Wednesday
Dec042013
by 
Bishop Hill
Bishop Hill Shuffling the deckchairs
Dec 4, 2013 Energy: wind 
The government looks set to change the levels at which they fix prices for electricity. It seems that hard pressed consumers are going to hand over less cash to onshore wind and solar operators but more to offshore ones.
Chief Secretary to the Treasury Danny Alexander described the shift in subsidy as "a rebalancing" and said overall spending would not change.
But Labour said "chopping and changing" pricing was bad for business.
As you can see it is fairly clear that all the big three political parties remain committed to ever-rising energy prices.
Reader Comments (59)
Bishop typo hi here?
The government looks set to change the levels at which they fix prices for electricity. It seems that hard pressed consumers are going to hand over less cash to onshore wind and solar operators but more to onshore ones.
Onshore x2
Bish, you mean more to "OFFshore ones"
Thanks, fixed.
The BBC story is a bit confusing. I think the changes in 2015 that are mentioned are to the subsidies paid via the RO system and/or strike prices. These apply to schemes over 5MW. The subsidies to schemes less than 5MW are paid through the Feed-in-Tariff scheme and these are due to change from April 1st 2014. Rumour has it that, because there has been a bigger than expected (by the Treasury) take-up of FiT subsidies in 2013, the FiT levels for onshore wind will be cut by 20% in April 2014. As always with DECC (and Ofgem, which administers the schemes), there is a great deal of confusion as to what is going on.
With elections getting ever closer, would it be cynical to suggest that offshore wind doesn't harm electoral prospects as much as onshore wind.
Anyone done an analysis of marginal constituencies and proximity to windfarms?
I find it unbelievable that the coalition energy policy madness continues on its shambolic journey towards a third world type crisis and yet there seems to be general acceptance by the public, industry, academics, opposition.....
SimonW, the BBC article says
"Mr Alexander denied suggestions the move was in response to Tory MPs unhappy at wind farms being sited in their constituencies"
which of course brings to mind Jim Hacker's First rule in politics: 'never believe anything until it's officially denied'.
Labour said "chopping and changing" pricing was bad for business". What does Labour know about business? I don't know how business has ever survived all those changes in prices of raw materials and other commodities!
The possibility that the government will sell off some state owned activities has raised speculation that the Met Office may get privatised.
They're beginning to panic a bit on the offshore wind front - I know from quite direct industry involvement that offshore activity is dropping off and major players are developing cold feet and beginning to shuffle - fears that the trough might turn out to be empty at the end of the queue are definitely present.
I think it's very useful to compare the actual press release touted across the MSM with say the BBC's interpretation.... The actual changed pricing still seems to be tentative and have an element of bargaining gambit about it.... in the case of hydro they're even offering to negotiate a price for individual proposals - a glimmer of desperation ?
tomo, that's an old press release. The new announcement will be out later today I think.
This in El País yesterday in an article about Spain's shortfall in differences between mandated consumer prices and the cost of generation (cumulatively 30 billion Euros currently);
"Officials from 12 European electricity companies were due to meet Tuesday with the European Union commissioner for energy, Günther Oettinger, to lobby for pan-European regulatory measures that favor combined-cycle power plants and reduce premiums paid for electricity supplied by renewable energy sources."
Reminds us that Davey is not entirely his own man.
All 3 parties are complicit in this renewables nonsense, yet each try to argue that somehow *they* have the best policy and of course are not individually responsible for the disastrous state of the nations energy policy.
It's like watching 3 burglars who have been caught red-handed breaking into a house arguing in court over who stole the least.
Pathetic, really.
Oops, wrong thread but kinda relevant.
tomo: It wouldn't surprise me if the message from Prof Gordon Hughes that the performance of offshore wind turbines degrades very rapidly such that they need replacing within about 15 years, has finally got through. Developers can see that with such poor turbine performance they will need much bigger subsidies to make a profit (or avoid making a loss). It is noticeable how many existing wind farms are being sold off by developers (who seem to have heeded the warnings) to gullible investors, who seem to have forgotten the old-maxim 'buyer beware'.
