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Is the Government Giving Special Terms to Renewable Energy Companies Run by its Cronies?

by David Turver
11 September 2024 8:13 PM

Regular readers will remember the recent article on the Allocation Round 6 (AR6) results for supplying renewable energy to the grid. After publication, I had a conversation that prompted me to take a closer look at the contracts awarded under the Permitted Reduction Scheme – the ‘loophole’ provision that allows companies to re-submit the same projects under later rounds to get a better deal. Let us take a look at what I found.

According to the Contract for Difference microsite, a maximum of 25% of the original capacity of a project can be withdrawn from its original contract and rebid under the Permitted Reduction Scheme part of AR6.

If we now look at Hornsea Project Three Offshore Wind Farm, it was originally awarded a contract in AR4 with a total capacity of 2,852MW (see Figure 1).

Figure 1 - Hornsea Project Three Original AR4 Contract for 2,852MW
Figure 1 – Hornsea Project Three Original AR4 Contract for 2,852MW

This original capacity is confirmed on the contract database of the Low Carbon Contract Company (LCCC). The LCCC database also shows that the withdrawn capacity is 705.9MW, or 24.8% of the original capacity which is slightly below the 25% limit.

If we turn now to the AR6 results, we can see that Hornsea Project Three was awarded three individual contracts under the Permitted Reduction Scheme of 360MW each, giving a total of 1,080MW (see Figure 2).

Figure 2 - Hornsea Project Three AR6 Permitted Reductions 1,080MW
Figure 2 – Hornsea Project Three AR6 Permitted Reductions 1,080MW

This 1,080MW represents 37.9% of the original capacity, which is well in excess of the 25% limit. The contract conditions (see 6.2 on p82) for AR4 say that if the company tries to adjust the capacity to less than 75% of the original then the request for adjustment will be invalid, meaning the original contract terms apply. The obvious question therefore arises: why has Hornsea Project Three been awarded Permitted Reduction Contracts above the 25% limit?

I approached the DESNZ Press Office on Sunday for an answer but have not yet received a reply. In the absence of an official response, we can piece together information from other sources to try and shed some light on the issue.

Hornsea Project Three is owned by Ørsted and Hornsea Project Four, also owned by Ørsted, was the biggest beneficiary of AR6 winning a contract for a 2,400MW project. It is probably just accidental that Baroness Brown is a Non-Executive Director of Ørsted and is a member of its Asset Project Committee (see Figure 3).

Figure 3 - Baroness Brown Non-Executive Director Of Orsted
Figure 3 – Baroness Brown Non-Executive Director Of Orsted

Coincidentally, the Baroness warned in May that the prices on offer in AR6 “may not be appealing enough” and said that the then Tory “Government needs to be a bit more generous and a bit more flexible”.  Baroness Brown is also the chair of the Carbon Trust, which until recently employed Chris Stark as its Chief Executive. Mr. Stark is now Head of Mission Control in DESNZ, tasked with “turbocharging [the] U.K. to clean power by 2030”. Chris Stark and Baroness Brown have quite a close relationship because Baroness Brown also sits on the Climate Change Committee, where Stark was CEO until earlier this year. Stark is also listed as a member of Baroness Brown’s staff in her register of interests in the House of Lords (see Figure 4).

Figure 4 - Chris Stark is Baroness Brown Staffer
Figure 4 – Chris Stark is Baroness Brown Staffer

It is certainly a strange coincidence that the Government should apparently break its own rules and award Permitted Reduction Contracts in excess of the limit to Hornsea Project Three, when a director of the owner Ørsted just happens to have a very close relationship with DESNZ’s Head of Mission Control. In the absence of any other explanation, the proverbial person on the Clapham omnibus would probably conclude that these awards amount to contracts for cronies.

I have submitted an FOI request to DESNZ requesting details of contacts between the department and representatives of Ørsted during the AR6 process. It will be interesting to see how this story develops when the press office responds and the results of the FOI request are published.

David Turver writes the Eigen Values Substack page, where this article first appeared. The podcast version of this article can be found on these links to Spotify, Apple and YouTube.

