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“Affordable Offshore Wind”?–The Real Facts Greenpeace Don’t Want You To Know!

October 9, 2017

By Paul Homewood

 

 

screenshot-2017-10-05-16-59-02-768x506

https://notalotofpeopleknowthat.wordpress.com/2017/10/06/gwpf-lodges-asa-complaint-over-false-claims-in-offshore-wind-campaign/

 

 

As I noted last week, the GWPF has complained to the Advertising Standards Authority about a highly misleading advert about offshore wind power, placed by a group of wind farm interests and left wing green outfits.

The posters, placed at some London Underground stations, specifically states:

The price paid for electricity from offshore wind farms has fallen by 50% over the last five years.

I have now had a chance to put together the actual figures, which tell a completely different story.

 

In the last full financial year, 2016/17, offshore wind produced 16.4 TWh.

Nearly all of this, 16.2 TWh, was subsidised via the Renewables Obligation mechanism, under which all licensed electricity suppliers in the United Kingdom must either source a certain proportion of electricity from renewable sources, or pay for Renewable Obligation Certificates, ROCs, currently priced at £45.58.

Offshore wind farms receive a greater allowance of ROCs than, for instance, onshore wind. This is intended to reflect the higher costs of the former. Most offshore operations now receive 2 ROCs per MWh.

In total during 2016/17, offshore wind farms were awarded 30,753,577 ROCs, worth at current prices £1401 million. This equates to £86/MWh.

On top of this subsidy, of course, the wind farms also get paid for the electricity they produce, for which the current market price is £46.40/MWh.

In total then, offshore wind farms are paid £132.40/MWh, nearly triple the market price. All of this is funded by electricity bill payers.

 

 

The RO was closed to all new generating capacity on 31 March 2017, and replaced by Contracts for Difference (CfDs). These guarantee a price for all electricity sold, index linked for 15 years. Contracts are awarded via auction, and the government tops up the market price received by the operator to the guarantee. (If the market price is higher, the producer refunds the government). CfDs are only open to low carbon generation.

Again, these prices are all funded through electricity bills.

There is currently a total of 4058 MW of offshore capacity contracted through CfDs, all either under or awaiting construction, and due to commission between now and 2021. (This includes a small amount commissioned since April 2017). The full list is below.

Various strike prices have been agreed, but weighted by capacity, the average is £142.85/MWh at 2017 prices.

In other words, the price paid to these new projects coming on stream between this year and 2021 is actually increasing from £132.40/MWh to £142.85/MWh.

 

MW Current Strike Price Weighted Price
Beatrice 588 150.97 21.88
Burbo 258 161.71 10.28
Dudgeon 402 161.71 16.02
EA 714 129.38 22.76
Hornsea 1200 150.97 44.64
Neart 448 123.47 13.63
Walney 448 123.47 13.63
TOTAL 4058 142.85

https://lowcarboncontracts.uk/cfds

 

 

It may be that prices for new projects coming on stream after 2021 will be cheaper, but bill payers will still be paying the cost of these earlier contracts for many years to come.

 

 

There is one other factor which must also be taken into account – the cost of intermittency.

In 2015, the Committee on Climate Change estimated in their Fifth Carbon Budget that this likely amounted to about £10/MWh:

image

https://www.theccc.org.uk/publication/power-sector-scenarios-for-the-fifth-carbon-budget/

So the cost to bill payers for the new offshore capacity being added between now and 2021 will actually be £152.85/MWh.

 

 

By 2021, offshore wind is set to be generating about 30 TWh a year, but the cost to bill payers will be enormous, around £3.1bn, equating to £115 per household.

These are the facts that the offshore wind industry and Greenpeace want to stay hidden

SOURCE

https://www.gov.uk/government/statistics/energy-trends-section-6-renewables

 

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19 Comments
  1. October 9, 2017 11:28 am

    Great assessment again.
    The cost of standby is almost certainly far higher than the CCC estimate as wear and tear are magnified and should be included as well as the lower efficiency for generating in reserve mode.

  2. Tim Hammond permalink
    October 9, 2017 12:40 pm

    Is the “current market price” a true reflection of what the market price would be if we didn’t have all the interventions and distortions to the market that have been made in the cause of renewables?

  3. Gerry, England permalink
    October 9, 2017 12:47 pm

    Brilliant work. Now if we have a grown up debate over the energy cap this extra cost should be brought out into the open but note that SSE are in on this scam advert. Only British Gas have been honest by saying government taxes and costs were the cause of price rises.

  4. October 9, 2017 2:01 pm

    Does Greenpeace receive any monetary support from the Government?

