Ørsted In Talks To Sell Half Of Huge UK Wind Farm To Apollo
The title of this post, is the same as that as this article in The Times.
This is the sub-heading.
The US investment giant is eyeing a 50 per cent stake in the Danish energy company’s £8.5 billion Hornsea 3 project off the Yorkshire coast
These are the first three paragraphs, which add more detail.
An American investment giant is negotiating a deal to buy half of what will be the world’s largest off-shore wind farm off the coast of Yorkshire from the troubled Danish energy company Ørsted.
New York-based Apollo, which oversees assets of about $840 billion, is in talks with Ørsted about acquiring a 50 per cent stake in Hornsea 3, an £8.5 billion project that started construction in 2023 and will be capable of powering more than three million UK homes.
A transaction would be a boost for Orsted, which has come under pressure in recent months from rising costs and a backlash against renewables in the United States by President Trump. Orsted started the process of selling a stake in Hornsea 3 in 2024 and said last month that it had an unnamed preferred bidder for the asset, which the Financial Times first reported was Apollo.
I have written several times about Ørstedregularly building a large wind farm and then selling it, so they must be doing something right.
In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, I wrote about how Aviva bought Hornsea 1 from Ørsted.
One of the guys at Aviva explained that these sort of investments gave the right sort of cash flow to fund insurance risks and pensions.
Now that Trump has attempted to give his kiss of death to wind power in the United States, will US funds be looking for quality investments like Hornsea 3 in the UK and other large wind farms in France, Germany, Norway, Japan and Korea?
Already, Blackrock are investing billions to build a massive data centre at Blyth, where there are Gigawatts of offshore wind power and an interconnector to Norway, so that UK and Norwegian wind can be backed up by UK nuclear and Norwegian hydropower.
Highview Power And Ørsted
I wrote Highview Power, Ørsted Find Value In Integrating Offshore Wind With Liquid Air Energy Storage in November 2023.
I would have thought, that by now a battery would have been announced in one of Ørsted’s many projects.
I asked Google AI if Highview Power and Ørsted were still talking about liquid air energy storage and received this reply.
Yes, Highview Power and Ørsted are still actively involved in Liquid Air Energy Storage (LAES), having completed a joint study in late 2023 on combining LAES with offshore wind to benefit the UK grid, and the findings were presented to the government for its long-duration energy storage (LDES) consultation. They believe LAES can reduce wind curtailment, increase energy productivity, and support grid resilience, with potential projects aligned with offshore wind farm timelines.
Perhap’s Ørsted are getting their finances aorted first?
Conclusion
The Times They Are A-Changing!
Porterbrook Raises £250m Of New Green Private Placements
The title of this post, is the same as that of this article on Railway Gazette.
This is the sub-heading.
Porterbrook, the UK’s leading rolling stock financier and asset management company, is delighted to announce the successful closing of its £250m Private Placement.
These are the first two paragraphs.
The transaction, which includes existing and new investors, has enabled the company to extend its debt maturity profile at attractive pricing and further diversify its investor base of US, UK and Swiss institutions.
Porterbrook owns a quarter of the national passenger rail fleet, and in recent years has significantly diversified its portfolio including taking ownership of the Long Marston Rail Innovation Centre in Warwickshire, confirming a 49% stake in Brodie Engineering in Kilmarnock, and financing the redevelopment of Bletchley Depot for West Midland Trains.
We must be doing something right on the railways, if US, UK and Swiss institutions are prepared to back them financially.
But then Aviva, who were formerly Norwich Union, backed Greater Anglia’s new Swiss trains.
Conclusion
Despite what some might think, it would appear that green investments aren’t all bad.
Masdar To Invest In Iberdrola’s 1.4 GW East Anglia Offshore Wind Project
The title of this post, is the same as that of this article on offshoreWIND.biz.
This is the sub-heading.
Iberdrola and Masdar have signed a strategic partnership agreement to evaluate the joint development of offshore wind and green hydrogen projects in Germany, the UK, and the US, which also includes an investment in Iberdrola’s 1.4 GW East Anglia 3 offshore wind project in the UK.
These first two paragraphs outline the del.
After the parties’ successful co-investment in the Baltic Eagle offshore wind farm in Germany, the new milestone of this alliance will be to achieve a further co-investment concerning the 1.4 GW East Anglia 3 offshore wind project in the UK, said the companies.
According to the partners, the deal has been under negotiation for the last few months and could be signed by the end of the first quarter of 2024. Masdar’s stake in the wind farm could be 49 per cent.
This deal appears to be very similar to Masdar’s deal with RWE, that I wrote about in RWE Partners With Masdar For 3 GW Dogger Bank South Offshore Wind Projects.
- The Iberdrola deal involves the 1.4 GW East Anglia 3 wind farm, which has a Contract for Difference at £37.35 £/MWh and is scheduled to be completed by 2026.
- The RWE deal involves the 3 GW Dogger Bank South wind farm, which doesn’t have a Contract for Difference and is scheduled to be completed by 2031.
- Both deals are done with wind farm developers, who have a long track record.
- Both wind farms are the latest to be built in mature clusters of wind farms, so there is a lot of production and maintenance data available.
I suspect, that many capable engineers and accountants can give an accurate prediction of the cash flow from these wind farms.
I will expect that we’ll see more deals like this, where high quality wind farms are sold to foreign energy companies with lots of money.
Just over five years ago, I wrote World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, which described how and why Aviva were investing in the Hornsea 1 wind farm.
Conclusion
It appears that Masdar are doing the same as Aviva and usind wind farms as a safe investment for lots of money.
Octopus Energy Forays Into German Offshore Wind Market With Butendiek Acquisition
The title of this post, is the same as that of this article on offshoreWIND.biz.
This is the sub-heading.
Octopus Energy’s generation arm has made its first offshore wind investment in Germany with the acquisition of a 5 per cent stake in the 288 MW Butendiek offshore wind farm from Ewz, the Zurich Municipal Electric Utility.
This paragraph introduces the wind farm.
Located 32 kilometres west of Sylt Island in the North Sea, the Butendiek offshore wind farm features 80 3.6 MW Siemens Gamesa wind turbines. The project has been operational since 2015, generating enough clean power for 370,000 homes.
