It would appear that in spite of Craig Emerson's Chicken dance mocking Abbott's claim that Whyalla would be wiped off the map, it now looks like green energy will do just that.

In South Australia wholesale electricity prices in that state reached more than 30 times the prices recorded in the eastern states last week. At one point, the maximum price in the state hit $1400/MWh.

Unsurprisingly, several companies operating in South Australia, including BHP Billiton and beleaguered steelmaker Arrium, warned state Treasurer and Energy Minister Tom Koutsantonis that they might temporarily close their plants because of the high and erratic electricity prices. Electricity contracts for delivery next year and in 2018 are priced at between $90/MWh and $100/MWh in South Australia, compared with between $50/MWh and $63/MWh in Victoria, NSW and Queensland.

Let us not forget that South Australia continues to boast about its status as the wind power capital of the country and having the highest proportion of its electricity generated by renewable sources. Since 2003, the contribution of wind to South Australian electricity generation has grown to more than one-quarter of the total.

The short answer is, contrary to Roy and HG’s famous prognostication that too much is never enough, too much is too much when it comes to intermittent and unreliable renewable energy. South Australia is paying a heavy price for its misguided energy policy, potentially leading to the further deindustrialisation of the state while also reducing its citizens’ living standards. But the real tragedy is that this outcome was entirely foreseeable.

South Australia’s Treasurer and Energy Minister Tom Koutsantonis was last week forced to plead for a temporary power supply from the private owner of a mothballed gas-fired power plant at Port Augusta, after several major companies, including BHP Billiton and Arrium, warned him of possible shutdowns because of high energy prices.

Yet the Labor government still slavishly adheres to its Climate Change strategy that got it into this state.

Let's slash emissions, switch to renewable energy , grow the economy and create jobs.

How pathetic this nations leaders have become. Blind Freddie can see where we are headed.

the sad part is that many of the watermelons sit in offices whose heating/cooling is paid for by the tax payer. They could not give a stuff about the pensioners trying to stay warm or cool.

The problem isn't that the politicians are committed to the green dream; it's that they're not!

The green dream involved replacing the coal fired power station at Port Augusta with a solar thermal one. But that was dealt a blow by Tony Abbott's idiotic decision to demand the CEFC make a commercial return on its investment. Since then the politicians have paid lip service to the plan to build it, but have failed to ensure anything actually gets done.

Meanwhile the coal mine was depleted and the power station was old, highly polluting and uneconomic to run. They eventually closed it without a replacement, with predictable results.

Aiden perhaps you can advise where one of these big solar thermal plants is actually operating? The one at Bridgewater went broke and Where are the Mildura or Broken Hill ones? The fact is that seed money is burned up and then the "Managers" resign and hand over to a liquidator. No one would deal with them unless there are Government guarantees available.
Lots of stainless steel, galvanised frames and mirrors but they just do not work!

Abbott cutting the feed in tarif to 8c /KWH killed it and many others.

JBowyer,

This anti pioneer attitude is a big part of the problem. Somewhere has to be the first commercial solar thermal plant in Australia, and the economic conditions favour Port Augusta for that.

Bridgewater (and the proposed facilities at Mildura and Broken Hill) were just concentrated photovoltaic generators; a completely different technology. Unlike PV, Solar thermal has the big advantage of being dispatchable.

Have a look at http://en.wikipedia.org/wiki/List_of_solar_thermal_power_stations to see where they're operating overseas. Unfortunately the list is a few years old.

__________________________________________________________________________________

doog,

There should not be a feedin tariff. Solar energy producers should be paid the wholesale electricity price, not a special subsidised rate. What's needed is access to cheap finance to make them profitable to build. Once they're up and running, they can generate electricity more cheaply than fossil fuels.

Aiden here we go again. They are always somewhere else and always, always cheaper than fossil fuels. The point is if that was the case everyone would be building them. They are duds put up by charlatans and supported by idiots. I had a good look at Bridgewater and it was very well built but economically a dud!
When will you get it through your thick skull there is no such thing as free anything especially money. You squawk about our Grandchildren inheriting a failing planet but are happy to spend now with their money.
No subsidies for solar or wind it stands or falls on it's own merits.

