Petrol station conversions

 

The demand for petroleum products (LPG, Gasoline, Diesel and lubricating oil) is not going to suddenly stop.  Second hand ICE (Internal Combustion Engine) cars are going to be around for a long time and they will become very very cheap as the demand  for them wanes.  Everyone will want an electric car but the cheapness of ICE cars will persuade many to continue to use them.   And there will always be "petrol heads" who just love their ICE cars.

 

However, the demand for petroleum products will start to decrease and it will be a one way trend.  What do "gas stations" do.  They work on very small margins and large volumes and on having a monopoly on the fuel we need for transportation.  It doesn't take much of a decrease in their sales to make them a stranded asset.

 

Clearly, if they want to continue in business, they have to become energy providers rather than petroleum providers and allow us to charge our battery cars at their facilities.  They have a problem here that all sorts of other companies have realized that if they have a charging station, it will attract customers to their premises to shop while the car is being charged.  Charging stations are springing up at super markets, restaurants and other businesses. 

 

The petrol companies need other streams of revenue.  A couple come to mind.  Already many 'gas stations' have stores and restaurants connected to their petroleum outlets and I suspect that they make more money on these than on the sale of petroleum.  Just here where I live, one gas station showed real initiative when it started to sell really large ice cream cones at cost.  Suddenly their business boomed and the kids pushed Dad into stopping there to fill up.

 

When you are charging your car, no matter how fast 'fast charging' gets, it will always take more time than to fill up the tank of an ICE car so you have a little time on your hands.  It is likely that smart gas stations will expand the goods that can be purchased at their stations.

 

But there is another revenue stream that could be attractive to a petrol station that is also a charging station.  Mega Batteries.

 

If a lot of cars are charging at the same time, especially if they are all fast chargers as seems to be the trend now, it will put a huge demand on the grid.  The whole grid will have to be upgraded to avoid burning out the wires at peak times.  that is unless the petrol stations install a mega battery.

  

Let's say for the sake of the argument a petrol station installs a one mWh (mega Watt hour) battery.  A typical car of the future will have, say, a 100kWh battery.  A fully charged 1mWh battery could therefore charge up 10 cars without needing recharging.  Batteries are now being developed based on Li that will be able to charge right to the top and be used right to the bottom without damage.  Anyway,why such a large battery, Isn't it a waste putting in such a large capacity you might say.

 

Well no.  Mega batteries by themselves are ridiculously profitable.  Look at the Hornsdale example.  It is rumored to have paid off its $66m(Aus) cost in three short years by buying power when it is cheap and selling it when it is expensive.  Better still, for the Hornsdale site, it is part of a wind farm so they  store power when it is being generated in excess of demand rather than having to feather the wind turbines.

 

This points up the next profit generator for the gas stations we are converting.  They should install solar panels on every surface they have available.  Most of them have a large roof over their petrol pumps and the roof of the adjacent building where they sell pies, ice cream, bread and milk. 

 

A petrol company with many gas stations could become a major player in the energy supply of a country.  One of our NZ petrol companies has upward of 250 stations.  With a one mWh battery at each station, they become one of the largest battery operators in the world and as a bonus it is distributed storage.  They become a large peaker plant and benefit from our insane spot price system.

 

There is also a possibility that negotiations with existing power distributors might result in less expensive power to charge the mega battery since the power distributor avoids the need to upgrade their grid to cater for a whole bunch of fast chargers all operating at the same time. The only really grunty cables that are needed are those from the mega battery to the charging points, not the whole grid.

And here is one more revenue stream generator.  As ICE cars age, there is, going to be, for a while, an ever increasing demand for mechanics.  The cars will be getting longer and longer in the tooth and need ever increasing maintenance.  For a while, a connected garage, the way it used to be, will be a real money spinner.  Mind you, at some point this will fade as electric cars take over.  The smart operator will make money in this golden period and then get out of this part of the business.

 

It is going to be a difficult time for 'gas stations' unless they innovate and become energy stations.

Open letter to NZ power companies.

 

        An open letter to NZ power companies

 

Just curious.  A rhetorical question, if you like.  Why is it that none of the power companies and none of the wind farms have installed mega batteries.  The 100mWh Tesla battery at Hornsdale in Southern Australia has paid off it's total capital costs in 3 short years.  I've never heard of such a profitable investment.  Now virtually all the income is pure profit.  In addition it has greatly stabilized the voltage and frequency of the grid it is part of and has reduced power prices.  They are now installing more batteries, more or less doubling their capacity.

For new wind farms, I wonder why they don't put in a mega-battery first before they even have the first wind turbine up and running.  With our crazy spot price system, it would seem likely  that they would have started to make a profit right off, buying low and selling high.  When the turbines are working, they can, of course, store any excess power they generate instead of having to feather the the turbines.  Mega batteries basically constitute a peaker plant*.

*A power plant that is only used when power demand is unusually high.  They are highly uneconomical but are needed to ensure a constant supply of electricity regardless of the demand.

From the customer's point of view, if power companies had mega batteries, the power companies could stop being so twitchy about their customers installing solar panels.  They could give the customer a decent price for the power that he sends to the grid, say 75% of the price that they charge the customer for power he takes from the grid.  This would eliminate the need and the motivation for the customer to go off grid and/or install his own batteries.  The customer foots the capital cost for the generation infrastructure (panels) and the power company gains all this extra generation capacity for free.  It is a win win all around.

 Lithium is not the only game in town.  For instance, there are the ZnBr plating batteries and the liquid metal batteries using Ca and Sb.  Both have the distinct advantage of not degrading over time and both can be fully charged and discharged without damage.   They also don't lose their charge if left fully charged.  They don't have quite the cycle efficiency of Li batteries but are a tad better than pumped storage. If you go to youtube and type in 'Just Have A Think Iron Batteries' you will see another innovation that, if it is all it is cracked up to be, will revolutionize renewable energy.  Then there are a range of redox batteries using the different oxidation states of Fe or V.

Why are you power companies so slow off the mark. You could be creaming the profits while at the same time serving your customers, something that is somewhat lacking at present.  I think I know what the answer is.

You are making lovely wind falls when the spot price peaks.  When enough mega-battery capacity is installed there will no longer be these wind falls.  Mind you the first adopters will really cream the profits.

Globization and Free trade agreements??

Globalization has been a disaster for the people of the world and Free Trade Agreements are their cornerstone.  It shouldn't be this way.  Free trade between people should bring benefits to all.  The problem is the lack of regulation.  On an individual level we are regulated.  We aren't allowed to kill each other and there are sanctions if we do.  We aren't allowed to steal from each other, to shut down the right of other to free speech, to freedom of religion and so forth.

 Big business has been fighting tooth and nail to be allowed to operate without regulation.  We will self regulate, they say.  Well we have seen where that got us in 2008.  If it hadn't been for Obama, we would have had a financial melt down.  As it is, the best that could be done is to postpone the melt down while we got banks, wall street and big business under control.  We have failed. 

Because these institutions Pay the Piper, they Call the Tune (PPCT) and the underlying situation is even more dire than it was before 2008.  Banks are bigger, we haven't put in place regulations to allow them to fail, they are gambling with our money and Rent taking* and we allow big business to pollute our commons even to our air without paying for the clean up. 

 *Every time they make a transaction, some of the money sticks to their grubby little fingers as a commission.  This is called rent taking.  It encourages them to shift money back and forth and enriches them beyond the dreams of ordinary people.  Where do you think this money comes from.  That's right.  From your pocket.

For heaven sake, the fossil fuel industry receives an estimated trillion dollars of subsidies and makes gigantic profits when they should actually be paying extra tax for the mess they are making.  Sure it is us that are using their products but they are fighting tooth and nail to avoid a transition to renewable energy.  They are probably loosing the battle but their rear guard actions are making the transition take far too long.  We may be well on the way to testing the theory of sudden climate change.

Below is an small sample of Naomi Klein's recent book This Changes Everything.  I would highly recommend getting the whole book.  In this part, Naomi describes how trade agreements shot down what has been described as the best solar energy initiative in North America.   Be afraid, be very much afraid.   This is only one aspect of the effects of the trade agreements which underpin globalization.  There are many more.  I would suggest you also get her book Shock Doctrine.    Curious actions by your government begin to make sense with this background.

