"Green" policies are destroying this country

Basically that is about it, but the end user will also be paying for everything associated with hydrogen production and I haven`t seen anything to say we would not be again paying for this hydrogen generated electricity when it is added to the grid.

Being generious, the price will be 50% more expensive than "The Hinkley dreadful deal". And that is without taking into account 28% of those proposed offshore terminals are floating platforms and will be much more expensive than fixed.

It seems pretty straightforward to me. Today, wind generators are getting paid for everything they produce. We've been regaled in the news about the two occasions in history when wind power exceeded demand (at two in the morning). In any event, providers currently get paid for curtailment. Coupled with priority dispatch for wind, you can build a wind farm today sure in the knowledge that you will get paid for every kWh produced. The investment thesis depends on this.

Some of us might cynically say that the State is being bilked for guaranteed high prices, but basically that is the level at which investors are prepared to invest. This year we've seen what happens when projected returns go down because of cost increases -- investors leave the market in droves. Anyway, the point here is that an investment decision at current prices is based on being able to bill for everything produced. There is no (investable) capacity that can be considered "spare", which goes against your contention that:

Now consider the situation where some percentage of wind power is going to current demand, and the rest is going to hydrogen production for conversion back to electricity when the wind isn't blowing. Presumably the percentage split depends on modelling which looks at the longest periods without wind that have to be catered for.

Ok, the round-trip conversion efficiency of electricity to hydrogen or ammonia and back is 20%. (You can find some better numbers, you can find some worse numbers. My point is not to argue a specific number, just to observe that the efficiency is poor). How much will those particular kWh of energy cost?

There are two ways to look at it. Either the energy that has to be roundtripped is five times more expensive. Or you just pay for all wind energy at the same price, regardless of how it will be used. It works out the same either way. To take a simplistic example: we have 6GW of continuous demand, for which we have to build 25GW of nameplate wind capacity. At 40% capacity factor that gets us 10GW on average, of which 5GW on average goes to immediate demand and 5GW goes to hydrogen. That latter 5GW generates our remaining 1GW of demand.

Whether you say that we pay for 10GW of capacity at €85/MWh, or 5GW at €85/MWh plus 1GW at €425/MWh, it works out the same. Either way you are satisfying 6GW of continuous demand and paying much more than if you weren't using unreliables. The actual figures depend on how much wind energy you have to roundtrip to hydrogen. The ESB projections that were the subject of a video posted on this thread seemed to imply about half and half.

No, I can't tell you anything about the "Trading and Settlement Code". I bet you can, though, judging by the trailing snark. What I can tell you is that all of the onshore wind auctions to date have included some form of compensation for curtailment. In RESS-3 it's called UAEC (Unrealised Available Energy Compensation). "UAEC compensates, at the Strike Price, for availability not converted to generation for reasons of either curtailment or oversupply." (direct quote from the RESS-3 T's & C's).

An IT article (here) about this provision from before the auction quotes a DECC spokesman as saying "This de-risking should translate into lower auction bids, through the removal of risk premia and, in turn, lower costs to consumers". Did that happen? Of course not, this is Ireland. RESS-3 prices were higher than RESS-2, just as those were higher than RESS-1.

Of course demand is not flat. What sort of frickin' eejit do you take me for? Did you want me to produce some sort of elaborate software model for you to run? That's why I specifically referred to average demand. The whole point of fag-packet calculations is to make things as simple as possible without being simplistic. Happy to be corrected if I've crossed that line.

I don't understand your point. My figure was €85/MWh (not €45), so start there.

Why would the PSO even continue to exist in a world where essentially the only two forms of generation are renewables and "renewable gases"? You're clearly someone who knows an amount about how things currently work. Not so sure you're managing to put yourself in the future mindset.

That made me smile 😁. Seems to be mostly on the Greenie side of the fence that posters think it's reasonable to demand that "you do all the work so I can scoff at it later".

Since the scenario we're talking about is one that is actually being proposed, wouldn't you hope (like I do) that someone has already done the detailed modelling? If you know where it is, I'd love to get a link.

If, on the other hand, you agree that nobody is coming clean about the savage implications for electricity prices in the brave new world, why do you think that is?

So you are talking about RESS-3, not renewables in general? Glad you clarified that. Not what you said originally. In reality there is not a single generator on RESS-3 at the moment and won’t be for years.

I don’t think you understand the price support scheme very well. In practice the cash flows are much more complex than you describe.

