Several folks around here cite Evans Pritchard from time to time, noting that some of his stuff is excellent and some is bonkers. His latest on the wonders of (offshore) windfarms is firmly in the latter character, being in the nature of an outpouring of religious fervour. How else can we explain this?
Barry Norris from Argonaut Capital disagrees [with AEP's uncritical enthusiasm], calling wind “an unsustainable economic rent seeking parasitical industry”. Rent seeking, certainly. But unsustainable? The cost of running a gas power plant this autumn (around £84 MWh) is still almost double the average tariff paid to wind companies under recent CfD contracts (£46 MWh). It was nine times more during the gas panic last year. The Treasury pockets the difference. It is a reverse subsidy. Home-harvested wind also slows the leakage of our national wealth through the current account deficit. Mr Norris doubts that wind companies will be able to meet commitments agreed in their CfD contracts, and will require a renegotiation. I agree. The strike price will have to rise in the new unforeseen circumstances. He expects a ”shabby bail-out”: I call it a reduction in the wind tax paid to the Treasury.
Oh dear. Aside from the entirely dishonest use of the "9 times" statistic (as coined by Ed Miliband, oft-parroted by greens, and true for just a couple of days last autumn): why will higher-than-expected gas prices require renegotiation of windpower contracts? Answer: because that's not the unforeseen circumstance. The problem is not high gas prices - which ought to assist other forms of energy - but shortage of raw materials and skilled labour (see diagram below) as every developer on the planet is seeking to pile (literally) into the same things at the same time, on a truly gigantic scale. A bit, errr, inflationary, wouldn't we say? And
(a) Those CfDs, far from the being hedge they were offered as (via auctions), were in fact used as speculative punts by the developers, hoping that they'd be able to source their raw materials at prices which the CfD would reward with an acceptable rate of return. But that's what they were - naked speculative punts. And pretty stupid ones too, because ...
(b) ... this wasn't remotely unforeseen. Trust me: the banks knew this all along: both the speculative aspect, and the inflationary outcome.
As with so many aspects of the Net Zero thing, there's a very strong odour of incense here: it's basically a religion.
ND
24 comments:
"an outpouring of religious fervour": an idolator, isn't he?
Not to mention...
https://news.sky.com/story/future-of-renewable-energy-in-balance-as-uk-suffers-wind-drought-with-global-stilling-to-come-12766917
https://www.euronews.com/green/2023/04/17/are-wind-droughts-a-threat-to-the-booming-north-sea-wind-power-industry
Anyway, no matter. We're all so well off after thirteen years of this government, energy prices will be irrelevant, no?
We've gone long on logs again this winter...
And, hahah! - I've just noticed the y-axis of that graph is labelled "capacity / megawatt hours".
GCSE physics fail.
Posted by someone at the DTel who's no idea what they are talking about.
Sorry to be OT again, but back to Germany...
"Germany might just be an analogue economy struggling to make the transition to a digital age"
What a pathetic analogy... nothing to do with killing your cheap energy sources, or having them killed for you?
https://www.theguardian.com/business/2023/nov/10/why-germanys-once-miracle-economy-is-turning-into-a-mirage
AEP has been writing portentous drivel for 3 decades now. Every week he manages to come up with some 'significant' turning point in some economic sphere or other. He's recently drunk the Green kool aid, and returns to that well frequently, writing increasingly deranged columns about the great sunlit Green Uplands that are just ahead (always 5-10 years ahead of course). I can only assume he has his pension invested in a 'green' fund.
He's also currently banging on about how the money supply has turned negative, and how this presages the end of the world, completely ignoring the fact the money supply went through the roof just a few years ago as governments the world over turned the printing presses on. It NEEDS to go negative for a while to extract some of the covid money printing. There's still far too much money floating around the system, far more than there was pre-covid. The negative growth in money supply is for once evidence that the central banks are doing their jobs, purging the covid excesses out of the system.
"The negative growth in money supply is for once evidence that the central banks are doing their jobs, purging the covid excesses out of the system."
But have they purged the QE of 2009-20 out of the system yet? I thought kicking the can down the road was settled Brit and Septic economic policy.
The terrible thing is that the BoE was running the presses from 2009-2020, faster than ever in 2020, and that was even before Covid struck the fan.
https://www.bankofengland.co.uk/quarterly-bulletin/2022/2022-q1/qe-at-the-bank-of-england-a-perspective-on-its-functioning-and-effectiveness
Anon @ 2:35
Not really OT at all, given Germany's equally crazy Energiewende - but be fair - the Graun piece covers a range of diagnoses, including:
" after Angela Merkel committed to shutting down all of Germany’s nuclear power stations in 2011 months after the Fukushima disaster in Japan, the country became over-reliant on cheap Russian gas to meet its energy needs. “They put all their eggs in the Russian basket,” "
There's a bit missing in all this discussion about Net Zero / Electric Cars / Wind / Solar and that's the Grid. Except for a small mention this week that the government wants 80% (yes 80%) of the UK's total energy needs to come from the Grid rather than 20% now. Presumably before 2035. The talk about £19bn being invested in improvements.
https://www.edie.net/national-grid-unveils-42bn-uk-investment-roadmap-on-the-road-to-net-zero/
Not one to suggest that government ministers are batsh**t crazy but there are questions about whether they can getting planning agreement done in time and whether there are the skills available to construct these lines and the sub-stations.