Thanks Paul I missed that quote. It also suggests that despite having no MPs the UKIP surge is having an effect.
I watched the whole of the Yes Minister series last year (to accompany my fitness campaign on the running machine!). Although it was shown in the 80s it is just as relevant today. It is more like a documentary than a satire though (see Climategate enquiries!). Highly recommended for any youngsters that missed out on it, it's quite a good history lesson in the political issues of that era as well.
Oh dear Bish, I also thought of the Titanic and its deckchairs as soon as I heard the news.
AND of course it doesn't slow the feed of money to the PM's in-laws. They will still be getting top whack.
Phillip Bratby@9:48 AM
yup - ROI on these projects looks like random betting on The Grand National - trouble is, the buggers are placing bets with tax, public borrowing and consumer levy derived funds - and even those aren't enough....
Paul Matthews
yep - let's see what DECC have actually said >>> compare and contrast to MSM blathering. It's not like any of the participants needs any actual evidence though is it?
SimonW - yes it was Maggie Thatcher's favourite program. The fact that she thought it was as good as a documentary tells you all.
Schrodinger's Cat: "...that the Met Office may get privatised."
And if we heed a rather small article in last week's DT about the MO saying they could not forecast the weather after December with any accuracy, but that December will anyway only be mild, it may get privatised sooner than we think if the weather turns arctic - as some expect.
Interesting comment ' Mr Davey also told MPs last week: "There will be some good news to announce on offshore wind shortly." As a fan of offshore wind farms it looks like a good day for the Windies amongst us! Hopefully we will understand our energy resources need to be based on diversity of sources and and ones that are likely to be ongoing. Hopefully someone in government will push for tidal barrages in the Severn estuary or the Norfolk wash in the near future.
If we have these infrastructures in place, it may cost us more at present, but as long as there is a moon in the sky and a sun moving masses of air we will have a power source which is not dependent on the whim of unreliable foreign governments.
Garethman - I am sure your enthusiasm for offshore wind and tidal is well meaning. But there are two key problems with both: low energy density and very high maintenance costs. Wind can be useful when small scale and in off-grid and remote locations where the cost of shipping diesel or coal is high, and that is about it. Trying to keep even a post industrial country like the UK powered with windmills is madness, which will very likely end in blackouts and bloodshed.
Dec 4, 2013 at 10:21 AM | Unregistered CommenterGarethman
Are you for Real?????????????????
Haven't you read anything on this and other Forums of how absolutely ludicrous Wind Generation is?
If Garethman is prepared to pay at least three times as much for an unreliable electricity supply, then he is welcome to it. Only people feeding at the subsidy trough want to see electricity consumers' money poured into unreliable, intermitttent and unaffordable generators. Industry can't afford it and neither can 99% of consumers.
Well, I rather like the idea of wind generation. I'd be very supportive of taking as much of it as any investor could build. As long as he builds it with his own money, and delivers power to me when I want it (and only when I want it) at no premium to the £50-60 per MWh (wholesale) that I currently pay.
I don't think we can rely on wind turbines for all our energy needs, that's why I said it needs to be part of a healthily range of resources. The issue about cost is up to the market. If it is too expensive, no doubt the market will decide it's fate in the longer term. However with most schemes of this nature the money and expense is up front. Thereafter it tends to fall. Wind and tide do not come free, but they are ours and to an extent reliable, unlike Russian gas supplies. I don't mind paying for something that gives the UK a long term investment in energy, i know it's expensive at the moment, but living next to a substantial land based wind farm it strikes me that some of the environmental concerns are exaggerated to say the least. Where the market can play a negative role is in the following situation. The government has just guaranteed £25 billion for a Nuclear power station on Anglesey. We could have just about equipped every home in the UK with PV rooftop generation where possible as well as schools and other building with large roof areas. It would have in conjunction with traditional energy resources, drastically cut down our need to import fuel and been a lasting gift to our children as well as providing employment across the UK. The major issue is that unlike other energy generation, once it is installed it provides very little profit for energy companies, and so those who see energy production in terms of profit and loss only are never going to give such schemes the thumbs up. PV reliability and lifetime is improving all the time and falling in price, so has to be worth consideration. If it's good enough for Anthony Watts, it is good enough for the rest of us.
