What follows is a brief summary of recent developments adversely affecting the wind industry. I have been posting links as comments in various places at Cliscep drawing attention to the events in question, but as they are coming thick and fast, it seems sensible to draw them together in one place. One might have thought that such problems would occasion something of a re-think in the corridors of power regarding the direction of travel of the UK’s energy policy, but to date none of this seems to have registered with the majority of our politicians, and certainly not with those currently in charge or with those who are most likely to replace them.

First there was the failure of the latest contracts for difference round. Readers may recall that when Kwasi Kwarteng was in charge of what was then called BEIS, he was reduced to pleading with renewables developers to take up their options under previous Contracts for Difference (CfD) rounds. This was because the “contracts” were no such thing – rather they were one-way options which developers could take up or walk away from they as they chose, depending on what they decided was in their best interests at the time. Because the low bids (that had been shouted from the rooftops by renewable energy enthusiasts) were unviable, and because market prices were higher, the developers chose to walk away from the options rather than to implement them. Mr Kwarteng’s pleas were made in vain.

Consequently the UK government decided to tighten up the process in AR5, and ensured that going forward the “contracts” really would be contracts, which the developers, once they made bids which were accepted, would be legally obliged to implement. The only problem with that brilliant idea was that the developers recognised it for the trap it was, and so not a single offshore wind farm bid was forthcoming in this year’s CfD round.

This resulted in an article in the Daily Telegraph with the heading “Wind industry on hold after auction flop spooks developers” and sub-heading “Bosses warn that lack of state support risks undermining Britain’s overall net zero goals”. An extensive quote from the article is due, given its importance:

Offshore wind farm developers are delaying non-essential work on UK projects after a government renewables auction flopped, with industry sources warning they may be forced to wait until after the next election to get schemes moving again.

At least two major companies are pausing or slowing investment to the minimum pace necessary to keep projects alive, with one describing the current position as a “holding pattern”.

The slowdown comes after confidence was knocked by the disastrous fifth auction round for renewable energy subsidies earlier this month.

No bids were received by offshore wind developers due to what companies said were unrealistically low prices.

The cloud of uncertainty has spooked developers, who warned there was now little chance the UK will reach its target of 50 gigawatts of offshore wind capacity by 2030.

One executive said: “The target is a joke now. Ministers just haven’t got it. They don’t realise how fundamentally serious the situation is.”

Another executive said they believed ministers had grasped the scale of the problem but were failing to reassure the sector about how they would approach next year’s auction.

The renewables industry soon regrouped, and started demanding that the UK government make financial assistance available. Paul Homewood usefully summarises this development , with a helpful link to another Daily Telegraph article, which summarises the problem. In brief, developers are demanding £75 per Mwh, which is considerably more than the prices they signed up to under the options they can (and probably will) walk away from. That £75 figure is misleading since, for some bizarre reason, figures are always quoted at 2012 prices. Allowing for inflation, as Paul Homewood points out, that price equates to nearer £95 per Mwh in 2023 prices. As he says:

The undeniable reality is that offshore wind never was viable at the fanciful prices signed up for last year and before. The cheapest offshore wind being sold via CfD is from Triton Knoll, which is being paid £97.82/MWh.

There never was any intention to trigger those contracts, instead wind farm owners always planned to sell at much higher prices on the open market.

In the latest auction, this loophole was closed by the government, leaving the wind industry between a rock and a hard place, with their bluff having been well and truly called.

Next is the story reported by Reuters regarding the risk (which some of us have been banging on about for at least 18 months) regarding the security risks associated with offshore wind developments:

As Europe turns to renewable sources to diversify energy supplies away from Russian oil and gas, a peaceful marine scene conceals a billion-dollar security headache.

Rising above the Baltic Sea less than 10 km (6 miles) off the coast of Denmark, 161 wind turbines spin slowly. They supply around 4% of the country’s power, sent to shore through two cable connections.

The turbines have no barriers or surveillance.

“Our technicians are only here until five o’clock in the afternoon, then they go home,” said Thomas Almegaard, head of operations at Nysted wind farm, co-owned and operated by Denmark-based Orsted, the world’s biggest offshore wind developer.

“If the Russians wanted to cause damage, they could do it easily,” he told Reuters aboard a service vessel as it sailed through the wind farm.

“We don’t do any monitoring.”

Naturally this leads up to a call for yet more money from governments:

Developers like Orsted think governments should take the lead and help provide the billions of dollars needed to protect their infrastructure. But even as North Sea countries alone plan to install enough wind power for more than 100 million homes by 2030, governments are still considering how much they can spend to safeguard such offshore assets.

As usual, in the UK, it seems that the long-suffering taxpayer, not the developers, will have to pick up this extra bill:

Britain, which has spent 65 million pounds ($79 million) adapting two vessels for underwater surveillance and seabed warfare, said its government was responsible for security policy and works with industry to implement protection measures.

Finally (for now – no doubt further developments will continue to come out of the woodwork), there is the recent news about the financial woes of Siemens, driven by problems with its wind energy division, Siemens Gamesa. The Financial Times has the story under the heading “Siemens Energy seeks government guarantees as wind crisis deepens”:

Siemens Energy is in talks with the German government to secure billions of euros of guarantees for long-term projects after warning that losses at its troubled wind turbine business would be higher than forecast.

The Dax-listed company said on Thursday that it was in need of backstops for projects as the financial picture at its wind turbine business deteriorates. In June, the group said that overhauling the division, which has been beset by technical mishaps, would cost €1bn.

Without the guarantees, a €110bn portfolio of clean energy projects planned by the company will be in jeopardy, according to executives at the Munich-based company…

…“Their business in wind is in utter disarray,” said William Mackie, head of capital goods research at Kepler Cheuvreux….

In the case of Siemens, problems seem to be arising in substantial part from technical flaws with their turbines, but as the article notes, the whole wind industry is being adversely affected by higher interest rates and increased costs.

It all makes for sorry reading. Will the penny ever drop?

62 Comments

  1. I don’t believe we have really “run out of puff”*. Run out of realistic expectations of cheap, uninterrupted power more like it, coupled with tussles between governments and energy companies over greater returns upon investment.

    * with the exception of the last three mornings when that absence has led to hours and hours of mist.

    Liked by 1 person

  2. Mark, that’s an interesting take on the security implications of wind power. I’ve often heard that the distributed nature of renewables made them more secure, but in the case of wind it looks like a fighter plane could go and strafe a bunch of wind turbine nacelles and put economically finish off a wind farm. Nuclear plants by contrast are heavily fortified by their very nature and mean fewer points to defend.

    Liked by 3 people

  3. Alan,

    I know that you understand that my tongue-in-cheek title was a metaphor, rather than an assessment of the state of wind levels in the UK. That said, don’t forget what the Met Office (in a possibly unguarded moment) had to say last year on the subject of UK wind trends:

    There have been fewer occurrences of max gust speeds exceeding 40/50/60 Kt for the last two decades compared to the 1980s and 1990s.

    The UK annual mean wind speed for 2021 was second lowest in a series from 1969.

    The UK annual mean wind speed from 1969 to 2021 shows a downward trend, consistent with that observed globally…

    If this is correct, and if the trend continues, then betting the house on wind power doesn’t look like the most intelligent strategy.

