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Britain is now free to frack and slash energy bills

September 18, 2016

By Paul Homewood 




Bjorn Lomborg has just gone further down the greenies’ Xmas card list!

From the Telegraph:


This week has seen debate rage about whether the Hinkley Point deal represents good value. But there is another vital element of energy policy that is not being discussed. For one of the key benefits of the vote to leave the European Union is that Britain will not longer have to cooperate with overzealous regulations on shale gas extraction, or fracking, which has the potential to transform the energy market.

Of course, any kind of resource extraction needs regulation to prevent companies from despoiling the environment and leaving the public to pick up the tab. But the EU’s regulations went much further than that. In a letter to the Government last year, nine leaders of multinational energy companies warned that EU regulations “seriously exacerbate an already ailing investment climate for producing oil and gas within Europe”

If you want to reduce carbon dioxide emissions, fracking matters. America has shown how to make very large reductions – by switching from coal to gas. While gas is still a fossil fuel, it emits only about half as much greenhouse gas as coal. Making gas much cheaper through fracking has driven the US switch. It has not just reduced American emissions three-times more than all European solar and wind has managed, but it has also given the US an economic advantage from cheaper energy worth some £200 billion per year.

We need to ditch our unrealistic expectations for renewables. They remain very costly and provide little energy. This year, Britain will spend £4.7 billion on subsidies for renewables, yet wind and solar provide just 1.7 per cent – and all renewables just 6.3 per cent – of UK energy. Moreover, wind and solar will need subsidies for decades to come. Just a cut – not elimination – in subsidies caused new solar sales in Britain to drop like a stone, with 74 per cent fewer solar panels installed.

All societies need power around the clock, and this demand is normally supplied by a mix of coal, gas and nuclear, which can generate electricity at any time – even when it’s dark or the wind isn’t blowing. Since solar and wind can’t do this, they always get to sell their electricity to the market first, so other more reliable power sources increasingly get relegated to playing backup.

That has two consequences. First, renewable power gets ever less valuable because it is all sold at the same time. In California, where all solar power is delivered at around midday, its value will drop by two-thirds by the time it is delivering 30 per cent of required electricity.

The second consequence is that backup power is more expensive, because the fixed costs have to be paid back from fewer hours of sellable electricity production.  This inevitably ends in higher bills for consumers or taxpayers.

Even so, because of regulations, it is often impossible for power companies to fully recoup their costs, so increasingly they are mothballing expensive plants. Across Europe, 60 per cent of all gas plants may be unprofitable and are at risk of closure. Hence – and absurdly – governments increasingly must also subsidise otherwise economic fossil fuel to keep the lights on. Britain has committed to pay £1 billion to keep backup capacity available for peak power – mostly in the form of fossil fuels – just for 2018.

Perhaps the most bizarre outcome is the effort to commission up to 1.2GW of small diesel generators as emergency backup. This means thousands of diesel generators scattered around Britain. Because they’re exempt from environmental regulation, they could end up polluting the same amount as a million extra diesel cars. Per unit of electricity, they emit more than three times as much carbon dioxide as existing electricity production. The cost will likely run to about £1.5 billion extra.

You couldn’t make this stuff up. Trying to get more renewables means we end up paying for power three times: once for the power; once for subsidies to inefficient renewables; and then once more to subsidise backup fossil fuels. Yet, despite all of that, the impact on CO2 emissions is trivial: the total reduction from UK solar and wind is equal to 29 Mt CO2, which could be achieved through the EU emissions trading scheme for just £107 million.

Across the world, despite the exuberant optimism of many supporters, solar and wind will remain mostly an ultra-expensive and ineffective way forward for the next quarter century. The International Energy Agency estimates that even with the Paris climate agreement fully implemented, only 2.4 per cent of the world’s energy will come from solar and wind in 2040, and even in climate-obsessed Europe, the proportion will in 24 years be a paltry 6 per cent.

As an EU member, Britain too focused on inefficient but hugely expensive solar and wind, yet is still likely to miss the targets for renewable energy set for 2020. A much better course is now possible: to focus on cheaper gas through fracking. It may not feel as good, but it will cut more CO2 and generate – instead of costing – billions of pounds.



Will Ambrose Evans-Pritchard please take note?

  1. September 18, 2016 9:55 am

    Reblogged this on WeatherAction News and commented:
    We need to ditch our unrealistic expectations for renewables. They remain very costly and provide little energy. This year, Britain will spend £4.7 billion on subsidies for renewables, yet wind and solar provide just 1.7 per cent – and all renewables just 6.3 per cent – of UK energy. Moreover, wind and solar will need subsidies for decades to come.

