From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
OFFSHORE WIND POWER V GAS POWER?
Which is cheaper – offshore wind or gas power?
We always seem to go round in circles when we discuss this! Politicians and the wind lobby always refer to the official Levelised Costs, last published by the BEIS in 2023, often dishonestly including Carbon Pricing in the cost of gas power, even though it is a TAX, not a COST.
Others point out that you cannot simply compare levelised costs, as they do not include the indirect costs associated with intermittent renewables, particularly the need to pay for standby capacity.
In fact the only valid comparison is to compare the TOTAL COST of wind power, with the FUEL COST of CCGT power stations. The latter, of course, will still have to be fully manned and maintained whilst on standby, so those costs are in essence fixed. The only extra cost they incur when actually generating is fuel itself.
The following analysis is based wholly on the assumptions used in the BEIS Electricity Generation Costs report, referred to above, and other official data.
In 2023, gas power supplied 101 TWh, a third of total electricity in Great Britain.
The latest government mid-range projections for the price of gas are around 70p/therm, which is £24/MWh. With a fuel efficiency of 53%, that works out at £45/MWh of electricity produced, or an annual total of £4.5bn.
https://www.gov.uk/government/publications/fossil-fuel-price-assumptions-2024
Now we come on to offshore wind power.
The BEIS costings assumed capital costs of £2200/kW – this is the top of their range, which is more realistic, given the massive increase in strike prices offered in last summer’s CfD auction. To generate 101 TWh, we would need 26 GW of new offshore wind capacity, which is more than we have presently. That works out at a total capital cost of £57 billion.
To this can be added the operating costs of offshore wind, which the BEIS estimated at £19/MWh.
So over a life of fifteen years, operating costs plus capital come to £86 billion. The cost of natural gas over the same period to produce the same amount of electricity would be £67 billion.
Even then wind power costs are understated, because we should add on the cost of grid upgrades, projected at over £100 billion, or at least the appropriate share for the extra 26 GW.
We know that wind power already on the system costs considerably more than the BEIS’ optimistic calculations. But even using these for new wind farms, it is clear that CCGT is much cheaper.
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In fact the only valid comparison is to compare the TOTAL COST of wind power, with the FUEL COST of CCGT power stations.
Don’t think this is correct. When you do investment analysis using NPV you have to compare the total costs of the real alterntatives you are considering.
The issue is that at the moment no-one (well, maybe with the exception of Ed Miliband) is seriously planning total dependence on wind and solar, and only them.
What they are in fact considering and planning is a hybrid system, which would be gas enough to supply peak demand during an evening winter dead calm, and also wind and solar alongside it. The hope is that the wind and solar will meet a substantial portion of demand, though I haven’t noticed the percentage being specified, and the claim is that the fuel savings will justify the installation and maintenance and transmission costs of the wind and solar.
In this case countries and operators are really considering two alternatives, one to use gas and conventional only, the other to use gas and conventional with some amount of gas alongside it.
The correct evaluation method is to list all the cash flows for each of these alternatives and calculate the NPV (using identical discount rates, of course). With emphasis on ALL. You need to include all the costs of adding the wind and solar to the network, transmission, maintenance etc. And you need to take account of the additional costs on the gas plant of being kept on standby and rapid start.
You may object that no country starts from zero, as this method assumes. That is correct, though it would still be very illuminating to do such an analysis, since it brings the economics clearly into focus. If you can’t make the case from zero basis there is no point trying to migrate your way to it from an existing situation.
For a country at the moment, not starting from scratch, the correct method would be very similar, its just the cost picture would change. You have a certain amount of conventional and nuclear plant, which will have cash flows associated with its maintenance and fuel. Then you’ll have cash flows associated with renewal and expansion and maintenance and fuel. Similar for the wind and solar plant. You are probably considering three real world alternatives:
I don’t think the article explained it particularly well, but it is absolutely correct to compare total wind cost with CCGT fuel cost. The point is that wind generation can only replace part of CCGT generation because the CCGT still has to be there for backup when the wind fails. The cost of CCGT-only is the cost of construction + manning + maintenance + fuel. The cost of wind is the total cost of wind plus CGT costs of construction + manning + maintenance. Those CCGT costs are the same for wind backup as they are for CCGT-only. Removing them from both sides of the equation we end up balancing the total cost of wind versus the fuel-only cost of CCGT.
