Shetland windfarm - Viking Energy

[Ghostrider]

Idle ponderings, questions without answers, playing with numbers.

 

Viking will be profitable, if they get the damn thing commissioned and paid off before Government subsidies are slashed or withdrawn. Subsidies will falter or vanish when supply and demand reaches a "certain" ratio, and some suit "decides" an "incentive" to build is no longer needed. Or, when the next new bright and shiny "fad" comes along that politicians see is the safest bet to back to ensure their collectives butts are returned to their seats on the gravy train. Could be next year, could be in twenty years, that is the gamble in all this.

 

If subsidies go, we're screwed. If they go before commissioning, they can stop work immediately, as to continue will just dig a deeper hole. At least they hopefully won't have spent all of the allocated budget at that stage, so it will be a little less to pay off. We'd probably be best advised to consider going bankrupt though, than try to clear the debt. Worst case scenario, the subsidies vanish within a year or so of completion when very little has been paid off, we'll have the full bill to cover, and income will not cover it. We'd be paying it, not it paying us. There would seem little point in operating the thing on that basis, and again going bankrupt, even for a larger amount wuld probably be well advised.

 

This isn't a last in first out game, he who runs the tightest ship will survive longest. We have unavoidable costs none of our competitors have, a great long cable to lay, and keep up, and the greatest loss in transport due to the length of said cable, plus far greater wear and tear etc on the machinery due to weather/climate. Can our extra wind compensate, only time will tell. Another gamble. If it can't can we still remain competitive when the business becomes more cut throat, as it will when more and more producers come onstream. Its a sellers market just now, but how long can it remain so, windmills are springing up faster than dockens in voar just now. There is a market saturation point, how close is it to being reached?

 

If 5 Burradale size turbines is all a network supplying the power needs of 23,000 can stand, that ratio applied to the national population of circa 56 Million is only 12,208 Burradale turbines the UK grid can handle. How many are feeding it right now, and how many, excluding Viking, are works in progress? Yes, yes, I know, comparing the national grid to the local one is not strictly like for like, when you can sook off it from Land's End to Skaw, Unst it works slightly differently than one from Sumbugh Head to Skaw, Unst, and there's export potential to Europe, Ireland, blah, blah............but its a ball park number to start from, and its nowhere near as big as you might have thought.

[mate64]

^^ It is difficult to predict the future but ‘gamble’ may not be the most suitable description of VE.

 

I have no idea how the climate is going to change (and neither does anyone else) but there are some things that appear quite likely:

 

1. Renewable energy production is going to become a massive industry

 

2. The fishing industry will continue to decline

 

3. Agriculture in Shetland will never again answer any of our economic needs

 

4. Knitting. Na

 

5. Oil monies from Sullom will decrease drastically (this is the biggie)

 

6. Petrol prices will go up.

(I remember when it was 3 bob a gallon. That’s about 3p per litre). With so called peak oil fuel inflation will be even higher than in the past. We could see £10/£20 per L in the foreseeable future.

 

Do we really want to be buying our power from Orkney instead of exporting it to Europe? We must not be left behind thinking that others can develop this industry better or cheaper. We have the best resources - wind, wave and tide. We start with wind. And we should start now.

 

For those against: where exactly do you think we are going to get income from? How are we going to sustain our way of life? Why did you call yourselves ‘sustainable’ Shetland?

[crofter]

 

What VE actually said was 67% of the ground which will be disturbed during the construction process is degraded peat.

 

Cheers for that, is this on the VE website?

 

I see this reported in the ST today:

 

Dr Dick Birnie of Aberdeen's Macaulay Land Use Research Institute who said at a meeting last week that Viking Energy had wrongly assumed that two thirds of the windfarm blanket bog area was eroding as if it were bare peat.

[crofter]

3. Agriculture in Shetland will never again answer any of our economic needs

 

 

None of them?

[unlinkedstudent]

^^ Mate64 - I am against the windfarm but not a member of Sustainable Shetland. Unlike Viking Energy, I can at least do basic mathematics and do not rely solely on probability maths!

 

Obviously Mate64 your scrying skills are somewhat better than mine (I prefer the black crystal ball meself) but you too are making predictions, even if you do say "quite likely".

 

Why should we start with wind? Tell you want, if you are so keen on the idea, why don't you apply for a bank loan or use your own money to fund it? After all, if VE and their cronies say it's a sure thing, they must have consulted a decent clairvoyant!

[Ghostrider]

^^ It is difficult to predict the future but ‘gamble’ may not be the most suitable description of VE.

 

When the difference between making a healthy profit and making a meagre one, if not a loss, hinges on a Government subsidy, it falls in to my category of a gamble.

