As recently as 2014 the government agreed contracts to buy electricity from wind farms for £150 per megawatt-hour, in 2012 terms, several times the market price. The projects approved yesterday are set to supply power for as little as £39.65 per megawatt-hour, also in 2012 money: a 74 per cent drop. The reductions pose a challenge for nuclear developers. Hinkley Point C, the only plant under construction, has a contract at £92.50 per megawatt-hour. EDF, the French company building the Somerset plant, said yesterday that its sister project at Sizewell, Suffolk, would be “significantly cheaper”.
Times 21st Sept 2019 read more »
Alistair Osborne: Who wouldn’t prefer clean energy from Dogger than, say, Hinkley Point C: the £20 billion nuclear disaster in leafy Somerset? The latest round of offshore wind contracts is quite a moment. For the first time, it looks like being subsidy-free. Companies have agreed to build 5.5 gigawatts of new capacity, enough to power almost seven million homes, for a guaranteed price of as little as £39.65 per megawatt hour – in 2012 prices. Compare that to the price for when the turbines start whirring in 2023-24, also in 2012 money: £48.13/MWh. In short, clean energy without any extra cost to the consumer. In just five years, wind has blown the competition away. It was only in 2014 that Dong Energy, now Orsted, signed up to build the 1,200MW Hornsea 1 project at a strike price of £140/MWh. By September 2017, the guaranteed price for the 1,386MW Hornsea 2 was down to £57.50. And now it’s 30 per cent cheaper again: a dizzying drop that drives home two things. First, that Britain, blessed with a nice bit of breeze, leads the world in offshore wind: by next year it’ll have 10GW of installed capacity. Second, that the more you build, the cheaper it gets. If only the same thing could be said for nuclear power. The strike price for Hinkley Point, in the same 2012 money, is a rapacious £92.50/MWh: a socking bribe to get France’s EDF and its Chinese partner to build the thing. It’s set to rip off consumers for 35 years. Naturally, it’s at least eight years late: now shooting for operations in 2025, not 2017. Its French prototype in Flamanville, where building costs have more than trebled to €10.9 billion, is at least ten years late. Oh, and its welding’s dodgy, too. And nuclear’s not even green: it comes with a vast clean-up bill. True, it brings baseload energy that wind can’t yet match. But storage technology is advancing all the time. So why’s the government persisting with last century tech that comes at a radioactive price? Yes, offshore wind might endanger a seabird that’s forgotten its specs. But, luckily, it’s a bigger threat to another species: nuclear white elephants.
Times 21st Sept 2019 read more »
Wind has won the argument. The auction prices for offshore projects announced today have blown away the competition. Four projects on the Dogger Bank – more than 60 miles out into the North Sea, and invisible even to the most outraged Nimby armed with a telescope – will have five gigawatts (GW) of capacity at a strike price ranging from £39.65 to £41.61 per megawatt/hour (MWh) from 2023 to 2024. A further project off Scotland will come in at similar price levels. This is 30pc below the amazing figures achieved in the 2017 auction (£57.50) that stunned the power industry, which in turn were a fraction of the Treasury’s previous estimates. The market price of wholesale electricity this year has been around £50 MW/h so the new CfD contracts do not entail subsidy. We are moving beyond that stale debate. The new arrays will start delivering electricity to the grid from the first week. The process is so streamlined on the Humber that towers are transported in six-packs on giant COSCO ships and are then erected along with the nacelle and the blade in a single working day. The power is switched on the next day. Bingo. Would it be churlish to note that the EPR nuclear reactors in Flamanville and Olkiluoto – pioneers for Hinkley Point – are a more than a decade behind schedule, even leaving aside the hideous cost? The strike price for Hinkley is £92.50 and this is already over £100 when adjusted for inflation. The new wind projects have a combined capacity of 5.6 GW. This is not the same as base load power from nuclear plants lest there be any confusion. However, the average yield is rising fast. The “capacity factor” of the new generation of wind farms in the North Sea will be around 60pc with the advent of taller cathedral-sized turbines and hi-tech smart blades that pitch automatically into the wind. Therefore this amounts to around 3.3 GW of deliverable power. Energy storage costs are plummeting so fast that we can already envisage long-term back-up for periods of low wind at a price that will match or undercut imported gas by the late 2020s. Bloomberg New Energy Finance forecasts breath-taking gains in the production of “green” hydrogen from electrolysis over the next decade as that technology comes of age. The hydrogen can then be burned as a zero-carbon fuel in peaker plants when needed. As we reported in August, a cryogenic liquid air storage project by Highview Power is already up and running in Bury. The company is eyeing levelised costs of around £40 MWh at future projects within a decade once scale is achieved. It can lengthen the storage time to one, two, three, or four weeks almost exponentially without much extra outlay. With such advances the intermittency objection against offshore wind fades away. The Government plans to expand offshore wind to 30 GW by 2030, making it the backbone of our power system. Today’s CfD auction results are likely to push this target yet higher – perhaps to 35 GW or more – as rival sources of energy fall by the wayside. The official Committee on Climate Change wants 75 GW by mid-century, at which point we would be broadly self-sufficient in electricity with some to spare for power-to-gas electrolysis. We could go further yet, subject to the constraints of marine eco-systems. Britain could become a major supplier of power to Europe’s industrial core and a supplier of green hydrogen worldwide. This country is very close to cracking the electricity challenge and therefore also close to cracking zero-carbon power for electric vehicles and rail transport at low cost. Rejoice.
Telegraph 20th Sept 2019 read more »
Guardian 20th Sept 2019 read more »