{"id":285504,"date":"2023-10-28T18:47:07","date_gmt":"2023-10-28T16:47:07","guid":{"rendered":"https:\/\/climatescience.press\/?p=285504"},"modified":"2023-10-28T18:47:10","modified_gmt":"2023-10-28T16:47:10","slug":"in-the-doldrums","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=285504","title":{"rendered":"In the Doldrums\u2026"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

\u2026Running out of puff. Siemens Energy is in talks with the German government to secure billions of euros of guarantees for long-term projects after warning that losses at its troubled wind turbine business would be higher than forecast.<\/em><\/strong><\/p>\n\n\n\n

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

From Climate Scepticism<\/a><\/p>\n\n\n\n

BY\u00a0MARK HODGSON<\/a><\/strong><\/p>\n\n\n\n

What follows is a brief summary of recent developments adversely affecting the wind industry. I have been posting links as comments in various places at Cliscep drawing attention to the events in question, but as they are coming thick and fast, it seems sensible to draw them together in one place. One might have thought that such problems would occasion something of a re-think in the corridors of power regarding the direction of travel of the UK\u2019s energy policy, but to date none of this seems to have registered with the majority of our politicians, and certainly not with those currently in charge or with those who are most likely to replace them.<\/p>\n\n\n\n

First there was the failure of the latest contracts for difference round. Readers may recall that when Kwasi Kwarteng was in charge of what was then called BEIS, he was reduced to pleading with renewables developers to take up their options under previous Contracts for Difference (CfD) rounds. This was because the \u201ccontracts\u201d were no such thing \u2013 rather they were one-way options which developers could take up or walk away from they as they chose, depending on what they decided was in their best interests at the time. Because the low bids (that had been shouted from the rooftops by renewable energy enthusiasts) were unviable, and because market prices were higher, the developers chose to walk away from the options rather than to implement them. Mr Kwarteng\u2019s pleas were made in vain.<\/p>\n\n\n\n

Consequently the UK government decided to tighten up the process in AR5, and ensured that going forward the \u201ccontracts\u201d really would be contracts, which the developers, once they made bids which were accepted, would be legally obliged to implement. The only problem with that brilliant idea was that the developers recognised it for the trap it was, and so not a single offshore wind farm bid was forthcoming in this year\u2019s CfD round.<\/p>\n\n\n\n

This resulted in an article<\/a> in the Daily Telegraph with the heading \u201cWind industry on hold after auction flop spooks developers<\/em>\u201d and sub-heading \u201cBosses warn that lack of state support risks undermining Britain\u2019s overall net zero goals\u201d<\/em>. An extensive quote from the article is due, given its importance:<\/p>\n\n\n\n

\n

Offshore wind farm developers are delaying non-essential work on UK projects after a government renewables auction flopped, with industry sources warning they may be forced to wait until after the next election to get schemes moving again.<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

At least two major companies are pausing or slowing investment to the minimum pace necessary to keep projects alive, with one describing the current position as a \u201cholding pattern\u201d.<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

The slowdown comes after confidence was knocked by the disastrous fifth auction round for renewable energy subsidies earlier this month.<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

No bids were received by offshore wind developers due to what companies said were unrealistically low prices.<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

The cloud of uncertainty has spooked developers, who warned there was now little chance the UK will reach its target of 50 gigawatts of offshore wind capacity by 2030.<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

One executive said: \u201cThe target is a joke now. Ministers just haven\u2019t got it. They don\u2019t realise how fundamentally serious the situation is.\u201d<\/em><\/p>\n<\/blockquote>\n\n\n\n

\n

Another executive said they believed ministers had grasped the scale of the problem but were failing to reassure the sector about how they would approach next year\u2019s auction.<\/em><\/p>\n<\/blockquote>\n\n\n\n

