The Guardian, 3 May, 2016.
‘The idea that renewable energy can power the UK is an “appalling delusion”, according to the final interview given by former chief scientific adviser, the late Professor Sir David MacKay.
‘The sensible energy and climate change plan for the UK, MacKay said, was for the country to focus on nuclear power and carbon capture storage technology, which traps the carbon dioxide from fossil fuel burning. In that scenario, the amount of wind and solar the UK needed would be almost zero, he said.
‘However, solar could be a very important power source in other countries, he said, where sunny summers coincided with a big demand for electricity for air conditioning. Prof MacKay also said electric cars are going to be a “massive hit” but said he was “very disappointed” by the lack of progress on CCS, after the government cancelled a pioneering £1bn programme at the last minute.
‘Prof MacKay was a physicist at the University of Cambridge and served as chief scientific adviser to the Department of Energy and Climate Change (Decc) from 2009-2014. He had gained public prominence after writing a book, Sustainable Energy - without the Hot Air, which assessed the potential of energy technologies from physical principles.
‘The interview with author Mark Lynas was given 11 days before his death from cancer on 14 April and released with the permission of his wife.
‘Prof MacKay argued that solar, wind and biomass energy would require too much land, huge battery back-ups and cost too much to be a viable option for the UK.
‘“There is this appalling delusion that people have that we can take this thing that is currently producing 1% of our electricity and we can just scale it up and if there is a slight issue of it not adding up, then we can just do energy efficiency,” he said. “Humanity really does needs to pay attention to arithmetic and the laws of physics – we need a plan that adds up.”
‘Prof MacKay had previously avoided being drawn into the political debate about energy, but told Lynas: “I have always tried to avoid advocating particular solutions but maybe because time is getting thinner I should call a spade a spade.”
‘The key for the UK, he said, was a zero-carbon solution that works in the winter, when energy demand is highest but sunshine is lowest and winds can drop for days at a time. “The sensible thing to do for a country like the UK, I think, is to focus on CCS, which the world needs anyway, and nuclear,” said Prof MacKay.
‘The decision on a new nuclear power plant at Hinkley Point, which the government hopes will be the first of a new generation of plants, has been delayed until September.
‘“Then if you ask what is the optimal amount of wind and solar to add in then the answer is going to be almost zero,” he said. “I love wind turbines – they are the cathedrals of the modern age – but they are a waste of money if you have a low carbon solution that gets you through the winter … because when the wind blows you are going to have to either turn them down or something else down that you have already paid for like nuclear or CCS.”
David MacKay, ‘Sustainable Energy - without the Hot Air’
FRANCE 24, 4 May, 2016.
‘The trial of 12 people accused of involvement in a multi-billion euro carbon-trading fraud opened in Paris on Monday, a case that has been described by French authorities as “the heist of a century”.
‘Shady deals, offshore accounts, money laundering… The trial has all the hallmarks of a crime thriller and comes nearly seven years after French authorities cracked down on a carbon-trading scheme that cost the European Union €5 billion – including €1.6 billion in France – according to Europol.
‘The case dates back to October 2008, around the same time the European Commission introduced phase two of its EU emissions trading system (EU ETS), which was designed to combat climate change by reducing greenhouse gases.
‘The EU ETS was a simple “cap-and-trade” system. Under it, EU member states set a cap on the amount of carbon companies in specific sectors could produce. This could then be traded on the European market as emission allowances. Companies that did not use their entire allowance could sell the surplus, while those that had exceeded the limit could buy more. It was also possible to purchase international credits from emissions-saving projects abroad.
‘Despite the good intentions behind the EU ETS, it was an imperfect system that was easily exploited.
‘“The structure was poorly conceived from the start and had some real flaws,” Katheline Schubert, an environmental economics professor at the Sorbonne university in Paris, told FRANCE 24.
‘Investigators believe that a group of three men – Mardoché Mouly, Arnaud Mimran and Samy Souied – realised this, and devised a scheme to defraud billions of euros by purchasing emission allowances on the European market from abroad, using a complex network of shell companies and offshore accounts in Latvia, Cyprus and Hong Kong.
‘Attempts to stamp out endemic fraud in the EU’s flagship Emissions Trading Scheme are “not adequate”, say auditors.
Telegraph, 29 November, 2015.
‘The EU’s main scheme for reducing CO2 emissions is almost never enforced, according to an official report by Brussels’ own spending watchdog.
‘Only one EU country inspected – Britain – makes on-the-spot visits to factories to check whether they are staying within their carbon limits under the scheme, the EU Court of Auditors found. Even the UK only checks 1 per cent of sites, down from 5 per cent before.
BBC News, 25 August 2015
‘The vast majority of carbon credits generated by Russia and Ukraine did not represent cuts in emissions, according to a new study.*
‘The authors say that offsets created under a UN scheme "significantly undermined" efforts to tackle climate change.
‘The credits may have increased emissions by 600 million tonnes.
‘In some projects, chemicals known to warm the climate were created and then destroyed to claim cash.
‘As a result of political horse trading at UN negotiations on climate change, countries like Russia and the Ukraine were allowed to create carbon credits from activities like curbing coal waste fires, or restricting gas emissions from petroleum production.
‘Under the UN scheme, called Joint Implementation, they then were able to sell those credits to the European Union's carbon market. Companies bought the offsets rather than making their own more expensive, emissions cuts.
‘But this study, from the Stockholm Environment Institute, says the vast majority of Russian and Ukrainian credits were in fact, “hot air” - no actual emissions were reduced.
* Stockholm Environment Institute paper - download page.
The Telegraph, 25 April, 2016.
‘The use of supposedly 'green' biodiesel to hit EU renewable energy targets has actually significantly increased greenhouse gas emissions, a new study finds.
‘By 2020, continued use of biodiesel derived from vegetable oil will increase total EU transport emissions by almost four per cent compared with using its fossil fuel alternative, according to analysis by Transport & Environment, a green group.
‘That is roughly equivalent to putting an extra 12 million cars to the road, it says.
‘Countries across Europe have blended small percentages of biofuels into petrol and diesel in recent years in an attempt to cut emissions and to hit the EU's renewable energy directive (RED), which requires 10 per cent of transport energy to come from renewable sources by 2020.
‘But Transport & Environment says the EU's own studies show that producing biodiesel from food crops - in particular soy and palm oil - is significantly worse for the environment than producing regular diesel.
‘This is largely due to the knock-on effects on land usage of using food crops for fuel, which can result in rainforests or other habitats being cleared to make way for more food crops, so actually increasing emissions.
‘Producing crop-based biodiesel has an emissions footprint on average 1.8 times the size of fossil fuel based diesel, it says.
According to experts, if the EU persists with the RED requirement for 10% biodiesel, it is likely to add 1p per litre to UK pump prices, for a less efficient fuel.
‘Sixty-four employees have brought worker compensation cases against the company.
Copenhagen Post, 2 May, 2016.
‘DR reports that up to 64 workers at Siemens Wind Power in Denmark have developed chronic illnesses after prolonged exposure to dangerous chemicals over the last decade.
‘As part of its 21 Søndag series, DR yesterday revealed it has access to reports from the National Board of Industrial Injuries in Denmark dealing with 64 compensation cases brought by employees against the company.
‘According to DR, the National Board of Industrial Injuries has reached the decision that the illnesses developed by the employees in question, including asthma and eczema, are a direct result of exposure to the toxic chemicals epoxy and isocyanates. The chemicals are known allergens, and they are on the EU’s list of carcinogenic substances.
‘According to the Danish Working Environment Act, workers can seek compensation if they have been exposed to such chemicals for prolonged periods of time.
‘According to experts, 64 is a high number – even for a company as large as Siemens.
‘“[The numbers are] shockingly high and very serious. When someone becomes sick as a result of these substances, they remain sick for life,” Hans Jørgen Limborg, a workplace researcher and manager at TeamArbejdsliv, told DR.
‘Rasmus Windfeld, a public relations officer at Siemens Wind Power, stated that Siemens was committed to improving working conditions and called the current situation “totally unacceptable”.
As most wind investment in England and Wales judders to a halt under the threat of the removal of subsidies, other European countries are also seeking to put the brakes on the wind rush:
Germany is having increasing problems with the costs and management of its very large, and heavily subsidised, intermittent renewables. Next year, Germany is proposing to switch away from fixed subsidies to an auction-based system similar to the UK’s new system of ‘Contracts for Difference’.
In March this year, German Economy Minister Sigmar Gabriel presented a draft amendment to the Renewable Energy Act (EEG). The new rules would regulate the subsidy levels for renewable energy and are to be adopted in coming months. The draft proposes that the amount of renewable energy in the electricity mix will be limited to a level of 40 to 45 percent by 2025. At the end of last year the level was already nearly 33%. 
A study by consultants ERA on behalf of the Green Party parliamentary group concludes that under these provisions the development of wind energy will collapse fairly soon: a target of 45% would mean that only 1500MW could be installed annually after 2018.