 

The subsidy may be "guaranteed", but coming from a Government that's cold comfort. If anyone has the capability to wheedle out of such and not make it worth the paper its written on, a Government does. All it takes is a change in management, not even that, a change in thinking produced by the latest fad.

 

I have no idea how the climate is going to change (and neither does anyone else)....

 

Well, there's a turn up for the books, according to numerous posts on the climate change thread, and probably some on this one too, we've been assured so called "Climate Scientists" have that one more or less sewn up.

 

....but there are some things that appear quite likely:

 

1. Renewable energy production is going to become a massive industry

 

Probably, but I'm far from convinced clusters of windmills producing intermittently and erratically will ever be a meaningful part of it.

 

2. The fishing industry will continue to decline

 

It certainly will as long as its ruled from Brussels.

 

3. Agriculture in Shetland will never again answer any of our economic needs

 

Probably not, as long as its ruled from Brussels too.

 

4. Knitting. Na

 

I'll agree with you there. The days of haund made lang ooin drawers ir bye wi, modern materials and third world sweat shops have seen to that.

 

5. Oil monies from Sullom will decrease drastically (this is the biggie)

 

Really. So just how little have the SIC let Total get away with paying for Orca Voe then?

 

Seriously though. Inevitably in time the Sullom Voe etc will decrease, when and by how much, only the oil industry can realistically predict. A replacement income is desirable, if not essential, but unless there is a cast iron enforcable in law guarantee that the subsidy will stay at least at current levels until the VE investment is paid off in full, VE isn't going to be that income stream.

 

The only other way it can pay as well is if electricity prices double, and then consumption will fall as few will be able to afford to buy it, ending in a similar shortfall.

 

6. Petrol prices will go up.

(I remember when it was 3 bob a gallon. That’s about 3p per litre). With so called peak oil fuel inflation will be even higher than in the past. We could see £10/£20 per L in the foreseeable future.

 

No doubt, but beyond a certain figure and sales will plummet, it will also open the floodgates to make alternative fuels development and use potentially viable.

 

Do we really want to be buying our power from Orkney instead of exporting it to Europe? We must not be left behind thinking that others can develop this industry better or cheaper. We have the best resources - wind, wave and tide. We start with wind. And we should start now.

 

Once the cable is in place we'll be buying power from the national grid some of the time anyway, even with VE. If the subsidy sinks without trace and VE cannot compete against other suppliers to the grid, we'll buy it all from the grid and the VE turbines will sit idle and costing not earning.

 

For those against: where exactly do you think we are going to get income from? How are we going to sustain our way of life? Why did you call yourselves ‘sustainable’ Shetland?

 

This pretty much sums up a significant proportion of what I see to be wrong with VE, Its being driven forward partly relying on blinding folk with £££ signs, and by fear of "what will happen" if there's nothing about to come on stream to fill the void left by the oil revenue when it finally runs out.

 

To be blunt, that makes it the most blatant case of "counting your chickens before they've hatched", I've seen in quite some time.

 

At this stage nobody should be distracted by thinking about what all this money thats "going to be made" can be spent on, nor should anyone be driven by fear of any kind. Everyone's energies should be concentrating 100% on picking over the VE business plan with a fine tooth comb, looking for the flaws and holes, identifying the weaknessess, etc, etc....In short, make sure every base is covered, make it as foolproof as possible.

 

Once money is being made from it, it'll be spent easily enough, and once money is being made from it any fear for the future is automatically taken care of. Neither have a place in the here and now, both can be met and dealt with quite easily when they actually arrive. Spending time thinking about them just now is simply a distraction, that if it wasn't there would allow far more calm and rational consideration and debate of what's being proposed.

[crofter]

Everyone's energies should be concentrating 100% on picking over the VE business plan with a fine tooth comb, looking for the flaws and holes, identifying the weaknessess, etc, etc....In short, make sure every base is covered, make it as foolproof as possible.

 

Yes, I agree. Where can we see this business plan, I can't find it on the VE website?

[MuckleJoannie]

I would hope there is a business plan somewhere. It was the SIC that originally set up Viking so I had a look on the SIC website but nothing is available. How about contacting Viking direct?

 

The schemes that SHEAP and SSE are setting up seem much more sensible, using Shetland wind for the benefit of the isles. As well as warming water they are now planning to install a huge battery so that more wind energy can be stored and the power station output can be stabilised.

 

http://www.shetlandtimes.co.uk/2010/11/26/uks-biggest-battery-destined-for-isles-as-part-of-sse-scheme-to-improve-local-grid

[JustMe]

Never mind any other issues!. The one question I seek an answer to is why anyone would want to build a great big windfarm in Shetland with all the problems and costs of building an interconnector and so far the only logic I can see for Scottish and Southern is that they could then close down the Lerwick power Station. Otherwise windfarms on the mainland are going to be cheaper to build and probably cheaper to maintain.