    • Joe Public permalink
      October 9, 2017 2:27 pm

      Yes – it is subsidised!

      Oh the irony.

      https://www.greenpeace.org.uk/greenpeace-environmental-trust/

      • Chris permalink
        October 9, 2017 2:43 pm

        Er – I can’t see anything on this webpage that indicates government support. Having charitable status certainly doesn’t mean a subsidy.

      • October 9, 2017 2:45 pm

        … and gets free advertising from the BBC.

      • Mark Hodgson permalink
        October 9, 2017 5:58 pm

        I dislike Greenpeace intensely, but their website says this:

        “To maintain absolute independence, we don’t accept money from companies, governments or political parties. We’re serious about that – we screen cheques, and actually send them back when they’re drawn on a corporate account. We depend on the donations of individual supporters to carry on our campaigns for a greener, more peaceful world.

        Our accounts are audited every year, and we publish Annual Reports so you can see exactly how much money we’re given and how it gets spent.”

        Unless they are lying about that – and I have no evidence that they are – then they are one of the NGOs not receiving Government funding. Still, they do indirectly benefit financially from their charitable status, and if they were as serious about their absolute independence as they claim, they would cease to be a charity and cease to enjoy those indirect financial benefits from the state. My dislike for them might then be ameliorated slightly.

      • Nigel S permalink
        October 9, 2017 6:58 pm

        Greepeace seem to be about the only one that does not take taxpayers’ money.

        http://www.telegraph.co.uk/news/worldnews/europe/10532853/European-Union-funding-90m-green-lobbying-con.html

      • Joe Public permalink
        October 9, 2017 9:59 pm

        Replying to Chris 2:43pm:

        “Er – I can’t see anything on this webpage that indicates government support. Having charitable status certainly doesn’t mean a subsidy.”

        Greenies whinge when FF companies receive tax breaks, *claiming* they’re receiving ‘subsidies’.

        Alinsky’s Rules for Radicals #4

    • October 9, 2017 7:49 pm

      Greenpeace is the one that doesn’t VISIBLY take government money.
      I wouldn’t put it past some political people to find an undercover way of channelling public funds to them.

  5. October 9, 2017 2:35 pm

    As an entrepreneur in Canada’s wind capital who has looked very hard at wind farms, I concur with these numbers. It’s a ten times proposition, that is, the organic revenue is about 1/10 of what you’d need to be profitable, and the other 90% would have to be subsidized. Offshore is far more productive because of the exponential relationship between wind speed and energy within the wind, but I can definitely see the three times proposition, where you make a third of the revenue and the other two thirds need to come from the government. And in Canada the costs are not going down. I presume that’s the same everywhere. The UN says they are, but I don’t see the authors of those reports building wind farms with their own money, at least not here.

  6. October 9, 2017 3:04 pm

    In my opinion (which is worth nothing), the companies supporting the advert should be charged with fraud and then given heavy fines (plus jail term for the bosses). They should be forced to fund corrected advertising which should be given a full page spread in every national newspaper and maintained on advertising hoardings for a year.

    NB fraud is providing deliberately untrue or misleading information for the purpose of making a gain.

    • Nigel S permalink
      October 9, 2017 4:51 pm

      I’ve emailed John de Jong of Nuon to ask ‘Why are you supporting this fraudulent advertising campaign aimed at UK MPs?’, no response so far. I shall start emailing to ask why soon. Vattenfall took over my energy supplier recently. I shall have to look elsewhere.

      https://corporate.vattenfall.co.uk/projects/isupplyenergy/

  7. October 9, 2017 3:43 pm

    Send it to the ASA 🙂

  8. markl permalink
    October 9, 2017 3:57 pm

    The AGW narrative is based on deceptive and selective reporting. As long as they have MSM support the lies can and will continue.

  9. Athelstan permalink
    October 9, 2017 4:48 pm

    as the adage goes: A lie is halfway round the world befor the truth has its boots on.

    Hmm, the big problem is the lie is out first and later on the truth comes out and who will know it, the truth of it, for evidently the great British public just see and read the lies, and lets admit it this pleases our liars in charge, aka HMG. Does it not?

    Greenpiss got their poster up first and job done insofar as they are concerned, this is a propaganda war and thanks to the London authorites, media and London Underground as per in these times of universal deceit: once again the truth is getting a good kicking.

    When the lunatics and green priests are running the show and the asylum, there’s not much anyone can do.

    • Nigel S permalink
      October 9, 2017 4:53 pm

      Good thing that London Underground doesn’t rely on windmills for electricity.

      • October 9, 2017 6:19 pm

        They should be careful what they wish for.

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