Monday, 9 April 2018
New report implies that the proposed Scottish Government Energy Company will NOT boost renewable energy
A report from Ernst and Young on the proposals to launch an Energy Company owned by the Scottish Government gives little hope that the Company will give a substantial boost to renewable energy. The report was issued by the Scottish Government in advance of consultations on the Energy Company being started.
At the time of the SNP's Conference last October (2017) Nicola Sturgeon announced the intention to start a Scottish Government owned energy company and that:
“Energy would be bought wholesale or generated here in Scotland – renewable, of course – and sold to customers as close to cost price as possible,” she told the Scottish National party conference in Glasgow on Tuesday. “No shareholders to worry about. No corporate bonuses to consider.”
Hopes that such a company would be able to open the doors to the many possibilities for cheap onshore wind and solar farms in Scotland are likely to be dashed if the company is formed following the priorities set down in the report. The idea of 'increasing the proportion of energy from renewable sources' is relegated to 'phase two' of the agenda for the Company (see page 16). In political terms this means that whilst there may be a lot of advertising focus on how the company gets its energy from renewable energy sources, in reality little or no new energy will be sourced from new renewable energy projects - that is unless they would have been started anyway as a result of programmes funded by Westminster.
The Scottish Energy Company is likely to follow the practice of various self-styled green energy companies of saying they supply energy from renewable energy sources, even though these schemes would exist anyway (and otherwise be given supply contracts by other companies). The renewable projects come into being because of incentives from the Westminster Government (through the Renewables Obligation, feed-in tariffs or contracts for difference). It is true that Ecotricity (and to a much more limited extent Good Energy) has established a substantial amount of renewable energy projects through its generation arm, but again, this would not have been possible without the support schemes organised by Westminster.
It follows that unless and until Westminster revives some method of offering long term power purchase agreements (PPAs) to onshore wind and solar farms, it is difficult to see, under the priorities outlined by Ernst and Young's report, that the Scottish Government will procure much (if any) new renewable energy generation.
What renewable energy projects need are the offer of long term power purchasing agreements (PPAs) lasting say, 15 years. This is needed be cause unlike fossil fuels renewable energy projects are capital intensive.Even though such projects may be able to deliver energy for the consumer at the same, or lower, price than fossil fuels, they will not be built unless investors and bankers are insulated against the risk of power price market fluctuations. This can be done through the projects having long term PPAs.
Yet the priorities as outlined in the report offer little hope that the Scottish Government Energy Company will offer long term PPAs. The Energy Company seems likely to procure its electricity from short term contracts (or PPAs) from energy generators. This will preclude the possibility of helping new renewable energy projects start generating, because they will need much longer PPAs
The Energy Company therefore faces the prospect of trying to compete solely on price in an electricity market increasingly populated by many small companies all trying to do the same thing, whilst at the same time failing to deliver its promises of promoting renewable energy.
Some references:
https://www.theguardian.com/politics/2017/oct/10/sturgeon-proposes-cheap-state-owned-energy-for-scotland
http://www.bbc.co.uk/news/uk-scotland-scotland-business-43692809
The Ernst and Young report:
http://www.gov.scot/Resource/0053/00533962.pdf
Sunday, 1 April 2018
Why Britain's distorted electricity market means that 'subsidy free' renewable energy is a myth
The media is awash with stories of the imminent emergence of 'subsidy free' wind and solar power in the UK, but the reality is that the uncompetitive nature of the British electricity market mostly undermines that prospect. In theory onshore wind power and maybe some solar power projects would be able to generate power to sell at competitive prices on the British wholesale electricity market. In practice most of the potential buyers of energy from new renewable energy projects will not be interested in buying the energy even at cheap prices simply because it conflicts with their own generation portfolios.
True, there is a limited possibility for some very large corporate consumers who are interested in buying green electricity to fund new projects by issuing corporate power purchase agreements (PPAs). But in reality this market is small, and I have heard this estimated to be no larger than 100 MW a year. That means it would take around 20 years for not quite 1 per cent of electricity to be supplied this way.
PPAs are needed for new renewable energy projects that offer the generators the certainty that they can be paid a minimum amount for each MWh that they produce for the long term. The UK Government's PPAs, called contracts for differences (CfDs), last 15 years. However they are no longer available for onshore wind and solar.
