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The Economics of Wind Power
Date 15/07/2012 17:09  Author webmaster  Hits 2590  Language Global
Memorandum submitted by Roger Helmer MEP to the Energy and Climate Change Committee (Commons)

1.1 Democratic deficit & top-down policy-making. There has been little public debate about UK energy policy of any consequence. The previous government and present coalition have sought to champion the issue of climate change on the global stage, and pushed for stronger EU and domestic targets and for a global agreement. This green political consensus has deprived the public of the opportunity to hear dissenting opinion, and has sidelined individuals who have criticised climate and renewable energy policies.

1.2 Proper scrutiny of the economics of wind power is overdue, but welcome. However, 'the economics of wind energy' cannot be understood by itself. The full context of the current emphasis on renewable energy needs to be remembered. The UK's wind energy programme is the consequence of policies at international, EU, and UK levels, which have been characterised as 'target-oriented' and 'top-down', setting permissible limits for emissions, and quotas for the production of renewable energy.

1.3 What is most notable about these approaches is that they are prone to failure. The UNFCCC process has failed to find a meaningful agreement between parties. The EU is riven-through with disagreements about nuclear energy, shale gas, and whether there should be an emphasis on renewable or low carbon sources of energy, with member countries beginning to express their preferences for radically different policies. The UK's own emissions reduction-targets have been comprehensively missed, and show no signs of being met before 2030 [1] . These failures were anticipated [2] , and mistakes which have damaged economies and relations between countries could have been avoided, had there been a more open debate.

2. Lessons from other countries. Stark contrast exist between the energy policies of other countries. The most useful comparisons exist between the USA and Germany. In the USA, a boom in shale gas has allowed energy prices to fall, leading to the cancellation of comparatively expensive wind, coal and nuclear projects [3] . More surprisingly, it has resulted in a substantial reduction in CO2 emissions from the electricity generating sector [4] . Germany on the other hand, which produces approximately 8% of its electricity from wind, has had a very different experience. Germany now has the second highest domestic energy prices in the EU, beaten only by Denmark [5] . Although Germany is routinely portrayed as a pioneer of renewable energy, doubts have emerged about the stability of the country's grid, and the ability of consumers to pay for rising costs [6] . Furthermore, the decision to phase out nuclear energy has led to planning and approval of 29 gas fired and 17 coal-fired power plants [7] , and calls for the repeal of emissions regulations [8] .

3. Estimating the cost of wind energy. Most economic analyses of the cost of wind power look simply at a stand-alone wind turbine.  But any realistic costing has to look at the cost of wind power at grid scale plus conventional back-up.  Back-up generally requires outmoded single-cycle gas turbines [9] .  These are not only inefficient, but used as back-up they have to run intermittently, which further reduces their net efficiency.  There is no good estimate of the total cost per unit of electricity from a combined wind plus back-up system, but the Hughes Report demonstrates that the capital cost of wind plus back-up is nine to ten times the equivalent capacity in combined-cycle gas turbines alone.

Read the rest of the report on parliament.uk

See also: Fighting Wind Farms: A guide for campaigners