The level of difficulty Germany is experiencing with managing its huge wind and solar capacity (now over 80GW) is revealed by the fact that it is now paying premium prices to Danish generators to shut down in order not to further curtail excess German wind production.
Bloomberg reports that German network operator TenneT paid Danish power producers to withhold 37GWh of output in November 2015 in order to avoid curtailing yet more German output. This was an increase from 1.5GWh in the previous year. 
Curtailment cost Tennet alone EUR 329 million in 2015. This was two and a half times as much as in the previous year. The other network operators, Amprion and EnBW, had a combined cost of 150 million Euros, according to a survey by Wirtschaftswoche of the four network operators in Germany. 
There is a growing backlash both on the costs of the renewables programme and the damage being done to valued landscapes, especially in the south of Germany.
In November 2014 Bavaria implemented the so-called ‘10H rule’ requiring a separation distance of ten times turbine height for all new turbines. This may effectively stop further commercial wind development in Bavaria. Low wind speeds mean that developers are looking at wind turbines in the 175-210m range and few sites exist where it is possible to build such turbines without breaking the new regulation.
 Original story in Berliner Zeitung.
 ‘Germany Pays to Halt Danish Wind Power to Protect Own Output’, Bloomberg, 1 December, 2015.
 ‘Windräder stehen still – und kosten Hunderte Millionen Euro’, Wirtschaftswoche, 28 April, 2016.
Poland has had something of a Wild-West reputation for unrestricted wind development in the past, resulting in very large, unplanned growth. This has also resulted in strong political pressure to reign in the wind industry cowboys.
Draft legislation has now been produced by MPs in the governing Law & Justice party along the lines of the Bavarian 10H rule, it would require wind farms to be sited at a distance of at least ten times the turbine height from houses and protected natural areas.
The proposed law would also raise the tax burden on wind developers, applying a 2% annual tax on the investment value of the entire turbine. Previously tax had only been applied to the investment value of the tower and foundation. Developers and operators would also be obliged to pay significant fees to technical authorities for permitting. The law also foresees fines and even jail sentences of up to two years for failure to get proper approvals.
Other measures in the draft legislation include a requirement to renew operating permits every two years and to get permission even for repairs and maintenance.
The proposed law would restrict wind development to designated areas in local zoning plans.
‘Proposed Polish law puts damper on wind’, Wind Power Monthly, 14 March 2016.
Jyllands-Posten reports that Denmark’s Climate and Energy Minister is warning that the country’s green energy transition has become too expensive and too unpopular. The Liberal government is proposing to implement a policy of ‘Green realism’, rolling back renewables support. Jyllands-posten has reported that the Minister proposes cutting back on already consented offshore wind parks with a view to saving DKr 5 billion. 
In September 2015, it was reported that the Liberal Danish Government proposed to implement large cuts in ‘Green’ policies for the period 2016-19. The cuts are in response to a widening budget deficit and seek to save at least DKr340 million for the period to the next parliamentary election in 2019.
To achieve this level of saving, numbers of climate change projects are to be ended or cut back. It is also proposed to abandon many of the targets which have driven policy to date, most notably: a 40% reduction in CO2 emissions by 2020, the production of 100% of energy from renewables by 2050 and the phasing out of all coal-fired power stations.
 ‘Denmark’s Liberal Government To Roll Back Renewable Energy Policy’, Jyllands-Posten, 23 April, 2016.
 ‘Regeringen vil spare 340 mio. på miljø og klima’, Informationen, 1 September, 2015.
‘Denmark’s Government Readies U-Turn on Ambitious Climate Targets’, Bloomberg, 1 September, 2015.
The Norwegian Wind Energy Association (NORWEA) is protesting loundly after the centre-right government announced that it will end its ‘electricity certificate’ subsidy system within 5 years. It is also threatening to introduce wind development zones in order to “dampen conflicts and contribute with appropriate choices of locating wind power.” 
The state-owned Norwegian energy conglomerate Statkraft has announced that it is to halt new investment in offshore projects as part of an “adjusted” investment strategy.
The downturn in Norway’s oil industry is seriously affecting the investment climate at the moment. 
Statkraft has been a major player in UK offshore projects.
Norway enjoys very low electricity prices due to an abundance of hydro, which accounts some 99% of power. Wind has never been able to compete without very large subsidies.
Statkraft abandoned 1GW of planned onshore wind investment in 2014 as “uneconomic”. But have recently revived plans to complete some of their planned onshore schemes.
Norway’s installed wind capacity at the end of 2015 stood at only 819MW, with no new capacity added during the year. It is looking to install up to 3.5GW by 2020.
Sweden has shared the ‘electricity certificate’ subsidy system with Norway. It too is throttling back on wind power.
No wind farms were commissioned in Sweden in the second quarter of 2015, compared to 50MW in the same period in the previous year, according to the Swedish national wind association.
Reuters, 4 September, 2015.
‘Finland’s government proposed setting a November 2017 deadline for granting subsidies to wind power plants as applications exceeded a previously set capacity limit.
‘The decision, if approved by the parliament, would mean the end of the existing feed-in tariff system in Finland, and follows a decision by Britain to scrap all new subsidies for onshore wind from next April.
‘“The present system can no longer be considered a sufficiently cost-effective and market-oriented incentive system,” Finland’s Ministry of Employment and Economy said in a statement.
‘The measure could save 70-80 million euros in 2020, it added.
‘The centre-right government has proposed the deadline to apply for subsidies as it has already received more applications than the system can accept under the 2,000 MW cap set earlier.
The Telegraph, 14 April, 2016.
‘Taxpayers have been left with a £17,000 bill for every household that signed up to the Government’s failed flagship energy efficiency scheme, the Green Deal.
‘Ministers wasted a total of £240 million on the ill-fated programme, which was launched in 2013 with the intention of upgrading Britain’s entire housing stock, a damning National Audit Office report found.
‘The Green Deal was supposed to encourage households to take out loans to fund the cost of installing measures such as insulation or double glazing, with the cost paid back out of the resulting savings on their energy bills.
‘Yet the scheme was eventually abandoned in July last year after just 14,000 households signed up, taking out loans worth just £50 million – on average less than £3,600 each.
‘By contrast the Department of Energy and Climate Change (DECC) had spent £240 million – more than £17,000 per household – on setting up, promoting and helping administer the scheme.
‘The Green Deal did not deliver value for money and “failed to deliver any meaningful benefit”, Amyas Morse, head of the NAO, concluded.
‘The NAO also criticised the Government for the costly design of another energy efficiency scheme, the Energy Company Obligation (ECO), which required gas and electricity suppliers to upgrade homes.
‘The £3bn scheme was paid for on energy bills and was almost three times more expensive per tonne of carbon saved than previous schemes, so increasing energy bills, the NAO said.
This was a pet Lib Dem project, introduced when they held the Energy portfolio in the Coalition government. The benighted Sir Ed Davey was then insisting that, “Britain must lead the international battle against global warming”, adding that not to do so would be “deeply irresponsible”.
Perhaps Sir Ed should be surcharged for wasting taxpayers’ money.
‘BRITISH taxpayers have been forced to subsidise the very Chinese steel companies that are threatening 40,000 UK jobs, critics say.
Daily Express, 10 April, 2016.
‘It comes after revelations that the European Investment Bank has given so-called “soft loans” to China of £80million as part of a climate policy intended to lower emissions.
‘The astonishing figures include a loan of £40million to one of the world’s worst “steel dumping” culprits, the Wuhan Iron & Steel Corporation.
‘To add insult to injury Wuhun, the world’s eighth largest steel producer, boasts the Chinese state as its main shareholder. Wuhun is such a prolific steel dumper that it has now been especially targeted by the European Commission, which wants to slap it with 36.6 per cent tariffs.
‘Just five years ago, however, EU bankers decided to lend it €50million (£40million) to put towards a €207million (£167million) Euro Combined Cycle Plant.
‘The loan was paid out under the China Climate Change Framework Loan II. The money is supposed to persuade the steel giants to invest in lower emission technology.
‘Furious critics last night pointed out the irony that the loan was concerned with reducing the cost of power generation while one of the complaints of Tata Group is the high cost of energy associated with its steel production operation in South Wales.
‘Others asked whether Wuhan would have been in a position to dump steel so aggressively if their energy costs had been higher.
‘Another Chinese beneficiary of British tax pounds was the Shaogang Songshan plant in Guangdong which, in 2008, received €35million (£30million) in EIB funding in the interests of “improving energy efficiency”.
The Telegraph, 7 April, 2016.
‘Britain will have too much electricity this summer due to the growth in wind and solar farms, National Grid has forecast, warning it could be forced to issue unprecedented emergency orders to power plants to switch off.
‘Businesses will also be paid to shift their power demand to times when there is surplus electricity, as the UK energy system struggles to cope with the huge expansion in subsidised renewable power.