Suddenly, trade law became a whole lot less abstract.  And if you think that only right wing governments cow tow to their financial bosses, I have news for you.  Yes the Left often puts people of integrity up for election rather than puppets but they also receive a lot of their finances from big business.  PPCT

From This Changes Everything by Naomi Klein

Sitting at the long conference table overlooking his factory floor, Paolo Maccario, an elegant Italian businessman who moved to Toronto to open a solar factory, has the proud, resigned air of a captain determined to go down with his ship. He makes an effort to put on a brave face: True, “the Ontario market is pretty much gone,” but the company will find new customers for its solar panels, he tells me, maybe in Europe, or the United States. Their products are good, best in class, and “the cost is competitive enough.”
As chief operating officer of Silfab Ontario, Mr. Maccario has to say these things; anything else would be a breach of fiduciary duty. But he is also frank that the last few months have been almost absurdly bad. Customers are convinced the factory is going to close down and won’t be able to honour the 25-year warranty on the solar panels they purchased. Suppliers who had been planning to set up their own factories nearby to cut down on transport costs are now keeping their distance.
Even his own board back home in Italy (Silfab is owned by Silfab SpA, whose founder was a pioneer in Italian photovoltaic manufacturing) seemed to be jumping ship – cancelling a $7-million investment in custom machinery. What are the chances he would choose to open this factory here today, given all that has happened, I ask. At this, all attempts at PR drop away and he replies, “I would say below zero if such a number exists.”
And yet in 2010, the decision to locate the company’s first North American solar manufacturing plant in Ontario seemed to make a great deal of sense. One year earlier the province had unveiled its climate action plan, the Green Energy and Green Economy Act, centred on a bold pledge to wean Canada’s most populous province completely off coal by 2014.
The plan was lauded by energy experts around the world, particularly in the U.S., where such ambition was lagging. On a visit to Toronto, Al Gore offered his highest blessing, proclaiming it “widely recognized now as the single best green energy [program] on the North American continent.” The legislation created what is known as a feed-in tariff program, which allowed renewable energy providers to sell power back to the grid, offering long-term contracts with guaranteed premium prices.
The catch was that in order for energy providers to qualify, they had to ensure that a minimum percentage – 40 to 60 per cent – of their workforces and materials were local to Ontario.
The provision was an attempt to revive Ontario’s moribund manufacturing sector, which was reeling from the near bankruptcy of General Motors and Chrysler. Compounding these challenges was the fact that Alberta’s tar sands oil boom had sent the Canadian dollar soaring, making Ontario a much costlier place to build anything.
In the years that followed the announcement, Ontario’s efforts to get off coal were plagued by political blunders. Large natural gas and wind developers ran roughshod over local communities, while the government wasted hundreds of millions (at least) trying to clean up the unnecessary messes.
Yet even with all these screwups, the core of the program was an undeniable success. By 2012, Ontario was the largest solar producer in Canada and by 2013, it had only one working coal-fired power plant left. And by 2014, more than 31,000 jobs had been created. Silfab is a great example of how it worked.
The Italian owners had already decided to open a solar panel plant in North America. But Ontario – overcast and cold a lot of the year – wasn’t “on the radar screen,” Mr. Maccario admitted. That changed when the province introduced the green energy plan. Its local-content provisions meant that in communities that switched to renewable energy, manufacturers like his could count on a stable market for their products, one that was protected from having to compete head-to-head with cheaper solar panels from China. So Silfab chose Toronto for its first North American solar plant.
Ontario’s politicians loved Silfab. It helped that the building the company purchased to produce its panels was an abandoned auto parts factory. And many of the workers the company hired also came from the auto sector. Then things started to go very wrong. Just as the U.S. has acted against local renewable supports in China, so Japan and then the European Union let it be known that they considered Ontario’s local content requirement to be a violation of World Trade Organization rules.
The WTO ruled against Canada, determining that Ontario’s buy-local provisions were indeed illegal. And the province wasted little time in nixing the local-content rules that had been so central to its program. It was this, Mr. Maccario said, that led his foreign investors to pull their support for factory expansion. “Seeing all those, for lack of a better term, mixed messages … was the straw that broke the camel’s back.”
From a climate perspective, the WTO ruling was an outrage: If we want to keep warming below catastrophic levels, wealthy economies like Canada must make getting off fossil fuels their top priority.
How absurd, then, for the WTO to interfere with that success – to let trade trump the planet itself.
And yet from a strictly legal standpoint, Japan and the EU were perfectly correct. One of the key provisions in almost all free trade agreements involves something called “national treatment,” which requires governments to make no distinction between goods produced by local companies and goods produced by foreign firms outside their borders.
Worse, it’s not only critical supports for renewable energy that are at risk of these attacks. Any attempt by a government to regulate the sale or extraction of particularly dirty kinds of fossil fuels is also vulnerable to similar trade challenges.
For instance, in 2012, the U.S.-incorporated oil company Lone Pine began taking steps to use NAFTA to challenge Quebec’s hard-won fracking moratorium. It has since announced plans to sue Canada for at least $230-million U.S. under NAFTA’s rules on expropriation and “fair and equitable treatment.”
None of this should be surprising. Of course the richest and most powerful companies in the world will exploit the law to try to stamp out real and perceived threats and to lock in their ability to dig and drill wherever they wish in the world.
In some cases, governments may successfully defend their emission-reducing activities in trade court. But in too many others, they can be relied upon to cave in early, not wanting to appear anti-free trade. Trade challenges aren’t killing renewable energy, but the growth is not happening fast enough. And the legal uncertainty that now surrounds some of the most significant green energy programs in the world is bogging us down at the very moment when science is telling us we need to leap ahead.
To allow arcane trade law, which has been negotiated with scant public scrutiny, (my emphasis) to have this kind of power over an issue so critical to humanity’s future is a special kind of madness. As Nobel Prize-winning economist Joseph Stiglitz puts it, “Should you let a group of foolish lawyers, who put together something before they understood these issues, interfere with saving the planet?”
The greatest tragedy of all is that so much of this was eminently avoidable.
We knew about the climate crisis when the rules of the new trade system were being written. After all, NAFTA was signed just one year after governments, including the U.S., signed the landmark United Nations Framework Convention on Climate Change in Rio.
And it was by no means inevitable that these deals would go through. A strong coalition of North American labour and environmental groups opposed NAFTA precisely because they knew it would drive down labour and environmental standards.
But for a complex set of reasons, the leadership of many large environmental organizations decided to play ball. “One by one, former NAFTA opponents and skeptics became enthusiastic supporters, and said so publicly,” writes journalist Mark Dowie in his critical history of the U.S. environmental movement, Losing Ground.
The errors of this period cannot be undone, but it is not too late for a new kind of climate movement to take up the fight against so-called free trade and build this needed architecture now.
That doesn’t – and never did – mean an end to economic exchange across borders. It does, however, mean a far more thoughtful and deliberate approach to why we trade and whom it serves.

---

Excerpted from This Changes Everything: Capitalism vs. the Climate.Copyright © 2014 Naomi Klein. Published by Knopf Canada, a division of Random House of Canada Limited a Penguin Random House Company. Reproduced by arrangement with the Publisher. All rights reserved.

Car ChargingPower Points

With electric cars finally beginning to enter the domestic fleets of the world, we are going to need lots of charging points.  Everyone with an electric car will have a power point at home.  In fact you already do.  As long as you don't want fast charging, all you need is an extension cord from the nearest outlet.  This will give you somewhere between 10 and 25 amp charging, depending on your individual electrical set up.  However, here we are talking about charging away from home.

Commercial charging points will spring up in company parking lots, along streets instead of, or integrated into parking meters, at restaurants, in high rise commercial parking lots and so forth.  What characteristics should they have.

You should be able to swipe your card and then choose a number of options.

  With respect to the amount of power you want, you should be able to choose full charge or a given amount of money or a given number of kWh (kilowatt hours).  If, by chance, you chose more than your car can take at the time, you would only be debited for the amount you used; not the amount you asked for.

With respect to the supply options you should be able to choose Charge now (at the full day time cost per kWh) or option 1, 2 or 3.  Option 1 would cut in when the power company sends a signal down the line or over a dedicated phone chip that because of extra generating capacity, somewhat cheaper electricity is now available.  Option 2 cuts in when the uptake of electricity by offering Option 1 is not enough to balance the load with the supply and option 3 a further reduction in price to bring  even more load on line.  Each option gives the consumer less expensive electricity than the previous option and allows the power company to sell more electricity and not waste water.
 
