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A gallery of rogues, spivs and wideboys

There's an article at the Guardian today that really takes one aback. Taking into account the author, the author of the underlying report, and those it quotes, it's quite a gallery of rogues.

Guardian energy editor Terry Macalister writes that wind energy is now the cheapest technology for electricity generation in the UK. Yes, folks this is the Great Levelised Cost Lie in action again. Here's how Macalister explains it:

The numbers drawn up by Bloomberg are a “levelised cost of energy” (LCOE) which takes into account financing, intermittency and other issues, so that different technologies can be fairly compared. However LCOE does not account for the cost of managing intermittent power in the national grid electricity system.

Everybody, but everybody in the energy policy debate knows that levelised costs are grossly misleading because the cost is only one half of the equation. The value of the output matters just as much, and the value of intermittent renewables is only a fraction of the value of dispatchable technologies. So when Macalister - or Doug Parr of Greenpeace, or Seb Henbest of BNEF - tell you that LCOE is a way to "fairly" compare different technologies it's not true. And when they tell you that wind is "fully competitive" with other technologies it's not true either.

They are behaving like the worst kind of city spiv, the most shameful dealer in dodgy share schemes.

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Reader Comments (25)

If Patriotism is the last refuge of the scoundrel, then environmentalism is the first...

Oct 8, 2015 at 10:31 AM | Unregistered CommenterManniac

There are some commentators that use levelised costs correctly. Colin Gibson is one, and his measure of the renewable costs tell it completely different story.

Of those who use levelised costs poorly, there is also the solar industry; perhaps they are even worse than the wind industry. They're claiming to be a parity with CCGT costs. But even a cursory examination reveals that all they're talking about is the cost of built capacity (and at that, over-stated solar capacity) and not the cost of achieved lifetime production.

I don't think anyone of any importance or sense is taken in by this any more. Who cares about the likes of McAlister or that other loony Toynbee. Most of RenewablesUK advertising is equally ridiculous as David Partington has pointed out in several papers published at the Scientific Alliance.

The simple way to put this is that they are simply modern-day spivs. Fortunately, I think Amber Rudd as twigged this as well.

Anyway, this helps with the argument that we should no longer subsidise these two industries as they're obviously now mature.

Oct 8, 2015 at 10:38 AM | Unregistered CommenterCapell

There is an interesting link in the comments at the Guardian:

"By 2014 European Union countries had invested approximately €1 trillion, €1000,000,000,000, in large scale Renewable Energy installations.

This has provided a nameplate electrical generating capacity of about 216 Gigawatts, nominally about ~22% of the total European generation needs of about 1000 Gigawatts.

The actual measured output by 2014 from data supplied by the Renewables Industry has been 38 Gigawatts or 3.8% of Europe’s electricity requirement, at a capacity factor of ~18% overall.

Accounting for capacity factors the capital cost of these Renewable Energy installations has been about €29billion / Gigawatt. That capital cost should be compared with conventional gas-fired electricity generation costing about €1billion / Gigawatt."

Oct 8, 2015 at 10:44 AM | Registered Commenterdennisa

the value of intermittent renewables is only a fraction of the value of intermittent technologies.

Is the second "intermittent" a mistake? Surely you meant to compare intermittent renewables with more reliable technologies.

[BH: Thanks fixed]

Oct 8, 2015 at 10:51 AM | Unregistered CommenterRoy

Thinking some more about this, it's actually worse than we thought. LCOE misses the value of the product (as noted by me), the cost of managing intermittency (as noted by the Graun) and the cost of the grid connections.

You would have to be a crook to use LCOE as a metric.

Oct 8, 2015 at 11:14 AM | Registered CommenterBishop Hill

Will the grauniad be investing in this scheme and encouraging its readers to do the same?

It is too Green to be true.

Oct 8, 2015 at 11:25 AM | Unregistered Commentergolf charlie

There is no depth to which rogues, spivs and wideboys will not stoop in order to keep their snouts in the troughs.