‘National Grid, which is responsible for balancing Britain’s power supply and demand, warned that operating the system at times of low demand was “becoming increasingly challenging”, in part due to the growth of “intermittent power capacity” such as wind and solar farms.
‘Historically, supply and demand on the national electricity grid largely balanced themselves out through market forces, because power plants would not be generating if there were no buyers for their electricity.
‘But that market has been changed radically by the growth of renewables, which generate when the wind blows or sun shines, receive subsidies on top of the market price, and in some cases feed their electricity directly into local power grids.
‘National Grid said that the “changing generation mix” meant there would be increasing reliance on it to intervene in the market “to keep the system secure”.
‘The boom in solar panels in recent years, fuelled by subsidies, has far exceeded expectations [not our expectations or those of most experts! Ed.]. These panels feed the power they produce directly into homes or the local electricity grid, reducing demand on the national system to what is expected to be a record low this year.
‘National demand is now forecast to fall so low that at times it would be outstripped by supply from wind farms, nuclear plants and a core of conventional flexible plants that National Grid needs to help balance the system, forcing the Grid to intervene.
‘“Wind generation may need to be curtailed this summer during minimum demand periods to help us balance the system,” it said, in its annual summer outlook report.
Wind farms are already paid millions of pounds every year to switch off when there is insufficient power cable capacity to transport their electricity to areas where it is needed. The report suggests National Grid may now have to pay them to switch off because their power is simply not needed at all.
‘The company warned it may also have to “issue emergency instructions to inflexible generators to reduce their output during some weeks in order to balance supply and demand”.
Experts have been warning of this problem for many years. It was an entirely foreseeable consequence of excessive and undiscriminating subsidies for wind and solar PV.
It has long been evident from DECC’s own figures that generous subsidies were over-stimulating the growth of Solar PV and wind in relation to their own National Renewable Energy Action Plan targets.
The consequences for the market were also foreseeable. In 2009, Parsons Brinkerhoff, power experts who carried out renewables grid capacity studies and published the most authoritative levelised power generation costings for many years, published a detailed study called , ‘Powering the Future, 2050’ (PDF download). This study noted that, “There is a risk that decisions and actions taken now to meet the EU 2020 renewables target will have undesired and adverse impacts on the UK’s ability to meet the 2050 carbon obligations. For example, the early and widespread adoption of wind power could severely undermine the viability of other low-carbon technologies, making it difficult to meet carbon targets and longer-term commitments.” This warning has been proved true in the Hinkley C fiasco and in the continuing problem of funding sufficient gas-fuelled peaking power generators to buffer excessive wind and solar pv load.
Matt Ridley’s Blog, First published 4 April, 2016 in The Times.
‘Before Redcar and Port Talbot, remember Lynemouth, where Britain’s last large aluminium smelter closed in 2012. In aluminium, as in steel, China is now by far the largest producer, smelting five times as much as any other continent, let alone country. The chief reason aluminium left (though a small plant survives at Lochaber) was the sky-high electricity prices paid in Britain: electrolysis is how you make aluminium. For extra-large industrial users, British electricity prices are the highest in Europe, twice the average, and far higher than in Asia and America.
‘Britain has the highest electricity prices because it has the most draconian climate policies. Despite promises not to do so, the government insists on going faster than other countries in emissions reduction. As Lord Deben, chairman of the Committee on Climate Change, put it recently, apparently without intended irony, the British approach to climate legislation is the envy of most countries in the world. At green conferences maybe.
‘As well as paying huge and growing bills to subsidise those futile playthings of the rich, the wind and solar industries, energy-intensive industry also picks up the cost of the “carbon price floor”, a tax on fossil fuels used to generate electricity, which was introduced in 2013 and doubled last year to £18.08 per tonne of carbon, or more than four times the cost of the European emissions trading scheme, of £4 a tonne. This can have little impact on climate, however, not only because Britain’s emissions are less than 2 per cent of global emissions, but because it merely exports jobs and emissions.
‘Port Talbot’s blast furnace is less dependent on electricity than aluminium smelters, but those who say that high electricity prices are not contributing to steel’s collapse are missing three key points. First, downstream processes in the steel industry such as galvanising use a lot of electricity; second, steel production elsewhere is increasingly shifting to electric-arc furnaces, which recycle scrap steel — and generate fewer emissions. That’s not likely at Port Talbot because of Britain’s high electricity prices. The country’s one electric-arc furnace, run by Celsa in Cardiff, is struggling, and we mostly export rather than melt our mountains of scrap.
‘And third, as the Global Warming Policy Forum points out, climate policies affect the cost of all goods and services purchased by industry, including labour. According to government estimates, by 2030 medium-sized businesses would see prices 114 per cent higher than they would be in the absence of climate policies, and they would need to pass those costs on to customers.
‘So aluminium and steel are mere harbingers of heavy industry doom because of our costly energy. As the think tank Civitas reported at the time of Lynemouth’s closure, “There are still many other energy-intensive industries left in the UK, such as glass, chemical and ceramic manufacturing. Together these are worth £75 billion and employ 700,000 people and they are just as vulnerable to the future rises in energy costs.”
‘Lord Deben’s committee is tasked by Ed Miliband’s 2008 Climate Change Act with giving the government impartial advice on how to meet that act’s targets. No other EU member state has yet set a legally binding 2030 target, but the committee announced in November its recommendation for a fifth “carbon budget”, that by 2030, Britain should generate 57 per cent fewer carbon dioxide emissions (from heat, transport, electricity and industry) than in 1990. The government must respond by the end of June.
‘That’s awkward because, as Peter Lilley, MP, has spotted, the deadline is likely to precede any decision by the EU about how to share the burden of meeting the promise it made at the Paris climate conference in December to reduce European emissions by 40 per cent by 2030. If Britain is already committed to reductions of 57 per cent, it can hardly complain if the European Council agrees lesser reductions for other countries, so as to hit the target of 40 per cent for the union as a whole. It is, in effect, a unilateral gift of jobs to other countries — if we stay in the EU.
‘Speaking at the Institute of Public Policy Research shortly before the launch of his committee’s latest report, the impartial Lord Deben was asked about the impact on energy-intensive industry. He replied that “heavy energy users will have to find ways of being less heavy users”. Charming. This they are indeed doing, by putting steelworkers on benefits, where they emit less. But shifting the work to China may actually increase emissions since China gets more of its energy from coal. Lord Deben added, incredibly, that there is “no evidence at all of offshoring due to climate policy”. I wonder if he dares say that in Wales.
‘It is true that the immediate Welsh crisis is caused more by China’s dumping of cheap steel on world markets than by energy costs per se. But this issue is also related to climate policy. China has been massively increasing its emissions in recent years as it expands its heavy industries. Last year’s climate conference in Paris effectively gave a green light for it to continue to do so.
‘Requiring countries to make only non-binding promises of emissions reduction, the Paris agreement let China off even that. As David Campbell, a professor at Lancaster University law school, put it: “The implicit, though categorical enough, permission to increase emissions under Article 4 (7) of the UNFCCC [United Nations Framework Convention on Climate Change] is strengthened by a provision under Article 4 (4) of the Paris Agreement that China and India cannot be required to make reductions.”
The first of those clauses says that the extent to which a developing country — a category which includes China — has to implement its promises can take fully into account the need for social development and poverty eradication “as an overriding priority”. The second merely says that developing countries should be “encouraged to move over time” towards emission reduction “or limitation” but only “in the light of different national circumstances”.
Tata Steel have, unsurprisingly, called time on covering massive losses at their Port Talbot steelworks. The company have long warned about the three-pronged threat to British steel production:
In the last six months there has been a widespread outcry from Labour and SNP politicians and the commentariat blaming the Government and other countries for the steel crisis.
For some reason, Labour, Lib Dem, SNP and Green spokespersons, and the BBC, have shown a marked reluctance to analyse the role of ‘green’ energy policy costs as a major causal factor in the current crisis, preferring to focus on Chinese dumping of cheap steel.
The appearance of a cover-up of the real policy costs has not been helped by the fact that the Government last published “Estimated impacts of energy and climate change policies on energy prices and bills” in 2014. 
There is, of course, an obvious conflict in the politically-correct news agendas of some media organisations. BBC Radio and TV in particular have been particularly strident in recent years in furthering a ‘green’, not to say Greenpeace, agenda on carbon rectitude and penalising Energy Intensive Industries (EIIs).
For over 10 years UK Governments of various political hues have quite deliberately penalised EIIs, and steel-making in particular, by racking up carbon taxes and other Green taxes, levies and subsidy costs. The escalating problem has long been evident to anyone with eyes not totally blinded by the all-pervasive Greenery.
The Government’s own figures reveal that UK EIIs have been paying far more than in other European countries:
Tata, Britain’s largest steel manufacturer, blamed “cripplingly high” energy costs for its decision in 2015 to shed 1,200 jobs at its plant in Scunthorpe. It was noted at the time that British companies were paying forward power prices of £41.90/MWh for the year, near double the £21.45/MWh being paid in Germany for the same wholesale contract, according to Marex Spectron, the energy consultancy, quoted in The Times. 