It appears to be a mature smaller wind farm. As it has been operating for eight years, the electricity generates and any costs associated with the farm, will be well defined.
If someone made an investment, the return could probably be fairly accurately predicted.
These paragraphs outline Octopus’s strategy for investing in wind farms.
According to Octopus Energy, the deal marks the next step in the company’s global offshore wind strategy and follows its decision to channel more than EUR 1 billion of investment into green energy infrastructure in Germany by 2030.
Since entering the market last year, the company invested in four onshore wind farms with a combined capacity of 100 MW.
Octopus Energy plans to unleash USD 20 billion in offshore wind investment globally.
Besides Germany, the company invested in offshore wind farms in the UK and the Netherlands, as well as in developers of new offshore wind projects including Norway, Sweden, and South Korea.
In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, I explain how Aviva invest in wind farms to get a return to back up their pension and insurance businesses.
As Octopus probably understand wind farms as well as, if not better than Aviva, what better place is there for the company to invest their spare cash and customers’ balances?
Octopus and Aviva are almost showing how wind farms can be used as deposit accounts, that generate a predicable return.
I suspect that other assets like energy storage, interconnectors and solar farms, where there is a history of electricity flows and maintenance costs, can also be run as deposit accounts for investors.
I can also see individuals being able to put their money into a bank account backed by renewable assets.
Note.
Silvertown Tunnel Works – 24th September 2023
I took these pictures of the Silvertown Tunnel works on the North Bank of the Thames today.
I was on a train going to Woolwich Arsenal.
What Is The Silvertown Tunnel?
The title of this section, is the same as that of this article on the Londonist, which is an excellent description of the Silvertown Tunnel.
The article says this about tolls.
The new tunnel will require you to part with some pounds if you want to use it. Despite the consultation on this taking place a decade ago, the final details have yet to be publicised. We can expect something similar to the Dartford Crossing (currently £2.50 for cars etc, free for motorbikes/mopeds).
As there is a mayoral election next year, I doubt that Sadiq Khan will announce the charge on the Silvertown and Blackwall Tunnels before the election.
Let’s Play Accountants
This is a paragraph in the Londonist Article.
Construction of the tunnel is eating up something like £1.2 billion (2020 estimate). It’ll then cost another estimated £1 billion over 25 years to pay for maintenance, financing and operation. Riverlinx paid up-front costs and will be paid back by TfL through money collected from tolls.
The running costs would appear to be a billion over 25 years, which is £ 40,000,000 in a year.
This is said on this page on the Greater London Assembly web site.
Blackwall tunnels (northbound and southbound) each carry approximately 50,000 vehicles per day in only two lanes of traffic.
That means that each tunnel handles approximately 18,250,000 vehicles per year.
Dartford Crossing charges are according to the Wikipedia entry are as follows.
- Cars, motorhomes, small minibuses – £ 2.50
- 2-axle buses, coaches, vans, goods – £ 3.00
- Multi-axle goods, coaches – £ 6.00
The Wikipedia entry also says this about the capacity and traffic through and over the Dartford Crossing.
The design capacity is 135,000 vehicles per day, but in practice the crossing carries around 160,000.
My good friend; Bob from the 1970s had an impeccable cv.
- Chief Accountant of Vickers.
- Chief Management Accountant of Lloyds Bank.
He was also one of two outstanding practical accountants I have known.
Several of his practical tips on how to handle money in computers, ended up in Artemis; the project management computer system, I wrote in the 1970.
Bob and I would solve problems in Mother Bunches Wine Bar and I suspect, we’d come to the conclusion, that an average charge of £3 per vehicle will be charged in the Blackwall and Silvertown Tunnels.
I also believe from my fluid flow experience, that a proportion of the excess traffic through and over the Dartford Crossing will divert to the new Silvertown Tunnel.
- Together the Blackwall and Silvertown Tunnels will have four lanes in both directions.
- The Silvertown Tunnel will hopefully designed to modern standards and be more free-flowing, than the Blackwall.
- Sat-navs will direct drivers to the quickest routes.
Just as water finds its own level, an equilibrium will develop between the flows.
- I suspect that during the day, the flow over the Dartford Crossing will drop to the design capacity of 135,000
- At night, will vehicles divert through the free-flowing Blackwall and Silvertown Tunnels?
- Will those living in North Central London inside the North Circular Road drive through the Blackwall and Silvertown Tunnels?
- Will the free-flowing Blackwall and Silvertown Tunnels encourage people crossing the Thames to use their car, rather than the train, as the car is more convenient and the toll will be less than the train fare?
- We should also beware that new roads, railways and tunnels generate new traffic, that no-one predicts.
My feeling is that combined traffic through the four lanes of the Blackwall and Silvertown Tunnels will be upwards of seventy thousand per day.
I can now calculate revenue for different levels of combined traffic through the Blackwall and Silvertown Tunnels.
- 40,000 vehicles in each direction per day is a total of 29,200,000 vehicles per year, which would raise £ 87.6 million per year in toll charges.
- 50,000 vehicles in each direction per day is a total of 36,500,000 vehicles per year, which would raise £ 109.5 million per year in toll charges.
- 60,000 vehicles in each direction per day is a total of 43,800,000 vehicles per year, which would raise £ 131.4 million per year in toll charges.
- 70,000 vehicles in each direction per day is a total of 51,100,000 vehicles per year, which would raise £ 153.3 million per year in toll charges.
- 80,000 vehicles in each direction per day is a total of 58.400,000 vehicles per year, which would raise £ 175.2 million per year in toll charges.
I am assuming the following.
- All days of a 365-day year have similar traffic.
- Everybody pays without fuss, by technology like number-plate recognition.
- The average toll chare paid is £ 3.
I am drawn to the conclusion, that the contract signed between Transport for London and Riverlinx, is a licence to print money.
Even, if the tunnels only attract 40-50,000 vehicles per day, the revenue is way in excess of the £40 million needed for maintenance, financing and operation of the Silvertown Tunnel.
I have a few further thoughts and questions.
Who Are Riverlinx?
