Wind energy costs four times more in UK than Brazil

December 16, 2013 by  
Filed under Green Energy News

  • UK families pay £95 per MWh for wind, compared to £27 MWh in Brazil
  • Damning report by Policy Exchange urges government to slash costs
  • Energy Minister Michael Fallon is set to unveil detailed plans about how to make subsidies more competitive

By
Gerri Peev

20:34 EST, 15 December 2013


|

04:36 EST, 16 December 2013

Britain pays four times as much for its wind energy as Brazil, thanks to uncompetitive subsidies.

A damning report from the Policy Exchange urges the government to hold the wind industry to its pledge to slash costs by the end of the decade.

UK families are paying £95 per MWh for onshore wind, compared to £27 MWh in Brazil, according to its report.

Gap: UK families are paying £95 per MWh for onshore wind, compared to £27 MWh in Brazil

Gap: UK families are paying £95 per MWh for onshore wind, compared to £27 MWh in Brazil

It argues that the government should hold an auction of renewable technologies to allow the industry to compete for state support.

This could start as early as next year for projects which would begin in 2017.

Currently, ministers only plan to introduce energy auctions in 2018 for projects that will be commissioned after 2020.

But this week Energy Minister Michael Fallon is set to unveil detailed plans about how to make subsidies more competitive.

Announcement: Energy Minister Michael Fallon is set to unveil detailed plans about how to make subsidies more competitive this week

Announcement: Energy Minister Michael Fallon is set to unveil detailed plans about how to make subsidies more competitive this week

Critics fear this could mean more onshore windfarms by the backdoor as they are cheaper to run compared to offshore wind, which costs about 50 per cent more to generate.

But government sources insisted that the plan will make it more difficult for the onshore windfarms to get state handouts because they will be subject to a ‘constrained allocation’.

In Brazil, prices for onshore wind have dropped to world record lows since auctioning was introduced.
But in Britain, ministers are much keener on more expensive offshore wind because it is less politically controversial.

While onshore windfarms trigger fury from local communities due to their visual blight and noise, offshore windfarms are far away enough from homes not to spark protest.

But offshore wind is about 50 per cent as expensive as onshore wind, with a strike price of £155 MWh.

The most expensive technologies are tidal and wave power, which cost around £305 MWh.

Simon Moore, author of the report said: ‘The government needs to act more ruthlessly to reduce household energy bills by cutting state support for renewable technologies that do not come down in price.

He added: ‘Offshore wind may play an important role in our future energy mix. But it should not be given favourable treatment at the expense of other low carbon technologies which could reduce our carbon emissions at a much cheaper price.’

The report said of offshore wind, that ‘at its current costs it is simply too poor value an investment to be allowed to continue much longer’.

The Policy Exchange also called for the government to abolish the EU Renewable Energy Target which it said imposed unnecessary costs on Britain’s energy.

In its report, it said: ‘While the renewable energy target exists, introducing effective means of competition, or of cost-control more broadly, is seen as impossible. The legally-binding target makes no allowance for the potential high expense of meeting it.’ 

Future: Currently, ministers only plan to introduce energy auctions in 2018 for projects that will be commissioned after 2020

Future: Currently, ministers only plan to introduce energy auctions in 2018 for projects that will be commissioned after 2020

The EU Renewable Energy Target decrees that 15 per cent of all energy in the UK – or 30 to 35 per cent of electricity – is generated by renewable sources by 2020.

But emissions from the electricity sector are already capped by a separate European Emissions Trading System.

Average electricity bills are already £563 a year, out of a total dual fuel bill of £1255.

By 2020, this will rise to £598 out of a total bill of £1331. Various renewables targets are already contributing to £37 of this rise, and will account for £110 in 2020.

‘A policy that imposes higher-than-necessary costs risks failing if public support is lost,’ the report said.

Part of the reason for Brazil’s low wind energy prices has been put down to unusually high wind speeds, a surplus of wind turbines and hidden incentives.

Its wind turbines have much better capacity of up to 65 per cent, compared to up to 35 per cent in the UK and much of Europe.


Comments (56)

Share what you think

The comments below have not been moderated.

JustAnotherPasserby,

London,

8 hours ago

taxpayer pays through the nose because of Labour’s green taxes.

Truth Hurts,

preston, United Kingdom,

11 hours ago

The Favelas should be thankful they dont have our bills then eh,

Cheddarcakes,

Here and there, United Kingdom,

12 hours ago

Wind and all green power isn’t about cheaper electricity for consumers it is about lining the pockets of wealthy city investors. Another job well done from the government screwing us over

Smujsmith,

Pig-atop-the-hill, United Kingdom,

12 hours ago

When you have a government of millionaires, with relatives who have “vested interests”, there’s no surprise that we British natives are being ripped off yet again. This government will do what they need to do to ensure the companies keep making huge profits, without a care for the rest of us. A program of building smart coal stations, and reopen the mines would provide energy and work, whilst making use of the 300 years worth of natural reserves under our feet.

Rod52,

Leicester, United Kingdom,

11 hours ago

Apparently Britain sits on 3000+ million tonnes of coal reserves, we should follow Germany’s lead and start using it again, but I doubt we will as the ‘eco-lobby’ are getting very rich at the expense of the poorest in society! Where will they turn when the public have been all but ‘bled’ dry. That time is fast-approaching!

Poppy Clarke,

Croydon, United Kingdom,

11 hours ago

Come on this is how it works in the Tory world. These companies give generously to the party funds they expect pay back. You can’t reopen mines the men who worked there had to be punished for opposing Maggie and joining the unions. You can’t have unions uniting the poor and low paid it would mean the wealthy would lose some of their privilefged lifestyle

Spencer I. Mather,

Bradwell-Great Yarmouth,

14 hours ago

Why am I not surprised, with the politicians that we have to-day nothing surprises me..!!!

Irene,

Glasgow, United Kingdom,

14 hours ago

Time we only had MP’S who could run country e.g chancelor with financial experience.
Every post should have someone with qualifications that they need to run that post.

Irene,

Glasgow, United Kingdom,

14 hours ago

Aye get your OWN damn house in order before you squeeze us for any more cuts

Tim Coleman,

Nottingham, United Kingdom,

15 hours ago

It’s just jobs for the boys having said that your run of the day Eco warier doesn’t care because not polluting the planet unless of course you take into account the manufacture of the things.

Mark,

EUSSR, United Kingdom,

15 hours ago

Why we have to put up with these ghastly things and pay more,why am I not surprised?

E.J.C.,

Basingstoke, United Kingdom,

16 hours ago

When you look at who realy ownes our energy companies (not the holding companies, dig as little deeper than that) you will understand that they have no interest at all in cheep renewable energy. We have seen all kinds of dubious research telling how ineficient it all is, when you look at the the same research presented in some other countries (ones that have no ties to Big Oil companies) it tells a whole new story. Time to wake up and direct some of this anger towards change sheeple..

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Who is this week’s top commenter?
Find out now

Comments are closed.