The problem is that most of the market for offering PPAs that can fund new renewable energy projects comes from the big electricity suppliers, who have been known in the past as the 'Big Six'. Only PPAs offered by really large companies will be usually taken seriously enough by banks and and other institutions to enable renewable energy projects to obtain long term loans or equity. The trouble is that the Big Energy suppliers will usually have little interest in offering long term PPAs to new renewable energy projects. For a start they can buy in power at much the same price as the renewable energy generator can offer without needing to commit themselves to long term agreements. Crucially, the big electricity companies are struggling to keep their own power stations in business, and are not going to sign up competition from other people for their own business!
It is something of a trade secret that the only reason the Big Energy companies ever did offer long term PPAs to renewable energy companies under the Renewables Obligation was simply because they could make a lot of money out of doing so. In effect, they were compensated for the losses their power plant accrued through not being able to sell so much electricity. This goes a long way to explain how it is that renewable energy has, in the past, seemed so much more expensive in the UK compared to other European countries. But now those Government incentives are no longer on offer to new renewable energy projects.
Without financing renewable energy projects cannot be set up, and financial institutions will usually only invest/loan money to companies that they think have a pretty certain likelihood of being in business for the length of any PPA that they will issue. Various smaller electricity suppliers may have a very robust future. However, unfortunately, many financial institutions may not have a sufficiently positive attitude to smaller electricity suppliers to allow them to offer cheap financing to those potential renewable generators that have been offered PPAs.
There are, of course, various green electricity suppliers who offer renewable electricity, but of course these will invariably be existing projects that have been funded already through the Government's Renewables Obligation or maybe the feed-in tariff scheme. But these options are no longer available for new renewable energy projects.
At the end of the day there are a few independent big consumers - the Googles, Microsofts etc of this world - who will be interested in offering corporate PPAs to cheap new renewable energy projects. However such companies represent a very small segment of the electricity market.
At the end of the day, there may be lots of potential for generating electricity from renewable energy at prices that are no higher than that from new gas fired power stations. But the British electricity market is skewed against this happening. Renewable energy projects are capital intensive which means that investors have to take a long term risk to support them - so we need long term PPAs to be underpinned by the Government. But despite encouraging noises coming from Energy Minister Claire Perry on this subject, there seems little early prospect of such contracts (CfDs in government-speak) being made available for onshore wind and solar.
True, there is a limited possibility for some very large corporate consumers who are interested in buying green electricity to fund new projects by issuing corporate power purchase agreements (PPAs). But in reality this market is small, and I have heard this estimated to be no larger than 100 MW a year. That means it would take around 20 years for not quite 1 per cent of electricity to be supplied this way.
PPAs are needed for new renewable energy projects that offer the generators the certainty that they can be paid a minimum amount for each MWh that they produce for the long term. The UK Government's PPAs, called contracts for differences (CfDs), last 15 years. However they are no longer available for onshore wind and solar.
The problem is that most of the market for offering PPAs that can fund new renewable energy projects comes from the big electricity suppliers, who have been known in the past as the 'Big Six'. Only PPAs offered by really large companies will be usually taken seriously enough by banks and and other institutions to enable renewable energy projects to obtain long term loans or equity. The trouble is that the Big Energy suppliers will usually have little interest in offering long term PPAs to new renewable energy projects. For a start they can buy in power at much the same price as the renewable energy generator can offer without needing to commit themselves to long term agreements. Crucially, the big electricity companies are struggling to keep their own power stations in business, and are not going to sign up competition from other people for their own business!
It is something of a trade secret that the only reason the Big Energy companies ever did offer long term PPAs to renewable energy companies under the Renewables Obligation was simply because they could make a lot of money out of doing so. In effect, they were compensated for the losses their power plant accrued through not being able to sell so much electricity. This goes a long way to explain how it is that renewable energy has, in the past, seemed so much more expensive in the UK compared to other European countries. But now those Government incentives are no longer on offer to new renewable energy projects.
Without financing renewable energy projects cannot be set up, and financial institutions will usually only invest/loan money to companies that they think have a pretty certain likelihood of being in business for the length of any PPA that they will issue. Various smaller electricity suppliers may have a very robust future. However, unfortunately, many financial institutions may not have a sufficiently positive attitude to smaller electricity suppliers to allow them to offer cheap financing to those potential renewable generators that have been offered PPAs.
There are, of course, various green electricity suppliers who offer renewable electricity, but of course these will invariably be existing projects that have been funded already through the Government's Renewables Obligation or maybe the feed-in tariff scheme. But these options are no longer available for new renewable energy projects.
