HC 517 The Economics of Wind Power

WIND 48

Submission by George F Wood
(retired ‘Head of Technical and Economics, Balancing Services’, National Grid)

Economic Factors Associated with Wind-Turbines

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1)     If the Renewable Obligation Certificate subsidies (ROC’s) were abandoned practically no more wind-turbines would be built in the UK. This is fact, and therefore in itself proves that wind-turbines are uneconomic compared to conventional power generation sources such as gas, coal and oil fired power stations, and also the existing nuclear power stations. With the current ROC subsidies levels of 6p/kWh onshore and 12p/kWh offshore, this means that the wind-turbine generators receive practically double or treble the level of payments of the current conventional and nuclear power station sources.

2)     Wind-turbines require significant levels of additional back-up and regulating reserve support because of their output intermittencies that result from the changeable wind conditions, which:
a) almost doubles the wind-turbine generation capacity build factor costs required for the UK Power System in order to provide the adequacy of security of electrical supplies (e.g. on the coldest winter days, with the highest electricity demands, there is generally no wind because of a high pressure zone spreading across the whole of Britain and the Western reaches of Europe which therefore results in no outputs from wind-turbines across the country)
b) places an economic burden on the electrical supply costs from the need for and generation from additional regulating and standby generation reserves.
These additional costs are charged through the balancing services to each Supplier and not levied directly against wind-turbines

3)     Wind-turbines, by their very nature, for safety, noise, and aesthetics, and also because of the the need to capture the windiest spots, have to be built in remote locations requiring new power transmission or distribution connections. The major National Grid infrastructure costs to reinforce the power network will be separately charged and levied back to the customers through the Suppliers tariff charges.
These additional costs are not levied directly against wind-turbines.

4)     New electrical power interconnectors are being built and further planned to Northern Ireland, Southern Ireland, Norway, between Scotland and England, Belgium, Holland as well as existing interconnections to France. These are all either connected or to be connected via high voltage submarine cables. These future transmission interconnector development costs would not all be necessary or economic if it were not for the continued expansion of wind-turbines. All these additional costs should be factored against the requirements for wind-turbines and will ultimately be charged back through the tariffs of Electricity Suppliers.

5)     Additionally, all interconnector power transfers country to country and to remote parts of the British Isles will incur additional power transfer energy losses which will all be factored back to the consumer as ‘add-on costs’ via the ‘Electricity Suppliers’ charges and should mainly be factored against wind-turbine costs.

Footnote: Wind-turbines offer minimal or possibly no carbon emissions savings if accurate carbon footprint evaluations were carried out on the UK generating and transmission resources for ‘with’ and ‘without’ wind-turbines.

June 2012

Prepared 10th July 2012