THE cost of building offshore wind farms has fallen massively, making the power they generate cheaper than nuclear. The milestone is a huge boon to the renewables industry, and has be achieved far earlier than expected. Aggressive bidding for a multimillion-pound pot of government subsidies means an offshore wind farm in the Moray Firth will be built for £57.50 per megawatt hour, about half the price of building a wind farm two years ago. The cost for the new nuclear power station at Hinkley Point is £92.50 per MWh. Scottish Renewables deputy chief executive Jenny Hogan said “The cost reductions seen in offshore wind in particular have been dramatic and are testament to the determination of developers to drive down costs. The scale of innovation taking place across the sector and its growing supply chain show the importance of ensuring a viable, competitive route to market is available for clean power technologies.” “However, onshore wind and solar are currently excluded from competing in contract-for-difference auctions. The government has the tools to drive down costs even further and these technologies can and should be allowed to play their role in delivering the government’s own industrial strategy.” The SNP said the Tories’ “wrong-headed” energy policy had been shown up. MSP Gillian Martin said: “This is excellent news for Scotland’s flourishing and world-leading renewables sector – and shows how misguided the Tories are on energy policy. The price of offshore wind energy has been falling for years – yet the Tories insisted on pushing ahead with their expensive white elephant project at Hinkley Point. Renewable energy is the future – offering sustainable jobs, economic growth and helping us tackle climate change and meet our environmental targets. The Tory obsession with nuclear power is frankly bizarre.”
The National 12th Sept 2017 read more »
The government is under pressure to reconsider its commitment to a new generation of nuclear power stations after the cost of offshore wind power reached a record low. Experts said green energy had reached a tipping point in the UK after two windfarms secured a state-backed price for their output that was nearly half the level awarded last year to Britain’s first new nuclear power site in a generation, Hinkley Point C. Vince Cable, the leader of the Liberal Democrats, said the breakthrough should prompt a rethink of the government’s energy plans, which have pencilled in atomic plants at Wylfa in Wales, Sizewell in Suffolk and Bradwell in Essex. “The spectacular drop in the cost of offshore wind is extremely encouraging and shows the need for a radical reappraisal by government of the UK’s energy provision,” he said. The government spending watchdog this year described Hinkley as a “risky and expensive” project that generations of British consumers will have to pay for through electricity bills. Experts hailed Monday’s auction results, for a group of windfarms that will open early in the next decade, as evidence that large scale renewable projects had come of age in Britain.
Guardian 11th Sept 2017 read more »
Bloomberg 11th Sept 2017 read more »
The persistent myth that green energy is expensive has been shredded by the revelation that windfarms will be built around Britain’s coast far more cheaply than new nuclear reactors. New power stations in the UK today are usually only built with the certainty provided by subsidies paid through energy bills, so the record low guaranteed price awarded to the developers of three new mega offshore windfarms today is, first and foremost, welcome news for consumers. Ironically for the party that champions free market economics, the Conservatives’ commitment to a fleet of new nuclear power plants is being challenged by competition. With a major government review of the cost of energy due out in October, there are calls for Theresa May to at the very least commit to further support for offshore wind and, more radically, to drop plans for new nuclear. It’s become clear which way the wind is blowing.
Guardian 11th Sept 2017 read more »
Developers, green groups and politicians have welcomed the latest results from the UK Government’s Contract for Difference (CfD) auction, which has seen the cost of offshore wind halve over the last two years to set a record low-strike price of £57.50 per MWh. Results published by the Department of Business, Energy and Industrial Strategy (BEIS) show that 11 energy projects worth £176m annually were awarded contracts in the auction. Three offshore projects, the 1.4GW Hornsea Project Two, the 860MW Triton Knoll farm and 0.95GW Moray Offshore Windfarm (East), representing 3.2GW of new capacity, were awarded contracts. The Moray and Hornsea projects were issued contracts with a record strike price of £57.50 per MWh, while the Triton Knoll project gained one at £74.75. The mean average strike price for the projects was £66.13 per MWh, well below the sector’s target to bring costs below the £100 per MWh threshold by 2020.
