How Britain went tilting at windmills

(The Telegraph, by Michael Hanlon, Jan. 13, 2013) The unfortunate technical term is “intermittent renewables”. This is the name given to the wave of green energy sources such as solar, wind and wave power. Wind farms are certainly “renewable” but they are also unreliable, say opponents.

When the wind does not blow – and that is surprisingly often, even in our allegedly tempestuous archipelago – a wind farm is not a power station but a collection of useless white fans on a hillside. Meanwhile, a nuclear plant or gas-fuelled turbine keeps churning out electricity, day and night, with Stakhanovite determination.

Now opponents of wind energy have another stick with which to go tilting at windmills. The Public Accounts Committee, chaired by the increasingly redoubtable Margaret Hodge, has produced a report slamming the “generous” licence deals, worth about £17 billion, that have been done with just two engineering companies, Macquarie and Transmission Capital Partners, to provide the necessary infrastructure to connect wind-derived electricity to the grid. Under the 20-year deal, agreed under the last Labour administration but rubber-stamped by current Department of Energy and Climate Change (DECC) ministers, energy firms are paid even if they fail to deliver energy to households.

Ms Hodge, a Labour MP, described the contracts this week as a “licence for the private sector to print money at the expense of hard-pressed consumers”. And this comes at a bad time. A growing population, a series of unusually cold winters, increasing demands on power and a national grid stretched to its limit have seen fuel bills double, in real terms, in the past eight years, now averaging more than £1,300 a year per household. The infrastructure deal alone will add around £35 a year to bills, as the cost of the subsidy is passed back to consumers via the suppliers. This will be the final straw for the growing number of wind-farm opponents, who claim it is an inherently expensive and unreliable technology that represents poor value for money in the fight against climate change.

So is wind power – particularly the more expensive offshore wind power – dead in the water? Wind-derived energy faces fierce opposition from all sides. Some on the political Left will worry that the mistakes of the Private Finance Initiatives of the last decade are about to be repeated (PFI saw what were effectively massive, albeit long-term, transfers of money from the taxpayer to private infrastructure and building firms in return for quickly built hospitals and Tube lines). And many Tories know that rural constituents are sceptical of climate change and hate the aesthetics of wind farms.

Of course, aesthetics cannot be measured. Some people like the appearance of modern wind turbines, thinking them sleek and graceful. Many hate them. Probably a silent majority is indifferent. Wind farms certainly look better in some places than others. But what you see when you gaze up at a spinning turbine, whose span may be bigger than that of a jumbo jet, is probably going to be influenced by how much good you think it is doing.

Wind was the Great White Hope of energy policy, not just here but across Europe and much of the rest of the world. In 2008, Gordon Brown, as prime minister, pledged to spend £100 billion on wind farms to ensure Britain would meet its ambitious targets to generate 30 per cent of our electricity from renewables by 2020, a pledge that was not opposed by the Tories.

Supporters of wind power say this would be money well-spent. They argue that if enough wind farms are built, the economies of scale kick in to such an extent that the costs of this technology fall through the floor, finally making wind power economically competitive with other sources of power.

Opponents say wind power may work, in the sense that it does generate electricity, but it is an expensive way of reducing our carbon emissions. Better, they say, to invest in clean gas technology, new technologies like carbon capture and storage and, especially, in nuclear.

Britain is certainly in the middle of a wind boom. Currently there are more than 4,000 on- and offshore wind turbines installed in the UK, generating around five gigawatts of power, “saving” about six million tonnes of CO2 that would otherwise be generated by fossil fuels (about 1 per cent of the UK’s total greenhouse gas emissions).

This equates to several large gas-fired stations and just over 3 per cent of our total generating capacity – a figure set to double, then double again in the coming decades. Britain has the world’s eighth-largest wind economy and is home to the world’s largest offshore wind farm, off the coast near Margate in Kent, whose 100 massive turbines produce 300 megawatts of power.

But wind power is not, yet, cheap. The “fuel” – moving air – is of course free, but harnessing it is not. Turbines have to be built and maintained. In the early 1990s supporters of wind power created the impression that a wind turbine was essentially a “fit and forget” technology, but two decades of experience have shown that this is not the case.

Today’s super-large windmills are hugely sophisticated pieces of kit, subjected to astronomical mechanical stresses that can wear out the main bearings in a couple of years. Placing them in the sea adds additional stresses, mostly in the form of salt corrosion, which can play havoc with the electrics. New grids have to be built to take wind‑generated electricity from the places where it is made (usually sparsely populated) to the places where it is needed.

Looking at the raw costs of producing electricity from various power sources is instructive. For a megawatt hour (a standard unit of energy, enough to brew about 50,000 cups of tea), the cheapest fuel is nuclear (£74), followed by gas (£77) and coal (£95). Onshore wind ties with hydroelectric at just over £100 and offshore wind can cost a whopping £146.

These figures are not set in stone. Aside from the subsidies (more of which later), technologies can change. The nuclear costs do not include the costs of long-term waste storage, a solution for which has yet to be agreed. Gas may get a lot cheaper if fracking takes off and floods the world market with cheap methane. Hydroelectric will only be a minority power source in the UK, thanks to topography (it only works in hilly places). Coal costs will rise if this carbon-dirty fuel is subject to tighter emissions penalties. And wind costs will probably fall, per unit, if enough cash is pumped in.

To level the playing field the previous government introduced the “Renewables Obligation”, which recognises that any new technology cannot possibly hope to compete with existing means of production in the early years.

The system works by forcing electricity suppliers to source some of their energy from low-carbon renewable sources, like wind. The suppliers pay the generators a premium, called a Renewables Obligation Certificate (ROC), on top of the going rate for electricity – effectively a cross-subsidy.

The costs of this scheme are passed on to bill payers. Currently, conventional power sources, gas and coal, plus nuclear, receive no RO subsidy. Onshore wind received one ROC (worth about £38 per megawatt hour), offshore wind gets two ROCs, bringing the “raw” cost down from that eye-watering £146 to a competitive £70 or so. And these subsidies do not include those that have come under criticism this week, which guarantee wind-exploiting companies an inflation-linked return of about 10 per cent per year over 20 years, with almost zero risk – the sort of deal most investors could only dream about.

Dodgy deals aside, there is another problem with wind: it is, as we have seen, intermittent. The quoted “capacity” of a given wind farm is simply the amount of electricity it would produce if the wind blew 24 hours a day, 365 days a year. The reality is that wind farms usually produce somewhere between a quarter and a third of their theoretical capacity.

Worse, the wind often does not blow when it is needed on the coldest, stillest days, and blows a lot when it is not (during relatively mild autumn and summer storms). Because of this inherent unreliability, intermittent renewables currently account for just 3.3 per cent of global electricity generation. As a report on wind power in this week’s New Scientist says, “wind, sun and wave are simply too fickle to be counted upon”.

The problem would be solved if we could find a way of storing the extra energy produced by wind when it is not needed, without having to build expensive back‑up power stations. What the industry dubs “wrong time energy” could be used, for instance, to pump water from an offshore wind farm to a clifftop reservoir, where it could be used to power turbines when allowed to flow down to the sea.

Other solutions include batteries, compressed and liquefied air to store excess energy. If the technology could be perfected, then wind alone could provide the bulk of our electricity needs. But getting there will not be cheap. In this era of austerity, persuading the taxpayer to donate billions to engineering and power companies on a risk-free basis may be a step too far.


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