    Liked by 1 person

  4. There’s more online news to add to the events referred to above:

    “Top Wind Firm Profits Tumble 98% in New Blow to Clean Energy”

    https://www.bloomberg.com/news/articles/2023-10-26/goldwind-profits-plunged-even-as-wind-power-surges-in-china

    wind-turbine maker, said third-quarter profit tumbled in another blow to a renewables sector reeling from the impact of lower prices even as demand jumps.

    The producer’s net income fell 98% to 9.4 million yuan ($1.29 million) in the three months ended Sept. 30 from a year earlier, the company said Thursday in a statement. Sales volumes in the first nine months were 8.9 gigawatts, up more than a quarter on the same period in 2022. Goldwind’s shares fell as much as 5% intraday in Shenzhen on Friday.

    Asia’s largest economy is accelerating deployment of renewable energy as it works to curb emissions and meet rising electricity demand. Though installations are rising, competition is intensifying among China’s wind turbine producers and pushing prices lower.

    The sharp quarterly profit drop is due to higher selling expenses and research-and-development costs, Citigroup analyst Pierre Lau wrote in a note. Wind developers are facing higher project costs since all national subsidies expired in 2021 and regional governments require more local-economy contributions, Bloomberg NEF analyst Xiangyu Chen wrote last month.

    Clean energy technology manufacturers globally are struggling with rising costs and delays to some projects. Siemens Energy AG plunged more than a third Thursday after confirming it is in talks with the German government about state guarantees as it grapples with weakness in its wind-turbine unit….

    Like

  5. A couple of months ago another gas pipeline was damaged. It now seems that one container ship dragging an anchor took out the pipeline, a power cable and a telecoms cable in just a few hours without stopping. (Sorry, lost the links.) Another head-ache for windfarms and for whoever is paying for the cabling.

    Like

  9. Beth,

    Thanks for the link. I particularly liked this:

    And so we arrive at a point where a company selling products that depend on government subsidies is now asking to be subsidized itself. And the whole green industry depended on government pumped “science” and artificially low interest rates to exist in the first place. Like a pyramid scheme skiing on a two ponzi scams, sooner or later it has to collapse.

    Like

  10. And now even the Guardian has to recognise the new normal…:

    “Is crisis at Siemens Energy symptom of a wider wind power problem?
    Rising construction and financing costs are likely to require fresh policies from the UK and US”

    https://www.theguardian.com/environment/2023/oct/27/is-crisis-at-siemens-energy-symptom-of-a-wider-wind-power-problem

    One of the world’s biggest wind turbine makers has reignited concerns over the headwinds facing the industry after losing billions in market value this week.

    Shares in Siemens Energy, the owner of the turbine manufacturer Siemens Gamesa, plummeted after it emerged that the company was in rescue talks with the German government to secure €15bn of guarantees to shore up its balance sheet. The company expects heavy losses this year after faults were discovered in its newest turbine models….

    …some fear that a troubling trend has emerged: the climbing costs of financing and building windfarms have created headwinds for those constructing offshore windfarms around the world. Inflation is casting doubt on the future of multibillion-pound wind projects. In time, the sector-wide cost pressures could threaten government renewable energy targets too.

    Sweden’s Vattenfall raised a red flag over rising costs this summer, halting work on its giant offshore windfarm off the Norfolk coast.

    Vattenfall said it would stop work on Norfolk Boreas, designed to power the equivalent of 1.5m British homes, because a 40% increase in its costs, in large part due to higher prices for energy and materials, meant it was no longer profitable.

    Vattenfall bid a record low price of £37.35 per megawatt hour (MWh) to win a government support contract for the project but, following a surge in global energy prices, said it would now need a “significantly higher” subsidy for its project to make financial sense.

    Along with SSE and ScottishPower, it warned the UK government that its late summer auction for new subsidy contracts was set too low to cover costs. The government ignored calls for the auction to start at a higher price and no new offshore windfarms bid for contracts.

    The Danish windfarm giant Ørsted, meanwhile, has raised concerns about supply chain glitches and soaring interest rates, and told investors of a near £2bn writedown due to delays to a string of windfarm projects in the US….

    …In the US, Joe Biden set an offshore wind target of 30GW by 2030. But analysts at BloombergNEF cut their forecasts to just 16.4GW by the end of the decade after policymakers in New York forcefully rejected developers’ pleas for higher rates earlier this month. The slowdown casts doubt on the US ability to meet its climate commitments, including the country’s Paris agreement pledge to at least halve greenhouse gas emissions from 2005 levels by the end of the decade…./blockquote>

    Like

  11. “The case for wind power was built upon a myth
    We keep being told that it will continue to get cheaper. Now the truth has been revealed”

    https://www.telegraph.co.uk/news/2023/10/29/the-case-for-wind-power-was-built-upon-a-falsehood/

    Wind is already the cheapest form of power and will save us a fortune in future. We know this because the green energy lobby keeps telling us so. But it is hard to square with the words of Tom Glover, chair of energy company RWE’s UK arm, last week.

    No more offshore wind farms will be built, he said, unless the Government hikes the guaranteed long-term prices offered to their operators by as much as 70 per cent.

    The energy “market” is not really much of a market at all, not when it comes to green energy. The Government underwrites wind and solar through “contracts for difference” – guaranteeing operators a minimum “strike price”, rising with inflation, for every megawatt-hour of electricity they generate over 15 years.

    The trouble is that wind farm developers will no longer accept the strike prices offered. Last time the Government held an auction for the right to build offshore wind farms, in September, it received not a single bid.

    The maximum strike price the Government offered was £44 per MWh. According to RWE it won’t receive any bids until this is raised to between £65 and £75.

    How come, when the cost of wind energy is supposed to be falling year on year? True, the cost did fall sharply up until 2019. But this then went into reverse thanks to higher commodity prices and interest rates. With renewable energy, most of the costs come upfront – which makes it particularly reliant on cheap debt.

    But this is only half the story. If we are going to have a grid based on intermittent renewables, it is no use looking just at the cost of generation. We have to add on the cost of energy storage, or some other kind of back-up – or else build so many wind and solar farms that we have just enough power at the worst of times, and a super-abundance of it at other times.

    All are likely to be horrendously expensive. Storing energy in lithium batteries, for example, can cost around six times as much as generating it in the first place. Using gas as back-up – as we do now – means we have gas power stations sitting idle for some periods, pushing up the unit cost of generation when they are needed.

    As for super-abundance, we would end up with masses of idle wind turbines and solar panels instead. They would only get built if their owners were bribed with huge compensation for being unable to supply all their power to the grid.

    Wind farms already do receive such “constraint payments”, which inevitably end up on our bills. In 2022, energy consumers – unknowingly in most cases – had to pay £215 million to wind farm owners to turn off their turbines. This is a bill that is surely only going to rise as more and more wind farms – and far too few energy storage facilities – are connected to the grid.

    Remember how, last summer, the renewables lobby was trying to tell us that wind energy was “nine times cheaper” than gas? It was a blatantly false comparison between long-term strike prices for wind and “day ahead” prices for gas – ie the inflated prices we have to pay the owners of gas power stations to turn them on for a few hours at short notice when wind and solar are in short supply. We are paying more than we need to for gas power because we are using it to balance renewables.

