@old_scientist 

Posted by: @old_scientist

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As an investor in multiple listed renewable companies on the FTSE, I can assure you I'm not making a lot of money doing nothing. In fact, 6 of the 7 listed renewable funds I have invested in have lost substantial amounts of money over the last 3 years. Take a look at UK Wind (UKW), a £4.2bn operator of UK wind farms, that is down 32% over the last 3 years. I personally have a substantial investment

I too had investments in the renewable's industry but with the high interest rates, the lack of grid capacity and poor strike prices being offered at the time by the Government, there was only one way for the market and that was down. So I pulled out 18 month ago.

Sorry to hear you have lost those percentages. 🙁

But the fact remains, these wind farms have 15+ year contracts that they will be paid for the power they produce regardless of whether they actually produce any (think its called contracts for difference?). Most of the time they are being paid to shutdown especially over the Winter.

Due to the lack of grid capacity and the policy direction to keep the "Not in my back yard brigade" happy (past ban of on shore wind etc), the situation is an expensive mess!

@technogeek @old_scientist I'm no investment advisor but I see opportunity.

World is transitioning to renewables, those fundamentals can't be beaten by short term conditions.

What's that investment saying about blood in the streets...

Not financial advice.

@jamespa 

Posted by: @technogeek

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Posted by: @technogeek

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The climate science or the fact there is a lot of renewable energy generating companies making a lot of money to practically do nothing at the expense of the bill payer? I refer to the latter!

 

 

True, but of course they had to be convinced to invest in the first place because the bill payer didn't pay for the infrastructure.

In an uncertain political climate I can understand why a long term investment commands a premium.  

The bottom line is, the country (and the world for that matter) has left it too late to start the renewable transition. The Government has consequently panicked and sadly very badly managed the whole project (bit like HS2 etc really!)

They have built the power generation to try and show the world the UK is a head of the game without building the means to deliver the power. It is like Amazon building a load of warehouses without their home delivery fleet, they probably would not be as successful. The result, the homeowner is paying a huge amount more for power than necessary. As I have mentioned in another post, the windfarms are contracted to be paid regardless of their contribution to the grid plus the need to use gas turbines to fill in the huge power gaps in the south together with the crazy price setting practise of the wholesale market. I can only see electricity bills climbing higher and higher which is not going to end well in my honest opinion!

I am currently looking into batteries and solar panels if I can fund it, to protect myself a little more from this craziness! 😀

@scalextrix

Posted by: @scalextrix

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I'm no investment advisor but I see opportunity.

World is transitioning to renewables, those fundamentals can't be beaten by short term conditions.

Depends on your personal circumstances, if you have 20 years to wait for a return on your investment you may well be very correct. In my case I will probably be dead by then so I need a return in the time frame of 5+ years for my pension, which the renewable industry is not going to give in my view. The situation is mainly caused by inflation and high borrowing costs making renewable project installation a very expensive business at present.

Posted by: @technogeek

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The bottom line is, the country (and the world for that matter) has left it too late to start the renewable transition

The world certainly, we should have started 30+ years ago.  Unfortunately the oil industry and other vested interests hid the evidence and then fillybustered and, as a direct result, we will all pay more and suffer more.

Posted by: @technogeek

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The Government has consequently panicked and sadly very badly managed the whole project

I'm not sure that is fair, and of course its successive governments not particularly the current one which is having to deal with the legacy.  Im not suggesting what any government has done is perfect, but there are a lot of political and financial constraints and legacy issues which aren't immediately apparent, and always the nagging drone from the doubters and the vested interests which, in a democracy, cant be ignored!

The gas/electricity price ratio I think originates essentially form a decision maybe a decade or two ago (EU wide I believe) that electricity prices would be linked to wholesale gas prices, which was probably sensible at the time but is probably no longer sensible.  That said I do believe that a part of the rationale is encouraging investment by big generators, you will recall that one recent wind turbine auction received no responses because the price offered was too low, and of course political uncertainty inevitably pushes it up because there is a lower level of guarantee that policies will remain stable during the time required to recoup the investment.  

Posted by: @technogeek

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As I have mentioned in another post, the windfarms are contracted to be paid regardless of their contribution to the grid

Quite probably so but please refer to my comment above about the total absence of bids in a recent call.  In the end investors need to be convinced to stump up the money and some form of guarantee is probably a good investment relative to the price they would demand if there were no guarantee.

Im not sure when the decision was made to load policy costs onto electricity not gas, but its been like this for many years.  Once done these become difficult, albeit not impossible, to unwind because of the inevitable 'losers'.

Posted by: @technogeek

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They have built the power generation to try and show the world the UK is a head of the game without building the means to deliver the power.

Im pretty sure @transparent (who knows about this stuff) said that the main reason for occasionally paying wind generators to switch off is because there are gas fired power stations of a particular type which cant economically be switched off in less than about 24 hrs, rather than principally being a transmission problem.  Im also pretty sure he said that these will have to go in the next 5 years if NESO is to meet its renewables target.

The reality is that there is always going to be some level of waste and also some level of demand before supply or vice versa in a transition as big as this; we cant expect these things to be perfect.  I have no idea whether we are better or worse than others.  It would help a lot if the public were more flexible and became more tolerant of some limits on what they can do at any one time.  ToU tarrifs are of course tilting in that direction and batteries help bridge the gap, but I still think we have a long way to go.  There would be little or no personal inconvenience if, for example, your ASHP switched off and your car stopped charging during half time of the cup final, or indeed for an hour or so on many other occasions in order to balance load better.  

I think its all too easy to pick on elements of the policy, but ultimately there are many more constraints on what Government can do financially and politically than simple analysis take into account.  I think the underlying problem is leaving it later than would have been ideal!

