'Old Sparky' - Private Eye 14-27 November16 Nov 2025 14:40
In a long overdue move, wildly over-optimistic government assumptions about how much electricity can be relied on from intermittently generating windfarms have been reduced by about 30 percent – with big consequences for energy secretary Ed Miliband’s 2030 decarbonisation plan.
The downgrade makes wind power much less attractive as a contributor to decarbonisation. Costings will now need to recognise the need for more gas-fired generation to make up the difference, while the correction also ups the pressure to build more wind farms.
These insights have emerged from the damagingly delayed “AR7” auction of subsidies for renewable energy projects. Wind power is by far the biggest category of projects bidding for government bungs and, as Eye 1647 revealed, the six-month delay arose from belatedly identified technical c*ck-ups in the budget-setting in last year’s AR6 round.
Of key importance are assumptions made on the future price of wholesale electricity, needed to budget for the subsidies given to windfarms and other renewable energy generators. The subsidies come as a top-up paid to generators when future wholesale prices fall below a pre-determined level. Miliband continues to assert, against most expert opinion, that his decarbonisation plan will reduce wholesale prices significantly. This is the doctrinaire assumption he’s doggedly used in AR7 budgeting (though he’s wisely reticent these days on what RETAIL prices we’ll pay).
But here’s the catch: Miliband’s lower wholesale price assumption means higher top-ups and less money in the budget for more windfarms and other such projects. A higher, more realistic wholesale assumption means less money needed for top-up bungs and more for those new windfarms – but only if he drops his singular insistence that renewables will bring prices crashing down.
We won’t see the results of the tortuous bung auction until February. The current official rationale for the whole 2030 decarbonisation endeavour is unlikely to survive AR7, But will Miliband himself survive in office?
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No chance that the public will understand this. Ed keeps digging. "He who pays the piper calls the tune," - that's the public (bill payers) and Rachel, NOT Ed. Hopefully he's losing the trust of both!
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