Europe’s Largest Wind Farm Facing Bankruptcy
November 12, 2023
By Paul Homewood
h/t Joe Public
More bad news for the wind industry:.
https://twitter.com/IntermittentNRG/status/1723692080801710475
What is different about this one is that the PPA forces the wind farm to buy power on the spot market, when the wind does not provide enough:
In other words, the wind farm is obliged to pay the costs of its own intermittency. And, of course, when wind power is low, spot market prices rise.
This highlights the worthlessness of wind power, as when there is plenty of wind, the value of the product is low.
In this country it is energy consumers who have to pay the costs of intermittency, something which needs changing.
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NOT A LOT OF PEOPLE KNOW THAT 
Why can Sweden write a good contract and UK can not?
That is the $64000 question. Who allowed these companies to place unreliable generators on the grid then charge consumers for the essential back-up? The guilty ought to be punished, but were no doubt awarded medals.
Watching the clueless numpties on the ‘Select Committee’ last night debating their Net Zero ‘goals’, was worse than pulling teeth. There was one guy asking some vaguely challenging questions about where our energy comes from when the wind doesn’t blow. He also asked how poor people will manage when they can’t afford to pay their bills and their power is cut off. The fact that Net Zero is the underlying cause of this vastly amplified fuel poverty, is studiously skirted around throughout. Lots of finger pointing at the fossil fuel providers, with further schemes to ‘punish’ them being proposed. These parasites are wasting vast amounts of public money pursuing insane agendas to make people so poor, they can’t keep warm in winter. They should all be sacked and hung out to dry.
I’m not sure they have. No intermittent operator will agree to a contract where they “pay” for the intermittancy. They may have to “deliver” power do buy it in when thry cannot generate it themselves, but they then on-sell it to consumers. Perhaps they have to on-sell at their contract price, but the piece isn’t clear, and if that’s so, they will demand a higher contract price to allow for that. Investors are neither stupid nor greedy. They require their return & will only agree a deal where that’s likely. They are not going to agree a deal where for 50% of the time they make a loss that’s bigger than the profit they make the rest of the time.
The PPA price would surely reflect the risk of the cost of purchasing power on the open market when they aren’t generating if you were required to offer an in all in rate. The indication is most PPAs don’t have an obligation to provide power when its windless not quite sure why any entity would enter into such a contract.
But doesn’t the windfarm then just on-sell what it has bought to consumers? So they still pay, as market prices rise because of intermittancy. If not, what do they do with the power they have bought?
The wind farm does not sell directly to consumers. It sells to retailers, who in turn have contracts or tariff structures with consumers, few of which allow market prices to be passed to customers.
I presume the PPA is firm, that is the utility pays a fixed price for an agreed volume. The risk is with the owner/operator. Looking at the majority owner my guess is that the profit was front loaded onto the actual supply of the units. So now the utility has a worthless PPA and the operator walks away.
Since “energy” is a somewhat evanescent ‘product’ the sensible assumption would be that a generating company would agree to provide a contracted amount based on demand. The problem which nobody has so far (attempted to) come to grips with is that not only does demand vary from minute to minute — though experience has shown that it is possible to assess demand within reasonable parameters — but where wind generation is concernd so does the supply of fuel, ie wind.
In reality there is no way that windfarm operators can ever guarantee supply in the way that coal, gas or nuclear operators can which in a sane environment would rule out wind for anything other than a minimal level of battery storage or some other industrial/commercial operation where continuity of supply is not important.
As has been said before, wind is a 13th century technology which we gratefully abandoned 250 years ago when more reliable technologies arrived. The idea that we are content to take civilised society back a quarter of a millenium is bizarre to say the least.
Well said! Now all that is needed is to get this obvious truth into the thick heads of our politicians
Posted this the other day – a letter in the Telegraph.
Sir,
Matt Ridley’s article (Electricity from wind isn’t cheap and it never will be) is spot on. The problem is, many of our politicians and net-zero enthusiasts are confused about the “product”.
Comparing the MWh price of wind and solar with that of fossil fuel or nuclear electricity is like comparing a kilo apples with a kilo of oranges. Wind and solar are not the same product since they are intermittent. Until the purveyors of renewables are obliged to sell the same product (dispatchable electricity 24/7) there will always be problems and confusion.
The renewable providers should be obliged to sell the same product in competition with fossil fuel or nuclear providers which would mean that they would have to either invest in massive energy storage facilities, or to have a binding contract with a fossil fuel/nuclear provider to purchase electricity when the wind doesn’t blow and at night.
Yours etc.
You have to ask: In which warped world would an unreliable energy provider have to buy from a reliable energy provider to provide reliable energy, with the consequential price hike, and not just use the reliable provider directly at original (lower) price?
I’ve argued before that there is a place for solar if only because at least daylight is predictable and in some niche contexts daylight is sufficient to recharge a built-in battery.