Yes, the position taken by Nick Stokes here: put in wind and solar, and justify their total costs of install and running by the fuel savings.
The problem is that there is little to no fuel savings, since the fossil fuel plants have to kept at, at a minimum, warm standby. At worst, they have to be kept at hot standby.
Fuel costs are down by a percent or two. Capital and maintenance costs are not reduced at all.
CCGT costs should reflect what they would be IF the were not crippled by being forced to take a back seat to wind and solar, and allowed to operate at full capacity.
“Never argue the impossibility of something that has already been proven.” I wish I knew the quote for that…
It turns out that over the last 10 years the wholesale price of electricity in Texas has been very stable. We can talk about resiliency in another thread maybe, but your point is on cost. In Texas the grid has absorbed a massive amount of both wind and solar without a subsequent rise in price. I wish I knew how to imbed charts. Check out this historic prices from EIA
Electric Reliability Council of Texas (ERCOT) Wholesale Electricity Dashboard – U.S. Energy Information Administration (EIA)
Separately they have historic generation by fuel source. In Texas renewables can hit 75% generation – and that’s on a grid that is largely isolated from its neighbors. If wind was as bad as you say we should have seen a massive rise in the price of electricity in ERCOT. Why do you suppose that wholesale electricity prices have stayed basically flat for 10 years (far below the rate of inflation) even as wind has taken a massive share of ERCOT generation?
NESO’s “Clean Power 2030” document is available at the following link :
https://www.neso.energy/publications/clean-power-2030
Their vision of a “clean power system” for Britain is given on page 7 :
NB : “Generation” is not the same as “demand”, and the other 95% will include nuclear, biomass, hydro and interconnector (ICT) contributions.
Their previsions for how to cope with those “sustained periods of low wind” is given on page 22 :
.
The NESO report does actually mention “some stakeholders” concerns about this, though for some reason that specific point failed to make it into the UK governments later “Action Plan” document.
In the “Unabated gas generation” section of the NESO report, page 30 :
.
It appears that NESO did perform a “cost / benefit analysis” of the various combinations internally, but as far as I can see a detailed breakdown of their numbers is not available for third-parties to “check their working”.
In section “3.3 Insights from our clean power pathways”, on page 49 :
.
The last of the six “Supporting documents” documents on the NESO webpage link above is their “Data workbook”, which is a 3.2 MB, 48-tab, Excel spreadsheet.
The last 11 of those tabs are “Data Tables”, the second of which — “ES1: Electricity supply” — contains a lot of “interesting” detailed numbers, in particular “Variable = Capacity (MW)” and “Variable = Storage Capacity (GWh)”.
A subset of that information is given in the attached plots.
Notes
– NESO envisage “unabated gas” increasing in the short term, before falling back to 35 GW in 2030. From my reading that particular detail has not received a lot of publicity …
– Most of the “LDES” (Long Duration Energy Storage) is actually “pumped hydro”, which will still be in the “construction phase” up to 2028, and only start coming on-line from 2029.
– It’s complicated …
Thanks, very interesting!
michel, there is an interesting post at Watt Logic that discusses the NESO plans for the CCGT fleet and how realistic they are. Many comments by people who know what they are talking about.
https://watt-logic.com/2024/12/19/unrealistic-plans-for-ccgt-fleet/
Is Wind Power Cheaper Than Gas?
Is the Pope Catholic?
“Pope Francis Names First Woman to Head Major Vatican Office” – Breitbart.
No.
No Fracing way!!!
Fracked Gas is way less expensive than Wind or Solar would ever be. Even if the cost of their manufacture and installation is discounted.
I guess another really simple test is to do the NPV of adding a certain amount of dispatchable capacity to an existing grid. All the cash flows required – if its wind off the north coast of Scotland this means transmission, and it also means storage or backup. Whatever it takes to make it perform to the same standard as the alternative of a gas or coal plant.
Again however, this is total cash flows, capital, maintenance, fuel, all of them.. The difficulty with the proposal in the head post seems to be that it tries to take a short cut by considering only some of them.
You need to do the comparative analysis based on the NPV of the life cycle cost of the longest LCC. Somewhere along the lines of 5 x LCC for solar, 3 x LCC for wind, 2 x LCC for gas vs 1 x LCC for nuclear.
It’s important to remember that the goal of wind power is not to produce reliable economical electricity.
We’re only having this discussion because certain people believe we can control the climate if we can control atmospheric CO2.
How’s it going so far?