Oct 8, 2015 at 11:48 AM | Registered CommenterPhillip Bratby

There was a post over at WUWT a few months ago that resulted in a graph showing how the portion of renewable energy in the system affected retail electricity prices.
I wish I could ask the author of the original Bloomberg article to reconcile the higher costs with his parity with fossil fuels. The only way to do that is to admit renewable are increasing costs for legacy power systems.

Oct 8, 2015 at 12:06 PM | Unregistered CommenterSean

They are crooks. But the beauty of it, and they STILL don't get it, is that they crooks from a bygone age; an age where the internet didn't exist, and where there is an unalterable record of their words and deeds.

They are like a gloveless 19th century burglar wandering into a house that has CCTV. He doesn't realise that the world isn't the way it used to be and he is leaving fingerprints and video of his crimes everywhere.

Oct 8, 2015 at 12:14 PM | Unregistered CommenterStuck-Record

A clearer example of shooting yourself in the foot I cannot imagine. If Osborne ends energy subsidies and that brings an end to wind power expansion then they need look no further than the mirror to find who was to blame. The article even adds the very obvious lie that fossil fuels are still getting more expensive.

Oct 8, 2015 at 12:30 PM | Unregistered CommenterJamesG

What is about the direct correlation between climate fanatic and con-artist?

Oct 8, 2015 at 12:40 PM | Unregistered Commenterhunter

Levelised dont include the routine cost of renewals and maintenance.

Fossil Fuel and Nuclear power stations last sixty years Wind Turbines last only for fifteen years .

Drive around and you can see arrays of Turbines where one or two have are stationary and the rest are rotating because these rotors have become worn and are dangerously mechanically unbalanced and have obviously had to be Locked out of use.

Are Wind Turbines wind tunnel tested or X rayed or ultra sounded.

Oct 8, 2015 at 12:53 PM | Unregistered CommenterJamspid


"You would have to be a crook to use LCOE as a metric"

Would have..?

Oct 8, 2015 at 12:54 PM | Registered Commenterjamesp

@Capell, thanks for the link to the Colin Gibson paper and spreadsheet. This is an excellent piece of work and well worth reading.Certainly does levelised costs in a proper and "defensible manner

Oct 8, 2015 at 1:16 PM | Unregistered CommenterMaxW

If it is so cheap, why does it need any subsidy at all?

How many of Londons tower blocks have a wind turbine, confidently generating all the electrical needs of the occupants?

Guardian Economics, is for the Clods of the Earth.

Oct 8, 2015 at 2:47 PM | Unregistered Commentergolf charlie

So are we all ready to complain to the Independent Press Standards Organization

Oct 8, 2015 at 4:11 PM | Unregistered CommenterJamspid

I drive past 4 windmills every morning now.

What amazes me is the number of days when none of the leaves on the highest trees are moving at all, which are at a height level with the center spindle 400 to 500 meters away, yet the windmills are spinning rather fast.

I'm beginning to suspect that some con is occurring, are the fit tariffs for wind so high that they are simply sucking power in, reflecting it back for fit payment and using some to spin the windmills (so the con is less obvious!).

or could it be as they are presumed to only feed power any reverse drain is unaccounted and therefore free?

Oct 9, 2015 at 12:06 AM | Unregistered CommenterRM

Jamspid, The Guardian is one of the broadsheet newspapers that do not take part in IPSO. They agree to regulate themselves.

Oct 9, 2015 at 4:02 AM | Unregistered Commentermichael hart

Jamspid, michael hart is correct. The Guardian believes itself to be above the law of the land so refuses to be bound by mere 'trade bodies'. It has no relevance to common tradespeople you see.

Oct 9, 2015 at 8:56 AM | Unregistered Commentergolf charlie

@RM Some of the larger turbines draw power to keep them turning when the wind is low to prevent the driveshaft sagging. Some also do this in cold weather to stop them icing up.

Oct 9, 2015 at 9:10 AM | Unregistered CommenterBill

I had heard that, and some days they are turning in no wind but very slowly <1 rev in 5 mins

But yesterday as an example temps 12c, so no ice possible, but spinning at approx 5 to 10 rpm, seems rather fast?

Oct 9, 2015 at 11:56 AM | Unregistered CommenterRM

Here's a thought from the peanut gallery : to see which systems are most efficient, scrap all subsidies and other political favours and see which ones prosper and which ones don't.

