electricity

Green taliban know it all wisely tell us that the future is in renewables…especially wind. Even pretend tories like David Farrar think wind power if fantastic.

But then they never tell us about all the subsidies to make it work do they?

Every job in Britain’s wind farm industry is effectively subsidised to the extent of £100,000 per year, The Telegraph can disclose.

A new analysis of government and industry figures shows that wind turbine owners received £1.2billion in the form of a consumer subsidy, paid by a supplement on electricity bills last year. They employed 12,000 people, to produce an effective £100,000 subsidy on each job.

The disclosure is potentially embarrassing for the wind industry, which claims it is an economically dynamic sector that creates jobs. It was described by critics as proof the sector was not economically viable, with one calling it evidence of “soft jobs” that depended on the taxpayer.

The subsidy was disclosed in a new analysis of official figures, which showed that:

ÞThe level of support from subsidies in some cases is so high that jobs are effectively supported to the extent of £1.3million each;  Read more »

If explaining is losing – then David Parker has lost.

He has produced a lengthy rebuttal of Dr Brent Layton’s attack on the Green/Labour power policy.

I just love that Labour’s primary rebuttal is that they don’t agree with the ‘tone’…

The tone of Dr Layton’s critique is clear from the start when he sets up a straw man alternative. He says that a move to a pay-as-bid market would result in changed bidding behaviour. Virtually everyone knows that. I don’t know who he thinks is proposing that. Labour certainly isn’t and as far as I am aware the people he has named in his paper are not either.  Read more »

The head of the Electricity Authority has attacked the Green/Labour power policy, saying it will lead to ”black outs, less investment in renewable power projects and shrink the New Zealand economy”.

In a speech in Auckland this morning, Electricity Authority chairman Brent Layton (pictured) attacked the plans, saying they will lead to blackouts, less investment in renewable power projects and shrink the New Zealand economy.

He says the cost of a regulator transferring wealth under such a centralised power-buyer proposal would have a “chilling effect” on investment, which is likely to be “large, widespread and long-lived”.

“Either the government will be forced to build future plants, and many other assets, or shortages of electricity and other services will be likely.”  Read more »

David Farrar just loves wind power…he thinks the awful pylons and turbines blotting the landscape, howling up excessive noise and smashing birds to a pulp is cool.

There are many faults, fallacies, and failures with wind power, ones the advocates refuse to discuss:

The claim: Wind Power is free.

Wind power is not free. All natural energy resources such as coal, wind and sun appear “free” – no one has to incur costs to create them. But turning a “free” resource into usable electricity costs money for collecting, generating and distributing that energy. To consumers and tax payers, the real cost of wind power is very high, no matter how well it is hidden by politicians.

The claim: Wind power is reliable.

Wind power is not reliable. No one can make the wind blow when the energy is needed – in fact, wind farms produce, on average, less than 30% of their nameplate capacity, often at times of lower demand.  Read more »

In Monday’s DomPost (not online) was this article by Lewis Evans about the Greens/Labour power scam. Basically it concludes that the only way that they can deliver lower power prices to consumers is to increase taxes on those same consumers.

In other words there is no possibility that power prices will be cheaper, and that they are basically running an electoral scam.

THE Greens/Labour proposal for an electricity single-buyer model with steep household electricity price discounts is economically flawed.

It requires a taxation increase that is similar to the reduction in electricity bills.

Electricity will be no cheaper to produce. It pre-empts the wise use of water within the electricity market as well as between electricity and other uses. It reduces the effectiveness of the ETS scheme in limiting emissions.

The proposal forces generators with existing hydro and geothermal plant to supply blocks of electricity at prices far below the cost of additional electricity production with new plant. Although the electricity market is reasonably competitive, long established firms are profitable. They have low capital costs, and are paid a price set by aggregate New Zealand demand equalling supply.

This is the real cost of electricity to the economy. When demand for electricity is increasing this price is equal to the cost of the next new generator. The electricity market is no different from any market where expansion requires increased establishment costs. In the case of forestry, there is no market power and established firms close to ports may be very profitable compared to plantations established later in the hinterland.

Some 78 per cent of electricity generated by hydro and geothermal plant is owned by the Crown. Adjusting this figure for taxation on private sector activity, a one dollar electricity discount to a household reduces government income by at least 85 cents.