  2. September 18, 2016 10:23 am

    I didn’t realise Lomborg could go any further down the Greenies’ Christmas Card list. (Do greenies do Christmas? But anti-Gaia, isn’t it?)

    The DT poll attached to the article still shows 58% agin fracking. Telegraoh readers used to be brighter than that!

    • Mick J permalink
      September 18, 2016 6:07 pm

      They were the ones that moved on leaving the CFLs to their own devices. 🙂

  3. September 18, 2016 10:24 am

    More on the importance of cheap, reliable energy in the economy of US and elsewhere.

  4. CheshireRed permalink
    September 18, 2016 10:27 am

    Just goes to show the complete futility of so-called ‘renewables’. Insane stuff.

    PS. Paul, a little while back you published evidence of some 5,000 coal-fired power stations coming online globally within 5 years or so. Where can I find that story or link? Thanks.

  5. Max Sawyer permalink
    September 18, 2016 10:34 am

    Is it not be possible for our electricity to be generated without subsidies? The companies are only selling a product, after all, and most commercial concerns have to operate without this tax on consumers.

    Re Hinckley Point C, I sent this letter to the Telegraph yesterday:


    I suspect the following is not too far from the truth:

    Dear Theresa,

    If you cancel Hinckley Point C, France will make Brexit as difficult and as harmful to the UK as possible.

    Yours sincerely,

    Francois Hollande


    Dear Theresa,

    If you cancel Hinckley Point C, you can forget about trade deals with China.

    Yours sincerely,

    Xi Jinping

    Rock, hard place and Realpolitik. The Prime minister has made the wrong decision and has saddled us all with a new tax for years to come, but I do have a little sympathy for her reasons for doing so. Unfortunately, this decision does show a preparedness to give in to blackmail, which will have been noted by EU members opposed to Brexit.

    • September 18, 2016 12:48 pm

      “Is it not be possible for our electricity to be generated without subsidies?”

      What an engagingly naive idea, Max! /sarc

      I doubt it will catch on any time soon since government and the green blob between them have successfully ploughed up the playing field enthusiastically egged on by a series of greedy (and in some cases downright crooked) capitalists starting with Ken Lay of Enron and working on from there.

      I keep being reminded of a customer of mine way back who was about to lose his job (probably) when his boss sold the firm to one of the national conglomerates. “Our business is wholesaling groceries,” he said, “and we are good at it and usually make a profit in the process. Their business is making money and as soon as there is more to be made by turning this place into a multi-storey car park they’ll do it.”

      We could all name the worst ones but the bottom line is that virtually all the wind/solar companies spotted a “licence to print money” and jumped aboard with great alacrity. I fear that the only solution is going to be to renationalise the whole industry, give the CEGB ownership and responsibility for all aspects of generation and transmission and recreate the regional boards for distribution and maintenance. The “Chinese wall” which the EU demanded will no longer be obligatory post-Brexit and in the medium term at least I can’t see any other sane way to proceed.

      Only a central authority with the capability and competence to plan properly for future requirements and with control over the mix can hope to restore something resembling sanity to the industry. This does not preclude measures to reduce CO2 emissions (should that prove desirable or even necessary) but it will bring order out of chaos and stabilise consumer prices.

      • Harry Passfield permalink
        September 18, 2016 3:56 pm

        Like your thinking, Mike. However, have you thought that the likes of Deben would be in charge of the new CEGB? He would very much push the ruinable path. Competence doesn’t come into it.

      • It doesn't add up... permalink
        September 18, 2016 8:49 pm

        I see no difference to OFGEM and BEIS being in charge. It’s time customers were given a say. Those who wished could buy renewable power when available at the full subsidised price (and have their smart meter tell them the bad news otherwise). The rest of us could vote with our wallets.

    • CheshireRed permalink
      September 18, 2016 1:58 pm

      I think you’re likely to be very close to the truth there.

      The real villains are Ed Davey and George Osborne who ‘negotiated’ this ‘deal’. Seriously, out of date tech’, behind schedule and over budget in the only two places it’s being built, and build cost, strike price and T&C’s that are astounding in its stupidity. A blind, deaf, dumb illiterate and innumerate monkey could’ve got a better deal than Davey and Osborne. Let’s not over-look Cameron either for approving it in the first place. Weapons-grade w*nkers, all 3 of them.

      • September 18, 2016 6:38 pm

        Ye Gods, Harry! Don’t even think it.

        When I am PM Gumdrop will not be allowed anywhere within a day’s travel of anything to do with electricity generation. And mentioning his name in my presence will be classed as sedition for which I plan to reintroduce the death penalty!

        Engineers only need apply. I want people who know what they are doing strange as that concept may be in modern Britain.

