Alarmism from the Climate Change Committee must stop

There is a shockingly alarmist comment in today’s press release from the normally restrained Committee on Climate Change.

‘continued reliance on unabated gas-fired generation carries the risk of electricity bills for the typical household being up to £600 higher than under a low-carbon power system over the next decades.’

We need the CCC to be an objective and thoughtful analyst of energy and climate change. Its (entirely correct) opposition to extensive unabated gas-fired power generation must not cause it to get as careless with the truth as its political masters. Today’s statement risks severely diminishing its standing.

(There’s a response from the CCC to the points made on Carbon Brief, and other web sites such as this one, here.)

The rationale for the Committee’s £600 figure is as follows:

a)     If we use use gas to provide nearly 100% of our electricity, the UK is vulnerable to gas price rises raising the cost to generate power.

b)    Similarly, a  carbon tax of £500 per tonne of CO2 would add to the cost of generating 100% of our electricity with fossil fuels such as natural gas.

c)     Add these two factors together and the CCC sees a wholesale cost of electricity of about 26.4p per kilowatt hour in 2050, compared to about 8.3p for low carbon technologies. Since the average household consumes about 3,300 kilowatt hours of electricity a year the additional cost is the difference between 26.4p and 8.3p (18.1p) multiplied by 3,300 kilowatt hours. This arithmetic produces an incremental cost for gas-generated electricity of about £600.

The problems with its analysis.

a)     It doesn’t make clear that its arithmetic refers to the year 2050 and not ‘over the next decades’ as specified in its press release. Price differences are much, much smaller before 2040.

b)    Gas fired power stations last about 20 years. If we (wholly mistakenly, I believe) dash for unabated gas today, all the plants will be demolished by 2050. Today’s decisions, or even those of 2025, won’t affect electricity prices in 2050

c)     None of the main low-carbon technologies will anywhere near as expensive as 26.4p per kilowatt hour in 2050. Today, farm-sized PV farms are being built to provide power at about 12p per kWh. Onshore wind is about 9p. Biomass is similar. Even the most expensive mainstream renewable source – offshore wind – is no more than 14p per kWh. The Severn Barrage will cost less. And all renewables will get cheaper over the next forty years. As a result, if it did cost 26.4p/kWh to generate electricity using gas in 2050, no gas power stations would be built. They would be hopelessly uncommercial against renewable competitors.

d) No-one is suggesting that the 30% of UK power that will be generated by renewables in 2020 will disappear. The assumption that nearly all generation is gas powered in 2050 is strikingly unreasonable.

d)    The main ingredient in the CCC’s high electricity price is a carbon tax of £500 per tonne, approximately 60 times current levels. But the Department of Energy’s ‘central’ carbon price estimate is £200 per tonne in 2050. It’s close to propaganda to use the £500 figure without explaining why is reasonable to employ a figure so far from standard estimates.

e)     In addition, the CCC uses a projected gas price of 102p a therm in 2050 but only publishes the sources of its estimates out to 2035. These show ‘central’ costs of about 70p in the period 2020 to the end of the period.

The profoundly wrong government decision to incentivise more exploration and encourage the construction of unabated CCGT power stations is frightening the CCC into taking a more aggressive stance against gas. This is understandable because its world-leading work is being largely ignored. Nevertheless it must remain an impartial and evidence-based research institute and resist the understandable temptation to overstate its case.

 

 

 

  1. Christopher Shaw’s avatar

    I think it is way past the time when it is perfectly legitimate for authoritative institutions to adopt an alarmist position. I think what is happening to the climate is alarming.

