Wind power results – 2013/14

I have been monitoring the UK peak power demand every day for the last 12 months, and how that power was delivered. The UK government has invested about £50 billion into Wind energy since 2005,  so how has it performed?

The average Wind component of UK peak power demand was 5.7% over a full year. The maximum power output was 6GW on 21 February 2014 at 18:10, while  the maximum proportion of demand was 16.8% on Sunday 17th August 2014 at 20:08. The minimum proportion was 0.15% on 31st May 2014 when total Wind output was 49MW (0.05GW).

Power delivery by Fuel type to meet Peak demand every day since September 2013. Weekdays peak demand occurs around 18:00 and fat weekdays around 20:00.

Power delivery by Fuel type to meet Peak demand every day since September 2013. Weekdays peak demand occurs around 18:00 and at weekdays occurs around 20:00.

For comparison Nuclear Power averaged 18.1% of demand and never fell below 15%. The bulk of UK power is still met by fossil fuels and it is impossible to imagine a future Grid based purely on Wind power. The mix of coal and gas is interesting. Coal is dominant in Winter while gas dominates in summer. I also monitored the daily energy “trough” or the lowest demand for electricity which usually occurs each day at around 4am . This is shown below.

Power delivery by fuel type at minimum daily power demand (~4am)

Power delivery by fuel type at minimum daily power demand (~4am)

It is Coal that keeps the lights on during winter nights! Gas output is ramped down at night, probably because it is easier to regulate power in Gas power stations. The exception to this is during the summer when several coal power stations would appear to be mothballed.

The statistics for Wind power at night appear better because the overall demand is much less. The average contribution of wind power to minimum demand was 9.8%, and the  maximum Wind supplied was 22.5% on 2nd February at 05:30 (6GW).  However Nuclear also contributes proportionately more at night averaging 30%, which is 10% more than Gas. The difference between the 2 extreme demand curves is shown below over the 13 month period. Note the sharp drop in power demand over the Christmas period.

Daily Peak and Minimum demand  over  a 13 month period Sep 2013 to Oct 2014

Daily Peak and Minimum demand over a 13 month period Sep 2013 to Oct 2014

This analysis makes it clear, to me at least, that the UK should shift the balance of investment towards Nuclear and away from Wind. Even doubling Wind generating capacity to 20GW would still leave some days with essentially zero output, thereby undermining energy security. Furthermore Gas will always be needed with at least the same generating capacity as Wind in order to continuously balance Wind’s erratic output. Nor can energy storage save the day, since it reduces the EROEI for Wind to below sustainable levels.

The data used for this analysis was collected through BM reports – the National Grid balancing mechanism. There are about 10% of wind farms that are not metered by BM so the above figures should probably be adjusted upwards by 10%. The conclusion is the same.

The live monitoring of peak demand over the last 30 days is shown below.

This entry was posted in coal, Energy, nuclear, renewables, Science, Technology, wind farms and tagged . Bookmark the permalink.

35 Responses to Wind power results – 2013/14

  1. The people responsible for this policy should be in jail.

  2. A C Osborn says:

    I monitor the Wind output versus the rest of generation regularly and it is nothing but a very expensive, disruptive, unreliable method of generating electricity at the detriment to all the better generators. The contrast between French Import (no £50B required by us) and Wind is really telling.
    Over at Bishop Hill it has been noticed that the grid output is getting close to brown or blackouts and will just get worse especially by aroung 2018 due to a variety of problems with FF and Nuclear generation.
    As I commented over there (but it hasn’t appeared yet) is that the FF and nuclear generators could Kill off Wind and Solar by reducing their own output due to a number reasons like
    Urgent repairs
    shutting/moth balling no profitable plants etc

    It would soon become apparent to both politicians and the general public what a complete waste of money and Grid capacity Wind is when thet have to rely on it for running a modern society.
    No Computers, TV, Xboxes, heating etc to keep them occupied and warm.

  3. Clive Best says:

    I completely agree. Our aging AGR reactors are coming to the end of their lives. Greenpeace and FoE essentially forced the government to ban plans for replacement coal stations 6 years ago. The energy companies have no incentive to invest in new Gas stations under the threat of a Labour price freeze. We are sleep walking to black-outs as soon as this winter. Are politicians stupid ? Or are they really only interested in short term PR stunts. I cannot understand how people like Lord Deben can continue to call for more renewables when they clearly are failing to deliver any predictable energy. Does he not look at the figures? But then he only has a few years to serve and the Wind lobby have vested interests in high places.

  4. A C Osborn says:

    Clive, as they say “follow the money”, all those in positions of being able to influence those decisions have massive conflicts of interest that have been ignored by the oversight committee.

    • Clive Best says:

      Renewable energy has become a taboo subject, a bit like the NHS. It is not PC to point out that DECC policy is barking mad and leading us back to Iron Age living. No doubt politicians will blame everyone else but themselves when the penny finally drops.

  5. Eric Barnes says:

    Great article Clive. New reactor technology could kill 2 birds with one stone.
    Eliminating stockpiles of nuclear waste and providing nearly unlimited energy. The greens will fight that tooth and nail since the thought of humans being liberated by cheap power would be a crime against nature.

  6. DrO says:

    Nice article on updating the supply/demand picture Re wind. However, I wonder how the “renewables value” picture looks like in the UK?

    It is unlikely that renewables will become a majority of the energy supply any time soon, since the cost of “storage” is of cosmological proportions. That is, the most important aspect of the energy grid is “base load” (i.e. the ability to provide a steady base minimum supply). Since renewable cannot provide this in isolation, the only “solution” is to include some manner of storage. The most charitable estimates of storage costs double – triple the costs … assuming they actually work, since there has not been any real industrial operation of such as yet.

    The costs also generally assume renewables power plants have a long life cycle with little maintenance/breakdowns, and are provided with charitable “breakeven” periods of as little as 8 years, and omitting many on-going costs for breakage/wear, etc.

    Some fairly well established numbers for actual costs (not including storage and certain other realities) seem to break-down something like this

    1) Hydro: 5 – 6 c/kWh, produces base load, no storage required.

    2) Coal: 7 c/kWh, produces base load, no storage required.

    3) NatGas: 8 c/KWh, can produce base load, and can be (relatively) easily “ramped”, no storage required.

    4) Nuclear: 7c/KWh, based on “off the shelf” Westinghouse AP1000. Some countries (Canada, UK, France, etc) insist on using “home grown” nuclear technology usually administered by the government. There, costs can be as much as 13 c/kWh or more, often due to “political meddling”, rather than pure engineering costs.