JBowyer,
"They are always somewhere else"
Yes, that's the problem. We don't treat the problem sufficiently seriously like other countries do.

"and always, always cheaper than fossil fuels."
WRONG!

They are UNDER CERTAIN CONDITIONS cheaper than fossil fuels. We CAN create those conditions here: all it needs is to make cheap finance available. But the Abbott government did the opposite, demanding the CEFC make a commercial return and trying to get rid of it altogether.

"The point is if that was the case everyone would be building them."
Certainly a lot more people than now would be building them if cheap finance were available, but it certainly wouldn't be everyone, for two reasons. Firstly it would still only be a marginal investment; firms have limited capability and most would direct their efforts at other more profitable ventures. Secondly, the more renewable energy infrastructure gets built, the more it would drive electricity prices down, so the less profitable it would become.

"When will you get it through your thick skull there is no such thing as free anything especially money."
I did not say it was free. Even though it will ultimately pay for itself, there is an initial outlay. But there is no good reason to avoid spending the money.

"You squawk about our Grandchildren inheriting a failing planet but are happy to spend now with their money."
No, money the government borrows is not our grandchildren's. Where did you get the idiotic idea that our grandchildren are obligated to pay off the government's debt?

And look at it another way; why do you squawk about spending with our grandchildren's money while opposing doing the things that will bring tangible benefits to our grandchildren?

"No subsidies for solar or wind it stands or falls on it's own merits."
I think that's quite a shortsighted view, as fossil fuels have the effective subsidy of being allowed to pollute. Also, more renewable energy does drive down prices. However it's clear that feedin tariffs are not a sensible subsidy method at the moment, as they are expensive and ignore demand.

Aidan,

The solar thermal plant would never replace the coal plant, and on past projects would cause the power cost to rocket even higher. In all an idiotic idea.

What I am hearing from the left whingers is that the cure to the highest electricity prices in Aus caused by renewables, is to install more renewables?

"This anti pioneer attitude is a big part of the problem. Somewhere has to be the first commercial solar thermal plant in Australia, and the economic conditions favour Port Augusta for that."

One could easily make the same claim about hamster-wheel or fairy-dust technology. Or communism for that matter, as many have. "The only reason it has never worked is that no-one has *really* given it a fair go!"

Shadow,

"The solar thermal plant would never replace the coal plant,"
Supported conjecture! Its purpose was intended to be to replace the coal plant, and it's certainly a better replacement than the Nothing that did actually replace it.

"and on past projects would cause the power cost to rocket even higher."
Considering there have not previously been past projects for dispatchable solar energy, that's not a valid conclusion.

"In all an idiotic idea."
An idiotic dismissal!

"What I am hearing from the left whingers is that the cure to the highest electricity prices in Aus caused by renewables, is to install more renewables?"
Unlike the right whingers, those on the left understand that the causes of SA's high electricity prices is far more complex than just "renewables". Supply shortages are a much bigger factor, particularly with the current high prices. Poor regulation, allowing unnecessarily high prices to be charged for transmission and distribution, has also increased costs. Then there's the cost of the feedin tariffs to subsidise renewable energy; as I made it clear further up the thread, I oppose these. But the renewable energy itself is more likely to depress prices than increase them.

__________________________________________________________________________________

PaulMurrayCbr,

"One could easily make the same claim about hamster-wheel or fairy-dust technology. Or communism for that matter,"
If the argument against hamster-wheel or fairy-dust technology or communism was that it hadn't been tried before, one could indeed make that claim. But there are much better arguments against hamster-wheel and fairy-dust technology and communism.

There aren't correspondingly better arguments against concentrated solar power with molten salt storage.

