Boris’ speech promising 40GW of offshore wind power by 2030 has predictably been widely misreported in the media. The pledge has not just been dreamt up by the PM, as has widely been implied, but was actually written into the Conservative Manifesto last year.
It is also only an increase from the existing target of 30GW.
Furthermore it is of course in line with what the Committee on Climate Change have been calling for, and is much less than Labour’s target of 52 GW.
In short, Boris could fall under a bus tomorrow and nothing would change. Such massive expansion of wind power is an inexorable consequence of the Climate Change Act and subsequent Net Zero Plan.
It is of course good that renewable policy is now attracting the media’s attention, with questions raised about cost and intermittency. However the media have been grossly negligent in not addressing these issues years ago, when we might have avoided many of the problems we have now.
That may in part be due to the fact that most coverage has been left in the past to the useful idiots of the environmental lobby.
Predictably the buffoon Ed Miliband has complained that the Tory record on rolling out renewables has been poor. If only! Sadly the opposite is true.
Since 2010, offshore capacity has increased from 1.3 to 11.2 GW. With the contracts already in place, capacity of over 20 GW will be operational by 2026.
With nearly 6 GW of contracted at last year’s auction alone, getting close to 40 GW by 2030 or soon after should be achievable from a construction point of view.
The real problem is cost. Again many media reports wrongly imply that the government will build and pay for these wind farms. There is clearly a lack of understanding of how the system works, that they are built by private capital, and ultimately paid for through energy bills.
The cost is reported as £50bn, which is consistent with BEIS projections of £1630/kw, based on 29 GW (40 less 11).
But as GWPF analysis has pointed out, recent CfD prices simply are not viable given known capital costs. According to BEIS, operational costs alone for offshore are £22/MWh, nearly half the strike price of £48/MWh agreed for Dogger Bank and other schemes due on line in 2024/25.
GWPF believe investors in these projects are gambling on wholesale prices rising, in which case they will simply renege on their contracts, and sell at market rates.
Two years ago, power prices were £60/MWh, and expected to carry on rising. Now they are below £40/MWh, and, with fossil fuel demand weak, likely to remain low for sometime.
How many investors will be willing to make the same gamble now in the hope that power prices double?
One final thought. Despite all of this expenditure, offshore wind will still only be supplying about 8% of UK energy come 2030. Hardly a gamebreaker!
via NOT A LOT OF PEOPLE KNOW THAT
October 10, 2020 at 11:48AM