This is said on the About Roverlinx page of the Riverlinx web site.
TfL awarded Riverlinx SPV (Special Purpose Vehicle) the contract for financing and overseeing the design, build and maintenance of the Silvertown Tunnel in 2019.
The Riverlinx CJV (Construction Joint Venture) is contracted by TfL and Riverlinx SPV to complete the design and construction works, delivering the Silvertown Tunnel on time and on budget.
Riverlinx CJV is a joint venture, a partnership bringing together international, market leading expertise from three civil engineering and construction companies: BAM Nuttall, Ferrovial Construction and SK ecoplant.
In collaboration with TfL, our supply chain and other key stakeholders in the project, Riverlinx CJV will complete construction of the Silvertown Tunnel in Spring 2025.
Note.
- BAM Nuttall is a construction and civil engineering company, that is a subsidiary of the Dutch Royal BAM Group.
- Ferrovial Construction is the construction subsidiary of Spanish company; Ferrovial.
- SK ecoplant is a subsidiary of the South Korean conglomorate; SK Group.
These companies should be capable of building the Silvertown Tunnel.
Where Will The Money To Build The Tunnel Come From?
In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, using an article in The Times, I explain how Aviva invest our pensions and insurance money in wind farms.
Strangely, a tolled tunnel is a bit like a wind farm financially, in that if it’s working and the wind is blowing or the traffic is coming, it will continue to generate an income.
Built by quality construction companies, as most tunnels are, they will be the sort of investment, that would satisfy the Avivas of this world.
Will Riverlinx Get All The Tolls From The Tunnel?
Nothing is said about how the excess of income over expenditure will go.
I suspect, as the project is being designed, financed and built by Riverlinx, that they will not go unrewarded.
Will The Mayor Set The Toll Charges?
I suspect that the Mayor and TfL will set the charges.
These are some figures with different charges for 70,000 vehicles in each direction per day or a total of 51,100,000 vehicles per year.
- £3 in each direction would raise £ 153.3 million per year in toll charges.
- £4 in each direction would raise £ 204.4 million per year in toll charges.
- £5 in each direction would raise £ 255.5 million per year in toll charges.
- £6 in each direction would raise £ 306.6 million per year in toll charges.
Note.
- Some of the papers are talking of a four pound charge.
- A pound increase may not be much to the average driver, but they will certainly mount up.
Higher toll charges could be used by an unscrupulous Mayor to deter vehicles entering Central London or nudge people towards public transport.
What Happens If The Tunnel Springs A Leak?
I can remember the following tunnels being built under the Thames in my lifetime.
- Blackwall Tunnel – second bore
- Dartford Tunnel
- DLR to Greenwich and Lewisham
- DLR to Woolwich
- Elizabeth Line to Woolwich
- Jubilee Line – four crossings
- Victoria Line to Vauxhall
None of these seven seems to have sprung a leak recently. And neither have the older Victorian tunnels.
Tunnels with an income stream, appear to be a good risk, if they don’t spring a leak.
But London tunnels don’t seem to have a high likelihood of leaking.
Fines
Fines could be a problem, but this article on Kent Online, which is entitled Dartford Crossing Continues To Generate more Than One-Third Of Income From Fines As Profits Total More Than £100m, says otherwise.
Conclusion
This would appear to be a low risk venture and I suspect it will make Riverlinx and TfL a lot of money.
Ørsted Completes 50% Stake Sale In Hornsea 2 To French Team
The title of this post, is the same as that of this article on Renewables Now.
This sale was outlined in this press release from Ørsted in March, where this is the first paragraph.
Ørsted has signed an agreement to divest a 50 % ownership stake in its 1.3 GW Hornsea 2 Offshore Wind Farm in the UK to a consortium comprising AXA IM Alts, acting on behalf of clients, and Crédit Agricole Assurances.
Insurance companies must like wind power, as Aviva backed Hornsea 1 wind farm. I wrote about this in World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant.
It looks like the French feel the same way as Aviva about Ørsted’s Hornsea wind farms.
There is no safer mattress in which to stash your cash.
Renewable Power’s Effect On The Tory Leadership Election
I wouldn’t normally comment on the Tory Leadership Election, as I don’t have a vote and my preference has already been eliminated.
But after reading this article on the Telegraph, which is entitled Britain Will Soon Have A Glut Of Cheap Power, And World-Leading Batteries To Store It, I feel I have to comment both about this election and the General Election, that will follow in a few years.
These two paragraphs from the article illustrate the future growth of offshore wind power.
It is a point about the mathematical implications of the UK’s gargantuan push for renewables. Offshore wind capacity is going to increase from 11 to 50 gigawatts (GW) by 2030 under the Government’s latest fast-track plans.
RenewableUK says this country currently has a total of 86GW in the project pipeline. This the most ambitious rollout of offshore wind in the world, ahead of China at 78GW, and the US at 48GW.
If we assume that there is eight years left of this decade, that means that we should install about 4.9 GW of offshore wind every year until 2030. If we add in planned solar and onshore wind developments, we must be looking at at least 5 GW of renewable energy being added every year.
We have also got the 3.26 GW Hinckley Point C coming on stream.
I think we can say, that when it comes to electricity generation, we will not be worried, so Liz and Rishi can leave that one to the engineers.
If we have an electricity problem, it is about distribution and storage.
- We need more interconnectors between where the wind farms are being built and where the electricity will be used.
- National Grid and the Government have published plans for two interconnectors between Scotland and England, which I wrote about in New Electricity ‘Superhighways’ Needed To Cope With Surge In Wind Power.
- We need energy storage to back up the wind and solar power, when the wind isn’t blowing and the sun isn’t shining.
I think it is reasonable to assume, that we will get the interconnectors we need and the Telegraph article puts forward a very feasible and affordable solution to the energy storage problem, which is described in these two paragraphs from the article.
That is now in sight, and one of the world leaders is a British start-up. Highview Power has refined a beautifully simple technology using liquid air stored in insulated steel towers at low pressure.
This cryogenic process cools air to minus 196 degrees using the standard kit for LNG. It compresses the volume 700-fold. The liquid re-expands with a blast of force when heated and drives a turbine, providing dispatchable power with the help of a flywheel.