    So, no, don’t be fooled by the PR. RWE has let the cat out of the bag. Renewables never were particularly cheap – and they are likely to get a lot more expensive.

    Like

  13. The problems for wind companies are global. Here’s a story from the USA:

    “Wind Industry Outraged at Government Refusal to Deliver Even More Subsidies”

    Wind Industry Outraged at Government Refusal to Deliver Even More Subsidies

    It takes real audacity for the most heavily subsidised ‘industry’ on earth, to demand even more. And it takes real courage for the governments who have been handing out massive subsidies, without question, to reject demands for more of the same.

    Which is where the New York State Public Service Commission (PSC) comes in.

    Led by two mega Scandinavian wind power outfits, Equinor and Orsted, the US wind industry has been engaged in a shakedown effort that would make the New York mob blush.

    The PSC, to its credit, was unmoved by the industry’s usual bullying and belligerence, and unanimously rejected the demands made for guaranteed contract prices that would have added more than $12 billion to their coffers….

    Like

  14. “It takes real audacity for the most heavily subsidised ‘industry’ on earth, to demand even more”

    the chickens/dead birds are coming home to roost.

    Like

  15. “BP posts profits of $3.3bn as oil prices rise again”

    https://www.bbc.co.uk/news/business-67264120

    Tucked away in this article, we find:

    …The company also said it had taken a $540m charge on three wind farm projects off the coast of New York. BP, which is carrying out the projects in partnership with Norway’s Equinor, said it had failed to renegotiate agreements with authorities in an attempt to mitigate the impact of inflation and delays….

    Like

  16. Perhaps renewables/net zero scepticism is alive and well in Australia too (though I hasten to add I haven’t bothered looking at how the opinion poll was structured and questioned):

    “Guardian Essential poll: most voters don’t believe Australia will meet Labor’s net zero by 2050 target
    Almost three-quarters say development of renewables should not ‘come at the expense of local communities’ and half support nuclear energy”

    https://www.theguardian.com/australia-news/2023/oct/31/guardian-essential-poll-results-labor-net-zero-climate-change-renewables

    Fewer than one in three voters believe Australia is on track to meet the Albanese government’s target of net zero emissions by 2050, according to the Guardian Essential poll.

    The latest poll of 1,149 voters also found that half of Australians support nuclear energy. Although renewables remain popular, their local impact and transmission infrastructure are a concern.

    The findings help explain Peter Dutton’s political strategy to talk up the potential of nuclear power and criticise the transition to renewable energy as unfeasible or harmful to local communities….

    Like

  17. Not a breath of wind here (leafy Surrey) this morning which set me to thinking about what happens to all those wind turbines during calm spells – I’ve read that there are over 11,000 of the things spread across the country and round the shores.
    Aiui, they need power to keep the blades turning – very slowly – to protect the bearings. Then there are other demands such as oil pumps, heaters, instrumentation, etc..
    Does anyone have an idea of what that demand adds up to?
    Taking 100 kW as a guess, that would equate to over a GW if – when – the whole fleet is bacalmed: a significant load at a time when reserves are likely to be stretched anyway.

    Like

  18. Another must-read article, IMO:

    “Britain, a goner with the wind
    The dash for wind energy is a generational folly that will see the nation’s economic future sacrificed on the altar of Net Zero”

    https://thecritic.co.uk/issues/november-2023/britain-a-goner-with-the-wind/

    It includes this summary of recent problems, but goes on to offer a detailed summary of why the UK’s energy policy is utter madness, and is doomed to fail, causing economic mayhem as it does so:

    Britain has bet everything on wind, mostly offshore wind, to decarbonise the national electricity grid by 2035 and reach Net Zero by 2050. The commitment is to increase the current 14 GW of offshore wind production to 50 GW by 2030, enough to power around half the UK’s predicted electricity consumption. It is Britain’s only current growing source of energy generation.

    And yet the wind industry is in crisis. New developments are on hold and the government’s offshore auction in September failed to attract a single bid. Wind farm operators are effectively on strike unless the UK taxpayer ponies up more cash. The reason is that offshore wind is too expensive to be commercially viable, even with inflation-adjusted price guarantees which protect suppliers against intermittency and supply chain problems.

    Mads Nipper, the CEO of Danish offshore wind pioneer Ørsted, told Bloomberg News recently it is now “inevitable” that consumers will have to pay more. “And if they don’t, neither we nor any of our colleagues are going to build more offshore,” he warned in an embarrassing back-track from previous industry claims that offshore wind was the cheapest form of energy….

    Like

  19. “Brace for the Wind and Electric-Vehicle Bailouts
    Government is too invested to let these companies go bust, and taxpayers will be charged for the repair job.”

    https://www.wsj.com/articles/brace-for-the-wind-and-electric-vehicle-bailouts-506383a8

    …Government has invested too much politically and financially in renewables and electric vehicles to let the companies go bust.

    In June Siemens blamed a “substantial increase in failure rates of wind turbine components” for its mounting losses—about $4.8 billion this year—and warned that its financial problems could drag on for years as it repairs and replaces faulty equipment. The company has a backlog of orders from wind developers chasing government subsidies, but banks won’t extend credit because of its financial troubles. Siemens wants Berlin to issue loan guarantees on the faulty premise that its failure could endanger the country’s economy and national security. Wind is the new too-big-to-fail enterprise….

    …American companies are also pleading for government help. Large offshore wind developers in September importuned New York’s Public Service Commission to increase contractual payments by an average of 48% to cover their costs. Regulators rejected their requests.

    Now developers are mulling whether to cancel the projects if they can’t coax more corporate welfare out of the Biden administration. Denmark’s Orsted, the world’s top offshore wind developer, and U.S. governors in the Northeast are lobbying the White House to boost subsidies in the Inflation Reduction Act to cover 50% of wind project costs.

    Taxpayers and electricity customers will inevitably have to pay more to support wind energy, Orsted CEO Mads Nipper said last month. “And if they don’t, neither we nor any of our colleagues are going to build more offshore,” he warned. “It’s very simple.” Other wind executives are handing down similar ultimatums. One of the largest U.K. power generators, RWE, told the British government last week that its payments to wind developers would have to rise 70% if it wanted more projects built.

    The European Commission got the message, and on Oct. 24 it announced more financial support for wind developers. How long before auto makers start begging for bailouts as they struggle to sell government-mandated EVs?

    For now, auto makers are simply pumping the brakes on their electric-vehicle investments….

    Like

  23. Mike, from your link:

    “While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry,” White House spokesman Michael Kikukawa said.

    The irony of this statement just can’t be missed. Right now, it’s unfavourable headwinds, but what happens when the wind just refuses to blow? That can happen, when you inextricably bind macro and microeconomics to the weather.

    Like

  24. “Report: Rising costs threaten wind power industry’s viability”

    https://www.edie.net/report-rising-costs-threaten-wind-power-industrys-viability/

    New research has revealed that the renewable sector is battling rising costs and higher interest rates; the eight largest renewable energy firms reported a $3bn decrease in asset value in the first half of the year.

    This is based on a report published by the global insurance firm Allianz Trade, highlighting the rising struggles confining the wind energy sector including operating and financing costs, quality-control problems and supply-chain issues.

