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Power United Kingdom

Prices For Offshore Wind Power To Rise By 50% (bbc.com) 188

Simon Jack reports via the BBC: The price paid to generate electricity by offshore wind farms is set to rise by more than 50% as the government tries to entice energy firms to invest. Its comes after an auction for offshore wind projects failed to attract any bids, with firms arguing the price set for electricity generated was too low. The BBC understands the government now will raise the price it pays from 44 pounds per MWh to as much as 70 pounds. It is hoped more offshore wind capacity will lead to cheaper energy bills. Energy companies have told the BBC that electricity produced out at sea would remain cheaper and less prone to shock increases compared to power derived from gas-fired power stations.

The UK is a world leader in offshore wind and is home to the world's four largest farms, supporting tens of thousands of jobs, which provided 13.8% of the UK's electricity generation last year, according to government statistics. But when the government revealed in September that no companies bid for project contracts, plans to nearly quadruple offshore wind capacity from 13 gigawatts GW to 50 by 2030 -- enough to power every home in the UK -- were dealt a heavy blow.

The technology has been described as the "jewel in the UK's renewable energy crown," but firms have been hit by higher costs for building offshore farms, with materials such as steel and labour being more expensive. According to energy companies, the government's failure to recognize the impact of higher costs led some firms to abandon existing projects, and all operators to boycott the most recent auction.

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Prices For Offshore Wind Power To Rise By 50%

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  • "44 pounds per MWh to as much as 70 pounds."

    So how much do British consumers pay per Kwh for their power?

    • around 46 US cents per Kwh

      • Re:price of power (Score:5, Informative)

        by ShanghaiBill ( 739463 ) on Wednesday November 15, 2023 @11:43PM (#64008871)

        around 46 US cents per Kwh

        OMG. The most expensive power in America is in Hawaii, and even that is cheaper than the UK.

        In Kentucky, retail power is under 10 cents/kwh.

        The wholesale power price quoted in TFA is about 5 cents/kwh for wind in the UK. Residential customers are paying ten times that much. That's a big ripoff.

        • Re: (Score:3, Funny)

          by Arethan ( 223197 )

          Hahaha! Yeah no kidding! Even FL is under 16c/kWhr!
          You guys in the UK getting blowjobs along with your gucci power prices?

          • We're a tiny little country off the North Coast of the EU that insists on maintaining it's own "independent" Nuclear weapons systems. That means we have to have nuclear power plants, and commission and decommission them which mean we also need to have pumped hydro storage and so massively push up the cost of our electricity and pretend that they are a civilian thing whilst paying for them through our electricity bills. That means that we don't even get blowjobs.

          • > You guys in the UK getting blowjobs along with your gucci power prices?

            No we are fighting Russia. You should see the state Germany's power costs are in, what we have here is nothing compared to that.

        • Iâ(TM)m currently paying 26.758p / kWh (plus an annoying standing charge of 45.315p per day), which is roughly 33 cents / kWh. Itâ(TM)s high, very high, and our bills increased a lot after Putin started his vanity project in Ukraine. On the flip side, we only used 135 kWh last month (ca. £36), although thatâ(TM)s more than the same period last year when we used 110 kWh.

        • The actual wholesale price of electricity in the UK is no where near as low as 5c/kWh. Retail price is high, but it's not 10x.

        • by BigZee ( 769371 )
          There are some major issues in the UK power industry from a customer perspective. Most relevant to this discussion though is that all electricity prices are based on the cost to generate electricity using natural gas. Because of the war in Ukraine, gas prices are high and consequently electricity prices are high, regardless of the source. It's criminal but that's the UK government for you.
          • It has nothing to do with the Government mate. The prices are set internationally.

        • Re:price of power (Score:5, Informative)

          by AmiMoJo ( 196126 ) on Thursday November 16, 2023 @05:47AM (#64009269) Homepage Journal

          According to the EIA website, most of Kentucky's electricity is generated from coal, followed by gas.

          In other words, it's cheap because the costs are externalized. If you had to pay for the damage being done, it wouldn't be 10c/kWh.

      • by amorsen ( 7485 )

        https://www.theenergyshop.com/... [theenergyshop.com]

        Around 28p per kWh which is 35 US cents per kWh.

        The UK price is mostly set by natural gas. There is rarely enough solar+wind+nuclear+coal to set the price.

        • I suspect the numbers I were looking at likely included the 'standing charge' averaged into it.

          • by Tx ( 96709 )

            It's possible. My electricity rate for a recent week, factoring in the standing charge and VAT (sales tax), comes to £0.38, or $0.48 (without the standing charge, it's £0.28). However I'm a low-use electricity customer, being I'm single, work from an office, have gas heating and stove etc, so the standing charge makes a disproportionately high contribution to my bill. I suspect the figures you saw are simply out of date, because there was a period a while back when they were that high, shortly a

            • I can easily recall when my retail electricity price was around £0.12 (12 p) per kilowatt hour. That was before the UK government went insane.