[Ghostrider]

How much belief/faith does SSE have in renewables anyway? They only recently invested millions in becoming a shareholder in an oil/gas exploration block.

 

Maybe my way of thinking is warped, but that kind of behaviour doesn't say to me that they're a company who have embraced renewables as the "only" way "forward" in the energy world that VE would try and have the rest of believe.

 

It says to me that they're a company who are seeing possible ways to make money for themselves in both oil/gas and in renewables in the foreseeable future, and are hedging their bets by investing in both, in case one of them desn't work out.

 

All this "eggs in one basket" VE represents makes me very nervous, I'd much rather an investment of the nature being proposed for VE was in something tried, tested and largely predictable in terms of return, like shares in an oil or gas field. Than in an industry that is in its infancy, like renewables, which by default of that status can only be fast changing, volatile and largely unpredictable.

[ArabiaTerra]

Never mind any other issues!. The one question I seek an answer to is why anyone would want to build a great big windfarm in Shetland with all the problems and costs of building an interconnector and so far the only logic I can see for Scottish and Southern is that they could then close down the Lerwick power Station. Otherwise windfarms on the mainland are going to be cheaper to build and probably cheaper to maintain.

Construction costs will be pretty much the same, after all the actual turbines are coming from overseas anyway. The big advantage of the VE proposal is it will be twice as efficient as one built down south, so they will be getting effectively twice the windfarm for their investment. As for maintenance, a wind generator is a fairly simple beast, there's not a lot to go wrong compared to say, nuclear power or a gas turbine. Burradale will have given them plenty of data on comparative maintenance costs with a similar set-up down south, and that hasn't put them off so I assume it's not a significant factor.

[Guest posiedon]

ArabiaTerra

As for maintenance, a wind generator is a fairly simple beast, there's not a lot to go wrong compared to say, nuclear power or a gas turbine.

The one on Aith pier (which I can see from my kitchen window) has more down time than productive time, and I don't just mean lack of wind, I mean the turbine actually laying vertical on the pier, presumably while repairs are carried out.

[Ghostrider]

As for maintenance, a wind generator is a fairly simple beast, there's not a lot to go wrong compared to say, nuclear power or a gas turbine.

 

Not arguing with the comparison, but nuclear and gas tend to be at or ground level, and not on top of hills. Repairs can be undertaken at almost any time. How much generation time is going to be lost every winter due to the weather at such altitudes making repairs impossible, or ground conditions (like those out there tonight) making access impossible.

 

A wind generator can be no simpler than a dynamo, and from what I recall of them they were happy to run on a little regular lubrication for a while. But once their original lifespan was nearing its end, bushes, brushes, bearings, windings etc all were liable to play up. The big problem with that was that their original lifespan was highly unpredictable, it varied drastically due to the composition of the air that circulated through them. Can VE really expect the longevity in our salt laden winter air that is "normal" elsewhere? Certainly they'll know better when to expect it to happen, at some unknown future time, than they do just now, Burradale will teach them that, but just now nobody can really say, as Burradale hasn't been in operation long enough.

[crofter]

All this "eggs in one basket" VE represents makes me very nervous, I'd much rather an investment of the nature being proposed for VE was in something tried, tested and largely predictable in terms of return, like shares in an oil or gas field.

 

Allan Wishart said on the radio shetland "debate" that the most the CT could lose was 65 million (but in the next breath he said 70 million) Either way, it is not all the fund, just a big chunk of it. What worries me is how accurate their assumptions and projections are. For instance, the 67% degraded peat claim. Now an environmental expert has said that they were wrong. We need an economic expert to examine the numbers very carefully.

[ArabiaTerra]

All this "eggs in one basket" VE represents makes me very nervous, I'd much rather an investment of the nature being proposed for VE was in something tried, tested and largely predictable in terms of return, like shares in an oil or gas field.

 

Allan Wishart said on the radio shetland "debate" that the most the CT could lose was 65 million (but in the next breath he said 70 million) Either way, it is not all the fund, just a big chunk of it. What worries me is how accurate their assumptions and projections are. For instance, the 67% degraded peat claim. Now an environmental expert has said that they were wrong. We need an economic expert to examine the numbers very carefully.

You need to be careful here. From what I understand of this row, VE said that 67% of the land the windfarm was to be built on was degraded. "sustainable" Shetland assumed this meant the entire site "inside the fence" as it were and asked the expert. The expert said this wasn't true. VE then clarified that they meant 67% of the actual ground that would be dug up during the construction process. Of course, "sustainable" Shetland were already shouting and screaming so much about "more VE lies", that they didn't (or more likely, wouldn't) hear the clarification. I have yet to hear anything from "sustainable" Shetland to indicate they have even acknowledged this.