Britain Awards Wind Farm Contracts That Will Power 12 Million Homes (nytimes.com) 86
The UK government has awarded guaranteed electricity prices to offshore wind projects totaling 8.4 GW in a bid to revive wind development, attract nearly $30 billion in private investment, and stabilize energy costs. The New York Times reports: On Wednesday, the British government said that it would provide guaranteed electricity prices for a group of wind farms off England, Scotland and Wales that would, once built, provide power for 12 million homes. The 8.4 gigawatts, a power capacity measure, that won support is the largest amount that has been achieved in an auction in Britain. The government said that these wind farms could lead to 22 billion pounds, or almost $30 billion, in private investment.
The government holds regular auctions, roughly on an annual basis. Results have been improving after a failed auction in 2023 that produced no bids from developers. The government almost doubled its original budget for the recent auction to about 1.8 billion pounds per year. To encourage renewable energy sources like offshore wind, Britain offers a price floor to provide certainty for investors. The average floor, or strike price, from the auction on Wednesday was about 91 pounds, or $122 per megawatt-hour, in 2024 prices, up about 11 percent from the last auction.
Over the past year the wholesale price for electricity in Britain was on average about 79 pounds, according to Drax Electric Insights, a market analysis website. The bulk of the planned wind farms that won price supports will be off eastern England. Support will also go to wind farms off Scotland and Wales. The British government wants at least 95 percent of the country's electricity generation to come from clean sources by 2030. Political consensus for ambitious climate goals is eroding in Britain, but the government of Prime Minister Keir Starmer believes that an enormous bet on clean energy, especially offshore wind, is necessary to protect consumers from volatile fossil fuel prices.
The government holds regular auctions, roughly on an annual basis. Results have been improving after a failed auction in 2023 that produced no bids from developers. The government almost doubled its original budget for the recent auction to about 1.8 billion pounds per year. To encourage renewable energy sources like offshore wind, Britain offers a price floor to provide certainty for investors. The average floor, or strike price, from the auction on Wednesday was about 91 pounds, or $122 per megawatt-hour, in 2024 prices, up about 11 percent from the last auction.
Over the past year the wholesale price for electricity in Britain was on average about 79 pounds, according to Drax Electric Insights, a market analysis website. The bulk of the planned wind farms that won price supports will be off eastern England. Support will also go to wind farms off Scotland and Wales. The British government wants at least 95 percent of the country's electricity generation to come from clean sources by 2030. Political consensus for ambitious climate goals is eroding in Britain, but the government of Prime Minister Keir Starmer believes that an enormous bet on clean energy, especially offshore wind, is necessary to protect consumers from volatile fossil fuel prices.
How much storage is planned in that? (Score:2, Interesting)
Building wind or solor without some form of minimal storage reeks of incompetence to me.
Re:How much storage is planned in that? (Score:5, Informative)
CfDs run on a tech-by-tech basis, eg onshore wind, offshore wind, storage, are all run as separate auctions. Round 7 didn’t include storage, but previous rounds have. The bulk of UK storage is bought through merchant revenues instead: wholesale arbitrage, Balancing Mechanism, and ancillary services such as dynamic containment and frequency response. There’s also a Capacity Market explicitly designed to pay battery operators for providing availability during stress events. So the UK is investing in storage, just largely through different mechanisms that account for how it’s used.
We’re at 7.5GW of storage, roughly, for the UK as a whole, which is a fivefold increase in five years. So while of course we would like to be at 75 or 750GW today, we’re heading in the right direction. Obviously this will only increase with falling battery prices, and particularly if sodium takes off thanks to CATL’s developments.
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Nice!
As for Na batteries from CATL, have we solved the issue of the linear load curve? I mean I know a BMS can be programmed to account for it but the issue of rising amperage on dropping voltage at grid scale is a tad uncomfortable, no?