    The report notes that inflation and global energy price fluctuations are sparking concerns regarding the feasibility of several wind power projects worldwide and causing major industry players to either halt or seek government funding for large industrial projects. …

    Like

  25. To add to all the wind industries’ other problems, this one has a delicious irony about it:

    “Hawick wind farm turbine deliveries delayed by high winds”

    https://www.bbc.co.uk/news/uk-scotland-south-scotland-67355849

    Deliveries of turbine blades to a Borders wind farm have had to be cancelled – due to high winds.

    Developers Energiekontor confirmed the decision to delay the transportation to its Pines Burn project near Hawick.

    The company has previously faced criticism for the disruption caused by the slow-moving convoy carrying the 65m (210ft) blades through the town.

    It said it was doing everything possible to keep any traffic impact to an “absolute minimum”….

    …Due to their size, the convoys require a police escort.

    The deliveries were halted last month for a review following complaints that they had “paralysed” Hawick town centre.

    They were scheduled to restart on Wednesday but the company confirmed they had now been cancelled due to forecast high winds….

    Like

  26. “Onshore wind projects in England stall as no new applications are received
    Fears grow that Rishi Sunak’s anti-green policy shift is driving investment in renewable energy abroad”

    https://www.theguardian.com/environment/2023/nov/11/onshore-wind-projects-england-stall-no-new-applications-are-received

    This article bemoans the lack of new onshore wind farm applications in England, and seems bemused at this given that planning rules have now been relaxed (they always said it was tighter planning rules in England that was holding back windfarms south of the border). The spin here is staggering, but at least they’ve stopped claiming that wind power is cheap:

    …The collapse will add to growing unease in Whitehall after no one bid for licences in the latest auction for offshore wind projects because the price companies could charge for the energy was set at too low a rate.

    The Observer understands that, with panic setting in behind the scenes, ministers will announce a new framework of pricing within days to try to attract more investment into the sector before it is too late. There is also dismay among civil servants and government advisers, past and present, over the effect that recent government pronouncements on the green agenda have had on companies’ investment thinking….

    …James Robottom, head of policy at RenewableUK, the body representing about 500 companies in the sector, said other countries were doing far more to maximise opportunities. “Unprecedented financial incentives are being offered to renewable energy developers by the US and the EU,” he said. “International competition to secure private investment in clean energy projects is intense as other countries seek to lure developers away from the UK to work elsewhere”….

    In other words: “We need subsidies [aka “unprecedented financial incentives”] to make this stuff financially viable”.

    Like

  28. “Building wind power, canceling coal — it’s all drowning under borrowing costs
    Central banks’ efforts to tame inflation have made it harder for both wealthy and poor nations to shift away from fossil fuels.”

    https://www.politico.com/news/2023/12/09/climate-talks-newest-threat-interest-rates-00130949

    It’s a piece apparently written by a true believer in the climate emergency, so it’s all the more meaningful given that the problems with renewables and with ridding the world of fossil fuels are very apparent to the author:

    Plans to push South Africa and Indonesia off coal sputtered. So have offshore wind farms on the New Jersey and British coasts, and a green hydrogen project in an Italian port city.

    Climate projects around the world are sinking because of high borrowing costs driven by interest rates — jeopardizing a major plank of the international effort to prevent the most catastrophic damage from warming temperatures….

    …Interest rates were one reason developers gave for canceling major offshore wind projects in recent months, including two projects near New Jersey by the Danish company Ørsted and a Swedish business’ project in the North Sea. In September, no bidders turned out for a September offshore wind energy auction in the U.K., also related to the effects of higher borrowing costs.

    “It’s a very under-appreciated fact how critically, how badly interest rates are impacting our global climate change efforts,” said Sumant Sinha, CEO of the Indian renewable energy developer ReNew Power. “It’s an innocent bystander in this whole managing the economy and controlling inflation, and people don’t realize that.”

    Essentially, persistent rate spikes have scrambled economic fundamentals for large, capital-intensive projects with long repayment periods — the exact type of projects needed if the world wants to hit its goals of massively slashing carbon emissions by mid-century.

    The economic climate is also making it harder to wean the world off fossil fuels. Rising rates have made it infeasible to do the debt-refinancing needed to decommission carbon-spewing coal plants, said Joseph Curtin, power and climate managing director at the Rockefeller Foundation. Already, he said, that reality has gummed up tens of billions of dollars that wealthy countries once offered to help nudge South Africa, Indonesia and Vietnam off coal….

    …Renewables investments have cooled steeply enough in the Middle East that consulting firm Wood Mackenzie is forecasting fewer new installations than it previously thought, said Chris Seiple, vice chair of its power and renewables group.

    The same effect is slowing onshore wind projects in Asia, a region highly dependent on coal and imported oil and gas, said Mike Taylor, senior analyst with the Abu Dhabi-based International Renewable Energy Association, or IRENA.

    Simultaneously, high rates have made costlier renewable projects difficult to finance even in rich countries.

    Hydrogen, a source of optimism for blunting the climate impact of heavy industry, doesn’t make financial sense at current rates, Seiple said. Just 7 percent of European hydrogen projects have lined up financing for construction, according to research firm Bloomberg New Energy Finance. Italian energy company Enel abandoned its government-backed green hydrogen project in La Spezia last month.

    Shaky financing for renewables is therefore delaying the aggressive clean energy deployment the scientists say is necessary to combat climate change. The rates are a key driver of that newfound instability.

    That’s because clean-energy projects typically get most of their capital on the front end, then repay that debt over the years with revenue they get from power customers. The prices the developers can charge are often agreed upon before the financing is finalized, making it hard to withstand fluctuations in the rates.

    “The renewable business is completely different than the traditional energy business,” Ramon Mendez, Uruguay’s former energy secretary, said at a news conference Wednesday. “Renewables is just the finance business.”…

    Like

  30. “Giant Wind Turbines Keep Mysteriously Falling Over. This Shouldn’t Be Happening.
    The taller the turbine, the more epic the tumble.”

    https://www.popularmechanics.com/technology/infrastructure/a42622565/wind-turbines-falling-over/

    The taller the wind turbine, the harder they fall. And they sure are falling.

    Wind turbine failures are on the uptick, from Oklahoma to Sweden and Colorado to Germany, with all three of the major manufacturers admitting that the race to create bigger turbines has invited manufacturing issues, according to a report from Bloomberg.

    Multiple turbines that are taller than 750 feet are collapsing across the world, with the tallest—784 feet in stature—falling in Germany in September 2021. To put it in perspective, those turbines are taller than both the Space Needle in Seattle and the Washington Monument in Washington, D.C. Even smaller turbines that recently took a tumble in Oklahoma, Wisconsin, Wales, and Colorado were about the height of the Statue of Liberty.

    Turbines are falling for the three largest players in the industry: General Electric, Vestas, and Siemens Gamesa. Why? “It takes time to stabilize production and quality on these new products,” Larry Culp, GE CEO, said last October on an earning call, according to Bloomberg. “Rapid innovation strains manufacturing and the broader supply chain.”

    Without industrywide data chronicling the rise—and now fall—of turbines, we’re relying on industry experts to note the flaws in the wind farming. “We’re seeing these failures happening in a shorter time frame on the new turbines,” Fraser McLachlan, CEO of insurer GCube Underwriting, told Bloomberg, “and that’s quite concerning.”…

    Like

  31. “Wind farm operator forced to cut hundreds of jobs
    Ørsted quits several global markets and scales back offshore projects amid strong headwinds”

    https://www.telegraph.co.uk/business/2024/02/07/wind-farm-orsted-cuts-jobs-scales-back-offshore-projects/

    One of Britain’s largest offshore wind developers has been forced to cut hundreds of jobs and quit several global markets as it battles spiralling costs.

