THOUGHTS ON WIND FARMS

James Lyon Copywright

 

Economics

Generation costs of wind farms are typically around $80 per MWh

Average wholesale prices of electricity in the National Electricity Market (NEM),around $30 to $50 per MWh.

 

EG Macarthur Wind Farm, cost $600,000,000, at 8% interest over 20 years = annualized capital cost $61,000,000 pa; + operating costs $10,000,000 pa

= total annual cost $71,000,000.

"nameplate capacity" 329.4MW, generating 721,000 to 1,010,000 MWh per year (depending on the "capacity factor", 25% to 35%)

Generation cost = $70.30 to $98.47 per MWh (most likely around $82.02)

http://www.macarthurwindfarm.com.au/

 

CO2 reduction would be 360,500 to1,000,000 tonnes CO2 pa. With a wind farm subsidy at $40 per MWh, the cost of abatement would be $40 to $80 per tonne

 

Greenhouse Gas Reduction

Australian Government MRET Review (Tambling Report) 2003

(Executive Summary para 18)

"MRET is a relatively expensive abatement measure compared with a number of other Australian Government as well as some State and Territory government initiatives. In 2010, the cost of abatement to the economy arising from current MRET settings is expected to be about $32 per tonne CO2-e."

http://www.mretreview.gov.au/report/index.html

 

AGL's submission to the MRET Review (p5)

"AGL.s experience is that renewable energy generation is a costly way to reduce greenhouse gas emissions when compared with fuel switching to low emission fuels such as natural gas for generation and use in domestic residences, and demand side abatement. AGL is opposed to strategies designed to reduce greenhouse gas emissions at anything other than least cost to the electricity consumer."

http://www.mretreview.gov.au/pubs/mret-submission226.pdf

 

European Experience

The British National Audit Office concluded (January 2005) that wind was the most expensive way to fund carbon emission reductions in Britain, costing from 70 to 140 pounds per tonne of carbon saved.

The German Energy Agency (Deutsche Energie-Agentur - DENA) published a study (24 February 2005) which found that wind energy could generate up to 20% of Germany's power needs, but this would require re-development of the power grid raising the cost of CO2 abatement to between 41 and 77 pounds per tonne. The study concluded that improvements in the energy efficiency of housing would achieve equivalent CO2 emissions at substantially lower costs.

Studies in Denmark and Ireland have also found that the cost of carbon emissions reduction resulting from extensive introduction of wind power has been significantly higher than the cost of carbon traded in the carbon market. In other words, renewable energy has not been a least-cost carbon reduction strategy.

Origin Energy

Submission re Victorian Renewable Energy subsidy proposal

" ... a Victorian-specific renewable energy scheme ... will not deliver cost-effective GHG abatement, being up to four times the cost of that delivered by other approaches;

http://www.doi.vic.gov.au/DOI/Internet/Energy.nsf/AllDocs/8F88D12773FD1DD9CA2570D6000E72A4?OpenDocument

 

Alternatives

The Origin Energy Submission to the Victorian Renewable Energy subsidy proposal lists (p5)greenhouse gas reduction strategies in order of cost: Building standards, DSM, Coal to coal - new black USC, Coal to coal -new brown IGCCC, coal to coal - new USC + drying, New black IGCC, Co-firing biomass, Solar hot water, Biomass, Nuclear, Solar thermal, HDR, ZETs, Wind, Distributed PV,

 

Social, Planning & Ammenity Issues

The very limited greenhouse gas benefits from wind farm developments do not justify any special planning concessions compared with other industrial developments.

 

* Australian wind farm developers select individual land owners and make secret deals. This creates a situation of winners and losers and arouses social and community tensions.

* In Victoria, the Planning Process removes power of community to decide its own future, imposes state government policy, commercial needs of developers.

* compare with Denmark, Germany, Holland, where compensation is negotiated and numerous wind farms have been built with much less conflict than in UK, Australia

* Landscape is often depicted as a subjective issue - developers say "some people like the look of the turbines", but people who choose to live in a rural environment usually don't like them. Visual impact is identified as the leading cause of opposition

* Amenity impacts depend on distance - minimum setbacks should be required for flicker and visual impact reasons.

* noise should be dealt with by setback requirements as well as noise standards. Base noise standard should be 35DBa, not 40DBa

* Wind farm permits should require the developer/operator to commission open, ongoing independent monitoring of capacity factors achieved and the effect on the volume of greenhouse gas emissions. If the community is asked to subsidize wind farms because they promise environmental benefits, the community is entitled to know that it's getting value for money.

 

After several years of wind farm operation in Victoria, with large subsidies to the producers, there has been no scientific assessment of its greenhouse gas abatement impact.