David, thank you. I think but for you and Gordon Hughes, I'd be largely in the dark as to what's actually going on here. I see much more from the USA and it all tallies. I don't spend much time following established news media, but I'm not aware of any incisive questioning taking place.
LF is a significant Achilles heel for renewables, affected by not only the levels of wind & Sun availability, but also by maintenance regimes, defects (and they suffer many), ageing and severe weather events etc
On any metric, renewables are far worse than the generation types they are trying to replace - as Warren Buffet said ‘without subsidies, they’re simply not worth building’
What also happened in August was a significant amount of wind was constrained off due to system constraints [summer maintenance and project works outages have particularly restricted Scottish transmission capacity] and I am surmising that LCCC only pay for metered energy thus the windmill owners then pick up some level of income in the BM. So on an unconstrained transmission system the subsidy would be higher.
Also it appears that it is the newer windmills that get constrained off first as they are prepared to bid to turn down at a lower price than the older windmills which are at higher strike prices.
Continuing to go off at a slight tangent the initial cost forecast for system constraints in August is close to £200m. Now not all this goes to the windmill owners as a big proportion ends up in the coffers of CCGT owners as they sit there looking at wind forecast and transmission capacity available and work out they will be generator of last resort. Then on top of this you have all the other balancing costs many of which are driven by level of unreliables penetration so nett cost forecast for August is c290m which I believe will make it the most expensive month per MWh consumed when normalised for the current gas price.
Indeed. Paid for curtailment in August was 1.2TWh at a cost of £63m, including wind farms on ROCs as well as on CFDs or taking no subsidy. That's the equivalent to sinking a large LNG ship fully laden. There will also have been voluntary curtailment by wind farms that get no CFD compensation when prices are negative for long enough (1 hour or 6 hours, depending on contract) in the day ahead market, or which have not commenced a subsidy either as a choice or because they aren't fully commissioned.
Turn-up cost was £119m for 1.14TWh. The record cost was £161m in November 2021 during the energy crisis.
Profoundly depressing. It's almost like Contracts for Difference have been deliberately designed to drain the public purse and transfer wealth to private corporations and investors (many of them overseas), however favourable or unfavourable the weather conditions are as regards renewables electricity generation. Now they're going to try to close the one loophole whereby companies are paid nothing if the electricity market price drops below zero by building more and more extremely expensive battery backups to absorb the extra capacity when the wind is blowing strongly across the country - which will mean even more profits for them when they sell the stored electricity back to the grid.
Constraining off windmill generation is costing a small fortune and will get significantly higher until the Eastern DC Links are commissioned and even then will only get us back to todays levels as even more unreliables will have been added to the system. Personally I would have mandated now that all new windmill and solar panel installations have to be able to absorb at least 4hrs max output ie they have to include a BESS system as part of the development to get approval and if that blows up the economics so be it.
It seems to me that in a more rational world, adaptation of the grid and energy storage would have been an integral part of installation of wind and solar, so we could see better what the costs were, but it's clear from David's articles that Joe Public is certainly not meant to see them.
For what it's worth (precisely nothing), I would have capped the proportion of intermittent sources allowed on the grid to keep it manageable (I'm not knowledgeable enough to give a figure), accepted a pause in abatement of the power sector's contribution to the UK's 1% of global carbon dioxide emissions while gas plant takes up the slack, and focused on nuclear plant to do the future heavy lifting.
I wonder when Joe is going to start seriously asking why, given all these cheap renewables he's been told about, his bills keep going up, and what the official cover story will be?
Perfectly sensible strategy and I would add buy time to resurrect our manufacturing industry even if its only assembling so we actually gets some so called green jobs. Millibrains strategy is just supporting jobs in Germany, Denmark and China plus others. At least GMB have worked this out and called it out for what it is so lets see if No.10 reign mad Ed back in.
