‘Windfarm was at the mercy of the elements.’ Who knew?

Isn’t it such a pain when economic reality jumps up and smacks you in the face?

Stuff reports that the new chairman of NZ Windfarms has discovered the unpredictability of wind power. Well – blow me down! Quote.

Stuart Bauld spoke of the options as he also announced a $14m loss due to Vector selling its 22 per cent shareholding meaning Windfarms lost millions of dollars in tax benefits under continuity of shareholding accounting rules.

Bould [sic] said the company can consistently produce a modest profit and a modest cash flow, but will never be a major player in the industry. […]

Windfarms faced two formidable obstacles – it was unable to manage its revenue effectively, and was at the mercy of the elements.

“We remain exposed to a completely unsatisfactory and poorly designed wholesale market where our own healthy production drives down our revenue by over supplying the market.

“Wind flow is unpredictable. When the company first started operations, it assumed that it could achieve 160 gigawatts of production per year.

“This was later changed to 140 GWH and then to 130 GWH. Whilst we have occasionally operated at an annual rate close to this, it has never been achieved over a full year, so this year we again reduced it to 120 GWH, production we did not achieve this in 2018. end quote.

I do love green technology promises! 160? No sweat.? Oh, OK, maybe 140.? No? Let’s predict 130. Oops, sorry shareholders – I think we will go for 120. Nope – did not make 120GWH either. 75% down on promised and still not achieved. Quote.

“The reality is that it is only by putting our plant at risk that we can achieve these higher numbers.”

There were only a few solutions, he said. One was to add an alternative fuel source, or enter the retail market. end quote.

Add an alternative fuel source?? Diesel-powered windfarms? Quote.

A significant infusion of cash was necessary but shareholders were unlikely to fondly view a request for more money when the company had so far failed to consistently produce a profit and returns for investors. […] end quote.

Yeah, shareholders can be odd that way …

Scotter, a commenter on the Stuff article, appears to know about these things and has done the maths and provided some interesting figures: Quote.

Well, this article pretty much says it all – the business case for windfarms relies completely on tax benefits (i.e. subsidies) and the grid operator (Transpower) taking all the power even if they don?t want it.
The Te Rere Hau wind farm has a name plate capacity of 48MW but 120GWhrs per year means its average output is only 13.6MW. This gives a capacity factor of 28% which is actually quite good! But compare this with Huntly on gas that can consistently do 953MW.
Te Rere Hau cost in excess of $140m to construct and was completed in 2011 and currently has maintenance costs of $5m per year. So cost per MW of actual output in 2011 was $10.3m/MW.
Huntly?s combined cycle gas turbine rated at 403MW was installed in 2007 for $520m or cost per MW of $1.29m/MW.
The new Te Mihi geothermal station at Taupo is rated at 166MW and cost $623m in 2014. i.e. cost of $3.8m/MW.
The Te Uku Wind Farm near Raglan has a nameplate capacity of 64MW so for capacity factor of 28% produces on average 18MW. It cost $200m to build in 2011 so cost of $11.1m/MW
? Windfarms cost 8 times as much to build as a gas turbine plant and provide unreliable output.
? Windfarms cost 3 times as much to build as a geothermal plant and provide unreliable output.
? To replace Huntly?s output with windfarms would cost $10.6 billion and it still wouldn?t be reliable.

But by 2030 when we have run out of gas and have 780,000 EV?s on the road (20% of the fleet according to the government?s target) we will need 1.5GW to charge the cars and another 1.0GW to replace Huntly. If this is to be provided by unreliable windfarms it will cost $27.5 billion.
At the moment we don?t have the money or any idea how this will actually be achieved!
Look forward to rolling blackouts in 3 or for years! End of quote.

Don’t worry. Megan Woods has it all under control. She said so in the house and so it must be true.