Investment In European Wind Industry Falls In 2022
By Paul Homewood
From Wind-Europe:
Investments in wind energy in Europe fell in 2022. Orders for new wind turbines were down 47% on 2021. The problem is inflation, with costs rising at a higher rate than prospective revenues. Investors are also being turned away by unhelpful national interventions in electricity markets. The EU must make Europe an attractive place for renewables investments again – the forthcoming market design proposals must address this. The fall in investments and turbine orders is also compounding the problems faced by Europe’s wind energy supply chain. The Net-Zero Industry Act can’t come soon enough.
WindEurope latest data on wind turbine orders in Europe in 2022 paints an extremely worrying picture. Total orders for new wind turbines in 2022 fell by 47% on 2021. The EU saw only 9 GW worth of new turbine orders. This reflects a fall in new investments in wind energy that were announced last year: the first 11 months saw final investment decisions for only 12 GW of new wind farms.** The EU needs to build 30 GW of new wind farms a year under its new energy and climate security targets.
The EU has big ambitions for offshore wind: to get from more than 15 GW today to over 100 GW by 2030. Several offshore wind farms were expected to reach financial close last year, but final investment decisions were delayed due to inflation, market interventions and uncertainty about future revenues.
Inflation impacting investments
Inflation in commodity prices and other input costs has raised the price of wind turbines, by up to 40% over the last two years. But the prospective revenues of those planning to build wind farms have not kept pace with this. Many governments index the prices paid for wind energy (usually determined in auctions), but not enough. And the long time-lag between developers deciding their auction bids and their turbine suppliers actually procuring their components doesn’t help either. Governments need to ensure full indexation.
The simple truth is that wind power has only thrived in Europe because of the generous subsidies doled out. It will never be competitive in a free and open market, because its intermittency makes it worthless.
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NOT A LOT OF PEOPLE KNOW THAT 
Nothing but pipe dreams. It was a bad experiment gone wrong.
Bin the Net Zero con and lets invest in reliable fossil fuels.
But but gas is the most expensive way to generate electricity. The BBC says so:-
The way electricity prices are set has pushed UK household bills up by £7.2bn over two years, analysis suggests.
Under existing rules, energy suppliers pay the highest price for wholesale electricity no matter how it is made.
Gas-fired power stations are the most expensive way to generate electricity, but only make about 40% of all electricity used by UK homes.
https://www.bbc.co.uk/news/business-64471262
How do the BBC get away with such blatant lies? With OFCOM, Labour and Conservatives all supporting these lies what recourse do license fee payers, taxpayers and utility payers have? These lies have tripled UK household utility bills after-all.
But they are WRONG. The market doesn’t operate in the way the pool did, ranking offers and picking the cheapest to meet demand. It is a bilateral market on hugely varying timescales. If a nuclear plant sold a hedge to a retail supplier for say 100MW continuous for the next 2 years at a fixed price, that contract stands and forms part of the supply unless the nuclear plant is unable to supply or the retailer goes bankrupt. Generators and retailers, large customers, banks, and trader can gain a licence to trade on the electricity market. All trades are registered with Elexon/EMR Settlement, and broken down half hour by half hour into Settlement Periods.
Gas generators may well sell forward hedges if they can purchase gas that could be used to supply the power sale at a margin that is profitable. Their only concern is that the trade be profitable. If it turns out that the generation is not required because of high winds, then it can unwind the trade, and bank a profit that way. The most expensive way to generate electricity is from technologies earning 5ROCs per MWh – that is tidal turbines and wave power. Or from coal fired power charging £6,000/MWh in the Balancing Mechanism because of shortage. Or an interconnector import at nearly £10,000/MWh to help keep the lights on in France. All the subsidies for renewables are added into consumer bills. That includes the effects of UKA carbon allowances. Two years ago (until May 2021) the £18/tonne CO2 support price applied. Last year saw the UKA trade as high as £90/Tonne CO2. On its own, it has added around £8bn to electricity prices, though recent auctions have been clearing at levels just about £60/tonne CO2 – enough to raise over £5bn in proceeds, and boost electricity prices by over £20/MWh.
The problem of “gas is expensive” is that it is used inefficiently.
‘Peaker plants’ are small Open Cycle types able (most of the time) to generate when renewables don’t perform.
They would run about 35% efficiency compared with Closed Cycle at 62%, hence 77% higher gas consumption for the same amount of electricity.
But Closed Cycle plants are uneconomic if run on a stop start basis so they cannot exist with renewables.
Meanwhile ECIU make extravagant claims:
https://www.current-news.co.uk/news/uk-net-zero-businesses-contributing-71-billion-to-economy-says-cbi-and-eciu-report
I suspect if they admitted it was costing the economy £71bn it would be closer to the truth.
