From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
I missed this announcement just before Xmas:
Following the launch of the first hydrogen allocation round (HAR1) in July 2022, we have selected the successful projects to be offered contracts. We are pleased to announce 11 successful projects, totalling 125MW capacity.
HAR1 puts the UK in a leading position internationally: this represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe. This round will provide over £2 billion of revenue support from the Hydrogen Production Business Model, which will start to be paid once projects become operational. Over £90 million from the Net Zero Hydrogen Fund has been allocated to support the construction of these projects.
We have conducted a robust allocation process to ensure only deliverable projects that represent value for money are awarded contracts. The 11 projects have been agreed at a weighted average [footnote 1] strike price of £241/MWh (£175/MWh in 2012 prices). This compares well to the strike prices of other nascent technologies such as floating offshore wind and tidal stream.
Government delivered HAR1 to time, and we expect that first projects will become operational from 2025. Combined with our commitments to further Hydrogen Allocation Rounds, this gives hydrogen developers, investors and supply chain companies the certainty they need to commit to the UK.
The CfD prices of £241/MWh compare to the current wholesale cost of natural gas at around £34/MWh.
The amount of hydrogen these projects will make is miniscule, about 1 TWh even if they work at 100% capacity. UK consumption of gas is over 800 TWh annually. £2 billion is a lot of money to pay out for so little, and presumably will be added to our gas bills, in the same way that subsidies for wind power are added to electricity bills.
What is interesting is that the strike prices will be flexed to changes in the market price of gas:
The schemes all appear to be electrolysers, and they all claim that only renewable electricity will be used, an absurd assumption! None of them say what they will do when there is not enough wind and solar power to meet demand – will they idle their plants, or will they carry on as usual taking whatever power the grid can supply?
How the DESNZ can claim it represents value for money is a mystery! And to pretend they are nascent technologies is also untrue, because electrolysis is a well established process.
But it’s our money they are spending, not their own, so why worry?
Above all though, this lifts the lid on just how horribly expensive green energy is. Remember too that the renewable power they claim they will use is already subsidised heavily. So £241/MWh understates the true cost.
Rishi Sunak seems to be desperate to ensure that Keir Starmer will be the next prime minister. Every single thing he does seems to have that objective. He could do anything differently – anything – and it would reduce Keir Starmer’s chances. The real irony is that while Rishi Sunak does not have to do any of these things, he is also allowing Keir Starmer to do absolutely nothing towards his own election. What a mess.
The great thing about an empty suit is you can fill it with what you please. Starmer is that suit and now the Post Office scandal is touching him and Limp Dum leader, Ed Davey – the man who killed fracking in the UK.. Pass the popcorn.
If the Tories want any hope of survival Cassius must kill Caesar and kind of now. Isn’t going happen so go Reform UK instead.
You’ve been suckered by Farage.
The Post office prosecuted their victims themselves. As a branch of Government they could do that.
The Post Office does not and did not come under the Director of Public Prosecutions – Starmer wasn’t involved.
The last 14 years of Tory government, with LibDem help, is another story.
Maybe he is poisoning the well for Starmer who has no clue whatsoever about energy policy
“successful projects”?? I see they are declaring the result before they’re even built. Who would have guessed.
I think it probably means ‘successful’ in the sense that they were successful in winning contracts.
successful in getting subsidies?
Also, “work at 100% capacity”, but what they don’t mention is that to make hydrogen takes a LOT of energy, of which only ~30% is returned when consumed. The starting point should therefore be 30%, which can only go downhill.
Out of control, attention-deficient and hyperactively-disordered children = the whole damn lot of them.
Encouraged and steered as best can be by: The Blob and its legions of crony (fair-weather) friends.
To all intents, they are now in the majority and have all the power
Another £2 Billion Handed Out
The UK government has been hard at work throwing much increased subsidies at the renewable sector, and not only on that. Aid to Ukraine and other states like India and China. Then, there’s the £8 million/day hotel bill for the illegal migrants, the hundreds of millions given to France to do basically nowt to stop the boats. Rwanda has trousered many tens of millions and it has yet to receive a single migrant. Roads here could be used by astronauts training for the moon etc The list really does go on.
Despite all those council charges, fines and taxes they slap us with….
“Four in 10 councils in England are at risk of going bust over the next five years as the local authority funding crisis spirals out of control”
https://www.telegraph.co.uk/business/2024/01/14/four-in-10-councils-risk-bust-next-five-years/
We must exclude Thurrock council as it freely chose to give all its money and more to a dodgy solar farm hand who went on to spend the money on a Bugatti and lots of other very expensive goodies. The good people of Thurrock are stuck with the bill. For years to come.