The renewables industry soon regrouped, and started demanding that the UK government make financial assistance available. Paul Homewood usefully summarises<\/a> this development , with a helpful link to another Daily Telegraph article<\/a>, which summarises the problem. In brief, developers are demanding \u00a375 per Mwh, which is considerably more than the prices they signed up to under the options they can (and probably will) walk away from. That \u00a375 figure is misleading since, for some bizarre reason, figures are always quoted at 2012 prices. Allowing for inflation, as Paul Homewood points out, that price equates to nearer \u00a395 per Mwh in 2023 prices. As he says:<\/p>\n\n\n\n

The undeniable reality is that offshore wind never was viable at the fanciful prices signed up for last year and before. The cheapest offshore wind being sold via CfD is from Triton Knoll, which is being paid \u00a397.82\/MWh.<\/em><\/p>\n\n\n\n

There never was any intention to trigger those contracts, instead wind farm owners always planned to sell at much higher prices on the open market.<\/em><\/p>\n\n\n\n

In the latest auction, this loophole was closed by the government, leaving the wind industry between a rock and a hard place, with their bluff having been well and truly called.<\/em><\/p>\n\n\n\n

Next is the story reported by Reuters<\/a> regarding the risk (which some of us have been banging on about for at least 18 months<\/a>) regarding the security risks associated with offshore wind developments:<\/p>\n\n\n\n

As Europe turns to renewable sources to diversify energy supplies away from Russian oil and gas, a peaceful marine scene conceals a billion-dollar security headache.<\/em><\/p>\n\n\n\n

Rising above the Baltic Sea less than 10 km (6 miles) off the coast of Denmark, 161 wind turbines spin slowly. They supply around 4% of the country\u2019s power, sent to shore through two cable connections.<\/em><\/p>\n\n\n\n

The turbines have no barriers or surveillance.<\/em><\/p>\n\n\n\n

\u201cOur technicians are only here until five o\u2019clock in the afternoon, then they go home,\u201d said Thomas Almegaard, head of operations at Nysted wind farm, co-owned and operated by Denmark-based Orsted, the world\u2019s biggest offshore wind developer.<\/em><\/p>\n\n\n\n

\u201cIf the Russians wanted to cause damage, they could do it easily,\u201d he told Reuters aboard a service vessel as it sailed through the wind farm.<\/em><\/p>\n\n\n\n

\u201cWe don\u2019t do any monitoring.\u201d<\/em><\/p>\n\n\n\n

Naturally this leads up to a call for yet more money from governments:<\/p>\n\n\n\n

Developers like Orsted think governments should take the lead and help provide the billions of dollars needed to protect their infrastructure. But even as North Sea countries alone plan to install enough wind power for more than 100 million homes by 2030, governments are still considering how much they can spend to safeguard such offshore assets.<\/em><\/p>\n\n\n\n

As usual, in the UK, it seems that the long-suffering taxpayer, not the developers, will have to pick up this extra bill:<\/p>\n\n\n\n

Britain, which has spent 65 million pounds ($79 million) adapting two vessels for underwater surveillance and seabed warfare, said its government was responsible for security policy and works with industry to implement protection measures.<\/em><\/p>\n\n\n\n

Finally (for now \u2013 no doubt further developments will continue to come out of the woodwork), there is the recent news about the financial woes of Siemens, driven by problems with its wind energy division, Siemens Gamesa. The Financial Times has the story<\/a> under the heading \u201cSiemens Energy seeks government guarantees as wind crisis deepens<\/em>\u201d:<\/p>\n\n\n\n

Siemens Energy is in talks with the German government to secure billions of euros of guarantees for long-term projects after warning that losses at its troubled wind turbine business would be higher than forecast.<\/em><\/p>\n\n\n\n

The Dax-listed company said on Thursday that it was in need of backstops for projects as the financial picture at its wind turbine business deteriorates. In June, the group said that overhauling the division, which has been beset by technical mishaps, would cost \u20ac1bn.<\/em><\/p>\n\n\n\n

Without the guarantees, a \u20ac110bn portfolio of clean energy projects planned by the company will be in jeopardy, according to executives at the Munich-based company\u2026<\/em><\/p>\n\n\n\n

\u2026\u201cTheir business in wind is in utter disarray,\u201d said William Mackie, head of capital goods research at Kepler Cheuvreux\u2026.<\/em><\/p>\n\n\n\n