Tags: Chris StarkEnergy IndustryGovernment contractsHouse of LordsNet ZeroRenewable energy

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28 Comments
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Marcus Aurelius knew
Marcus Aurelius knew
8 months ago

Yes

Right, time to read the article.

Last edited 8 months ago by Marcus Aurelius knew
2
0
EppingBlogger
EppingBlogger
8 months ago

Isn’t it a bit soon in this administration to find, ahem, suggestions of what some might regard as wanton corruption.

7
0
huxleypiggles
huxleypiggles
8 months ago
Reply to  EppingBlogger

“wanton corruption”

What already?

There have been some jobs for “mates” in the higher reaches of the Civil Service and gongs given here and there plus the usual money laundering via Ukraine but nothing we wouldn’t expect given that Kneel passed a law to safeguard his retirement spends.

Give them time surely. They have barely got their feet under the table. This time next year they will really be laundering the cash.

7
0
varmint
varmint
8 months ago
Reply to  huxleypiggles

“Give them time”—–Please no. —In two months they have awarded pay rises to their mates in the Public sector while stripping the winter fuel allowance of the people that don’t vote Labour (pensioners). This despite the fact that in their obsession with the fake global warming they forgot or didn’t care that cold kills 20 times more people than heat does, and one of their own studies said a few years ago when the Tories were considering removing the allowance that up to 4000 pensioners could die as a result.
—–Meanwhile Miliband has wasted no time in indicating he will decimate oil and gas and is approving turbines everywhere except on motorways. —Not bad for 2 months.

9
0
huxleypiggles
huxleypiggles
8 months ago
Reply to  varmint

“Give them time”

It was sarcasm 🙄

2
0
varmint
varmint
8 months ago
Reply to  huxleypiggles

I know——I needed to vent as usual.

0
0
iconoclast
iconoclast
8 months ago

Thanks to David Turver for this information.

The corruption is so thick you can cut it with a knife.

Barely two months in to the remainder of 5 years.

A banana anyone to celebrate our new republic?

15
0
iconoclast
iconoclast
8 months ago
Reply to  iconoclast

It is like feeling the pavement beneath your feet moving and heaving as it breaks apart and we sink steadily with each blow of this corrupt new administration.

A change is as good as a rest some say.

I don’t feel rested nor do I feel there has been any change except the corruption seems to be more visible and coming thicker and faster than under the previous administration’s 14 years.

Last edited 8 months ago by iconoclast
9
0
HicManemus
HicManemus
8 months ago

Baroness King, former member of the Automotive Council of the WEF. An engineer by profession she has her finger in many pies. She is a cross-bench peer.

Just plucking some information from Wiki about a couple of the Permanent secretaries at the DESNZ, it is interesting to note that one has a degree in modern history (Oxford) and one a degree in modern languages (Cambridge). Not sure how that helps their understanding of NZ. CSaP is another interesting organisation (Cambridge).

These two senior civil servants at DESNZ are fellows, along with many civil servants of CSaP. “CSaP gives senior civil servants access to senior academics at Cambridge across all disciplines.” All very laudible I’m sure.

Last edited 8 months ago by HicManemus
6
0
Norfolk-Sceptic
Norfolk-Sceptic
8 months ago
Reply to  HicManemus

All disciplines?

Ha, ha! 🙂

3
0
HicManemus
HicManemus
8 months ago
Reply to  Norfolk-Sceptic

Oh yes, these tentacles spread far and wide in the CS.

1
0
iconoclast
iconoclast
8 months ago
Reply to  HicManemus

“CSaP gives access to senior civil servants to senior academics at Cambridge across all disciplines.”

Thanks for that.

It is an example of the kinds of corrupt lobby contacts behind the scenes between senior civil servants and outside interests which Margaret Thatcher allowed for the first time in the history of the Civil Service in its C20 form.

So develop the contacts and any kinds of dirty deals can be done behind the scenes and no one will know.

So forty years on and forty years of development of corrupt contacts of a kind invisible to the public.

It needs to stop.

All such meetings need to be documented and recorded and held in public and only between elected government officials and the outside interests.

That will not of course stop corruption but it will help shine cleansing sunlight on what is going on daily.