Oct 9, 2015 at 1:51 PM | Unregistered CommenterPunksta

Be honest we are stuck with Wind Turbines lets try and make them work.

Best way to overcome the intermittent supply problem i think is to use only Offshore Turbines take the random generated power to either Desalinate sea water or fresh water and use electrolysis to convert to Hydrogen and Oxygen then pump both ashore for storage in a triple diameter pipe Oxygen Hydrogen and outer rim for coolant.Then use in a conventional gas fired power station which has the added advantage you can add in natural gas as back up.

Not as financially viable as just drilling a hole in the ground and harvesting Mother Nature,s Fart but Onshore Hydrogen Storage best way to go .Also do away with bladed Turbines and use the flapping motion from a canvas sails to drive a Hydraulic motor/generator.Lot worse noise ,don't kill birds 30% more efficient longer life less maintenance .Disadvantage some geek in Canada has the patent as does some geek have the patent on Wind Powered Electrolysis.

Oct 10, 2015 at 10:48 AM | Unregistered CommenterJamspid

This is the sort of stuff I expect our government departments to be totally on top of and understand inside out. A successful long term energy policy should be an absolute priority in the modern world but it seems it is filed under ""too hard" whilst they concentrate on more pressing matters such as foxhunting or gay marriage. In days of yore we used to laugh at Swampy and his anti-progress ilk; now they've put on a shiny suit and have control of the levers of power. Bryony Gods.

Thanks Capell for your link to Colin Gibson's excellent analysis, just the sort of framework I would want to start with as a basis for discussion. Sensitivity analysis too, whatever next! If things have been missed, fine let's discuss and add them if necessary; don't agree with the numbers, bring some evidence and let's see what difference it makes. As BH says, any analysis that omits elements in that paper to fool their audience should be ridiculed and dismissed.

It is not hard to actually analyse the situation logically, you just need to exclude the pressure groups (from all sides) from skewing the debate. Of course when it doesn't give the required answer just add factor X (e.g. externalities) of sufficent size to tip the scales and show you win anyway.

Looking at nuclear in the paper it doesn't seem to include decommissioning costs which AIUI could indeed be a very big relevant factor X. Gibson alludes to a "Total Cost" analysis as well, has that been shoved into that analysis? Can anyone elucidate?

Oct 12, 2015 at 9:45 AM | Registered CommenterSimonW

I agree with the thrust of your criticism of the figures for renewables but I'm not sure I agree with all your analysis.

You say that LCOE omits the value of output. Well, the value of output depends on two things: the market price of electricity and the load factor. I assume it's the latter you're referring to.

LCOE does include a measure of load factor. Whether it's the right one is another matter. I don't have access to the background data in the Bloomberg paper - all we have here is the press release - but in a report by the World Energy Council they quote Bloomberg's figure of 28-31% for onshore wind in the UK. This is a bit on the high side (the average is actually close to 25%). But I'm not sure it's transformative and the Bloomberg figures are not completely out of line with recent IEA and other data.

What LCOE does not include are the system costs, which add about £12-30 for wind at 10-30% penetration levels, which is a combination of grid costs and back up power because of intermittency.

These headline figures, however, underestimate the overall impact on the system as a whole, because when they do run, renewables have almost zero marginal costs so they squeeze out gas and other dispatchables. This reduces the profitability of and therefore the incentive to invest in such plants. So renewables reduce the incentive to invest in the very capacity that they make necessary.

As a consequence, investment in CCGTs has more or less come to a halt. The government has tried to get round this problem by having an additional subsidy for capacity, but this hasn't been enough to overcome the underlying economics, and all the subsidy in the recent auction went to existing capacity.

For the same reasons, renewables reduce the profitability of nuclear, which is the last thing that technology needs.

As a final point, the renewables lobby always harp on about onshore wind, but that's effectively up to its practical and political limits in the UK, so if wind is to be scaled up it has to be with offshore, including going into deep waters, which is of course much more expensive.

Oct 12, 2015 at 12:04 PM | Unregistered CommenterChris Savage

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