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Net Zero Watch pours scorn on Tony Blair Institute claims about ‘cheap’ onshore wind

January 21, 2022

By Paul Homewood

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London, 21 January — Net Zero Watch has ridiculed claims by the “Tony Blair Institute for Global Change” that the recent sharp rise in energy prices could have been avoided if the UK had only erected more onshore wind turbines over the last decade.
 


Given that Tony Blair introduced lavish subsidies for land owners and wind investors 20 years ago, it is unsurprising that his institute is trying to downplay their contribution to rising energy bills. However, its claim that more onshore wind turbines would have avoided rising energy bills is simply untrue.
Audited accounts show that the actual breakeven cost for new onshore wind in the 2010s was about £95 per MWh in current prices, not some fictional figure of £50 per MWh as claimed, and this did not change significantly between 2008 and 2018. 
Building more of this expensive and unreliable energy source would have made things today much worse not better. Indeed, it would have been better if the UK had limited the growth in wind power and concentrated on the construction of the latest high efficiency Combined Cycle Gas Turbines and nuclear power. Electricity today would not only be cheaper,
it would also be cleaner.
Further details
The “Tony Blair Institute for Global Change” has claimed that the falling cost of onshore wind means that the UK has
lost out by not building more of this technology, first introduced in bulk by the Blair government after 2002. Similar statements have been made by Carbon Brief.
Neither claim stands up to scrutiny.
Onshore wind farms cost consumers in the UK just under £1.5 billion in subsidy in 2020, or about £50 per household in total, one third hitting consumers through electricity bills and the rest finding its way to them through the cost of goods and services as shops and businesses pass on their own share of the subsidy. Because of this subsidy, onshore wind electricity was supplied at an average cost of about £90/MWh, roughly double the cost of conventional energy.
Analysis of the audited accounts of onshore wind farms between 2008 and 2019 conducted by Professor Hughes of the University of Edinburgh, showed no significant reduction in capital or operational costs over this time. Windfarms built in 2008 broke even at about £92/MWh, and those built in 2018/19 at about £91/MWh.
Both the “Tony Blair Institute” and “Carbon Brief” rely on an estimated break-even cost for new wind farms over the last decade of about £50/MWh. This is wishful thinking for which there is no empirical evidence in the audited accounts.
Furthermore, as is well-known, but not apparently to the “Tony Blair Institute” or Carbon Brief, onshore wind was restricted in England by the willingness of communities to accept it and not at all in Scotland, which has 60% of all the onshore wind in the UK. Mr Cameron’s “ban” was half-hearted and had no real effect. Insofar as onshore wind development was limited, it was discouraged by reductions in subsidy driven through by the Treasury.
The only realistic option for developing more renewable capacity at the time would have been to increase the amount of offshore wind. This would have involved a commitment to pay between £140 and £180 per MWh – the current prices for offshore projects developed in the 2010s. Those prices are 3.5 to 4.5 times the average market price in real terms for 2015-19 and would have imposed a huge burden on electricity customers, not just temporarily but for another 12-15 years.
It should also be remembered that the wind does not blow on demand. The current gas crisis has been exacerbated by low wind conditions that would have becalmed any additional onshore capacity that Mr Cameron might have built.

Advocates of more reliance on wind generation should tell us how we are to ensure that the electricity system continues to function in such conditions without relying on gas – and what the cost will be. Gas generation is the cheapest form of backup to intermittent wind generation.
By opposing the extraction of Britain’s massive shale gas reserves, Tony Blair’s Institute together with other green NGOs, MPs and ministers have directly contributed to the UK’s gas supply and energy cost crisis. 
What is more, they also sabotaged any prospect of building new – and much more efficient – gas plants which would have met the current needs at lower cost and with lower carbon emissions.

The authors of those policies should reflect on their part in making the current situation worse than it might have been.
Professor Hughes said:

The ‘Tony Blair Institute’ and ‘Carbon Brief’ authors appear to live in an alternative universe of speculative numbers. We have plenty of actual evidence about the cost of onshore wind in exactly the period under discussion. It was (and still is) extremely expensive. To have built more of it would have made the current situation even more painful for consumers.”

https://www.netzerowatch.com/net-zero-watch-pours-scorn-on-tony-blair-institute-claims-about-onshore-wind/

For the record, the onshore wind farms covered by CfDs and constructed around 2018/19 receive index linked, guaranteed prices ranging between £91.39 and £98.23/MWh, not the fictional £50/MWh dreamt by Blair.

