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REF Blog

Can Renewables be Economically Competitive?

If we have learned anything over the last ten years of arbitrary targets and policy mandated income support to renewables, it is that the sector has failed to reduce its costs significantly, and, far from learning to stand on its own feet, is content to be a long-term subsidy dependent. This won't be acceptable to the consumer in the medium let alone the longer term, and it fails to provide an economically compelling low carbon example to the developing world.

Clearly, something has to change, and will change. If renewables are to have a role in that new dispensation they will have to improve dramatically. But how? What are the major problems that have to be solved before they are fundamentally economic and can make their way in the world without special and unsustainable commercial favours?

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Are Green Times Just Around the Corner?

The following talk was given at a meeting of the All Party Parliamentary Group on Rebalancing the Economy, at the House of Commons at 10.00 on the 13th of February 2013. The session topic was The Cost of Energy. Other speakers were Tamaryn Napp (Imperial College London), Professor Alan Riley (City University Law School), and Jeremy Nicholson (Director, Energy Intensive Users Group).

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Costs of Offshore Wind Farms

On the 3rd of February the Sunday Telegraph published an article about the costs of Round 3 offshore wind, and used cost estimates generated by REF: "Foreign Firms' '£100bn wind farm subsidies'" 

The Department of Energy & Climate Change was quoted as saying that our figures were "based on pure speculation". This is untrue, and we have written to the Rt Hon Ed Davey, Secretary of State at the department to point this out. Here is our letter.

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PAC Report on Offshore Wind Transmission Costs

The Public Accounts Committee has today published its report on the costs of grid connections for offshore wind: Public Accounts Committee - Twentieth Report Department of Energy and Climate Change: Offshore electricity transmission-a new model for infrastructure.

The central finding of the report is that:

"The terms of the transmission licences awarded so far appear heavily skewed towards attracting investors rather than securing a good deal for consumers." (Summary)

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Reforming Green Energy Policies

George Monbiot has just published (31.12.12) a retrospective column describing 2012 as as a landmark year in which the world's politicians turned their backs on environmental policies ("2012: the year we did our best to abandon the natural world"):

The discussion ranges broadly, but for present purposes we will focus on climate change and energy policy where he observes that:

The climate meeting in Doha at the end of the year produced a [...] combination of inanity and contradiction. Governments have now begun to concede, without evincing any great concern, that they will miss their target of no more than 2C of global warming this century. Instead we're on track for between four and six degrees. To prevent climate breakdown, coal burning should be in steep decline. Far from it: the International Energy Agency reports that global use of the most carbon-dense fossil fuel is climbing by about 200m tonnes a year. This helps to explain why global emissions are rising so fast.

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Energy Policy in an Independent Scotland

In a speech to a Scotsman conference today in Edinburgh, Energy Policy in an Independent Scotland, The Rt Hon Ed Davey, Secretary of State for Energy and Climate Change, has issued a clear warning that in the event of Scottish independence the costs of the current subsidy programs to renewables would be be met by Scottish consumers, without cross-subsidy from England Wales.

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Separation Distances between Wind Farms and Dwellings

The Sunday Times has reported that an increasing number of local authorities are setting or considering minimum acceptable separation distances between dwellings and wind turbines in their Local Development Plans. These are reported to include Milton Keynes, Stratford on Avon, Cherwell, Staffordshire, South Cambridgeshire, Rutland, Northumberland, South Kesteven, Lincolshire County Council, and Wiltshire Council.

Typical of these is Wiltshire Council, which is consulting on a buffer zone around dwellings that increases with proposed turbine height. REF responded to that consultation following a request by a local resident, and taking noise impacts into account, concluded that the separation distances proposed represent a reasonable compromise between protecting the amenity of Wiltshire residents while enabling development of appropriately-scaled renewable energy projects.

Given that local planners are expected to enhance or, at least, preserve the amenity enjoyed by local residents it makes sense to ensure the impacts of wind farms are not excessive.

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How Much More Onshore Wind Power will be Consented and Built in the United Kingdom?

Following remarks made by the Minister of State for Energy, John Hayes, MP, there is some confusion about the future for onshore wind power in the United Kingdom. Speaking on Channel 4 news Mr Hayes remarked:

"With respect of what is built, with what is consented and with a small proportion of what is in the planning system, we will have reached our ambition in respect of the renewables’ target – end of story.

The prime minister in the House of Commons said that when we’ve reached our targets then he invited all parties to think about where we went next. I endorse his view entirely.

In respect of the targets that we have for renewables when we take into account, what’s built, what’s consented, what’s in planning system now – it will certainly have [been] achieved, it will be job done."

Quoted in Christopher Hope, ‘Job done on windfarms, says Hayes’, Daily Telegraph (13.11.12).

It is straightforward to put these remarks into concrete terms. We know that the government’s own central scenario for onshore wind has been for “up to around” 13 GWs of capacity (DECC, Renewable Energy Roadmap 2011). However, in recent months DECC has started to say “up to 13 GWs” a reflection of a growing concern that larger capacities of onshore wind not possible due to growing public resistance to the turbines themselves and also to the substantial grid infrastructure needed to support them. Thus, we infer that when Mr Hayes refers to “our targets” he is thinking of 13 GWs.

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CarbonBrief and the Costs of Scottish Wind Power

Following a report in the Sunday Times in Scotland on 4 November 2012 entitled “SNP fad for wind 'will cost us £400'”, CarbonBrief  approached us because they were apparently surprised that the costs of subsidising Scottish wind could reach nearly £1 billion per year by 2020. We provided the data which underpinned the calculation. However, this was only selectively reproduced on the CarbonBrief blog.

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Coal to Biomass and Back Again?

Ofgem today announced the results of its survey of the future electricity supply "capacity margin", which is the quantity of available generation over and above the level of expected peak demand (Electricity Capacity Assessment Report. In addition, see Ofgem's press release.)

Although striking, the results only confirmed what many have long suspected (not least ourselves in 2008: see Electricity Prices in the United Kingdom, written with Hugh Sharman). Namely, that in some plausible circumstances the margin in 2015/16, when the effects of the European Union Large Combustion Plant Directive (LCPD), really bite, falls to very low levels. As Ofgem's own press release puts it: "Margins are projected to fall from 14 per cent in 2012/13 to 4 per cent in 2015/16"

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