Wind power: quenching a fire with champagne

There is a game, in the style of Trivial Pursuit, where one card reads something like:

‘Paul extinguished the flames by pouring champagne over them. That was efficient. Right or wrong?’

The answer the player is supposed to give is: Wrong, it was effective, but not efficient. Paul could have achieved the same end by using water.

Too bad the colleagues at the IPPR don’t seem to understand this. It could have benefited their latest report on wind energy, supposedly a ‘myth-buster’ which shows how wind farm subsidies really provide terrific value for money.

The report provides several estimates of the CO2 savings achieved through wind energy. The precise figures vary because it depends on the assumptions we make on what exactly is being replaced by wind. If wind primarily replaces coal, a very carbon-intensive energy source, the savings are high. If it replaces a less carbon-intensive source, the savings are smaller.

It is difficult to see the point of this exercise, because nobody argues that wind energy is ‘ineffective’ in a literal sense. If you start with an energy portfolio of technologies with varying carbon intensity, and if you then insert a zero-carbon technology without increasing total energy production, then of course the overall carbon intensity will go down. That is almost by definition true, and almost by definition irrelevant. But the most common critique of wind energy, which the IPPR report fails to address, is that it is simply an extremely expensive way of getting CO2 out of energy production. The same goal, if we accept it for the sake of the argument, could be achieved at a fraction of the cost. Even The Economist, which normally shuts down its critical faculty as soon as something comes with the magic word ‘green’ attached, recognises:

‘If Britain wants to achieve its decarbonisation targets, it can do so – but by switching more of its energy generation from burning coal to burning gas. Trying to get there by a pell-mell fielding of the costliest renewables is pointless.’

Most economists favour a source-neutral carbon tax, a mechanism which affects the volume of CO2 savings, but which is neutral with regard to how these savings are being achieved. Market participants would try to make these savings in the least costly way. They would pick the lowest-hanging fruit first, and then successively work their way up the fruit tree, up to the point where picking another fruit would require so much effort that they prefer to just pay the carbon tax. Under a carbon tax, shifting from a conventional energy source to renewables would still be an option. It cannot be ruled out that some market participants would choose this approach; it is just very unlikely, because renewables are a meagre fruit hanging on a long and thin branch high up in the tree crown.

And that is exactly the reason why no country has adopted a neutral approach to carbon reduction: It might work, but not in the politically preferred way. At some point, we have ceased to see renewables as just one among many potential options for carbon reduction, and have started to attribute moral qualities to them. The share of renewables in a country’s energy portfolio is now almost taken as a barometer of how culturally advanced that country is.

If we read the IPPR report as an attempt to rationalise this sentiment, it starts to make some sense. But as a defence of wind energy subsidies on cost-effectiveness grounds, it is utterly unconvincing.

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

4 thoughts on “Wind power: quenching a fire with champagne”

  1. Posted 07/09/2012 at 10:44 | Permalink

    Yup, agreed. I have since been convinced that doing like France and going full-on nuclear is the way to go. Whether you go with Westinghouse’s quoted price of $1 billion for a 1,000 MW reactor or whether you times that by five for the usual British incompetence and over-spend, the payback period is rather less than ten years (assuming 12p/kWh), after that, it’s more or less free energy for a few decades until the decommissioning unpleasantness kicks off.

  2. Posted 07/09/2012 at 11:53 | Permalink

    or with a neutral carbon tax, you may not choose renewables at all. You might switch the lights off more often or put some insulation in the loft or switch the heating off in the bedrooms when the kids are away. They could start by charging VAT on fuel.

  3. Posted 07/09/2012 at 11:58 | Permalink

    Are you disillusioned by rising electricity prices, over dependence on the “green” dream [especially uneconomical and inefficient wind farms] and the destruction of our countryside then please object to the Government at

    or by GOOGLING “E-PETITION 22958” and following the link.

    Please pass this message on to Councillors, friends, neighbours and anyone else you know to persuade them to sign up too. If you are really concerned about wind turbines please write a letter promoting this petition to your local Newsletter and to the Editors of your local newspapers.

  4. Posted 07/09/2012 at 14:39 | Permalink

    “At some point, we have ceased to see renewables as just one among many potential options for carbon reduction, and have started to attribute moral qualities to them”

    This is the crucial point.

    That “switching more… energy generation from burning coal to burning gas” would reduce CO2 emissions ignores the fact that gas is a hydrocarbon and therefore gas is bad.

Comments are closed.