Member Info for romaron

Https://grid.iamkate.com/

Https://notalotofpeopleknowthat.wordpress.com/2024/03/11/the-german-energy-transition-threatens-to-be-an-unaffordable-unrealisable-disaster-according-to-the-governments-own-independent-auditors/

Far from “taking account” of consumption emissions, they expose the whole hypocrisy and futility of the UK’s Net Zero agenda. Until the rest of the world phases out fossil fuels, nothing we can do will make the blindest bit of difference.

https://notalotofpeopleknowthat.wordpress.com/2024/03/11/the-elephant-in-the-room-that-risks-exposing-britains-net-zero-agenda/

I am banging on about the renewable fiasco to do my little bit about the lemming like hysteria that politicians show when using what they see as populism to get elected. I had a long chat with another investor at the weekend whereby we asked each other if we were just as locked into EnQuest due to a sunk cost fallacy. We attacked it from a negative perspective and come up with reasons to divest. The sheer numbers and tax losses we hold only ened up reinforcing our decision to hold EnQuest stock. Without the tax losses we'd be gone. I don't think there is any argument there.

Energy is such an essential to life (try running a hospital without it) and our defence against bad actors(Russia) depends on us delivering weapons and forces. The Ukraine, Syria and Gaza situation show us that the tactics and weaponry of WW1 are still being used. OIil is far from finished.

China seems to be taking measures to ensure inderpendent oil supplies (it brought Japan into WW2) and Russia is struggling to keep up production of oil. World events and prices are in our favour. Even Labour must take their head out of the sand eventually.

Exactly Taverham. You need a PhD to fully understand the breakdown of your electricity bill. The eco-zealots have obfuscated and conflated so much that the truth is buried under mountains of conflicting arguments. I eventually understood this: "For the avoidance of doubt, CfD subsidies are paid when the strike price is above the reference price. Effectively, the reference price is set by gas-fired generation, so subsidies are paid when the strike price is higher than the gas price. So, that £5.25bn represents subsides in excess of electricity produced from gas.

In parts of 2021 and 2022, the market price for their output was above the CfD strike price, so the generators paid back some money. Now that energy prices have stabilised around pre-crisis levels, record subsidies are being paid." That was for the period 2018-2024.

So it is built into the CfD model that there is protection with subsidies whilst the O&G industry is subject to market conditions and penal tax rates. The LCOE is argued to be above the cost of nuclear (Prof. Sir Dieter Helm who you won't see on a Sunday morning politics programme). With my limited knowledge I know who I side with. What is always omitted in the equations and arguments for renewables is that we are now back in a pre Ukraine situation regarding gas and the public had support from the O&G industry to pay their energy bills. I would accept defeat if renewables were in fact cheaper but that is not the case and the public are entitled to ask why their bills haven't come down to the levels promised by Labour. The wind farm owners and the electricity suppliers aren't evil people but if you had a government on your side dishing out freebies would you complain?

There is an ending to this and that will be the realisation that we've lost a successful industry too early and suffered the revenue loss and paid to replace its production with imports. One thing for sure electricty [and gas LNG] won't be coming down any time soon. Labour's budget will be a collector's item.

You'll be better at understanding it than me Stevo. The CfD mentions NPV in the calculation over a 15 year anticipated life of a wind farm. I'd need to be in a classroom with a lecturer who could break it down into simple language with the variations that affect the price. Even this https://grid.iamkate.com/ is incredibly complex. Simple on the outside but it only affects the marginal intermittency pricing whilst the bulk of the contract between wind farms and the electricity suppliers will be hidden behind "commercial sensitivity". They are imo actually VERY safe deals between huge pension funds and only slightly riskier than gilts or treasury bills because they are underwritten by the UK state.

Eventually there will be NO getting away from the fact that renewables are more EXPENSIVE and that politicians have been lying through their teeth at the cheapness of renewables. They've been able to use the efficiency of hydrocarbons against the industry itself and subsidised renewables by draining the O&G industry of capital and the necessary environment to encourage continuing investment in O&G. Whoever thinks that more expensive imports are a solution to producing revenue earning home production shows that ideology and dogma do not involve common sense or reality.

Another annoying EPL effect that might affect us slightly but will be twisted by the eco-zealots with reference to the vast profits being made by BP. Of course they're not in the NS but when has accuracy ever been important to them? Energy Voice have an article about BP writing a $900m impairment into their 2023 accounts "in respect of certain assets in the North Sea as a result of changes to the group's oil and gas price and discount rate assumptions and active phasing". They didn't specify which assets.

The total impairments by BP were $5.7bn for 2023. BP state they will continue their share buyback's guidance through 2025.