Edie 11th Sept 2017 read more »
The world’s biggest offshore wind farm will be built in British waters at a fraction of the price of the Hinkley Point nuclear plant in a breakthrough for the renewable energy technology. Ministers were urged to put more offshore wind farms at the heart of Britain’s industrial strategy after new subsidy contracts yesterday showed their cost has fallen 50 per cent in two years. Developers of the record-breaking Hornsea Two wind farm off the Yorkshire coast and a second large project off Scotland were awarded contracts guaranteeing them a subsidised price of £57.50 for each megawatt-hour (MWh) of electricity they generate for 15 years. The price compares with the £92.50/MWh price guaranteed to Hinkley Point in Somerset for 35 years and prices of up to £120/MWh awarded to other offshore wind projects two years ago. The subsidies will be funded by levies on energy bills. Britain’s nuclear industry defended itself last night as green campaigners argued that the offshore wind price should mean the “nail in the coffin for new nuclear”. The 1.4-gigawatt Hornsea Two wind farm, 55 miles from Grimsby, is due to be completed by April 2023, two and a half years before the earliest possible date for the first power from Hinkley Point, which is already facing delays. Greg Clark, the business and energy secretary, stood by the need for nuclear plants as part of a “diverse energy mix”. “There will be times when the wind isn’t blowing so you need completely reliable energy,” he said. “We are upgrading our energy infrastructure for the future including new nuclear and . . . important renewables like offshore wind.”
Times 12th Sept 2017 read more »
The price of renewable energy is falling faster than anyone dared hope. Three years ago the builders of the Hornsea One wind farm off Grimsby won a contract from the government to produce power for £140 per megawatt-hour (MWh), roughly three times the average wholesale energy price at the time. Yesterday, at an auction for the right to build a second Hornsea wind farm, competing bidders drove the price down by nearly 60 per cent compared with 2014, to £57.50 per MWh. The level of subsidy in these prices has fallen from nearly 200 per cent of the wholesale price to about 20. These numbers are little short of revolutionary. Another giant project off northern Scotland will produce wind power for the same price, which has halved in two years. Offshore wind power capacity is now cheaper to install even than new gas-fired power stations and its unit cost is a third lower than that of Hinkley Point C, the £19.5 billion nuclear plant being built in Somerset. Wind power, of course, remains intermittent. But new technologies are enabling big electricity users, especially in heavy industry, to manage their demand to take advantage of sharp rises in wind power supply. Older but updated technologies, batteries chief among them, will let homes and businesses store renewable energy when it is produced to be used when it is needed. Since final approval of Hinkley Point C last year its main French contractor has added £1.5 billion to the budget and 15 months to the construction timetable. When it comes on stream, in 2025 at the earliest, its constant high output will be hailed as an advantage. It is true that the country needs a guaranteed “base load ” capacity, but at this price the case for such an unwieldy and unproven design is hard to sustain. In the future, nonrenewable power sources will need to be turned up and down to complement renewable ones. This is possible with small gas-powered plants, but not with nuclear giants. Yesterday’s auction should be taken in government as a signal to redouble investment in research and investment in renewable energy, energy storage and the smart grid. It is also a clear signal that nuclear energy on the scale of Hinkley Point is fast being left behind.
