Electricity generated from onshore wind now being installed in the UK is over 30 per cent cheaper than Hinkley C – and that’s using official market data. Onshore wind schemes now being installed are being paid over 30 per cent less than what Hinkley C would be paid under the UK Government’s current agreement with EDF if it was generating now. Of course this 30 per cent is really a big underestimate of the price difference because Hinkley C is offered the prospect of a loan guarantee for around two thirds of the capital costs – a commitment that is, metaphorically, worth its weight in gold, and one that is simply not available to onshore wind schemes.
You don’t believe me? Well work out the sums yourself. Onshore wind’s income stream essentially consists of two items, first the wholesale power cost, which since December has been running at around £30-35 per MWh, and then it receives 75 per cent of the value of a renewable obligation certificate (ROC) which at the latest e-auction price was valued at £42.70. So that gives you a price paid to onshore wind schemes being set up now of £67 per MWh.
You can look at the data on the following websites:
Meanwhile the much quoted price offered for Hinkley C (and even that is not enough it seems) is £92.50 per MWh (over 35 years – onshore wind contracts only last for 20 years). But this £92.50 price, much quoted as it is, is out of date. This is a figure, according to the agreement between the Government and EDF, expressed in 2012 prices, and which is subject to uprating using the Consumer Price Index (CPI). If you uprate the 2012 figure into today’s prices you get something more like £97.50. Compare that with the £67 being paid to newly installed onshore wind farms! And, there are quite a few going up as they race to meet the Government deadlines of being established within the next year or so. According to RenewableUK figures there are over 2.5 GWe of onshore wind under construction at the moment.
Of course even the £97.50 for 35 years with a two-thirds capital underwriting is not enough, it seems for EDF. They are now demanding that the French Government throw more subsidies at them to build the project. Imagine that, a British power station subsidised in full view by French taxpayers and electricity consumers! Meanwhile the British Government will not let onshore wind developers (or solar farm developers) compete for any future contracts to supply electricity. The British Government much prefers to throw subsidies at conventional power stations through the capacity market in a failing effort to get more gas fired power stations built and also offer much higher contract prices to nuclear power developers who can’t deliver their projects!
They throw money at dirty power and give none to the cheapest clean energy sources!
What an energy policy!
Dr David Toke is Reader in Energy Politics in the Department of Politics and International Relations in the University of Aberdeen
This article was originally published on Dave Toke’s Green Energy Blog