    5) Wind: If produced from on-shore, typically around 20 c/kWh, if from off-shore, typically 30 c/kWh. That is, 3 – 5 time more expensive compared to “traditional” sources. Of course, this requires storage, so a full implementation is more likely around 50 – 150c/kWh … that is, about 10 – 30 time more expensive compared to traditional.

    6) Solar: depends on whether photo-voltaic or solar-thermal. Solar-thermal might be getting down to around 40 c/kWh, while photo-voltaic can be as much as 80 c/kWh. Then double to triple those numbers for storage costs.

    All of this ignores the additional massive capital investment in new power grids, since often there are no power grids “where the wind is blowing” or off-shore. Those costs represent massive additional hurdles, just look at what is happening in Germany at the moment.

    A key point in all this is that often renewables’ costs are quoted at much lower numbers, since renewables are heavily subsidised. This is often due to quirks in how renewables are actually paid for. For example, in Canada and parts of Europe, there are “feed in tariffs”. That is, the government sets the price for electricity introduced into the grid via renewables. Those numbers are often arbitrary, and are more to do with political machinations than actual costs.

    In the US, a key method for subsidising renewable is via tax/depreciation incentives. For example, a renewable supplier is told they must sell their energy at some “national rate”, such as 7c/kWh (which is much lower compared to the cost of generation etc). However, they are then permitted to make all manner of tax deduction and “accelerations”, which in the offsets their renewables real costs, and makes the “process” profitable for the supplier effectively due to taxation issues (i.e. somebody else must pay more taxes).

    There are a variety of entertaining developments reflecting the many government dissertations. For example, some tax deduction is based on the “rated power” of your windmill/tubine, not on the actual output of your windmill/turbine. Not surprisingly, many turbine manufacturers massively over rate their units in order to provide the purchaser with an “extra tax gift”.

    All of this, of course, still ignores the many many billions that are provided as outright gifts to renewables generators, and to the manufacturers of renewable equipment (many scandals here).

    So consider a typical US household, who currently may spend something like USD 1,200/year for electricity costs, and represents a manageable portion of disposable income. To keep things in perspective, the US per capita GDP is around USD 50k. If you waived your magic wand and “poof” only renewables were available in the “West”, their typical annual electricity cost would increase to around USD 8-10,000/year (without storage). How manageable is that? Then, include storage, with annual electricity costs going to USD 20-30,000/year … a complete non-starter.

    … of course, it gets worse, much worse. If your home electricity costs increase, then your at work (office, factory, etc.) costs increase massively also. Since the US (and the West in general) are already massively undercut by (especially) the Chinese (and notice that undercut is including the massive fuel cost to move their products thousands of miles), then your industries will become even less competitive.

    Worse still, moving all of the West to renewables will NOT move China et al to renewables. Thus, since the West has gone off oil etc, the price of oil plummets. Since the primary cost to the Chinese is energy, their costs plummet further, and thus become even more competitive.

    Net result, the West spirals downward economically to become the new “fourth world” poor nations (which is actual what some liberals/the UN have stated as their objective, see Maurice Strong et al).

    And the “very best” part (oops, sarcasm), is that since the Chinese et al do not use anything vaguely resembling clean technologies, the actual carbon/pollution foot-print of the planet will INCREASE with the West “going green” (and into poverty).

    I am guessing that at some point as prices and misery increase in the name of “green”, there will be a revolt (starting to see a little of that in Germany already).

    How do these types of considerations stack up for the UK?

    • A C Osborn says:

      Just about the same, some people in the MSM are at last starting to ask some questions, but no where near enough.
      The majority of the Public appear to hate Wind Turbines, but who listens to them. except there is a General Election coming fairly soon, so just maybe someone will.

    • Clive Best says:

      I agree with your figures. Here in Europe the cost of new nuclear build is hampered by over-regulation but still comes in cheaper than Wind which is subsidized with a guarenteed price of £100 per MWh for on-shore and £150 per MWh for off-shore. That equates to 20-25c/kWh. These prices are fixed for the lifetime of the turbine. Building wind farms is a risk free investment with annual returns of up to 10% on capital – all subsidized through ‘green’ surcharges on electricity bills. That is why UK heavy industry is now in serious trouble. German industry so far has been protected but this nonsense can’t go on for much longer.

      The costs also generally assume renewables power plants have a long life cycle with little maintenance/breakdowns, and are provided with charitable “breakeven” periods of as little as 8 years, and omitting many on-going costs for breakage/wear, etc.

      The lifetime of off-shore wind farms in the North Sea and Scotland are over-estimated and the maintenance costs are huge. If you drive past any on-shore wind farm in UK it is common to see one or two not moving because the turbines are broken. However repairing them is easy compared to an off-shore turbine.

      We are continuously told of the high costs of decommissioning nuclear power stations. However their lifetime is at least 60 years and the cost is included in the strike price. Who is going to pay to return wind farms to green fields ? Who is going to pay to remove the rotting hulks from the shores of our coastline in 20 years time?

      Of course only the tax payer will get lumbered with that cost. That is if they ever get decommissioned.

      Your remarks about energy storage being the answer to the stochastic nature of renewable energy are exactly right. Installing any large scale storage system forces the ‘Energy Return on Energy Invested’ – EROEI towards unity. Even ancient Rome managed on EROEI of about 2-3.

      The scam still has some time to run. It will need an Enron style collapse to bring politicians to their senses.

  7. Chris Manuell says:

    Either the IMSR or LFTR reactors would be much cheaper to build and produce more energy than renewables see

  8. fujirobin says:

    What appears to be missing is an analysis from National Grid that shows the consequences of adding an extra GW of wind capacity at various levels. At some point the balancing costs to maintain the same blackout risks would make it pointless. But how far off is this level? or have we passed it?. Real evidence/data is required from the experts and this needs to be fed into policy-making.

    I don’t accept the general antiwind argument that 1GW of wind capacity implies 1GW of gas/coal stations constantly on hot standby, as it depends on the time of year, accuracy of forecasting etc but again it would be useful to run these arguments by the National Grid people who have the data and do the work. No-one can realistically argue with the facts. And btw Clive do remember that not all wind generation is metered and shown on the BMReports pages.. a large amount just appears as negative demand.

