The Real Cost Of Decarbonisation Revealed By Sir David MacKay In 2011

By Paul Homewood

 

The late Professor Sir David MacKay, formerly chief scientific adviser to DECC, was an ardent proponent of the need to decarbonise the UK economy.

But he was also an honest man, not afraid to challenge government policy, such as frequently arguing that renewable energy was a waste of time.

Back in 2011, he designed a “cost of energy calculator” for DECC, as the Telegraph reported at the time:

 

Reducing dependence on fossil fuels and moving to renewable and nuclear energy would cost an additional £60billion every year until 2050, the officials said.

But Professor David MacKay, a government adviser on climate change, said that doing nothing to reduce carbon emissions would prove even more expensive because of rising energy prices.

Although the cost of converting to green energy will initially be paid by energy companies and the Government, they are likely to pass it on to taxpayers through higher energy bills and taxes.

The bulk of the cost will lie in replacing the ageing fossil fuel and nuclear power stations and meeting the Government’s commitment to reduce carbon dioxide emissions to hit European Union targets.

Meeting the country’s current energy needs costs an estimated £220billion, equivalent to £3,700 per person every year.

The cheapest option for switching to green energy would increase the estimated cost of energy to £4,598 per person per year.

Under this plan, just over 40 per cent of energy would come from wind, solar and renewable power, a third would come from nuclear plants and a quarter from gas stations.

The estimates suggest that failing to replace fossil fuel plants with greener energy would be even more costly.

Continuing to rely on coal and gas would cost about £4,682 a year per person, according to the forecasts.

The most expensive scenario, working out at £5,181 per person a year, would rely on a far higher use of nuclear power than any of the other options.

The "cost of energy calculator" has been designed by Prof MacKay for the Department of Energy and Climate Change. The Government estimates that household bills will probably increase by around £200 a year over the next decade, with about half of this rise caused by Britain’s climate change policies.

Household energy bills are already at record levels, with the average domestic fuel cost estimated to be about £1,175 for 2011, compared with £1,075 for the same level of energy consumption last year.

Energy companies were criticised for raising their prices this summer. The industry has claimed that gas prices have risen because production has fallen from the Middle East during the Arab Spring, and extra supplies have gone to Japan following the Fukushima nuclear plant disaster in Japan last March.

Prof MacKay said: "I was irritated by all the twaddle being talked about energy and the misleading comparisons made. I just wanted the numbers without the hype. I am just the numbers guy, trying to be helpful."

https://www.telegraph.co.uk/news/earth/greenpolitics/8980982/Greener-energy-will-cost-4600-each-a-year.html

 

The costs of decarbonisation he estimated were frighteningly huge, and ever since successive Energy Secretaries have attempted to cover them up.

His claim that the country’s energy costs would rise from £3700 to £4598 per person by 2050, would mean an extra cost of £58bn a year by the end of the period. These numbers are simply too big to comprehend in normal terms.

And, on current trends, MacKay almost certainly underestimated the cost of going green. He notes that sticking with fossil fuels would also cost much more, because of rising prices of oil, gas and coal. In fact, since 2011 the reverse has been the case.

When he designed his calculator, prices were peaking. For instance, oil was at $125/bbl. They are now down to $74/bbl, and are forecast to rise only slightly by 2040:

 

https://www.gov.uk/government/publications/fossil-fuel-price-assumptions-2018

 

This means that staying with coal and gas would be much less than MacKay’s projections, and less even than his base case.

His other forecast, that bills would rise by £100 a year because of climate policies, is also well on the way to fruition. Again, because of falling fossil fuel prices, we could have expected lower bills since 2011.

 

MacKay was never afraid to tell the public the truth about the cost of his policies, because he believed that they were essential. Sadly, the politicians he worked with and their successors aren’t so honest.