There it is.
In 2022 global emissions per ( https://www.worldometers.info/co2-emissions/co2-emissions-by-country/#google_vignette )
China – 32.88%
India – 6.99%
Russia – 4.96%
Brazil – 1.21%
S Are – 1.05%
BRICS – 47.09% of global 2022
2023
China – 34%
India – 7.6%
Russia – 5.3%
Brazil – 1.2%
S Are – 1%
BRICS – 49.1% of global 2023
2024 (no 2024 figures yet)
The Paris Climate fund was to be bankrolled by Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, The Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, The United Kingdom, and The United States.
The 5 founding BRICS countries are receiver nations and responsible for more than 50% of current global emissions. Until they’re required to cut emissions, global emissions levels will only rise.
The real cost is the implementation onto a grid.
IEE Japan did a study on putting VRE (variable renewable Energy) onto the Viet Nam grid.
And they didn’t include a lot of “incidental” costs.
Integration costs are massive.
New York just did a big offshore wind power purchase agreement for $155/MWh. That is a real LCOE not theory. Theory often excludes financing cost and profit which can be almost as big as construction.
And , of course, the more wind and solar on the grid,
The higher the cost of electricity to the consumer… (data from EU)
This is all nonsense. Just last night I heard no less a personage than Emma Pinchbeck (the classics scholar and unlikely CEO of the Climate Change Committee) patiently explaining…well, something. I couldn’t quite follow her rigorously educated argument but the point is wind power is cheaper. So there.
One day I hope to hear a power engineer explain how wind is cheaper, but they all seem to be too busy keeping the lights on or something.
Of course, you couldn’t “couldn’t quite follow her rigorously educated argument” about Climate Change. It’s the same as following a “rigorously educated argument” proving the existence of God. It’s a matter of faith, not logic.
Not even close to the same logic. In fact, there is no logic to grid wind and solar.
A change of [political] climate. Story tip
“Multiple US defence and intelligence sources who are either in or close to the Trump camp tell Guido “this is insane, the UK has no idea what it is playing at” with such threats, and claim that they have also been considering the future of the vital partnership in recent weeks because of the “statements of Starmer, Lammy and Mandelson and the deterioration of the relationship”. Guido can disclose that over the past few weeks top Trump appointees have raised Labour’s words on President elect Trump in internal meetings discussing the intelligence and security relationship, as well as Starmer’s ambassadorial appointment. Is Labour risking the UK’s most vital intelligence and security partnership because of their set of whinging lefty talking points?”
Senior US Sources Slam Labour’s “Insane” Threat To Cut Off Intelligence and Defence Cooperation Because of Musk and Trump
https://order-order.com/2025/01/07/senior-us-sources-slam-labours-insane-threat-to-cut-off-intelligence-and-defence-cooperation-because-of-musk-and-trump/
Adieu…
Yes, they are stuck at the level of radical student politics. No idea how to implement anything. 15 years in the wilderness has taught them nothing about why they ended up there. Reeves must be the most unqualified Chancellor in British history, along with the equally unqualified Miliband and Lammy. How Starmer can have thought he could get away with Lammy, given his previous proven inability to think before opening his mouth? And as for Philips! Eyes tight shut.
If Guido is right about this, and it seems plausible, then its really serious.
This, too, shall pass. Or something like that.
The “cost of offshore wind” is ambiguous between fixed and floating since floating should cost several times fixed. Two very different numbers.
Say you have a generator in your back yard in your garden shed that can generate a measly 1Kw. Could be gas engine powered or a windmill.
Now simply consider the additional costs you would have to incur to put that same generator out on the water at some beachfront and maintain its availability for your power generation purposes.
Those in favor of offshore wind power generation simply have an inexplicably poor grip on real costs.
…..a poor grip on reality, and as a result they find it very difficult to face up to the truth, because it does not agree with their faux reality.
“We probably have around 150 different floating wind platform designs at the moment. So how do you build a perfect port for the floating wind?
The perfect port hasn’t been built yet. To do this we first need to agree on what kind of designs we are looking at for the future.
Floating wind is very different from fixed bottom in terms of port requirements since the components and equipment are not only stored there but also installed at the port as well… it therefore needs to have space for turbine assembly and installation of turbines on top and most likely for assembly of floaters as well as for wet storage of the floaters.