              • by Tx ( 96709 )

                Ah, the good old days, when leaving my home PC's on 24/7 seemed perfectly reasonable. Yeah, the oldest bill I have with my current supplier is from 2019, £0.136/kWh, as recently as that. To be fair, I don't think it's much of a UK government issue, there are several countries in Europe paying higher charges than us, I think we're around the European average.

              • Are you talking about the insanity of Net Zero?

                12p was including that, the current prices are caused by Putin.

    • If the generation alone is going to cost 7c/kWh wholesale, then Iâ(TM)m assuming a lot more for transport, the gas backup plants and taxes. At a minimum weâ(TM)re talking 28c/kWh if this were handled end-to-end by a commercial entity with no profit motive. Given the government handles it, I would say at least 30% added for government waste and then the 20% VAT beyond that, so roughly 35-40c/kWh.

      I personally pay approximately 4c/kWh in the US for nearby fixed retail contract hydro and nuclear power

      • by amorsen ( 7485 )

        The gas backup plants are already there. They will simply run somewhat less often.

        Comparing to hydro is not reasonable; hydro has all the advantages and costs very little. Unfortunately, constructing hydro in the UK starts with constructing a mountain to put it on, which somewhat increases the the cost.

        • by AmiMoJo ( 196126 )

          New hydro is being built in Scotland using the existing valleys. The plan is basically to flood some of them, turning them into reservoirs, and then pump water in and out.

    • "44 pounds per MWh to as much as 70 pounds."

      So how much do British consumers pay per Kwh for their power?

      I have a related question, what is the strike price for Sizewell C?

      A bit of looking about tells me that Sizewell C is supposed to come in at 20% under the price for Hinkley Point C, and Hinkley Point C has a strike price of 92.5 pounds. What is 92.5 minus 20%? My calculator tells me that is 74 pounds.

      When Hinkley Point C was getting a strike price offer of around 90 pounds per MWh and offshore wind projects were getting a strike price of about 35 pounds then that didn't look great for nuclear power in the

      • Given inflation in the last few years, especially in the construction industry, I suspect it will cost a lot more to build a nuclear plant now and that strike price will also go up.

        • Given inflation in the last few years, especially in the construction industry, I suspect it will cost a lot more to build a nuclear plant now and that strike price will also go up.

          Yes, clearly inflation will make the costs go up but I thought I was making it clear that the real question was how wind power compared to nuclear fission on costs. Maybe inflation impacts both similarly to a point the ratio on the cost of one to the other is largely unchanged. Maybe inflation impacts them differently enough that nuclear power looks to be cheaper than wind power.

          Maybe I should have rephrased the question in my earlier post. What people will want to know is what is the lowest cost option

          • by q_e_t ( 5104099 )

            Given inflation in the last few years, especially in the construction industry, I suspect it will cost a lot more to build a nuclear plant now and that strike price will also go up.

            Yes, clearly inflation will make the costs go up but I thought I was making it clear that the real question was how wind power compared to nuclear fission on costs.

            On a marginal production basis, wind is significantly cheaper. The strike price is also lower.

          • Yes, clearly inflation will make the costs go up but I thought I was making it clear that the real question was how wind power compared to nuclear fission on costs.

            The thing you have to remember is that the strike price for Nuclear is manipulated because the generating company has limited liability for decommissioning and has limits on accident liability. The Electricity customers have to cover both of those separately, which are items that Wind doesn't have. That means that the situation is actually much worse for nuclear than it looks on paper, but the decision to invest in nuclear is a strategic / military one rather than a cost based one. If that weren't true the

      • Re:price of power (Score:4, Insightful)

        by VeryFluffyBunny ( 5037285 ) on Thursday November 16, 2023 @02:54AM (#64009119)
        Re: corporate welfare - This is not the only way to do large civil engineering projects. In fact, we don't NEED privatised corporations to do it at all. A lot of the UKs infrastructure was developed by national industries & it was done mostly cheaply & efficiently. Over the past few decades, the UK has insisted on doing all kinds of civil infrastructure projects as public-private partnerships (See: https://en.wikipedia.org/wiki/... [wikipedia.org]), which have invariably been disastrously expensive (The true costs are usually hidden) & have under-delivered. That's what economists mean when they say "privatise the profits & socialise the losses." It's basically corruption in order to fleece the electorate.