(Apologies for the typo: my reply to Shadow should of course have said "unsupported conjecture", as there was no reason why a solar thermal plant woud never replace the coal plant)

Aiden probably our greatest problem in the world is the fact that Government have decided to dud all the savers. Interest rates are as low as they have ever been and there is abundant money so saying low cost finance is needed is a nonsense. You mean no cost finance, free money, well good luck with that.
Our greatest problem is the dishonesty involved in these green schemes and finance. Next time the world cannot trust itself to pay it's debts we will really be up against it. Lending Billions for school halls will not save us again. In fact it did not save us last time we are still deeply in trouble. Rudd the idiot is now posturing as some overpaid multi millionaire UN man, not just disgusting but pathetic!

Aidan,

The only way a solar thermal plant could run without a huge feed in tariff would be if the government paid for the whole project up front and wrote off the capital, as the present plants are only viable with a feed in price nearly 10x the coal generation cost.

Secondly, the solar thermal plants provide some power for the evening peak, but can't supply 24/7 even without overcast weather. If there is overcast weather, they produce next to nothing which leads to the massive feed in cost.

So in their present state, they don't fully replace a reliable coal based system, even ignoring their monstrous cost.

Some people suggest that to get 100% reliability and that is what we
need, I know I know, to all intents and purpose that is what we have
now, the cost becomes astronomical even suggesting infinity dollars.

We cannot afford it. Someone needs to work out how long it will take us
to build enough nuclear power stations at the rate we can get the
money together. Once that is known we can ration out the coal we have
to keep the show on the road during the build.

It has now become obvious that solar and wind cannot do the job.
All round the world the solar wind systems are not coping.
However the politicians are not even aware that there is any doubt.
They are charging on with plans for more solar and wind without even
asking if it will work.
If they continue on and you live or work above the third floor then
move or get another job.

Shadow,
"The only way a solar thermal plant could run without a huge feed in tariff would be if the government paid for the whole project up front and wrote off the capital, as the present plants are only viable with a feed in price nearly 10x the coal generation cost."
Here you go again with your unsupported conjecture! What present plants are you referring to? Who calculated that cost? What data did they use and what assumptions did they make?

Even if the present plants required such a high feedin tariff to be viable, it wouldn't necessarily follow that the government paying and writing off the capital cost upfront would be the only alternative way to make it viable.

"Secondly, the solar thermal plants provide some power for the evening peak, but can't supply 24/7 even without overcast weather."
That depends how they're designed. If they have a high heating capacity, high storage capacity and relatively low output capacity they can. But aiming to supply 24/7 would be a big mistake IMO – you don't need to replicate the undesirable features of coal fired power stations. Far better to concentrate on the times when the demand (and hence the wholesale electricity price) is highest, and buy cheap electricity from elsewhere at times of low demand.

"If there is overcast weather, they produce next to nothing which leads to the massive feed in cost."
It's pretty rare to have overcast weather when it isn't windy. But such occasions do occur (e.g. today) so contingencies do need to be made. The simplest (and cheapest) solution is to add a backup boiler running on gas. But it's not the only option. A more complicated, more expensive, but perhaps ultimately better value alternative is to colocate some ceramic fuel cells there – these generate electricity more efficiently than gas turbines, but they require a high temperature to operate.

I think those windturbines are the biggest blight on the country
side. They are just so ugly.

A visual pollutant. Horrible.

JBowyer,

"Aiden probably our greatest problem in the world is the fact that Government have decided to dud all the savers."
That's not the greatest problem in the world, as it only adversely affects those fortunate enough to already have money, and the adverse effect on them is trivial compared with problems like pollution. I wouldn't rank it in the top ten problems, and were it not for the government's proposed Super changes, I wouldn't even rank it in the top hundred in Australia. Indeed globally there are thousands of much bigger problems. Usury is not a human right!

However, if you do consider low rates of return for savers to be a big problem, the solution is for the government to run a much bigger deficit. The economy needs stimulating (otherwise we'll go into recession and all be worse off) and we have a choice between a fiscal stimulus and a monetary stimulus (or both). But be aware that if our interest rates remain significantly higher than those of other countries, we'll also need to start a sovereign wealth fund to stop speculators pushing our dollar to unsustainably high levels.

