From the mouths of snake oil pedlars . . .
THE POLITICS OF LYING
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Intro by Steve Cook
I am featuring the following excellent article from Eigen Values because it highlights the degree to which politicians are perfectly willing to lie to you to obtain your “support” for whatever lunacy their globalist puppet masters wish them to inflict on you.
In this instance, the lying and calculating deception comes from the Labour Party’s Ed Milliband. The report shows that these are not small fibs but a whopping, calculating deceit that if believed by the public will provide Labour with a specious mandate for policies guaranteed to wreck the economy even more than the Tories have already wrecked it and push the country’s citizens deeper into poverty.
Of course, a mandate based on the deliberate disinforming of the People is not really a mandate. It is a con job and treasonous act masquerading as a mandate. Unfortunately by the time we wise up to it, the maniacs responsible will be running the government and wreaking upon the nation whatever deprivations their globalist overlords see fit.
But who will turn out to be the biggest liars? The Tories or Socialists?
It will be a close-run thing.
The basic truth we all need to understand is that we cannot afford to take on trust any utterance from politicians of either major party.
The day we force our politicians to get honest and straight is the day our nation will truly start to flourish and prosper.
Shonky Reports from Wonky Wonks
Snake oil politicians peddling shonky reports from foolish policy wonks.
by DAVID TURVER
SOURCE: Eigen Values
Introduction
Energy Policy is not front and centre of this election campaign. However, Ed Miliband took to Twitter/X last week to claim that a report cited by Claire Couthino, the Energy Secretary supported his claim that Labour’s 2030 clean power plan would save people money on their energy bills.
As a reminder, the Conservatives have set a target to decarbonise the grid by 2035 (NZ2035) and Labour want to accelerate that by five years and deliver a Net Zero grid by 2030 (NZ2030). Time to dig into the report, examine Ed’s claim and the accuracy of the analysis.
The Policy Exchange/Aurora Decarbonising the Grid Report
The report in question was published in March 2024 by the Policy Exchange who acknowledge the modelling work was carried out by Aurora Energy Research. The report and associated slide deck and data book can be found here. Policy Exchange describe themselves as the most influential think tank in the country. Aurora was founded by some professors from Oxford University and claims it is the largest dedicated power analytics provider in Europe. However, as we shall see below, it looks like doubling the brains on this report has halved the collective IQ.
Problems for Ed Miliband
The first problem for Ed is that the consumer costs in the quoted post from Aurora Energy Research cannot be found in the report, slide deck or data book. At the bottom of their thread, they do say you can get in touch if you have any questions. I did reply to their tweet thread asking what they meant by “total consumer costs” and how they arrived at them. Sadly, I have not received a reply.
The second problem for Ed is much more substantial. The slide deck says on page 6:
“Technological and policy barriers are unlikely to be overcome to reach Net Zero in the power sector within the timescales of current political targets.”
In other words, we are unlikely to hit a Net Zero grid by either 2030 or 2035. They go on to say on page 25:
“Further accelerating Net Zero in the power sector to 2030 requires more extreme policy action and is likely to be out of reach.”
To give a flavour of how unfeasible both plans are (see p19 of the slide deck), to achieve NZ2035 requires the pace of offshore wind deployment to accelerate by a factor of three, from about 1GW per year to 3.2GW per year. However, the pace of offshore development needs to increase 6-fold to meet the NZ2030 target.
In other words, a net zero power grid by 2030 is simply not going to happen.
More Problems with the Decarbonising the Grid Report
However, the headlines are only the start of the problems for Ed Miliband and for the Policy Exchange and Aurora.
Missing Grid Costs
The Aurora slide deck (p28) says that to achieve a Net Zero grid by 2030, we will need to spend £116bn on wind and solar capacity up to 2035. As an aside, they also say we would need to spend a little less or £105bn to achieve the same thing by 2035.
However, despite acknowledging that the extension of the transmission grid must be accelerated, they appear to have glossed over the costs of this grid expansion. The National Grid ESO has announced £54bn of spending on the electricity transmission infrastructure up to 2030 and a further £58bn in the 2030-2035 period, a total of £112bn. These extra grid expansion costs broadly double Aurora’s cost estimates. Moreover, given that there is expected to be additional demand on the grid from electric vehicles and heat pumps by then, even more spending on the distribution network is likely to be required.
Missing Generation Capacity Costs
The Aurora slide deck (p7) indicates that to achieve a Net Zero grid by 2030 or 2035, then extra generation capacity will be required in technologies such as BECCS, gas with carbon capture and storage (CCS), hydrogen gas turbines and both long term and battery storage.