Nobody would dream of using wind power to supply the grid were it not for the fact that DECC has rigged the market at huge cost to the consumer. The politicians committed themselves to impossible renewable energy targets and now we watch on as they squander our money, wreck our competitiveness, drive industry away and push up the numbers who die from the cold.
That's a rational approach Garethman, but some of the underlying assumptions don't hold up. Wind is not a new technology. Forgetting the centuries long history, in the modern era Vestas have been building turbines for over 40years commercially. Their business model still depends on there being state subsidies and they have a long record of opening subsidised factories in many countries, and then closing and moving them when the subsidy harvest is gathered in. By this stage wind should not need subsidy. If it was going to survive in the main generation market it would be able to compete by providing competitively priced electricty without needing governments to mandate pricing three times higher than other generators.
There is certainly a niche place for wind - rural and offgrid supply when backed with storage is an excellent place for wind, but it does not belong in the mainstream at the levels currently forced upon people.
I agree that the current nukes being purchased are way over priced, but that's down to incompetence in government, not the technolocy. The (two) sites now going ahead are simply replacing stations that are coming off line, so only keep us treading water and don't add anything to the mix. Ideally we need another 20GW of them.
Covering the country with PV would achieve not a lot - it still needs back up and would need a restructure of the grid even bigger than the one already necessary for wind. Sounds nice, but the bills would be even bigger!
You've not mentioned gas, which in terms of energy security is probably our biggest ace.
Ultimately it comes down to whether you regard energy as an essential enabler of modern life; in which case you make it as available as possible, as cheaply as possible - or you regard it as a necessary evil and ration it and price people out of using it. In the latter case of course you're condeming many millons to a standard of living equivalent to the 1950s.
Well the numbers are out and the deckchairs have not even been shuffled, they have been moved an inch.
In June, the draft strike price for onshore wind projects was set at £100/MWh. This has now been slashed to £95.
For solar, it's down from £125 to £120.
The BBC ("The government is to make big changes to the way it subsidises renewable energy") seems to have got the story completely wrong.
If you want a good laugh, look at the figures quoted alongside the BBC News website article, headed 'UK wind energy statistics'...
As I've posted in the Comments section, these are NAMEPLATE CAPACITY figures - and of course bear no relation whatsoever to actual output. Needless to say, the BBC has ignored this minor discrepancy.
Garethman
To be frank, going for wind and solar is a Pyrrhic victory
And just for emphasis and without being trite, from Wiki
"A Pyrrhic victory is a victory with such a devastating cost that it is tantamount to defeat."
Having worked on spacecraft solar works best when there's no atmosphere and you can point at the sun. And even then you lose around 20% in the power conversion.
The reality is that our policies are driven by what people would like in an ideal world rather than what is possible in the real world . In effect like believing in homeopathy to cure cancer without proof and getting rid of oncology wards.
Get on with fracking stupid!
If you want ANOTHER good laugh (see how good I am to you..?) go onto another feature on the BBC website entitled: 'UK energy mix: Where does our power come from?'
Look in astonishment at the graph (near the bottom) where the DECC have confidently predicted that, by 2030, 40% (that's FORTY PERCENT) of our power will come from 'renewables'....
That's in just seventeen years' time, folks - so better get those standby generators bought and fixed up for cold, still, winter's afternoons, when we're going to be 40% short of power...
Unless. of course, they've included 'biomass' which is another word for the complete trashing of North Carolina's forests...
