Upgrades to gas and electricity networks will cost households Â£88 billion over eight years, Ofgem says. But why is the Mail saying this money is going to be spent on “wind farm pylons”?
Under the headline ‘Wind farm pylons will cost every home Â£88 as part of Â£22bn project to link them to national grid’ the paper reports:
“Every home will pay Â£88 to build a vast network of pylons in a Â£22 billion project to link wind farms to the national grid. Bills will start to rise next year under the controversial plans revealed by industry regulator Ofgem yesterday. An average of Â£11 will be added annually for eight years, making Â£88 in total on top of any other increases.
“The scheme is part of a Â£200 billion programme to switch to ‘green’ energy and build nuclear power stations to meet targets to cut carbon emissions …”
Financing gas and electricity transmission upgrades
The figures are taken from an announcement by Ofgem yesterday, outlining its suggested plan for financing the upgrade of the UK’s energy transmission systems which consumers will pay for through a payment added to their energy bills.
Because it is now standard practice for some newspapers to engage in all kinds of bizarre mathematics to inflate the apparent cost of ‘green’ policies to consumers, Ofgem preemptively provides an estimate for how much this is going to cost an average household:
“The impact of the total … package announced today is estimated to lead to household bills being around Â£7 higher in 2013, rising to around a Â£15 increase in 2021. The average increase on annual household bills across the eight years of the price control is around Â£11 compared to this year.”
Over eight years, this will comprise Â£88 per household, which is the figure the Mail has alighted on for its piece.
What is this paying for?
Although the amount is right, the Mail’s description of what consumers will be paying for is not.
In total, the plans will costs Â£22bn, Ofgem says:
“The majority of the proposed investment, around Â£15 billion, would include the upgrade and renewal of the high voltage electricity network in England and Wales and the high pressure gas networks across Britain â?¦ An estimated Â£7 billion would help to ensure that our low pressure gas networks, which deliver gas to homes and businesses, remain safe and reliable.”
In other words, the money is paying for upgrading electricity and gas networks, and so it is misleading to suggest it is solely the cost of building pylons to connect wind farms to the grid.
This looks like deliberate misrepresentation on the part of the Mail, because Ofgem actually breaks down the costs to consumers:
“The Â£11 average increase to a household bill [per year] breaks down into around Â£4 for National Grid Electricity Transmission (NGET), Â£2 for National Grid Gas Transmission (NGGT) and Â£5 for the gas distribution companies.”
So applying the Mail’s calculation correctly, the average household will pay Â£32 over eight years for electricity transmission upgrades under the proposals, which will enable a range of new energy sources including wind farms, new gas plants and (in theory) nuclear power, with Â£56 going to pay for gas upgrades.
Where did the Mail get the inspiration for its “windfarm pylons” headline? It’s not entirely clear, as Ofgem doesn’t break down the spend on electricity infrastructure by energy type.
This document from the Energy Networks Strategy Group – the body that advises the Department of Energy and Climate Change on future infrastructure needs – examines similar costs in a scenario where the UK meets renewable energy and carbon reduction targets for 2020. It suggests around 60 per cent of new capacity will be from wind power – onshore and offshore.
These numbers don’t provide a detailed picture of how much transmission infrastructure costs will be for each new technology, but they do show that taking the entirety of spending on new energy grid infrastructure as applying to “windfarm pylons” is not particularly valid.
So a more accurate headline might have been: “Electricity upgrades will cost every home Â£32 over the next eight years”. But then that doesn’t really have the same ring, does it?
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