The Coalition con on “green energy”
I’ve just been reading that Ed Davey is trying to tell us that his green policies will reduce energy costs. This despite the government’s admission that the new proposals in its energy bill will add £90 per household to bills — and widespread estimates in the media that it will be nearer £200. That’s before we factor in the last-minute decision to exempt energy-intensive businesses, and share out the costs between the rest — including you and me.
Of course I have been arguing for some time that we are driving these energy-intensive businesses off-shore, taking their jobs and investment with them. But the solution is not to get pensioners to pay up instead. The solution is to recognise the folly of playground technologies like wind and solar, and to stop doing them.
So how does Davey figure that his policy, which we all know will push prices up, could in fact do the opposite? There seem to be two ideas.
First, alongside his expensive renewables plans, he has a “Green Deal”, which will enable households to economise, and cut their energy consumption. Electricity will certainly cost more — but we’ll use less of it. The idea is we’ll each borrow £10,000 for home insulation, and pay the interest, and the capital, out of the savings we’ll make. Ed Davey fails to mention that the Green Deal has been around for a while and up-take by households is — shall we say — disappointing. Indeed worse than disappointing. Not 10%. Not 1%. In fact it actually a big round zero. Not a single home has bought in. Not one.
Of course we’re all in favour of energy efficiency and home insulation. It’s a no-brainer. But I’m not convinced that you can pay for the loan out of energy savings — and nor, it seems, is anyone else. Take my own house. I already have six inches of loft insulation, and double glazing all round. I’d like to do cavity wall insulation, but it’s an old house and it doesn’t have cavity walls. I can’t see what more I can do, and I daresay many homes are in the same position.
Second idea: fossil fuel prices “will rise”. We’ve all been told for years that fossil fuels are getting scarce and therefore more expensive, and while electricity from wind farms is expensive now, it’ll look good (they say) in coming years, when fossil fuels are more expensive. (Even this doesn’t work — I have written elsewhere about the reasons why wind turbines actually don’t save any fossil fuel at all, when you allow for the necessary back-up). But it also shows Davey’s deep ignorance of global energy markets. We’ve been told since the sixties that fossil fuels will run out. We read Paul Ehrlich’s “The Population Bomb”. Oil would run out by the eighties and we’d be starving by the nineties.
But somehow it didn’t happen like that. The more we use, the more we find. We’re in the middle of an energy revolution. Suddenly the world is awash with gas. We have gas reserves, quite possibly for centuries. America expects to be self-sufficient in gas by 2020 (and also to be the world’s largest oil producer, ahead of Saudi Arabia). China quite possibly has as much shale gas as America. Even we in the UK have rather a lot.
Medium term, the probability is that fossil fuel prices will stabilise, or even fall, as gas has in the USA. Whereas the cost of wind power may well increase as the durability and maintenance issues (especially offshore) come home to roost, and bite the ankle of the British Wind Energy Association.
Ed Davey is trying to deny the plain facts of the cost of his policies by dragging in extraneous factors — with dodgy pay-backs on insulation, and highly speculative estimates of future fossil fuel prices. Like so many green energy advocates, he just can’t face up to the reality that renewables are hugely expensive, wasteful and ineffectual. Pure gesture politics that we can no longer afford.