Windfarms around Britain’s coast will beat the planned nuclear power station Hinkley Point on price when the winning bidders for a £290m-a-year pot of government subsidies are announced on Monday, experts predict. Such a milestone would mark a dramatic cost reduction for a technology that was once far more expensive than atomic power, and could fuel calls for a rethink over the UK’s future energy mix. Industry watchers said successful offshore windfarm developers may secure guaranteed payments for power as low as £70-80 per megawatt hour in the government’s auction, known as the second Contracts for Difference Allocation Round. In comparison, France’s EDF has been promised £92.50 per MW hour for power from the two reactors it is building in Somerset, around twice the wholesale price. The subsidies are paid by consumers via levies on energy bills. Emma Pinchbeck, executive director at the industry group RenewableUK, said: “I think it’s a watershed moment for renewables. If the price comes in as low as people are suggesting, it means large-scale renewable generation will be cheaper than incumbent technologies. The idea that renewables are expensive is going to be undermined.” Howard said one reason developers might bid very low was because there was uncertainty over when or whether future auctions would be held for offshore windfarms in the UK. Pinchbeck urged ministers to commit to a timetable for further auctions. “The idea that there will be more auctions, that’s really important, for developing and keeping a supply chain in the UK,” she said. The government has allocated another £440m a year for further auctions held before 2020, but since the general election it has not made clear whether they will still go ahead. The results of Monday’s auction could ignite a debate over UK energy policy, and whether the Conservatives should rethink their long-standing plan for a new fleet of nuclear power stations to replace ageing reactors and coal plants, which are being phased out. Greenpeace said the low prices would mark “a huge moment for the UK energy sector”. Keith Anderson, chief corporate officer at one of the UK’s biggest energy companies, ScottishPower, said: “My challenge to the nuclear sector would be: look, here’s the cost reduction offshore wind has demonstrated. “The challenge to nuclear industry is if you don’t want people to criticise the £92.50 per MW hour [subsidy that nuclear is receiving], show us how you are bringing the cost down. That is a colossal challenge.” The nuclear industry argues that no single low carbon source could meet the UK’s power needs alone. “With two-thirds of the UK’s currently dispatchable generation capacity due to retire by 2030, including all but one of the current nuclear fleet, the UK will need the full range of low carbon technologies to provide the reliable, secure and readily available power for homes, businesses and public services,” said Tom Greatrex, chief executive of the Nuclear Industry Association. EDF said future new nuclear projects such as Sizewell C in Suffolk would be at a lower cost than Hinkley. The auction results, due at 7am on Monday, are also likely to inform a major government review of the costs of energy set to be published in October.
Guardian 10th Sept 2017 read more »
Emeritus Professor Keith Barnham: UK electricity prices will be much higher than Germany thanks to renewable energy cuts and nuclear subsidies. Briefing for meeting in Parliament.
Burning Answers 11th Sept 2017 read more »
Power from offshore wind in the UK will be cheaper than electricity from new nuclear plants for the first time. The development, revealed in figures from the National Grid, has been seen as a milestone in the advance of renewable energy. The plummeting cost of offshore wind energy has caught even its most optimistic supporters by surprise. Nuclear firms said the UK still needed a mix of low-carbon energy, especially for when wind power was not possible. The figures for offshore wind were revealed as the result of an auction for subsidies, in which the lowest bidder wins. Two firms said they were willing to build offshore wind farms for a subsidy of £57.50 per megawatt hour. That compares with new nuclear plants at a subsidy of £92.50 per megawatt hour for 2022-23.
BBC 11th Sept 2017 read more »
The cost to the UK taxpayer of subsidising offshore windfarms has plummeted by more than 50 per cent and is now well below the price the government has guaranteed to the developers of the contentious Hinkley Point nuclear power plant in Somerset. Three offshore wind projects have won subsidy contracts from the government in the latest auction for “less established technologies”, which was also open to projects such as tidal schemes but excluded solar and onshore wind. The price of electricity guaranteed to offshore wind developers in this latest auction has dropped to as low as £57.50 per megawatt hour – a significant fall from the average £117.14/MWh awarded to offshore schemes in the last comparable subsidy round in 2015. The latest “strike price”, which is guaranteed for 15 years and rises with inflation, is also well below the £92.50/MWh controversially promised by the government to the French and Chinese developers of the new Hinkley Point C nuclear power plant in Somerset. The Hinkley price, which also rises with inflation and is therefore already worth closer to 100/MWh, has been secured for the first 35 years of the plant’s operation.
FT 11th Sept 2017 read more »