        The other option of "leaving it to the markets..." Well, I hope we can agree that would be even more disastrous. The current issues with not enough new antibiotics vs antibiotic resistant bacteria is a direct result of "leaving it to the markets." Corporations act in purely the financial interests of whoever owns them, not for the public good. Govts need to step in & do their f**king jobs for civil-scale projects & infrastructure instead of dogmatically following this neoliberal ideology.
        • Mrs Thatcher came to power with the hopeful but simplistic idea that the public sector was wasteful, largely because employees had no strong incentive to work hard or to innovate. The private sector, she told us, would remedy those faults. It would bring initiative, innovation, and all sorts of clever ways of increasing efficiency.

          What she failed to notice was that, in the nature of things, the private sector would keep any such gains to itself.

          • by Viol8 ( 599362 )

            The problem with the public sector - ie civil service - is no one there ever gets fired or demoted for screwing up. If they fixed that simple problem then public sector projects would work as desired.

            • Tu quoque: There's plenty of evidence of corporations screwing up right royally & nobody being actually held to account unless there's a class-action lawsuit or something similar. The UK does conduct public inquiries when the shit really does hit the fan so that we have some kind of transparency & accountability. Both the public & private sectors suffer from the same kinds of incompetence, inertia, lack of incentives to progress/innovate, etc.. I's arguable that there's more perverse incentives
      • The problem is that you are comparing nuclear at it's cheapest to wind at it's most expensive.

        The strike price for HPC at £92 was set in 2013 as part of the CfD scheme. The strike price for wind that you are looking at has just been set, after the governments last auction for offshore space failed to attract any bids -- they were told that this was likely to happen, but the UK government is currently too busy arguing with itself to pay attention to, well, anything.

        HPC is currently forecasting a loss,

      • by q_e_t ( 5104099 )
        Computing differences in strike price by looking at completion cost is nonsense, as well you know.
      • by q_e_t ( 5104099 )
        Wind power does not cost £70. That's a strike price. They are different things.
    • Well depends on the supplier of course, also what region, but currently due to the high gas prices the cost per kWh is around 27p which is a sharp increase from the 13p or so we had a couple of years back resulting in a lot of fuel poverty.

      Gas prices are approx 7p per kWh, but for heating you obviously need to use many kWh. Thus its way cheaper to use gas directly for heating and cooking.

      It is important to note that these costs are CAPPED. The UK government has regulated a cap to sheild most energy users

    • Lets take this to american fries units..... KwH/US Dollars

      9/kW (US D per kilo watt hour) is the MWh to as much as 70 pounds

      Your average UK consumer is spending 25/kW taking away grid charges, and their are some people on a smart grid, who can get that down to 12/kW

      So offshore wind providers want the maximum a utility company will pay for grid attached residential production just about any place in the world.

      Now if the offshore power company could store say 50MWh and seen it back at 500MW it
  • It'll more than double the world's current largest wind farm (20GW), also in China (though on-shore).

    https://www.euronews.com/green... [euronews.com]

  • Working as Adam Smith told us they should, yes?

    • by MrL0G1C ( 867445 )

      The govt initially didn't allow market forces to work, they put out an auction where the companies could bid lower prices to get the contracts to build wind farms. But the govt set the maximum price too low, no company could supply electricity for the price they wanted. The summary is wrong in saying the price is increase 50% because A) the price was never 50% lower and B) the amount that increased is where bidding starts, not ends.

    • As well as "The Wealth of Nations", Adam Smith wrote "The Theory of Moral Sentiments". In fact, the latter appeared 17 years before the former.

      Throughout his works, Smith is at pains to stress the vital importance of morality and custom. He was well aware that unprincipled men could easily clean up by selling out their own neighbours and countries. He hoped they wouldn't, but with little confidence.

      The theory of "laissez faire" (non-interference) has always been open to the obvious objection that people don

  • by zakeria ( 1031430 ) on Wednesday November 15, 2023 @10:46PM (#64008777) Homepage
    its approaching winter in the UK and most people are having to make serious cuts to their power consumption. We are currently spending £6 or $7.50c per day and thats with us sitting with lights off and heating turned down. If it gets any higher we'll have to either cut back on food or get cold.
    • Perhaps visiting a warm hub [abc.net.au] every other day when running without heat could lessen the burden?

      It's horrible it comes to that, but at least it's a pragmatic temporary solution that could provide for a greater sense of community so long as everyone is relaxed about it.

    • The price of electricity offered for these projects have nothing to do with the price of actual electricity which is currently driven by a variety of different market factors. Currently the wholesale electricity cost on the UK market is over 100 pounds / MWh, significantly higher than even the raised price of this bid.

    • its approaching winter in the UK and most people are having to make serious cuts to their power consumption.