Jeremy Nicholson, director of the Energy Intensive Users Group, which represents Tata and other big British manufacturers, was quoted as saying that the disparity was growing and represented a profound threat to the future of heavy industry in Britain: “It was being driven, he said, by the rising burden of green energy taxes in Britain — among the highest in the world — and by an acute shortfall of electricity-generating capacity after the closure of a string of gas and coal-fired stations. German industrial companies were largely shielded from carbon taxes and other green energy schemes, dramatically reducing their power bills.”
EEF, the Manufacturers Association, have long warned that disproportionately high levels of Green taxes and subsidies in the UK were endangering energy-intensive industries.
This view was supported by research published in 2012 for the Government’s own Department of Business Innovation & Skills, BIS, which showed that many UK manufacturers are paying much more in energy taxation and for climate change policies than our competitors.
This clearly showed that green policies were costing Britain’s steelmakers and other energy intensive manufacturing sectors at least double what their main European rivals paid. The picture was even worse when looking at competitors in Asia, Russia and the US.
Despite warnings from energy economists and industry, the Coalition Government, with Lib Dems running the energy portfolio, introduced a punative Carbon Price Support regime in 2013. Like the Labour’s 2008 Climate Change Act, this unilaterally and disproportionately penalised UK EIIs.
In an authoritative 2009 report, Parsons Brinkerhoff warned that: “There is widespread concern that the inadvertent costs to industry of carbon trading and improvement programmes may force industries offshore to areas with lower or no emission targets. This would damage the UK economy directly by the loss of employment and indirectly by increasing imports. The latter would increase global CO2 emissions – the exact reverse of the intent of such measures. ” 
EEF, the steel industry and others warned government before the 2014 Budget that unless they received immediate and extensive reliefs from the Carbon Price Support regime and other energy costs, UK EII would be uniquely disadvantaged:
EEF has for some time been concerned about the unilateral nature and impact on manufacturers of this policy and as the EU carbon price remains at historic lows the ability of the CPF to create a divergence in UK and EU electricity prices continues to grow. The Carbon Price Support (CPS) rate in 2015/16 is already almost twice that originally intended (at £18.08 as compared with the 2011 indicative rate of £9.86), and EEF estimates that this will constitute almost 10% of a large industrial user electricity bill and will leave the UK paying a carbon price about four times higher than the rest of Europe. This damages UK manufacturing and is not sustainable in the long term. Thankfully the Chancellor has chosen to freeze the CPS rates through to 2020, if he had not we'd have seen a UK carbon price of around £40 in 2020, some eight times higher than the rest of the EU.
The floor price of £18 per tCO2 is more than four times higher than the EU’s current carbon price which is less than £4 (€4.80 on 30 March 2016).
... the consequences of UK energy policy were becoming increasingly evident:
Alcan closes (2011)
‘Rio Tinto Alcan chief executive Jacynth Cote said the decision followed a thorough strategic review.
She said: “... It is clear the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation.”’
Steel jobs cut (2014)
‘Around 400 jobs are to go at the Tata steelmaking plant in Port Talbot, the company has announced.
‘Chief executive Karl Koehler said the changes were vital if the company was to remain competitive.
‘He pointed to the UK's high business rates and "uncompetitive" energy costs as factors in the decision.
Government, belatedly, began to understand the full extent of the problem late in 2015:
The BIS committee noted that, “ The [steel] industry has identified five actions that are available to address the current crisis. Some of these actions are entirely within the gift of the Government; others require EU approval or coordinated action at an EU level.” They tabulated these together with action sought, reasons for action and action delivered.
The Government launched a new consultation on energy cost relief for industry on 1 April, 2016. 
The consultation document notes: “An exemption provided to industry will narrow the base of consumption from which total RO and FIT support costs are recovered, and therefore increase electricity costs for non-exempt households and businesses. ”
 ‘Estimated impacts of energy and climate change policies on energy prices and bills, 2014’, DECC.
 ‘International industrial energy prices’, DECC, Statistical data set, updated 24 September 2015.
 ‘UK industry “crippled” by electricity costs twice as high as in Germany’, The Times, 20 October, 2015 (paywalled).
 EEF, ‘EEF Steel Facts and Figures’
 ICF, for BIS, ‘An International Comparison of Energy and Climate Change Policies Impacting Energy Intensive Industries in Selected Countries’, 11 July 2012.(PDF download).
 Parsons Brinkerhoff, ‘Powering the Future, 2050’, 11 July 2012.(PDF download).
 ‘Government response to the steel crisis: creating a level playing field’, (18 December, 2015), Parliament website.
 ‘New consultation launched on energy cost relief for industry’, (1 April, 2016), Government website (BIS).
Matt Ridley, ‘Green costs are killing heavy industry in Britain’, Matt Ridley’s Blog, First published 4 April, 2016 in The Times.
‘How is Britain going green? By shutting down industry - Britain has the highest energy costs in Europe, thanks to decisions taken not in Brussels but in Whitehall’, The Spectator, 2 April, 2016.
‘Green zealots to blame for steel’s decline’, Bill Carmichael, The Yorkshire Post, 2 April, 2016.
The Telegraph, 1 March, 2016.
‘Annual energy bill levy to prevent blackouts could rise from £10 to £20 to fund higher subsidies for coal, gas and nuclear power plants.
‘Households face paying hundreds of millions of pounds in extra levies on their energy bills, under new plans to ensure Britain has enough power plants to keep the lights on.
‘Amber Rudd, the energy secretary, unveiled plans to overhaul a crucial subsidy scheme that is designed to maintain secure electricity supplies, amid fears it was failing and could leave the UK at risk of blackouts.
‘The “capacity market” scheme is already due to run in winter 2018-19 and 2019-20, when energy firms will be paid almost £1 billion in subsidies each year to guarantee their coal, gas and nuclear power plants will be running.
‘The payments will be funded through levies on energy bills, adding about £10 a year to a typical household electricity bill.
‘The changes unveiled on Tuesday are expected to result in significantly higher subsidies being paid to a greater number of power plants in future years. Analysts say the cost of the scheme could rise by at least 50 per cent and even double - potentially increasing the levy on household bills to £15 or £20 a year.
The Times (Paywalled), 30 March, 2016.
‘The former boss of one of Britain’s biggest energy suppliers has warned that the safety buffer separating Britain from power cuts will be uncomfortably slim for up to four years.
‘Experts had already warned this winter that Britain was at its highest risk of blackouts in more than a decade before the announcement of a succession of closures of coal-fired power stations.
‘Paul Massara, a former chief executive of npower, warned yesterday that the tight supply would last for up to four winters, in contrast with rosier forecasts from the regulator that the safety buffer between capacity and peak electricity demand would begin to improve from 2017 onwards.
‘Mr Massara said that new measures designed to lock in electricity generation would not kick in fully for several more years. Responding to the suggestion that the margin would be less tight after this year, he added: “I think it will be three or four winters.”
See also: ‘Capacity mechanism “isn’t working”, says former Npower chief’, Utility Week, 30 March, 2016.
The Times (Paywalled), 27 February, 2016.
‘Britain faces nearly three months of electricity shortages next winter because five of the biggest coal-fired power stations are to close in April.
‘Provisional forecasts for the winter of 2016, released by National Grid, show that Britain faces a power deficit in late November that will drag on for 11 weeks until spring, when warmer weather will reduce overall demand.
‘Without urgent action to address the shortfall, experts warn that the crunch could lead to rolling blackouts for industries and, under exceptional circumstances, domestic users.
‘“First up for cuts in the event of a shortfall in electricity supply would be anumber of big industrial users,” said Paul Johnson, of the Industrial Communities Alliance, which represents 60 local authorities. “Then there would have to be controlled disconnections of households and other businesses.”
‘Brian Galloway, director of energy policy at Scottish Power, said that the supply picture was “far from ideal”.
‘“Managing next winter could be very challenging,” he said. “A cold winter would exacerbate the situation.” [a bit rich, as SP, owned by Iberdrola, is a major player in building wind power arrays rather than base load power stations! Ed.]
‘The electricity shortfall is being predicted as the power stations at Longannet in Fife, Ferrybridge and Eggborough, both in Yorkshire, Rugely in Staffordshire and Fiddlers Ferry in Cheshire face full or partial closure.
‘The closures threaten to remove about 7,000 megawatts from the grid, or more than 10 per cent of Britain’s entire generating capacity.
See also: ‘UK energy supply forecasts “into the red” for first time next winter’, The Telegraph, 26 February, 2016.
Energy Voice, 26 January, 2016.
‘The UK is heading for a severe electricity supply crisis by 2025, the Institution of Mechanical Engineers (IME) is warning today.
