£2.7 Billion Bill for Floating Wind

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

https://www.gov.uk/government/news/record-breaking-auction-for-offshore-wind-secured-to-take-back-control-of-britains-energy

I briefly touched on floating offshore wind in the new AR7 auction, but it is worth a closer look.

At a strike price of £216.49/MWh at 2024 prices, or £226/MWh at today’s the technology remains ridiculously expensive, at more than four times the cost of gas power.

It is supposed be a new, developing technology, demanding investment. Yet the Hywind project off the coast of Peterhead has been operational since 2018.

Worse still, the current AR7 prices are even higher than the £201.97/MWh current strike price for Green Volt’s floating wind farm set in last year’s AR6.

Prices are going up, not down. So why are we still wasting money on what appears to be a white elephant?

The two new projects for floating wind agreed at AR7 have a budgeted subsidy of £133 million a year. This may sound insignificant, given that their electricity output will also be tiny, with capacity of just 192 MW.

But these CfDs give guaranteed, index linked strike prices for twenty years. Over the full period of the contract, a subsidy of £2.7 billion will be paid at current prices. Remember this is on top of the revenue from the electricity produced.

It still pales into insignificance when the whole of AR7 is added up. We have so far concentrated on costs per MWh, but in total over twenty years, we will be paying out a subsidy of £38 billion.

I can think of no other branch of government that could, or ever has, signed away £38 billion of taxpayers’ money on a white elephant that has zero value at all to the country.