  2. Douglas Haigh fidhe’s avatar

    The climate Change Committee should realise that wind (for their beloved turbines) is variable, random and difficult to predict. They should also read the submission from Roland Heap CEng MIET laid before the Commons Committee on True Wind Turbine Costs. In his submission he points out that wind turbines are at best nationally 29% efficient, And if it wasn’t for the very generous Government hand-outs no contractor would get involved with them.
    If wind turbines have any use at all it is this– fill any spare land around existing power stations with them and use the electricity generated to provide hydrogen by electrolysis, this can be stored in large quantities on site and then used to fuel the existing steam boilers. And it doesn’t matter how innefficient the process is, the result is a fuel source provided by wind driven electricity that can be stored for a ‘rainy day’ and when burnt in a steam boiler produces nothing more dangerous than water vapour!
    It seems to me that putting large wind generator farms all over the countryside and then having to rewire the grid to make use of the resultant energy is a bit backward. I cannot believe that British engineers are incapable of converting our existing burners to fire on hydrogen. A small test site is required to test the theory.

  3. The gasman’s avatar

    Very good post. This kind of misleading propaganda from a supposedly independent body is quite worrying and it plays into the hands of the sceptics. The supposed figure for carbon tax in 2050 is ridiculous.

    Douglas, the chair of the committee was until recently the chair of a wind turbine company.

  4. Michael Knowles CEng MIMechE’s avatar

    The more I read of what the government says and the Climate Change Committee, the more it makes doubt what they are doing and saying. They seem to be looking so far into the future with information based on consultants’ modelling that does not relate to current performance figures in DUKES or economic and engineering reality.

    Renewable developers/operators have had over 10 years experience in the RO, & 12 years before that with the NFFO, receiving subsidies that are two and three times (and more) than the wholesale cost of electricity. They now should be expected to do much better than this especially on the large wind farm capacities onshore such as ScottishPower Whitelee 322 MW @ 140 x 2.3MW Siemens turbines total, and three other large wind farms each over 100MW in Scotland. Offshore wind has even larger capacities/turbine sizes like Thanet Array 300MW 100 X3MW Vestas & London Array I&II 1000MW. We have looked in detail at onshore and offshore wind farms ref economies of scale e.g., 87% of onshore turbines have 3 x 1MW or greater mainly 2 to 3 MW. The other 13% are small, sometimes single, 225kW; 300kW; 500kW and 600kW, which could be dealt with by putting them into the lower capacity FITs programme.

    By reducing RO subsidies further than the 10% proposed by DECC in its July report on RO banding levels for 2013 to 2017, savings from onshore wind power alone of £1billion a year and up to £2billion a year should be possible by 2020 with the offshore cost reduction programme. These reductions are for 20 years from 2013 to 2017!!

    With the Energy Bill on Electricity Market Reform Bill now being put to Parliament soon for its first reading, it is important that the truth on the economics of renewables and nuclear costs is brought into the open. The proposals in the EMR for an auction process with Feed in Tariffs and Contract for Differences should give a much fairer deal for consumers. It ought to be brought in as soon as possible and the over generous Renewables Obligation phased out before 2017.

    The costs of new 3rd generation nuclear plants EDF’s 2 twin 3700MW EPRs and recently Hitachi 2 twin 2700MW ABWRs have been in the news. These will probably produce 94TWhs a year of electricity between them for some £40 to £45billion investment. at 7 to 9p/kWh generated cost for 60 years. The next lot of renewable electricity is likely to cost £20-£25billion investment and produce 32TWhs still at substantially higher prices unless the generators can bring costs down dramatically, Much of it will be from wind for 25 years before substantial replacement programme, for our children and grandchildren to pick up the bill.

    According to a recent European Energy Review newsletter, Germany now has realised the cost of their policy to go totally for renewable energy and abandon nuclear viz., “The German government has just announced a 47% rise in the tariffs that consumers have to pay on their energy bills to finance the Energiewende”

    Bring back the CEGB

    Mike, Cheltenham
    Co-author of the Institution of Mechanical Engineers’ Energy Policy Statement EP 11/02 – “UK Electricity Generation – Cost effective management” http://www.imeche.org/Libraries/Public_Affairs/IMechE_Electricity_Generation_PS_Feb_2012.sflb.ashx and the Institution’s response to DECC consultation on RO banding levels for 2013 to 2017 http://www.imeche.org/Libraries/Public_Affairs/3236-consultation-ro-banding-response-form.sflb.ashx

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