Introduction

In this article we look at the costs and benefits of renewable energy policy. We will consider in a future posts the implications for energy quality, reliability and security.

How much does Net Zero policy actually cost?

We found it very difficult to get a full picture of the costs of Net Zero but, fortunately for us, energy analyst David Turver has already done it. His detailed article Subsidies Galore! pulls together the major costs using government data from the Subsidy Control Transparency Database.

He caveated his analysis by highlighting obvious inaccuracies in the database but said:

Of the 1,169 schemes in the database 1,025 of them have active status. Of these, I judged 144 of them to be Net Zero or energy related. The total budget for these items is £328bn, yes billion, with a ‘b’.

For comparison, subsidies for reliable nuclear energy research and development projects are currently estimated at £409m. Nuclear will also require subsidies to operate but this is in the main due to the technology being neglected in favour of renewables. Imagine where we would be now if we had invested £328bn in carbon free nuclear?

David provided a detailed breakdown of the major costs and interviewed by the Daily Sceptic.

But aren’t bills going down by £300?

Labour came into power suggesting they would reduce bills by £300 per household. The claim is based on analysis by the Network Electricity Systems Operator.  NESO is a company controlled by The Secretary Of State For Energy Security And Net Zero currently one Ed Miliband!

The report is clear that the main assumption justifying lower costs for renewables is a very high carbon price (i.e. tax) for fossil fuels. But the carbon price is set by the government and it could set it at any value it wanted. Therefore, the government is artificially raising the costs of fossil fuels to make renewables look cheap. This is highly misleading, some might say fraudulent.

But what about those community benefits?

Closer to home, a recent article promoting the Cubico plans for Scout Moor 2 in Lancashire News made the following claim (emphasis added):

By coincidence, the announcement came two years on from a heated Rossendale Council debate between political parties about financial pressures and accusations that past opposition to an earlier, different Scout Moor extension plan from 2015, meant the council missed out on an estimated £26 million of potential income.

The author provided no reference for this claim (the link provided is a general one to the Council news on their website) and there is no discussion on how much residents would benefit in practice. Bear in mind that energy bills are much higher than they would otherwise be because of renewable subsidies. Much of the funds would have come from renting the land required for the turbines.

Additionally, there is also no consideration of the additional costs that the council would have accrued, for example due to increases in the policing of illegal off-road activity which is already a major problem here. This claim also ignores the major impact on Commoners who were not due to receive appropriate compensation for their loss of Commoners Rights. Remarkably the developer’s plans suggested that the land affected (and due for compensation) would be only that required for the bases of the turbines!

The article also fails to mention that Rochdale Council refused the Coronation Power planning application for another large wind farm in the same area alongside Rooley Moor Road.

We also note that the rejection of the original extension has been good for the local environment, farming and the community.

Finally, we must point out that for Scout Moor 1, none of the community benefit fund was allocated to local communities who applied for those funds. The majority of the funding went to United Utilities and was not spent in the area.

Putting £26m in context

Various bodies have estimated the costs of NetZero to households but the most authoritative body is NetZero Watch which has broken down both the direct cost of subsidies hidden in our energy bills (£348) and indirect costs (£1,772) in their report Net Zero cost at least £2000 per household.

Few people realise that they are paying the direct cost in their energy bills because the cost is not itemised. Almost no-one appreciates the extent of the indirect costs which arise from a variety of renewable programmes, grid reinforcement costs, inefficient gas power generation (begin forced to run inefficiently as backup) and higher gas prices (due to carbon levies and emergency pricing).

Therefore, we assume conservatively that the impact of renewable subsidies on households was around £500/annum/household on average during that period.

Given that the population served by Rossendale Council is 71,000, we estimate (on the basis of 2.4 people per household) that that there are around 30,000 households.

Therefore the cost to each household over the same period was 10 years x £500, i.e. £5,000. Multiplying this figure by the number of households suggests a total cost to Rossendale bill payers of £150m – some benefit!

It is worth noting as an aside that most of the 28m households in the UK who are not benefiting from wind turbines are still all paying the costs.

In summary

We assume that any benefits promised by Cubico will be a small fraction of the real costs to households of NetZero policy.

The moral of the story? Beware of wind farm developers bearing gifts!