Our response to climate sceptic Andrew Turnbull's piece in the FT in which he rails against renewables and investment in new energy technologies.
Andrew Turnbull, former Permanent Secretary to the Treasury, loses sight of the facts and objectives on energy policy in a column on the future of the Treasury in yesterday’s Financial Times.
He outlines seven ways to meet the challenges of the next Parliament. Number six says:
“The Treasury must retain its role as an economic department, arguing for better-functioning and better-regulated markets and defending the interests of consumers.
“It could start, for example, by exposing the hidden costs for UK electricity consumers of the huge expansion plans for offshore wind and challenging the high cross-subsidies imposed by the renewables obligation and feed-in tariffs.
“In pursuing this economic policy role, the Treasury should act as challenger of departments and not as the usurper of their policymaking function.”
His comments follow the announcement on Friday of a world-leading boom in offshore wind power off Britain’s coasts to generate upwards of 25 per cent of Britain’s electricity by 2020.
With around 30 per cent of conventional electricity generation scheduled to close over the next 10-20 years the question is what type of generation does Britain invest in, not should there be investment. World fossil fuel supplies over the next period are set to decline, pushing up prices. This coupled with the EU Emissions Trading Scheme raising fossil fuel prices will make fuel-free technologies increasingly attractive in terms of cost and energy security.
Indeed Ofgem’s evidence shows that the cheapest option for Britain’s consumer bills is a green stimulus with investment in energy efficiency and low carbon energy as the country emerges from recession. Missing Britain’s commitment to producing 15 per cent of energy from renewable sources by 2020 could raise prices by 60 per cent by 2016.
Offshore wind power will be crucial to meeting Britain’s renewable target. Market forces alone will not achieve the necessary shift to a low-carbon energy mix. Like all more established technologies, new offshore wind power needs initial investment in infrastructure and research and development.
Turnbull’s comments belie the fact that coal, gas and nuclear technologies have all been given vast levels of government support over the past decades. Indeed, no nuclear power station has ever been built without massive subsidy. The Energy Bill currently being debated in Parliament will again confer huge subsidies to coal power stations with its proposed levy on consumer bills for carbon capture and storage demonstration projects. He must compare like with like.
He seems also to have missed in his assessment the potentially extraordinary economic benefits this technology could have for Britain. The Carbon Trust judge that this expansion of offshore wind power could create 70,000 new jobs over the next ten years. The offshore wind sector as a whole is projected to create 135,000 direct and 85,000 secondary jobs by 2050. Net economic benefit is projected to be up to £65bn by 2050.
Britain is world-leading in offshore and engineering skills and with early investment could gain enormous advantages by developing an export industry in offshore wind technology and skills.
The economic cost of inaction on climate change should not be ignored in this calculation. Lord Stern made clear in his 2007 Review of the Economics of Climate Change that the cost of inaction on climate change could be up to twenty times higher than the cost of taking effective action now.
It is not the role of the Treasury to usurp the role of other ministries but to provide support for low carbon industrial growth in line with evidence. One only wonders if his jaundiced view of Britain’s renewable energy future is anything to do with his position as a Trustee of Lord Lawson’s climate sceptic Global Warming Policy Foundation.
In November Left Foot Forward took apart Lawson’s claims that the science on climate change “isn’t reliable” and exposed his links to big oil.
Our guest writer is Louise Hutchins
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14 Responses to “Offshore wind power – an economic and jobs boom”
Ben Folley
RT @leftfootfwd: Offshore wind power – an economic and jobs boom: http://is.gd/67zyn
Tyler
OK,all well and good saying you’d liek 25% of the UKs power to come from windfarms…and given the writer is from Greenpeace, you can hardly expect anything else.
Might be worth remembering though, that you need upwards of 80% latency for windfarms (wind is unpredictable, and “normal” power stations can’t be turned on and off quick enough). Then there is the fact that the only ship in the North Sea capable of laying the deepwater pylons needed is booked up till 2014, and it’s sister ship will only be ready in 2015. So unless you can magic more out of thin air this simply won’t happen.
Not to mention that the government doesn’t believe it’s own spiel either – after all, they let the only windfarm producer in the UK go bust…..which just makes the claims for job creation and economic benefit even more spurious.
The incredible thing in my mind, is how the left have focused so totally on wind power, which is pretty ineffecient and pretty unreliable. Especially given that wave power is a much better alternative (unless the moon disappears, there will always be waves 24 a day).
Matt Sinclair
Louise,
This is utter nonsense. The different scenarios in Ofgem’s research are largely determined by the pace of economic growth and the resulting pressure on international gas supplies, not the extent of renewable investment in Britain (all of their scenarios assume the second dash for gas which is being forced by the amount of unreliable wind going onto the grid and political opposition to coal from, among others, Greenpeace).
A more rigorous analysis is provided by Citigroup in their review of pan European utilities (not online unfortunately), which is intended for investors rather than political consumption, which suggests the scale of investment needed, largely to meet renewable targets, implies real terms price increases of 57% to 100%. They argue that will mean an “affordability crisis” for climate change policy.
The jobs numbers are completely misleading as well. If I stole Greenpeace’s budget, resulting in all of you needing to be fired, and burned it but for £25k which I used to employ someone to sweep up all the ashes, would I be creating a job? That’s what you’re doing in that analysis, ignoring the jobs lost in order to pay for the subsidies which buy “green jobs”. Analysis from Spain and Germany suggests that renewable subsidies result in net job losses. Citigroup suggest that, once you get past the mantra of “green jobs” the reality will be lower productivity (as energy will be more expensive and less reliable), reduced output and reduced consumer and business spending power.
I love how quickly environmentalist organisations retreat from arguing the substance of their case – that we should accept significant sacrifices in material standards of living to combat climate change – to the ridiculous notion that by switching to a source of power far more expensive you’ll benefit the economy. It’s almost like you’ve lost all faith in your ability to convince the public of the actual merits of your case.
Best,
Matt
Jim
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