THE myth that our energy bills would come tumbling down thanks to the abundance of cheap offshore wind power has finally been blown to smithereens by the failure of the latest auction for the Contracts for Difference subsidy scheme to attract any bidders. The government’s price cap of £44/MWh at 2012 prices (about £60 at current prices) was simply not economically viable.
This follows the Swedish energy firm Vattenfall’s recent decision to cancel its giant 1.4 GW Norfolk Boreas project before construction had begun. Boreas had been awarded a CfD in last year’s round.
For years we have been promised that ultra-cheap wind power was just around the corner. In 2020 Dr Malte Jansen of the Centre for Environmental Policy at Imperial College London claimed: ‘Offshore wind power will soon be so cheap to produce that it will undercut fossil-fuelled power stations and may be the cheapest form of energy for the UK.’ Last year the Guardian bragged that the cost of offshore wind had fallen yet again, to just £37/MWh.
All these claims, of course, derived from the annual auctions for the Contracts for Difference subsidy scheme. What the cheerleaders had not realised was that the wind farms were under no legal obligation to honour these contracts. Instead those companies which bid low are now selling at the much higher market price.
In this latest auction round, however, this loophole was removed, and bidders would have been forced to honour their contracts. As a result, they have pulled out of the auction, and are now demanding much bigger subsidies.
There never was any evidence that the true cost of offshore wind was as low as the auction prices suggested. Independent analysis has long concluded that the real cost is between £80 and £100/MWh, and this does not take account of the wider system costs of integrating intermittent wind power, maybe as much as another £50/MWh. Gas-fired power is currently about £80/MWh.
It is not only the UK where the wind industry is struggling to match expectations. In the US developers such as Shell and Avangrid are pulling out of contracts to build offshore wind farms. The giant Danish wind company Oersted has lost a third of its market value since warning two weeks ago that it may be writing down its assets by up to $2.3billion on its US projects. European turbine makers are also in trouble, appearing to have woefully underestimated the costs and problems of building large turbines for operation offshore, where conditions are much more severe.
In stark contrast to the promises of the renewable lobby, subsidies for offshore wind are expected to add nearly £5billion to our energy bills this year.
In large part, the wind industry has been hoist by its own petard, with the government believing all of its propaganda about falling costs. Now, thanks to the government’s obsession with renewables and its closure of coal power capacity, it may have little choice but to cave into the industry’s demands for greater subsidies.
Meanwhile our energy bills will continue to rocket.
IT WAS certainly exceptionally hot last week, but even with thermometers next to airport runways, main roads and in the middle of London, the highest temperature the Met Office could come up with was 33.2C (91.8F) at Kew.
It was much hotter in September 1906, when the temperature reached 96F at Bawtry in South Yorkshire, still a UK record for the month. That heatwave lasted five days from August 30 to September 3, and covered the whole country, from Scotland and Ireland to the south of England.
In contrast, temperatures last week did not appear to get above the mid 80s at most for much of the country. The Central England Temperature series, for example, peaked at only 84F.
Monthly Weather Report of the Meteorological Office
Maybe even more remarkable were the three September heatwaves in 1911, which were the culmination of an exceptionally hot summer.
Mean temperatures in July/August were a full 2C higher in 1911 than this year.
I have no doubt that in due course the Met Office will highlight this year’s heatwaves in June and this month, and claim they are evidence of climate change. I doubt that they will mention the summer of 1911, much less explain how it could happen in the absence of climate change.
Another day, another £65billion!
WHEN the Climate Change Act was passed in 2008, and upgraded to ‘Net Zero’ four years ago, there was no attempt to estimate the costs involved, nor any technical plan as to how the targets were going to be achieved.
Even now the government refuses to treat the matter of costs in any serious fashion, instead pretending that the country will end up being better off eventually, thanks to all those lovely green jobs and a booming, world-leading green economy.
What our economy will look like in 30 years is something nobody can know, but it is becoming increasingly apparent that we are all going to be much worse off in the foreseeable future, certainly the next decade or so. And we are finding more problems which were not anticipated at the start.
This week the Daily Telegraph reported that it could cost £65billion to decommission Britain’s gas grid, a 176,000-mile network of buried pipes. This is according to a draft National Infrastructure Report. It says that unused pipes must be removed or they risk decay and experts fear the potential collapse of roads. At the moment the network is properly maintained, with the cost included in our gas bills.
Quite who is expected to pay this bill which, knowing what we do about public infrastructure projects, is probably a gross underestimate, is another matter. It works out at £2,300 per household.
Logistically it will be a nightmare too, with districts being turned off one by one. I could mention the traffic chaos as roads are dug up in town after town, but I doubt whether many of us will be able to afford cars by then.