"Interest rates are as low as they have ever been and there is abundant money so saying low cost finance is needed is a nonsense. You mean no cost finance, free money, well good luck with that."
No, I mean what I say. Solar thermal is, according to its promotors, economically viable with a rate below 4%. But commercially it's unable to get the finance that cheap.

"Our greatest problem is the dishonesty involved in these green schemes and finance."
Make your mind up!

I think the problem of dishonesty involved in the fossil fuel industry's far greater.

"Next time the world cannot trust itself to pay it's debts we will really be up against it. Lending Billions for school halls will not save us again. In fact it did not save us last time we are still deeply in trouble."
The main reason they went with the school halls scheme was because other infrastructure projects weren't shovel ready...(tbc)

JBowyer (continued)
...They set up Infrastructure Australia to avoid us having that problem again. Meanwhile the Rudd government's stimulus did keep us out of recession, though the recovery was subsequently damaged with an unnecessary interest rate rise and then the attempt to rush to surplus.

"Rudd the idiot is now posturing as some overpaid multi millionaire UN man, not just disgusting but pathetic!"
Neither disgusting nor pathetic, but he won't get the job.

_________________________________________________________________________________

Bazz,

What we have now is NOT 100% reliability. Those who say the cost of 100% reliability is infinite mean that it would need infinite levels of redundancy to reach exactly 100%.

How fast we can get the money together is not the limiting factor for how many nuclear plants we can build.

Rationing coal is not the answer. There's no shortage of coal, but for environmental reasons we need to leave most of it in the ground. I look forward to the day when coal is only used for scientific, educational and cultural purposes instead of being burned to produce electricity that could easily be provided some other way.

We've only become significantly reliant on solar and wind in the 21st century. It is far too early to dismiss them based on the pathetic amount of infrastructure we currently have.

The real question is not "will it work?" but "how do we make it work?"

_________________________________________________________________________________

CHERFUL,

Your dislike of windmills is entirely subjective, and most people find the visual effects of mining and burning coal to be far worse.

But the pollution from coal is also objective, with measurable declines in air quality, resulting in an increase in respiratory illness. Plus there's the CO2 pollution adversely impacting the climate.

Aidan,

Your comments are the ones that are pure unsupported conjecture.

The second biggest problem for renewables is that the capital cost is huge, and the recovery cost per kWhr for the 20yr life of the project is also high. Unless the capital cost is written off, the plant requires a hugely subsidised feed in tariff.

The most expensive is the molten salt solar thermal (which I challenge you to compare the costs against coal) and in spite of its massive cost still needs gas back up.

The biggest problem is still its unreliability, so that one not only has the cost of the renewables plant, but the cost of the back up too.

SM, the problem politically seems to be that the politicians do not
seem to understand that the backup has to be capable of 100% of the
countries load. It WILL happen that all storage, no matter how big,
will be exhausted at some time.
When it happens you can be sure it will happen at the very worse time.
So it means that we have to build an energy regime twice the size
that is currently being planned.
The difficulty is if they take the risk the system WILL fail at
2PM one hot overcast windless 2nd day in a row.
How many lifts are there in Sydney ?
I can tell you that there is nowhere enough lift mechanics to get
everyone out and walking home by dark. Remember they have to walk
up the number of floors plus one.
If it causes a system collapse like they had in the US people would
be in their lift for a couple of days.
Well that is one problem, what is the next one ?

Aiden you and I will just have to disagree.
If Solar or wind was economic there would be a line of companies doing it.
Nothing is ever said about tide power because it is just not trendy enough for all the usual suspects but that is a horse of a completely different colour lol.

Hasbeen,

Everyone knows the capital cost of solar and wind power is high. But you seem to be making the extraordinary claim that it's so high that selling the electricity it generates at the normal wholesale price, the operating profit over twenty years would not even cover the infrastructure cost.

Have I understood your position correctly?
If so, what evidence do you base it on?

