When “MORE” is Never “ENOUGH”: British Wind Power Outfits Demand MORE Subsidies

oliver

Sometimes, asking for “more” requires extreme audacity.

Offshore wind farms may be scrapped due to budget cap, ScottishPower warns
The Telegraph
Emily Godsen
30 October 2014

Keith Anderson says company’s East Anglia project is being scaled back and claims Government budget limits mean wind farms that do get built will be unnecessarily expensive

Several proposed offshore wind farms may be scrapped in coming months because the Government is not awarding enough subsidies, the head of energy giant ScottishPower has said.

Keith Anderson, chief corporate officer, said it was cutting the size of its planned 240-turbine East Anglia offshore wind farm because the budget for subsidies to be awarded this year was “not big enough”. The project could be scrapped altogether if it did not secure a subsidy contract this year.

Those offshore wind farms that do get built in coming years will be unnecessarily expensive because ministers are effectively forcing companies to build smaller projects, preventing them from developing economies of scale, he claimed. As a result the Government would miss its own target for cutting offshore wind’s costs by 2020, Mr Anderson, the former head of the Offshore Wind Industry Council, forecast.

Offshore wind farms are heavily subsidised through levies on consumer energy bills. Ministers are preparing to award subsidy contracts for new projects in a “reverse auction” over coming months, but the maximum available budget is barely half the size the wind industry had expected, Mr Anderson said.

About five projects are expected to compete for the subsidies, which can realistically fund just one 700MW-800MW offshore wind farm, according to industry body Renewable UK.

Mr Anderson told the Telegraph that ScottishPower was being forced to scale back its proposed 1.2 gigawatt (GW) wind farm off the coast of East Anglia in order that its total annual subsidy requirement would be less than £235m – the maximum budget being awarded this year.

Even then, it risked losing out to rival projects.

“There will be more applications than there is budget,” Mr Anderson confirmed. “I think on the back of the auction there will be a lot of companies re-examining what they do with their projects and whether they are viable any more.

“We are hopeful we can submit a competitive bid and win, but if we are sitting here in January and have not got a contract we would have to totally reschedule the project timeline. Until we had analysed all of that we wouldn’t have a clue as to whether the project would still be economically viable. We would have to totally reassess and re-examine the whole project.”

No subsidy allocation has been confirmed to be awarded next year, although ministers have indicated there is roughly £1bn to be allocated over the rest of the decade.

Mr Anderson said that by awarding such limited budgets at a time, the Government was stymieing its own aim of cutting the technology’s costs.

Offshore wind farms currently receive about £150 – roughly triple the market price of power – for every megawatt-hour of power they generate. Ministers have said that cost should be cut to £100 for projects being awarded contracts in 2020.

“You cannot build a huge big project, so you will not get the big economies of scale,” Mr Anderson said. He said the kind of projects being proposed now had originally been expected to be at least 1GW each in order to drive cost efficiencies.

“Our belief is if you drove the process to do projects of that size and scale you would drive the costs down harder and faster. If you push the projects down to smaller size and scale, we don’t think you will get the cost reduction coming through the industry as quickly as you could.

“If you wanted to hit magical £100 target by 2020, I think doing it this way pushes it out by a few years,” he said. “It’s been made more difficult and it will take longer.”

Energy Secretary, Ed Davey, said the government had no plans to increase its subsidy cap so as to ensure customers get best value for money.

“It’s very important that government has a budget and doesn’t have unconstrained spending which won’t provide the best value for consumers” said the Liberal Democrat minister.

“Having a disciplined budget will help drive competition and if it means we only get the most efficient projects coming forward ahead of others, then I celebrate that.”

Mr Davey added that he believes the government is still on target to bring down the costs of wind power by 2020.

“Green energy is part of the government’s long term economic plan and we are seeing wind generation increase in very big increases. We are ahead of our targets.”
The Telegraph

Piglets-Snout-2270058

High time for MORE. Our subsidy trough is drying up.

Meanwhile, the case made for lumbering British power punters with the exorbitant cost of subsidising wind power has run aground, as gas prices are forecast to fall (not rise).

“Green” energy fantasists, like Ed Davey ran the “wind is free” line as a political con-job, claiming that wind power investment would result in cheaper power prices – in the long-run.

That piece of wind industry backed drivel relied upon wild forecasts tossed up by the wind industry and its parasites about rapidly rising fossil fuel prices; and the myth that wind power production costs will fall dramatically, over time. That dross – cobbled together by the Department of Energy and Climate Change (Britain’s number 1 wind industry cheer-squad) – has been chanted by DECC’s operatives like a Buddhist mantra ever since.

Back in January, The Economist reported on the INSANE cost of delivering offshore wind power – where generators are guaranteed obscene returns – being able to charge “three times the current wholesale price of electricity and about 60% more than is promised to onshore turbines.”

The Economist reported that “offshore wind power is staggeringly expensive” and “among the most expensive ways of marginally reducing carbon emissions known to man”.  But that is merely to compare the insane costs of onshore wind power with the completely insane costs of offshore wind power (see our post here).