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I don’t think they have, no. So you’d need mitigations like battery design tweaks (eg wider voltage window), power electronics adaptations, and operational strategies like stacked cell groups to reduce voltage sag per group. All of that reduces the cost advantage of sodium, but to be fair, there’s a whole S-curve of scale and learning economies that we’ve not got to, yet
Re: How much storage is planned in that? (Score:1)
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No, the question is why the hell are you posting to slashdot, "news for nerds", when you're clearly an ignorant idiot?
Re:How much storage is planned in that? (Score:4, Insightful)
Weâ(TM)re at 7.5GW of storage
Tooth gnashing intensifies! That's power not storage :D
The figure I got was 6.8GW/10.5GWh. Of course it's a even more complicated because that 10.5GWh is split over plants of various individual power/capacity ratings, so it's still not clear how long one could power how much for. And then of course there's transmission constrictions but whatever!
So while of course we would like to be at 75 or 750GW today, weâ(TM)re heading in the right direction.
I don't think we need either of those. We're currently consuming 42GW, so having even 75 from batteries would be more than enough delivery capacity.
and particularly if sodium takes off thanks to CATLâ(TM)s developments.
Yeah funny that. At the time when Tesla installed as was breathlessly quoted by the press as the world's largest battery (it was actually only the world's largest lithium battery), there was a larger sodium which had been running for a few years in Japan. Although that was a NaS chemistry, so quite different from the newer sodium ones.
Re:How much storage is planned in that? (Score:5, Informative)
We're at 7.5 GW of storage
Tooth gnashing intensifies! That's power not storage :D
Indeed. I second that gnashing
The figure I got was 6.8 GW / 10.5 GWh.
I think you are both looking only at battery storage. The UK also has about 2.8 GW / 24 GWh of pumped hydro storage (with plans to add more).
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China just opened a 1GW vanadium flow battery plant. That's a single plant. It cost $810 million dollar USD.
Although I'm pretty sure GB can't build a battery at that scale for that price. It was built in Xinjiang so they could have used slave labour for quite a bit of it. But even assuming twice the price, it would help the windfarms so much to have that kind of storage. Imagine being able to store 8GW of power from that farm.
I'm with GP: it's almost criminal to not spend another billion dollar and add at l
Re:How much storage is planned in that? (Score:4, Informative)
The UK *is* adding GWs of storage to support renewables. They’re just treated as separate projects, including financing and revenue flows.
What would a more integrated solution look like and why would it be better? Physical colocation? With what? Not the turbines themselves, they’re offshore. And why do it at where the power comes onshore?
Revenue flows and financing are different for good reasons, as I explained above. Coupling them really speaks to me of an old mindset of trying to make wind + storage = firm power. But decoupling the two allows for more flexibility and is better overall.
Re:How much storage is planned in that? (Score:4, Informative)
And why do it at where the power comes onshore?
While you're mostly on point there is good reason to do it where it comes onshore. Upsets in power, especially due to rippling effects of a plant tripping offline do affect wider grid stability. The choice of where to add storage does in fact matter, and it is objectively a good idea to have it in places where you not only help stability, but where you have an existing grid connection sized for the power being generated. I.e. you don't want to add extra transmission lines and associated substations and equipment simply to put your battery somewhere else.
Many storage projects *are* in fact being co-located with generation projects, even when they are funded or managed by different companies under different construction permits. In many cases retrospectively so.
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There are some real advantages to colocation, and I shouldn’t have put my question so rhetorically. But there are downsides too. A few mentioned below by stripes. Generally, the challenges of grids are felt most keenly near where there’s high demand / load, so if you put batteries there rather than at the seaside, you get to defer expensive grid upgrades, and you get voltage stabilisation etc where it’s needed. Seaside sites are typically quite constrained, too — there are more degre
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Benefits for grid depends on the grid construction. Different grids need different solutions to different problems. Some are suffering exactly as you say, but others are suffering in different ways mainly in overall transmission, and in situations where your peak transmission is overloading the long distance transport (e.g. Germany's north south power corridor) you don't want batteries at the load, you want them at the generation point. You can source or sink in different places to make a grid distribute po
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What would a more integrated solution look like and why would it be better? Physical colocation? With what? Not the turbines themselves, they’re offshore. And why do it at where the power comes onshore?
