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REF Blog

The Increasing Cost of CO2 Emissions Reductions in the United Kingdom

A reduction in the use of coal and a rise of gas for generating electricity has slashed the UK grid emissions factor to around 0.26 tonnes of CO2 per MWh.  This has the economic consequence of increasing the subsidy cost of saving emissions through increased use of renewables.  It now costs around £169 to save a tonne of CO2 through use of onshore wind, and £267 for offshore wind. This is 6-10 times the estimated cost of environmental damage caused by a tonne of emitted CO2 and demonstrates how expensive and ineffective the UK renewables policy is in abating greenhouse gas emissions.

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UK Coal Benefits from Exceptionally High Wholesale Electricity Prices

The unusually hot September weather, and a resulting higher demand from air-conditioning and refrigeration units, over the past week has contributed to very high wholesale electricity prices, with coal stations being the main beneficiary.

Coal appears to have been called upon because several gigawatts of gas generation were offline. Furthermore, generation from the UK’s 14 GW of wind turbines during the period was, as is likely during a hot spell, modest, ranging from a high of 4GW to less than 1 GW, or from 29% to less than 7% of its capacity.

The prices charged by the coal generators during this period were exceptionally high. West Burton coal-fired power station, owned by EdF, charged up to £1,237 per MWh for providing an extra 1.5 GWh of electricity on Wednesday 14th September. This is approximately 30 times the usual wholesale price. Ratcliffe-on-Soar coal-fired power station, owned by E.On, charged up to £1,484 per MWh for providing extra power, earning an extra £6 million for the day.

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Wind Farm Constraint Payments over Easter 2016

Windy bank holidays, when wind power output is high but demand is low, can force National Grid to make significant constraint payments to wind farms, plus related payments to conventional generators, to cope with the surplus, unusable electricity generated by wind farms, usually because the windfarms are located behind a grid bottleneck.

2016 has proved to be the most expensive Easter holiday period to date for wind farm constraint payments, with a total of £3.7 million being shared between 39 wind farms.

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REF Interim Statement on DECC Announcement of CfD Auction Prices

The Department of Energy and Climate Change (DECC) has today published the results of the first round of competition for Feed-in Tariffs with Contracts for Difference (FiTs CfDs, hereafter CfDs), a subsidy mechanism that will run alongside the Renewables Obligation (RO) until the latter closes to new entrants in early 2017, when CfDs will become the sole subsidy mechanism for large scale renewable electricity generators.

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DECC Publishes Energy Price Impacts

The Department of Energy and Climate Change has today published the tables of policy-induced price impacts that were the subject of REF's Freedom of Information request and DECC’s response.

These price impacts were deliberately omitted from the 2014 issue of Estimated Impacts of Energy and Climate Policies on Energy Prices and Bills, in spite of their obvious importance and the fact that they had appeared in all previous issues of Estimated Impacts, as discussed in a previous REF blog.

The price impact tables have been usefully released as a spreadsheet annex to the 2014 document titled Supplementary tables - Prices and Bills 2014.

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Where are the Energy Price Impacts?

Update : 10 December, 2014.  DECC has now released the energy price impacts.

On the eve of the deadline expiry, DECC yesterday responded to REF’s Freedom of Information request for the ‘estimated impacts of energy and climate policies on energy prices’; data inexplicably omitted from their study titled Estimated Impacts of Energy and Climate Policies on Energy Prices and Bills (2014). Their response can be read here.

The price impacts (p/kWh) of Government’s green policies have been published in all previous issues of this key document, and indeed are explicitly referred to in its title.

Price impacts are extremely important because they permit analysts and members of the public to assess the raw impact of policies, before the claimed offsetting impacts of energy efficiency, for example, are taken into account. This allows the reader to form a view of the plausibility of the offsetting effects and also to estimate impacts on particular users rather than on the ‘average’ users upon which DECC’s study focuses. This latter point is very important for business consumers, because businesses vary so much, with the ‘average’ business being almost meaningless.

