You Did Say Your Costs Had Been “Slashed” Didn’t You?

  • Date: 21/11/18
  • Andrew Montford, GWPF

If costs really have gone down, windfarm operators will take subsidy cuts in their stride

In the Times this morning, energy correspondent Emily Gosden reports on the latest news from the UK’s capacity market (link £):

The government has slashed the financial support on offer for new offshore wind farms, forcing developers to find further cost savings if their projects are to proceed.

It’s odd that she should talk of “slashing” financial support though. Just over a year ago, she was celebrating claims that windfarm operators had already slashed costs, allowing them to make ultra-low bids in the last renewables capacity auction. As she told everyone at the time, measures like using cheaper foundations and housing maintenance staff in floating “hotels” had brought this happy state of affairs to pass. The era of cheap renewables was upon us, readers will no doubt have concluded.

So the news that the government has adjusted their level of support to the new circumstances doesn’t really represent a “slashing”, surely? It’s what is supposed to happen, isn’t it? And the windfarm giants like Orsted should take it in their stride, shouldn’t they? After all, they have floating hotels now.

Of course, some people scoffed at the idea that windfarm costs were going down.  But what do they know?

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