It also does not need to be space-hungry and it would probably make more sense to have every domestic roof covered with solar panels than to demand gas boilers are replaced by heat pumps.
Wind generation can never be efficient or cost-effective by its very nature and, as I said, we rightly abandoned it when better ‘fuels’ were discovered/ invented.
The difficulty we are encountering here is government’s obsession with nit-picking regulation. There is no necessity to reduce CO2 output, certainly not to the extent that government is demanding and certainly not in the way it is going about it.
Good.
” … the wind farm is obliged to pay the costs of its own intermittency.”
Britain should have implemented Prof Dieter Helm’s 2017 recommendation:
This is proof that power should be run as a strategic good ie that the aim should be to provide power as a non profit or nationalised industry. This would take out the profit part and therefore balancing power generation would not need penalties. Of course that would mean it was not fun and some billionaires would lose a few bucks!
Spoken like someone who has never experienced the horror of State-run industry.
The electricity sector was nationalised in the UK in 1948 (and in fact most of Europe) with generation, grid, retail State-owned. It was a non-contestable monopoly with the only source of investment being taxation/borrowing, and with no profit motive no incentive for efficiency, and with no competition no restraint on prices or care about service to consumers. The sector did not receive enough investment, because tax receipts had to be shared around all the other government activities.
There is a reason the bloated, tax devouring, State Leviathan was privatised. I wonder what that could be?
The privatisation (in the 80s) worked well in the UK. Competition brought retail prices down, drove efficiency. The whole problem now is Government has become a market player which by regulation, subsidy, policy, carbon taxes, price caps has so distorted the market, it cannot operate properly.
The solution is LESS Government not more!
Also spoken like someone who has no experience with energy management.
He’s just a dumbass communist. He rails against wealth, when wealth provides the platform upon which he speaks.
“This is proof [?] that power should be run as a strategic good ie that the aim should be to provide power as a non profit or nationalised industry.”
Brilliant! Government makes a royal mess of the energy markets, so, obviously, they should be put in charge of all of it!
My understanding is that in the UK last year, a significant # of electrical power retailers went bankrupt when faced with the need to supply power unavailable on the wholesale (wind/solar) market but exorbitant on the spot market from NG powered generators. Texas had a similar crunch for some retailers in their winter 2022 fiasco when spot pricing of $500-1000/kw-hr occurred for short intervals.
I expect that when the PPA was written, the contract price was higher than the cost of the balancing power. What has gone wrong for the wind producer is that, with the price of gas quadrupling, the cost of balancing power is now way above the wind contract price, and they didn’t hedge against that sufficiently.
Firm quantity PPA hedges will become more widespread, and wind producers will need to install (battery) storage so they turn from being an intermittent producer to a dispatchable producer with predictable profile.
Indeed. It has always seemed obvious that intermittent supplies should be required to provide either the cost of purchasing backup or ideally of providing it themselves.
…but that would make them (?more) uncompetitive with legacy provision.
How can any intermittent provider sign a ‘baseload contract’, as mentioned in the article.
This is a problem for Tesla owning Uber and other delivery drivers. Use a fast charger twice a day to maximise income and any savings go in a refurbished battery. You need two one on the road and one charging slowly.
Backdrop: The driver, Dobson Omene, runs a transportation service in Atlanta, Georgia. His Model 3 battery died after 120,000 miles. At the time of the failure, he typically used a Tesla Supercharger — generically referred to as a fast charger — twice a day.
https://www.forbes.com/sites/brookecrothers/2023/11/12/experts-address-excessive-use-of-tesla-supercharger-after-model-3-dies/
120,000 mile battery life sounds GOOD to me.
Only for a battery, I never had an ICE engine fail at a low mileage like that or know of one that has.
Conversely I know of several currently approaching 200k miles and one Toyota petrol at 300k, and many years ago an Audi that was well on its way back from the moon brfore the steel worm got it. All these were well maintained including the body. For an ICE unless dicked about with by a petrolhead who doesn’t know what they’re doing it’s usually the body that is the reason for scrapping.
My previous Audi A6 (2005 model) was at ~173K miles when I parted with it. The independent dealer continued to use it as a courtesy car for at least 3 years as I had maintained it well. This is the key to longevity, good/regular servicing as well as long steady-speed journeys and quality body/paintwork to prevent rust. Being a 3.0 TDi 4WD also meant that much of the driving was well within it’s capabilities so component stresses were significantly lower. With steady driving I even got 37K miles out of a set of set of winter tyres.
Oh dear……….. Reality bites
Not too far off topic:
https://renews.biz/89441/uk-wind-power-still-a-better-deal-than-gas/
” Analysis by independent think tank New Green Alliance has revealed even if the UK government sets prices for offshore wind power at double the level paid in the last successful Contracts for Difference auction, it will still be cheaper than gas power, and prices will be less volatile. ”
and
” “The average UK energy bill is double what it was two years ago ”
Article dated 13th November 2023.
The article can be dismantled using the usual logical arguments.