The cost of the backup is trivial, particularly with solar thermal where it can be incorporated into the design of solar thermal infrastructure for much less than it would otherwise cost to provide that capacity.

_____________________________________________________________________________________

Bazz,

The figure wouldn't quite be 100%, as this is a big country; the winds always blowing somewhere. But yes, it would certainly have to be a high proportion of the demand. That's fairly well understood and it's not a particularly big problem; the backup infrastructure is relatively cheap and much of it's already there.

There's also a huge potential for demand management; that happens already with some heavy users of electricity curtailing their use at times when demand is high and supply low, but there is potential for much more of it, particularly if more heavy industry is electrically powered and if consumers are given access to the wholesale electricity market.

But even if our backup is inadequate and demand management fails, the catastrophic scenario you predict would not eventuate. Instead they'd just resort to load shedding (rolling blackouts). Highly undesirable, of course, but the system would not collapse.

_____________________________________________________________________________________

JBowyer,

We never have to agree to disagree. I can be swayed by logic and I hope you can too.

Unfortunately I think you overestimate the efficiency of the market. Marginally profitable investments are unlikely to attract a line of companies, and it can be hard to get regulatory approval for wind turbines. Having said that, have you looked at the rooftop solar industry lately?

Tide power has very few environmentally acceptable locations available.

Aiden "Marginally profitable investments" mate tell me where I can get better than three percent? Have a look there are now Government bonds where you pay to invest. Please do not ask me to explain that, I cannot, it is a complete mystery to me.
My point is that there is no world wide conspiracy to stop solar and wind. There is no great electric engine the big car companies bought to stop it replacing the internal combustion engine.
I think you underestimate market power.

Well Aiden, I know that a cascade type collapse should never happen
but they have happened. Perhaps with computer network control it is
far less likely simply because the computer can act very quickly and
never goes to the toilet. NSW had a non internet control system and
was all microwave linked so was immune to a lot of problems.

Germany's largest supplier, RWE, is on the brink of bankruptcy
and will either just shut down or the government will step in.
It is literally too big to fail. Its troubles are all caused by the
large percentage of alternate power, ie solar & wind, and its "redundant"
coal power plants.
So Denmark and Sth Australia are not the only victims of green enthusiasm.

Aidan,

"But you seem to be making the extraordinary claim that it's so high that selling the electricity it generates at the normal wholesale price, the operating profit over twenty years would not even cover the infrastructure cost."

Exactly, by now it should be dawning on you. For example, the running costs of nuclear reactors is so low that the cost of power is almost entirely paying off the capital cost.

The green dream is actually coming true. They always wanted to use this scam to drive us back to the dark ages.

Peasants driving cars, eating nice food, living in nice homes & even flying off for holidays, for god's sake, they could never abide such goings on. It was always their objective to restrict such pleasures to themselves & a few other elite.

I wonder if any of them are smart enough to realise that when the lights go out, those lifts in those inner city high rise apartments all stop?

Shadow,

"Exactly, by now it should be dawning on you. For example, the running costs of nuclear reactors is so low that the cost of power is almost entirely paying off the capital cost."

You're claiming that nuclear is also failing to pay off the capital cost?

Where did you get the idea that the business case for nuclear and renewables is so weak?
____________________________________________________________________________________

Bazz,

With decent infrastructure a cascade collapse will not happen. The USA had underinvested in infrastructure for decades and paid the price.

Are you sure RWE's financial problems aren't caused by the cost of decommissioning its nuclear plants?
____________________________________________________________________________________

Hasbeen,

There may be a few old hippies who want to drive us back to the dark ages, but most greens are very very strongly against that.

____________________________________________________________________________________

JBowyer,

You can get better returns on the share market, and ISTR most of the Industry Superfunds are doing better than that at the moment.

I'm not claiming there's a worldwide conspiracy to stop solar and wind (at least not a big one, but some fossil fuel companies do run misinformation campaigns for that purpose). But market power is a constant and at the moment the markets aren't displaying any enthusiasm. Government action is needed to encourage them, but so far the governments haven't done anywhere near enough, and the measures they have implemented have been inefficient.