    I agree nuclear is a useful component that we need more of, but perhaps those who moan about wind subsidies could comment on the bribes being offered to the French to build us one, and estimate how long it would take to bring a new nuke onstream

    • Clive Best says:

      I completely agree. There is no point adding wind capacity if you have to maintain an equal capacity of Gas to balance it. For every GW of wind capacity you must have 1 GW of balancing capacity – unless you want blackouts. Even in Winter there are days with sub-zero temperatures and no wind. Winter 1983 springs to mind. Temperatures fell to -20C across central England and the frost remained on the trees for 10 days. Zero wind. Luckily Didcot Coal power station was still operating ! Alas – no more.

      An Irish study found that if wind capacity reaches 20% of total generating capacity then CO2 emissions actually increase as more wind is connected. This is a PhD thesis

      A retired power engineer Leo Smith also made a study which showed that as the Wind contribution increases then the efficiency of gas stations decrease to balance power requirements. Eventually you burn more gas than having a fossil fuel only Grid !

      This is his paper

      I am sure that the National Grid are aware of all this but they keep quiet – because they still make profits. It is the political masters who are to blame. Unfortunately there are very few politicians who have any technical knowledge so they rely on Green spin. It will all end in tears and they will then blame their by then retired advisors.

  9. Maybe we can sort this out using batteries to store wind power. I´m firing up my excel spreadsheet to see how we can put together a proposal for a huge megaproject to put the UK on wind power, then I´ll start a campaign to collect donations for the conceptual engineering. This will be similar to my Save Drowning Islands campaign, which has been really successful.

    • Clive Best says:

      For an energy source to be viable it must produce more useable energy during its lifetime than the energy consumed in building it. This is called the Energy Return on Energy Invested. Fossil fuels vary from about ~50 for new simple fields to as low as 10 for shale gas.

      Wind energy comes in around 15 which seems like a good investment. However the source is stochastic (uncontrollable) whereas the others you can switch on or off. To make WIND also controllable you need to store energy when the wind blows hard to cover the lull periods. The problem is that now you have to factor in the Energy cost of making 20 GWhours worth of batteries, flywheels or even pumped hydro storage.

      There have been some smart ideas proposed like making methane or Hyrdrogen from H2O using excess Wind electricity.

      So far however the killer for all such schemes is the extra energy cost in implementing these inefficient energy storage, because you can’t beat the second law of thermodynamics.

      All such cases lead to an EROEI below about 3 which is about the same as using cattle to plough fields !

      Unfortunately I strongly suspect the same applies to using CCS on Coal plants.

      Nuclear is still the only feasible long term solution whether we like it or not.

      • fujirobin says:

        Unless you have oodles of hydro, like Norway, I can’t see any energy storage system on the horizon… and ISTR that one of “our” big energy companies (now in foreign hands) abandoned Vanadium Redox battery technology a while ago and flogged the technology off abroad.

        Now real-time energy pricing might help – AIUI it can cost 200 times as much to supply a unit of energy at 6pm on a cold winter’s night compared to 4 a.m. in summer yet we have grown to expect to pay the same (why?). I guess that’s what the smart metering stuff is all about, but I won’t hold my breath for huge savings. But I’d certainly think twice about when I stick the dishwasher on if I could save shedloads of money by choosing the right time.

        • Clive Best says:

          I agree that electricity prices should be real time dependant on demand, which is essentially the same thing as time of day modulated by season and day of the week.

          Energy suppliers should then also get paid for generated power according to the same demand algorithm. This would then force renewables companies to solve the energy storage problem themselves or else go bankrupt.

          Why the hell should we pay them £100-150 per MWh for power generated at 4am when we don’t need it? They should instead get paid the market rate.

          • fujirobin says:

            “Why the hell should we pay them £100-150 per MWh for power generated at 4am” – good point sir! that would focus the minds of the policy-makers.

      • I think an idea isn´t smart if it isn´t going to be viable within 20 to 30 years. The battery containers idea was a tongue in cheek play on an MIT technology they want to use to build shipping container size batteries.

        I realize nuclear may be an option for a developed country where safety is highly regarded, but I don´t think it would work safely in countries such as Venezuela or Congo (I worked in both, and I understand their safety cultures).

        Even if I we discard the global warming/CO2 emissions issue, it´s clear to me we are eventually going to run out of oil and gas (meaning prices will be so high they won´t be acceptable or will break the world economy´s back). This means we do need a solution other than nuclear power. And I can´t get around the fact that while wind and solar may deliver a partial solution, they do need the energy storage technology.

        And I don´t see anything practical over the horizon. Which takes me to geoengineering if the CO2 emissions do turn out to need to be stopped. It´s either that or we will see nuclear plants in Venezuela and Congo. And that sure is scary.

        • DrO says:

          Your point is taken on the issue of “limited supply”, but there is much danger in over generalisations and off-hand predictions.

          For example, during the 90’s and early 2000’s there was much hype about “peak oil”, and that we were already past the peak and “running out”.

          Then comes shale, and now peak oil, and especially peak gas, is way off in the future some where. Not to mention gas prices dropped from almost USD 17 mmBTU to under USD 2 mmBTU between 06 – 09, and seems to have stabilised around the high 3’s at the moment. That is, gas at least, is abundant, relatively clean, and very affordable.

          Similarly for deep ocean discoveries, and other technology.

          We should not underestimate man’s ingenuity etc.

          Also, as a matter of interest, even if we run out of oil, it is possible to convert coal to oil (indeed some countries use this as their key supply). The conversion rate with newer methods is about 1.5 barrels/ton of coal. Even at 1 barrel/ton, the US alone has sufficient coal reserves to provide about 300 years worth of oil. For this to work commercially, the price of oil needs to be above USD 100/barrel on a sustained basis, with current technologies.

          However, of great importance in the big picture discussion is that Climate Change (CC) is very poorly understood. It is really only over the last 50 years that there has been anything vaguely resembling proper instrumentation. That is way too short and incomplete a history for the kinds of datasets etc we need. With the extension of current (traditional, relatively clean, low cost) supplies, we can take our time over the next 30-50 years to gather (hopefully) sufficient data to get a (sensible) grip on what is actually happening, and thus, what is actually needed.

          • fujirobin says:

            DrO – are you a cornucopian? (

            Check out the maths – try Youtubing Albert Bartlett.

            and “300 years of oil” is meaningless without a consumption rate and/or some assumptions about the energy market. Common sense should tell you that all sources of fossil fuels will eventually run out however wrong the forecasts are and have been. Nuclear fuels too in the long run. So what does that leave?

