Having done a very quick read, the following strikes me between the eyes.
1. The reason your bills are so high is that while CCGT gas is priced at £114/MWH, £60/MWH is carbon taxes on gas generation. It doesn't say what gas price its used, but the gas price is not much above 2021 prices now when generation costs were only about £60/MWH
2. They are pricing Onshore and Offshore wind at the same price now of £44/MWH, which seems to blow out the labour party claim that onshore is much cheaper.
3. Most striking of all they seem to think that in real terms that wind and solar will not get any more expensive than it is now at £44/MWH which seems a complete fantasy given that from previous auctions Vattenfall and BP have recently now withdrawn from a previous auction citing costs have gone up by over 40%.
4. They have priced in for the first time CCGT converted to hydrogen generation in a comparison of "peaking technologies" where miraculously the cost of H class CCGT comes in at £70-90/MWH which is about the price level I had in mind and contradicts its earlier £114/MWH for base load generation which utterly no sense to me, peaking plant by definition runs at less that peak efficiency where as base load does.
Very optimistically IMHO 100% Hydrogen via conventional gas power station comes in at £100-120/MWH so about 38% more expensive than using natural gas.
Personally I can't see it being cheaper than about £220/MWH
I have covered some of that above. I think the reason the cost of hydrogen comes down below the cost of unabated gas is that they assume CCUS, and so the carbon taxes go away.
They calculate that hydrogen form BECCS is actually less than zero because they get carbon credits for storing the CO2. It's all a big fantasy game.
To be clear, in the balancing options hydrogen comes out as the most expensive and there's no statement about what the price of hydrogen they assume in that.
Most say its got no hope unless its below $3/Kg and most put the current estimated price at $6-8/Kg.
How on earth does Hydrogen generation store Co2??
The fact is that this shows that carbon taxes are forcing our industry out of business while China, Russia, India and the rest of Asia are able to completely out compete us on practically everything.
And how on earth are they projecting no cost increase in renewables when the new reports are that costs have risen by 40%??
We have to put an end to this socialist madness before we have no business left.
"Several companies, including the UK's largest renewables generator SSE, have ruled themselves out of the auction, with one source saying the number of potential bidders was "between two and zero, with expectations at the lower end of that range".
So not only was it not cheap before this, its rapidly getting more expensive rather rapidly.
Excellent piece of analysis and hopefully will help fuel the groundswell of opinion and spark a debate about how much we want to pay to achieve net zero or if we even want to go there. Im pretty sure the lauded goals of 50GW offshore wind by 2030 and net zero power generation are now dead and we will see them quietly disappearing. It wont happen overnight as politicians having committed themselves to net zero have to slowly wind back from it even Caroline Lucas is targeting energy usage now as she knows unreliables are never going to be cost effective.
The costs would be even lower for conventional generation if the subsidies were taken away from RE Wind. It's the protective subsidies that "artificially" reduce the true costs. It is designed to mislead and is a fraud.
According to the CFD Auction timetable, today, August 8th:
Delivery Body issues a ‘Notice of Auction’ inviting qualified applicants to submit sealed bids
The ‘Notice of Auction’ will specify that an auction is to be held and the deadline for the submission of sealed bids
There has been no such notice publicised. That means that there are insufficient potential bids to merit an auction. All applicants will therefore get the full Administrative Strike Price for their technology. This is likely to mean very small volumes of expensive tidal (£270/MWh in today’s money) and floating wind (£155/MWh in today’s money), and perhaps a few solar projects if they can get a grid connection, but even these must be in doubt. It increases the probability that there are no bids at all for ordinary offshore wind.
I see that the Delivery Body has issued a notice a day late. It smacks of a cover up, so I have written to them challenging them for an explanation, and pointing out that the whole AR5 process has been an exercise in procrastination in the face of clear messages from the renewables industry that Administrative Strike Prices are inadequate. I expect they will plead purdah.
