Absurd and Costly
There is not the faintest chance that 7,000 wind turbines can be constructed in this time, given the construction capacity restrictions and tight timetable. But, even if the turbines
were built, this would not be the end of the matter. Britain would still require a considerable back-up of conventional electricity-generating capacity because the turbines would frequently produce no electricity at all, given the fluctuation in wind speeds. Paul Golby, Chief Executive of E.ON UK, has said that this back-up capacity would have to amount to 90% of the capacity of the wind turbines, if supplies were to be reliable. This would be an absurd, and costly, misallocation of resources, with the extra costs falling on households and businesses. But, costs apart, there is yet another problem. And that is whether the necessary back-up capacity is likely to be available.
The current Government has woefully neglected Britain’s energy infrastructure, and much of Britain’s current electricity-generating capacity is due for closure over the next 10 to 15 years. Most of Britain’s ageing nuclear power stations are due to be decommissioned, and half of Britain’s coal-fired power stations are due to be retired because of the EU’s Large Combustion Power Directive (concerned with controlling emissions of, for example, sulphur dioxide and nitrogen oxides). Under these circumstances, there is a very real risk that there will not be adequate conventional back-up capacity despite the Government’s welcome acceptance of the need for nuclear power (there will inevitably be delays in construction) and the operation of new gas-fired capacity (which, incidentally, makes Britain unduly dependent on imports, as our own supplies are dwindling fast).
The prospect of power cuts is, therefore, all too real. Brutally, the lights could go out, and business and the public services, now so dependent on computers, would suffer. The folly of putting so many eggs in the basket of wind power is the height of irresponsibility.
The EU’s Renewables Directive: Disproportionate Burden
The Government’s ‘dash for wind’ in order to develop a “low-carbon economy” is, of course, part of its climate-change policy of cutting carbon emissions in order to “combat global warming”. Any expansion of nuclear power would also curtail carbon emissions, and, indeed, if one believes that a low-carbon economy is a good idea (perhaps for security reasons as well as ‘saving the planet’), one might ask why not allocate far more resources to nuclear power and far fewer to renewables.
Alas, this would not be permitted under the EU’s 2008 Renewables Directive.(1) Under this Directive, the UK has agreed to meet 15% of its energy consumption from renewable sources by 2020. Whilst renewables include biomass, solar power, wind, wave/tide, and hydroelectricity, nuclear power is excluded. Insofar as the Renewables Directive is part of the EU’s policy of cutting carbon dioxide emissions by 20% by 2020 compared with 1990, this is perverse to say the least.
Whilst the UK has a 15% renewables target for 2020, just 1.5% of energy consumption was met by permissible renewables in 2006.(2) The UK has committed itself, therefore, to increase its renewables share ten-fold by 2020. With the possible exceptions of Malta and Luxembourg, the UK is faced with by far the greatest challenge in reaching its 2020 target. In addition, the unit costs in the UK are relatively high because Britain lacks access to cheap biomass resources in the electricity and heat sectors, and is placing greater reliance on high cost, expensive electricity technologies, such as wind (mainly) and wave/tidal. By contrast several EU countries are well-placed, including Austria, Finland, and Sweden, as are many of the central and eastern European countries.
It is, therefore, unsurprising that the UK is likely to carry a disproportionate burden of the costs of meeting the EU’s 2020 renewables target. According to a study by Pöyry Energy Consulting, the UK could carry around 20-25% of the total EU costs.(3) Pöyry has estimated that the annual cost in 2020 could be around £150 to £200 per UK household, and the lifetime costs up to 2020 would be £1,800, even as high as £2,800, per UK household. These are significant sums, and they are likely to be under-estimates.
Given my earlier comment that the Government’s plans for 7,000 wind turbines will not be achieved by 2020, there is no chance that we will meet the renewables target. (And, in any case, 7,000 turbines, even if built, are apparently inadequate for Britain to meet the 15% target.) The Government is living in fantasy-land – but it seems hell-bent on pursuing an energy policy which will be costly, will dangerously distort energy policy, and will leave the country vulnerable to black-outs.
The Economic Effects
Even if the lights stay on, it is clear that the Government’s current strategy will lead to higher and less competitive energy prices in Britain, other things being equal. For households, especially low income and pensioner households, this will bite into general living standards. Businesses, especially energy intensive industries, will continue to lose competitiveness and will migrate overseas to, say, India or China. The Energy Intensive Users Group (EIUG) estimates that various ‘green measures’ (the Renewables Obligation, the Climate Change Levy, and the costs of the EU’s Emissions Trading Scheme) already account for a quarter of total energy costs for their members. The situation will surely deteriorate. Britain’s chemicals, cement, and steel industries, to name but three, are likely to shrink, jobs will be lost, and the balance of payments will deteriorate.