Boris Blown Away: True Cost of PM’s Offshore Wind Power Plan is Absolutely Staggering
A MW of intermittent offshore wind power capacity costs up to 17 times the cost of a thoroughly reliable MW of gas-fired power generation. And, whereas, the latter is available around-the-clock, the former is available when Mother Nature deems fit. And she tends to be a temperamental, old cow.
One particular wheeze among Britain’s renewable energy rent seekers, is to float wind turbines on pontoons and anchor them to the seafloor.
At first blush, this was meant to reduce the capital cost of running these things offshore. However, as Andrew Montford details below, the reverse is true.
A standard offshore turbine has a per MW capital cost of around 5 to 6 times that of gas-fired power. But – according to the figures produced by one floating wind farm operator, the capital costs ratio per MW for floating wind turbines is a mind-boggling 17 times that of a gas-fired turbine. And yet, Britain’s PM, Boris Johnson reckons that he will deliver power at 1970s prices – 24 × 365 – by corralling his little island continent with thousands more of these things. ‘Bonkers’ doesn’t cover it.
Floating windfarm to sink backers?
The Global Warming Policy Forum
15 October 2020
A megawatt of gas-fired power station comes with a capital cost of perhaps £0.6 million. You can run such a power station flat out – upwards of 90% of the time – giving you very cheap electricity.
But of course that’s not what the political establishment has done. Instead, successive governments have promoted renewables. Onshore windfarm capacity is three times the price, and they only run 30% of the time, at best.
As if that wasn’t bad enough, the political establishment has gone for offshore wind too. This is about 5-6 times the capital cost of gas turbines, although the stronger winds at sea mean that they run on average over 40% of the time.
It’s true that windfarms don’t need fuel, of course, but they also necessitate expensive interventions to balance the grid, and they also mean that gas turbines can no longer run flat out, making them much less efficient.
That’s bad, but the political establishment clearly feels that it’s a case of “not bad enough”. The latest wheeze is floating offshore windfarms, an example of which is the Kincardine Floating Windfarm, the largest such in the world, which has just announced its annual results
It’s fair to say that things are not going well. With a capacity of 50 MW, the windfarm is tiny, but when it was first announced it came with an astonishing price tag of £250 million, making its capacity eight times the price of gas, while potentially only running half as often.
Unfortunately, the cost has risen further still. First to £350 million, and it is now reported that the management think the final bill could end up at £500 million. That would amount to £10 million per megawatt, or nearly seventeen times what a megawatt of gas capacity would cost.
Only those inside the political bubble could think this was a good idea.
Still, if it’s any comfort to consumers angry that they will be picking up the bill for this foolishness, it turns out that one of the main backers of the Kincardine project is himself a member of the political establishment; the Liberal Democrat peer Nicol Stephen. If he is paying the price for believing his own party’s green PR then few will sympathise.
Global Warming Policy Forum
Hywind, low economics: The cost of floating offshore wind power
The Global Warming Policy Forum
16 October 2020
Yesterday, I wrote about the financial travails of the Kincardine Floating Windfarm and the eye watering bill that is going to have to be paid for its construction. The cost of floating offshore wind power is, it seems, going to be high.
I thought it might be interesting to look at Hywind, the UK’s first operational floating windfarm, which started production back in 2017. Floating windfarms are thought to be a good idea for two main reasons. Firstly you can park them where-ever the wind is best; that means you should maximise production. It is also argued that operating and maintenance costs should be lower; instead of having to deliver crew and parts by boat or helicopter, you simply tow a broken turbine back to port and fix it there.
Let’s see how Hywind is doing. The windfarm is aptly named, because, parked 20 miles off Peterhead, it has been delivering load factors (that is, the percentage of theoretical capacity) of over 50%. That’s better than even the best fixed windfarms, for which you might expect a figure of around 45%.
Unfortunately, according to Hywind’s most recent accounts, this improved performance comes at a cost. At £264 million, its paltry 30MW of capacity cost its backers £8.8m per megawatt. This compares to £3.5m for fixed offshore wind (which operates at much lower load factor) , and £0.6 million for gas turbines (which can operate at much higher ones). So the projects backers are paying three times the price of fixed offshore wind, for marginally higher output.
Meanwhile, the operating costs are either disappointing or disastrous, depending on your view of the world. A fixed offshore windfarm like Rampion – of similar vintage to Hywind – has operating costs of around £150,000/MW. On that basis, Hywind’s £200,000 per megawatt is very disappointing. On the other hand, renewables advocates claim that the true operating costs of fixed offshore wind are well below £100,000/MW. If that’s the case, and floating offshore is supposed to be cheaper to maintain, then Hywind’s performance could be seen as a disaster.
All this means that the underlying economics of the project are appalling. Hywind only managed to clock up £5 million of electricity sales, and its underlying position is a loss of £15 million or so. Still, the developers will not be overly worried; subsidies from the government brought in another £29 million of income, and so they are sitting pretty on a profit of £13 million.
Why would they care about their operating costs?
Global Warming Policy Forum