This is supply balancing and has some definite advantages over the present supply balancing.  Every kWh you take when it is available is one less that you take when supplies are low.

At home, if you have a dedicated, smart-charging point you might even have option 4.  Option 4 is "Charge and Supply".  You would use this one when you are not going to be using your car for a while.  You might be on vacation overseas or you might only use your car on weekends so the car during your holiday or during the week  would be plugged into Option 4.  With this option, your car will receive charge when option 3 (the least expensive electricity) is available and will send power back to the grid when the power company signals that it needs some peak shaving (high load and hence a short term need for extra electricity).  In this mode, your electric vehicle will generate a small but very welcome revenue for you.

Hopefully, the power companies will be smart enough to realize that if they set up the system to allow the customer to save money and to have options, they gain as well.  They gain by being able to sell more of their power rather than letting water flow over the spillway or having to feather their wind turbines.  They gain by not having to build a dedicated, very economically wasteful  power station just for peak shaving and they gain by having the good will of their customers.  They also help their country and the world by putting less carbon into the environment.  Systems as described above are ideal for using intermittent renewable power sources such as wind, hydro and solar and if you have a charged battery in your car, charged when excess energy is available, you will  demand less  power when fossil fuel must be used to generate it.

New Zealand Going Under

America has finally woken up. (funny way to start a blog on New Zealand).  As of early October, 2011 she is talking about bringing back manufacturing from overseas and providing jobs for Americans.  This has nothing to do with virtue amongst the American Corporatocracy.  They haven't finally started to think about the good of the country that spawned and nurtures them.  They haven't suddenly put the good of their fellow citizens above their own highly inflated salaries and bonuses*.  No, the reason is far more prosaic although I'm sure they will try to claim the moral high ground.  The truth is that the Chinese Yuan is beginning to rise with much more 'up' inevitable in the near future and the wages of Chinese workers are rising, by latest reports, at about 15% per year.  American firms see the writing on the wall.

*Their latest ploy is to join with a small country overseas and, while staying in America physically, pay taxes overseas. Have a look at one of Elizabeth Warren's Youtubes to see a full description.

By the by, did you ever wonder what happened to that fabulous dream we had a few decades ago that we would all soon be working 30 hour weeks with 5 week annual vacations plus all the other holidays throughout the year.  What happened to the story that with automation, fabulous goods would become less and less expensive and we would all be living in the lap of luxury.  Well to some extent it came true.  Look at this fabulous invention, for instance, thanks  to Steve Jobs, that you are using to read this blog.  Look how the price has come down from it's first inception.  However, the futurists, as they usually do, forgot one part of the puzzle.  You have to have a job in order to buy things.  In a perverse way, some of us have lots of free time.  We are on welfare.  As long as our needs are modest and we have somewhere to live, all our time is our own.  If we can earn a little money under the radar we are 'sweet'.  Not a pretty picture.  But this is supposed to be a blog about New Zealand.

New Zealand is just as prone to corporate greed and government short sightedness as any country in the world.  We are always decrying our low productivity, complaining about the lack of jobs and even more so, about the lack of worthwhile jobs.  Our diaspora is somewhere around a million of our best and brightest and most enterprising people.  We wonder why our young and not so young people search for a better life overseas.  Lets look at how we are operating New Zealand Inc. and how we could operate.

Our Lumber Industry
New Zealand has the basis of a great lumber industry.  We have slightly more land than the UK and a population of 4.3 million (UK - 62m) so we have lots of land on which to plant trees............ and we have   lots of trees planted.  Our main species is the Monterrey Pine, Pinus radiata and with our fabulous growing conditions, the cycle is from 17 to 25 years.  You should see the growth rings on  our pine logs.  They are typically  a cm or two wide.  We plant them, prune them (lifts) to ensure clear, value added wood and replant as soon as the trees are cut.

 Then we send raw logs overseas!!!  Our lumber mills have closed in droves.  In the mean time, Canada is undergoing a boom in value added timber products.  Question:-Where does she sell her ply wood, milled timber and even fully made up struts?   Answer:-  To the same markets where we send our raw logs!!!   How come Canada can get it right and we can't.

Mean time, our lumber mill workers are either packing super market shelves or leaving for Australia and points North.  A skilled lumber mill worker will have a productivity, measured as the value of what he produces divided by the hours he works.  Lets call his productivity 'X'.  When he changes jobs and starts to pack super market shelves, his productivity will drop to 0.1X.  If he goes on welfare his productivity is minus 0.1X.  No wonder our productivity stats are low.  We are trashing all the high productivity  jobs.  No wonder our tax take is down.

Could this trashing of one of our primary industries be due to the nature of our much vaunted free trade agreement.  Note that when China felt herself in danger of not having enough Rare Earth Metals, her free trade agreement didn't stop her from curtailing their sale*.

* If you think this is an exaggeration, let's send a trade delegation to China to buy their REM concentrate.  We will refine it here and sell, either the refined metals or the electronic equipment made from these Rare Earth Metals. Since we have the inside track, overseas companies will be pushing and shoving to set up here in New Zealand.  Any idea what China will say when we invoke the Free Trade Agreement in order to buy her REM concentrate. I'm sure she will put it very politely.

We have just had a disastrous earthquake.  This could be and element of our salvation with respect to the lumber industry.  Let's put a major research effort into the building of wooden buildings from composite wood-epoxy beams which laugh at earthquakes.  Then let's export made up beams and other wooden building materials to other earthquake areas.  Let's not export the technology.  That is a short term gain for a long term loss.

Our Fishing Industry
Our fishing industry is another example.  We allow foreign fishing boats to fish our waters.  They must land their fish in New Zealand (at least we got that right)**.  Recently there has been a great bro ha ha (sp?) about the terrible conditions of Indonesian fishermen on Korean boats that are doing our fishing for us.  As usual we are looking at the right hand while the left hand does the trick.  Why do we allow foreign fishing boats anywhere near our fish stocks.  Does anyone think that these Korean paragons of virtue will treat our fishing stocks better than they treat their Indonesian fishermen***.  In the mean time, our people are out of work.  Out of work, on welfare, not paying taxes, not shopping at local businesses (who therefore pay less taxes) and ultimately looking for work overseas.  Once again, the same story as with our lumber industry.  People out of work, negatively productive, fleeing New Zealand, breaking up families and not paying taxes.  No wonder we have to borrow money.  We have to borrow to make up for the lost tax take and to pay welfare to the out-of-work Kiwis.

*Incidentally, much of our fishing industry is owned and operated by Iwi (Maori Tribes).  Here we have the unedifying sight of Maori bosses putting their own people out of work so that they can get higher salaries and bonuses and so that the Iwi can make larger profits. The bosses then get mana by passing on a dribble of this larges to their members.  Maori were given large concessions to fish our marine waters.  They sell these concessions to companies who aggregate them into worthwhile bundles and sell them on to foreign fishing companies.  One of the reasons for giving these concessions to the Maori was so that they would employ Maori in the fishing industry.

** I got that one wrong.  It has now been revealed that much of our fish is processed overseas.

***This same boat was later found to have dumped a hold full of our fish in order to have room for a more valuable catch she made.
  
12 June 2017  I just learned that one of our salmon farm businesses, King Salmon is Malaysian owned by a company with very a very questionable record on human rights and sustainable fisheries practices.
   

Fisheries policy - let's change tacks.
Whale Poo

Rolling Stock Manufacture
We are going back into rail and Electrified rail at that. GREAT MOVE.  We have seen what is rolling down the turnpike at our stalled car (Kiwi Inc.) and have made a very sensible decision.  Then we go and buy our rolling stock overseas despite having a local industry that is perfectly capable of manufacturing them!!!  Are we nuts*.  See:
cost-of-manufacturing-overseas

* Incidentally, a news item on National Radio sometime in Sept 2012, following the closure of yet another industry, suggested that for every  job lost in a primary industry, another 4 ancillary jobs are lost.  I have no idea if the 4:1 ratio is in the ball park but the principle is sound.  Imagine how many jobs would be created, just by producing our own rolling stock in New Zealand, not to mention all the other industries mentioned (and not mentioned) in this blog.Imagine how many spin off industries would result from us having to upgrade our manufacturing capacity to build these modern rail cars and engines.