          • DrO says:

            In response to fujirobin’s “are you conucopian?” … no, and I think you missed the point entirely.

            As these discussions are in the context of Climate Change (CC), my comments are in that context also.

            The point is that the IPCC et al wish to force massive socio-economic upheaval on the population of the planet. They insist that we must act forthwith. Some of the manipulation to force earlier action (than is necessary) is based on various ancillary arguments such as dwindling supplies of carbon-based sources, and therefore (according to them) we must switch for that reason also … and so on, and so on.

            All I am saying is, while classical energy sources are likely to have a limited supply, it does not look like those speculative positions to force social change can be based on limited classical energy supply, since we are likely to have sufficient supply for a reasonable future period (e.g. 100+ years at least).

            The maths are fairly clear about this, and the critical point is there is no particular panic in the short-medium term, even if we run out in hundreds or thousands of years.

  10. fujirobin says:

    What do you make of the arguments that wind on the system reduces spot prices on the electricity market? Poyry’s report “Wind Energy and electricity prices” – available here

    gotta look at all sides of the argument and this looks very much like the standard economic theory I did at university !

    • DrO says:

      That report is a bit of swizzle. It spins the story of spot prices to suit their particular agenda.

      There are so many things wrong with that story it is hard to know where to begin. Just a couple examples:

      1) They claim that wind energy production costs are zero, since, according to them, there is no fuel cost etc. That is just silly. The correct pricing must include the amortised cost of the infrastructure, all the maintenance, etc etc.

      2) In many countries, wind etc is subsidised via taxes, and so the actual (wind) electricity can appear cheap, since “somebody” has already paid for it. If you take the taxes back and factor those into the real costs, then their arguments tend to fall apart.

      3) Spot prices in electricity do not behave like “normal” energy spot prices since electricity usually can be only shipped locally (c.f. oil, gas, which can ship globally, whereas you can’t “arb” electricity between, say, the UK and California). If there is not a grid, it can’t flow. As such, traded electricity prices are highly idiosyncratic to local conditions, and can be easily manipulated by the authorities to suit their purpose, or be the result of “the law of unintended consequences” by policy makers, etc.

      and so and so on.

      Finally, I am not sure if you have ever traded anything, I am guessing not. In reality, the trading of securities and derivatives has surprisingly little to do with “standard economic theory” that you may have studied at university. To be sure, some basic principles are important (e.g. the “concept” of supply/demand, Interest Rate Parity, etc.). However, I urge you to strap on a couple of trades and see how closely real markets operate to “standard economic theory” … there is usually a huge gap between theory and reality in the markets. As just one of the special issues in energy markets, you may wish to look up “convenience yield” and its implications.

  11. fujirobin says:

    DrO –

    re 1) they refer to zero MARGINAL cost (the cost of producing an extra unit) not fully-loaded production costs, as that is what is relevant.

    re 2) They factor this in and conclude from their literature survey that wind yields a net benefit AFTER subsidies. A paper on the Irish electricity market says the same

    re 3) what is surely relevant here is the proportion of electricity trades that go thru the spot market (vs OTC and intraday) and I am still in the dark on this.

    I am presuming Poyry are deserving of serious consideration, and that they know their subject as they are professionals in the game with access to stuff that individuals may find hard to get at.

    I *have* had a dabble at trading, and agree with the the aphorism that “there are two types of traders – the amateurs and the professionals. The amateurs provide the money”.

    I have no idea how convenience yield is relevant here as it appears to relate to holding inventory in a futures market.

    • DrO says:

      As noted earlier, there is very much wrong with that paper, and it would require something of tome to explain the many problems. I provide just few additional comments here, and will leave it that, as I am quite certain that paper (and ones like it) are promoting an agenda, not reporting effective/real valuation … I am guessing you will wish to believe what you will, but after you have become head of derivatives trading and head of quant groups for some years, let me know and we can revisit the details.

      First a few “smell tests”:

      1) The paper is from EWEA = European Wind Energy Association … hmmm, do you think that is a hint as to their “perspective” and objectives?

      Why not interview electricity traders and get their analysis, instead of insisting on a lobby group’s results.

      2) Merit Order Effect: seems to be an invention of those with an agenda to come up with an abstraction of reality so that they can make various claims. If I had the time, I would demonstrate to you how their manipulation leads to one particular MOE implication, while fiddling with the numbers in a different way produces another “result”.

      In any case, if you wish to make a case on “valuation”, then lets not go off on some theoretical invention.

      You will note that the real markets never use a supply/demand curve intersection for pricing. There is a reason for that … but I don’t have the time to teach you about valuation here.

      3) Your reference to the “Irish” study is just another one of those Merit Order assessments, and as such of the same value as the EWEA’s.

      Now a few reality checks:

      1) Wind costs more compared to traditional sources. This is NOT disputed. Wind is particularly poor in value when compared to commercial sources of electricity (as opposed to government sources). An “off the shelf” Westinghouse AP1000 nuclear reactor produces fully costed electricity somewhere around 7c/kWh. New hydro projects produce around 5 – 6c/kWh. Wind, at its very best, is 20-30 c/kWh, or worse.

      So, let’s see, how does the introduction of 20-30c energy lower the spot price when fed into a grid that could be producing well under 10c/kWh?

      …. something is very wrong with that document

      2) Using the “0-marginal” cost is a trick, since it allows them to argue that Wind sources should be fed into the grid first. Then, any additional supply, if you are to rely on the “equilibrium” pricing approach, will necessarily lower the “theoretical” market clearing price.

      If instead, you prioritise the sources to the grid, say, based on c/kWh, then hydro and nuclear would be at the top of the list, and the same study would show that, for example, additional nuclear or hydro power would reduce (theoretical) spot rates, etc.

      … as noted above … theoretical economics permits all manner things that, while may very well exist in some utopian environment in a galaxy far far away, often has little to do with the reality on this planet.

      Perhaps a variation on Disraeli’s comment “there are lies, damn lies, and statistics” in relation to academic economics is appropriate.

      3) Regarding trading: I will wish to interpret your “aphorism” as intended to introduce a little humour.

      a) Still, it is useful to note that in reality amateurs contribute almost nothing to the financial markets. To begin with, amateurs tend to “dabble” in equities, often referred to as “retail”. Retail is a smallish percentage of equity trading. The entire equity market itself is tiny percentage of the total market, which dominated by interest rate trading (almost exclusively by institutions and governments).