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https://www.lowcarboncontracts.uk/cfd-register/

These wind farms are the most recent to be covered by subsidy schemes, which have been subsequently removed for onshore wind. Onshore wind farms commissioned prior to the introduction of CfDs nearly all receive subsidies of £50/MWh via ROCs, in addition to the income from electricity sales.

Because of the end of subsidies to new onshore wind farms, building of new capacity has virtually dried up completely. In the last two years, just 374MW has been commissioned, increasing capacity by a mere 3%.

54 Comments
  1. Jack Broughton permalink
    January 21, 2022 12:42 pm

    Apparently the wind-based robbers have agreed to pay some of their recent windfall profits. According to SSE, this shows how good wind power is for the UK: you could not make it up!!

    • marlene permalink
      January 27, 2022 5:58 am

      How to keep an audience sitting quietly: Ask “Does anyone in here know an honest politician?”

  2. 2hmp permalink
    January 21, 2022 12:45 pm

    Everyone who researches this form of energy has said that it will never be profitable without subsidies. Now we should make off shore windfarms self supporting but who will clear the wreckage.

  3. Brian Smith permalink
    January 21, 2022 12:46 pm

    This sort of analysis makes me despair. Who is it that is able to continue this dishonesty and who has at the same time, the power to see that it goes on to influence not just policy but the infrastructure we build?

    • Harry Passfield permalink
      January 21, 2022 1:50 pm

      One name: Deben!

      • roger permalink
        January 21, 2022 1:57 pm

        I like to be inclusive, so without doubt Westminster

    • Curious George permalink
      January 21, 2022 4:04 pm

      Saudi Arabia of wind power?

  4. January 21, 2022 12:54 pm

    This man is a danger to the human race what a problem he has caused to our nations standing in the world and is also partly responsible for the elderly suffering fuel poverty No country in the world would accept him that is for sure. Detestable man that he is

  5. Jordan permalink
    January 21, 2022 1:10 pm

    Meanwhile, a profit warning from Siemens Gamesa.

    https://www.nasdaq.com/articles/siemens-energy-pulls-margin-outlook-on-siemens-gamesa-profit-warning-2021-07-14

    “Earlier, Siemens Gamesa, the world’s largest maker of offshore wind turbines, toned down sales expectations and warned of a possible loss in the current fiscal year, blaming a sharp increase in raw material prices.”

    Hmm… raw material prices. Steel and cement?

  6. January 21, 2022 1:27 pm

    Tony Blair’s anti-Midas touch reputation is maintained, rendering yet more doubt about his judgement.

    He has not declared any personal interest in wind power, has he?

    • Harry Passfield permalink
      January 21, 2022 1:48 pm

      Maybe his millionaire children have managed to front his profits….

    • January 21, 2022 2:27 pm

      Was his judgement ever seen in a positive light? His pursuit of personal power and lucre puts almost all other poiliticians in the shade. And is it just me who has noticed his ‘demon eyes’ have been replaced by a mouth full of incisors, ready to tear opponents apart?!!

  7. Harry Passfield permalink
    January 21, 2022 1:47 pm

    The authors of those policies should reflect on their part in making the current situation worse than it might have been.

    Then again, they weren’t really trying to make things better, other than their bank accounts.
    As to subsidies, does the number above include costs of restraint payments and balancing? Just imagine how cheap, reliable and clean electricity would be if wind (and solar) had not been given the go ahead without the need for all these additional payments.

    • January 22, 2022 3:02 pm

      Well Harry,
      If you were to see the destruction to the pristine landscape of Scotland (our only remaining industry), which the Buely to Denny high power line inflicted on Scotland, you would weep.
      I have often wondered why these destructive projects could not be inflicted on the end users, like Edinburgh, Glasgow and London..
      Silly me.

  8. Andy Skarstein permalink
    January 21, 2022 2:30 pm

    For this numpty to be promoting wind power generation , I have to wonder just how much of a financial interest he has in the wind turbine industry ?

  9. Malcolm permalink
    January 21, 2022 3:11 pm

    Not sure why this clown is still even listened to. Blair is yesterday’s man and the knighthood he bought has only cheapened the UK’s honours system.

    • January 21, 2022 4:58 pm

      Cheapened to the point where it’s totally pointless?

    • January 21, 2022 5:11 pm

      Over 1.1 MILLION signatories to rescind his knighthood, and nothing! No reaction. The honours system is now totally corrupted and worthless, which is a great shame for the ordinary person who is honoured for doing something extraordinary.

      • dave permalink
        January 22, 2022 9:40 am

        “…the ordinary person who is honoured for doing something extraordinary.”

