Shetland windfarm - Viking Energy

[Clooty Cap]

I'd like someone to explain the below quote from Erik's letter on the SN letters.

 

'They don't mention the fact that the 45 per cent community share of this windfarm will bring in more money than the vast Sullom Voe oil terminal ever did'

 

This is quite a claim given the VE income will be based on current government policy.

 

SVT has probably had an average of 3-400 local staff for the last 30 years, all of whom have ploughed much of their income back into the local economy. VE will employ a fraction of this in full time local staff.

 

I assumed they were basing these claims on the performance of the Burradale windmills since the subsidies that are available at present aren't a permanent income.

 

Given that Burradale is already the most productive windmills in the world with an average capacity of over 50% there is a good chance that the modern more efficient windmills should be able to produce an even higher average capacity so even in a world without subsidies the windfarm should provide a good financial return, whether that return is as large as the oil terminals is open to debate.

[Njugle]

I'd like someone to explain the below quote from Erik's letter on the SN letters.

 

'They don't mention the fact that the 45 per cent community share of this windfarm will bring in more money than the vast Sullom Voe oil terminal ever did'

 

This is quite a claim given the VE income will be based on current government policy.

And more of Shetland will be forced into fuel poverty through increased energy costs to subsidise this and similar large scale developments, as another consequence. Getting this bountiful return to the consumers who need it most will be a difficult process, and all UK consumers will, in effect, be subsidising that local benefit when/if it comes. Very socialist, unless of course it doesn't work like that, in which case many will suffer.

[Skunnered]

^^That's an excellent point Njugle. The so-called "subsidy" for windmill generated power is not in fact a subsidy paid by the government, but a subsidy that will be paid by all electricity consumers in the UK through increased electricity prices, and the wind farm operators benefit through the ROC system. Of course this means higher prices for the poor as well as for the middle or well-off, so you are quite right that in effect it increases the fuel poverty situation.

 

As to how the SIC intend to pass the benefits of their new wealth from the windfarm on to those suffering from fuel poverty is a very good question. I'm quite sure that they (or the CT) cannot simply pay lump sums across to poor individuals (see what happened when they tried to make Christmas payments to the elderly) because of the EC, or the tax-man, or whatever. So I wonder if this was just a statement to soften up the public?

[Greenfingers]

 

Given that Burradale is already the most productive windmills in the world with an average capacity of over 50% there is a good chance that the modern more efficient windmills should be able to produce an even higher average capacity so even in a world without subsidies the windfarm should provide a good financial return, whether that return is as large as the oil terminals is open to debate.

 

This is supposition.

 

You say that the windfarm " should be able to produce" and "should provide a good financial return" because, like the rest of us you don't know because Viking Energy have never ( to the best of my knowledge) published any figures as to how this thing is going to turn a profit. The only financial projections I have seen were published in a 2003 survey by Strathclyde University which is now wildly out of date based on the latest estimate of the costs.

If VE are to start to regain our trust after all the lies,subterfuge & propaganda which they have subjected us to, then they need to " come clean" and show us how this project can benefit our community financially.

 

You cannot base a potential £400 million investment on a wish list.

[Ghostrider]

^^That's an excellent point Njugle. The so-called "subsidy" for windmill generated power is not in fact a subsidy paid by the government, but a subsidy that will be paid by all electricity consumers in the UK through increased electricity prices, and the wind farm operators benefit through the ROC system. Of course this means higher prices for the poor as well as for the middle or well-off, so you are quite right that in effect it increases the fuel poverty situation.

 

I've brought this up before, and so have others. A Govt. subsidy is funded by tax on certain product consumers, or a tax on everyone, depending on how its levied. Where electric is concerned the manner in which it is levied matters little, as by its nature the product consumer and the entire population amounts to virtually one and the same.

