Bishop Hill Will Philip Hammond apologise?
Mar 2, 2011 Energy Much interest in the comments to the Johnny Ball thread, with reader "Mac" noting the claim of Transport Secretary Philip Hammond that offonshore wind generation does not require subsidy. This is, ahem, not exactly true, as the following excerpts from Hansard makes clear:
Onshore Wind Farms
7. Andrew Bridgen (North West Leicestershire) (Con): Whether historical wind measurements are taken into account in determining 'subsidy allocation for onshore wind farms'. [15500]
The Minister of State, Department of Energy and Climate Change (Charles Hendry): Onshore wind farms can claim one renewables obligation certificate (ROC) for each megawatt-hour of electricity actually generated, which focuses investment in those areas where the wind resource is strongest. It is therefore in the developers' direct interest to study very carefully the historical wind measurements.
Andrew Bridgen: As my hon. Friend is no doubt aware, Leicestershire is one of the most inland and least windy counties in England. Will he please assure me that 'subsidies for wind farms' will only be allocated in areas that can demonstrate that the amount of wind is sustainable and economically viable?
Charles Hendry: I can absolutely assure my hon. Friend that the way the ROC system works ensures that the 'greatest incentive' is there to develop wind projects where the wind resource is strongest. We are absolutely committed, too, to the principle of localism for those below 50 MW and for local communities to be directly involved in these decisions and to receive a more direct benefit than was the case under the previous Government.
It appears then, that Mr Hammond was 100%, ahem, mistaken. Will he apologise? Or even issue a correction? We're not holding our breath here.
Reader Comments (69)
@ Browned off....
I accept that wind has been hugely oversold - but you are taking the other partisan extreme, with similarly slender justification. Just because carbon isn't the problem on the scale we have been told, doesn't mean that wind power is the work of satan.
Firstly, the calculations are usually about 40% for either FIT or ROC (you don't get both) plus 60% from energy sales to the market (although it is market based, and if renewables generation nationally is below the required legal minimum then the price of ROCs rises due to scarcity), so your 80%+ figure looks suspect to say the least.
Secondly, the price of energy from oil/gas/coal (and to a lesser extent nuclear) is rising dramatically due to insecurity of supply (both actual shortages and political conflict) of base fuels. This means that the relatively high cost now, becomes more reasonable (and secure) in the future because of the rising cost of alternatives (although obviously it can only ever be a limited proportion of total generation).
Sorry to seem so centrist in such a polarised debate, but I would argue that the evidence supports an energy mix including wind (and nuclear). Simply taking the opposing extreme from the Climate Change camp doesn't win many converts.
Mar 2, 2011 at 7:49 PM | Fred Bloggs
Have a look at this:
http://www.cawt.co.uk/files/How_turbines_make_money.pdf
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As regards spinning reserve, have a look at this:
National Grid looking at wind (http://tinyurl.com/4gb45fy):-
"For example, for 8000MW of wind (e.g. in line with Government's 2010 target of 10% renewables), around 3000MW of conventional capacity (equivalent to some 37% of the wind capacity) can be retired without any increased probability that load reductions would be required due to generation shortages on cold days.
However, as the amount of wind increases, the proportion of conventional capacity that can be displaced without eroding the level of security reduces. For example, for 25000MW of wind only 5000MW (i.e. 20% of the wind capacity) of conventional capacity can be retired.
This implies that, for larger wind penetrations, the wind capacity that can be taken as firm is not proportional to the expected wind energy production.
It follows that the electricity market will need to maintain in service a larger proportion of conventional generation capacity despite reduced load factors. Such plant is often referred to as "standby plant".
In other words, for 25GW connected wind National Grid would need 20GW of "standby plant", i.e. 80% (100% - 20%)
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Feel free to pose further questions, and I do not mind if someone can show me where I am wrong.
Mar 2, 2011 at 8:45 PM | mgreen
There are so many mistakes in your little essay that I am not going to waste my time taking it apart.
You do the work; provide citations for all your assertions.
@Brownedoff: Thanks for the links.
