Move over wind farms: why some argue cutting costs is the best way to cut carbon
Move over wind farms: why some argue cutting costs is the best way to cut carbon
For many, the shift to renewable energy is a clear path to reducing carbon emissions. But for Gavin Tait, a 69-year-old from Glasgow, the journey has led to unexpected financial challenges. Tait, who proudly identifies as an early adopter of new technology, invested in solar panels, a home battery, and a heat pump during his retirement a decade ago. At the time, the decision seemed straightforward: “I could save money and help the environment—why not?”
Initially, the transition proved beneficial. His well-insulated home stayed warm, and energy expenses dropped. However, as winter temperatures plunged, the situation changed. “I noticed my electricity bills were going through the roof,” Tait says. This year, he and his wife reverted to using their gas boiler, which they had stored as a backup. He attributes the increased costs to the price of electricity, now around 27p per kilowatt-hour, compared to less than 6p for gas-powered boilers.
“It’s simple. Economically, it just doesn’t stack up,” Tait explains.
Gavin’s experience echoes a broader trend. A Censuswide survey conducted for Ecotricity last summer found that two-thirds of heat pump owners reported higher heating costs than before. For critics of government policy, this highlights a growing concern: the focus on decarbonizing electricity may be overshadowing progress in heating and transport, which together account for over 40% of the UK’s emissions.
They argue that ministers are prioritizing the cleanest energy sources, even though electricity generation contributes only about 10% to total emissions. This emphasis, they claim, has driven up electricity prices, making it harder for households to switch to renewable alternatives. The issue has become more pressing with rising oil and gas costs due to Middle Eastern conflicts, fueling fears of prolonged high energy bills.
The government maintains that its strategy ensures greater energy security by reducing dependence on imported gas. It also claims the move lowers emissions and eventually cuts bills. But is this the right approach? With progress in heating and transport lagging behind targets, some question whether the focus is misplaced.
The Hidden Costs of Renewable Systems
Sir Dieter Helm, a professor of economic policy at Oxford University, offers a different perspective. When asked about the cost of renewables, he laughs. “It all depends what you choose to measure,” he says. Helm argues that concentrating solely on generation costs overlooks the system’s broader expenses.
Electricity must be consistently available, not just when the wind blows or the sun shines. This necessitates backup power, extra capacity, and a more expansive grid. Helm provides a simplified example: the UK’s peak electricity demand is about 45 gigawatts (GW). Historically, this could be met with 60GW of coal, gas, or nuclear power. But as the system transitions to renewables, capacity needs have more than doubled, reaching an estimated 120GW.
Expanding the grid to accommodate offshore wind farms has already increased network charges. Balancing costs—such as payments to wind farms to curtail production during overcapacity—are also rising. Meanwhile, a subsidy program once accounted for roughly 10% of the average household bill.
While solar power has become cheaper through mass production, the UK’s often cloudy winters limit its effectiveness. Offshore wind, though a key renewable resource, is more costly to harness. These factors, Helm suggests, mean the system’s overall cost is not as simple as the price of electricity alone.
