Offshore power ‘will fail without subsidies’
By Paul Homewood
Most wind farms in Britain will not be economically viable when existing subsidies end and will close prematurely without further revenue support, new analysis suggests.
A report commissioned by SSE has found that the huge expansion of wind power in the UK is likely to push wholesale electricity prices so low on windy days that most wind farms will be unable to cover their operating costs simply from selling power into the market.
This could lead to mass early closures of offshore and onshore wind farms when their existing subsidy arrangements end, primarily from the 2030s. Building new wind farms to replace them could increase the costs of hitting Britain’s net zero target by £20 billion, the report says.
Some of us have been saying this for a long while.
There will, of course, be times when prices are high, but as this will be when wind power is low the wind operators will not benefit.
It already looks inevitable that wind turbines will become prohibitively expensive to maintain once they get that old, particularly offshore ones.The removal of subsidies, coupled with over capacity, will send many operators over the edge.
Not only does this have cost implications, it will also pose challenges for security of supply. It can take several years to construct offshore wind farms, so what will happen if a chunk of older capacity suddenly disappears?
We know that many wind farms are owned by shell companies, often abroad. It is not difficult to envisage a situation where they take the money and run, leaving behind the rusting turbines which they are supposed to be decommissioning.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
Yet more sheer brass neck from the wind industry now trying to put a gun to our heads. “Stop paying us subsidies and we shut down. Obviously you shut down your reliable generators to accommodate us so you now need us. Pay up or else!”
I can’t raise even a shrug at the thought that wind may stop providing capacity but, I most definitely do care that the carpet baggers who have rooked the public over the years with their monstrosities should be held legally and financially responsible for their removal. And becoming insolvent should not give them any protection from their responsibilities.
“It can take several years to construct offshore wind farms …”
If the Government come to their senses, it will take several years to plan, construct, and bring reliable electricity generation on stream.
That is, if there is anyone left who knows what to do!
The SSE report is at
Click to access Net%20zero%20without%20breaking%20the%20bank%20-%20LCP%20SSE%20report%202021%20.pdf
On page 15.
“”The current CfD regime only provides support to new
low-carbon generation capacity.
Under the fourth step, revenue stability is expanded to cover
existing low-carbon generation capacity, including life-extensions,
refurbishments and repowering.
Under the current trajectory, large amounts of existing low-carbon
capacity reach the end of their CfD or RO support from around 2030
onwards and will close prematurely as they are unable to cover their
ongoing costs or the cost of life-extensions ”
“
There’s even more to the story. Wind farms on ROCs get paid the same subsidy regardless of market price provided they generate. So they get positive net revenue so long as a negative market price doesn’t exceed the value of their ROCs. At a zero market price, when market price responsive wind generators would be shutting down they need to be paid to do so to compensate for the loss of production subsidy.
For wind farms on CFDs things work differently. Their subsidies are capped at the value of the strike price (which is typically much higher than the value of the ROCs paid to others), so they can tolerate a much greater negative price with no incentive to shut down. Meanwhile, consumers get to pay the subsidies. Only if there is a contiguous period of six hours or more of negative prices do things change – and they get no compensation at all for the entire period, so they have a strong incentive to shut down. Of course, as the volume of wind under this regime increases, shutting it all down could have a significant impact on generation, so prices after the day ahead market could go positive again. However, since so far the periods of surplus tend to occur only overnight, it has proven easier to manipulate the market to ensure that the six hour rule doesn’t apply, and they maximise the subsidies.
BEIS is trying to negotiate different CFD terms for the next round, with no subsidy being paid for any period of negative prices. The result is that wind farms will need to factor in how much curtailment they can expect under those rules, and make sure they get compensated by a higher CFD price.
One of the big subsidies for wind farms is building interconnectors so their surpluses can be exported while British consumers get to subsidise them. There are OFGEM consultations on plans for interconnectors that close soon which show the extent to which they are in hock to National Grid’s desire to increase their portfolio of interconnectors (and grid reinforcement to supply them), and to some rather dodgy accounting that pretends it will result in lower CO2 emissions. Well, at least on the Continent, supposedly. They have the brazen cheek to suggest that although a study they commissioned shows that this expansion will be harmful to GB consumers (although I suspect it underestimates the harm) it justifies proceeding on the grounds of the overall benefit to continental consumers and the great carbon god.
I am submitting a response to their consultation which I shall also be copying to John Constable at GWPF, pointing out some of the holes in their analyses.
I have no right to speak on behalf of all sceptics, but on behalf of all sceptics, thank you for your efforts!
Governments rigging commercial markets, and forever changing their minds on how best to do it. What could possibly go wrong? 🙄
“Offshore power ‘will fail without subsidies’”
M’kay.
Offshore power will fail WITH subsidies. So what’s the point?
Ultimately there is no-one to blame but Government. Viable National power supply from windmills(they’re not turbines)has never been even a remote possibility. Stupid, with as many whistles and bells as one cares to add! Like they care. It’s not their money!
Well when they are rusting hulks they won’t being going in landfill as in the USA, they’ll just keel them over, and boy will the ‘greens’ will just love that! Probably worth considering a future in marine conservation!
If there has been no “security deposit” type of payment by the offshore (and onshore) operators of wind turbines to the government, as security against abandonment to cover the expense of removal or tower and turbine, future payments should be withheld from the operator to create such a security deposit to be held by the government.
Any mine opened here in South Africa has, by law, to place a deposit in escrow for the future rehabilitation. One of the big scams that the Gupta bunch perpetrated on SA was to move the deposit for a mine that they had bought, into a bank that was under their influence. Once out of the direct government view (not that the ANC lot were looking very hard) the accounts, that should have just been sitting there, were being rapidly shuffled around! Whether there actually IS any rehabilitation money left is anyone’s guess! And I would expect this sort of razzle-dazzling to go on when it’s time to clean up the ‘renewables’ messes.
The most useful thing offshore windfarms might do is be toppled at end of life to make no fishing zones to help preserve stocks. Shouldn’t cost too much?
Would hve the bonusof the greens (whose campaigns got them there in the first place) screaming blue murder.
Wind (and solar) have been getting subsidies for 15+ years and still they cannot economically compete with fossil fuel alternatives or nuclear reactors.
What other product (other than EV’s) or service has been given this much subsidy to smoothen market entry?Governments would have pulled the plug on any other product.
Reblogged this on WeatherAction News and commented:
If only, if only.
Judging by recent output in the UK, offshore wind power is already failing.
The National Grid is vulnerable at the moment with the recent unscheduled disconnections at Heysham, approx 1.3GW of baseload lost.
This is already a reality in Germany. Iirc, this was reported on Pierre Gosselin’s No Tricks Zone.
Old windfarms have come to the end of their 20-year subsidy and have shut down as it is not economic to run them, even though the capital has been written off. So far the govt has stood firm against extending the subsidies.