The tide turns for green energy

Thursday 12 March 2015

If a new tidal power scheme is anything to go by, politicians are prepared to tackle climate change at any price - including the welfare of the rest of us.

The headlong charge to make the UK a low-carbon economy is reflected in the desperation of both the current Lib-Con coalition government and the Labour opposition to find and fund new ways of producing green energy. The scale of the problem is hard to underestimate. As Caroline Flint, the shadow energy secretary noted last weekend: ‘We need to invest around £100 billion in the electricity system alone by 2020 as we replace ageing and polluting sources of power with new, cleaner alternatives. But investment is running at half that level.’

Flint was talking to the Observer about Labour’s idea of green premium bonds to encourage the public to invest in new forms of energy. While it may be copying an idea already in use in Germany, it sounds like an expensive way to raise money when the government can borrow from the financial markets very cheaply. It’s just the kind of wonkish, half-thought-through announcement we can expect more of in the run-up to the election. But when it comes to green energy, cost barely seems to be a consideration in the rush to be seen to be green.

For example, last week plans for producing electricity in the UK from tidal lagoons were unveiled. The first, to be built off the coast of Swansea, will involve building a sea wall five miles long with turbines embedded into it. As the tide comes in, water will flow through the turbines to produce power and the process will be reversed as the tide goes out. The proposal would involve building six such lagoons – four in Wales plus two in England.

In many ways, this is good news. When green energy is so often discussed in terms of small-scale local schemes or even the demand to use less rather than generate more, the plans for tidal lagoons are on a huge scale and involve billions of pounds of investment. Unlike wind power, which is unpredictable, the timing of electricity production from the lagoons would be predictable because we know exactly when tides will occur, making the electricity much easier to manage on the National Grid. And a sea wall - something that could have other benefits besides producing power - is far less likely to incur the wrath of local residents who often hate their local landscape being covered in wind turbines. With offshore wind turbines – which are much less intermittent and more productive than their equivalents on land – proving to be stubbornly expensive to build and maintain, tidal lagoons could solve a number of problems.

The trouble is the cost. The developers want a guaranteed price of £168 per megawatt-hour (MWh) from the Swansea scheme. That’s far higher than the cost of electricity from coal (more like £50 per MWh) or even onshore wind at roughly £80 per MWh. The only redeeming feature of tidal lagoons is that the costs might, in the long run, come down to marginally less than the eye-bleedingly expensive price agreed for power from the Hinkley Point C nuclear-power plant, at £95 per MWh – although nuclear plants produce power almost constantly, providing vital ‘base load’ for the system. Moreover, if we going to bank on the costs of tidal power coming down as more facilities get built, maybe we should give the same benefit of the doubt to nuclear, the costs of which would no doubt fall as more plants were built - if they are ever given the chance, given the lingering anti-nuclear feeling among green groups and in the corridors of power.

Such is the price to be paid for low-carbon energy – and it will be end-users who pay that price. Not only will it make high energy bills even higher, but it makes the UK even less attractive to heavy industrial users of electricity. At a time when the government is trying to ‘rebalance’ the economy towards industry and away from services, making large-scale production even more expensive by bumping up the price of power seems irrational.

In the dash to decarbonise the UK economy in the name of preventing climate change, the result could be far greater hardship. There are often claims that green policies will produce lots of jobs, but the reality is almost certainly the opposite: massive subsidies to one kind of firm - green energy producers, recycling firms, and so on - at the expense of many others. The tidal lagoon project is a case in point. It is only the obsession with global warming that means schemes like these tidal lagoons are considered viable at all. Meanwhile, natural gas produced by ‘fracking’ is struggling to get off the ground, despite having enormous potential to produce cheap, reliable and flexible power. Where gas replaces coal, it leads to lower emissions than before. Yet green groups have been at the forefront of trying to block its development in the UK.

In short, tackling climate change through making energy more expensive could have worse consequences than rising temperatures (and would do little to prevent rising temperatures, too).

It is one thing to favour low-carbon solutions where there is little difference in price. There can be benefits in terms of increasing security of supply, providing some insurance against fluctuating fuel prices and producing less local air pollution. But those benefits do not justify the enormous sums of money being thrown at renewable energy schemes, at the expense of the people who need the energy. Instead of spending a fortune on dubious energy sources funded by whizz-bang schemes like Flint’s premium bonds, maybe we should have a serious conversation about the damage that green policies could be having.

About me

I'm a writer and author on a wide range of issues. I'm the former deputy editor of the online magazine spiked and I currently work at the Institute of Ideas. I'm the author of Panic on a Plate: How Society Developed an Eating Disorder (Imprint Academic, 2011).