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ISET Economist Blog

A blog about economics in the South Caucasus.

Georgia Going with the Wind?

The obsession of hydropower may have obscured other green energy options for Georgia. For one thing, investment in hydro is not happening as fast as could have been expected a few years ago. But, much more importantly, the bulk of hydropower would be in any case generated in the summer, when Georgia does not need as much of it. The surplus electricity is supposed to be exported to Turkey. But why destroy pristine landscapes and interfere with fragile ecosystems for the sake of exporting electricity to Turkey? Has anybody ever tried to answer the question of how much will Georgia earn in energy security, tax revenues, transmission fees and jobs for the price of massive and possibly irreversible damage to the environment?

Regardless of how much we care for Svaneti and Racha’s ecosystems, it is clear that the massive investment in hydropower will not make Georgia energy-independent and green in the “dry” winter months. Even at the peak of hydropower generation, in 2010, thermal power generation and electricity imports stood at 683GWh and 222GWh, respectively. The gap was much larger in 2011 and 2012, and with consumption growing from year to year, it is likely to continue to increase.


WHY NOT CONSIDER ALTERNATIVES SUCH AS WIND ENERGY
?

According to the Wind Atlas data produced by Karenergo (presented on the website of the Ministry of Energy and Natural Resources), Georgia has considerable wind energy generation capacity. The strongest argument in favor of wind energy, however, is that the seasonal patterns of wind and hydropower generation are exact mirror images of each other. Peaking in winter – the lowest point in hydropower generation – wind can fill the gap in green energy production, contributing to the government’s long term objective to substitute green energy for imports and thermal generation. In other words, if optimally located, wind farms would produce electricity when it is most needed, counteracting the seasonal decline in hydro generation, and reducing Georgia’s dependence on the imports of electricity and gas.

The wind option has another important benefit given that Georgia is already endowed with considerable hydropower generation capacity and water reservoirs. Wind farms can be particularly effective if located next to existing reservoirs that feed hydropower plants (HPPs). Whenever demand is low, such as at night, excess wind energy can be stored by pumping water back into reservoirs. When demand is high, water can be released from the reservoirs to power turbines and produce electricity.

So far, the "pump-storage" technology has not been utilized in Georgia since excess electricity that is produced by small HPPs in summer months could not be stored for lack of spare storage capacity (mind it that water reservoirs are quite full in summer). This technology could be easily employed to store excess wind electricity (e.g. at night) when reservoirs are half empty during the winter. The result would be higher day-time production by both HPPs and wind farms.

Clearly, wind energy development faces many technical bottlenecks such as variability, dispatch-ability and storability. However, the global trends in wind energy generation provide evidence that these challenges can be successfully addressed even in countries where wind accounts for a relatively large share of total electricity production. For instance, in Denmark, Portugal, Spain and Ireland wind energy is used to produce 21%, 18%, 16% and 14% of total electricity consumption, respectively. What is then preventing wind energy from taking off in Georgia?

For the moment the main obstacle is cost. Yet, considering global trends in wind energy technology, it may be high time to prepare for tomorrow by investing in relevant education, experimental wind farms, and pump storage facilities. The costs of wind energy have dramatically declined over past twenty years. The most recent (2012) Renewables Global Status Report prepared by Renewable Energy Policy Network for the 21st Century reported that production costs for onshore wind farms stand around 5.2-16.5 US Dollar Cents/kWh, almost in level with typical costs of hydro power (5-10 Cents/kWh).

In fact, tomorrow may be already here.

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Guest - Simon Appleby on Sunday, 28 April 2013 23:21

I worked on a capital raising in Indonesia some time ago on a pump-storage wind-hydro project, which enlightened me to the negative attributes of such projects.

Most EU states with wind farms have mandates for renewable energy and subsidies for their development and operation. Without these state interventions, the only windmills on the continent would be pumping water into cattle troughs and entertaining tourists in Tulip season in Holland, which is perhaps as it should be.