Re Fred Bloggs
It reminds me more of Enron and California. Create an artificial scarcity, raise commodity prices and profit. Like the sub-prime market, the smart money knows exactly what's going on. On it's own, the investment case for wind doesn't add up, so no sane bank would invest. Add in subsidies and long term supply contracts via legislation and you get 10%+ ROI and profits. The banks are then much keener to lend on a sure thing and even help market or lobby for more profits, so big on wind, big on carbon trading, big on spreading the fear to boost insurance profits.
mgreen
You say
You do not consider the opportunity cost of wind vs nuclear. What is the policy logic of investing in a marginal, intermittent and expensive technology when limited budgets would be more usefully spent on nuclear?
‘Good’ energy policy must try to ensure reliable baseload capacity going forward. Wind cannot deliver this.
Wind simply doesn’t feature in any hard-nosed analysis of where money needs to be spent.
I don’t ‘like’ nuclear nor does it pay me, but I think debate as serious as this needs to focus on the facts, however unpalatable they may be for many.
If there is a serious intention to decarbonise the UK economy, nuclear and electrified transport are necessary, and wind is only optional if one prefers gesture over deed.
First two rules of politics:
Never apologise
Never explain.
@Brownedoff
I'm not sure what you disagree with exactly, but I'll start with the point where we seem to be closest.
You cited a reference at:
http://www.cawt.co.uk/files/How_turbines_make_money.pdf
I don't completely agree with the statistics and method of calculating used in this paper, but the differences are ones on which reasonable people could disagree.
They state that for a 2.5MW turbine operating at 30% efficiency:
1. Selling the electricity on the open market would realise about £242k
2. ROCs would deliver £224k
My maths says that's about 48% subsidy, and 52% energy sales. I suggested 40%/60% - so that's not so far away. Where do your £450k dropping to £55k without subsidy come from?
The true worth of electricity produced by wind power is zero because wind cannot perform any of the three functions needed of a generator connected to the grid: baseload, load follow or peak load. How much would I be prepared to pay for electricity from an intermittent supply? Answer - zero. It's better to have no electricity supply (and use something else) than have an intermittent supply.
I'd love it if we could stop referring to the shift to alternative energy technologies specifically as "decarbonising". Yes, the alternative energy supplies are carbon-free but emphasis on the word "decarbonise" suggests strongly that this is the primary driver of the process. It gives undue weight to the consideration of carbon dioxide in the shift to greater energy security and non-fossil-based provision.
Is there a word which sufficiently encompasses viable alternative energies without giving the nod to the rather irrelevant carbon molecule? If not, should we invent one?
I can remember back in Sydney in the late 1940's, the government was fighting with the unions for control of the coal mines and we had power blackouts, going on all through the winter.
My mother was either too poor or too mean to buy a pressure lamp or even a kero lamp, so I did my homework by a single candle. It was OK - fun at first, but a bore as time went by.
We had a gas heater so it was warm enough, but dark.
The eletricitity authorities were very well organised and suburbs were blacked out in rotation every night, with warning in advance on the radio.
Eventually the PM sent in the army into the mines and the lights came on again.
I suggest that you in the UK look up how this was done in Sydney, long, long ago.
Might just come useful soon for you.
We are some years behind you but out new coalition government are intending for us to catch up as soon as we can.
Strangely, the oposition seems to be opposed.
Oh well, I guess that's what oppositions are meant to do.
(We're well behing the times down here in Oz-land - probalby because we have to keep standing on our heads to make sure we don't fall off.)
AusieDan - all the plans for rolling blackouts are in order, presumably under national emergency planning. They are even online, and rather ominously, they were updated in 2005. I will search for the link if you are interested. I'll re-post what I just wrote on the Dave Mackay thread as it is probably more relevant here:
Roy - Phillip Bratby mentioned the Telegraph [article] on the 'Will Phil Hammond Apologise' thread but thanks for posting this, it needs widespread coverage. My father gets the Daily Telegraph for the crossword, but the article may not be in the Scottish edition; any chance of scanning it and getting it online somehow?