        Or for going the extra mile when nobody else will.

        Sunspot activity is fascinating at present. It varies between strength like the last cycle and and strength LESS than the last cycle. The chances of a strong cycle seem to be diminishing:

        https://www.spaceweather.live/en/solar-activity.html

  10. January 21, 2022 3:44 pm

    Do any readers have a notion of how much the windmill scam owes to corruption for its continuation?
    My wild guess, given the enormity of the scam, is not less than/50%.

  11. dennisambler permalink
    January 21, 2022 3:47 pm

    “if the UK had only erected more onshore wind turbines over the last decade.”

    If the wind isn’t blowing for 11,000 turbines, it won’t be blowing for 44,000. It seems to be the new mode of government, if something doesn’t work, do more of it.

  12. It doesn't add up... permalink
    January 21, 2022 4:10 pm

    Here’s the real picture for recent renewables costs to consumers via CFDs Expensive offshore wind dominates.

    • Malcolm Skipper permalink
      January 21, 2022 5:29 pm

      A very good graphic. Could you give link to it please?

      • It doesn't add up... permalink
        January 21, 2022 7:15 pm

        Click on it and you will be offered a link (and also you get a larger version if you load the link in a new tab). I produced the chart myself from data downloaded from the Low Carbon Contracts Company, analysed in spreadsheet. The data can be downloaded from here:

        https://www.lowcarboncontracts.uk/data-portal/dataset/actual-cfd-generation-and-avoided-ghg-emissions

        Use the MWh and strike price data to generate a column of revenue at strike price, and then use pivot tables to summarise the data (it helps to have another column with just the month and year), and calculate the average revenues per MWh.

    • Malcolm Skipper permalink
      January 21, 2022 10:56 pm

      Thank you. That is helpful.

  13. Mack permalink
    January 21, 2022 4:12 pm

    There is quite a simple explanation for the TBI’s miscalculation. They obviously borrowed the abacus belonging to Bob ‘only dinosaurs still believe in fossil fuels’ Ward to do their sums. I don’t know what the Grantham Institute are paying him but it’s clearly not enough. His twitter feed is pure comedy gold at the moment.

  14. January 21, 2022 4:53 pm

    The claim in the Guardian is that renewables will save households £27 on average this year. This is because of money being returned due to the wholesale price exceeding the strike price.

    Can anyone make sense of how this works? Here is the link, could anyone explain it in plain English?

    https://www.lowcarboncontracts.uk/news/announcement/reconciliation-of-q4-2021-payments-sees-cfd-portfolio-paying-back-to-electricity-suppliers

    <>

    • January 22, 2022 1:13 am

      Simply you lie and then accuse anyone who checks up on you a racist/ denier etc…..it works!

      • January 22, 2022 1:22 pm

        Not very helpful !

    • Phoenix44 permalink
      January 22, 2022 9:32 am

      The claim it’s saving us money is nonsensical. Essentially there’s an agreed fixed price that renewables get over a period. During that period they actually get paid a variable price. Then the total they have got is reconciled with the total they should have got.

      • January 22, 2022 1:23 pm

        Thanks but can you elaborate? I don’t understand the link.

    • jimlemaistre permalink
      January 23, 2022 6:49 am

      KB, Let me try.

      Most of the western governments have established ‘Environmental Credits’ with their environmental legislations. If you produce ‘Excessive CO2’ you can buy ‘Credits’ that will ‘Absolve you of your sins’. Tesla is profitable because of this system. Wind turbine companies and solar generating and all the producers of Electric Cars have ‘Credits’ to sell.

      Last year Intercontinental Exchange Inc. (ICE) trading in carbon allowances reached a record volume. The buying and selling by ICE reached the equivalent of about one half of global energy emissions trading. A total of 18 billion tons of carbon allowances were traded in 2021 which was the equivalent to an estimated $1 trillion in exchange traded value.

      https://www.marketsmedia.com/record-volume-of-environmental-contracts-traded-on-ice/

      This is a reflection of how companies use these markets to manage and price their respective climate risk, as well as meet their compliance obligations. Last year ICE traded contracts that included a record 15.2 billion tons of EU carbon allowances, a record 2.4 billion tons of California carbon allowances and 346 million tons of Regional Greenhouse Gas Initiative allowances. This followed its launch in May 2021 of a 255 million ton allocation of U.K. carbon allowances. Last year, Tesla saw $428 million, coming from sales of regulatory credits. For more see Page 5 . . .

      https://www.academia.edu/62574334/Tesla_Versus_Toyota_Camry

      All the ‘Green Initiatives’ keep the cash flowing through the back door even when ‘Green Energy’ companies are NOT profitable from operations. The Great Big Cash Slush Fund being financed by naïve consumers and advocated by our political leaders and their proud green agendas, supported by environmentalists of all stripes and the Media.

