Someone get a grip. UK energy policy is once again coming apart at the seams, with growing doubts over whether net zero or even energy security goals can be met.
Only now are the true economic costs and practical difficulties of going carbon-free becoming fully evident, and it’s not a pretty sight. Yet still policymakers don’t seem to get it; either that or they are being deliberately misleading on the ease with which it can be delivered.
As if to confirm the gaping chasm between ambition and reality, the latest round of auctions for UK renewable energy licences, the outcome of which is due to be announced late next week, has plainly hit the rocks.
Having already abandoned a key UK offshore wind development because of rising costs, the Swedish utility Vattenfall has indicated that it won’t be participating in the Government’s so-called Auction Round Five.
Similarly with the UK energy group SSE, which has said it will not be entering its Seagreen offshore development into the auction, citing a low, officially set, strike price, and dramatically rising costs.
Under pressure from the renewables industry, the Government has announced a slight increase in the promised subsidy below strike prices, but it’s unlikely to make a difference.
Presumably there are at least some bidders still in the running; even so, officials will struggle to get the capacity hoped for, putting in jeopardy the target of 50GW of offshore wind by 2030. Current capacity stands at just 14GW, so there is a way to go.
This in turn raises doubts about the Government’s separate target of complete decarbonisation of the electricity network by 2035. This, too, looks unrealistic. British energy policy is once more in a chaotic mess. It was ever thus.
As it is, policymakers have set strike prices so low that investors are struggling to see how they might make a return. No surprise that prices should be forced down like this, for the green energy transition is not just about saving the planet. It is also meant to deliver much lower energy costs.
This, too, is turning out to be a pretence. It’s true that in the past seven or eight years, the notional cost of renewable energy has plummeted. The price of offshore wind output has, for instance, fallen by around two thirds, from £100 per megawatt hour to less than £40. There you go, say ministers in response to net zero sceptics; it’s cheaper than coal.
Would that it was, but the claim is in fact a statistical illusion. The manufacturing, installation and maintenance costs alone have been surging since the war in Ukraine. To these we must also add the costs of upgrading the National Grid to bring the new sources of electricity from where they are generated to where they are used.
Littering the countryside with pylons is understandably running into local opposition. Billions may have to be forked out to compensate affected communities, or in finding alternative, more expensive, transmission routes. It could make HS2 look cheap by comparison.
But to gain a proper understanding of the real costs of wind, and to a lesser extent, solar, we need to factor in another of their characteristics – that they are intermittent.…/renewable-energy-net…/

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