Demands for more subsidy expose the illusion of falling wind power costs


By Paul Homewood


“The belief in falling wind power costs is the central foundation of the government’s Net Zero enterprise, and it is demonstrably false. The absurdity of current Net Zero plans is now exposed for all to see.”
London, 1 March – Net Zero Watch is highlighting the fact that claims of falling wind power costs are contradicted by demands from wind power operators for additional subsidies on top of existing support.
This debate has been in progress since 2017, when research published by the Global Warming Policy Foundation indicated that the wind industry’s bids for Contracts for Difference subsidies (CfDs) were absurdly low and did not reflect underlying capital and operating costs.
These observations were confirmed by alternative methodologies and by other authors (details are given below), and critics repeatedly predicted that the industry would eventually beg for more subsidy.
Confirmation that we were correct can be found in the fact that the Financial Times is now reporting that wind farm developers, including the industry giants Vattenfall and Ørsted, are asking for tax breaks in the forthcoming budget, offering the spurious justification that inflation has made uneconomic their low Contracts for Difference contracts awarded for delivery in 2024 (FT: 
“Wind Farm Developers demand UK tax Breaks to offset Rising Costs”).

Net Zero Watch notes that since the CfD strike prices are inflation-indexed the industry’s excuse does not hold water. On the contrary, the demand for tax breaks confirms that the low bids in the CfD auctions were never accurate reflections of underlying windpower costs.
Net Zero Watch says that the Chancellor should refuse to be blackmailed by the wind industry and must reject demands for further financial support.
Professor Gordon Hughes, author of several of the studies cited below, said:
“The offshore wind developers seeking additional subsidies are treating taxpayers as fools. CfD contracts are inflation-indexed, so electricity customers will be paying higher prices for their electricity until 2040 and beyond as a consequence of recent inflation. The notion that there has been an unexpected increase in capital costs since bids were submitted last summer is ridiculous, as suppliers have been warning of severe cost pressures for at least 18 months.
The reality is that offshore operators have been submitting unsustainable CfD bids ever since 2017, hoping that something would turn up. Even a period of very high market prices is not enough, so now they want to be bailed out by tax breaks. The Chancellor should just say No.”
Dr John Constable, NZW’s director of energy, said:
“The belief in falling wind power costs is the central foundation of the government’s Net Zero enterprise, and it is demonstrably false. The absurdity of current Net Zero plans is now exposed for all to see.”

Notes for Editors: Articles and studies on unrealistic offshore wind bids for Contracts for Difference
1. Gordon Hughes, Capell Aris, John Constable, Offshore Wind Strike Prices: Behind the Headlines (GWPF: London, 2017)
2. Gordon Hughes, Who’s the Patsy? Offshore wind’s high-stakes poker game (GWPF: London, 2019)
3. John Aldersey-Williams, Ian D. Broadbent, Peter A. Strachan, “Better estimates of LCOE from audited accounts– A new methodology with examples from United Kingdom offshore wind and CCGT”, Energy Policy, 128 (2019), pp 25-35.
4. Gordon Hughes, Wind Power Economics: Rhetoric and Reality: Volume I: Wind Power Costs in the United Kingdom (Renewable Energy Foundation: 2020).
5. Gordon Hughes, Wind Power Economics: Rhetoric and Reality: Volume II: Wind Power in Denmark (Renewable Energy Foundation: 2020).
6. Andrew Montford, Offshore wind: Cost predictions and cost outcomes (GWPF: London, 2021)
7. Kathryn Porter: Addressing the high real cost of renewable generation (Watt Logic 2022)

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March 2, 2023 2:32 am

You can see the problem at a glance here:

Nick Stokes claims that because wind is free the most cost effective generation system will be wind + solar + gas. This will be cheaper than just gas because the fuel savings will more than cover the costs of installing and running the wind and solar.

It will also, the claim is, be cheaper than running coal.

The problem is apparent from the charts in the link. This is the actual output from about 28GW of wind, on and off shore. Suppose you are setting up and costing the system Nick favors from scratch. How much of the time will you end up using gas? Or, put another way, how much supply is your 28GW going to let you commit to providing?

