Oxford academic Prof. Sir Dieter Helm has attacked Ed Milband’s new energy policy as flawed, in a prominent article in the Times Comment section (8th Nov p.34-35). Far from being ‘nine times cheaper than gas’ as he says Miliband has claimed, Helm says that renewables are ‘intermittent, low-energy-density, small scale and geographically dispersed’, which means ‘lots of new transmission and distribution infrastructure, batteries and other long duration storage. And lots of back-up gas’.
For example, he says, ‘we now need roughly 120GW of installed generation capacity to meet the same demand that 60GW met pre-renewables- twice the transmission lines and pylons and all the back-up batteries and storage too. All of these are additional costs’. He also says that, by contrast, far from being costly and volatile, as Miliband claims, fossil gas in now getting cheaper- including LNG from the USA. It’s certainly true that fossil gas is not as expensive as it was at one stage in the recent past- when the ‘9 times more costly’ claim was made. But using it unabated will increase emissions, and adding CCS to reduce them will push its cost up.
However, Helm thinks the UK is going in the wrong direction and evidently wants it to use more fossil gas, presumably with CCS, and, despite the admittedly high cost, more nuclear, including SMRs. And on renewables he says ‘we should not go hellbent to get to net zero electricity by 2030 with all the cost of rushing forward with renewables before the infrastructure is in place’. Well, it is true that we do need to push flexible grid and storage systems much faster, but that’s not an argument for slowing down renewables: we need to push ahead with both.
Helm clearly isn’t going to be happy with ideas like that, and, sounding much like the Tories and Reform, he seems to be uncertain about renewables e.g. he says, with a sensible energy policy, we could ‘stop covering prime agricultural land with solar panels’. Well that is a view. Certainly, many think their siting and scale should be more carefully regulated- even if current plans would only involve the use around 0.4% of UK land area, with grazing still be possible. But he also talks of halting building offshore wind farms off the North East of Scotland- as he explains in another article, partly since it’s too far away from the main UK power market. There are siting and pricing issues to debate, and in this second article Helm does go a bit further than in his Times piece. But, amongst other things, in it he recommends abandoning or limiting the next round of the Contracts for Difference scheme. Given that the AR7 CfD auction process is just about to get going that maybe is a rather unrealistic.
Helm’s analysis is a bit different from the very up-tempo pro-renewables material the Times has recently been pushing, albeit as industry sponsored and simplified paid-for coverage. But that does not ignore system and network issues. Though Helm is right to look in more detail at the full the cost of system balancing: as I noted in my last post, if we move to a larger share of renewables balancing costs will rise. He is also right to note the offshoring issue: the UK is not including the carbon emissions due to the production of goods that are imported - one of the climate policy loophole issues that has just been taken up in a new legal challenge to the government by lobbyists.
In terms of how power is actually being produced in the UK, Helm is also right to be a bit wary of simple assertions that the UK is shifting to ‘home grown power’: most solar cells are made in China, most wind technology is also imported. But the power sources themselves are indigenous, and their use will reduce UK emissions. So that at least is a step forward, even if Helm seems unimpressed.
In the second paper he concludes ‘The idea that a modern economy with rising energy demands for firm power can get by with mainly wind and solar is an implausible one. Some wind and some solar have roles to play, but not the leading roles. Britain already has enough offshore wind. It has lots of roofs (rather than high-value agricultural land) upon which to install solar, but neither can provide cheap firm power’.
So are we back to nuclear and fossil gas with CCS as the main way forward? They are not cheap either. Are we doomed then to use expensive energy? It does sound a gloomy future. Well let’s see what the new Budget comes up with later this month- with energy costs being a central issue. And then the new CfD, due for finalisation early next year. Will that deliver some lower cost power? That would be a game changer….
Employment is another key issue, with Miliband clearly hoping that his energy policy will lead to significant expansion of green jobs. However, although Helm doesn’t mention this issue, it’s interesting that the Scottish TUC has noted that wind and solar power investment generated fewer jobs per pound of turnover in Scotland in 2023 than some other green options, including upgrading energy efficiency (see chart above). That is a key cost-saving labour-intense positive infrastructure energy option that is often ignored. Though Helm is keen on upgrading smart meters - he sees the UK programme as expensive and far behind what is being achieved in the rest of Europe. Well maybe so, though there certainly have been some problems with the UK smart meter programme, which is meant to help consumers manage their energy use efficiently. And also with the previous governments home energy efficiency programme. Evidently it’s not easy for governments to get energy saving right.
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