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Why won’t the government admit the true cost of renewable energy?

August 23, 2017

By Paul Homewood



The government has been claiming that “flexibility measures”, which they are planning to introduce, will save us all billions of pounds.

I covered this story last month here, and showed the claims to be a con.

It is pleasing to see that the GWPF have now followed this up, with an article in CapX:




By Harry Wilkinson

Everyone knows that renewable power is inherently unreliable, or as engineers put it: “intermittent”. Nonetheless, there is a plan in place to become ever more reliant on these technologies for our electricity supply.

This has forced the government into taking a risky bet on unproven “flexibility measures”, in a desperate attempt to try and manage this huge technical challenge.

These measures will have hefty upfront costs of up to £20 billion, but the benefits are uncertain, spread over many years and will be outweighed many times over by the cost of renewable subsidies. Once again, the government is failing to be honest about the significant costs involved in switching from fossil fuels to renewables.


The measures come in a package of 29 separate actions to be undertaken by government, the energy regulator Ofgem and industry, as part of a “Smart Systems and Flexibility Plan”, published by the Department for Business, Energy and Industrial Strategy in July. These actions support two key objectives: offering greater incentives to businesses to develop energy storage facilities, and making it easier for businesses to be paid for reducing their energy usage when capacity margins are particularly tight.

The shift towards a greater number of small-scale energy suppliers will force the National Grid to invest far more in the transmission and distribution networks which transport power from supplier to consumer. According to Npower this will add £114 on the average domestic bill by 2020, a 124 per cent increase compared to 2007.

An example of such an investment is the recently constructed Beauly-Denny power line, which cost £820 million and cut a horrible steel swathe through the Highlands. Time and again, promoting renewables comes at the cost of protecting the environment.

A report on system flexibility by green energy consultants Carbon Trust has led to many headlines suggesting such measures will save the country up to £40 billion. This is misleading. The Government’s own policy paper reveals the saving may only be £17 billion and is spread all the way until 2050, which equates to a more modest-sounding saving of between £500m and £1bn per year on average.

But there is a bigger problem with these calculations. The supposed savings are calculated against the cost of continuing to be straight-jacketed by draconian climate change targets, but without investing any new resources in flexibility measures. An alternative approach could be much cheaper, but it would need to deviate from the inflexible stipulations of the Climate Change Act. Indeed, the cost of meeting the Act is now running at upwards of £10bn a year, and is likely to be at almost £30bn a year by 2030. Any illusory savings from flexibility measures will be dwarfed by the cost of renewable subsidies.

This is nothing more than yet another bill for hard-pressed consumers to support “clean” technology. It has been wilfully and misleadingly trumped up as a saving, by assuming that adherence to the Climate Change Act is some sort of immovable fact of life. The truth is that it is a choice, and politicians should start being upfront about the costs of that choice.

Close examination of the full Government paper reveals that the relative benefits of the policy are unevenly spread across different types of consumers. They have presented the initiative as one of “Putting Consumers in Control”, however the reality is that the measures are focussed primarily on a small group of large corporate consumers. They stand to gain the biggest savings by regulating their energy usage: for example, by switching off large appliances when capacity margins are tight.

Despite the significant costs, Britain will still be forced to rely on a core of gas-fuelled power stations to provide power while the wind is not blowing and the sun not shining. These stations will be rarely used and so become expensive to maintain. In one scenario considered in the Carbon Trust study, these power stations will still have a combined capacity of 16 GW in 2020, but they will only be used 6 per cent of the time because subsidised renewables have prioritised access to the National Grid.

The Government has thus conspired to make all existing technologies uneconomic. New technologies on the other hand may well become competitive before 2050. All the eggs are being put in the basket of already failing renewables.

Fossil fuels have powered the economy since the industrial revolution, making us all better off, and freeing people from the tyranny of being tied to the land. Now these gains are being gradually eroded by politicians who have put corporate interests and renewable energy lobbyists above the common interest.

But they refuse to be honest about it. Yet again, the Government and assorted interests are presenting significant costs as “savings” and asking us to be grateful for it.

The policies may well generate savings compared to a policy of building new renewables without flexibility measures, but that does not mean that they do not come with costs to the economy as a whole. This is the inevitable result of putting the attempted regulation of carbon dioxide before all else, and at any cost. A more balanced approach to energy policy has never been needed more.

Harry Wilkinson is a researcher at the Global Warming Policy Forum

  1. J R Cole permalink
    August 23, 2017 6:46 pm

    You Brits need to take back your country before it’s too late.

  2. Simon Allnutt permalink
    August 23, 2017 8:34 pm

    Governments don’t admit mistakes until all the politicians involved have left parliament.

    • August 24, 2017 5:35 am

      …. with their gongs and pensions (and with well-paid consultancies lined up).

    • HotScot permalink
      August 24, 2017 6:41 am

      I can’t recall ever hearing a government admitting it was wrong on any major policy. A bit of indiscreet shagging by an individual, sure, but nothing major.

  3. August 23, 2017 9:30 pm

    ‘Why won’t the government admit the true cost of renewable energy?.

    Because the public would blow a fuse.

