From ... in Literature — Feb 13, 2023

UK Government’s ambitions to increase ineffective wind power generation would cost £154 billion

The total cost to double the UK’s wind power generation is $185 billion (£154 billion).

With approximately 28 million electricity customers in the UK, the additional cost for doubling wind power capacity is $6,626 (£5,492) per customer.

The UK currently has 28 GW wind power capacity, 14 GW of onshore and 14 GW of offshore, with the potential to generate 245,280 GWH per year, although last year it only actually generated a quarter of that – 61,631 GWH. Yet, despite the poor performance of wind to generate energy, the UK government wants to increase the offshore wind capacity to 40 GW by 2030 which will cost in the region of £154 billion.

As well as other Agenda 2030 targets, one of the ambitions stated in the 2019 Queen’s Speech was: “We will increase our ambition on offshore wind to 40GW by 2030, and enable new floating turbines.”

Then Prime Minister Boris Johnson reiterated this ambition at a Conservative party conference on 29 September 2020: “We believe that in 10 years’ time offshore wind will be powering every home in the country, with our target rising from 30 gigawatts to 40 gigawatts.”

Head of UK Region for Ørsted, a renewable energy company with 25% of the global market share in offshore wind, Duncan Clark said: “Offshore wind is the most cost-effective way to achieve the UK’s net zero ambitions and delivering 40 GW of offshore wind by 2030 is an essential part of this roadmap.”

But, will wind power generate enough to power every home? Is it cost-effective? And as there is no climate emergency and failure of “renewable energy” projects is the most likely outcome, who will be paying the price for the Government’s “net zero” failures?

In the following, Bill Ponton calculates what it would cost to increase the UK’s wind capacity, the total for onshore and offshore, to 40 GW. His calculations can be easily used to calculate the cost of increasing offshore wind capacity only for those who would like to take the Government at its word or calculate how much money companies such as Ørsted stand to make.

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The Cost of Virtue Signalling – the Impact of Doubling UK Wind Power

By Bill Ponton as published by What’s Up With That?

In this article, I will quantify the cost to UK electricity customers of doubling wind power generation. This cost would be in addition to what customers are paying currently. Think of it as a premium one pays to virtue signal.

Let’s start by taking a close look at the current state of electric power generation in the UK.

In 2022, the UK derived: 24% of its electric energy from wind generation, 43% from gas turbine generation and 33% from other sources such as coal, nuclear, hydro and biomass.

Table 1 details the exact quantities in MWH for each power generation source. The data used to derive these quantities was downloaded from GridWatch with power generation in MW from each source observed at 2.5 min intervals ^[1].

Figure 1 is a stacked graph of the wind, gas turbine and other power generation. The graph is instructive in that it shows wind generation varying in magnitude over time and gas turbine generation being dispatched to offset those fluctuations.

The UK currently has 28 GW wind power capacity, 14 GW of onshore and 14 GW of offshore, with the potential to generate 245,280 GWH per year ^[2]. It actually generated 61,631 GWH in wind energy in 2022 or approximately 25% of the total wind power capacity.

To understand the impact that a doubling of wind power capacity would have on wind energy generation, one needs to double the value of wind power generation at each observation point in the 2022 GridWatch dataset. It results in total wind generation of 123,311 GWH per year.

In addition, gas turbine power generation needs to be reduced at each interval by the amount required to keep the new sum of wind and gas turbine power generation equal to the original sum. However, at intervals where a doubling of wind power exceeds the original sum, wind power should be limited to the value of the original sum. In addition, gas turbine power generation must not fall below 2,000 MW at any time. (This is also the case with the actual data where gas turbine power generation only falls below 2,000 MW for 0.25% of the time).

These constraints result in a curtailment of wind energy generation of 31,438 GWH (or 25.5% of the total wind energy generated) and useful wind energy generation of 91,873 GWH (or 35% of the total energy provided to the grid) as detailed in Table 2. Figure 2 is a stacked graph of yearly data under the doubling of wind power scenario.

It is important to understand that a doubling of wind power generation does not enable gas turbine generation capacity to be reduced. The legacy gas turbine capacity must be available at a moment’s notice to ramp up and compensate for vacillations in wind power. Therefore, the cost of operating and maintaining (“O&M”) gas turbine generation is not diminished. However, gas turbine generation is reduced by 30,217 GWH per year resulting in 194,327,778 MMbtu of thermal energy savings or $971,638,889 of fuel cost savings per year as detailed in Table 3, assuming the prior 20-year average of US$5/MMbtu ^[3].

The capital cost of building wind power generation, excluding financing expense, is US$6,041/kW for offshore and US$1,718/kw for onshore ^[4]. An additional 14 GW offshore and 14 GW onshore would cost in capital $84,574,000,000 and $24,052,000,000, respectively. The additional wind power generation O&M cost is US$115/kW-y for offshore and US$27/kW-y for onshore ^[4]. An additional 14 GW offshore and 14 GW onshore would cost in O&M $1,610,000,000/year and $378,000,000/year, respectively, as shown in Table 4.

Assuming a weighted average cost of capital (“WACC”) after tax of 4.4% ^[5], financing the capital investment over the 20-year project life would cost UK electricity customers $8,260,542,875 per year. The wind power O&M cost minus the Combined Cycle Gas Turbine (“CCGT”) fuel savings add an additional $1,016,361,111 per year for a total of $9,276,903,985 per year. The total cost over the life of the project is $185,538,079,707 (or NPV of $121,991,131,529). With approximately 28,000,000 electricity customers in the UK, the additional cost for doubling of wind power capacity is $6,626 (or NPV of $4,357) per customer.

[At an exchange rate of US$1 to £0.84, the total cost is $185,538,079,707 = £153,794,740,726. And the additional cost to UK customers is $6,626 = £5,492)

Shifting the UK wind/CCGT generation mix from 24%/43% to 35%/31% by doubling wind power capacity at a cost of $185 billion must be disappointing to true believers in the virtue of wind power. Moreover, the cost of this scheme dwarfs the cost of a scheme that includes battery storage as a way of increasing the contribution from wind power generation.

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UK Government’s ambitions to increase ineffective wind power generation would cost £154 billion

The Cost of Virtue Signalling – the Impact of Doubling UK Wind Power

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The Cost of Virtue Signalling – the Impact of Doubling UK Wind Power

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