The article also talks of twenty energy storage systems, spread around the UK.
- They will have a total output of 6 GW.
- In total they will be able to store 600 GWh of electricity.
The first one for Humberside is currently being planned.
Surely, building these wind and solar farms, interconnectors and energy storage systems will cost billions of pounds.
Consider.
- Wind and solar farms get paid for the electricity they generate.
- , Interconnectors get paid for the electricity they transfer.
- Energy storage systems make a profit by buying energy when it’s cheap and selling it, when the price is better.
- In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, I talked about how Aviva were funding the world’s largest wind farm at Hornsea.
- National Grid has a history of funding interconnectors like the North Sea Link from large financial institutions.
I believe that the islands of Great Britain and Ireland and the waters around our combined shores will become the largest zero-carbon power station in the world.
This will attract engineering companies and financial institutions from all over the world and we will see a repeat of the rush for energy that we saw for oil and gas in the last century.
If we get the financial regime right, I can see a lot of tax money flowing towards the Exchequer.
The big question will be what do we do with all this energy.
- Some will be converted into hydrogen for transport, the making of zero-carbon steel and cement and for use as a chemical feedstock.
- Industries that use a lot of electricity may move to the UK.
- A large supply of electricity and hydrogen will make it easy to decarbonise housing, offices and factories.
The Telegraph article also says this.
Much can be exported to the Continent through interconnectors for a fat revenue stream, helping to plug the UK’s trade deficit, and helping to rescue Germany from the double folly of nuclear closures and the Putin pact. But there are limits since weather patterns in Britain and Northwest Europe overlap – partially.
I suspect that more energy will be exported to Germany than most economists think, as it will be needed and it will be a nice little earner for the UK.
Given the substantial amount of German investment in our wind industry, I do wonder, if Boris and Olaf did a deal to encourage more German investment, when they met in April this year.
- BP have been backed with their wind farms by a German utility company.
- RWE are developing the Sofia wind farm.
- Only last week, the deal for the NeuConnect interconnector between the Isle of Grain and Wilhelmshaven was signed.
- Siemens have a lot of investments in the UK.
I wouldn’t be surprised to see more German investments in the next few months.
The Golden Hello
Has there ever been a Prime Minister, who will receive such a golden hello, as the one Liz or Rishi will receive in September?
The Tory Leadership Election
Some of the candidates said they would reduce taxes , if they won and Liz Truss is still saying that.
I wonder why Rishi isn’t saying that he would reduce taxes, as he must know the cash flow that is coming. It may be he’s just a more cautious soul.
XLCC Obtains Planning Approval To Build UK’s First HVDC Cable Factory In North Ayrshire
The title of this post, is the same as that of this press release from XLCC.
These are the first three paragraphs.
On 29th June 2022, the North Ayrshire Council Planning Committee resolved to grant planning permission for XLCC’s HVDC subsea cable manufacturing operations in Hunterston, Scotland.
Breaking ground in the coming months, the brownfield site will create a new UK industry to support global decarbonisation targets. Once fully operational, the facility will support 900 jobs in the area, with thousands more in the wider supply chain.
XLCC’s first order is for four 3,800km long cables to connect solar and wind renewable power generation in the Sahara to the UK for the Xlinks Morocco-UK power project.
XLCC have also issued two other important press releases.
XLCC To Build New Cable Laying Vessel To Address Increase In Future Demand For HVDC Cable
These are the first paragraphs.
XLCC, the new HVDC, renewable energy focused business in the UK, has completed the concept design of an advanced, first-of-a-kind Cable Laying Vessel to be delivered in the first half of 2025.
As the world strives for Net Zero, the UK, EU and other world economies have set themselves ambitious targets for decarbonisation. The UK, for example, has stated that it will be powered entirely by clean energy by 2035 and that it will fully decarbonise the power system in the same time frame. This ambition is driving an exponential growth in high voltage cable demand as the increase in installation of offshore wind and interconnectors drive a forecast six times increase (2020 – 2027 over 2014 – 2020) for HVDC cable.
The planned delivery of the XLCC CLV will support the Morocco – UK Power Project, the first client project, through the delivery of four 3,800km subsea HVDC cables from a wind and solar generation site in Morocco to the UK.
This press release can be read in full here.
XLCC Signs UK Steel Charter For New Export-Led Cable Industry
These are the first paragraphs.
XLCC signed the UK Steel Charter at an event in Parliament on 19 April 2022, alongside representatives from politics, business and the trade union movement.
XLCC will create a new export-led HVDC cable manufacturing industry for the UK, nearly doubling the world’s current production. It aims to support renewable energy projects with the first factory planned for Hunterston, Scotland. XLCC will deliver its first project for the Xlinks Morocco-UK Power Project, consisting of four 3,800km long subsea cables, with the first phase between 2025-2027 connecting wind and solar power generated in Morocco exclusively to the UK in Devon.
Signing the UK Steel Charter shows a commitment to supporting existing and future jobs within the sector and the supply chain. Along with strengthening UK-based business, sourcing steel locally will cut transport emissions and seek to support decarbonisation in a sector dedicated to finding ways to minimise environmental impact of steel use.
This press release can be read in full here.
I have a few thoughts.
You Wait For A Large Interconnector Project To Come Along And Then Two Arrive Holding Hands
This paragraph introduces the Morocco-UK Power Project.
The Xlinks Morocco-UK Power Project will be a new electricity generation facility entirely powered by solar and wind energy combined with a battery storage facility. Located in Morocco’s renewable energy rich region of Guelmim Oued Noun, it will cover an approximate area of 1,500km2 and will be connected exclusively to Great Britain via 3,800km HVDC sub-sea cables.
XLCC have this mission statement on their home page.
XLCC will establish a new, export-led, green industry in the UK: world class HVDC subsea cable manufacturing.
Our mission is to provide the connectivity required for renewable power to meet future global energy needs.
Xlinks Morocco-UK Power Project and XLCC appear to be made for each other.
In some ways it takes me back to the 1970s, where large oil and gas projects in the North Sea were paired with platform building in Scottish lochs.
