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Energy giant revives wind farm after Miliband’s £1.8bn subsidy blitz

Orsted will resubmit plans for Hornsea 4, a project it cancelled last year because the grants on offer were too low µµ

https://www.telegraph.co.uk/business/2026/02/06/energy-giant-revives-north-sea-wind-farm-miliband-subsidy/

A Danish energy giant has revived plans for a massive North Sea wind farm after Ed Miliband promised billions more in subsidies.

Ørsted, the world’s largest wind farm operator, said it would resubmit plans for the Hornsea 4 wind farm off the east of England next year after Mr Miliband offered a much higher subsidy for the power generated.

The group blew a hole in the Energy Secretary’s net zero hopes last year by cancelling the project. It said government-backed grants under the Contracts for Difference (CfD) scheme were too low.

Mr Miliband last month announced plans to boost the annual subsidies on offer, promising them minimum average prices of £95 per megawatt hour, which is about £10 more than Ørsted would have received under a prior deal.

Another decision by Mr Miliband means the contracts guaranteeing the payments, estimated by the energy department to cost up to £1.8bn a year, were also extended from 15 years to 20 years.

Hornsea 4 is a 180-turbine project off the coasts of Norfolk and Yorkshire. It would have a capacity of 2.4 gigawatts, among the largest ever built, generating enough power for 2.6 million homes on a windy day..................

Government on collision course with GMB union over job insecurity excessive taxation

Britain’s energy industry faces collapse thanks to Labour’s “chaotic and needless” rundown of the oil and gas sector, one of its biggest union backers has warned.

Louise Gilmour, Scotland secretary of the GMB union, says “delusional” net zero policies championed by Ed Miliband are causing “arguably the most destructive industrial calamity in our nation’s history”.

Ms Gilmour directly attacks Mr Miliband over the “dismal” effects of his policies, which are killing British jobs and creating jobs in China for the ever growing number of wind farms the Government insists on building. She has backed a new report that says Britain will permanently lose its energy independence unless there is a major shift in Government policy.

It puts Labour on a collision course with its third-biggest union backer, which donates £1m a year to the party. The GMB has previously warned that Mr Miliband’s rush to net zero is costing jobs, but this is the most scathing attack to date on the Government by the union, which has 560,000 members.

The report by the Jobs Foundation, titled Cliff Edge, says 200 jobs per week are being lost because of Labour’s ban on North Sea exploration and taxes that are swallowing up companies’ entire profits.

In some cases, oil and gas firms are paying 120 per cent tax on their profits because of the Government’s energy profits levy (EPL).

It says investors are considering putting their money into Nigeria’s energy sector instead of Britain’s, saying the African country is a “more stable regime”.

Ms Gilmour writes in a foreword to the report: “Our governments [in Westminster and Holyrood] seem stricken, almost delusional, in the face of onrushing disaster, insisting we must ignore today’s reality and believe in tomorrow’s dreams.”

She says Britain will need oil and gas for decades as it builds up its renewable energy capacity. But instead of drilling for new sources of North Sea oil and gas, Britain is relying on imports from Norway, which found a huge new oil field last year because it has not banned exploration.

Countries like Norway, Ms Gilmour says, “are not self-harming at such a pace and scale” as the UK.

The need to protect “energy security and a sector underpinning hundreds of thousands of jobs could not be clearer or more obvious”, she says, “well, clear and obvious everywhere but Holyrood and Westminster apparently”.

Turning her ire on Mr Miliband, she says that even as Mr Miliband was making claims of 400,000 jobs in renewables being created in the UK, the first eight of of 54 monopile foundations for the Inch Cape wind farm, each weighing 2,300 tonnes, were arriving in Leith after being shipped 9,000 miles from Qinzhou in China.“It would almost have been funny if not so absolutely dismal,” she adds.

The just transition is becoming Britain’s cruellest industrial lie

By Louise Gilmour, GMB Scotland Secretary

A just transition. The three little words that have come to mean nothing at all in a country losing thousands of good jobs today, right now, on airy promises of a brighter, greener tomorrow. Families and communities founded on well-paid, unionised jobs in oil and gas would be unharmed, we were assured, because – cue the M&S voice-over – this isn’t just any transition, it’s a just transition, a fair and inclusive transition.