At the end of the day there are a few independent big consumers - the Googles, Microsofts etc of this world - who will be interested in offering corporate PPAs to cheap new renewable energy projects. However such companies represent a very small segment of the electricity market.
At the end of the day, there may be lots of potential for generating electricity from renewable energy at prices that are no higher than that from new gas fired power stations. But the British electricity market is skewed against this happening. Renewable energy projects are capital intensive which means that investors have to take a long term risk to support them - so we need long term PPAs to be underpinned by the Government. But despite encouraging noises coming from Energy Minister Claire Perry on this subject, there seems little early prospect of such contracts (CfDs in government-speak) being made available for onshore wind and solar.
Wednesday, 14 March 2018
How Labour can really put the wind up the Tories
Labour is well placed to embarrass the Tories by attacking
the Government’s war on the onshore wind industry in the UK. Despite onshore
wind now being the cheapest widely available electricity source the Government
is actively sabotaging the industry by refusing to allow long term contracts to
be issued to wind developers. Meanwhile large subsidies are being offered to
gas, coal and nuclear power stations.
Under the last Labour Government incentives were given to
build up a large increase in onshore wind power, which now supplies around a
tenth of UK’s electricity supply, with offshore wind and solar farms now
supplying around another ten per cent of UK electricity. But right wing English
Tory pressure has prevented any move towards enabling long term contracts to be
issued so that new windfarms can be financed. Meanwhile the UK risks becoming
increasingly dependent on supplies of gas from places like Russia and Qatar.
The Labour frontbench is beginning to realise that young
people in particular want to see green energy being given a chance, and, for
example, John McDonnell has recently attacked the Tories for failing to doing anything to revive support for the
feed-in tariff scheme that helped people install solar panels on their roofs.
But attention ought also to be turned to promoting onshore windfamrs. Doing so
would embarrass the Government and also sow division inside the Tory ranks.
More practically, it would offer hope to people who are working in the industry
that they might have a future. Places like Grimsby are benefitting from
offshore wind projects which are still being built, but onshore wind factories
are being closed down, the latest being the Glasgow based Gaia Wind.
Independent experts say that onshore wind can be built
costing the consumer less than new large gas fired power stations. However orders have dried up because the Government is
refusing to organise long term guarantees of prices paid for electricity to be
generated by the wind farms. Long term contracts are needed because the
technology is capital intensive meaning that while the wind is free, the money
for the equipment needs to be paid for at the start of the project. Hence effective
(say 15 year) long term price guarantees are needed to persuade banks to offer
loans to support windfarm construction.
The majority of the capacity of UK’s onshore windfarms have
been installed in Scotland. Despite the fact that the Scottish Government is
keen to have more windfarms, control over what contracts are issued for
electricity supply rests with Westminster. Yet it is English Tory MPs, often
allied to the climate-sceptic Nigel Lawson and his ‘Global Warming Policy
Foundation’, that are preventing the Government from providing opportunities for onshore wind.
The Minister of State for Energy, Claire Perry, has, in recent months, been making some encouraging noises about providing some 'contracts for differences', CFDs as they are know in trade-jargon, available for onshore wind. They were available for onshore wind when the CfD system was launched in early 2015 but since then, while some offshore wind contracts have been awarded, onshore wind has been carved out of bidding for such contracts. Yet Perry appears to lack the required political clout to do much that changes anything, especially to overcome the vocal hostility of the climate-and-wind sceptical group of Tory MPs.
Making a priority of
embarrassing the Government over this issue should be a win-win situation for
Labour. Renewable energy, including wind power, is very popular among all
voters, especially with young voters. On the other hand by supporting onshore
wind Labour can proclaim it is promoting consumer interests of obtaining
electricity - above all clean energy – from the cheapest possible source.
Attacking the Government for its failure to support onshore wind is a very good
way of taking votes from the Tories. Please, John McDonnell and Jeremy Corbyn,
spend some time on this! Put some real wind up the Tories!
Tuesday, 16 January 2018
Future of Energy Conference at University of Aberdeen
Some of the conference presentations and also recordings of contributions can be seen at: https://www.abdn.ac.uk/energy/events/the-future-of-energy-222.php
Details of Conference:
The Future of Energy
Details of Conference:
The Future of Energy
A Conference presented by the MSc in Energy Politics and
Law, University of Aberdeen on Wednesday March 28th. Venue:
Linklater Rooms, University of Aberdeen.
