That equity and debt didn’t come into their possession for nothing though, ie if money going offshore is bad then presumably foreign investment is good when the money comes onshore. It would be interesting to see the net flows of cash to judge whether bill payers are being ripped off.
Even with the subsidies the equity returns are sub-par. The business needs a huge amount of capital, both equity and debt; the returns are volatile and the unstable political climate demands a risk premium (yes we’ve had a conservative government for 14 years but they are wont to declaring windfall taxes on a whim).
If the business was a guaranteed profit machine, share prices of market participants would be steadily rising and others would be queuing up to take part. Instead we have auctions with no takers.
Beatrice (and others) operate a further money-grubbing trick which Andrew Montford discovered, gaming the system to charge us twice for the same electricity. When a windfarm generates too much electricity for the national grid to absorb it is obliged to curtail its output, for which it receives a generous constraint payment. The Blackhillock substation which serves Beatrice has a facility which can divert the Beatrice electricity into an off-grid low voltage network and/or battery storage system for which they can receive payment even when they have accepted a constraint payment from the grid, apparently quite legally. https://www.netzerowatch.com/all-news/how-windfarms-charge-you-twice-for-the-same-electricity.
Thanks David, another superb analysis of those subsidy riddled, overseas owned, intermittent power sources
The wind power industry is in financial strife, all over the world - OEMs posting large losses, being hit with huge maintenance costs on poor quality tat that are failing early and those consumer subsidies are the only thing keeping their heads above water
Reality is a great teacher, renewables are facing their end game and I for one, celebrate that
I think you have undervalued the cost of ROCs by about 13%. It's easy to forget that what the consumer pays is not the cashout value, but also the premium recycle value from the redistributed cashout fund. In addition, OFGEM recycles monies from late payment. They tend to disguise this by hiding away the publication of the full ROC value announcements so you have to delve to find them year by year. Here's my record of their reported values from 2013/14 to 2022/23
Recycle values tend to be higher when renewables output has been below average, or there was an unexpected spurt in demand, and lower when there is bumper renewables output or unexpectedly low demand (as in 2020). The scheme is geared to try to ensure there is a shortfall of real ROCs vs. obligation - only in 2015/16 was there an excess and therefore zero recycle value. ROC cashout prices are RPI indexed: the price to apply from this April is £64.73/ROC, but the expected ROC value is 13% higher at over £73/MWh.
Thank you for the reporting, David. regarding these investments that do not make economic sense. These schemes are designed to be opaque and indirect. Doubtless that similar schemes with different names to line the economic elites's pockets are being planned for California offshore wind. Yesterday, I attended this fundraiser opposing offshore wind from REACT Alliance https://www.reactalliance.org/events-2-1/save-our-seas-sos Dr. Carolyn Porco gave a good talk critical of the harms of the proposed project during the event.
Paying top-dollar for inherently-unreliable offshore wind power does not make economic sense.. However, billions are being spent to lobby for and promote offshore wind.
"A recent study by Bloomberg has drawn attention to the way that wind farms overstate likely generation at times of constraint and thus cause unreasonable cost (£51m since 2018) to consumers. While correct, excessive prices charged by wind farms to reduce output are a much more significant problem, resulting in much higher total costs for consumers, exceeding for example, £100m in 2023 alone"
I would be interested in any views you may have on these two posts
The first says do absolutely nothing
https://edmhdotme.wpcomstaging.com/minimal-future-warming-from-co2-ch4-n2o/
The second says Weather-Dependent “Renewables” are absolutely useless at doing nothing but pointlessly very expensive
https://edmhdotme.wpcomstaging.com/the-myth-of-cheap-renewables/
If Western politicians had any sense and took some notice they could save Western Civilisation from an self-inflicted disaster and a lot of money.
That equity and debt didn’t come into their possession for nothing though, ie if money going offshore is bad then presumably foreign investment is good when the money comes onshore. It would be interesting to see the net flows of cash to judge whether bill payers are being ripped off.
TRIG’s ordinary shares are listed on the London Stock Exchange.
https://www.hl.co.uk/shares/shares-search-results/t/the-renewables-infrastructure-group-ord-npv
A cursory glance at its share price chart would suggest that this business is not the slam-dunk profit making scam that your article makes out.