In this alternative universe, ministers insist, a well-planned and necessary contraction of our offshore industries and their supply chains will see workers seamlessly find new jobs harnessing the power of the wind, sun and sea. It is a lovely thought but bears little resemblance to the chaotic reality of a rushed and needless rundown of our oil and gas sector, not least in Aberdeen, where the drumbeat of redundancy announcements is quickening week by dispiriting week.

Meanwhile, our governments seem stricken, almost delusional, in the face of onrushing disaster, insisting we must ignore today’s reality and believe in tomorrow’s dreams as arguably the most destructive industrial calamity in our nation’s history – a disaster risking untold jobs, communities, even higher bills, and our energy security – unfolds.

For those of us old enough to remember, this energy revolution is already resembling another, when sudden, savage pit closures 40 years ago only transitioned thriving mining communities into despair and dereliction.

The UK will, of course, need oil and gas for years, decades, while continuing to build our renewables capacity and the need for measured progress towards net zero while protecting our energy security and a sector underpinning hundreds of thousands of jobs could not be clearer or more obvious. Well, clear and obvious everywhere but Holyrood and Westminster apparently.

If only breathless promises were real jobs. Ed Miliband, for example, recently broke the happy news that 400,000 jobs in renewables will now be created in the UK, 100,000 more than promised by Labour during the election campaign.

The Secretary of State for Energy and Climate Change must forgive us if we do not hold our breath. Even as he spoke, the first eight – of 54 – 2,300-tonne monopile foundations for the Inch Cape wind farm were arriving in Leith after being ferried 9,000 miles from Qinzhou in China. It would have been almost funny if not so absolutely dismal.

Our failure to seize engineering and manufacturing opportunities is depressing but, by now, default. It does not have to be this way, however. Other countries are not self-harming at such pace and scale, but using renewables to bolster their own industrial base while continuing to support the oil and gas production which will, one way or another, help pave our road to net zero.

If only breathless promises were real jobs. Ed Miliband, fo

(continued)

At the same time, the IEA can now see a scenario in which oil demand continues to grow, because so many countries are backpedalling on their clean energy commitments (led, of course, by the US).

A potential longer-term supply and demand mismatch implies higher prices. Despite this, the net long position in oil held by hedge funds is exceptionally bearish compared with the last several years, and the strong consensus view in the market for the coming year is still quite bearish. We may be living in a “just in case” world but most traders still have a “just in time” view on oil, and they seem to assume there is no trouble on the horizon.

And yet, in a world of increased political volatility, excess supply could disappear quickly for any number of reasons, from supply disruption in Iran, more turmoil in Latin America, a blockade of transport chokepoints in the Gulf or South China Seas, a natural disaster, or simply faster Chinese stockpiling.

The market discounting of such events coupled with unequivocal bullishness on equities “increases the odds that the opposite will happen — equities will fall and oil will rise in 2026”, as Currency Research Associates put it in a January 6 note to investors. Indeed, their analysis predicts $500 a barrel oil by 2030 (though it must be said nobody has successfully predicted the price of oil that far out).

This is in part because energy markets adapt and evolve when prices get too high. Whenever one energy source becomes too expensive, another rises to replace it. What’s more, history shows that when the world is going through the transition from one kind of fuel to another, there are often price spikes and lots of volatility. This is because supply chains and infrastructure in the new fuel are being built (requiring more energy), even as production in the old fuel is declining. This was true in the transition from, say, whale oil and woodfuel to coal, coal to oil, oil to gas and so on.

That leads to a final factor for investors to consider regarding the price of oil over the next few years. China may be stockpiling crude for geopolitical reasons. But it is also eager to move more quickly to a clean energy future, leveraging its competitiveness in green technologies such as lithium batteries, electric vehicles, solar panels and the like. This is a way not only to bolster its own economy and ambitions to lead the world in the clean energy sector, but also to decrease reliance on fossil fuels at a time when the US is trying to control more of them.

