Guest Post by Willis Eschenbach
Let me invite you to consider the Scottish coast, where the tides are large and the headlines are gushing—much like the capital outflow—over the MeyGen tidal project, a four-turbine, six-megawatt marvel whirring away beneath the waves. The headlines scream Underwater turbine spinning for 6 years off Scotland’s coast is a breakthrough for tidal energy.
Me? I’m just a suspicious sort with too many years in the accounting trenches and a soft spot for arithmetic. So I thought I’d take a peek at the math behind the green curtain and see what’s really going on.
First, the basics. The capital cost for the four-turbine Phase 1A MeyGen project was £51 million at construction—call it £66 million in 2025 pounds, or about US$90 million at today’s exchange rate. No one seems keen to publish the total operation and maintenance (O&M) bill for Maygen, but industry estimates for similar tidal setups run 2–4 cents per kilowatt-hour (kWh). For 51 million kWh generated so far, that’s a ballpark $1–2 million for O&M.
So, $91 million spent, 51 million kWh produced. That’s $1.78 per kWh—over thirty times the US grid price for gas-fired power, which hovers around $0.04–0.06 per kWh. Ouch.
Now I can hear you thinking, “But that’s just the first seven years! The costs are front-loaded! Surely it gets better over time?” And you’re right. So let’s squint into the always-misty future.
Over the projected 25-year lifespan of the four turbines, the array is expected to generate about 164 million kWh. There’ll be two major overhauls—$3 million each—and 25 years of O&M at around $0.03 per kWh, totaling around $6 million. Add it all up: $90 million (capital) + $6 million (overhauls) + $6 million (O&M) = roughly $102 million.
Divide by the lifetime output, and you’re looking at a cool US$0.62 per kWh. That’s about ten times what gas power costs in the US.
Why are the costs so high? Well, in part it’s the “capacity factor”. That’s the percentage of the nameplate rating that they are actually generating. The individual turbines are rated at 1.5 megawatts. One has been operational for nine years, one for eight years, and two for 7 years. That’s 31 turbine-years, times 1.5 megawatts/turbine, times 8,766 hours per year, yields 407 gigawatt-hours (GWh) if they were running full-tilt.
But in the real world, they only put out 51 GWh, so their capacity factor is a pathetic 13% …
And that cost and capacity factor are assuming that there are no unexpected breakdowns in the next 18 years. Is that realistic, given that the ocean is one of the most corrosive natural environments on the planet.?
Well, a popular saying of my youth had it that “What goes around, comes around.”
But as a lifetime blue-water sailor, surfer, sport and commercial diver, and commercial fisherman, I can assure you that when the ocean is involved, the true saying is:
What goes around …
…
… stops.
And not only is the cost ludicrously high, but the output varies widely. There are two high and two low tides each day. So every 6 hours or so, at slack tides these megabuck machines are putting out exactly zero watts. That’s the reason for the low capacity factor. As a result, they require natural-gas-powered backup to balance them out by providing power for the four times daily when they wimp out.
And here’s where it gets truly Scottish, in the tragic sense of the Scottish Play. Scotland sits atop trillions of cubic feet of natural gas, but drilling for gas is banned in the name of meaningless virtue signaling.
The truth is that instead of tapping their own gas resources, the Scots import about 4 billion cubic meters of gas every year. They’re paying premium prices plus shipping costs for the same amount of gas, and they’re making zero difference to the amount of gas burned. It’s merely virtue signalling because they’re just burning Norwegian gas instead of Scottish gas. The only real gusher in Scotland these days is the steady stream of cash leaving the country.
How can the people pushing this madness think it’s a great plan? Don’t they own a calculator? I feel like the doctor in the Scottish Play when the Queen went mad, who said “This is a disease beyond my practice” …
And here at the end of the story, my question is … how did the Scots ever get a reputation for being financially canny and tight with a pound?
My best to all, even those mistakenly pushing Net Zero and the Green Nude Eel,
w.
You know the drill. When you comment, quote the exact words you are discussing. Makes things far clearer.
References: [1] [2] [3] [4] [5] [6] [7] [8]
As a Scot, I am not surprised at all by this. After all, we currently have a Scottish government which thinks that Scotland is too warm.
Can’t say I’ve ever felt over-warm when in Scotland, Bill.