4.30-5.15pm Expert Panel. Four experts will introduce themselves and a point of view and then answer questions raised by the audience. These include Professor Peter Strachan, Aberdeen Business School, Robert Gordon University and Dr Daria Sharapolova, Aberdeen University Centre for Energy Law
Itinerary
9.45-10.15 Tea/Coffee and Registration
10.15 A few words from Dr David Toke, Programme Co-ordinator of MSc in Energy Politics and Law
10.20 Opening Address by John Scrimgeour, Director of the Energy Institute of Aberdeen University
10.30 Rebecca Williams, Policy Manager for RenewableUK who will talk about onshore wind and other priorities for RenewableUK
11.00 Morag McCorkindale from Aberdeen Renewable Energy Group who will talk about low carbon based transport policy in Aberdeen and the opportunities for existing oil and gas businesses in the new energy economy
11.30 Dr David Toke, Programme Leader, MSc in Energy Politics and Law. ‘So why has offshore wind now become so much cheaper and easier to build than nuclear power?’
12.00 Sam Gomersall from Pale Blue Dot Energy will give a presentation about how Aberdeen is leading the hydrogen revolution
12.30 – 1.15 LUNCH
1.15 -1.45 Caroline Bragg from the Association of Decentralised Energy who will talk about developing heat networks
1.45-2.15 Professor Alex Kemp from the Economics Department at the University of Aberdeen who will talk about the issue of oil revenues.
2.15- 2.45 David Ritchie, Head of Energy Industries in the Scottish Government’s Energy and Climate Directorate will talk about his work at the Scottish Government
2.45-3.15 Thomas Mcmillan representing the Solar Trade Association (he is Director of Renewables at Savills) will talk about issues facing the solar pv industry
3.15- 3.30 TEA and COFFEE
3.30-4pm Professor John Patterson from the Law Dept at Aberdeen University who will talk about decommissioning of oil platforms
4-4.30 Adam Ezzamel, the Project Director of the Aberdeen Offshore Windfarm (European Offshore Wind Demonstration Project) will talk about the project.
The Conference will be held in
the Linklater Rooms of Aberdeen University https://www.abdn.ac.uk/confevents/venues/linklater-rooms-50.php, We would expect speakers
to talk for 20 minutes leaving 10 minutes for discussion.
You can see an outline of
the MSc degree at https://www.abdn.ac.uk/study/postgraduate-taught/degree-programmes/72/energy-politics-and-law/
Tuesday, 2 January 2018
EDF launch so-called 'cheap nuclear' plan that will ruin taxpayers
EDF are about to persuade the Government to sign a blank cheque for another one of their failing European Pressurised Reactors at Sizewell C. The plan is to get taxpayers to pay for a large chunk of the the 'equity' financing of the plant and get the Government to guarantee the bulk of the rest of the costs. EDF will say at the start that the plant would be 'cheap', but, magically, the cost would gradually escalate over time. But meanwhile the Government would be committed to foot the bill. This will lead to the biggest black hole in the nation's finances since the financial crash.
However, this will get around the humiliation of EDF having to be paid the high price per MWh that Hinkley C is to be paid. A lower price might be agreed. But instead the taxpayers will foot a bill that is likely to rise to well over £10 billion pounds. The plant will not be any cheaper than Hinkley C, its just that the cost will be hidden on Treasury books. But this will have a catastrophic effect on public finances and deprive the Exchequer of many billions £s that could otherwise be spent on public services. This will be the subsidy to top all subsidies!
It is a gross distortion to claim that in this way nuclear power can be made cheaper than any sources. Of course if the Government takes out its chequebook and promises any power generator to pay whatever it likes then the power price will be much lower. With the Government effectively promising to pay for any and all cost overruns on such a project, what is to stop EDF from racking up virtually any bill it wants?
One might think that such a transparently biased scheme (towards nuclear companies, away from the taxpayer and renewable energy) would be dismissed by any Government. Yet energy minister Tom Harrington has already signed up to a generally similar type of plan full of fantasies of how the costs of the projects would be kept under control (as usual).
Hinkley C was supposed to be online now, yet even by EDF's projections it will not be working before 2027. Yet we are now to believe that the next power plant at Sizewell C will be built on time. Of course EDF can promise that this will be happening, because they will not have to pay for the consequences. The taxpayer will, in time, as the loans guaranteed by the Government have to be paid by the Government -as well as the equity stake - and no doubt extra to ensure that the plant is finally built.