  6. September 18, 2016 10:51 am

    It is amazing that after reading this article, only 40% of readers support fracking in the UK, whereas 58% oppose it. Where do the 58% expect to get their energy from and how much are they prepared to pay for it? Do they not understand that wealth depends on cheap energy?

    • September 18, 2016 11:03 am

      I don’t think the Grombies actually read the article ..they just vote.
      But since they’ve found a way of bot-fixing the DM comments they might have used bots in the vote also.

    • CheshireRed permalink
      September 18, 2016 2:00 pm

      Is it unreasonable to wonder if Greenies put notice of the Telegraph poll out to all their members, who then obligingly log on to vote? Given how motivated they are I wouldn’t be remotely surprised.

  7. rwoollaston permalink
    September 18, 2016 11:24 am

    We may be free to slash energy bills, but I fear we will choose not to. As Hinkley Point, by implication Sizewell B, and several windfarms have been approved at strike prices 2-3 times higher than current wholesale prices, it is in politicians’ interest to justify this by increasing wholesale electricity prices further by continuing to shut down cheap capactity using the excuse it is high carbon (even if it’s gas).) Unless of course it can be kept going by stripping woodlands and forests here and in North America because the biomass produced is ‘green.’

    • Max Sawyer permalink
      September 18, 2016 2:08 pm

      Unfortunately for the consumer, lower energy prices would mean less VAT for the government. Any guesses as to what will happen to post-Brexit prices?

      I take Mike’s point, so how about tearing up the licences to print money and then introducing a properly competitive energy market without subsidies? Given current computer capability, why should changing suppliers take any longer than a few seconds? Buying energy should be seen in the same way as buying a bag of potatoes – a free and unencumbered choice between suppliers – with maintenance of the National Grid being put out to tender. But then, there is the example of the railways….

      I also take his point about the effect on businesses when their guiding lights stand down or are removed – GEC was rock-solid under Lord Weinstock and Morrisons had few problems under Sir Ken.

      • September 18, 2016 3:01 pm

        I was tempted to add, and since you’ve now mentioned it I will, that the railway privatisation is the shambles it is partly due to the same “Chinese wall” requirement to separate infrastructure from operation.

        So that could go as well, if we fancied the idea. Problem is the complexity of about a dozen or more operaing franchises, leasing companies, maintenance firms, etc is a purely British add-on and not one we can make the EU carry the can for so I don’t see that changing any time soon either!

    • September 18, 2016 3:23 pm

      You cannot imply anything about Sizewell B from the strike price for Hinkley Point C. Sizewell B gets the wholesale price for electricity, i.e. it is subsidy free.

      • rwoollaston permalink
        September 18, 2016 6:32 pm

        Sizewell gets a £3/MWh discount on the strike price compared to Hinkley Point. This is nowhere near the wholesale price of electricity today.

  8. Oliver K. Manuel permalink
    September 18, 2016 1:12 pm

    As an outsider, I do not know if Britian is really now free, or if that will be delayed indefinitely by bureaucratic EU rules.

  9. Robin Guenier permalink
    September 18, 2016 1:34 pm

    I was surprised to see Lomborg’s claim that “wind and solar provide just 1.7 per cent … of UK energy.” I would have expected wind and solar – even as a percentage of total energy – to be rather more than that. According to these data, his figures are roughly correct for 2014 (6% of electricity production – therefore about 2% of total energy): But surely they’re more than that by now? (Unfortunately the link he provides is to various sets of OECD data that are available only to OECD iLibrary subscribers.) Can anyone provide a link to current data?

    • NeilC permalink
      September 18, 2016 2:50 pm

      Robin, I’ve been randomly monitoring (180 days) Gridwatch demand for the last 18 months, they do not report solar, but wind accounts for 5.4% of electricity demand.

      • Robin Guenier permalink
        September 18, 2016 4:09 pm

        Thanks Neil – useful.

    • Joe Public permalink
      September 18, 2016 3:13 pm

      The latest Energy Consumption in the UK (2016) data:

      • Robin Guenier permalink
        September 18, 2016 4:09 pm

        Thanks Joe, but that report does not – so far as I can see – provide the data I’m looking for: the percentage contribution of wind and solar to overall UK energy.

        BTW this interesting and comprehensive study of 2015 data provides some useful information re G20 countries – see, in particular, Figures 8 and 9. Unfortunately it includes wind and solar in one category: “wind, solar, geothermal, biomass, geothermal etc.”

      • Robin Guenier permalink
        September 18, 2016 4:12 pm

        Apologies – I forgot the link to that “interesting and comprehensive study”:

    • Joe Public permalink
      September 18, 2016 4:38 pm

      Hi Robin

      ” ….. the data I’m looking for: the percentage contribution of wind and solar to overall UK energy.”

      Is the 2015 info you’re searching for on pages 29 & 192 of July 2016 published ‘Digest of United Kingdom Energy Statistics’?

