At the end of June, we wrote that things were not going as well for the Net Zero Zealots in Europe as hoped. However, the UK seemed hellbent on marching forwards, charging consumers for net zero schemes regardless of the costs. Now it seems, it is the UK’s turn to face the cold hard facts.
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The Telegraph reported on Monday that “net zero” is a key battleground for both the Conservative and the Labour parties ahead of the next election – the latest development being a Tory revolt against a ban on new oil boilers in the name of “net zero.”
Installed Prime Minister Rishi Sunak is being urged to scrap a ban on new oil boilers. Senior Tories have warned it will cost votes, with George Eustice, who was environment secretary in Boris Johnson’s government, describing the policy as “a Ulez for rural communities.” The ban will affect 1.7 million households that are not connected to the gas grid.
The week before, The Telegraph had reported that Sunak gave the go-ahead for hundreds of new licenses to drill for oil and gas in the North Sea. He said Labour’s plans to end new exploration were “bad for the environment.” Labour’s policy of ending new oil and gas licences was bad for the economy and energy security and would make the UK “more reliant on energy that comes from abroad” and pointed to new figures showing that the carbon footprint of imported liquified natural gas (“LNG”) is nearly four times higher than domestic production.
Also on Monday, but from the other side of the pond, The New York Times reported that “some troubled projects are raising concerns about the role to be played by offshore wind farms in tackling climate change” and highlighted an offshore wind project in the North Sea off eastern England called the Norfork Offshore Wind Zone.
The Crown Estate “manages” around half of the foreshore around England, Wales and Northern Ireland. Part of this “management” is leasing and licensing offshore wind farms. The Norfork Offshore Wind Zone is one of the offshore wind farms that pay a fee to the Crown for seabed rights.
In 2022, the Crown Estate’s seabed holdings were estimated to power 8.6 million homes, equivalent to delivering the annual electricity needs for around 31% of all UK homes and 12% of the UK’s total electricity needs. And it has proved financially rewarding for the King’s coffers.
For the financial year 2021/22, the value of the Crown Estate’s portfolio increased by 8.3% and in the financial year 2022/23 it increased by a further 1.3% to £15.8 billion. The increase over the two years was driven primarily by an increase in the Marine portfolio, which increased by 22% in 2021/22 and 14% in 2022/23. For both years, the increases in the Marine portfolio were driven largely by offshore wind.
Offshore wind has also contributed significantly to the Crown Estate’s profits. At the end of June, The Times reported that the bulk of the near-£130 million increase in profits of the King’s property group last year came from the fees paid by the developers who won the rights to build six new offshore wind farms in January.
However, the report by The New York Times below may indicate the King’s hopes for profiteering further from offshore wind could be curtailed, provided the UK government doesn’t step in and bail out the failing industry at taxpayers’ expense. But either way, the King isn’t about to become a pauper just yet, his coffers will still benefit from leases for oil and gas pipelines on or in the seabed around the UK.
- UN’s “sustainable” goal for renewable energy is sheer fantasy, if not utter madness
- UK government restricts wind farm developers’ ability to abuse system for profit and they’re not happy about it
- UK Government’s ambitions to increase ineffective wind power generation would cost £154 billion
- Wind turbines are an eyesore, a hazard and an environmental disaster
- Solar and wind renewable energy projects are environmentally destructive
- The destruction caused by “renewable energy”; the not-so-green reality behind the green agenda
- Offshore wind farm will make North Atlantic Right Whales extinct
- Meet The Great Reset King – Charles III
Offshore Wind Runs into Rising Costs and Delays
Keep in mind The New York Times coverage is as controlled as the rest of the commercially-controlled media. It will not bite the hand that feeds them. As such it will attempt to nudge its readers to follow the party line – “renewable energy” is failing because governments are not doing enough, for example – and it will not expose “renewable energy” for what it is (see the ‘Further reading’ list above) or the people and corporations who profit from it.
Vattenfall, a Swedish energy company, has for years been doing preliminary work for what would be one of the world’s largest offshore wind complexes, in the North Sea off eastern England.
Now, there are questions about whether this project will ever be built. Last month, Vattenfall said it would halt the first of three phases of the wind farm complex, the Norfolk Offshore Wind Zone, which is projected to provide power for about four million homes in Britain.
Vattenfall blamed rapidly escalating costs for equipment and construction expenses, which they said had climbed as much as 40 per cent over the past few quarters. The estimated price tag for the three phases has risen to 13 billion pounds, or about $16.6 billion, from £10 billion.
“With the new market conditions, it simply doesn’t make sense to continue the project,” Helene Bistrom, head of business area wind at Vattenfall, said during a video presentation. The decision led Vattenfall, which is owned by the Swedish government, to write down more than $500 million.
Vattenfall’s pullback added to the widespread alarm unfolding across the offshore industry about rapidly increasing costs, due partly to supply chain issues and rising demand.
In recent months, several developers in the United States have sought to renegotiate power supply contracts, scrapping them in at least one case, and Orsted, a Danish company that is the world’s largest offshore wind developer, warned that a major project, Hornsea 3, in Britain could be “at risk” without more government support.
With interest rates shooting up, financing the billions of dollars in investment that goes into these installations has also become far more expensive.
On Monday, the turbine maker Siemens Energy reported a net loss of 2.9 billion euros ($3.2 billion) for the April-June quarter, largely because of problems tied to “increased product costs and ramp-up challenges” in its offshore energy business.
“There’s very few projects that are immune to the inflationary impact,” said Finlay Clark, an analyst at Wood Mackenzie, a consulting firm.
Europe’s Shift Away from Fossil Fuels
The European Union has begun a transition to greener forms of energy. But financial and geopolitical considerations could complicate the efforts.
- A Competitive Field: The EU is trying to assemble the building blocks to produce electric cars, but incentives offered by the Biden administration are luring companies to the United States.
- A Wind Pioneer: Henrik Stiesdal helped design the first modern wind turbines. A thousand patents later, he’s a green tech entrepreneur rolling out new innovations.
- Nuclear Power: Germany shut down its three remaining reactors, just as other European countries look to expand their reliance on nuclear energy.
- Ban on Gas-Powered Cars: Germany has reached an agreement with the E.U. to allow the sale of vehicles that burn fuels made from renewable energy past 2035, resolving a dispute over a proposed ban on internal combustion engines.
Rising costs for wind developers are a problem for governments in Europe, the United States and elsewhere. Many countries are counting on an enormous and rapid expansion of offshore wind to achieve a significant portion of their renewable energy goals.
“We are wasting time here,” Morten Dyrholm, group senior vice president for corporate affairs at Vestas Wind Systems, the Danish turbine maker, said of the industry’s problems. “We need to grow the sector quite dramatically.”
Mr. Dyrholm and others in the industry say the inflation problems are a warning sign that governments need to change their system of awarding offshore wind licenses.
The procedures for obtaining the rights to build wind farms vary in different countries but often involve an auction of seabed leases followed, sometimes years later, by agreements that set the price paid by power companies for the electricity generated.
Featured image: What does the scrapping of a wind farm plan mean for UK renewable energy? BBC, 22 July 2023
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