Play the ball not the man. How do you explain the chart in the article. Simply: more renewables = higher cost electricity? If they’re getting cheaper that is. |
 adam2 Jan '25 - 13:21 - 152 of 153
Green Electricity Costs a Bundle
adam, The author of that article, Lomborg, has a bit of a reputation.
Lomborg fails to mention that prices will become far worse if countries wait to transition to green energy. An Oxford University study found that if the world transitions “fast” to renewables and decarbonizes by 2050, $400 billion would be saved by 2050 when compared to a “slow” transition where decarbonization happens by 2070. The Fast Transition is not only more economical than the Slow Transition, but it is also $514 billion dollars cheaper than not transitioning to clean energy at all. This study hinges on the fact that renewable energy is actually cheaper than fossil fuels – for decades, fossil fuel costs have remained relatively constant (accounting for inflation), while solar and wind costs have dropped at a rate of 10% per year. By 2017, solar had outcompeted coal and gas to become the cheapest source of energy in the world. Based on this study, it is obvious that the world should switch to renewable sources of energy as fast as possible. |
Bought a few more in my SIPP. Divvy looks covered next year, rate music is downwards, other infra / renewables funds look like they are bottoming out. |
hxxps://archive.ph/lZKbb
Green Electricity Costs a Bundle |
Dividend received today1.95p per share |
HP, if renewables are getting cheaper and more efficient, why are the subsidies required to encourage investment increasing? |
"Popit26 Dec '24 - 14:12 - 146 of 148
The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas"
Vastly? I seriously doubt it. Think of all the costs involved just in finding oil/gas never mind actually drilling for it then transporting it.
Wind/solar are getting more efficient all the time. |
Personally I see those subsidies as related to the inconsistencies of renewable power.
The Govt would not need to offer these contracts if we were not introducing wind and solar into the grid.
Each to their own I suppose. |
There's loads on this if you google it. i.e.
UK Subsidies for Fossil-Fuel Power Plants Swell to Record
By Bloomberg Feb 28, 2024
It seems pretty much all countries subsidize their energy production to ensure surety of supply. |
The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast government subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.
Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.
If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.
There is nothing to be gained from virtue signalling to the rest of the world about how “green” we are, if the economy is stagnating and eventually collapsing.
China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy. |
HP- are you referring to explicit or implicit subsidies for fossil fuels? |
The fossil fuels industries are subsidized so why not renewables? |
I agree Adam, there are a few good substack writers that give good alternative views. Macrovoices podcast is a good listen too.
I like NESF's battery strategy where they are tied to the solar sites, so no new grid connection needed. Given the issues in Australia and the profits being made by battery supply in a heavily invested renewable grid, could be a forerunner for what will happen in the UK in the medium term. An issue compounded by what Norway are looking to do with renegotiating their interconnected supply to the rest of Europe. |
David Turver’s Substack worth reading for the “anti” case also Ambrose Evans Pritchard (Telegraph) for the “pro” case. |
You’re right they can’t. I think Paul was talking about not issuing new ones. I doubt given the rhetoric that this will happen with this administration but it could with the next. Also windfall taxes are poss. As the scale of renewables grow so will the subsidy and the crippling costs on industry, consumer and tax payer. If you agree that renewables cost more (on a tax free basis) and that they are abundant often when they are least needed and scarce when badly needed. Then you have to find another solution (nuclear and gas). |
Why would subsidies be pulled when they are contracted?
Who would trust the Govt in future contracts after such an action? |
FGEN say their end of life valuation is conservative and but they believe that it may be possible to run some of these facilitates on a non subsidised basis beyond eol. Something they are pursuing.
So what happens if subsidies are pulled? Can we live with greatly reduced renewable supply? |
I think offshore wind AR5 there were no bids (£60 inflation adjusted) so price hiked substantially for AR6.
It’s been nice work if you can get it for renewable companies, but markets look forward. What are they seeing?
If by medium term you mean the length of Ed Millibrain’s tenure, is that to be measured in the life span of a lettuce? What kind of industrial policy elicits electricity prices 4x that of the USA and then wonders why bond yields are spiking and growth is going negative? |
Adam
New build would dry up without the subsidies so not in the mid term. Worst case less supply pushes up prices
The attraction of the existing renewable trusts is the cost of upgrading to new, cheaper and more efficient kit is a relatively small % of the sunk total cost which they have already incurred? Gives them a competitive advantage
Not sure if this applies to wind?
None of us know how this all unfolds, the issues are whether the discount is large enough and the management are good enough to work the assets |
How many of these companies would be profitable without subsidies? Either ROCs, CFDs and constraint payments? What would the NAVs and dividends be? So rephrasing the question: How long will the subsidies last or be so generous? |
I highly rate the management of BSIFOver the years directors have bought some sizeable amounts of shares |
 Payette
Just so folks dont get carried away with the >10% yield... I think that this is most likely a limited life company. Solar panels and wind turbines wear out. And more to the point, subsidies and leases of land on which assets are sat, are limited. So this company will pay out at similar levels for 10 year or so, then ramp down as assets become older or leasehold land returned to freeholder. Some assets may generate income for longer - e.g. the AD assets; I reckon one sixth of the asset base might go on "forever" (unfortunately some of these were sold to 3inf).
The company say the opposite! They claim that environmental infrastructure is a long-term asset class. They IPO'd in 2014 with a 19.8 year av life, now 10 years later it's 16.5 years and that this is conservative. NESS have said the same
Clearly their skill set is the ability to expand and extend.
My view is that if you rate the management, then relax and let them do their job with the risk reward screwed in your favour with the discount to NAV
I bought a load on Thursday and Friday plus NESF and GRID. Got SEIT.
Any others I should be looking at? |
Happy to have bought down here beats traditional christmas shopping! |
A strange post.(130)
It seems we are to take the company today and freeze it.....wait ten or twenty years and look again at some worn out assets ??
The AD business ...if it is to go on "forever" will require constant cap ex but the wind and solar are simply to be left to run down.
Blades and complete turbines can be replaced but most wind turbines are exceeding their projected lifespan and FGEN uses very conservative estimates.
To replace existing solar panels with cheaper, more efficient panels looks a good move when all the infrastructure is already in place.
A few years ago I was looking at a battery storage start up and investors were concerned about the technology rendering their batteries obsolete ....the guys pointed out that even if there was a problem the batteries were only 25% of the total cost of the installation
"Just so folks don't get carried away with the >10% yield".....hmmm !! ...the second word that springs to mind is "off" |
@Payette no one got carried away when the yield went above 9% a couple of moths ago so don't see 10% as being anymore beneficial. Fundamentally too many of these companies have been propped up by generous subsidy schemes particularly the ROC scheme which clearly will payout to the end but long run wholesale power prices are falling back and there is an increasing risk of negative power pricing starting to influence forward power pricing now as well. Also until the bond mkt has found a floor i feel these will continue to drift back and even though sub 70 was a good entry point im not so sure currently. |
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