There's a MASSIVE reason for the price cap (which he fails to mention at all). These seabed auction are taking place very early on the project lifetime. These projects are not going to start making money for maybe 8 years. If you hold an uncapped auction now, it favours the very large companies (basically bp and Shell) because they are bigger than everyone else and have the capability to pay out half a billion quid now and not have to worry about getting any return on it for 10 years. So they can pay massive fees now to win everything, push everyone else out of the market, set themselves up in monopoly, and then when it comes to selling the power, they can hike up the power prices and push it all onto the consumers - because after all, they've got the half a billion quid they forked out for the lease to make back.
Meanwhile, all your other companies who have been developing offshore wind have been killed off because Big Oil has kicked them out.
In other words, bp and Shell can take more pain than anyone else, kill off their competition, then hike up the prices and screw over the consumers wallet.
Big Oil companies are now pissed off that the Scottish government capped their ability to screw everyone else over, by saying "we will only let you pay this much for the seabed, because we think anything higher is unsustainable and bad for the industry, and ultimately for consumers" And we get articles like this...
So sorry, but NO, this is NOT a scandal. Well done Scottish gov.
What a shamozzle our politicians have made of economic policy. It's what we get when their advisors are chosen from a narrow band of neo liberal "economists" such as Benny Higgins and Andrew Wilson . The latter has now given up his post of heading up Charlotte Street Partners so standby for him taking an even more active role in helping helm HMS Scottish Government .
This article is nonsense.
There's a MASSIVE reason for the price cap (which he fails to mention at all). These seabed auction are taking place very early on the project lifetime. These projects are not going to start making money for maybe 8 years. If you hold an uncapped auction now, it favours the very large companies (basically bp and Shell) because they are bigger than everyone else and have the capability to pay out half a billion quid now and not have to worry about getting any return on it for 10 years. So they can pay massive fees now to win everything, push everyone else out of the market, set themselves up in monopoly, and then when it comes to selling the power, they can hike up the power prices and push it all onto the consumers - because after all, they've got the half a billion quid they forked out for the lease to make back.
Meanwhile, all your other companies who have been developing offshore wind have been killed off because Big Oil has kicked them out.
In other words, bp and Shell can take more pain than anyone else, kill off their competition, then hike up the prices and screw over the consumers wallet.
Big Oil companies are now pissed off that the Scottish government capped their ability to screw everyone else over, by saying "we will only let you pay this much for the seabed, because we think anything higher is unsustainable and bad for the industry, and ultimately for consumers" And we get articles like this...
So sorry, but NO, this is NOT a scandal. Well done Scottish gov.
What a shamozzle our politicians have made of economic policy. It's what we get when their advisors are chosen from a narrow band of neo liberal "economists" such as Benny Higgins and Andrew Wilson . The latter has now given up his post of heading up Charlotte Street Partners so standby for him taking an even more active role in helping helm HMS Scottish Government .