Great article David. I've been involved in capital projects for 30+yrs (asset management through to programme and project delivery) and it is nonsensical to think that interest rates and construction costs wouldn't impact payback. The construction sector (I'm in ultilities) as a whole has tried countless initiatives to reduce costs over time but not been very successful (reducing unnecessary project scope has been the main source as opposed to real productivity improvements) - the reasons are many fold, some within control, many outwith. I think flat construction costs would be a real achievement and anyone assuming reductions is throwing investment money away. Once again the complexity of markets outwits the blunt actions of Govts. Who pays for these errors? I'm not holding my breath.
You can extract data on individual wind farm production from the Renewable Energy Foundation website, digging down to per month per wind farm. Also the Low Carbon Contracts Company provides details by CFD of daily generation, CFD payments, production weighted day ahead average prices and actual strike prices going back to the beginning. You want Actual CfD Generation and avoided GHG emissions from their data portal.
I found that Beatrice appears to have managed to avoid its CFD in part, with only 1533GWh reported under the CFD compared with 2084 GWh in its most recent financial year.
I asked the LCCC about curtailment compensation under CFDs. They confirmed that they would only be payable if there was a Qualifying Change in Law, which there has not been. There have been no curtailment payments from LCCC, and they don't even have a procedure for re-charging them to retailers if they were to occur.
HH Gas...it is a structural decline and will end up at marginal cash cost of production by late 2020's. Which for US, as it's shale, is much higher than Qatar or Russia.
Qatar undergoing huge expansion for seaborne LNG market...North Field....while Power of Siberia 2 pipeline from Russia to China puts Yamal European gas back into the market in China. Addiong to completed PoS 2.
So US LNG exports have peaked I would guess. So domestic market has to be the dump. Not all volume coming on line has take or pays in place....So global gas going to collapse in price although freight differentials etc will remain....just as they ramp up expensive renewables....
PS..9x more expensive....Henry Hub gas prices inflation adjusted closed at record lows last night...and that is before the new Qatari fields come on.....
Great article David. I've been involved in capital projects for 30+yrs (asset management through to programme and project delivery) and it is nonsensical to think that interest rates and construction costs wouldn't impact payback. The construction sector (I'm in ultilities) as a whole has tried countless initiatives to reduce costs over time but not been very successful (reducing unnecessary project scope has been the main source as opposed to real productivity improvements) - the reasons are many fold, some within control, many outwith. I think flat construction costs would be a real achievement and anyone assuming reductions is throwing investment money away. Once again the complexity of markets outwits the blunt actions of Govts. Who pays for these errors? I'm not holding my breath.
Great work!
You can extract data on individual wind farm production from the Renewable Energy Foundation website, digging down to per month per wind farm. Also the Low Carbon Contracts Company provides details by CFD of daily generation, CFD payments, production weighted day ahead average prices and actual strike prices going back to the beginning. You want Actual CfD Generation and avoided GHG emissions from their data portal.
I found that Beatrice appears to have managed to avoid its CFD in part, with only 1533GWh reported under the CFD compared with 2084 GWh in its most recent financial year.
I asked the LCCC about curtailment compensation under CFDs. They confirmed that they would only be payable if there was a Qualifying Change in Law, which there has not been. There have been no curtailment payments from LCCC, and they don't even have a procedure for re-charging them to retailers if they were to occur.
yes fair enough...I used to work for one of the largest seaborne coal traders...thermal, coking and coke
HH Gas...it is a structural decline and will end up at marginal cash cost of production by late 2020's. Which for US, as it's shale, is much higher than Qatar or Russia.
Qatar undergoing huge expansion for seaborne LNG market...North Field....while Power of Siberia 2 pipeline from Russia to China puts Yamal European gas back into the market in China. Addiong to completed PoS 2.
So US LNG exports have peaked I would guess. So domestic market has to be the dump. Not all volume coming on line has take or pays in place....So global gas going to collapse in price although freight differentials etc will remain....just as they ramp up expensive renewables....
PS..9x more expensive....Henry Hub gas prices inflation adjusted closed at record lows last night...and that is before the new Qatari fields come on.....
You use thermal coal price. You need to use the coking coal price. Point remains the same however.