UK 2019 Auction- Offshore Wind Strike Prices (subsidies now historical) )

[NickW + 2,714]

https://cleantechnica.com/2019/09/23/uk-offshore-wind-prices-reach-new-record-low-in-latest-cfd-auction/

[markslawson + 1,057]

16 hours ago, NickW said:

https://cleantechnica.com/2019/09/23/uk-offshore-wind-prices-reach-new-record-low-in-latest-cfd-auction/

 

Sorry Nick, again I'll have to rain on your parade. The announced deal is in fact part of a green aid scheme from the UK government. Now sure you can say the bids to this program have fallen below wholesale prices. but distributors are not buying the stuff. Instead its some government company, as per the note below. I dunno what that company does with the power purchased except maybe force the distributors to take it (at what price?). I couldn't find any usable accounts for the company. It is funded by a levy on suppliers to the tune of six million pounds in 2018.

Beyond that I'm puzzled over what the prices mean, and it is typical of the coverage in these areas that the writers don't seem to know much or ask any questions, but I don't think its the big win for offshore wind you think it is. Maybe its a "we'll take all you can produce at this set price and if wholesale prices go higher you'll get more" kinda deal. If anyone knows more I'd be interested to hear about it.  

Blurb on the scheme

"The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting low-carbon electricity generation.

CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high.

Renewable generators located in the UK that meet the eligibility requirements can apply for a CfD by submitting what is a form of ‘sealed bid’. There have been two auctions, or allocation rounds, to date, which have seen a range of different renewable technologies competing directly against each other for a contract.

Successful developers of renewable projects enter into a private law contract with the Low Carbon Contracts Company (LCCC), a government-owned company. Developers are paid a flat (indexed) rate for the electricity they produce over a 15-year period; the difference between the ‘strike price’ (a price for electricity reflecting the cost of investing in a particular low carbon technology) and the ‘reference price’ (a measure of the average market price for electricity in the GB market)."

[NickW + 2,714]

On ‎9‎/‎26‎/‎2019 at 2:05 AM, markslawson said:

 

Sorry Nick, again I'll have to rain on your parade. The announced deal is in fact part of a green aid scheme from the UK government. Now sure you can say the bids to this program have fallen below wholesale prices. but distributors are not buying the stuff. Instead its some government company, as per the note below. I dunno what that company does with the power purchased except maybe force the distributors to take it (at what price?). I couldn't find any usable accounts for the company. It is funded by a levy on suppliers to the tune of six million pounds in 2018.

Beyond that I'm puzzled over what the prices mean, and it is typical of the coverage in these areas that the writers don't seem to know much or ask any questions, but I don't think its the big win for offshore wind you think it is. Maybe its a "we'll take all you can produce at this set price and if wholesale prices go higher you'll get more" kinda deal. If anyone knows more I'd be interested to hear about it.  

Blurb on the scheme

"The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting low-carbon electricity generation.

CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high.

Renewable generators located in the UK that meet the eligibility requirements can apply for a CfD by submitting what is a form of ‘sealed bid’. There have been two auctions, or allocation rounds, to date, which have seen a range of different renewable technologies competing directly against each other for a contract.

Successful developers of renewable projects enter into a private law contract with the Low Carbon Contracts Company (LCCC), a government-owned company. Developers are paid a flat (indexed) rate for the electricity they produce over a 15-year period; the difference between the ‘strike price’ (a price for electricity reflecting the cost of investing in a particular low carbon technology) and the ‘reference price’ (a measure of the average market price for electricity in the GB market)."

Yes Mark but at that strike price (less than half that which EDF require to build nukes) you can see the direction this is heading in.

The strike price for the latest round of offshore wind is less than the average wholesale price for UK electricity in 2018 which is predominated by CCGT (approx. 50%). I bet there is still a fair way to go on the efficiency curve as far as wind goes.