EDF are claiming that Sizewell C will cost '£5bn less' than Hinkley C. Of course EDF hasn't even begun the serious construction of Hinkley C, so how do they know how much it will cost anyway!!
Of course, with rumours circulating that Boris Johnson could be appointed Business Secretary, the nuclear industry could have just the right person to front its raid on the nation's finances. Boris Johnson is not known for his attention to detail, but he's a breeze at giving rhetorical backing to all sorts of fanciful ideas. He's just the guy nuclear power needs!
You can read about EDF's latest cunning plan at https://www.thetimes.co.uk/edition/business/cut-price-nuclear-power-plant-possible-says-edf-cmq37xm8q
EDF are claiming that Sizewell C will cost '£5bn less' than Hinkley C. Of course EDF hasn't even begun the serious construction of Hinkley C, so how do they know how much it will cost anyway!!
Of course, with rumours circulating that Boris Johnson could be appointed Business Secretary, the nuclear industry could have just the right person to front its raid on the nation's finances. Boris Johnson is not known for his attention to detail, but he's a breeze at giving rhetorical backing to all sorts of fanciful ideas. He's just the guy nuclear power needs!
You can read about EDF's latest cunning plan at https://www.thetimes.co.uk/edition/business/cut-price-nuclear-power-plant-possible-says-edf-cmq37xm8q
The National Audit report in the summer of 2017, in their annexes, effectively backed the 'Government pays' option (ie blank cheque). See https://www.nao.org.uk/wp-content/uploads/2017/06/Hinkley-Point-C.pdf
You can see the nuclear industry's general thrust at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/665473/The_Nuclear_Sector_Deal_171206.pdf
Sunday, 24 December 2017
Four ways in which society is institutionally ageist
The revelation in today's paper that some UK companies have been manipulating Facebook to show job opportunities only to under 35s is just a iceberg-style manifestation of the ageism that permeates society and handicaps a lot of older people from getting an even break. Society is institutionally ageist in at least four ways.
First is that Government's way of presenting the data hides the immense level of unemployment of older people. The official records show that unemployment in the 50-64 year old age group is relatively low. But this is a construction based on the exclusion of nearly a third of people in this age-group as 'economically inactive'. In fact the unemployment among older people is massive, and much worse than younger age groups once this is taken into account. Indeed those older people that are classified as actively looking for a job find it much more difficult (they remain unemployed for much longer than average) than younger people.
Of course the figures then assume that people over 65 don't exist for unemployment purposes. They've got a pension, so they don't count. People in this age group who complain about age discrimination in employment are just laughed at. From an economic point of view, never mind individual rights angle, this is really stupid.
If we want a better economy, we need more people working - as opposed to more people living off their savings or state benefits, which should otherwise be invested in sustainable production (solar or wind power perhaps?). Ok, we shouldn't force people to work when they've had enough - but why make it difficult for older people to do stuff when they want?
The second way that society is institutionally ageist is the way that there is an incipient (sometimes overt) bias against older people in employment. When I was 31 (that was in 1983 by the way) I remember going to an IT training event put on by some government agency. Big affair. I got to see an adviser who then told me that I was too old. Apparently this age discrimination is a big thing in IT still. Of course these days it is against the law to overtly discriminate, but sometimes the veil falls off the implicit discrimination, as is the case with the Facebook story revealed today.
To many of course, the fact that the establishment, with all its many ills, is run largely by older people acts to obscure the suffering faced by the not-so-fortunate older people. But when you look at individual cases of how older people have got the top positions you realise that it didn't have anything to do with their age. I was certainly not appointed to my current job at the University of Aberdeen (at the age of 60) because I was old. Really. Neither, (going a long way further up the food chain!) was Vince Cable, the Liberal Democrat Leader, or Jeremy Corbyn, the Leader of the Labour Party appointed to be leaders because they are retiree age. They got these jobs because of their reputation and respect among their relevant party members (or some of them!). Of course being around a long time helps you build up experience and achievements that impresses people, but that does not automatically follow just because you're old! But the fact that you are old can certainly detract from your appeal in many people's eyes.