‘IME, which has more than 112,000 members in 140 countries says the closure of coal and nuclear plants would lead to a 40-55% shortfall amid growing demand.
‘And the group’s new report – Engineering the UK Electricity Gap – also says plans to plug the gap by building combined cycle gas turbine (CCGT) plants are unrealistic as the UK would need about 30 of them in less than 10 years.
‘Launching today’s report, IME head of energy and environment Dr Jenifer Baxter, lead author of the document, said: “The UK is facing an electricity supply crisis.
‘“As the UK population rises and with the greater use of electricity use in transport and heating, it looks almost certain that electricity demand is going to rise.
‘“However, with little or no focus on reducing electricity demand, the retirement of the majority of the country’s ageing nuclear fleet, recent proposals to phase out coal-fired power by 2025 and the cut in renewable-energy subsidies, the UK is on course to produce even less electricity than it does at the moment.
‘“We cannot rely on CCGTs alone to plug this gap as we have neither the time, resources nor enough people with the right skills to build sufficient power plants.
‘She added: “Imports will put the UK’s electricity supply at the mercy of the markets, weather and politics of other countries, making it less secure and less affordable.
‘“Currently there are insufficient incentives for companies to invest in any sort of electricity infrastructure or innovation and worryingly even the government’s own energy calculator does not allow for the scenarios that new energy policy points towards.”
New Scientist, 22 February, 2016.
‘There’s a still in the air – and it is bad news for North America’s wind turbines.
‘Last year saw the lowest average wind speeds in half a century across much of North America. There were long periods of motionless air across most of the Great Plains and the West, stretching through to Texas and Florida, and from Mexico to Canada.
‘And weather watchers say the wind drought was back again in the early weeks of 2016. “Low-wind conditions have returned to the US”, says Michael Brower of AWS Truepower, a consultancy for the country’s wind-power industry.
‘In much of the American West, average wind speeds were a fifth below normal in the first half of last year. As a result, the electricity output of US wind farms fell 6 per cent despite their generating capacity increasing by 9 per cent, according to government agency the Energy Information Administration.
‘“The possibility of a prolonged wind drought is on the minds of many in the wind industry,” says Brower.
‘The immediate cause, say meteorologists, is a large ridge of high pressure that formed over the north-eastern Pacific and the western half of North America in mid-2013. This diverted wind-bringing storms far north into the Arctic.
‘“The ridge was remarkable for its longevity, lasting from June 2013 through to mid-2015. It is the strongest in records dating back to 1960,” says Daran Rife, a meteorologist at energy consultancy DNV GL.
‘So what caused the high pressure? Some have blamed El Niño, the short-term shift in oceanic currents in the Pacific Ocean that is affecting weather around the world. According to analysis by Brower, Texas experienced wind droughts in 1987 and 1992, both of which were El Niño years.
‘But in a study published earlier this month, Rife pointed out that the still air in 2015 predated the formation of the current El Niño.
‘Most meteorologists believe that the persistent high pressure is at least partly a result of the Pacific Decadal Oscillation, a fluctuation that is similar to El Niño but lasts for decades. In the past two years, the oscillation has switched to its “warm” phase, meaning that the wind drought could stick around through 2016.
A similar very low wind year was experienced in the UK in 2010-11. A fall of 7.5% in power obtained from wind, hydro and other renewable sources was blamed on a dry winter with very low wind speeds.
‘Drax mulls mothballing coal-fired plants after posting 2015 losses’
‘Power Engineering International, 23 February, 2016.
‘British power group Drax could be set to mothball its coal-fired power plants as low gas prices, competition from renewables, withdrawal of government support and the UK’s plan to close its coal-fired plants by 2025 all take their toll.
‘The company announced a strategy review this week after posting a loss of 64 per cent in its pre-tax earnings for 2015, with profits falling from £166m ($234m) to £59m. The group was forced to more than halve its dividend to shareholders, citing "severe market deterioration and difficult regulatory challenges".
‘CEO Dorothy Thompson was quoted as saying that while the firm “may choose to mothball” its coal plants, “what we are keen to do is to work with the government and find the right solution”.
‘And according to Andy Koss, CEO of Drax Power Ltd, existing coal-fired plants may still be crucial for keeping the UK’s lights on if the government fails to build enough new capacity to make up for the planned plant closures.
‘Drax has already converted two of the six units at its 39.6 GW coal-fired plant in North Yorkshire to burn biomass, and conversion of a third unit is planned if government aid for the process passes a European Commission investigation.
‘Koss has warned that unless this aid is delivered within the next two years, the coal-fired boilers may deteriorate to such an extent that conversion would no longer be possible.
Meanwhile, in Japan:
‘Japan re-embraces coal power’
‘Power Engineering International, 24 February, 2016.
‘The Japanese government has decided to relax its opposition to coal-fired power.
‘The country’s environment ministry issued objections to five new coal-fired stations in 2015 but the industry ministry has persuaded them to accept voluntary steps by power companies to curb emissions.
‘Environmentalists say the change in attitude jeopardises Japan’s pledge to reduce CO2, however the ministry stated that it is monitoring stations to ensure enough is being done to meet carbon limits.
‘Japan is readying to open up its power retail market in April, and companies are rushing to build 43 coal-fired plants or 20.5 gigawatt of capacity in coming years, about a 50 per cent increase.
‘As part of the agreement, the Ministry of Economy, Trade and Industry is set to tighten its rules over coal-fired power stations from April 1, including issuing new non-binding requirements on the heat efficiency of new and existing plants to curb emissions.
‘“We will also monitor and check annually on progress. If we find the power industry cannot reach its goal, we will consider new measures,” Environment Minister Tamayo Marukawa said after meeting with industry minister Motoo Hayashi to seal the agreement.
Just as other countries are building large amounts of new coal capacity, or, like Denmark, going back on previous resolutions to abandon coal, the UK has committed to closing what remains of our coal-fired power stations which currently provide over 26% of net power supply (2015 figures). This, as base load capacity margins are reaching crisis point.
The Telegraph reports that some high-interest bonds based on renewables subsidies are failing as subsidies are reduced:
‘Investors who bought a bond promising annual returns of 7.5pc from renewable energy company Wind Prospect Group face a three year wait to have their capital returned.
‘The “mini-bonds”, called ReBonds, were issued by the company in 2011 and were due to pay the annual interest before investors were able to request their capital back last year. But bondholders have been in limbo since the summer when interest payments and redemption requests were suspended.
‘At the time the firm said there would be a “three month moratorium” but, as Telegraph Money reported in January, six months later and interest and capital remains unpaid.
‘In an update to investors, seen by Telegraph Money, the firm said it will take three years for all bonds to be redeemed under a restructuring plan.
‘Interest payments, both future payments and those that are overdue, will be serviced, the company said.
‘Investors in a "mini-bond" – a new type of investment that often pays attractive interest rates – risk losing some or all of their money after interest payments ceased.
‘The bonds, issued in 2013 by Secured Energy Bonds, a subsidiary of an Australian firm called CBD Energy, promised to pay 6.5pc interest for three years.
‘But both CBD Energy, which specialised in renewable sources such as solar power, and Secured Energy Bonds have gone bust and investors in the mini-bond said they had not received an interest payment due on January 26.
‘A British company, Independent Portfolio Managers (IPM), was involved in issuing the bonds and appointed as a "security trustee" of Secured Energy Bonds in a move designed to safeguard investors' interests. IPM said the bonds were "secured" against the assets of the energy company, meaning that investors should have some protection in the event of insolvency.
‘However, it is not clear at this stage if bondholders will receive any of their money back and there have been reports that Secured Energy Bonds' money was diverted to the parent company as its own problems intensified.
 ‘Mini-bond investors face three year wait to get their money back’, Telegraph Money, 24 February, 2016.
 ‘Energy mini-bonds: investors out of pocket as interest payments are halted’, Telegraph Money, 2 February, 2015.
Utility Week, 28 January, 2016.
‘“Dozens of dirty diesel generators”. Hardly the headlines the government was hoping for when it set up the capacity market. Yet, when the second auction came to a close this winter, it once again became clear that small scale diesel generators had ended up among those subsidised. The cost this time? £176 million on small scale diesel generation over 15 years - even more than the £109 million in the first auction. Experts have told Utility Week that without changes to the market it could be even worse in the next round.
‘While the primary purpose of the capacity market may be to ensure security of supply, it doesn’t exist in isolation. It wouldn’t be necessary if the government wasn’t also trying to cut carbon emissions. The government’s dilemma is that, in trying to achieve one of those objectives, it is apparently compromising the other. On the one hand it’s committed to closing all of the UK’s coal fired power stations by 2025. On the other, it’s subsidising one of the few forms of generation that is as carbon intensive in order to replace lost capacity.
‘Jimmy Aldridge, senior research fellow at the Institute for Public Policy Research (IPPR), told Utility Week there are “…more bill payers’ subsidies going to the dirtiest form of generation available at the same time that the government were over in Paris trying to negotiate a climate deal, and doing good work towards that end. From our perspective that’s a step in the wrong direction, in trying to come up with a sustainable energy policy.”
