{"id":277959,"date":"2023-09-09T13:48:29","date_gmt":"2023-09-09T11:48:29","guid":{"rendered":"https:\/\/climatescience.press\/?p=277959"},"modified":"2023-09-09T13:48:42","modified_gmt":"2023-09-09T11:48:42","slug":"net-zero-offshore-wind","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=277959","title":{"rendered":"Net Zero Offshore\u00a0Wind"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From NOT A LOT OF PEOPLE KNOW THAT<\/a><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The Government has today announced the results of the fifth auction of Contracts for Difference (CfD) subsidies for renewable electricity generation. Its has been a failure, and may represent a landmark moment for renewables policy.<\/strong><\/p>\n\n\n\n

Only 3.7GW of new capacity has bid successfully, mostly through small projects, as compared to nearly 12GW last year. There were no bids for offshore wind, the UK\u2019s flagship renewable generator.<\/p>\n\n\n\n


Participants in the auction bid for guaranteed prices, below a cap set by ministers in advance of the auction. The cap for offshore wind was set at \u00a344\/MWh (in 2012 prices, equivalent to around \u00a370\/MWh today). This is higher than successful bids in the past, yet no wind farm developers felt able to bid at this price. Wind industry claims that this is due to rising prices are implausible \u2013 CfD contracts are index-linked.<\/p>\n\n\n\n


While offshore wind\u2019s failure to bid may be surprising to some, perhaps even to the Government, it will come as no shock to those familiar with the long-term capital and operating cost trends for wind power, as revealed in audited financial statements. Costs have not been falling dramatically as the industry claimed. All around the world the wind industry is in trouble for the same reasons; costs remain high, and high levels of subsidy are needed to reward investors.<\/p>\n\n\n\n


In addition, the latest auction round closes down the\u00a0loophole<\/a>\u00a0that allowed windfarms to reap huge windfall profits by failing to activate their contracts so that they could benefit from higher prices in the open market.
The fact is that wind power, wherever, is an expensive way of generating energy. That isn\u2019t surprising either; wind is a physically low-quality fuel and the cost of turning it into electricity is intrinsically high.<\/p>\n\n\n\n


The previously successful low bids for offshore wind were unrealistic, a point we made at the time. Even when built, wind farms delayed taking up their contracts so they could operate on a merchant basis, taking advantage of temporarily high wholesale prices.<\/p>\n\n\n\n


Importantly, the cap for onshore wind bids in this round of the CFD auction was higher than that for offshore, at \u00a353\/MWh (2012 prices). There were a substantial number of successful bids at this price, though they are all located in Scotland, where land rents are lower and where the developers can expect to make extra income through the infamous \u201cconstraint payments\u201d, where a wind farm is paid to reduce output. (Demand in Scotland is low and the grid links to England are congested, limiting exports.) Even so, we doubt that these successful onshore bids are strongly economic.<\/p>\n\n\n\n


Andrew Montford, director of Net Zero Watch, said:
“Government seems to have believed the spin about falling offshore wind costs, and set a low cap on bids for new contracts, thus calling the wind industry\u2019s bluff by accident. Doubtless, the industry will now beg for new and higher subsidies, blaming inflation and supply chain problems. Government should not believe this spin. As global experience shows, wind power is extremely and intrinsically expensive.”<\/strong><\/em><\/p>\n\n\n\n


Dr John Constable, energy editor of Net Zero Watch, said:
“The CfD auction results are symptomatic of a wider failure of wind power around the world. The industry is in a crisis from which it is unlikely to recover, because its costs are simply too high to be sustainable. The time has come for Government to admit that renewables have failed, and to start looking at realistic energy policies.”<\/strong><\/em><\/p>\n\n\n\n

\n\n\n\n

There\u2019s an interesting comment in EDP:<\/p>\n\n\n\n

Andrew Harston, chair of <\/em>East Wind<\/em><\/a>, said: “This is a difficult time for UK offshore wind developers with massively increased costs of the order of 40% in their supply chain as a result of inflation effects and the impact of higher interest rates.<\/em><\/p>\n\n\n\n

The impact of interest rates is real and significant. For years they have of course been artificially ultra low, thanks to QE. That has been in effect yet another subsidy for renewable energy, paid for by savers. It can also be argued that inflation has also been ultra low until 2021, as the pandemic depressed economic activity.<\/p>\n\n\n\n