    Ørsted, which operates 12 wind farms in the UK, announced a raft of cost-cutting measures after posting around £2.2bn worth of losses for 2023.

    This includes halting dividend payments until 2025 and pulling out of several international markets, including in Norway, Spain and Portugal.

    Ørsted’s cash crunch comes after the business abandoned several uncompleted projects in the US last year after incurring billions of pounds of losses.

    Mads Nipper, chief executive of the Danish business, said up to 800 roles will be affected by the cost cuts, with expected wind farm output falling from 50 gigawatts to 38 gigawatts by 2030.

    This could mean the business builds 1,500 fewer turbines.

    Mr Nipper said: “Despite a year with strong underlying business progress, 2023 marked a year with substantial challenges for Ørsted.

    “Our financial results are adversely affected by the impairments we took on our US offshore projects in the third quarter of 2023.”

    The latest update also confirmed that chairman Thomas Thune Andersen will step down in March.

    Mr Andersen said: “2023 was a challenging year for Ørsted. We have learned from the challenges and today, we are announcing a robust business plan with revised strategic growth ambitions for 2030.”

    In total, Ørsted has written off £3.3bn from its wind farm business….

    Like

  32. “SSE has published its Q3 Trading Statement”

    https://www.sse.com/news-and-views/2024/02/sse-has-published-its-q3-trading-statement/

    …Focus on delivery throughout challenging weather and operational conditions which saw ten named storms, with lower-than-planned renewables output over the quarter….

    …SSE reaffirms FY24 adjusted earnings per share guidance of more than 150 pence, noting a narrower range of probable financial outcomes for the full-year following lower than planned renewables output over the quarter.

    SSE Renewables output over the first three quarters was around 15% below plan, or 10% below plan relative to full year, having been impacted by a combination of mixed weather conditions, short-term plant outages and rephasing of flexible hydro output into the fourth quarter. January has seen continued mixed weather conditions for the renewables fleet.

    In SSE Thermal, performance continues to reflect lower spark spreads and market volatility when compared to the same period last year….

    …The Group’s final full-year earnings outturn remains subject to factors such as plant availability, supportive market conditions and normal weather across the remainder of the fourth quarter…

    …However, turbine installation on Dogger Bank A has been affected by challenging weather conditions with vessel availability and supply chain delays further impacting progress. Following notification of further vessel unavailability over the coming weeks there is an increasing possibility that full operations will not be achieved until 2025…

    But, don’t worry, investors! The Government is riding to the rescue:

    …An increasingly supportive policy environment
    The quarter saw continued improvement in the long-term policy and regulatory environment underpinning SSE’s net zero-focused strategy and the benefits of the Group’s high-quality pipeline across networks, renewables and flexibility. This included:

    Publication by Ofgem of its Sector Specific Methodology Consultation for the RIIO-3 framework which has the potential to integrate the ASTI success into a progressive price control framework;

    Significant increases to the Administrative Strike Price for Allocation Round 6 of the Contracts for Difference framework, where SSE has potential projects including its recently consented Cloiche onshore wind farm as well as Berwick Bank should timely planning consent be received;

    and

    Progress in developing the routes to market for CCS, hydrogen and, in particular, long duration energy storage projects, where a long-awaited government consultation response confirmed it is minded to introduce a cap and floor revenue stabilisation mechanism….

    Like

  34. https://www.bbc.co.uk/news/uk-scotland-highlands-islands-65015217

    A giant hydro scheme which would double the UK’s ability to store electricity for long periods is taking a leap forward with a £100m investment by SSE.

    The proposed 92m-high dam and two reservoirs at Coire Glas in the Highlands would be Britain’s biggest hydroelectric project for 40 years.
    Scottish ministers approved the 1.5GW pumped storage facility in 2020.
    But power giant SSE wants assurances from the UK government before finally signing it off.

    A spokesperson for the Department for Energy Security and Net Zero said it was “committed to supporting the low carbon hydro sector, including hydro storage”.

    Perth-based SSE says the £1.5bn scheme would help tackle climate change and improve UK energy security.”

    But we want more money from UK taxpayers before we commit to keeping the global temperature just nice.

    Like

  35. How anyone can describe the Coire Glas scheme – yet another proposed destruction of beautiful wild places – as a “green” energy scheme is beyond me.

    Like

  36. Mark – saving the planet, energy security & double the UK’s ability to store electricity for long periods, what’s not to like 🙂

    Like

  37. Mark, regarding the greening of Coire Glas, you have clearly not been reading your Lewis Carroll recently:-
    ” ‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’ ”
    https://www.brainyquote.com/quotes/lewis_carroll_389152
    I suspect that we here at Cliscep could make much the same remark about many other renewable/sustainable schemes that rake in the ‘green’ subsidies/grants etc.
    Regards, John.

    Like

  38. The usual stuff from Gaia Vince in the Guardian:

    “Climate-crisis deniers sought for exclusive Florida residence. Private ark essential
    Gaia Vince”

    https://www.theguardian.com/commentisfree/2024/feb/10/climate-crisis-deniers-sought-for-exclusive-florida-residence-private-ark-essential

    It was the final section of the article that caught my eye:

    Alarming forecasts from Big Wind this week, as the world’s three largest companies are struggling with hikes in raw material costs, delays, investment problems and high inflation — offshore wind is around 30% more expensive now. Turbine makers Vestas and Siemens Energy won’t be paying dividends, with the latter expecting €2bn (£1.71bn) losses this year, partly because of equipment failures.

    The biggest shock is from Danish wind giant Ørsted, which announced it’s slashing one-third of installations from a planned 50 gigawatts (GW) by 2050 to just 35-38GW. It’s cutting around 800 jobs, pulling out of Norway, Portugal, Spain, and slowing what remains of its US projects. Ørsted (formerly known as Dong, snigger) has been the posterchild of the clean revolution, pioneering the transition from an oil and gas major to wind superpower. But over the past few years, the proverbial hit its giant blades. It blames long, costly regulatory delays as it expanded in the new US market, a struggle to get tax credits and requirements for expensive locally made parts. We cannot afford this slowdown: the world has agreed to triple renewable power by 2030. Governments must create the conditions for rapid expansion in these challenging offshore and floating markets, even if it means agreeing higher energy prices in the short term. Now, where did we put that £28bn?

    She even calls it Big Wind! Amazing. Far from asking where we put that £28Bn, I suggest we ask what happened to the dishonest claims that wind power was cheap, and going net zero would reduce our bills? Never mind – sod the poor, “even if it means agreeing higher energy prices in the short term”. And in the long-term, I would suggest.

    Like

  39. “Icy blast of bankruptcies loom for Swedish wind-power sector, experts warn”

    https://brusselssignal.eu/2024/03/icy-blast-of-bankruptcies-loom-for-swedish-wind-power-sector-experts-warn/

    Two Swedish economists have issued a warning that the country’s wind-power industry is on the brink of a wave of bankruptcies.

