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Green Subsidies Soar To £2.6bn

June 29, 2014

By Paul Homewood

 

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http://www.telegraph.co.uk/earth/energy/10931986/Green-energy-cost-hits-record-high-as-expensive-turbines-built-at-sea.html

 

The Telegraph report on how the cost of renewable energy subsidies has soared, as renewable capacity increases, and particularly that of the most highly subsidised offshore wind.

The figures they quote are for 2012/13, so will certainly be higher still for this last financial year.

 

The cost of generating green electricity has hit a record high as subsidies are handed to expensive offshore wind farms and household solar panels, new figures show.

The annual bill for consumers to subsidise renewable technologies has soared to more than £2.5bn as more turbines are built and households install panels on their roofs.

But new figures show that the average cost for each unit of green electricity has also increased, hitting a record high of £66.97 per MWh in 2012-13, the most recent period for which figures are available.

The figure was a rise from £54.26 the year before, despite pledges from ministers to bear down on the costs of green energy.

The increase reflects the drive to build wind turbines at sea, which receive roughly twice as much subsidy as those built onshore, where wind farms have proved increasingly controversial.

Subsidies paid to energy companies for this kind of large-scale project reached £2bn, from £1.5bn a year before.

The new figures also reflect the rush by tens of thousands of households to install solar panels on their roofs at generous subsidy levels before ministers cut support in March 2012. The bill for this kind of small-scale subsidy leapt to £500m in 2012-13, from £150m the year before.

Dr John Constable, director of Renewable Energy Foundation, a UK charity that has long been critical of the costs of the renewables targets, said: “DECC is subsidising renewables to meet arbitrary and over-ambitious EU targets, so it was inevitable that we would move rapidly up the cost curve once the ‘cheaper’ opportunities had either been fully developed like landfill gas or exceeded the limits of public acceptability like onshore wind.”

He added: “Subsidy costs are now spiralling out of control – the annual burn is about £3bn a year and rising fast. There still is a good case for experimenting with renewables, but building so much capacity when the whole sector is still fundamentally uneconomic is bound to end in tears.

 

 

Nothing surprising here, and subsidies are due to treble by 2020, according to the government’s own figures which have budgeted for an annual cost by then of £7.6bn.

8 Comments
  1. Joe Public permalink
    June 29, 2014 1:29 pm

    Dr John Constable …… said: “DECC is subsidising renewables to meet arbitrary and over-ambitious EU targets ….”

    But it’s not DECC, it’s British Taxpayers & energy users who fund the entire subsidy.

  2. manicbeancounter permalink
    June 29, 2014 1:32 pm

    It should be noted that the average cost of £66.97 per MWh in 2012-13 for green electricity is just the subsidy. There are three other costs not taken into account.
    First, and largest, is that green electricity also receives the wholesale price of about £45-50 per MWh that conventional power stations receive.
    Second, and also considerable in size, is the huge investment in grid capacity to transport the generated electricity from remote areas.
    Third, are the consequences of having a complete disconnect between the generation of green electricity and the demand for electricity in general. It reduces the efficiency of conventional power stations.

    • June 29, 2014 1:57 pm

      There is also the coming cost of paying gas power stations to stand idle, the Capacity Market Mechanism

      • Joe Public permalink
        June 29, 2014 5:40 pm

        And the hire & siting-costs of diesel generators which may or may not be used.

  3. manicbeancounter permalink
    June 29, 2014 2:18 pm

    The major component (about 70%) of the subsidies to green electricity are in the form of ROCs – Renewables Obligation Certificates. There are three components to the growth.

    1. Renewable electricity generated qualifying for ROCs.
    2. Renewable Obligation Certificates issued. (Biomass and onshore wind 1 ROC per MWh, offshore wind 2 ROCs per MW)
    3. The buy-out value of the ROCs. This value is declared by the regulator OFGEM, and inflated each year by the Retail Prices Index. In 2012-13 the buy-out value was £40.71 and in 2013-14 £42.02.