There Are Several Interconnector Projects Under Development
We will see a lot of undersea interconnectors in the next few years.
- Country-to-country interconnectors
- Interconnectors along the coast of the UK.
- Connections to offshore wind farms.
This capacity, with a ship to lay it, is being created at the right time.
Icelink
Icelink is a proposed interconnector between Iceland and the UK.
- It would be up to 1200 km long.
- It would have a capacity of around 1 GW
XLCC could spur the development of this project.
Floating Wind Farms Hundreds Of Miles Out To Sea
The developer of a floating wind farm, say a hundred miles out to sea, is not going to develop it, if there isn’t a secure supply of cable.
Where Will Finance Come From?
Wind farms have proven to be good investments for finance giants such as Aviva.
See World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, for Aviva’s philosophy.
As mathematical modelling for electrical systems get better, the estimates of the finance needed and the returns to be made, will indicate whether these mega-projects can be funded.
It was done with North Sea oil and gas and it can be done with offshore wind power and its interconnectors.
In The Times on the 4th of July 2022, there is this article, which is entitled Schroders Chief Buzzing To Take Finance Offshore Wind Farms.
It is a must-read!
Conclusion
XLCC and its cable factory will spur the expansion of zero-carbon electricity in the UK.
Highview Chief Rupert Pearce On The Cold Batteries That Could Save The Planet
The title of this post, is the same as that of this article on The Sunday Times.
It is an article very much worth a read, as it talks about former Inmarsat boss; Rupert Pearce and his new position as boss at Highview Power.
I have followed Highview Power for a few years.
I first wrote about the company in British Start-Up Beats World To Holy Grail Of Cheap Energy Storage For Wind And Solar, after reading about the company in the Daily Telegraph in August 2019.
They seem to have had good press in the last three years and have generated a steady stream of orders from Spain, Chile and Scotland.
But progress seems to have been slow to get the first full-size system at Carrington completed.
It does seem , that Rupert Pearce could be the professional boss they need?
Highview Power ‘s CRYOBatteries certainly have potential.
Highview Power CRYOBatteries Compared To Lithium-Ion Batteries
Highview Power ‘s CRYOBatteries do not use any exotic metals or materials, that are not readily available, whereas lithium-ion batteries use lots of rare metals and electricity in their manufacture.
CRYOBatteries can also be expanded in capacity by just adding more liquid-air tanks.
Highview Power CRYOBatteries Typically Cost £500 Million
This figure is disclosed in the Sunday Times article.
For that you probably get a power station, with these characteristics.
- 50 MW Output.
- Five to eight hour storage.
- No emissions.
- Well-understood maintenance.
- An environmentally-friendly plant.
- Long battery life.
But my experience tells me, that like large lithium-ion batteries used for grid storage, that CRYOBatteries could be an asset that will appeal to large financial companies.
- At present, Highview Power have not run a 50 MW CRYOBattery, but once they show high reliability, I can envisage the energy storage funds taking a good look.
- At £500 million a throw, they are a good size with probably a decent return for insurance companies and pension funds.
See World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant for Aviva’s view on investing in massive green infrastructure.
I very much feel, that with his City connections and experience, that Rupert Pearce might be the right person to arrange financing for CRYOBatteries.
I will add a story from the financing of Artemis, which was the project management system, that I wrote in the 1970s.
Normally we leased or rented the systems, but some companies wanted to buy them outright, so we came up with a price of something like £125,000. Our bank were happy to fund these systems, when the purchaser was someone like BP, Shell, Bechtel, Brown & Root or British Aerospace. Later on, the bank would package together several systems and get us a better deal.
Intriguingly, £125,000 in the late 1970s is about half a billion now. I suspect, I’m being naive to suggest that Highview’s problem of funding multiple sales is similar to the one we had fifty years ago.
Highview Power CRYOBatteries And Wind And Solar Farms
I discussed the use of CRYOBatteries with solar power in The Power Of Solar With A Large Battery.
As the Highview Power press release, on which I based the article has now been deleted, I would assume that that project has fallen through. But the principles still apply!
But surely, a wind farm paired with an appropriately-sized CRYOBattery would ensure a steady supply of power?
Could CRYOBatteries Be Used With Floating Offshore Wind Farms?
In ScotWind N3 Offshore Wind Farm, I described an unusual wind farm proposed by Magnora ASA.
- This page on their web site outlines their project.
- It will be technology agnostic, with 15MW turbines and a total capacity of 500MW
- It will use floating offshore wind with a concrete floater
- It is estimated, that it will have a capacity factor of 56 %.
- The water depth will be an astonishing 106-125m
- The construction and operation will use local facilities at Stornoway and Kishorn Ports.
- The floater will have local and Scottish content.
The floater will be key to the whole wind farm.
- It will certainly have an offshore substation to connect the wind turbines to the cable to the shore.
- Magnora may be proposing to add a hydrogen electrolyser.
- Tanks within the concrete floater can be used to store gases.
I wonder if CRYOBatteries could be installed on the concrete floaters, that would be used to smooth the electrical output of the wind farm?
Note that in the past, concrete semi-submersible concrete structures have been used to host all kinds of gas and oil processing equipment.
Conclusion
I feel that Highview Power have made a good choice of Chief Executive and I have high hopes he can awaken a company with masses of potential.
How Britannia With Help From Her Friends Can Rule The Waves And The Wind
The Government doesn’t seem to have published its future energy plans yet, but that hasn’t stopped the BBC speculating in this article on their web site, which is entitled Energy Strategy: UK Plans Eight New Nuclear Reactors To Boost Production.
These are the first two paragraphs.
Up to eight more nuclear reactors could be delivered on existing sites as part of the UK’s new energy strategy.
The plan, which aims to boost UK energy independence and tackle rising prices, also includes plans to increase wind, hydrogen and solar production.
Other points include.
- Up to 95% of the UK’s electricity could come from low-carbon sources by 2030.
- 50 gigawatts (GW) of energy through offshore wind farms, which would be more than enough to power every home in the UK.
- One of the big points of contention is thought to have been the construction of onshore wind turbines.