      Very few amateurs trade energy products, or most anything other than equities. This is often since amateurs/retail is typically using the equity market for retirement funding, and the equity markets are the only ones that provide a long-term up-drift, and if you invest/buy-hold for a period longer than 5-10 years in, say the S&P, you are almost guaranteed to come out ahead (that needs some qualifying for risk, indexing etc, but all that is for another time).

      b) The spot markets cannot be dealt with in isolation. The intra-day and OTC traders know what the “flows are”, and their pricing is impacted by the entire ensemble. Yet, another reason why studies like EWEA’s have little to do with reality … indeed some may consider it much worse, as it appears to “talk a good game” in an effort to “compel” neophytes to believe their (EWEA’s) beliefs, rather than to make a decision based on facts.

      c) As for convenience yield (CY): I think you missed the point, or did not look deeply enough.

      First, some big picture issues: Yes, CY appears in futures, and indeed forwards, and options pricing explicitly. However, the markets operate to be as near to “arbitrage free” as is practical. This means there is direct connection between spot and forward prices. Put differently, what ever the spot price is must “connect” in a way to the forward prices. The impact works both ways.

      However, of particular interest here, and the reason I suggested CY for your consideration, is if you were to understand “how weird” CY can get, and why it does so, then you would start to understand some of deep peculiarities of energy, and especially electricity prices.

      … that is, since this conversation is about the “interpretation” of the “value” of wind as expressed by some “pricing” methodologies, you need to understand the peculiarities of the electricity markets, and since each locale has its own peculiarities, there is quite a bit of work ahead of you. To imagine that MOE can somehow be used in isolation of those realities seems fatal … and note that even if MOE is to be used, comparing Irish MOE to Danish MOE etc may make about as much sense as comparing California’s energy issues to Saudi Arabia’s.

  12. fujirobin says:

    This is the way I see it: the Merit Order is not “an invention of those with an agenda” – it is the way that genarating plant was prioritised in order of marginal cost in the old CEGB days. Things are largely the same these days but moderated through an electricity market as distorted by subsidies/incentives. Somewhere I once found a complete list of all UK generating plant (including nukes and wind farms) in that order. It is real and a logical way to deal with demand-following. Once a wind (or nuke) plant is built, more or less any price above zero is worth taking (economically-speaking wind is a price-taker). So to get anyone to build a nuke or wind plant, some form of guarantee is required or they won’t invest. (Remember the bailout of the nuclear industry a few years ago?) Generators with high fuel costs are the price setters at the margin, and these are the people who lose money when wind comes on stream. From a system point of view, wind coming onstream displaces those plants and reduces their (thermal) plant’s capacity factor and hence profits. I can see why the traditional generators don’t like it. The question is whether these price reductions at the margin are worth the subsidy cost, and several studies by “academic economists” (is there any other sort?) have shown they have been in the past. As noted the subsidy regime is a long-term commitment and the future is less clear. Whether wind subsidies are worth it or not seems (to me) to come down pretty much to the price of gas over the coming decades. i.e. its a gamble. Lets be upfront about it.

    • DrO says:

      I am afraid there are a variety of errors and “indiscretions” in your response. Also, as is so often the case, it is easy to “throw in a controversial statement”, but which then requires considerably more than, say, 140 chars or sound-bite to correct. I will provide a much shorter response than is appropriate, as my time is limited.

      1) a) Yes, Merit Order has been around a while, but when used it was typically for government run operations (e.g. CEGB), not for “free market/proper pricing” settings … i.e. where politics/agendas are more important compared to rational pricing. For example, in the UK Merit Order was abandoned once electricity was privatised. This is precisely since “market pricing” is not compatible with “academic/political/agenda” pricing. This doubly underscores the lack of merit in the EWEA study trying to use Merit Order to argue “lower pricing” in free-market/trading setting … though, not that current UK system is pure “free market”.

      This issue has many more bits to it, for example base-load matters, which I will omit for now, but further destroy the usefulness of Merit Order with renewables.

      I think your remark “things are largely the same these days” is clearly wrong, there is no CEGB, etc. since 1990. It is misleading to pretend that somehow Merit Order is anything other than agenda driven/theoretical methodology.

      Indeed, reading the “theoretical” studies on Merit Order, one finds (theoretical) reports, e.g. some German reports that I presume you are alluding to, that wind/solar have reduced electricity prices by 10+% … but bizarrely, the actual price paid by German consumers had increased substantially according to the proper/real world records. Clearly, the theoretical measures have nothing to do with reality … and that is before many subsidies and other “fiddles” are accounted.

      Some of those studies come from Germany, where there are so many distortions that “accounting for anything” is nothing short of heroic. Just one illustration: German corporations don’t pay the same rates as retail. So one could apply Merit Order and find corporate electricity rates had gone down … and suggest that is due to “wind”, when in reality it is mandated by the government, and all the while consumers/retail are soaked with massively higher electricity rates to subsidies wind/solar and the corporations.

      … what does mandated pricing have to do with “spot prices” and trading … nothing. So again, applying Merit Order on the pretence that it is somehow good for “free market” etc etc is rubbish.

      b) The statement that any utility technology needs ” some form of guarantee is required or they won’t invest” as presented is spin and is a kind of “own goal”.

      If a traditional plant/source needs guarantees of 7c/kWh for the next 40 years, and a wind farm needs 25 c/kWh for the next 40 years to breakeven in some sense, yes they both have guarantees, but why should anyone pay 3 – 4 times more compared to alternatives. Once again, the question is “value”, not some ancillary matter used to pretend these are the same things just because they both have guarantees.

      There are many other potentially serious omissions, such as:

      (i) the available data indicates wind farms have a much shorter life span compared to traditional plants … that “accelerated entropy” considerably increases costs for wind.

      (ii) “Good wind” tends to be far from existing grids, requiring (very) expensive new grids.

      (iii) Wind intermittency means building at least twice or thrice the required capacity.

      (iv) Base-load and storage issues completely destroy any chance of “substantial” wind capacity.

      (v) Pay attention to the many “specialised” words and qualifiers used by lobbyists, such as “calculated cost/price” (c.f. actual), “levelised prices”, each of these mean that the lobby publications are literally using fanciful terms, as those terms qualify the results to be “assumed/manipulated” calculations.

