[krona]

The outcome of Contracts for Difference (CfD) Allocation Round 6 suggests wind isn't cheap compared to wholesale electricity prices in the UK, which are already one of the highest in the world. The maths is quite simple.

And that doesn't include curtailment costs, which are not insignificant.

[Reason077]

The average strike price for offshore wind in AR6 came in at £59.90/MWh. That's pretty cheap, and much cheaper than any new nuclear. Hinkley Point C's strike price is £92.50/MWh. (note: strike prices are always quoted based on 2012 currency, and get adjusted for inflation)

You can't really compare strike prices to spot prices on the wholesale market precisely because there's so much supply under CfD contracts, which distorts the wholesale market. When supply is abundant, the wholesale price plummets and even goes negative, yet suppliers still want to generate because they get the CfD price. When supply is constrained (eg: cold snaps in winter with little wind), the spot price can surge to £1000/MWh.

[krona]

That £59.90 figure is 2012 prices.

In 2024 money offshore was £102 offshore, onshore £89. AR7 estimates are >10% higher. Those prices were not high enough for Hornsea 4, who cancelled the contract (with a big write down for the entire project) after being awarded it.

Hinkley C is, as everyone knows, a disaster.

[Reason077]

Yes, like I said, UK CfD strike prices (both nuclear and wind) are always quoted in 2012 prices.

But even adjusting for inflation, offshore wind's £59.90 is a fraction of the retail price that UK consumers and most businesses pay for electricity. There's plenty of margin left for the middlemen (regulator, grid operator, distribution network operator, electricity retailer, etc).

... and Hinkley Point C's £92.50 is £133.79 today, and could be £160+ by the time it actually starts generating in (maybe?) 2031.