Will energy bills rise £300 by 2020 because of wind power, as the Express claims?
- 08 Aug 2012, 09:00
- Robin Webster
Energy bills to rocket by £300", announced the
front page of Tuesday's Daily Express, suggesting the
government's "obsession with wind power" would push consumer
electricity bills up by £300 by 2020.
Daily Mail and the
Mirror have repeated the figure. The articles are
based on a submission to the Energy and Climate Change Committee
written by part time professor of economics at Edinburgh University
and former World Bank advisor
Professor Gordon Hughes, for the climate skeptic thinktank
Global Warming Policy Foundation (GWPF).
The GWPF issued a press release for the submission on Monday -
it appears to be largely based on a
previous report Hughes wrote for the GWPF. The report,
entitled 'Why is wind power so expensive?' was covered
in the Daily Mail earlier this year.
£300 on bills?
The Express headline comes from Professor Hughes's estimate
that: "the average household electricity bill" will rise from:
"£528 per year at 2010 prices to a range
from £730 to £840 in 2020"
…a projected rise of up to about £300, in a scenario where UK
onshore wind power grows to 12 gigawatts (GW) and offshore to 24GW.
This rate of growth in wind is slightly higher than current
Professor Hughes's calculations differ markedly from more
mainstream estimates, like those from the Committee on Climate
Change (CCC), which has calculated that if the government fulfills
its current plans for increasing renewable capacity and energy
efficiency it will add £110 to
household electricity bills in 2020. In oral
evidence to the the ECC Committee, the chair of the CCC, David
Kennedy, said that about £50 of that rise is due to support for
wind power - one sixth of Professor Hughes' estimation of £300.
But in his submission, Hughes criticises such "official"
predictions for being "subjective", and states it is "impossible to
determine whether the claims are reliable".
In his calculations, the figures for cost are based on comparing
"additional system costs" for wind with a "Gas" scenario where the
same amount of demand is met by gas power only. But his assessment
is itself subjective and difficult to assess - the numbers for
additional system costs are referenced in the text only to
"Author's calculations", and as far as we can tell, these haven't
£124 billion vs £13 billion
Based on Hughes's submission, the Express also states that the
government's green crusade "blunder" will cost £124 billion,
adding: "the same electricity would be provided by modern combined
gas cycle plant for £13 billion - nearly 10 times cheaper".
The Express has taken these figures from Hughes's submission -
kind of. But it has misread them, and confused the capital costs
the submission talks about - the cost of building energy
infrastructure - with the total cost of supplying electricity.
The Express might be forgiven for doing so, as it's not really
stressed that the costs Hughes is comparing are only the costs of
building infrastructure, and don't include the fuel costs
associated with gas power - i.e. the cost of the gas you need to
burn to produce electricity.
press release, for example, reads:
"The necessary investment for this Wind
scenario would amount to about £124 billion. The same electricity
demand could be met from 21.5 GW of combined cycle gas plants with
a capital cost of £13 billion - the latter option is cheaper by an
order of magnitude."
Given the comparison the submission is making, it seems quite
important to note the suggested figure of £13 billion doesn't
include the cost of the fuel required to produce the electricity,
particularly as the future costs of gas are likely to continue to
One has to turn to Hughes's earlier report for a clear statement
about this: "of course, the higher capital and non-fuel operating
costs for the renewable scenario ... may be offset by a reduction
in fuel costs..." Hughes suggests that in his scenario, this
doesn't make as much of a difference "as might be expected", for a
variety of different reasons.
Hughes gave oral
evidence to the ECC Committee last month in the company of the
chair of the CCC David Kennedy, Dr Robert
Gross from Imperial College and
Professor Samuel Fankhauser from LSE. In the session Hughes
played, in his own words, the "role of dissentient", with the other
three experts reflecting the views of their institutions, that wind
power is in Kennedy's words an "attractive option in the sense that
it is a cost-effective, low-carbon technology".
In discussing the assumptions behind Hughes' work, Dr Gross
criticised aspects of Professor Hughes' suggested future scenarios
for the electricity system which leads to the headline figures as
"hypothetical instances where we do things that are just, frankly,
plainly daft". In responding to Hughes' argument that they were
just using different assumptions he added "I am not referring to my
own modelling; I am referring to colleagues in electrical
engineering at Imperial College, and I am referring to a vast
international literature that has looked at this."
submission to ECC on the costs of wind power, for example,
cited a wide range of research and gave significantly lower
estimates for the impacts on cost of maintaining 'backup' capacity
of wind power.
Professor Hughes' document is one of
eighty-seven different written submissions to the Energy and
Climate Change Committee's investigation, which we may look over in
more detail. It is, notably, the only one to make front page of a