      P29: 1.1 Aggregate energy balance 2015 Gross calorific values

      P192: Table 6.4 Capacity of, and electricity generated from, renewable sources.

      Yup, mixed units so you’d need to convert to either to toe or GWh

      • Robin Guenier permalink
        September 18, 2016 5:08 pm

        Are these data what I’m looking for? I don’t think so. They enable me to calculate the wind/solar share of renewable generation. But then I need to know the renewable share of electricity generation. And I can’t find that – nor the electricity share of total energy.

      • September 18, 2016 5:32 pm

        Robin & Jo
        Table 5.5 Electricity fuel use, generation and supply (Page 141&2) should give you the data some of the data. It has Total Electricity Supplied (gross) from Wind & Solar, and from all sources. The percentages per year for renewable share of total electricity are
        2011 4.5%
        2012 6.1%
        2013 8.9%
        2014 11.2%
        2015 14.8%

        I cannot see the figures for the electricity share of total energy.

      • September 18, 2016 6:48 pm

        Kevin : remember that burning rubbish etc is the biggest renewable ..But the Greenblob would have you think it’s wind & solar.

      • Joe Public permalink
        September 18, 2016 7:04 pm

        Hi Robin @ 5:08pm

        “But then I need to know the renewable share of electricity generation. And I can’t find that – nor the electricity share of total energy.”

        Try “UK ENERGY IN BRIEF 2016”, figures are primarily taken from the 2016 edition of the “Digest of UK Energy Statistics” DUKES

        P8 Final energy consumption 2015 = 137.7 mtoe. Of which electricity was 26.0 mtoe. So 26/137.7 = 18.8816%

        [But be aware some of the fuels will have been used to generate that electricity.]

        P29 Renewable energy sources, 2015 (In thousand-toe – so I’ve vonverted to mtoe)
        Solar PV and active solar heating 0.701 mtoe
        Wind 3.466 mtoe
        Combined wind + solar = 4.167mtoe

        Therefore combined wind + solar as % of electricity is 4.167/26.0 = 16.02%

      • Joe Public permalink
        September 18, 2016 7:13 pm

        Or the Table on p30, the explanation of which is:

        “At 83.6 TWh, renewables accounted for 24.6% of electricity generated in the UK during 2015, 5.5 percentage points higher than during 2014. Total generation from renewables increased by 29% between 2014 and 2015. Other bioenergy showed the largest absolute increase at 6.7 TWh (30%), mostly from plant biomass. Solar photovoltaics increased by 87% from 4.0 TWh to 7.6 TWh. Total wind generation increased by 26% to 40.3 GWh due to increased capacity and higher than average wind speeds. Hydro increased by 6.7% reflecting higher than average rainfall.
        The main weather effect on renewable generation was the average wind speeds which were the highest in the last fifteen years.
        When taking into account only sources eligible under the Renewables Obligation, renewables accounted for 26% of UK electricity sales, up from 20% in 2014.”

      • Joe Public permalink
        September 18, 2016 7:32 pm

        Or to really blow your mind, there’s an animated energy flow chart Sankey diagram for 2012/2013/2014/2015, which unfortunately is not ‘freezable’.

        You can however, “Print Screen” capture an image, and with practice you could capture 2015!

      • Robin Guenier permalink
        September 18, 2016 8:50 pm

        Thanks to all – and especially now to Paul – that’s been extraordinarily helpful. And interesting: not that it really matters, but 2.1% is, in a sense, rather a lot more than Lomborg’s 1.7%.

  10. rwoollaston permalink
    September 18, 2016 6:53 pm

    According to this data: electricity consumption represents approx 37% of UK energy consumption. Therefore scale down the wind and solar electricity generation percentages by this percentage to get to their percentage contribution to total energy consumption.

  11. NeilC permalink
    September 19, 2016 5:20 am

    Based on the above electricity consumption being 37% of UK energy consumption my figure of 5,4% of grid demand (my comment September 18, 2016 2:50 pm) would represent 1.998% of UK energy consumpti.on.

    Robin, if you want a spread sheet of my work, Paul has my email address.

  12. tom0mason permalink
    September 19, 2016 9:20 am

    We just need to contract in some poor desperate but well forested country and reduce their assets to wood pellets for Drax, and UK electricity supplies will be secure…

    Buy that line and the bridge comes free!

  13. Gerry, England permalink
    September 19, 2016 12:53 pm

    People whine about the privatization of the energy market but because of government interference we don’t have a free market in energy. If we did then it would be goodbye windmills and solar panels as they are too expensive. Renationalising it would make no difference really since the problems won’t go away. At the moment people can’t see how much the green crap subsidies add to their bills.

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