Lord Callanan Misleads Parliament
By Paul Homewood
h/t Dennis Ambler
There was an interesting debate in the House of Lords yesterday, triggered by a question by Lord Frost to Lord Callanan, the Parliamentary Under Secretary of State at the DESNZ:
https://www.theyworkforyou.com/lords/?id=2024-05-16a.684.4&s=speaker%3A10613#g686.1
The response by Callanan was disgracefully misleading.
For a start, he claimed that offshore wind only cost £44/MWh, based on DESNZ levelised costs published last November. But hew must know that these costings are totally unrealistic, given that his own Department increased the Administrative strike price to £100.27/MWh at 2023 prices last November.
Moreover, he also falsely claimed that gas generation cost £114/MWh, but this figure includes an artificial carbon tax of £60/MWh. The true cost should be £54/MWh.
He is then asked by Lord Tyrie whether the wider system costs should be included in his assessment of offshore wind costs. Callanan waffles about this without actually telling us what the added cost might be.
It is, of course, abundantly clear that when these extra costs are included, the cost of offshore wind power is considerably more than gas. Callanan knows this, and should be forced back to the chamber to apologise for deliberately misleading Parliament.
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NOT A LOT OF PEOPLE KNOW THAT 
It is difficult to understand how those people sleep at night.
The problem is that they do sleep at night. Net zero is an utopian concept and its adherents know of no other truth.
Odd, isn’t it, that the more they talk of how cheap wind and solar power are, the higher the price of electricity rises?
Utterly shameful and inexcusable —and further confirmation, if any is needed, that ‘decarbonisation’ is a house of cards without foundation.
Maybe the HoL speaker, or whoever is in charge, needs to be made aware that one of his members is telling porkies.
Alternatively can someone collect all the porkies that Paul has exposed and blow the whole net zero con apart before the UK is made bankrupt?
The administrative strike price for floating off shore wind is set at £176/MWh at 2012 prices (nortonrosefulbright.com). Lord Callanan will know this so he’s effectively lying. Residents of North Devon are waiting on a planning decision on the White Cross Offshore Wind project. Wind farm cable work in Braunton could be disastrous, say villagers – BBC News
The cables will come ashore in the middle of the Saunton Sands car park, a very popular leisure spot for the holiday season. Those familiar with it will imagine the chaos this will cause, the car park is often full and closed at busy times. Braunton Burrows, which sits behind the 3 mile beach, is supposed to be protected. It has UNESCO designated Biosphere reserve status and is an AONB. The area is privately owned by Christie Estates. Read into that what you will.
We residents of North Devon are keeping a close watch on this great white elephant.
To be fair, the price paid is not the same as the cost of production.
To be equally fair the price of CCGT generation would be 50% lower without the ludicrous carbon tax.
Indeed – with subsidies there is a profit. Most businesses exist because there is a profit to reward the investment. The reward tends to be higher than for debt finance because shareholders have to bear the risk that profit will not occur, wiping out their investment. The profit for many wind farms is quite high, as has been reviewed here from time to time.
Quick back of envelope for recent wind farms: £2.75bn/GW capital cost, 45% load factor, 25 year life, 6% debt interest gives a capital charge of about £215m p.a. for 3.942TWh of production, or £54.57/MWh. Then add the maintenance at £15-20/MWh plus other sundries and you can see why wind farms withdrew from construction in AR4 and bidding in AR5. Now factor in that contract terms offer no protection any time prices are negative, exposing new farms to full marginal curtailment risk, so that perhaps 25% or more of their output is worthless, so they must bump prices by 100/75 and you see where the £100 strike price is not out of line.
Incidentally, UKA carbon prices have fallen right back to around £35/tCO2e, which makes the tax somewhat lower – depending on the mode of plant operation/resultant efficiency it’s in the range of about £12-20/MWh.
It used to be the exercise range for the last Army unit of DUKWs that were based on the other side of the estuary at Fremington Camp. I was driven in one as a cadet, across the estuary in boat mode and the wet sands (tires deflated) and into the assault course through the dunes, which was like a fairground ride – then back across the estuary to a landing point at the mouth, pump up the tires as we drove, and 50mph back to camp and an evening meal in the NAAFI.
Can someone explain why, if wind generated power is so cheap, why the generating companies complained that the strike prices are too low?
