wood chips and switchgrass, is in severe financial trouble. In general, biofuels have labored under uncertainly about how much the federal government will mandate to be blended into fuels. The renewable energy production tax credit expired at the end of 2013, depressing the profits of all future wind farms.
Since the tax credit expired, “there wasn’t much meat in the market,” Rathi said.
“I have this much money to spend,” said Daniel Choi, an energy analyst at Lux Research. “Am I going to use it to buy new plots of land, to develop this plot of land, or will I allot it to investing in a new renewable energy company?”
Investments in wind and solar shine, then fade
Remember a few years ago, when BP said it stood for “Beyond Petroleum” and Chevron’s ads declared, “It’s time oil companies get behind the development of renewable energy”?
A survey of the oil majors’ holdings reveals that the investments that gave those claims a ring of truth are now mostly stalled or sold. What momentum exists is near the oil majors’ core competencies: biofuels, geothermal and solar projects that make fossil fuel extraction more efficient.
Shell and BP still have significant holdings in wind but seem to hold them at arm’s length.
Shell WindEnergy Inc. pulled out of a major project in California two years ago but still operates eight U.S. wind farms that comprise 720 wind turbines, said Shell spokesman Ray Fisher. The corporate parent, Royal Dutch Shell, maintains a small wind energy branch, though its future is only vaguely defined. Investors are watching for signs that Shell may move out of the wind business in the coming years.
BP invested $3 billion in wind farms starting in 2005, eventually operating 16 of them in nine states, producing 2,600 megawatts of power. In 2013, as the company struggled to pay for the damage from its Gulf of Mexico oil spill, it was determined to sell them. Then, a few months later, it decided to hold onto wind after all because no one offered a good buying price.
“Despite receiving a number of bids, the company determined that it was not the right time to sell the business,” said Jason Ryan, a BP spokesman.
Investments in solar photovoltaics (PV), where the oil majors were once formidable, have vanished.
BP at one point boasted of having the most efficient thin-film solar panels in the world, and in 2001 hatched a plan to put solar on all new BP service stations. In 2009, it arranged to build solar plants on the roofs of Wal-Mart stores in California (ClimateWire, April 23, 2009). But BP shut down these operations in 2011.
“The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long term returns for the company, despite our best efforts,” BP said in an internal letter to staff.
Shell in 2002 bought a German solar company (from Siemens AG), established it as one of the leaders in the then-tiny U.S. solar market, and then sold it back to the Germans (to SolarWorld AG) in 2006.
Chevron’s exit has been the most recent. In the wake of its divestments this year, Chevron’s holdings are limited to a few solar photovoltaic projects in California and a small wind farm in Wyoming. It says it is experimenting in solar technology.
The one oil company that maintains a vital interest in solar panels is Total SA, the French petroleum giant. In 2011, it spent almost $1.4 billion to buy a controlling interest in SunPower Corp., one of the U.S.’s leading solar panel makers, which it runs as a semi-independent arm.
Clean, as long as it’s core
For the oil industry’s other big players, though, the remaining oomph in solar power is in what is called “enhanced oil recovery.” Mirrors are positioned to bounce sunbeams to a central point, where a fluid is superheated to create steam. The steam, in turn, is injected in the ground to increase the productivity of an existing oil well.
Chevron has a demonstration enhanced oil recovery plant in Coalinga, Calif., that has 7,600 mirrors, while Shell has allied with GlassPoint Solar Inc. on a project in Oman.
In geothermal power, which uses hot subterranean rocks to create steam that makes electricity, Chevron operates sizable plants in the Philippines and in Indonesia.
One vein that almost all the supermajors still pursue is biofuels, though often on a smaller scale than a few years ago, according to Bloomberg.
Chevron and Exxon Mobil Corp. both dabble in advanced biofuels research. By comparison, Shell and BP are more bullish. Shell has a deep history with biofuels that spans about three decades, said Shell’s Fisher, adding that Shell is one of the world’s largest distributors of biofuels and that capacity expansions are ongoing. BP’s green-fuels scope includes the largest bioethanol plant in the United Kingdom, operated with DuPont, and three mills in Brazil that help convert sugar cane into ethanol. In 2012, BP scrapped plans for a $300 million cellulosic ethanol refinery in Florida.
One name that rarely enters the conversation, when it comes to renewables, is Exxon Mobil.