      Now, of course, I respect that some people would simply wish to pay more because they “like” wind or whatever for philosophical/ideological reasons (along with free-range chickens, organic vegetables, and so on)… but I do not accept that those people should be able to force everyone else to be “soaked”, particularly if the “story” is manipulated to pretend that it costs less, when quite clearly it costs much more.

      If you wish to “sell wind”, fine … but be up front about it. If the democracy votes for wind on the basis of fair, accurate, informed decisions and everyone knows/accepts that it will cost 4 (or 10) times as much as another choice … fine, but if there is manipulation to trick the voters …. that is a very different problem.

      c) Clearly, and as above, at the margin is meaningless if the full-cost price of the 0-margin source is much higher compared to a higher at the margin source, since the full price has to be paid one way or another. It’s an apples and oranges problem. For Merit Order to have the slightest chance of usefulness, the alternatives must be compared on an apples to apples basis.

      Moreover, in an industry where guarantees are required, and by your own admission, at the margin pricing is something of an “own goal”/non-sequitur. With guarantees, the pricing is worked out backwards to ensure that the costs are covered over the plants operating horizon. That is, those are the prices assuming that source is running full-out or at some assumed capacity. Thus, messing around with Merit Order makes a dog’s breakfast of the actual supply compared to the guaranty cost/price supply to arrive at the prices, and thus makes a complete dog’s breakfast of the revenue stream (i.e. you will loose your shirt).

      Put differently, you tell them they have guarantees, and then renege on the guarantees as it suits some agenda.

      If you lay out 10 billion for a nuclear plant, and calculate it needs to run full whack at 7c/kWh for 40 years to collect sufficient revenue to pay for everything, and then later start substituting some other source of electricity, then the original plant is not producing, and hence not collecting, and thus the entire project will be destroyed (financially speaking). An extreme example would be to spend the 10 billion on the plant, and immediately on completion, do not turn it on, but instead spend another 30 billion on a wind farm. Then, you will need to defease the 30 billion for the wind farm, at say, 25c/kWh, and completely write-off/lose the 10 billion for the nuclear plant since you have opted to use only the “0-margin” prioritisation. So your actual cost for electricity will be 32 c/kWh, for the same amount of energy that the first 10 billion would have provided (i.e. you have lost 30 billion (10 from the nuclear plant, plus another 20 billion for the unnecessary high price of wind, and all because you prioritise on 0-margin).

      The best way to get into trouble with financial matters is to start departing from cash flow and P&L objectives/discipline, and start introducing all manner of secondary and tertiary measures … keep your eye on the prize, if you take home less than your started with, something has gone horribly wrong, and no matter what fanciful terms you use, Merit Order or otherwise, it is a clearly bush league approach to losing money.

      You can’t have guarantee + Merit Order, they are incompatible, which the real world resolves with tax-payer bail-outs.

      By the way, what would cost less: USD 15,000 petrol auto, consuming petrol/diesel at say USD 3.5/gallon (at the margin) and 40 miles/gallon, or a USD 50,000 otherwise identical but plug-in electric, at say USD 0 for electricity (i.e. free to run, 0-cost at the margin). Assume 12,000 miles/year, and an 8 year life cycle.

      … ignoring funding and other running costs for simplicity, the total expenditure over 8 years for the petrol auto is 15,000 + 8*(12,000*3.5/40) = 15,000 + 8,400 = 23,400.

      The total expenditure for the plug in is USD 50,000, with exactly 0-cost at the margin.

      Clearly, the petrol auto is much less expensive in its own right, even with substantial cost at the margin.

      However, notice that if you bought each of them, and used the plug-in on a Merit Order basis, then your total cost for the 8 years is at least 65,000. So the Merit Order approach costs more than either of the individual schemes … but you could always impress your friends by telling them that you have 0-cost at the margin 🙂

      Indeed, buying two petrol auto’s would cost less compared to one petrol+one plug-in. That is, I can have double the capacity, and a substantial at the margin cost, and still come out far ahead of the petrol + plug-in Merit Order strategy.

      Again, I am sure some people get personal/emotional satisfaction from their Prius or Leaf (and I am happy for them), and they may well brag about 0- or low-cost at the margin, but there is no way in Hell it is less expensive compared to bog standard petrol/diesel. So buy your Prius and feel good, but do not BS anybody into buying a Prius on the basis that it is less expensive compared to other choices.

      2) As for the “it’s a gamble” comment … that requires far more time than I have at the moment, but for now I will just say … that is no answer.

      • fujirobin says:

        Interesting… so where in the world is there a free electricity market that you approve of, and how has wind fared there?

        If wind’s existence is down to political spin rather than economics, how is it that 35GW wind capacity was added last year in countries across the political spectrum? The greenies surely don’t have that much influence…

        By all means lets look at the cost of various generating technologies over the next 20-odd years – is there any consensus on the figures? (from what I’ve seen there is a huge amount of politics involved in all the estimates to suit various biases) What happens if gas prices halve, stay the same, double or treble? What about interest rates?

        re your b) I have read that there is no free-market nuke operator anywhere in the world – they are all underwritten by governments – is this true? and of course nukes wouldn’t exist without decades of taxpayer subsidies and bailouts.

        • DrO says:

          Well, I see you moved the goal post and are trying to change the subject.

          I have no idea where you get some of your nonsense from. At no time have I claimed that there is free electricity market anywhere. Indeed, I have been stressing exactly the opposite … there is no such thing as “free anything”. That is the hole point, and that is why the Merit Order/at-the-margin bit is nonsense any-place where price competition is intended to lower prices.

          As stressed, see for example my simplified example of petrol + plug-in hybrid, even if the plug-in is provided with free electricity, it is NOT free to own/operate, since at the very least you have to pay for the capital costs etc etc. This is why 0-cost margin is meaningless for “price discovery” processes (which is the essence of free markets).

          I am extremely surprised at your 2nd para, it is either extremely naive or something that warrants no response on merit. However, and again, it is precisely because there are political agendas that wind (and solar) have expanded. Wind and solar are either explicitly mandated by governments (i.e. you are told you must build a certain amount of wind, as with some the Obama programmes, the Germans, etc), or are implicitly mandated via tax and other incentive schemes, all force-paid for by the tax-payers. In every locale I am aware of there is AT MINIMUM a 30-70% subsidy for wind/solar. Corporations are provided special incentives to make massive profits if they build, so, what a surprise, they build.