“…why…?”
It is, perhaps, because every pompous ass has blinded every other pompous ass with his own laughable version of science and technology. Nobody in the thick of it has the slightest idea of how things SHOULD work. Nobody is thinking what MIGHT have been (and still could be) if different attitudes had been allowed to prevail. Why did we not keep our coal-stations ticking over, with a strategic stockpile of 30 million tons of coal in reserve, purchased during the world recessions which occur so regularly? Why do we allow nervous nellies and eco-lunatics to wreck all meaningful attempts to build more nuclear power stations? Etc. etc.
They should have asked him to explain why David Turvey’s debunking article of 2 days ago is incorrect. If he couldn’t he should be asked to explain why the government is continuing to waste tax payers money.
https://open.substack.com/pub/davidturver/p/debunking-cheap-renewables-myth?r=2z1w3b&utm_campaign=post&utm_medium=email
“Callanan knows this, and should be forced back to the chamber to apologise for deliberately misleading Parliament.”
Don’t agree. He should be impeached and kicked out of the Lords.
Both I and he know that he is safe, presently. But there must come a time when the peasants arrive with pitchforks and flaming torches.
“…peasants arrive…”
If they first can find charging points for their EVs!
They can come by train….assuming the Labour funding rail unions are not having another day off.
He should be levelised.
Can,t seem to get it to load , but a graph from Bloomberg shows that electric grid prices have rocketed since 2021. Up from around £40 per MWh for many years before , into to the hundreds , [ as high as £600 per MWh .]
This was when they changed the ETS scheme to hide the subsidies for renewables and put up the prices for conventional generation .
And most offshore wind farms are being paid around £200 per MWh .So for a politician to claim it is cheap is just more political lies .
And what is the chance the media will tell the truth that renewable subsidies cost the average household an extra £600 per year .
What about decarbonising aviation? And when is the government giving us a date for banning ICE vehicle imports? Two of the questions I bombard my MP Flick Drummond from time to time yet answer comes there none.
Only one conclusion can be drawn, simply that he is sadly and naively deluded or an out and out liar?
A Government minister telling porkies! Never! It used to be called a ‘terminological inexactitude’. Anybody else remember that?
Along with “economical with the actualité”
I thought lying to the house was a punishable offence or did that cease when Sir Tony bLiar became PM?
I’m not sure whether it applies to the Lords or not. It’s quite conceivable that the very idea was so unBritish it never entered anyone’s head.
Unfortunately that was then; this is now.
Keep plugging! Maybe Callanan would like to face someone who actually knows the facts in a debate on live TV.
I can dream, can’t I?
“Lies, damned lies and statistics.”
Arthur James Balfour, 1st Earl of Balfour, as quoted in the Manchester Guardian, 29th June 1892
I wonder what “levelised” involves?
Is it a synonym for “fiddled” ?
Levelised costs.
Levelized Cost of Electricity – an overview | ScienceDirect Topics
Levelised costs.
As posted by others on this messageboard on several occasions, the structure of the calculations that generate the “Levelised Cost of Energy” is deeply flawed. When I last checked, the flaws included no reference to the costs associated with:
1 Providing grid back-up.
2 Providing grid stability.
3 Providing energy security.
4 The increased risk of supply failure.
5 “Carbon taxes” used to artificially inflate the cost of fossil fuels, when there is no proof that CO2 produced by fossil fuels is responsible for dangerous climate change.
Quite right Micky R, which is why a German group proposed an alternative that included all of these missing costs for using unreliables.
… a German group proposed an alternative that included all of these missing costs …
Sounds interesting !
My list of five points above could have been set out more clearly. “Carbon tax” is included in the LCOE calculations, but it should be excluded for the reason provided above.
Micky, you forgot
6. Grid expansion for connectivity, only necessary due to the dispersed nature of wind & solar.
..you forgot..
Revised:
The structure of the calculations that generate the “Levelised Cost of Energy” (LCOE) is deeply flawed. When I last checked, the flaws included no reference to the costs associated with:
1 Providing grid back-up.
2 Providing grid stability.
3 Providing energy security.
4 The increased risk of supply failure.
5 The capital works associated with connecting the dispersed renewable generation sites to the existing grid.
Additionally, the LCOE calculations are flawed in that the calculations include “Carbon taxes”, which are used to artificially inflate the cost of fossil fuel when there is no proof that CO2 produced by fossil fuels is responsible for dangerous climate change.
