We, as a country, have decided to make tackling climate change much more expensive. This is the logical consequence of today’s news that onshore wind, the cheapest form of low carbon power, is to suffer much heavier restrictions on where it can be built. Given that the need to tackle climate change has not gone away, the options left to us to reduce the impact of our need for electricity are much more expensive.
But there’s a bigger problem than this, and that’s the message it sends about our future as a country. The new restrictions on wind turbines will make it more difficult to build them in areas where wind turbines already exist, on flatter land and near old buildings. But the key change is this statement by Eric Pickles:
“the need for renewable energy does not automatically override environmental protections and the planning concerns of local communities”
While this sounds reasonable, ‘environmental protections’ does not refer to the natural world, but rather to views. How opponents of wind power have got away with conflating the natural world and the views of people who’ve retired to the countryside is baffling, and a failing on the part of its advocates. Previously, while aesthetic impact was taken into account, it only resulted in a refused planning application when there was an impact on genuinely astonishing views, like national parks or Areas of Outstanding Natural Beauty. Now it seems likely that rather than permitting national needs to occasionally override the concerns of people who’ve bought houses in the countryside, much more of our country will be locked in stasis.
People tend not to like change, and people especially don’t like change if they’ve retired to the countryside. The majority of objections to wind farms come from retirees and incomers to communities, rather than lifelong countryside dwellers. Eric Pickles’ statement realigns the UK to serve this interest group. While people of course deserve their retirement, turning the countryside into a care home is not the way to run an economy.
We have a proud heritage, and we could have a proud future. But changes like this, which place more power in the hands of people with little interest in the future, make it more likely that that future will be as a museum for Chinese tourists. This is not the legacy the Coalition should leave.
May 16, 2011
Tim Worstall is simultaneously wrong and right:
“We don’t actually give a shit about which technology provides us with low carbon power. We care only that we get low carbon power. So, of course, incentives and subsidies should be simple and unique. One system for all.Onshore wind should get the same deal as offshore wind, as solar PV, as tidal, as wave, as nuclear, as hydro. For what we actually want to have is that low carbon power in the most efficient manner possible. So set that one incentive and may the best system win.”
He’s absolutely right that we should aim to ensure that every single type of power generation gets the same deal for its power, to ensure that we move towards a low-carbon grid at the lowest cost possible. Unfortunately, the Government’s reforms to the energy market probably won’t achieve that. It’s because the electricity market is hellishly complicated, because balancing the electricity supply is hellishly complicated.
Let me give a (very) brief overview of how it works. The National Grid, every half hour, announces how much electricity it thinks it’s going to need in half an hour’s time. Generators then bid a certain price to supply that power, and NG picks the cheapest ones (not always, because of something called the merit order, but generally). They agree a contract that says in half an hour’s time they’ll supply that amount of power. This happens 48 times a day, every day. In the event that National Grid gets it wrong, it either has to pay generators a premium to produce less or to produce more. Somehow, this all works, and our lights stay on – we’ve never had a total grid failure since the National Grid was set up, although NG engineers are still required to train for what to do in the event of a wonderfully dramatically named Black Start.
Demand varies throughout the day, by around 20GW, or around twenty Sizewell B-sized nukes. Obviously, when demand is higher, the price that generators can bid with is higher. And herein lies the problem with the Government’s preferred option for supporting low-carbon energy.
It’s based on something called ‘Contracts for Difference’. Basically, a low-carbon generator agrees a long-term contract with the Government to supply a certain amount of energy over a given period, say, a year. They’ll still sell their electricity on the wholesale market as above, but they’ll have it ‘topped up’ to an agreed level if it goes below a certain rate. It effectively sets a guaranteed price floor for low-carbon generation.
This is great for nuclear, because nuclear is always on. At night, when demand and prices are low, their generation is topped up. During the day when prices are high, they can extract a premium. However, it could very easily bone variable renewables, like wind, because they have no control over when they produce electricity and could find that the majority of their income comes at night, on the lower rate. This privileges nuclear even if wind is cheaper at the point of production.