They must be wearing something under their kilts, so not true Scots.
$1.78 per kWh?
Of course the costs are insanely high, AND the turbine has an incredibly low capacity factor … the tide only comes in twice a day and goes out twice a day!
I have been in locations that had more than 12 hours of sunshine a day. I have been in locations where the wind blew for 24 hours straight. I have never been in a location that had more than 4 tidal currents a day.
Did their models suggest that increasing atmospheric CO2 was going to cause 40 tidal currents per day?
Sorry, too simple!
What is the threshold current for operation? I should have said there are only four periods per day where the turbine resides in a current velocity above the threshold.
With some real world experience I can tell you your O and M cost is approaching an order of magnitude too low. Lookup the history of the Pelamis wave power company, they began and crashed with similar O and M assumptions, horrendously optimistic
Thanks, Mike, I figured the O&M numbers were too low, but I prefer to underpromise and overdeliver.
Best to you,
w.
Hi Willis.
Great analysis
You mention turnkey capital cost and O&M, but bank loans at 6% over 25 years need to be paid off, and Owners need a return on investment at 10% over 25 years.
Usually it is 50% bank loans, 50% Owner invest.
Insurance escalates at 4%/y
O&M escalates at 4%/y
There is no way reasonable subsidies could make the numbers look smallish, ever.
Lifetime costs; NO Subsidies
.
$90 million; $45 m Bank loan; $45 m Owner invest
Amortize bank loan; 6% for 25 y; $3.8 m/y
Pay Owner; 10%/y for 25 y; $4.9 m/y
Production over 25 y; 164 m kWh
O&M; $0.03 /kWh x 164 m kWh = $5 m
.
Payments to bank; $3.8 x 25 = $95 m
Payments to Owner; $4.9 x 25 = $122.5 m
O&M; $5 m
Overhauls; $6 m
Total = $229 m
Electricity cost to utility/kWh = $229 m/164 m kWh = $1.39/kWh
If government subsidies were $1.30/kWh, electricity cost would be $0.09/kWh
Thanks, Wil. You say:
“If government subsidies were $1.30/kWh, electricity cost would be $0.09/kWh”
Not true. BOTH costs are borne by consumers, so the cost is unchanged.
w.
You are right, Wil, but the subsidy cost is hidden in various ways, whereas the electricity cost/kWh is touted ad nauseam by a clique of self-serving evil doers.
I have not counted extra grid costs/kWh, and extra balancing cost/kWh
The minuscule plus is, tides occur every day, but sunshine may be awol for weeks in Scotland
Also there is Insurance at about $1 million/y
Even at an order of magnitude too low – an order of reality too high.
Capacity factor – Same problem with most computation LCOE for renewables . An overstatement of capacity factor of 5% understates the LCOE by 15-20%.
Additionally estimated lifetime of renewables are typically overstated while fossil fuel plant lifespans are understated.
I thought as much. The location, is in a very narrow channel, where the vertical rise of the sea results in a horizontal current. Obviously, such locations are scarce. But, you can bet, that lots of people will be jumping on the bandwaggon, spouting a real alternative to FFs.
Just a few years back, the Orkneys took over an experimental wave project, that was about to be dismantled by the engineering team. The Orkney council, were convinced they could make it work, and so it was sold to them for the princely sum of £1.
About 18 months later, it cost them about, £100K to have it scrapped. Perhaps they should’ve remembered this old saying:
They all said it couldn’t be done
But he said he knew it
So he tried the thing that couldn’t be done
And couldn’t bl**dy do it!
Must say though, from the illustration, it’s a nice bit o’ Lego.
I’ve seen the Nova Scota Annapolis Royal tidal station in a restricted arm of the Bay of Fundy which has been there for quite a while. Others there tried may have too much tide, also a wind problem in places; regardless salt water ain’t kind as all the petroleum platform operations have known for long enough to sink in.
The sea can be a harsh and unforgiving mistress.
Recently declared as a hazard to navigation 🙁
Oh no!!!
(never mind . . . )
https://www.cbc.ca/news/canada/nova-scotia/tidal-power-green-energy-bay-of-fundy-trevor-boudreau-1.7509897
“Over the projected 25-year lifespan of the four turbines”
Suuuuuure. There are many components in the electric grid that last much longer – eg Hoover Dam in USA opened 1936. Moving metal parts submerged in salt water to generate electricity… only example of reliable operation I can think of is military submarines. Those work great but their capital cost and maintenance cost are not optimal. I’m glad the article focused on operating cost.
