Comment & Analysis
Who looks after us, the electricity payer? My electricity in ten years has gone up from 6 pence to 15 pence per unit. So not only am I paying 150% more directly for the units I consume but I also have to pay through my taxes the increased bills for all the government and public bodies and buildings.
The supply of electricity is a service not a wealth creating industry. The politicians have created a monster and it is only politicians who can stop it. It started with Blair signing the wrong carbon reducing document with Europe because he did not understand it. Then in charge of the DECC has been Milliband, Hulme, Hendry, Hayes, and now Rudd. None of them has any electrical qualifications and by their actions they have damaged UK industry.
Over this period the media has covered hundreds of stories on the subject but have always been careful to muddle the units of electricity and put out statements from PR departments of vested interests. When they talk about new build nuclear power station they quote the figure of £92.5/MWh in ten years time. This is a meaningless figure to the general public and I am sorry to say a lot of engineers I have spoken to. They should always put in two figures for comparison. A gas turbine can produce electricity below 2p/kWh compared to the 9.25p/kWh for this new build nuclear station.
Renewables' advocates talk about parity of price but never tell us what they are comparing it with. A land based 2MW wind turbine producing electricity at 8.6p/kWh matches the Longannet coal fired power station when it has a £40 million connection charge and is restricted to produce only 300MW when it could produce 2,400MW because the wind is blowing.
The technical press is also very poor as it produces reports written on a single vested subject. It also has the problem that sloshing money around with the current subsidies has employed thousands of people and you must not criticise engineering work that it is good for us. The fact that it has killed off the production of aluminium and is throttling the steel industry does not get covered.
Look at prices for generation of electricity in pence per kilowatt hour. Coal, Nuclear and Gas can all produce electricity at 2p if they are run as base load stations. As the summer load is half the winter load and night time load drops to two thirds of the day load and so these station have to be throttled back. On top of that is the reduction caused by high winds and in the summer the PV output.
It has been argued that gas turbine standby to cover wind reductions releases more CO2 from the gas than is saved by wind turbines. This is because there are too many turbines now for the demand on the grid. But then we add carbon taxes to coal and gas and so the present price is 4.9p. That is still a lot cheaper than the 8.6p for large wind turbines on shore and the 16.5p for the off shore turbines. For farmers who installed turbines below 100kW to make their farms pay, they receive 26.5p. A small scale hydro plant of 750kW gets paid 15.6p. Biomass plants get 13.6p but all are beaten by the Milliband rate for PV which is now 52.2p. The latest subsidy to enter the fold is wind turbine owners installing diesel generator standby sets for which they get paid an annual grant and an electricity price of 36p.
So start with the 4.9p figure and add in all the electricity companies' costs of compulsory purchase of renewables, transmission, distribution, metering, administration, capital allowances,and profit and the figure moves from 4.9p to 15p. All more expensive renewables have to be purchased in preference to base load.
If there were lots of bottles of blue top milk and some were £4 and the others £1 you would think I was mad if I told you you had to buy all the £4 bottles first before you could buy the £1 bottles. You are doing just that with electricity. It is in every electricity companies interest for the price to rise as this makes the turnover grow and justifies the increase of top level salaries. The media cry of switching has done nothing as the price has moved in ten years from 6p to 15p regardless.
Let us look at capital allowances for the big companies. They have been ordered by the Department of Energy and Climate Change and Ofgem to install a 400kV line through the middle of Scotland. The original estimate was £180 million it is coming in at £850 million. In addition is the cost of the upgrade through the central belt by Scottish Power. But north of Inverness to the Pentland Firth is having a DC line and associated new substations with a total current estimate of £1,200 million. There is also a £212 million DC line being built from Inverkip to the western isles for future tidal and wind systems. All this work has increased the transmission system in Scotland by a factor of ten times with no forseeable capacity requirement.
There is only one tidal turbine operating above 1MW and the two wave power companies in Edinburgh have both gone into administration. The real issue here is the equipment installed has been made in Finland, Sweden, Holland, Germany, China and France. This is the wealth creating part of the work. The Pentland Firth DC Line shows only a 1% cost of Engineering. In other words most of it is being done by the equipment producers. In addition there are suggestions for a further 10 large transmission lines.
So Politicians have rushed headlong into the renewable electricity without any ability to understand the stupidity of it. We have more PV installed (5,000MW) than Spain and don't make any of the panels or aluminium. Is it sensible to pay a domestic PV owner £1,400 per year for his summer generated electricity when the local coal power station could supply the same for £97 and at the time it is needed and not just when the sun shines. Can it be right that in the middle of the night when the load is not there to tell a wind farm to shut off and pay 99p ( the highest figure I have seen)for every unit not supplied. Should we be paying industry to shut down on a winters evening when the load get too great? How come the Indians, the Chinese and the Germans are all building coal fired stations at a rate so fast that our emissions from coal look minute? Why have we allowed the European Parliament to rule that British Coal is too high in sulphur to be burnt in the UK?
The DECC told Drax which produces 8% of the UK's electricity that they had to close if they did not change from coal, so a very enterprising Director converted half of it to wood chips sourced in the USA and shipped over. Now DECC says that overall it does not save CO2 emissions, but the price of the electricity has gone from 3p to 5.5p for wood chips until 2027.
Not all the CO2 is booked against UK. Alex Salmon's call for Scotland to produce an equivalent amount of electricity from renewables as it consumes by 2020 just shows the disregard for the variable aspect of wind and the complete lack of storage for electricity. England and Wales need to keep paying the subsidies because if Scotland was independent then it would go bust on the electricity price increase.
I am lucky to have worked in many wealth creating engineering jobs from the origins of GPS in 1966, installations of turbines and generators on the Snake River in Washington State to the design and construction of a plant to create wealth from gasses from the North Sea worth £300m per year to the balance of payments. I have just visited Washington, and where I pay 15p for my electricity, the domestic rate there is 1.75p. (2.7US cents/kWh). This is what the workers for Boeing and Microsoft are paying when they go home. Instead of a annual electricity bill of £600 only a bill of £70. No wonder our industry like Rolls Royce and the steel works have trouble competing. The steel industry in Germany can pay as little as 2.1p not the 5p we pay.
Magazines like Professional Engineering are essential reading for every engineer but it is important to keep ones wits about you when reading newspapers and listening to the statements made on TV. Anyway I am told by an Australian professor that due to the increase in CO2 in the atmosphere food is growing faster in the third world and timber is growing faster than we are cutting it down. Europe is not increasing food production because of all the EU legislation affecting farming. Oh well, I won't be here for much longer – up in a puff of smoke with a further discharge of CO2 from I hope the gas from a fracking well.