The Economics of Renewable Energy - Economic Affairs Committee Contents


Memorandum by the Campaign to Protect Rural England, Durham

  1.  In setting its 2010 target, the Government stated that the cost of renewable energy should be acceptable to consumers.

  2.  2001, the Department estimated that by 2010 the Renewables Obligation would have increased electricity prices by an average of 5.7% across all electricity consumers.

  This price increase will cost the typical domestic consumer about £10 to £12 per annum (at 2002 prices).

  Wind generated electricity is subsidised by the Renewables Obligation (RO) plus its market increment plus the Climate Change Levy exemption (CCLe). I read at the time that this amounts to nearly twice the value of conventional generation and more than 25 times that on coal-fired generation per MWh. Gas and nuclear generation not subsidised at all.

  3.  2003, the DTI's Energy White Paper said:

    "We have ... introduced a Renewables Obligation for England and Wales in April 2002... The cost is met through higher prices to consumers... By 2010, it is estimated that this support and Climate Change Levy exemption will be worth around £1 billion a year to the UK renewables industry".

  4.  2005, The House of Commons Committee of Public Accounts (CPA) reported that:

    "The Renewables Obligation is currently at least four times more expensive than the other means of reducing carbon dioxide currently used in the United Kingdom..." and as noted in the Introduction d (i): "By 2010, the cost of the Renewables Obligation, which does not appear on electricity bills and is not explained to consumers, is expected to reach £1 billion per annum".

  5.  Additionally, the CPA drew attention to the lack of democracy in the RO arrangement:

    "the Department [DTI] has not consulted consumers, or their representative groups, about their willingness to contribute to the cost of renewable energy".

  Resurrecting HOC Committee of Public Accounts report is essential.

  6.  2007 UCTE study Integration of Wind Power into European Electricity Grids

http://www.ucte.org/_library/otherreports/2007-01-15-Final-report-EWIS-phase-I-approved.pdf Abstract "The variable contributions from wind power must be balanced almost completely with other back-up generation capacity located elsewhere. This adds to the requirements for grid reinforcements".

  7.  2008 June, E.ON has launched its new energy manifesto, warning that if the UK is to meet its target of generating 20% of its energy from renewable sources by 2020, it will still need to develop a new generation of fossil fuel-fired power plants. The company said the UK would require 50GW of renewable energy to meet the EU target, but that would require up to 45GW of backup capacity from coal and gas-fired plants that could be used to ensure energy supply when renewable energy supplies are not available.

  8.  Benefits of wind power in line with the Energy White Paper and emissions saved is a material planning consideration so the load or capacity factor needs to be about 30% as the predicted if emissions saved and electricity generated are to be as claimed.

  9.  HL Paper126 at 3.1

  Doubt was cast on this UK load factor of 30% by Hugh Sharman an independent energy consultant working in Denmark. He noted Danish turbines have operated at a load factor of only 21%. If this was to be the case in the UK not only would half as many turbines again be needed to deliver the same target output but also potential investors would face dramatic reductions in the income derived from wind farms.

  10.  Advertising Standards Agency ASA found that BWEA member company npower had breached its rules by using a figure of 860 g/kWh for CO2 displacement* for its proposed new Batsworthy Cross wind farm.

    "The 860 figure is still in use on the BWEA website yet in October 2007 they were said to be looking with ASA at a revised figure".

  11.  BERR's calculation in the Fullabrook Down press release is 0.36 not 0.86 and Load Factors appear to be averaging less than 30% Thus it appears we need about 3 times the number of turbines BWEA has said we need for a given saving. Where will they go?

  12.  2007 May, The Energy White Paper, Meeting the Challenge, sets out the Government's energy strategy to address the long term energy challenges we face and deliver our four energy policy goals:

    —  to put ourselves on a path to cutting CO2 emissions by some 60% by about 2050, with real progress by 2020;

    —  to maintain the reliability of energy supplies;

    —  to promote competitive markets in the UK and beyond; and

    —  to ensure that every home is adequately and affordably heated.

  Policy goal 4 is not being met. Policy 2 essential to our survival is at risk. Renewables are not just wind.

  13.  The NFFO system drove developers to the windiest sites where the electricity would be cheapest but unfortunately coincided with our most valued landscapes. The Renewable Obligation and its associated ROCs is an excessive "consumer-led" subsidy which has never been explained to those who pay for it.

  14.  The cheapest electricity is that we don't use and the dearest that we don't have, which is why we need a firm supply. The problem it seems is the effect wind is having on the efficient operation of the remainder of the generating plant and the grid. However that is an issue for the technicians.

  15.  Our main concern has been the weakening of the planning system with the heads they win, tails we lose scenario and the fashionable idea that there are no disbenefits from wind energy Planning has become draconian The UK protocol for wind and the BERR guidance for onshore wind seemed to just "appear" with no prior warning The idea of the IPC seems to make a nonsense of democracy as the people who will be most affected are seemingly being ignored.

  16.  In the North East Wind Turbines are not doing what they promised yet a letter from the Energy Minister stated there were no problems in the North East.

  The following figures show the reality:

LOAD FACTORS AS % (COMPILED BY E MANN FROM FIGURES ON OFGEM WEBSITE)




Name of wind power station
2003
2004
2005
2006
2007

Blyth Harbour Wall
12
11.6
13.2
10.5
9.57
Great Eppleton
11.2
15
zero
zero
zero
Kirkheaton
25.3
26.8
23.2
27.6
25.74
Tow Law
26.2
31.7
30.8
28.6
21.64
High Hedley Hope
27.4
32.2
33.8
28.6
31.89
GlaxoSmithKline
—
—
8.9
8.2
10.07
Holmside
—
—
19.1
14.2
16.7
Holmside nffo
—
—
19.8
16.2
22.03
Hare Hill
—
—
14.6
16.2
21.94
Hare Hill nffo
—
—
18.3
21.1
18.29
*High Volts
—
15.7
18.4
15.5
21.38
*High Volts nffo
—
30.1
20.1
6.6
21.74
Blyth offshore WTG 1
16.2
26.5
8.8
2.1
zero
Blyth offshore WTG 2 (LF zero 2002)
zero
zero
zero
zero
zero

Elizabeth Mann

12 June 2008





 
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