- Targets for hydrogen production are being doubled to help provide cleaner energy for industry as well as for power, transport and potentially heating.
- A new licensing round for North Sea oil and gas projects.
- A heat pump accelerator program.
In this post I shall only be looking at one technology – offshore wind and in particular offshore floating wind.
Who Are Our Friends?
I will start with explaining, who I see as our friends, in the title of this post.
The Seas Around Us
If we are talking about offshore winds around the the UK, then the seas around the UK are surely our biggest and most-needed friend.
The Island Of Ireland
The seas are shared with the island of Ireland and the UK and the Republic must work together to maximise our joint opportunities.
As some of the largest offshore wind farm proposals, between Wales and Ireland involve a Welsh company called Blue Gem Wind, who are a partnership between Irish company; Simply Blue Energy, and French company; TotalEnergies, we already seem to be working with the Irish and the French.
The City Of London
Large insurance and pension companies, based in the City of London like, abrdn, Aviva, L & G and others are always looking for investments with which to provide income to back their insurance business and our pensions.
In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, I describe why and how, Aviva back wind farms.
Germany
Germany are certainly on our side, despite being in a mess of Mutti Merkel’s making, because she got the country too deeply dependant on Vlad the Mad’s tainted gas.
- German utilities are providing finance to build wind farms in British waters.
- German company; Siemens is manufacturing turbine blades in Hull.
- Germany wouldn’t mind buying any electricity and hydrogen we have spare. Especially, as we haven’t invaded them since 1944.
I suspect a mutually-beneficial relationship can be negotiated.
Norway
I have customised software for a number of countries, including Iran, Saudi Arabia, South Korea and the United States and despite selling large numbers of systems to Norway, the Norwegians never requested any modifications.
They are generally easy-going people and they are great friends of the UK. They were certainly a fertile country for the sale of Artemis systems.
Just as the UK worked together with the Norwegians to deliver North Sea Oil, we are now starting to work together to develop renewable energy in the North Sea.
In UK To Norway Sub-Sea Green Power Cable Operational, I describe how we have built the North Sea Link with the Norwegians, which will link the British and Norwegian energy networks to our mutual benefit.
In Is This The World’s Most Ambitious Green Energy Solution?, I describe an ambitious plan called Northern Horizons, proposed by Norwegian company; Aker Solutions to build a 10 GW floating wind farm, which will be 120 km to the North-East of the Shetlands.
Floating Wind Turbines
This is the introduction of the Wikipedia entry for floating wind turbines.
A floating wind turbine is an offshore wind turbine mounted on a floating structure that allows the turbine to generate electricity in water depths where fixed-foundation turbines are not feasible. Floating wind farms have the potential to significantly increase the sea area available for offshore wind farms, especially in countries with limited shallow waters, such as Japan, France and US West coast. Locating wind farms further offshore can also reduce visual pollution, provide better accommodation for fishing and shipping lanes, and reach stronger and more consistent winds.
At its simplest a floating wind farm consists of a semi-submersible platform, which is securely anchored to the sea-bed to provide a firm platform on which to erect a standard wind turbine.
There are currently two operational floating wind farms off the East Coast of Scotland and one in the Atlantic off the Portuguese coast.
- These wind farms are fairly small and use between three and five turbines to generate between 25-50 MW.
- The largest current floating turbines are the 9.5 MW turbines in the Kincardine Wind Farm in Scotland, but already engineers are talking of 14 MW and 20 MW floating turbines.
- Experience of the operation of floating wind turbines, indicates that they can have capacity factors in excess of 50 %.
- Floating wind turbines can be erected on their floats in the safety of a port using a dockside crane and then towed into position.
- Floating wind turbines can be towed into a suitable port for servicing and upgrading.
Many serious engineers and economists, think that floating wind farms are the future.
The Energy Density of Fixed Foundation And Floating Wind Farms
In ScotWind Offshore Wind Leasing Delivers Major Boost To Scotland’s Net Zero Aspirations, I summarised the latest round of Scotwind offshore wind leases.
- Six new fixed foundation wind farms will give a capacity of 9.7 GW in 3042 km² or about 3.2 MW per km².
- Ten new floating wind farms will give a capacity of 14.6 GW in 4193 km² or about 3.5 MW per km².
Note.
- Floating wind farms have a small advantage in terms of energy density over those with fixed foundations.
- Suppose these energy densities are achieved using 14 MW turbines.
- Engineers are talking of 20 MW turbines.
- Using large turbines could increase the energy density by 20/14 or 43 %
We could see in a few years with 20 MW turbines, fixed foundation turbines having an energy density of 4.6 MW per km², with floating turbines having 5 MW per km².
The Potential Of A Ten-Mile Square In The Seas Around Us
I will assume.
- It is at least 100 km from land.
- The water would be at least 100 metres deep.
- There are no structures in the area.
And calculate.
- The area will be a hundred square miles, which is smaller than the county of Rutland.
- This will be 259 square kilometres.
If it were to be filled with floating wind turbines at a density of 5 MW per km², the capacity would be 1300 MW or 1.3 GW.
There must be hundreds of empty ten-mile squares in the seas around us.
Offshore Hydrogen Production And Storage
I believe in the near future, that a lot of offshore wind energy will be converted to hydrogen offshore.
- Electrolysers could be combined with wind turbines.
- Larger electrolysers could be combined with sub-stations collecting the electricity.
- In Torvex Energy, I discuss a method to create hydrogen from seawater, without having to desalinate the water. Surely, this technology would be ideal for offshore electrolysis.
Hydrogen would be brought to shore using pipelines, some of which could be repurposed from existing gas pipelines, that are now redundant, as the gas-fields they served have no gas left.
I also suspect that hydrogen could be stored in a handy depleted gas field or perhaps some form of specialist storage infrastructure.
Combining Wind And Wave Power In A Single Device
Marine Power Systems are a Welsh company, that has developed a semi-submersible structure, that can support a large wind turbine and/or a wave-power generator.
This is the mission statement on their home page.
Marine Power Systems is revolutionising the way in which we harvest energy from the world’s oceans.