The third way that society is institutionally ageist is a very obvious one. Calling somebody old is an insult (even though it shouldn't be). The very fact that it IS an insult and is routinely used, often without any reflection, is a mark of the institutionalisation of ageism in the very fabric of modern culture. If you want to insult a politician, call them 'old'. If you don't like the people who voted for Brexit, call them old - now that's really common these days. It's a way of avoiding the argument, of appealing to your base (mainly young people) - it's a reverse of what people attack Trump for doing in fact. I think leaving the EU is a bad move, but it's got nothing to do with the age of the people who tend to like the idea, and everything to do with the arguments about internationalism, peace, fraternity etc.
The fourth way that society is institutionally ageist is the notion that somehow old people are assumed to have a better deal than younger people. Well, some do, some don't. But on average they certainly don't have higher pay. Household income for the over 65s is, despite some improvements in recent years, still only three-quarters of the average younger people. What's so marvellous about that? There's also the not inconsequential fact that the oldies on average have rather fewer years of healthy life ahead of them than the younger people. Yes, there's a lot of problems facing younger people that need sorting ...housing, tuition fees etc etc. But don't take it out on the oldies please.
https://www.thetimes.co.uk/
http://www.telegraph.co.uk/news/politics/labour/11781155/Andy-Burnham-accused-of-ageism-by-Jeremy-Corbyn-supporters.html
https://www.theguardian.com/commentisfree/2017/jun/24/vince-cable-ageism-is-old-fool-worse-young-one
https://www.theguardian.com/money/2017/aug/08/pensioners-living-in-golden-era-as-income-rise-outstrips-workers
First is that Government's way of presenting the data hides the immense level of unemployment of older people. The official records show that unemployment in the 50-64 year old age group is relatively low. But this is a construction based on the exclusion of nearly a third of people in this age-group as 'economically inactive'. In fact the unemployment among older people is massive, and much worse than younger age groups once this is taken into account. Indeed those older people that are classified as actively looking for a job find it much more difficult (they remain unemployed for much longer than average) than younger people.
Of course the figures then assume that people over 65 don't exist for unemployment purposes. They've got a pension, so they don't count. People in this age group who complain about age discrimination in employment are just laughed at. From an economic point of view, never mind individual rights angle, this is really stupid.
If we want a better economy, we need more people working - as opposed to more people living off their savings or state benefits, which should otherwise be invested in sustainable production (solar or wind power perhaps?). Ok, we shouldn't force people to work when they've had enough - but why make it difficult for older people to do stuff when they want?
The second way that society is institutionally ageist is the way that there is an incipient (sometimes overt) bias against older people in employment. When I was 31 (that was in 1983 by the way) I remember going to an IT training event put on by some government agency. Big affair. I got to see an adviser who then told me that I was too old. Apparently this age discrimination is a big thing in IT still. Of course these days it is against the law to overtly discriminate, but sometimes the veil falls off the implicit discrimination, as is the case with the Facebook story revealed today.
To many of course, the fact that the establishment, with all its many ills, is run largely by older people acts to obscure the suffering faced by the not-so-fortunate older people. But when you look at individual cases of how older people have got the top positions you realise that it didn't have anything to do with their age. I was certainly not appointed to my current job at the University of Aberdeen (at the age of 60) because I was old. Really. Neither, (going a long way further up the food chain!) was Vince Cable, the Liberal Democrat Leader, or Jeremy Corbyn, the Leader of the Labour Party appointed to be leaders because they are retiree age. They got these jobs because of their reputation and respect among their relevant party members (or some of them!). Of course being around a long time helps you build up experience and achievements that impresses people, but that does not automatically follow just because you're old! But the fact that you are old can certainly detract from your appeal in many people's eyes.
The third way that society is institutionally ageist is a very obvious one. Calling somebody old is an insult (even though it shouldn't be). The very fact that it IS an insult and is routinely used, often without any reflection, is a mark of the institutionalisation of ageism in the very fabric of modern culture. If you want to insult a politician, call them 'old'. If you don't like the people who voted for Brexit, call them old - now that's really common these days. It's a way of avoiding the argument, of appealing to your base (mainly young people) - it's a reverse of what people attack Trump for doing in fact. I think leaving the EU is a bad move, but it's got nothing to do with the age of the people who tend to like the idea, and everything to do with the arguments about internationalism, peace, fraternity etc.
