Member Info for romaron

The Norwegian government has unveiled Ventyr Energi, a consortium of Parkwind and Ingka Investments, as the winner of the Sørlige Nordsjø II (Southern North Sea II) offshore wind auction round in Norway. The winning bid in the auction was NOK 1.15 (EUR 0.099) per kilowatt hour. The Norwegian Parliament has decided that the upper limit for state support is NOK 23 billion (approximately EUR 1.9 billion).

It works like the UK CfD system so is the equivalent of £85.19 MWh. I'm no expert but our failed auction AR5 was priced at £44 MWh. The experts will analyse and give their opinions and I wouldn't be surprised if they comment on the winning consortium which includes IKEA who have a 49 per cent stake. I think that the larger global companies are ensuring they have an alternative to the public grid. The politicians will crow about the "success" of the auction so it will be interesting to see what the experts think.

Https://www.netzerowatch.com/all-news/more-fantasy-energy-policy

The author of this, Andrew Montford, has a point but also ignores the elephant in the room. If we wish to continue with technological advances and AI, together with EVs and heat pumps, we're gonna be using a lot more electricity whilst relying on an intermittent and far less dense source of power for the electricity. Higher electricity bills are unavoidable whatever route is chosen. Labour have demonised the term "profit" unless it is by a renewable company, who sadly don't even make a profit if the subsidies are removed. In this new economy the only alternative is to nationalise because companies won't invest if there is no possibility of making a profit.

We're all living in a fantasy land. Energy has been far too cheap for far too long. The public will soon find out and it looks like Labour will be in power when it happens.

Andrew is correct in that the green zealots have got us into this mess by demanding the impossible and politicians promising it (renewables 9X cheaper; Labour).

Juan - I'm with you. The above is regarding electricity and gas and it is even more difficult and tricky to understand oil which is the other 75/80% of energy we use in the UK. Hunt conflated the two (O&G) with the EPL and that may prove to be a massive blunder. EnQuest have broken no laws and done nothing wrong. With the lack of investment oil is a becoming a rare commodity and one of the few sectors that will make a profit as it is largely blackout resistant. Labour has made its bed but I don't think they're prepared to lie in it.

It is worrying M. Labour have got in a lot of confusion over this. For beneficial change the influence of a 'disruptor' is sometimes uncomfortable as few embrace change automatically but if it has an economic or social benefit it will get through eventually. Poor old ED has confused disruptor with destructor.

Hi old mentor Gordon Brown sold a large amount of our gold reserves at the bottom of the market because he was concerned about the "volatility" of gold (echoes of energy prices). Brown was wrong then and Labour are wrong now. Ed Miliband's O&G are the volatile gold reserves of Gordon Brown.

Labour want to destroy the O&G industry at the altar of climate ideology which is based on a lot of hocus-pocus based on impossble to prove theories and models.

This madness will end.

Https://notalotofpeopleknowthat.wordpress.com/2024/03/19/the-tories-are-stuck-in-a-net-zero-trap-of-their-own-making/

I particularly liked this. It was a simple mistake anybody could make. Renewables weren't 9X cheaper than gas - it was the other way around, certainly with green hydrogen:

"Green hydrogen is another silver bullet that’s colossally expensive. In a 2022 report, policy expert Francis Menton went through the pie-in-the-sky economics of relying on renewable electricity to make hydrogen to burn in a gas-fired power station. To use green hydrogen to produce the same quantities of electricity as gas, you need a turbine capable of producing 288 MW, costing $305 million (£240 million), plus a supporting 4.7 GW of solar capacity – more than 16 times the capacity of the gas-fired power station – to provide electricity directly to the grid and generate sufficient hydrogen to be stored as backup. In total, this would cost $6.6 billion (£5.2 billion). By contrast, natural gas would require just the $305 million gas turbine plus $600 million-worth (£472 million) of natural gas, making a total cost of around $900m."

Remarkablly steady. Almost as if a foot was on the break. Steady upward pressure that gets in the way of geopolitics and benefits those nasty producers. I'd release reserves into the market from SPR if I was an embattled US President.

It's also about timing as well Keir

https://twitter.com/sarahhowardSAR/status/1734682138350604795/photo/1

December 2023

https://notalotofpeopleknowthat.wordpress.com/2024/03/19/electric-lorry-maker-backed-by-david-beckham-collapses-into-administration/

March 2024

We really are deplorables. Quite embarrassing really but we still lead the world in climate activism and smugness. Poor but proud.

