It’s a striking headline on the front of today’s Daily Telegraph: “Greener energy will cost £4,600 each a year.” And no doubt it will fuel any incipient hositility to renewables among the broadsheet’s large readership. But is it accurate?
Technically, yes. Professor David MacKay, a government adviser on climate change, has done the calculations on how much it will cost on sustaining and replacing the nation’s entire energy system. The resulting figure – which is not synonymous with energy bills – is the total investment in energy needed (£2.4 trillion) over the next four decades. That is then divided by population to come up with the figure.
But as the article makes clear a few paragraphs further down, it could cost even more to rely on traditional sources of power such as fossil fuels and nuclear. (It also suggests we are already spending £3,700 a year already).
MacKay, who is a professor of physics at Cambridge – and has written a highly regarded book on the future of energy – has (with DECC officials) produced a “cost of energy calculator” setting out what Britain will need to spend in the coming years.
Key to this is his assumption that energy already costs us an average of £3,700 a year per person in Britain.
There are several future options including:
* “Do nothing” to develop low-carbon energy systems: this would cost £4,682 a year, reflecting an almost inevitable rise in the cost of conventional fossil fuels in the coming decades.
* A “least-cost” scenario with a balanced energy mix of 42 per cent renewables, 31 per cent nuclear power and 27 per cent gas plants. This option, known as “MARKAL“, would cost £4,598 a year, ie slightly less than the “do nothing” option.
DECC’s carbon plan also looks at three further options: (on page 16-19 of this document).
* “higher renewables, more energy efficiency scenario” of 55 per cent wind
* “higher CCS (but still mostly fossil fuels), more bioenergy”
* “higher nuclear, less energy efficiency”
Strikingly, the renewables option is the cheapest of these with the nuclear the most expensive. As a result, in contrast to the Telegraph, the Guardian takes a different line: it’s headline is “Low-carbon energy ‘no dearer than doing nothing‘”. (Although, curiously, it’s online version mirrors the Tel with “UK switch to low-carbon energy will cost £5,000 per person per year“).
But matters are still not perfectly straightforward. The key question for DECC is why the “higher renewables” scenario is combined with “more energy efficiency” when the other options are not to the same degree?
(DECC presumes energy saving of 54 per cent in the renewable scenario; 43 per cent under the fossil fuels/biomass scenario and only 31 per cent in the nuclear scenario).
Why is there a presumption that if we move towards wind/solar power then people will use more insulation? It does not necessarily follow. Presumably if you combined the extra energy efficiency to nuclear or fossil fuels they may no longer come out as the most expensive options.
(UPDATE at 15:18pm: Mackay tells me: “When we publish only 4 scenarios, it is impossible to explore all combinations“. He is very keen for readers to have a go at using the calculator themselves with any variety of inputs – here’s another link to the calculator.)
In the same vein, DECC admits that the MARKAL does presume energy use at half of today’s levels (optimistic). The “do nothing” option, of course, does not.
Again it’s worth asking whether renewables are quite so cost-effective if officials don’t factor in insulation at the same time.
Jim Pickard
Kiran Stacey