Dodgy digits in the fight against renewables

Simon Bullock

07 November 2011

In the ongoing battle to do as little as possible about tackling climate change, a new argument has been deployed in recent months - that investment in renewables is somehow an expensive luxury we just can't afford.

Of course, it's right to look at the costs of different options, but the slew of recent reports on this issue are taking a partial view of the relative merits of renewables versus other technologies like gas and nuclear - or often misleading people on the true costs of climate change policies.

The latest is a new report by KPMG, apparently due to feature in tonight's Panorama, and quoted in yesterday's Sunday Times saying that investing less in renewables could save £34 billion by 2020.

But there are major flaws in using these figures to justify slashing investment in renewables. Here are two:

First, this figure is only about capital investment - building the infrastructure. But a gas-fired power station also needs fuel to make it run, whereas wind is free. Gas costs have spiralled in recent years, and are set to continue to rise. Any fair comparison of gas and wind must include running costs, not just capital spending.

Second, investment decisions now will last 30-40 years. Looking just to 2020 - nine years away - is dangerously short-sighted. The Government's independent advisor on climate change - the Committee on Climate Change (CCC) - is clear that we need the electricity sector to be decarbonised by 2030. Gas is nine times more carbon-intense than the CCC's target for average electricity emissions in 2030. If by 2020 we hadn't build renewables but used more gas, we would need to fit those gas-fired power stations with Carbon Capture and Storage in the 2020s - that would add to the capital costs, again heavily weakening the "no renewables" case.

More on this when the details of the KPMG work come out tomorrow.