The Economics of Renewable Energy - Economic Affairs Committee Contents


Memorandum by J H R Hampson

1.  INTRODUCTION

  There are compelling reasons for saving energy in buildings, transport and industry. When we achieve these energy savings there are always huge economic gains and reduced carbon emissions. Conversely when we provide incentives for renewable energy, whilst there are some minimal carbon savings, the cost of electricity is increased forcing great financial burdens on society and industry.

  The dreams of harnessing our natural resources cannot be fulfilled without great cost penalty to the electricity consumer. Nor can substantial reductions in man-made carbon emissions actually be achieved with Renewables. As a Consulting Engineer it was against the grain for me to oppose technological development on alternate energy but I always felt that every aspect of this romantic and political initiative must be tempered with realism. After retirement I was asked to help save a beautiful landscape from wind turbines. I expanded by research and exposed the Great Renewables Myth of renewable when I quantified the lack of carbon saving benefits.

  There is a total misconception with regard to Renewable Energy in the UK. I wish to correct this. To do this I assume that there could be 15% Renewables and show what that really means in terms of carbon reduction. Since alternate energy sources are not always available we have to apply load factors to their installed capacity. I will demonstrate the impact of Renewables on the World's man-made emissions, the impact on UK's man-made emissions and the impact on the world's total carbon emissions. I have used DTI published load factors. My estimates need to be adjusted downwards for carbon emitting back-up when the alternate energy source is not available, for example when the wind speeds are either too low or too high. Counter arguments state that there is already sufficient back-up available but at one point in time all additional non reliable forms of renewable energy will require additional back-up by carbon emitting plant. Renewables have been unfairly supported for far too long and have diverted attention away from the areas where real carbon savings could be achieved. Not only are the savings exaggerated but Renewables already impose cost penalties on electricity consumers. Alternatives, such as reducing energy consumption in transport and buildings and increasing the efficiency of our power stations, save consumer cost as well as reducing carbon. Renewables on the other hand add considerable costs and saves little carbon. This fact needs to be published and understood by the whole population of the United Kingdom.

  I have prepared a similar paper with respect to Scotland where they are out of touch with reality in terms of Renewables and consumer costs. This is especially the case with their recent proposed rejection of DTI/BERR information on wave and tidal energy. BERR claim that these are not worthy of special support at this time and I endorse that view. In Scotland the situation is different since there is hydro capacity and they do not support nuclear. Sadly they have been unable to develop support for the preservation of the countryside from the expansion of wind farms as distinct from what has been achieved in the Lake District. The key issue is that Scotland is a net supporter of electricity and their 50% proposed Renewables target means expensive transmission either sub-sea, under-ground or by the use of ugly high pylons. The visual intrusion will be on both sides of the border unless more expensive options of undergrounding or sub-sea are accounted for.

  I have not focussed on the actual costs since I know that others are better equipped to provide this information. I have concentrated on the lack of benefits from Renewables. Suffice to state that we are dealing with between 3.5 and 12 times the cost of conventional power which the consumer pays for, even although this whole exercise does little for the reduction of the world's carbon reductions.

2.  QUANTIFICATION OF RENEWABLES CONTRIBUTION

2.1  Effect of 15% Renewables in UK on the World's man-made emissions:

FIGURES FOR UK BASED ON MAN-MADE CO2 EMISSIONS
UK Carbon Contribution 2.2% of World Contribution
ElectricityGeneration35% of Man-Made
  
Wind Power11% of Installed Capacity of Generation
Load Factor of Wind35%
Wind Energy Corrected for Load Factor3.85%
Wind Carbon Saving0.02965% Man-made Carbon Emissions
  
Wave Power1% of Installed Capacity of Generation
Load Factor of Wave25%
Wave Energy Corrected for Load Factor0.25%
Wave Carbon Saving0.00193% Man-made Carbon Emissions
  
Tidal Power1% of Installed Capacity of Generation
Load Factor of Tidal27%
Tidal Corrected for Load Factor0.27%
Tidal Carbon Saving0.00208% Man-made Carbon Emissions
  
Hydro Power2% of Installed Capacity of Generation
Load Factor of Hydro35%
Hydro Corrected for Load Factor0.7%
Hydro Carbon Saving0.00539% Total Carbon Emissions
  
Total Carbon Saving for 15% Renewables 0.039% Total Carbon Emissions


  We can conclude from this that 15% UK Renewables would represent a reduction in the world's man-made emissions by 1 part in 2,561.

