The true cost of wind farms and other green power projects is far higher than ministers have admitted, a new Centre for Policy Studies report claims, claiming renewable energy will be “the most expensive policy disaster in modern British history”.
Scrapping the UK’s green energy targets in favour of gas-fired power plants would save consumers £214 a year by 2020, the report suggests – despite ministers’ insistence that the total impact of the policies will be only £141 per household by then.
Wind and solar farms rely on subsidies to be economically viable and the costs of the subsidies are charged to consumers through so-called ‘green levies’ on energy bills.
“The costs of intermittent renewables are massively understated,” the CPS argues, accusing ministers of an unstated policy objective to deliberately “hide the full cost and operational implications” of green power.
As well as subsidies for the wind and solar farms, the CPS report points to the need for dozens of backup power plants to keep the lights on when the wind doesn’t blow and the sun doesn’t shine.
Ministers have been forced to offer additional payments to gas and coal power plants because the intermittent nature of wind and solar power “wrecks the economics of conventional power stations”.
“To keep the lights on, everything ends up requiring subsidies,” the CPS says.
The costs of new cabling to connect up wind farms in remote parts of Britain and far off the coast are also not properly reflected in current assessments, it says.
The “patchwork of interventions” is an unduly costly way of keeping the lights on, the report argues.
It suggests that if ministers want to keep to their green energy targets, they should renationalise the power generation sector, so avoiding the need to subsidise private companies to build new wind farms and other power plants for profit. Nationalisation would save consumers £92 a year by 2020, it estimates.
Ministers are backing a vast expansion of green energy under plans to help tackle global warming.
Under EU rules, the UK is required to generate 15 per cent of its total energy – including heat, power and transport – from renewable sources by 2020. In practice, this means 30 per cent of its electricity will need to come from renewables.
Official Government estimates, published last year, show that a typical household now pays £68 a year in green levies to subsidise renewable energy projects and to fund carbon taxes – about 5 per cent on an annual gas and electricity bill of £1,319.
By 2020 minister, the estimates suggest, such levies will hit £141, or 11 per cent of an annual bill of £1,319.
This includes the costs of more wind and solar farms being built and carbon taxes rising, as well as the Government’s estimate of the costs of the new scheme it is introducing to subsidise conventional power plants as backup for intermittent renewables.
A spokesman for the Department of Energy Climate Change said: “The figures in this report don’t add up and ignore the urgent need to cut our carbon emissions. We are making sure we can keep the lights on, cut carbon emissions and keep bills down for consumers.”
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