We see that in the Norwegian market things are going too slowly and technology development doesn’t progress”
T Sandlorv, CCO Karmsand Port Authority
https://www.offshore.wind.biz/2024/12/19/supply-chain-calls-for-narrowing-down-floating-wind-platform-designs/
I don’t need a cost analysis; all I need is to compare prices in Germany and the UK with France. Then all I need to determine is whether or not the discrepancy is due to stupidity, ignorance, or corruption. I have determined it is due to a new form of Democracy that embraces all three.
The best cost -benefit analysis ever using real world data that leads to the “only” logical conclusion. There’s the three legged stool that makes wind and solar “attractive”: Stupidity, ignorance, and corruption.
I have just had a delivery of heating oil. At 62p a litre. That equates to around 6.2p ($0.08c US?) per kWh.
Gas is retailing at around 5-6p a kWh.
Electricity overall is averaging around 20p a kWh. Even when it’s mostly generated by gas and ‘cheap’ wind.
And yet the lie is spread everywhere that ‘electricity is expensive because of gas prices’
That must include some discounts. Undiscounted domestic electricity is quite a bit more expensive than that. There is regional variation of course, but just shy of 25p per kWh is closer to the mark—almost 25% higher.Ignore that. I realize I’ve mistaken the waiving of surcharges for a “discount”. (Shame on me.)
Story tip:
Croatian wind farm ‘blown away’..
https://vijesti.hrt.hr/hrvatska/bura-unistila-jednu-od-najvecih-solarnih-elektrana-u-hrvatskoj-11933011#
You have left out the new gas capacity to be bought. The plan is to move huge new workloads onto electricity over the next 20 years or so. Examples are 30 million heat pumps at approx 3 kW each (= 2 to 3 times the current size of the grid). Or 40 million cars and vans at, what?, 8 kW each, 20 or 30% running at the same time overnight, say another 60 to 90 GW. The back up when there is no wind or solar has to increase dramatically. Please let me know if these numbers are rubbish!
If the Telegraph is to be believed, it doesn’t matter as wind is taking over anyhow:
https://www.telegraph.co.uk/business/2025/01/06/wind-turbines-overtake-gas-as-top-source-of-british-energy/
As usual though, beneficial numbers are missing. Numbers such as how much of the calendar year this represents, capacity vs. utilization, etc are left as an exercise to the imagination.
A [scientific?] guesstimate
The Grauniad and the i Newspaper also ran that story with a similar type of headline even though they both acknowledged towards the end that
“when all sources of gas generation were taken into account the fossil fuel was still the biggest source of electricity, generating 28% of the UK’s power in 2024 compared with 26% from wind” (Grauniad)
The i had an almost identical statement at the end of the piece.
Of course gas is cheaper than wind. On shore or off.
Gas can do the job all by itself wind can’t. The cost of the gas plant needs to be added to the wind cost.
The two are not directly comparable.
Others point out that you cannot simply compare levelised costs
I’m a flaming consumer and I want level playing field supply so don’t give me this pea and thimble trick dumping nonsense with fickle energy. You can’t supply me with the electrons I require 24/7/365 at the correct voltage and frequency you can damn well keep them and use them yourself.
Where are all the troll frantics telling us wind and solar are “cheaper” ???
Hiding under moms bed??
This article is full of numbers that are total bullshit.
Recently, Denmark did not get bids for three multi-$billion offshore wind systems, because the wind developers could not get financing at acceptable interest rates and insurance at acceptable premiums.
Even with the equivalent of 50% subsidies, they would have to charge 16 c/kWh, wholesale
But there are other charges, such as for
a fleet of power plants to counteract the up/down output of wind, plus
a fleet of power plants to provide power in case of no wind or too much wind, plus
curtailment of wind production when it is in excess of demand, plus
end of life disassembly at sea, plus
storage at hazardous waste sites for many decades
These 5 items add about 8 c/kWh
By the time this electricity is transmitted and distributed, and taxes, surcharges and fees and utility profit are added, we are talking 16 + 8 + 8 = 32 c/kWh on the customer invoice.
All of us will be SO SCREWED FOR DECADES, and it would not matter one iota regarding global warming, which is mostly cyclical
There is an awful lot of smelly bullshit associated with climatology.
The point is, the article is using ‘official’ numbers. When things look bad using ‘official’ numbers, we all know that reality will be a lot worse. That we will be screwed for decades is something we can all agree on.
