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UK Wind Capacity Is Increasing–But At What Cost?

February 15, 2018

By Paul Homewood

 

 image

https://windeurope.org/about-wind/statistics/european/wind-in-power-2017/

 

According to Wind Europe, the self acclaimed “voice of the wind industry”, new wind power capacity of 4270 MW was added in the UK last year. Of this, 1680 MW was offshore, and 2590 MW onshore.

Despite fake claims about how much the cost of wind power has been falling, what are the actual costs of this new capacity?

 

Offshore

The following developments, which all have CfD contracts, started producing power in 2017:

  • Burbo Extension – 258 MW
  • Dudgeon – 402 MW
  • Walney Phase 1 – 330 MW

All three have index linked contracts, currently worth £161.71/Mwh. These are due to be increased for inflation in April.

In addition, 690 MW of capacity has been added by developments which still qualify for ROCs, as they were already in the pipeline when the RO scheme was wound up for new projects.

These schemes are awarded 2 ROCs per Mwh. An ROC is worth £47.22/Mwh this year, so these schemes receive an effective subsidy of £94.44/Mwh.

The current wholesale price of electricity is £45.80/Mwh, so these projects could expect to receive a total payment of £140.24/Mwh.

If we add the CfD and RO projects together, the average price works out at £152.89/Mwh, more than three times the market price.

Onshore

We have not got any official BEIS data for Q4 yet, but it is reasonable to assume that the new capacity added last year still qualifies for ROCs.

Onshore wind farms receive 0.9 ROCs per Mwh, so the subsidy is worth £42.50.

Including the market price earned, they would receive £88.30/Mwh.

 

Remember this when the wind industry brags about how much costs have come down!

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21 Comments
  1. Bitter@twisted permalink
    February 15, 2018 2:58 pm

    Stop the subsidies and the wind “power” scam will also stop.
    And the squealing of the troughers will be deafening.

    • February 15, 2018 3:31 pm

      The troughers have been squealing loudly ever since the ROCs and FiTs were stopped and the planning rules were changed in England. It doesn’t stop them and their supporters in the BBC from saying that wind power is the cheapest form of electricity generation, although I haven’t heard them claiming that “the wind is free” recently.

    • February 16, 2018 9:14 am

      No mention of Load Factor ( 9% for solar and about 30% average for offshore/onshore wind ). Or for Credit Capacity ( 0% for solar and less than 10% for wind ).

      Also no breakdown of the GB figure as to do so would show that it is Scotland that is way out in front in Europe.

      Not good news for Scotland as their economy has benefitted little from this investment in wind. Most of the capital is from outside Scotland and little of it ( probably less than 30% )was spent in Scotland. A Scottish wind resource that is exploited for the economic benefit of others.

      Remember GB energy policy is reserved to Westminster.

  2. Stuart Brown permalink
    February 15, 2018 3:58 pm

    Outside of those subsidies, doesn’t adding more capacity just mean that more money flows their way for being constrained off? A little old but…

    http://www.ref.org.uk/ref-blog/336-new-wind-farm-constrained-off-grid-within-days-of-opening

    “Constraint payments to wind power began in 2010 with three wind farms, all in Scotland. There are now 51 wind farms receiving such payments, 15 offshore, some in English and Welsh waters, and 36 onshore, all in Scotland.

    Constraint payments made to wind since that date amount to £266m, £90m of which was paid in 2015 and £70m so far in 2016.

    These payments, and the corresponding payments to conventional generation to increase output south of the constraint in order to bring the electricity grid back into balance, are a significant part of the rapidly increasing cost of Balancing Services Use of System (BSUoS) costs, which have risen from about £300m a year in 2001/2 to more than £1bn a year at present. These costs are passed on to consumers in electricity bills.”

    • February 16, 2018 12:53 pm

      Constraint payments, particularly in Scotland, arise because the Westminster Government refuses to find a mechanism to get a couple of planned Pumped Storage schemes built using Loch Ness as the base source. The Scottish Government has urged Westminster on this to no avail. Maybe it is too far from London.
      Maybe they are too busy trying to find a way to get more Nuclear plants built, and arranging for more imports from the continent via interconnectors.

  3. February 15, 2018 4:18 pm

    I did not know what an “ROC” is (I’m American) so I googled it.

    http://aawt.org.uk/rocs.pdf

    Nice work if you can get it.

  4. Rowland H permalink
    February 15, 2018 4:29 pm

    Just what the doctor ordered re providing some numbers. Even more obscene are the constraint payments as detailed by Stuart Brown.

  5. markl permalink
    February 15, 2018 5:11 pm

    If more people understood the difference between ‘capacity’ and usable energy from wind turbines the subsidy game would end.

  6. Harry Passfield permalink
    February 15, 2018 5:17 pm

    Government policy has tripled the price of electricity! Someone needs sacking!
    Talk about whelk stalls!

    • Gerry, England permalink
      February 17, 2018 1:15 pm

      But don’t fear, the government is going to cap electricity prices. Mind you if you want to be pessimistic you could point out the last time Ofgem interfered with the market to cut costs it cost people more.

  7. Athelstan permalink
    February 15, 2018 6:18 pm

    “If we add the CfD and RO projects together, the average price works out at £152.89/Mwh, more than three times the market price.”

