Net-zero is achieved!

[Workingman]

Unfortunately the net-zero is the number of bids for the government's latest auction of licences for North Sea wind farms. No takers.

It is said that the strike price of £44 MWh was not enough to cover higher costs. That's 4.4p kWh to you and me yet the price cap is currently at 34p kWh and we all know that the suppliers will charge at the cap. Obviously not a big enough profit.

Maybe another problem is what happened with the oil and gas fields. The larger, and more profitable fields, were taken up first leaving the smaller fields as a sort of reserve.

Could it be that the geologically easier to develop, install, access and maintain sites have or are running out? Perhaps offshore North Sea wind has peaked?

[cromwell]

Or, they know that the ban on onshore wind farms is going to be lifted and are just waiting for the starting pistol.
Much cheaper to build these monstrosities on land, I would think.

[Workingman]

The pledge by the government is for 50GW installed (nameplate) capacity by 2030 - just seven years from now. It is 3.5 times our current installed capacity of ~14GW

The UK has about 2.600 wind turbines in the North Sea so it will need roughly another 9000 to meet the 2030 goal. It is a pipe dream, even if we install them on valuable arable land.

[cromwell]

Well this is the thing, isn't it?
Big promises by people who don't live in the real world. Who couldn't deliver a pizza, let alone a massive infrastructure project.

[Workingman]

16 or 17 SMRs meet the requirements of all the proposed windmills. At about 4 hectares (14 acres) each they are about 10% the size of a Hinkley and have a construction time of less than two years. Best thing is that they provide baseload 24/7 - windmills don't, they are intermittent..

Ah, but, nuclear is deadly...

[cromwell]

Now here's something I didn't know.
Wind turbines have gearboxes!
Every gearbox typically holds between 250-300 litres of oil. The UK has circa 11,000 wind turbines so thats 3,300,000 litres of oil when they need an oil change.
Just stop oil?

[Suff]

Installation costs have risen by up to 100%. There is already one farm in delivery which has been suspended pending a reduction in installation costs.

The main problem is, as you say WM, that the average wholesale spot price for electricity has doubled but the CFD (Contract for Difference), strike price has not risen for 2 years.

With the CFD at £44 per MW/h, any price over that which the company gets for the electricity will be taken by the government. Anything under will be covered by the government. It is supposed to give stability to the companies who are going to invest billions in creating the wind farms.

With the spot price of Electricity around £70 to £80 per MW/h, it is guaranteed that the companies will be paying huge sums of money to the government but carrying double or even higher costs to deploy.

Naturally nobody bid. It was totally stupid of the Government to not raise the CFD. But the issue is that Hinckley Point C strike price is £95 per MW/h and they don't want to get anywhere near there as it is likely energy prices will drop dramatically in the next 2-3 years but the CFD will be for up to 25 years.

They're not going to get their 50gw unless they raise the CFD strike price but if they do raise the strike price they run a real risk that they will wind up paying out billions of £ for decades.

Hard choice.