Friday, 24th August 2012
Scotland’s unsustainable energy policy
The following speech was delivered an SCDI 'Meet the Politician' event held in Glasgow on Friday 24 August.
Alex Salmond’s plans to “re-industrialise” Scotland through the widespread construction of giant wind turbines, will have disastrous consequences for business, industry and individual Scots. Onshore and offshore windfarms will wreck much of Scotland’s unique landscape and seascape, driving away visitors and destroying jobs in the tourist sector. The plans for onshore and offshore industrial wind factories are ill-conceived and financially unsustainable as a coherent energy policy.
If the SNP Government gets its way turbines will be inescapable in Scotland. I am certain that they did not set out on this path maliciously, but having trumpeted their intention to achieve 100% electricity generation from renewables by 2020 in Scotland, they have found themselves on a political juggernaut that is hard to stop. Now, despite mounting public opposition and clear evidence that their policy is unsustainable, they plough on regardless, determined to save political face at any cost.
They are currently attempting completely to replace fossil fuels and nuclear power with renewable energy. They seem not to realise that commercially available renewable technologies simply cannot provide energy security. Giant industrial wind turbines are visual monstrosities that produce a trickle of electricity at vast cost to the consumer. They don't significantly reduce CO2 emissions and they threaten to plunge us into an energy crisis, just as we try to drag ourselves out of a financial crisis.
We know that every single megawatt of generating capacity from windfarms has to be matched by a reliable, affordable back-up supply for when the wind is either not blowing or blowing too hard. The proven, currently available technologies are gas, coal or nuclear. But nobody from the Scottish Government is planning for coal or gas and they have made their position quite clear about nuclear.
Even if SNP government ministers woke up tomorrow realising the error of their ways, there is simply not enough time to commission any new coal based plants with carbon capture and storage capabilities before 2015. Even if he wanted to, Alex Salmond could not commission a replacement nuclear plant and have it fully operational before 2019 at the earliest. So to avoid widespread blackouts at the end of the decade, we will have to hope that large numbers of open cycle gas turbines are built between now and 2015. But even then, increased dependency on imported gas will increase demand. Increased demand will increase fuel bills and increased fuel bills will increase fuel poverty.
The Scottish Government has either failed to realise this or they have completely ignored it. They continue on their relentless stampede for renewables which has become their flagship policy, second only to independence in order of importance. They aim to achieve their absurd target of 30 GW of installed capacity by 2020, which would mean virtually doubling every year the number of on and offshore wind farms currently under construction.
The government has already identified 15 areas where vast offshore arrays could be constructed, threatening virtually to enclose and surround the entire country with massive wind projects from Berwickshire up the East coast to Shetland and back down the West coast to the Solway.
But even the experts struggle to justify such unrealistic targets. The Adam Smith Institute and the Scientific Alliance recently noted that to deliver 18 or 19 GW of offshore wind, the Government would need to construct another 5,000 turbines before 2020. With only around 120 days per year suitable for offshore construction, that means 5 turbines will have to be installed every day until 2020. It is just not possible.
There is also another glaring discrepancy in the Scottish Government’s energy policy. Energy Minister Fergus Ewing recently said that subsidies paid to Scotland’s windfarm operators and landowners come from consumers “spread across the UK…since this is how the Renewable Obligation operates and will continue to do so.” So what if Scotland becomes an independent nation before 2020, fulfilling the SNPs other key objective…who will have to meet the costs of our renewables then? Does Fergus Ewing really expect us to believe that the English would be happy to continue footing the bill for Scotland’s prohibitively expensive and ludicrously ambitious energy targets?
But challenging the new renewables religion is a high risk strategy. Ask anyone living in an inner city what they think of wind turbines and you will hear the usual myths trotted out, such as they actually enhance the rural landscape and in any case “beauty is in the eye of the beholder.” Such assertions are generally made by people who have only ever seen windfarms on the telly, or at a distance while speeding along the motorway in a car. These are the same people who believe that being opposed to wind turbines is the moral equivalent of climate change denial or voting BNP! They are certainly not people who have to live next to a wind turbine the height of a 65 storey tower block and who have seen their health suffer and the value of their homes plummet as a result.
The city-dwelling windfarm champions describe those who oppose wind turbines as ‘a vocal minority.’ This is true inasmuch as it is a minority who inhabit the countryside and have to live next to these industrial monsters. And so we hear government ministers at Westminster and Holyrood constantly reminding us that repeated surveys show a majority of citizens favour wind energy. We can hardly be surprised that any urban survey of people who never see a turbine will reveal that they are in favour of its use. But once they begin to understand the truth about the inefficiency of these turbines, their disastrous impact on the countryside and the billions in subsidies they absorb, coming directly out of the pockets of consumers, then perhaps in years to come, the chattering classes may cease their chatter and change their views.
