32 Comments
Jun 28·edited Jun 28Liked by David Turver

Worry not David, our incoming incompetent DESNZ Minister, Red Ed, will use his executive power to remove any need for local resident agreement to onshore wind farms in the planning process - no longer will campaign groups be allowed to delay, or cancel wind projects - you will have them in your back yard and lump it - socialism on steroids

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David. Can you please help a novice who can see to absurdities of NZ and the problems surrounding UK power generation capacity but has a problem relating it to real world issues. Here is a calculation I have put together:

Number of households in Greater Manchester = 1,178,000 units

Average Power consumption per household in UK = electricity 2,700 KWh pa and gas 11,500KWh pa TOTAL 14,200KWh pa per household or 16,700 million KWh pa (elec + gas)

Assume gas is substituted by the equivalent power from electricity

Manchester consumes the equivalent of 16,700 million KWh pa

ONE wide turbine can produce 6,000m KWh pa

[[Most onshore wind turbines have a capacity of 2-3 megawatts (MW), which can produce 6 million kilowatt hours (kWh) of electricity every year. Enough to power around 1,500 average households with electricity. As the wind blows faster, more electricity is generated.]]

Therefore 2,800 turbines required

Density of wind turbine farms is about 12 units per 1 km by 1 km

Therefore, to power Greater Manchester 2,800 / 12 = 250 square km :

square root = 16km by 16km

AREA of GM = 1,300km2

[[SMRs are defined as small nuclear reactors with a maximum output of 300 Megawatt electric (MWe) and can produce 7.2 million kWh per day. By comparison, large-size nuclear power plants have an output of over 1,000 MWe and can produce 24 million kWh per day.]]

7.2 mKWh per day = equivalent of 2,600 million KWh pa

or 7 number SMR to power Greater Manchester or 4 sq km

or 2 number large reactors to power Greater Manchester

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Jun 25Liked by David Turver

What happens when the subsidies expire?

REMA - Pronounced wallet reamer.

In fact it will happen long before the subsidies expire, and it will entrench and expand them. The present system is near breakdown, which is why it will be replaced. It will be costly, not least because of all the QCiL clauses in contracts that guarantee compensation (and were why CFDs and ROCs were not subjected to generator levy).

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Very good article. As always when I read such articles, I think they would be better quoting prices in pence per kWh. Yes, we can all do the maths but it's so much more relatable for even the technical reader who is a non specialist in this area. It's rather like reading something in French, which one speaks a bit but has to translate all the time, something which reduces the attention that one pays to the core argument.

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author

Wholesale prices are usually quoted in £/MWh.

Quoting in p/kWh might perhaps lead people to think that's what they pay for renewables in their bills, making them look cheap because they know they pay say 20-odd pence per unit. But in reality, wholesale prices are inflated considerably by subsidies, grid costs, various policies, VAT and of course supplier profits.

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Jun 23Liked by David Turver

Thank you David! I have two questions:

1) Given the evidence, it would be rational to stop or pause offshore wind, so why isn't this happening?

2) I gather Gordon Hughes believes that based on evidence, the economic life of newer offshore wind farms will be limited to around 15 years by the rising costs of maintenance in a very hostile environment. Given the amount of material and investment involved I find this prospect alarming. Will they become UNESCO World Heritage sites?

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Jun 24Liked by David Turver

1) It is happening, if only by accident. AR4 buildout is behind schedule with some cancelled and AR5 attracted no bids to build offshore. We wait to see how Miliband will react. Baroness Brown suggested that AR6 prices aren't high enough either.

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author

Yes, and AR6 timetable has been delayed because of appeals against disqualification from the process. Just like AR5. But AR4 went without disqualifications or appeals. Interesting.

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I think that was inevitable once the election was announced. July 4th was a key date in the earlier timetable. Now Miliband has a few weeks to work out how much he will increase the auction budget.

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The answer to 1) is one of the great inponderables. I suspect because politicians are both poorly informed and have so much political capital invested in renewables, they can't back down without looking even more stupid.

On 2), I agree with Gordon. Once CfDs expire, even just the cash costs of operating will likely exceed revenue. That's why I predicted bankruptcies or begging bowls.

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Jun 23Liked by David Turver

.

These prices don’t factor in any backup storage energy. If wind operators had to fund stored backup, instead of using gas energy as a backup, this would double or treble the cost of wind and solar energy.

RE

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Have I missed something here?

With the green plot (Walney) - how does it have direct costs of £80 and operating cost of £150, but total costs of only £140. They all appear to be like this.

RE

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author
Jun 23·edited Jun 23Author

Op costs about £108/MWh. Total costs £129. Scales are not the same

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Jun 23·edited Jun 23Liked by David Turver

Here is another hidden cost - £67 million, for new roads to getnthe turbine blades up the mountain. I bet those costs were not bourne by the wind farm developer.

https://youtu.be/zaQgL2q8oco?si=PgZ75C0YjaY7UWOJ

Note again that all the hardware is from abriard - so no New Green Economy for the UK either…

Ralph

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Jun 24Liked by David Turver

Id be surprised that the highway authority would have been liable to make the road suitable out of its own pocket but may have contributed where there was long term benefit for all road users. Conversely there is a lot of wind farms installed still planned down this part of Scotland so I could see the port and other wind farm developers perhaps putting a few quid in the pot as you hit the nail on the head that majority of kit for a windfarm is imported. It makes so frustrated when idiot politicians say we are leading the way on wind energy. NO we have given away our wealth to other countries mainly the EU you couldn't make it up.

