Advocates of Net Zero policies repeatedly reassure the public that they are advancing cheap, green energy with the promise of vast numbers of lucrative green jobs and world leadership for the U.K. in selected green technologies.
Unfortunately for the hard pressed British electorate, ‘cheap, green energy’ is nothing more than an empty political slogan arrived at by a dishonest sleight of hand. Specifically, the politicians simply ignore the true costs of the ‘cheap, green energy’ which soon becomes very expensive when factoring in all costs.
The chart below is from the U.K. Government’s own Electricity Generation Costs 2023 report and forms the centrepiece of the green propaganda. It purportedly shows the ‘levelised cost of electricity’ (LCOE) for different generating technologies. The Government uses deceptive calculations to arrive at a distorted cost for electricity generated by wind-power over the lifetime of a plant, by which means the Government can falsely claim that offshore wind is 2.5 times cheaper than dirty old gas generation (CCGT).
The most outrageous trick in this ‘analysis’ is that the Government has treated completely reliable electricity generated by gas (‘dispatchable’, in the trade jargon) in exactly the same way as extraordinarily unreliable electricity generated by a wind farm. This is not even an apples and oranges comparison, this is an elephant and microchips comparison. As a simple thought experiment, how much of a discount would you require for a car, cooker or washing machine whose operation was controlled externally and is very hard to predict versus the same equipment where you decide when you use it? For most people the answer would be an enormous discount, indicating that the true utility of variable electricity supply is very, very low.
There is really no comparison between an inexpensive tried-and-tested reliable power source and an exceptionally unreliable megawatt hour. We really are being had for a patsy.
To make costs comparable, you would need to state them on a comparable dispatchable basis, which means combining a wind farm with a battery storage facility to produce stable supply. At the moment there are only a handful of battery projects, which are very costly and provide only a short period of supply for their catchment area. As an indicator of the scale of battery backup required to ‘plug the gap’ when wind and solar power falter due to weather conditions, the Australian city of Melbourne has installed a ‘battery farm’ at Hornsdale at a cost of A$90m, covering 2.5 acres that can provide 28 minutes of electricity if there is a total failure of ‘renewable’ energy supply.
For reference, calculations by Bjorn Lomborg, the President of the Copenhagen Consensus Centre, indicate that the EU’s entire battery capacity is enough to cover one minute and 21 seconds of average demand. At this stage, it isn’t possible to calculate a cost per MWh (megawatt hour) for offshore wind farm plus battery installation, but it is clear that the resulting levelised cost would be very high and orders of magnitude (i.e., multiples of 10) higher than in the chart above (£44 per MWh).
In prior years, the Government at least made a half-hearted stab at acknowledging the enormous difference in utility between reliable and unreliable electricity by considering various downstream impacts of variable green electricity. The methodology was not fully disclosed, but it involved adding additional costs onto wind farms to adjust their levelised costs and then deducting costs from the levelised cost of combined cycle gas turbine plants, which have delivered uninterrupted, cheap energy for decades. That analysis resulted in a somewhat complex chart showing ‘enhanced levelised cost of electricity’, which we have simplified below.
It is plain to see that gas (CCGT) is the cheapest form of electricity generation on an enhanced levelised cost basis even when accounting only in this partial way for downstream network costs.
The Government has not included any such assessment of downstream impacts in the 2023 analysis because so called ‘balancing costs’ have been shifted on to the consumer. This is an arbitrary accounting convention and ignores the fact that the same costs will need to be incurred, regardless of whom they are charged to.
Note also that between 2020 and 2023 assessments, the Government massively and somewhat arbitrarily inflated the cost of gas (CCGT) based on a very much higher ‘carbon costs’ from £32 per MWh to £60 per MWh (the carbon costs are a somewhat arbitrary value that the Government places on the ‘social cost’ of carbon emissions). By moving this assumption up, or down, the Government can itself alter CCGT levelised costs and attractiveness relative to other forms of generation. This huge increase has distorted the 2023 outcomes to make gas appear much less attractive compared to wind. Ultimately though this is a policy assumption rather than a physical or market factor and is driven by value judgements rather than scientific reasons.
We have illustrated that for the 2023 assessment, by using the Government’s own earlier method of analysis we have gone from a position where offshore wind appears to be 2.5 times cheaper than gas to a position were gas is the cheapest form of generation when factoring in the system impacts as they were accounted for in the 2020 assessment.
There are a number of other questionable assumptions that unsurprisingly all work towards inflating the levelised costs of electricity from gas and reducing the levelised cost of wind. The main such assumption being a very high 61% load factor for offshore wind, which as far as we are aware has not ever been achieved anywhere in practice (the ‘load factor’ is the amount of electricity produced by a wind farm over a year as a proportion of how much it would produce if the wind was always favourable). The Government itself shows actual load factors for offshore wind farms were in the range of 39% to 47% up to 2017.
If you were to go a stage further and construct a truly representative scenario where gas power generation was replaced by wind, you would have to factor in the reality that you would need to effectively keep your old gas generation in reserve in order to have an uninterrupted supply of electricity. This leads to suboptimal operation of the gas plant and very high unit costs with lower output on the same fixed cost base.
