17th October 2017

Energy reality check (John Tulloch)

In the same week when the UK government was cracking down on energy costs with a price cap proposal, we had the extraordinary, simultaneous announcement that it will support – vicariously, via UK consumers’ pockets – island wind energy projects?
Viking Energy (VE) proponents are, needless to say, bursting with delight and while not wishing to pour cold water on their untold riches fantasy, a reality check is in order.
In a recent article on Lord Ian Duncan’s (Con.) gushing support for island renewables (shetlandtimes.co.uk, 22nd September and The Shetland Times 29th September), he was quoted as saying:
“What we’re trying to do is have islands defined as ‘islands off-shore’… which allows us to make a little bit of progress on that, in terms of the funding arrangements…”
He was alluding to the hitherto unsuccessful attempts to establish an “island strike price” (£115/MWh) that VE proponents claimed was essential to ensure viability.
As in the recent Tory election manifesto, he was vague about the precise nature of the promised support and on 23rd September, I posted the following questions below the online article:

1. “What size of cable is the UK government supporting?”
2. “Will the island strike price apply?”
3. “Will UK consumers pay for the grid connection?” Or,
4. “Will VE simply be allowed to enter the next offshore wind auction?”

We now have the answers:

1. The UK government has not committed to support any cable.
2. The island strike price will not apply.
3. There is no commitment to force English and Welsh consumers to subsidise the £1.017 billion grid connection.

However,

4. VE will, simply, be allowed to enter the next round of UK offshore wind auctions.

The problem with this is that the winning bids in the last round came in at £57.50/MWh, half the price VE claims is essential for viability, even before the £1 billion grid interconnector is considered.
Ah but…, the government has pledged to commit £557 million in grants for “future projects”? Indeed – “free beer, tomorrow”, with the obvious, unstated condition that Scottish independence must first disappear from the political radar. Which it won’t.
Of course, given that Holyrood is so keen on promoting island renewables, an independent Scottish government will, no doubt, ensure that Scottish consumers/taxpayers fork out the same £557 million?
In a pig’s ear! Dream on.
Ultimately, all this will achieve will be the further steady drain of charitable trust funds into VE, financing continuing pursuit of a “Rainbow’s End” fantasy that recedes by precisely one step for each and every step taken towards it.
Meanwhile, expect the proposed 60MW cable to Caithness to be installed, Peel Energy’s Mossy Hill wind farm to be built and the Lerwick Power Station to close, at a cost to UK consumers of £376 million in additional, unnecessary subsidies.

John Tulloch
Lyndon,
Arrochar.

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