“the tories have shot themselves in the foot on the windfall tax” said one snp figure. “it is less clear that they are champions of the oil and gas sector.”

hunt admitted scottish o&g had lost out, allowing nationalists to characterise it as a raid on scottish resources ahead of the general election expected this year. “westminster has once again sold out the ne of scotland to fill the pockets of the uk treasury” says stephen ***** snp leader at westminster.

the scottish greens have called for a reversal of the “perverse mechanism” within the wft that gives o&g producers 91p tax relief for every £1 invested in uk operations, rather than making this available for renewables.

hypocrisy and blatant lies. the greens conveniently omit that wind farms do not pay a wft unless they earn exceptional profits over £75 per mwh or are operating under existing cfds. pretty indefensible when they’ve been banging on about how cheap renewables are for over a year (9x cheaper?).

there is a desperate need for educating the public but instead we get the likes of hugh fearnley-whittingstall (a cook) being allowed to pontificate his eco-zealotry on what is considered one of the top political programmes on bbc this morning without challenge.

the renewable lobby is beginning to look shrill and out of ideas. most of what they preach has been proven to be hyperbole and propaganda. the standard article (frac 22:53) is an example. business can also see the damage and attacks that labour threaten the o&g industry. are they hoping the crocodile will eat them last?

Https://datawrapper.dwcdn.net/N76ms/3/

Not a solar farm with 35 miles of me (even better if you live in Kent). Only one onshore windfarm in Wales - none in England. Scottish obduracy slowing up the wind farm coverage of the East - Highland clearance almost complete.

I'm a dummy but this is where I am. Pricing of anything is not perfect so the fiendishly complicated CfD system is a bit like democracy. Not perfect but (seemingly) the best we've got). It applies across the board for everything. Trainers and T-shirts from pennies to thousands is an example. So we accept it and few understand it. The market is expected to find its own level eventually.

This is my explanation. With interest rates close to zero and the West in an environmental religious crusade whipped up by demagogues and dodgy science they demanded we go backwards towards more inefficient and expensive energy and at the same time demonise the hydrocarbons that had made life so much better for billions.

It went swimmingly for the first few years as hydrocarbons just got cheaper (shale) and the renewable technology followed a similar path. Covid and the Ukraine war impacted this but it would have happened anyway imo as the world and commodities move in cycles. Between 2014 and 2022 the path for renewables was following O&G pricing. The expectation was that O&G would run out and become more expensive whilst technology and pricing for wind would go in the oppposite direction. This did happen in the UK until the auction for AR5 in September 2023 which didn't receive ANY bids. This is an example of governments trying to predict the future. There is a massive amount of money in funds looking to fund state pensions and the like which means energy is always a "go to " investment because of predictability and government backing - closer to gilts than fashion. There is a vested interest in creating another predictable form of investment from tax gathering and revenue from tax paying utility (energy) users. This is also sunk capital and many politicians have publicly chained themselves to the lies and exaggerations that surround renewables thereby trapping themselves. The initial shortfall in this policy was funded by a windfall tax on the easiest scapegoat that handily fitted the narrative; the UK O&G industry. This is now coming to an end as basically the industry struggles to make a profit now and future investment has all but dried up.

Hiding this from the public is getting more difficult by the day and we are seeing erstwhile champions of wind backing out of deals (Orsted, Vattenfrall) and asking for even MORE subsidies via the CfD auctions. Now, there is only so much lipstick you can put on a pig and resistance is building towards the eco-zealots and their crusade which demands that cost NOW is not a consideration. There is a better afterlife for all those that sign up to this new religion. That doesn't explain why churches are empty on Sundays - they can't all be going on marches.

This leaves the electricity energy suppliers with a problem. Their new deals with the wind farms will reflect the REAL WORLD which the likes of Orsted and Vattenfall are already facing. Prices can only go UP. Sell that to to the public.

The proposed administrative strike price for AR6 is £73 £/MWH, in 2012 prices

"The Administrative Strike Prices presented have been calculated in real terms on the basis of a 2012 price level. To convert this into a more recently available price base, a Consumer Price Index (CPI) index can be used1,2. As an illustration, this formula is provided below. CPI Adjustor £2012→£current = CPIcurrent/AverageCPI2012 For stakeholders to convert the Administrative Strike Prices into the most recently available price base (September 2023 at time of publication), the following CPI inflator should be used: 1.3736. "

