The cost of climate change

At least I now know you understand. It costs far less than gas to produce, but business wise they are getting the best price they can while staying just below the competition.

As more wind generation develops competition will grow and the gap between production cost and sale price will shrink.

Something that can't happen with gas. 

But that is the point - you have no idea how much Wind power costs to produce.

You have latched onto these fantasy figures from the government that bear no reality to the real world. CfD's were introduced precisely because Wind Power was uneconomic - and nobody is suggesting getting rid of them and allowing wind power to rise or fall according to the market.

Face facts - you were conned.

I have every idea. I have seen the figures from a dozen different sites. Try offering them £70 a MWh. Still cheaper than gas. 

This is one of those weird threads that seem to crop up every now and then on this forum. Pacifico has got his figures wrong. We all make mistakes occasionally so while mildly embarrassing no biggie if he just says “oops you’re right, I got it wrong this time”. Instead he has thrashed around trying to obscure, misrepresent ever more desperate to cover his tracks but only succeeding in making a mild embarrassment into a complete destruction of his credibility. We are not quite up to the Infamous Greenland referendums meltdown but starting to approximate.

Let’s just remind you all one more time of the basic facts that have remained unchanged for many many pages.

At current prices, electricity generated from gas costs just over £100 per MGW.

The cost of offshore wind power is substantially less. The current cost is around £50.

Offshore wind generation costs have reduced substantially over recent years reaching £37 in summer 2022 but with construction raw materials (eg steel) costs increasing and interest rates increasing, they have increased over the last year or so to their current figure.

Wind investment needs price certainty as it’s costs are front loaded - it’s “fuel” is free, much of its cost comes in initial construction. So the government organises this through the Contract for Difference scheme.

A new project bids for a strike point against other projects and if successful the project will be built and power generated will be sold via this scheme.

Power generated is sold to the grid at the same price as power generated from gas. Let’s say for illustration that price is £110 per MWH. The grid pays the wind power generation company £110 for each MWH it feeds to the grid - exactly the same price as they would pay gas power generators.

Then the CFD mechanism kicks in. If they have won a bid at a CFD price of £50 per MWH, then the wind generator will have received £110 from the grid but pays £60 back to government leaving him with a net £50.

If on the other hand the Grid power price had only been £30 per MWH, the wing generating company would receive £30 from grid plus a further £20 from government - again leaving him with a net receipt of £50.

There is a bidding round for CFD on a regular basis. The government sets a maximum bid price beyond which operators cannot bid. In 2022 the maximum bid was £48 and as costs at the time were low, bids drove the strike price down to under £38. The Government screwed up the 2023 bid process by setting the maximum bid at £44. As costs have increased to around £50, the fixed sales price off £44 was below cost price of £50 and therefore obviously no one bid at a loss.

Anyone with primary school maths can work out that if gas generated electricity costs £100 and wind £50, wind is cheaper.

Pacifico will no doubt try to obscure and deflect but those are the current facts. Wind generated electricity is currently half the cost of gas generated electricity.

Yep, that's a good summary. 
Its annoying when you have to spend time going back through the thread gathering the info just because someone is playing dodge ball. 
You are right this is very Grass Hopper style

No one would have offered them £48 per MWh if it cost more than that to produce. 

You been given the evidence several times, you just look stupid now. 

Yes we've already said £48.00 par MWh is less than it costs to produce currently. That does not mean its more expensive than gas generation. 

To clarify for you. Wind/solar £50 per MWh Gas £100 per MWh. 
Gas twice as much as wind/ solar.
Is that simple enough for you? 

You can buy wind/solar for £70 per MWh but you can't buy Gas for £70 per MWh. 

Therefore wind/solar cheaper than gas. 

I thought you'd understood this very simple maths and were prevaricating. Now I'm not so sure.