The shameless blackmail by the wind industry is a golden opportunity for the Chancellor
By Paul Homewood
Press Release
The government should reject the wind industry’s crude blackmail and cancel contracts that appear to have been obtained on the basis of false representations.
London, 3 March – Further details are now emerging of the offshore wind industry’s attempt to obtain additional support for unbuilt projects, first reported by the Financial Times, and the subject of a Net Zero Watch statement (“Demands for more subsidy expose the illusion of falling wind power costs”).
The Times is now reporting that the Danish state-controlled wind giant Ørsted is threatening to cancel the £8 billion Hornsea Three wind farm, the world’s biggest, unless it is given more UK government support through “enhanced capital allowances”.
Hornsea Three was amongst five projects that bid very low prices for UK government Contracts for Difference in 2022. Ørsted claims that it is not alone, and that all these projects are now “in jeopardy”.
The justification offered for this threat is that the company is facing “very extraordinary circumstances” that have increased its costs.
However, since the contracts are inflation-linked in any case, and world steel prices have actually fallen since Ørsted submitted its CfD bid for Hornsea 3, Net Zero Watch does not accept this explanation.
On the contrary, we refer once again to analysis that we and others have published over the years, demonstrating from audited financial statements that wind CAPEX and OPEX have not fallen significantly, and that the CfD bids were never realistic.
We predicted that these companies would eventually return to government demanding even more support. We were widely criticised at the time for this work, with one prominent energy reporter stating that it was bizarre to believe that the wind companies were “banking on threatening to go bust” in order to blackmail government into further subsidy. However, this is precisely the situation that is now emerging.
A government spokesperson has been quoted to the effect that Hornsea Three’s “inflation-linked contract was already generous” but they were “open to listening to the sector about concerns they may have”.
The Chancellor may choose to listen, but he should reject the industry’s crude blackmail, and indeed take it as a golden opportunity to cancel contracts that appear to have been obtained on the basis of false representations.
Dr John Constable, Net Zero Watch’s director of energy, said:
“From 2002 to 2022, the offshore wind industry in the UK has received about £20 billion in subsidy, charged on consumer bills and mostly under the Renewables Obligation. If offshore wind is not yet showing real cost reductions it is unlikely ever to do so. The Chancellor should stand up for consumers and taxpayers and say that enough is enough.”
Touché little Emily!
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NOT A LOT OF PEOPLE KNOW THAT 
Will the Chancellor grow a pair? I suspect that, based on his record, he will give in to the troughers and liars.
The political elite are so much in awe of “Net Zero”, that the wind farms will get everything they demand. Oersted already have the Chancellor’s balls in a vice like grip!
Of course he will, he’s bought and paid for.
Ah so!
Ever-so-cheap wind power?
No, Wind and Solar Power is Not “Cheaper Than Coal”
“It’s total and utter bilge, nonsense, rubbish like almost all the claims churned out to a gullible public by a compliant media desperately spewing out climate-catastrophist propaganda to prepare us for the colder, darker, more miserable future our rulers have in store for us”.
Details for the poverty stricken here —
https://dailysceptic.org/2023/02/08/no-wind-and-solar-power-is-not-cheaper-than-coal/
Call their bluff.
Socialist Chancellors (and PM’s) such as we have been burdened with for all this century, are not likely to suddenly lose their spots and actually pretend to be Conservatives. Closing down as much renewables as possible is what a responsible right-wing govt. would do ? No chance in our Orwellian paradise ?
Given the negligible UK greenhouse gas output and the exoneration of CO2 as harmful (Lightfoot and Ratzer, 2021 et seq.)r, any shade of politics government would end the self harm of net zero.
Lets not forget the vast amount capex NG has to invest to accommodate these wind farms as well the vast profits the ones already running make through financial engineering. Im agnostic about climate change but if the evangelists are going to pursue it to the ends of the earth it needs to be done in a structured way that minimises the overall cost to the consumer. Only a national entity like the CEGB can deliver a least cost solution. The waste in the current system from constraints costs to smart meters is outrageous and our so called political leaders from whatever party should be calling this out as they are so blinded to the climate goal at the expense of everything else.
The companies knew the CfD has termination rights to mitigate their risks, should they fail to deliver these projects. There are accompanying non-delivery penalties. They knew what they were getting into.
The Government also knew what they were getting into. They held the pen when drafting the contract, and accepted non-delivery of a project was possible. They decided the non-delivery penalties.
If the Government responds to any of these “demands” (begging), it has to be a firm “no”. Otherwise their own EMR auction arrangements will lie in tatters.
Consider projects who may have been rejected in the auction because their prices were higher at the original time of selection. What if any of these are now shown to have been competitive? Any retrospective change would create winners and losers, and things could get “messy”.
The only thing the Government can realistically do is accept any notifications to terminate, and enforce the non-delivery payments from the failed developers. At least the Government can then hold another auction to try to, belatedly, recover its position.
If this is what happens, it will reveal the Government’s irresponsibility when it mandated the closure of the coal fired power stations.
Thanks Jordan: an interesting angle.
The government is in a big mess. It set the cap on bids for AR4 at £46/MWh in 2012 money, and has lowered it for AR5 to £44/MWh in 2012 money. That is not a great deal of headroom above the foolish £37.35/MWh bids, doubtless suffering from winner’s curse. It’s not just the AR4 capacity that is in doubt, but the AR5 auction as well. On top of the rising prices for proper capacity from the T-4 auction, and the risks of under procurement and further closure of capacity due to end of life and late start for Hinkley Point the whole programme is in extreme jeopardy. All the delays to FID timescales mean that delivery, even at higher prices will be late. They may end up like the Irish with panic purchases of diesel generators.
The chancellor should (and probably will) give the wind industry all it asks for and then more again. I want to watch the faces of the greenies as they tell us that wind is cheaper than gas/coal. (Is it my wishful thinking, or are the externalities of wind and solar reaching mainstream; at least the cost of grid upgrades and possibly the madness of keeping spinning reserve on standby?)
Meanwhile, battery cars sales have fallen off a cliff – one way to move them when the battery is dead – this year as taxpayer cash ended in both the EU and China. Sadly under the dribbling fool in the US, taxpayer cash will increase hence the carmakers will focus there.
All % of Europe’s wind turbine manufacturers have been operating at a loss for well over a year now and have been pleading with the EC to increase their subsidies.
In June 2022 Wind Europe noted that “the lack of specialised vessels for offshore wind operations is just one indication of the poor condition of Europe’s wind energy supply chain” they also pointed to difficulties with “the availability of key raw materials”
These problems for offshore wind are only likely to get worse as the turbines are now getting bigger than the three types of vessels available to install them – shortage of these vessels “poses risks for project execution worldwide”
First we have to stop funding all this rubbish . We can legally avoid paying income tax, by keeping our earnings low. If in business get a good accountant. Use cash. Grow your own. Get a few chick chicks and feed them scraps(which apparently is illegal). Obviously fight tooth and nail against digital ID and currency which will surely usher in a totalitarian green hell. Take that 77th Brigade!