Panorama has incurred the wrath of the renewable energy industry, making misleading claims about the costs of wind on the basis of an unpublished and unfinished report.
Unknown Knowns and Known Unknowns?
Panorama and ST can't be questioned because no one has seen the evidence.
Panorama incurred the wrath of the renewable energy industry with program they claim made biased claims about offshore wind costs based on an as yet unpublished and unfinished report.
It's yet another media report made on the basis of irrefutable data - that's to say data that's either made up or data that no one has actually seen. Even the company producing the "basis" of the latest story hasn't as yet finished processing the information. Unfortunately its the headlines that stick - no the fact that all the evidence says "this story is plain wrong".
In the wake of teasers like “Abandoning wind will save taxpayer £34 billion”, last Monday's BBC Panorama program could have left supporters of wind power wondering if they hadn't been making a huge mistake. Thankfully, they can stop questioning their sanity. The Panorama program was taking its figures from a leaked draught press release about an, as yet, unpublished KPMG report for the government.
Carbon Brief, investigating a Sunday Times story about the same report asked KPMG to clarify the figures. They said:
“...the Sunday Times story was based on "preliminary findings" and "...the full report itself is still being written"...
..."They added cheerily that they would let us know when they had a clearer idea of timing, and "hopefully we're not too far off!"
It's not the first time the media have responding to an unpublished report on energy costs this year – but this time, no one seems to know what data has been used to generate the headline figures – not even KPMG!.
Known Knowns
This is what we do know.
- The Panorama program made no mention of the rising prices of wholesale energy costs. According to Ofgem wholesale gas price is 40% higher this year than 2010/11 and wholesale fuel costs account for 56% of electricity bills. The same report continues
“Our snapshot estimate of the net margin on supplying a typical, standard tariff, dual fuel customer is approximately £125 per customer for the year from October 2011”
- The average cost of “subsidising” renewables is around £20 a year – more than 6 times less than the profit margins of the energy companies. What's more, fossil fuels get massive hidden subsidies in the form of tax breaks and the socialisation of the costs of damage caused by pollution and by some measures are already far more expensive than wind.
- The UK has suffered systematic underinvestment in new plant and infrastructure for 20 years . No matter how we produce power we will have to pay the price for the historic failings of our liberalised energy market.
- Fossil energy prices will continue to rise. Demand is rising rapidly worldwide. There are serious questions surrounding the new “golden age of gas”, driven by the ability to “frack” shale gas and even the International Energy Authority (IEA) warn that gas is not a solution to climate change.
- No mention was made of climate change - one of the main reasons for investing in renewables (Climate Progress summarises the IEA's shocking predictions on climate change). The KPMG report is apparently about costs. The IEA 2011 World Energy Outlook is very clear about the cost of not investing in low carbon energy:
“Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.”
Clues about the clueless?
When the KPMG report finally emerges it may be possible to set their figures into some sort of context. It's difficult to really know how such a damming summary of wind can be produced at a time when investment in renewables is set to hit an all time high and costs are dropping rapidly. There are a few clues about the Panorama report.
Presenter Tom Heap's own web site says - "Tom is The Eco-Sceptic’ questioning the accepted environmental dogma. He has recently written on the perils of relying on nature for your energy, the self-righteous green movement”. BGB would be the last site to complain about questioning “self righteous greens” - but it appears Mr Heap has a bit of a record for less than accurate reporting.
Jo Abbess, blogging about his coverage of “Climategate" in June 2010 cited inaccuracies and said “some of the mistakes made by the reporter, Tom Heap, were laughable”. Since she blogged last year, criticising Heap's analysis of offshore costs, there's stronger data supporting the price competitiveness of renewables. EU climate chief Connie Hedegaa saying “offshore wind is competitive with nuclear power”.
Desmond Carrington's Guardian critique of Heap's reporting on Monday identifies a similar tendency towards one sided and inaccurate journalism. Jo Abbess concludes her blog by saying "Tom Heap is, in my humble opinion, entirely unqualified to broadcast on climate change" - perhaps he's entirely unqualified to broadcast on energy costs as well!
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