          As such, if you can steal from consumers/tax-payers and mandate 35 GW, then 35GW appears, but that has NOTHING to do with its price competitiveness or any other “rational” decision (of course a politician will argue that it is “rational” to promise/lie/cheat to get elected etc.).

          The money still comes from the tax-payers both from additional taxes, and in many cases massively higher electricity rates. A few examples:

          1) In the US, typical electricity rates are 4 – 7 USc/kWh (depends on various idiosyncrasies due to whether “tiered” pricing is used, or “time of day” pricing is used, etc.).

          Notice that in GBP or EUR terms those costs are around 3 – 5 GBPp or EURc/kWh.

          … i.e. US electricity prices are massively lower compared to Europe.

          Most of US electricity comes from coal, then nuclear, then gas. Only about 3% of US electricity comes from wind/solar/geo etc … and it is that “high” only because it is mandated and heavily financial incentivised.

          2) In Germany, electricity cost has moved above 26 EURc/kWh, i.e. the equivalent of about 35 USDc/kWh, i.e. about 5 times more expensive c.f. the US.

          They have 25% wind or more.

          3) Ontario (Canada) recently elected a party with a “green platform”. On election, they shut down all the coal plants. Then they made a giant sneaky deal with Samsung. Samsung pays for about 7 Billion wind generation infrastructure (this is a political trick to avoid the need to add to the Gov’s giant deficit), for which Samsung receives high priority access to the grid (i.e. “mandated Merit Order”, so much for that nonsense), and perhaps as much as 40’ish c/kWh.

          The consumers and tax-payers are no “locked in” to this ridiculous deal, all so that the current political party can “appear green”.

          The bulk of Ontario’s electricity comes from nuclear. Since the “Samsung deal” Ontario’s electricity price has moved from about 9 c/kWh to its current 14’ish c/kWh, and in a couple of years when the Samsung deal is fully implemented, the price will be around 17 c/kWh.

          The total contribution of wind to Ontario’s capacity is about 2%, but electricity prices have doubled for that incremental increase in capacity and related Gov “energy misadventures”.

          At one point, the Ontario Gov was paying home-owners 86c/kWh to put solar on their roofs … WOW what an arb. In 2006 the home-owner feeds into the grid and gets paid 86c/kWh, but Ontario’s electricity price is actually around 9c/kWh at the time. What a surprise, lots of home-owners install solar …. it certainly is not because solar is “cheap”.

          Similar arbs are available in the US and UK through various programmes. I think in the UK you can still plant a small/medium wind turbine in your backyard, and get paid 27 p/kWh, when UK’s typical electricity price is around 14 p/kWh … again, a massive mandated “arb”. At commercial scales, the “up-front arb” is not quite so sweet, but then there are other “hooks” and “backdoors” that provide massive profitability … all because it is politically mandated, not because it makes (free market) financial sense.

          So it is no surprise that much capacity is being built when you can generate 100% profits for doing nothing … but it certainly is not because wind is cheap.

          And all that is before the disastrous expense of storage and all manner of fiddled amounts for new grids that haven’t even been built or paid for yet, etc.

          These are real prices paid by real people, not some “special in the ether” calculated measure.

          Regarding your statements about uncertainties, yes of course there are uncertainties, and which requires careful planning, and even then there are some parts that necessarily defy predictability.

          But that works both ways. As of today, oil prices have fallen nearly 30% from their peak a little while back. Gas prices have plummeted since 2006. There are studies that show that gas would have to move from its current approx USD 3.5 mmBTU to nearly USD 20 mmBTU for wind to become competitive.

          At the moment, wind is not price competitive. All the studies that use actual/real in the field operating results show this (or, just ask any Canadian, German, etc electricity consumers who are paying 2 – 5 times as much as they need to just to have a fraction of their capacity in wind).

          … you can speculate about any scenario you like, but there is nothing realistically in the near future that would make wind price competitive, even with a reasonably wide range of scenarios.

          As for interest rates, I had deliberately stated I would leave out funding issues, and here too your “throw away” remark is misleading. The funding issue is primarily in relation to the upfront capital required to build the infrastructure. Comparable “effectively equivalent” wind farms and nuclear plants require approximately the same up-front capital if:

          – don’t need much new grid work
          – don’t care about intermittency of power (i.e. if you don’t need base-load).
          – don’t care about storage (which is connected to base-load also).
          – there continues dumping of turbines by the Chinese, etc

          If you do care about any of those things, a wind farm’s upfront capital is 2 – 3 times that of nuclear. Gas is much cheaper still.

          The actual level of interest rates is to some extent irrelevant, since it is/can be locked for the life of the plant, and it is one of costs factored into the “reverse engineered” cost/revenue approach to pricing electricity. However, if you have to spend 2 – 3 times as much on your up-front infrastructure, then clearly, your interest payments will be 2 – 3 time bigger regardless of interest rates (in reality there is non-linear adjustment due to Present Value theory/bond pricing mechanics).

          As for your last point, again I had already answered this part previously. I don’t believe there is a full free market electricity market anywhere. Like farming/food, utilities are treated as strategic assets by (as far as I know) all Govs. However, you are quite wrong to say they are all underwritten by Govs. In the US, for example, utilities are often private corporations, and you can buy/sell their shares in the markets. The role of the Gov in those cases is to ensure stability. Very roughly speaking, this comes back to your fallacious “guarantee” comment earlier, and which I had corrected already. A private corporation enters into a kind of agreement with the Gov, where the Gov agrees that the corporation may charge a particular rate over a particular period. That is, the corporation performs careful financial analyses, and determines what on-average rate they need to receive in order for the (entire) project (e.g. over 40-years) to be sensible. The Gov will wish to allow the lowest rate, to avoid voter revolt.

          However, in the “free’st” setting, the corporation may have much freedom in terms of technology etc. If the corporation gets it wrong, and sometime in the future the (locked) rates do not generate sufficient dividend for the shareholders, then their share price plummets, and managers etc are fired, etc etc.

          In many cases, corporations may be restricted to which technology they use, or who supplies various components … then, usually, that means higher costs/higher rates.

          In the US, it is not uncommon for the Gov to provide loan guarantees. That is not actually a loan, just a guarantee, so the utility can have an easier time raising capital (and at a lower price) … though now the Gov takes some credit risk.

          By comparison, in the US, when it comes to wind/solar, the Federal Gov has pissed away billions on all manner of “larks”, such as Solyndra, and many comparable examples in Germany etc.

          …. and so on and so on.