Sale of our Land
We are at the beginning of a boom in agricultural markets overseas as other countries continue to grow their GDP, Increase their middle class,* trash their environment mine their water and send their soils downstream to the sea.  The way the world population is growing and, far more important, the way they are increasing their "standard of living", the future for an agricultural country is bright.  Then we sell our farm land to overseas interests!!!

*  In Asia.  On the contrary, much of the western world is trashing their middle class.

No argument about selling land to someone who wants to come here as a permanent resident, buy and operate a dairy farm, join the local volunteer fire brigade, send his kids to our schools and be part of the community.  Why, though, do we sell blocks of land to vertically integrated overseas companies that will take the profits overseas.  If they were bringing some vital technology here there might be some justification but to the contrary, In so many branches of agriculture and especially in dairy, we are the experts in the field.

The worst example of this is the recent sale of the Crafer farms.  These are a block of 10 or 12 dairy farms that the receivers peddled overseas.  They insisted on selling them as a block which pretty well eliminates individual Kiwi share milkers who want to become dairy farmers from purchasing them.  Instead they sold them to a Chinese dairy business.  Are we nuts!!!

The government has argued that this selling of our farms (and our houses) to overseas concerns does not raise the price.  The liquidators of the Crafer farms obviously thought otherwise.  If they thought they could have got more money by selling them individually to  local farmers they would have done so.  After all, they work on commission. 

Sat, June 3, 2017.  I just read in today's press that our major parking company in Christchurch is a Hong Kong company.  This is beyond a joke.

Energy Policy
I'm not going to type  all this again.  We show very little imagination or creativity.  Have a look at these links:

1.  The government, with very little expense, could make the uptake of solar electric much more financially feasible.  Panel prices are coming down and correct government action could set us well on the way to energy independence. Absolutely no subsidies needed.
Solar-electric-government-role

2.  Having solar panels is financially identical to having a pension  right now,  long before we retire.  There is a good argument for allowing access to our KiwiSaver to finance them
Kiwisaver-and-solar-panels

3.  Much nonsense has been talked about the unsuitability of renewable energy because of its intermittent nature.  This totally ignores such coming innovations such as demand balancing, electric cars, new types of batteries and smart grids. It further ignores the function of the grid to pass power from places with wind to places without and areas where the sun is shining to areas where it is not.
Excess-energy-what-to-do

4.  We mustn't fall into the German trap.  Their uptake of solar electric has been fantastic but there are fish hooks.  There is a better way.
Double-metering-its-insidious

5.  Same as "4"
German-fit-system-brilliant

6.  The steady replacement of our fossil fuel powered domestic fleet with Electrics has many benefits.  The function of government is to set the stage, not to actually do anything.  Again, no subsidies needed.
Legislation-for-electric-cars

7.  Wind farms are been shot down all over the country.  Some of the concerns may be justified, Most are pure nimbiism.  The government should sort out this mess.
Enabling-wind-farms

8.  Get real guys.  Wind energy is clean, competitive in price and highly compatible with our Hydro rich energy mix.  Let's get on with it.
Wind-energys-no-good


Our policy on Climate Change
We could be far more innovative here as well.  We must be completely selfish here and look after New Zealand.  We can't do anything of significance about world climate change ourselves.  If we stopped all our emissions of greenhouse gasses, it would have no effect on the world output.  We could:

a) set an example as we have often done in the past,
b) guard our clean green image,
c) future proof New Zealand against a likely collapse of the ecology and economy of our major trading partners and
d) reduce our financial obligation under Kyoto
global-warming-anthropogenic-or-not
forget-climate-change

Note that our lumber industry should get carbon credits, not a carbon charge.  The trees we grow are taking Carbon dioxide out of the air and because our forests are young and growing (not mature forests in which net CO2 uptake is zero) they take up a lot of carbon.  Very close to 50% of the dry weight of wood is carbon.  In-so-far as part of this wood is built into long lasting furniture and buildings it is a long term sequestration of  carbon.  Then instead of using the highly polluting lignite coal to manufacture urea, we could equally well be using all the wood waste.  This would bring more carbon credits to the lumbering industry and the ability to sell green urea.  We could even burn this wood in such a way to leave charcoal and enrich our soils, especially in the far north with it.
Urea from wood waste 
The value of Charcoal in the soil.



Carbon Tax
Our Cap and Trade policy to control our carbon emissions is designed to make the banks rich**, most of them not even Kiwi owned. Australia has just introduced a carbon tax system and the banks are lining up, rubbing their hands together vying for the business.   If much of the commentary is correct, Cap and Trade will not even be effective.   Jim Hansen has proposed a far better system called Tax and Dividend which has every chance of being effective and will protect the citizens of any country that adopts it, from the temporary increase in the price of just about everything which will be caused by switching to renewables.  Best of all, from the point of view of the political party that proposes it, it would be a real vote catcher.
Jim Hansen's climate change solution

Why are our political parties so reluctant to propose Hansen's Tax and Dividend instead of cap and trade.


**By the by, if we do insist on making the banks rich, with whatever carbon tax system we put in place or, for that matter, if we insist on the disastrous policy of selling our family silver,,,,, give both jobs to KiwiBank.  Are we really that intent on making Ausi banks rich.  Does someone (Everyone??) in government own shares in Ausi banks???  Give the job to KiwiBank who would then increase her capitalization and her ability to make loans and her revenues  would stay in New Zealand to the benefit of all. 



Our Agriculture
We could be producing green urea (sounds like an oxymoron, doesn't it?). Instead we are proposing to use our lignite which is the dirtiest form of coal.  Even worse, the company that is proposing to do this is an SOE for heaven sake!!!  A government company.  Note that Urea only contains the nutrient, Nitrogen but we could also be producing high quality whole (with all the nutrients) fertilizer for our farms at a very low cost.  We could also have truly green dairy farms. 
fertilizing-new-zealand-natural-way
wood-waste-and-urea
indoor-dairy-farms

Selling off our SOE's (state owned enterprises)
The government is now talking about selling off 49% of our State Owned Enterprises to make up for the money we are borrowing.   This is like a trucking company selling off it's trucks to make the end-of-year books look better. I have a "problem or two" with this.  It is unbelievable that she is selling off assets which are reported to return dividends of 20% (I don't believe this either) instead of borrowing money at 4%.

1) We, the citizens of New Zealand, already own these companies.  The SOE's are the property of every Kiwi.  They don't belong to the government except in the sense than every member of parliament owns just as much of them as every other Kiwi. Selling us our own SOE's is like stealing empty bottles from behind a convenience store and trying to sell them back to the owner.  (at the age of 9, I tried this, was caught and this was the end of my career in crime).  Where in the legislation does it allow these very temporary directors of Kiwi Inc. to sell off the family silver.

2).  All Kiwi's will have to pay more taxes because  of the reduced dividends coming in from these SOE's

3) Who will buy them.  Clearly Kiwi's who have some spare cash.  They will then get the dividends*.  The rich Kiwis who have bought shares will have some income to make up for the increased taxes.  Poor Kiwis will be simply out of pocket.  The bottom line.....  Money coming out of the pocket of poor Kiwis into the pockets of rich Kiwis. A typical  money-merry-go-round that we have, in the past, associated with America, not with New Zealand.

*incidentally, it is very clever on the part of government.  They sell us our own property, we get the dividends and then we pay tax at our marginal tax rate on these dividends.  The government gets a third of the dividend back even though they no longer own the shares.  Very cute.

4)  As soon as the buyers of these shares need money or when the shares have gained some value, they will sell them.  Who will buy them.  Who has lots of American dollars because of their low wages.  You guessed it.  And they don't necessarily buy up our SOE's directly.  There are front companies and front companies for front companies and......  you get the picture.  Same result.  We end up with 49% of our strategic assets owned overseas.  We end up being tenants in our own country.

5.  Apparently, shareholders which own 25% or more of a company have quite a few rights in controlling a company.  I am not familiar with the inns and outs of this situation but it would appear that owning 51% of a company does not give the control that is implied by the Key government.

