By Paul Homewood
Sometimes simple is best!
NESO have conveniently listed their estimates of the capital expenditure needed for Ed Miliband’s Clean Power 2030 mission:
https://www.neso.energy/document/346781/download
Over the five years, they reckon a total cost of £242 billion.
Mere chicken feed!
As we will still need a full fleet of gas power stations, the only offsetting savings will be the fuel savings for them.
Government projections say that the price of natural gas will be around 70p/therm in the next decade, equivalent to £24/MWh. Given fuel efficiency of 53% at a CCGT, the fuel cost would therefore be about £45/MWh of electricity generated.
Currently they say generate about 84 TWh of gas power a year and the Clean Power plan will knock this down to 15 TWh. The annual fuel saving will therefore be £3.1 billion. However the operating costs of offshore wind are estimated at £19/MWh, meaning that the net saving would only be £1.8 billion.
https://www.gov.uk/government/publications/fossil-fuel-price-assumptions-2024
And we have not even looked at the cost of capital – ROC of, say, 8% would cost £19 billion a year.
The current fleet of CCGTs won’t last forever, of course, but Miliband will still need to pay to replace these anyway, whether like for like, or with CCS gas power or hydrogen. And in twenty years time, we would be facing another £200 billion to replace the worn out wind turbines and solar panels.
It does not take a genius to work out that these numbers don’t stack up! Even if gas prices were to double, the equation would not alter.