I think this is the most significant energy story since the development of the national grid - a clear admission that due to the failure to replace our ageing coal and nuclear plants the lights are going to go out. Sure, they have made plans for this (rolling blackouts) eventuality under national emergency conditions but no-one ever imagined blackouts every time there's a dominant anti-cyclone over the British Isles in the cold winter months when peak demand can reach 55-60GW and generation from wind drops to less than 200MW (as has happened numerous times in the previous 5 winters). The 1GW potential from the other key renewable (hydro) also drops to a fraction of this due to low flows from frozen run-off. So peace time blackouts here we come.
Lots of people in rural areas and in the Highlands (where temperatures regularly fall to -15C in these conditions do not have mains gas or oil central heating, and rely on electricity to keep their houses warm. The cost of kersene for oil boilers has increased by 500% in the last 10 years and fuel poverty is already a significant problem for many householders who can no longer afford to heat their homes. In urban areas looting and disorder would be an inevitable consequence of blackouts. I'd like to have a copy of the article so I can at least show it to my MP and MSPs for their comment and explanation.
The legal framework could be key here, afaik the electricity companies operating the national grid still have a legal duty to provide a stable electricity supply 24/7 365. If there are significant outages, they have to explain the reasons why in writing to the relevant Minister [in Scotland this used to be the Secretary of State for Scotland, so it is probably John Swinney as Cabinet Secretary now]. I assume it is the same situation south of the border. I wonder if Brussels now has an input here - it could be that the UK will be breaking European Law for not being able to provide electricity to industry, schools, hospitals and consumers just because the wind drops? Knowing the perverse priorities of politicians, it could be that the threat of a wrist slap from Brussels is all we need to get them to see sense and stop the ROCs for wind now, and kick-start the rapid construction of thermal plants? If money is tight, the £30bn could be diverted from the high speed train line which will only go from London to Birmingham anyway - the current journey times are not long enough journey to merit making the hour saved worth the money. Mar 3, 2011 at 6:54 AM | Unregistered Commenter lapogus
Mar 2, 2011 at 10:12 PM | mgreen
"1. Selling the electricity on the open market would realise about £242k
2. ROCs would deliver £224k
My maths says that's about 48% subsidy, and 52% energy sales. I suggested 40%/60% - so that's not so far away. Where do your £450k dropping to £55k without subsidy come from?"
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At the time the above mentioned report was published, the FIT rate assumed to be £40.00/MWh, and you did get both FIT and ROC.
In my workings I assumed that the price of 1MWh of electricity from non-renewable power plant was say, about £10/MWh.
Using the figures you quote: total income is £242k + £224k =£466k
The £242k is earned of the back of a tariff (£40) which is four times the tariff (£10) earned by a non-subsidised generator.
So with no subsidy, the total income becomes (£242k/4) + 0 = £60.5k + 0 = £60.5k.
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Mar 2, 2011 at 8:45 PM | mgreen
"Just because carbon isn't the problem on the scale we have been told, doesn't mean that wind power is the work of satan."
Well, IMHO, in due course (when rolling blackouts commence and your bill is unaffordable), you will come to realise that wind really is the work of satan
"....... but I would argue that the evidence supports an energy mix including wind (and nuclear)."
I see you put "and nuclear" in brackets - good choice - whilst there is loadsa new wind in the pipeline, the outlook for new nuclear is getting grimmer and grimmer to the point where it is likely there will be no new nuclear in the UK at all, because of the ever rising cost of construction, the volatility of the price of a MWh generated and worst of all the determination of those buffoons in Westminster to deny all financial assistance.
"Simply taking the opposing extreme from the Climate Change camp doesn't win many converts"
There is nothing extreme in drawing attention to the fact that 1MWh of juice from an existing windmill costs about £80.00/MWh whilst the cost from a coal fired plant costs £10.00/MWh and that difference is put onto your bill
Perhaps you would be kind enough to withdraw that characterisation of my message?
.
mgreen
I am following your exchange with Brownedoff with interest.
Inter alia, I would be very interested in your response to my comment at 10:00pm March 02 above.
Which you ignored.
