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Offshore Wind Subsidies Topped £4 Billion Last Year

July 22, 2021

By Paul Homewood

An offshore wind farm in Redcar on Teesside.

Last year, subsidies for offshore wind amounted to £4034 million, including £1651 million via the Contract for Difference scheme at an average of £128/MWh.

Offshore wind output totalled 40.7 TWh, just 13% of UK generation.

Justin Rowlatt says the offshore wind industry is now virtually subsidy free!

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CORRECTION

I have calculated the ROCs incorrectly. The true cost of subsidies for those is £2383 million. This means the total cost of subsidies, including CfDs, is £4034 million.

38 Comments
  1. Robert Christopher permalink
    July 22, 2021 4:10 pm

    £3422 million subsidy for 40.7 TWh of electricity, when they want to deliver it, not when we want it.

    Is that a subsidy of 8.4 p/kWh ?

    • July 22, 2021 4:56 pm

      Yep!

    • July 22, 2021 5:08 pm

      Actually its worse. I understated the ROC part of the equation, so the overall subsidy is £4.0 bn!

      • Ray Sanders permalink
        July 22, 2021 6:26 pm

        So we could fund two Rolls Royce SMRs per year and still have a decent amount of change!

      • Gamecock permalink
        July 22, 2021 7:30 pm

        No, Ray. RR SMRs do not exist.

      • tom0mason permalink
        July 22, 2021 7:40 pm

        Gamecock,
        If RR were offered funding like those windmills have, they’d produce a SMRs pronto!
        I dare say they would probably have a couple ready by the end of the week! 😉

      • Gamecock permalink
        July 22, 2021 10:02 pm

        tomo, do you have information that their limiting factor is funding? I doubt that that’s the problem.

        They are over 5 years into the SMR project, predicting success another 10 years out. It’s still to early to assume their success. Indeed, I have seen nothing to suggest they will succeed.

        This is just Ray Sanders whataboutery. The post is about offshore wind subsidies.

    • July 22, 2021 9:00 pm

      I suppose the good news is that when the wind is not blowing these windfarms produce no electricity and we do not have to pay any subsidy. So when the wind does not blow our electricity overall is cheaper.

      • Jordan permalink
        July 22, 2021 10:24 pm

        Nicholas

        windfarms produce no electricity … like the last 5 days at the time of writing. I had a look yesterday morning, and production was 220MW, out of a total 15,000MW. Even if we had already doubled-up wind to 30,000MW, there would have been burger-all wind production this week.
        And none of this says the same thing could not happen in the middle of winter when the UK needs heating and lighting.
        Coal has been running at nearly 1000MW most of this week. God knows what’s supposed to happen when the irrational decision of completely banishing coal fired power station reaches its conclusions.

      • Chaswarnertoo permalink
        July 23, 2021 7:47 am

        You forgot the ‘sarc’ tag.

  2. Brian BAKER permalink
    July 22, 2021 4:11 pm

    But you might like to look at where they domiciled their company’s. For nontax purposes. tor.All the usual suspects. I’ve never seen so many people being virtue signallers operating extortion with a feel-good face.

  3. Robert Christopher permalink
    July 22, 2021 4:11 pm

    £3422 million subsidy for 40.7 TWh of electricity, when they want to deliver it, not when we want it.

    Is that a subsidy of 8.4 p/kWh ?

    • It doesn't add up... permalink
      July 22, 2021 8:38 pm

      The CFD earners generated 12.88TWh of subsidy earning generation: the £128/MWh figure for them is correct, and I assume the £1.65bn is taken from the Low Carbon Contracts Company downloads on CFD payments. Not sure about the other figures though: Paul hasn’t quoted a source. I looked here:

      https://ref.org.uk/generators/group/index.php?group=yr

      which shows (clicking third + sign for 2020) some 42.299 million ROCs earned by offshore wind, which were worth a little over £50/ROC, or an extra £2.1bn or more. But if you look at the detail:

      https://ref.org.uk/generators/search.php?TechGroup=WD&TechCode=FW

      you find that the data for 2020 aren’t complete, so that is certainly an underestimate.

      Energy Trends did report a total of 40.681TWh of offshore wind generation for 2020.

      Taking the ref data per wind farm, and assuming that their GWh and ROC figures relate to the same annual period for each wind farm (although different wind farms are not necessarily reporting the same periods), I calculate the the average ROC factor is about 1.75ROCs/MWh. So that would give 27.8TWh of ROC-subsidised wind earning 1.75ROCs, or 48.65m ROCs, worth £2.4-2.5bn, for a total of over £4bn of subsidy, or around £100/MWh on average.