You write about the subjects with admirable certainty. Perhaps I had assumed that this certainty arise from you having read the literature?

You essentially found two numbers and multiplied them together and presented your conclusion as an analysis. Your result could be correct but you have given us no reason to believe it.

The PSO and price support mechanism are expected to be an enduring part of the market. It isn’t going to magically go away (the UK’s nuclear projects are supported by a similar mechanism, and fossil plants in Ireland are also supported by long term contracts through the capacity remuneration mechanism).

So you are talking about right now and not the past nor the future? Great. Maybe we can just stand still so. No need to waste any more money on folly.

Up to 2018, renewables were handsomely rewarded for curtailment but thankfully the CRU (then CER) and Dept grew a braincell in 2012 while the country was in the depths of recession and realised it was bankrupting the island. Then SEM-13-010 came about and said that the swindle must end in 2016 with the phase out of compensation for curtailment. A year later, this was unwittingly extended per the isem design decision SEM-14-045. Hence "curtailed active power" and all references to its compensation were removed from the Trading and Settlement Code in 2017/18. (it was mentioned in all sections A-D, but primarily covered in B).

However, in 2019, the professional lobby group that is WEI (formerly IWEA) hoodwinked the Minister, his Dept and Regulator that the only way that good honest wind could compete is by being paid for their entire availability, whether used or not, was by paying handsomely for it through an auction process (for the appearance of "transparency"), especially since their god given rights for Priority Dispatch were being taken away by the pesky EU on the 4th of July (windependence day). Hence the RESS schemes were born, which have quickly evolved through multiple iterations to where we are now, full circle and complete payment for energy plus constraints plus curtailment.

Of course you are correct in saying that none of the current 5GW or so are eligible but are a bit disengenuous with the truth when it comes to fact that most of the mooted 37GW that is proposed will be underwritten by RESS3 or later and ergo will benefit.

In a one sided bet, I'm sure anyone could bid lower with a curtailment clause in place. Especially when there was no calculations done to justify the payment of curtailment in the first instance. I recall Eirgrid were queried on it at the time but to no avail. There's your lack of transparency (to the underwriting public). It doesn't stop the myriad of sob stories and complaints that the wind can't deliver for that price now and would prefer to walk away unless the Minister signs off on more (which he'll probably do as a final 2 fingers to the Irish tax payer before he suckles at the tit of retirement).

Rather than continually asking so many questions, maybe you could answer some of the ones posed to you? Perhaps start by laying out your figures? You know, in a show of good faith and transparency. Plenty of folk have given a stab at it with theirs, albeit back of the envelope and crude assumptions aside, they don't seem too far wide of the mark. Yet your continued posting of all the wrongs with their approach hasn't put a single guesstimate of your own to the final cost on the bill payer. It's easy to cast aspersions in a world where even the minister can't answer a simple question - how much will it all cost? Those who aren't fully convinced of the merits of all our eggs in a green basket have shown you theirs, now let's see yours...

Thanks. And to further question this - are we doing this today already for coal/oil/gas generated power?

No we don't.

Small caveat - if for example the grid is not available but the generator is, they are compensated to their cleared market position (assuming they have a Firm Access quantity to that value - which they all do). This rare event occurred in the last 12 months or so where both circuits to Glanagow 220kV station appeared to be out of order for months on end meaning that the WG1 ccgt could not generate. It would occasionally get PNs (not full availability, just what we actually need) in the market so was presumably paid for it. Other generators would then have also been paid to make up the shortfall. I had presumed this was then charged to Esb for failing to maintain the cables but that is not the case and is to the bill payers account.

I may be incorrect, but I do not believe that you are so naive to believe that anyone tendering for a product with the knowledge that everything they can produce will be accepted and paid for, regardless of whether it is needed or used, has no bearing on their tender price.

A complete cop-out it is it not that you don`t think your modeling would be on-topic, when you have repeatedly asked others for the same here ?

There is only one proposal, offshore wind and hydrogen. Others here have researched that proposal and clearly shown that for the offshore part of that proposal alone, economically it is even more expensive that the greens "Dreadful deal behind the world`s most expensive power plant" Hinkley Point.

Other than a lot of hand waving, I do not see where you have posted anything to show that@ps200306 point that those who favor this plan "know practically nothing about the economics but still insist they are definitely right" is incorrect

You're conveniently omitting that legacy wind and others like DSUs also get a predetermined payment every month regardless of whether they run or not.