For the last couple of years, renewable enthusiasts have been trumpeting that the levelized cost of electricity is now competitive, and sometimes lower for renewables compared to fossil fuel generation. This completely misses the elephant in the room: intermittency.
Interruptible (such as renewable) utilities are typically worth 1/2 or less of dispatchable, on-demand service. I.e., LCOE for renewable generation may be about the same as for dispatchable fossil generation, but it needs to be MUCH lower to be truly competitive.
Alternatively, LCOE for intermittent sources such as renewables should also incorporate the full carrying cost of the dispatchable facilities required to back them up. Then LCOE would be a reasonable basis for comparison.
Very useful analysis, but surely this is not gaslighting, its just distortion deliberate or otherwise. Gaslighting is specifically to manipulate another person into doubting their own perceptions, experiences or understanding of events.
I would say it is gaslighting. Manipulating us into believing our high energy bills are down to Putin, when in reality it's their obsession with renewables.
To put the calculations about the Gas energy generation in practical terms. In the electricity bill of a UK customer, what fraction of the bill is carbon tax?
If you believe the government's own analysis it is about £60/MWh on gas generation. If you look at the forecast proceeds for UKA carbon allowances, most of which fall on the electricity sector (though some on steel etc.), it's about £8bn a year. Recent auctions have dropped in value because there is now an expectation that electricity demand will suffer, reducing the need for allowances. Also, coal that had been expected to run next winter when the allowance rations were set now won't. There are of course other taxes that should qualify, including Climate Change Levy which is about £2bn. Arguably, also windfall tax on oil and gas.
They have taken a big tumble just recently to £40/tonne CO2.
The OBR include forecasts in Annex Table 5: their March forecast had already reflected some of the drop so show ~£6bn, which now looks optimistic. I was remembering figures I had seen back in October, I suspect. Last year allowances touched £100/tonne CO2 when we were burning extra gas and coal to keep the Continent in electricity.
The only ones possible would be less maintenance downtime and benefits of less wind shear, or greater efficiency of a design for the expected winds. This is part of an excellent tutorial on wind (although it dates from earlier times when turbines were smaller):
OTOH increased rotor diameter leads to increased differentials in wind speed and loading on the hub between the top and bottom positions of a blade, increasing the stresses - and the need for maintenance as we go large! This is perhaps behind the problems that Siemens have been acknowledging with their turbines recently. These problems have been more obvious with tidal turbines because water is much denser than air, increasing the stresses - and limiting the practical size of turbines because larger ones are soon wrecked.
Efficiency depends on blade design, feathering regime, frictional losses and generator size relative to to the rotor. The maximum theoretical efficiency is 16/27ths, given by Betz' Law (proof at the above site - see the last menu item). Different designs have different efficiencies at different wind speeds. Efficiency starts very low at the cut in speed, increases towards the design sweet spot, and then falls off when the generator maximum output becomes the limiting factor. This is a typical efficiency curve
You will see it peaks at around 45% of the energy in the wind, which is about 75% of the theoretical Betz limit maximum: few designs do any better, and most that do are trying to make the best of a lower wind speed resource. Designs are fine tuned around expected wind speed distributions among other factors. The sweet spot can be shifted to higher or lower wind speeds.
Beyond that it's about Hopium in terms of the weather. Perhaps they should point to where the IPCC is forecasting even zephyrs due to climate change.
It should be noted that the Hywind floating wind farm runs at the highest capacity factors in the UK fleet (just over 50%), with the site having been carefully selected and not constrained by bottom depth. However, it comes at a massive cost premium: it earns 3.5ROCs/MWh, now worth well over £200/MWh of subsidy on top of market price. Is it worth it?
