Booker Unravels Renewable UK’s Wind Power Claims
By Paul Homewood
Booker follows up my story about last week’s interview with Renewable UK’s Chief Exec, Hugh McNeal, which claimed that onshore wind is now the cheapest form of generation:
The interview in last week’s Sunday Telegraph with Hugh McNeal, the new head of RenewableUK, was remarkable in more ways than one. Certainly readers may have been surprised to know how easily he could switch from being a senior official at the Department of Energy and Climate Change (DECC) to running our leading lobby group for wind farms. But even more significant was the way he unwittingly exposed what appears to me to be a massive deceit now at the heart of our national energy policy.
Like DECC, he has bought into the trick of pretending that renewables are now “the cheapest form of new [electricity] generation in Britain”. On the face of it this claim seems ludicrous, since renewables only survive on a tidal wave of subsidies which make them twice or three times as expensive as the fossil fuels which still supply up to 70 per cent of our electricity.
But herein lies the utterly deceitful game DECC is playing. First, they know that George Osborne’s “carbon tax” is gradually intended to make power from fossil fuels as costly as that from wind and solar, so that they can describe these as “subsidy-free”. Secondly, they know they desperately need new gas-fired power stations to keep the lights on when the wind isn’t blowing and the sun isn’t shining. So, thirdly, they are now planning to throw huge bribes at the power companies to get those new gas plants built.
Hugh McNeal, chief executive of RenewableUK Credit: Eddie Mulholland
But, fourthly, the bit Mr McNeal didn’t mention, or perhaps does not yet know, they are also aware that because the would-be operators of these power stations know that it is Decc’s policy by 2030 to phase out all fossil-fuel electricity (unless it is made with “carbon capture” technology which is unlikely ever to be invented), it is not going to pay these companies to invest billions in new power plants with such a limited life.
So DECC has now got itself impaled on the contradictions of a policy which, short of repealing the Climate Change Act, can only result in the lights going out and our economy grinding to a halt. As the old saying has it, “those who seek to deceive others, end up only by deceiving themselves”.
As I showed, McNeal’s claims were based on DECC calculations, which include a “carbon tax” amounting to £18/MWh, without which CCGT costs would come down to £38/MWh.
This compares to the latest round of CfD contracts, which awarded £86/MWh to onshore wind farms.
He also picks up on the point that nobody is likely to want to invest in a new CCGT plant when there is so much uncertainty about whether they will be allowed to run it for its full economic life. The only way past this barrier is for the government to pay enough via the Capacity Market mechanism to cover the full capital costs in the first 15 years.