OFGEM have set the new energy price cap, which takes effect on Saturday (July 1). Based on wholesale market prices from February to April, it represents a cut of 36 per cent from this latest quarter, although consumer savings will be smaller with the withdrawal of government subsidies.
Market prices have continued to fall since April, so the September price cap should be lower still.
Catalyst Digital Energy
Electricity prices have fallen in tandem with gas prices, which tend to set the power price, with spot power prices now as low as £70/MWh, edging closer to the historical norm of about £50. While this is good news for consumers, it also means that subsidies for wind power are increasing again. The average price paid to offshore wind farms under the CfD subsidy mechanism was £179/MWh in May, meaning that £90million in subsidies was paid out in the month. On top of this, older installations receive more than £100/MWh in subsidies via the Renewable Obligation scheme, in addition to the value of the electricity they sell. In all, overall subsidies to operators of wind farms are expected to top £5billion this year.
Of course, you cannot look at the cost of wind power in isolation; the wider system costs incurred to cope with the intermittency of the wind need to be taken into account – the need for back-up capacity, transmission network upgrades, balancing costs and so on.
The Telegraph recently reported that energy bills would soon have to rise by £200 a year to pay wind farms to switch off when there is too much wind power for the grid to handle. An OECD study a few years ago implied that all of these wider grid-scale costs could reach £20billion a year by the 2030s.
Indeed a National Grid press release last month announced that the country would need to spend an astonishing £18.4billion a year in upgrading the grid ‘to enable the decarbonisation of the UK power sector by 2035’. This covers only network costs, not the cost of building thousands of wind and solar farms.
They talk of ‘investment’, but it’s the public who will end up paying the bill for this, not to mention the interest and profits the investors will demand on their capital.
It ain’t half cold, Mum!
MAY is always the hottest time of the year in India, just before the monsoon rains start to cool things down, and it was no exception last year. Naturally the BBC made a big play of the heatwave in Delhi at the time, with the usual unsubstantiated claims that ‘heatwaves are becoming more intense there’, and ‘climate change is driving the heat intensity’.
When the data for the month came in, it turned out that temperatures in Delhi were not unusually high at all. Indeed Delhi’s climate was much hotter during the 1940s than at any time since:
The BBC has been strangely silent about the cold weather that hit India’s capital this May. In fact it was the third coldest on record. Temperatures near to 30C may seem high to us, but when early morning temperatures dip to 15C, which they did on May 4, it is a problem for people without heating or proper cold weather clothing. It is a reminder that cold kills eight times as many people in India than heat.
WHEN the Met Office joyfully announced a UK record temperature of 40.3C at RAF Coningsby in Lincolnshire last summer, suspicions were immediately aroused. After all, we have been accustomed to the thermometer next to the runway at Heathrow regularly topping the list every time there is a heatwave!
One of my colleagues did some sleuthing and discovered that the weather station at Coningsby is within a few paces of not only the runway, but a large building and two apparently concreted areas. (The red arrow indicates the weather station):
Judging by the Google scale, the runway is about 20m away, and those two areas to the left and right are closer still. The World Meteorological Organisation (WMO) set strict standards for the siting of thermometers; they say that a Class 1 station, regarded as high quality, must be at least 100m away from ‘heat sources or reflective surfaces, such as buildings, car parks and concrete surfaces’. Clearly Coningsby does not meet these criteria, or even the Class 2 standards. It would meet only Class 3, regarded as a poor quality site, which the WMO say could overstate temperatures by 1C. This means that the so-called record of 40.3C should not have been ratified by the Met Office.
It gets worse! The only other sites which registered 40C are also poorly sited, either in London, where the urban heat island effect is reckoned to add at least two degrees, or next to the runways at Heathrow and Northolt.
The Met Office of course was desperate to declare 40C somewhere, and was prepared to disregard proper quality standards to do so.