Press Releases
RECHARCHING THE NATION
PRESS RELEASE
November 2003
Renewable energy has been identified as a ‘green issue’. For the most part, its champions have been environmental pressure groups who favour state intervention to resolve ecological problems, and who oppose other forms of energy, especially nuclear. In his new paper, Wall Street Journal contributor Dan Lewis challenges these assumptions. Within the framework of Kyoto and the agreed policy by all political parties of 10% renewable electricity by 2010, this paper explores how to achieve this goal with free market principles. Diversity and consumer choice have a big role to play and ‘alternative’ and ‘conventional’ energy sources can coexist. In Recharging the Nation, Dan Lewis cuts through the jargon and places the question of renewable energy in a larger economic and political context.
Background:
Recharging The Nation is the first research paper of recent times to assess the economics and challenges ahead for Britain to increase renewable electricity from under 3% to 10% by 2010, an additional 4300 MW. It comes at a vital time. Britain is trying to increase the percentage of electricity from resources like wind, solar biomass and hydro. But is current government policy working and what will it really cost?
In the light of this summer’s sudden power cuts in Britain as well as North America and Italy, the critical importance of electricity generation and capacity are firmly on the agenda again. British consumption of electricity is growing at 1% per year. Last year measured per head of population, the average Briton consumed just under 600 watts per hour. Only 15 of these watts were renewable.
What the paper says:
The existing policy and framework to achieve the 10% renewable target is grossly distorted, bureaucratic and unnecessarily costly. Bureaucracy has indeed become the policy. Much greater success has been achieved overseas with less money and less bureaucracy.
The four renewable technologies of solar, wind hydro and biomass are thoroughly demystified, then lined up side by side and compared in terms of capital cost, availability and government support.
Wind is the cheapest way of generating renewable electricity. Although there have been some aesthetic objections to wind farms, this paper proposes ways to change the framework of profit, ownership and planning to win local support. There is also much greater scope for constructing wind farms offshore. To reach the 10% target by 2010, Britain will need to build 18,000 MW of windfarms. This will cost about 13 Billion Sterling.
Biomass is the last refuge for Britain’s struggling farming industry, but to generate 10% of electricity form energy crops would require between 3 and 10 million acres out of Britain’s 60 million. This seems highly unlikely. However, existing poultry manure and landfill gas plants work well as the fuel is distributed over a small area.
Hydroelectric dams work well, but all the best sites are now taken in Britain, mostly in Scotland. Wave systems are not yet quite out of R and D and will make no difference to 2010, whereas a Severn tidal system would add huge capacity quite cheaply, but run at a high cost.
Solar is the clear loser. It costs 6 times more than wind and produces most of its electricity in summer when Britain needs it least. It has the lowest load factor and is not built here!
What is to be done?
For energy policy to be set free, we must take the following steps:
An end to all Government-sponsored Micro Generation grant systems. They represent a degree of control and bureaucracy that is stifling the growth of green electricity.
Introduction of a micro generation system blind tax credit of 4p per kilowatt-hour generated with a fixed date of 2030 when this will run out.
Establishment of an energy-planning framework that incorporates clear fiscal incentives to landowners and nearby residents for the development of Renewable Energy Capacity. Expanding the range of ownership and profits of electricity generation not only makes economic sense, but is also popular with the electorate.
2030 to be established as the final date for the end of all subsidy and government intervention in the Electricity Market in Britain and Europe.
