Roger Helmer: The misallocation of resources involved in the dash for renewable energy

This story is over

I have written at length about the vast misallocation of resources involved in the dash for renewable energy, and especially solar and wind power.

We see analyses of the costs of solar and wind, with the industry insisting it has achieved the Holy Grail of ‘grid parity’ – in other words, cost parity with conventional generation. So this begs an interesting question – why does the industry also insist it continues to need massive subsidies?

A major part of the answer is the costings fail to account for the massive costs of back-up, which is essential when the wind doesn’t blow or the sun doesn’t shine. You’re effectively paying twice for the capacity – first, for the intermittent renewables, and a second time for the back-up.

Then conventional generation is less efficient when run intermittently as back-up for renewables, meaning higher costs and higher emissions per unit of output. Worse still, conventional generation is designed to be efficient when run steadily. You simply can’t make an economic case to build a gas-fired power station if it’s going to run intermittently. So we now have to offer capacity payments – an additional layer of subsidy to allow the back-up capacity to be built.

The day may come when solar and/or wind become economically viable. This would be based on further substantial increases in efficiency and the availability of very large-scale (and efficient) energy storage. But even then, if and when that day comes, we shall look back and regret our vast misallocation of resources on wind and solar capacity which by then will be obsolescent, old-fashioned, inefficient and expensive.

So are we in UKIP against all renewables? Not at all, and the best example to quote is hydro, which (provided you have the right locations and topography) is cheap and controllable.

I have occasionally been asked to comment on another renewable technology – anaerobic digestion. Popular on farms, the idea is to take agricultural waste, allow it to ferment, take off and burn the resulting methane – and use the residue as fertiliser. I freely admitted that I didn’t fully understand the economics of anaerobic digestion, but I had no objection to it if it was economic.

It sounds like a win-win. Free feed-stock. Free gas. Free fertiliser. If only. It doesn’t quite work like that. It’s rather like claiming that the wind is free, and so it is — if you ignore the costs of converting it to electricity. Indeed you might say that coal and oil are free – they’re just lying there in the ground and waiting for someone to come and take them away. But again, the costs of obtaining them and converting them to usable electricity are substantial.

I haven’t studied the economics of anaerobic digestion (it’s a minor issue compared to solar and wind) but fortunately The Daily Mail did.

Its conclusions are damning. First of all, there just isn’t enough agricultural waste to feed the available capacity so thousands of acres of perfectly good arable land are growing maize and other crops explicitly for anaerobic digestion. That was 131,000 acres in June 2016. Land that could be used for food, to help ensure our food security and reduce our balance of payments.

And anaerobic digestion has led to a number of leaks or even explosions that have contaminated farmland and waterways and caused the death of dozens of farm animals.

It is bizarre campaign groups and NGOs vehemently oppose shale gas development, on the grounds that it might possibly do some environmental damage, and yet seem to have nothing to say about anaerobic digestion which actually is doing great damage – and costing hundreds of millions in subsidies.