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Post by zanygame on Oct 12, 2023 12:20:11 GMT
Would be interesting to find out if this is true, why its true. What I'm getting here. Wind power costs half as much to produce but costs 1.5 times as much to buy. Zany, I am struggling a bit to understand your point. We have seen that wind power is roughly half the current cost of gas generated electricity. That much is true. Indeed wind was selling for as little as £37 per MGW as recently as the summer 2022 CFD round. www.4coffshore.com/News/nearly-7-gw-of-offshore-wind-awarded-in-uks-latest-cfd-auction.-cost-falls-by-702525.-nid25892.html. Like so many things costs have increased recently so no-one was prepared to sell at £44 in the most recent round - it is reckoned that a price of around £50 is required. I am struggling to understand why you think wind generated electricity costs 1.5 times as much to buy. That simply isn't true. I wonder if you have misunderstood how the contract for differences scheme works. P:ower generators sell the power they have generated to the grid. At present all generators sell the power they have generated to the grid at the same price regardless of fuel used. Under the CFD scheme generators sell forward their power ensuring they get a fixed price. The most recent CFD round for wind power failed to get any bids at £44 as a price of around £50 was required to secure bids. CFD works by fixing a price the developer will get for the power. So say they have a contract for difference at £50. If the market price from the grid is £30, the government pays the developer a further £20 to bring achieved price up to £50. If the market price is £80, the developer pays £30 of that to the government to take achieved price down to £50. I was basing the cost of electricity produced from gas on the figure Pacifico gave, I assumed he understood my enquiry. |
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Post by zanygame on Oct 12, 2023 12:27:47 GMT
. Well its widely claimed so I assume someone has calculated it. Its possible they have under estimated to cost of return on investment? The early windfarms were considered high risk investments and would have much higher return rates? Because of the fickle nature of the endeavor, it's probably quite difficult to calculate in 'cold blood'. Insurance companies are quite likely to take a rather defensive attitude over being asked to bet that the wind will blow properly/normally/moderately. If you ran a real wind farm for ten years you could probably work out what the price needs to be - but with largish error bars Wind farms have been around for over a decade. When they were first muted the costs were high as no one really knew the maintenance needed. As time went on it turned out maintenance costs were lower and then far lower than expected. Hence the drop in manufacturing electricity costs. Its possible that those originally investing did so with much higher return rates and that these rates have not yet run their course. However on the figures I've seen, I am more inclined to believe Dappy has the correct numbers. |
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Post by dappy on Oct 12, 2023 12:36:41 GMT
There is no doubt that in the early days offshore wind farms were much more expensive than they are now and hence the cost of producing power from them was higher than alternative forms of power generation.
Now they are cheaper as we have seen. It is possible of course that gas price may fall so substantially that electricity from gas becomes cheaper than wind but that feels unlikely.
Still confused where the suggestion that wind generated electricity sells for 50% more than gas generated electricity originates from. Not the case.
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Post by Orac on Oct 12, 2023 12:47:27 GMT
However on the figures I've seen, I am more inclined to believe Dappy has the correct numbers. I imagine you are. It doesn't matter what figures dappy has. If no one is prepared to take a contract to sell at that price, then it's not the real price. |
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Post by dappy on Oct 12, 2023 12:57:23 GMT
No one has suggested that £44 is todays "real" price Orac.
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Post by zanygame on Oct 12, 2023 13:25:42 GMT
However on the figures I've seen, I am more inclined to believe Dappy has the correct numbers. I imagine you are. It doesn't matter what figures dappy has. If no one is prepared to take a contract to sell at that price, then it's not the real price. Its more the price gas generated electricity sells for, that you need to look at. Why would wind and solar generators agree to £48 per MWh when gas is twice that at least. Assuming that reductions in the production costs of electricity were passed along to customers, and an average cost of £85/MWh for fossil fuel energy, if this were to be replaced by wind and solar at a cost of £44 to £57/MWh, this could lead to a saving of between £183 and £268 per year, depending on the proportion of wind and solar electricity production used [6].  www.pagerpower.com/news/the-cost-of-electricity-generation-methods/ |
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Post by Orac on Oct 12, 2023 14:14:31 GMT
I'm just telling you that your speculations about the price are futile in the face of the reality of nobody agreeing to sell at that price.
