Expert critique of Policy Exchange renewables report
- 01 Mar 2012, 16:00
- Robin Webster
An interesting critique of a
report by the thinktank Policy Exchange emerged yesterday, courtesy
Dr Rob Gross of Imperial College and the UK Energy Research
Centre. Dr Gross wrote the analysis in response to a claim made by
Policy Exchange that "renewable energy will cost households an
extra £400 a year" by 2020, which was noted at the time by
Mark Lynas and
Then-Energy Minister Chris Huhne labelled the report "
nonsense on stilts" - a response which seemed to
rather please Policy Exchange.
We also looked at
the report at the time so we were interested to see the new
critique, which is much more substantive. PX's top-line figure of
£400 was based on an assumption that measures designed to increase
uptake of renewables will work (and cost money), whilst those
designed to increase uptake of energy-saving measures like house
insulation - (thus reducing bills) - will not.
...it makes little sense to assume that
policies to promote renewable energy are bound to succeed and
increase the price of power, whilst policies to promote energy
efficiency and reduce bills are bound to fail. The success or
failure of policies is an empirical matter.
While there are reasonable worries about the efficacy of the
Government's energy efficiency measures, as Gross points out, PX's
estimations are situated right at one end of the scale, giving the
worst-case scenario which assumes they just don't work at
This approach is repeated elsewhere. Gross notes, for example,
that the Government's
Electricity Network Strategy Group (ENSG) has recently
estimated the total "transmission costs" for renewable energy at
£8.8 billion. Not insubstantial - but according to Dr Gross the
figures which PX uses in its calculations are about double the ENSG
estimates. PX suggests its figures are conservative by comparing
them to an even higher estimate by the anti-wind lobby group the
Renewable Energy Foundation.
The PX report estimated that higher UK energy prices would cost
consumers around £185 per year as a result of paying for more
expensive products and services. Gross characterises this figure as
"pure guesswork" and points out, for example, that around 40 per
cent of UK products and services are exported to other countries,
and a large fraction of the goods and services we use here are
Gross also says that PX selects a "particularly high estimate" for
the cost of offshore wind and compares it to a figure for the
efficiency of gas plants that is "well beyond what many believe to
be the limits of current designs". The effect is to make gas look
cheaper (and cleaner), and wind more expensive.
Why does all this matter?
As we've noted before, people pushing a certain position in the
energy debate often seek out the numbers that show their chosen
path in the best light.
For example, supporters of renewable energy have tended to take
the position that over the next decade gas prices are going to go
up - making renewables relatively less expensive - and
energy efficiency measures are
going to work - bringing down bills by reducing energy
On the other hand, advocates against renewable energy say shale
bring gas prices down, renewable energy costs will
stay high, and energy efficiency measures - well, they
aren't going to work at all.
The end result is that media channels tend to report the results
that best suit their own political positions in the energy debate,
making it very difficult to tell what's really going on.
Of course, Policy Exchange are not arguing against climate
legislation or emissions cuts. The thinktank advocates market
mechanisms such as carbon pricing or carbon trading to reducing
In particular, and notably in its
most recent report, PX argues that the European Emissions
Trading Scheme is the sensible way to cut the UK's greenhouse gas
emissions. Many of the well documented
problems with the ETS, it suggests, "do not appear unsolvable,"
and the real solution to our carbon woes lies in setting a
long-term "carbon cap" for the ETS.
So far, however,
lengthy negotiation at the European level has not fixed these
issues, leaving it a
relatively ineffective mechanism for reducing emissions.
Because the debate over the UK energy mix is technical and
contentious, other experts will probably disagree with some details
of Gross' analysis. But given the PX report's bias towards
the extreme in presenting the drawbacks of renewables subsidies, it
seems to us that Gross's comment is right - that the "[…] principal
objective was polemical, with a line of argument decided ahead of
While this a relatively minor (and detailed) example of
fact-checking, the Policy Exchange report and Gross' critique
do provide an interesting case study of the way thinktanks operate
in producing reports designed to influence policy debates.
Update: The author of the Policy Exchange report Dr Simon Less
has responded to the paper