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Wind Farm Subsidies Continue For Next Six Years

July 4, 2013

By Paul Homewood

 

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http://www.telegraph.co.uk/earth/energy/10146403/Wind-farms-get-generous-subsidies-for-another-six-years.html

 

The Telegraph confirm what we already knew, that, under the new system introduced by DECC, wind farms will continue to receive a similar level of subsidy as under the old system. They report:-

 

The Government said onshore wind farms should get at least £100 per megawatt-hour, when the market rate for electricity is currently less than £50 per mega-watt hour.

Offshore wind farms will get triple the market rate at £155 per megawatt-hour in a deal described by City analysts as "astonishingly expensive".

The difference will be met by a subsidy from the taxpayer, which is potentially more generous than the current regime that hands developers more than £1 billion a year.

[Not totally accurate, by the way, as the subsidy will be passed onto electricity suppliers to add to energy bills].

 

They continue:-

 

Ed Davey, the Energy Secretary, said new costs were "broadly comparable" with 2013 prices but his department said it had not worked out whether consumers will be paying more or less for wind power under the new system.

 

Pardon? Is the nutter in charge of our energy policy really saying he has introduced legislation and not done a cost assessment beforehand? Well, if he cannot do it, I’ll do it for him.

 

Assuming a current rate of £50 / MWh, and based on last year’s wind generation figures, the subsidy works out at:-

 

  TWh 2012 Subsidy per MWh Annual Subsidy
£ billion
Onshore 13.32 £55 733
Offshore 7.46 £105 783
Total 20.78   1515

 

 

There, that was not difficult, was it? (I assume by the way that even Dopey Davey knows what the old system cost in subsidies).

However, we can go one step further. By 2020, the UK is targeted to source 15% of its energy needs from renewables. As “energy needs” includes non-electricity sources such as gas for heating, it is generally accepted that this target will mean we need to source between 30% and 40% of our electricity from renewables by 2020. (For instance here and here.)

Annual electricity generation was 363TWh last year, so, using a figure of 35%, we are looking at 127 TWh from renewables by 2020. Biomass and Hydro could possibly supply about 30 TWh of this, so we are left looking for wind to provide the bulk of the rest, say 95 TWh.

It is generally accepted that most new wind capacity will have to come from offshore, so we could be looking at the following amount of subsidy:-

 

  Estimated TWH
2020
Subsidy per MWh Annual Subsidy
£ billion
Onshore 40 £55 2200
Offshore 55 £105 5775
Total 95   7975

 

 

One can understand why Davey was not keen to release these figures, instead pretending that not much had changed. As usual though, the dopey bird, who wrote the article, did not seem to have the gumption to challenge him.

 

Footnote

According to the Telegraph’s report:-

 

The renewables industry said the level of subsidies would still mean it is "challenging" for them to make a profit.”

I know we can’t really trust spokesmen for renewables anymore than we can estate agents. But if that really is the case, it goes to show just how uneconomic the bird chompers really are.

2 Comments
  1. John F. Hultquist permalink
    July 4, 2013 3:58 pm

    One of the things not always easily determined about any substantial flow of money is who benefits. So reading of the amounts being committed by the UK for wind farms, what can be learned if one “follows the money” ?

    There have been a few reports that large land owners that often overlap with the political class are sometimes beneficiaries. An average bloke surely doesn’t own enough land to get involved.
    This question occurs to me because the nearest project to me is on public land. Here in the State of Washington a large area owned by the State is controlled by the Department of Natural Resources (DNR) and managed to provide money to fund public schools. Historically this mandate was met mostly by selling timber or leasing for cattle and sheep grazing. The DNR has diversified the income sources in recent years, one such being leasing land for wind farms.
    http://washingtondnr.wordpress.com/2010/03/15/wind-power-projects-on-state-trust-land-are-creating-clean-energy/

    This wind farm is about 25 km east of me — info here:

    http://pse.com/inyourcommunity/kittitas/Pages/Wild-Horse.aspx

  2. Joe Public permalink
    July 4, 2013 5:06 pm

    “The renewables industry said the level of subsidies would still mean it is “challenging” for them to make a profit.”

    This statement is obviously a load of b@llox, as witnessed by the number of applications for new Bird-Bashing Farms being submitted.

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