Thanks Cumbrian lad. I agree that gas has to be part of the mix, the downside is that any major use of gas holds us hostage to the Russians who have shown they are quite happy to shut off supplies at a moments notice if they wish to re-enforce a political point. The first duty of any government is to protect it's people. so ensuring we are hostages to fortune does concern me. With ref to PV generation, everyone I know who had PV generates far more empower than they as a household can use, so it must be reasonably useful. However, in the winter when the sun is low the generation is not as useful, on the other hand that is when it tends to be windy. Tidal power is useful, but you would need a lot of barrages and there would be serious environmental protests. Oil is great, but our North sea oil is running out which requires us to import more anymore at prices beyond our control. Nuclear power is outrageously expensive, slow to build and develop and disatrous when things go wrong. So any energy productions has its downside. We must protect those who are in fuel poverty through a number of initiatives, it should not be beyond the capabilities of any decent government to effect this. The UK, whether we like it or not is getting cooler, (as a lefty warmest I'm happy to admit that) so our energy needs will increase. We need to ensure we don't put all our eggs in one basket, ensure a diversity of production and have accessible and reasonably prices power for all.
Garethman, as a nation we're sitting on vast reserves of gas. We just have to extract it.
"..it should not be beyond the capabilities of any decent government to effect this..."
It should not indeed, so we are forced to the conclusion that either we've not had 'decent' governments for some time, or that it is indeed beyond them.
Quite true. For example, that unreliable Blackpool City Council could go either way on fracking......
And if it's a good investment, private investors will risk the money upfront, and make sure the promise is followed through. That's what happens in the non-nationalised parts of the Evil Fossil Fuel Industry. No need for government funding. Otherwise, how, and when, will the market ever get to decide its fate?
The transition to other forms of energy, especially those requiring big upfront investment, will be helped by allowing development of known cheap fuels like coal and gas , not by suppressing them. Suppressing them and spending public funds on turkeys like wind power just increases the costs of everything (including building new nuclear capacity) and discourages investment.
Garethman; Germany has seen an enormous uptake in domestic solar panels coupled with dramatic growth in windpower. Yet they are building 10+ new coal-fired power plants.
The fundamental issue is that renewable power is not dispatchable, meaning that it is not consistently available when required. So it has to be backed-up by conventional plant. Hence, for a given increment of output, double the installed capacity is needed: renewable + back-up.
That kills the economics even before the extra infrastructure is added into the balance. Then there are the major problems with frequency control which have caused serious problems in Germany (and caused Poland to install interuptors on the interlinks).
As you say, solar does not do much in winter but neither is it consistently windy. A winter or two ago Europe endured weeks under a "blocking high" - not a breath of wind anywhere. If you want a clear record of the erratic performance of windpower, take a look at Gridwatch.
Did anyone catch Jeremy Vine on Radio 2 today? First item was on this very topic. I didn't catch much of the programme, I'd be interested on the views of anyone who did.
Garethman, as a nation we're sitting on vast reserves of gas. We just have to extract it.
We are also sitting on 250 years worth of Coal, which is even better for Base load than Gas.
Bish, at least the UKIP Rep was telling it how it is and the BBC allowed it as well.
All the rest of the people interviewed were extolling the virtues of Wind, especially Offshore, which is the worst case scenario.
Schrodinger's -
Who would buy it? - well it's already a branch of Greenpeace I suppose, so they might acquire it. Using funds provided by the Taxpayer of course.
Garethman: "PV reliability and lifetime is improving all the time and falling in price, so has to be worth consideration. If it's good enough for Anthony Watts, it is good enough for the rest of us."
Perhaps if you had read AW's justification for going with PV - like the incredibly high tariffs in CA - you would understand his reasons. In any case, when it comes to PV, the UK skies hardly compare to those of California.
Hi Garethman,
welcome, stick around, it's good to hear alternative views.
"..it should not be beyond the capabilities of any decent government to effect this..."
Agreed, energy policy is a fascinating problem for many of the reasons you touch on (security, mix, cost, maintenance etc). I fear for us to solve it effectively though we need to shift away from listening to those too emotionally involved to think straight (Greenies, NGOs and yes probably some on the sceptical side too) and let the experienced engineers in to sort it all out. Unfortunately we are currently a long way from that situation. Let the markets decide with private investment fighting to see who the winners will be.