  4. Dermot Flaherty permalink
    August 23, 2017 10:07 pm

    It seems to me that like the NHS, “Climate Change” has taken on almost religious significance such that any attempt at objective criticism is perceived as Bad v Good. Given that the overwhelming motivation for the vast majority of our politicians is to stay in power, why should we expect any significant number of them to swim against the tide ?

    Apart from Peter Lilley and John Redwood, I can’t think of a single MP who has the courage to question the new consensus, although I seem to recall that David Davis spoke sensibly before the Brexit black hole swallowed him (as it is doing with most of them).

    Indeed, I fear that Brexit is becoming so all consuming that the likelihood of any serious attempt to re-examine what passes for our Energy Policy in the next few years is pretty slim and it will need the lights to go out before there is any chance of sanity returning.

    • richard verney permalink
      August 23, 2017 11:15 pm

      Brexit is our only hope of getting back on track with respect to sensible Energy Policies.

      The EU have just outlawed (effective 1st September) vacuum cleaners exceeding 1600 watts. They are seeking to outlaw 3,000 watt kettles. They have mo understanding of energy production or energy consumption.

      We need to follow the US and pull out of the Paris Accord and push ahead with fracking.

      • Gerry, England permalink
        August 24, 2017 11:44 am

        There is something of a double-edged sword to these reductions. A reduction in energy use will save the need for generating capacity and isn’t that a main plank of government’s policy as created by Huhne and Davey – increased efficiency? The rule on vacuums sets a goal for designers to improve the efficiency of their products so that they work the same on less power. Can’t quite see how that works for a kettle as the amount of energy to heat the water will be the same but then it won’t bother me as I use a gas heated stove top kettle. But if there isn’t an improvement in vacuum cleaners then it might just be used for longer resulting in no energy saving.

        A botched Brexit as is currently planned will force a big change in future policy.

  5. Geoff Sherrington permalink
    August 23, 2017 10:49 pm

    Sadly, our State govt in Victoria Australia is now passing into law a target of 50% renewables by some narby year, after having just forced the closure of one of our bigger coal stations at Hazelwood.
    They are selling this policy as a saving of $30 a year for everyone. As you note for GB, this does not account for subsidies for windmills and solar farms. It is IMHO, close to being actionable as knowingly misleading the public for political and hence monetary gain. Geoff.

  6. Athelstan permalink
    August 24, 2017 12:18 am

    Ruinables, we dig our own graves, financial disaster beckons and will arrive no ifs nor buts, economically speaking green = calamity.

    You voted for it.

    • Gerry, England permalink
      August 24, 2017 11:37 am

      Thankfully I didn’t since I abstained while I await a party that speaks for me. Will May still be PM by mid-October? An election next year? Not unlikely. 2019 most definitely.

      • Athelstan permalink
        August 24, 2017 12:37 pm

        Agreed…………..2019 but we need an alternative and I don’t foresee any prospect of there being one.

  7. Adrian Bryant permalink
    August 24, 2017 3:35 am

    I spend most of my time in Thailand. My latest electricity bill just arrived. As a ‘heavier than normal user’ with 8 a/c units in my house (normally only 2/3 in use at the same time) I have to pay a premium but still pay 10p/kWh even with the slump in the pound. I have also bought a vacuum cleaner here too. It shows that the powerful suction is due to a 2000W motor but the rating label notes that, in the EU, the same machine is rated at 1700W. Just change the sticky label to get round daft legislation!

    In the UK my electricity bills are growing exponentially and there will come a time when the public decides that all the added costs of climate policy demand a change in government. Change is already happening with Brexit and Trump. Climate change rates well down on the public’s concerns but ‘just managing’ is top. As the bills go up the pressure on government will increase.

  8. Bloke down the pub permalink
    August 24, 2017 9:24 am

    WUWT has an article about using railway trains running up and down hills as a way of storing potential energy. Claims by the company of 80% efficiency cf 60% achieved by pumped storage, but without the limitations of needing big lakes. Would seem to have potential, ahem, in areas like Wales where a lot of wind turbines are situated.
    I don’t know how significant the amounts would be. Maybe if they tied it in with sightseeing trips for tourists, they’d have an extra income stream.

  9. Tim Hammond permalink
    August 24, 2017 9:51 am

    So instead of being paid by customers to produce something customers want, businesses will be paid by taxpayers (or energy constumers) to not produce. And that is claimed to make us better off? Swapping paying for something we want for paying for nothing?

    At least they should be honest – the “nothing” is the claimed mitigation of the claimed terrible effects of climate change.

    I’m not sure I can think of another example of such extraordinary global insanity than the energy policies of most developed countries. The trillions we are wasting, the misdirected efforts to wasteful and pointless technologies, the resulting lies, corruption and widening of inequalities. All on scare stories with little more substance than ghosts and vampires.

    Nothing less than the disastrous return of the LIA can save us, and who would want that?

  10. August 24, 2017 5:00 pm

    Reblogged this on Climate Collections.

  11. Stew Green permalink
    August 25, 2017 9:53 pm

    Just running a comment test
    @Dung thinks some sites are being blocked

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