A RESPONSE to a letter by Jon Tait appeared on February 16, written by David Farrar, the well-known local supporter of Friends of the Earth.
He claimed that he wished to make a ‘few corrections’ to Mr Tait’s letter and sought to prove that the Renewable Obligation subsidy paid per wind turbine was small. He stated that the £300,000 per turbine per year quoted by Mr Tait should have been rather less than one tenth of this figure (ie, £25,000). In doing so, Mr Farrar demonstrated a complete lack of understanding of the subsidy regime that supports renewable energy.
It is quite clear that he has not appreciated either the nature or the extent of the main subsidy mechanism, known as the Renewables Obligation. This does indeed result in a 3MW wind turbine earning about £300,000 per year from this subsidy alone. Under this mechanism, operators of onshore windfarms currently receive a generous subsidy of approximately £45 per MWh of electricity generated. Anybody can check the latest auction prices for Renewables Obligation Certificates (ROCs) at www.e-roc.co.uk.
The cost is recovered from all consumers as a levy on their domestic electricity bills. All electricity suppliers are obliged to buy a certain number of ROCs each year and they are currently awarded to onshore windfarms at the rate of one ROC per MWh generated.
The rate of 0.48p/KWh, that Mr Farrar mentions, has nothing to do with the Renewables Obligation. It would appear that, in quoting this figure, he is referring to another issue altogether, namely the Climate Change Levy which does have a rate of 0.48p/KWh and is yet another surcharge added to all our domestic electricity bills.
Mr Farrar states that a 3MW turbine would generate 5GWh per year (ie, 5,000 MWh per year). To arrive at this figure of 5GWh per year, Mr Farrar is making an assumption that the average output of a typical 3MW turbine is 19 per cent of its maximum theoretical output.
Those of his persuasion usually quote higher figures for turbine output than what is typically achieved – for example the agent George F White has been assuming an unrealistically high figure of 38 per cent in planning applications and developers typically use 30 per cent in their applications. A more realistic onshore figure is around 27 per cent. This would result in an annual output for a 3MW turbine of about 7,096MWh per year, not 5,000 MWh as Mr Farrar suggests.
So multiplying 7,096MWh per year by the correct rate of subsidy of £45 per MWh (the price of a ROC), the resultant annual subsidy per 3MW turbine is about £319,000, very close to Mr Tait’s figure (but not including the further subsidy available as a result of wind energy’s exemption from the Climate Change Levy).
It turns out that Mr Farrar is claiming that the Renewables Obligation subsidy is less than a tenth of the actual value. We all pay, what will be an increasing amount of this subsidy, through our electricity bills. Such blatant manipulation, or misunderstanding, of the figures by Mr Farrar does the green cause no favours.