Technology: Yes we can
Economy: But we probably shouldn’t
“Ocean saying: What goes around…stops”
From the referenced gushing article:
”A (subsea) turbine has been spinning for more than six years…A record.”
But that also means every other subsea tide turbine—including the other three at MeyGen—failed before six years!
A problem perhaps bigger than, and probably explaining, the pathetic capacity factor. For these purposes, slackwater before and after each tidal change lasts about 3 hours according to the Coast Guard. So slackwater induced capacity factor should be about (3*4=12/24) 50%. The other lost 37% to the observed actual 13% is probably because ‘What goes around in the ocean…stops.’
So the MeyGen LCOE costs must be significantly higher than WE estimated. And proving that, like Calvin, greens are math atheists.
DIdn’t Mr. Stokes claim recently on another thread that he was a mathematician? Maybe he can fix it.
Don’t they own a calculator?
_______________________
Don’t need one, they have a subscription to the Guardian, The Times and listen to the Beeb.
Owning a calculator helps not a jot is you can’t actually do math.
I’ve had students submit answers that were clearly preposterous (to 8 decimal places though) because they were incapable of doing a rudimentary mental estimate and accepted whatever came out of their calculator as gospel – failing therefore to account for them making any error.
Most climate zealots can’t count past 10 without taking their shoes and socks off.
“They’re paying premium prices plus shipping costs for the same amount of gas, and they’re making zero difference to the amount of gas burned.”
Probably not, it may be more. Gas turbines have notoriously low fuel efficiency at part load. Some require 40% of their full load fuel consumption simply to remain hot and ready to go. This, along with their 2,000 degree exhaust temperature, is why they are not use for car or truck engines despite their low weight and great power capability. In stop and go driving they do poorly. They cannot be fired up immediately to meet demands and require some time, perhaps as much several minutes for a large electricity generating machine in cold shutdown to be able to produce electricity. If synced to mate with a variable output tidal machine, much of their operating time will be a less than full power and even some at hot standby, therefore such a system will operate at less than optimum fuel efficiency. I suspect that a careful calculation of gas fuel consumption for such a system would show that it uses more gas than if the gas turbines alone did it all.
Some actual numbers on CCGT from GE Vernova.
At full load capacity, their thermal efficiency is 61%. At 80% load, it is 60%. And at minimum load 40% (below which they cannot be run at all) it is still 58%
That is why at the newish Port Everglades CCGT, the capacity of the system(3 gas turbines into one steam turbine) is 2400MW even tho the normal load of the old resid fired plant it replaced was 2000. The extra 400MW offers summer peaking capacity at almost no fuel expense, which enabled FPL to completely shut down 6 old inefficient gas peakers. After the new plant came on line, my electricity bill here in Fort Lauderdale went down significantly.
Rid,
Your 40% is minimum, but operators prefer 50%, just to be sure.
BTW, when a jet plane lands, it does so at full power, with flaps extended and air brakes up.
It case of an aborted landing, the pilot pushes one red button, and everything instantly returns to full lift, the plane rises, and goes around
That line git ne too. It’s triple whammy in Australia. Gas, coal and uranium exports while not aggressively pursuing them domestically. Virtue signalling an economic death spiral.
Scotland is a real whizz at waste thanks to the Barnett formula.
“And here at the end of the story, my question is … how did the Scots ever get a reputation for being financially canny and tight with a pound?”
None of the comments so far have mentioned that in addition to Scots having a reputation for being careful with money that they have also been terrific scientists and engineers over the centuries. At least up until recently . . .
No doubt they are still terrific scientists and engineers in Scotland, but it is politicians that hold the purse strings.
Book: “How the Scots Invented the Modern World” by Arthur Herman
and mariners.
So you’d reckon they’d have some good experience to draw upon to remind them what a bitch the sea can be when you try to make her your mistress.
Scotland is culturally several different countries. Just as the SNP is several different parties. Its also a country, like Ireland, which many of its best and brightest have felt they had to leave, and they have left behind them unchecked a fatal tendency to student politics.