KiwiSaver
And finally KiwiSaver.  It has the potential to be the most important innovation in our history (OK, that may be a little exaggerated --- but only a little).  KiwiSaver is Kiwis investing in their own economy, the dividends coming back to Kiwis to be spent in Kiwi businesses which pay taxes to the Kiwi government etc.    The benefits are far more extensive than sketched above. See:
KiwiSaver - Good for new Zealand

But it is a terrible investment....... and not to put too fine a point on it - a scam.  The poorness of the investment is obvious when you see the bribes that the government had to offer to get people to invest in it.  To provide these bribes, the government has to a)borrow more money,  b)lower services or  c)hike taxes.  The present government has done all three.  Sure, the present world economic situation has a lot to do with our economic woes but KiwiSaver bribes are a contributing factor.  Money is simply taken out of Kiwi Pockets in order to bribe other Kiwis to save.  Government debt is increased while private debt is decreased.  A zero sum game as far as our overall New Zealand debt is concerned.  No wonder our credit rating has gone down from AAA to AA.  It would be so easy to fix it.  (See the above link).  Simply stop all the government and employer contributions (another scam) and let us invest before taxes.  Go all the way and tax our real (above inflation) dividends rather than our nominal dividends.  This way KiwiSaver becomes a viable investment in its own right.

Why should the rules around KiwiSaver be different from the rules around other investments??(that is a retorical question).  Because we are asked to put a large proportion of our disposable income into an investment fund for all of our working life for the good of New Zealand.  This is not an investment such as we would make when we buy shares or a rental house and should not be treated the same way by the government.  It is not an investment that we can cash up when we decide to.  Surly we deserve a fair return on this sort of investment.  And imagine the money coming into the economy as Kiwis retire and have a decent pension fund.  Instead of being a burden, retiring Kiwis become a positive asset to the economy.

New Zealand is a great innovator.  We lead the world in so many ways but we could do so much more.

Cap and Trade in New Zealand

My adopted country is New Zealand.  I feel very lucky to have been allowed to settle here and very proud to be a Kiwi.  New Zealand is a Quixotic little country, a green and pleasant land,  and she punches above her weight in many ways. For instance:

#We were the first to give women the vote.

#We opposed nuclear weapons, nuclear ships in our waters and the use of nuclear power.  For our efforts we were attacked by France (Rainbow Warrior) virtually ostracized by America and took a severe hit on our economy.

#We have put in a voting system called MMP which is about as close as one gets in the world, to true representative government.

#We refused to be drawn into a war of exploitation in Iraq but sent troops when the war was over to help reconstruct the country.

#During two world wars, instead of fortifying our remote little islands and hunkering down, we sent our best and bravest  to help defeat Germany and Japan.  We took huge casualties.

#We have eliminated farm subsidies so that now, farmers farm crops rather than subsidies.  We went cold turkey from a situation of heavy subsidies and it was traumatic.  Now New Zealand competes very well with countries which heavily subsidize their  farmers;  so successfully that some of these countries; the USA for instance, puts tariffs on our agricultural produce despite their heavily subsidies.

#And we have adopted a financial obligation for our carbon emissions but here we are falling down.   We are either first country or right up there with the firsts few to do so.  We have done so despite the fact that on a world scale, our carbon emissions are minuscule.  Even if we reduced them to zero it would have virtually no effect on the emissions of the world.  And we have adopted Cap and Trade to the detriment of our businesses since a carbon obligation will make our exports more expensive.  We have adopted them and included Methane in the mix  despite the fact that it rather rapidly converts to Carbon dioxide.  That is another story.  And we have not insisted on the true value of our tree farming.  In so far as a tree is cut down and built into a long lasting house or piece of furniture, it is actually a net remover of Carbon dioxide from the atmosphere.  That also is another story and may be fixed soon.  However, I can't help feeling proud that we are making the gesture.  So how are we falling down.

We have just had (May 2011) James Hansen on tour in New Zealand.  For those of you not familiar with Prof Hansen, he is a top climatologist; arguably the top climatologist of the world.  He has pulled together the work of many scientists including his own and demonstrated with a very high level of probability that  a) the climate is changing  b) that it has changed rather suddenly in the past as certain limits have been passed and c) that it is very likely that if we continue on our present path, we are likely to cause a destabilization and a switch to a new climate regime.  Why does this matter.

Well it doesn't in the long term -- the very long term.  The point, though, is that human civilization has developed during the past 11,000 years in a period of relatively stable climate and our civilization is  adapted to it.  We have had some mini glitches in our climate since the end of the glacial and even they have had pretty wide spread effects.  The point is, that because of the relative stability of our climate and hence our sea levels, many of our cities have been built within 10 or so vertical meters of sea level.  Because of the stability and hence predictability of our climate we are  just about able to produce enough food for our huge population with our knowledge of how to farm in the present climate regime.  If we get a rapid climate change we will have New Orleans type floods in all our coastal cities,  our food production will plummet with the change in climate zones and huge numbers of species of animals and plants will go extinct with unforeseen consequences to the support systems that allow us to exist on our planet. 

Looked at on a 10million year time scale this won't matter at all.  It will be equivalent to one of the great extinctions and possibly include humans.  At the very least, we might achieve the Lovelock Number*.  The world will recover, new species will evolve and a remnant population of humans might even be left to breed up again and repeat the whole disaster.  The point is, that we have a reasonably comfortable, interesting existence and even civilized life in the present climate setting and are very much in danger of trashing it and putting ourselves back into a deep dark age.  Just imagine the effect of  the world wheat crop failing for even one year, not to mention  the failure of the rice, corn barley and rye crops failing as well.  Just imagine if the crop failure continued for 10 years or for even for a Milena.  Even worse, imagine if the climate flick flacked (flickering) between the two states for a decade or more as many scientists predict so that it is impossible to predict from year to year what the climate will do.  So why are we failing here in New Zealand.

*James Lovelock has predicted that within a few decades our world population will be down to a billion or so.   (it would only take a single year in which the rice, wheat, corn, barley and rye crops failed to cause epic starvation)

We have adopted Cap and Trade  and the consensis is amongst many comentators that the main effect of  Cap and Trade will be to make the banks rich.

On the other hand there is Jim Hansen's solution called tax and dividend.  Wheras the congressional document in America on Cap and trade runs to some 2000 pages, Jim Hansen's Tax and Dividend can be expressed on one side of a sheet of A4 paper---------------  double spaced.  It is highly likely to be extremely effective.  It has the added advantage, unlike Cap and Trade, of economically protecting Joe Citizen during the transition to Renewable Energy.  What is his system.


As I said, it is called Tax and Dividend and I won't even need one piece of foolscap to describe it.  Two short   paragraphs will be enough.

Paragraph 1
Hansen suggests taxing fossil fuel as it comes out of the ground or through your borders.  The tax will start low and increase gradually every year.  This of course will make everything we use more expensive.

Now here is the good part.

Paragraph 2

Every cent of this fossil fuel  tax, however collected, will be returned equally to every citizen by no-cost electronic transfer.  Jim has suggested an equal portion to every adult and a half portion to each child up to a maximum of two children per family.  I think it might be easier to give an equal portion to every human registered tax payer (people only, not businesses).  The income tax data base exists in every country and it would encourage anyone who is not registered to register.  There it is.    The downstream effects from this policy, however, take a little more paper to describe.

Incidentally, The New Zealand failure is that we brought Prof Hansen here, sponsored him, listened to him and then ignored what he had to say.  Not even the Green Party is proposing Tax and Dividend.    Lets look at the effects of his  system.  They are many.

Someone who is modest in their energy use, who has an insulated home, cycles to work, has energy efficient appliances etc. will actually end up with a net gain despite the increases in the price of everything.

Someone who drives an SUV, uses resistance electricity instead of a heat pump and has old, inefficient devices will be out of pocket.  There will be a great incentive to get efficient and in fact to use this tax money to buy LED light bulbs to replace the existing ones as they burn out, to buy locally,  to replace the family car with an electric lizi when the old one is finished and so forth.

Long before renewable electricity becomes cheaper than fossil fuel generated electricity, investment will flee.  It will be clear that as the tax on fossil fuel rises steadily year by year, fossil fuel will become more and more expensive and investing in fossil fuel, less and less worthwhile. The shift of investment to renewable energy will accelerate our climb up the learning and technological curves.  This will result in less and less costly electricity.  Better still. It will be stably priced electricity.  All renewable energy systems are fuel free. None of them use a resource that is every increasing in scarcity and cost.  Competition will also cut in and achieve the same result.  With many countries and many companies competing for the market to sell renewable energy devices, price will inevitably come down.

