By Paul Homewood
London, 21 January —
Net Zero Watch has ridiculed claims by the “Tony Blair Institute for Global Change” that the recent sharp rise in energy prices could have been avoided if the UK had only erected more onshore wind turbines over the last decade.
Given that Tony Blair introduced lavish subsidies for land owners and wind investors 20 years ago, it is unsurprising that his institute is trying to downplay their contribution to rising energy bills. However, its claim that more onshore wind turbines would have avoided rising energy bills is simply untrue.
Audited accounts show that the actual breakeven cost for new onshore wind in the 2010s was about £95 per MWh in current prices, not some fictional figure of £50 per MWh as claimed, and this did not change significantly between 2008 and 2018.
Building more of this expensive and unreliable energy source would have made things today much worse not better. Indeed, it would have been better if the UK had limited the growth in wind power and concentrated on the construction of the latest high efficiency Combined Cycle Gas Turbines and nuclear power. Electricity today would not only be cheaper, it would also be cleaner.
The “Tony Blair Institute for Global Change” has claimed that the falling cost of onshore wind means that the UK has lost out by not building more of this technology, first introduced in bulk by the Blair government after 2002. Similar statements have been made by Carbon Brief.
Neither claim stands up to scrutiny.
Onshore wind farms cost consumers in the UK just under £1.5 billion in subsidy in 2020, or about £50 per household in total, one third hitting consumers through electricity bills and the rest finding its way to them through the cost of goods and services as shops and businesses pass on their own share of the subsidy. Because of this subsidy, onshore wind electricity was supplied at an average cost of about £90/MWh, roughly double the cost of conventional energy.
Analysis of the audited accounts of onshore wind farms between 2008 and 2019 conducted by Professor Hughes of the University of Edinburgh, showed no significant reduction in capital or operational costs over this time. Windfarms built in 2008 broke even at about £92/MWh, and those built in 2018/19 at about £91/MWh.
Both the “Tony Blair Institute” and “Carbon Brief” rely on an estimated break-even cost for new wind farms over the last decade of about £50/MWh. This is wishful thinking for which there is no empirical evidence in the audited accounts.
Furthermore, as is well-known, but not apparently to the “Tony Blair Institute” or Carbon Brief, onshore wind was restricted in England by the willingness of communities to accept it and not at all in Scotland, which has 60% of all the onshore wind in the UK. Mr. Cameron’s “ban” was half-hearted and had no real effect. Insofar as onshore wind development was limited, it was discouraged by reductions in subsidy driven through by the Treasury.
The only realistic option for developing more renewable capacity at the time would have been to increase the amount of offshore wind. This would have involved a commitment to pay between £140 and £180 per MWh – the current prices for offshore projects developed in the 2010s. Those prices are 3.5 to 4.5 times the average market price in real terms for 2015-19 and would have imposed a huge burden on electricity customers, not just temporarily but for another 12-15 years.
It should also be remembered that the wind does not blow on demand. The current gas crisis has been exacerbated by low wind conditions that would have becalmed any additional onshore capacity that Mr. Cameron might have built.
Advocates of more reliance on wind generation should tell us how we are to ensure that the electricity system continues to function in such conditions without relying on gas – and what the cost will be. Gas generation is the cheapest form of backup to intermittent wind generation.
By opposing the extraction of Britain’s massive shale gas reserves, Tony Blair’s Institute together with other green NGOs, MPs and ministers have directly contributed to the UK’s gas supply and energy cost crisis.
What is more, they also sabotaged any prospect of building new – and much more efficient – gas plants which would have met the current needs at lower cost and with lower carbon emissions.
The authors of those policies should reflect on their part in making the current situation worse than it might have been.
Professor Hughes said:
The ‘Tony Blair Institute’ and ‘Carbon Brief’ authors appear to live in an alternative universe of speculative numbers. We have plenty of actual evidence about the cost of onshore wind in exactly the period under discussion. It was (and still is) extremely expensive. To have built more of it would have made the current situation even more painful for consumers.”
For the record, the onshore wind farms covered by CfDs and constructed around 2018/19 receive index linked, guaranteed prices ranging between £91.39 and £98.23/MWh, not the fictional £50/MWh dreamt by Blair.
These wind farms are the most recent to be covered by subsidy schemes, which have been subsequently removed for onshore wind. Onshore wind farms commissioned prior to the introduction of CfDs nearly all receive subsidies of £50/MWh via ROCs, in addition to the income from electricity sales.
Because of the end of subsidies to new onshore wind farms, building of new capacity has virtually dried up completely. In the last two years, just 374MW has been commissioned, increasing capacity by a mere 3%.
via NOT A LOT OF PEOPLE KNOW THAT
JANUARY 21, 2022