I presume they get paid by Eirgrid, the same as everyone else who is eligible. Why don't you read the auction pack and find out. They're all on the SEMO website.

However, you weren't correctly answering the question asked. No other technology gets paid based on their full availability since the new SEM went live on 1st October 2018, apart from the example I gave about outturn available plant.

The Capacity market is a separate mechanism designed as a backup for intermittent generation and those generators who are eligible are paid based on a derated capacity factor. If they are available or not doesn't always come into it as there are secondary markets and all sorts. Basically it's a hedge to prevent extreme pricing, that if the strike price is exceeded, the generators pay back into the market. On the flip side, it guarantees that backup generation will be available when the wind doesn't blow and is sized to meet the needs of the SEM. It is not comparable to what has been offered to RESS which is not a flat predetermined fee based on considered calculations but instead a variable fee depending on how much the wind blows with no upper cap on what is paid out.

I agree that some sort of guarantee is unavoidable, but the Capacity approach is far superior to covering for curtailment and constraints. A flat fee that fairly reflects value to the grid should be the preferred approach.

Roosterman's excellent question was essentially "what other generators are eligible for energy payments plus constraints plus curtailment (akin to wind or solar)"?

The answer is none as no other technology class is eligible for curtailment payments. Some generators, in specific scenarios, may be eligible for transmission constraint payments. But that's it. They are not compensated based on their full potential availability.

Capacity payments are something else entirely. They are an insurance against intermittency to guarantee security of supply and there very much is a price cap on how high the price per MWh can go as there's a strike price, above which they pay back and way above that, there's a Ceiling price against the value of lost load. It rarely exceeds the strike price and has never exceeded the Pcap.

PS: You must have missed this auction outcome for T-4 22/23 where some wind was successful: https://www.sem-o.com/documents/general-publications/T-4-2022-2023-Final-Capacity-Market-Auction-Overview.pdf

If price vs oil and gas is your criterion then success or failure will depend on two things - the price of oil/gas (including carbon price) and interest rates. If oil/gas goes expensive and interest rates are cheap over long term then wind/solar/storage/nuclear will do well on the criteria. If oil/gas become cheap and interest rates go high, then wind/solar/storage/nuclear will represent terrible value.

it’s not an unreasonable criterion at all.

The problem is that we really have no idea how the fully loaded price of gas and oil will go. It is just unpredictable as we have found out to our cost over the last few years. The same goes for interest rates. We had 20 years of low interest rates which made wind/solar/storage/nuclear attractive propositions. Then one day we didn’t and now all the auction prices have gone nuts as a direct result.

There are serious technological issues too for wind/solar/storage/nuclear. But really these need investment and scale. If prices and rates make it attractive, then enough of these problems will get solved. If these problems are solved for Europe and America, the solutions can be applied worldwide.

Governments are trying to make this work, and if you are critical you could say they are doing this by ‘queering the pitch’. The Americans are bypassing the interest rates issue with cheap government funding. The Europeans are bypassing the problem of fossil fuel being too cheap with blanket emission caps and charges, and various other minor measures to discourage fossil fuel use.

These are both big strategies which may well have all sorts of unplanned for negative consequences. But I can’t see how these are bad solutions to the overall problem. In the end the problem needs money and resources to solve.

We cannot do that because of carbon pricing in the European Union. when you emit, you pay And the European Union certainly does have a consequential impact as a whole.

The EU's rules (in particular the emissions trading system which forces emissions down by a couple of percent per year) will drive up costs unbearably in the medium term if we don't decarbonize. This would certainly bankrupt the country. These charges have already left Moneypoint largely unviable. Even if we left the European Union we would still be stung with the carbon border tax for our exports (assuming we had any industrial base left).

Having our own oil and gas would give us energy security but it wouldn't guarantee low oil prices for our economy. Oil and gas is a global market. And hoping that we discover a mineral resource is not really a plan, certainly not for the next forty years. A lot of people have promised giant oil discoveries and drawn down funds from Irish pensioners over the last 50 years, but they haven't actually found a whole lot. The enthusiasm to hunt for new oil also seems to have cooled as interest rates have climbed.

Fluctuations in the price of oil and gas don't make any big difference to the cost of renewables which are under a RESS contract.

The price the offshore generators get for their output is decoupled from the wholesale energy price that the hydrogen generators will pay

Offshore wind generators will get the contracted prices that they have agreed. There will be periods when the wholesale energy prices are lower than this price, and times when the wholesale price is higher. It is these fluctuations that will drive the dynamic energy storage market.