By Paul Homewood
This may be a fatal blow to Crazy Ed Miliband’s North Sea Wind Fantasy:
As we know, Orsted, Denmark’s world leading offshore wind developer, pulled out of its Contract for Difference to build a giant 2400 MW Hornsea 4 wind farm in May. The contract had only been signed last year, with a guaranteed, index linked price on the table of £84.97/MWh. But they could make no money out of that.
Crazy Ed was no doubt hoping that they could be tempted back this summer to take advantage of the obscenely higher prices he was offering to fulfil his dream. The new prices of £116/MWh he offered were 36% higher than before. But even that was not enough to tempt the Danish Government backed Orsted. According to the Telegraph:
Ørsted also confirmed that the company would not be offering to build any more UK wind farms in AR7, a blow to Mr Miliband’s ambition to decarbonise the grid by 2030.
The company insisted this was not a result of developments in the US but reflected the fact that “we do not have any projects that are eligible to be considered”.
Orsted have already been forced to issue a £7billion rights issue, needed to fund existing projects which are no longer viable.
As the Telegraph report, Orsted’s days of milking billions out of US taxpayers to build their whale killing monstrosities off the coast of New York and New England are over, with Trump insisting on value for money and proper environmental protection.
Orsted don’t even have enough money to finish off the projects in hand. And their business model of developing new sites and then selling on as cash cows to other investors is no longer viable, with costs increasing and subsidies falling.
Orsted, with backing from the Danish state, has long dominated UK offshore wind. At last year’s AR6, the only other successful applicant was East Anglia Two, ultimately owned by the Spanish conglomerate, Iberdrola, who only contracted for 900 MW.
Have any energy businesses or investors now got the sort of money to build the multi billion wind farms in the North Sea that Miliband wants at prices that are remotely viable?
If nothing else, Orsted’s exit will raise the bar as far as price is concerned. If Crazy Ed is to get the capacity he is so desperate for, he will have to pay through the nose for it.
Or rather, we will!
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Author: Paul Homewood
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