This from yesterday:

https://www.theguardian.com/environment/2024/mar/18/climate-protesters-in-england-and-wales-lose-criminal-damage-defence

So a glimmer of common sense returning. Activists believe that they are on a mission and have a higher calling. I didn't realise that in their opinion if "right" was on their side (remember it is their definition) they have carte blanche to commit criminal damage without legal recourse or penalty. Just as worrying is that some juries fell for the legal argument of 'conscience'. I wonder if the realisation of everyday people (potential jurists) that the cult of climate change is falling apart under scrutiny. Their claims and data are being shown as scientifically weak and impossibly expensive. People don't want to go back to a medieval economy. The public opinion towards these deluded demonstrators is moving back to the real world where cost-of-living is much more pressing and the luxury of virtue signalling has lost its allure. People still want cheap transport and holidays abroad.

"OSLO, March 18 (Reuters) - Norway began its first auction on Monday for the right to build a commercial offshore wind farm, offering up to 1.5 gigawatts (GW) of capacity in what the government hopes will be the start of a massive development of renewable electricity.

"Bids are coming in ... This is a very good day for Norway," Energy Minister Terje Aasland told NRK radio later in the day, after it was announced the auction would continue on Tuesday.

Some analysts had feared no bids would be made amid soaring developing costs for the global offshore wind industry.

"The auction has continued throughout the day and has taken a break. The auction will start again at 09.00 (local time) tomorrow, Tuesday," the energy ministry told Reuters.

The ministry will present the winner when bidding ends. It declined to say how many groups were involved in the bidding." Reuters

Doesn't look like an auction to me. Sounds more like horse-trading.

Https://www.theage.com.au/technology/uber-to-pay-272-million-to-australian-taxi-operators-20240318-p5fd4p.html?fbclid=IwAR1MiIY0BbBMy8lHCfYnxNol-dQ6xxfAELaaX85ppv_RD7r5SK_qqiZZ24M

I've a pal who emigrated to Australia. We played football together. He had 3 taxi licenses. It cost him $960,000 and he received $593,000 compensation from the Labour party he'd have got zero from the Liberal (Tory for us) party.

Australia is the "first off the rank" in this respect globally and so he's got a nice little payment coming. Who will be next?

There's a lot of bad news heading towards the brave new world of ESG and technology.

O/T "The auction is now underway," the energy ministry said in an emailed statement, dispelling fears of some analysts that no bids would be made amid soaring developing costs for the global offshore wind industry. Reuters latest from Norway.

Very few I would imagine Aim. I doubt the 'Repeal the Climate Change Act' will make any difference either because the number of votes it attracts will be small. The best we can is embarrass and call out the lies of the politicians. The general public don't care and TBF if it doesn't really affect you neither would we. There is polarisation everywhere.

The options are closing for politicians and the term "trade off" is always in their back pocket. They'll never admit to or say "we were wrong and let ideology and false prophets mislead us". We'll never get decent PR in the Press because the other side is saying exactly the same and most people's interest in energy ends at "will the light come on and how much will it cost?"

Utilities are taken for granted and costs are controlled to some extent because governments and parties want to be elected.

Eventually the truth seeps through and the limitations of EVs, heat pumps, hydrogen and carbon capture etc. are exposed but mainly it is the cost that cannot be ignored forever. The well is practically dry in the UKCS for subsidising the eco-zealots ambitions so where will the money come from? It can't come from the NHS or Defence, can it?

The Norwegian wind auction tomorrow will bring a harsh dose of reality to the cost of offshore wind. The only response that Ed can give will be that it is planning holding up ONSHORE wind so that'll be a nice election divider. He'll say build them closer to the customers who in turn will say not near me. Cities versus suburbia and those in rural areas. Build them too close and you'll lose the suburban vote thereby perpetuating the Labour - Conservative divide. Whoever cared about the rural vote or fishermen. There aren't enough of them to make a difference to politicians. They will pretend to support them though.

Data mining - if you're gonna pick a period to support your weak argument choose an 18 month periosd that includes 2 winters. Torture most figures long enough and they'll say what you want to hear.

https://notalotofpeopleknowthat.wordpress.com/2024/03/17/ed-hawkins-wet-weather-claims-dont-hold-water/#more-72365

Well done Sweden. Maybe Greta can help with more subsidies:

https://notalotofpeopleknowthat.wordpress.com/2024/03/17/swedish-wind-farms-facing-bankruptcy/#respond

They won't listen but it only takes a minute:

https://petition.parliament.uk/petitions/657353

Tomorrow is the Norwegian wind auction opening at 9 a.m. GMT.