Adding BESS to these engineeringly incompetent generation sources, would make the projects unaffordable, hence why they’ve seldom done it (plus the materials would also be unsourceable on mass grid scales)
It's all such a ridiculous and unnecessary mess in order for us to virtue-signal our intent to 'save the planet' from an entirely imaginary (and deliberately fabricated) CO2 caused 'climate crisis'. The idea of demand-side management was to minimise constraint payments by offering extremely favourable half hourly smart tariffs to customers at times when there was a generation surplus. Then they realised at times there would be so much surplus that they would be PAYING customers to use electricity in order to prevent the grid from becoming destabilised. Just one problem there: when the market price dips below zero, wind farm owners don't get paid anything, so now they're backing away from offering to pay customers to consume electricity (and maybe store it themselves) and instead the Green blob are moving to monopolise storage as well as highly intermittent generation. They win, the energy customer loses.
But the reality is that cheap prices for select consumers just mean that the cost is added to our bills The cost reduction is illusory. The most subsidised day of the week under CFDs is Sunday, when demand is low and surpluses are more frequent and larger.
I totally agree that the situation we find ourselves in is ridiculous but it is what it is and we aren't going to overturn it anytime soon so we need to make it better. As I see it OFGEM have caused the constraint issue by refusing since 2016 to sanction the Eastern DC Links investment but have now flipped the other way and have approved this and a welter of other projects irrespective of whether some of the these windfarms will ever be built. Until we have a body that takes whole system approach i.e. CEGB MkII anomalies will persist. NESO wont the that creature its remit is to facilitate not direct the path to achieving Net Zero and without a whole system approach organising generation and transmission so that security of supply is maintained at least cost to consumers this overly complex system will just get more complicated and overlaid with many more financial ruses to try and keep it working leaving consumers worse off.
David, thank you. I think but for you and Gordon Hughes, I'd be largely in the dark as to what's actually going on here. I see much more from the USA and it all tallies. I don't spend much time following established news media, but I'm not aware of any incisive questioning taking place.
Great review David
LF is a significant Achilles heel for renewables, affected by not only the levels of wind & Sun availability, but also by maintenance regimes, defects (and they suffer many), ageing and severe weather events etc
On any metric, renewables are far worse than the generation types they are trying to replace - as Warren Buffet said ‘without subsidies, they’re simply not worth building’
What also happened in August was a significant amount of wind was constrained off due to system constraints [summer maintenance and project works outages have particularly restricted Scottish transmission capacity] and I am surmising that LCCC only pay for metered energy thus the windmill owners then pick up some level of income in the BM. So on an unconstrained transmission system the subsidy would be higher.
Also it appears that it is the newer windmills that get constrained off first as they are prepared to bid to turn down at a lower price than the older windmills which are at higher strike prices.
Continuing to go off at a slight tangent the initial cost forecast for system constraints in August is close to £200m. Now not all this goes to the windmill owners as a big proportion ends up in the coffers of CCGT owners as they sit there looking at wind forecast and transmission capacity available and work out they will be generator of last resort. Then on top of this you have all the other balancing costs many of which are driven by level of unreliables penetration so nett cost forecast for August is c290m which I believe will make it the most expensive month per MWh consumed when normalised for the current gas price.
Indeed. Paid for curtailment in August was 1.2TWh at a cost of £63m, including wind farms on ROCs as well as on CFDs or taking no subsidy. That's the equivalent to sinking a large LNG ship fully laden. There will also have been voluntary curtailment by wind farms that get no CFD compensation when prices are negative for long enough (1 hour or 6 hours, depending on contract) in the day ahead market, or which have not commenced a subsidy either as a choice or because they aren't fully commissioned.
Turn-up cost was £119m for 1.14TWh. The record cost was £161m in November 2021 during the energy crisis.