2.2  UK Renewables influence on UK's man-made emissions:


Electricity Generation man-made emissions
35% of UK's man-made emissions
15% Renewables contribution to reducing carbon emissions from Electricity Generation

Wind Energy Corrected for Load Factor
3.85%
Wave Energy Corrected for Load Factor
0.25%
Tidal Corrected for Load Factor
0.27%
Hydro Corrected for Load Factor
0.7%
Total Reduction of Electricity Generation emissions
5.07% of Electricity Generation
15% Renewables contribution to UK's man-made
1.7745% of UK's Carbon Emissions


  From the foregoing we can conclude that 15% Renewables would reduce UK's man-made carbon emissions by only 1.8% or 1 part in 56.

2.3  Influence of 15% UK Renewables on the World's total carbon emissions:

FIGURES FOR UK BASED ON TOTAL CO2 EMISSIONS
Man-made CO23.2% of Total CO2
UK Carbon Contribution2.2% of World Contribution
Electricity Generation35% of Man-Made
  
Wind Power11% of Installed Capacity of Generation
Load Factor of Wind27%
Wind Energy Corrected for Load Factor2.97%
Wind Carbon Saving0.00073% Total Carbon Emissions
  
Wave Power1% of Installed Capacity of Generation
Load Factor of Wave25%
Wave Energy Corrected for Load Factor0.25%
Wave Carbon Saving0.00006% Total Carbon Emissions
  
Tidal Power1% of Installed Capacity of Generation
Load Factor of Tidal27%
Tidal Corrected for Load Factor0.27%
Tidal Carbon Saving0.00007% Total Carbon Emissions
  
Hydro Power2% of Installed Capacity of Generation
Load Factor of Hydro35%
Hydro Corrected for Load Factor0.7%
Hydro Carbon Saving0.00017% Total Carbon Emissions
  
Total Carbon Saving for 15% Renewables 0.00103% Total Carbon Emissions


  We conclude from the foregoing that 15% UK Renewables would represent a mere reduction of 0.001% or 1 part in 96,860 of the world's total emissions.

  From this it is easy to see that UK Renewables not only make an insignificant contribution to World emissions but even at a level of 15% they actually contribute only a 1.8% saving in UK's man-made CO2 emissions.

  It is my understanding that Renewables is a devolved responsibility so that regardless Scotland is likely to opt for 50% renewable. This would have the effect of increasing the foregoing figures by just under 4% since Scotland's electricity share is around 11% of the UK generation.

3.  COSTS

  I now turn to the cost burdens of Renewables. Now that the days of nationalisation are over, all costs are borne by the consumers. Electricity prices have risen by a third this year and that probably means that 1 million UK households will be consigned to fuel poverty. Industry and commerce are responsibly addressing those carbon reductions which matter. At this time they too are also carrying the burden of Renewables in their electricity costs. These costs will continue to rise unless the policy is changed. It is outrageous that ineffective and expensive Renewables should be financed at the same time as such other initiatives by responsible consumers. Both the UK and Scottish governments are being fanciful about the leffect of Renewables and ignore their high cost to the consumer. These high costs are concealed because they do not need to be accounted for as government expenditure.

  Affordability is a strong feature in the UK Energy Policy and with the benefit of this Inquiry we should at last see that in the UK the CO2 change through Renewables can only be a token gesture and we indulge in this at great inconvenience and cost with negligible influence on world emissions. Carbon is only one of the emissions which could influence climate change and it is naive to continue to focus solely on carbon and electricity generation.

  All forms of renewable energy cost considerably more than electricity generated by conventional means. The penalties to consumers have to be properly assessed.

  The people of Scotland have made it clear through their extensive objections to the Beauly-Denny tall pylon infrastructure that they do not want to see Scotland's landscape decimated in this manner.

  The Public Inquiry process for the Beauly-Denny line has not yet been concluded. The people's reactions to pylons and turbines are similar in England. The transmission costs through the borders to England have not yet been demonstrated. These energy forms are already prohibitively expensive even without transmission costs being taken into account. They will require new infrastructure and whether this involves high pylons or is put underground or sub-sea it has to be fully accounted for.