The pollution from the burning of fossil fuels will decrease and continue to decrease as renewables replace fossil fuel.  People will be healthier and medical costs will decrease.

With the decrease in the cost of solar panels, many households will find it worthwhile to have their own home system.  Baring a revolution in battery technology, it generally will not be worthwhile to have batteries and instead, the grid will be used as the energy storage system.  This will produce diffusely generated energy and the Internet effect will be achieved.  The Internet was invented by the military to eliminate the vulnerability of their communication systems to be knocked out by a single strike.  Likewise when our energy is generated by wind farms distributed all over our country, from hydro dams at various locations and from the solar panels on the roves of our buildings, the system becomes far more robust in the face of  human or natural disasters.

There may also be a psychological effect.  If you are generating energy on the roof, it emphasizes your connection with natural processes.  There may well be a differential between the cost of energy you buy from the grid and the cost they pay for your electricity.  It will be worth your while to vacuum, bake, wash dishes, wash clothes, charge up your electric car etc. when the sun shines and it is your own electricity you are using.  A certain awareness of natural cycles is encouraged.

And finally, if New Zealand adopts Tax and Dividend, it just might tip Australia over the edge to doing the same.  The Green Party in Australia has the balance of power this year (2011) and they could follow suit.  This just might be enough to induce China to follow suit.  They are desperate not to fall into the fossil fuel trap they way the western world has.  If this happens, the rest of the world has to follow.  I don't understand the details but apparently the agreements between countries are such that if you put a carbon tax on your own coal, for instance, and export it overseas, the receiving country doesn't tax it.  If you don't put on a carbon tax   the receiving country can.  Essentially the receiving country collects your tax for its own use.  New Zealand is too small to induce such a change, Australia with her huge exports of coal, may be large enough.  China is another story.  If she puts this in place the world must follow.  This might just be enough to save our sorry selves from ourselves as the specter of sudden climate change comes down the turnpike at us.

Wind energy's no good

At least that is what I read in an anti-wind farm article in our local news paper.  The reason given was that wind energy has to be used as it is produced and can not be stored.  Fortunately this is not true. 

So let's examine this question of how to get the maximum benefit from the energy from a wind farm; of how you store wind energy. 
 

Most countries generate some of their electricity from Hydro.  Here in New Zealand we are one of a very few nations which generates more than 50%  of our power  from Hydro.  Combined with our geothermal energy we have 70% of our energy from renewable sources.  Hydro is the perfect partner for wind farms.  Every unit (kWh) of electricity which is generated by wind leaves water in the dams to be used instantly when the wind isn't blowing.  Energy already stored is left in place to be used as needed.   Now, if you are on your toes, you will immediately ask what happens if the dams are full and the wind is blowing.   You see the problem.  I'll get to that in a minute.

In addition to saving water for future use, wind displaces the use of coal. In New Zealand we have one large coal fired power station.  Every kWh generated by wind leaves approximately 300g of coal in the ground* (This is  energy which is already stored).  A single 3mw wind turbine operating at a site that has a 35% capacity factor, leaves approximately 2,700 tons per year of this  non-renewable resource in the ground to be used by future generations of Kiwis. A typical 30 turbine wind farm over a 25 year life leaves over 2 million tons of coal in the ground and reduces our (expensive under Kyoto) Carbon dioxide production by over 6 million tons**. Hopefully, because of our foresight in building wind farms,  our kids won't have to burn this valuable resource but will use it as an industrial feed stock.  Thankfully, our grandfathers showed  foresight by building hydro-electric dams which is why our generation is in pretty good shape right now.  If we tried to build these Hydroelectric dams today it would take a decade just to get through the consent process.

*I have used a very conservative figure here which is for the most modern, coal-fired power stations.  The average world wide figure is above 400g of coal per kWh.  (look at paragraph 7 in the linked article)

**12g of coal plus 32g of Oxygen yields 44g of Carbon dioxide.  Hence roughly 3 2/3 tons of Carbon dioxide is produced for every ton of coal burnt

Wind also displaces the use of natural gas.  Like coal, this is a far to valuable resource to be burnt.  In the past New Zealand has used natural gas* to produce value-added methanol.  Both coal and gas can be used as the starting point for the production of a mind boggling range of value added products including fertilizers, parmacuticals, plastics, fine chemicals and so forth.  However looking at natural gas as a source of energy rather than as an industrial feed stock, every kWh of wind energy produced leaves either coal or gas energy unused (stored).

*Note that in 2012, new technology has produced a glut of natural gas which some commentators say will continue for a few decades.  Any bets on what will happen to our energy consumption with the advent of this cheap energy. 

Further energy storing opportunities come from demand balancing of our power grid (as opposed to the present, predominantly, supply balancing system).  In New Zealand we already have a crude form of demand balancing.  Many of us heat water when 'electricity-is-available' rather than 'on-demand'.  This is done by the clock rather than when  excess power is actually available. Some of us also have heat storage devices on the same circuit.   In the future, we will have the choice of operating washing machines, turning on heat storage devices, doing our cooking and so forth with cheaper 'when-available' electricity rather than more expensive "on-demand" electricity.  The critical development is the introduction of "Smart Grids" which you have been hearing so much about.  There are two levels of such applications.  If you have set your dish washer to come on when the signal for third level electricity is sent, (use now, level 1, level 2, level 3 etc. - each one a bit cheaper than the previous one), you don't want it to go off if there is a switch to level 2.  A heat storage device such as a hot water tank or space heater is a different story.  It can switch on and off instantly and as often as needed to balance the supply.  Devices that use power which can be switched on and off at any time would likely get a lower rate than devices such as dish washers.

Smart grids, of course, explain what happens when the wind is blowing but the dams are full.  At present, we would have to let the water flow over the spillway rather than generating electricity with it.  With smart grids and smart devices, the electricity company can send a lower priority signal, triggering a bunch of devices to come on line.  More electricity is used, making a profit for the company and saving money for the user and water (energy) is not wasted.

And finally, electric cars will begin to appear on our roads this year.  Not only can they be charged, for the most part, when electricity is available and hence cheaper, but there is much talk about using them as peak shaving devices to send electricity back into the grid when demand is high.  Charging 'when-available' will reduce driving costs (and use energy when the Nor-wester is blowing).  Giving back power 'when-needed' will generate a small but much appreciated revenue for the electric car owner.  It will also eliminate the need to borrow money to build an expensive peak shaving power station.

In summary, wind energy is stored in a number of ways.

#For hydro dams it is in the form of water in the dam not used and ready to go through the generators on demand. 
#For fossil fuels it is stored in fuel not used and available far into the future (very very long term storage).
#For the home owner energy is stored in the form of a linen closet of washing or a cupboard of dishes, washed when electricity was cheapest
#For the electric car owner it is stored in a battery charged when electricity was least expensive.

We have not even touched on the use of batteries which will come into their own as the technology improves.


In none of the above have we talked about methods the industry uses such as pumped storage.  That is another story.

Saying that wind farms (or any other form of renewable energy) are not effective because electricity can not be stored shows an insularity bordering on hermitage. Saying that we must have batteries to store the energy is true as far as it goes but there are many other ways of storing energy from intermittent sources.

Post Script
Since writing this blog, a Ted Talk has come out by a professor from MIT.  He is doing work on the construction of very cheap, very large batteries to store megawatt quantities of energy in units the size of shipping containers.  Thus another element is added to smart grids to make the generation of renewable intermittent energy more flexible.

Mining Royalties and Renewable Energy

Mining Royalties and Renewable Energy

Revenue from mining is a one off. Minerals are not renewable and once gone they can not be mined again. There is no justification whatsoever for mining our family jewels if we plan to waste this money on current consumption. All the revenue from mining must be used to set up infrastructure which will benefit future generations . These minerals belong to them just as much as they belong to us. One very good sector in which to invest this money is renewable energy. The benefits of having New Zealand totally independent of overseas energy are too obvious to warrant rehashing yet again and the benefit of energy independence extends far into the future to benefit our great great grandchildren.  Thankfully, our grandfathers built the hydro electric dams which provide us with half of our electricity today.