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Jun 23Liked by David Turver

David, thanks for this detailed analysis.

As the financial data are derived from official accounts, the analysis seems irrefutable, and strongly suggests that wind-farms of almost any type will never be economical - as many suspected.

PSB three broad and somewhat rhetorical issues/Qs, several of which may have been considered in some of your previous posts:

[1] The cost differences between cheapest and most expensive Total Costs in £ per MWh seems enormous. The CFD Funded Farms variation is c.£70 for E Anglia One & Dudgeon versus a wide range of £120-£250 per MWh for the others. The variation for the three ROC Funded Farms seems much smaller, within a range of c.£ 105-£115 per MWh. This begs several Qs. Is some/all of this merely creative accounting, as you suggested in one case? Is one particular design of farm so much better/cheaper that it should be the template for all others? Should these costs have been foreseen by either HMG or the contractor well in advance of construction (a long shot)? Is there any evidence to suggest what the future cost trend(s) will be for the various types of wind-farms, especially long term maintenance and replacement cost profiles?

[2] What about the non-financial costs, especially in two main areas: [a] the CO2 costs of construction and maintenance (though many would say these are relatively unimportant)? And [b] other environmental and wild-life impacts? I think you have touched on both areas before but altruists might suppose that the caring Church of Net Zero would be pleased to be fully transparent about the data in these areas.

[3] Back-up energy costs (not just electricity) are perhaps the issue of greatest concern. Unless nuclear fusion (which has always been 30 years away) suddenly becomes viable, it seems certain that the ongoing need for non-renewable back-up electricity generation (mainly CCGT?) would greatly exacerbate the already uneconomical supposedly renewable energy costs.

The renewable energy future for the UK is looking impossibly expensive and often smacks of illogical and lazy ideological planning. It looks as if the wind-farm emperors have very few clothes, but the government tailor is happy to keep lending expensive cloaks. Almost worse, there is a strong sense that HMG would never dare to end the subsidies regime. Please keep chipping away.

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author

I think there's a lot of variables such as:

1. maintenance that pushes up costs and reduces output

2. Curtailment

3. Whether financed by debt or equity.

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Jun 23Liked by David Turver

I guess you saw the letter from Luis Castro in the Daily Sceptic

https://dailysceptic.org/2024/06/22/senior-official-in-department-for-energy-security-net-zero-admits-labours-plans-to-decarbonise-u-k-s-electricity-grid-by-2030-are-completely-unworkable/

“We are likely to need around 30-50 GW of long duration flexible capacity by 2035. At this point, unabated gas generation remains the only mature technology capable of providing sustained flexible capacity……”

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Jun 23Liked by David Turver

Even Millibrain knows this as there was an acknowledgement in their manifesto that they will need to keep a strategic reserve of gas after 2030. Also what does that statement actually mean is it one half hour period in high summer when demand is low they actually run the grid without any gas being used or is it a whole year?

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As you cited Greater Gabbard as most expensive ROC windfarm I looked at accounts and I make operating costs excluding depreciation at c£60/MWh (is your chart correct?) and concur with your 107/MWh above inclusive of depreciation. Also the construction debt isn't held in the operating entity so its two owners presumably levy some charges which increases operating costs. Well I hope that is the case otherwise the O&M costs are obscene / MWh compared to other forms of generation. The other thing i didn't realise is that OFTO income is derived from NGESO ( I thought windfarms paid them but its treated as part of the grid albeit the windfarm has to pay TuoS charges but Gabbard OFTO only got 4.5m from NGESO so it can't be that a big amount and I suspect its recharged through the PPA anyhow). Ultimately trying to unpick the true costs is pretty difficult as the owners of windfarms are financial engineers and know how to manipulate the system to maximise profit and minimise taxes.

So a couple of other things about Gabbard (FYE 31/3/23) it sold its output to its two owners SSE/RWE at £246/MWh under its PPAs (terms aren't shown but presumably market linked at that costs) and thus it was able to hand over a tasty £251m dividend to its two parents. It had negligible constraints so its clean load factor was 33.6% ok its older kit but well down on the 40-45% this should be producing.

So all in all the viability of these without subsidies is questionable although I suspect with so much cash swashing about they aren't run as efficiently as possible but the clock is ticking down.

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We can calculate the ROC revenue precisely. The accounting year corresponds with the scheme year. For 2022/23 the cashout price was £52.88/ROC while the full recycle value added £6.88/ROC. The windfarm earns 2 ROC/MWh. So the overall ROC subsidy was worth £119.76/MWh. The accounts do mention that the full recycle value is part of revenue.

https://www.ofgem.gov.uk/publications/renewables-obligation-late-payment-distribution-2022-2023

Add on a further sum for REGOs, although there is no explicit mention in the accounts. That is much more uncertain, but REGO prices were boosted after the government refused to carry on recognising REGOs from abroad.

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They then sold the energy on at 246/MWh on average across the year albeit this was 22/23 so has the Ukraine factor in the price and the govt then gave us all a bung loading up the govt credit card and they keep telling us how cheap renewables are!!

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Depreciation was £70.4m on a £1,484m cost of the wind farm (just under £3m/MW) with additional cost for the decommissioning reserve also capitalised. The life is quoted at 23 years. Accounting depreciation adopts widely different standards at different ventures. I've seen US style sum of digits which front ends the cost and big life variations and treatments of decommissioning. Holding structures and financing can be quite complex. There's no debt on the balance sheet here: that supports the shareholders' funds and is held elsewhere. Also, derivative hedging of financial risk varies hugely. There appears to be none of any significance in the subsidiary here.

I usually like to level the playing field by looking at the original capital cost and converting it to a capital charge that covers financing and depreciation.

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I include depreciation in the op cost calc. Revenue £395.4m, Operating profit £232.1m gives op costs of £163.1m. Generation as per accounts of 1,484GWh (p6 of the pdf), so £110/MWh operating costs. Even on just cost of sales the direct costs are £158.9m, giving direct costs of £107/MWh

https://find-and-update.company-information.service.gov.uk/company/04985731/filing-history

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So wind generators can’t participate in a free energy market with infrastructure built for traditional generators. Hence the subsidies to allow them to play. But what about all the grid infrastructure being built to support adding more wind? If subsidies are withdrawn after 15 or 20 years does that mean it is going to be useless after that time? Unless subsidies are continued…

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Good point and so far the grid has been behind the curve in dealing with the amount of generation connected particularly in N Scotland where the transmission constraints are significant. Look at Moray East and Seagreen, two of the newer windfarms, they spend more time being constrained off but doesn't bother them as they still get paid anyhow oh and on what they forecast not what they actually produce. Anyhow pendulum has swung the otehr way now and NG/SP/SSHE are now proposing a massive built out of grid infrastructure to cover for almost everything proposed over the next ten years which in itself would be wildly over provisioning and thats before we see old assets getting decommissioned because they are no longer financially viable. As an aside its interesting to note that teh ESO 24/25 winter outlook actually sees max demand slightly lower than last year so much for demand rising due to us electrifying anything!! Sadly the electricity industry has poor record of forecasting massively over building in the 60's and only getting away with it because the AGR nukes were so late being commissioned. None of the mainstream parties have a handle on this and are now hiding behind climate change as a cover all to hide their inadequacies.

We need a total reset and a much more measured forward approach that balances reducing gereenhouse gas emissions but not at the expense of overall costs or security of supply and this means moving away from the free for all mess that just need more and more subsidies to sustain it.

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Don’t underestimate the attention to the energy crisis that the Reform Party is taking. We will abolish current Net Zero policies. We will invest as rapidly as possible in home made(UK)SMRs and abolish the mandates for EVs and Heat pumps.

The Aberdeen Chamber of Commerce predicts a loss of 100,000 jobs in the Scottish Oil and Gas Industry. This ridiculous attack on fossil fuels must stop. It is essential to our livelihoods.

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Or they build even more turbines.

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Excellent analysis, David. You've no doubt seen: https://www.ref.org.uk/Files/performance-wind-power-uk.pdf

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Thanks for this. I am from the US, but I imagine wind farms are wind farms. I posted your substack in a variety of places, including my Facebook group... Celebrate Facebook Freedom ( A group I started, because I was repeatedly banned by Facebook for sharing essays and opinions they wished to censor. This helped, somewhat) I am unaware of any adequate solutions to energy storage, either large or portable. Do you know of any.

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Jun 23Liked by David Turver

The ‘prestigious’ Royal Society said we should use hydrogen for backup. Using 800 caverns carved out some 2,500 ft down in salt beds, to store the super-critical hydrogen fluid at 2,50l psi, to power 60 new 2 gw power stations, all running piston engine generators for some strange reason (not sure why they did not propose jet turbines on combined cycle).

But they made some basic errors.

They said UK energy consumption will be 570 twh per year, when it is likely to be 1,300 twh.

They said total costs to be about £200 billion, when my estimate is about £2,000 billion.

They forgot to add in the extra generation capacity required to charge up this hydrogen ‘battery’, because it is only 25% efficient. This adds in a whole load of extra costs to the system.

They did not add the costs of enormous amounts of de-min water generation.

But they do note as a side issue, that electrolosys on this scale has never been tried before.

https://royalsociety.org/-/media/policy/projects/large-scale-electricity-storage/Large-scale-electricity-storage-report.pdf

Ralph

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Batteries are way too expensive to deal with inter-seasonal and inter-annual supply and demand variations. So is hydrogen, so storage is not an answer imv.

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