    Another great analysis Paul, i ‘enjoy’ this posts in a masochistic sort of way.

    The pain of, having just coughed up (literally) for my quarterly electricity and gas bill and boy do we try to keep the lights low…………….Enforced, taxpayers – we’re so carbon footprint conscious, expensive and malignantly made daft energy policy outcomes achieve only one thing, poverty and deindustrialization and that’s just what the green puritans require – of YOU.

    Er, I don’t suppose that, Ms Ambrose be writing about this (above quote) in tomorrows DT?

  8. Bitter@twisted permalink
    February 15, 2018 6:56 pm

    No she won’t, Athelstan, because she is a pig-ignorant alarmist shill.

    • Athelstan permalink
      February 15, 2018 11:35 pm

      A forlorn hope Bitter@twisted, I know.

  9. February 15, 2018 7:15 pm

    All energy bills should include the costs of Renewable Subsidies in a transparent manner.

    It is our human right to know what TAXES we are paying; for that is precisely what these costs are.
    Without these TAXES poverty will reduce. With them unecesary deaths will occur.
    Never mind NOx pullutants,

    These subsidies will kill people; as deaths by cold are some 20 times deaths by heat.

    • Athelstan permalink
      February 15, 2018 11:34 pm

      That is a bleak final sentence but a very cogent assessment and statement.

      well said indeed.

  10. It doesn't add up... permalink
    February 17, 2018 12:41 am

    The good news: those wind farms that depend in part on the market price probably didn’t make quite the average, but around £5/MWh less, because they were most often not producing when supply was tight and prices high, while producing at full whack when supply was plentiful and prices low. That’s another way of saying that their output is worth less, which probably makes it bad news, because the subsidies are a larger portion of revenues than you might at first calculate.

    The really bad news is that these costs do not include the extra costs of hooking up new wind farms to the grid, nor of the extra costs incurred by other generators in accommodating their intermittent output. Grid costs have escalated alarmingly since the push to renewables got underway – essentially we’ve had to double our investment in the grid to cope. These costs also end up on consumer bills, but are never attributed to their real cause in official figures.

  11. Harry Passfield permalink
    February 17, 2018 2:51 pm

    FWIW: I wrote to Claire Perry the following email, via my MP. I will be happy to let you know what, if any, is her repsonse.

    “To: The Right Honourable Claire Perry, Minister of State for Energy and Clean Growth

    Dear Ms Perry,

    I have supported the Conservative party since I was able to vote more than 50 years ago. I have not missed any vote, local or national in all those years. But oh boy! How the party has changed in that time.

    Once upon a time we could depend on MPs who had a broad experience of business in general and specific expertise in arts and sciences. But now, I am hard-pressed to find anyone who has the technical competence to hold a discussion on, say ‘Climate Change’, or offer their thoughts on pricing strategies in goods and commodities.

    This is all the more apparent when one looks at the insane (I can think of no other word to describe it) plans to actually prevent the UK population accessing cheap electricity while forcing them to pay three times the best price for another form of electricity generated by windmills (ok, only when the wind blows).

    If you ran a car dealership you would not survive in business very long if you told customers that they could only buy the most inefficient, expensive gas-guzzlers rather than the cheap, reliable, sustainable runabouts that are still available – but which you plan to scrap.

    There is a very good saying which is beginning to gain traction with people: “It has been said that regulating carbon dioxide emissions will make the United Kingdom the cleanest Third World country on Earth.”

    It is even more apt when one considers that if the UK sacrificed everything in the pursuit of a zero-carbon (dioxide) goal for ‘clean’ energy it would have absolutely no discernible effect on global temperatures and would merely serve to beggar our country and impoverish its energy users.

    It needs someone with a clear-headed open mindedness to grasp this nettle, ignore the mad proseltising of the Green lobby and bring back solid, functional and cheap power generation. But I don’t think you are brave enough to be that person: you’ve been kidnapped by the green blob.

    Please, I beg you to spend the very few minutes it takes to read the argument being made at the following website. Do not, please, allow your minders to divert you from it. If you read it from the point of view of a consumer then perhaps, as Minister responsible, you might think that something needs to be done. I hope you can figure out just what that is. I assure you that ramping up the cost of electricity more and more is not the answer.”

    https://notalotofpeopleknowthat.wordpress.com/2018/02/15/uk-wind-capacity-is-increasing-but-at-what-cost/

    • Jack Broughton permalink
      February 17, 2018 3:59 pm

      Suspect that you will get a Sir Humphrey style reply saying how wonderful everything is … how Britain leads the world in (imported) green energy plant ……

      • Harry Passfield permalink
        February 17, 2018 6:43 pm

        Hi Jack! (Glad we’re not on a ‘plane!). Yes. In previous emails to my MP I have come across his protectors – and had words with them. I know MPs need filters for the deranged but it pisses me off when they censor constituents.

  12. Nick dekker permalink
    February 20, 2018 10:03 pm

    Hi Paul

    With the massive amount of onshore wind in Scotland and the very windy weather of the past two months, are there times when Scotland is now exporting more electricity to England than it is actually using itself. I have seen figures on Extranet where the Scotland-England flow has been approaching 5GWs.

    Nick Dekker

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