19 Dec 2011

Attacks on Wind Continue

NuClear News December 2011 is now available for downloading at

I do recommend signing up for it - one of the articles looks at the attacks on wind. Click on read more to see it (download the article to get the references) - it really is a fascinating insight into the war against wind - interestingly Caroline Lucas discovered earlier this month that energy companies have lent free of charge more than 50 staff to government departments - and guess what? None of the staff on secondment work for renewable energy companies or non-governmental organisations - see Guardian article here.

The renewable energy industry has been fighting back after reports that a forthcoming report from KPMG will suggests the UK could save £34bn (or £550 per year per household) by ditching plans for a massive expansion in wind power capacity. The preliminary findings of the KPMG report claimed Britain could meet its 2020 carbon reduction targets more cost effectively by building nuclear and gas-fired power stations instead of wind farms.

Renewable UK said KPMG failed to consider the whole cost of new conventional power plants, citing  research by energy regulator Ofgem showing electricity bills would increase by 52% if Britain failed to invest in renewable energy. "The KPMG report focuses solely on the upfront costs of building new power plants, ignoring other lifecycle costs, such as fuel and decommissioning. In comparing the costs of the various technologies, the report appears to deliberately fail to take into account the low operating costs of wind, which counterbalance the high capital and construction cost." (1)

Renewable UK says the recent rises in electricity bills have been caused by the global increase in the price of gas, not by renewables. "DECC's own Annual Report on Fuel Poverty clearly states that between 2004 and 2009, domestic electricity prices increased by more than 75 per cent, while gas prices increased by over 122 per cent over the same period." The cost of generating electricity from wind, according to Ofgem, is less than £10 per year per household, or less than one per cent of the average household fuel bill. So relying heavily on gas will not drive fuel bills down in the future.

Central to KPMG's claims is the assumption that a large proportion of the new generation of nuclear
plants can be deployed quickly during the coming decade despite industry expectations of drawn out technical and planning approval processes. Few industry analysts believe that more than two new nuclear power stations will be operating before the end of the decade. However, a failure to deliver the level of nuclear power assumed in the KPMG report would leave us dangerously over-reliant on imported fossil fuels, during a decade in which a quarter of the UK's existing power stations will have to be permanently decommissioned. (2)

KPMG told the BBC‟s Panorama that a speedy move from coal to cleaner gas-fired energy generation would still allow the UK to meet EU emissions commitments and save consumers money at a time when home heating bills are at record highs. (3) Pete Atherton of Citigroup describes offshore wind as “eye-wateringly expensive”. Costs are supposed to fall over the years, but in fact, he says, they keep going up. (The Government has set up a Task Force to reduce the cost of offshore wind (4))

When Panorama or The Daily Mail etc make dubious remarks about the cost of energy or green taxes a good place to look is the Carbon Brief blog. (5) Many of the sources cited by Panorama were unavailable. Given Ofgem's suggestion that gas is largely to blame for the current high state of fuel bills, the blog looks in particular at claims made by energy academic Dieter Helm that gas prices may fall in the future, making renewables relatively more expensive. The unstated assumption - which Helm has frequently promoted - is that indigenous production of shale gas will be the cause of that. Fair enough - it's a point of view. Both a UK Parliamentary Committee which looked into the question and Deutsche Bank have concluded that shale gas is unlikely to have a dramatic impact on gas prices in this country, but we did not hear from them in the programme.

Damian Carrington in The Guardian asked: “So how much are customers paying for this supposed lunacy?” The answer, nowhere to be found in the whole 30-minute programme is about £20 a year - for all renewables subsidies. Include all government levies - mainly for schemes increasing energy efficiency and alleviating fuel poverty - and the cost rises to £80 a year. The increase in the average gas bill alone since last year due to wholesale price rises, using Ofgem numbers, was about £170. (6) Tom Heap of Panorama responded to Carrington‟s piece and Carrington responded again in the Comments section. (7) The good thing about this debate is that, as many of those who appeared on Panorama said, energy prices are going up whatever mix of technology is deployed, so unless politicians set out the case for their actions in an honest and open way, public anger is likely to foil the urgent need to give the UK an energy system for the 21st century.

A stream of front-page newspaper reports, some now retracted after Press Complaints Commission complaints, have exaggerated current green and social levies on energy bills, claiming they were adding £200 or even £300 a year. Other stories have claimed future levies could add £1,000 a year: government figures predict a £135 increase by 2020 but with bills overall just £13 higher than if no policies to reduce carbon emissions had been implemented, owing to rising fossil fuel costs. (8) Responding to these reports Secretary of State for Energy and Climate Change, Chris Huhne, said that shale gas is unlikely to become a game changing technology anytime soon, and criticised those touting it as a more "realistic" technology than wind turbines. "A golden age of cheap energy looks increasingly unlikely, and wind turbines are certainly here to stay," he said. "Shale gas has not yet lit a single room in the UK, nor roasted a single Sunday lunch. Yet those who clamour loudest for 'realistic' energy policies would have us hitch our wagon to shale alone." (9)

The KPMG report, which was supposed to be published on 8th November, now seems to have mysteriously disappeared. (10)

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