No different from the USSR claiming that tractors that don’t work and nobody wants represent economic value. That we gave to buy EVs and they are mote expensive than ICE cars us not “growth”.
Windmill windmill not ‘turbine’. Turbines are in jet engines and water mills. Any data on windmill longevity beginning to accrue?
This was written:
The simple truth is that wind power has only thrived in Europe because of the generous subsidies doled out. It will never be competitive in a free and open market, because its intermittency makes it worthless.
Wind Energy is much worse than just worthless, something worthless would not have destroyed reliable fossil and nuclear power. Wind power is pure EVIL, a weapon for destroying Western Civilizations, which was its real purpose in the first place.
Yes, wind power has negative value.
‘The problem is inflation, with costs rising at a higher rate than prospective revenues. Investors are also being turned away by unhelpful national interventions in electricity markets.’
‘problem is . . . also’
Then it’s not the problem, only part of it. No editors at windeurope/newsroom?
‘The Net-Zero Industry Act can’t come soon enough.’
I would counsel people to not have faith in a ‘Net-Zero Industry Act.’
‘WindEurope latest data on wind turbine orders in Europe in 2022 paints an extremely worrying picture.’
Worrying? What is ‘worrying’ about it? Is it simply that YOUR income depends on it? A problem for thee doesn’t worry me.
‘The EU needs to build 30 GW of new wind farms a year under its new energy and climate security targets.’
One wonders how wind farms provide energy security – they clearly displace dependable sources. And what the heck is ‘climate security?’
Net-Zero Industry is what you get when climate policies drive energy prices through the roof. I’m sure China will cut the EU a break based on the volume of renewable energy generation products and electrified vehicles the EU imports.
As even GangGreen is aware, the UK beloved National “Health” Service is apparently again on the brink of collapse.
They will also be aware that in London and in many UK cities and towns, the more excitable youth enjoy a bit of stabbing, especially on a Friday night. Now, stabbing may be fun for the stabbers, but it hurts and can be dangerous.
I do wonder if we might stop the stabbing (who wants anyone to enjoy themselves?) and by extension, ban Surgery, sack all surgeons, blow up the Royal College of Surgeons and demolish all surgical wards and operating theatres. Employ homeopaths instead. Must make enormous savings even if the homeopaths are paid well. Big Pharma will like it because they will flog more pills and vaccines and even get to supply the miniscule quantities of stuff homeopaths need.
Barmy?
Well, yes, I confess it is. But it is almost exactly equivalent to what our Beloved Leaders have done in closing and filling coal mines, blowing up coal power stations, banning fracking, making gas uneconomical and (without so much as a cost / benefit analysis in sight, invested eyewateringly large amounts of our money into ludicrous “Renewable” energy.
In recent months Judith Curry has posted articles by a planning engineer. Most of it concerned penetration of the grid by wind, in other words, how much wind can grids tolerate? The conclusion was not very much, 25% was considered to be doing well. Grids were developed for generators rotated by large, heavy steam turbines. It didn’t matter whether the steam was produced using wood, oil, coal, gas or nuclear. The rotating turbines had significant inertia which contributed to stability. (It is important that the generators on the grid are feeding in 3 phases of very similar waveform electricity. In other words, the phases need to synchronise closely and have the same frequency.
Wind is erratic and all over the place. Increased levels lead to instability, blackouts and even damage. I know that National Grid and others keep claiming new records for wind generation, 60% was claimed recently.
If JC’s planning engineer is right, then wind has a big problem and we are being fed unreliable claims. Does anyone know what is going on?
Peter you are quite right about the issue of spinning inertia stabilising the grid and the fact that wind turbines do not supply inertia. The ways in which the grid attempts to get over this problem (and lots of other associated problems such as reactive power control, phase angle, frequency, voltage, short circuit level and loads more) are many and various.
Drax ( of biomass burning fame) do a good layman’s style set of guides to explain these. Start with this one concerning “Reactive Power” (VAR) and it links to most of the other issues.
https://www.drax.com/power-generation/silent-force-moves-electricity/
Wind and solar are essentially parasitic in their nature in that they only supply part of the overall package and depend on other traditional generators to make up for their deficiencies. Perhaps the ultimate example of this is the use of “Synchronous Condensers”
https://www.siemens-energy.com/global/en/offerings/power-transmission/portfolio/flexible-ac-transmission-systems.html?gclid=EAIaIQobChMIsPXtosn2_AIVpOjtCh0ltw4XEAAYASAAEgLWDPD_BwE
As there are not enough of these to balance the system when wind is producing a lot they simply pay thermal generators to spin up their gensets (using power) to provide all the back upservices i.e. paying twice.