Worse still, these estimates may be overly optimistic, because the unreliability of wind means that we will have to rely on fossil-fuel coal and gas stations for baseload backup, and they will add to CO2 emissions. With five-time higher targets for 100% electricity generation from renewables by 2020, Scotland will be trapped in an unsustainable timebomb of rising costs, fuel poverty, ruined landscapes and lost jobs.
Electricity suppliers meet their obligations by presenting Renewables Obligation Certificates (ROCs) to the regulator, OFGEM. If they do not have sufficient ROCs to cover their obligation, they must make a payment into a buy-out fund that is allocated to the ROCs after deducting OFGEM’s costs for administration. For 2011/12 the estimated cost of a ROC was £38 and suppliers of onshore wind energy were given 1 ROC for every MWh produced. Offshore windfarms receive 2 ROCs per MWh and tidal and wave power installations will be paid 5 ROCs per MWh.
The Feed-in Tariffs (FiTs) are another of the methods which drive the rush for renewables. The Department of Energy and Climate Change introduced the FiTs in 2010 to incentivise small-scale (less than 5MW) low carbon electricity generation. FiTs are mainly used to encourage electricity generation by organisations, businesses, communities and individuals which are not normally involved in the electricity market. The premise is that they invest in generating plant and in return they are guaranteed payment for any electricity they export to the grid for up to 25 years. For wind turbines, suppliers receive around 31.5 per kWh exported back to the grid.
In a recent policy report prepared for the Global Warming Policy Foundation, Professor Gordon Hughes estimated that the total consumer bill for wind subsidies by 2030 will top a shocking £130 billion. Other reports have exposed that a dozen of the biggest UK landowners will collect almost £850 million in subsidies between them. This is an extraordinary amount of funding that will be paid by ordinary consumers through hidden additions to their electricity bills.
But this is not surprising when you consider that for an average industrial onshore turbine, the developer can generate electricity that is worth around £150,000 per year. Concurrently, that same turbine can attract annual subsidies upwards of £250,000. Without these subsidies, it is unlikely that anyone would invest in wind power, but with them windfarms become a very attractive and extremely lucrative option for developers.
Those who claim that off-shore wind developments will provide the answer, are also well off track. The Royal Academy of Engineering has calculated that the cost of a kilowatt hour of electricity produced by an offshore wind turbine is 7.2p, compared to 2.2p from gas, 2.3p from nuclear and 2.5p from coal. The big power companies are no longer farming wind, they are farming subsidies and the poor consumers have to foot the bill.
Why are British landowners so keen to have their farms and estates industrialised. Again, money is the driver. The feed-in-tariffs net millions annually for the big estates, that’s why the Earl of Glasgow, the Duke of Roxburghe, the Duke of Beaufort, the Earl of Moray, The Earl of Seafield and Lord Inchcape are all cashing in.
The Duke of Roxburghe will net £1.5 million a year from his 48 – four hundred foot high turbines at Fallago Rig in the beautiful Lammermuir Hills. Sir Alastair Gordon-Cumming will earn £435,000 annually from 29 giant turbines on his Altyre Estate near Forres in Moray. The Earl of Seafield will get £120,000 a year from 8 turbines on his estate near Banff. The Earl of Moray receives £2 million a year from 49 turbines that have trashed the landscape at Braes O’Doune near Stirling and are clearly visible from the iconic Stirling Castle. The Earl of Glasgow, a Lib-Dem peer, has 14 turbines on his Kelburn estate, so will earn upwards of £300,000 a year. And Crown Estates, one of the richest bodies in the country, will net billions from leasing large tracts of seabed for offshore wind developments.
Rental payments vary and are top secret but it is estimated that landowners can now expect up to £60,000 per year 'risk-free' for every large turbine erected on their land. Around a dozen or more of Scotland's wealthiest private landowners will trouser around £1 billion in rental fees over the next eight years, no doubt replenishing their wine cellars with the best available vintages in the process!
The potential profits for the fat-cat energy companies are even greater. A single turbine can generate more than £13 million profit over its 20 year lifespan, only half coming from the electricity it produces and the other half from consumer subsidies added directly onto electricity bills.
And the energy companies and landowners are even paid for NOT producing electricity when the grid is overloaded and unable to cope. The money just pours in, whether the turbines are operating or not. The latest figures show that the total cost of wind energy constraints for 2011 reached over £25 million. That means £25 million of UK and Scottish consumers' money has been paid out to energy companies and landowners to keep their turbines switched off because the grid was overloaded! This is quite simply scandalous.