      My Thoughts . . .

  15. January 21, 2022 5:08 pm

    ‘Scorn’ is too good a word for ‘blind Tony’. Of anyone, his actions and what he says is very deliberate, so the garbage about how more wind would have averted the energy crisis can only be deliberate lies. I cannot believe he is so uninformed as to be that naïve.

    • Harry Passfield permalink
      January 21, 2022 8:04 pm

      The truly naive ones are those who believe his lies.

    • January 22, 2022 6:40 am

      Perhaps his behaviour comes from being a barrister? They are used to believing lies in order to defend their clients

      • dave permalink
        January 22, 2022 1:19 pm

        ” used to believing lies…”

        I think this is a little glib.

        The job of barristers is not ‘to get you off.’. Their job is to present your case in the best possible light, whether it is a good case or a bad case, and nothing more. There is little mileage to be gained in fabricating stories.. Any deviousness will be probed by the barrister for the other side. That is the balance of the adversarial system.

        Barristers work best when they are narrowly focused. Best to think of a client as ‘tenant alleged to be in arrears,’ as a doctor will think, ‘the ulcer in bed three.’

        In the U.S.A., the Court-House culture is more… robust.

  16. Coeur de Lion permalink
    January 21, 2022 5:27 pm

    And what about offshore wind? Three times market? I imagine disposal costs have been averaged in? Eh?

  17. GeoffB permalink
    January 21, 2022 6:03 pm

    The Tony Blair institute for global change… pretentious name as is The Jimmy Saville institute for social care..

    • Harry Passfield permalink
      January 21, 2022 8:12 pm

      Foundations and Institutes, especially those with crooked politicians’ names attached, are nothing nothing more than industrial laundries – for money! How else do they get to fly in private jets all over the world without paying anything from their private fortunes?

    • Phoenix44 permalink
      January 22, 2022 9:34 am

      So egotistical it’s laughable. Not only his name but “global change”!

      His opinion of his own abilities is beyond vast.

    • January 22, 2022 4:17 pm

      The Jimmy Saville institute for social care. And child welfare?

  18. January 21, 2022 7:18 pm

    the recent sharp rise in energy prices could have been avoided if the UK had only erected more onshore wind turbines over the last decade

    The cost of running gas heating and gas cookers has zero to do with how many part-time wind turbines there are. Surely this is obvious even to blinkered climate obsessives like Blair?

  19. Mack permalink
    January 21, 2022 11:50 pm

    O/T I note the UK government are celebrating today the announcement of the launch of a £3.6 billion electric battery plant in Northumberland. A factory that has attracted funding from the great British taxpayer alongside the usual suspects amongst the hedge fund leecherati. Apparently this project will provide 3,000 jobs on site. Now, I’ve lost sight of my abacus, since the Tony Blair Institute apparently borrowed it to work out how cheap wind farm driven energy isn’t these days but, from a rough calculation on the back of a fag packet, £3.6 billion divided by 3,000 works out as the equivalent of a decent lottery win for each and every employee. Except the employees won’t be paying for such largesse, the great British public will be. That is the reality of the pursuit of the renewable ‘Holy Grail’.

  20. January 22, 2022 1:16 am

    Wilful and with the intention to deceive………. it only needs to get as far as the maxist lackies of the “impartial” BBC and the Gruaniad who fall over themselves to promote it and then sadly it becomes fact

  21. StephenP permalink
    January 22, 2022 1:17 am

    The previous article was about the increase in grid balancing costs. If we have more wind generation what effect will it have on banking costs and how will the balancing be achieved?
    Batteries? What would that cost?

    • StephenP permalink
      January 22, 2022 1:19 am

      …balancing costs

  22. Phoenix44 permalink
    January 22, 2022 9:25 am

    If costs have fallen then we were stupid to build them early!

    Surely even Blair can work that out?

    • January 22, 2022 10:56 am

      Like petrol prices, if they’re falling, you delay filling up your car.

  23. January 22, 2022 4:24 pm

    A reply to Dave above; at 1:19pm
    Glib is not the word I’d use. From my experience in the witness box there is no such thing as justice. The winner in a court case is the side whose brief produces the best story on the day, whether or not it is the truth. Judges are humans and their decisions can be and are influenced by emotions. And this doesn’t even take into account the abilities of juries to totally ignore facts!

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