Profoundly depressing. It's almost like Contracts for Difference have been deliberately designed to drain the public purse and transfer wealth to private corporations and investors (many of them overseas), however favourable or unfavourable the weather conditions are as regards renewables electricity generation. Now they're going to try to close the one loophole whereby companies are paid nothing if the electricity market price drops below zero by building more and more extremely expensive battery backups to absorb the extra capacity when the wind is blowing strongly across the country - which will mean even more profits for them when they sell the stored electricity back to the grid.
Constraining off windmill generation is costing a small fortune and will get significantly higher until the Eastern DC Links are commissioned and even then will only get us back to todays levels as even more unreliables will have been added to the system. Personally I would have mandated now that all new windmill and solar panel installations have to be able to absorb at least 4hrs max output ie they have to include a BESS system as part of the development to get approval and if that blows up the economics so be it.
According to the Energy Bad Boys, battery storage is currently extremely expensive, which won't come as any surprise: https://energybadboys.substack.com/p/battery-storage-is-141-times-more. The situation in the UK would be somewhat less extreme as our gas is more expensive.
It seems to me that in a more rational world, adaptation of the grid and energy storage would have been an integral part of installation of wind and solar, so we could see better what the costs were, but it's clear from David's articles that Joe Public is certainly not meant to see them.
For what it's worth (precisely nothing), I would have capped the proportion of intermittent sources allowed on the grid to keep it manageable (I'm not knowledgeable enough to give a figure), accepted a pause in abatement of the power sector's contribution to the UK's 1% of global carbon dioxide emissions while gas plant takes up the slack, and focused on nuclear plant to do the future heavy lifting.
I wonder when Joe is going to start seriously asking why, given all these cheap renewables he's been told about, his bills keep going up, and what the official cover story will be?
Perfectly sensible strategy and I would add buy time to resurrect our manufacturing industry even if its only assembling so we actually gets some so called green jobs. Millibrains strategy is just supporting jobs in Germany, Denmark and China plus others. At least GMB have worked this out and called it out for what it is so lets see if No.10 reign mad Ed back in.
Thanks you and agreed.
I'm hoping for some revelation about Ed's financial interest in, or gifts from, emergency generator suppliers.
Adding BESS to these engineeringly incompetent generation sources, would make the projects unaffordable, hence why they’ve seldom done it (plus the materials would also be unsourceable on mass grid scales)
It's all such a ridiculous and unnecessary mess in order for us to virtue-signal our intent to 'save the planet' from an entirely imaginary (and deliberately fabricated) CO2 caused 'climate crisis'. The idea of demand-side management was to minimise constraint payments by offering extremely favourable half hourly smart tariffs to customers at times when there was a generation surplus. Then they realised at times there would be so much surplus that they would be PAYING customers to use electricity in order to prevent the grid from becoming destabilised. Just one problem there: when the market price dips below zero, wind farm owners don't get paid anything, so now they're backing away from offering to pay customers to consume electricity (and maybe store it themselves) and instead the Green blob are moving to monopolise storage as well as highly intermittent generation. They win, the energy customer loses.
But the reality is that cheap prices for select consumers just mean that the cost is added to our bills The cost reduction is illusory. The most subsidised day of the week under CFDs is Sunday, when demand is low and surpluses are more frequent and larger.
https://i0.wp.com/wattsupwiththat.com/wp-content/uploads/2024/09/CFDs-by-DoW-1727193494.3463.png
I totally agree that the situation we find ourselves in is ridiculous but it is what it is and we aren't going to overturn it anytime soon so we need to make it better. As I see it OFGEM have caused the constraint issue by refusing since 2016 to sanction the Eastern DC Links investment but have now flipped the other way and have approved this and a welter of other projects irrespective of whether some of the these windfarms will ever be built. Until we have a body that takes whole system approach i.e. CEGB MkII anomalies will persist. NESO wont the that creature its remit is to facilitate not direct the path to achieving Net Zero and without a whole system approach organising generation and transmission so that security of supply is maintained at least cost to consumers this overly complex system will just get more complicated and overlaid with many more financial ruses to try and keep it working leaving consumers worse off.