    Christian Sandström and Christian Steinbeck analysed wind-power companies’ annual reports in Sweden and their work revealed “significant financial problems”, they told Swedish media outlet Kvartal on February 28.

    “The total loss for the years 2017–2022 amounted to 13.5 billion Swedish krona [€1.2 billion], which meant a loss margin of 39 per cent,” they said about the sector.

    Such heavy losses seem to be the rule rather than the exception for wind-power companies in Sweden, according to the annual reports.

    The Swedish Government has been pushing its national energy policies in a “green” direction, promoting wind power and decommissioning nuclear power plants. But the cost appears to be much more painful than previously thought, the economists stressed.

    Sandström and Steinbeck have been pointing towards profitability problems in the wind sector for some time “despite suppliers benefiting from Government support through electricity certificates and being exempt from covering the entire expenses associated with grid adaptation for wind energy or the depreciation of properties near installations”.

    Since the economists’ initial findings, Markbygden Ett, Sweden’s largest wind-farm installation with 179 turbines, is already facing bankruptcy, stacking up hundreds of millions of krona in debt.

    The firm is not alone – many other alternative-power companies in Sweden are in trouble….

    Like

  41. “Vestas’ share price has fallen by a quarter in half a year

    Ørsted and Vestas in particular have underperformed the market in the first half of the year, according to a survey of share prices conducted by Energiwatch.”

    https://energywatch.com/article17258556.ece

    …Jacob Pedersen , senior analyst at Sydbank, believes there are two main reasons why the share has lost so much value in the first six months of the year.

    ”The interest rate cuts that many expected to come have not materialised. This has weighed on the share, because Vestas’ customers are dependent on falling interest rates, so it has made investors quite nervous,” he says.

    High interest rates mean that it is more expensive to borrow money to finance new wind turbine projects, so the rising interest rates of recent years have made the economics of new wind turbine projects increasingly challenging.

    The consensus among economists has been that interest rates should fall during 2023, but interest rates have not fallen as sharply as many expected, which has also dampened demand for new Vestas wind turbines.

    Vestas has for some time been rebuilding the company’s ability to make money. This strategy has been called Back in Black, referring to a return to the black on the bottom line – i.e. profits – after several loss-making reorganisations.

    Among other things, the company has announced that it is ready to be more critical of projects and raise the price of wind turbines to ensure a good return.

    But this leaves Vestas more vulnerable to competition from China and elsewhere, as seen on Wednesday, when Vestas fell early in the morning on the back of a Chinese supplier securing its first European wind project.

    According to Jacob Pedersen, the other reason why the Vestas share price has been under water in the first half of the year is that the company has not received many orders…

    Like

  42. AR6 increases are not enough for wind developers apparently. They want more, so they can ‘boost Green growth’ and contribute to the decarbonisation target set for 2030. Call me cynical, but I suggest they want more money from the taxpayer so they can boost their profits – not by contributing a growing ‘Green economy’ but by sucking up taxpayer subsidies. They are crony Green capitalists and the system of capital funding they are advocating is eco-Communism.

    Scottish Renewables, supported by 67 organisations within the renewable energy sector, has issued a collective plea to the new UK Government to accelerate the deployment of renewable energy projects.

    This call comes ahead of Allocation Round 6 (AR6) of the Contracts for Difference (CfD) scheme, crucial for securing investments in low carbon electricity generation.

    Despite more than 12GW of renewable projects being eligible for AR6, concerns have arisen due to the current budget constraints, potentially limiting the number of projects that can secure funding.

    Claire Mack called for immediate action from the new government to align the CfD budget with the industry’s potential, facilitating economic growth and job creation while advancing clean energy objectives across the UK.

    Ms Mack said: “The new UK Government has an immediate opportunity to not only get us back on track to meet our bold targets but to kickstart economic growth and high-value job creation by uplifting the Allocation Round 6 budget.

    “Maximising CfD will also pave the way for cleaner, cheaper and more secure energy for the benefit of communities across the UK.”

    https://www.energylivenews.com/2024/07/08/energy-sector-urges-uk-government-to-increase-cfd-funding/

    That’s not deluded, it’s not insane, it’s not groupthink, it is calculated, malign, deliberate, cynical opportunism and rampant greed, combined with a complete disregard for the natural environment, and for the lives of those who are going to have to put up with these ‘clean energy’ projects springing up in their back yards. The response should be akin to the response you’d give to a highway robber who cuts down ancient majestic trees just to stop your carriage so he can rob you of your money and possessions.

    Liked by 3 people

  43. “Europe’s largest wind-power plant stacks up hundreds of millions in losses”

    https://brusselssignal.eu/2024/08/europes-largest-wind-power-plant-stacks-up-hundreds-of-millions-in-losses/

    Sweden’s Markbygden Ett, Europe’s largest wind-power plant, has lost more than €322 million since its start-up and between 2017 and 2023, the loss margin was minus 193 per cent, Swedish news outlet Affärs Världen has reported.

    The Chinese-owned Markbygd Ett facility has been struggling with financial problems for several years and applied for debt restructuring in the autumn of 2023, according to the July 30 media report.

    Restructuring, or företagsrekonstruktion, is a procedure in Sweden that allows companies facing financial distress to restructure their debts and operations under court supervision to avoid bankruptcy and continue working

    Such efforts are in large part financed by European taxpayers. The European Investment Bank (EIB) lent out €174 million to the Swedish wind farm firm, making it the biggest lender to the company.

    That loan is guaranteed by the European Fund for Strategic Investments (EFSI) and by extension by the European Union budget….

    Liked by 2 people

  44. “Equinor scraps Spain, Portugal offshore wind plans as costs rise”

    https://www.reuters.com/business/energy/equinor-scraps-spain-portugal-offshore-wind-plans-costs-rise-2024-08-28/

    Norwegian energy company Equinor (EQNR.OL)
    , opens new tab     has cancelled its offshore-wind projects in Spain and Portugal, in addition to its previously announced exit from Vietnam, and could withdraw from more countries to rein in spending, an executive told Reuters on Wednesday.    ..

    …State-controlled Equinor needs to prioritise capital more than in the past given rising costs in the offshore wind sector, due to inflation, high interest rates and supply-chain delays.

    “It’s getting more and more expensive, and we think things are going to take more time in quite a few markets around the world,” Eitrheim said, adding Equinor may pull out from more markets….

    Liked by 1 person

  45. “Trump victory raises risk of investing in offshore wind projects, says RWE

    German energy firm shaves €3bn from spending plans for next financial year to €7bn”

    https://www.theguardian.com/environment/2024/nov/13/trump-victory-raises-risk-of-investing-in-offshore-wind-projects-says-germanys-rwe

    A German energy firm has said that Donald Trump’s election victory has increased the risks of investing in offshore wind projects – but his return to the White House could help bolster Britain’s renewables sector, according to UK developer SSE.

    Germany’s RWE has cut its spending plans and warned that, as a result of the US election, “the risks for offshore wind projects have increased”.

    The company, which is behind a string of wind and solar projects, on Wednesday shaved €3bn from its spending plans for the next financial year to €7bn, down from €10bn in 2024. It will also delay its plans to invest €55bn in renewables before 2030.

    Trump’s re-election last week sent a chill through the renewables sector, as investors dumped green energy stocks.