America’s second-largest company by gross revenue showed relatively little enthusiasm for renewable energy projects and ventures in the past, even as interest in renewables grew prominently in 2008 and 2009, and the firm largely maintains this attitude today.
Exxon Mobil officials have also expressed deep skepticism of electric cars at past events, arguing that it was unlikely that advanced batteries would ever match the energy density that is contained in liquid petroleum fuels.
Exxon Mobil does, however, support renewable energy research indirectly, as a sponsor of the Global Climate and Energy Project, a research initiative at Stanford University that exists to “conduct fundamental research on technologies that will permit the development of global energy systems with significantly lower greenhouse gas emissions,” according to the GCEP website.
Chevron’s 2 flirtations with solar
When it comes to understanding why the big oil companies can’t seem to embrace clean energy, the experience of Robert Redlinger proves instructive.
Redlinger began at Chevron in 2003, when it bought the energy contracting company he worked for, Viron Energy Services. Redlinger headed up Viron’s distributed solar business and became a leader in Chevron’s clean energy subsidiary, Chevron Energy Services. By the mid-2000s, Chevron Energy Services had become the second-biggest solar integrator in California. It built ground-mount systems and solar canopies, and on rooftops.
But by 2007, Redlinger said in an interview, it was becoming clear to him that solar panels were becoming a commodity and that Chevron would make tiny profits.
So at his prodding, Chevron expanded into building utility-scale plants. Redlinger headed the team that secured attractive sites for solar farms. For a brief time, it appeared that a major oil company would have been in a leading position in what is now one of the world’s top utility-scale markets for solar.
Along with the budding projects came the need for letters of credit and deposits to create interconnections to the grid. It was when it began to require millions of dollars of capital investment that Redlinger’s bosses started having second thoughts. “In fact, my superiors at Chevron Energy Solutions never even took it to the corporation and never asked for the funds because they knew it would be rejected,” Redlinger said in an email.
By 2009, Chevron had sold its solar assets, and Redlinger left the company in 2010.
“There was always a disconnect,” Redlinger said of Chevron’s relationship with solar. “It never really had the buy-in of the corporation. It was always a bottom-up effort of the staff rather than a top-down strategy directed from above.”
Around 2012, after Redlinger’s departure, Chevron Energy Solutions again got an infusion of cash from its parent to pursue big geothermal and solar projects. And again, last month, the company got cold feet.
Do oil companies understand electrons?
Many aspects of the electricity business were unfamiliar and uncomfortable to an oil executive, Redlinger said.
One was debt. Like most equipment-intensive industries, the solar industry incurs lots of debt to build its projects. But Chevron’s leaders were allergic to incurring debt and employing other financing structures commonly used to build electric infrastructure. The oil industry, with its huge cash reserves and extraordinary appetite for risk, is used to paying costs from its own pocket. One loan on an oil field gone bad can bankrupt an entire company.
As a result, Redlinger said, he could never make the case that a solar project, despite its lower returns, in the end could be as profitable as an oil project if you structured it differently.
Furthermore, Chevron executives bristled at the relationship with a solar plant’s primary customer — the electric utility.
The oil companies are used to high risk and high reward. The utilities offered low risk, low reward — and an inferior bargaining position. Utilities are monopolies, and a monopoly defines the terms. Chevron does tango with the utilities as the operator of some big cogeneration electric stations. But when it came to building solar plants, Chevron was distressed by its lower status.
“The utility business is not a good one,” Redlinger said, “unless you’re a utility.”
Redlinger addressed a question that occurs to many when they think of the oil companies and renewable energy. The oil majors are better than anyone at energy. Solar, wind and geothermal power are all energy. So what’s the problem?
The problem, Redlinger said, is that the oil companies know molecules, and solar isn’t about molecules. It’s about electrons.
What the oil companies do, Redlinger said, is one part exploration — geology, geophysics, computer simulation of oil reserves, drilling and heavy earthwork. The other part is chemical engineering, massaging chemical bonds with treatment and heat to convert crude into usable fuels like diesel and gasoline.
What solar and other electricity-generation business do, by contrast, is electronics engineering and manufacturing. “The electrons business is just not core to what the oil majors do,” Redlinger said.
“It’s not that the oil companies can’t get good at it,” he said. “They’re very, very talented and have very good personnel. The question they have to ask themselves is why. If you have a business model that is profitable, and will remain profitable for 20 or 30 years, and that takes all your resources to remain profitable, why change it?”
"Mothers Against Wind Turbines™" Phoenix Rising... 