The precipitous drop in the price of electricity from offshore wind turbines should be a tipping point for green technology. In 2014 the current generated by a forest of giant whirling fans out at sea was priced at around £150 per megawatt hour. In the latest auction this week the comparable cost dropped as low as £57.50/MWh. Even when the cost of providing back-up capacity for still days is added, the cost of producing energy from offshore wind is little more than £70/MWh. Compared to the new Hinkley C nuclear plant which produces electricity at a cost of £92.50/MWh, one has to wonder whether as a nation we should persist with nuclear energy as an option to reduce our greenhouse gas output.
Hinkley looks like a dinosaur even before it arrives on earth. It’s unclear whether the unproven design will ever get built. If it does, the cost of complying with safety and anti-terrorism standards may well be prohibitive. Hinkley was conceived when the conventional wisdom was that we would start to run out of hydrocarbons. Fears of a runaway price for oil and gas now look overheated. The government has however supported plans to install a nuclear power plant, backed by French and Chinese state operators, costing £18bn. Nuclear power has a trump card: it is a zero-carbon technology which delivers a continuous, uninterrupted supply. This may be a consideration in the years ahead if the UK banned petrol engines and only allowed electric cars. Imagine, say nuclear fans, the surge of demand when everyone got home and plugged in their motors. But we are not there yet.
Driving all this is Britain’s Climate Change Act, which stipulates that by 2050 the country’s net emissions of greenhouse gases should be 80% lower than in 1990. The latest “carbon budget” sets a cap on emissions between 2028 and 2032 and requires a 57% reduction in emissions by 2030. In this piece of work it was recommended that the power sector reduced the amount of carbon produced per unit of energy to less than 100g of carbon dioxide per kilowatt hour. It also considered what would happen if the UK decarbonised without nuclear power and calculated that this carbon intensity limit would be breached by 20%. But the committee did not envisage how quickly the cost of electricity generated by offshore wind would fall, which suggests a greater role for it at the expense of nuclear power.
So it is worrying that we have not heard a whisper from ministers about a clean growth plan to meet emission targets that takes into account the cost-effectiveness of wind. Instead, onshore turbines are currently banned. The last round of offshore wind contracts spent less than two-thirds of the budget allocated. Auctions for solar power last took place in 2015. Experts warn of a palpable chilling of the investment climate for renewables in the UK. Amazingly, under current plans nuclear spending will rise to five times that of offshore wind by 2025. Ministers are looking at nuclear deals with Japan and South Korean firms. Facts should drive Britain’s energy plans, not wishful thinking about sugaring putative trade deals in Asia once the UK leaves the European Union. Policy needs to boost, not restrain, renewables. Economics has sealed the fate of redundant technologies before: last year, thanks to a carbon tax – for the first time – the UK generated more electricity from wind turbines than from burning coal. Greenhouse gas emissions in the UK have now fallen to levels barely seen since the reign of Queen Victoria. In the coming weeks ministers must open the door to a greener, cleaner future where Britain meets greenhouse gas targets without more expensive nuclear plants.