However, some of these technologies do not yet exist (BECCS and gas + CCS) or are extremely expensive (hydrogen and battery storage). Yet, they have not included a cost for this extra spending.
Unrealistic Costs of Renewables
The capital cost estimates they use for renewables are also unrealistically low. Working through Section IV of Aurora’s databook, their assumed capex per GW of installed capacity can be calculated.
They indicate that to hit a Net Zero grid by 2030, a total £116bn will have to be spent on renewables capacity by 2035 (p28), with £93.5bn of this by 2030. This spend would deliver 26GW of solar power, 12.5GW of onshore wind and 36GW of offshore wind. The bulk of the money, nearly £70bn of the £93.5bn will be spent on offshore wind.
They indicate an additional 36GW of offshore wind would need to be installed by 2030, giving a spend of £1.9bn/GW of capacity. By way of comparison, the 3.6GW Dogger Bank offshore windfarm is currently under construction and in 2021 was estimated to cost £9bn, and in December 2023, the cost estimate had apparently increased to £11bn. This gives a cost per GW of £2.5bn/GW (2021) or £3.1bn/GW (2023) which are 29%-58% more expensive than Aurora’s assumption. Dogger Bank A was awarded its Contract for Difference (CfD) at £39.65/MWh (2012 prices) in AR3. Since then, strike prices have gone up considerably with developers being offered £73/MWh (2012 prices) or £102/MWh (2024 prices) for new offshore wind in this years’ AR6 auction.
Moreover, even Aurora say that the CfD subsidy scheme needs to be updated to prioritise securing capacity over price competition. Any way you look at it, Aurora’s estimates are way too low.
Similarly, Sneddon Law onshore windfarm recently came online with a reported spend of £50m to deliver 30GW of installed capacity. This works out at £1.7bn/GW, some 70% above Aurora’s assumption of about £1.1bn/GW.
In addition, Aurora assumes that 26GW of solar power will be delivered by 2030 at a cost of £10.8bn. This is around £415m/GW. However, the most recent Government figures show the median cost of installing solar panels for 10-50kW installations was £1,376m/GW in 2023 or more than three times Aurora’s estimate. Larger solar farms may well be cheaper, but they are unlikely to fall to anywhere near Aurora’s estimate.
In summary, Aurora’s cost estimates for new renewables are ridiculously low, meaning their overall spending estimate is similarly too low.
Fantasy System Costs
Aurora’s report does not repeat the claim in their tweet about consumer costs being £109/MWh in a Net Zero by 2035 scenario or £107/MWh (or 10.7p/kWh) if we achieve a Net Zero grid by 2030.
However, we can challenge these numbers in two ways. First, if we spend more money earlier in the NZ2030 scenario than in the NZ2035 alternative, then any discounted cashflow model would put system costs higher under NZ2030.
In addition, the latest Ofgem price cap is 22.36p/kWh plus 60.12p daily standing charge. For a typical household usage of 2,700kWh per year this works out at a total cost of 30.5p/kWh or 2.8 times Aurora’s NZ2030 calculation.
The current day ahead wholesale price for electricity, set by gas is £73/MWh or 7.3p/kWh, so the full retail price is approximately 4 times that of the wholesale cost. The basic CfD cost of currently installed offshore wind CfDs is around £145/MWh or 14.5p/kWh.
The idea that total retail prices can fall by two thirds and come in below the current price of offshore wind after a further spend of £2-300bn or so by 2030 is clearly for the birds.
Conclusions
Aurora is assuming costs for renewables that are a fraction of what we know apply in reality. They have also left out the costs of grid upgrades, BECCS, hydrogen storage and carbon capture. There are hundreds of billions of pounds missing from their analysis. The cost savings they claim are completely spurious.
It would not be surprising if the actual cost of delivering a Net Zero grid by 2030 is three times Aurora’s estimate once realistic costs are considered. The total consumer cost estimate from Aurora is clearly an untruth based on fantasy assumptions that bear no resemblance to reality.
It is not easy to be sympathetic to politicians, however, when they are fed shonky reports from thinktanks that purport to be the most influential in the country, it easy to see how they become caught up in Net Zero mania.
However, when Ed Miliband seeks to use the report to claim his Net Zero grid by 2030 will save money when such a shonky report clearly warns his plan is “likely to be out of reach”, then any sympathy that might have been due rapidly evaporates.
Our democracy is in real trouble when misleading and false claims are made to justify policy action when the reports those claims are based on are built on such dodgy assumptions.