Many major civilisations collapsed under the weight of corruption and we are going the same way and need to try to stop that happening.

Or else learn to speak Chinese as a citizen of Chingland.

2
0
huxleypiggles
huxleypiggles
8 months ago
Reply to  HicManemus

DESNZ?

CSaP?

0
0
iconoclast
iconoclast
8 months ago
Reply to  huxleypiggles

The Centre for Science and Policy at Cambridge University.

https://www.csap.cam.ac.uk/policy-fellowships/faqs/policy-fellow-faqs/

Last edited 8 months ago by iconoclast
1
0
iconoclast
iconoclast
8 months ago
Reply to  huxleypiggles

Department for Energy Security and Net Zero – GOV.UK
DESNZ is a government department that aims to secure energy supply, lower bills and achieve net zero emissions by 2030.

1
0
JeremyP99
JeremyP99
8 months ago
Reply to  HicManemus

I too have made an FoI request to this mob; asking for the scientific qualification of all the major players listed on their website, and their SPADs.

1
0
WillP
WillP
8 months ago

The the idea of questioning the moral integrity of anyone involved with climate change and net zero is appalling. They do it for entirely selfless reasons, and any appearance financial gain is entirely coincidental.

6
0
huxleypiggles
huxleypiggles
8 months ago
Reply to  WillP

Most definitely. 😀

1
0
varmint
varmint
8 months ago
Reply to  WillP

Pardon——Can you explain what you just said. because I think I am getting the wrong end of the stick

0
0
Hester
Hester
8 months ago

Excellent investigative journalism, keep digging, hopefully it will gain wider exposure and the hogs will be exposed. Thank you

5
0
varmint
varmint
8 months ago
Reply to  Hester

The hogs can only be exposed when this kind of thing appears on the 6 O’Clock News, but it NEVER DOES

0
0
RTSC
RTSC
8 months ago

“In the absence of any other explanation, the proverbial person on the Clapham omnibus would probably conclude that these awards amount to contracts for cronies.”
——-

Far too polite. They’d conclude that it is blatant corruption, because that’s what it is.

4
0
Hester
Hester
8 months ago

On a different tack, sorry. Did anyone see the exchange between Sunak and Starmer at question time yesterday? I haven’t watched the show for years but was interested in Nigel Farage’s question. What I observed was a tax payer funded, version of a Jermey Kyle show, baying, gurneying faces on both front rows, in itself a sorry and shaming spectacle for anyone watching, as this is supposed to be our bastion of democracy. Then the repeated question to Starmer regarding the Winter fuel payment roll back and the paper which would have been done to quantify the effect on the elderly. Starmer blatantly refused to answer the question, instead he waffled on about things the Conservatives had done and left him with a 22bil black hole, the man never in fact answered any question put to him, which makes me wonder two things. One, why doesn’t the Speaker do his job and demand that the Questions asked are answered, and two if not, what exactly is the point of Question time if the Primeminister and others do not actually answer questions but instead spout whatever they like, to avoid answering. Parliament is a joke, and its a joke being played on us, the entire display was arrogance and hubris at its best.

3
0
huxleypiggles
huxleypiggles
8 months ago
Reply to  Hester

What is the point of Parliament?

Tom ducked if I know.

2
0
Arborvitae23
Arborvitae23
8 months ago

Talking of green energy and energy security.
I came across this the other day.
https://xlinks.co/morocco-uk-power-project/

Last edited 8 months ago by Arborvitae23
0
0
JXB
JXB
8 months ago

Where power is concentrated in one place – that’s Government (‘democratic’ is just a word used as camouflage) – tyranny exists and bribery and corruption are inevitable – a feature, not a bug in the system.

Why anyone is ever surprised, or thinks we have democracy is one of life’s great mysteries.

Last edited 8 months ago by JXB
0
0
iconoclast
iconoclast
8 months ago

Policing minister has purse stolen while at annual policing conference

0
0
lyndar
lyndar
8 months ago

Corruption – and I bet the Freedom of Information request will be turned down like the the three others I’ve seen already in the last few weeks. Democracy? Don’t make me laugh.

0
0

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