Orsted Demand Government Cash To Subsidise Hornsea Offshore Wind
By Paul Homewood
h/t Philip Bratby
The UK’s leading offshore wind developer is in talks with Net Zero Secretary Claire Coutinho about the fate of its flagship project off the coast of Norfolk, after spiralling costs cast doubt over its viability.
Ørsted, the Danish renewable energy giant, is understood to be in talks with the Department for Energy Security and Net Zero, led by Ms Coutinho, about securing more generous subsidy arrangements for its Hornsea 3 wind farm project.
It would see 231 turbines installed off the coasts of Norfolk and Lincolnshire, generating power for 3m homes.
Subsidies for Hornsea 3 were agreed with the Government last year through contracts for difference (CfDs), with operators guaranteed a minimum price per megawatt hour (MWh) known as the strike price. Ørsted was promised £37.35.
However, the wind industry has been hammered by inflation of up to 40pc since then. Building Hornsea 3 would now put Ørsted at risk of significant losses and executives warned earlier this year that they needed more government support to keep the project alive.
The UK government is preparing to publish details of its next “allocation round” for new renewable energy project subsidies, including offshore wind. The announcement is expected this week and should confirm the strike price has been raised to above £70.
The last round offered a strike price of £44 for offshore wind and attracted no bidders.
In y view, the government should tell them to take a running jump. If they cave in to the Danish wind company, it will simply encourage all the others who have signed contracts or will in future to demand more money every time they suffer losses.
Orsted are big enough to withstand any losses at Hornsea, and if they are not, then the Danish government should bail them out, not British taxpayers. And if Orsted simply pull out, our government should tell them they will not be considered for any future auctions.
But above all, what this latest episode illustrates is just how poorly these contracts were drafted in the first place by Ed Davey. CfDs put no legal obligation on wind farms to actually activate the contracts, or even construct them. By contrast, in the US Orsted and others have had to pay billions in financial penalties for breaking supply contracts.
Onr final comment. The Telegraph still does not seem to be aware that all the prices they have quoted are at 2012 prices. The £70/MWh, for instance, actually means a current price of around £100/MWh.
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NOT A LOT OF PEOPLE KNOW THAT 
Well we’re skint too. The last person in this seat / office spent it all. No use looking for more.
And why are they expecting the British Taxpayer to bail them out???? Get lost had enough of this nonsense
This calls for a petition.
As a taxpayer, I say NO – you’ve had enough for your heavily subsidised, intermittent, engineeringly incompetent generation
Like any other business that fails, due to lack of financial prudence and investing in unwanted products, let them die.
But offshore wind is “9x cheaper” than gas generation according to a recent boast from local loon Labour MP Clive Lewis:
https://x.com/labourlewis/status/1692135414365057041?s=20
Wind power is cheaper than fossil fuels and creates green job! NOT. The folly of relying on intermittent wind power is obvious, why should the government pay Orsted more than the agreed price. I have no idea of Coutinho’s qualifications and ability, but I guess she will roll over and give them what they want. How much longer do we have to go back to coal, together with oil and gas before the country collapses under the weight of net zero costs.
Coutinho got her job as an MP because she is Sushi’s pal having worked at the Treasury following a brief career in the financial world. A commenter on Turbulent Times claims a personal knowledge of her and says she is bright. A view from here is that she runs around trying to look local. Quite what she knows about horses to be a judge at our local show leaves me baffled. Much the same as her criticism of Brave Suella’s comments on homelessness, claiming to have worked with them. Comes across as more interested in her career than representing the electors and obviously as a member of the government no longer does.
The correct headline should be that Orsted asks for more Taxpayers cash. Wouldn’t it be nice if the legacy media were honest about who pays.
It appears from recent newspaper articles that the blackmail is working – the “Energy Secretary” has stated that the next round of subsidy offerings will be much higher. In the region, in fact, of exactly what these grifters are asking for.
One hopes that sanity/reality will hit all this nonsense soon, but by God it’s taking its time.
In other news the German government (presumably subject to EU approval) has agreed to provide €7.5bn of a €15bn rescue package for Siemens, while effectively underwriting the rest of it.
https://www.cityam.com/german-government-to-guarantee-6-5bn-siemens-energy-rescue-package/
Their latest results were announced earlier, seemingly papering over the cracks at Siemens Gamesa.
https://www.msn.com/en-gb/money/companies/siemens-energy-slips-into-red-in-fourth-quarter-on-poor-wind-results/ar-AA1jXboC
To be fair to Ed Davey the ministers responsible for the design and running of AR4 that Hornsea 3 falls under were coal station terrorist Alok Sharma, and the hapless Kwasi Kwarteng who believed the wind hype.
You have to wonder what the future is for the other AR4 projects sitting on £45.37/MWh currently. East Anglia 3, Inchcape (off Arbroath/St Andrews) and Moray West are all surely at risk, with Norfolk Boreas already cancelled. The government offer of a slush fund for “non profit factors” was only supposed to apply to later rounds. It no longer looks credible.
Probably the best tactic is for government to terminate the CFDs and have them re-tender as part of AR6. But the escalating costs must surely mean that the whole policy of relying on wind needs to be reevaluate and replaced.
I see that the LCCC has just added the AR5 projects to the CFD register
https://cfd.lowcarboncontracts.uk/cfd-register/register/AR5-BWI-610/
I wrote to them several weeks ago asking whether they would publish current indexed prices for these projects when they were listed. I have yet to get a reply, but it appears they have opted for apples and pears by only quoting the 2012 strike price, while all the other projects are shown at fully indexed prices. Cue excuses for journalistic confusion.
The supplier (or contractor) should always be in fear of the customer. Hah!
Only one thing to say to Ørsted, “Foxtrot Oscar”!
The DT writes:
“It would see 231 turbines installed off the coasts of Norfolk and Lincolnshire, generating power for 3m homes.”
A wind farm cannot POWER anything because its power is intermittent and people do not expect (yet) their power to be chaotically intermittent. The Government, the windfarm industry and the MSM should be told to stop these claims.
I did put in a complaint to the ASA. They rang me to say the agreed with my complaint but could nothing unless this “generating power for xm homes” was made directly to retail customers to promote sales.
I also wrote to complain to my Conservative MP as DESNZ make the same fraudulent claim in their Renewable Auction Round press releases, but received no reply.
Bank that. Then look for ads from the likes of SSE who like to boast about their renewables portfolios that breach the standard. You already have the decision in hand, so it should be open and shut. If we find an obvious case we need to make sure it gets media coverage.
The Government will have to give in the offshore wind industry’s demands for price increases and/or bailouts. This is because Net Zero by 2050 is written into law and the Government is therefore forced to follow the carbon (dioxide) budgets set by the CCC and will be taken to court by ClientEarth (an organisation in part funded by the UK taxpayer) if they fall behind, as has already happened resulting in further new Net Zero burdens for the UK.
They’ve given in AR6 offshore wind only £73/MWh. So much for wind being the cheapest form of energy. Thought the Tories might have held out to stress test Labour but no.
https://renews.biz/89521/uk-hikes-offshore-wind-cfd-price-cap-by-66/