The renewable energy business has never seen anything like it. It’s spent years campaigning for a half-decent subsidy like they have in Germany (and at last 62 other jurisdictions, according to Wikipedia including such unlikely places as Iran). Then, just as the UK government finally ascents to the idea, up pops George Monbiot, one of our most revered green thinkers, and trashes the whole concept. In the Guardian. Ungrateful or what?
Step forward Jeremy “Solar Century” Leggett to defend the newly installed Feed-in-Tariffs. And a big welcome to Jonathan Porritt who has also been drawn into the fray. It’s all getting very entertaining. If nothing else, it’s showing us what big egos all these guys have and how easily hurt they get too. If you want to read the background, the links are here:
• The Guardian summary, including 7 posts, is here
• Porritt weighs in here
• Monbiot counters here
All the makings of a classic schism here. But underlying all this is a semi-hidden agenda, and that is whether you are pro- or anti-nuclear power. Monbiot is a nuclear convert. Leggett and Porritt remain in the pure green camp, eschewing all the maths that David MacKay and others have been throwing at us these past few years. It’s pretty much a re-run of the Roundheads v the Cavaliers.
Our dear government is backing both horses. Pressing green buttons to start new nuclear power schemes, whilst simultaneously throwing money at small-scale renewables.
And me? You want your blogger to have an opinion? Can I fence sit this one out please? No! Oh well.
Let’s take a closer look. Like Jonathan Porritt, I have “spent a happy hour reading through this four-phase battle, point by point.” But, unlike him, I didn’t find Leggett’s defence particularly compelling. Why?
• He claims that PV is getting cheaper all the time, and it won’t be long before it is as cheap as fossil-fuel based electricity – known as grid parity. But methinks he exaggerates the effect. PV is not like silicon chips, and is not subject to Moore’s Law. In fact my impression is that prices have been pretty stable over the past few years as PV manufacturing has run into capacity constraints because of rising demand from all these countries implementing Feed-in-Tariffs.
• Grid parity could, of course, be achieved by another effect, that of rising fossil fuel prices which would make conventional electricity much more expensive. That might yet happen, but it’s not a reason to subsidise PV.
• What Leggett doesn’t adequately explain is why some renewables should get bigger subsidies than others and – incidentally – none more so than PV which gets by far the most. Monbiot lays down a challenge on this one and it’s not answered. Actually, it does get answered but in a very oblique way. It seems that Leggett’s reason for a high subsidy for PV is that — basically — it’s not nuclear. He writes: “We would be crazy just to go for the technologies that happen to be the cheapest in March 2010, and it is extraordinary that an advocate of expensive nuclear like Monbiot can argue this.”
• By this logic, the more expensive the technology, the more it should be subsidised. Which is, in fact, exactly what FiTs do. Leggett seems to be suggesting that if it gets a big subsidy it will then get cheaper more quickly, but there seems no evidence for this. After 10 years of FiTs in Germany, PV is still comfortably the most expensive technology out there.
• The 50,000 jobs argument. Are these real jobs or simply subsidy harvesting jobs? If you throw billions at any enterprise, you will create tens of thousands of jobs. The test is whether they will survive the removal of the subsidies. It seems unlikely, but of course no one can say for sure. Presumably, if we hit grid parity, the subsidies stop and the jobs take-off from there. But just what if we don’t hit grid parity anytime soon.
• Where’s the money coming from? It’s a carbon tax on fossil fuels. It will be taken from everyone and given to those with the wherewithal to install PV or other renewables — i.e. the rich. Therefore, in my view, Monbiot is more or less right. The net effect will be a Robin Hood tax in reverse. Leggett tries to duck out of this one by suggesting that the levy will be so small that no one will notice. He suggests: “The average yearly cost of the feed-in tariff scheme to household levy payers is projected to be £8.50 per year to 2030.”
But that rather depends how many people take up the FiTs, doesn’t it? Now for some natty maths. Are you reading this, professors?
By Leggett’s own calculations, an “end of terrace house, 62m2” with a 2.5kW array on the roof is capable of producing 2,125kWh/annum. Let’s run with this figure.
2,125kWh would pay the lucky homeowner just under £1,000 each year for 25 years, at the agreed FiT of 41p/kWh. Now, according to Leggett, this is only going to cost us all £8.50 per year on our fuel bills. £8.50 x 25 million households equates to £212 million per annum. That’s peanuts. If everyone of these gets paid out £1,000 each year, then there will only be 212,000 schemes up and running. If that’s all that’s been done by 2020, then FiTs would be judged to be a failure, methinks. Not to mention 2030, which is the date Leggett refers to. I'll stick with 2020.
How much has Germany installed in the past ten years? This article suggests that current capacity is between 5 and 6 Gigawatts, and the take-up has been growing phenomenally quickly, by as much as 40% per annum. 5 Gigawatt capacity is equivalent to 2 million terraced roof installations, roughly ten times as much as Leggett’s £8.50 will support. Or, to put it another way, the average fuel bill will have to be £85 higher in order to pay for it. And that’s just for PV! So, if we repeat the German experience here, by 2020 we would expect our fuel bills to be positively groaning with incentive levies of one sort or another. £8.50, my arse.
These calcs sort of confirm the conversation I had the other week with the man from British Gas who reckoned the Renewable Heat Incentive would add 35% to our gas bills by 2020. It looks like FiTs will be adding a similar amount to our electricity bills.
And how much power will these 2 million rooftop installations actually produce? According to Leggett’s own estimates, if a 2.5kW array produces 2,125kWh/annum, then 2 million homes kitted out this way would produce around 4,250 Gigawatts hours. It sure sounds like a lot, until you realise that there is another unit up from this, the Terawatt, which is a 1,000 Gigawatts, and the UK consumes something like 400 terawatt hours of electricity per annum. So these 2 million roof top PV arrays will be contributing no more than 1% of the total required – if we follow the German model – by 2020. How depressing! I wish it were more, but it’s not.
So subsidising PV is a) very expensive and b) just scratching the surface. Add to it the levies for wind and hydro, and the levies for the Renewable Heat Incentive, and it’s easy to see how the effect will be to add hundreds of pounds to the typical family fuel bill by 2020. Monbiot’s point is not that a carbon tax such as this shouldn’t be applied, but that it could be spent more effectively. I think he’s right.
In fact, the more you analyse it, the more right Monbiot’s arguments seem to be. But rational analysis has been left behind because the hornet’s nest Monbiot has stirred up has little to do with renewables and FiTs, and much to do with nuclear power. It’s a topic which has always divided greens, and it looks like it’s going to continue to do for many years to come. What worries me is that Leggett and Porritt are twisting facts and figures in order to support their views. In doing so, they paint a far too rosy picture of what small-scale renewables can achieve. It’s all too reminiscent of the posturing that went on in Ken Livingstone’s London Climate Change Action Plan.