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Nuclear spin and the regulator

Two new myths now surround wind power following the UK government's recent Energy Policy Review. First, that it is about three times as expensive as nuclear. Second, that wind's fluctuating output is problematic. Equally worrying is the number of other bodies lining up against renewables, including the British energy regulator Callum McCarthy. With an energy minister who is unashamedly pro-nuclear, all the signs are that the government will support a new nuclear building program. Rather than right a wrong by modifying the new electricity trading arrangements (NETA) and thus levelling the playing field for renewables, he suggests the government consider a higher renewables subsidy. But channelling more money into renewables to compensate for the failings of the trading system plays directly into nuclear's hands. Better, surely, to attack the root of the problem -- NETA itself.

Two new myths have been added to British folklore over past weeks. First, that wind power is about three times as expensive as nuclear. Second, that wind's fluctuating output is problematic for power systems. The nuclear industry is having a field day, never mind that both statements are totally untrue. Equally worrying is the number of other bodies lining up against renewables, including the British energy regulator Callum McCarthy.

The background to the story is the government's Energy Policy Review, being conducted by the Cabinet Office. What is at stake is the future of energy in the UK -- in particular what is to replace existing nuclear plant as it comes to the end of its life. The nuclear industry is fighting for survival, but the spin, hype and half-truths which are pouring forth from the nuclear lobby threaten to obscure meaningful debate. With an energy minister who is unashamedly pro-nuclear, all the signs are that the government has made up its mind to support a new nuclear building program -- and it is now busy massaging the facts to fit that policy.

The technical and economic issues surrounding nuclear power are complex. There are plenty of opportunities for embellishing the industry's fairytales. Recognising that generation costs might be a crucial issue, the Department of Trade And Industry (DTI) set the scene with a fictitious figure for the cost of electricity from nuclear plant of about four pence a kilowatt hour, about six dollar cents (page 46). Although the DTI cites a 1995 policy paper as the source, the paper used a range of costs which at today's prices is 4.7-7.8 pence/kWh (7-11.5 cents) -- quite a way from the four pence blithely taken as fact by the government. Curiously, the Cabinet Office has come up with exactly the same figure as the DTI.

Under the new Renewables Obligation, the price of renewables is likely to gravitate towards £0.05/kWh, another fictitious figure as it reflects no more than the cost of "buying-out" of the obligation for electricity retailers who choose this route. Nuclear, however, has seized upon the figure and is comparing it with £0.03/kWh as the price of nuclear power -- presuming production series of ten plant and protection from some of the financial risk. Pigs might fly.

As if that was not enough, the nuclear lobby is also busy suggesting wind is "unreliable," with no evidence to back this up. Even worse, McCarthy has swallowed this line, weighing in on the side of wind's detractors to make the same point. Again, no evidence is provided to back the charge of unreliability, except insofar as it reflects the flaws of a trading system that is simply not cost reflective (page 42). But McCarthy seems determined to make wind pay for costs he claims its variable supply imposes on the power system, though utility experts the world over are demonstrating that these costs are no more than a fiction of his imagination.

McCarthy recognises that under these circumstances, government targets for renewables are unobtainable. Rather than right a wrong by modifying the new electricity trading arrangements (NETA) and thus levelling the playing field for renewables, he suggests the government consider a higher renewables subsidy. Some renewables groups, hit by not only unjust imbalance penalties under McCarthy's new electricity trading arrangements, but also the low current prices for wholesale electricity, see this as the answer. They want a higher "buy-out" price. The problem is that channelling more money into renewables to compensate for the failings of the trading system plays directly into nuclear's hands. The higher the subsidy to renewables, the cheaper and more attractive nuclear appears by comparison.

No time for reticence

Better, surely, to attack the root of the problem -- NETA itself. But to expect McCarthy -- the architect of the system and a renewables doubter -- to effect any useful change is back to the realm of flying pigs. Indeed, it raises the question: why was the regulator given the task of reviewing the first few months of NETA's operation instead of an independent auditor?

Change to NETA is necessary and possible, given political will. Here, Britain could take a leaf out of California's book where measures have just been approved to exempt wind from penalties for imbalance between the differences between scheduled and delivered power onto the system. At the same time as getting NETA sorted, the wind community must also to respond to the nuclear threat by deploying fact -- not fiction. This is not the time for reticence, believing wind's virtues to be self evident. Nor is it time for the sort of dirty tactics adopted by the nuclear lobby. But the untruths about wind's unreliability and cost need to be robustly and publicly countered before fiction becomes accepted as fact.

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