Just as dollar-based sanctions pushed countries at risk of US financial retribution to hold a more diverse basket of reserves, perhaps petro-politics and higher oil prices will spark a faster green transition. That would be a rare silver lining for the energy story in today’s chaotic world.

https://www.ft.com/content/3c7830fc-9649-4e29-b992-f99c6edadaca

It’s incredible to think that since Russia invaded Ukraine, oil prices have actually dropped from roughly $100 a barrel to around $60 today. There are good reasons for this — too much supply, lower demand in some big consuming countries and even the sense that we overestimate the effect of geopolitics on the market.

In my view, though, they are being underplayed. Huge protests in Iran and threats of a US military strike raised prices by only a few dollars. The threat of a potential trade war with Europe over Greenland then flattened them again. But markets are terrible at pricing political risk, which is by nature illiquid (each political event is, after all, a kind of one-off) and tough to model. Meanwhile, there are other reasons to think that we may be about to see oil prices start to head higher.

Let’s start with Chinese stockpiling. As Gavekal Research pointed out in a client webinar last week, despite the move to electric vehicles and the slowdown in the Chinese construction sector, the country is still buying record volumes of crude. China is clearly building up a strategic petroleum reserve, which is a good idea given the fact that America is becoming a petrostate with a goal, clearly laid out in the Trump administration’s national security strategy, of ringfencing more natural resources.

On that note, one might argue that US control of Venezuelan oil will bring even more supply into the market, implying lower prices (although it’s worth noting that the market’s initial reaction was a 1.8 per cent rise in the price of crude because of uncertainty being introduced).

But even if you are bullish on Venezuelan resources, it will take at least 10 years and tens of billions of dollars to bring that oil to market. And so far, despite US President Donald Trump’s demands, the energy majors don’t seem eager to rush back into the country too quickly. Who could be, when there is little sense of what the political model there, and indeed in the US itself, will be over the next decade?

What is clear is that we’ve already hit peak oil production in the near term. Last September, the International Energy Agency reported that in 2024, around 80 per cent of global oil production and 90 per cent of natural gas production came from fields that had passed their production peaks. The report indicated that, barring any major new investment, production from existing fields would peak this year and decline rapidly — even with the use of water pressure injections and other techniques to squeeze out more production.

John Swinney tells Energy Voice the 'damaging' energy profits levy must go, branding the promised benefits 'a mirage'.

John Swinney has blasted the continuation of the windfall tax — and revealed he pleaded with Prime Minister Keir Starmer to have it scrapped.

In an exclusive Bute House interview with Owen Wyatt on behalf of Energy Voice, the First Minister said the rationale for the levy does not stand up to scrutiny.

“The decline in the oil and gas sector is happening at a more aggressive rate and pace than I think was originally foreseen,” he explained.

“Meanwhile, the upsurge in renewables activity to essentially create the opportunities of a new clean, green energy future are not happening fast enough to counter that decline in oil and gas.

Swinney said pleas with Prime Minister Starmer had fallen on deaf ears.

“The energy profits levy was designed to be a profit on windfall taxation in the oil and gas sector but I think…it would be fair to say that today the likelihood of profits in the North Sea oil and gas sector has almost disappeared,” the first minister continued.

“But the sustaining of the energy profits levy at the levels that the UK government propose is actually having a doubly damaging effect because it is stopping any investment activity.

“I last aired this with the Prime Minister when I saw him face to face in Wales at the British-Irish Council in December.”

“Why is oil and gas declining faster than we might have anticipated in a country where we are still using oil and gas, and will have to use that for some years to come?

Swinney said the benefits of the windfall tax are ‘a mirage’.

“My argument is that that that money will never materialise because there isn’t enough economic activity in oil and gas to generate the profits, to generate the levy, that is being anticipated,” he explained.

“So it’s almost like a mirage that is being talked about.

“I think it’s because of the energy profits levy .”.....................

https://www.energyvoice.com/oilandgas/590326/exclusive-video-first-minister-says-windfall-tax-must-go/

(continued)

Things only get worse with Scope three, which requires companies to pursue net zero across their ‘value chain’, meaning all indirect sources of emissions. This includes suppliers, transportation providers, customers and employees. If a worker chooses to commute in a petrol-guzzling 4×4, as is their right, they are contributing to their company’s Scope three emissions and must be managed. This explains why many firms now offer employee electric vehicle leasing schemes. It is not a philanthropic endeavour, but an offering to their ESG (Environment, Social, and Governance) overlords.