‘Small scale diesel generation produces 1010gCO2/kWh according to figures from IPPR. By comparison the combined cycle gas turbines which the government was hoping to contract in the auction produce a mere 378gCO2/kWh.
‘So how did this happen? It isn’t because diesel generation is itself especially cheap. As Tom Porter, partner at consultancy firm LCP, explained: “In a competitive market we would not expect diesel generators to be as cost efficient as new gas generators.”
‘Instead, it’s the multiple sources of revenue they’re able to take advantage of which have made diesel generators competitive.
‘There is, of course, the capacity payments themselves; £18/kW in the most recent auction. There’s also contracts for National Grid’s Short Term Operating Reserve (STOR). In his report for IPPR ‘Mad Maths: How new diesel generators are securing excessive returns at bill payers’ expense’, Aldridge calculated that for a typical set of diesel generators this could be expected to bring in £20/kW each year.
‘However, the most important source of revenue is triad avoidance payments. As the small scale diesel generators are ‘embedded’ in the distribution network, they are exempt from Transmission Network Use of Service (TNUoS) charges.
‘It means they can help energy users reduce their peak load and therefore their TNUoS charges, without incurring the charges themselves. Aldridge calculates that this could bring in yearly revenues of £35/kW.
‘On top of all this, diesel generators have been able to avoid several restrictions faced by others. They are small enough to be exempt from the EU’s Industrial Emissions Directive, which places limits on nitrous oxides, sulphur oxides and dust. The same is true for the Emissions Trading Scheme, which would otherwise require them to obtain allowances for the carbon dioxide they emit.
Dr John Constable, GWPF, 31 January, 2016.
‘On the 27th of January last week the UK’s Department of Energy and Climate Change announced the conclusion of the latest auctions for Demand Side Response, one of several transitional instruments currently being used ahead of the introduction of the Capacity Mechanism, to address tight margins of electricity generation over peak load.
‘803 MW of capacity in the winter 2016/17 was bought for £27.50/kW, giving a total cost to the consumer of about £22m. Figures of this order may seem like a pin-prick in a sector so large, but the fact that such emergency costs need to be imposed at all is in itself remarkable, and a clear indication that the UK’s energy and climate policies have created electricity system management problems that were not anticipated by government, and the significance of which has until recently been treated as minimal by the renewables industry and sympathetic academics.
‘Moreover, these charges are a sign of things to come. The Office for Budget Responsibility has predicted that the Capacity Mechanism will cost some £600m in its first year, 2018/19, rising to £1.1bn in 2019/20, and then to £1.3bn in 2020.
‘The necessity of these actions was explained by the Secretary of State for DECC, the Rt Hon Amber Rudd, MP, in her speech of November 18 last year, when she observed that “We now have an electricity system where no form of power generation, not even gas-fired power stations, can be built without government intervention.” Implicit in such a statement is the admission that this problem must be creation of other state interventions. After all, energy is not a ‘public good’, and will be spontaneously supplied by the market unless that market is distorted. And of course it has been distorted. A combination of EU Directives and their UK implementations has conspired to reduce Combined Cycle Gas Turbine load factors to, as DECC itself reports, around 30%, when they are perfectly capable of running at 90%. This is hardly encouraging for investors in the plant that will be required to replace coal generators now on the verge of closure.
‘Revealing though these emergency measures are, their significance is broader still, since they provide clear evidence of a tendency to reduce that part of the consumer price that is decided by wholesale markets. Many charges on the consumer are now quite invisible to the markets, or determined in airless, government managed events, such as the auctions reported last week. This is extremely undesirable, and reveals a deep contradiction at the heart of European energy policy, which on the one hand is, laudably, urging market liberalisation, while on the other, and principally through its climate policies, forcing member states to adopt mandates that are strongly illiberal both in their principles and in their indirect consequences.
‘The experience in Germany is broadly similar, and discouraging. The Frankfurter Allgemeine Zeitung reported last week that the special measures required to guarantee security of electricity supply had in 2015 for the first time topped €1bn:
The total cost for network operator Tennet in 2015 comes to 700 million euros – including 225 million euros (2014: 74 million) for the startup and shutdown of power plants, 152 million euros (2014: 92 million) for the retrieval of network reserve and 329 million ( 2014: 128 million) for the emergency shutdown of wind turbines. The second major network operators 50 Hertz, which has to transport a lot of wind power in northern and eastern Germany, recently announced spending on grid stability of the 300 million euros.
‘Network charges in Germany, the FAZ reports, now account for about 20% of the price to consumers, a proportion that will have to rise. For while it is true that new power lines are being built, and these will reduce the need for constraint payments to wind, for example, the power lines will themselves have to be paid for by a charge on the consumer, roughly 5% to 10% of the capital cost of the asset for the lifetime of that asset. Grid reinforcements are very expensive.
‘As critics have long pointed out, the fact that the wind and the sun is free is little short of meaningless. – So is the fossil fuel in the ground. The costs for both are all in the extraction, conversion and delivery to consumers, with delivery, the system operation costs, being so high for renewables that any reductions in capital cost are dwarfed. The fact that these system costs are being imposed through instruments that are non-market, or only weakly competitive, not only adds insult to injury in the short term but promises a future in which the consumer is simply the victim of administrative pricing.’
On 19 January, wind output fell as low as 74MW. UK electricity demand rose sharply to a peak of 52,058MW on that day, as temperatures sank. At peak demand, at 5pm, solar PV was producing nothing (it was dark) and the wind fleet managed only 81MW, just 0.15% of UK demand.
This demonstrates the fatuity of claims by wind industry apologists that “the wind is always blowing somewhere” and that we can depend on wind and solar to meet demand.
See below for an article on the 4 November 2015 supply crisis and the failure of wind to contribute.
German-owned energy conglomerate E.On UK have announced that they will not be proceeding with the Isles turbine scheme near Newton Aycliffe, in Co. Durham.
The company cited environmental and technical issues. “These include the longstanding objection from the Ministry of Defence, the high bird activity on the site, investor uncertainty and changes to planning law,” it said.
There is a suspicion that the decision might have more to do with the Government’s changes to planning guidance and wind subsidies.
Purely by coincidence, RWE Innogy, the other major German wind developer, has just announced that they have halted 12 wind projects in Scotland and Wales. The company are quoted as saying that work on the 12 onshore wind projects will resume, “when it has been confirmed that a route to market, via a Contract for Difference or something similar, is in place”.
In the policy reset speech of 18 November 2015, the Secretary of State for Energy and Climate Change, the Rt Hon Amber Rudd, MP, made it clear that she intends to protect the consumer against excessive subsidy costs, which are in principle limited by the Treasury’s Levy Control Framework (LCF) to £7.6bn per year in 2020.
The scale of the difficulties that government faces in achieving this goal is made clear in a new website page published today by the Renewable Energy Foundation, a UK charity that has been critical of overly expensive and ineffective renewable energy policies.
The REF web page  is based on information derived from the government’s own Renewable Energy Planning Database (REPD), the latest version of which was published on the 14th of December. REF’s calculations estimate the generation from the consented capacities of the various technologies, and thus measures progress towards the electricity component of the 2020 renewables targets specified by the European Union’s Renewables Directive of 2009.
This work confirms earlier analyses by REF predicting a major overshoot of the renewable electricity target, which implies a breach of the Treasury budget limits. If all the consented capacity is built, the target will be overshot by 35%, implying a budget overshoot of approximately £2bn per year.
In contrast to renewable electricity, progress on meeting the heat and transport parts of the overall energy target of 15% has been slow with growth of only 34% and 1% respectively over the five years to 2014. 
Dr John Constable, director of REF, said: “Overshooting the electricity part of the 2020 renewable energy target at consumers’ expense makes no sense, especially if it means diverting limited resources from the renewable heat and transport sub-targets.”
Dr Constable continued:
“Not all the consented capacity of renewable electricity can be afforded by the UK consumer. DECC needs to take very firm action to ensure that needless renewable electricity projects are killed off without delay, lifting planning blight on local populations and giving a clear signal to investors that government believes development effort should be refocused on the heat and transport sectors.”
 See text of Amber Rudd’s speech.
 REF website.
 UK’s 2020 renewable energy target is made up of three sub-targets: electricity, heat and transport. The relative proportions of each of these towards the total target and the suggested trajectory towards meeting the 2020 target was set in the National Renewable Energy Action Plan for the UK (PDF file).
 Annual progress towards meeting the three sub-targets shows that renewables heating and cooling increased from 2,095 to 2,804 kToe (24.4 TWh to 32.6TWh) between 2010 and 2014– an increase of 34%. Transport biofuel usage increased from 1150 to 1167 kToe (13.4 to 13.6 TWh) between 2010 and 2014 – an increase of 1%. See DUKES.
