CfD Subsidies Rising Again, As Market Prices Fall
By Paul Homewood
We have now got the full data in from the Low Carbon Contracts Company concerning CfD subsidies for 2023/24.
https://dp.lowcarboncontracts.uk/dataset/actual-cfd-generation-and-avoided-ghg-emissions
The above chart is for calendar year. Subsidies in the early years naturally were low as the system had only just started in 2016. Subsidies hit a record high in 2020, when market electricity prices had dropped through the floor because of lockdown induced low demand.
On a financial year basis, subsidies jumped to £2159 million in 2023/24, with average market prices of £82.53/MWh.
This year, market prices have fallen even further. Since January they have been averaging £57.45/MWh.
Bear in mind that the current Administrative Strike Prices for offshore, onshore and solar are £105, £92 and £87/MWh respectively.
So much for cheap renewables!.
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NOT A LOT OF PEOPLE KNOW THAT 
So, we are subsidising by £1.5 billion power generation that does not measurably alter the world’s CO2. It also destroys UK competitiveness. What clever governance we have!
China coal production for 2023 was 4.66 billion metric tons. China produces the UK annual CO2 emissions in 10.6 days.
India’s Economic Times Energy World site has the headline, “India to ramp up coal stock to 150 million tonne by FY24 to meet growing power needs”.
“The minister’s statement is backed by the recent achievement in coal production, with India surpassing 900 million tonne as of March 6, 2024, thus setting a new record and edging closer to the ambitious target of 1 billion tonne by the end of this fiscal year. The Minister highlighted the availability of ample coal stock, with approximately 85 million tonne with coal companies and 43.28 million tonne at domestic coal-based thermal power plants as of March 5, 2024. This strategic reserve is poised to ensure uninterrupted power supply across the nation, meeting the escalating electricity demand.”
The UK is currently importing 21.6% of our electricity, almost half from France. We ought not to fall out with France: https://www.theguardian.com/world/2021/oct/05/france-uk-jersey-eu-energy-supply-fishing-row-channel
Nor fall out with China who own/control 75% of all Rare Earth Minerals where, since we have blown up most of our fossil fuel generators, are totally invested in green energy. (Not forgetting solar panels and wind turbines require frequent replacement).
The UK would be up the creek if China pulls the plug and stops trading with us! What’s the immediate backup plan??
You have to remember, a lot of that £1.5Bn ends up in globalist billionaire bank accounts, onshore or offshore! Net zero is about transferring wealth from the masses to the elites, nothing more and the climate/carbon scam peddles it
Anyone who understands energy and power generation, understands renewables are the most expensive form of intermittent electricity production – it’s like living in an house, where the roof randomly disappears, quite a lot – no one would ever buy one
I guess more to the point is not just the lack of generation for extended periods (like the last few days with wind generating less than 1000MW) but also than when allowing for turbines own use (driving blades to avoid bearing brinelling, dehumidification, oil pressurisation et alia) then they are actually a nett user of electricity.
IIRC poster “It Doesn’t Add Up” was able to identify the point at which turbines own use nationally became greater than gross reported generation and it was around about the 1GW mark. Complete madness.
You make an excellent, often overlooked point Ray regarding the fossil fuel / nuclear generated electricity taken from grid, by both wind & solar farms, to keep them warm, dry & operationally ready during Dunkleflaute / dark days & nights
I too like ‘It Doesn’t Add Ups’ comments which are both competent and informative
Ray, “IIRC poster “It Doesn’t Add Up” was able to identify the point at which turbines own use nationally became greater than gross reported generation”
For our entire offshore fleet, that event occurred briefly 2 days ago. At 08:30GMT on 5th May.
They were ‘negatively contributing’ 0.427MW. Here’s betting they weren’t refunding the subsidies paid to their onshore brothers (& sisters) that made up that deficit! 🤣
https://i.postimg.cc/mkC10ZKw/temp-Image-UM6g-CV.avif
Source:
https://bmrs.elexon.co.uk/actual-or-estimated-wind-and-solar-power-generation
“It Doesn’t Add Up” was able to identify the point at which turbines own use nationally became greater than gross reported generation
A webpage with a live display of the energy input/output for wind would be interesting.
“Oh look, it’s negative …. again”
I updated my chart showing average CFD prices by technology against day ahead prices to cover the recent April indexation uplift
and likewise for wind, including ROC subsidies. I have used the actual final ROC value including recycle elements where this is known, and uplifted the cashout value by 13%, being the average recycle uplift where the final price is yet to be determined (i.e. since April 2023).
The dramatic fall in day ahead prices is partly due to the big fall in gas prices, but also the fall in UKA carbon allowances, which have dropped to the point where RATS has been running coal much of the year because it is cheaper than gas (albeit they are now looking at trying to use up coal stocks rather than re-export them when it shuts down). A further influence has been low prices on interconnectors, motivated by ample gas stocks and high reservoir levels for hydro even in Spain – which has reduced French prices which have also been pressured lower by the return of nuclear capacity.
Here’s a chart of the monthly capacity factors for CFD offshore wind farms. Capacity is defined as the highest daily average output in the life of each wind farm, and the average monthly power output is shown as a percentage of that maximum.
The lines are colour coded across the spectrum by start up date to allow some impression of how age relates to performance. A generally low wind year like 2021 should therefore not distort relative performance. Monthly data also reveals major maintenance shutdowns (e.g. for cable repairs) which are an important part of overall performance and reliability. It is interesting to note that despite being still fairly new (it was fully commissioned in April 2022), Moray East is clearly suffering from significant curtailment because its lower strike price can make it cheapest to curtail more often – its CFD is offering limited protection against that.
The CfD costs are small change compared to the ROC largesse
True. FiTs got a 5.2% indexation boost at the start of April too.
https://www.ofgem.gov.uk/publications/feed-tariff-fit-tariff-table-1-april-2024
Collected through your bill
https://www.ofgem.gov.uk/publications/feed-tariffs-guidance-licensed-electricity-suppliers
The “failing” plans of the marxists.
Subsidies can only continue if there is money to provide them. What happens if there is a financial collapse and no more “government” money is available? I tell you what happens, the whole sh1tshow collapses. I would offer that this is intentional.
And how about the interconnectors? Those supplying us are not FORCED to supply if they have a need themselves. What if a change of government decides on protecting the home supply? What then? What if Putin and the Chinese have every interconnector mapped like they have the subsea internet cables AND the gas and oil pipelines from the North Sea. Again new weak links.
Just like the rewilding asininity. Make the country dependent on imports creating a serious strategic weak link which can be severed for one of several reasons. V
Call me a conspiracy theorist but every “new” new great idea the lefties come up with will have at least one major flaw and weak link. You would almost begin to think this is all being done deliberately……….