These Govt Green Energy activists will stop at nothing to promote their pet beliefs. I've been in construction for 30+yrs and I don't care what major infrastructure project you are tackling the cost savings being predicted are ridiculous. Everyone in the UK has experienced massive increases to their energy costs and it all coincides with expanding renewables Final thought to ponder... when was the last time the Govt was able to estimate the costs of infrastructure work to any degree of moderate accuracy? Answer - NEVER. Great piece of work David.
There is a simple way to gauge the cost of Weather-Dependent "Renewables". Take comparative costs say from the US EIA and divide them by the productivity they achieve. That gives you a true comparative cost of providing a unit of power to the grid.
The simple sums which are optimistic for "Renewables" are shown here
Actually it's mostly just a fairy tale, because what we really pay for wind is either market price + ROCs and REGOs, or CFD strike price plus REGOs. There is no way that the weighted average strike price plus all the ROC stuff will come down anywhere close to their fantasy prices.
I have noted that LCCC seem to have revised down a number of strike prices since end June - the latest being lopping almot £10/MWh off Triton Knoll. I will write and ask them about this.
I've just had a thought. Could you do something on energy prices normalised to GDP/Capita and economic growth?
I suspect their is a very strong link between % of renewables, high energy prices per capita income and slow to zero growth
I covered some of that here.
https://davidturver.substack.com/p/what-will-net-zero-ever-do-for-us
I found this, released from BEIS published 1st August on the projected costs of generation and I'd value David doing an article on this
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1179359/electricity-generation-costs-2023.pdf
Having done a very quick read, the following strikes me between the eyes.
1. The reason your bills are so high is that while CCGT gas is priced at £114/MWH, £60/MWH is carbon taxes on gas generation. It doesn't say what gas price its used, but the gas price is not much above 2021 prices now when generation costs were only about £60/MWH
2. They are pricing Onshore and Offshore wind at the same price now of £44/MWH, which seems to blow out the labour party claim that onshore is much cheaper.
3. Most striking of all they seem to think that in real terms that wind and solar will not get any more expensive than it is now at £44/MWH which seems a complete fantasy given that from previous auctions Vattenfall and BP have recently now withdrawn from a previous auction citing costs have gone up by over 40%.
4. They have priced in for the first time CCGT converted to hydrogen generation in a comparison of "peaking technologies" where miraculously the cost of H class CCGT comes in at £70-90/MWH which is about the price level I had in mind and contradicts its earlier £114/MWH for base load generation which utterly no sense to me, peaking plant by definition runs at less that peak efficiency where as base load does.
Very optimistically IMHO 100% Hydrogen via conventional gas power station comes in at £100-120/MWH so about 38% more expensive than using natural gas.
Personally I can't see it being cheaper than about £220/MWH
Another day on fantasy island for the government.
I have covered some of that above. I think the reason the cost of hydrogen comes down below the cost of unabated gas is that they assume CCUS, and so the carbon taxes go away.
They calculate that hydrogen form BECCS is actually less than zero because they get carbon credits for storing the CO2. It's all a big fantasy game.
To be clear, in the balancing options hydrogen comes out as the most expensive and there's no statement about what the price of hydrogen they assume in that.
Most say its got no hope unless its below $3/Kg and most put the current estimated price at $6-8/Kg.
How on earth does Hydrogen generation store Co2??
The fact is that this shows that carbon taxes are forcing our industry out of business while China, Russia, India and the rest of Asia are able to completely out compete us on practically everything.
And how on earth are they projecting no cost increase in renewables when the new reports are that costs have risen by 40%??
We have to put an end to this socialist madness before we have no business left.
You have to laugh, wind is now so cheap, that no one bid in the government's CfD auction.
https://news.sky.com/story/offshore-wind-power-warning-as-government-auction-flops-12956522
"Several companies, including the UK's largest renewables generator SSE, have ruled themselves out of the auction, with one source saying the number of potential bidders was "between two and zero, with expectations at the lower end of that range".
So not only was it not cheap before this, its rapidly getting more expensive rather rapidly.
