Serica Energy Share Discussion Threads

[xxnjr] 04/1/2025 16:11

What is £70-80 per MWh (2012 pricing) reindexed to 2030 the earliest this project could be online?

According to Nat Grid Live over the 'past year' UK electric cost averaged £70.91/MWh in 2024. So this Morocco project reindexed from 2012 to 2030+ pricing could deliver extremely expensive energy?

[xxnjr] 04/1/2025 16:05

"The Morocco – UK Power Project is a privately funded infrastructure project.
In August 2023, the project was declared a project of “national significance” by Claire Coutinho, the UK’s Secretary of State for Energy Security and Net Zero.

The project will generate revenue via the Contracts for Difference (CfD) scheme, the UK government’s mechanism for supporting low-carbon electricity generation. CfDs incentivise investment by providing developers of low-carbon projects with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high. Developers of renewables projects that receive a CfD, enter a contract with the Low Carbon Contracts Company (LCCC), a government-owned company.

A CfD ‘strike price’ reflects the cost of investment in a low-carbon technology. It is set at the time the contract is agreed – expressed as a 2012 price to allow for cost/value comparison of different projects over time – and is uprated for inflation annually. CfD generators are paid the difference between the ‘strike price’ and the ‘reference price’ (the average market price for electricity in Great Britain). This helps to create a relatively stable revenue stream around the strike price. When the market price for electricity generated by a CfD Generator is below the agreed strike price, payments are made by LCCC to the generator to make up the difference. Conversely, when the market price is above the strike price, the CfD Generator pays LCCC the difference.

When we look at our internal cost projections as they stand today, we would envisage a strike price range of £70-80 per MWh (2012 pricing), but ultimately the strike price will be determined by DESNZ, who are currently evaluating the project

Sounds like Ed Milliband will be setting the strike price. Presumably at a level to provide guaranteed cash flows to cover the project, as it would otherwise be uneconomic?

[xxnjr] 04/1/2025 15:27

Yes, yes, yes but are UK based solar farms self funding? Or reliant on government subsidies? Is the (?x1000kms) underwater cable from Morocco reliant on build subsidy? Or artificially inflated guaranteed power prices to deliver the project?

[nigelpm] 04/1/2025 15:23

You're in danger of manipulating the numbers based on winter solar irradiatiom which is much lower than annual average which was c. 5% of all electricity last year. Wind was actually 31% so those windmills did almost a third of UK electricity production last year! Solar is small scale still but we probably aren't far away from large farms in northern Africa powering Europe. Anyway, gone way off topic here. I believe the UK needs more renewable and more gas so serica should do alright.

[bountyhunter] 04/1/2025 14:07

Gas up another 2% to 124.50p/th today.
Weather cloudy and calm with minimal daylight hours.

[xxnjr] 04/1/2025 13:54

Nigel

It might be self funding (whatever that means) but solar is really an irrelevance for the UK. According to National Grid Live over the 'past day' solar contributed 1.2%, wind 15.5%, gas 46%. Solar's contribution will fall to 0% after sundown.

But even if solar is relevant for the UK. What are the economics? I don't actually know but my hunch is all these solar farms that private equity build in the UK are only there to collect the subsidies. Am I wrong Nigel? You say they are self funding. How does it work in the UK? Can you really construct and run a solar farm for say 20,000 home equivalent output without being reliant on subsidies? Sometimes the subsidy is in the form of minimum and guaranteed price support to make what would otherwise be a non-commercial investment a commercial investment.

[nigelpm] 04/1/2025 11:34

Solar is now self funding. Wind is getting there. Net Zero is a fantasy but that's a very different argument.

[xxnjr] 04/1/2025 11:13

There is a really good documentary, 78 mins of it, on Sky News Australia, also on you tube. Googling

The Real Cost of Net Zero: The shocking truth of the renewable energy push

should get you there.

[serratia] 04/1/2025 11:04

OT,

A comment from elsewhere -

"In 2024 the consumer paid Seagreen [windfarm] £104 million for actually generating electricity, plus £198 million for the constrained volumes, and £64 million for the premium charged to reduce output.

This gives a total of £367 million.

The amount of green electricity actually generated by Seagreen in 2024 was 1.36 TWh. Therefore the cost to the consumer of Seagreen's actually generated wind power was £270 per MWh."

[nigelpm] 04/1/2025 10:47

The simple ignorance on here is something to behold. Suggest people read up on it.

[davenash] 04/1/2025 10:36

@loganair
Also, windfarm operators are told to shut down windmills as our aging grid system is unable to cope with too much energy entering the grid and we have insufficient storage capacity/infrastructure. When this happens, the windfarm operators are paid a wind curtailment/constraint payment. this cost is indirectly paid by the consumer.

There are various news reports out there as to how much is paid to the operators per year - BBC, Telegraph, Bloomberg, Carbon Tracker, etc - Worth a bit of a read.

[loganair] 04/1/2025 09:09

The problem with windmills is they can only operate when the wind is blowing above 6mph and below 40mph, therefore when there is a gale blowing the turbines have to be turned off,

I often cross the Irish sea and at least 50% of the time the wind turbines have been switched off, also importantly the number that have only two blades because one has been blown off therefore can not operate until another blade has been put on.

[heialex1] 04/1/2025 07:54

If gas prices continue to rise for the next few months this should do very well. Surprised the share hasn't performed better, but 200p here we're come...

[nigelpm] 04/1/2025 05:18

You need both. The idea of getting rid of the windmills is utter stupidity.

[xxnjr] 04/1/2025 03:32

But thats not good enough is it Nigel. You need something that is dependable 365 days a yr. Let's say wind varies from about 5% to 50% of UK electricity supply depending on how windy it is. Over the last yr wind on average supplied about 30% of UK leccy which is impressive. But there are times when it's down to 5%. And sometimes in winter you can get ultra calm conditions lasting for 2 wks or more. OK we can use battery storage - but that only works for about 4-8 hrs with current technology. Then the lights go out. Basically you need to have 100% redundancy from gas and nuclear to compensate for the days when wind electrons are marginalised. Doing that is all very expensive leading ultimately to even higher electricity prices than now. This will decimate high energy consumers like steel and car manufacturing with production being moved to China/US etc etc.

Trump/Musk's point is that UK policy is a big mistake. Farmers are being paid to grow weeds, not food. Oilers have pulled the E&P plug. Steel and car plants are closing down. All due to idiotic regulation and net zero policies dreamt up by virtue signalling clueless governments.

[nigelpm] 03/1/2025 23:05

"just 11%"

That's a lot!! ;-)

You've made my point for me - they kick out a lot of electricity even when the wind is barely blowing.

[gippy] 03/1/2025 22:45

Those windmills kick out a huge amount of electricity day in day out ...... but only when the wind is blowing.

As I write this on a relatively calm and cold Friday evening we are getting just 11% of our national power requirement from wind whilst gas is coming in at 48%.

True, it's the other way around on a mild and windy day but we will need plenty of gas for the foreseeable future.

[xxnjr] 03/1/2025 14:13

Trump tweet.

UK.gov is making a big mistake. Open up the North Sea for Oil & Gas. Get rid of all those windmills now!

[lord gnome] 03/1/2025 14:03

Looks like the share price has stepped on the gas. Up we go.

[fandagle] 02/1/2025 11:27

Oh Dear! It looks as if Europe & The Uk are running out of Gas.

[tygarreg] 02/1/2025 08:52

Maybe the North Sea gas producers can take up the slack left by Russian pipeline closure!

[tonytyke2] 01/1/2025 21:12

Well that's the end of that gas era to the EU. Ukraine putting their foot down.