Aidan,

I said nothing of the sort, but I will forgive your lapse in understanding and judgement.

However, if there is direct competition between coal fired generation and nuclear, nuclear wouldn't pay for itself even though it is far more competitive than molten salt solar.

Without a feed in tariff, wind, solar and nuclear are not viable options.

Aidan asks, "Are you sure RWE's financial problems aren't caused by the cost of decommissioning its nuclear plants?"

Typical Green chutzpah, shutting down the German nuclear industry without fair warning then blaming it for woes caused while subsidizing renewable energy to business. Merkel's action against Eon and RWE, (see below), was a knee-jerk reaction that Germany will have to massively compensate, plus business closures, with more and more households cut from electricity they cannot afford.

http://www.ft.com/cms/s/0/df44d1ee-e792-11e5-bc31-138df2ae9ee6.html#axzz4F88owHOP

I usually just shake my head at your postings, Aidan, but that only encourages your hubris. Enjoy your grand reveries.

Luciferase, what you mistake for hubris was nothing of the sort. I asked a straightforward question. FWIW I think Germany's decision to phase out nuclear power was a silly one that's going to make the transition away from fossil fuels much more expensive and technically difficult.

Unfortunately the page you linked to's inside a paywall. But I'd read elsewhere that the nuclear decommissioning was causing financial issues for RWE, so I thought the question was worth asking.

_____________________________________________________________________________________

Shadow,

Thanks for the clarification.

But I ask again: Where did you get the idea that the business cases for nuclear and renewables are so weak?

Aiden, the German government is holding the taxes that were levied
to pay the costs of decommissioning and are set aside for that task.
RWE will go broke, apparently it has reached the no way out point.
The only thing that seems to be under discussion is how to keep the
lights on after the last politican leaves Germany.

Aidan,

"Where did you get the idea that the business cases for nuclear and renewables are so weak?" - The answer is just about every technical, financial and economics article written on renewable energy.

Nuclear is not viable in Aus for the same reason that renewables aren't, primarily the very low cost of coal generated power. However, nuclear is viable in countries where there are few fossil fuel resources such as in France and Germany.

The only way renewables are viable in Aus is through uncompetitive means ie.
1 A huge feed in tariff or,
2 A massive tax on fossil fuels.

Shadow,
There's a very big difference between not being commercially viable and not even making enough operating profit to cover capital costs. My understanding is the wholesale price in Australia is quite high by international standards, and both nuclear and renewables would be able to cover the capital costs but not the financing costs. If you can find information that shows otherwise, I'd be interested in seeing it.

Come off the grass Aidan.

My power bill 10 years ago was $250 a quarter, with 3 kids at home.

Now with just 2 of us, O no change in usage, my current bill is just over $800 for a quarter.

Most of that increase is due to the feed in requirements of renewables.

As I said, the green dream of driving us back to the dark ages is alive & very very well.

Aidan,

When you say crap like "both nuclear and renewables would be able to cover the capital costs but not the financing costs" Then I know that you are completely clueless, as the cost of capital and financing costs are intertwined.

"What is 'Cost Of Capital'
The cost of funds used for financing a business. Cost of capital depends on the mode of financing used – it refers to the cost of equity if the business is financed solely through equity, or to the cost of debt if it is financed solely through debt. Many companies use a combination of debt and equity to finance their businesses, and for such companies, their overall cost of capital is derived from a weighted average of all capital sources, widely known as the weighted average cost of capital (WACC). Since the cost of capital represents a hurdle rate that a company must overcome before it can generate value, it is extensively used in the capital budgeting process to determine whether the company should proceed with a project"

Essentially the cost of capital is the cost to repay the financing costs or cover sufficient return on the equity invested. The minimum expected is to cover the repayment of the investment plus interest and a small profit over the expected lifespan of the project.

For example, based on existing installation costs and generation of wind power, a $100m loan would be needed to build 30MW of installed wind generation capacity which would generate on average about 7000 MWhrs.

