Do you care about the energy mix?

DaffyDill_2

Looks like the gas price is going to plunge as oil prices go down and U.S. gas imports rise. Could even be a real slump in gas prices.

This is bad news. The cost of wind power will become relatively that much more - should we be bold and stick with it, even if it does mean paying a bit more?

Fusion may be the very long term answer, so perhaps some of the green taxes should be diverted to research.

But the real medium term opportunity is in solar and battery technology. Solar power efficiency is rising and costs are coming down. Soon solar will be cost competitive. But we need really good batteries - at least 10X better than today's - to make solar really useful.

Fan though I am of wind, is it perhaps time to stop backing the wind horse and put the money into solar and battery R&D?

That's where I would vote for much of the green levy to go.

ChumpusRex

The drop in oil prices and increasing availability of LNG from various countries could lower gas prices in the UK - at least temporarily.

There are a lot of new wind power projects in planning. Currently the government pays wind farms a subsidy of about £110 per MWh, to give a guaranteed sale price of £155/MWh. The government have been discussing reducing the minimum guaranteed price to £145/MWh, and a lot of wind farm construction investors have threatened to pull out.

Solar is a non-starter in the UK. There just isn't enough sun to make it viable. Since the government cut the FIT, new solar has pretty much stopped, because the net sale price of the energy produced (about £250/MWh) makes it non-viable, even when offsetting retail priced electricity.

There's very little scope for new hydro in the UK - there are few suitable geographic sites, and those that there are are heavily protected sites of natural importance. There is some scope for small-scale hydro, but this brings with it the grid stability problems of small-scale generation. There is one potential site for pumped-storage hydro, in Exmoor, but with modern planning constraints, the chance of it being developed is zero.

The most realistic alternative renewable project is the Severn tidal barrage. However, the estimated construction cost in the £35 billion range means that the government and private investors simply can't afford it.

Thorium and Fusion power are several decades away at least.

This leaves only conventional power sources, and various storage technologies as the available options.

Coal is cheap, currently costing around £35/MWh, but that doesn't include the cost of construction of new plants, etc. However, politically and environmentally the future is bleak. The carbon dioxide output is just too high. Carbon capture technologies are very expensive, with estimates of increasing costs by about £80-100/MWh.

Natural gas is likely to have a reasonable price - more expensive than coal - at close to £45/MWh and is less carbon intensive. However, the price future is uncertain.

Conventional nuclear with plants such as the one designed for Hinkley point C seem to have a reasonably compelling business case. The government has offered a guaranteed price of £92.50/MWh, but industry experts suggest that a lot of this is a "risk" premium and additional costs for an early version before the builders have good experience at building them.

Martyn1981

ChumpusRex wrote: »

There are a lot of new wind power projects in planning. Currently the government pays wind farms a subsidy of about £110 per MWh, to give a guaranteed sale price of £155/MWh. The government have been discussing reducing the minimum guaranteed price to £145/MWh, and a lot of wind farm construction investors have threatened to pull out.

Solar is a non-starter in the UK. There just isn't enough sun to make it viable. Since the government cut the FIT, new solar has pretty much stopped, because the net sale price of the energy produced (about £250/MWh) makes it non-viable, even when offsetting retail priced electricity.

Whilst your post is a reasonable summing up of energy options, and you've got the CfD for off-shore wind correct, you haven't noted that the CfD for on-shore wind is far lower at £95/MWh, so a subsidy of approx £45 to £50 per MWh.

But you are absolutely miles out on PV. The incoming CfD for large projects is £120 (not £250). Even the highest FiT level for domestic PV currently works out at a support level of £162.65/MWh. A figure, which if anything is still far too generous given current install prices if you research and shop around, but is self correcting with tariff level degressions linked to quarterly MWp installs.

Also 2014 was a record year for PV roll-out in the UK.

Both the 15 yr on-shore wind and large scale PV subsidies should be lower than the 35yr nuclear subsidies by 2023 (2017 in the case of wind) when the first new reactor may go online. The STA (Solar Trade Association) had asked for a lower CfD level for the later years of the decade, but oddly, the government ignored them. The suspicion is that they didn't want, at that point in time, to announce a lower CfD for PV (the new kid on the block) when they were still trying to 'sell' the idea of new nuclear to the UK populace.

CfD rates - page 7

[Edit - given your statement that the UK doesn't have enough sun, and the general consensus that wind levels in the UK are very good, then you might want to note that the difference in CfD levels between on-shore wind and PV closes from £25/MWh to £10/MWh over the 4 year period. And is already substantially below off-shore levels. M.]

Mart.