Has the Sunday Telegraph revealed the ‘true cost’ of windfarms?
Every British wind farm job is subsidised to the tune of £100,00 per year, according to the the Sunday Telegraph. In a story the paper says reveals the “true cost of wind farms”, the paper says its analysis undermines the wind industry’s claim to generate both energy and economic growth. Carbon Brief examines the claims.
According to the Sunday Telegraph’s front page, new analysis shows the wind industry received £1.2 billion in subsidies – paid for by levies on consumer energy bills – over the last year. Split over 12,000 people – the number of people the industry employs – the article says this sum equates to an “effective £100,000 subsidy on each job”. An accompanying editorial says this “is an astonishing figure”.
How much does wind power cost consumers?
According to anti-wind organisation the Renewable Energy Foundation (REF), the Sunday Telegraph used its database to calculate that wind farms received £1.2 billion in subsidies last year.
The database – based on figures from energy regulator Ofgem, according to REF – breaks down the subsidies received by every wind farm in the country. It indicates the government issued 24.6 million renewables certificates for wind power under the Renewables Obligation (RO) scheme between 2012 and 2013. As REF assumes every certificate costs consumers £50, this brings the total consumer cost to £1.2 billion.
According to a report by energy regulator Ofgem, 20.5 million RO certificates were issued for wind power in the 2011-12 financial year. So the estimate of 24.6 million over a slightly different twelve month period could be right.
But Ofgem’s data raises questions over REF’s estimate of £50 per RO certificate. A spokesperson for the regulator tells us that for 2011 to 2012, it would put the cost to consumers at £42.27 per certificate, rather than £50. The calculation is inevitably something of an estimate, as the scheme is quite complicated. What’s more, Ofgem doesn’t have figures right up to 2013. It seems possible, however, that REF’s estimate is at the high end.
How many jobs does wind power create?
The second part of the calculation is the estimate that the wind industry employs 12,000 people.
Industry group RenewableUK (RE-UK) calculated last year that in April 2012 the wind industry directly employed 12,242 people.
This number doesn’t include indirect employment, such as jobs in manufacturing wind turbines, or supplying the raw materials needed. RE-UK estimates that if these indirect jobs are included then the wind industry could provide an extra 5,000 jobs across the sector.
So what does this mean?
The RO has been criticised before as an inefficient mechanism for supporting renewable energy. But in an attempt to create a media-friendly top-line figure, the Sunday Telegraph appears to have relied on high-end estimates for how much it costs – and a somewhat pared down estimate for the number of jobs generated.
The calculation is also rather simplistic, and ignores any other benefits wind power brings to society. For example, wind turbines generate power for the National Grid, providing just over five per cent of the country’s electricity in 2012. Generating power from an alternative source – for example gas or coal – could also cost the country money. According to the Organisation for Economic Cooperation and Development in April, the UK government’s subsidies to fossil fuels actually increased by £500 million between 2010 and 2011 to £4.3 billion of support.
Finally, generating electricity from wind power reduces greenhouse gas emissions. The Sunday Telegraph doesn’t seem that convinced that reducing emissions is a good idea, however – arguing somewhat grudgingly that it might be a good idea “in an ideal world”.