The Price of Green Energy

Mr. Cameron's senior energy adviser, Ben Moxham, has said (5 Sep 2011) that household energy bills will rise by about 300 per year as a result of following so-called 'climate change' policies.

Mr. Moxham used to work for BP and has knowledge of the energy industry, particularly oil and renewables. His note to the Prime Minister casts doubt on recent pronouncements by ministers on the economic benefits of 'decarbonisation'.

On July 29, researchers at Cambridge University came to a similar conclusion: that the Coalition's energy reforms would add an extra 32% to energy bills; around 300 to the average household.

This is on top of price rises announced by most of the large energy companies during the summer.

Two areas of particular concern for consumers are:

  • More energy to come from renewables.
  • A fixed guarantee price for electricity generated by low-carbon methods.

    Firstly, "Renewables" is usually taken to mean wind power, which is several times the price of other forms of energy.

    Secondly, "a guaranteed price" is likely to refer to a much higher price than the industry norm for a kilowatt hour.

    The Royal Academy of Engineering estimates the current cost of energy production (pence per Kilowatt hour) as

    Gas Fired 2.2
    Nuclear 2.3 (including decommissioning)
    Coal 2.5 to 3.2 (without carbon capture)
    On-shore Wind 5 to 7
    Off-shore wind 15 to 21

    The figures for wind are of particular note. Many people reading this will have noticed wind turbines appearing in their locality.

    The Renewable Energy Foundation found that wind turbines south of Hadrian's Wall are unlikely to produce enough energy to earn their keep.

    A series of payments known as the Renewables Obligation subsidises the initial investment. The subsidy is independent of the amount of energy generated, whether it is large, small or zero.

    Mr. Moxham has suggested looking again at the higher cost technologies 'in a way that minimises cost and disruption to investment'.

    I wonder what this means....

    5 Sep 2011

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