Thursday, June 20, 2013

Sunday Telegraph article on wind energy is grossly misleading

There is a big discussion on the Telegraph website over an article in last Sunday's Telegraph claiming that the wind energy industry  gets a subsidy of £100,000 per job.

The Carbon Brief website has criticised the figure advanced in this article.

Using the figures supplied by Carbon Brief,
20.5 million ROCs issued 2011-12
£42.72 per certificate
= £876,000,000 subsidy, not £1.2 billion as the Telegraph suggests.
Note also that the fossil fuel industry received a £4.3 billion subsidy 2010-11.

Carbon Brief finds there are 17,242 jobs in wind industry, including indirect jobs
Therefore subsidy per job =   £50,806 which is about half of the Telegraph estimate, and not an unreasonable subsidy even in its own narrow terms, and given that the wind industry is not labour intensive.

But there is more to this subsidy than just creating jobs. The central aim of the subsidy is to generate low carbon electricity.

There are
   4,733 turbines installed in the UK, producing
19,380  GWh produced in 1 yr
= 4.09  GWh / turbine / yr
= 82 GWh over life of 1 turbine, assuming (conservatively) a 20 year life span.

18p = cost of 1 kWh of electricity
£180,000 = cost of 1 gWh of electricity
£ 14,760,000 = value of electricity supplied by one turbine at current prices.

If we knew how many turbines were installed in 2011-12, we could relate the subsidy to the eventual value produced.

In the absence of any firm figures for the numbers produced per year, I find here  that UK capacity has increased by 2000mW from 2009-2011, an increase of 1000 mW a year.
If 4733 turbines have a capacity of 6000 mW, the average turbine has a capacity of 1.27 mW.
So to produce an increase of 1000mW capacity, we must be installing something like 7-800 turbines a year.

This would give a subsidy of between £1.1million and £1.4million per turbine, which is not bad in view of the fact that they will each produce £14million worth of electricity.

I fully recognise that these are very rough figures. I very much hope I have not made some error with a decimal point somewhere. They would be more accurate if we knew exactly how many turbines were installed in 2011-12.

But they do indicate that the campaign coming from a noisy minority of anti-wind activists is economically illiterate.

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