Spare a thought for the king. He (Charles III) won’t be enjoying a widely-forecast wind power royalties bonanza unless the UK government raises its ceiling of £44 per megawatt hour of power. A new auction of offshore wind power licences yesterday attracted no bidders as big and smaller players alike sat on their hands because of the rising cost of building turbines. Labour shortages and inflation in key commodities including steel and rare earths caused Sweden’s Vattenfall to halt construction of a giant offshore wind farm off the Norfolk coast earlier this year. Then the maximum price paid to wholesalers was set at the same level as for the last round of auctions, failing to account for inflation. “The Conservatives have now trashed the industry,” says Ed Miliband, the shadow climate change secretary. A more nuanced analysis might note that the industry is also a victim of its own success. Offshore wind prices per unit of power have fallen so far in the past two decades that it’s now a third cheaper than gas, and the marginal cost of extra power when the turbines are installed and the wind is blowing is zero. All of which makes it hard to argue for a higher ceiling price (“contract for difference”). No one said net zero would be easy… or cheap.
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