 DECC: Renewable Energy Planning Database
With just a few, smaller, power plant breakdowns and several days of wind failing to generate any significant amount of electricity, National Grid was forced to implement “last resort” measures on 4 November in order to safeguard domestic electricity supplies, despite the fact that temperatures were above normal for the time of year.
EDF Energy’s gas-fired power station at West Burton, in Lincolnshire, and GDF Suez’s coal-fired plant at Rugeley, in Staffordshire, were both unexpectedly out of action. The 490MW Fidler’s Ferry coal-fired plant, run by SSE, also experienced a “failure”.
The shortfall left National Grid engineers scrambling to meet demand.
National Grid confirmed on the Wednesday that it had, for the first time, used new emergency powers to pay factories to cut their electricity usage. They refused to say which businesses had reduced consumption but it is likely they would include energy intensive users such as refineries, smelters or steel foundries. The scheme is very profitable for businesses, which are paid up to £2,500 per megawatt hour for foregone consumption compared with a normal electricity price of around £50 per megawatt hour.
A ‘Notification of Inadequate System Margin’ (NISM), was issued at 1.30pm on Wednesday, the first time since 2011, requiring that “more generation to be brought onto the system”. It is reported that NG were buying in extra supplies from Eire, on top of maximised French and Dutch interconnector imports.
It is thought that National Grid are also having to call on very expensive Short-Term Operating Reserve (STOR) capacity, which includes dedicated diesel generator parks and back-up gas power plant which has been brought out of mothballs to bolster the thin capacity margin this winter.
The Times reports that, “Hundreds of millions of pounds worth of subsidies will be handed to highly polluting diesel-fuelled electricity generators, under plans to preventpower shortages over the next few years.” (See: ‘Short-term Operating Reserve’, below)
Meanwhile wind has been experiencing one of its periodic failures to make any significant contribution to national load.
A large low pressure system saw wind output failing over several days, falling as low as 130MW on 4 November.
German wind output in the same period was equally poor, even though Germany has over five times the installed wind capacity of the UK.
National Grid have long recognised that this is a widespread problem. Before the severe winter of 2010, when we experienced repeated, and extended, low wind events they noted that:
Recent history has shown that wind power output at the time of the winter peak can be very low. The winter peak normally occurs when temperatures are low and this often results from anti-cyclonic conditions that also mean very little wind. High pressure normally extends over a large area and this could mean there would be very little wind generation in Western Europe.
(National Grid, ‘Winter Outlook Report 2009/10’. ‘Generation Side Risks’, 167, p.54).
Centre for Policy Studies report, ‘The Great Green Hangover’, November 2015.
Commons Energy and Climate Change Committee: Security of supply hearing, 24 November. (See from 10:05, for National Grid contribution; some discussion on wind contribution from 11:38. National Grid team ran rings round the new committee).
‘Wind makes electricity expensive and unreliable without cutting emissions’, 13 November, 2015. Matt Ridley’s Rational Optimist Blog; includes text of his paywalled Times article (‘We’ve blown it by rushing towards wind power’) of 9 November, and comments on the incoherent diatribe it provoked by Chris Goodall and Mark Lynas in the Guardian.
‘Last week’s UK power price spike’, Timera Energy blog, 9 November, 2015.
‘Britain uses “last resort” measures to keep the lights on’, The Telegraph, 4 November, 2015.
‘Winter blackout fear as power chiefs are forced to use emergency back-up’, The Times [paywalled], 5 November, 2015.
‘Dirty diesel plants will receive huge subsidies’, The Times [paywalled], 4 November, 2015.
‘Madness On Stilts: UK Turns To Diesel To Meet Power Supply Crunch’, GWPF/FT, 4 November, 2015.
See also: ‘Short-term Operating Reserve’, below.
Even before the problems outined above, National Grid was warning that consumers would face additional bills for emergency measures to try and secure electricity supplies this winter.
The closure of more coal-fired power stations and the ongoing failure to replace them with reliable generating capacity have further decreased the security margin for UK energy supplies, leaving our electricity supply system more exposed to disruption than at any time for at least a decade.
National Grid say that, “Additional balancing services of 2.4 GW have been contracted for the winter period to be available to manage periods of peak demand. This includes 133MW coming from businesses who have signed up for reducing demand at peak periods if called on, in return for payment.”
This, and other measures, allow them to claim a margin of spare capacity this winter of 5.1%, compared with 6.1% last winter. But this has only been achieved by negotiating measures to cut power to factories, reduce supply voltages and by paying mothballed power stations large amounts to act as standby cover. Without these measures, the margin would be dangerously low, at 1.2%.
The Times states that, “power companies will be paid up to £3,000 per megawatt hour during shortfalls. The wholesale price is about £40 per megawatt hour. If National Grid is concerned about a shortage, it will issue an alert to power producers. Stations that can supply extra power will be paid the ‘triad price’ as a reward. Until this year, the triad price was capped at £300. Ofgem has raised it to provide an incentive for generators to maintain extra capacity. National Grid said measures would add only 50p to the average bills, but this did not include the triad prices.”
There is little prospect of things improving anytime soon, as fossil-fuelled generators come under increasing pressure from a perfect storm of emissions regulation, carbon taxes and market discrimination in favour of renewables.
We have already heard of 3 coal- and gas-fired power stations closing early in 2016.
This was before it was announced that the EU have introduced an Industrial Emissions Directive which further penalises British coal-fired power stations and the domestic coal industry. It is reported that UK operators will be not only forced to burn imported coal, but are saddled with nearly a million tonnes of UK coal which will be unusable after 1 January, 2016.
‘Households to pay for winter energy crisis’, The Times [paywalled], 16 October, 2015.
‘Winter Outlook report 2015/16’, National Grid, 15 October 2015.
‘EU ban on Britain’s “dirty” coal forces power stations into desperate sell-off’, The Times [paywalled], 5 November, 2015.
See also: ‘Short-term Operating Reserve’, below.
The Telegraph, 2 september, 2015.
‘A coal-fired power plant that produces 4pc of the UK’s electricity is set to close in March, increasing the risk of blackouts in winter 2016-17 and threatening the loss of 240 jobs.
‘The owners of Eggborough power station in Yorkshire announced on Wednesday that they had begun consulting with staff on closing the 53-year-old, 2 gigawatt (GW) plant, because carbon taxes and low wholesale power prices had made it financially unsustainable.
Sunday Express, 20 September, 2015.
‘A “shocking” military dossier reveals a catalogue of potentially catastrophic air safety incidents, many of them related to unlit turbines and new or uncharted developments.
‘However, the Ministry of Defence withheld more information on national security grounds meaning the real number could be much higher.
‘Last night, campaigners called for an urgent review of the mapping and lighting of wind turbines to prevent a fatal crash involving a low-flying aircraft.
‘The 59 near-misses were classified from negligible to high in terms of severity with 15 cases - most of them from RAF Lossiemouth in Moray - in the high-risk category.
‘One Sea King helicopter captain revealed that search and rescue crews were having to manually update flight charts to keep pace with the renewables industry.
‘He said: “Occasionally up to a hundred amendments per cycle are required to be plotted and this must be repeated on up to a dozen copies of some charts.
‘“If a chart is used by the aircrew or becomes dog eared that chart must be replaced and the amendments re-done.
‘“On average, over a thousand hand plotted and written amendments are required per month, taking many hours of work.
‘“Cumulatively over a period of months or years the task becomes mindless, very onerous and extremely prone to error.”
‘One third of the reports were made by pilots or ground crew from Lossiemouth, which is often used for low-level training flights over the Scottish mountains.
‘A hazard report filed in September 2013 concerned an uncharted 300ft wind turbine, adding: “It is of particular concern as it is on the Inverurie Heli Lane into Aberdeen.”
‘It also noted that a single turbine marked on their charts had been “developed into a wind farm with over 10 turbines”.
‘Others relate to temporary anemometer masts, which are erected to measure wind speed. One Sea King report said: “Over the course of a 5 day detachment to Glencorse Barracks, Edinburgh, several unlit anemometer masts up to approx. 200ft were sighted... The masts were thin and difficult to see by day, and would have been near impossible to see at night being unlit.”
Sunday Express, 4 October, 2015.
‘Light aircraft pilots have warned it is “just a matter of time” before wind farms cause a “disastrous” accident in Scotland.
There have been a number of fatal air-accidents involving wind industry sites recorded in North America. Most have involved collisions with unmarked anemometer masts.
See the Safety Page for more information.
Edie newsroom, 27 August, 2015.
‘As many as 73% of manufacturers want to see legislative reform of the UK's current environmental and climate change policies, according to a new survey by the manufacturers organisation EEF.
‘Respondents claimed that existing regulations are harming their international competitiveness.
On a number of occasions this summer we have seen high pressure systems over the UK and much of Western Europe, with a resultant collapse in wind power output. Unsurprisingly, these demonstrations of the intermittency of wind have not generated any press releases from RenewableUK, WWF Scotland and other wind industry interests which loudly advertise occasional ‘record’ surges in wind output.
