Wind power costs are plunging and it might not take too long before they get down to £40 per MWh, well below recent UK wholesale power prices which have been at £45 per MWh in recent times. Offshore wind power costs have seen the sharpest decline, although falling prices for onshore wind should also be evident in the UK if only the UK Government were offering long term power purchase agreements (PPAs) for them as well as offshore windfarms. Anti-renewable commentators are still quoting costs for onshore wind power (£70-£80 per MWh) that are grossly out of date, relying on nothing more than than the fact that the Government have not offered any PPAs for them recently. Recent offshore wind farm auctions in the UK, Germany, Denmark and The Netherlands have seen prices plunge to below £60 per MWh and predictions are being made that prices will carry on falling. But why is this happening? This is a question that befuddles some anti-renewable energy think tanks and spokesperson who seem to think that some of the world’s leading corporations are spoofing us all. But there’s no spoof – it’s happening. But how can this be, given that until recently offshore windfarms have sometimes been costing £100 per MWh or more? There are six reasons for this that I can see: advances in computer modelling; digital control; smaller number of turbines for same output; fabrication and construction techniques for building the windfarms have been dramatically improved; considerable reduction in ‘supply chain’ costs have been achieved and some big multinational corporations are now seeing renewable energy as the central, rather than peripheral.
Dave Toke’s Blog 10th Dec 2017 read more »
Government officials have admitted the plan to put a cap on standard energy prices could scupper growing competition in the energy market, unless the regulator keeps bills high enough to make it worthwhile for consumers to switch. Ministers have argued that the first intervention in energy pricing since privatisation is necessary after Ofgem’s previous attempts to break up the “two-tier energy market” failed and its recent efforts will take too long to come into effect. Nonetheless ministers will hand over responsibility for the success of the cap to the regulator despite its “repeated, but ultimately unsuccessful, interventions”. The Government itself admits that this risks increasing costs while simultaneously putting the brakes on competition and investment. Fresh switching data shows that over five million customers have changed supplier this year, topping last year’s rate. In November alone 475,000 households switched to a better deal, 14pc more than in November 2016.
Telegraph 11th Dec 2017 read more »
The government has made no estimate of how much its proposed energy price cap could save households, despite Theresa May’s claim that it would cut bills by up to £100 a year. The prime minister has vowed to bring an “end to rip-off energy prices once and for all”. The plan to set a maximum price for gas and electricity would apply to about 11 million households that are on expensive standard tariffs and are not already protected by existing price caps. Ministers say that the cap is necessary after the competition watchdog found that most Britons were paying too much, amid inefficiency and excessive profits at leading suppliers. An official impact assessment being published today reveals that the government has not analysed how much the policy is likely to save households, or how much it will cost suppliers, amid warnings that some businesses could go bust. The absence of any cost-benefit analysis appears to run contrary to the government’s own guidance for new policies.
Times 11th Dec 2017 read more »