So marine life will be hit from above (windmills) and below from this unseen menace. Follow the money in addition to the entrails.
Separate comment after some research.
To now, there have been 9 renewable tidal generation proposals globally per Google AI.
7 are still vaporware.
MeyGen is still in ‘phase 1a’ at 13% capacity factor after 9 years.
Only South Korea’s Sihwa has been in ‘full operation’ since 2012 (ten turbines on a VERY large artificial ‘lagoon’, with nameplate rated 254 MW total capacity). I just ran its numbers—25% capacity factor at a capital cost of $650 million. Ouch.
No wonder 7 proposals are still only vaporware.
I seem to recall reading about many attempted projects over the years…but a shortage of follow up success stories.
Look up “Bay of Fundy”, although they claim their first turbine failure in 2009…I remember attempted projects there going back to the ‘70’s….yeah that old…and probably before that too….
I was perusing through the 1928 issues of General Electric Review and there was a mention about using tides to generate power. The idea has been around for a long time.
Can’t remember who did it but off the coast of Oregon multi years ago they dropped in a buoy based generator with a whole lot of fanfare. Not sure how much they learned but it lasted less then a day before it stopped operating, haven’t ever heard about a follow up test. If they did one they kept it fairly quiet probably due to the ridicule they received from the first test.
Iirc, there are a couple of putative wave-action generators that are now re-purposed as “artificial reefs” around Australia’s coastline too.
You mean the ones that have washed up on the shores, an eyesore on beaches, with the local councils trying to figure out how they can remove them without spending millions.
Lockheed developed their Dam-Atoll wave action electrical generator in 1979 and patented it. It went nowhere.
https://youtu.be/loLXUTKvp4M?si=gMBlpLmZj-2V8cVX
B-b-b-but they’re s-s-s-saving the p-p-p-planet!
The only way to guarantee continuous generation is to have a number of different plants at different places on the coast that have high tide at different times.
It would work but be very expensive because of the duplication of plant.
But I can see that it’s an attractive idea to the greenies who never think beyond the basic concept.
So many words with numbers plucked out of the air. Phase 1 is very small – presumably as a trial before building more. Surprised that in the calculations here no mention of economies of scale was mentioned. Isn’t that a basic part of economics? How much will that reduce costs? No need to guess, look it up here: https://www.lowcarboncontracts.uk/news/the-meygen-tidal-stream-project-pioneering-sustainable-energy-generation-from-the-ocean/ For the next 28MW the agreed strike price comes down to 17p/KwH. So 7 times bigger, 10 times cheaper. The planned complete project is 10 times bigger again. Will prices reduce by 10 times again? Most probably not, but halving seems reasonable so down to about 9p/KwH.
By the way it took about 30 seconds to find that link. I thought readers of this site were skeptical? Why don’t you apply that skepticism to the articles here? Does it sound right? Are there any resources with figures which disagree with the article? Simple, basic questions. Is a series of education articles required on how to be skeptical?
We should be skeptical of the info in your link since it reads like a press release for the tidal project rather than an impartial review on the merits.
At a strike price of 17p/kWh [~$0.22/wKh] the tidal project is much more expensive than CCGT produced electricity. Of course this tidal project requires something reliable to back it up so you are paying for two systems. Thus it doesn’t refute the findings of Willis’ article.
btw Where is your link for the price dropping by half? Or is that just motivated thinking?
Numbers “picked out of the air”? What are you smoking? Those are the real numbers for the Maygen plant.
And your “economies of scale” is like the guy who said “Yes, the supermarkets lose a little money on every item, but they make up for it by selling such a large volume! It’s economies of scale!”.
I note that your whiz-bang article doesn’t say even one word about the actual costs of the Maygen plant. It’s all about pie-in-the-sky numbers for the future … and if you believe them, more fool you. You’ve already had this “strike price” grift played on you by the offshore wind industry, but it seems you learned nothing.
For example, in 2024, the Seagreen offshore wind farm received £104 million for generation, £198 million for constrained (curtailed) volumes, and £64 million for premium output reduction, resulting in a total consumer cost of £367 million for 1.36 TWh delivered—an effective cost of £270/MWh, far above the strike price.
The strike price does NOT include the following: curtailment/constraint costs, grid balancing/ancillary costs, premium output reduction costs, or options/lease fees.