The fourth way that society is institutionally ageist is the notion that somehow old people are assumed to have a better deal than younger people. Well, some do, some don't. But on average they certainly don't have higher pay. Household income for the over 65s is, despite some improvements in recent years, still only three-quarters of the average younger people. What's so marvellous about that? There's also the not inconsequential fact that the oldies on average have rather fewer years of healthy life ahead of them than the younger people. Yes, there's a lot of problems facing younger people that need sorting ...housing, tuition fees etc etc. But don't take it out on the oldies please.
https://www.thetimes.co.uk/
https://www.cio.com/article/3198472/careers-staffing/the-hard-truths-of-navigating-ageism-in-it.html
http://www.telegraph.co.uk/news/politics/labour/11781155/Andy-Burnham-accused-of-ageism-by-Jeremy-Corbyn-supporters.html
https://www.theguardian.com/commentisfree/2017/jun/24/vince-cable-ageism-is-old-fool-worse-young-one
https://www.theguardian.com/money/2017/aug/08/pensioners-living-in-golden-era-as-income-rise-outstrips-workers
Sunday, 10 December 2017
Why wind power costs are crashing and soon could plunge well below wholesale electricity prices
Wind power costs are plunging and it might not take too long before they get down to £40 per MWh, well below recent UK wholesale power prices which have been at £45 per MWh in recent times.
Offshore wind power costs have seen the sharpest decline, although falling prices for onshore wind should also be evident in the UK if only the UK Government were offering long term power purchase agreements (PPAs) for them as well as offshore windfarms. Anti-renewable commentators are still quoting costs for onshore wind power (£70-£80 per MWh) that are grossly out of date, relying on nothing more than than the fact that the Government have not offered any PPAs for them recently.
Recent offshore wind farm auctions in the UK, Germany, Denmark and The Netherlands have seen prices plunge to below £60 per MWh and predictions are being made that prices will carry on falling. But why is this happening? This is a question that befuddles some anti-renewable energy think tanks and spokesperson who seem to think that some of the world's leading corporations are spoofing us all. But there's no spoof - it's happening.
But how can this be, given that until recently offshore windfarms have sometimes been costing £100 per MWh or more?
There are six reasons for this that I can see.
First, advancements in computer modelling techniques have led to better designs of wind turbine blades that can capture more energy whilst weighing much less than previously. This has allowed wind turbines to be built that are much bigger and thus whose blades can take in a much larger swept area without substantially increasing the cost of the materials involved.
Second, digital control over wind turbines also increases the amount of energy converted into electricity.
Together this means that, for example, a turbine can be built that produces twice as much as designs of machines previously installed whilst only modestly increasing the weight of materials involved. This on its own cuts the total costs by almost a half.
Third, the benefits of installing a much smaller number of turbines can be utilised because, for example, there needs to be only half as much expense per output needed to install a machine that produces 2x MWh a year as opposed to installing 2 machines which each generate x MWh a year.
Fourth, fabrication and construction techniques for building the windfarms have been dramatically improved. For example, whereas it would previously have taken several weeks to install and commission a wind turbine in the sea (once the monopile or jacket has been emplaced), now it can be done in a single day. This saves very large sums of money in terms of hiring vessels alone.
Fifth, considerable reduction in 'supply chain' costs have been achieved. For example. wind turbine manufacturing companies in the past have out-sourced manufacturing of gearboxes, but now they are done 'in house'. The large production lines and very large sizes of offshore windfarms has made this more practical.
Sixth, the fact that some big multinational corporations are now seeing renewable energy as the central, rather than peripheral, aspect of their power generation business has meant that they will use their cheapest in-house financing means to support them. When it comes to the cost of servicing debts, guarantees made by the biggest companies will slash financial costs.
The most recent UK auctions saw PPAs issued at £57.50 per MWh for the Hornsea 2 and Moray Firth windfarms. But it has been suggested from inside the industry that the costs of such developments have already fallen to around £50 per MWh and that a further reduction of around 20 per cent is already on the cards.
Much concern has been expressed over the fact that it was said in the recent Budget statement that there would be no new money for renewable energy until 2025. Whilst this is very bad news for developing technologies such as tidal stream, this will not matter at all if wind power can be delivered for no more than the wholesale power price.
Of course this shouldn't be a signal for people to say the Government doesn't need to do anything to promote wind power anymore. That is because without long term guarantees of minimum levels of income industry will not build the projects. They are capital intensive meaning that investors need to know that they will get their money back, and for that they need income stability. In addition the UK is now running short of new windfarm sites simply because The Crown Estates have not issued any new licenses since 2009. Now The Crown Estates are poised to start as new round of licensing.