Our flexible technology is the only solution of its type that can be configured to harness wind and wave energy, either as a combined solution or on their own, in deep water. Built on common platform our devices deliver both cost efficiency and performance throughout the entire product lifecycle.
Our structurally efficient floating platform, PelaFlex, brings excellent stability and straightforward deployment and maintenance. The PelaGen wave energy converter represents market-leading technology and generates energy at an extremely competitive cost of energy.
Through optimised farm layout and the combination of wind and wave energy, project developers can best exploit the energy resource for any given area of seabed.
We are unlocking the power of oceans.
There is a link on the page to more pages, that explain the technology.
It looks to me, that it is well-designed technology, that has a high-chance of being successful.
It should also be noted that according to this news page on the Marine Power Systems web site, which is entitled MPS Lands £3.5M Of Funding From UK Government, the UK government feel the technology is worth backing.
I certainly believe that if Marine Power Systems are not successful, then someone else will build on their original work.
If wind and wave power can successfully be paired in a single float, then this must surely increase the energy production at each float/turbine in the floating wind farm.
Energy Storage In Wind Turbines
The output of wind farms can be very variable, as the wind huffs and puffs, but I believe we will see energy storage in wind turbines to moderate the electricity and deliver a steadier output.
Using lithium-ion or other batteries may be possible, but with floating offshore turbines, there might be scope to use the deep sea beneath the float and the turbine.
Hybrid Wind Farms
In the latest round of Scotwind offshore wind leases, one wind farm stands out as different. Magnora ASA’s ScotWind N3 Offshore Wind Farm is described as a floating offshore wind farm with a concrete floater.
I can see more wind farms built using this model, where there is another fixed or floating platform acts as control centre, sub-station, energy store or hydrogen electrolyser.
How Much Electricity Could Be Produced In UK And Irish Waters?
I will use the following assumptions.
- Much of the new capacity will be floating wind turbines in deep water.
- The floating wind turbines are at a density of around 5 MW per km²
This Google Map shows the British Isles.
I will look at various seas.
The Celtic Sea
The Celtic Sea is to the South-West of Wales and the South of Ireland.
In Blue Gem Wind, I posted this extract from the The Our Projects page of the Blue Gem Wind web site.
Floating wind is set to become a key technology in the fight against climate change with over 80% of the worlds wind resource in water deeper than 60 metres. Independent studies have suggested there could be as much as 50GW of electricity capacity available in the Celtic Sea waters of the UK and Ireland. This renewable energy resource could play a key role in the UK meeting the 2050 Net-Zero target required to mitigate climate change. Floating wind will provide new low carbon supply chain opportunities, support coastal communities and create long-term benefits for the region.
Consider.
- The key figure would appear 50 GW of electricity capacity available in the Celtic Sea waters of the UK and Ireland.
- Earlier I said that floating turbines can have a wind turbine density of 5 MW per km².
- According to Wikipedia, the surface area of the Celtic Sea is 300,000 km².
To accommodate enough floating turbines to generate 50 GW would need 10000 km², which is a 100 km. square, or 3.33 % of the area of the Celtic Sea.
This wind generation capacity of 50 GW would appear to be feasible in the Celtic Sea and still leave plenty of space for the shipping.
The Irish Sea
According to Wikipedia, the surface area of the Irish Sea is 46,000 km².
Currently, there are ten wind farms in the Irish Sea.
- Six are in English waters, three are in Welsh and one is in Irish.
- None are more than sixteen kilometres from the coast.
The total power is 2.7 GW.
I feel that the maximum number of wind farms in the Irish Sea would not cover more than the 3.33 % proposed for the Celtic Sea.
3.33 % of the Irish Sea would be 1532 km², which could support 7.6 GW of wind-generated electricity.
I can’t leave the Irish Sea without talking about two wind farms Mona and Morgan, that are being developed by an enBW and BP joint venture, which I discussed in Mona, Morgan And Morven. This infographic from the joint venture describes Mona and Morgan.
That would appear to be a 3 GW development underway in the Irish Sea.
Off The Coast Of South-East England, East Anglia, Lincolnshire And Yorkshire
These wind farms are proposed in these areas.
- Hornsea – 6 GW
- Triton Knoll – 900 MW
- Dogger Bank – 3.6 GW
- Norfolk Boreas – 1.8 GW
- Norfolk Vanguard – 1.8 GW
- East Anglia Array – 7.2 GW
- Rampion Extension – 1.2 GW
Note.
All wind farms have comprehensive web sites or Wikipedia entries.
The total capacity of these wind farms is 22.5 GW
The North Sea
According to Wikipedia, the surface area of the North Sea is 570,000 km².
Would it is reasonable to assume, that perhaps a tenth of this area would be available for new wind farms in UK waters?
3.33 % of the available North Sea would be 1898 km², which could support 9.5 GW of wind-generated electricity.
On The East Coast Of Scotland
In Wind Farms On The East Coast Of Scotland, I summarised the wind farms off the East coast of Scotland, that are being built in a cluster in the First of Forth.
This map shows the proposed wind farms in this area.
There are five wind farms in the map.
- The green area is the cable corridor for Seagreen 1a
- Inch Cape is the odd-shaped wind farm to the North and West of the green area
- Seagreen at the top of the map, to the North of Inch Cape.
- Marr Bank with the pink NE-SW hatching
- Berwick Bank with the green NW-SE hatching
- Neart Na Gaoithe is edged in blue to the South of the green area.
Berwick Bank and Marr Bank are both owned by SSE and appear to have been combined.
The capacity of the wind farms can be summarised as follows.
- Seagreen – 1075 MW
- Neart Na Gaoithe – 450 MW
- Inch Cape – 1000 MW
- Berwick Bank and Marr Bank – 4100 MW
This gives a total of 6625 MW or just over 6.6 GW.
Around The North Of Scotland
This map shows the latest successful ScotWind leases.
Note.
- Several of these proposed wind farms have detailed web sites.
These seventeen leases total up to 24.3 GW.
An Interim Total
I believe these figures are realisable.
- Celtic Sea – 50 GW
- Irish Sea – 7.6 GW – 3 GW already underway
- South East England, East Anglia, Lincolnshire And Yorkshire – 22.5 GW
- North Sea – 9.5 GW
- On The East Coast Of Scotland – 6.6 GW
- Around The North Of Scotland – 24.3 GW
Note.