Add to Micky R’s list the costs of curtailment, and perhaps in future, of subsidising storage and redelivery. Both will prove very substantial as more capacity is added and the frequency and size of surpluses increases. If you look at the most recent wind farms they seem to have appalling capacity factors: Moray East, Triton Knoll, Seagreen and Hornsea 2: a lot of it is down to curtailment.
Thanks IDAU
Assuming that energy storage might be required even if there is sufficient grid back-up (?)
Revised:
The structure of the calculations that generate the “Levelised Cost of Energy” (LCOE) is deeply flawed; the flaws include no reference to the costs associated with:
1 Providing grid back-up.
2 Providing grid stability.
3 Providing energy security.
4 Providing energy storage.
5 The increased risk of supply failure.
6 The capital works associated with connecting the dispersed renewable generation sites to the existing grid.
7 Curtailment
Additionally, the LCOE calculations are flawed in that the calculations include “Carbon taxes”, which are used to artificially inflate the cost of fossil fuel when there is no proof that CO2 produced by fossil fuels is responsible for dangerous climate change.
It’s a good word that: Levelised. Back in the ’80s, IBM was in court for years for ‘Antitrust’ allegations – rigging the market is the nearest I can describe it. Well, if your company, HMG Ltd, has the power to more than double the price of a competitor’s product (with huge tax hikes) that to me is the very definition of Antitrust – or Racketeering, if you want a better word.
Lord Callanan, ex-Tory MP and Transport Minister needs to be made to discuss energy prices nett of taxes that his government artificially adds to the opposing providers’ offerings. If he’s not a liar, he is guilty of egregious dissembling – and ‘Antitrust’.
Huh, Whatever happened to the BBC ‘s ‘Yesterday in Parliament‘ .. used t o hear it on the VHF at bedtime …gone with Sailing Home ? One eventually forgets about these informative programmes, ( the bbc knows that ?) and so much important info slips under the radar … like the Monthly – or was it weekly, status of ImpEx – Balance of Payments which many people understood WAY BACK THEN. So once again a Generational thing.
Tell the Heron again too : If it wasn’t for CCGT, with a LOW Demand ( little real manufacturing – if only we could Remove the IT Element of power demand ) the wind n stuff wouldn’t stand a snowball’s chance in feeding anyone, let alone a few Herons. The ponds ( batteries) would run dry, the Canals ( Pylon network of new cabling) would be empty … and try getting hungry thirsty workers to produce anything ….
Yet the City Sniggers continue to throw stupid figures in the air to confuse & detract. Is there a Uni Course on Detraction Studies?
the official record might as well have said “The noble Lord Callanan put his fingers in his ears and sang La, la, la can’t hear you.”
I have had correspondence with Lord Callanan on the impact that the now defunct Minimum Energy performance of Buildings Bill is still going to have on the property market. Banks started saying that they would consider whether to refuse mortgages on properties with poor EPC ratings when this legislation would force them to have an average portfolio of mortgages on properties rated C or better. They have not changed their view despite the obligation being removed. Lord Callanan apparently could not understand the devastation that would hit the property market if you couldn’t get a mortgage on a property rated D or worse (most of the property in this country), as then you couldn’t sell it, except of course to the predatory banks who smell a big opportunity here.
Absolutely right, even if the nonsensical “EPC” ratings are replaced with a proper assessment of property energy efficiency.
As you say, the condition of a majority of properties, especially in the UK’s larger cities, is a joke. Not just in terms of insulation but in basic “Janet & John” issues like the roof, guttering, fall-pipes, not to mention damp and mould growth. Doubt that? Get on the top deck of a bus and ride out from any city center and see for yourself.
What was it Klaus Schwab said? “You will own nothing, but you WILL be happy!” (Or else!)
Why spoil a good point with silly claims about banks? Shareholders own banks a financial institutions, not as landlords. And banks lose money if their loans are not repaid and will lose more if house prices go down.
I’m afraid that it is not a silly point. Lloyds are already getting into the residential property market. We have also seen financial institutions saying that the future of the let property market lies with institutional owners rather than individual landlords. In a rather different context, RBS GHG was renowned for lending to distressed buyers and then foreclosing to acquire commercial property cheaply.
