The Alternative Green Energy Thread

JKenH

Looking at the latest CFD round results I find it a little surprising that solar PV did not do better given the reports of how solar costs were falling.  Compared to the first round in 2015 when the solar strike price was £50/MWh I was expecting some a little lower than £45.99. 

I have not seen any comment since the results were announced but prior to the auction I believe it was thought solar would be a lower price and take a bigger share of the 3.5GW pot than the 2.2GW allocated. Onshore wind fared worse at 0.9GW against a cap of 3.5GW. (Combined cap of 5GW for the two technologies). 

edit: off shore corrected to onshore

QrizB

0.9GW was onshore wind, not offshore?

I'm just speculating here but it could be that onshore wind and solar PV are mature enough technologies that projects have looked at long-term electricity price forecasts and decided to risk the market, rather than tie themselves up with CfDs.

JKenH

QrizB said:

0.9GW was onshore wind, not offshore?

I'm just speculating here but it could be that onshore wind and solar PV are mature enough technologies that projects have looked at long-term electricity price forecasts and decided to risk the market, rather than tie themselves up with CfDs.

Typo, sorry. I’ll correct it. 

michaels

QrizB said:

0.9GW was onshore wind, not offshore?

I'm just speculating here but it could be that onshore wind and solar PV are mature enough technologies that projects have looked at long-term electricity price forecasts and decided to risk the market, rather than tie themselves up with CfDs.

It is a good point, the CfD is a ceiling as well as a floor and the strike prices seem to be well below likely market prices.  Against that is both wind and solar max generation happens when (causes) prices to be low, and the CfD structure allows for cheap long term financing.

Perhaps it is the bump up in long term interest rates (cost of capital) that have actually had the biggest impact on how high or low the bids were?

JKenH

‘Significant commercial incentive’ for offshore wind farms to delay CfD activation

The data shows there is a "significant commercial incentive" for delaying the CfD, with strike prices for offshore wind in 2017’s Allocation Round 2 being set at £73.71/MWh and £94.81/MWh (both prices in current money).

This is compared to the Intermittent Market Reference Price (IMRP), which is used to determine CfD payments in each hour for offshore wind farms, which has averaged £187.42/MWh since the start of 2022 up to 14 May.

Of the 3,190 hourly periods from the start of the year to 14 May, the IMRP has been higher than £73.71/MWh in 3,072 (96%) and higher than £94.81/MWh in 2,892 (91%) of them.

https://www.current-news.co.uk/news/significant-commercial-incentive-for-offshore-wind-farms-to-delay-cfd-activation

michaels

I know there is a deadline for starting the CfD and suppliers are basically waiting as long as they can as they ar currently earning  more than they would under the CfD but are they committed to the CfD or could they decide not to opt in at all?

QrizB

michaels said:

I know there is a deadline for starting the CfD and suppliers are basically waiting as long as they can as they ar currently earning  more than they would under the CfD but are they committed to the CfD or could they decide not to opt in at all?

The areicle says there is a three-year commissioning window under the CfD scheme.

Opting not to take the CfD at all could cause problems with the generator's finance arrangements (it's likely the guaranteed income from the CfD played a part in their agreement with the bank / bondholders / VCs).

JKenH

Anybody know why we are burning coal this week?

QrizB

JKenH said:

Anybody know why we are burning coal this week?

If you turn off all the other generation modes, then compare it to the price, we're burning coal when the electricity price peaks throughout the week.

I would guess that, on those occasions, the high price of electricity is enough to counteract the penalties for burning coal.

paul991

its so can export to europe