- I have tried to be as pessimistic as possible.
- Irish and North Sea estimates are based on Blue Gem Wind’s professional estimate for the Celtic Sea.
- I have used published figures where possible.
My estimates total up to 120.1 GW of extra wind-power capacity. As I write this, current UK electricity production is around 33 GW.
Vikings Will Invade
This Google Map shows the Faroe Islands, the North of Scotland, Norway and Denmark.
To get an idea of scale, the Shetland Isles are around 70 miles or 113 km. from North to South.
In Is This The World’s Most Ambitious Green Energy Solution?, I talked about Norwegian company; Aker Solutions’s plan for Northern Horizons.
- It would be a 10 GW offshore floating wind farm 136 km to the North-East of the Shetlands.
- This position would probably place it about halfway between the Faroes and the Norwegian coast.
- The project is best described in this article on the Engineer, which is entitled Northern Horizons Plans Clean Energy Exports For Scotland.
- In the article, there is a good graphic and a video.
This will be offshore engineering of the highest class, but then I first came across Norwegian offshore engineering like this in the 1970s, where nothing was too difficult for Norwegian engineers.
There are two major points to remember about the Norwegians.
- They have the Sovereign Wealth Fund to pay for the massive investment in Northern Horizons.
- They need to replace their oil and gas income, with a zero-carbon investment stream.
I feel that Northern Horizons will not be a one-off and the virgin sea in the map above will be liberally carpeted with more floating wind farms.
- On Shetland, electricity can be fed into the UK grid.
- On Norway, electricity can be fed into the Norwegian grid or stored in Norwegian pumped storage systems.
- On Scotland, more pumped storage systems can be built to store energy.
- Hydrogen can be piped to where it is needed to decarbonise heavy industry and transport.
- Norwegian fjords, Shetland harbours, Scottish lochs and possibly Scapa Flow would be ideal places to assemble and service the giant floating turbines and build the other needed floating infrastructure.
- I can also see Denmark getting in on the act, as they will probably want to decarbonise the Faroe Islands.
I estimate that between the Faroes, Scotland and Norway, there are 510,000 km² of virgin sea.
With a potential of 5 MW per km², that area has the potential to create an amazing amount of both electricity and hydrogen.
Exporting Power To Europe
There will need to be more interconnectors from the UK to Europe.
These are already working.
- BritNed – 1 GW – Isle of Grain and Rotterdam
- ElecLink – 1 GW – Through the Channel Tunnel
- HVDC Cross-Channel – 2 GW – England and France
- IFA-2 – 1 GW – England and France
- NemoLink – 1 GW – Kent and Belgium
- North Sea Link – 1.4 GW – Blyth and Norway
- Viking Link – 1.4 GW – Lincolnshire and Denmark
These are proposed.
- GridLink – 1.4 GW – Kent and Dunkirk
- NeuConnect – 1.4 GW – Isle of Grain and Germany
- North Connect – 1.4 GW – Scotland and Norway
There are also gas interconnectors, that could be converted to hydrogen.
This press release from National Grid, which is entitled Undersea Electricity Superhighways That Will Help Deliver Net Zero Move A Step Closer, has these bullet points.
- Positive progress on plans for £3.4bn electricity super-highway projects – Scotland to England Green Links.
- Ofgem opens consultation that recognises the “clear case” and “consumer benefit” of two subsea high voltage cables to transport clean between Scotland and England.
- The cables form part of a planned 16 project £10 billion investment from National Grid to deliver on the government’s target of 40GW of offshore wind generation by 2030.
This paragraph expands on the work by National Grid to meet the third point.
These projects are part of National Grid’s work upgrading the electricity transmission system to deliver the UK government’s target of 40GW of offshore wind generation by 2030. In addition to the Eastern Links, it is developing 14 major projects across its network to facilitate the target representing a £10 billion investment. This includes two further Scotland to England high voltage links (also in partnership with the Scottish transmission network owners) and proposals in the Humber, Lincolnshire, East Midlands, North of England, Yorkshire, North Kent, as well as four in East Anglia (one of which is a proposed offshore link between Suffolk and Kent).
I think we can assume, that National Grid will do their part to allow the UK government’s target of 40GW of offshore wind generation by 2030 to be met.
Will The UK Have 40 GW Of Offshore Wind Generation By 2030?
In the Wikipedia entry for Windpower In The UK, this is the opening sentence.
The United Kingdom is one of the best locations for wind power in the world and is considered to be the best in Europe. By the beginning of March 2022, the UK had 11,091 wind turbines with a total installed capacity of over 24.6 gigawatts (GW): 14.1 GW of onshore capacity and 10.4 GW of offshore capacity.
It would appear an extra 30 GW of wind power is needed.
In An Interim Total earlier, I gave these figures.
- Celtic Sea – 50 GW
- Irish Sea – 7.6 GW – 3 GW already underway
- South East England, East Anglia, Lincolnshire And Yorkshire – 22.5 GW
- North Sea – 9.5 GW
- On The East Coast Of Scotland – 6.6 GW
- ScotWind – 24.3 GW
The wind farms in South East England, East Anglia, Lincolnshire And Yorkshire and ScotWind and Mona and Morgan are either being planned or under construction, and in many cases leases to construct wind farms are being paid.
I would feel, that at least 30 GW of these 56.4 GW of wind farms will be completed by 2030.
Conclusion
Boris’s vision of the UK becoming a Saudi Arabia of wind is no fantasy of a man with massive dreams.
Standard floating wind turbines, with the possibility of also harvesting wave power could be assembled in ports along the coasts, towed into position and then connected up.
Several GW of wind-power capacity could probably be added each year to what would become the largest zero-carbon power station in the world.
By harvesting the power of the winds and waves in the seas around the British Isles it is an engineering and mathematical possibility, that could have been developed by any of those great visionary Victorian engineers like Armstrong, Bazalgette, Brunel and Reynolds, if they had had access to our modern technology.
Up Yours! Putin!
The Anonymous Widower 