Some good reasons for Georgia to avoid wind energy like the plague:

(1) Wind turbines have a catastrophic effect upon migrating birdlife, killing and maiming huge numbers every year. A chilling example of this can be seen here

http://www.youtube.com/watch?v=jwVz5hdAMGU

Oxford University academic Clive Hambler refers to Spanish research indicating that each wind turbine in Spain kills between 110-330 birds and 200-670 bats per annum. Not even Prince Phillip with a score of beaters, two loaders and a brace of shotguns could blaze his way through this much wildlife on the wing in a season.

The California Energy Commission suggests the figures are closer to 895 birds killed per turbine per year in Sweden. Because turbines are often located on uplands, where thermals are to be found, they kill raptors at a higher rate than other birds. Vultures and Golden Eagles, both of which are endemic here, are killed at huge rates.

The original article can be found here http://www.spectator.co.uk/features/8807761/wind-farms-vs-wildlife/

(2) Low frequency noise causes distress to neighbouring communities and livestock, with illness not uncommon. Sleepless neighbours in Europe have resorted to illegal demolition of neighbouring turbines to get some sleep, and been jailed for it. Renowned epidemiologist Dr Carl Phillips concluded that there is ‘overwhelming evidence that wind turbines cause serious health problems in nearby residents, usually stress-disorder type diseases, at a nontrivial rate’ in December 2011, in a peer-reviewed report in the Bulletin of Science, Technology & Society.

A layman's review can be read in this article http://www.dailymail.co.uk/home/moslive/article-2199284/Wind-farms-Are-wind-farms-saving-killing-A-provocative-investigation-claims-thousands-people-falling-sick-live-near-them.html

(3) Wind farms are generally dependent upon mandates and subsidies. In Australia's case (a country with massive gas reserves and "The Saudi Arabia of Coal"), a turbine producing no more than $150,000 worth of electricity each year requires a $500,000 state subsidy each year to be built. Georgia does not have a strong revenue base to support subsidies of this kind.

(4) If subsidies can't be arranged, the costs need to be passed on to consumers. For example, in Britain the percentage of total energy that comes from wind is only 0.6 per cent. According to the Renewable Energy Foundation, ‘policies intended to meet the EU Renewables Directive in 2020 will impose extra consumer costs of approximately £15 billion per annum’ or £670 per household."

Every year hundreds of elderly Georgians die before their time in winter as they cannot afford their energy bills, and die of cold-related illnesses in poorly insulated dwellings. That is with the current rather cheap electricity and gas available in the market. Incorporating wind energy into the production mix is likely to increase energy costs for the poor, and lead to more deaths, not reduce them.

(5) Georgia would be swimming against the tide by entering this sector as other major economies exit it as a failed experiment. The UK has recently enacted a moratorium on all new wind farm development in light of community outrage over high energy bills and environmental damage caused by wind farms.

(6) Wind farms are dangerous! More people are killed each year by wind turbine accidents than have been killed in nuclear reactor accidents in the past 26 years. The workers and bystanders injured by wind turbine accidents in two years exceeds the total casualty count of the Fukushima Diaichi Nuclear Reactor disaster of 2011.

For more details, see here http://www.caithnesswindfarms.co.uk/page4.htm

(7) The wind energy sector has become infiltrated by organised crime in the EU, with objectors to wind turbine establishment being harrassed by Mafia thugs and corrupt deals between government officials and Mafia wind farm operators thriving. Given Georgia's vulnerability to this phenomenon, it is something we could do without.

http://www.japantimes.co.jp/life/2013/01/25/environment/mafia-on-sicily-sees-gold-in-going-green/#.UX1YfcU-sYo

(8) Georgia already has excellent environmental credentials on its energy use, using mostly hydro in summer and cheap, clean-burning Azeri gas in winter. Coal fired plants (that produce far more CO2 and particulates than natural gas) are a minor part of the country's energy mix. The imperative for Georgia to incorporate wind energy in its mix just doesn't exist.

