The Sydney Morning Herald of Wed 14 May carried an article on page 7 headed 'Wind farm vow to power desalination'.

The article claims:

"The [NSW] State Government has signed a 20-year contract to create the largest wind farm in NSW to power its desalination plant.

This is part of its committment that the plant would use renewable energy, even though it will be a big electricity user.

The 63-turbine Capital Wind Farm in Bungendore, near Queanbeyan - funded by Babcock & Brown Wind Partners and Babcock & Brown Power - will provide all the electricity needs of the desalination plant, the Premier, Morris Iemma, said yesterday. ..."

and, towards its end,

"Sydney Water has also agreed to buy at least 180,000 renewable energy certificates - each for one megawatt hour of electricity produced from a renewable source - from the wind farm each year, worth about $9 million. This will underwrite its construction, Dr Schott said.

She would not reveal the price agreed to for the wind-generated electricity or the renewable energy certificates, other than to say they were "very close to market....and indexed to CPI"."

Do I read the article correctly to say the capital cost for the 63 turbines in the farm will be about $9 million? (That's around $143,000 per turbine - seems realistic.) Surely they do not mean $9 million for each of 20 years, $180 million in total?

Am I right in thinking that, at, say, $0.04 per KWH (the cheapest, off-peak, consumer electricity price) the 180,000 megawatt hours base load contract would be worth, at $40 per MWH, $7.2 million PER ANNUM, GUARANTEED, INDEXED, for TWENTY YEARS whether or not the wind blows? WOW! Not knocking renewable energy, but where can I get some of this privatisation?

But hey, why isn't that sale going to the existing publicly owned NSW electricity utility, which has off-peak capacity, currently unsold, to burn?

I wonder, will any interests by NSW parliamentarians in Babcock & Brown Wind Partners, the wind farm owners, show up on the registe

Forrest, I can’t get at all enthused about the details of a project like this, for as long as the fundamental purpose is so wildly off-track.

The problem is that the whole exercise of providing wind energy for desalination is geared directly towards supporting the absurdity of a continuous high rate of population growth for Sydney…NOT towards the development of a sustainable city.

Just to complete the last sentence of the opening post, which, for some annoying reason was truncated by my text editor: it should have read:

"....., show up on the register of pecuniary interests in due course?"

Ludwig,

I don't dispute the contention that the fundamental purpose of the Kurnell desalination project may be wildly off track. My observations on the proposed source of renewable energy being promoted for it are intended to cause viewers to question the sincerity behind the NSW government's policies, first, in using this particular method of desalination in this place, and second, in proposing to sell off its seemingly very viable electricity business right when such brilliant investment returns are starting to emerge.

For a capital investment of around $143,000 to be able to gross around $114,000 IN ITS FIRST YEAR selling its free renewable energy at only the off-peak electricity price of $40 per MWH seems to me an incredibly good rate of return for the investors. Granted there would be managment and maintenance costs, but wind farming is a well-established technology with few unknowns: the returns, basically guaranteed by the power of taxation through Sydney Water for 20 years, are so seemingly good that I question whether there is not a conflict of interest on the part of those in government who are making the policy decisions that are currently (at public expense) being promoted.

Is the proposed electricity business sell-off anything less than a 'tail wagging the dog' situation, and being undertaken simply so that some really spectacular returns can be made even better for only that small part of the market in which it is possible for a small (read retired parliamentarian) private investor to obtain a ring-side seat and get top returns? By 'privatising' the NSW public's electricity business (but not the actual assets) what, other than selling the right to hike electricity prices to the public, is the NSW government doing?

The only other thing its likely doing is increasing yet further the outstanding returns on that absolutely capital wind farm!

Dear Forrest,

From past knowledge and experience all projects of government funding and involvement tend to ultimately cost a lot more than the initial figures presented.

It would be great to see realistic costings projected up to the time of project completion. After all - most of these projects are funded by taxpayers (present and future). Until we can see an honest and realistic appraisal of the scheme, any discussion will remain pure speculation.

Wind farming may be a solution in the right direction, but the technical means currently in use are a blight on the landscape and more sympathetic and attractive wind farming methods have been suggested to the government that would add to the landscape in an attractive mannner.

Foxy “From past knowledge and experience all projects of government funding and involvement tend to ultimately cost a lot more than the initial figures presented.”

Agree. I have no problem with wind farms or other eyesores provided the numbers assumed stack up when everything is operational and the benefits are as good or better than expected.

Such things are commercial risks and we have a private commercial sector who are practiced in assessing commercial risk and deciding if “the risk” is too much to warrant taking. Those commercial risk takers operate in a world of assumptions and projections and can make the call objectively.

However, when we get “government funding” the political objectives and agendas overshadow the “commercial risk assessments” and the tax payer gets stuck with the excess (remembering that none of these things ever come in below budget).
Then the tax payer is like a “captive bank”, unable to reject or object to the excesses of the borrower / risk taker; because the borrower is the person who the majority of tax payers elected to look after what is supposed to be their best interests.

But the worst thing is, the political reputations, hung on the bad investment, then seek to bury the mistakes and divert funds from other projects which could have been really beneficial.

Cities are going to grow no matter what and will need ever more water.

The wind farm ideas are better than the Victorian Government's shocking plan to siphon off the Goulburn River to Melbourne. But can these ideas work?

What does an attractive wind farm look like?