In the case of Siemens, problems seem to be arising in substantial part from technical flaws with their turbines, but as the article notes, the whole wind industry is being adversely affected by higher interest rates and increased costs.<\/p>\n\n\n\n

It all makes for sorry reading. Will the penny ever drop?<\/p>\n\n\n\n

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

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

\u2026Running out of puff. Siemens Energy is in talks with the German government to secure billions of euros of guarantees for long-term projects after warning that losses at its troubled wind turbine business would be higher than forecast. 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But that too is not going to plan.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/11\/image-540.png?fit=1200%2C801&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/11\/image-540.png?fit=1200%2C801&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/11\/image-540.png?fit=1200%2C801&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/11\/image-540.png?fit=1200%2C801&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/11\/image-540.png?fit=1200%2C801&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":232792,"url":"https:\/\/climatescience.press\/?p=232792","url_meta":{"origin":285504,"position":3},"title":"Biggest Losers: Thousands Sacked As Germany\u2019s Wind Turbine Makers Face Financial Doom","author":"uwe.roland.gross","date":"07\/12\/2022","format":false,"excerpt":"Cut the subsidies to wind power and turbine makers soon fold.\u00a0Siemens Gamesa has\u00a0been axing hundreds of jobs in Europe and America\u00a0as the wheels come off the renewable energy gravy train.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0594082ae47246.webp?fit=1120%2C630&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0594082ae47246.webp?fit=1120%2C630&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0594082ae47246.webp?fit=1120%2C630&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0594082ae47246.webp?fit=1120%2C630&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0594082ae47246.webp?fit=1120%2C630&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":333274,"url":"https:\/\/climatescience.press\/?p=333274","url_meta":{"origin":285504,"position":4},"title":"Siemens Sinks: Germany\u2019s Top Wind Turbine Maker Sacks 4,100 Workers\u00a0Overnight","author":"uwe.roland.gross","date":"19\/06\/2024","format":false,"excerpt":"Remember how the wind and solar industries would create hundreds of thousands of highly-paid groovy \u2018green\u2019 jobs? No? Well, as it turns out, the few (highly subsidised) jobs created are disappearing like the sun over the horizon. Although, for the axed workers, there will be no reappearance the following day.\u2026","rel":"","context":"In \"Chief Executive Jochen Eickholt\"","block_context":{"text":"Chief Executive Jochen Eickholt","link":"https:\/\/climatescience.press\/?tag=chief-executive-jochen-eickholt"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/06\/image-389.png?fit=1200%2C599&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/06\/image-389.png?fit=1200%2C599&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/06\/image-389.png?fit=1200%2C599&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/06\/image-389.png?fit=1200%2C599&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/06\/image-389.png?fit=1200%2C599&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":272313,"url":"https:\/\/climatescience.press\/?p=272313","url_meta":{"origin":285504,"position":5},"title":"How faulty wind turbines threaten to bring down a German industrial\u00a0powerhouse","author":"uwe.roland.gross","date":"09\/08\/2023","format":false,"excerpt":"Siemens warned on Monday that it was facing a \u20ac4.5bn (\u00a33.9bn) loss this year as a result of issues within its wind turbine division.","rel":"","context":"In \"Germany\"","block_context":{"text":"Germany","link":"https:\/\/climatescience.press\/?tag=germany"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0e8ce098bf480c0d0ca9ca9cbd4af017d.jpg?fit=1200%2C600&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0e8ce098bf480c0d0ca9ca9cbd4af017d.jpg?fit=1200%2C600&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0e8ce098bf480c0d0ca9ca9cbd4af017d.jpg?fit=1200%2C600&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0e8ce098bf480c0d0ca9ca9cbd4af017d.jpg?fit=1200%2C600&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0e8ce098bf480c0d0ca9ca9cbd4af017d.jpg?fit=1200%2C600&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/285504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=285504"}],"version-history":[{"count":6,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/285504\/revisions"}],"predecessor-version":[{"id":285513,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/285504\/revisions\/285513"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/285508"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=285504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=285504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=285504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}