The costs on capital assuming a heavily subsidized 2% interest over 20yrs would be $370 000/m or $53 per MWhr or 5.3c/ kWhr, which is already more than the average cost for coal fired generation. Next you need to add roughly $20/MWhr for maintenance, and more for operational staffing etc, and eventually profits, and you end up with a cost of generation of > $100/ MWhr compared to coal fired stations that feed in at less than $40/MWhr.

Those of you following this thread may be interested in listening
to this talk with James Kunstler and Alice J. Friedemann who is the
author of “When Trucks Stop Running: Energy and the future of Transportation.”

http://traffic.libsyn.com/kunstlercast/KunstlerCast_278.mp3

The last third of the discussion is directly about electricity grid
generation. One interesting morsel to me was that diesel rail
locomotives are more efficient than electrified track long haul
electric locomotives, after taking into account substations etc etc.

The US has a similar layout of cities and country, except on a larger
scale as far as population is concerned and it may well have some
lessons for us.
Forget some preconceived notions that we all have, the futrure will
not be similar to the past no matter what.

Shadow,

I'm well aware of that. But I was under the impression that you were claiming that it was not fundable by concessional loans.

_____________________________________________________________________________________

Hasbeen,

I wasn't on the grass!

Have you got any evidence that most of the rise in your power bills was due to the feed in requirements of renewables? It's certainly a factor, but AIUI there are three much bigger factors:
• the regulators permitting much higher charges for the use of polls and wires
• much higher gas prices
• profiteering by electricity retailers
• profiteering by the power generators

The last reason appears to be most to blame for SA's recent high prices – see http://reneweconomy.com.au/2016/how-gas-generators-cashed-in-on-south-australias-energy-crisis-96642

Aidan,

I never said anything of the sort. Concessional loans can be given out, but as a cost to taxpayers they are limited and hard to get. I was giving a best case scenario for wind power, and even then they are not profitable without huge in feed subsidies.

Secondly, of course generators make huge profits during peaks, and have been doing so for decades, the fuel costs are at the highest, and it is an incentive to bring on as much generation as possible. It makes up for the losses the generators make during low periods, and in spite of this several generators have gone out of business.

Shadow,

Looking at your "best case scenario", apart from your typo (you said it would generate about 7000 MWhrs each year, but it's actually ten times that) one thing in particular stands out: $100m is VERY expensive for a 30MW capacity wind farm.

Actual cost figures for some Australian wind farms can be found at http://ramblingsdc.net/Australia/WindPower.html#Capital_costs_of_wind_power

The main problem in SA is that the high costs aren't acting as an incentive to bring on as much generation as possible. There's a much stronger incentive for them to keep prices high by not bringing on all their generation. It's a version of the tactic Enron was notorious for.

The problem was worst in 2001, just after privatisation, when it led to brownouts and rolling blackouts. They addressed the problem by setting a maximum price and encouraging the generation companies to get involved in electricity retail. That (plus construction of a second link to Victoria) ended the supply reliability issues, but evidently the underlying problem remains, though at least it's confined to those days that are neither sunny nor windy.

Aidan,

Again you misquote me! I was doing monthly calculations not annual.

$100m not only includes the generation, but the cost of connecting it to the grid. The cost of the generation is roughly $4m per 2MW turbine, so 15 turbines will cost about $60m and the cost of upgrading the grid to take 30MW would be in the region of $40m on average. ($10m for the switchyard and transformation plus $600 000/km for 132kV power lines.)

Of course, as the lines are owned by the transmission companies, they are not reflected in the capital cost of the wind farm, but, make no mistake, the transmission companies don't make a loss, and easily cover their costs with transmission charges.

The problem with wind and solar having a guaranteed feed in is that it requires the other generators to ramp up and down rapidly. This clearly does not work for coal fired plants, and the main coal fired plant was making a loss and shut down. This left SA at the mercy of the high cost gas generators. All a sign that a renewable mix above 30% is a bad idea.