You can see that if you do it at the top of the production range, 15GW or so, you will be running gas all the time. If you run it at the low end, 5GW or so, you manage to cover more of the demand with wind but you are now building out 28GW of wind to do that even for some of the time. So your cost base rises. And not only that, constraint payments because of oversupply rise.

I said in an earlier post that Paul is probably the person who could do what is needed to settle this once and for all. Do a DCF analysis of

— coal
— gas
— wind + solar + gas

for a given configuration. You could take a sample 10GW of demand, or you could do it on the actual data from the UK, which would be better of course.

Paul must have all the date you’d need or have fairly ready access to it. I am persuaded that if you do the analysis right you’ll find that the fuel savings from installing wind and solar no way cover the total cost of the installation, the transmission and the constraint payments.

Nick just repeats over and over that wind is free. Yes, it is, but using it is not, and the question is what is the comparative financial performance of total systems for supplying a national grid. Whether wind is free is immaterial, the important question is performance of the total system compared to superheated coal or continously running gas.

Reply to  michel
March 2, 2023 2:56 am

Nick just repeats over and over that wind is free.

So is the rain that falls but gathering it and getting it to my household taps is where all the expense comes in. Not that I expect children to understand any of that or who pays the water rates. Maybe lefties never grow up and why they have such instant rapport with Greta.

Ben Vorlich
Reply to  observa
March 2, 2023 3:01 am

Getting rid of it after you’ve used it costs a fair bit too, and seems more difficult, at least ib the UK.

Reply to  Ben Vorlich
March 2, 2023 3:11 am

Believe me it is. I’ve been at war with Thames Water for 4 months. You certainly cannot trust this company.

It doesnot add up
Reply to  observa
March 2, 2023 3:17 am

Oil and gas and uranium are also free. It just costs to harvest them.

Reply to  It doesnot add up
March 2, 2023 3:20 am

It costs to harvest anything – even wind and Sun.

Reply to  strativarius
March 2, 2023 8:36 am

There’s also the cost of storage, from the time wind/solar or fossil fuels are “harvested” to the time it’s needed.
Fossil oil and gas are stored in tanks, while coal can just be piled on the ground. Tanks for oil and gas last for many decades, ground last a bit longer.
Electricity is stored in batteries. The cost of a battery capable of storing as much as a tank for gas or oil is orders of magnitude greater. The battery also won’t last nearly as long as either type of tank.
The amount of energy needed to get oil and gas into and out of the tanks, is very small. On the other hand you will lose at least 10% of the available energy moving electricity into and then out of a battery.

Reply to  observa
March 2, 2023 3:21 am

What Nick repeats is free. Not that it’s of any use.

Ben Vorlich
Reply to  michel
March 2, 2023 2:59 am

You can download data as a csv file from going back to 13 May 2011. Data is taken every 5 minutes, although there are odd glitches which have to be dealt with. The date/time takes a bit of effort to sort into something Excel or Access understands.
Using this Image you can do comparisons to your heart’s content.

It doesnot add up
Reply to  Ben Vorlich
March 2, 2023 3:15 am

Leo Smith will hope that anyone who downloads his full data makes a contribution to the costs of his servers and data charges.

Reply to  It doesnot add up
March 2, 2023 5:22 am

I haven’t!!!!

Leo Smith
Reply to  It doesnot add up
March 2, 2023 7:47 am

No, its OK. Lots of people are very generous and dont download data. The people who do and make good uses of it are the reason the site is up there.

It doesnot add up
Reply to  michel
March 2, 2023 3:38 am

Nick Stokes consistently ignores all the real costs of attempting to integrate wind into a grid.That is partly because he doesn’t have any real knowledge, and partly because he refuses to learn when the realities are explained to him. Instead he will downtick the explanation (a sure sign that he has no valid counter argument) and carry on repeating the same nonsense, often in the same thread. It’s like dealing with a bush fire.

Leo Smith
Reply to  It doesnot add up
March 2, 2023 7:52 am

Nick Stokes is wilfully ignorant. Leaving aside climate change, the issues with renewables are clear and unequivocal.
One can come to only two conclusions.

  • Nick Stokes is in fact being paid handsomely by renewable energy interests.
  • Nick Stokes has a hard left Marxist agenda.And favours centralised government control of everything, no matter what the cost.

