A couple of weeks ago (I think September 11) I was watching BBC news mid morning, following the Hurricane Irma story and I happened to catch an editorial on the recent CfD auction where the lowest bids for offshore wind came in at £57.50 / MWh, well below the bids in the first round where £120 per MWh were the norm. The young female presenter interviewed the CEO of Renewables UK and a number of untrue statements were made. I put this down to ignorance on the part of the BBC and duplicity on the part of Emma Pinchbeck from Renewable UK. Every time I see a report like this I want to send a complaint to the BBC – but I just don’t have the time. And there are encouraging signs that the BBC are trying to get their act together. In the Web version of the story they do interview EDF and get the opinion from the nuclear side of the tracks.
[Inset image is one of the sub-stations on the Beauly-Denny power line. Politicians tend to look at projects like this and see jobs and prosperity. The alternative view that tends to be overlooked are additional capital and maintenace costs that have to be added to electricity bills.]
Let me begin with some of the errors made in the BBC news piece which I am recounting from memory.
Government Subsidy
Contracts for difference (CfD) were referred to as a government subsidy paid for by the tax payer which they are not (this mistake is repeated in the web version of the report). They are instead a price guarantee to the generating company legislated for by the government and paid for by the BILL PAYER. If the prevailing price for wholesale electricity is £45 / MWh the bill payer still has to pay £57.50. The “subsidy” element is the £12.50 additional payment.
…click on the above link to read the rest of the article…
Hinkley still scores on reliability and low carbon ….. but the extent to which its costs are obscene is now plainer than ever. In Monday’s capacity auction, two big offshore wind farms came in at £57.50 per megawatt hour and a third at £74.75. These “strike prices” ….. are expressed in 2012 figures, as is Hinkley’s £92.50 so the comparison is fair. As for the argument that we must pay up for reliable baseload supplies, there ought to be limits to how far it can be pushed. A nuclear premium of some level might be justified, but Hinkley lives in a financial world of its own, even before battery technology (possibly) shifts the economics further in favour of renewables …..
