‘Green’ Energy Fail: Counting the Staggering Cost of Britain’s CO2 Emissions Reduction Policy

When it comes to reducing carbon dioxide gas, wind power is touted as the perfect panacea – turns out it’s an abject failure on that score, too.

Leaving aside arguments about whether CO2 is a toxic pollutant or a naturally occurring beneficial trace gas which plants crave, the primary object of Britain’s effort to power itself on bluster and breezes is reducing carbon dioxide emissions in the electricity generation sector.

Assuming some economic benefit from such a reduction, any trained economist might reasonably ask a few pointed questions about the cost of doing so.

It turns out, that Britain’s obsession with wind power has placed it in an even worse position than had it done nothing at all. If the object was reducing carbon dioxide emissions, then gas and nuclear were the obvious choices. Instead, the Brits plumped for wind power, sent power prices through the roof and placed their power grid at risk of total collapse.

Consumers “Grossly Overpaying for Electricity”
Global Warming Policy Foundation
Press Release
10 January 2019

new report from the Global Warming Policy Foundation finds that UK consumers are paying far too much for the emissions reductions delivered by renewable energy.

The report, by Dr Capell Aris, is the result of extensive energy system modelling, and reports the costs, greenhouse gas emissions and grid security delivered by the current grid and by a series of counterfactual energy systems.  As Dr Aris explains:

“The dash for gas of the 1990s delivered lower carbon dioxide emissions and lower costs. If we had simply continued, we could now be enjoying electricity prices 30-40% lower than today, with similar carbon dioxide emissions, and vastly better grid security. Consumers are grossly overpaying for a very unreliable system.”

This counterintuitive result arises because of the effect of intermittent renewables on the grid. Renewables have forced gas-fired power stations to ramp their output up and down in order to balance the grid and prevent blackouts.

In addition, nobody is investing in the most efficient modern gas-fired plant while renewables are subsidised. The result is that the gas-fired fleet is much less efficient than it should be.

And the situation is going to get worse. Dr Aris has examined National Grid’s plans for the future generation mix and says we should expect steep price rises to continue every year for the foreseeable future. However, he also finds that with a system based on gas and nuclear power, emissions reductions could continue out to 2030 while maintaining consumer power prices at their current level. This result holds even if the very high prices of the planned Hinkley C power station apply in practice.

As Dr Aris puts it:

“The systems National Grid are looking at putting in place will deliver significant carbon emissions cuts but will double electricity prices. A system based on gas and nuclear would deliver similar emissions cuts at around half the price. This shouldn’t, therefore, be a difficult decision.”

Global Warming Policy Foundation

All at sea: part of Britain’s monumental energy fail.

 

Forward by Professor Gordon Hughes

In every competent and responsible polity, it is regarded as essential that any major policy initiative or project should be accompanied by a careful project evaluation or impact assessment. This should be followed up by regular progress evaluations and an ex-post appraisal through which the effects of the policy or project can reasonably be compared with expectations at the outset.

The goal is to learn the lessons of experience and to improve the design of future initiatives. Following such an approach is Treasury doctrine in the UK, and is urged on international organisations and developing countries. Unfortunately, actual practice within the UK is much more patchy; preaching is one thing, practice quite another.

The absence of systematic and honest policy appraisal is especially notable in the field of energy policy. Most of the impact assessments of energy policies have been characterised by a combination of dogma and wishful thinking. There has been extreme reluctance to carry out ex-post appraisals to assess whether the original – or, even, modified – goals have been achieved and at what cost. The example of the program to install smart meters is a classic example of the failures that can result from a reliance on policy dogma in place of independent appraisal.

The paper by Capell Aris examining the outcome of policies to promote renewable energy in power generation is a model example of an ex-post policy assessment. It compares a simple and reasonable counterfactual with what was actually achieved. It shows that cumulative costs and emissions of carbon dioxide would have been lower under the counterfactual than under the policies that were actually adopted. That advantage will not be eliminated if we project forward to 2030. In terms of the stated goals of controlling energy costs and reducing carbon emissions, policies to support the growth of renewable generation have been a failure.

All kinds of excuses will no doubt be offered – in particular, the role of European Union targets for renewable energy and the ‘unforeseen’ collapse in world gas prices. However, it should be remembered that the Renewables Obligation targets and supporting subsidies were introduced in 2002, well before the adoption of EU targets and before the increases in gas prices after 2005. The deficiencies and cost of renewable policies highlighted by this paper are the consequence of a home-grown failure of energy policy. It is an evasion to place the blame for this policy on the European Union’s Renewables Directive of 2009.

We need more ex-post appraisals of the kind carried out by Capell Aris to ensure that future policymaking avoids the mistakes that have characterised decision making over the last two decades. The last refuge of policy lobbyists is that ‘this time will be different’. As Dr Aris’s paper shows, this is almost never true. The analysis shows that the combination of surrendering to sentiment and ignoring the conclusions of simple economic analysis leads to the adoption of policies that are costly (in economic and environmental terms) and often counterproductive.

Summary
This study is an evaluation of Great Britain’s electricity generation system since 1990, with particular focus on the developments during this century. The performance parameters selected for this study are:

  • the total system cost (and the per unit cost of electrical energy);
  • the security of the generation system in meeting demand;
  • the reduction of carbon dioxide emissions incurred during generation.

The tools used for these studies are:

  • calculations of the levelised cost of electricity (LCOE), inclusive of any system integration charges required to cope with the intermittency and transmission connection of new renewable generation;
  • calculations of loss of load probability (LOLP), based on a probability analysis of matching generation and demand;
  • simple enumeration of emissions, based on emissions performance reports extracted from official data;
  • comparison of the As-built system and various counterfactual systems, such as one in which no expansion of renewable generation takes place and instead the ‘dash for gas’ of the 1990s is continued into this century.

The findings of this study are that generation costs have increased markedly since 2002, and that consumers’ electricity bills have risen accordingly.

Calculated LOLP values throughout the period remained low, but from 2016 have risen significantly, even with the inclusion of all interconnectors to the European generation system. Emissions of carbon dioxide have fallen sharply in the last five years, but the majority of this fall has been due to a recent switch from coal generation to gas generation.

Since generation from coal has almost ceased, the cost of future emissions cuts through expansion of renewable generation will begin to rise steeply. The counterfactual gas system would significantly outperform the As-built system in both cost and emissions terms. Continuation of the counterfactual gas scenario to 2030, with some expansion of the nuclear fleet, reveals that such a system is capable of holding prices down and delivering further emissions cuts. The gas system also performs well against all of National Grid’s ‘Future Energy Scenarios’. The present generation system is thus at a difficult crossroads. Any further expansion of renewables will:

  • increase the probability that the system will fail to meet demand (in a future when we will become ever more dependent on energy for economic progress, national security, health, and entertainment);
  • increase the cost of electricity to all consumers – even if renewable capital costs were zero, their system integration and operation and maintenance costs would make their electricity more expensive to consumers than that generated from modern gas turbines;
  • lead to rising costs to cut emissions as the renewable fleet displaces zero-emissions nuclear, and low-emissions gas.

You can download the full report (PDF 39 pages) here. 
Global Warming Policy Foundation

… and the answer was right there, all along.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. The whole “global warming” scam has been dreamt up to “legitimise money transfer from the wealthy countries to the poorest countries through the UN (World Government) which has set up the IPCC INTERGOVERNMENTAL Panel on Climate Change. The first word is the clue !!

  2. Reblogged this on ajmarciniak.

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