RE is cutting bills, and could have cut them more

[Mart]

Article here from the Guardian pointing out that with the high leccy wholesale prices, the CfD contracts are actually putting money back into the subsidy fund - something I mentioned on another thread a while back - so well worth a quick glance at the CfD register dashboards and the page below (second graph) showing expenditure on the contracts and the reversal in Q4 2021. Note these schemes are current so reflect the older more expensive schemes. The very cheap offshore wind contracts from the 2017 and 2019 auctions are not all operation yet.

[Note - RE would bring a double benefit here, it would displace more of the expensive gas gen, and also have a small impact on the price of gas consumed by reducing demand.]


CfD Historical Dashboard


Paybacks from UK renewables could cut £27 from bills by end of winter

Britain’s wind and solar farms could help to reduce households’ energy bills by paying back almost £800m to consumers by the end of the winter after gas and electricity market prices rocketed above their set subsidy levels.

Households earned a £157m windfall from renewable energy generators for the first time in the final quarter of last year following record high market prices, according to official figures.

The body responsible for managing renewable energy payments, the Low Carbon Contracts Company (LCCC), has forecast paybacks from the industry could increase to a total of £770m by the end of winter, shaving an average of £27 from the annual home energy bill.

But customers might have been in line for multibillion pound paybacks worth about £140 for a typical annual energy bill if the UK’s renewable energy rollout had taken place sooner, according to the industry.

[spread-tee]

Hear hear,

we need to spread this message far and wide, many people I speak to on the doorstep think the renewable levy needlessly increases our energy bills, and it can be quite an uphill struggle to explain the benefits.

Desp

[Mr Gus]

Describe it as a "cash generator for new & pre-existing subsidy schemes" perhaps Desp?

Thing is we all know & are dubious of any green scheme & price bumps for the install rendering it nigh on pointless from the perspective of those paying I guess !?

It's got that bad that perhaps it needs a proper energy charity to oversee & charge for services in a way that is credible to the public, that may be another tier of money syphoning but what other choice based on past cowboy tendencies?

What sort of regulation would you find palatable Desp? (as an honest & enlightened tradesman)

[AE-NMidlands]

Describe it as a "cash generator for new & pre-existing subsidy schemes" perhaps Desp?

Thing is we all know & are dubious of any green scheme & price bumps for the install rendering it nigh on pointless from the perspective of those paying I guess !?

It's got that bad that perhaps it needs a proper energy charity to oversee & charge for services in a way that is credible to the public, that may be another tier of money syphoning but what other choice based on past cowboy tendencies?

What sort of regulation would you find palatable Desp? (as an honest & enlightened tradesman)

Something like these people: https://www.groundwork.org.uk/greendoct ... anchester/
I saw a crowdfunder for training and building a workforce for a sister charity, I think.
I agree that the subsidy schemes have got a very bad name, and (worse) lots of scam cold calls use them as a front or smokescreen. It's also a scandal that the power companies levy the money but effectively are found to have embezzled it when they go bust - "sorry, there's nothing left." Which leaves the consumers paying extra to replace the money through our bills! They should go after the company directors' assets.
I would like to see our Ripple bills relieved of at least some of the levy though. It is wrong that consuming our own generation goes to paying FITs!
A

[Mr Gus]

Exactly (pending scrutiny of their own running costs) for bloat.
(i'm not saying they should be wearing sack cloth obviously, simply not taxpayer fund p155ers that turns out to be "jobs for the old boys network")

[nowty]

I would like to see our Ripple bills relieved of at least some of the levy though. It is wrong that consuming our own generation goes to paying FITs!

Not quite that simple though is it.

1) if you bought a community wind farm and received a dividend payment instead, your still going to have to buy your leccy with the proceeds and pay all the levies.

2) Unless your using the leccy at the same time and not exceeding your real time actual pro rata generation from the wind turbine, your not actually consuming your own generation, at least not in full. And it would be almost impossible to meter or impractical to work out.

But If Ripple succeed in achieving to persuade HMRC to allow the rebate to be tax free then that would go some way to cancelling out the green levies.

[Mart]

Hear hear,

we need to spread this message far and wide, many people I speak to on the doorstep think the renewable levy needlessly increases our energy bills, and it can be quite an uphill struggle to explain the benefits.

Desp

Hiya Desp, yes it's great news. Hard to sell people on thye extra costs of a subsidy sometimes, but getting to see how it can act as a brake on high prices when gas spikes, is a handy little argument to have in the back pocket. And in the next 5-10yrs the oldest and most expensive schemes will start to age out of the CfD scheme, but still be operational and selling on the open market.

Now here's an interesting thought, especially with the current high wholesale prices ..... how much offshore wind will get approval when the results of the 2021 CfD auction are announced in the spring/summer? For the first time there wasn't a capacity limit on offshore wind, just a subsidy pot limit based against Gov assumptions for the future wholesale price*. So theoretically there is no actual capacity limit if the bids come in close enough to that estimated wholesale price to minimise subsidy top ups. Imagine if they used the current wholesale price (but to be clear they aren't) every scheme ever imagined would get approval.

*I remember seeing the figures in one of the many CfD docs last year, but have forgotten it now, possibly £45/MWh or in that region? So the closer the winning bids are to the estimated average price, then the lower the subsidy per MWh would be, and the further the subsidy pot would stretch in terms of annual generation, and therefore new capacity.

[Ken]

this needs to be read in conjunction.
Benefits could be a lot greater if we ditched "merit order bidding" for leccy supplies.

https://reneweconomy.com.au/solar-and-w ... ce-crisis/

[Mart]

this needs to be read in conjunction.
Benefits could be a lot greater if we ditched "merit order bidding" for leccy supplies.

https://reneweconomy.com.au/solar-and-w ... ce-crisis/

That's a good article, so sorry for a small bit of pedantry, but I did think it was misleading comparing the latest offshore wind contracts to the current wholesale price. Perhaps it's a misunderstanding of award dates v's commissioning dates as it's an Australian news piece?

This paragraph seems to imply that the new contracts at around £50/MWh are already generating:

The last fixed-price government contracts offered for offshore wind energy in Britain – hardly the cheapest of renewables – were under 5p per kilowatt hour (kWh). That’s less than a quarter of the typical domestic tariff (what most people pay for electricity at home) that consumers are set to face in 2022. Households are paying for their electricity several times what it now costs to generate and transmit it from the cleanest energy sources at scale.

But if we look at the CfD register:

CfD Register

and select offshore wind and allocation round 3 (2019 auction), we find those schemes at prices between £47/MWh and £50/MWh, but they have commissioning dates from 2023 through 2025.

Good news though, is that we've been here before back in 2008 when gas prices spiked. Maybe if enough people all over Europe start to install heatpumps, and we all ramp up RE generation, we can push gas demand and prices back down quicker/further?

[bxman]

Thank God that an Australian Academic has analysed the crazy situation we have got ourselves into .

With luck our masters can use this knowledge to throw out the derivatives experts and restore some sanity to our national power market.