Either way, that 40% would suggest costs of around \u00a365\/MWh at 2012 prices, or \u00a380\/MWh at current prices. This is at a similar level to the market price of electricity.<\/p>\n\n\n\n

Given the wider system costs involved with intermittent renewables, offshore wind certainly cannot be regarded as a bargain.<\/p>\n\n\n\n

This is particularly so given the historic power price has been around \u00a350\/MWh. This has risen in the last couple of years because of two factors:<\/p>\n\n\n\n

1) Higher carbon prices, which feed into the price of gas-fired power. This is the direct result of govt policy, deliberately designed to force gas power out.<\/p>\n\n\n\n

2) The attack by western govts and banks on new gas and oil exploration, which has restricted supply.<\/p>\n\n\n\n

It is no coincidence that just today WSJ<\/a> are reporting that Biden has cancelled seven Alaskan oil and gas increases, originally granted by Trump.<\/p>\n\n\n\n

And what do DESNZ say about this disaster for renewable strategy:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

https:\/\/www.gov.uk\/government\/news\/record-number-of-renewables-projects-awarded-government-funding<\/a><\/p>\n\n\n\n

It may be a record number, but they are all tiny projects. Previously CfDs were reserved for large scale ones.<\/p>\n\n\n\n

Nearly half, 1.5 GW, is solar capacity, which will produce a tiny amount of power, only about 1 TWh. Worse still, it will be next to useless in winter.<\/p>\n\n\n\n

FOOTNOTE<\/strong><\/p>\n\n\n\n

Net Zero Watch state:<\/p>\n\n\n\n

In addition, the latest auction round closes down the <\/em>loophole<\/em><\/a> that allowed windfarms to reap huge windfall profits by failing to activate their contracts so that they could benefit from higher prices in the open market<\/em><\/p>\n\n\n\n

I may be wrong, but I thought the loophole was being closed from next year\u2019s round, AR6.<\/p>\n\n\n\n

