Don’t Believe Your Lying Eyes!

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

h/t Philip Bratby

The wind industry must be getting really desperate now!

From the Guardian:

Wind power has cut at least £104bn from energy costs in the UK since 2010, a study has found.

Users of gas have been among the biggest beneficiaries, the research suggested.

Research by University College London found that from 2010 to 2023, energy from windfarms resulted in electricity bills being lower by about £14.2bn than they would have been if gas had been needed to generate the same amount of power.

However, the reduction in the cost of gas that could be attributed to wind generation – owing to the cut in demand and not needing to build new infrastructure – was much greater, at about £133.3bn.

Over the same period, consumers paid about £43.2bn in green subsidies, levied on electricity bills rather than gas bills. The net result was a reduction of £104.3bn in UK energy bills over the 13-year period, according to the researchers.

Surging renewable energy generation across Europe made demand for gas – and thus gas prices – lower than they would otherwise have been, and meant electricity companies had less need to build costly new gas-fired power stations, according to the analysis. The way that the UK’s energy market works also means gas-fired power stations are in effect allowed to set the price of electricity.

https://uk.news.yahoo.com/wind-power-cut-104bn-uk-050019061.html

Believe our computer models, not your lying eyes!

I’m sure the British public, suffering under the highest electricity bills in the world, know in their hearts that they are actually £100 billion better off!

Pull the other one, it’s got bells on!

The report itself is here. Let’s go through the numbers.

It claims that wholesale power costs would have been £14.2 billion lower for the 2010 to 2023 period. This is because of what is known as the Merit Order Effect.

In essence, day-ahead power prices are set by highest accepted bid, normally gas plants. The more wind power there is on the system, the less gas there is, meaning that the marginal price tends to be slightly lower.

We can accept in principle the saving of £14.2 billion they have calculated. Over 14 years it is insignificant against the £70 billion + cost of the electricity market. And as they admit, direct subsidies for wind add up to £43.2 billion for the same period.

However, it is important to note that the marginal cost of gas power is made much higher by the inefficient, intermittent operation forced on it by intermittent renewables. I suspect this factor alone has wiped out the theoretical savings espoused in the report.

But it is the bigger “saving” of £133.3 billion which is contentious, to say the least!

The logic is that the increased amount of wind power in the UK has reduced international demand for natural gas, thus reducing the international price. Hence, lower electricity prices, not to mention gas prices for households! Hey Presto!

Their model calculates that international gas prices would be more than double what they are now, if it was not wind power. But their calculations are based on the whole of Europe, which plainly is a nonsense when they are only considering UK subsidies for wind power.

However the UK only consumes less than 2% of the world’s natural gas. It is absurd to suppose that the tiny reduction in UK consumption since 2010, 35 bcm out of a global total of 4015 bcm in 2023, has had any tangible effect at all.

Moreover, the model ignores market realities – that increased demand incentivises increase in supply, thus keeping prices in equilibrium.

Nor is the European market for gas as insular as the model supposes. As the Energy Institute’s Review of Energy shows, LNG prices are pretty much aligned worldwide. It was only the short term lack of LNG processing and shipping capacity that caused problems in 2022/23, coupled of course with overreliance on Russian pipelines.

The extra long term demand for gas in the UK, which the model presupposes, could easily have been supplied from the world market without price ramifications.

The model also assumes that without new wind power, more new gas capacity would have been needed, thus adding further cost. But this ignores the fact that we already have adequate CCGT capacity. (It is rather the closure of coal power plants which have squeezed capacity margins)/

All this is theoretical. But what is not are all the other costs of integrating intermittent wind power, which this study ignores. For instance:

• Provision of standby capacity
• Grid balancing and storage
• The inefficient working of CCGT plants, due to intermittent operation
• Constraint payments to wind farms
• Grid upgrades and connections to remote wind farms

The report concludes that we should all be grateful for wind power, without which our record electricity prices would have been even higher still!

The report is clearly an attempt to justify a predetermined conclusion.

As such it is worthless junk.

FOOTNOTE

The two first named authors, O’Shea and Horne appear to be hedge fund managers.

It is worth noting though that the third, Mark Maslin, is a long term climate activist. It was Maslin who ludicrously wrote a paper a few years ago, which blamed the Little Ice Age on the death of 56 million people in South America, following the Spanish colonisation in the 1600s. This despite the fact that the Little Ice Age had begun 300 years earlier!

He has also written several climate propaganda books, including How to Save Our Planet: The Facts in 2021, which received rave reviews from Christiana Figueres, Greenpeace and the BBC!

It is not clear exactly what qualifications he brings to an analysis of energy costs.

The fact that the report’s conclusions align with Maslin’s political agenda is, I am sure, purely coincidental!