I can’t say why integrating them would be better, but I can say not integrating them has real advantages. For example adding a large storage facility could take excess power from wind and solar at different times. As an independent unit it could also retroactively add storage capacity for prior projects, or if this project turns out to have issues the storage could be useful for other projects. If the wind generation is a huge success but the storage system is a dud replacing it with a different st
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It was built in Xinjiang so they could have used slave labour for quite a bit of it.
Unlikeley. From where would those slaves come from?
Seems with "plant" you meant power plant? That is pretty misleading, as battery is not power plant. And first when I read your sentence, I thought you meant a plant as in factory that produces vanadium flow batteries.
So, what they actually did was setting up a vanadium flow battery (storage):
China is a global leader in vanadium flow battery (VFB) deployment, building the world's largest GWh-scale projects, like the 200MW/1GWh system in Xinjiang
That project is integrated into a PV installation, btw.
I found this article quite
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The uyghurs are currently being used as slave labourers all over China. It's called "mandatory work training" when they put for instance a professor in the English language to work as a manual labourer to give him "a better work ethic", in exchange for food rations and a bed in a guarded camp.
Normally people call that slave labour, but if you feel it's normal, feel free to come and work for me for the same conditions and rates.
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a) only idiots call this slave labour
b) all over Europe we have mandatory military service, or as alternative civil service - no one calls it slave labour
c) It's called "mandatory work training" when they put for instance a professor in the English language to work as a manual labourer to give him "a better work ethic", in exchange for food rations and a bed in a guarded camp. - that is simply not happening - as he did his mandatory civil service already, otherwise he would not work as English teacher
d) thi
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Although I'm pretty sure GB can't build a battery at that scale for that price.
What scale? One of the benefits of Vanadium flow batteries is that storage charge scales with how much liquid you purchase, not labour or resources required to build. Liquid also scales HUGELY for construction cost, so it doesn't cost much more to build a 1GWh than a 500MWh battery. Add to that that this was a containerized system which means construction costs are tiny for an expansion of liquid.
Most of the cost of the battery China built was the cost of the power conversion (200MW) and the grid connection
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Most likely Flow Batteries.
But short term, Sodium in batteries might be a good solution.
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Re:How much storage is planned in that? (Score:4, Insightful)
And why is UK so dependent on gas? Because Margaret Thatcher ruined a well run public infrastructure for short term gain and made producing electricity from gas the most viable option for making money fast because who cares about long term stability? And also, who cares about ordinary people gets worse outcome out of privatization as long as rich people can get richer?
Tom Nicholas has an excellent video about this, How energy privatization is bankrupting Britain [youtu.be]
Even before the recent increases in the wholesale cost of gas, energy suppliers have been steadily ratcheting up prices. Outside of the global oil shocks of the 1970s the average price of electricity consistently went down under nationalization. Adjusting for inflation the average Brit was paying 36 percent less to turn the lights on in 1990 than they were in 1946.
Far from driving down prices attempts to introduce competition to the market have actually reversed that trend. Between 1998 and 2019 the average domestic electricity rate increased in real terms by a whopping 80 percent.
Following Russia's invasion of Ukraine and the subsequent spike in wholesale gas prices energy bills in the UK have risen even further at a ridiculous rate in 2020 the average annual UK Energy bill was around 450 pounds by 2022 it was 2500 pounds and in 2023 it's expected to be a full three grand.
