Renew Extra Weekly

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Going backwards on energy - with the Tony Blair Institute

‘For much of the past decade, renewable-energy costs fell rapidly’, but now ‘the cost of creating new clean power has risen across much of the system’. So says Tone Lagengen, in a new report from the Tony Blair Institute for Global Change. It calls for a new approach to supporting clean energy technology with a focus on allegedly cheaper options. She says that, under the current approach, for renewables like offshore wind, ‘inflation, higher interest rates, constrained supply chains & global competition for key components have pushed up capital costs. This is evident in the upward trajectory of strike prices at offshore-wind auctions in recent years. In 2019’s Allocation Round 3, offshore wind cleared at the lowest prices recorded: about £55 per megawatt hour (MWh) based on 2024 prices’. By contrast, she says ‘Allocation Round 5 in 2023 failed to attract a single offshore-wind bid, as no project could be delivered below the administrative strike price. Allo...

Solar and wind boom in new CfD

The latest round of the Contract for Difference (CfD) competitive auctions for new renewable energy projects has led to a major expansion of the UK renewables programme. In January, the Auction Round 7 results for offshore wind were published (AR7), with a record 8.4GW of new offshore wind capacity secured in Europe’s biggest ever offshore wind auction. When installed it will take the UK offshore total to around 25GW. And now the CfD results for the other renewables (AR7a) have emerged - with 4.9GW of new solar and 1.3GW of new onshore wind getting 20-year contracts, up from the existing 21GW of solar and 16GW of onshore wind. AR7a also added 21MW of small tidal stream projects to the 122 MW of existing CfD supported capacity. In terms of the number of projects, AR7a was the largest CfD round so far, with 157 new solar farms, all but 22 (4.3GW) in England, and 28 new onshore wind farms, 21 of them (over 1GW) in Scotland. They including some very large projects - an 18...

Wind futures - the USA misses out, China wins?

Wind power is winning out most places, and the use of offshore wind sites is also now spreading fast. The UK is currently still in the lead on offshore wind, with 16GW installed, but that may change soon. Germany, despite having a limited coast line, has a target of 30GW by 2030 and has already installed over 9GW in the Baltic. Other EU countries, with more extensive coasts, are also pushing ahead. And Belgium, Denmark, France, Germany, Iceland, Ireland, Luxembourg, the Netherlands, Norway and the UK have now signed up to the Hamburg Declaration , a commitment to deliver 100GW of joint offshore wind projects across shared North Sea waters by 2050. The €9.5 billion pact aims to turn the North Sea into the world’s ‘largest clean energy reservoir’ and mobilise €1 trillion of capital in Europe. The Hamburg Declaration came just days after Donald Trump denigrated the uses of wind power. He has been very outspoken on the horrors of offshore wind, especially the UK programme. And ...

UK Power costs - will they fall under new plans?

A new study from the UK National Energy System Operator claims that, as a share of GDP, energy costs are set to fall from 10% of GDP today to 5-6% of GDP by 2050 if the transition to a low-carbon system is well-managed, based on NESO’s heavily renewable based Future Energy Scenarios. The new NESO study is quite a complex, looking to the significant change that is planned and what the costs would be. Perhaps unsuprisingly, there was some media confusion over what it was saying, with headlines asking ‘would net zero cost householders £500 p.a?’ So what does NESO actually say? While it accepted that there would be major costs, peaking at about £460bn by 2029 in some scenarios, it claimed that continuing as at present would also cost and not just in terms of climate impact. As Edie noted, the UK’s energy system is currently importing fossil fuels; some £50bn was spent in 2024, equivalent to 2% of GDP, with £27bn attributable to road fuel, the remainder being split evenl...

Nuclear overview- no new nuclear renaissance?

In a spirited overview of nuclear prospects, Prof. Steve Thomas from Greenwich University says that ‘despite a major public relations push in the media and with policymakers for new nuclear, the anticipated nuclear revival will not happen because of the fundamentals of the technology in terms of cost, construction time, and reliability. Commercial financiers will remain very reluctant to fund these projects if any of the risk falls on them. Nuclear projects also take far too long before a return on investment can begin to be earned, typically more than 15 years from investment decision to first power’. Small modular Reactors (SMRs) are sometimes seen as the way ahead, but Arnie Gundersen , a former nuclear industry executive with 50 years of experience managing 70 nuclear projects says ‘Despite all the headlines and billions in taxpayer subsidies, an SMR will never be built—not in time to matter, and not at a price that makes sense’. He adds ‘I once b...

Wind power cost issues- and the new CfD

Wind power has been doing well in the UK, especially offshore. But there are issues. The variability of renewable energy sources like wind and solar is not their only problem- pushing the full system costs of energy up, as I discussed in my last post. There are also curtailment costs incurred when local potential green power supply exceeds what can be delivered to consumers. For example, last year, SSE earned nearly £10 million in ‘constraint’ payments for unused wind power generated in Scotland, the vast majority from its Viking on-shore 103 turbine wind farm. It is not alone. For example, a Feature article in the Times (Jan 10th) noted that SSE’s Seagreen offshore wind farm off the East coast of Scotland has been paid to curtail output from it 114 turbines for 63% of the time. In all, the Times report noted, curtailment cost consumers £1.5 bn last year and it said the fundamental problem was the ‘lack of cables’ to users- with wind farms mostly bein...