As an old PT&D hand albeit on the low and medium voltage side, HV distribution is (or was) extremely profitable. So profitable that those who made the final decision could name their price. With NG having a monopoly, it's all the more interesting.
The Grid is the missing link to all this but few appear to be giving it airtime. Or perhaps the deals are already made.
@ the government wants 80% (yes 80%) of the UK's total energy needs to come from the Grid rather than 20% now
but not in that article, PGR - any other source?
I'm guessing you mean electricity, not energy (though those are converging somewhat these days - but still a very material difference)
The only way intermittent wind/solar power will ever be feasible as a reliable source of energy to supply all our needs is if someone comes up with an efficient battery/storage solution for the excess energy produced when the wind is blowing /sun is shining for use when neither of these is happening.
Jan
I have just such a device.
It can store energy for an unlimited amount of time. Possibly as long as several millennia.
It can be stored in ice. Or underwater. In rocks, deep within the earth. All the while keeping the energy stored within.
Then, when power is needed, the device is bought to the surface and can be transported to domestic points for consumers to use.
Or, preferably, the stored energy could be used by vast industrial servers. These then connect to a web, or grid, and that enables the rapid transmission of the energy to any part of the United Kingdom. Ready for use. Day or night. Wind or rain. Calm or Gale.
At the flick of a switch.
The downside is the initial extraction and the carbon release. But I’m sure this device, “ COAL” we call it, will prove its efficiency vs other energy sources.
Surely this new-fangled "COAL" device is biomass? It just stored the carbon a bit longer ago than those Canadian wood-chips that Drax are making a fortune from.
Come to think of it, there's an even more concentrated form of biomass - if you subject coal to vast pressures and heat it anaerobically, it can exude a liquid energy concentrate called "OIL"!
I'm guessing you mean electricity, not energy (though those are converging somewhat these days - but still a very material difference)
My apologies. Still very, very *ambitious*.
The point I was trying to make which was lost, is the issue of getting approvals for the Grid. Unless the government are relying on the goodwill of the people, as they have done with housing and immigration, can't see this happening.
Or it is going to need the sort of goodwill shown when Covid contracts were handed out.
https://dailytelegraph.pressreader.com/article/282248080277731
The Sky story on the approval of the Whitehaven coal mine, which is actually right next door to the Coast To Coast Path, quotes greens as follows:
"The mine could release as much climate-heating pollution as putting 200,000 extra cars on UK roads, analysis by think tank Green Alliance has found."
Given that our approx 70 million official population had 40 million vehicles including HGVs and motorbikes,
https://www.racfoundation.org/motoring-faqs/mobility
then the seven million migrants 2000-2020 will account for 4 million vehicles with their climate-heating pollution.
Give me a UK with seven million migrants less and a steel industry, please.
Putting my ministerial hat on, surely the solution to dropping wind speeds is to build a giant wind machine, which can be powered by solar during the day, and gas at night!
And as I type, it comes through Nutella has been sacked. More psychodrama from the Tories rather than actually governing then.
And Cameron back in government by the looks of it.
They're really going all out to make the government look like the annual shindig of the third biggest supplier of office products in the UK.
Well, what a shame...
https://wattsupwiththat.com/2023/11/12/europes-largest-wind-farm-facing-bankruptcy/
Flaming fish. Cameron!
The fragrant Samantha must need a new kitchen.
Not wind power but related. An article which demonstrates that we are run by cretins.
Sigh.
https://www.telegraph.co.uk/money/net-zero/heat-pumps-noisy-millions-british-homes/
"Heat pumps are too loud to be installed in millions of homes under the Government’s noise guidelines, ministers have been told.
The Government wants to install 600,000 heat pumps a year by 2028 to hit net zero targets, but a report by sound specialists warns uptake could be limited.
The study reveals that most heat pumps are too loud for many homes in built-up areas, such as terraced houses and flats, because they would break noise limits set for homeowners who want to install one without planning permission and with a government grant.
Local authorities are also braced for a rise in noise complaints as more of the green appliances are installed in urban areas, the report seen by The Telegraph reveals."
Isn't Ambrosia Heavens Pilchard famous as being the man who predicted eleven of the last three recessions?
(And btw it was Lady Archer who was described as "fragrant", not Sam Cam)
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