Worse still, these final couple of figures would be even higher were it not for the government's introduction of a price cap this will see the UK government hand over up to 140 billion pounds in subsidies to energy suppliers to ensure that ordinary Brits can turn the heating on far from Maggie Thatcher's dream of an energy industry in which the free market drives down prices then what we've ended up with is one in which the government is panding private companies cash by the bucket load so there is a lot of anger in the UK
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Kinda sorta but the wholesale market is quite decoupled from the retail market. It was the retail suppliers that got privatised, the wholesale side was always private. I hate The issues with the way consumer pricing works are important to fix, but the answer lies in some important technical fixes on the wholesale side. Especially RO buyout / restructuring to directly convert windfall rents into consumer savings; levy reform and default time-of-use tariffs, to ensure cheap renewable hours show up in real bil
Re: How much storage is planned in that? (Score:2)
Storage and wind auctions are not linked, but there is 100GWh in the planning pipeline. Not all of that will get built, but it is a 10x increase.
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Dunno, but we spent £1.5 billion last year paying for curtailment (i.e. paying wind farms to stop generating because we can't do anything with the power), so I'm guessing the answer is "not enough". 13% of the total potential wind generation was curtailed last year. Eventually I guess grid capacity and storage will catch up, but for the moment, I'm guessing the amount of curtailment is only going to go higher.
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No idea why people call it a problem if you have to throttle wind power production, because of surplus power.
That is an utterly stupid point of view.
You would not complain at all, if you suddenly have surplus money on your bank account, or would you?
Sure, if you have surplus water in your garden, that might be a problem, or surplus milk in your supermarket, or surplus chicken shit ...
If you have a surplus of stuff that annoys the shit out of you, and you can not get rid of it: understandable that you are bo
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The issue is *paying* producers to do this *while we still have carbon intensive production*. It’s a problem of grid congestion and inability to store enough power
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Yes, and the point of paying is: the grid operators have an incentive to provide solutions ... either sell to outer markets or store it, or power down their CO2 producing plants.
In Germany, we do the same. The grid operator has to pay for excess power he can not absorb, the same price as if he would take it. To force him overtime to either swallow the bill, or find a solution to that "issue".
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Yes, there’s a price signal. But the UK grid operator is a regulated natural monopoly, so it is under no existential threat from passing on rising costs of operation like curtailment to its customers. There’s regulatory and other pressure, but that’s not a full substitute for market discipline, and indeed the UK grid operator has not exactly been pulling its finger out to dramatically increase storage and connectivity. We have a congested grid and the plan for relief is insipid. And people
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If your grid is congested, then you probably had an increase in electricity production and consumption and the grid is trailing in being upgraded.
Has hardly anything to do with renewables per se.
Anyway, Germany has similar problems with high wind production in the north, high electricity consumption in the south, and a very slow build up of grid infrastructure to transport energy from north to south.
It is getting better though.
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Done right, storage lets you defer some of your grid upgrades for transport, though. And storage is cheaper and generally less politicised.
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It’s quite a big issue, yes.
This article is a couple of years old, but captures the main issues accurately.
https://www.politico.eu/articl... [politico.eu]
Consumer price chart (Score:1)
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Building wind or solor without some form of minimal storage reeks of incompetence to me.
Depends. Storage is good if you fall short of generating enough power to meet demand, but you don’t need it if you are able to meet demand. So if for example you have some sort of LPG power generation that is meeting demand but also stupefyingly expensive, or polluting more then you want adding wind so you can cut back on the other generation is fine. If you aren’t otherwise able to meet demand more intermittent generation without more storage can still be valuable, if the existing intermitt
Oh, look, power that doesn't require ... (Score:2)
... 50 000 years of waste management and can be set up within months with minimal regulations, a crew of 20 men, a crane and a modern windmill making inroads while the fission and Fusion pipe-dreams are still swallowing bazillions of tax money still are trying to prove their long-term efficiency. ... Other than for Germans that is, who are actually capable of basic math and engineering and thus have abandoned their world-leading fission programs a while ago.
Who would've thunk?
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Other than for Germans that is, who are actually capable of basic math and engineering and thus have abandoned their world-leading fission programs a while ago.