 

For many years, probably almost as long as the relvant subsidies have existed, Shetland crofters (and probably crofters everywhere) have been taking stick and been the butt of endless "jokes" about being subsidy junkies. Yet now that the same principle is applied to local (prospective) electric producers, everybody is delighted and gung ho. I find that extremely strange, and if I were a cynic I'd say those who are so keen very probably have been blinded to certain realities by $$$ signs, and/or the "save the planet" mantra.

 

Taken at its most basic, crofters were and are subsidised to produce plentiful and affordable food to feed the population, and the population has never let them hear the end of the fact its subsidised by them. Yet when it is proposed that (prospective) electric producers are equally heavily subsidised, if not more so, to produce perhaps plentiful, but certainly not affordable heat and light to the population, they're virtually being feted as heros. To my train of logic, that makes absolutely not one whisker of sense whatsoever.

 

Having been a crofter I learned at least one thing about Govt. subsidies, regardless of who holds the purse strings, they come, and go, and who qualifies for then and who doesn't, and how much they pay out, changes from black to white and black again to someplace rather gray with monotonous regularity on a whim and the stroke of a civil servants pen. There is no such thing as a "Guaranteed" Govt. subsidy. There is one kitty, holding whatever it holds, which is divvied up according to political motivation at that moment. If the kitty is low, as it very likely is in the current economic climate, as soon as any subsidy is seen to be taking a disproportionate slice of the cake, as a windmill subsidy very likely will as more and more come onstream, it will be slashed, if something else comes along that is more guaranteed to return more of the same bums back to the same seats in Westminster or wherever (concocting a war or or invasion to "defend the nation" is usually a good one), the subsidy will vanish.

 

It is teh subsidy element that is my single largest concern and opposition to VE as it stands. The numbers need to be out in the open how how well VE is expected to perform in an unweighted market ie. can it be expected to return any profit on sales alone, if so can it be expected to return a decent profit on sales alone.

 

If it can't be expected at this stage to bring back a respectable percentage return on the investment from sales alone, it should be dropped like a hot brick for the dead duck it is, before any more time, energy and our money is wasted on it. To see any subsidy as other than a welcome bonus to be enjoyed while it lasts, is highly irresponsible. To invest heavily in an enterprise which relies on a subsidy to make it profitable, is courting finiancial suicide. Ask any crofter.

[ArabiaTerra]

To Ghost rider and others:

 

Google "Fossil Fuel subsidies"

 

These dwarf anything that is being given to the renewables industry.

[stilldellin]

^^^^ from Ghostrider, quote :- courting finiancial suicide :

 

You got it Ghostrider, never a truer word was said !

[Ghostrider]

To Ghost rider and others:

 

Google "Fossil Fuel subsidies"

 

These dwarf anything that is being given to the renewables industry.

 

Aye, but. We're not discussing investing our communal funds in a coal, gas or diesel fuelled power station, we're discussing investing them in a fleet of small windmill fuelled generators.

 

I would put forward exactly the same argument against investing communal funds in any opportunity that relies on any sort of subsidy to make it viable, that I'm putting forward against VE. Any investment has risks, but when the difference between sinking and swimming hinges on a whim of politicians and civil servants as to how many zeros they put in front of the decimal point on that years cheque, and whether they decide to sign it or not, it, to my mind is a risk far too far.

 

As an aside, I do not support any subsidy being paid to any power generator, regardless of how they fuel their generation, it is unbridled madness. How can any politician or government justify the current situation, of paying a subsidy to power generators who use fossil fuels so that they're viable and profitable, then paying another subsidy to power generators who use natural forces so that they're viable and profitable too, while at the same time lecture and dictate to the population on the need to reduce their energy consumption? They're contradicting themselves continously.

 

If they are really sincere in their wish to reduce energy use and depletion of resources, surely the most obvious mechanism through which to do in a situation where subsidies are already being paid, is to remove all subsidisation and let the free market charge the end customer the viable actual cost of their energy consumption. There's nothing like price rises to encourage folk to reassess their priorities and habits.