I do not believe the other option, that he is just extraordinarily low IQ.

Reply to  Leo Smith
March 2, 2023 8:42 am

Didn’t Nick work on the BEST project?

Gary Pearse
Reply to  michel
March 2, 2023 4:10 am

“Do a DCF analysis of

— coal
— gas
— wind + solar + gas

for a given configuration.”

In other words, you do a feasibility study including a pilot plant to obtain real data before undertaking ANY technical project! Imagine at this stage of the game having to tell people this. Look at the terrible economic and human devastation of Sri Lanka using the trial and error ‘method’ of Green development.

This human pilot plant gave us a No-Go result. Yet the West’s zombie leaders are going ahead with the the destruction of it’s own agriculture on the Sri Lanka plan. Google the Sri Lanka debacle and you will find that the real cause of it is now buried by layers of articles on corruption as the cause. Thus is how they operate.

Barnes Moore
Reply to  michel
March 2, 2023 5:51 am

Ed Hoskins has done a pretty good job of summing it up. He as a few posts similar to this one – this one is his most recent, I think.His posts have been shared here at WUWT as well.

Reply to  Barnes Moore
March 2, 2023 10:05 am

Good link thanks BM

Scarecrow Repair
Reply to  michel
March 2, 2023 8:55 am

“Wind and sun are free” goes right along with what Don Boudreaux of Cafe Hayek likes to say — there are no natural resources. There are only raw materials, which require human work and time and money to turn into actual usable resources.

Reply to  michel
March 2, 2023 10:07 am

Nick Stokes will be proud if he reads this thread – so many name drops. He’s a celebrity here.

March 2, 2023 2:47 am

Wind may be “free” but diminishing returns can set in very quickly. I watched an array of wind turbines near here the other day which is set in three rows. The direction the wind was coming from, row 2 was behind the first and row 3 behind row 2. I’ve often theorized about what happens in these circumstances and, sure enough, I could see that row 1 was turning faster than row 2 and that row 3 was hardly turning at all. Rows 2 and 3 had literally had “the wind taken out of their sails” as I believed would happen.

Dave Andrews
Reply to  atticman
March 2, 2023 8:01 am
Last edited 25 days ago by Dave Andrews
Reply to  atticman
March 2, 2023 9:17 am

Competition sailors all know about stealing wind from others’ sails.

No sailors in wind farm design companies obviously.

Reply to  atticman
March 2, 2023 10:12 am

Thought experiment – if the entire planet were converted to an evenly distributed wind farm, would surface wind stop? If heights were varied could earth’s rotation rate be controlled?
The scenarios described can’t happen for practical reasons, but ideas should matter to someone worried about ppb of a gas.

March 2, 2023 3:08 am

“…it is demonstrably false.”

Ah, but it can be modelled to be shown to be true. 

And that’s what really counts. The illusion, or the delusion even, has to be maintained such as most people will still believe it. Control of key institutions like the media and education make that all the more possible to do.

Price of offshore wind power falls to cheapest ever level in UK

…price of offshore wind power in the UK has fallen to an all-time low, which could ease the pressure on future household energy bills.

Except it isn’t, it didn’t and it won’t, and when reality bites…

“UK efforts to deal with energy crisis ‘raise risk of missing net zero target’

Absence of long-term plan could deter investors or lead them to increase prices, says National Audit Office”

I wonder how many are recanting their ‘faith’ as the farce goes on?

Last edited 25 days ago by strativarius
Dave Andrews
Reply to  strativarius
March 2, 2023 8:15 am

Judging from the ever more hysterical letters the Grauniad keeps publishing nobody is recanting

“people like me don’t damage property or block roads in some kind of anarchist frenzy. We do it as the only effective avenue left to demand government acts to save billions of lives”
Letter Wed !st March 23!

Scarecrow Repair
Reply to  Dave Andrews
March 2, 2023 9:00 am

Then they should read MLK’s Letter From a Birmingham Jail and take pride in paying the price for having a conscience. That they don’t tells me they have no conscience.

Scarecrow Repair
Reply to  strativarius
March 2, 2023 8:59 am

It only says the price has fallen, not the cost. It ain’t lyin’.