A further problem is a political one in that the Government has on its books a large capacity of almost undeliverable nuclear power projects on its hands which makes it look like (on paper) that the Government is meeting is non-fossil fuel construction targets, but in fact is not. Even if Hinkley C is built for example, it will soak up very large sums of money for a very long period of time that could be much more usefully deployed to support developing renewable energy technologies that do ha ve a chance of seeing their costs reduced.
https://www.bloomberg.com/news/articles/2017-09-11/u-k-offshore-wind-costs-fall-to-record-in-latest-auction
http://ieefa.org/ieefa-europe-offshore-wind-costs-maintain-falling-trend/
Offshore wind power costs have seen the sharpest decline, although falling prices for onshore wind should also be evident in the UK if only the UK Government were offering long term power purchase agreements (PPAs) for them as well as offshore windfarms. Anti-renewable commentators are still quoting costs for onshore wind power (£70-£80 per MWh) that are grossly out of date, relying on nothing more than than the fact that the Government have not offered any PPAs for them recently.
Recent offshore wind farm auctions in the UK, Germany, Denmark and The Netherlands have seen prices plunge to below £60 per MWh and predictions are being made that prices will carry on falling. But why is this happening? This is a question that befuddles some anti-renewable energy think tanks and spokesperson who seem to think that some of the world's leading corporations are spoofing us all. But there's no spoof - it's happening.
But how can this be, given that until recently offshore windfarms have sometimes been costing £100 per MWh or more?
There are six reasons for this that I can see.
First, advancements in computer modelling techniques have led to better designs of wind turbine blades that can capture more energy whilst weighing much less than previously. This has allowed wind turbines to be built that are much bigger and thus whose blades can take in a much larger swept area without substantially increasing the cost of the materials involved.
Second, digital control over wind turbines also increases the amount of energy converted into electricity.
Together this means that, for example, a turbine can be built that produces twice as much as designs of machines previously installed whilst only modestly increasing the weight of materials involved. This on its own cuts the total costs by almost a half.
Third, the benefits of installing a much smaller number of turbines can be utilised because, for example, there needs to be only half as much expense per output needed to install a machine that produces 2x MWh a year as opposed to installing 2 machines which each generate x MWh a year.
Fourth, fabrication and construction techniques for building the windfarms have been dramatically improved. For example, whereas it would previously have taken several weeks to install and commission a wind turbine in the sea (once the monopile or jacket has been emplaced), now it can be done in a single day. This saves very large sums of money in terms of hiring vessels alone.
Fifth, considerable reduction in 'supply chain' costs have been achieved. For example. wind turbine manufacturing companies in the past have out-sourced manufacturing of gearboxes, but now they are done 'in house'. The large production lines and very large sizes of offshore windfarms has made this more practical.
Sixth, the fact that some big multinational corporations are now seeing renewable energy as the central, rather than peripheral, aspect of their power generation business has meant that they will use their cheapest in-house financing means to support them. When it comes to the cost of servicing debts, guarantees made by the biggest companies will slash financial costs.
The most recent UK auctions saw PPAs issued at £57.50 per MWh for the Hornsea 2 and Moray Firth windfarms. But it has been suggested from inside the industry that the costs of such developments have already fallen to around £50 per MWh and that a further reduction of around 20 per cent is already on the cards.
Much concern has been expressed over the fact that it was said in the recent Budget statement that there would be no new money for renewable energy until 2025. Whilst this is very bad news for developing technologies such as tidal stream, this will not matter at all if wind power can be delivered for no more than the wholesale power price.
Of course this shouldn't be a signal for people to say the Government doesn't need to do anything to promote wind power anymore. That is because without long term guarantees of minimum levels of income industry will not build the projects. They are capital intensive meaning that investors need to know that they will get their money back, and for that they need income stability. In addition the UK is now running short of new windfarm sites simply because The Crown Estates have not issued any new licenses since 2009. Now The Crown Estates are poised to start as new round of licensing.
A further problem is a political one in that the Government has on its books a large capacity of almost undeliverable nuclear power projects on its hands which makes it look like (on paper) that the Government is meeting is non-fossil fuel construction targets, but in fact is not. Even if Hinkley C is built for example, it will soak up very large sums of money for a very long period of time that could be much more usefully deployed to support developing renewable energy technologies that do ha ve a chance of seeing their costs reduced.
https://www.bloomberg.com/news/articles/2017-09-11/u-k-offshore-wind-costs-fall-to-record-in-latest-auction
http://ieefa.org/ieefa-europe-offshore-wind-costs-maintain-falling-trend/
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