For each household’s power bill reduced by $330 government revenue will fall by at least $280. Either household taxes need to rise by $280 or government expenditure be curtailed. Across all households this has substantial implications for taxation and government funded programmes.  Read more »

Labour and The Greens are telling us that the solution in California is the one to look at. Except earlier I blogged about how fragile it is with planning for rolling blackouts.

Now we can look at why their power is cheap…simple economics.

Changes in California’s market have attracted lots of new generation; the state expects to have 44% more generating capacity than it needs next year. Grid officials say they expect the surplus to fall to 20% by 2022, though it will remain high for about a decade.

However, the surplus generating capacity doesn’t guarantee steady power flow. Even though California has a lot of plants, it doesn’t have the right mix: Many of the solar and wind sources added in recent years have actually made the system more fragile, because they provide power intermittently.

So once again the Labour and Green parties have lied about the solution. They have simply looked at California, seen they have a state control of the market and assumed that is the underlying reason for cheap power. Wrong. Simple economics is the underlying reason, and 10 years of enforcing building of extra capacity so much so that they now have 44% more capacity than is needed.  Read more »

Labour and the Greens first held up South Korea as the model of their electricity reforms, that didn’t work out so well, so now they are talking about California as the nirvana. Quite apart from the fact that the Socialist Republic of California is flat broke and slashing jobs their electricity sector isn’t much chop either.

This from the California Consumer Energy Centre:

To understand the situation facing California, there are three terms that need to be defined- blackouts, brownouts, and rotational outages or “rolling blackouts.” A rotational outage or “rolling blackout” is when the utility company shuts off the power to an area, turns it back on, and then shuts the power off in a different area. The power outage typically lasts 60 to 90 minutes.

A brownout is when the electrical current flowing to your home or office is temporarily reduced (an average household can barely notice the difference). You may notice that the lights may slightly dim temporarily. These power reductions can be uncontrolled and controlled.

They also have a grading system for their “rolling blackouts”:  Read more »

People often criticise me for calling the Green party the Green Taliban, but after last week and their economic terrorism you can wonder no longer.

They of course are all cock-a-hoop at what they have done. They are pleased to have wiped millions off the value of key infrastructure stocks, but they know what they have done, they are too stupid to realise.

The Labour and Green parties’ power policy could wipe as much as $1.4 billion off the values of Contact Energy and Trustpower, says a Forsyth Barr analyst.

In a research note published today, analyst Andrew Harvey-Green described the Opposition’s policy as a “hand grenade” with far-reaching implications for the industry.  Read more »

Seamus Hogan of Offsetting Behaviour writes an open letter to David Shearer and David Parker. It is somewhat impertinent but asks valid questions which they need to answer:

Dear David and David,

I have read with interest the policy document you released yesterday: New Zealand Power, Energising New Zealand.I wonder if you could clarify a few points for me.

1. In the document and the associated speeches, you quote the Wolak report’s figure of $4.3b of, in your words, “super profits”. Have either of your read the report, or any of the trenchant criticisms of that report? (A bit egotistically, I can suggest work that I was involved in, here, here, and here, but there are others.)
2. You say that “prices are rising faster than in many of our major competitor countries”, and show a graph comparing the price trend in a number of countries since 1986. Let’s leave aside the question of what is meant by “competitor country”. Is it your position that prices were correct in New Zealand in 1986? Elsewhere you say that your new agency, New Zealand Power, will set prices based on operating costs and a fair return on capital. Is it your position that prices were generating a fair return on capital in 1986?
3. You say that the faster rate of price growth in New Zealand “undermines the competitiveness of our economy”. But one of your graphs shows that real industrial prices have remained about constant since 1986 and commercial prices have fallen. What exactly do you mean by “competitiveness”?   Read more »

The Green party staffer who blogs at The Standard as James Henderson aka Clinton Smith has been all over Twitter and the blog touting South Korea as the model that Labour and Greens are following.

There are a few flaws in that belief, and one they clearly haven’t understood. Firstly lets look at how South Korea generates their power.

From Wikipedia:

Fully 65.3% of their power production is from Thermal generation, burning fossil fuels like LNG, Oil and Coal. 31.1% is produced by nuclear energy. All renewables including Solar, Wind etc account for only 2% of power generation. Hydro is miniscule.  Read more »