Scope three means every facet must be scrutinised for its environmental impact. This certainly causes headaches and costs for business themselves as they bend over backward to conform, for fear of being penalised or losing access to capital. Yet it is often the smaller companies in the ‘value chains’ who bear the biggest brunt. Consider another supermarket, Tesco. They have committed themselves to net zero by 2050 and claim that 98 per cent of their emissions are in the Scope three category. Therefore, to reduce their emissions in any significant way they must deal with their suppliers.

Many of their suppliers are farmers, already buckling under rising costs and the government’s inheritance tax raid on family farms. Now they must contend with Tesco pressuring them to reduce their emissions.

One way Tesco applies such pressure is by partnering with NatWest to arrange for farmers to access loans to fund ‘renewable energy sources… and fossil free heating or cooling systems.’ Translation: Tesco is pushing farmers into debt. Not to buy more cattle or fertiliser, but to fund green technologies selected by environmental apparatchiks. Tesco celebrated that 1,500 farmers would partake in this scheme. We cannot know the exact amount each has borrowed but presuming it is in line with NatWest’s normal green finance terms we can assume a minimum of £50,000 per farmer. The average farm receives an annual government subsidy of £13,500. If each farmer paid back their loan in the minimum time frame, at the minimum interest rate (base rate), they would spend £6,000 on interest alone. That is almost six months’ worth of subsidy spent servicing green debt. It is a dizzying, state-induced financial circle.

This is the ugly reality of net zero. It is not all Teslas and reusable water bottles; it is farmers forced into debt to pay penance for their cows’ flatulence.

We must reject the Greenhouse Gas Protocol. Although the public support green policies in the abstract, the costly realities for their energy bills and supermarket shop are hidden from them and lack democratic consent. If net zero is to be enforced across the economy, it should make its case at the ballot box, not be socially engineered via bad regulations zealously applied by corporations.

Last week, a new report by the Institute for Economic Affairs argued that the cost of transitioning to net zero could be billions – even trillions – more than some government forecasts. That may sounds worrying, yet in many ways it still understates the problem. Net zero isn’t just hurting our energy sector, it has a complete stranglehold over the entire British economy – and it is making us all poorer.

No large company in Britain can escape its grasp. Our regulators, in league with asset managers, are constantly pressuring companies into pursuing costly and fruitless green goals that make them less profitable. As a result FTSE 100 companies now routinely have formal net zero targets. Their decarbonisation is largely measured using the Greenhouse Gas (GHG) protocol, which splits emissions into three categories: scope one, two and three. Companies are not considered properly net zero unless they meet their targets in every category.

Scope one emissions are those directly produced by a company’s operations, and are arguably the most intuitive and acceptable category for companies to tackle.

Scope two refers to the emissions that a company allegedly produces via its energy usage. This means companies are responsible for their energy supplier. Scope two obligations encourage companies to sign ‘Purchase Power Agreements,’ with specific renewable developers. These agreements make the company in question the sole customer of specific wind farms, purchasing their entire output at a predetermined price. Sainsbury’s now funds eight wind farms, peppered across the Scottish countryside, via such agreements. These allow Sainsbury’s to claim that they have reduced their Scope two emissions, as technically they are purchasing their power from a renewable source.

In reality, Sainsbury’s, and other companies with PPAs in place do not actually consume the electricity produced by the renewables they fund. Rather, it all goes into Britain’s electricity market blender. The latest wind farm backed by Sainsbury’s is only expected to produce electricity at the equivalent of full capacity approximately a third of the time, meaning that gas turbines must be constantly cranked on and off to plug the gaps.

This intermittency – the yoyoing of energy supply across the grid – impacts everyone’s bills. It is unavoidable when you make electricity generation dependant on the wind and sun. Roughly a quarter of a household electricity bill funds electricity network costs, which have exploded in recent years for this very reason. In many cases wind farms are paid to switch off when the wind blows too harshly and the grid can’t handle the upsurge in power. These payments are fast approaching £2 billion. This is all accelerated by corporations funding wind farms to meet their Scope two emission targets.

