A couple of comments. How did you index LCOEs in 2021 money in comparison with AR6 CFDs awarded in 2012 money? There are still no official indexed current prices until they are issued following the indexation update in April: I previously tried to persuade LCCC to provide current indexation levels on newly awarded CFDs but they refused to do it on the grounds that the regulations don't require them to. Avoiding misleading journalists and the public was not on their agenda. OTOH CPI indexation is easy to calculate from ONS data.1.4 is close enough to the April 2024 indexation factor from 2012.
I'm not sure I entirely agree with your carbon tax analysis. There is no payment to the Treasury for any remaining grandfathered allowances. From the consumer point of view to the extent that gas prices are still setting wholesale prices they find themselves paying an extra bonus to nuclear and renewables on ROCs that is only subject to CT clawback to the Treasury. In tight markets prices are set by demand destruction and not by cost. In those circumstances the real tax is the lack of adequate capacity.
The Unpopular Truth About Electricity and the Future of Energy.
Wind and solar power can only survive as parasites on more efficient generators. This slim and elegant book by Lars Schernikau and William Smith is a root and branch demolition of the most cherished beliefs of the climate and energy warriors in the alternative universe.
People who don’t need the full story can get what they need to know from the beautifully illustrated 24-minute video produced to promote the revised edition. https://youtu.be/j3d4348UxvY
First they demolish the green fantasy that we can get along with less power by practicing demand management while we replace hydrocarbons with so-called renewables. The rise of new forms of energy is a history of addition, not substitution starting with wood, supplemented by coal, then oil, then nuclear power and lately by wind and solar ( the unreliables). Unfortunately wind and solar only achieved prominence by mistake based on the failure to take account of wind droughts, (Dunkelflautes in Europe.)
The recent period when the progressive west embraced “carbon mitigation” policies will be seen as a potentially catastrophic aberration in the history of the western world.
The author’s unpopular story can be summed up in three statements.
1. Present and future energy requirements far outstrip Net Zero pathways and possible “renewable” generation.
2. There is a disconnect between the installed capacity of unreliable energy and generated electricity due to the ten factors that account for the full cost of energy (FCOE.) These are building, cost of fuel, operating, transportation and balancing, storage, backup, cost to environment, decommissioning and disposal, room cost (land footprint).
3. The lack of viable long-term grid-scale storage.
They point out that another index, the energy return on investment (eROI) picks up many of the 10 factors and it is vastly more informative than the LCOE because it measures the efficiency of energy systems. Large numbers indicate high efficiency and nuclear power scores around 70 compared with coal near 30 while most wind and solar systems score below 5. That is the cut-off figure between systems that are sustainable and systems that are not efficient enough to survive independently. These figures will be fine-tuned but the tendency is clear.
The only way to determine the true cost of wind power is to make the operators contract to supply the grid with a minimum amount of Mw continuously 24/7/365. That way, the cost of maintaining backup gas capacity and/or storage would become explicit and would fall on the wind operators, not be a hidden cost subsidised by consumers.
A couple of comments. How did you index LCOEs in 2021 money in comparison with AR6 CFDs awarded in 2012 money? There are still no official indexed current prices until they are issued following the indexation update in April: I previously tried to persuade LCCC to provide current indexation levels on newly awarded CFDs but they refused to do it on the grounds that the regulations don't require them to. Avoiding misleading journalists and the public was not on their agenda. OTOH CPI indexation is easy to calculate from ONS data.1.4 is close enough to the April 2024 indexation factor from 2012.
I'm not sure I entirely agree with your carbon tax analysis. There is no payment to the Treasury for any remaining grandfathered allowances. From the consumer point of view to the extent that gas prices are still setting wholesale prices they find themselves paying an extra bonus to nuclear and renewables on ROCs that is only subject to CT clawback to the Treasury. In tight markets prices are set by demand destruction and not by cost. In those circumstances the real tax is the lack of adequate capacity.
I used the CPI data published by the UK government, that is contractual basis for the CFD payments.
The multiplier from 2012 to 2021 is 1.161
"Are the people at DESNZ incompetent?
Are they being fed misinformation?
Are they suffering from extreme cognitive bias because their livelihood depends on propagating the myth of cheap wind and solar power?
Or are they being instructed by their political masters to produce misinformation?"
OR ALL OF THE ABOVE?
BTW, thanks for recommending My Two Cents.
The Unpopular Truth About Electricity and the Future of Energy.
Wind and solar power can only survive as parasites on more efficient generators. This slim and elegant book by Lars Schernikau and William Smith is a root and branch demolition of the most cherished beliefs of the climate and energy warriors in the alternative universe.
People who don’t need the full story can get what they need to know from the beautifully illustrated 24-minute video produced to promote the revised edition. https://youtu.be/j3d4348UxvY
First they demolish the green fantasy that we can get along with less power by practicing demand management while we replace hydrocarbons with so-called renewables. The rise of new forms of energy is a history of addition, not substitution starting with wood, supplemented by coal, then oil, then nuclear power and lately by wind and solar ( the unreliables). Unfortunately wind and solar only achieved prominence by mistake based on the failure to take account of wind droughts, (Dunkelflautes in Europe.)
The recent period when the progressive west embraced “carbon mitigation” policies will be seen as a potentially catastrophic aberration in the history of the western world.
The author’s unpopular story can be summed up in three statements.
1. Present and future energy requirements far outstrip Net Zero pathways and possible “renewable” generation.
2. There is a disconnect between the installed capacity of unreliable energy and generated electricity due to the ten factors that account for the full cost of energy (FCOE.) These are building, cost of fuel, operating, transportation and balancing, storage, backup, cost to environment, decommissioning and disposal, room cost (land footprint).
3. The lack of viable long-term grid-scale storage.
They point out that another index, the energy return on investment (eROI) picks up many of the 10 factors and it is vastly more informative than the LCOE because it measures the efficiency of energy systems. Large numbers indicate high efficiency and nuclear power scores around 70 compared with coal near 30 while most wind and solar systems score below 5. That is the cut-off figure between systems that are sustainable and systems that are not efficient enough to survive independently. These figures will be fine-tuned but the tendency is clear.
The only way to determine the true cost of wind power is to make the operators contract to supply the grid with a minimum amount of Mw continuously 24/7/365. That way, the cost of maintaining backup gas capacity and/or storage would become explicit and would fall on the wind operators, not be a hidden cost subsidised by consumers.
Not sure even that captures the additional grid investment required, which is very substantial.
Thanks for calling out this wishful thinking.