Re the maintenance issue I read somewhere recently the question: which would you rather have?
Your turbine in a big well lit indoor hall with maintenance staff living nearby able to run a 24/hr shift rota.
Your turbines dotted about in (by definition) rough seas with limited and delayed access and terrible working conditions.
(similar argument for grid connections of course)
Claiming that wind power is "free" as people do is just nonsensical.
(Not an engineer, but many years ago as a trainee did get to watch a massive turbine fire being put out during a night shift (at the now defunct Thorpe Marsh power station). The impressive local guys had it under control well before the fire brigade arrived. Exciting stuff!)
"But Labour said "chopping and changing" pricing was bad for business." - of course price freezes are a different matter.
Lobby, and we yield. Part 183 in an endless series entitled "All your money is ours"
"Fewer new onshore wind farms will be built as subsidies are cut, but offshore wind payments increased following lobbying from the industry"
http://www.telegraph.co.uk/earth/energy/renewableenergy/10493889/Fewer-onshore-wind-farms-to-be-built-as-government-cuts-subsidies.html
Problems with offshore wind farms documented here
http://www.spiegel.de/international/germany/german-offshore-wind-industry-goes-from-boom-to-bust-a-914158.html
http://www.nce.co.uk/news/energy/turbines-issue-spotted-too-late/8631895.article
http://social.windenergyupdate.com/turbine-supply-chain/monopile-worries-mount-grouted-joint-doubts-linger
http://uk.reuters.com/article/2010/04/23/uk-offshore-wind-flaw-idUKTRE63M3H720100423
Some talk here about the Met Office being privatised - without being too facetious, doesn't it need to offer something that other folks might want to buy? I'm not seeing much, and we're well aware of the activities of many er, liabilities on their books.
IPO? Good luck with that.
Garethman - yes I take many of your points. Who would want to be in charge of energy supplies for the UK? - at the moment we have nobody!!.
The energy security issue has been my main argument for the best part of 40 years. We should have been building houses better in that time to ensure lower energy use now. Even when we had the North Sea and energy was much lower priced, it should have been a priority. The gas would have lasted much longer for a start.
I think you have to be pretty frugal with your electricity use to have enough from the average panel (4kW peak) and that is at the best of times. Even with today's rising prices and falling costs of PV - it is only the Feed-in-Tariffs that make it attractive which is why the solar salesmen were bleating about the reductions in FiT. The other problem, especially with the cheaper panels is that many lose 5% efficiency per year - do the maths for a decade of use.
I also agree with the comments in reply above. Anyone who thinks that wind will be cheaper in the long run is very deluded as the turbines will need replacing in 15 to 25 years max.
You mention wave and tide. It sounds attractive, especially tidal which is variable, but highly predictable, but not only is it environmentally bad as you say, but costs 6 times the price of a gas power station - see strike prices for the various forms of generation at link below. The price you need to pay to get anyone to invest in it. How much are you willing to pay to have that level of local security?
http://www.templar.co.uk/downloads/EMR_Draft_FiT_CfD_strike_prices.pdf
The way forward IMHO is to frack our own gas, much less disruptive than wind turbines on land anyway and move towards thorium based nuclear if we can find any engineers of course. You mention nuclear disasters - well there have not been many in half-a-century and if you strip out the Frankenstein fear element, nuclear power has caused the deaths of very few people. Try comparing it to deaths on the world roads in the same period.
The obsession with CO2 emissions in a world that isn't warming despite unprecedented amounts of CO2 being put out is leading to some very bad and very expensive decisions - or in some cases lack of decisions.
Schrodinger's Cat
"The possibility that the government will sell off some state owned activities has raised speculation that the Met Office may get privatised."
I can't help hoping that the Met Office is taken over by one of the usual suspects with an appalling across-the-board reputation like Capita, ATOS or G4S.
Even the most evangelical warmist would struggle to believe in the Met Office's credibility then, let alone be able to convince anyone else.