It doesnot add up
Reply to  Scarecrow Repair
March 2, 2023 9:08 am

Perhaps worth looking at what has really been happening to price for wind generation – and bear in mind that CFDs are about to get a ~10% inflation uplift in April.

comment image

Reply to  strativarius
March 2, 2023 10:15 am

Output from a computer programmed by a smart person wearing glasses is so dangerous to disparage.

March 2, 2023 3:11 am

Net Profit beats Net Zero on Reliability, Total Cost and Time to Market.

March 2, 2023 3:21 am

To date there has not been a single successful “proof of concept” renewable generation system that actually works without substantial fossil fuel back up.

Example: El Hierro island in the Canaries – has ideal circumstances – persistent wind & lots of powerful sunshine all of which can be backed up by a high altitude volcanic caldera which serves as pumped storage reservoir – you couldn’t ask for a more ideal place where renewables could prevail – unfortunately even here it only managed to displace 30% of the diesel fired fuel use – the generators and associated distribution infrastructure still have to be there – only the fuel use was reduced.

There are a few others – King Island, Jeju Island, Faroes, Falklands etc. etc. all of which are touted as successes but sober analysis reveals that the renewables are overall a net destabilising and costly overburden and in no way demonstrate even remotely approaching net zero.

If we were to double, treble or quadruple the renewables the zeros would still be zeros and the conventional generation and infrastructure would have to remain and the amount of fuel saving (reducing CO2) is stymied by the laws of diminishing returns.

Here’s the problem – (being deliberately simplistic) :-

Let the existing diesel generation = “X” MW

Then the solar has to be 2X to cover the hours of night via pumped storage for when the wind doesn’t blow (more realistically 3X).

The wind has to be 4X since you would be lucky to get 25% average energy return and for when there is no sun and only wind (typically every night).

Plus an additional 1X in pumped hydro (at least) to store energy from the wind and solar when there is a surplus – to fill in when there isn’t.

So we have to add at least 7 times the energy generation capacity plus the costly full power capable (but lightly loaded) additional grid network to support it. Little of the wind and solar are likely to be sited near or alongside existing distribution lines.

All this if we are to stand any chance of supporting a nett zero grid. (And I haven’t considered possibly a further 2X in battery storage.)

Horror of horrors we still require the diesel generators to fill in when the sun doesn’t shine and the wind doesn’t blow and we run out of pumped storage. Which in the case of “successful” El Hiero is 70% of the time.

Seven times the power generating infrastructure to reduce the diesel use by 30% – now you can clearly see why the intrusion of renewables into the grid simply raises the price of energy for very little gain (even if you believe CO2 is a problem – which I don’t).

Following the learning curve logic of this exponential relationship we would have to invest 14X to achieve 50% reduction and a 30X investment to achieve a 75% reduction – but we would still require the fossil fuelled generators and infrastructure to remain operational and maintained.

So the actual CO2 reduction per unit of installed power is only 4.3% (30%÷7) of what the nameplate capacity might suggest it could save.

Do the maths – we would have to throw a further 16 times this (7X) oversupply to reduce the diesel use by 95% and even then we would still require the diesel generators to fill in the 5% or live with – on average – 5% downtime due to “power failures” euphemistically called “load shedding” that’s about an hour a day (more likely one day or so per month due to overcast windless weather persisting for more than a couple of days) – think that’s reasonable enough when by this time you will be paying about 1500% more for electricity.

You are welcome to go broke feeling good about yourself but include me out(Sam Goldwyn quote)

 “Unreliables, therefore, inflict not only a deadweight cost but also a deadweight surplus capacity to the grid, to say nothing of the costly instability caused by giving unreliables precedence over thermal in meeting demand.”  Christopher Monckton

Reply to  Chasmsteed
March 2, 2023 3:36 am

“To date there has not been a single successful “proof of concept” renewable generation system that actually works without substantial fossil fuel back up.”

Hence the climate crisis etc

There has to be a sense of urgency (10 yrs etc) to ram these [untried and untested] measures through.

From Nantucket sleighride to Nantucket wind turbine ride. What shall we do with the whale carcasses?

Last edited 25 days ago by strativarius
It doesnot add up
Reply to  strativarius
March 2, 2023 4:11 am

El HIerro would need a lot more storage to cover this. THe existing pumped storage is only good for a partial contribution over a few hours.