One thing must be guarded against. Mining revenue must not be used to displace money from other sources which otherwise would have been put into renewable energy. This is creative accounting at its worst. Mining revenue must be added to the other funds to add to our already high proportion of renewably generated energy. Such funds can be invested directly, in, for instance a State Owned Windfarm (SOE) or instead, can be leveraged by providing research funds or incentives which tip the viability of a renewable energy source towards economic feasibility.

Mining royalties have been reported as 1% of the sales value of the mineral sold. If this is the "whole story" then there is no justification for selling off our family jewels for a mess of pottage. I note the intention mentioned in the New Zealand Energy Strategy to review the royalty situation, presumably the way the Australian Rudd government recently attempted. This is good. Once sorted out, these increased royalties should be paid into the Mine Revenue Account for use in development which creates long term benefits. However, the bare royalty payment is not the whole story.

Does a mine pay income tax in addition to its royalty payment? If so, the tax must be credited to the Mine Revenue Account. Without the mine, this stream of revenue would not come to the government. Next, every employee of the mine pays income tax. This is a revenue stream  to the government which would not exist if the mine was not operating. Into the Mine Revenue Account also. Every purchase by the mine and its employees of everything from a new vehicle to a roll of toilet paper attracts GST at 12.5% (soon to rise). Into the Mine Revenue Account. And then there are the downstream effects. For instance, a mine employee buys his food at a local super market which pays taxes and whose employees pay taxes. Give this one to your resident math boffin. It is an infinite converging series with a finite sum. If you have a good mathematician on board, he will be able to work out how much more of the tax take should go into the Mine Revenue Account.

Looking at the above, it turns out that the revenue from a mine to the government goes far beyond the bare royalties and all this revenue should be used for development that benefits future generations. (in addition, remember, to funds that would have been spent on this if the mine didn't exist).

The next question is what we do with the minerals we have mined. Let's use iron sands as an example. Are we going to sell off the raw mineral with just the gangue (waste) removed the way Australia does. This is like selling off a Fabergé egg for the price of the gold it contains. At the very least we should be selling refined ingots of steel but let's get more ambitious. How about selling railway lines, machine tools and even car parts. How about selling our own electric car with a difference.

We are fixated on the idea that we could never compete with the big boys overseas. We could never, for instance compete with Hollywood, could we? Well we could and we did. Lets not sell New Zealand short. By adding value to our mineral resources, far more money will go into the Mine Revenue Account to be used for renewable energy infrastructure and other long term development. If, at present, we are not able to beneficiate our mineral resources and sell value-added-products, let's leave them in the ground until we have achieved the necessary level of sophistication. They are only going to increase in value as the years go by and other countries use up their non-renewable resources.

However we use our minerals, let us use this windfall, one-off source of revenue to benefit future generations. We couldn't do better than to use this revenue to ensure New Zealand's energy independence.

Why Renewables

Presented to the NZ govt. in response to her request for comments on the 2010 energy policy document.

Why Renewables

Abstract

The reasons for increasing the portion of our energy which comes from renewable sources and decreasing our dependence on imported and domestic fossil fuels has been hashed over so many times that it is almost redundant to write such a paper. However, it is useful sometimes to have a check list and there may be an idea or two in the following which hasn't occurred to the reader. Most of this paper can be skimmed over, just reading the headlines. Please feel free to add any other reasons for renewables that occur to you. If you put them in comments, I will incorporate them into the article.


When we produce liquid fuel from, for instance, wood waste, we put CO2 back into the atmosphere that has been recently removed. We create a carbon cycle but introduce no new CO2 into the atmosphere. When we produce electricity from wind or sunshine we completely displace the use of fossil fuel and the production of CO2. It is true that if New Zealand completely ceased to release sequestered (fossil) Carbon, we would have very little effect on the world emission of green house gas. However, there are two reasons we should make the effort. First, we are citizens of the world and should do our part as a population of 4.3m. In fact, since we are part of the industrialized world and arguably produce 10 times the CO2 per capita as the average resident of this planet, perhaps we should be making the same effort as 43 million other people. The second reason is that the world is tightly connected in many different ways and any innovations we come up with can spread to other jurisdictions. People are by and large sheep. They follow innovations from others. Kiwis are innovators

Improvement of our Balance of Payments
As individuals and as a nation, we borrow in order to spend about 10% more than we earn. A portion of this is due to our import of fossil fuels. With the advent of electric cars which can be charged 'when-power-is-available' rather than 'on-demand', there will be a continuous steady reduction in our import of fossil fuels as the domestic fleet switches over to electricity. This will greatly improve our balance of payments. Even now, before the advent of electric cars, renewables could allow us to heat, run our stoves and so forth with electricity displacing fossil fuels(natural gas). To gain the full effect on our balance of payments from the uptake of electric cars, we want to be generating our electricity from renewable sources. Curiously,though, it has been reported that even if the electricity for charging electric cars was produced by coal fired power stations, there would be a small net reduction in carbon emissions. This seems hard to believe but probably has something to do with efficiencies of large power generators.

Reduction in the price of Fossil Fuels
Supply and demand is a hard task master for suppliers. As the demand for fossil fuels decreases around the world, the price of fossil fuels will decrease. We will have need of some liquid fuels for some time to come, even if our domestic fleet completely converts to electricity. Liquid fuel will be needed for non electrified trains, for heavy trucks, for earth moving machinery and so forth. Everything we can do to reduce the demand for fossil fuels will reduce its price. As with the previous argument, while our direct influence may be small, our example is large.

Strategic
While at present, at least, we are at the low end of the scale with respect to our vulnerability to terrorist attacks, we are at the high end with respect to our vulnerable to natural disasters*. If Huntley** and/or a couple of our hydro dams was disabled tomorrow, we would be hard pressed. Renewable energy in most of its forms tends to be diffuse rather than concentrated in one geographical location. As such it benefits from the Internet effect. A distributed electrical generating network is very hard to knock out either by man made or natural disasters.

*Since the writing of this blog, we have had the Christchurch Earthquake.
** New Zealand's only coal fired power station.

Stabilization and Reduction of Electricity Prices
The cost of generating electricity using fossil fuels is going one way. At the same time, the cost of generating renewable energy is coming down as we mount the technological learning curve and as large scale production cuts in. It makes sense to steadily replace our use of fossil fuels with renewables.

Improvement of our Export Competitiveness
Energy is a large part of the cost of every product we export, whether agricultural or industrial. Countries which continue to obtain most of their energy and fertilizers from fossil fuels will become less and less competitive while the converse is true for countries which adopt renewables. If we do nothing we will fall behind. If we innovate rapidly we could be ahead of the pack with a continuing competitive advantage. Being just ahead of the pack is hugely different in economic terms than being just behind the pack

Reduction of our Kyoto Expense
For better or worse, we have committed ourselves to Kyoto and an ETS. This will cost us money which comes from the taxes of Kiwis. Every Kwh we produce renewably is that much less CO2 produced and that much less money flowing out of New Zealand to no purpose.

Safety from a World Economic Meltdown
Despite the pundits trying to talk us into an economic recovery, the indicators are that the world is still well and truly immersed in deep doodoo. Worse still, economists are all talking about getting us back to a 2 to 3% growth mode. At 2% our economies double every 35 years. At 3%, every 23 years. Doubling our economy results in the use of twice the water (actually more than twice in most countries), twice the wood, twice the minerals and so forth. A doubling of the economy also produces twice the pollution and garbage. How many countries do you know that could find twice the water or harvest twice the wood without destroying their Giya support system. New Zealand is one but there aren't many others. This suicidal quest for continuous growth is very likely to lead the world again and again into more and more severe economic downturns. With globalization, we are extremely vulnerable to economic quakes in other parts of the world. This recent mini eco-quake gave us a taste of how this works. Being totally energy-independent is one of a number of vital measure to make us resilient in the face of overseas economic meltdowns.

Enhancement of our Clean Green Image
A hard to measure but undoubtedly a significant part of our export industry depends on our clean green image. For northern tourists who come from crowded, polluted environments, a vision of clean green New Zealand stays with them when they return home. This can include solar panels on house roves, wind turbines on ridges and on rail easements with wind turbines powering electrified trains. Despite what we might think of such things, spoiled as we are by our wild and wonderful country, tourists see these generators of renewable energy as the signs of responsible, thoughtful, clean citizen of the world.