Times 12th Sept 2017 read more »
Left to its own devices, the market will not deliver on clean power beyond 2021. Anyone setting long-term policy to secure the UK’s energy supply deserves a degree of sympathy. When the government first set its strategy to replace the UK’s ageing fleet of nuclear power plants and agreed key terms of the much-maligned deal for a first plant at Hinkley Point, oil prices were above $100 per barrel. Rising global demand was expected to push them higher, sending gas prices up in tandem. Now, oil seems likely to stabilise at around half that level. Meanwhile the costs of renewable energy have plunged. The latest auction of government subsidies to provide electricity from “less established technologies” is a striking illustration of just how fast things have changed. Two offshore wind projects won contracts after bidding for a guaranteed price as low as £57.50 per megawatt hour, less than half the average price awarded to offshore schemes in 2015. A third project won a guarantee of £74.75/MWh. This rapid improvement has been aided by lower commodity prices and by a consolidation of UK providers that has pushed out smaller operators and helped those remaining achieve economies of scale. Turbines have also become bigger and more powerful; and developers such as Denmark’s Dong Energy, originally an oil and gas company, are using their expertise in offshore construction to good effect. If the government does want nuclear plants to go ahead, it will need to consider playing a more direct role in funding projects to limit the cost of capital All this is immensely welcome, especially given the huge potential for offshore wind generation around the UK and the government’s reluctance to allow significant onshore expansion. However, it will sharpen scrutiny of UK energy policy. In particular, it casts the Hinkley Point scheme – under which the gov ernment has promised to pay the French and Chinese developers an inflation-linked price of £92.50/MWhfor 35 years – in an unflattering light. Despite the clear mistakes made in the Hinkley Point deal – rightly excoriated by the National Audit Office – this does not obviate the argument for building new nuclear plants to meet a part of the UK’s energy needs. Despite the huge advances in renewable generation, and progress in dealing with challenges such as intermittency, it will still be a matter of decades before the system can function without traditional generation. A reliable source of supply that contributes to energy security deserves some premium.
FT 12th Sept 2017 read more »
Tom Greatrex of the Nuclear Industry Association said: “It doesn’t matter how low the price of offshore wind is.” Why? Because renewable energy is heavily intermittent. That £57.50 strike price looks very impressive compared to Hinkley’s price, but it doesn’t take into account the periods of time when the wind isn’t blowing hard enough to move the turbines – or when it’s blowing too hard. Even this fight is a mark of how far the industry has come, however. Only 10 years ago, the debate over the viability of renewables was not about intermittency or the problems it posed for the power grid. Instead, it was about the sheer cost of generating the power. That phase of the debate is now passing. Onshore wind is already cost competitive, although it remains understandably unpopular with those who have to live near it (imagine setting up a ginormous washing machine on a hillside near your house and you’ll start to grasp the problem). Some solar farms are already operating in the UK without subsidy. These costs are forecast to fall even further in the coming years. Some estimates have suggested that the cost of building new wind and solar plants will fall by about 60pc in the next 20 years. Unless Britain plans to manage new demands from the next generation of power plants, it will hit problems That’s from levels that are already close to cost competitive with traditional fossil fuels. Generation costs are not, unfortunately, the whole story. The shifting energy mix imposes new costs that are not captured by the plants themselves. Broadly, there are three categories of cost. The first is the cost of updating the national electricity grid so that it can cope with large inputs from power sources that turn on and off every so often, not something the grid is currently designed for. The second is the cost of ensuring that the system can cover peak demand even when the wind isn’t blowing or the sun isn’t shining. In the UK, that has meant drawing up plans to commission highly expensive open cycle gas turbine plants – a type of gas plant that can turn on and off. The cost of these plants is sky high, upwards of £150 per megawatt hour. The third is the cost of switching off renewable energy sources when power generation is so high that it might overload the grid.
Telegraph 11th Sept 2017 read more »
University College London (UCL) described the unexpected slashing of prices of electricity from new windfarms, including one in the Moray Firth, as a “tipping point” that would turn the energy world “upside down.” EDP Renewables’ planned Moray Offshore Renewable Power development was one of three offshore farms among 11 schemes to win UK Government subsidies, with prices as low as £57.50 per megawatt hour (MWh) of electricity, for wind projects being delivered in 2022-23. Hailed as “astounding” by industry body RenewableUK, the prices are considerably lower than the cost of power from the new Hinkley Point C nuclear plant, which secured subsidies of £92.50 per MWh. Michael Grubb, professor of international energy and climate change policy at UCL’s Energy Institute, said: “Today’s auction results confirm a new era in UK energy. Wind energy will take the mantle as the UK’s most important and valuable energy resource as our oil and gas depletes, turning the energy world upside down.” Vattenfall, which is developing Aberdeen’s European Offshore Wind Deployment Centre, said: “Offshore wind continues on its dramatic cost reduction pathway, promising the British consumer low-cost, competitive, fossil-free power for years to come.”
Energy Voice 12th Sept 2017 read more »