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Boris Johnson’s pledge of wind power for every home ‘could cost taxpayer £27bn a year’  

Credit:  Prime Minister's promise, made at Conservative Party's virtual conference last week, may result in doubling of consumer bills | By Hayley Dixon and Edward Malnick, Sunday Political Editor | The Telegraph | 10 October 2020 | www.telegraph.co.uk ~~

Household electricity bills could double under Boris Johnson’s plans to power every home using offshore wind farms by 2030, experts have warned.

It is estimated that the Prime Minister’s pledge could cost taxpayers £27 billion a year because it is based on data that does “does not withstand even cursory scrutiny”.

Professor Gordon Hughes, who has completed one of the largest ever studies on the economics of wind power, found that, contrary to promises from politicians and the industry, the cost is actually rising.

It is feared the huge, foreign-owned companies that build wind farms will seek huge taxpayer or consumer bail-outs when the true “financial consequences” become clear.

Mr Johnson’s pledge to quadruple offshore wind capacity to 40GW within the decade, made at the Conservative Party’s virtual conference last week, could result in a doubling of consumer bills.

Prof Hughes told The Telegraph: “Any ambitious target is going to be expensive, because the system cannot deliver very large increases in capacity in a short period of time. It is like building the Olympics or High Speed rail – the costs just go out of control.

“Nobody knows exactly how much it will add to bills, because we are yet to see the detail of how it will be paid for, but I find it very unlikely that it would mean less than a doubling in household bills.”

He said the promise had to be seen alongside other pledges, such as the electrification of vehicles and heating, which could see household demand rise by 50 to 100 percent.

His analysis has been rejected by the Government and the renewables industry, which insists the UK’s power system needs to be updated and wind is the cheapest way to do so.

Mr Johnson may be forced to push on with his plan, regardless of cost, in order to meet the targets set under the Paris agreement to limit the global temperature rise to 1.5 degrees, set to be enshrined in the Brexit deal.

Dr John Constable, the director of Renewable Energy Foundation, a UK charity that will shortly publish Prof Hughes’ work, said: “The Prime Minister urgently needs an energy cost minimisation strategy to make a success of Brexit and to create an authentic economic recovery post-Covid.

“In his haste, he has seized the cost-maximising renewables industry by mistake. If Mr Johnson persists in this error, his successors, Labour or Conservative, will be clearing up the mess for decades.”

Prof Hughes, professor of economics at the University of Edinburgh, advised the World Bank on energy and environmental policy and has spent the last 18 months looking at the actual capital and operating costs for a large majority of the onshore and offshore wind farms built in the UK since 2002.

He found that, despite a fall in the wholesale price and almost universal claims that the cost is falling and will continue to do so, both the capital and operating costs have “increased significantly” in the last two decades.

For offshore wind farms, the average capital costs per MW of capacity have doubled since 2008, the analysis of accounts found, whilst the typical operating costs per MW have quadrupled between the same dates. As a result of increasing costs and lower yields as the turbines age, the revenues will be less than the operating costs.

The report compared the current offshore projects being built in north-western Europe to “speculative property development” which would require the wholesale price of power to increase by up to four times to enable lenders and investors to be repaid.

It warned: “This leads to the prospect of what is not so much a car crash as a motorway pile-up in the fog of ignorance. The looming crisis will require that those who finance wind power and its related ecosystem of companies are bailed out by either taxpayers or electricity consumers.”

Prof Hughes estimated that Mr Johnson’s pledge will come with a construction price tag of around £150 billion, including improving the network capacity of the grid, which will have to be paid for over the roughly 15-year lifespan of the project.

In addition, the operating costs and extra system and grid costs are estimated at up to £17 billion, costing taxpayers £27 billion a year in total.

He said it was unclear how the Government is planning to fund the increase, and it could be paid for with higher electricity prices, a reduction in other public spending, higher taxes or green levies.

He added: “If Mr Johnson gets his way then somebody has got to pay for the reality that the wind doesn’t blow all of the time. You have to pay for having backup capacity which sits idle most of the time but can run when output from wind or solar is low.”

As well as paying for gas power stations to sit idle, the National Grid will need to make payments to wind farms to switch off when too much electricity is produced.

In an addendum to his report, Prof Hughes noted that the Department for Business, Energy and Industrial Strategy (BEIS) report that is “believed to have formed the basis for the Government thinking on the costs of offshore wind” is “wholly inadequate” and “cannot be relied upon for any purpose whatsoever”.

The calculations do not match the actual costs in company accounts and BEIS only takes into account its own studies, not the huge body of evidence available, it noted.

However, BEIS hit back at the claims, saying its report is “based on best available expert data” and that to suggest such a degree of error is “not credible”.

A spokesman said: “It is demonstrably false that the cost of offshore wind is rising. Since 2015, prices have fallen by 65 per cent, with similar falls seen across Europe. The falling price, thanks to Government support, now means the UK produces more offshore wind electricity than any other country in the world.

“It is because of the falling cost that we recently pledged to produce enough electricity through offshore wind to power every home in the country by 2030.”

Luke Clark, of RenewableUK, the trade association for wind power, insisted it “is one of the lowest cost options for new power in the UK, and the industry has worked tirelessly to bring down costs over the last decade by investing in innovative new technologies and our supply chain”.

He said: “The real risk for consumers is being tied to expensive, high carbon power sources instead of low-cost renewables, which markets across the globe are consistently showing to be the future of the energy system.”

Source:  Prime Minister's promise, made at Conservative Party's virtual conference last week, may result in doubling of consumer bills | By Hayley Dixon and Edward Malnick, Sunday Political Editor | The Telegraph | 10 October 2020 | www.telegraph.co.uk

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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