I did not mention grid extension and reinforcement, a 2 c/kWh item, if wind/solar penetration is about 30 – 40%
Perhaps this could be a great opportunity to add a fossil fuel power plant, and avoid the carbon taxes. Just build the wind plant, and include the backup fossil fuel plant as part of it. Exempt the backup-plant from the typical taxes and fees added by the green politicians, since it is designed to serve the wind farm.
Of course the backup plant has to be kept running at some level. Plus there are occasional peak demand times, that the wind farm doesn’t need to be designed to handle. So, the backup system must have capacity to handle those occasional peak demands. Be sure to include the capacity to handle the plans for 100% electric car usage.
This does not avoid paying carbon tax to green religion, it just replaces one form of tax with another. Building and operating a wind farm at the expense of taxpayer is an indirect form of carbon tax. I am sure the parasitic climate-industrial complex would not mind this. Perpetuating wind and solar at the expense of society is their goal. But why succumb to the insanity? Why agree to pay carbon tax to green religion? What is wrong with NOT building the wind farm?
True. I was just trying to imagine a way to put the backup power into the project proposal. Otherwise the backup system is just ignored and not budgeted as part of the project.
Offshore wind and fusion are two of the most expensive, and therefore two of the stupidest, ways to generate electricity ever proposed. The opportunity costs associated with investing in them would be detrimental to any society who attempted to adopt them.
Except a little problem, – the only ongoing fusion power plant that works is that big glowing ball in the sky, at exactly the right distance to make us avoid freezing up or burning up.
Fusion is what keeps those fairly useless solar energy collectors fed a few hours a day.
The answer to that question is immaterial and misleading. As Homi Bhabha so presciently noted…’No energy is more expensive than no energy’… and that is what wind represents… times of NO energy.
Figure it out. It will do you good to think about it.
A guy can do all the figuring you want at the end of the day the only thing that matters is how much is your power bill. If your power bill is lower with wind then wind is cheaper, if your power bill is higher with wind then wind is more expensive. This is not that complicated. The only downfall of my thought experiment is the cheating government propping up wind and pretending like I’m not paying for it.
Bob, that is very wooly thinking. You could have a zero power bill if you are on wind, but the wind does not blow. In mid-winter that could be fatal. What is important is having power when you need it. Read what Homi Bhabha said, above, and think about it.
While the analysis seems sound, it may be confusing consumer price with costs. Prices are subject to government and commercial manipulation, and subsidies foist the actual plant and equipment costs (and much of the risk) onto the consumer. These are hard to separate when consumers receive electricity from a dynamic mixture of sources. Sometimes a rough estimate can answer the question more simply.
Back of envelope:
1 MW land based wind turbine will cost between $1 – $2 million
1 MW sea based wind turbine will cost between $10 – $25 million
Land based wind turbine will consume 16-20 kilotonnes of “fossil fuels” per MW capacity for manufacture, siting, and first year operation.
Mulitply land costs by 10 for sea-based wind turbine
Commercial generator for 1 MW capacity cost around $250K (est Catarpillar-based, 53 ft trailer sized engine generator, delivered and sited, plus negotiated service)
Average hourly production for a 10 MW capacity wind turbine will average 1.2 MW, or >10.5GW/h per year.
Commercial generator will put out >8.7 GW/h per year (counting downtime for service), consuming ~0.9 Ktonnes (e.g. natural gas) per MWh. .
Today’s trading price for U.S. Henry Hub natural gas is less than $40 per MMbtu ( ~293 KWh). The commercial generator will cost ~$1.2 million to run for the year.
Assuming annual replacement, commercial generator cost >$1.5M.
A (land based) 10MW capacity wind generator will “consume” 9 Mtonnes of fuel in construction and operations to produce the same output as the commercial generator over each year of operation.
Multiply cost by 10 for the sea-based wind generator, for the same output.
The commercial generator is semi portable, can be sited wherever the existing grid requires, and will put out power not requiring regulation or synchronization. (it won’t need to be put on a floating platform in order to attach to the grid).
The commercial generator can be delivered within 1 year of contract finalization.
Cost comparison estimate only (this is what “back of envelope” actually means). Your mileage will vary. Most of the world can’t get Henry Hub natural gas at $37 per MMbtu. All figures estimates biased in favor of the wind turbine. No one in their right mind would put in GW capacity generation based on 1MW modules: if building a generator using natural gas fuel, it would be cheaper just to build (reactivate, or refurb) a plant with the necessary capacity and close to existing infrastructure.