Excellent piece of analysis and hopefully will help fuel the groundswell of opinion and spark a debate about how much we want to pay to achieve net zero or if we even want to go there. Im pretty sure the lauded goals of 50GW offshore wind by 2030 and net zero power generation are now dead and we will see them quietly disappearing. It wont happen overnight as politicians having committed themselves to net zero have to slowly wind back from it even Caroline Lucas is targeting energy usage now as she knows unreliables are never going to be cost effective.
And If I may?
The costs would be even lower for conventional generation if the subsidies were taken away from RE Wind. It's the protective subsidies that "artificially" reduce the true costs. It is designed to mislead and is a fraud.
The dog that didn’t bark in the night.
According to the CFD Auction timetable, today, August 8th:
Delivery Body issues a ‘Notice of Auction’ inviting qualified applicants to submit sealed bids
The ‘Notice of Auction’ will specify that an auction is to be held and the deadline for the submission of sealed bids
There has been no such notice publicised. That means that there are insufficient potential bids to merit an auction. All applicants will therefore get the full Administrative Strike Price for their technology. This is likely to mean very small volumes of expensive tidal (£270/MWh in today’s money) and floating wind (£155/MWh in today’s money), and perhaps a few solar projects if they can get a grid connection, but even these must be in doubt. It increases the probability that there are no bids at all for ordinary offshore wind.
I see that the Delivery Body has issued a notice a day late. It smacks of a cover up, so I have written to them challenging them for an explanation, and pointing out that the whole AR5 process has been an exercise in procrastination in the face of clear messages from the renewables industry that Administrative Strike Prices are inadequate. I expect they will plead purdah.
For the last couple of years, renewable enthusiasts have been trumpeting that the levelized cost of electricity is now competitive, and sometimes lower for renewables compared to fossil fuel generation. This completely misses the elephant in the room: intermittency.
Interruptible (such as renewable) utilities are typically worth 1/2 or less of dispatchable, on-demand service. I.e., LCOE for renewable generation may be about the same as for dispatchable fossil generation, but it needs to be MUCH lower to be truly competitive.
Alternatively, LCOE for intermittent sources such as renewables should also incorporate the full carrying cost of the dispatchable facilities required to back them up. Then LCOE would be a reasonable basis for comparison.
Have a look at LCOE values for offshore wind in the U.S. It’s much higher than onshore and for good reason--higher construction costs.
Very useful analysis, but surely this is not gaslighting, its just distortion deliberate or otherwise. Gaslighting is specifically to manipulate another person into doubting their own perceptions, experiences or understanding of events.
I would say it is gaslighting. Manipulating us into believing our high energy bills are down to Putin, when in reality it's their obsession with renewables.
To put the calculations about the Gas energy generation in practical terms. In the electricity bill of a UK customer, what fraction of the bill is carbon tax?
If you believe the government's own analysis it is about £60/MWh on gas generation. If you look at the forecast proceeds for UKA carbon allowances, most of which fall on the electricity sector (though some on steel etc.), it's about £8bn a year. Recent auctions have dropped in value because there is now an expectation that electricity demand will suffer, reducing the need for allowances. Also, coal that had been expected to run next winter when the allowance rations were set now won't. There are of course other taxes that should qualify, including Climate Change Levy which is about £2bn. Arguably, also windfall tax on oil and gas.
Hi do you have a link to the reference for the £8bn cost of the UK carbon allowances?
You can find the historical auction results here, going back to May 2019 when they first ran:
https://www.ice.com/marketdata/reports/278
You can find futures prices here (including historical charts):
https://www.barchart.com/futures/quotes/CMZ23
They have taken a big tumble just recently to £40/tonne CO2.
The OBR include forecasts in Annex Table 5: their March forecast had already reflected some of the drop so show ~£6bn, which now looks optimistic. I was remembering figures I had seen back in October, I suspect. Last year allowances touched £100/tonne CO2 when we were burning extra gas and coal to keep the Continent in electricity.
https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/#annex-a
Thank you.