      The problem in the UK is that it got a massive energy bonanza when the North Sea oil fields were discovered in the 80s, but it didn't do any strategic investment with the windfall. For example, it could have used some of the money to upgrade it's woeful housing stock to better energy efficiency levels. If it had done that over the last 30 years, your home might now use only 1/3 of the energy it does, which would protect you from the rising gas bills. Or it could have built out more renewable, or nuclear, or

      • The UK has been run by crazy neo-liberal ideologues for decades. These people are nothing more than religious zealots.

        Do religious zealots usually retire with piles of money and property that seemingly materialised from nowhere?

        Maybe they do.

    • by AmiMoJo ( 196126 )

      That's largely due to our deregulated energy market. The price of gas went up, and corporate profits went up, and consumers had to pay for it all. To make matters worse, we closed our gas storage fields some years ago, so couldn't buy it cheap in the summer like more sensible countries.

      Renewables remain the cheapest form of energy, but few people have heat pumps so are stuck with gas for heating. Our housing stock is mostly complete crap too. Poorly insulated and with antiquated heating systems that waste a

    • In our case (in southern England) make that £10 a day for electricity and gas - which seems likely to increase still further when the cold weather arrives. Then there are the high taxes to keep energy costs even as low as that through subsidies.

      Global warming? If only!

  • by Eunomion ( 8640039 ) on Wednesday November 15, 2023 @11:37PM (#64008857)
    Offshore wind is greenwashing central. The costs are deliberately high.
    • by Miles_O'Toole ( 5152533 ) on Wednesday November 15, 2023 @11:39PM (#64008863)

      The Tories are taking one last opportunity to line the pockets of their rich owners. Therefore the costs will be inflated.

      Fixed that for you.

      • This is happening all over the world. Hidden costs are popping up and big offshore wind projects collapsing or being delayed, but the companies behind them are still profiting.
        • Well, maybe the US can't do it, but other projects are still going on. Among them are these current projects with a capacity of more than 350 MW, along with projected completion dates: Sofia and Dogger Bank A and B in the UK, scheduled for 2023, 2024 and 2026, Borkum Riffgrund 3 in Germany, 2025, Greater Changhua, just completed, Moray West in the UK, 2025, Hollandse Kust 1,2,3,4 and 5, Netherlands, all scheduled 2023-4, Yunlin and Changfang in Taiwan, also 2023, Guondian Xiangshan 1 in China, 2025, Fecam

          • Real projects happen, yes. But they're still mostly chosen for tax purposes, hiding assets, laundering money, gaining leverage over the industry, etc. That's the only reason to intentionally seek high costs.
  • by q_e_t ( 5104099 ) on Thursday November 16, 2023 @02:48AM (#64009113)
    What is being described is the strike price for new generation which hasn't increased for several years. This is a floor for the price of electricity from a source but is neither the cost of generation nor the wholesale cost. Wind generation builders made a representation to the UK government that prices for building new generation had risen due to inflation but because the already fairly low strike price had not risen that obtaining investment was now much more difficult which would make new starts difficult. In real terms, since the strike price was frozen (from memory about five years ago) this is actually only a small increase over that period. The wholesale price is pretty much always above the strike price so it won't have a significant impact on pricing to consumers.
  • I honestly don't understand it, but the UK government seems determined to ruin the country. Just as an anecdote: We watch a fair amount of British television, and there are constant appeals for medical-related charities. Charities for cancer treatment. Charities for rehabilitation. Charities for a zillion other things. All of which *ought* to be handled by the NHS, but very obviously is not.

    Apparently, energy policy is just as badly handled. If I read the rate tables [nimblefins.co.uk] correctly, UK consumers pay 53p/kwh co

    • by q_e_t ( 5104099 )
      The costs are not as suggested. The cost is £0.30/kWh with a small additional connection fee but it's nowhere near £0.53/kWh. A standing fee can't be usage dependent and be a standing connection fee.
    • The connection charge is a standing charge and is per day whether you use energy or not.

      It's a bit of a rip off, actually, especially if you have solar at home. But the standing charges are probably about half the normal bill yes.

    • by jbengt ( 874751 )
      The standing charge is not per kWh.
  • Costs to build offshore wind farms have risen dramatically in the last 2 years and companies realize that its will never be profitable for them. That's main reason for no bids. Wish I could remember and link the article. One company actually pulled out of a deal because of costs.
  • by necro81 ( 917438 ) on Thursday November 16, 2023 @08:17AM (#64009437) Journal

    44 pounds per MWh to as much as 70 pounds

    Could we get that in kilograms, please? Why doesn't the UK get with the metric system, already?

  • by nanoakron ( 234907 ) on Thursday November 16, 2023 @02:34PM (#64010355)

    So energy companies will get £70/MWh

    The average UK household consumes 2.7MWh per year (£190) yet pays in excess of £3000 for the privilege

    Where does all the money go?

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