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DECC Conceals Estimates of Energy and Climate Policy Price Impacts

On the 6th of November the Department of Energy and Climate Change (DECC) published the third and much delayed edition of its Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills.

REF has previously criticised the methodology used in the previous two issues of Estimated Impacts (2011 and 2013), particularly the tendency to focus on modelled average bills not price effects and so conceal important variations in effects on different types of domestic households. DECC also made use of unreasonably optimistic assumptions with regard to the effects of energy efficiency measures. For further details see our study Shortfall, Rebound, Backfire (2012), and subsequent correspondence with DECC and the UK Statistics Authority.

The latest, 2014, release of Estimated Impacts continues to suffer from many of the faults identified by REF in previous editions, and is rendered still more unsatisfactory because the tables showing the electricity and gas price impacts (£/MWh), rather than modelled average bill effects, have been deliberately withheld, even though they appeared in the three previous editions.

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Ecotricity Advertisement in the Guardian

On the 7th of November the wind farm developer and green electricity supplier Ecotricity placed a double page spread advertisement in the Guardian newspaper. This advertisement claimed that wind power played a significant part in securing supplies on the 19th of October, when four nuclear power stations were already offline and the system came under further pressure in the evening because of a fire at Didcot B power station, a Combined Cycle Gas Turbine (CCGT) power station.

Specifically, Ecotricity wrote that:

“No one noticed that around nine million homes worth of electricity had electricity had simply ‘disappeared’ after four nuclear power stations had shut down and Didcot went up in flames. No one noticed because Britain’s windmills carried on turning, powering almost 25% of our country. It was a historic event that went almost unnoticed; one revolution after another quietly secured our energy needs. The lights didn’t go out. We have wind energy to thank for that.”

These claims are repeated on the Ecotricity web site: “Nothing Happened”.

In yesterday’s Sunday Telegraph (23.11.14) Christopher Booker’s column discussed the Guardian advertisement, and called its accuracy into question: “Revealed: the Guardian Wind farm advert that tried to pull the wool over our eyes

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New Ed Davey Letter Confirms that Onshore Wind Targets for 2020 are already Met


Summary & Conclusions

1. A letter from the Secretary of State for Energy and Climate Change, the Rt Hon Ed Davey, MP, to Mary Creagh MP, reveals that DECC calculates that sufficient onshore wind has been developed (i.e. consented and likely to be built) to meet the upper level of government expectations for this technology, 13 GW (about 6,500 turbines), confirming an earlier study by REF

2. Consequently, the 6.4 GW of onshore wind currently in the planning system (approximately 3,000 turbines) are surplus to requirements. The presence of this needless 6.4 GW of onshore wind in the planning system is causing undue cost to local authorities and widespread planning blight to affected communities, to say nothing of misdirected capital and development effort in the energy industry.

3. In our judgment Mr Davey should cool the sector down with a statement to the effect that the onshore wind target is now met, that DECC does not support onshore wind applications currently in the planning system, and that effort should be focused on other areas.

4. In the absence of such a statement, which we believe unlikely for political reasons, decision makers in the planning system, from local councillors, to inspectors to the Secretary of State at the Department of Communities and Local Government, Mr Pickles, can be confident that in applications for onshore wind no weight need be given to the project’s contribution towards renewable energy targets.

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Robert Freer

REF is saddened to report the death of Robert Freer, one of our technical advisors, and a keen supporter of our objectives.

Robert Freer was a civil engineer who worked mainly on energy and maritime projects and especially at the interface between research and practice. He was involved in the design and construction of nuclear, hydro-electric, diesel, and gas turbine power stations in this country and overseas (including Dounreay, Winfrith, Kariba and Aswan) and on the development of a prototype wind energy generator and a wave energy device. He was awarded the George Stephenson Medal by the Institution of Civil Engineers in 2002, and organised and led two DTI sponsored OSTEMS visits to a number of European countries and to Japan on dam safety and on energy from waste. Robert also served on a number of committees of the Institution of Civil Engineers on the ICE Council.

Robert’s funeral will take place on the 29th of September at 11am at St George’s Church, Hanover Square.

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