The Cost

New Study By Stuart Young

Coal gas and oil subsidy 28 Aug 2012

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Calculation for 2 x 15kW turbines near Ballantrae South Ayrshire

CATS welcomes and endorses Iain Gray’s assessment of the situation Scotland is in as a result of the SNP’s energy policy. A lack of understanding by much of the British public of the drivers of renewable energy is causing untold environmental and economic damage to our country and driving more and more people into real poverty, not just fuel poverty on a daily basis.

We are all consumers. We all pay for the entire cost of the Renewables Obligation and for the utterly immoral Feed In Tariff regime. Renewables Obligation Certificates (ROCs) add approximately 5p per unit to every unit generated by onshore wind and double that for offshore wind.

The Feed in Tariff scheme is difficult to believe, but it is true.  If you have a small turbine (actually not necessarily small, it can be up to 5MW worth), your electricity supplier will pay you, yes you, to generate and use your own electricity, and will actually pay you a little more if you sell the electricity back to the Electricity supply company. This is clearly bad business for the Electricity supplier, but it gets the money back by spreading that cost around all its other customers, which is you.

Two small 15kW turbines erected on many farms will earn nearly £17,000 for its owner in one year and will feed into the grid only about £1000 worth of electricity.  The consumer, you, pay £18,000 for £1,000 worth of electricity.  Copy of Calculation for 2 x 15kW turbines near Ballantrae South Ayrshire

This is a payment guaranteed for 20 to 25 years. A 3MW 145 metre turbine earns £295,650 per turbine per year for its owners for 20 – 25 years. We already subsidise 3,708 turbines like these and thousands more are coming along in Alex Salmond’s renewable energy plans. All for us to pay for through rising energy bills and the rising cost of food and goods as companies add their energy costs to these goods.

John Constable and the Renewable Energy Foundation have published REF on Fuel Poverty describing how subsidised  wind energy causes ever increasing fuel poverty.

Another study Ireland – Dudo , based on real data from the Irish National Grid, shows that there is actually a slight increase in CO2 emissions as wind energy contributions increase.

The big question is how is Scotland going to export all this wind power when the grid is already saturated? And how much will it cost the public in constraint payments when the English do not want Scottish wind energy? 

Citigroup urges caution over Scottish green energy  Brian Taylor Political editor, Scotland

Citigroup said the referendum process would “create huge uncertainty” over green investment A major finance group has urged extreme caution over investing in Scotland’s renewable energy sector, partly because of the independence referendum. Citigroup said the referendum process will create huge uncertainty at the moment when major decisions on green projects are needed. First Minister Alex Salmond dismissed concerns in the report. He said much of the renewable energy produced would be for export and would help “keep the lights on” in England. A new report by Citigroup analysts said SNP’s two flagship policies – an independence referendum towards the end of the current parliament and a big increase in renewable energy and green jobs – may be in conflict. It argues the referendum process will “create huge uncertainty” at precisely the moment when big investment decisions in renewable projects will need to be taken. The report also argues that an independent Scotland would have too small a consumer base to generate the annual subsidy of £4bn, which they believe would be needed to support a hugely increased reliance on renewable energy. As so often in both politics and business, it is, I suppose, a matter of confidence. Are we optimistic or pessimistic about Scotland’s renewable energy prospects?”   Brian Taylor Political editor, Scotland Read more from Brian It states: “Continued subsidy from consumers in England and Wales would be required, but Scotland seceding from the UK would clearly place this subsidy stream at grave risk. ”Renewable investors risk seeing their assets stranded in a newly independent Scotland.” The Citigroup report concluded: “Utilities and other investors should exercise extreme caution in committing further capital to Scotland.” But Mr Salmond told BBC Radio Scotland’s Good Morning Scotland programme: “In order to get anywhere near the renewable energy obligations that London is going to have, England is going to have to have Scottish renewables from the sea. ”Perhaps the reason why all these international companies are committing funds to Scotland is because in 10 years’ time, without Scottish offshore wind power, then there would be a severe danger of the lights going off in England. I don’t think anybody is going to want or allow that to happen.” Mr Salmond hit out at the Citigroup report saying: “The analyst from Citigroup, he seems to think we’re going to use all this power in Scotland. We’re not. It’s power for export. ”Believe me, in the modern world the ability to produce power is a great asset, not a liability.” The first minister added: “If an analyst in Citigroup has a kind of brainstorm, so what? You don’t need a crystal ball. You just need to read the book and the book tells you that over the last year alone £750m has been invested in Scottish renewables.” Scottish Labour leader Iain Gray said the report showed “the SNP’s refusal to come clean about a referendum is creating uncertainty and damaging Scotland’s economy”. He added: “We have been warning about this for months and now we see a major global bank actually advising its clients not to invest in Scotland. ”What is even worse is they are advising clients not to invest in Scotland’s key growth industry of renewable energy. The best future for that industry is for Scotland to remain part of the bigger economic market that is the UK.” ‘Create uncertainty’ Scottish Secretary and Lib Dem MP Michael Moore agreed that the report pointed to a “perfect example of the referendum uncertainty”. He added: “It is vital that we maximise the potential of the renewables sector by providing the stable environment in which that can happen. ”The Scottish government must end the uncertainty and confusion caused by the delay over the referendum and should bring forward their proposals now. ”Scotland’s renewables sector has enormous potential, and we are determined that Scotland will feel the full benefit of it. But the report makes absolutely clear that it is only the size and scale of UK investment and its consumer base that will make that happen.” The Scottish Conservative Party’s David McLetchie agreed that the referendum was starting to create uncertainty among the business community. He added: “We have repeatedly called for the SNP to set a single question and to set a date as soon as possible for the referendum so we can settle this matter once and for all. ”With businesses being advised not to invest in Scotland until this is resolved we can ill afford any further delay. We need to start concentrating on what Scotland needs, rather than on Alex Salmond’s narrow minded independence agenda.”

