The fight-back has begun. Despite it being blindingly obvious that a large part of Britain’s energy crisis is due to having put too many eggs in the unreliable basket that is renewables (at great expense), the climate worriers are determined that this must not be allowed to derail the onwards rush to “net zero”. In the space of a single 24 hours period, the Guardian website has seen three separate articles arguing that the energy crisis we are facing is because we have too little, not too much, reliance on renewable energy.
Government should have moved earlier to low-carbon, say industry expertsi
Ramming the point home is the sub-heading: “Energy crisis could have been lessened if more had been done to shift UK market towards renewables”.
Interestingly, the argument advanced by Roger Fouquet of the London School of Economics, is that fossil fuels are inherently subject to wild price fluctuations, but “[r]enewables do not suffer from these market-related problems.” This rather conveniently ignores the fact that demand for gas has surged at a time when supply has been constrained, in part at least because of the very unreliability of renewable energy. In the UK the wind has most certainly not been blowing in 2021 anything like as helpfully as it did in 2020, and the consequent shortfalls in electricity production have forced the National Grid to turn to gas, and even to “evil” coal, to keep the lights on. Quite how having more unreliable renewables would solve this problem is difficult to see. In part at least, then, the fluctuations in gas prices have been driven by the fluctuating reliability of wind turbines.
Secondly, it also ignores the massive increases in prices being paid by the National Grid to generators to keep the lights on when the wind wasn’t blowing. As Andrew Montford tweeted on 16th September 2021:
Drax biomass is the largest single recipient of subsidies under the Contracts for Difference Regime, taking home £342million in 2020. Drax also has coal-fired units. Yesterday these took home £10 million at £4000/MWh. Still, the lights stayed on.
Only the day before he had tweeted:
Balancing system costs for the day £30m so far. Coal running flat out to keep the lights on.
Given those inescapable and unpalatable facts, it’s a bit hard to take the quote from not exactly disinterested Dan McGrail, chief executive of RenewableUK, which represents wind energy companies that:
The only way to do that [protect consumers] in the long term is to have an energy system powered by cheap renewables, with flexible storage, hydrogen and other low-carbon technologies to meet demand at lowest cost.
A little further on in the article, there is a brief return to reality:
However, as Fouquet notes, “wind and solar do suffer from intermittency problems. So, while accelerating the transition to renewable energy sources is welcome for environmental reasons, it is important to develop an energy system that is flexible to these intermittencies.”
And what answer is proposed? Large-scale battery technologies – the ones that don’t exist yet on a scale that would protect us.
It’s also worth looking at the relative cost of electricity and gas in the UK. Admittedly the price of gas has shot up over recent days, and my domestic energy tariff is five months old, but even after recent gas price rises, gas is still cheaper than electricity, not least because – thanks to the unreliability of renewables – electricity costs have also shot up. My current domestic tariff is 14.795p per kWh for electricity, but a mere 3.921p per kWh for gas, making electricity almost four times more expensive than gas. Interestingly, the tariff it replaced had electricity at 10.269p per kWh and gas at 2.752p per kWh. Both had increased by close to 40%, but that wonderful renewable electricity hadn’t seen my electricity tariff rise by less than my gas tariff (actually, the electricity tariff rose by 44% while my gas tariff rose by 42.5%). What was that about renewables not suffering from from market-led problems? What was that about renewables being cheap? Surely, as the system relied more heavily on renewables when I renewed my tariff than when I signed up to my earlier one, that should have been reflected in my electricity tariff either having gone down, stayed stable, or at least not having gone up at the same rate as my gas tariff? Yet it wasn’t.
Britain’s energy crisis has been years in the making, thanks to the Conservatives
This is the heading to an articleii by Sir Ed Davey, apparently without any irony being intended. This isn’t the place to take issue with the entirety of the article (though it’s tempting – there’s much to take issue with). I’ll content myself with highlighting the paragraph that is central to the current debate:
As secretary of state for energy and climate change, I was proud of the role the Liberal Democrats played in weaning the UK off both coal and gas – for instance, when we nearly quadrupled the UK’s renewable energy between 2010 and 2015. Our policies led to massive investment in onshore and offshore wind and solar, and brought in new standards for zero-carbon housing and tough regulations on energy firms to force them to promote home insulation to cut customers’ heating bills and tackle fuel poverty. From promoting district heat networks to pushing National Grid and Norway’s StattNet to build the world’s longest subsea cable to link the UK to cheap hydropower, we were developing the low-carbon energy infrastructure to tackle climate change and improve the UK’s energy security.