Https://twitter.com/RachelReevesMP/status/1768977766668509527

Yesterday 15 March Any Questions BBC R4 presented by Alex Forsyth: https://www.bbc.co.uk/sounds/play/m001x5c8

One of the guests was Louise Haigh, Labour Shadow Sec. of State for Transport. Around 15:30 she was asked about the new system of environment land management system that replace the common agricultural policy. She waffled on and said it involved a “trade off”. The presenter then pressed her about what was the “trade off” and she excused herself by saying it was outside her “knowledge” as she was in charge of Transport.

She wasn’t so shy later (28:00) when pressed on how Labour was going to fund public finance plans. She said they had plans for “an extended windfall tax on the soaring profits of oil and gas giants”.

Amazing that she know FA about farming but is an expert on energy. It just goes to show what happens when a decent presenter tries to nail a politician. It was a very poor performance by Labour and they stick to repetition. There is (it appears) no directive from Central Office to change the narrative.

Hi Frac - I follow this guy. He says that Ukraine could easily sink a Russian oil tanker but doesn't want to upset Biden by sending prices rocketing. Possibility of SPR being used again. I'm not worried as it will need to be replaced whatever the eco-zealots think. Desperate times call for desperate measures. The public aren't told this stuff but it's real. He has laid out his opinion quite succinctly.

https://twitter.com/Big_Orrin/status/1769052496234684466

He also posted on 15 March the following "Interesting how much cfds in brent have changed over the last week. Were in huge backwardation now in small Contango."

This relates to the front end and is important. Seems a big change going on that only the professionals will truly understand. As far as I'm concerned these aren't insignificant and oil won't be getting cheaper.

Https://open.spotify.com/episode/7reZvNsfM8ivQ001MOTSGD

Something will break through the idiotic situation whereby individual safety is ranked lower than green ideology. It started this morning as TV presenters were scanning newspapers looking for a story. The veritable "butterfly flapping its wings" and creating a tsunami of common sense throughout the UK. I'm going with it and suggest others do too; post, mention, write, email to your MP and council as a concerned citizen/voter. Gaps are opening up and the cavalry of cheapness was never there.

This is the story: https://notalotofpeopleknowthat.wordpress.com/2024/03/15/patients-will-die-thanks-to-the-nhs-net-zero-drive/

Https://www.oxfordenergy.org/wpcms/wp-content/uploads/2024/03/Energy-Quantamentals-%5EN2-Myths-and-Realities-about-CTAs-Final.pdf

" The business of a quantitative fund is like a casino where the edge on individual trades is rather small, and one needs to conduct them repeatedly across many commodities to ensure sustainable profits. Unlike stocks and bonds, commodities were also attractive because selling futures was as easy as buying them, allowing traders to capitalize on trends in either direction. Finally, since futures trading does not require committing much capital upfront, besides a relatively small exchange-required initial margins, commodities bets could be highly leveraged."

In the article it explains how backwardisation works and how the original CTA's were attracted to this market. They are the casino and they always win in the long run. Over leveraging can be disastorous and the amounts are enormous because the returns are almost guaranteed and you have to place a lot of bets. Black boxes are now called AI. Human frailties are programmed out.

"Relatively small changes in optimized parameters of the momentum strategy could lead to drastically different performance. As the result, many systematic traders often learn the harsh reality that oil momentum works until it does not."

It doesn't explain the human impact of "climate change" but if the model continues working then you stick with it. The problem for us is that you have to be a casino to understand and afford it. Luckily this is a trader's dilemma and fundamentals will eventually come to our rescue. I'm sure onedb will enjoy this simplification and I'm only posting to show what we're up against. I enjoy the odd flutter but the Cheltenham winners are the large bookies.

I realise this is only one element of the oil market but it does underpin the trading and will influence and leach into the performance of stocks too. I'm much simpler and just think that profit from an essential activity never really goes out of favour (that is until Stevo confuses the hell out of us).

EV article about NS production:

"Assets owned by Harbour Energy, Shell and BP have earned promotion to the top tier, while certain Equinor, TotalEnergies and EnQuest assets have been relegated. The data, compiled by Dundas Consultants through companies’ statutory production reporting, represent hubs which accounted for 58% of total production from the UK sector over the course of 2023. There’s no change to the top three, made up of TotalEnergies’ Elgin (1st) and Culzean (2nd) and BP’s West of Shetland hub Clair. But the tail-end has seen major change on 2022 as TotalEnergies’ Shetland Gas Plant, Equinor’s Mariner and EnQuest’s Kraken hubs exit, replaced by Harbour’s Tolmount (15), BP’s ETAP (14) and Shell’s Gannet (13)."

I suppose it includes gas so not clear where we'd sit in a table of oil producrs on UKCS.

Steady Frac - the roads in Scotland are empty compared to here in the "smoke". You can't compare the importance of (say) Epping Forest and a theme park for hill walkers and sheep grazing.