OMFG the praise for Germany's utter shitshow is just mind blowing. They are the worst emitter of carbon per KWh of all the major Western European countries, mostly by a pretty wide margin.
Global warming is still a thing you know.
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You should stop getting your "news" from /. and idiots like atomicalgebra:
https://www.reddit.com/r/europ... [reddit.com].
Germany never was, and currently is not, the highest CO2 producer per kWh.
Google better statistics yourself.
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Oh wow Germany is doing better than Poland, that famous large Western European economy. Why not brag about doing better than Kazakhstan, too?
Here are the actual top 5 western European economies:
https://ourworldindata.org/gra... [ourworldindata.org]
Oh look where Germany is, it's the worst emitter and has the worst trend over time as well. Even France, which is a way way lower emitter has halved CO2/kWH since 2010, something Germany has not managed.
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Wow, how stupid is this:
has halved CO2/kWH since 2010 ????
Germany has more than halved its CO2 emissions since 1990.
What the fuck is cherry picking 2010 about?
Germany used to produce roughly 80% of its electricity with CO2 producing plants. Now it is 35%.
Farking idiot.
Germany is the world leader in CO2 reduction how farking stupid can you be?
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Germany has more than halved its CO2 emissions since 1990.
https://ourworldindata.org/gra... [ourworldindata.org]
lol you muppet.
Since 1990, the UK cut by 2.6, France cut by 2.5 and Spain by 2.9 since 1990. Italy cut by 2x. Germany managed 1.8.
So since 1990 it's also the worst of the top 5 western European economies.
What the fuck is cherry picking 2010 about?
Well I figured you'd be really pissy if I picked the date where Germany's have even less of an improvement compared ot its peers. But no apparently you want to pick the worse
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A "shit show" would be a steady-state at current levels. That is very much NOT what Germany is doing. You lack insight.
As to "pretty wide margin": https://www.iea.org/regions/eu... [iea.org]
Note that Germany has 83M citizens, while, for example, Poland has 37M. That puts Germany _below_ Poland per capita. You lack insight.
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A "shit show" would be a steady-state at current levels. That is very much NOT what Germany is doing. You lack insight.
Cool.
https://ourworldindata.org/gra... [ourworldindata.org]
Oh look everyone's been reducing their CO2/kWH. Germany is neither doing well in an absolute sense or doing remarkably in the trend either. In fact trend wise it's doing worse than Spain and the UK. Since 2010 it's done worse than France who HALVED the CO2/kWH and France had already eliminated WAY more fossil fuel in 2010 then Germany.
The insight is tha
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Doing better than Poland is not the brag you think it is. Also what part of WESTERN Europe do you not understand?
Did I "brag"? No, I did not. I just demonstrated you are lying.
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Oh goody I'm talking to a liar and a moron. First you lie about what I said, then you lie more about your own lies.
Hey fucknuts, Poland isn't Western Europe. I said Western. Learn to read. I've provided links showing Germany is the worst of the top 5 western European countries. Learning to read a graph is clearly going to be beyond your level, so I won't ask you to do that.
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Really? Doubling down on things by trying to redefine reality? That does not make you look smart at all.
But I guess you just want to crap on Germany, and facts be damned.
The difference over solar is increasing (Score:2)
Re:The difference over solar is increasing (Score:5, Interesting)
UK has poor insolation relatively speaking, so solar capacity is more limited here. And wind is complementary in its availability. The UK has moved forward with some big solar projects, and I expect we’ll see a lot more behind-the-meter growth as prices continue to fall.
Re: The difference over solar is increasing (Score:2)
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Fun fact, Madrid gets more rain than London. But I’m from Manchester originally, and getting soaked in the rain was a continuous risk
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$122 is getting kind of high when a home Solar system is delivering the same MWh for $50. Solar takes up more space but it's also a lot cheaper per MWh now.
