With the media warning that wind farms will cost the taxpayers £17 billion in energy costs, its time to put some reality into the spin. J.K. Galbraith, the esteemed economist, wrote in The New Industrial State that the social cost of monopolistic industrial power is a decrease in efficiency. It impacts the equity of income distribution. Achieving efficiency in electricity generation and transmission is what saves us money. Efficiency creates value by saving time, effort and resources.
Cambridge Econometrics has estimated that offshore wind will be only slightly more expensive than gas by 2030. An important factor in these calculations is that the cost of generating electricity from gas is dependent on the availability of gas resource into the future. Fracking, should drilling be undertaken, will only resolve supply constraints in the short term. As supply declines, the cost will increase. Offshore wind has the potential to provide us with 80% of our electricity needs. The fuel is the wind, which costs us nothing. The costs to maintain these whirling wind catchers are coming down each year as the turbines improve in design and power output. The Telegraph claims that offshore wind will add an additional £35 per year to our energy bills. Their maths were based on household consumption only. As Greenpeace’s EnergyDesk points out, households account for only 30 per cent of electricity consumption, so it is unlikely that they will bear all the cost directly. According to Greenpeace the figure is closer to £9.80.
Nuclear power uses uranium processed into fuel rods to power a steam turbine. The turbine generates electricity at up to 38% efficiency. This electricity is transmitted over the national grid where up to 67% of the electricity is lost before it is delivered to the end consumer, making nuclear power about 25% efficient. The heat generated by nuclear power is completed wasted, it is emitted though the stacks into the air and through pipes into the sea, including other particles including small quantities of radioactive isotopes that are harmful to human health. When the fuel rods are spent, they must be stored safely for thousands of years. This can be on site, or transported across the country to another location. Since transportation of radioactive materials is a matter of national security, the process is closely policed until the material is stored. These processes cost dear and are funded by the taxpayer. Nuclear power continues monopolistic industrial power and prolongs an inefficient power supply system.
So what are the alternatives? Were the investment required to support the nuclear industry spent on creating a sustainable, reasonable and economical energy infrastructure, we would be looking at a completely different future. Energy generation would be decentralised. Communities would become energy generators, taking the provision of electricity and heating into their own hands by owning their own energy supply and receiving the benefit of the efficiency created.
In 2008, when Solar PV efficiencies averaged about 16%, the total estimated capacity for solar electricity in the UK was 460 TWh per year. In 2010, the UK produced 381 TWh of electricity. Today solar PV efficiencies have increased to 21% and costs have cut in half due to increasing international production, making solar PV a low cost alternative to fossil fuels.
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