    He has vowed to clamp down on Joe Biden’s Inflation Reduction Act, which stands to inject about $433bn in grants, loans and tax incentives to healthcare, utilities and clean energy companies.

    Separately, Alistair Phillips-Davies, the chief executive of Britain’s SSE, said a clean energy slowdown in the US could be “a real positive” for the UK even after Trump’s victory wiped billions from the market value of Europe’s largest renewable energy developers.

    But Phillips-Davies told the Guardian that, while doubts surround the future of the US industry, the UK could seize the chance to secure a greater share of global supply chains and manufacturing opportunities.

    “It’s not good news for US renewables but it could be helpful because it means the US will not be sucking up the global supply chain,” Phillips-Davies said....

    Talk about whistling in the dark to keep your spirits up.

    Liked by 1 person

  46. “European wind stocks tumble after Trump says he will stop new turbine construction”

    https://www.cnbc.com/amp/2025/01/08/european-wind-stocks-drop-after-trump-pledges-to-stop-new-turbine-construction.html

    ...The Danish wind turbine manufacturer Vestas Wind Systems and Danish wind developer Orsted fell about 7% on Wednesday in the wake of Trump’s remarks.

    The president-elect went on a lengthy attack against wind turbines during Tuesday’s news conference, arguing that they are too expensive, require subsidies and lack public support.

    Trump’s opposition to wind power creates further challenges for an industry that has already struggled in the face of high interest rates that have raised the cost of developing new projects. In late 2023, for example, Orsted took a $4 billion write-down and canceled two offshore wind projects off the coast of New Jersey....

    Liked by 1 person

  47. “Norwegian oil giant cuts green investment in half”

    https://www.bbc.co.uk/news/articles/c1jg7k1kjwyo

    Norwegian energy giant Equinor is halving investment in renewable energy over the next two years while increasing oil and gas production.

    Chief executive Anders Opedal said that the transition to lower carbon energy was moving slower than expected, costs had increased, and customers were reluctant to commit to long term contracts.

    Mr Opedal told the BBC he was confident that Rosebank – a giant new oil field in the North Sea – would go ahead, despite a recent court ruling that consent had been awarded unlawfully.

    He also warned that gas prices could rise next winter as European gas storage levels were lower now than this time last year.

    “We are scaling down our investments in renewables and low carbon solutions because we don’t see the necessary profitability in the future,” Mr Opedal said.

    It will cut investments in renewables to $5bn over the next two years, down from about $10bn.

    It will also drop a target to spend half of its fixed assets budget on renewables and low carbon products by 2030.

    By contrast, Equinor will be increasing oil and gas production by 10% over the next two years.…

    Like

  48. “Orsted Cuts Investment Plans and Torpedoes Miliband’s Clean Power 2030Looks like the 2.4GW Hornsea 4 Awarded a CfD in AR6 has been cancelled”

    https://davidturver.substack.com/p/orsted-cuts-investment-plans-torpedos-miliband-clean-power-2030

    …significant doubt has been placed over the 2.4GW Hornsea Project Four (H4) that won a Contract for Difference (CfD) at a 2024 price of £82/MWh in Allocation Round 6 (AR6) when the results were announced last September. According to H4 latest newsletter, the project has been granted planning permission and won a CfD but it has not yet passed the Final Investment Decision. It certainly looks like this project is on the chopping block to be cancelled.

    It is all but certain that Orsted will not be participating in the forthcoming Allocation Round 7 (AR7) to win new subsidy contracts. Of course, this torpedoes Ed Miliband’s plan to almost quadruple offshore wind capacity by 2030. The loss of Hornsea Project Four and the lack of participation of Orsted in new auctions will leave a massive gap to be filled. If the world’s leading offshore wind developer is feeling the pinch, then we can be fairly sure that other developers will be facing significant challenges too.

    This sudden announcement may explain why AR7 announcements appear to be behind schedule. The Administrative Strike Prices for AR6 were announced in November 2023, more than four months before the auction process began in March 2024 and some ten months before the results were announced. Yet, we do not yet know the strike prices for AR7, nor the date for the start of applications. We might expect Miliband to offer even more of our money to try and keep his plans on track and for strike prices to rise again.

    It is certainly looking like Miliband’s insane plans for offshore wind to provide the bulk of our electricity generation by 2030 are holed below the waterline. Instead of the answer blowing in the wind, it’s an entirely different fluid emanating from a different orifice….

    Liked by 1 person

  49. “BP profits drop as it says it will reset strategy”

    https://www.bbc.co.uk/news/articles/c30d4ernzqjo

    Oil giant BP’s profits dropped sharply last year with the firm saying it will “fundamentally reset” its strategy.

    It is widely expected to say later this month that it will scale back renewable projects following similar moves from rivals including Equinor.…

    Liked by 1 person

  50. Or as the Guardian puts it:

    …The company has fallen from favour among many big investors since its previous chief executive, Bernard Looney, set a plan for BP to become a net zero energy company by slashing its oil and gas production by the end of the decade in favour of spending billions on renewable energy projects.

    In the past two years BP has lost almost a quarter of its market value, while its rivals in Europe and the US have managed to grow….

    Liked by 2 people

  52. “German election shows how far green wave has receded in Europe

    Result is further evidence that political conversation around the climate crisis has shifted”

    https://www.theguardian.com/world/2025/feb/24/german-election-shows-how-far-green-wave-has-receded-in-europe

    …the result, which is likely to leave the Greens excluded from a future coalition, is further evidence that the green wave that swept Europe a few years ago was an outlier, rather than the new normal. Greens have been kicked out of government in Austria, Belgium and Ireland in recent months, echoing a recent trend of incumbents of all political stripes being punished at the polls.…

    and

    “BP expected to scrap renewables target in shift back to fossil fuels

    Goal of increasing renewable energy generation 20-fold to be ditched, shareholders to be told this week”

    https://www.theguardian.com/business/2025/feb/24/bp-expected-to-scrap-renewables-target-in-shift-back-to-fossil-fuels

    BP is expected to ditch a target to ramp up renewable energy generation by 2030 as part of a shift back towards fossil fuels when it presents its strategy to investors this week.…

    …At an investor day in London on Wednesday, the company is likely to announce plans to divest assets and cut other low-carbon investments to reduce debt and increase returns, under mounting pressure from shareholders.…

    …The company has already scaled back its target to reduce oil and gas output – set by Auchincloss’s predecessor Bernard Looney – by the end of the decade. In 2020, the last time it presented a comprehensive strategy update, it aimed for a 40% reduction, but changed this to a 25% reduction in 2023, and is expected to reduce it further on Wednesday.…

    …Other energy companies such as Shell have renewed their focus on oil and gas, chasing better returns after fossil fuel prices bounced back from pandemic lows, and after Russia’s full-scale invasion of Ukraine three years ago. The investor environment has also changed with the re-election of the US president, Donald Trump, a strong advocate of fossil fuels.

    Since taking over, initially on an interim basis in September 2023, Auchincloss has scaled back investments in renewables and diluted BP’s climate pledges….

    Like

  53. “BP to slash green investment and ramp up gas and oil”

    https://www.bbc.co.uk/news/articles/c3374ekd11po

    ...Five years ago, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas by 40% by 2030, while significantly ramping up investment in renewables.