Wind and solar tend to produce at different times, as in wind production tends to be higher when solar is lower. So if you have a lot of solar built out but not enough storage to bridge the gaps wind will make the most of what storage you do have by providing power mostly when solar doesn’t. (not so much “at night”, but other then night time either solar or wind produces well around 90% of the time in many areas while solar or wind alone is much closer to 50% of the time)
I’m not
The floor price is also the ceiling! (Score:5, Interesting)
There is indeed a floor price in a Contract for Difference, so operators know they won’t get less than that. But that same price is also a *ceiling* price, so that the government is protected if prices spike. If that happens, operators have to eat the cost. That’s why it’s a Contract for *Difference*. It’s an explicitly two-sided mechanism and it’s pretty damn clever. It’s had three really positive effects:
1. Massive expansion of relevant renewables tech in the UK, particularly offshore wind — except for the auction the Tories fucked up. Incredible that they managed to break this, of all things, great dedication on their part to incompetence
2. Driven down prices through a clever reverse auction mechanism
3. Moved the UK away from previous pricing regimes that locked in high margins for operators even though renewables costs were falling. There’s still 35GW of UK wind power that’s provided under the previous Renewables Obligation mechanism which bakes in high prices. So when I say moved away, I don’t mean this shut down those old contracts, I mean that CfDs dilute the impact of those old contracts. Speaking personally, I still think the UK government would be best off buying the operators out of them and moving them to PPAs, long term contracts that de-risk for both sides similarly to a CfD (which can only work for net new generation)
This is the seventh round of CfDs, and long may they continue. They’ve enabled the UK to build out a big renewables fleet, with much more to come.
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It's very welcome, and at this point anything that accelerates the deployment, even if it isn't the very cheapest option, is welcome. It should bring bills down anyway.
Privatising profits, and socialising losses (Score:3, Informative)
Re:Privatising profits, and socialising losses (Score:4, Insightful)
You’ve misunderstood how these contracts work. See my other answer above. This is a fast-moving technology sector, there are significant risks to the government acting as direct provider, especially of locking in on rapidly outdated methods. CfDs have driven prices downwards massively over the time the auctions have been run.
The UK energy market has many issues, including poor value for consumers, but CfDs are part of the solution, not the problem, and a national program to build turbines just means losing access to global economies of scale (unless it’s a white labelling project, in case what’s the point?)
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Best analogy for CfD is to think of a fixed rate mortgage: it’s a bet between you and the bank, right? If you fix at say 5% for five years, and interest rates go up a lot during that time, you’ve won, but if interest rates fall, you’ve lost. Except that for a CfD, what you’ve done is got all the banks to give you a sealed envelope with their best offer of a rate inside, so they’re all competing with each other.
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The electricity market is not inelastic! Not in the short term, not in the medium term and not in the long term. Not for retail customers, not for industrial customers, not for wholesalers, not for producers, and not for manufacturers.
Consumers can and do cut demand (smart meters for real-time, buying panels and batteries, time-shifting, insulation, etc), for example.
And blithely ignoring global supply chain economies of scale and learning is just madness. Turbines costs are down by 60% over a decade; panel
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We could do that. Ultimately that’s a capex vs opex decision.
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There's a middle ground between nationalisation and buying from abroad, which is to require that companies produce certain components locally. That way money from factory construction and wages during operation stay local, and it supports local supply chains for ancillary industries.
Obviously you need to pick ones where it makes sense, such as things that are already practical here to some extent. Turbine blades, for example, and especially as they are a royal pain in the arse to ship. Very high performance
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That’s all true, but it kind of happens already today in the supply chain, where items that are cheaper to purchase locally are bought locally. But yes, a more robustly activist industrial strategy could include this kind of regulatory requirement. The tradeoff is that some bidders walk away, or that the regulations don’t keep up with changing tech, but that’s always a risk
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It's not unusual when countries are making large purchases that they demand that the vendor build a factory in their country to do the work. This brings in investment, keeps quite a lot of money in the country (i.e. wages when it's running, construction costs when it's being built), and starts to build up local supply chains and expertise.