Nowhere more so than BBC News, the broadcasting arm of the Net Zero zealots. It greeted Miliband's latest licences with the headline that he'd 'secured a record supply of offshore wind'.

n fact, nothing has been 'secured'. The biggest licence in the previous offshore round, held by Denmark's Orsted, was frozen indefinitely when it was found to be uneconomic. The cost of offshore wind farms – from high interest rates on the billions borrowed to the cost of copper for transmission to the expense of imported turbine blades – is soaring. No wonder RWE expects over £1.5billion a year in subsidies to proceed. Even then there's no guarantee it will.

Nor is there anything homegrown about wind power. Just about all we do in Britain is erect the turbines. Nearly all their parts – from gear boxes to blades to the rare earth metals, transformers and steel required – is imported. Even their erection is largely done by foreign-owned companies.

As for security of supply, not only does Miliband's fatwa on North Sea energy mean we'll have to import a lot more oil and gas – his rush to renewables means we'll also import a lot more electricity to balance the system when wind power is weak. Last year we imported 10 per cent of our electricity needs via cables vulnerable to Russian attack.

Though you'd never know it from the reporting of most of our media, we are in the midst of a renewables energy policy in which generating and grid capacity will have to double – all at a cost of tens of billions – simply to be able to produce and transport the current level of electricity. It is energy madness on stilts.

But the reach of Miliband's wrecking ball goes far beyond energy. The rush to renewables, which he instigated when last a Labour energy minister in 2008, has speeded up the de-industrialisation of Britain. Steel, chemicals, aluminium, glass and other heavy industries have been decimated – or even disappeared – thanks to high energy costs.

The loss isn't just well-paid jobs in areas that badly need them, though that is a tragedy in itself. It is the loss of a national capacity to provide in bulk the basic inputs for food production, pharmaceuticals, clean water and defence at a time of national peril.

That is just how devastating the Miliband mission is turning out to be – and why those opposed to it must unite in opposition. There is no higher political priority.

(continued)

All of them based their 'wind is 40 per cent cheaper' propaganda line on the official claim that electricity generated by a new gas-fired station would cost £145/MWh – clearly more than the latest wind power strike price.

But that figure assumes gas-fired stations would operate at merely 30 per cent capacity, because the Government only wants to resort to gas when the wind doesn't blow enough (or blows so much the turbines have to be shut down). Naturally, that raises the cost of gas-fired electricity.

Furthermore, in another sleight of hand, the £145 includes carbon taxes imposed on gas as part of the Net Zero crusade, adding around £40/MWh to the price. That is a policy choice. There is nothing immutable about it. Strip away the carbon taxes and run the gas-powered stations at a higher, more efficient level – over 80 per cent – and the price of electricity generated comes in at below £70/MWh. That is far lower than the £91 cost to which Miliband has locked us in real terms for the foreseeable future.

Furthermore, the Government's price of wind doesn't take into account all the extra costs of upgrading a national grid increasingly carrying electricity generated by intermittent renewables.

Offshore wind farms tend to land their electricity on isolated coasts, to which new transmission lines have to be constructed. Grids built to carry predictable, reliable electricity generated by fossil fuels or nuclear need expensive upgrading to deal with the vagaries of renewables, including the constant switching between wind and gas.

Then there's the cost of keeping gas-fired stations on standby to rev up when wind power is inadequate. The Government reckons it will still need all the existing 32 gigawatts of gas-fired capacity as back up by 2030, when the grid is supposed to be decarbonised, even though it would run for only 5 per cent of the time.

That's an expensive fallback – and needs to be included in the cost of renewables.

Take all that into account and the true cost of wind power is closer to £125/MWh versus under £70/MWh for gas. That gives you a more accurate picture of the damage Miliband is determined to inflict on what's left of British industry and the household fuels of the 'working people' Labour is supposed to look after.

Energy policy is now based on a number of fantasies that have been rattling around in Miliband's head for years: renewables are much cheaper; they also mean more secure energy because they're home grown; and renewables will bring down your bills.

Miliband once claimed renewables were 'nine times cheaper than fossil fuels'. He doesn't say that any more. Labour promised in the 2024 election to cut fuel bills by £300 a year. It doesn't say that any more, either. The scale of the folly on which we've embarked is scarcely appreciated, thanks to a compliant media, so much of which is content to recycle the claims of the Net Zero lobby without question. It is journalism by Press release.

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