In the scenarios that we looked at, any saving from ‘low cost’ wind, primarily lower due to carbon costs, would be more than offset by the very high unit cost of electricity from gas which would have to be purchased at enormous ‘standby’ costs to cover every period of low or excessive wind to prevent blackouts.
Real world data – the acid test
Observed data is always the acid test and in an excellent report by Mark P. Mills from the Manhattan Institute, he includes a chart of residential electricity prices versus wind and solar capacity per capita across European countries. Doubtless there may be some cofounding factors, but overall the trend is crystal clear: more ‘cheap’ renewable energy is directly linked to higher residential energy prices. Very much as we expected and the opposite outcome to that promised by the U.K. politicians.
The technocrats only real answer to the problem of unreliable renewables is to limit the ability of the consumer to use electricity. This is probably the main reason that smart meters and smart appliances are being rolled out to the end of 2025. Again the needs of the citizen will effectively be made subordinate to the needs of the system, itself dictated by ideology rather than supply problems or verifiable scientific reasons – a new and very unhealthy direction of travel.
Conclusions
You can see how easy it is to go from the fantasy of ‘cheap wind power’ promoted by the political class to the reality of very expensive wind, simply by including the real downstream costs. We have identified that the necessity of maintaining gas backup to wind power means that any savings from wind will often be more than negated by the costs of backup power. This proposition ties in with the observed reality that countries with higher levels of wind and solar capacity tend to have higher residential electricity prices.
The real problem though is the hell-for-leather dash for Net Zero and the accompanying plans produced by the unelected and unaccountable Climate Change Committee. This Soviet-style planning coupled with the Department for Business, Energy & Industrial Strategy arbitrating between different technologies and handing out billions in support of its favoured solution has all the characteristics of an accident waiting to happen. Bjorn Lomborg warned that “we are now going from wasting billions of dollars on ineffective policies to wasting trillions”.
The accelerated implementation of unreliable wind power will almost certainly lead to higher costs, lower living standards and the erosion of competitiveness and not to the green nirvana dishonestly promoted by Westminster politicians.
Alex Kriel is by training a physicist and was an early critic of the Imperial Covid model. He is a founder of the Thinking Coalition, which comprises a group of citizens who are concerned about Government overreach. Duncan White is a retired nurse with extensive experience of healthcare management and international health consultancy. He has researched Government carbon related policies for a number of years in cooperation with several U.K. groups representing the interests of motorists. This article was first published on the Thinking Coalition website. Sign up for updates here.
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It would be useful for many of us to see more explanation of how the levelised cost of energy is calculated and where the deceptions creep in. I think I know but this article seems to gloss over the detail.
I am not in a position to look for you now, but you may wish to look through the documents published by the Global Warming Policy Foundation. I recall they have a number of publications that go into the details of levelised cost and probably give the details you are seeking?
Levelised cost is :- Net cost / estimated energy produced in life time. Net cost is the cost to build – subsidy. Hence;-
levelised cost = (Cost to build – subsidy) / (energy generated per year * lifetime of installation). based on this website, which is in $, but I think the principle would be the same:https://www.simpleray.com/resources-and-informations/how-to-calculate-simple-lcoe-for-solar#:~:text=LCOE%2C%20or%20levelized%20cost%20of,rate%20at%20a%20known%20cost.
Makes no sense to me. It ignores operating costs, subsidies paid to turn off power when not needed, and backup power generation cost. A better metric would start with a constant figure for power supply to the grid, then measure the performance of renewables in meeting this target excluding any payments for power switch offs but including the cost of backup power. This should yield an optimal level of renewable capacity beyond which returns decline.
The cost per kilowatt hour is an an almost irrelevant figure when considering a system’s ability to provide power to meet the needs of the country.
This would have to include calculations for meeting demand for the worst case scenario of say, a blocking high pressure area over the UK for days during winter. This is not an unlikely occurrence.
When the wind blows at the right speed and the sun shines, renewables are helpful in reducing power costs but they can never be a solution to powering the country reliably.
Further electrifying the country with electricity used entirely for transport, industry and domestic heating and cooking will only exacerbate the problem, and no amount of hot air from politicians will offset that.
The cheapest per kWh electricity is no electricity. In fact it’s a nice little earner. Consumers are paid not to have electricity at certain times.
This goes with wind energy producers being paid not to supply electricity at certain times.
Suppliers being paid not to supply it; consumers being paid not to use it. So that’s what Net Zero means, see.
Good article, quite genteel. If you use TCO or Total Cost Of Ownership, the Bird Choppers which slice up 500-1500 large birds every year per Turbine, are 10x more expensive, 10x less efficient than a coal plant or gas. All costs in – the build, implementation, maintenance, replacements, repairs, subsidies ad naseum, necessity as the article says, of backup power generation costs vs MW generation. They are an utter joke and disgrace.
If the Bird Choppers were so great and inexpensive why were there 0 takers on the last wind farm auction? And why has my utility bill doubled recently? What are the total hidden subsidies btw ?
