All posts tagged RenewableUK

10GW of extra offshore wind turbines by 2020 – The Real Costs

Projected 10GW in offshore wind turbines by 2020 to add 5% to electricity and gas bills, and reduce UK CO2 emissions by nearly 2%. Cost to exceed benefits by 3.8 or 27 times.

 

The Telegraph has an article “Offshore wind farm scrapped due to fears over birds”

A 200MW extension to the 630MW London Array has been abandoned “over the impact on the red-throated diver, a bird classified as rare or vulnerable by the European Commission“. However,

Ministers say they want between 8GW and 15GW built by 2020, up from 3.6GW now, and suggest a total of about 10GW is most likely.

My comment on this (with references) is

Some statistics to put the 10GW of extra offshore wind power by 2020 in perspective.

Offshore wind power operates at about 35% of nameplate from DECC figures1.

So that will produce about 30,660,000 Mwh of electricity.

At present each megawatt of offshore wind gets 2 renewables obligations certificates, worth £842,8. So that will add £2575m to bills, or about 5%3 of 2012 Electricity AND Gas bills.

But this will help reduce the UKs Carbon emissions. How much?

RenewableUK reckons that each megawatt hour of renewable electricity saves 430kg of CO2 emissions4. So that equates to 13.2 mt, or 1.84% of the 716.4 mt6 1990 baseline emissions.

This has a value as well, called the “social cost of carbon”. The Stern Review reckoned $85t/CO25. The UNIPCC said the average was $126. So that is £675m or £95m towards saving the planet for future generations. Costs are either 3.8 or 27 times the benefits.

 

The costs of £2575m are not the full costs. There are also extra transmission costs, and backup capacity. A more sceptical view would put a much lower social cost of carbon than the $12 of the UNIPCC.

From note 5, the marginal abatement costs of offshore wind turbines are 3.8 times Stern’s estimate. Perhaps somebody should ask Lord Stern where the marginal abatement costs of less than $85 per tonne of CO2 are to be found. There are millions of households and businesses in this country who would love to know.

Notes

  1. DECC stats here, spreadsheet “Renewable electricity capacity and generation (ET 6.1)”. Offshore wind was 35.2% of nameplate in 2012.
  2. https://www.ofgem.gov.uk/ofgem-publications/58136/buy-out-price-and-mututalisation-ceiling-201314.pdf.
  3. In 2012 the big six energy companies charged about £44bn to all customers. 5% rise assumes they have 85% of the market. Graph here, from this article.
  4. From http://www.renewableuk.com/en/renewable-energy/wind-energy/uk-wind-energy-database/figures-explained.cfm, last section “CO2 Reductions (p.a.) in Tonnes”.
  5. The Stern review noted on pages xvi-xvii

    Preliminary calculations adopting the approach to valuation taken in this Review suggest that the social cost of carbon today, is of the order of $85 per tonne of CO2……. This number is well above marginal abatement costs in many sectors.

  6. The UNIPCC AR4 Summary for Policymakers in 2007 stated on page 22.

    Peer-reviewed estimates of the social cost of carbon in 2005 average US$12 per tonne of CO2, but the range from 100 estimates is large (-$3 to $95/tCO2).

  7. Source World Bank data. UK data at http://data.worldbank.org/country/united-kingdom
  8. The current banding is at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211292/ro_banding_levels_2013_17.pdf

First-time comments are moderated. Please use the comments as a point of contact, stating this is the case.

Kevin Marshall

 

 

 

 

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by manicbeancounter on 19/02/2014  •  Permalink
Posted in Climate Change Analysis, Climate Change Economics
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Posted by manicbeancounter on 19/02/2014

https://manicbeancounter.com/2014/02/19/10gw-of-extra-offshore-wind-turbines-by-2020-the-real-costs/

The Nub of the Climate Change Policy Problem

Over at the Conversation, Climate Scientist Mike Hulme has a short article “Science can’t settle what should be done about climate change“. He argues the politics, not science, must take centre stage. He makes four points.

  • How do we value future public goods and natural assets relative to their value today?
  • Is “commodifying” nature appropriate?
  • The morality of technologies for mitigation or adaptation. For instance, fracking and GM crops.
  • The role of national governments against multilateral treaties or international governing bodies. Also the consequent impacts on democracy.

Christopher Wright (Professor of Organisation Studies at University of Sydney) commented

The one problem I have with the above analysis is that the focus on climate science has been a quite deliberate strategy by those seeking to deny or cast doubt on the urgency of the problem. This has meant the debate has continually stalled around issues of whether climate change is a problem or not. The science highlights that it is a very big problem indeed. However, while the science continues to be questioned, we will be unable to have the serious policy conversation about what we need to do to avoid catastrophic changes to our ecosystem.

My reply (with references) is

Science might point to a very big problem, but it cannot translate that into coherent policy terms. Nor can it weigh that against the effectiveness of policies, nor the harms policies can cause. Economics is central to asking those questions. The key figure that encapsulates the predicted harm of climate change is the social cost of carbon SCC, expressed in tonnes of CO2 equivalent. In 2006 Stern measured this as $85/tCO21. A year later the AR4 SPM2 stated a range of -$3 to $95/tCO2 from peer reviewed studies, with an average of $12/tCO2.

The key figure for the effectiveness to policy is the marginal abatement cost. Basically this refers to the marginal cost of preventing a tonne of CO2 equivalent entering the atmosphere. For policy to be of net benefit, MAC needs to be less than SCC.

$85 is about £52, and $12 about £7.50. In the UK onshore wind turbines receive a direct subsidy equivalent to £98/tCO23 saved, and offshore £195/tCO2. Then there are the extra costs of transmission lines, and other costs which could double those figures.

Then you need to recognize that a global problem will not be solved by unilateralist policies by a country with producing less than 2% of global emissions. So the UK is impoverished now by harmful, ineffectual, policies, and still future generations suffer >90% of the consequences of unmitigated climate change. Mike Hulme’s four points above are in addition to this, weighing further against mitigation policy.

Notes

  1. The Stern review noted on pages xvi-xvii

    Preliminary calculations adopting the approach to valuation taken in this Review suggest that the social cost of carbon today, is of the order of $85 per tonne of CO2……. This number is well above marginal abatement costs in many sectors.

  2. The UNIPCC AR4 Summary for Policymakers in 2007 stated on page 22.

    Peer-reviewed estimates of the social cost of carbon in 2005 average US$12 per tonne of CO2, but the range from 100 estimates is large (-$3 to $95/tCO2).

  3. The renewables obligation credit (ROC) buy-out price is currently £42.02 per megawatt hour, as determined by OFGEM. The British renewable industry lobby group renewableUK, uses DECC’s carbon saving figure of 430g/kWh, as stated in an appendix to the Energy Efficiency Innovation Review in 2005. £42.02/.430 = £97.67. Onshore wind turbines get one ROC per MWh generated, offshore wind turbines 2 ROCs.

Kevin Marshall

Jo Nova discusses Mike Hulme’s four points here.

by manicbeancounter on 04/02/2014  •  Permalink
Posted in Climate Change Analysis, Climate Change Economics, Costs of Renewables
Tagged , , , , ,

Posted by manicbeancounter on 04/02/2014

https://manicbeancounter.com/2014/02/04/the-nub-of-the-climate-change-policy-problem/