Gas Power Is Now Cheaper Than Offshore Wind (Again!)
By Paul Homewood
You will recall claims last summer that offshore wind is nine times cheaper than gas, and how offshore wind farms were reducing energy bills. As Climate Debate pointed out at the time, the claim was dishonestly based on a brief spike in gas prices last July:
https://climatedebate.co.uk/is-wind-power-9-times-cheaper-than-gas/
Since then gas prices have fallen rapidly, as I reported a couple of weeks ago. And as a result, wholesale prices of electricity have fallen, as these tend to follow the cost of gas-fired generation.
https://www.catalyst-commercial.co.uk/works/february-2023-energy-market-brief/
In fact electricity prices have fallen so far that offshore wind farms are now being subsidised again via CfDs. For the month of January, a total of £89 million was paid out in subsidies, which of course are added to energy bills. The average market price during the month was £121/MWh, whilst the average strike price was £167/MWh.
Market indicators suggest that prices will remain at current levels.
I wonder whether we will see Carbon Brief reporting that offshore wind is now dearer than gas?
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NOT A LOT OF PEOPLE KNOW THAT 
This news could really do with publishing more widely. Many lives and livelihoods are put at risk as a result of high energy prices.
This government is continually squandering tax payers money on subsidies for off shore wind turbines.
All the while MPs except a pay increase yet do a diabolical job by unquestionably accepting the misappropriation of public funds.
Which MP is arguing against the removal of gas appliances ?
With gas prices falling I expect to be paying a fair price for gas soon. Hope there is somebody here who can work out correctly what that should be.
ICE NG Futures imply a wholesale price of c4.5p KW/h presently
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All the while MPs except a pay increase yet do a diabolical job by unquestionably accepting the misappropriation of public funds.
Which MP is arguing against the removal of gas appliances ?
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The new deputy chairman of the Conservative party offers hope.
“Voters are ‘sick to death’ of net zero, says Lee Anderson”
https://www.telegraph.co.uk/politics/2023/02/10/lee-anderson-voters-have-no-interest-net-zero/
Are there any of his constituents posting here?
Apologies for my ignorance, but do all CFD prices and ROC guarantees go up by the rate of inflation every year? Does this occur in April or depend on when the contract was signed?
Correct for CFDs, but note that the Low Carbon Contracts Company CFD Register is still only showing 2012 base prices for the AR4 projects awarded last year. Cue lots of claims about cheap generation by journalists ignoring that these projects won’t be built for several years, if ever unless the REMA review of the electricity market allows them better terms.
ROCs are more complicated because the values depend on adding in recycle value, which tends higher when renewables output falls below target and when market suppliers default on their obligations. The target is set by a formula that is designed to ensure a shortage of supply from generation, forcing the purchase of buyout certificates which attract no recycle value: instead the value is distributed to those certificates backed by actual generation. Defaults and bankruptcy result in a further levy on non defaulting companies so that green interests are looked after.
Any company that needs a taxpayers’ subsidy to stay in business is not a company that deserves to survive.
Still around four times more expensive than electricity from Coal 20 years ago. (Admittedly ignoring inflation.)
Test email. Not been getting through
For some reason I also get the same problem, normally my posts appear immediately but every now and then they can take up to an hour but always show up in the end. No idea why.
Test email. Not been getting through. Any reason?
Sometimes I experience a delay. I usually put it down to either Paul posting another article or else there is simply alot of ‘traffic’.
But I might be wrong.
Thurrock has been given special dispensation to hike council tax after their green investment disaster.
“Thurrock has been given special dispensation to hike council tax after their green investment disaster.”
Are the Glorious Leaders responsible for this waste of public money facing criminal charges? Probably not 😦
Of course prices not that low yet to see Moray enter the CfD. Also be interesting to see if Seagreen fail to exercise their CfD now they are close to getting phase 1 fully commissioned.
The on-shore wind and hot air from politicians is not getting cheaper.
“I wonder whether we will see Carbon Brief reporting that offshore wind is now dearer than gas?”
I think we all know the answer to that. And I don’t expect any of the politicians who tweeted the “nine times cheaper” nonsense to update their reporting on the subject either.
I wrote about this topic when the Carbon Brief report was first pushed by the reliably unreliable Guardian:
Carbon Barf?
If total cost, mining, processing, manufacturing, transport, assembly, power transmission, control of power, are all considered, wind and solar are the most expensive power ever in history, present or future.
Obscene subsidies, tax credits and rules on what gets priority for power input to the grids make it appear that wind and solar are not as unreasonable as they actually are.
Talking of gas power, this is a scheme designed to ensure that green hydrogen can get lots of subsidies without being contaminated by hydrogen from other production methods. Presumably other methods will end up being denied pipeline access, forcing the cost to super high green levels.
https://www.current-news.co.uk/news/uk-government-to-launch-new-certification-to-provide-reliable-hydrogen-tracing
An update on my chart on real wind prices vs market.
Reblogged this on Calculus of Decay .