Wednesday, 28 July 2010

More greenwash - this is no way to run a country

I have signed up to the TheyWorkForYou (an excellent initiative we should all support) feed for my new MP, Bob Walter (North Dorset), and was somewhat taken aback by an answer he received during the recent energy debate:

Robert Walter (North Dorset, Conservative)

I welcome the Secretary of State's statement on the low-carbon economy, particularly his commitment to offshore wind. In the beautiful Blackmore vale in my constituency we face yet another application to erect wind turbines. The only business case is the subsidy paid for those turbines; the wind blows barely 20% of the time. Will the Secretary of State confirm that it will still rest with the local planning authority to judge such applications on planning considerations?

OK, leaving aside the NIMBYism he is basically correct, or so I thought, about subsidies. But you can't expect a greenie such as Huhne to accept that comment lying down. Here's the response [my emphasis]:

Christopher Huhne (Secretary of State, Energy and Climate Change; Eastleigh, Liberal Democrat)

I can confirm to my hon. Friend that below 50 MW the decision is for the local planning authority. However, I urge him not to fall into the easy trap of assuming that the only reason for building onshore wind turbines is for subsidy. The recent study on costs that the Department has had from Mott MacDonald shows that there has been a dramatic reduction in the cost of onshore wind. The result is that it is competitive in a free market with other sources of energy.

What? Onshore wind stands up in a free market? Really? I had to find out if this was true even though I am in the middle of packing and can't really spare the time for the research.

So here is the paper: UK Electricity Generation Costs Update.

I've only had time to read the Executive Summary, but that was all that was needed to realise that it is all such a greenwash it should win a Humphrey Appleby prize for obfuscation and distortion.

The second paragraph ends with the rider:

All this means that any assessment of levelised costs is subject to large bands of uncertainty, which implies that the relative ranking of different technologies can also shift markedly.

This is consultant speak for "we stuck our fingers in the air and this is as far as we can go without sacrificing our own credibility to met your requirements".

The Executive Summary finishes:

There are a number of other important caveats that must be attached to these figures.
Not surprising really. The report looks like it was written to order, as are all consultants reports (I spent 12 years as a consultant so know the drill).

The cost estimates are generally for base-load energy on common assumptions of load factor (though wind is constrained by energy availability), and as such we are ignoring the issue of dispatch risk which depends on the plant’s expected merit position over its life.

If you can get them where you want them at the cost we have pulled out of the air you'll be lucky.

No consideration is provided here for differences between technologies for the requirements for reserve and balancing services, or in terms of transmission network reinforcement impacts.

We have not commented on (or quantified) the vulnerability of particular technologies to fuel supply and other interruptions, which varies considerably between technologies.
Don't expect any electricty on the coldest days of the year if you are mad enough to believe wind power is the solution.

Externalities relating to environmental and social impacts of construction, operation and fuel supply chains are excluded, except to the extent that they are internalised through the carbon price.

It only works if you set carbon tax high enough and ram them through local planning. We assume there will be no planning gain to pay for the disruption. My guess, following a cursory look at the figures, is that they have been told to use a carbon tax level higher than Stern calculated.

And finally, not forgetting that Huhne said that wind power is competitive in a free market:

The relative ranking of LGCs does not necessarily closely relate to the ability to finance technologies in the real world. Developers in practice factor in risk premiums, the appetite of lenders and the broader impacts on their own corporate financial positions. Once these factors are considered CCGTs and onshore wind projects are often easier to finance than most other technologies.

Which I read as you'll have to provide finance risk guarantees if you want some mug to build wind power in the future.

Wouldn't it be nice, just for one, to get some honesty in these reports and debates?

If anyone has the time to go through the detail and correct me if I'm wrong I'll be happy to retract my comments.

2 comments:

Roger Thornhill said...

Any further in ignoring obvious costs and risk and they will say wind is always cheaper because you do not have to drill for it or dig it up!


I can see a use for wind in synthesizing hydrocarbons to be used as transportation and heating purposes - e.g. the Orkneys could and IMHO should use the planned "renewables" there for that purpose, keeping the energy local and removing the need for the local economy to import fuel. Over a year, the variations will not matter. Converting to fuel is a good way to store energy - one can synthesize methane, ethanol, propane, butane, diesel these days. Use the technology where it is best placed. The market can decide and while there are subsidies and Government Fiat pushing through "schemes", the market cannot perform its function.

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