The same is true of SSE
https://www.hl.co.uk/shares/shares-search-results/s/sse-plc-ord-50p
And Iberdrola
https://www.hl.co.uk/shares/shares-search-results/i/iberdrola-sa-eur-0.75
And Orsted
https://www.hl.co.uk/shares/shares-search-results/o/orsted-as-dkk10
Even with the subsidies the equity returns are sub-par. The business needs a huge amount of capital, both equity and debt; the returns are volatile and the unstable political climate demands a risk premium (yes we’ve had a conservative government for 14 years but they are wont to declaring windfall taxes on a whim).
If the business was a guaranteed profit machine, share prices of market participants would be steadily rising and others would be queuing up to take part. Instead we have auctions with no takers.
Beatrice (and others) operate a further money-grubbing trick which Andrew Montford discovered, gaming the system to charge us twice for the same electricity. When a windfarm generates too much electricity for the national grid to absorb it is obliged to curtail its output, for which it receives a generous constraint payment. The Blackhillock substation which serves Beatrice has a facility which can divert the Beatrice electricity into an off-grid low voltage network and/or battery storage system for which they can receive payment even when they have accepted a constraint payment from the grid, apparently quite legally. https://www.netzerowatch.com/all-news/how-windfarms-charge-you-twice-for-the-same-electricity.
Thanks David, another superb analysis of those subsidy riddled, overseas owned, intermittent power sources
The wind power industry is in financial strife, all over the world - OEMs posting large losses, being hit with huge maintenance costs on poor quality tat that are failing early and those consumer subsidies are the only thing keeping their heads above water
Reality is a great teacher, renewables are facing their end game and I for one, celebrate that
I think you have undervalued the cost of ROCs by about 13%. It's easy to forget that what the consumer pays is not the cashout value, but also the premium recycle value from the redistributed cashout fund. In addition, OFGEM recycles monies from late payment. They tend to disguise this by hiding away the publication of the full ROC value announcements so you have to delve to find them year by year. Here's my record of their reported values from 2013/14 to 2022/23
Cash £42.02 £43.30 £43.30 £44.77 £45.58 £47.22 £48.78 £50.05 £50.80 £52.88
Recycle £0.60 £0.24 £0.00 £4.89 £5.42 £6.80 £5.02 £3.87 £7.04 £6.81
Late Payment £0.00 £0.00 £0.00 £0.21 £0.43 £1.02 £0.63 £0.55 £0.40 £0.07
Total £42.62 £43.54 £43.30 £49.87 £51.43 £55.04 £54.43 £54.47 £58.24 £59.76
Recycle values tend to be higher when renewables output has been below average, or there was an unexpected spurt in demand, and lower when there is bumper renewables output or unexpectedly low demand (as in 2020). The scheme is geared to try to ensure there is a shortfall of real ROCs vs. obligation - only in 2015/16 was there an excess and therefore zero recycle value. ROC cashout prices are RPI indexed: the price to apply from this April is £64.73/ROC, but the expected ROC value is 13% higher at over £73/MWh.
Thank you for the reporting, David. regarding these investments that do not make economic sense. These schemes are designed to be opaque and indirect. Doubtless that similar schemes with different names to line the economic elites's pockets are being planned for California offshore wind. Yesterday, I attended this fundraiser opposing offshore wind from REACT Alliance https://www.reactalliance.org/events-2-1/save-our-seas-sos Dr. Carolyn Porco gave a good talk critical of the harms of the proposed project during the event.
Paying top-dollar for inherently-unreliable offshore wind power does not make economic sense.. However, billions are being spent to lobby for and promote offshore wind.
I see this has appeared on the REF site
"A recent study by Bloomberg has drawn attention to the way that wind farms overstate likely generation at times of constraint and thus cause unreasonable cost (£51m since 2018) to consumers. While correct, excessive prices charged by wind farms to reduce output are a much more significant problem, resulting in much higher total costs for consumers, exceeding for example, £100m in 2023 alone"
Full blog item below
https://www.ref.org.uk/ref-blog/380-2024-03-12-15-27-20