What we are witnessing is in fact a dramatic transfer of money from the poor to the rich; from the beleaguered consumers to the wealthy estate owners and power companies. 900,000 Scottish homes are now suffering from actual fuel poverty, where more than 10% of their net household income is going towards paying their fuel bills.
According to a Scottish Government study, families’ fuel bills are rising three times faster than wages. Average fuel bills have reached £1,402 a year, up nearly 62% since 2003. But earnings have only increased by 19% over the same period. The ‘Fuel poverty evidence review’ (12 August 2012) predicted that average fuel- spend in Scottish homes would exceed 12% of income by 2015. Families are deemed to be ‘fuel poor’ if they spend over 10% of net income on household fuel bills. The Scottish Government’s fuel poverty report was published, ironically, on the same day as German energy giant E.on announced that its half-year profits had tripled to £2.45 billion, up 23.7% on its UK operation.
The Forestry Commission’s Annual Report in 2011 had an interesting statistic hidden away in the small print which revealed that in the past decade, they have cut down between 12,000 and 25,000 acres of forest in Scotland to make way for windfarms. That equates to around 25 million trees and this at a time when government targets are calling for 25% of our land area in Scotland to be covered by trees, requiring the planting of 25,000 acres of trees every year.
The Forestry Commission Scotland (FCS) has now granted exclusive rights to E.ON and ScottishPower Renewables to search all of its forests in Argyll for suitable sites for industrial wind turbine developments. In a self-confessed attempt to maximise income, FCS has invited expressions of interest from turbine developers for virtually any part of the National Forest Estate which covers 10% of Scotland’s landmass. They openly declare their desire to make £20 million per year income from renewables by 2020. The FCS website blithely swats away any concerns about digging up peatland or cutting down trees on the National Forest Estate by saying all such projects will be subject to full environmental impact assessments.
So while we argue about costly new technologies to capture and store carbon in depleted undersea oil and gas wells, we crazily cut down vast swathes of forest every year, destroying nature’s own carbon capture and storage system. Worse still, we are digging up peat bogs all across Scotland to construct industrial wind developments. Peatland is Europe's equivalent of rainforest and it constitutes a vital component of the world’s natural air conditioning system. Peatland and wetland ecosystems accumulate plant material and rotting trees under saturated conditions to form layers of peat soil up to 20 metres thick – storing on average 10 times more carbon per hectare than other ecosystems. But vast areas of carbon-capturing peat bogs in Scotland are being torn up to make way for so-called 'green' energy projects like windfarms, rendering the whole process carbon-negative.
Having trashed our natural carbon capture and storage systems on land, the Scottish Government will now do the same thing offshore. An estimated 55% of carbon in the atmosphere that becomes bound or 'sequestered' in natural systems is cycled into the seas and oceans and stored in seagrass meadows and kelp forests, so-called ‘blue carbon’ vegetation, in waters up to 20 metres deep, most of which in Europe are to be found around Scotland’s coasts. Destroying these precious ecosystems to build massive offshore turbines or wave and tidal systems will simply release millions of tonnes of stored CO2 into the atmosphere.
The future is also looking bleak. CIVITAS estimated that the UK Government's green policies could be adding 45% to electricity costs by 2030 for medium sized business owners. These extra costs will damage competitiveness and undermine viability, especially for high energy users. They risk driving industry to migrate overseas along with their CO2 emissions, thus having zero net impact on global emissions totals. We have already seen this happening in Spain.
So what is the answer? We must study all potential solutions before choosing what is right for Scotland. Focusing the majority of our efforts on one technology is unwise at best, idiotic at worst. Instead of ploughing ahead with ill-conceived plans conceptualised to meet ill-conceived targets, we must improve energy conservation and energy efficiency. This is a view which experts, backed by science, are supporting. The Institution of Mechanical Engineers who support the idea of wind power in general, have denounced the SNP's energy policy. They unequivocally state that energy conservation and energy efficiency are the two most sustainable methods of reducing our bills and our CO2 emissions. We can save up to 75% of the energy we currently use simply by being more efficient.
At the same time, we cannot turn our backs on nuclear and other traditional forms of generation just yet, as this will only increase our dependence on imported gas supplies from geo-politically sensitive areas such as Russia, Iran and the Middle East. To determine what is right for our people and our climate, we must look at all options. All renewable technologies must be thoroughly researched to evaluate their effectiveness in Scotland. Other forms of generation cannot be discounted. We must look at Shale Gas, nuclear thorium and the hydrogen economy. Whether or not any of these options will be suitable for Scotland remains to be seen, but they should be researched.
Struan Stevenson MEP