Sam, Sam, Sam. I am not sure whether you are simply unaware of the truth, or trying to wilfully mislead us.
1. LCOE is a nonsense measure as you half indicate. But in recent years costs have been rising and CfD awards and offers are way above, often more than 2X the Government's own calculations. See here:
The reasons being that material costs have risen, but perhaps more importantly the interest rates have gone up from almost zero a few years ago to around 5% now. This greatly impacts the cost of capital and hence the LCOE of high capex solutions like wind and solar.
2. Existing CfD-funded offshore wind costs us >£150/MWh, onshore £113 and solar £110/MWh. All far more expensive than gas-fired electricity even at today's inflated gas prices and the ETS carbon tax applied. New ones might be cheaper, but of course, they are index-linked so are more expensive when they finally come online. NNG was awarded a contract at £114/MWh in AR1, that will cost us over £158/MWh when the CfD is activated next year.
3. National Grid has called for £112bn of spending on transmission out to 2035. At an 8% cost of capital and 2% operations and maintenance cost, that's £11bn/yr to be added to our bills. A cost that should be added to the cost of renewables.
4. Storage in the form of batteries or green hydrogen just adds further capex to the system without increasing overall output. Factor that into LCOE calculations and the cost of renewables goes through the roof. Last year, the Royal Society said we would need 123TWh (hydrogen) or 68TWh (electrical) storage to manage the inter-annual variations in supply to a grid delivering just 570TWh per year. They got their costings wrong, but even theirs were many hundreds of billions of pounds. Batteries would cost in the trillions.
If we have to decarbonise (a big if), then low density, intermittent, low EROEI wind and solar are the wrong solution. The only sensible approach is a massive investment in nuclear power (with gas in the transition) akin to the French Messmer plan of the 1970's and 1980's. We won't need storage or anywhere as many extra grid lines either. To make that work we need to fix the regulatory barriers to cheap nuclear. We can fix faulty regulations, but mere mortals can never fix the faulty physics of wind and solar.
NESO2030 report is subtlety clear that renewables will not be cheaper and is nigh on undeliverable for 2030 maybe 2035 but certainly no earlier. And the worst of this headlong rush is there will be NO decent green jobs in this country all the high value kit will be produced in other countries. What should have happened was a revised strategy to ensure that we built up our own supply chain first before embarking on this goal. Also NESO needs to act like old CEGB and coordinate generation and transmission so we stop the nonesense of this weekend where 110GWh of green leccy was chucked away in favour of domestic gas and imported energy also fossil fuelled.
the deindustrialisation of the West is well underway, just as the United Nations intended and all based on an unproven claim that CO2 is driving climate. This view is what the International Panel for Climate Change says in it's Guidance for Policymakers, i.e. governments. The iPCC's own scientific assessment reports make no such claim contrary to what governments believe.
Not only that various officers of the IPCC have said quite blatantly that they want to dismantle the economic model that has existed since the start of the industrial revolution.
What better way than to impose the introduction of expensive and unreliable sources of generation, namely renewables. Renewables have no place on an electrical grid as they are unsuited for large scale grid supply and due to that inevitably put the cost per unit to the consumer so high that we become uncompetitive.
Very slowly the truth about our climate is being voiced, not least by an organisation called Clintel.org.
I would suggest that their web site is well worth visiting
A couple of points which I don't have a firm view on, but am grappling with myself:
1. To your point about renewable debated being scale dependent - The NESO 2030 New Dispatch scenario has around 70GW of wind between onshore and offshore. If the CFD length is 15 years and wind farms have a 25-30 year useful life, at least some of the economics is reliant on capturing some value in the non CFD years. If developers genuinely believe that the UK will build 70GW of wind, then their capture rates of the wholesale electricity price in the non CFD years should be lower (due to correlated production/oversupply) - thus they have to get more of the economics secured in the first 15 CFD years and bid higher?
2. Any views on how far the interconnector logic should be taken? I can see the narrow cost argument of a giant undersea cable to Morocco given solar deflation, but the vulnerability worries me when we have reports of multi fibre optic cables being cut in the Baltic Sea? Feels like there is some kind of Taleb style argument to be had here
I suggest you familiarise yourself with the writings of Dr Gordon Hughes, who writes extensively and knowledgably about energy and cost.
Due to the simple fact that output falls (Especially offshore) and maintenance costs rise as wind generators age (Approximately 4.5 % loss of output per annum) some wind farms are uneconomic after fifteen years, i.e. when the subsidies cease.
My belief is that people in general think that because wind generators or solar panels generate electrcity that they can simply replace conventional generation. This is completely wrong as both practically (intermittency) and technically, (uncontrollable supplying a system that needs fine control on an instantaneous basis, no inertia, no reactive power control and no short circuit current support), they are not suited to grid supply.
Extensive and expensive mitigation is required to offset those very real and significant deficiencies.
We are let down very badly by the politicians that implement these policies and by the civil service who are supposed advise, which they do very badly indeed, simply because they are technically illiterate.
Thanks! I'm currently doing some work on the capacity factor trends of UK offshore wind over time (via the Ofgem REGO certificate data) so will be interesting to see how this compares with other peoples work
"Building new homes near railway stations in commuting distance of the best jobs for instance is not just good for the environment because it means fewer trips in cars running on fossil fuels. It is good for growth too because it allows more people to access higher paying more productive jobs."
Very true but it would mean building on the green belt - very tricky politically
Sam, Sam, Sam. I am not sure whether you are simply unaware of the truth, or trying to wilfully mislead us.
1. LCOE is a nonsense measure as you half indicate. But in recent years costs have been rising and CfD awards and offers are way above, often more than 2X the Government's own calculations. See here:
https://davidturver.substack.com/p/crocodile-jaws-will-crush-net-zero and here:
https://davidturver.substack.com/p/offshore-wind-new-big-lie
The reasons being that material costs have risen, but perhaps more importantly the interest rates have gone up from almost zero a few years ago to around 5% now. This greatly impacts the cost of capital and hence the LCOE of high capex solutions like wind and solar.
2. Existing CfD-funded offshore wind costs us >£150/MWh, onshore £113 and solar £110/MWh. All far more expensive than gas-fired electricity even at today's inflated gas prices and the ETS carbon tax applied. New ones might be cheaper, but of course, they are index-linked so are more expensive when they finally come online. NNG was awarded a contract at £114/MWh in AR1, that will cost us over £158/MWh when the CfD is activated next year.
3. National Grid has called for £112bn of spending on transmission out to 2035. At an 8% cost of capital and 2% operations and maintenance cost, that's £11bn/yr to be added to our bills. A cost that should be added to the cost of renewables.
4. Storage in the form of batteries or green hydrogen just adds further capex to the system without increasing overall output. Factor that into LCOE calculations and the cost of renewables goes through the roof. Last year, the Royal Society said we would need 123TWh (hydrogen) or 68TWh (electrical) storage to manage the inter-annual variations in supply to a grid delivering just 570TWh per year. They got their costings wrong, but even theirs were many hundreds of billions of pounds. Batteries would cost in the trillions.
If we have to decarbonise (a big if), then low density, intermittent, low EROEI wind and solar are the wrong solution. The only sensible approach is a massive investment in nuclear power (with gas in the transition) akin to the French Messmer plan of the 1970's and 1980's. We won't need storage or anywhere as many extra grid lines either. To make that work we need to fix the regulatory barriers to cheap nuclear. We can fix faulty regulations, but mere mortals can never fix the faulty physics of wind and solar.
NESO2030 report is subtlety clear that renewables will not be cheaper and is nigh on undeliverable for 2030 maybe 2035 but certainly no earlier. And the worst of this headlong rush is there will be NO decent green jobs in this country all the high value kit will be produced in other countries. What should have happened was a revised strategy to ensure that we built up our own supply chain first before embarking on this goal. Also NESO needs to act like old CEGB and coordinate generation and transmission so we stop the nonesense of this weekend where 110GWh of green leccy was chucked away in favour of domestic gas and imported energy also fossil fuelled.
Sam,
the deindustrialisation of the West is well underway, just as the United Nations intended and all based on an unproven claim that CO2 is driving climate. This view is what the International Panel for Climate Change says in it's Guidance for Policymakers, i.e. governments. The iPCC's own scientific assessment reports make no such claim contrary to what governments believe.
Not only that various officers of the IPCC have said quite blatantly that they want to dismantle the economic model that has existed since the start of the industrial revolution.
What better way than to impose the introduction of expensive and unreliable sources of generation, namely renewables. Renewables have no place on an electrical grid as they are unsuited for large scale grid supply and due to that inevitably put the cost per unit to the consumer so high that we become uncompetitive.
Very slowly the truth about our climate is being voiced, not least by an organisation called Clintel.org.
I would suggest that their web site is well worth visiting
Excellent article Sam - really interesting!
A couple of points which I don't have a firm view on, but am grappling with myself:
1. To your point about renewable debated being scale dependent - The NESO 2030 New Dispatch scenario has around 70GW of wind between onshore and offshore. If the CFD length is 15 years and wind farms have a 25-30 year useful life, at least some of the economics is reliant on capturing some value in the non CFD years. If developers genuinely believe that the UK will build 70GW of wind, then their capture rates of the wholesale electricity price in the non CFD years should be lower (due to correlated production/oversupply) - thus they have to get more of the economics secured in the first 15 CFD years and bid higher?
2. Any views on how far the interconnector logic should be taken? I can see the narrow cost argument of a giant undersea cable to Morocco given solar deflation, but the vulnerability worries me when we have reports of multi fibre optic cables being cut in the Baltic Sea? Feels like there is some kind of Taleb style argument to be had here
Ed,
I suggest you familiarise yourself with the writings of Dr Gordon Hughes, who writes extensively and knowledgably about energy and cost.
Due to the simple fact that output falls (Especially offshore) and maintenance costs rise as wind generators age (Approximately 4.5 % loss of output per annum) some wind farms are uneconomic after fifteen years, i.e. when the subsidies cease.
My belief is that people in general think that because wind generators or solar panels generate electrcity that they can simply replace conventional generation. This is completely wrong as both practically (intermittency) and technically, (uncontrollable supplying a system that needs fine control on an instantaneous basis, no inertia, no reactive power control and no short circuit current support), they are not suited to grid supply.
Extensive and expensive mitigation is required to offset those very real and significant deficiencies.
We are let down very badly by the politicians that implement these policies and by the civil service who are supposed advise, which they do very badly indeed, simply because they are technically illiterate.
Thanks! I'm currently doing some work on the capacity factor trends of UK offshore wind over time (via the Ofgem REGO certificate data) so will be interesting to see how this compares with other peoples work
One clueless amateur talking to another, both utterly delusional.
https://johnsullivan.substack.com/p/uk-energy-consumption-and-electricity
"Building new homes near railway stations in commuting distance of the best jobs for instance is not just good for the environment because it means fewer trips in cars running on fossil fuels. It is good for growth too because it allows more people to access higher paying more productive jobs."
Very true but it would mean building on the green belt - very tricky politically
https://x.com/EyesOnThePriz12/status/1861035423780290952