The chairman of Shell UK has argued that the government should be focusing on cleaning up fossil fuel power stations, rather than spending money subsidising costly offshore wind farms, to meet emissions targets.
In an interview with The Scotsman, Graham van’t Hoff said, at a time when energy bills were rising, it was unfair to expect the taxpayer to foot the bill for such an expensive form of generation as offshore wind.
Instead, he thinks the focus should be on replacing old coal-fired power stations with cleaner gas plants, and on cleaning up fossil fuel plants by developing carbon capture and storage (CCS) technology.
Mr van’t Hoff said population growth in developing economies, at the same time as hundreds of millions of people were coming out of poverty, was having a dramatic impact on energy demands.
He said: “We are looking at something like a doubling of energy requirements in the next 40 years, as well as the need to get climate change under control, which would require something like halving emissions at a global level. If you put those two things together, you have an enormous challenge on your hands.”
He believes there is a need for “lots and lots of solutions” but said now was not the right time to push full steam ahead with offshore wind power.
The UK at present has 1,233 offshore wind turbines either built or in construction, with an installed capacity of 4.2 gigawatts (GW). Within the next decade, the UK government wants more than four times as much – 18GW by 2020.
However Mr van’t Hoff, speaking ahead of the TEDGlobal conference in Edinburgh this week, said: “What doesn’t make sense is very heavy investment in lots and lots of offshore wind.”
He argued that offshore wind was far more expensive than other forms of generation – about double the cost of setting up and running a new gas plant.
“We need a trajectory that achieves decarbonisation but we are also dealing with some other challenges in society,” he said.
“People are unemployed. People have got high energy bills. The only way that very expensive investments are going to get paid for is by an increase in those energy bills.”
He questioned whether today’s economic climate meant this was the right time for a potential “doubling” in energy bills.
He said he would be concerned if the focus on offshore wind got “too big”, not just because of the expense but also because the more wind we used, the more “redundant power capacity” would be needed in addition, “in case the wind doesn’t blow”.
“So there’s an awful lot of redundant capital that needs to be spent,” he added. “We do see a clear role for renewables but there is a question of pace.”
Instead, he argued, a “quick win” could be achieved by replacing coal plants with gas, which can cut carbon dioxide by 50 per cent. Using CCS technology on those plants could bring that up to 90 per cent. He argued CCS could also offer a huge business opportunity for Scotland because of the storage available offshore.
Peterhead power station in Aberdeenshire, owned by Shell and SSE, is thought to be one of the front-runners in a UK government competition for up to £1 billion funding towards fitting CCS technology.
Mr van’t Hoff said he was “extremely interested” in the funding, arguing that the gas-fired station in Peterhead was “naturally very well placed” for CCS.
“The infrastructure is already there, in that the basic pipeline is all in place and the reservoir is sitting there,” he said.
TEDGlobal is billed as an “ideas fest” that will explore the concept of “radical openness”.
Mr van’t Hoff is the latest critic to raise concerns about the cost of offshore wind. But a study by the Crown Estate this month suggested the cost could drop by a third through measures such as building bigger turbines.
• The UK government has launched a £1 billion carbon capture and storage (CCS) competition. The deadline for applications is 3 July.
So far 16 companies have expressed an interest, including National Grid, Centrica, Shell and SSE. A previous competition for £1bn failed to find a winner.
CCS captures CO2 from gas and coal-fired power stations before it is released into the atmosphere. The CO2 is liquefied and poured into disused oil wells via existing pipelines. It is believed to have huge potential for cleaning up fossil fuel power stations, but has yet to be proven on a commercial scale.
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