Can anybody throw some light on this?<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Government has today announced the results of the fifth auction of Contracts for Difference (CfD) subsidies for renewable electricity generation. Its has been a failure, and may represent a landmark moment for renewables policy.<\/p>\n","protected":false},"author":121246920,"featured_media":277969,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691818270,691818154,691822409,691822439],"class_list":{"0":"post-277959","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-contracts-for-difference-cfd","9":"tag-net-zero","10":"tag-offshore-wind-2","11":"tag-uk-offshore-wind","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/09\/00a3aa69de31bae906426ee521673552a7.jpeg?fit=1200%2C800&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1ajd","jetpack-related-posts":[{"id":341560,"url":"https:\/\/climatescience.press\/?p=341560","url_meta":{"origin":277959,"position":0},"title":"AR6 Results","author":"uwe.roland.gross","date":"05\/09\/2024","format":false,"excerpt":"The price for new electricity from offshore wind has risen to \u00a382\/MWh in current prices, a significant 58% increase since the previous successful auction. Higher prices will lead directly to higher household bills and the results raise the already astronomical price tag of meeting Miliband\u2019s unrealistic target to decarbonise the\u2026","rel":"","context":"In \"Net zero\"","block_context":{"text":"Net zero","link":"https:\/\/climatescience.press\/?tag=net-zero"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/09\/0bd94b8df-0c27-47eb-8a48-57c0fb073ec5-1.jpg?fit=1200%2C778&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/09\/0bd94b8df-0c27-47eb-8a48-57c0fb073ec5-1.jpg?fit=1200%2C778&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/09\/0bd94b8df-0c27-47eb-8a48-57c0fb073ec5-1.jpg?fit=1200%2C778&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/09\/0bd94b8df-0c27-47eb-8a48-57c0fb073ec5-1.jpg?fit=1200%2C778&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/09\/0bd94b8df-0c27-47eb-8a48-57c0fb073ec5-1.jpg?fit=1200%2C778&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":421373,"url":"https:\/\/climatescience.press\/?p=421373","url_meta":{"origin":277959,"position":1},"title":"Ed Miliband\u2019s Most Brazenly Dishonest Claims Yet","author":"uwe.roland.gross","date":"15\/01\/2026","format":false,"excerpt":"Ed Miliband\u2019s Department for Energy Security and Net Zero has just announced the results of the new CfD auction, in what must go down as one of the most blatantly dishonest and arguably fraudulent Government press releases in recent years.","rel":"","context":"In \"Department for Energy Security and Net Zero (DESNZ)\"","block_context":{"text":"Department for Energy Security and Net Zero (DESNZ)","link":"https:\/\/climatescience.press\/?tag=department-for-energy-security-and-net-zero-desnz"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/AQPyWrx9QR2dBvTsN-0Bmgfo6jOqEkaZ8uZpAsNgTbZhGUjG2IXwM2Mh02EaI1M14l5Yy-jofxpZYRS4kzdRhsRn3WwN9X2swLUwsEg_L2f6jwQPEqkK6dVPKRbk6Q-1.jpeg?fit=1200%2C697&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/AQPyWrx9QR2dBvTsN-0Bmgfo6jOqEkaZ8uZpAsNgTbZhGUjG2IXwM2Mh02EaI1M14l5Yy-jofxpZYRS4kzdRhsRn3WwN9X2swLUwsEg_L2f6jwQPEqkK6dVPKRbk6Q-1.jpeg?fit=1200%2C697&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/AQPyWrx9QR2dBvTsN-0Bmgfo6jOqEkaZ8uZpAsNgTbZhGUjG2IXwM2Mh02EaI1M14l5Yy-jofxpZYRS4kzdRhsRn3WwN9X2swLUwsEg_L2f6jwQPEqkK6dVPKRbk6Q-1.jpeg?fit=1200%2C697&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/AQPyWrx9QR2dBvTsN-0Bmgfo6jOqEkaZ8uZpAsNgTbZhGUjG2IXwM2Mh02EaI1M14l5Yy-jofxpZYRS4kzdRhsRn3WwN9X2swLUwsEg_L2f6jwQPEqkK6dVPKRbk6Q-1.jpeg?fit=1200%2C697&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/AQPyWrx9QR2dBvTsN-0Bmgfo6jOqEkaZ8uZpAsNgTbZhGUjG2IXwM2Mh02EaI1M14l5Yy-jofxpZYRS4kzdRhsRn3WwN9X2swLUwsEg_L2f6jwQPEqkK6dVPKRbk6Q-1.jpeg?fit=1200%2C697&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":248584,"url":"https:\/\/climatescience.press\/?p=248584","url_meta":{"origin":277959,"position":2},"title":"Never Enough: Wind Industry Squanders Billions & Demands Even More Subsidies From Taxpayers","author":"uwe.roland.gross","date":"19\/03\/2023","format":false,"excerpt":"Net Zero Watch notes that since the CfD strike prices are inflation-indexed the industry\u2019s excuse does not hold water. On the contrary, the demand for tax breaks confirms that the low bids in the CfD auctions were never accurate reflections of underlying windpower costs.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/03\/image-744.png?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/03\/image-744.png?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/03\/image-744.png?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/03\/image-744.png?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/03\/image-744.png?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":253758,"url":"https:\/\/climatescience.press\/?p=253758","url_meta":{"origin":277959,"position":3},"title":"Govt Quietly Drops Promises Of Cheap Renewable Energy","author":"uwe.roland.gross","date":"20\/04\/2023","format":false,"excerpt":"Government seeking views on introducing Contracts for Difference reforms rewarding applicants for including factors not only based on price in projects.","rel":"","context":"In \"Contracts for Difference\"","block_context":{"text":"Contracts for Difference","link":"https:\/\/climatescience.press\/?tag=contracts-for-difference"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01568988606501.webp?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01568988606501.webp?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01568988606501.webp?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01568988606501.webp?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01568988606501.webp?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":246307,"url":"https:\/\/climatescience.press\/?p=246307","url_meta":{"origin":277959,"position":4},"title":"Demands for more subsidy expose the illusion of falling wind power costs","author":"uwe.roland.gross","date":"01\/03\/2023","format":false,"excerpt":"\u201cThe belief in falling wind power costs is the central foundation of the government\u2019s Net Zero enterprise, and it is demonstrably false. 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