      It’s interesting to note that the more modern CFD earning wind farms are getting higher subsidies than the older ROC earning wind farms. That is however an artifact of low market prices in 2020. The picture is looking rather different in 2021, with soaring wholesale electricity prices reducing CFD payouts, whilst ROC earners benefit from the rising prices and the higher ROC values.

      • Joe Public permalink
        July 22, 2021 10:12 pm

        Thanks for providing those sources & details, IDAU.

  4. July 22, 2021 4:23 pm

    4;30pm Radio 4 ​”Extreme weather events are becoming more frequent. Hayley Fowler has been researching the links between weather systems, climate change and heat and flood we are currently experiencing.”
    Hayley Fowler of Newcastle Uni
    https://www.bbc.co.uk/programmes/m000y0qp

    2019 https://notalotofpeopleknowthat.wordpress.com/2019/08/09/heatwaves-flash-floods-the-new-normal-they-always-have-hayle

    • Gerry, England permalink
      July 23, 2021 10:25 am

      Doubt anyone would want to employ Hayley for her researching abilities then… Her profile has her job as Professor and it seems that she has done a lot around climate models – all those things that don’t actually work. So basically her job depends on keeping the scam going…

  5. July 22, 2021 4:30 pm

    It must be the new definition determined by the BBC; “virtually subsidy free” = “totally reliant on massive subsidies”.

    • Gamecock permalink
      July 22, 2021 7:33 pm

      Yeah, I don’t think you can afford ‘subsidy free.’

    • Gerry, England permalink
      July 23, 2021 10:26 am

      Perhaps we should make the BBC operate subsidy free by not buying a licence and using catch-up services.

  6. miket permalink
    July 22, 2021 4:57 pm

    erm…, what wind generated supply? Oh yes there it is, 0.17% of 35GW (mid morning).

  7. Joe Public permalink
    July 22, 2021 5:27 pm

    Those subsidies will be paid by consumers well into the 2030s.

    Pravda would have been proud of Aunty’s propaganda skills.

  8. Ray Sanders permalink
    July 22, 2021 6:30 pm

    “By getting the price down to GBP1.8 billion, it’s very much in the territory now of being able to access private equity to buy and run a reactor”
    https://world-nuclear-news.org/Articles/Rolls-Royce-on-track-for-2030-delivery-of-UK-SMR
    So we could fully fund 2 of these every year and they have a 60 year design life.

  9. MrGrimNasty permalink
    July 22, 2021 7:26 pm

    Excellent heat pump rant via GWPF.

    There was a spurious heat pump story in Coronation Street – any betting some strings were pulled to raise public awareness, make people think ‘everyone’ was going for them?

    • Ray Sanders permalink
      July 22, 2021 8:53 pm

      The thing is everyone with any knowledge of ASHPs knows damn well they are not up for the job by a long way so why is this madness being allowed to go ahead? Almost every point made in that film is being experienced by a neighbour of mine whose bills tripled when he replaced his oil fired central heating with one.
      As an aside my home (built in the 70s) is on a valley side. The original owner when it was being built arranged for a gas supply from a road in the valley bottom as the higher road from which it was accessed did not have a main. He apparently wanted to do a deal with the near neighbours to share the connection cost but they declined to help out believing that once he paid for it, they could get subsequently connected on the cheap. He caught wind of this and arranged for a sole supply pipe to the house instead. All my neighbours now variously have oil, LPG, solid fuel or electric night storage heating and I am the only one with mains gas. It really winds them up when I say how much my bills come to….but as the film points out, how long before they start putting a supplement on the gas to pay for all these stupid heat pumps.

      • MrGrimNasty permalink
        July 23, 2021 9:54 am

        In order to make renewables/green tech. sound competitive they are falsely accounting the current relative costs whilst aiming to deliberately inflate the price of fossil fuels.

        This allows them to simultaneously claim that they are saving you money whilst costing you 3 times as much!

  10. Coeur de Lion permalink
    July 23, 2021 8:58 am

    Coal is still producing more ‘lecky as I write.

  11. Stonyground permalink
    July 23, 2021 9:31 am

    Are you going to complain to them again Paul? Claiming that such huge subsidies equate to being virtually subsidy free is just lying.

  12. July 23, 2021 10:49 am

    “is now virtually subsidy free”
    So, just a little bit pregnant?
    Strange sort of virtue.