I haven't done that calculation.
A fine analysis
Is there any justification given for the increase in load factor? 🤨
The only ones possible would be less maintenance downtime and benefits of less wind shear, or greater efficiency of a design for the expected winds. This is part of an excellent tutorial on wind (although it dates from earlier times when turbines were smaller):
http://drømstørre.dk/wp-content/wind/miller/windpower%20web/en/tour/wres/shear.htm
Remember that power in the wind scales with the cube of wind speed, so a higher hub height in theory gives stronger winds. But:
http://drømstørre.dk/wp-content/wind/miller/windpower%20web/en/tour/wres/offshore.htm
OTOH increased rotor diameter leads to increased differentials in wind speed and loading on the hub between the top and bottom positions of a blade, increasing the stresses - and the need for maintenance as we go large! This is perhaps behind the problems that Siemens have been acknowledging with their turbines recently. These problems have been more obvious with tidal turbines because water is much denser than air, increasing the stresses - and limiting the practical size of turbines because larger ones are soon wrecked.
Efficiency depends on blade design, feathering regime, frictional losses and generator size relative to to the rotor. The maximum theoretical efficiency is 16/27ths, given by Betz' Law (proof at the above site - see the last menu item). Different designs have different efficiencies at different wind speeds. Efficiency starts very low at the cut in speed, increases towards the design sweet spot, and then falls off when the generator maximum output becomes the limiting factor. This is a typical efficiency curve
https://datawrapper.dwcdn.net/GqyyC/1/
You will see it peaks at around 45% of the energy in the wind, which is about 75% of the theoretical Betz limit maximum: few designs do any better, and most that do are trying to make the best of a lower wind speed resource. Designs are fine tuned around expected wind speed distributions among other factors. The sweet spot can be shifted to higher or lower wind speeds.
http://drømstørre.dk/wp-content/wind/miller/windpower%20web/en/tour/design/optim.htm
Beyond that it's about Hopium in terms of the weather. Perhaps they should point to where the IPCC is forecasting even zephyrs due to climate change.
It should be noted that the Hywind floating wind farm runs at the highest capacity factors in the UK fleet (just over 50%), with the site having been carefully selected and not constrained by bottom depth. However, it comes at a massive cost premium: it earns 3.5ROCs/MWh, now worth well over £200/MWh of subsidy on top of market price. Is it worth it?
😅
Excellent analysis as usual. Thank you. Eigenvalues has become my go to website for the latest info on the Net Zero scam.
These Govt Green Energy activists will stop at nothing to promote their pet beliefs. I've been in construction for 30+yrs and I don't care what major infrastructure project you are tackling the cost savings being predicted are ridiculous. Everyone in the UK has experienced massive increases to their energy costs and it all coincides with expanding renewables Final thought to ponder... when was the last time the Govt was able to estimate the costs of infrastructure work to any degree of moderate accuracy? Answer - NEVER. Great piece of work David.
There is a simple way to gauge the cost of Weather-Dependent "Renewables". Take comparative costs say from the US EIA and divide them by the productivity they achieve. That gives you a true comparative cost of providing a unit of power to the grid.
The simple sums which are optimistic for "Renewables" are shown here
https://edmhdotme.wpcomstaging.com/a-comparative-costing-model-for-power-generation-technologies/
and here
https://edmhdotme.wpcomstaging.com/a-few-graphs-say-it-all-for-renewables/
Actually it's mostly just a fairy tale, because what we really pay for wind is either market price + ROCs and REGOs, or CFD strike price plus REGOs. There is no way that the weighted average strike price plus all the ROC stuff will come down anywhere close to their fantasy prices.
I have noted that LCCC seem to have revised down a number of strike prices since end June - the latest being lopping almot £10/MWh off Triton Knoll. I will write and ask them about this.