In the barchart it shows a dark blue band which it says is Carbon. Does that represent a cost for the carbon produced? Is it the cost of offsetting that amount of carbon?
It’s the carbon taxes.
It’s the assumed future carbon taxes. Eyeballing it, it’s about £60/MWh, or perhaps around £170/tCO2e compared with current prices of around £35/tCO2e – nearly FIVE times as much.
Most likely the cost of DOOM assuming the most pessimistic Play-Station “climate” model that has yet been developed.
See Lord Nicholas Stern (Baron Stern of Brentford) and his Grantham Institute’s “Settled Scientific™” Statistical Bullshittery.
That carbon tax seems to be almost half the cost of the electricity. It’s more than the cost of the actual fuel. What a swizz!
He’s either a complete liar or completely incompetent.
I suspect he could easily be both.
“It makes no sense for us to rely on imported gas for years to come” Then why did the government decide to abandon fracking that would reduce our need for imported gas?
Just put Dieter Helm in charge (Make him a Lord and sack Callanan).
Callanan has a degree in Electronic and Electrical Engineering, but seems to have forgotten most of it, or as some have suggested, he is just making it up.
Dr North put forward a good theory that when people who have a good track record and look competent for the public role they are appointed to, disappear somewhere where they have their brains wiped as once they take office they are complete morons. Is there a real IPCRESS processing centre I wonder?
An IPCRESS centre? Well, MPs have mastered the art of: “Now, listen to me….”
The IPCRESS File
He’s not making it up, he is being deliberately misleading. Including tax as a “cost” of production when wind is exempt from that tax, is only just short of a lie. Excluding all the costs we have to pay to have renewables such as balancing is the same.
Good point, Phoenix. He should be brought to the House to a explain the hidden costs of balancing, back-up and grid connections.
According to register of interests. He is sole director of a company called
M C Associates (Europe) Ltd.
He owns one share worth £1, One search site (that wants £19 for the full accounts) lists it as to do with mental health.
It looks like he is not receiving anything as a an advisor to any companies associated with renewables, but I just wonder why he is a director.
He was a director at Aquind Ltd which had former names that included ‘energy’ in them.
Aquind is an interconnector project to France that got turned down for a licence by Kwarteng. It has an interesting history.
https://www.portsmouth.co.uk/news/politics/conservative-mps-receive-donations-from-the-company-behind-the-controversial-aquind-interconnector-scheme-4618302
https://www.msn.com/en-gb/travel/other/aquind-mod-raises-serious-national-security-concerns-over-controversial-interconnector-project-in-portsmouth-and-waterlooville/ar-BB1kvBOV
Callanan is lying through his teeth.
https://davidturver.substack.com/p/debunking-cheap-renewables-myth
Claiming a tax is a cost is clearly misleading. The tax is paid to the Treasury. It does not go to the producer to defray its costs. He would I’m sure be appalled if we claimed that there was a cost to working because we paid income tax
It is simple, each and everyone of the corrupt bastards should be dragged kicking and screaming to face the People and answer one simple question, if Wind and Solar are so damn cheap, therefore incredibly profitable given that the price paid for this “cheap” is artificially pegged to some hypothetical price dreamed up by a Civil Servant with both eyes firmly fixed on his revolving door advisory post in the Energy Supply Market, answer the question, why are subsidies required to inflate profits whilst punishing the poorest in society or do they just believe that a fancy job title coupled with a Lordship, is sufficient to grant them “jus primae noctis” to screw over the Nation time and again and again.
We need a revolution in this Country, for too long the corruption of power has eroded decency and allowed a few too maximise all fiscal opportunities offered with no recourse to punishment- CONsocialist, Labour, ilLiberals, SNP, Greens, the whole dame lot belong to the UniParty which will say anything to get that all important first foot on the ladder of excess, it is not a change of Government but a return to honesty that the UK urgently and desperately needs.
The Revolution is looong overdue. With very few exceptions (Andrew Bridgen) they should all answer to the people of our country for their malfeasance of office (that’s the euphemistic way of putting it). THE major problem is that ninety nine percent of women and ninety-ish percent of our fellow countrymen don’t know there’s a problem.
The real picture for the cost of wind generation to retailers: