Wind Power Hits Grid Parity! …or maybe not…

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For many years, the Holy Grail of renewables has been to hit “Grid Parity” – in other words, to generate energy so cheaply that it’s directly competitive with conventional generation, and so would require no subsidy.  It would stand on its own feet.  And let me be clear – UKIP’s rooted objection to renewables is based not on ideology, but on economics.  We’d be happy to support genuinely competitive renewables.  Indeed we do, in the case of hydro.  But of course with the caveat that the renewable technology should not do unacceptable damage to the environment in terms of landscape, visual intrusion, and the decimation of birds and bats.

We believe that solar will indeed achieve grid parity in the next few years – it’s probably there already if you put your panels in the Sahara Desert – but we’d rather they were not put on good agricultural land in our dull Northern climes, where sunlight is rarer.  But now – believe it or not – the wind industry is claiming grid parity (see photo above).  Do their claims stand up to scrutiny?  Sadly, no.

Of course these claims all depend on the definition and calculation of ‘grid parity’. If your definition is incomplete, and your calculation dodgy, then the conclusions are likely to be misleading. What people want to know is whether this or that renewable energy is as cheap to consumers as energy from our sources. Unsurprisingly, it turns out that many claims to ‘grid parity’ are so defined or calculated that they don’t in fact show that the energy is fundamentally economic. One definition may exclude electricity grid operation costs, which are very high for most renewables, another may load the costs of fossil fuels with rather arbitrary assumptions about climate change costs. The devil is in the detail.

The source for the Global Wind Energy Council (GWEC) advert poster is this statement:   The report to which it refers is in fact published by the International Renewable Energy Agency (IRENA).

Unfortunately, the wind industry is very secretive about the capital costs of its equipment, while the installation costs vary from country to country depending on labour costs, and the system management costs are a complex area and too little studied. Furthermore, performance varies a great deal from location to location and declines over time.  So the cost of wind power, and renewables generally, is both opaque, and variable from place to place.

Several points need to be made about the IRENA report.

The IRENA study uses the Levellised Cost of Electricity (LCOE) method that is notoriously inappropriate for uncontrollable generators such as wind power (and solar). The cost of delivering the electricity to consumers is so high that the appearance of competitiveness with fossil fuels evaporates if the extra costs are taken in to account. In fact, in the UK it would seem that even if the LCOE cost were zero, the additional system costs would still make wind energy more expensive than energy from conventional sources.

These studies often go on to add “the costs of climate change” to the price of fossil fuel electricity. This is largely arbitrary, since estimates of the social cost of carbon are almost as contentious as climate change itself.  Indeed (separate point) the presumed “social cost” of CO2, sometimes described as “an externality”, is at the heart of specious claims that “subsidies for fossil fuels exceed subsidies for renewables”.  The estimates of “externalities” are real finger-in-the-air stuff.  Indeed it is arguable that the externalities of atmospheric CO2 are positive.  It drives plant growth, bio-mass formation and crop yields.  It helps feed a hungry world.  It is, quite literally and visibly, greening the planet.

One critical aspect which the wind industry studiously ignores in its claims for grid parity are the costs of conventional back-up and the inefficiency exported by intermittent renewables to the back-up (typically gas).  Because wind is variable, the back-up must run intermittently and variably to complement the wind.  (Note that you have double the capital costs – you pay for wind capacity and back-up capacity).  But a gas plant run intermittently is inefficient.  It burns more gas and emits more CO2 per unit of output than it would if it were run properly.

If you want proof of this proposition, it lies in the “Capacity Payments” to operators of back-up plants.  They would simply not be viable run intermittently, so they need yet another subsidy (in addition to the existing multi-layered subsidies for landowners and wind operators).

So maybe these claims of grid parity need to be taken with a pinch of salt.  And we’ll ask the Killer Question: If they’ve achieved Grid Parity, why is the industry making such a song and dance about the proposed withdrawal of on-shore wind subsidies proposed by the present UK government?

In fact, the GWEC poster is cynical spin, and has little foundation, which raises the further question: Why, after decades of subsidies, are these technologies still not fundamentally competitive?  Perhaps it’s time to stop the subsidies.  Real world market pressure would concentrate minds, and make them focus on reducing costs, rather spraying consumer funds all over the streets of Brussels in the form of expensive advertising campaigns that don’t stand up to scrutiny.

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22 Responses to Wind Power Hits Grid Parity! …or maybe not…

  1. martinbrumby says:

    If the Ford motor company advertised that their cars would do 250 mpg, be cheaper than walking, cure your hemorrhoids and be kind to kittens everywhere, they would quite rightly end up in court.
    How come the BigWind and BigSolar crooks can get away with claims that aren’t just “misleading” (as you put it), but are bare faced malicious and deliberate lies?
    The sooner these clowns end up in court on a charge of conspiracy to defraud, the better.

  2. Ex-expat Colin says:

    There is something about a lot of people in this country. They get fooled into big investments and later find the legs are going to be kicked from under it. It is indeed sad for them as it has been for us propping it up for too long.

    Anyway, seems that (may, could, might, possibly) be a mini ice age on the way. Met Office warning in D. Mail today. But that won’t stop global warming you must understand. Not sure what the windmills will do in dead cold and those PV cells with thick ice on top.

