Spin, clarity and the DECC energy calculator
- 05 Jan 2012, 11:00
- Robin Webster
Over the winter break, the launch of a
new online energy calculator created by DECC attracted some
attention, and some contrasting media coverage.
The gimmick of the calculator is that it lets you take on the role
of secretary of state for energy - although unfortunately without
simulating the attention of tabloid newspapers. Instead, you get to
experiment with creating different future energy scenarios and
comparing them for emissions, energy security and costs.
It was created by DECC's chief scientific advisor Professor David
MacKay (author of an online
book on the same topic which was well received in the world of
energy geeks), and is actually a relaunch of sorts for DECC's
"pathways analysis", first created in 2010, on which DECC has
already based a
considerable amount of material.
What's new is that this is the first time that costs of energy
production have been included in public documents. Mackay
told the Guardian that the calculator is intended to "take the
poison out of the debate" on costs, by giving everyone the
opportunity to juggle with these three different priorities. Good
luck with that, Professor.
Whilst we were eating turkey sandwiches, the media's coverage took
rather different angles, depending on the editorial views of the
Telegraph headlined "Greener energy will cost £4,600 a year".
The Guardian originally went for a similar headline online, but
changed it to "UK switch to low-carbon energy 'no dearer
than doing nothing".
Actually, both of these headlines are technically correct, if you
accept the DECC analysis. Political correspondent at the FT Jim
written a good blog however which points out that the Telegraph
headline is somewhat disingenuous:
The [£4,600] figure … is not synonymous
with energy bills - [it] is the total investment in energy needed
(£2.4 trillion) over the next four decades … divided by population
to come up with the figure.
But as the article makes clear a few
paragraphs further down, it could cost even more to rely on
traditional sources of power such as fossil fuels and nuclear. (It
also suggests we are already spending £3,700 a year...
In other words, the predicted rise in the price of of fossil
fuels and the investment which is needed anyway to keep our
somewhat decrepit energy system from collapse, mean that according
to DECC's analysis it could cost just as much not to go green as it
does to switch to a low-carbon system.
Pickard continues by outlining
some of DECC's scenarios in more detail:
* "Do nothing" to develop low-carbon
energy systems: this would cost £4,682 a year, reflecting an almost
inevitable rise in the cost of conventional fossil fuels in the
* A "least-cost" scenario with a
balanced energy mix of 42 per cent renewables, 31 per cent nuclear
power and 27 per cent gas plants. This option, known as "MARKAL",
would cost £4,598 a year, ie slightly less than the "do nothing"
DECC's carbon plan also looks at three
further options: (on page 16-19 of
* "higher renewables, more energy
efficiency scenario" of 55 per cent wind * "higher CCS (but still
mostly fossil fuels), more bioenergy" * "higher nuclear, less
Strikingly, the renewables option is the
cheapest of these with the nuclear the most expensive.
...But matters are still not perfectly
straightforward. The key question for DECC is why the "higher
renewables" scenario is combined with "more energy efficiency" when
the other options are not to the same degree?
For example, why couldn't a scenario which imagined more nuclear
power be combined with more energy efficiency? The answer is, of
course, that there is no good reason. Professor Mackay responded on
the FT blog, noting that the Government could only highlight a few
scenarios and that readers should have a go at the calculator
themselves to see what result they get.
The criticism that DECC chose to highlight the "high renewables/
high energy efficiency" scenario for communications reasons is
probably justified. Although DECC supports the expansion of both
nuclear and renewable power, the cost of renewable power is under
consistent media attack - so DECC therefore has an interest in
creating headlines that defend their stance.
This does not impact on the credibility of the result itself -
although the whole process does also raise a recurring issue (which
discussed before) - about the ambition of the government's
plans on energy efficiency, compared to the resources they are
putting into delivering them.
Shale gas and the calculator
Ex-UKIP press officer and blogger
Tim Worstall argued
on the Adam Smith blog that the calculator is flawed because it
does not take into account the potential impacts of developing
'shale gas', which may bring prices down.
The Guardian noted:
Shale gas, which is currently being
explored in Lancashire and has driven prices down in the US, is not
explicitly included in the calculator. But can be easily
incorporated, says MacKay, by choosing a low gas price in the
It appears that the lowest
gas prices which can be fed into the DECC calculator are
45p/therm in 2050, consistent with estimates which are outlined in
fossil fuel price projections published in October 2011. These
use North American gas prices as a 'floor price' for the price of
gas in this country (as if the UK price falls below the US price
gas is likely to be exported). The predicted US price is based on
estimations by the Annual Energy
Outlook - which does take into account the predicted expansion
of production from shale gas, at least in the US.
When we spoke to DECC about this, they said the data used is
"based on the most up to date evidence" and that if people can
suggest other reputable work which has been done, they are keen to
receive it - so get in touch.
Simplifying the energy costs debate?
Given the complexities, there is some justification for Professor
Dieter Helm's description of the calculator as a "heroic and
potentially very misleading exercise". (Helm is an advocate for
shale gas technology.)
The calculator misses out some important points. This includes
failing to take into account not only the potential technological
developments of shale gas, nuclear power or different renewable
technologies, but the potential economic costs of climate change,
or its potential impacts on the UK's energy infrastructure over the
next few decades.
That said, the calculator allows anyone who is interested to
engage with the complex questions and trade-offs inherent in energy
policies - and allows interrogation of the assumptions and
questions which produce such simple-seeming headlines. This has to
be a good thing - maybe other analysts should follow a similar
UPDATE Monday 9th Jan 10am: Christopher Booker has
repeated many of the same criticisms of the DECC calculator in
column in the Sunday Telegraph. We will look further at