Worth The Candle? The Economic Impact of Renewable Energy Policy in Scotland and the UK .                  The report’s key finding is that for every job created in the UK in renewable energy, 3.7 jobs are lost. In Scotland there is no net benefit from government support for the sector, and probably a small net loss of jobs. In conclusion, policy to promote the renewable electricity sector in both Scotland and the UK is economically damaging. Government should not see this as an economic opportunity, therefore, but should focus debate instead on whether these costs, and the damage done to the environment, are worth the candle in terms of climate change mitigation.

Norway electricity sharing ‘by 2020’ What is Alex Salmond thinking? Has he not heard what happened to Denmark’s plans ? Norway was not interested in their wind as they have loads of HEP of their own and Denmark ended up PAYING Norway to take their excess wind energy. When the wind stopped blowing in Denmark , Norway said Hey, like some rather expensive HEP to keep your country running ? (OK I paraphrase and simplify but this was the overall result).

Wake up Scotland. The Times September 29 2011 by Peter Jones An ambitious £1.75 billion scheme enabling Scottish electricity generators to use Norway as a giant storage “battery” and helping to keep down domestic bills has taken a dramatic step forward, it has emerged. NorthConnect, the company formed to examine linking Scotland and Norway with a 570km-long subsea electricity cable, has disclosed that it is applying to National Grid to get a connection into Britain’s grid at Peterhead. The Scotland-Norway inter-connector, once thought to be a pipedream, is expected to be of huge benefit to operators of wind and other renewable energy farms in Scotland. The cable, it is hoped, will enable electricity firms on each side of the North Sea to sell into each other’s market, taking advantage of situations when wholesale prices are high in one market, but not in the other. It would also go a long way towards solving the problem of what to do with Scottish wind-generated electricity when there is no demand for it. The project’s progress is also a big feather in Alex Salmond’s cap. The Scottish First Minister has long championed the idea of a North Sea grid as a means of boosting the potential of the Scottish renewables industry. The application is the first signal that the idea is technically feasible and economically viable and comes only eight months after NorthConnect was set up by four big electricity firms including Scottish & Southern Energy (SSE) and Vattenfall of Sweden. While the project has still to surmount many planning hurdles in Scotland, Norway and on the seabed route, Odd Øygarden, NorthConnect’s chairman, said he expected the transmission line to be operating by 2020. He said: “We are sure that there is a real requirement to more closely link the electricity markets of Scandinavia and Great Britain together as this will bring benefits in terms of security of supply, deployment of additional renewable generation and more efficient generation in both regions.” Mr Øygarden said that prices in the two electricity markets were expected to become more volatile over the next 30 years as the price of fuels fluctuated and they became more dependent on unpredictable supplies of wind power. This would help to damp down price fluctuations and reduce the price increases that consumers might otherwise have to pay, he said. The plan is to send the cable across the 1,400 megawatt cable to Norway where it would drive pumps sending water up to high-level reservoirs. When the electricity was needed, the reservoirs would empty into hydro-electric power stations and the power would be sent back across the North Sea. Scotland has very little scope for building new pumped-storage hydro stations, but Norway has much bigger potential. Mr Øygarden said: “We have quite considerable pumped-storage at this time and we are assessing the future possibilities of bigger capacities but we have no clear plan to build more.” The plan goes some way to answer critics such as Mike Salter, chairman of Scottish Chambers of Commerce, who warned at a dinner in Glasgow last night that over-reliance on expensive renewable energy could force some companies out of business. He said the cost of new offshore wind farm electricity is now approaching 19p per kilowatthour (KWh) compared with the present gas wholesale price of 2p/KWh. He added: “A fish processor in Peterhead recently told me that he uses about £500,000 of electricity per year and has invested a lot in reducing his consumption and being efficient. But if his electricity bill doubles, he’s out of business.” Alex Salmond’s green energy revolution ‘threatens firms with bankruptcy’The costs of Alex Salmond’s green energy revolution are “going through the roof” and threaten to bankrupt companies by doubling energy bills, business leaders have warned the First Minister. The Scottish Chambers of Commerce (SCC) said electricity is currently about nine times more expensive to generate from wind farms than gas-powered plants. Mike Salter, the SCC chairman, told the organisation’s annual dinner that Government energy experts predict greater reliance on “very expensive” renewables will lead to consumers’ electricity bills doubling

Environment policy reforms to add £300 to energy bills Household energy bills will rise by more than £300 a year as a result of the Coalition’s green policies, a senior Downing Street adviser has told David Cameron. Foreign firms reap £500m a year in subsidies from UK wind farmsTwo thirds of wind turbines in the UK are owned by foreign companies, raking in half a billion pounds in subsidies added to household bills.