As to HS2, it should IMHO never have happened in its current form because the country, unlike France, is simply the wrong scale.  The time saved is negligible given modern work-anywhere practices and anyway assumes that you want to go from one terminus to the other which is rarely the case.  The principal rail problem to be solved was capacity, and solving that did not demand the overengineered (ie ultra fast) approach taken and consequent high level of expenditure. 

However I suspect vested interests had a large part to play in advocating HS2 and of course it was something of a vanity project.  I also suspect that the hollowing out of our civil service which has taken place over past decades means that we rely too much on vested interests to inform this sort of decision.  Political vacillation has of course contributed to spiralling costs (which are more or less guaranteed for large infrastructure projects because of the assumptions that contractors are required to make when they quote).

However its worth striking a balance here.  The Elizabeth line, another big rail project, is by all accounts a stonking success.  Its a shame that nobody thought to connect the two projects so that you could go straight from Bimingham to, say, Liverpool Street, and places in between and beyond, without having to change.  If you did that HS2 would not have to run at anything like the speed to achieve the same end to end time saving.

Posted by: @jamespa

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there are gas fired power stations of a particular type which cant economically be switched off in less than about 24 hrs

I believe part of the issue is the longer term energy markets where producers can bid to supply.  For some gas generators they can actually afford to bid below market rate (even negative), to ensure their plant is running, and because it's already running they then find it easy to fill any shortfall from other generation.  If they physically had to cold start the plant, they would lose out.  It's a loss leader strategy.

You can see this today, even though there was plenty of wind and solar, somehow 2GW of gas was still on the grid.

Posted by: @scalextrix

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Posted by: @jamespa

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there are gas fired power stations of a particular type which cant economically be switched off in less than about 24 hrs

I believe part of the issue is the longer term energy markets where producers can bid to supply.  For some gas generators they can actually afford to bid below market rate (even negative), to ensure their plant is running, and because it's already running they then find it easy to fill any shortfall from other generation.  If they physically had to cold start the plant, they would lose out.  It's a loss leader strategy.

You can see this today, even though there was plenty of wind and solar, somehow 2GW of gas was still on the grid.

I think that resonates with what @transparent tells us about it being inefficient to turn off certain gas plants, hence we pay , on occasions, (presumably less) to turn off some renewable generators   

Markets are a funny thing at times.  Until we implement a proper carbon tax/polluter pays principle this sort of thing is almost bound to happen but of course that doesn't mean that overall the balance is not reasonably close to reasonable given practical constraints and commercial realities.

Of course that argument is far too subtle, and inconvenient, for the press who just present it as Government being stupid/a consequence of 'net zero'.  Why let the facts get in the way of a good story particularly if it advances your political objective?

Posted by: @technogeek

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I need a return in the time frame of 5+ years for my pension

Very few if any investments guarantee that.  Cash becomes the only safe option if you have only a 5 year return horizon, and much of the time returns are similar to or only just above (or just below) inflation by the time you account for tax, so actually little or no better than spending the money.

(health warning - this is not investment advice!)

Posted by: @jamespa

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Posted by: @scalextrix

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Posted by: @jamespa

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there are gas fired power stations of a particular type which cant economically be switched off in less than about 24 hrs

I believe part of the issue is the longer term energy markets where producers can bid to supply.  For some gas generators they can actually afford to bid below market rate (even negative), to ensure their plant is running, and because it's already running they then find it easy to fill any shortfall from other generation.  If they physically had to cold start the plant, they would lose out.  It's a loss leader strategy.

You can see this today, even though there was plenty of wind and solar, somehow 2GW of gas was still on the grid.

I think that resonates with what @transparent tells us about it being inefficient to turn off certain gas plants, hence we pay , on occasions, (presumably less) to turn off some renewable generators   

Markets are a funny thing at times.  Until we implement a proper carbon tax/polluter pays principle this sort of thing is almost bound to happen but of course that doesn't mean that overall the balance is not reasonably close to reasonable given practical constraints and commercial realities.

Of course that argument is far too subtle, and inconvenient, for the press who just present it as Government being stupid/a consequence of 'net zero'.  Why let the facts get in the way of a good story particularly if it advances your political objective?

 

Exactly this!

It's far easier to throw mud than to offer solutions, or even engage in constructive debate.

Even the Tories are now leaning in the opposite direction of net zero, as their recent polling has told them this stance is more likely to get them re-elected. They are all just in it for themselves, and their principles are more curtailed than the output of a Scottish wind farm on a stormy day.

Posted by: @old_scientist

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It's far easier to throw mud than to offer solutions, or even engage in constructive debate.

... easier still is to find a scapegoat and blame all woes on them/that. 

You don't even have to criticise, just parrot peoples concerns and then say you will fix it by dealing with [ insert a scapegoat of your choice]. 

The only question is why do people fall for it, but they do!

Posted by: @jamespa

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The only question is why do people fall for it, but they do!

My theory;

The world is complicated and that makes it scary to some people.  Give them a simple answer, and even though it's wrong, won't solve the problem completely or even partially, so long as it creates a feeling of comfort, they will support it.

Our current government seem to be taking the harder path of real, more complicated solutions to energy, that might take a decade to fully show results, and for that I respect them technically.  But the people who want an easy comforting answer now, won't be convinced by answers about complex market arrangements.  They want to be told it's someone else's fault (the net zero zealots) and to go back to tried and tested fossil fuels, because renewables are different (and scary).

Doing the right thing can be bad politics.

@scalextrix And from today’s news, doing the wrong thing can be bad politics too! (If we don’t snaffle the fossil fuels, someone else will nick them from our seas!) Regrets, Toodles.