The official record shows that the entire UK wind fleet, onshore and offshore was producing less than half the output of a single small gas-fuelled power station. This is not a major concern when we are experiencing low summer demand; it is different matter when we see the same conditions during peak winter demand. On 7 December 2010 the UK recorded its fourth highest load ever of 60,050 MW. The UK wind fleet, then with c. 5,200 MW headline capacity, was producing only 300 MW, a Load Factor of 5.8%. The largest turbine array in the United Kingdom, the 322 MW Whitelee scheme was producing 5 MW, a Load Factor of 1.6%.
Meanwhile, load factors in other European countries at the same time were also low. The German wind fleet was recording a load factor of approximately 3% (830MW/25,777 MW) and Denmark 4% (142 MW / 3,500 MW).
Recent history has shown that wind power output at the time of the winter peak can be very low. The winter peak normally occurs when temperatures are low and this often results from anti-cyclonic conditions that also mean very little wind. High pressure normally extends over a large area and this could mean there would be very little wind generation in Western Europe.
(National Grid, ‘Winter Outlook Report 2009/10’. ‘Generation Side Risks’, 167, p.54).
The records also show the inaccuracy of even short-term forecasting. This is a continuing problem in integrating wind power and balancing power supplies.
Many large turbine arrays are not only producing next to nothing during these weather conditions, they are often consuming, rather than producing, power. This is known as “parasitic consumption”.
German-owned energy conglomerate RWE innogy have a website which shows the output of their various renewables sites across Europe. In this screenshot, taken at 00.35am on 24 April, 2015, you can see that their 509MW greater Gabbard offshore array was recorded as consuming 4,880kW (4.88MW), rather than producing power.
Oddly, RWE Innogy’s output figures are expressed in kW rather than MW, which is the usual expression of commercial wind turbine power, and, in the form of MWh, the measure used by Ofgem in recording the output figures upon which subsidy is paid. It is especially odd when they, and all other producers, use MW to express a wind farm’s headline capacity.
One can only suppose that the output figures for many of their schemes are often too embarassing when expressed in MW!
The official long-term output figures for large wind arrays can be looked up using the ‘Large scale renewable generators’ page of REF’s excellent ‘Energy Data’ resource. Just use the search facility to find what you want within the listings and then click on the ‘RID’ to get the full entry.
Due to the failure of previous governments over a long period to maintain investment in base load generators, the security of UK power supplies remains at risk. Indeed, National Grid recently announced (see below) that the risk of blackouts this winter has increased, compared with a year ago. The closure of some power stations will have left spare capacity on the system at just 1.2%, the worst for a decade.
The grid is scrambling to secure extra supplies through the STOR system (see below), with additional payments of £36m to have mothballed gas plants kept on standby, and by paying for some industries to reduce demand during periods of high load. They are also experimenting with reducing voltages on the system.
(18 June, 2015).
The Government has announced that it is fulfilling its pledge to end the Renewables Obligation subsidy for new onshore wind projects by bringing forward the already planned cut-off date from 2017 to 1 April 2016. 
Onshore wind will still be eligible for support under the supply-based subsidy system known as ‘Contracts for Difference’, where suppliers bid for supply contracts.
Feed-in Tariffs, which offer a higher rate of subsidy than the Renewables Obligation for schemes up to 5MW capacity, are to be reviewed later in the year. Hopefully, the Government will use the opportunity to address the scandal of downrating turbines to qualify for higher FiTs rates (see below).
It has long been clear that the unplanned, subsidy-led wind rush was leading to an overshoot of government targets for onshore wind.  Indeed, Ed Davey, the Lib Dem Energy Minister in the Coalition Government, admitted in 2014 that already built and consented wind schemes would exceed the Government’s “11-13GW” 2020 target for onshore wind. 
A consequence of this overshoot will be that the Treasury limit on subsidy spending (the Levy Control Framework) is likely to be greatly exceeded:
Officials admit that over £9 billion a year will being paid by consumers by 2020, more than £1.5 billion above the maximum limit the Coalition had originally planned. The mounting costs will mean that every household in the country will be forced to pay an estimated £170 a year or more by the end of the decade to support the renewable electricity schemes that were promoted by the Coalition.
Tory ministers are said to be “angry” at the scale of the over-run. They blame the Liberal Democrats who ran the Department for Energy and Climate Change for the past five years for the failure to control renewable energy programmes. 
Notwithstanding these problems, the Government is offering a lifeline for a substantial capacity of proposals: “Up to 5.2GW of onshore wind capacity could be eligible for grace periods which the Government is minded to offer to projects that already have planning consent, a grid connection offer and acceptance, as well as evidence of land rights”.
There are also likely to be giving continuing support for ‘Community schemes’. In the past, many commercial wind schemes have attempted to present themselves as such by offering a small degree of part-ownership or the chance to buy in to projects.
Despite these generous terms, Lib Dem peers Lord Wallace of Tankerness (Jim Wallace) and Baroness Maddock (Lord Beith’s partner) and Labour’s Lord Whitty have jointly announced their intention to lead a motion to block Clause 60 of the planned legislation, which would see the key subsidy for new onshore wind farms cut from April 2016.
Greg Clerk, Secretary of State for Communities and Local Government, has issued a written statement clarifying the how the Government intends implementing its manifesto commitment to, “change the law so that local people have the final say on windfarm applications.” 
The proposed changes are possibly more important than the subsidy changes, which have attracted greater press attention. The Minister states:
When determining planning applications for wind energy development involving one or more wind turbines, local planning authorities should only grant planning permission if:
- the development site is in an area identified as suitable for wind energy development in a Local or Neighbourhood Plan; and
- following consultation, it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing.
In applying these new considerations, suitable areas for wind energy development will need to have been allocated clearly in a Local or Neighbourhood Plan. Maps showing the wind resource as favourable to wind turbines, or similar, will not be sufficient. Whether a proposal has the backing of the affected local community is a planning judgement for the local planning authority.
Where a valid planning application for a wind energy development has already been submitted to a local planning authority and the development plan does not identify suitable sites, the following transitional provision applies. In such instances, local planning authorities can find the proposal acceptable if, following consultation, they are satisfied it has addressed the planning impacts identified by affected local communities and therefore has their backing. 
The new guidance will result in even greater efforts by wind speculators to try and manufacture evidence of support from ‘affected communities’ and to influence planning officers who are now given unprecedented powers to judge whether, for existing applications, applicants have “addressed the planning impacts identified by affected local communities and therefore has their backing”.
The speculators’ efforts already embrace the hiring of PR companies to massage public opinion; the setting up of so-called community consultation committees prior to an application, with representation from parish/community councils and the planning authority; the overwhelming emphasis on so-called ‘community funds’ (not supposed to be considered as part of a planning application); the employment of the usual handful of eco-activists to gather signatures supporting a scheme (see the Dirty Tricks page).
 DECC press release
House of Commons, Written Statement (HCWS40) by: Secretary of State for Energy and Climate Change (Amber Rudd) on 18 Jun 2015. ENDING NEW SUBSIDIES FOR ONSHORE WIND (PDF download).
 DECC, Renewable Energy Planning Database (REPD).
 Letter to Mary Creagh, MP.
 ‘The $7.6 Billion Burden That Led Britain to Slash Green Subsidy’, Bloomberg, 23 july, 2015.
 ‘Green energy subsidies spiral out of control’, The Telegraph, 4 July, 2015.
 House of Commons, Written Statement (HCWS42) by: Secretary of State for Energy and Climate Change (Greg Clark) on 18 Jun 2015. LOCAL PLANNING (PDF download).
See also: Oral Statement by Amber Rudd, Secretary of State for Energy and Climate Change on ending subsidies for onshore wind, 22 June 2015.
Sunday Herald, 5 July, 2015.
‘Only six per cent of the 30,020 jobs projected to be created in Scotland by 2015 through the growth of the offshore wind industry have actually materialised, the Sunday Herald can reveal.
‘A 2010 report on the future of the sector commissioned by industry body Scottish Renewables forecast that, under the most optimistic scenario, 30,020 full-time equivalent jobs would be in existence by 2015 and that this number would grow to 48,554 by 2020.
‘But the most recent figures show that in 2013 just 1,842 people were employed in the sector in 2013: a figure that is unlikely to have changed substantially as no offshore wind farms have been built in Scottish waters since then.
‘Those 1,842 created jobs are however more than twice the number of the study’s worst case scenario projection of 741 jobs by 2015, but far short of the 17,076 estimated under a second “more moderate” development scenario and considerably less than the 5,346 projected under the study’s third scenario of the number of jobs that would be created by 2015 “if Scotland fails to capture the economic benefits of offshore wind development.”
ELECTRICITY GENERATIONBalancing Mechanism Reporting System (BMRS).