How come Denmark can produce cheaper and less carbon intensive energy than the UK? Can't offshore windmills be built in the UK too?
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They can, but the problem they face is that they can't get any of the developers to want to build them because the ROI is set too low.
https://www.theguardian.com/environment/2023/sep/08/what-wen...
That's a very recent phenomenon though right? Presumably the current rates of inflation have a big impact. It wasn't so long ago that we were seeing record low strike prices being accepted for offshore wind, down to about £40/MWh.
There are a couple of things which are misleading about the quoted CfD strike prices. Firstly they are in 2012 prices. Secondly, they are inflated by CPI every year which means the market prices then lower than a true fixed price would be priced. Thirdly, in all rounds prior to the most recent round, what was granted by govt were actually options to enter into a CfD, so developers were able to walk away and replace CfDs with higher-priced market PPAs at COD if they wanted to (and many have indeed done that). As a result, the business plan which some developers have followed has essentially been to bid the lowest price they could get sufficient debt financing with and then try to improve on that with higher priced PPAs or finding financing willing to take merchant risk at COD.
I actually meant to say interest rates above but that these strike prices are inflated by CPI isn't really obvious so I'm glad you've mentioned it.
Is there anywhere I can read about these arrangements? It would be really interesting to know the true cost per mWh delivered from some of these schemes.
Yes, interest rate rises have made a meaningful difference too via their impact on cost of capital/discount rates/IRRs demanded.
There's a summary at the House of Commons library website here. I hadn't seen it before today but it seems to cover most of the key points I'm aware of (from investing in the UK and European power space for work) and is reasonably concise: https://commonslibrary.parliament.uk/research-briefings/cbp-...
Thanks for digging that out. I'll take a look at it later.
It’s mostly the fact that the more wind you build the less each turbine will make in profit as in general they all spin at the same time pushing the prices down when they produce electricity.
The solution is to increase demand during those moments and thus these new interconnects to Denmark and Norway. Other option is to build storage or new consumption (hydrogen, ammonia, e fuels, etc)
I don't think that is particularly an issue, at least in the UK. They have a guaranteed price per unit. If the wholesale price is above that then it is paid back.
The UK already has a stupid amount of offshore wind with multitudes more in the planning / development phase.
This is part of a wider strategy with The Netherlands, Denmark and Germany and interconnect their energy markets using the north sea renewables as both generation and interconnection.
The future is bright.
As further up in the thread, if a cyclone comes in on the gulf stream it arrives 20hrs earlier in the UK than in Denmark, and when significant wind power is built on the Irish Atlantic coast then there's effects will be amplified and a smoother renewable provision for now Europe will be available.
They can, and the UK is one of the largest builders of offshore wind. But Denmark has spare capacity, and UK electricity prices are high.
It’s not really said in the story, but this is a bidirectional connector.
There are certainly times when the UK generates excess energy from wind.
This interconnector was already exporting to Denmark earlier in the week when the UK was experiencing record wind generation (per Electricity Maps [1]). The link currently can’t be maximized from West Denmark to the UK due to transmission constraints on the DK side.
Is that rare? I naively thought that all electrical infrastructure could flow in whichever direction there was need.
For things like inverters for example, yes, you have to measure things to decide when to turn on (say) transistors based on that information. You have to carefully design it if you want to be able to drive the exact same H-bridge in reverse as a rectifier.
See "reverse power flow": https://roadnighttaylor.co.uk/connectology/what-is-reverse-p...
Absolutely. It's a given with stuff like wind.
There are… Hornsea for example is one of the bigger ones: https://hornseaproject3.co.uk/
Geographical spread of wind (and solar) generation helps produce a more consistent overall supply.
The UK has very large amounts of offshore wind, unfortunately it isn't enough and we're not developing more capacity fast enough. It doesn't help that the government has utterly screwed the incentives:
https://www.theguardian.com/environment/2023/sep/08/what-wen...
Also, when the wind blows too much, we produce more than we need. Christmas day had negative prices before 7am, as we had too much wind power.
Offshore is more expensive than onshore wind, which has been effectively banned across most of the UK.