This rather conveniently ignores the fact that the net effect of the policies pursued by Sir Ed when he was in charge of energy policy are now costing households an average of around £400 each in subsidies to the renewables industry. It also ignores (just as did the previous article) the fact that the current crisis has been caused by the unreliability of renewables and our over-reliance on them. If we were still more reliant on them, as Sir Ed wishes to see, the situation would be even worse.
The situation with regard to gas, it is fair to say, is far worse than it might have been because those who should have been attending to this sort of thing seem to have been asleep at the wheel. I was shocked to learn just how low the UK’s gas storage facilities have been allowed to fall, for instance. Still, Sir Ed’s concerns about fuel poverty seem to ring more than a little hollow when one considers the average cost per household of subsidies to the renewables industry.
There is much wrong, in my opinion, with this paragraph:
And guess what? Tory climate sceptic backbenchers and their backers are now arguing that the current energy crisis shows why we must scrap green levies and subsidies for the renewables industry. This isn’t just wrong because it would be embarrassing ahead of the forthcoming Glasgow Cop26 summit. It’s factually wrong. Almost all of the renewable power plants built thanks to Liberal Democrat policies are now paying the consumer back: with the wholesale price of power so high because of increased fossil fuel prices, renewables pay back the difference between a higher wholesale market price and the guaranteed price (“the strike price”) in their contract.
As indicated above, the reliance of the National Grid on renewables hasn’t seen the price of electricity outperform (in the sense of being cheaper or its price rise less quickly than the price of) gas at all. The link offered to justify the claims about the cheapness of renewable energy is to the CarbonBrief websiteiii. The heading to the CarbonBrief article alone rather undermines the claim it is supposed to underpin, however: “Analysis: Record-low price for UK offshore wind cheaper than existing gas plants by 2023”. Basically the claim is that the latest Contracts for Difference bidding round proves that renewable electricity will be cheaper than gas in two years’ time. The problem with this is that it fails to take into account the costs loaded onto consumers for years to come by the earlier rounds of bidding at much higher prices. It also fails to take into account that there is no guarantee that the new wind energy will ever come on stream if it proves to be uneconomic to the companies behind the bids for them to do so. Jit’s excellent articles in this respect should be compulsory reading, and John Constable’s evidence to the House of Lords’ Costs of Net Zero Inquiryiv should be compulsory viewing.
So, guess what, Sir Ed? Those sceptical Tory backbenchers are correct.
The Guardian view on an energy price shock: a crisis in the making
This is the heading to an editorial piece which appeared in the Guardian yesterdayv. There’s not too much to say, except to note that the Guardian editorial pushes the same line as the other two articles:
To protect the security of Britain’s energy supply ministers need to accelerate the provision of domestic zero-carbon power.
Having shed tears about fuel poverty earlier in the editorial, it then goes on to suggest that we should be accelerating our programme of installation of electrically powered heat pumps, even though these are expensive to install, much less efficient than the gas boilers they are to replace, and much more expensive to run (even after the recent gas price rises) than those same gas boilers
Gas market tightness causing prices to surge and questions over security of supply
This is the heading to an article on the Watt-Logic websitevi and it provides a useful antidote to the line taken at the Guardian. I end with some common sense:
One of the challenges for the gas market is the way in which it is lumped together with oil and coal by environmentalists, despite being significantly cleaner. As we move through the energy transition, it is important to maintain security of supply, and the current low wind conditions are highlighting the need for other forms of generation. Unless we invest in gas infrastructure, periods of high prices such as these will see gas being substituted with oil and coal – indeed, I have recently argued that in order to maintain security of supply in GB we should extend the lives of the remaining coal plant at least until the opening of Hinkley Point C.
It’s important that policymakers and the public remember why they want to mitigate the effects of climate change in the first place. This is not some abstract objective, the point is that climate change threatens lives and livelihoods. However, lack of energy supplies does exactly the same, and we need to take care that in seeking to avoid long-term (theoretical in the sense that the mitigating actions may have no effect) adverse outcomes, we do not create the same adverse outcomes in the short-term. Cold homes in winter are absolutely linked with excess deaths, and high prices make heating and cooking unaffordable for many. If climate change is a social justice issue, so too should be poor energy policy decisions – policymakers and activists should take note.
It would be nice if those in charge of the UK’s energy policy read it and take note – and better still, take action.