    So all the time that big Met computer system has sucked at the power stations with a bit of wind and other the software model stuff has come up with…may, could, might, possibly. Nurse!!

    • The past may not be a guide to the future. But if the pattern of the last two million years is anything to go by, our current 12000 year Interglacial, containing the whole of human civilisation, could be due to end soon. Look out for a mile of ice over Chicago. Now that really would be a climate catastrophe.

    • Ian Terry says:

      Colin. Come on. Its in the papers so it must be true!!!!!!!!!! When did anything like computers ever be more than the person hitting the keys correct.
      We will not need a nurse we will need a NHS but that another story.

      It all adds up to a great comment.

      Well done

  3. Thomas Fox says:

    How can grid parity ever be achieved while wind and solar are intermittent generators .
    Balancing has always been required long before the inefficient renewables were added , even our small island with its HV grid is not capable of distributing equally the undistibutable energy while keeping a steady voltage throughout ?

  4. Jane Davies says:

    I was brought up to think that telling lies was something to be ashamed of but it seems to be the norm these days. Anyone and everyone it would seem have no shame in telling huge porkies and even when they come back to bite one on the bum the perpetrators just walk away or bluff their way out by telling more. What has happened to consequences (?) another old fashioned value bites the dust.

    I see Cameron’s father in law has pocketed hundreds of thousands of taxpayers hard earned in subsidies for having wind farms on ‘his’ land. I say ‘his’ land because I doubt very much his family paid one penny for it. These vast estates were gifts from grateful monarchs over the centuries along with their titles and they should be returned to the taxpayers to whom it really belongs, but I won’t hold my breath waiting for that to happen!

  5. Jane Davies says:

    Here we are…the latest example of political lies masquerading under the word “definition”!

    “David Cameron has started work on changing the definition of child poverty as new figures are set to show the first increase in the number of poor children in poor households in a decade, Chris Hope reports. The Prime Minister chaired discussions about a new definition at a meeting of his Cabinet on Tuesday.”

    So if the truth doesn’t fit into your image or put another way bull***t then change the definition!

    • Yes — but over the last thirty years the left has managed to redefine poverty as a percentage below the mean — so no matter how prosperous we become, we still define the bottom third (or so) as poor. But most of these poor children have Nike trainers and a smart phone, and a TV in every bedroom.

      • Ian Terry says:

        Roger. You have obviously been in dictatorship Scotland and haven’t let us know.

        You forget to mention the tatoo’s and designer child buggy wedged in the hall as the parents lie in bed till around 11.00am after getting granny to take them to school. Trust me I am working in these type of houses every day of my life and nobody gives a s*** and they still keep handing out the credits

      • Jane Davies says:

        And the smokes which must cost an arm and leg these days!

  6. ian wragg says:

    What’s this Roger about the wa—r Tory MEP’s voting for all UK job vacancies to be advertised all over the EU together with a list of benefits available.
    This is the party which is supposed to be repatriating powers. Eurosceptic party, dream on.

  7. Ex-expat Colin says:

    Ref the vid link I put up…Choudary:

    My local tory office tells me:

    1. If I was not there then I am wasted
    2. Is the vid authentic?
    3. I should be aware of the freedom of speech BS

    So thats me well set back, but I could complain to the Met Chief Constable and Theresa May.

    As regards Calais…can a direct question be put at the likes of Junkers and Cameron. Like why are you doing SFA of any rapid consequence?

    We are pursuing te BBC next week about their clear bias on Climate Change

    • Ian Terry says:


      You keep on pitching that ball game. I love it.

      UKIP within the Uk has got to attack their weakness. I do not want to hear anymore about all the internal squabbles within the party. These people signed up, stop slagging off Nigel and others just get you head down and start to get a percieved united front. Just recieved a letter asking for more funding from the party. Following a trip to Sussex and a return to dictatorship Scotland. its bad up here but the South will fall apart within five years. Traffic, Housing, Water, sewerage you name it nothing has put in place to accomodate what is going to happen. Empress Nick up here has not got a ****Ing clue what will happen to the country with all this Hello come up here!!!!

      You stop them at Dover and Folkstone and you fly them home.

      It ain’t rocket science

      • Ex-expat Colin says:

        Saw Paul Nuttal at the EU summit thingy yesterday in response to Timmermans. Good words straight to the point from UKIP. Tory boy not really right…better Hannan.

        Timmermans did not quite like Pauls remarks about UK MEPs being AWOL at this summit because of Calais. Seems to be our fault…again! I could sense the hidden rage (sort of) from Timmyman and M. Le Pen he clearly does not like.

      • Ex-expat Colin says:

        Just as I thought things had ratcheted down much further:

        Not that I expect anything much to happen….but, but ,but if the BBC are writing us a letter of explanation I think it may delay further?

  8. Jane Davies says:

    I see the disgruntled disabled have invaded the Houses of Parliament, great stuff…….the kick back is starting!

  9. Jane Davies says:

    Talking about wind power….here is the weather forecast!

  10. Ian Terry says:

    Another slant on the greens thinking they are winning the fracking arguement. The whole RE religion is slowly coming apart.

  11. Pingback: Roger Helmer Straight Talking - Get Britain Out

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