Say’s economics – 19th century: the true utility of variable electricity supply is very, very low.
I own a shop selling yellow trousers. My friend owns a shop selling green trousers. The government has decided for political purposes to give 100% subsidy to my friends business. He can now afford to sell his product much cheaper than me, because his costs are greatly reduced. So are green trousers cheaper than yellow trousers? —-NO. —–Wind gets 100% subsidy and energy companies are forced to use energy from wind when it is available. Wind also is only part time energy and requires backup from mainly gas. This is like having to have two cars because one only works some of the time and then you are told that it is only the cost of running your first car that can count. ——Wind energy is DUMB, and the western world is using it because it is deemed we have used up more than our fair share of the fossil fuels in the ground and must fob our citizens off with expensive unreliable renewables. It is eco socialism all emanating from the UN and WEF. ——-If wind is so cheap why have electricity prices been rising steadily ever since we started using it and why do the countries with the most turbines like Germany Denmark and UK have the highest electricity prices?
Off topic but..
Cancer post vaccines…. John Campbell interviews Professer
https://youtu.be/PnJ5T1Enwq4?si=oEavJSv8DZTlitkE
No such animal as 2.5 times less.
Well said. Bravo. We face a mammoth struggle to re-educate a large part of the population in the use of English (or probably any other language) but it is necessary in order to have a meaningful discussion, especially on (slightly) technical matters.
Vaguely on topic: let us imagine that it is possible to construct wind, solar and hydro power installations such that they meet 100% of the world’s energy needs, 100% of the time. Wind farms slow the wind down. Hydro power slows rivers down. Solar power stops the sun heating whatever you stick the panels in front of. Has anyone modelled the environmental and climactic impact of that? I think a few billionaires could find a bunch of scientists prepared to produce models showing that doing all this will send Planet Earth well askew.
The Eco Nutter Establishment believes in 6 impossible things before breakfast.
But then, it has nothing to do with the climate. And everything to do with control; stripping “wealthy” western nations of their wealth and manufacturing base and transferring both to 2nd and 3rd world nations; creation of a One World “Technocratic” Government of self-appointed elites/bankers and corporations.
Which is all this comes down to.
I suppose the above article is valid perhaps as a means of converting some none believers but for many of us renewables are a poor joke.
Totally agree
Exactly like “Covid”
Step 1 – ask them to prove that there is a “problem” to “solve”
Another major factor is the sky high gas prices of the last 18 months, which were caused by politics (fracking ban and policies relating to Ukraine). Without that and the cost of carbon element, gas would be much cheaper than the others even when levelised.
Calculating the cost of supplying all of the UK’s energy needs by wind power alone. If you don’t want to read the article, no problem. The cost for every man, woman and child in the UK would be £49,000 repeated every 20 to 25 years not including upward adjustments for inflation. Or, if you want the figure per average UK household, it’s £125,000 repeated every 20 to 25 years. Or, an energy bill of over £400 a month.
It doesn’t matter. The long established formula for pricing wholesale electricity is to base it on the most expensive in the mix.
That being so, other suppliers have no incentive to offer their electricity at a lower price, so match the highest. This is why our electricity prices are dominated by the (volatile) price of gas since we lost low cost, stable coal from the mix.
It is why nuclear, wind, solar, biomass all match their prices to gas.
Even if wind was the only source, and if its price were lower than gas in the market, it would still be more expensive because of the subsidies it receives.
Bring back coal (which used to supply over 50% of our electricity until 2015) if we want low prices and guaranteed supply.
The Government LCOE figures for new developments are simply a big lie.
https://davidturver.substack.com/p/offshore-wind-new-big-lie
And the existing fleet gets more expensive each year.
https://davidturver.substack.com/p/renewables-will-increase-energy-bills
All of these claims of cheap electricity from renewables are entirely false. The Government “levelised costs” are entirely false. There is no arguement that the country doesn’t need any electricity, and a failure at any point in the system is immensely disruptive to everyone, no phones and no internet being the most immediately obvious. From this point on anyone suggesting “smart meter” demand control, or an unreliable supply from whatever source is clearly a rather less than intellegent being, perhaps compared to animals who don’t have any electricity use.
There is therefore no case whatsoever that we should switch to renewables, or even subsidise them if they have any effect on electricity price and availability 24/7. The electricity price mechanism is also fixed to maximise consumer costs, it is not the gas price that has much effect, it is the alleged renewable sources! This is not the place to fully explain all this, but it is for the Government to be entirely honest and transparent with the population. Of course they are exactly not, these levelised prices are clearly fiddled, have all kinds of hidden subsidies and cosats ignored, and forget that renewables need 100% instantly available backup available 24/7 with 100% reliability! The real cost of renewables is the production cost plus this backup ability, so levelised cost MUST include it. Strangely these charts do not, in fact it is not mentioned at all, and even worse renewables are allowed to replace FF production at not cost to them, but at huge cost to the other producers. The whole saga is completely mad, and has zero gain to anyone except highly subsidised renewables, and huge cost to consumers.