El Hierro Dec 22.png
Reply to  It doesnot add up
March 2, 2023 4:31 am

They don’t operate in the real world

It doesnot add up
Reply to  Chasmsteed
March 2, 2023 3:46 am

In December El Hierro relied on diesel for almost all its power. I’ll post the chart when I find it.

Reply to  Chasmsteed
March 2, 2023 6:43 am

But if you just give them enough money, they will do it properly, the next time…

Reply to  rxc6422
March 2, 2023 10:26 am

I think you wrote it as sarcasm, but I think that for a high enough cost it could be done.
People marvel walking on the moon – 50 years later – but shrug at a 7-hour Boston-to-LA flight.

Leo Smith
Reply to  Chasmsteed
March 2, 2023 7:56 am

To date there has not been a single successful “proof of concept” renewable generation system that actually works without substantial fossil fuel back up.

There is one case – and only one – in which it does work. This is probably true in New Zealand alone

If you have hydro capacity of say 50GW, but only enough rainfall to supply your country for about 2/3rds of the time, then adding 50GW of wind and solar will in fact work without the need for any other backup.

Reply to  Leo Smith
March 2, 2023 8:51 am

As long as demand does not grow.

It doesnot add up
Reply to  Leo Smith
March 2, 2023 1:21 pm

There are several countries with a high level of hydro output where it might also be made to work. Much of South America (but don’t rely on wind), Canada and parts of Africa near giant hydro projects.

It doesnot add up
Reply to  Chasmsteed
March 2, 2023 8:42 am

I added a bit more data to my El Hierro chart, so it is bookended by periods with strong wind generation and pumping to storage. At end December you can see that the storage filled quite quickly, with wind having to be curtailed when it was full. The storage is really very limited.

El Hierro Dec 22.png
Reply to  Chasmsteed
March 2, 2023 10:22 am

Plus an additional 1X in pumped hydro
Not available everywhere.

Ron Long
March 2, 2023 3:45 am

Costs, Cost/Benefit ratios, Discounted Cash Flow analysis, battery storage issues, mining specialty metals, etc are all important, but skip over the issue of birds, bats, bugs, and now whales chopped up or otherwise killed by the CAGW Greenie Loony crowd.

Reply to  Ron Long
March 2, 2023 10:30 am

If its down to me and earth’s last whale…. I’m eating the whale.

AGW is Not Science
March 2, 2023 3:48 am

Everywhere any non-trivial a.ount of wind and solar is put into the grid, power costs are driven UP.

At some point, even the most deluded will have to admit that the notion of decreasing electricity costs by building wind and solar is preposterous nonsense.

“Under my plan, electricity costs WILL NECESSARILY SKYROCKET.” – Barack Hussein Obama

Tom Abbott
March 2, 2023 4:37 am

Windmill Farms would go out of business without taxpayer subsidies.

Windmill Farms are not economically viable on their own.

It’s about time for a taxpayer revolt.

More Soylent Green!
March 2, 2023 4:57 am

Why is *free* energy so damn expensive?

March 2, 2023 5:16 am

“The offshore wind developers seeking additional subsidies are treating taxpayers as fools.”
No, it’s not the taxpayer who are the fools, It is the politicians who are the fools.

Reply to  gDavid
March 2, 2023 5:35 am

But there are still plenty of otherwise sensible people who adhere to the CAGW/net zero memes.

Leo Smith
Reply to  gDavid
March 2, 2023 7:59 am

No, the politicians are not fools. They are corrupt.

This is all about not releasing naughty pictiures and losing your wife, or green envelopes under the desk, or the directorship of an offshore wind company.

Reply to  Leo Smith
March 2, 2023 12:56 pm

Both can be true: corrupt fools.

Reply to  gDavid
March 2, 2023 8:52 am

The taxpayers keep voting the same politicians into office.

John Brown
March 2, 2023 6:46 am

Not only are wind estates expensive to build, maintain and harness their power, but even worse the costs of their electricity become many times more expensive when storage is required to solve the intermittency problem.
For instance, how many P GW wind turbines are required to provide P GWhrs of reliable/dispatchable energy using “excess” wind power to generate hydrogen by electrolysis as a store of energy ?
With a capacity factor of 30%, each of these wind turbines will provide 0.3 P GWhrs over a given period of time (say a year).
So if we require P GWhrs of reliable/dispatchable energy it will be necessary to provide a total of (1 – 0.3) P GWhrs = 0.7 P GWhrs from the storage for a given period of time.
Taking the efficiencies as :
Electrolysis : 60%
Compression : 87%
Electricity generation : 60%
The overall efficiency of electrolysis –> storage –> electricity generation is 31% (60% x 87% x 60% = 31%) and hence a total of 0.7 P GWhrs/0.31 = 2.26 P GWhrs is required to produce 0.7 P GWhrs of electricity over a given period of time.
To achieve the 2.26 P GWhrs required to produce the 0.7 P GWhrs of reliable/dispatchable electricity it will be necessary to install 2.26 P GW/0.3 = 7.5 P GW of wind turbine capacity when the capacity factor is 30%.
Hence a total of 1 P GW + 7.5 P GW = 8.5 GW is required.
Or, for each 1 GW of reliable/dispatchable power it is necessary to install 8.5 GW of wind turbine capacity.
Note : If I take the UK’s NGESO’s FES 2050 LTW figures for wind turbine capacity factor of 47% and electrolysis efficiency as 75%, then the calculation shows we need 4 GW of installed wind capacity for each 1 GW of reliable/dispatchable power.

Reply to  John Brown
March 2, 2023 10:32 am

With a capacity factor of 30%”
Then the error cascades.

March 2, 2023 6:56 am

It’s part of the new nationwide intelligence test.

Joao Martins
March 2, 2023 7:15 am

In the economy, wind farms are NOT in the production chapter, they are in the circulation chapter.

Their operation is collecting state subsidies, that is to say, TRANSFERRING tax money (OUR money) to THEIR (wind farm developers) pockets.

Their operation is a huge racket of PRIVATE APPROPRIATION through CONFISCATION of the wealth of the majority of people sponsored by the state.

Reply to  Joao Martins
March 2, 2023 10:36 am

Natural monopoly. Wireless distribution efficiency is non-linearly proportional to transmission distance in a bad way.

March 2, 2023 7:33 am

Rent seeking is ubiquitous throughout history. Always, everywhere. Don’t give them the extra subsidies/cost communizations. Not to them. Not to the (non Nordic) north sea oil producers trying to shirk on their freely assumed asset retirement obligations. Not to the US oil and gas producers trying (successfully) to do the same. Not to the US power producers with their coal ash piles. Not to the US coal producers shirking on pension, medical, bennies. And on and on.

Want to go subsidy free, for all forms of energy? Let’s rock….

Reply to  bigoilbob
March 2, 2023 10:17 am

You raise a vexed topic BOB.

It’s past time for a general reset on all taxpayer-provided subsidies – to pharma, universities, transport, military, energy, agriculture, NGOs, etc etc.
Every entity sucking on the taxpayer teat.

Let every player in every sector publicly re-apply for taxpayer subsidy funding of their operations.

No lobbyists admitted to the process.

And demonstrate to the public with independently-completed assessments exactly what the returns / benefits to taxpayers are as a result of all $ubsidies they are granted.

Reply to  Mr.
March 2, 2023 12:03 pm

I’m totally cool with that. But to complete the pic, we need to include those costs externalized for no good reason. That’s where most of the imbalance and economic inequality comes from. Those costs communized upon the rest of us disproportionately to our use of of the products and services, are not only unfair, but distort our capitalistic systems with the bad price information they provide.

It doesnot add up
Reply to  bigoilbob
March 2, 2023 1:25 pm

The trouble is that there is a wide divergence of opinion about “costs” that cannot be sensibly quantified or justified. Then it descends into politics, usually to rob the poor, as with most green schemes.

Reply to  It doesnot add up
March 2, 2023 3:27 pm

Even without consideration of what you are actually referring to – AGW costs – there would be plenty of agreement on the costs of what renewable and non sources should pay. I’ll even start by repeating my opinion that renewable sources should be economically evaluated by including the extra costs required to make it as reliable as required. Storage, power factor adjusting, girding up non renewable sources that are undependable in extreme conditions, extra grid bolstering that wouldn’t be required for fossil fuel sources – whatever it takes.

Reply to  bigoilbob
March 2, 2023 1:45 pm

“those costs externalized for no good reason. “

You mean all the “carbon” costs heaped on coal fired electricity ?!

Last edited 24 days ago by bnice2000
Reply to  bnice2000
March 2, 2023 3:21 pm

They are part of it. But I’m willing to disregard them. Just worldwide oil and gas environmental, safety, health regulatory Ben Dovers, coupled with the fact that most oil and gas sites won’t get properly plugged, abandoned and cleaned up, (following the lead of coal, copper, gold, etc.) are de-facto externalized costs that would more than tip the scale to renewables.

Reply to  bigoilbob
March 2, 2023 3:44 pm

What about the clean-ups required for wind & solar farms areas?

There are already razed forest, hilltops, plains, even marine areas that have been despoiled, made non-viable for other use because of defunct / abandoned wind & solar farms.

Are you saying these types of energy sources get a pass on externalized costs?

Reply to  Mr.
March 2, 2023 4:02 pm

Yes, they should certainly be included.

But keep in mind that the “resource” has already been identified as the best available, and will be with us pretty much into perpetuity. So, the “cleanup” is mostly the landfilling of inerts and recycling the rest of the equipment as it wears out and/or becomes outmoded. No comprehensive land cleanups needed. All the while richly supplementing farm and ranch rental incomes at very little inconvenience to them.

Contrast that to the coming Big Shirk of oil and gas asset retirement obligations, worldwide. Plugging tens of thousands of high angle, hard re-enter multilateralled, hydraulically incompetent “modern” shale wells. Collecting and finding a home for YUGE masses of dispersed naturally occurring radioactive materials. Restoring trash can lands in West Virginia, Pennsylvania, and other states. Removing hundreds of offshore rust piles that hardly cast a shadow. Just in the CONUS, the bill would be in the 11-12 $ figure range, and most of it will end up either communized onto the rest of us or ducked. Add a decimal place for worldwide costs.

I’m happy to compare the incremental ROR of these competing sources. RU?

Reply to  bigoilbob
March 2, 2023 7:41 pm

the “resource” has already been identified as the best available

How could w&s be the best resources available?

The sun disappears every night, and the wind disappears, well – whenever it takes the urge to.

Every living creature on this planet is in a constant battle to survive what ‘nature’ inflicts on us at every opportunity to get rid of us.

We need to make use of every resource & tool we can harness to continue as a species.

We don’t need to give ‘nature’ any concessions – she’ll probably win in the end anyway. Let’s not just roll over.

Reply to  bigoilbob
March 4, 2023 3:19 pm

CO2 is a net benefit, therefore it should be subsidized, not taxed.

Reply to  bigoilbob
March 2, 2023 1:44 pm

Rent seeking is ubiquitous throughout history”

Yep, and you are still doing it !

Kevin Kilty
March 2, 2023 7:42 am

Everyone here can see the problem and there are multiple ways of looking at the problem that arrive at the same conclusions. Nonetheless, few people seem capable of learning from their own troubles let alone learn from the folly of others.

We are going to waste a lot of money, perfectly valuable raw materials, and some environmental treasure chasing this vision of “costless” energy.

Reply to  Kevin Kilty
March 2, 2023 9:14 pm

Total annual U.S. electricity generation from wind energy increased from about 6 billion kilowatthours (kWh) in 2000 to about 380 billion kWh in 2021. In 2021, wind turbines were the source of about 9.2% of total U.S. utility-scale electricity generation. All of them are subsidized.

But CO2 continues to rise in the atmosphere. So all of the 20 year effort to switch to wind power was meaningless.

Peta of Newark
March 2, 2023 8:41 am

The numbers are out there:
Vattenfall’s new North Sea windfarms (Vanguard and Boreas)

They say will cost £10Billion and have 3.6GW nameplate power for both combined

At 40% capacity factor when new, dropping to 20% at 15 years, will generate 142Million MWh over that time.

They have signed a Contract for Difference with UK Government saying that they’re OK at £37 per MWh for the power it produces.

Holy Cow, that only gets them £5.25 Billion of sales – only just covering half their expenditure.

What sort of insanity is this…..

John Brown
Reply to  Peta of Newark
March 2, 2023 10:00 am

I don’t know the specifics of this CfD or the project but :
1) I undersand that CfDs are not necessarily binding contracts where the supplier must build the project and supply electricity at the CfD price. So perhaps this project will not be built.

2) The CfD price can be delayed for several years whilst the electricity is sold at market rates. So perhaps Vattenfall are gambling on this.

3) Perhaps they expect to be paid for curtailment whilst being able to sell the same electricity off grid at the same time.

4) Perhaps when the UK starts to become seriously short of electricity they will be expecting the Government to pay extra over and above the DfD price to avoid blackouts.

Reply to  Peta of Newark
March 2, 2023 10:39 am

At 40% capacity factor when new, dropping to 20% at 15 years
Did they sign it in writing? Then again, IBGYBG.

It doesnot add up
March 2, 2023 9:03 am

This snippet from the accounts of Moray Offshore Windfarm really puzzled me. Why give away the inflation hedge that is naturally built into a CFD? They have taken out interest rate swaps as well, managing to fix their floating rate exposure at a lowish level before interest rates started moving up sharply. Perhaps the sale of the inflation hedge helped to offset the cost of the interest rate guarantee – but inflation is always liable to outrun interest rates. Inflation is not going to be negative for any length of time – which might well be adverse for the repayment of debt, CFD income and perhaps a maintenance contract that has no downward flexibility on price.

Screenshot 2023-03-02 165855.png
Last edited 25 days ago by It doesnot add up
March 2, 2023 9:54 am

Demanding more for being/doing/giving less confirms… a pulse.

March 2, 2023 1:37 pm

Falling, as in rising steel prices and rising costs for labor and equipment too

It’s all part of the upside-down world of climate change.

Edward Katz
March 2, 2023 2:35 pm

This is another revelation that clean energies won’t amount to major consumer cost savings. It’s been shown that EVs won’t do it because the initial prices are 50% higher than gas/diesel types. It’s obvious that wind and solar couldn’t do it even before the subsidy requests increased because they needed fossil fuel backups when the wind speeds were too low and the sun wasn’t shining. And now we find that wind is even more undependable and its costs are rising even higher than initially revealed. We should brace ourselves for the next green findings because they’ll uncover yet another layer of expenses that will be passed off to taxpayers.

March 2, 2023 3:46 pm

A definition of CfD contracts would be helpful, in plain easy to understand language of course.

It doesnot add up
Reply to  Bob
March 3, 2023 9:40 am

A CFD contract is a financially settled swap contract. The first CFDs were interest rate swaps, with a fixed rate set against daily interest rate markets. In the case of wind generation, it guarantees a fixed price (which is indexed annually for inflation) for wind generation by paying the difference between the fixed (“strike”) price and the market price on the volume generated. The market price is defined as the day ahead price as traded in the market for each hour of the day. Where the market price is lower than the strike price the wind farm receives compensation, and when it is higher than the strike price it must pay the difference. In the UK, the contracts are handled by the Low Carbon Contracts Company, who also have mechanisms to ensure that compensation paid is charged out to electricity retailers in proportion to their sales, and hence to customers, or to pay out refunds if appropriate.

Reply to  It doesnot add up
March 4, 2023 2:23 pm

Thank you, are CfD contracts used in the fossil fuel and nuclear markets?

Peta of Newark
March 2, 2023 6:45 pm

Feel free to point and laugh; the current synoptic chart for UK and Europe

And it don’t change much until Monday lunchtime when a rather serious northerly flow starts up. Its gonna get cold methinks

On the gridwatch energy numbers,
Wind is 3.5GW
Ireland/France export is 2.6GW
Belgium/Holland/Norway import is 2.9GW
Demand is 27.8GW

Why doesn’t France just get their juice directly from Belgium & Holland – why does it have to come via the UK?

Surface Pressure Friday March 3.JPG
It doesnot add up
Reply to  Peta of Newark
March 3, 2023 11:16 am

Part of the answer is that there simply isn’t enough transmission capacity through Belgium and on to France. We built lots of interconnector capacity to France back in the days when they had surplus cheap nuclear. Germany used to be a big exporter into the Netherlands and Belgium.

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