The true cost of renewable energy

After throwing his crap about climate change at Cop27, Rishi Sunak returns to a more pressing problem: how to keep Britain’s lights lit this winter. Last week, it was revealed that the government was discussing a “reasonable worst-case scenario” where blackouts last up to a week. Whether or not these fears prove unfounded, there is a large and growing gap in the future of Britain’s electricity supply, with little to explain how to bridge it. The lights may not go out this winter, but there is a reckoning coming as Britain tries to head towards net zero.

Over the past decade, the National Grid has nearly eliminated coal power in Britain. The proportion of electricity generated from coal decreased from 29.5 percent in 2011 to just 2.1 percent in 2021. Most coal power has been replaced by wind and solar power (it rose from 5.2 percent in 2011 to 24.6 percent in 2021) and from During “thermal renewables” — the dirty business of burning wood pellets made from trees in North America — that rose from 3.6 percent in 2011 to 12.9 percent in 2021.

What the electricity industry hasn’t managed to do is keep us away from gas. We’re pretty much where we were a decade ago, with gas accounting for 39.9 percent of generation in 2021 compared to 39.8 percent in 2011. This is significant not only because it has offered consumers high wholesale gas prices in recent months, but Because the government’s path to net zero includes eliminating all fossil fuels and ensuring a carbon-neutral electricity supply by 2035.

It costs three or four times more to store a unit of electricity than it did to generate it in the first place

In fact, the price we pay for gas-generated electricity is higher than it should be at present because of the way we use it now. We use gas-fired power to fill in the gaps when choppy winds and solar power can’t deliver the goods. Over the summer, everyone from Boris Johnson to the Extinction Rebellion parrots the figure that wind power costs ‘nine times’ as gas power. But this is a wrong comparison. The number comes from an analysis by lobbying group Carbon Brief that compares the long-term, guaranteed, index-linked prices paid to renewable energy companies with the “next day” prices to be paid to owners of gas-fired power plants for their launch. for a few hours to make up for a shortfall in supply. It’s like comparing the cost of a season ticket on a train to the price of calling a rush hour Uber on the day of a rail strike.

How many times this year have you heard green energy advocates criticizing the fact that consumers have been robbed of our failure to switch to renewables more quickly? However, we don’t really have an alternative to gas to make up for the shortfall in wind and solar power. We could try to store renewable energy, but storage, in the form of batteries, for example, or pumped hydroelectric storage stations or some other emerging technology, is very expensive. It costs about three or four times more to store a unit of electricity than it did to generate it in the first place.

If we are going to get close to decarbonizing the power grid, we will have to invest in energy storage at a huge cost. Right now, we have the capacity to store less than an hour of the country’s electricity demand, but in winter weather conditions can be windless and cloudy for days at a time. The grid is built to transmit electricity generated in coal plants near where it is consumed. Wind and solar farms tend to be distributed in remote locations, by contrast, so the grid itself will have to be reconfigured, again at great cost. We will also need a massive increase in overall generation capacity as road vehicles and central heating systems are forced to switch to electric power. The switch to renewable energy will be far from cheap.

And right now, we’re going in the wrong direction. The total generation capacity available to the national grid has actually decreased from 77.9 GW in 2019 to 76.6 GW in 2021. Moreover, wind and solar farms are not working the way he had hoped. In the past year alone, available generation capacity for wind energy grew by 5.3 percent and solar by 2.8 percent. However, the amount of electricity generated by wind, wave and solar energy has decreased by 9.3 percent, largely due to lower wind speed. This is a problem that the wind industry has not yet realized: There is a long-term downward trend in wind speeds over the UK – and indeed around the world. This is an aspect of climate change that gets little coverage, perhaps because it goes against the lazy and incorrect narrative, championed by the former head of the Environment Agency among others, that Britain faces more violent weather.

Sooner or later, we have to give something up. The “Road to Zero Carbon” report published by National Grid ESO last year doesn’t provide much comfort. ‘The basic load concept is now gone,’ he declares, likening the old national grid to a train and the future national grid based on renewables to a more maneuverable sports car. In this green future they imagine, demand will be matched with supply via what’s called “dynamic containment” – or surprise pricing, as the rest of us might call it. But how much do electricity suppliers have to charge to manage demand at times when the supply of wind and solar power frequently collapses to 5 percent or less of what it could be in windy and sunny conditions?

We can only guess, but here’s a guide from the wholesale markets. In September last year, thanks to lower wind speeds, electricity suppliers were forced to pay wholesale prices of £2,500 per megawatt-hour to persuade gas power plants to enter the market – 50 times the average prices at the time. In July, they briefly had to pay Belgian electricity companies £9,724 per megawatt-hour to keep the lights out in London.

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Nowadays, consumers are not directly exposed to this kind of sharp price increases, because they are absorbed by retail electricity suppliers. But the intention will be to charge consumers in the future variable prices for electricity through their smart meters.

This, then, is the future we can look forward to: not one where the lights are necessarily out, but one where we have to push through the nose if we want to keep them in unfavorable weather. The price of green energy is a form of terrible segregation, in which the rich will have access to light and heat, and those who need it most, the poor, will shiver in the dark.

Ross Clark’s book Not Zero: How an Irrational Goal Will Poverty You, Help China (But Not Save the Planet) in the Next Year.

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