Wednesday, August 08, 2012

Edinburgh Professor pans wind energy costs

Gordon Hughes is Professor of Economics at Edinburgh University.

His recent submission to the House of Commons Energy and Climate Change Committee is not very complimentary about the economics of  investing in wind energy.  A couple of paragraphs from the executive summary illustrate:
[Capital Investment] "Meeting the UK Government’s target for renewable generation in 2020 will require total wind capacity of 36GW backed up by 21GW of open cycle gas plants plus large complementary investments in in transmission capacity.  Allowing for the shorter life of wind turbines, the investment outlay for this Wind scenario will be about £124 billion.  The same electricity demand could be met from 21.5 GW of combined cycle gas plants with a capital cost of £13 billion - this is the Gas scenario."
[Revenue costs] "Wind farms have relatively high operating and maintenance costs but they require no fuel.  Overall, the net saving on fuel, operating and maintenance costs for the Wind scenario relative to the Gas scenario, is less than £200 million per year, a very poor return on an additional investment of over £110 billion."

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