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UK offshore wind prices come in 40% cheaper than gas in record auction

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Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#101

Post by belorn »

tialaramex wrote: post #89
simplisticelk wrote: post #80

Earlier quoted context omitted.

Absolutely, as long as a the energy of a wind farm displaces enough MWh of gas to cover its capital costs (incl. network costs) at the marginal price of gas it should reduce system costs. But wind energy output across an area the size of the UK is so highly correlated that additional wind capacity has diminishing returns. I suspect that the UK is already beyond the point by which additional wind is economically benef…

> I suspect that the UK is already beyond the point by which additional wind is economically beneficial, but I’m not certain about that. I don't buy it. Just before Xmas the grid managed to move about 23GW of wind and it was a record. 23GW is lots but there was peak demand at that time, about 14GW of gas was still running when they hit that record. How can it be of no benefit to expand beyond that ? I don't expect to…

UK is currently limited by transmission. Gas can only be displaced by wind if the energy can be transported to the location where it is being consumed.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#102

Post by cbeach »

youngtaff wrote: post #100
cbeach wrote: post #95

Earlier quoted context omitted.

Would you choose a 5.5% tracker mortgage, or a mortgage fixed at 9.1% for 20 years?

That's not the choice here though as the tracker mortgage (gas) is more expensive the the fixed on (Wind)

but it's not, though, is it?

The government is turning a £55 gas price into £147 by adding an arbitrary carbon tax, and therefore making it look artificially more expensive than wind.

If we wanted to make an honest analysis here, we would say "gas is significantly less than expensive than the strike price agreed for wind, but some believe the externalities of gas generation could be signficant"

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#103

Post by ZeroGravitas »

simplisticelk wrote: post #71

This is an extremely misleading way to report the cost of energy. It’s almost meaningless to compare the cost of wind to the cost of gas because more wind does not reduce the need for gas plant. It may reduce gas utilization, but it will increase the cost of gas on a MWh basis by increasing capacity prices. Yes, more wind will reduce emissions, but these prices don’t mean they will reduce total system cost.

Not only do the existing wind farms reduce the price of electricity by saving gas, they have had much larger effect on reducing the price households pay for gas itself, by reducing demand for that commodity.

Over the period 2010 to 2023 they reduced electric bills in the UK by about 14 billion, but reduced gas bills by about 140 billion!

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#104

Post by youngtaff »

cbeach wrote: post #102
youngtaff wrote: post #100

Earlier quoted context omitted.

That's not the choice here though as the tracker mortgage (gas) is more expensive the the fixed on (Wind)

but it's not, though, is it? The government is turning a £55 gas price into £147 by adding an arbitrary carbon tax, and therefore making it look artificially more expensive than wind. If we wanted to make an honest analysis here, we would say "gas is significantly less than expensive than the strike price agreed for wind, but some believe the externalities of gas generation could be signficant"

The CPS charge is £18 per tonne of CO2, and all emitters pay for the CO2 they emit

The CPS charge isn't going away so it's not making gas look artificially more expensive than wind

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#105

Post by cbeach »

youngtaff wrote: post #104
cbeach wrote: post #102

Earlier quoted context omitted.

but it's not, though, is it? The government is turning a £55 gas price into £147 by adding an arbitrary carbon tax, and therefore making it look artificially more expensive than wind. If we wanted to make an honest analysis here, we would say "gas is significantly less than expensive than the strike price agreed for wind, but some believe the externalities of gas generation could be signficant"

The CPS charge is £18 per tonne of CO2, and all emitters pay for the CO2 they emit The CPS charge isn't going away so it's not making gas look artificially more expensive than wind

When you're trying to sell wind power to the public as a "cheaper" source of energy than fossil fuels, you've got to be honest with them if you want to win both hearts and minds.

Gas is cheaper, like-for-like.

We impose special taxes on gas, making it artificially more expensive, in order to manipulate the market into reducing use of fossil fuel.

There. That's all that needs to be said. If you're honest with people they're more likely to trust you, and join you in your endeavours.

The high cost of gas is entirely politically-driven, as Reform UK will prove when they take office in 2029.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#106

Post by zingar »

hnaccount_rng wrote: post #97
zingar wrote: post #93

Earlier quoted context omitted.

> ~ doesn’t matter whether you first sell the energy and then go to the government for reimbursement. Or whether you sell the energy to the government which then handles the follow up sale Still missing something in relation to a point above. Does one of these scenarios involve the operator “paying” or “giving back” actual money when the market price is higher than agreed? As opposed to just operating at a loss or le…

If you are willing to ignore the mechanics, then the result rounds to: The operator will receive the auctioned value of x £/MWh for each MWh delivered to the grid If you are interested in the mechanics, then _I think_ (i.e. not first hand knowledge) the operator will join each auction (once per day for each 15 min interval of the next day) and offer his energy amount there. He will then receive the integral of (aucti…

I’m specifically interested in understanding CfD, yes
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