The Tories’ wind power delusion

 By Matt Ridley in the Spectator

Read the original here.

This is a slightly edited version, for brevity. 

Dozens of Tory MPs are demanding an end to the ban on onshore wind farms. Wind power is cheap and getting cheaper, they argue. And surely, if we’re engaged in an energy war with Russia, we need all the power we can get?

It’s an argument that is wrong several times over. There is no ban on wind farms – it is actually a bog-standard planning requirement that they be confined to areas designated for that purpose and with community support. Nor do they offer a cheap solution: the costs are high and rising. In fact, relying on the wind for power would guarantee that electricity is expensive for ever, because wind’s unreliability poisons the market, driving up the price of gas-fired power too.

This week the prices offered to anybody – anybody! – who could guarantee to supply power on the chilly, windless evening of 29 November shot up briefly to about £1,100 per megawatt-hour (MWh), more than ten times the normal rate. Demand was forecast to peak at 41.2 gigawatts, supply at 40.7.

At such a price, enough supply did indeed come out of the woodwork, but not from the wind industry, which can’t just turn on the wind when it wants. Growing reliance on unreliable wind has left Britain paying sky-high prices on still, cold days.

Claims that onshore wind is cheap come thick and fast from politicians in thrall to the most well oiled of crony-capitalist industries, the wind merchants. The claims are not supported by the accounts of onshore wind farms, which indicate a breakeven cost of around £80/MWh for the very cheapest farms. And this, note, is for the efficient wind farms with 200-metre turbines (twice the typical height), located in the windiest sites and spaced at least 1,200 metres apart so they don’t they steal each other’s wind. The cost estimate doesn’t even count the need to carefully manage backup power generation for those times and places where the wind is not blowing hard enough, or blowing too hard. Nor does it count the cost of building and running transmission lines from remote wind farms to places where people actually live.

Wind farm accounts also show that this cost is rising, not falling, presumably due to such grid constraints, the fact that the best sites have gone, and the rising costs of steel, concrete, copper and neodymium making new machines pricier. Yet even £80/MWh is nearly double the cost of gas-fired power at the long-term average price of gas.

But that is if gas is allowed to supply electricity continuously without much interruption. If you keep telling gas power stations to switch off because the wind is blowing, as we do, then they will have to (and do) charge more to cover the inefficiency of heating up and cooling down the gas turbines. The more wind we add, the higher the price of gas-fired power. In this way, wind locks in high electricity prices, hastening the deindustrialisation of Britain, or what’s left of it.

And hey presto, wind farms can charge these same high prices as gas, delaying the start of the ‘contract for difference’ they signed to supply at lower prices. Why? Because this document is a thing of beauty for the wind farm operators: it’s not a contract to supply power at all, but an option to do so whenever the zephyrs of the gods play ball. The government, in its infinite stupidity when Lib Dems were in charge of energy, gave wind farms the right to supply power (with bonus payments if the grid cannot cope on a very windy day) but did not hold them to the price they quoted. At least not without a trivial penalty. Incredible? If only.

The ‘contracts for difference’ that were put in place not only transfer the costs and risks of all the uncertainty to the rest of the system, but are ditched at the first sign of a better deal. Hornsea 2, the world’s largest offshore wind farm, began operation this year. Orsted, the developer, signed a contract for difference in 2017 to sell its power at £57.50/MWh. In the event, it delayed the contract until next year and sold power at between four and ten times that, costing the consumer hundreds of millions of pounds a year. See what I mean about business plans based on spot prices?

The best thing about wind farms, as far as city spivs are concerned, is that they transfer money from poor to rich. The costs are borne by electricity bill payers – and power absorbs twice as much of the monthly budget of a poor person than a rich person. The rewards are trousered by the wealthy: landowners, private equity investors, lobbyists, Chinese mine owners.

Professor Gordon Hughes of Edinburgh University told me how the market could and should be reformed. If anyone wants to be serious about onshore wind, he says, let them sign guaranteed supply contracts to provide power on demand for at least 20 years – with serious penalties if they cannot deliver. So the wind farm would have to be combined with enough battery or other backup capacity to be as reliable as a gas power plant.

This would force the industry to build, say, a 100-megawatt wind farm, but only guarantee to deliver, say, 40 megawatts to the grid, storing the surplus in batteries for when the wind farm is producing less than 40. The true cost of wind would probably be more than £200 per megawatt hour.

Talking of batteries, wind energy’s fans (no pun intended) were excited on 21 November when Harmony Energy opened Europe’s largest battery farm near Hull. ‘But what happens when the wind doesn’t blow and the sun doesn’t shine blah blah bl – oh right, we now have industrial-scale batteries,’ enthused David Shukman, former science editor of the BBC.

Consisting of about 50 container-lorry-sized Tesla megapacks parked on a site the size of a football field, the plant will be capable of storing enough electricity to keep just 1 per cent of Britain’s grid going for, er, four minutes. Electricity just isn’t like carrots or coal – storing it is immensely expensive.

Notice these are purely economic arguments. I have not even started on the environmental drawbacks of wind farms. They need huge quantities of concrete and steel, both made with coal; they kill rare birds of prey, especially eagles; they slaughter bats; they obtrude on scenic landscapes; their magnets require rare earth minerals mined in China in hugely polluting ways.

Wind is a very low-density form of energy, so you need a very large number of wind farms to make any significant contribution to UK generation capacity: hundreds of square miles per gigawatt of capacity. A gigawatt of fossil fuel or nuclear power takes up a tiny fraction of the space and even less of the sky. In Scotland, where most onshore wind farms are proposed, this means turning almost all upland areas into what is called by planners a ‘wind farm landscape’. Enjoy the view.