    In 2023, the company lowered this oil and gas reduction target to 25%.

    It is now expected to abandon it altogether while confirming it is cutting investments in renewable energy by more than half in what chief executive Murray Auchincloss called a “fundamental reset”.…

    Liked by 1 person

  54. “BP shareholders want it to make money, not climate policy”

    https://www.bbc.co.uk/news/articles/c0mw1yw3kyvo

    It was more than 20 years ago that the then boss of BP reframed those famous initials as “Beyond Petroleum”.

    It was the first tentative step in transforming the company from an oil and gas producer to an energy provider investing an increasing amount of its fossil fuel profits into greener technology.

    Five years ago, chief executive Bernard Looney, who was in charge at the time, accelerated that process with ambitious targets to cut oil and gas production 40% by 2030, while massively ramping up investment in wind and solar.

    Today, BP could stand for “Back to Petroleum” following its announcement to shift back to oil and gas production and slash investment in renewables.

    Why?

    Profit and share price. There is simply less money in renewables than in oil and gas and some BP shareholders have become angry and impatient as they watch Shell produce double the returns they have seen while Exxon investors have received four times as much.

    For most – but not all – shareholders, the number one job of a company’s board and management is to maximise the value of the company.

    BP’s failure to do this has led to active speculation that BP should be taken over by a company that understands this. Or one that list its shares in the US where investors are less interested in a green transition.…

    Liked by 1 person

  55. BP, or Begins to be Practical, drops BS green nutty targets in bit to make a profit – News Flash.

    Like

  56. “Orsted Leaves Investors and Consumers Twisting in the Wind

    Expensive offshore wind power is bad for consumers and just as bad for investors.”

    https://davidturver.substack.com/p/orsted-leaves-investors-consumers-twisting-in-the-wind

    Conclusions

    Investors in Orsted are certainly feeling the pain of investing in offshore wind. The prospects for the newer windfarms do not look bright, with operational cash generation barely enough to fund financing costs.

    Consumers are also feeling pain from the costs of offshore wind. We are funding these eyewatering subsidies plus the extra costs of grid balancing, extension and backup. Because Ed Miliband is offering higher prices for longer in AR7 in an attempt to mitigate the pain to developers and investors, consumers will be made to suffer even more.

    Offshore wind farms are a lose-lose deal for both developers and consumers. The only winners are the banks that lend the money. Only Governments could organise such an epic destruction of wealth. Orsted is leaving investors and consumers swinging in the wind.

    Liked by 1 person

  57. The table in that article shows that the ROC payments will end soon for the earlier projects, starting from next year. It will be interesting to see what happens as O&M costs for old turbines are probably high and rising. Combine that with the loss of the ROC subsidy – currently worth about £150/MWh on top of the market price – and the financial outlook can’t be rosy.

    Expect to see some special pleading and/or threats of abandonment to try and extort further taxpayer cash.

    Liked by 2 people

  59. In the doldrums, both literally and metaphorically:

    https://www.dailymail.co.uk/news/article-15071401/Worlds-biggest-wind-farm-developer-sees-profits-plunge.html

    The world’s biggest wind developer has warned of a profits slump because the British summer was too warm and calm this year.

    Danish firm Orsted, which has 12 wind farms in Britain which generate 7 per cent of the country’s electricity, became the latest to bemoan slowing speeds amid worries over the UK’s energy strategy.

    The company said it now expects annual profits this year between £2.8 billion and £3.1 billion, compared to previous hopes of between £2.9 billion and £3.25 billion.…

    Like

  60. “Gone with the Wind

    Frankly, my dear, I don’t give a damn that wind operators are issuing profit warnings.”

    https://davidturver.substack.com/p/gone-with-the-wind

    There has been a string of profit warnings from renewables companies and funds complaining about a lack of wind. Even Ed Miliband has not been able to invent a scheme that pays subsidies when the wind doesn’t blow, so this year’s low wind conditions have hit the revenues of wind operators hard. The Contract for Difference (CfD) subsidy figures for September have been released, so we can take a look at what is happening.…

    …Offshore wind has so far this year received subsidies of £74/MWh or about 48% of revenue. Onshore wind received £39/MWh (34%) and solar got £2/MWh (3%) of their revenue from subsidies. This result comprehensively belies the claim that renewables are cheaper than gas. Reference prices are mostly set by gas and the subsidies are paid in addition to the reference price, so when subsidies are positive, the basic costs of renewables are more expensive than gas-fired electricity, even with a rising carbon tax.

    Conclusions

    We have been warning for some time that it is crazy for a developed economy to try and run its electricity generation system using technologies that are dependent on the weather. Even though there has been only a relatively modest decline in wind output this year, the operators and owners of wind farms are learning the hard way that it is very difficult to run a business that is at the mercy of the vagaries of the weather. Many of these companies are up to their eyeballs in debt. They better hope the wind blows hard this Autumn and Winter so they can collect higher subsidies, or they will be in real trouble.

    Their perilous finances are an even bigger reason to insist that proper funds are set aside to fund decommissioning or the long-suffering taxpayer will be on the hook for another hidden cost of renewables.

    Liked by 2 people

  61. “Alas, Poor ORIT”

    https://davidturver.substack.com/p/alas-poor-orit

    Conclusions

    In common with other funds focused on renewables, Octopus Renewables Infrastructure Trust appears to be adopting some rather aggressive accounting policies that have the impact of inflating asset values and probably under-stating the risks facing the company.

    They benefit from fairly predictable income by harvesting renewables subsidies, but have loaded the company with debt, assumed asset lives that are far too optimistic. They also ignore the risk of a change in the political weather that could see Net Zero abandoned and their realised power price assumptions undermined if carbon taxes and subsidies are cut. Their NAV would be sent tumbling.

    The falling share price perhaps tells us that the market is catching on to the risks surrounding funds of this nature. It remains to be seen whether its new roadmap for growth will deliver any benefits. For consumers, renewables have been a tragedy. Like with Shakespeare’s Yorick, one day soon shareholders might be picking over the remains of ORIT lamenting the good times of yesteryear. Regulators should be taking a greater interest in these retail funds.

    Like

  62. “Slump in wind speeds costs green energy giant £236m

    Danish operator Ørsted’s slowdown could force Ed Miliband to rethink expansion plans”

    https://archive.ph/WAed6#selection-2231.4-2235.88

    Falling wind speeds across the UK and Europe this year have cost renewable energy giant Ørsted £246m.

    The Danish wind farm operator estimated that a slump in wind speeds alone cost it 2.2bn Danish kroner (£246m) over the first nine months of 2025. The slowdown contributed to a 1.7bn kroner loss over just three months in the summer, the company said.

    Ørsted owns or co-owns 13 operational wind farms in the UK with a maximum operating capacity of 5.7 gigawatts (GW). The largest is the Hornsea cluster of wind farms in the North Sea off Yorkshire. Hornsea One and Two are up and running, while Hornsea Three, potentially the world’s largest wind farm, is under construction.

    The slump in wind speed continues a disastrous year-long weather trend that is undermining the company’s longer-term profits and forcing Ed Miliband to rethink his assumptions for offshore wind expansion.

    Last week, the Energy Secretary’s officials slashed forecasts for the expected output of windfarms in British waters compared to their theoretical maximum, from 61pc to 44pc.…

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