One of the main bits of advancing tech is offshore construction, so you don't really lock that in either way. Things like manufacturing parts for turbine blades is somewha
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Insourcing is rather a different thing from a nationalised energy provision system, though. Requiring a certain percentage of final assembly to happen in the UK, or for a percentage of the construction crews to be UK nationals is one thing, having the government run it all is quite another.
And even for insourcing, as always, there’s a question of how far you’re going to go. Do we insist that they buy British gearboxes, generators, bearings, power electronics, yaw systems for nacelles that are as
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None of this feels very germane to addressing the original issue, which was the high costs of energy for domestic consumers in the UK.
Well, it's a forum with proper threading. It allows discussions to veer and branch...
And even for insourcing, as always, thereâ(TM)s a question of how far youâ(TM)re going to go.
Yeah you can't spin up arbitrary industry overnight. If it's going to be a long term, essentially continuous program you can start with the quickest things and set deadlines for the less qui
I wonder... (Score:2)
I may be talking nonsense here because I really don't have enough knowledge about windmills. If climate change results in a large increase in wind speeds - and possibly and increase in the frequency and severity of hurricanes as well - is there a risk of whole wind farms being damaged or destroyed?
I love that we're building out wind energy, because it seems like a fast way to supplant fossil fuels. And there's no doubt that we need to act quickly and at a large scale if we're to have a chance of saving ours
Re: I wonder... (Score:3)
Not really. Storms don't get much more intense, that just get more common and last longer. Build your turbine to withstand today's hurricanes, and you'll just have more wind to generate power from.
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Unlike politicians, wind-farm planning looks at the lifetime of the elements and at the projections for climate change. In the typical 20-30 year window, these are pretty accurate. On a second level, insurance (that all industrial tech needs, except nuclear because they are lying about nuclear being "uninsurable") will do a second level on that analysis.
Hence this is an addressed concern.
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You are welcome. This aspect of things rarely gets discussed in public. But they are there.
So UK will pay 50% more for electricity generated (Score:2)
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1. The numbers are right there in the article for you. £91 strike price, £79 average 2025 price. That’s a 15% premium, not 50%
2. You don’t understand how a CfD works. See my other answer above. It’s a shared risk mechanism. If spot market prices go above the strike price, as has happened many times in the past, the operators eat the difference and the UK government and public win
Fucking NYT shitty reporting
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1. The numbers are right there in the article for you. £91 strike price, £79 average 2025 price. That’s a 15% premium, not 50%
2. You don’t understand how a CfD works. See my other answer above. It’s a shared risk mechanism. If spot market prices go above the strike price, as has happened many times in the past, the operators eat the difference and the UK government and public win
Fucking NYT shitty reporting
They aren't "eating the difference" as their cost has not increased. It just caps their profit while also guaranteeing them a minimum profit. This guarantee is only needed because offshore wind is extremely expensive energy,
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And then you look at the insane price assurance that Hinkley Point gets ...
Social value of AI (Score:2)
If AI companies wanted to demonstrate their products had social value, they should team up with Slashdot and build a mechanism that requires anyone who has shit karma to have to pose their oh-so-clever points and questions to the AI first, and the posts only go up if the point is an actual issue. Then we could spend less time talking about, say, this CfD pricing mechanism being “privatising profits while socialising risks”, when it’s nothing of the sort
Datacentres (Score:2)
12 millions homes, or how many AI datacentres?
Price floor trap (Score:2)
Setting a guaranteed price floor for electricity produced is an effective way to encourage private equity investment in new energy production infrastructure. In this way, it is a good thing. Rather than the government having to directly subsidize the build out, they just guarantee that the product will have a minimum market value. The investors know they will have a return on their investment and not lose money.
It is a trap. The problem is that they are guaranteeing that consumers will (indirectly) pay
Hmmm... (Score:1)