Tilting at windmills – just how much more does offshore wind power cost households compared to fossil fuel sources of energy? Calling all electricity, energy, commodity traders and mathematicians!
Side note: I am still baffled as to why “renewable energy” from wind and solar is not FREE. Taxpayer subsidies and hugely inflated utility bills over decades have already paid all the capital costs – so barring maintenance costs, there is very little cost involved. Imagine if the Dutch windmill owners oof 300 years ago had run into the “green lobby” all those years ago – the “swamp” would have rushed in ad charged the windmill owners a fortune for the wind power they were using! Utility bills should be going DOWN t lower levels, not going up because of a scam.
Yesterday, I posted this:
The attentive reader will notice that the headline changed from 45,000 to 410 times as a mark-up, because I failed to multiply by 1,000 to covert kWh to mWh!
Away, I thought that I would spit-ball the cost of electricity generated by oil and coal, just to see how it compared to natural gas (20 pence per mWh – around 25 cents) and the 100 dollar (80 pounds sterling) price of the UK’s latest auction of offshore wind power.
From here and here:
https://science.howstuffworks.com/environmental/energy/question481.htm
We have this:
“The thermal energy content of coal is 6,150 kWh/ton. Although coal-fired power generators are very efficient, they are still limited by the laws of thermodynamics. Only about 40 percent of the thermal energy in coal is converted to electricity, so the electricity generated per ton of coal is 0.4 x 6,150 kWh or 2,460 kWh/ton.”
“1 barrel of oil ≈ 1,700 kWh (electricity equivalent)
So, 2.46 mWh per ton of coal and 1.7 mWh per barrel of oil.
The specification for a coal futures contract is 1,000 tons per lot.
Futures prices are sourced from here:
Coal = around 118 bucks per 1,000 tons using specifications of the futures contract and pricing from here and here:
API2 Rotterdam Coal Futures (ice.com)
Coal (API2) CIF ARA (ARGUS-McCloskey) Futures Quotes - CME Group
And for oil per barrel a current price of around 70 bucks a barrel (with the electricity generated shown from Brave, for ease of reference).
Crude Oil WTI Futures Chart - Investing.com
For coal, it costs 118 bucks for 2,460 mWh (2,460,000 kWh) - 2,460 per ton times 1,000 tons per contract divided by 1,000 to get to mWh) = under 5 cents per mWh
For oil, it costs 70 bucks for 1.7 mWh (1,700 kWh) = a little over 41 bucks/mWh
Using oil for electricity is not cheap, though it may be convenient!
We can now compare the 100 bucks/mWh (82 pounds sterling) for the UK’s latest offshore wind contract with the 5 cents per mWh for coal, 20 cents per mWh for natural gas, and 41 bucks per mWh for oil.
That is not the end of the story of course, as it is households and industry that pay a price for electricity in their monthly bills.
For the UK the largest supplier charges 5.285p per kWh for gas and 22.407p per kWh for electricity. It also levies “standing charges” for the privilege of being “connected” of 38.846p per day (12 pounds er month, 144 pounds a year, to the electricity supply AND 30.504p per day – 9.48 pounds a month, 113 pounds a year for the privilege of being connected to the gas supply!!!
Around 250 pounds a year in “standing charges”. All this summed and Value Added Tax of 5% is lumped on to the total – for an additional 50 pounds per thousand pounds of charges.
So, 5,285 pence = 52.85 pounds per mWh for gas instead of 20 pence and 22,407 pence = 224.41 pounds for electricity
UL electricity generation includes a (sometimes) 40% renewable energy component, and which has just been agreed in the latest offshore wind CFD contract to be bought at 82 pounds per mWh – to be onward billed to UK households at probably 300 pounds per mWh.
The spit-balled cost of electricity generation from hydrocarbon (“fossil” – not fossil) fuels of 5 cents for coal, 20 cents for gas and 41 bucks per mWh for oil can be compared directly to the 270 bucks (224 pounds @ 1 dollar 20 cents per pound sterling) per mWh charged to households in the UK.
A massive mark up for electricity, and for natural gas, instead of 20 cents per mWh, UK consumers pay 52.85 pounds (5,285 pence) per mWh, using commodity futures as a base price.
Here’s a few international comparisons of household electricity charges.
For US States Electricity Rates for Every State - EnergyBot
California – 33 cents per kWh, 330 bucks per mWh
New York – 24.5 cents per kWh – 245 bucks per mWh
From here: Germany electricity prices, December 2023 | GlobalPetrolPrices.com
Germany households pay EUR 0.368 per kWh or USD 0.407 dollars – 40.7 cents.
From here: Electricity Prices in Canada 2023 (energyhub.org) Canada was paying $0.192 per kWh – around 14.2 cents per kWh – 142 US dollars per mWh. The Japanese pay 34 yen per kWh = 24 cents and Norwegian households pay 86.0 øre/kWh = around 8 US cents.
Onwards!!!
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So-called “earth-friendly” electricity generation from wind and solar in the few healthy and wealthy countries of Germany, Australia, USA, Great Britain, New Zealand, Canada, Japan, and all the EU, representing about 12% of the eight billion of the world’s population, only generate occasional electricity from breezes and sunshine as they CANNOT manufacture anything. Wind and solar are NOT a supply chain source for the products and fuels demanded by humanity as they ONLY generate occasional electricity under favorable weather conditions.
That A EYE has a growing appetite . It has become a monster.