There is no graph or table of data that mends that
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Post by Pacifico on Oct 12, 2023 14:28:29 GMT
However on the figures I've seen, I am more inclined to believe Dappy has the correct numbers. I imagine you are. It doesn't matter what figures dappy has. If no one is prepared to take a contract to sell at that price, then it's not the real price. I think we are banging our heads against a brick wall here - there is a view that wind only costs 'X' - the fact that you cannot buy it for 'X' does not seem to compute with some people. |
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Post by zanygame on Oct 12, 2023 15:11:33 GMT
I'm just telling you that your speculations about the price are futile in the face of the reality of nobody agreeing to sell at that price. There is no graph or table of data that mends that But it does answer the question why they wont sell at that price. I heard no ones willing to sell their house for a tenner either. Doesn't mean houses wont sell. |
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Post by zanygame on Oct 12, 2023 15:16:00 GMT
I imagine you are. It doesn't matter what figures dappy has. If no one is prepared to take a contract to sell at that price, then it's not the real price. I think we are banging our heads against a brick wall here - there is a view that wind only costs 'X' - the fact that you cannot buy it for 'X' does not seem to compute with some people. I think you fully understand what's being said. If wind power costs £40 to produce no one is going to sell it for £48 when they can get £80. I'm guessing you've never been in business. |
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Post by Orac on Oct 12, 2023 15:40:30 GMT
I'm just telling you that your speculations about the price are futile in the face of the reality of nobody agreeing to sell at that price. There is no graph or table of data that mends that But it does answer the question why they wont sell at that price. I heard no ones willing to sell their house for a tenner either. Doesn't mean houses wont sell. Nobody will sell it for a tenner and typically a house costs more than a tenner to provide. I'm not seeing the conundrum here. Is this supposed to be an illustration? You are making a claim about a price / cost that apparently isn't backed by market reality |
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Post by dappy on Oct 12, 2023 15:49:46 GMT
There is something Tommy Grasshopperery about Pacifico's inability to simply accept he is wrong. I had thought Tommy might have passed away but maybe he has just changed his user name.
Just to summarise one last time,
Gas generated electricity costs around £100 per MGW of electricity
Wind generated electricity used to be profitable at a fixed selling price of around £37 per MGW but costs have recently risen. The government messed up the recent CFD round restricting bids to a maximum fixed selling price of £44 per MGW whereas a maximum bid price of around £50 would have been needed to attract bids.
Its a bit of a roundabout process but the CFD scheme effectively fixes the price generators get for their power, so wind schemes fixed their price for around £37 per MGW in summer 2022 but would only be interested in developing new schemes at a price of around £50 per MGW now.
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Post by Pacifico on Oct 12, 2023 16:09:29 GMT
I think we are banging our heads against a brick wall here - there is a view that wind only costs 'X' - the fact that you cannot buy it for 'X' does not seem to compute with some people. I think you fully understand what's being said. If wind power costs £40 to produce no one is going to sell it for £48 when they can get £80. I'm guessing you've never been in business. But the costs that you (and dappy) keep quoting as the the comparative cost of wind power compared with gas to prove that wind is cheaper, are based on the assumption that you can get it for £44. As you are now saying - if you have to pay £80 for windpower then obviously it is not cheaper than gas. |
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Post by dappy on Oct 12, 2023 16:25:30 GMT
Don't be silly Pacifico.
The cost of a MGW of offshore wind generated electricity is currently around £50 and the cost of a MGW of gas generated electricity is currently around £100 (actually a bit more).
If you could just let me have the dates of both the EU referendums in Greenland that would be much appreciated.
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Post by Pacifico on Oct 12, 2023 16:34:34 GMT
FFS dappy - the graphic shown by zany is based on a report from the Department for BEIS who assume that the price paid for wind power is £44. That you cannot get wind energy for £44 shows that the figures in the chart are wrong - try and keep to reality and not this fantasy world you inhabit. |
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