    Most of the ROC data is published monthly by the DECC. Last year I analysed the then available data from Jan 2010 to Aug 2013. I found that from the period Jan-Dec 2010 to the period Sept 2012-Aug 2013, volume of renewables electricity generated increased by 80%; volume of ROCs by 116%; and value of ROCs by 140%.

    The major reason for the higher growth in ROCs issued to power generated (and hence above inflation increase in costs per MWh) was due to much higher growth in offshore wind power to onshore wind power.

    The details are at http://manicbeancounter.com/2013/12/31/the-rising-costs-of-the-renewables-obligation-certificate-scheme/

    Not all forms of renewables are equal. For instance Biomass

  4. save energy permalink
    June 29, 2014 2:37 pm

    According to the wind industry (may 2014) , UK currently has 1,278 Windfarms comprising –
    9,912 large turbines, + approx 18,000 small turbines,
    Total Capacity = 23 GW
    See – http://www.renewableuk.com/en/renewable-energy/wind-energy/uk-wind-energy-database/index.cfm/maplarge/1

    Even with all that capacity wind has only provided a measly 7% in the last 9 mths

    As I write this UK wind is contributing just 1 GW a mere 4% to our grid demand !! (we are importing 3 x more than that from France & Holland) & is operating at just 5% of its 23 GW capacity !!…but a tad better than the last 2 mths !! –
    Look here – http://www.gridwatch.templar.co.uk/
    Also – http://www.ukpowergeneration.info/

    Weather systems can be huge, Europe has had high pressure dominating for weeks, so sod all wind power from Ireland to Poland, Italy to Scotland.

    See the current production from your local RWE windfarm – http://www.rwe.com/web/cms/en/206488/rwe-innogy/sites/production-data-live/rwe-renewable-energy-live/
    Notes: 1. A minus fig indicates them taking power from grid to rotate blades.
    2. Capacity in MW but output is in kW, so divide output by 1,000 to compare.
    3 . It’s a manual reset.

    And this is how much EXTRA we pay per mth for low density intermittent ‘green’ energy – http://www.variablepitch.co.uk/finance/ (explore that site )
    & yes the figs are £millions/mth.

    Not a sensible way to use precious resources.

    I won’t even start on the community benefits ‘Ponzi scam’. (Google it )

    • • Lots more info from-
    Department of Energy & Climate Change ( DECC ) & Grid figs
    ( Digest of United Kingdom Energy Statistics ( DUKES)
    http://tinyurl.com/n4k7n8 ) – that proves this ‘green policy’ has compromised our energy security.

    But, Ed (di*khead) Davey the UKs Energy and Climate Change Secretary, has cunning plans to keep the lights on…
    1. Pay industry to stop work – http://www.bbc.co.uk/news/uk-politics-26819050

    2. Big dirty diesels to backup his ‘green clean’ wind & solar – Short Term Operating Reserve STOR. – http://tallbloke.wordpress.com/2014/06/11/the-insane-cost-of-ed-daveys-green-energy-policy/

    How mad is that ???

    It is a very dangerous world, when money & politics, trump science & engineering facts.

  5. dave ward permalink
    June 29, 2014 5:18 pm

    One thing that I’ve never had a satisfactory answer to is what happens in 25 years when the subsidies run out? Will there be a sudden, mad rush to replace all the existing turbines & panels? As we will supposedly be getting a substantial proportion of our electricity from renewables by then, we will be collectively b*****d when the money runs out….

    Of course, I AM being sarcastic – we know the claimed lifetimes are wildy optimistic, and it’s almost inconcievable that the current subsidy levels will continue for another 20 years. Just look to Spain, Germany & now Italy, where the money is already running out!

  6. catweazle666 permalink
    June 30, 2014 1:39 pm

    Here is a very interesting interactive map of RWE installations in Europe and the UK.

    http://www.rwe.com/web/cms/en/1101828/rwe-innogy/sites/

    Hovering the mouse over a site shows its current output.

    Interestingly, in times of low wind when the blades require turning or de-icing and the windfarm is actually drawing from the grid, it also shows the negative values too.

    It’s a shame other companies are not as transparent.

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