Claims that wind power production costs fall over time have proved to be nothing more than hot air – as blades continue to fracture; and bearings, generators and gearboxes wear out twice as fast as predicted (see our post here). And more and more turbines spontaneously combust (see our post here). The cost of replacement is phenomenal (see our post here).

Not only has the pitch about falling wind power costs fallen flat, but the argument that rapidly rising fossil fuel prices would make wind power even more “competitive” has just been delivered a mortal blow. Here’s Telegraph pricking the wind industry’s balloon.

Expensive green energy a ‘bad gamble’ as ministers slash gas price forecasts
The Telegraph
Emily Godsen
3 October 2014

Ministers cut forecasts of gas prices for the rest of the decade by as much as a fifth, meaning green energy will remain relatively far more costly

Gas and electricity will be significantly cheaper this decade than previously thought, according to new official estimates that undermine the Government’s case for backing expensive green energy.

Burning gas for power is currently far cheaper than electricity from wind farms, which receive billions of pounds in subsidies from consumers.

But ministers have repeatedly argued that gas prices will keep on rising, eventually making green energy good value for money.

On Thursday however the Department of Energy and Climate Change released new forecasts slashing its power and gas price forecasts for later this decade by as much as 20 per cent.

The forecasts suggest that instead of rising dramatically, wholesale prices will instead remain nearer to current levels out to 2020.

If ministers are right it spells good news for consumers, potentially sparing a typical dual-fuel customer close to £100-a-year in further bill rises by 2020, experts said.

But it also means new nuclear plants and wind farms will remain comparatively more expensive for years to come, they warned.

Gas forecasts published last year suggested prices rising from 66.7p per therm in 2014 to 73.8p in 2020.

Thursday’s forecasts cut those to 55.8p this year – reflecting recent falls in wholesale prices – rising to just 60.3p in 2020.

Forecasts for 2018 were cut by some 20 per cent.

Peter Atherton, energy analyst at Liberum Capital, said that green energy was “always a hell of a gamble and now looks like an increasingly bad gamble”.

“Year after year [energy secretary] Ed Davey has been banging on that one of the core reasons [for backing green energy] is to protect ourselves against inevitably high and volatile fossil fuel prices. Now their own forecasts are saying fossil fuel prices are going to be very affordable,” he said.

John Feddersen, chief executive of Aurora Energy Research, said that – if the new forecasts were accurate – “people will have lower power bills as a consequence”. A typical household dual fuel bill could be 7pc lower in 2020 than had been feared, he estimated.

The Department of Energy and Climate Change’s previous forecasts suggested the market price for electricity would rise from about £56 per megawatt-hour in 2015-16 to £64 in 2020-21. Yesterday’s forecast cuts that to £51 in 2015-16, rising to less than £54 in 2020-21.

Ministers currently offer offshore wind farms guaranteed prices of close to £150 per megawatt-hour, with consumers subsidising the difference.

The Government has capped the total budget that can be spent on green energy subsidies at £7.6bn in 2020. However, the lower the wholesale power price, the more subsidy each wind farm or nuclear plant will need – meaning the subsidy budget won’t stretch to as many projects.

“If your wholesale power price declines, government expenditure increases. It means more expenditure on any given project, and as a consequence fewer projects under the fixed cap,” Mr Feddersen said.

A spokesman for the Department of Energy and Climate Change said that the price forecasts had been cut due to “a softening in market expectations of future gas prices since the previous projections published in 2013”.

He said there was forecast to be “downward pressure on global gas markets in the second half of this decade as large sources of liquefied natural gas supply are due to come online during this period”.

He denied that the forecast revision undermined the case for green energy.

“We have a legally binding target to reduce our carbon emissions by 80pc by 2050. It’s not possible to achieve that without a diverse energy mix that includes renewable sources like wind and solar, which work alongside new technologies like carbon capture and storage that ensure we can continue to use fossil fuels in a cleaner way,” he said.

“Home-grown energy produced by renewables is also not subject to volatile international events that disrupt global oil and gas markets and the transport networks that supports these fuels.”

Separately on Friday, Margaret Hodge, head of the commons Public Accounts Committee warned that consumers are being ripped off by “incompetent” ministers who have signed them up to pay billions of pounds too much for wind farms.

In a damning report the PAC accused ministers of failing to protect consumers’ interests when they handed out £16.6bn in subsidies to five offshore wind farms and three other green energy projects. There was no competition in the process and no mechanism to claw back excessive profits.

“We are being ripped off by incompetence in Government and a desire to make excess profits in the industry,” Mrs Hodge said.

Ed Davey, the energy secretary, said: “To keep the lights on in British homes and businesses we needed to move quickly to secure new capacity and give investors confidence – fast.”
The Telegraph

ed-davey_885751c

“Green” energy fantasist, Ed Davey says: “You’ll see,
wind power will become free, as gas prices go sky high”.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

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