Government Doubles Down on Cheap Renewables Lie
Update to Generation Costs Report Still Claims £39/MWh Offshore Wind for 2030 delivery
Introduction
The Government announced big increases in the subsidies it would offer renewable technologies on Thursday 16th November. However, on Friday 17th November, the same Government department released its updated generation costs report for 2023 which said renewables technologies were still cheap. What is going on?
AR6 Auction Prices
By way of recap, the auction prices for the Allocation Round 6 (AR6) due to take place in 2024 are shown in Figure 1 below.
The Government expects AR6 projects to deliver in 2027/28 or 2028/29. The Government shows deceit by only announcing the prices in 2012 terms, but it is relatively easy to convert them into current money by applying an inflation factor from the BoE inflation calculator. In today’s money, fixed offshore wind projects can be awarded at prices up to £100/MWh, onshore wind £88/MWh and solar at £84/MWh. These represent big increases on the prices suggested in AR5, where famously, no offshore wind projects were awarded.
Updated Generation Cost Report 2023
The 2023 Generation Cost report has ostensibly been updated to include new data for Floating Offshore Wind and Tidal Stream Energy. However, they have restated the expected costs for other technologies too as shown in Figure 2. The figures shown are for 2030 delivery in 2021 money.
As we can see, the suggested strike prices for AR6 are significantly above the Generation Cost report figures. AR6 prices for Offshore wind are some 156% above the Generation Cost level, Floating Offshore 217% above, Onshore Wind 144% and Solar 126%. The Generation Cost report figures for geothermal and tidal are also well out of line with the AR6 strike prices. These are not mere rounding errors, these are massive differences that cannot be explained by Levelised Costs not being the same as CfD strike prices.
Conclusions
It is difficult to avoid the conclusion that the left hand of the DESNZ does not know what the right hand is doing. In fact, it looks like one part of the department is unable to acknowledge reality. It’s as if the “cheap renewables” ideology cannot be challenged.
The DESNZ is clearly suffering from institutional incompetence and is not fit for purpose. The 2023 Generation Cost report must be withdrawn and replaced with more realistic estimates based on real world costs.
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They are taking us all for fools.
Tony Blair opted to take a “lead by example” approach when he introduced the Climate Change Act in 2008, but at least the risks of taking such a unilateral approach were acknowledged and discussed at that time, see https://www.instituteforgovernment.org.uk/sites/default/files/climate_change_act.pdf.
Fast forward 15 years to the present time and the risk discussed in 2008 that unilateral decarbonisation could actually be counterproductive has come about. The non-Western world can see that the West is committing economic suicide through their nonsensical climate change policies and are never going to follow suit. They pay lip service to the West’s confected climate change scare and have no intention of curbing their ever-increasing consumption of cheap, efficient fossil fuels in the foreseeable future.
This renders the UK’s unilateral decarbonisation endeavours utterly pointless, yet we are told it is imperative that we eliminate our 0.9% share of global CO2 emissions by 2050 to “save the planet”.
This makes it obvious that Net Zero has nothing to do with climate but is all to do with inflicting totalitarian control. Our treasonous puppet politicians are intent on driving our economy off a cliff at the behest of their Malthusian globalist overlords, see https://twitter.com/ElanderNews/status/1568891471637680128?t=ugqAXUxwfL20BP522L51-w&s=09.
Well well well, its NINE times cheaper you know.
But the government's own report in August 2023 put the cost of CCGT generation at £114/MWH,
BUT - £60/MWH of that cost was carbon taxes which means its CLEAN cost is just £54/MWH some 35% CHEAPER, and of course more flexible, reliable and able to provide both reactive load support and voltage support.
But, does it end there? no.
We are told they need to build 5 TIMES the transmission lines for all these renewables, at a cost of some £54bn, which YOU will be paying for on bills ON TOP of the cost of the renewables.
Does it end there? NO
That 5 times more transmission lines requires now 5 times the maintenance as a result, adding even more to bills.
Does it end there? NO
To get all this power to your home, local transformers will have to be seriously upgraded for capacity at yet more cost.
Does it end there? NO!
To replace the gas generation with mass storage, the gas costed at £54/MWH will be replaced with either hydrogen of batteries which both come in at well over £200/MWH and that doesn't really cover the capital costs either, just the generation costs.
Renewables are cheap? My arse they are.