It also doesn’t include the MILLIONS of dollars in subsidies that the MeyGen project has gotten.
MeyGen has received a combination of grants, government funding, and revenue support mechanisms since its inception. Key subsidies and support include:
So to make just the Phase 1A of this sucker work, it got the following in TAXPAYER MONEY to date:
DECC: £13.3 million
Scottish Enterprise (Renewable Energy Investment Fund): $14.62 million
Highlands & Islands Enterprise (HIE): £3.31 million
The Crown Estate: £10 million
Department for Business, Energy & Industrial Strategy (BEIS); £10 million
So the taxpayer is already been fleeced of FIFTY ONE MILLION POUNDS … and as they say they say on TV, “But Wait! There’s More!
It also got a $200 per megawatt-hour subsidy for the first phase, so there’s another £5 million pounds or so out of the taxpayers’ pocket.
And you sit back and want to tell us what a wonderful deal this is? As someone said below, “Is a series of education articles required to teach you how to be skeptical?
Protip: Any renewable energy project that requires the taxpayers to cough up fifty-one million pounds is NOT economical.
In any case, since you have said in a most arrogant and unpleasant manner that my ACTUAL costs of the Maygen plant are completely wrong, how about you stop wasting both oxygen and our time and tell us exactly which of my costs are wrong, and what the real costs are.
I’ll wait …
w.
You’ll wait a long time, Wills.
But we don’t only use Norwegian gas, lots of gas from the USA comes into Grangemouth.
Very nice Willis, excellent work. Any country or state that bans development of a resource within their boundaries should be forbidden to use that resource no matter where it comes from.
They could be saving theirs for future use….a pretty standard investment and military strategy…
Do these chop fish like wind turbines chop birds?
Nope. They’re moving much more slowly. Tips of wind turbines are moving at up to 300 mph.
w.
Scotsmen being canny with money is a myth, they are utterly reckless with the stuff.
They were broke in the 18th Century so embarked on the Darien scheme which sucked up 20% of the nation’s income and failed, twice.
We were bailed out by the English (which we have never paid back) and joined the Union. Since then, we have been subsidised by the English, including under the Barnett formula, which hands the nation tens of millions of GBP to it every year.
Scotland has, now, an income tax rate 1p in the pound higher than in England and still can’t balance the books.
The former SNP leader (Nicola Sturgeon aka Wee Nippy) and her husband have been embroiled in scandal, including the question of a missing £600,000 from the public coffers.
Glasgow is the drugs capital of Europe, recording more deaths than any other city, and the solution? To introduce government run ‘Drug Lounges’ where addicts can take their preferred poison ‘safely’. Since when, drug deaths have increased. But no matter, it’s bound to work eventually.
Then there’s the Ferry scandal. The government nationalised a ferry construction company, which simply couldn’t keep up with the changing demands of government policy on how ferries between the mainland and the islands should be built.
Once the greatest shipbuilding nation in the world cannot now deliver a few little ferries. The only one to be launched was an ‘eco friendly’ model running off some daft concoction of fuels which, it turns out, is more ‘polluting’ than the outgoing, ancient, diesel engined model it replaced.
In short, never trust my fellow Scot’s with money. It’s likely to be ‘lost’, wasted, embezzled or frittered away on ludicrous schemes which have no prospect of succeeding.
Thanks, HotScot. Most interesting.
w.
“Scotland sits atop trillions of cubic feet of natural gas”
I didn’t find anything about this in the references at the bottom of the article. Could you please provide a reference. If the gas in question is under the North Sea, I think you’ll find that it is the UK Government that has control over the exploitation of that gas but having said that, the Scottish Government is just as hostile to the exploitation of natural gas as is the UK Government.
With regard to the Scottish reputation for being canny and thrifty, that may possibly have been true at some time in the past but I would imagine that levels of personal debt are just as high in Scotland these days as they are in England. And don’t forget Fred ‘the Shred”s role in the UK banking crisis of 2008.
Professor Mike Stephenson, Director of Science and Technology at the British Geological Survey said:
“The central estimate of shale gas in place is 80 trillion cubic feet and the central estimate for shale oil in place is 6 billion barrels of oil but reserves cannot be calculated at this stage before drilling and testing take place.
https://www.gov.uk/government/news/estimates-of-shale-gas-and-oil-in-scotland-published
Another subsidy harvesting scam without which it’s not economically viable.