          In the US, generally each state has much say over such things. In Canada, each province has much say over such thing, and general closer to/more Gov control/involvement. I haven’t tracked the privatised UK electricity market too closely in these regards, so cannot say where stand relative to the US, or Canadian models.

          …. on the Continent, it is mostly explicit Gov. In Norway, the Gov explicitly owns/runs 60-70% of their entire GDP, and in reality more via various restrictions and mandates on “private” corporations. The French … humm, the less said the better … and so on.

          … I have the feeling that no matter what facts or data I provide, you will insist that somehow wind deserves special dispensation … that is fine, so long as it is an authentic stance, and is not attempting to mislead anyone. You can be the loudest “wind cheerleader” you like, and I am happy for you … but as repeatedly emphasised previously, just be honest about it.

          In any case, I have reached my limit of time spent on this thread. I am sure you will wish to get the last word in, so go ahead, I won’t respond.

  13. fujirobin says:

    Thank you for sharing your insights DrO

  14. Cape Wind, Nantucket Sound. Cost $2.6 Billion, Nameplate 468 Megawatts, Capacity Factor 27%, Life Cycle 10 years, Life Cycle Output 11 Terawatts. Capital Cost per Megawatt $234.89. Cost of Production per Megawatt $70.
    State of the Art GE Flex 50 Combined Cycle Natural Gas Turbine. Cost $450 Million (right to work state), Baseplate 510 Megawatts, Capacity Factor 85%, Life Cycle 40 years, Life Cycle Output 152 Terawatts. Capital Cost per Megawatt, $2.96. Cost of Production per Megawatt $35, $15 of which is fuel cost.

  15. I have yet to read an article discussing the deployment of utility scale wind or solar projects in the U.S. that includes an assessment of Europe’s almost 30 year experience which has been less than stellar. “Analysis of Wind Farm Performance in UK and Denmark” by Dr Gordon Hughes, is a Professor of Economics at the University of Edinburgh where he teaches courses in the Economics of Natural Resources and Public Economics. He was a senior adviser on energy and environmental policy at the World Bank until 2001. He has advised governments on the design and implementation of environmental policies and was responsible for some of the World Bank’s most important environmental guidelines.

    The study has used data on the monthly output of wind farms in the UK and Denmark reported under regulatory arrangements and schemes for subsidizing renewable energy. Normalized age-performance curves have been estimated using standard statistical techniques which allow for differences between sites and over time in wind resources and other factors.
    The normalized load factor for UK onshore wind farms declines from a peak of about 24% at age 1 to 15% at age 10 and 11% at age 15. The decline in the normalized load factor for Danish onshore wind farms is slower but still significant with a fall from a peak of 22% to 18% at age 15. On the other hand for offshore wind farms in Denmark the normalized load factor falls from 39% at age 0 to 15% at age 10. The reasons for the observed declines in normalized load factors cannot be fully assessed using the data available but outages due to mechanical breakdowns appear to be a contributory factor.
    These findings have important implications for policy towards wind generation in the UK. First, they suggest that the subsidy regime is extremely generous if investment in new wind farms is profitable despite the decline in performance due to age and over time. Second, meeting the UK Government’s targets for wind generation will require a much higher level of wind capacity – and, thus, capital investment – than current projections imply. Third, the structure of contracts offered to wind generators under the proposed reform of the electricity market should be modified since few wind farms will operate for more than 12–15 years. As a consequence, any economic assessment of wind generation should not be based on an expected life which is longer than 15 years. In recent work reported in evidence to the House of Commons Select Committee on Energy and Climate Change I assumed that wind plants would have a residual value equal to 20% of their initial cost in real terms at the end of 15 years. The analysis in this paper suggests that this is too favorable an assumption. Given the costs of decommissioning old turbines the residual value is likely to be well below 10% of their initial cost and the decision point may be at 10 rather than 15 years.
    As a consequence, any economic assessment of wind generation should not be based on an expected life which is longer than 15 years. In recent work reported in evidence to the House of Commons Select Committee on Energy and Climate Change I assumed that wind plants would have a residual value equal to 20% of their initial cost in real terms at the end of 15 years. The analysis in this paper suggests that this is too favorable an assumption. Given the costs of decommissioning old turbines the residual value is likely to be well below 10% of their initial cost and the decision point may be at 10 rather than 15 years”.

    • Clive Best says:

      This is correct. The lifetime of on-shore and especially off-shore wind turbines has been overestimated, and has not been correctly factored into the energy price.

      It is not clear who will be responsible for decommissioning the old turbines. An energy company building a new wind farm can get a guaranteed return on investment through subsidies yielding up to a 20% return on investment. After 10 years it makes sense for the, to sell the farm or close the company after making a healthy profit. This leaves someone else responsible for the decaying structure.

      I have been counting broken turbines as I drive around the UK. You can tell which these are because they have been ‘feathered’ – stand stationary while the others turn assuming there is enough wind. I estimate that up to 10% of the UK fleet are actually broken. Why are these not being repaired ? One possible explanation is that they still earn money for the operator when wind power is too large for the grid. Then the operator receives constraint payments based on teh total installed capacity. So the broken ones get paid for as well. As more turbines are installed so the constraint payments increase.

      The national grid cannot currently handle more than 6GW power form dispersed wind farms.

  16. fujirobin says:

    I don’t buy your constraint payments argument – how often does it occur and what are the details of who gets paid what? That aside, AIUI, subsidies via ROCs get paid on MWh generated and if a turbine is not generating it aint earning jack, so it doesn’t make sense.

    • DrO says:

      No, that is wrong. ROC’s are issued to SUPPLIERS (not generators) for each MW PURCHASED (not generated, or even delivered). If a supplier has not PURCHASED an amount prescribed by law, then they must pay a commensurate penalty.

      So the supplier has to show that they purchased (paid for) something, whether it is delivered (to them) or not … or pay a huge penalty. If they can show a “purchase”, they receive a “certificate” (ROC), and they have to accumulate a sufficient number of those to avoid the penalties.

      This of course means that they don’t actually have to take delivery of anything, so long as they paid for, well, even “nothing”. The supplier can still supply by generating or sourcing by other means.

      This also opens to the doors to all manner of manipulations, such as ROC’s issued for purchases from wind farms that haven’t even been built or similar.

      The penalties and other such monies go into a giant fund, which is then used for further subsidies.

      The entire process is a mess, and they are trying to revamp it with various new “emperor’s clothes”.

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