Now, Tim might want to come back and say that’s great, because it’s a clear incentive for nuclear plants to produce more during the day, getting us our low carbon electricity more cheaply. The problem is that nuclear is incapable of responding to that market signal – you can’t ramp nuclear up and down with incurring significant expense, which to make economic would require another incentive payment for flexible response. The Government is also considering something called ‘capacity payments’ which are broadly payments intended to deliver that sort of flexible response services, but they’ll be pitched at a price which would only be worthwhile for gas, rather than nukes. It’s an example of a Government intervention in a market which requires further Government intervention in the market after they cock up the first intervention, and this is what Tim Yeo is getting at.
If you want low-carbon electricity, then you can pay a premium for it or tax carbon-intensive generation more heavily. The Government is doing both, but cocking up the former.
July 29, 2010
I work as a campaigner in the renewables industry. Right, that’s the disclaimer out of the way – although I should stress I signed up because of principles and the planet and bunnies and the green green grass of home and that sort of thing, rather than the derisory sums they pay me.
The Devil’s Knife has posted a piece claiming that Chris Huhne is The Most Dangerous Man in the Country. Huhne is, apparently, a meglomaniac environmentalist bent on bringing British industry to its knees by pursing a demented energy policy based on windmills. Chris (Mounsey, I’m sure DK resents sharing Huhne’s first name) uses an article by Christopher Booker in the Mail denouncing Huhne in similar terms.
Before getting into the fun nitty-gritty of comparative energy policy, it’s important to set Booker in the context of the Daily Mail’s core market. This is predominantly middle-aged, well-off, and living in suburbs or rural areas – exactly the same sort of people who typically view a wind farm near their property as an intrusion. The Daily Mail knows this, and is very good as tailoring its news product to their prejudices – just like the Guardian, in fact. The Mail is also very good at avoiding PCC complaints, which is why it’ll typically push nonsense like Booker’s piece into an op-ed, because, as a response to an earlier complaint I raised against the Mail stated:
“[It] was clearly an opinion piece rather than a definitive statement of fact.”
Even though that op-ed made some statements which were clearly intended to be factual. Booker’s employment by the Mail should be seen in the same context as Polly Toynbee’s by the Guardian: someone who is very good at writing articles that appeal to a particular demographic.
Now, the next ten years. New nuclear is unlikely to be built until 2018 at the very earliest (and that is extremely optimistic in any case), while our current plant will begin shutting down by 2015. We need something to bridge the gap. CCS has not been proven (specifically the ‘storage’ part), and there is absolutely no political support for new coal without it. In terms of deployable renewables, the only technology mature enough to be deployed in sufficient quantities in time is wind. Our remaining option is gas, in new CCGT or OCGT plant.
The question – which DECC’s energy pathways attempt to address – is therefore to do with the balance of wind and gas on the system, rather than pretend we can rely on nuclear. Luckily, gas and wind complement each other very well – OCGT plants in particular are very efficient at handling variability. Left to itself, the market would probably opt for substantial numbers of new CCGT plant, as well as significantly more onshore wind turbines, as both have relatively low capital costs (by ‘leave the market to itself’ I also assume that planning isn’t a factor – it’s funny how fond many anti-state activists are of planning regulations. I don’t include DK in this, of course). Of course, in the real world, the outcome we end up with will involve a certain amount of state intervention.
Luckily for us, OfGem has already done some research on potential scenarios for 2020. It considers the implications of both strong investment in renewables and also the potential level of economic growth. A cursory glance at the document will tell you that in the event of weak economic growth, energy bills are lower with more gas on the system by about 1%. Conversely, with strong economic growth, more renewables on the system coupled with strong energy saving incentives means energy prices 44-30% cheaper. This is largely to do with the likely rocketing price of gas – we’re not the only European country to recognise the compability of wind and gas.
I know which path I’d opt for if lower energy prices for consumers was my aim, quite apart from anything to do with carbon emissions. As a betting man, I know where my money is going.