What’s £2 billion in the scheme of things? Pocket change I suppose.
Alison Pearson did a wonderfully excoriating article in the Daily Telegraph yesterday about everything wrong with Conservative-in-name-only Britain.
https://www.telegraph.co.uk/columnists/2024/01/16/conservative-election-1997-wipeout-sunak-government-voters/
Yes, but she doesn’t get it. Parliament continues its leftward shift. And that is only going to intensify no matter how betrayed people might feel.
Because, at the end of the day, Parliament (since 1660) is sovereign above monarch and people. And what it says goes.
I’ve often read that Parliament is indeed sovereign within the ‘confines’ of an unwritten constitution, but am wondering if the UK is similar to the US in having a ‘Deep State’, i.e., a permanent bureaucracy that writes and enforces its own laws.
“but am wondering if the UK is similar to the US in having a ‘Deep State’”
Come on Frank, of course they do. Their deep state is even deeper. They believe in a Monarchy and that the Crown (themselves) are the rulers of the people.
In the US, the libs of the deep state don’t have the Crown to justify their actions, just their own self interests, self righteousness and egos.
Point taken, however, my specific question was whether or not all UK regulations are written and passed within Parliament, or is that function farmed out to the bureaucracy.
Most regulations and indeed most Acts of Parliament are drafted by civil servants. Many regulations can be passed into law more or less on the say-so of a sponsoring minister, who is often merely a figurehead pushed to do so by his civil servants. Almost no regulations get subjected to Parliamentary debate or a vote: they are promulgated as the result of enabling legislation. Sometimes regulations are published as an annex to a bill, but few MPs have the expertise to dissect and debate them – so they don’t.
Thank you, that was the insight I was looking for.
It has its share of errant people from civil service to intelligence etc
When I was in the Navy we had a gun called the civil servant because it wouldn’t work and you couldn’t fire it.
I despair. Short of lots and lots of blackouts I can’t see the UK waking up to the true scale of idiocy that is the reverse-Robin Hood Net Zero scam.
All the main parties agree with it and Reform (which someone will say I should vote for) want to nationalise the energy industry.
I remember the 1970s well – a rerun is happening. Three-day weeks, candles, industry closures and mass unemployment. Maybe that will make people sit up and think. Who knows?
“reverse-Robin Hood”
Alarmists want to call it the Anthropocene. I think the better name is the Orwellian period
I like the Hypocricene.
Does the UK have any politicians comparable to Trump?
Nope. We only have politicians.
don’t want to preen but we have Trump plus Vivek… check out the video on X
https://x.com/bennyjohnson/status/1747420626032205840?s=46&t=cDIMiezJIAFkKBofUAJaJw
A small ray of light amidst the gloom and doom-
China population decline accelerates as birthrate hits record low (msn.com)
Running out of factory fodder might put the mockers on cheap imported renewables in future. Demography will trump any ism any day.
“The schemes all appear to be electrolysers, and they all claim that only renewable electricity will be used”
In the US, the Brandon administration has proposed rules to make sure only renewables are used to make H2. They are going so far to keep any renewable power used for H2 from being replaced by GHG emitting sources. Potential H2 suppliers are howling, “No fair!”
None of this is fair, IMHO.
The energy amateurs have also spread $7 billion around to increase research in hydrogen as an energy source. Maybe they’ll be able to change the physical characteristics of hydrogen to eliminate its ability to escape from captivity, destroy metals, burn with incredible ferocity and cost more per BTU produced than any other energy option. Seven billion won’t be enough.
Can anyone explain how H2 can be economically produced at scale using an energy source that comes and goes erratically? Imagine trying to operate an oil refinery solely on intermittent wind/solar power. Green hydrogen is a fantasy pushed by incompetent idiots.
To make hydrogen by electrolysis economically at scale requires a reliable constant source of power – i.e dispatchable electricity. But if you have available dispatchable energy, why do you need storage in a form that will capture only a fraction of that power? It’s a stupid business model and all these schemes are destined for bankruptcy once the government funding runs out. Of course by then the perpetrators of this fraud will have the bulk of the money safely squirreled away in off shore accounts.
Electrolysis has many unsolved problems, but it does not need a dispatchable power, which is exactly why it is being promoted.
It needs reliable constant power.
“The wind started blowing, fire up the electrolysers. – Oops, it stopped, shut ’em down, The sun came out start ’em up again. Shoot, another cloud. Looks like we’re in for a calm night, tell the third shift not to bother to come to work.”
Yea, that’ll work.
Oh, wait, I know – we just need to quadruple our wind and solar systems and some giant batteries to store energy so we can run the electolysers when there’s not enough renewable energy. Problem solved. /s
“It needs reliable constant power.” Yes if you are producing aluminum. No if you are producing hydrogen.
The efficiency drops if you don’t operate as a continuous process with stable conditions. That eats into the economics, as does the underutilisation.
Please take it as a desperate, last ditch effort to “prove” that windmills are good for the planet.
If the idea is to replace natural gas with hydrogen, then I think it is absolutely fair to require them to use non-fossil-fuel energy sources to produce the hydrogen. Otherwise it will require MORE FF’s to generate the same amount of energy if they just used them directly.
No shortcuts allowed.
Remember the Hindenburg! Oh, the humanity….
Meanwhile, in the real world, concrete, steel, aluminum, glass, wood, and agricultural food products are the essential core of things needed for human existence. We have spent Trillions of dollars on “geen, renewable” energy, yet none of the above are powered by this energy.
I assert that far less than 1% of this list is produced using the green boondoggle. Prove me wrong…
If wind and solar are used to generate enough helium to replace natural gas for homes and to power our cars, how will “renewables” be able to also replace fossil fuels that currently generate our electricity?
Replacing natural gas with helium would be a great idea. Then we would have nothing! Replacing it with hydrogen would be hugely expensive, and useless. Such is politics…
A great idea. A wind and solar powered fusion reactor. 🙂
If they could find a way to make electricity out of platinum at a price only the Sultan of Brunei could afford, they’d be pouring money into that. Our money!
The 11 projects have been agreed at a weighted average [footnote 1] strike price of £241/MWh (£175/MWh in 2012 prices). This compares well to the strike prices of other nascent technologies such as floating offshore wind and tidal stream.
The CfD prices of £241/MWh compare to the current wholesale cost of natural gas at around £34/MWh.
Comment
UK natural gas futures fell to 79 pence per therm in the second week of 2024 after a 7.8% gain in the previous week,
Rounded = US natural Gas is 1/3 the price of natural gas vs UK. See what a little fracking can do?
Natural gas prices in Western USA 1/12/24
NATURALGAS (HENRY HUB) Price
3.13-0.18-5.44%
($3.13/1.27) x 10.37= 25.47591 (UK pounds)
.
In order to be able to export LNG the domestic Henry Hub price must be low enough to compete after liquefaction costs and shipping costs One LNG contract I know of is priced at 15% premium to Henry Hub, plus $2.25/MMBtu – FOB Sabine Point, so at the moment US LNG is not competitive into the UK because there is shipping to pay as well. (the UK price has fallen below 70p/therm today
When the UK actually had a small surplus of production compared with its needs, domestic prices were actually lower than Henry Hub. That’s the benefit of not having to pay up to import.
TIP TIP
… under an Energy Department rule, carmakers can arbitrarily
multiply the efficiency of electric cars by 6.67. … buried deep in the Federal
Register—on page 36,987 of volume 65.
From the Wall Street Journal
“The Electric-Vehicle Cheating Scandal
A government rule makes them look nearly seven times as efficient as they are.”
By Michael Buschbacher and James Conde
Get the government out of the energy business and all of this nonsense goes away.
If Hydrogen is so great, why does it need such a massive subsidy?
The inefficiency of the total renewable-energy-hydrogen-storage-energy-delivery system is so severe that a totally 100% renewable/hydrogen energy system that delivers a net energy amount in excess of that required to mine, manufacture, construct and operate it is simply not possible.
In any such system:
The problem is that the thermodynamic efficiency of the total system system (energy delivered to user/energy content of wind, about 6%) is so low that either:
a) most of the time there will not be any energy available for the third priority needs
or
b) if third priority needs are elevated to higher priority than baseload or peaking/intermittency generation, there will be power cuts.
Nobody is working on a fully integrated and coordinated comprehensive system design that would optimize the mix of technologies required to deliver a 100% renewable energy generation, storage and distribution system.
Because anyone with the expertise to develop such a comprehensive system design knows already it cannot be delivered , either economically or net energy positive.
I have been in grid conferences where both LNG and hydrogen company reps said that a stable, continuous supply of electricity is critical to their operations.
As such – the notion of using only renewables is risible. Equally so is the notion that “excess” or curtailed power will be used for hydrogen. What will happen is certainly a heavily subsidized minor increase in base load electricity for which rate payers overall will be bled copiously.
Sad but the economic and financial momentum is quite clear.