[Skunnered]

Problem is, we don't actually know how much of the claimed profit to the community is dependent upon the ROC subsidy, because VE haven't told us. They tell us that the benefit to the community is somewhere between £25M and £37M, but how much of that is subsidy?

 

They should be pressurised to declare how much profit there would be excluding the ROC subsidy, and how much they are forecasting to earn from the subsidy, then the public would have a clearer idea of how viable the project might be.

[Ghostrider]

^^ Exactly. In the absence of those figures being made public, I for one feel I am forced to make the assumption that projected profits disregarding the subsidy element are so low, if the exist at all, that VE is too scared to admit what they are as their little gravy train will immediately shudder to a standtill.

 

If anyone knows where to get hold of the numbers, I suppose it would be possible to come up with a ballpark guesstimate of the subsidy's worth, by assuming VE's probable output is of 50% is reasonable to get a figure on the annual output, then finding out how many certificates that earns them, and the value of each, add up the total and see how much of the £25 - £37 Million it comes to be. With what's left over giving you a probable profit on sales.

 

As the people VE are trying to "sell" this investment to though, we shouldn't have to be to that trouble though, and we deserve better. I believe asking what projected pre-subsidy operating profits are, is a reasonable question to ask and expect an answer to in the circumstances.

[Skunnered]

It seems to me that even our Councillors are not allowed to know certain "sensitive" bits of information, not just about the VE project but other things as well, so what chance does the public have in asking the SIC/VE to divulge any data that they would rather keep to themselves?

[Ghostrider]

^^ The SIC needs a change in elected leadership PDQ, get somebody that goes through the place like a dose of the sh*tes, reading the riot act, and telling it exactly like it is. We've had nothing but mealy mouthed waffle merchants steering for two going on three decades, and its gotten us where we are. There's so much been swept under the carpet and brushed off the end of the table, its a blooming wonder Sandy can still get to the big chair for it all.

[paulb]

i agree. i hate secrets.

however think what the lecky charges will be in 25 years the only thing we do know is its not going to go down.

its suggested that were going to depend on atomic power for our future. they are even greater gobblers of our money than the turbines will ever be. think how much its going to cost to clean up after the first lot.

we are having a small one installed its going to pay for its self in 5 years. so yes the goverments scheme will make it more profitable but over the 25 years its going to make money. ii don't know how long they expect to be paying for itself but they must know the figures they must know the what ifs maybe if the had the honesty to tell us those figures then they may just came things down.

claiming its sensitive info and we don't need to know is garbage. we are the people being asked to invest not mr manson and his pals.

[Infiltrator]

I had expected a simple answer to my query about Erik's statement that VE will bring in much more money to Shetland than Sullom Voe has.

 

I thought someone would supply the data or a weblink.

 

I didn't realise it was clouded by so many issues - somewhat ironic then that Erik's letter was titled 'Misinformation'

[Ghostrider]

It is somewhat ironic too that the subsidy VE are hoping to claim is known as ROC's.

 

Not many years ago there was another grand plan for Shetland to profit from rocs, those of the rock kind. There was to be a "super-quarry" in the north mainland, I forget now exactly where, producing crushed rock for export. Now I'm certain someone will quickly correct me if I'm remembering this wrong, but as best as I recall, the plan, despite being quite well advanced, was quickly thrown out on the grounds of visual impact..... What happened????

 

A hole in the ground, even if it was 100 x the size of the Scord or Brindister, or 100+ windmills lining the ridges of hills for miles. At least the hole in the ground was only going to be offensive on the eye to those within a few miles of its boundaries, the windmills will be offensive on the eye to whoever feels that way about them to the half of Shetland. How come a maximum of a few hundred north mainland residents objecting to a profitable development because it was going to spoil their view carried enough weight to have it binned, but a few hundred spread througout half of Shetland with the same opinion of the windmills are dismissed out of hand?

 

Ahh....but of course, the super-quarry hadn't been thought up and pushed forward by a handful of local speculators smart enough to get council backing and funding.