If you look at the above reasons, most have to do with the good of New Zealand, not of the world and that is how it should be. True, they contribute to the good of the world, but our primary goal should be the long term welfare of New Zealand. Our focus should be on decades and even centuries rather than election cycles.

Enabling Wind Farms

submitted to the New Zealand government in 2010 in response to a request for submissions on her energy policy

Enabling Wind Farms

Abstract
Because of the nature of our (New Zealand's) existing electrical generating infrastructure, the addition of wind turbines is more effective in New Zealand than for most other countries of the world. However, the construction of wind farms is being blocked at every turn by concerned citizens. Some of their concerns are pure Nimbiism and dislike of change but some of their concern may be justified. The government needs to honestly and thoroughly investigate such concerns associated with existing wind farms and then prepare and disseminate a paper on their findings in clear, easily understood language. If some of the concerns are genuine, the government must then help with the necessary research to solve these problems. Such an approach will ease the introduction of wind farms which are so essential for the future well being of New Zealand.

Background
Much is made by many commentators of the need for more research into ways of producing renewable energy. There is of course truth in their assertion. However, it draws attention away from the fact that one of the best forms of renewable energy, namely wind turbines, is already well up the technological learning curve. Wind energy is already very competitive, cost wise, with other energy sources. As you look to the future with the steady increase in the cost of fossil fuel and our Kyoto commitment, wind generated electricity will rapidly become the most viable option. As with many of the problems which face us today such as population increase, water degradation, green house gases and so forth, the problems are not ones of technology but of vested interests. The technological solutions are obvious.

Wind farms, because of their intermittent generating characteristics need huge storage batteries to balance their output. New Zealand is rich in such batteries. They are called hydro-electric dams. Every KWh produced by wind leaves water in the dams to be instantly used when the wind decreases. Here in New Zealand, because of the availability of already developed hydro power, wind turbines are more economically viable than for most other countries in the world. This is especially so since the generation capacity of our hydro generators is well above the sustainable energy generation capacity (determined by the amount of water flowing into the dam). This means that a dam can be drawn down, producing energy at a far greater rate than it's sustainable rate when necessary, and allowed to accumulate energy (water) when the wind is blowing strongly. This balances a similar, though not identical characteristic of wind turbines.

A one MW wind turbine is not expected to generate one megawatt continually throughout the year. Sites are rated for the availability of wind (capacity factor) and at a 30% site, over the year or years, you would expect to generate on average 0.3MW of power. However, this means that when the wind is at the optimum speed, a full MW is being generated for every nominal (nameplate) MW of generating equipment. Under these conditions, water (energy) can be left to accumulate behind the hydro dams. I repeat, a MW of wind generating capacity in New Zealand is worth more than the same capacity in almost any other country of the world.

Despite the obvious benefits of wind farms, at every turn there are fanatical objectors. The objections fall into a number of categories. These are

*Aesthetic. While some people, such as myself, find wind turbines things of beauty both for their elegant form and for what they represent, others do not.

*Shadow Flicker. This is the effect when the sun is directly behind a wind turbine from the point of view of an observer.

*Glint. Glint refers to the reflection of sunlight off the blades of a turbine and may occur when the sun is to the side or behind the observer.

*Noise. This includes audible noise transmitted through the air and low frequency sub-audible noise, primarily transmitted through the ground.

Lets have a look at each of these and then see what the government could do to ease the introduction of wind turbines.

The solution

Aesthetic
There is not a lot that can be done about this problem. In Europe, where electricity is expensive where the cost of electricity is subject to fossil fuel price fluctuations , where there are many potentially dangerous nuclear power plants and where air pollution is far worse than in New Zealand, many people see wind farms, at the very least, as the lesser of a number of evils and at best, things of beauty. We are somewhat spoiled in New Zealand. (See appendix 2)

Shadow Flicker
Shadow flicker occurs when you, the wind turbine and the sun are perfectly lined up. Unless you are very close to the wind turbine, a situation that is avoided by wind farms, the change in the intensity of light is very small and occurs for at most a few minutes on a few days per year. What the government can do in this regard is to publish as part of a paper on wind turbines, a well thought out explanation with suitable diagrams explaining the absurdity of worrying about shadow flicker. (see Appendix 1)

Glint
Glint can occur as different parts of the wind turbine reflect the sun to the observer. It is virtually eliminated by using matte paints on the turbine blades and by using light absorbing colors. Having the wind turbines a reasonable distance away from the observer also reduces any significant glint. Here the government must check out any reports of glint, determine if they actually exist, measure their intensity and duration and publish the results. If glint is indeed discovered from some wind turbines, a small research effort could be mounted to find an appropriate paint which will solve the problem.

Noise
The air born noise of a modern wind turbine which are constructed with acoustic isolation of the internal machinery from the nacelle and acoustic isolation of the generator from the blades along with the correct shaping of the blades makes it virtually impossible to separate air born turbine noise from the sound of wind through the trees at anything beyond a kilometer. In most instances you must be well within a km to hear a wind turbine. The effects of low frequency sound which propagate through the ground must be taken more seriously.

If an individual turbine does indeed produce low frequency sound and if it transmits the sound to the ground, such vibrations can propagate. Depending on the geology of the area, these vibrations can be propagated in unexpected ways. It is within the realm of possibility (just) that these vibrations could come up under a house, for instance, to the annoyance of the occupants. So what must the government do to address this problem.

All reported cases of low frequency sound from existing turbines should be investigated. This would involve
a) scanning the frequencies, if any, which are being transmitted from a turbine to the adjacent ground,
b)making measurements at the site of the complainant to see if any of these frequencies are showing up at the location in question,
c) stopping one or more turbines to see if that stops the vibrations (the same frequencies could be from a different source) and
d) applying dampers to any offending turbines and going back to "a".

Conclusion

What is needed is for the government to sponsor a small research project that examines any reported cases of annoyance from wind turbines and determines if they are justified. If any of these complaints prove to be justified, the government should lend a hand to find solutions.

(Appendix 1) Shadow flicker
Shadow flicker is a red herring. If you are any distance at all from the turbine, shadow flicker is virtually nonexistent. I will use the example of my house here in Waipara which is 5000m from the Mt Cass ridge to the East. The diameter swept out by a 3mw wind turbine is typically 90m. 90m at a range of 5000m makes an angle of 1.03 degrees of arc. From the observers point of view, looking at the horizon, the sun comes up at a different place each day. The amount it moves each day is 1/4 degree. Therefore, each wind turbine you can see from your house will have the sun behind it for 4 days as the sun 'travels' south and 4 days as it travels North. A total of 8 days per visible wind turbine.

The sun rises at 15minutes of arc(1/4 degree) per minute of time. If there was any flicker from a wind turbine at that range, it would last for just over 4 minutes. In my case, that would be 4 minutes just as the sun comes over the horizon early in the morning. However, as you will see in the next paragraph, there is practically no shadow flicker at that range.

A wind turbine blade for a 3mw turbine is typically 3.5m wide at its widest part. If the sun was a point source at an infinite distance, it would send a solid shadow 3.5 meters wide to Waipara. The sun is not a point source. It has a width of 32minutes (half a degree) of arc. Light from the edges of the sun fills in the shadow such that a full shadow (umbra) extends 350m beyond a 3.5m wide blade and by that distance the width of the full shadow is zero. At a distance of 5000m beyond the wind turbine, the shadow of the blade has spread out over 46m. Stated another way, the sun intensity will vary for the above mentioned 8 days of the year for 4 minutes in the early morning on those 8 days from full strength to 93% strength. Unless you are very close to a wind turbine, shadow flicker is virtually non existent and even if you are close, it will occur only for the short time that you, the turbine and the sun are perfectly lined up. Some simple graphics in the proposed government paper would explain this to the layman.

(Appendix 2) Aesthetics
One legitimate aspect of the aesthetic fear is the belief that if a wind turbine is visible from a property then the value of that property will decrease. The government should carry out a detailed survey both here and abroad to see if such properties have decreased or increased more or less than other properties in the same area that do not have a view of wind turbines. This would form part of the government report. An item on National Radio a couple of years ago indicated that the price of properties with a view of a wind turbine had actually increased more than the average in Europe.

William Hughes-Games
wlhgmk@gmail.com