Mar 3, 2011 at 11:46 AM | BBD
Re:- "mgreen"
I think there is a clue in the author's name.
I too am awaiting a response, but maybe mgreen is at work just now and will re-appear later.
Hmm, isn't this getting a little ad hominem? Yes, the 'green' is my name, not my politics.
Firstly to BBD - sorry wasn't ignoring you. I'd not explicitly discussed the opportunity cost of Wind vs Nuclear, as I don't think it's a choice of just one. New nuclear capacity is a nut we have to crack in the next few years for the obvious reasons of base generating load, but it isn't without problems. In particular:
1. No new nuclear facilities have been built in the last 20 years in the UK - and I'm less than convinced that the industry can build them at the costs being touted around. The Finland one has doubled in cost since they broke ground on it and it isn't even commissioned yet.
2. Public opinion is strongly against nuclear power, and pretty much no-one wants it near them. They might be stupid, ill informed dicks who refuse to listen to inconvenient evidence about its merits, but they have votes and politicians listen to them. So it's not easy to get past the legal challenges even for a politician who wants to stick his neck out.
I do want nuclear, but I'm under no illusions about whether it'll be easy.
And I want wind too - up to a reasonable level of total generating capacity (maybe 15% max), because it doesn't rely in imported fuels from unstable countries, and once it is built, it operates cheaply and without pollution. Efficiency is improving too as the technology matures, and should continue to do so, as well a getting cheaper per unit cost. There's some benefit to in the jobs and economic development if we build this technology, rather than just buying it from the Germans.
I agree with you on electrified transport, and as fossil fuel prices rise I think the public will bite back their objections and use more public transport generally.
mgreen
Thank you for your response.
You say
Whereas I argue that budgetary limitations and the fact of opportunity cost militate against substantial spending on wind. And it will be substantial, since new transmission infrastructure will be required to connect dispersed wind installations to the grid. This factor is typically ignored.
Your points (1) and (2) are well made, and I readily agree that there are considerable barriers to developing nuclear – and that it will cost a fortune (see opportunity cost and limited budgets above).
Your further arguments for wind are to my mind weak because you agree that total output is unlikely to exceed 15%.
So security of fuel supply, cheap operation (onshore wind only) and no pollution are marginally important, not strong justifications for wind.
I do not share you confidence that there is much further to go in improving turbine efficiency or transmission efficiency. Both are long established and relatively mature technologies (aeronautics informs turbine blade design).
Thus there is no great potential for a fall in unit cost of energy produced.
There will only be benefits to the economy and in job creation if the firms that build the kit are not simply sustained by the subsidies paid to their customers. At present, this is what is happening. It is a burden upon the national economy, not a benefit to it.
Mar 3, 2011 at 7:56 PM | mgreen
"Hmm, isn't this getting a little ad hominem?"
No, I do not think so, but on the other hand you accused me of taking an extreme position and I have requested that you withdraw that part of your commment, now for the second time.
Also, you asked me to expain the drop in income when subsidy is withdrawn, which I did at Mar 3, 2011 at 8:28 AM - are you satisfied?
"And I want wind too - up to a reasonable level of total generating capacity (maybe 15% max),"
Well, you are going to be disappointed, because if the idiots in Westminster get their way, you are facing a proposed wind penetration of at least 30% of total generating capacity by 2020.
I say "at least 30%" because that is based on the industry achieving 99GW capacity by 2020 as stated in National Grid document "Going Green". (see other thread for citation)
The capacity at the moment is about 75GW and Mr Holliday of National Grid says in today's Grauniad that he needs 100GW capacity by 2030, so pro rata he is looking at say, about 87GW by 2020.
Under Mr. Holliday's scenario, the wind penetration by 2020 will be about 35%.
How much more evidence of the satanic nature of wind do you need before you become a convert?
We have a running joke in our home. Every time we pass the huge windfarm near Glasgow we always say:
Look that one isn't turning, they could not have replaced the huge Duracell in the pillar!
Sounds funny, but the real joke is that they do need a power supply back up, provided by conventional power generation.