So in today's money that is £100.27 £/MWh

Were medieval payments that granted full or partial remission to sinners. These continue to this day and are now termed "renewable subsidies". You don't actually get any benefits financially but you supposedly feel better with a promise of future redemption. In the past it funded cathedrals and crusades as well as fine food and fine robes for bishops and pontiffs. Today it is simply redirected as foreign dividend. Read this and weep:

https://open.substack.com/pub/davidturver/p/offshore-wind-follow-the-money?r=lx6e9&utm_campaign=post&utm_medium=email

C. 9.15 on Sunday with Laura Kuenssberg

In response to a questionh of where Labour will find the money for public services RR replied "initial injection of cash by closing tax loopholes "

LK replied "they're crumbs" to which RR responded " - £1.5bn for VAT & business rates (private schools) and £7BN OVER THE COURSE OF THE PARLIAMENT by closing the loopholes" - she didn't say O&G but it couldn't have been anything else. It does shoew the paucity of ideas of where the money will come from. The Tories emptied the pot on O&G. That's £7bn over 5 years and I'd suggest it's front loaded.

Https://twitter.com/Ed_Miliband/status/1765836121248797155

He couldn't look more ridiculous if he tried.

This guy is hilarious: https://www.youtube.com/watch?v=8DAbUUbA1IY

"Recent EY research revealed Aberdeen is the worst city in the UK for economic growth."

What? Even after the visit from Ed and Keir in November. Surely a misprint.

Hi L7 - it appears to be from Bloomberg - https://www.worldoil.com/news/2024/3/6/uk-chancellor-extends-north-seal-oil-and-gas-windfall-tax-into-2029/

To comply with the sef-imposed modelling of OBR it looks to me that it is a kinda 5 year plan so they had to tack on an extra year to tidy it up. Pretty meaningless imo because it is the equivalent of the "sprint to clean energy by 2030" of Ed Miliband. That and the great rapture of NZ by 2050. Dates plucked out of the air. We can all do that with a certain amount of mystification (usually foumnd in religious dogma) and cod-economics that the public willnever understand (I'm with the public).

It looks like Labour have accepted the budget and it remains to be seen how "growth" will happen with less efficient and more expensive energy. We can't all join the ranks of climate.org activists or work on wind farms.

This morning the future looks rosy for O&G UK if you look at the alternatives. The numbers that Frac mentions mean there is another hole in the finances that will need filling.

Https://twitter.com/7Kiwi/status/1765447201793217003

Government sneaks out AR6 budget on day of the Budget. Over £1bn (£1.4bn in today's money) to be allocated to renewables, up 351% on AR5. Of that, £800m to offshore wind and some of that to bail out projects that bid too low in AR4. Bills going up again

Strike prices confirmed at well above current market rates too. So, renewables are not cheaper than gas. £1.4bn is £50 extra per household on electricity bills. What the Chancellor giveth in NI cuts, he taketh away in electricity bills

*Norwegian CfD wind auction on 18 March. will be interesting.

Email from Rachel tonight,

"Ronald-

Today’s Budget is more of the same. Once again, the Tories failed to deliver the change Britain needs.

They promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.

This Budget was all spin and no substance - covering up 14 years of failure and broken promises with a last-ditch attempt to save their own skin ahead of this year’s general election.

The Tories know they have only one chance to win the election: buying it.

They raised the spending caps for their own benefit. And now they want you to thank them for handing back £5 for every £10 they’ve raised in tax."

She then asked for a donation.

I don't blame the Tories for Covid or the Ukraine war and I don't think the weather always has to be declared a crisis or an emergency. Would things have been better under Labour with the once in a generation events?

The shrillness and the need to always apportion blame on someone else makes the Labour missives as readable as those from juststopoil.

Hunt skimmed over the NS and it is clear that for them [Tories] the caravan has moved on. It was probably indefensible to permit the industry to make windfall profits gainst a background of media hype and activism over the past 2 years since the Ukraine war. The cure for low prices is low prices and that seems to be happening with natural gas. For oil it is more complex but neither party can ignore the tax revenue and I reckon it is now being cemented in both parties future plans although it looks like ther'll be only one winner, Labour. If there is NO investment in the NS then this tax revenue is at risk. Even if Miliband does his worst the opposition within his own party from Rachel and the Unions will ensure he is left to play in the corner with GB Energy whilst the grown-ups manage the Nation's finances. There are enough within there own party let alone a Tory opposition to ask why electricity prices aren't cheaper and the 9X cheaper quote will be regularly aired.

In some ways it's win/win for us. I expect Brent to remain high and with our tax advantage we can afford to be choosy regarding new deals. I hope you're right about more departures Frac because for some there is no economic future yet the importance of oil doesn't diminish or go away. Expediency always rules in politics and imports versus losing tax revenues means ther'll only be one outcome.