Unbeknownst to taxpayers and power consumers, the wind industry has engineered the most outrageous raft of subsidies, mostly hidden and all massively generous. These include being paid hundreds of $millions to produce nothing at all, with what are called “constraint payments”.
In Britain, taxpayers have stumped up £1 billion in constraint payments to wind power outfits over the last five years.
Under that aspect of the scam, by 2030, wind power outfits across the UK (principally in Scotland) are predicted to pocket £3 billion a year for simply doing nothing at all.
Then there’s the “Contracts for Difference” scam. Which guarantees a fixed price to wind power outfits, with the difference picked up by, you know who. As David Turner details below, the burden born by unwitting taxpayers is already staggering, and can only get worse.
Record August CfD Subsidies
Substack
David Turner
29 September 2024
Introduction
The Low Carbon Contract Company (LCCC) manage the Contracts for Difference (CfD) subsidy scheme and publish data to show how much it costs us. The data is usually published about ten days in arrears and sometimes gets adjusted. Now we have the full data for August 2024 and it has settled down enough for some reasonable analysis.
Overall Subsidy Levels Rising
The headline is that overall CfD subsidies rose sharply in August 2024 to a total of £237m, the third highest total on record and by far the highest level for the month of August (see Figure 1).
Figure 1 – Overall CfD Subsides by Month and Technology (£)
The total is up £84.2m from July’s total. The main driver of the increase is offshore wind which is up £74.5m from a month ago. This August’s total is also up £123.8m from August 2023. Since August last year, offshore wind subsidies are up £72.3m, biomass conversion £35m, biomass with CHP up £10.2m, onshore wind £5.1m.
There are several factors driving the increase in subsidy since last year. First and most obvious is that more wind farms have now activated their CfDs since last year. Moray East and Hornsea Project 2 offshore projects came online earlier this year as did the Sneddon onshore wind farm. Moreover, the CfD part of Drax biomass plant was not used at all last August but attracted £25.6m in subsidy in August 2024.
Load Factors
However, the number of turbines claiming subsidy is not the only driver of increased subsidy. Load factors are also up. This means that both onshore and offshore wind farms produced closer to their theoretical maximum during the month (see Figure 2).
Figure 2 – Calculated Load Factor by Month for Active Windfarms (%)
Using the nameplate capacity recorded by LCCC for each installation, we can calculate the load factor for each project and aggregate it by technology. In August 2024, CfD-funded offshore windfarms achieved a load factor of 34.7%, the third highest August on record, the highest since August 2020 and up three percentage points since last year. Onshore wind achieved 24.9%, the second highest August load factor on record and up from 16.7% last year.
More wind means more generation and other things being equal, more generation means more subsidy.
Subsidy per MWh
The other things that drive the levels of subsidy are the CfD strike prices and the reference price used to calculate the subsidy level. For offshore wind, the weighted average strike price has fallen ~£23/MWh from about £178/MWh in August 2023 to £155/MWh this year. This is because of the aforementioned addition of Moray East and Hornsea Project 2 which both have lower strike prices than the earlier offshore wind farms. The strike prices for onshore wind are up a few pounds from last year to £113/MWh and solar is up £4 to £110/MWh.
However, the Intermittent Market Reference Price (IMRP) which is used as the baseline for the price that renewable electricity was sold for in the market is down significantly on last year. The average IMRP, weighted by generation, has fallen about £25/MWh from £76/MWh in August 2023 to about £51/MWh in August 2024.
The subsidy per MWh is calculated as the difference between the strike price and the IMRP. The upshot is that the subsidy per MWh for offshore wind is up a bit since last year and is up sharply for onshore wind and for solar power (see Figure 3).
Figure 3 – Subsidy per MWh by Technology (£ per MWh)
Gas prices are lower this year than they were last, so that explains some of the reduction in IMRP, because gas often sets the market rate of electricity. However, adding more uncontrolled renewable generation can also affect the IMRP. There were two days in August when the weighted IMRP for offshore wind fell below £20/MWh and three occasions when the weighted IMRP for solar fell below £10/MWh. Provided the price stays positive, this does not matter to the generators, they just make up the difference with extra subsidies. If the price goes negative for a time, then some wind farms are not paid curtailment fees.
Conclusion
The addition of the newer, cheaper offshore wind farms has not had a significant impact on the subsidy per MWh. The reduction in average strike price has been overwhelmed by a combination of the indexation upwards in April and cheaper gas prices since last year. Even if gas prices stay at the current elevated levels, we are unlikely to see a significant reduction in the subsidy per MWh, because increased generation from renewables pushes down the IMRP, thus increasing subsidies. For the generators it is heads they win, tails the consumer loses. We can expect more record subsidies between now and February 2025 as the seasonal load factors creep back up and Drax is kept running to replace our last remaining coal plant which shuts shortly.
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STOP THESE THINGS 
What is the wind developer’s contractual obligation for reparation when the entire development becomes a “tech-wreck” in 25 years?
It is irrelevant what their contractual obligations are. They will have sold and repartnered and the “owner” will be bankrupt on paper, while all the subsidy money will have sailed away into some foreign investor’s pocket.