  BERR recognises that the wave and tidal energy forms are not ready for support at this time. The issue of non-viability is not something which can be tackled overnight. These energy forms have been on the academics' and engineers' wish lists for decades. The sites where energy from these sources are consistently strong are remote from consumers. The situation in Scotland is different from the rest of the UK. They intend to promote wave and tidal by changing the banding.

  Whilst in overall terms inflation seems to be under control, food and energy are inflating beyond all expectations but not beyond reason. We are already paying the penalty for delaying decisions on UK energy policy, as well as the cost penalties of the initiatives of both Westminster and Holyrood to encourage non-viable wind energy which is several times the cost of conventional energy.

4.  THE LIMITS OF RENEWABLES

  As demonstrated above the carbon argument for Renewables is weak. Furthermore whenever the carbon emitting reserve has to be increased to back-up additional Renewables the carbon argument completely disappears and incentives must be stopped. Without these incentives it will no longer be a great money spinner and the development of wind energy will then grind to an immediate halt.

  Affordable electricity costs are essential for our economy and well being. Non viable forms of electricity generation should not be encouraged.

  The UK grid and the transmission infrastructure are designed for power stations feeding out to remote and diverse users. Where renewable energy sources are plentiful they are far removed from the points of demand and new infrastructure is needed.

  Wind energy has to be limited to ensure grid stability and also in order to avoid grid failures similar to those recently experienced in Europe and USA.

5.  THE CAUSES OF CLIMATE CHANGE ARE STILL UNDER SCRUTINY

  We must recognise that the assumption is now being challenged that man-made carbon emissions are a key influencing factor in Climate Change. The scientific and engineering communities remain divided as to whether or not man-made emissions are key influencers of global warming. To date no study has proved this to be the case. The major proponent of this premise is the IPPC but even they acknowledge that major climate change preceded man-made emissions. Their recent summary document states that, "Paleoclimate information supports the interpretation that the warmth of the last half century is unusual in at least the previous 1,300 years. The last time the Polar Regions were significantly warmer than present for an extended period (about 125,000 years ago), reductions in polar ice volume led to 4 to 6 metres of sea level rise ..."

  There were no man-made emissions in the former situation and there is plenty of evidence to show the cycles of warming and cooling before then and between then and now. This is strong evidence from the very body which the government relies on to back up their case on carbon emissions. It is beyond question that Global warming and cooling are natural phenomena. Suffice to state that there is an opposing view on whether man-made emissions have a meaningful influence. We will have wasted a lot of consumer monies on addressing this subject before it is ultimately proved that the influence is not significant, Those who promote Renewables on the basis of major carbon impact are presenting a misleading cure since 65% of the UK's man-made emissions CO2 do not emanate from electricity generation and Renewables only contribute to electricity generation. However even if the government concentrated on the higher 65% in the form of transport, heating and industry because of its size the UK is unable to meaningfully influence world carbon levels and climate change This subject needs to be fully understood by all politicians not just a few.

6.  SUMMARY

    —  The ability of the UK to influence world emissions is near zero, even if we hypothetically considered the production of all our electricity by non carbon emitting means. The larger portion of UK's man-made emissions is from transportation, heating and industry.

    —  Consumers cannot afford the additional costs of Renewables which in any case only relate to a small percentage of the 35% of man-made carbon emissions which in turn relates only to electricity generation.

    —  Until the issues of affordability can be properly addressed there is no justification for pursuing high cost non-viable forms of renewable energy.

    —  Wind energy is decimating our beautiful countryside.

    —  Wind energy will always be considerably more expensive than conventional energy and the carbon argument is not an acceptable card to play where the effect on world emissions is negligible.

    —  Vested commercial interests and efficient lobbying of Westminster coupled with deals done in Brussels by many who are ill informed are the root cause of this burden on British society. Ministers have not considered the severe cost implications on electricity consumers of the necessary additional transmission together with its visual intrusion on our landscapes or further increased costs in its concealment have not been properly investigated.

    —  Biomass releases carbon on combustion and the incentives offered will lead to farmers moving away from food production.

  I hope that this inquiry will lead to an independent quantification of the limited benefits of Renewables and the burdens placed on electricity consumers by these,together with the decimation of our countryside and shorelines by wind turbines.

3 June 2008



 
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