JUNE 9, 2020By Paul Homewood
Hornsea Wind Farm
In his puff piece for renewable energy today, the BBC’s Justin Rowlatt noted that:
Now the UK has the biggest offshore wind industry in the world, as well as the largest single wind farm, completed off the coast of Yorkshire last year.
Nothing could sum up the moronic obsession with renewable energy better than this statement. There is in fact a good reason why we have thebiggest offshore wind industry– we are the only country daft enough to pay the exorbitant bill for it.
Thelargest wind farm,of course, is Hornsea, a 1200MW project. It may be the biggest, but it also happens to be one of the most expensive sources of electricity in the world.
The contract price for Hornsea is £162.47/MWh, which under CfD is a guaranteed price, which will be index linked for 15 years. In short, a licence to print money.
https://www.lowcarboncontracts.uk/cfds/hornsea-phase-2
The current market price for electricity is below £20/MWh, so Hornsea is getting eight times what it would get if it had to trade in the market.
https://www.energybrokers.co.uk/electricity/historic-price-data-graph
At current prices, Hornsea will receive an annual subsidy of about £600 million. OK, if prices recover to more normal levels of around £40/MWh, once economic activity recovers, the subsidy will be slightly less.
But here’s the rub. Whether prices are high or low, Hornsea’s owners will receive their guaranteed price anyway. The system even allows them to sell every single unit of electricity they generate, and if there is a surplus of power in the market, they will get paid NOT to produce.
In other words, there is no commercial risk for Hornsea at all. A licence to print money, all at the expense of bill payers.
Hornsea, by the way, is joint owned by Oersted (formerly DONG) andGlobal Infrastructure Partners LLP, a global wealth fund. I find it hard to understand how sending hundreds of millions of pounds every year to either of those companies can possibly benefit the UK economy.
Maybe Justin Rowlatt might be able to explain?