  13. David Wild permalink
    July 23, 2021 11:28 am

    And now the National Grid is warning of power outages as 2 nukes shut down. With lower winter temps, low wind speeds and surging demand in Europe we could be back to the 3 day week (remember that), at best, this winter. And, of course, it’s COLD weather that is the most lethal!
    https://www.telegraph.co.uk/business/2021/07/22/centrica-opts-keep-nuclear-power-stake/
    A total surprise, of course…

    • It doesn't add up... permalink
      July 23, 2021 9:06 pm

      I took a look at the early winter outlook

      https://www.nationalgrideso.com/document/203051/download

      They seem not to be noticing we already have a tight market in summer.

    • Ray Sanders permalink
      July 23, 2021 10:57 pm

      I find it odd that NG even bother to mention Dungeness B, it has not generated a single watt since Sept 2018 and EDF announced closure and defuelling 6 weeks ago. Hunterston B was already slated to close 7th January 2022 at latest. They almost seem to be getting their excuses in first but should any serious grid be dependent on plants well past their design lives?

      • Nicholas Lewis permalink
        July 23, 2021 11:25 pm

        don’t worry too much we’ve got plenty of polluting diesel peakers and expensive batteries to cover the shortfall

  14. Ken Pollock permalink
    July 25, 2021 12:44 pm

    We visited Dungeness last Wednesday. Huge buildings, highly impressive, and sad that “A”, the Magnox one, closed some time ago and “B”, the AGR one, was closed for tests in 2018. No chance of it re-opening.
    Nearby, as many will know, were about 20 wind turbines, totally stationary, not a watt being produced…
    What about SMRs? Yes, they may not be ready now, but we have had small nuclear reactors for decades – powering submarines and surface ships. The captain of a nuclear sub told me his boat was powered by a reactor no bigger than a 1metre cube and that the sub had a lifetime’s fuel on board on launching.
    So adapting that technology for an SMR would be relatively easy, if we really wanted to. And then any size of power station just needs multiples of the basic unit. And once that is cleared, you can have 5,10,100 at no extra cost of proving their safety…
    But whisper it: the word “nuclear” scares the public stiff, and the politicians respond!
    How many died of radiation after Fukushima (that caused the Germans to abandon nuclear power) None. Not one! Try and get the public to believe that…

    • MikeHig permalink
      July 27, 2021 11:01 am

      KP: adapting submarine reactor designs for civilian use is not straightforward, aiui.
      Sub reactors have to be small, for obvious reasons, so they have to use fuel which is far more enriched than civilian plants to get the right reaction dynamics. Highly enriched fuel is a no-no for civil plants because of the perceived proliferation risk.
      I read somewhere that RR’s design for an SMR has virtually nothing in common with their sub reactor design: maybe someone can confirm or correct that?

      • Dr Ken Pollock permalink
        July 27, 2021 11:20 am

        MikeHig, I am very grateful for your contribution, based on much greater knowledge than my own. That said, I am not sure you would rule out developments of SMRs (properly called AMRs now, I believe) as a practical and cheaper option to the massive power stations we normally associate with nuclear power.
        All nuclear power is perceived to be risky. Not sure we cannot convince the public (and politicians) that the risk is acceptable – compared to the cost, disruption and intermittency of wind and solar sources of energy…

    • MikeHig permalink
      July 28, 2021 11:14 am

      Dr Ken; I certainly would not rule out SMRs and I’m encouraged by the progress being made. I think I read that there is a pilot under construction in the US.
      They should bring down the cost of construction, as you say. Nuclear power in the UK could also be made cheaper by simply adopting a proven design and building a fleet of them, as was intended with Sizewell and its stillborn successors.
      My fear is that we will, once again, develop our own unique design which will struggle against the Americans, and others, with their much larger domestic market and international sales muscle.
      Lastly, while I’m being a gloomster, I think everyone is quietly ignoring the time it will take to get regulatory approval to build the first one in the UK. Sizewell was heavily based on a very well-proven design in operation worldwide and the inquiry took 5 years – or was it 7?
      This will be a first-of-a-kind with no operating track record. I would like to be proved wrong but I doubt we will see one up and running in the UK inside 10 years at best – much too late to help with the looming capacity crunch.

      • Dr Ken Pollock permalink
        August 1, 2021 11:58 am

        MikeHig, been away. Hence silence. Agree with your comments, but note importance highlighted by two recent events: big fire in Musk’s battery in S Australia – not an easy solution, and big fuss over stopping coal use in EU, with Poland relying on coal for 70% of electricity production. Nuclear answers both problems, even if SMRs take a while to be approved…

  15. July 27, 2021 12:45 am

    Man made climate change and renewable energy are two of the most gargantuan scams in human history. Politicians, and the academics they feed through grants, are telling us that the almighty government can control the weather, if you just shut up and pay the costs.

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