I worked on a capital raising in Indonesia some time ago on a pump-storage wind-hydro project, which enlightened me to the negative attributes of such projects. Most EU states with wind farms have mandates for renewable energy and subsidies for their development and operation. Without these state interventions, the only windmills on the continent would be pumping water into cattle troughs and entertaining tourists in Tulip season in Holland, which is perhaps as it should be. Some good reasons for Georgia to avoid wind energy like the plague: (1) Wind turbines have a catastrophic effect upon migrating birdlife, killing and maiming huge numbers every year. A chilling example of this can be seen here http://www.youtube.com/watch?v=jwVz5hdAMGU Oxford University academic Clive Hambler refers to Spanish research indicating that each wind turbine in Spain kills between 110-330 birds and 200-670 bats per annum. Not even Prince Phillip with a score of beaters, two loaders and a brace of shotguns could blaze his way through this much wildlife on the wing in a season. The California Energy Commission suggests the figures are closer to 895 birds killed per turbine per year in Sweden. Because turbines are often located on uplands, where thermals are to be found, they kill raptors at a higher rate than other birds. Vultures and Golden Eagles, both of which are endemic here, are killed at huge rates. The original article can be found here http://www.spectator.co.uk/features/8807761/wind-farms-vs-wildlife/ (2) Low frequency noise causes distress to neighbouring communities and livestock, with illness not uncommon. Sleepless neighbours in Europe have resorted to illegal demolition of neighbouring turbines to get some sleep, and been jailed for it. Renowned epidemiologist Dr Carl Phillips concluded that there is ‘overwhelming evidence that wind turbines cause serious health problems in nearby residents, usually stress-disorder type diseases, at a nontrivial rate’ in December 2011, in a peer-reviewed report in the Bulletin of Science, Technology & Society. A layman's review can be read in this article http://www.dailymail.co.uk/home/moslive/article-2199284/Wind-farms-Are-wind-farms-saving-killing-A-provocative-investigation-claims-thousands-people-falling-sick-live-near-them.html (3) Wind farms are generally dependent upon mandates and subsidies. In Australia's case (a country with massive gas reserves and "The Saudi Arabia of Coal"), a turbine producing no more than $150,000 worth of electricity each year requires a $500,000 state subsidy each year to be built. Georgia does not have a strong revenue base to support subsidies of this kind. (4) If subsidies can't be arranged, the costs need to be passed on to consumers. For example, in Britain the percentage of total energy that comes from wind is only 0.6 per cent. According to the Renewable Energy Foundation, ‘policies intended to meet the EU Renewables Directive in 2020 will impose extra consumer costs of approximately £15 billion per annum’ or £670 per household." Every year hundreds of elderly Georgians die before their time in winter as they cannot afford their energy bills, and die of cold-related illnesses in poorly insulated dwellings. That is with the current rather cheap electricity and gas available in the market. Incorporating wind energy into the production mix is likely to increase energy costs for the poor, and lead to more deaths, not reduce them. (5) Georgia would be swimming against the tide by entering this sector as other major economies exit it as a failed experiment. The UK has recently enacted a moratorium on all new wind farm development in light of community outrage over high energy bills and environmental damage caused by wind farms. (6) Wind farms are dangerous! More people are killed each year by wind turbine accidents than have been killed in nuclear reactor accidents in the past 26 years. The workers and bystanders injured by wind turbine accidents in two years exceeds the total casualty count of the Fukushima Diaichi Nuclear Reactor disaster of 2011. For more details, see here http://www.caithnesswindfarms.co.uk/page4.htm (7) The wind energy sector has become infiltrated by organised crime in the EU, with objectors to wind turbine establishment being harrassed by Mafia thugs and corrupt deals between government officials and Mafia wind farm operators thriving. Given Georgia's vulnerability to this phenomenon, it is something we could do without. http://www.japantimes.co.jp/life/2013/01/25/environment/mafia-on-sicily-sees-gold-in-going-green/#.UX1YfcU-sYo (8) Georgia already has excellent environmental credentials on its energy use, using mostly hydro in summer and cheap, clean-burning Azeri gas in winter. Coal fired plants (that produce far more CO2 and particulates than natural gas) are a minor part of the country's energy mix. The imperative for Georgia to incorporate wind energy in its mix just doesn't exist.
Guest - Eric on Monday, 29 April 2013 12:13

Simon, you get the most-substantive-and-fun-to-read-comment-of-the-year award!

Simon, you get the most-substantive-and-fun-to-read-comment-of-the-year award!
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