Grok explains:-
Scottish Government Funding: The project was awarded £23 million from the Scottish Government to help develop the world’s first large-scale tidal energy farm.
• Saltire Tidal Energy Challenge Fund: In March 2020, MeyGen received a £1.5 million grant from the Scottish Government’s £10 million Saltire Tidal Energy Challenge Fund to develop a subsea tidal turbine connection hub for the next phase of the project.
• UK Government and Other Funding for Phase 1A: In September 2014, a financing package of £51.3 million ($78 million) was secured for MeyGen Phase 1A, which included £13.3 million in direct grants from the UK Government’s Department of Energy and Climate Change (DECC) and Highlands and Islands Enterprise (HIE). Additionally, £7.5 million in debt was provided by Scottish Enterprise, and £10 million came from The Crown Estate.
• European Commission Support: The project secured a £14 million (€16.8 million) revenue support package from the European Commission’s NER300 programme for innovative low-carbon energy demonstration projects for MeyGen Phase 1B in October 2015.
• Scottish Enterprise Loan: In 2022, MeyGen secured a £2.5 million loan from Scottish Enterprise to support further development.
Note: If you are wondering who The Crown Estate is, and why it would splash out £10 million – The Crown Estate is land owned by the Crown which includes the seabed within UK maritime territorial limits. The Crown Estates collects rents on windmills (on-shore and off-shore), solar installations and in this case tidal installations.
This provides King Charles II with a “nice little earner”. However his ancestor George III ceded revenues from Crown land to the Exchequer in exchange for a guaranteed annual stipend… The Sovereign Grant. But that stipend is a percentage, 25%, of revenues received. Thanks to all those off-shore windmills and other installations on Crown land, The Crown Estate has had a huge windfall, so much so that to avoid criticism it was agreed with Our Clown Prince of Windsor that he would get “just” 15%.
So the numbers…
… the Sovereign Grant for the financial year 2025-2026 will be £132 million. This represents a 53% increase from the £86.3 million allocated in 2024-2025, primarily due to record profits of £1.1 billion from the Crown Estate, driven by offshore wind farm leasing.
Not surprising Charles is such a fan of “climate change” and Net Zero, is it?
Well, from a selected perspective, we have had a demonstration project. It is still ongoing but the evidence revealed thus far indicates it is far from an optimum solution.
In the UK tidal schemes for the Severn Barrage have been proposed in 1920,1933,1944, several in the 1960s and 1970s and 1981. The 1981 proposal was originally costed at £5.6bn but was cancelled when the cost rose to over £10bn.
Tidal sites in Morecambe Bay and the River Mersey have also been investigated but eventually came to naught.
Willis – you have been on a roll lately. I categorize this type of tech along with the nonsense re: batteries having 1800 mile range that can be fully recharged in 5 minutes as “renewable porn”. Keep up the great work, I always enjoy your posts, even the more technical ones that I frankly have trouble deciphering.
I have to say it again. An energy source that cannot respond customer demand is not suited for supplying the grid. The energy produced will have little and sometimes negative value. The cost of production doesn’t matter if the product is useless.
Yes, machinery that has to be built in the ocean is best avoided. Just because a form of energy exists is not a reason to develop it.
What is most disturbing is the ignorance of the Scots who are governing when they do not seem to have a grasp of basic mathematics or even simpler arithmetic. In the fifties and early sixties you could give a child a word sum with this data to determine which of these, gas or tidal electricity, is much cheaper and they would quickly work it out. Has education become so dumbed down that bright pupils and even university students cannot work this out in their heads or so indoctrinated they cannot believe the results?
Good students at one time liked to give mathematically correct answers to impress their peers. Now they are taught that only politically correct answers will allow them to pursue their chosen career.
La Race tidal power station in France has been running since 1966, so much longer than this Scottish ‘marvel’.
The French never built another though which is a reflection of it’s potential?
Again as with many renewable generation types it fails on providing the technical attributes required, power on demand as required, inertia, reactive power etc, so requiring considerable support from conventional generators.
As I frequently say, because it can generate electricity does not mean it is suitable for grid supply. Far too few who have the authority to select what is connected to the grid understand the basics.