That 60% record generation for wind lasted for all of half an hour!
I saw somewhere else that Professor Hughes of Edinburgh has said that these wind turbines decrease in output over a fairly short period and that their lifespan was about half that of the stated one, about 12 years against 25 years. He is an economics professor and a statistician apparently and naturally has been branded a liar etc. I followed up his assertion and, if right, it would blow a big hole in the economic case for wind.
There are 2 links here that I thought might be of interest.
http://aims.niassembly.gov.uk/officialreport/minutesofevidencereport.aspx?&AgendaId=26111&eveID=13093
The original story was from the Daily Mail
https://www.dailymail.co.uk/news/article-2254901/Wind-turbines-half-long-previously-thought-study-shows-signs-wearing-just-12-years.html
The first link is interesting because in it in Paul’s area. Hughes clearly goes against KPMG which is pretty brave. The DM link is over 10 years old so his assertion should be showing up around now or before. Has anybody got any figures on the replacement of ageing turbines? It could also have something to do with the fall of investment in the main story.
“It [wind power] will never be competitive in a free and open market, because its intermittency makes it worthless.” The intermittency certainly makes it very expensive.
I calculate that should any electricity supplier wish to run on 100% wind power and use “excess” electricity to produce hydrogen as a store of energy for when doesn’t blow it will be necessary for them to build at least 7.5 GW of installed wind capacity for each 1 GW of reliable/dispatchable power.
This would be for electrolysis -> stored, compressed hydrogen gas -> electricity from standard generators as and when required (viz when the wind drops).
Suppose we want P GW of power to be “dispatchable”, meaning always available “on demand”.
Let us start with P GW of installed wind turbine power and calculate the extra installed capacity required to produce P GW of dispatchable power.
Now the capacity factor of, for instance, UK North Sea offshore wind turbines is 33% (onshore is less) over a complete year, so the average amount of power over a year supplied by such a wind turbine is 0.33P GW and consequently we will require 0.67P GW of storage.
[The capacity factor being the average output over a given time as a percentage of the installed/nameplate capacity due to the variability of the wind]
The efficiencies of the hydrogen production, compression/storage and the burning of the hydrogen to produce electricity are :
Electrolysis : 60%
Compression : 87%
Electricity generation : 60%
So overall efficiency = 60% x 87% x 60% = 31%
So the amount of excess power required to produce the missing 0.67P GW is 0.67P/0.31 = 2.16P GW.
Since the capacity factor is 33%, this means we will need 2.16P/0.33 = 6.55P GW of additional installed wind power to provide the needed 0.67P GW of dispatchable power.
Hence a total of P GW + 6.55P GW = 7.5P GW of installed wind turbine capacity is required to provide P GW of dispatchable power.
Then of course there is the cost of the hydrogen storage….
So the current UK plan is to work with intermittency and use behaviour changes, volatile pricing and rolling blackouts all controlled by smart meters in order for demand to match supply.
John, I used to know a chap who ran calculations in the way you have. Did you by any chance do nuclear engineering at Manchester?
So the solution to inflation is to fully index costs (prices) to inflation? That might work for their shareholders today but it won’t work for them tomorrow and destroys the economy. Hello Weimar.
Yesterday I was talking to a banker whose brief was to fund environment projects particularly wind farms to limit climate change.. When I asked whether he meant high CO2 levels, he replied, yes. I asked him what percentage of the atmosphere was CO2 and he said he didn’t think it was quite as much as 10%, What chance has commonness got to defeat such nonsense.
National Grid’s expansion plans explained.
https://www.current-news.co.uk/news/etys-2023-predicts-widespread-renewable-growth-but-transmission-concerns-amounting-in-the-south-of-england
Doubles and trebles all round. All thanks to backing Net Zero.
Octopus results
https://www.current-news.co.uk/news/octopus-energy-group-revenues-surge-110-in-2022-despite-retail-challenges
£150m loss as a social service, supposedly.
The problem is the Pollack limit about which there has been heated debate on WUWT. This is where you have enough windmills that when working at their best output – not nameplate capacity – are able to supply 100% of the grid demand. But as we know that is impossible for any length of time, the Pollack limit is how much annual output you can achieve. Generally it is between 25 to 28%. Therefore to raise this annual percentage you need to have an oversupply of windmills which means that as more are added there is increasing redundancy and a diminishing return – on something only viable with taxpayers cash in the first place. Unless you have somewhere to dump the surplus on the good days, more and more windmills will need to be turned off.