When Full Fact published its original investigation into statistics on wind power backup costs used in a recent Civitas Report, we raised concerns that certain figures could have been mis-counted based on evidence from the original source from which the research was drawn.

Citivas responded to the concerns in full, initially raised by the RES group, by claiming that the original figures were likely to be underestimated themselves, and highlighted the acknowledged caveats concerning their data which they had originally made clear.

Continuing the dialogue, RES have produced a strongly-worded commentary on the Civitas response.

They highlight, among other matters, other sources of research not used by Civitas in their report. They point out that, in spite of the caveats acknowledged by Civitas, there were superior versions of the truth available that the think tank ignored, such as reports from the National Grid.

Their position is set out in full below, in their own words:

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CIVITAS have made two basic claims. To refute, firstly the “acknowledgement given to the caveats involved in measuring the various costs of wind-power generation”:

When justifying using Gibson’s figures CIVITAS state “Understanding of additional costs has developed since 2003”. Correct. There is a lot more information available which is why it is astonishing that CIVITAS have chosen to ignore it. In addition to the 2003 Dale et al. report, other reports include;

• A study compiled by the Carbon Trust in 2003 as one part of a broader renewable impact study – The Renewable Network Impact Study – carried out by Mott MacDonald.

• An exhaustive study carried out by the UK Energy Research Council in 2006. This combined a team of 6 academics and reviewed over 200 international studies.

• A 200 page book on the subject “Renewable Electricity and the Grid” published in 2007 which has 23 contributing authors from different academic and professional backgrounds.

To ignore this research and choose to cite instead a paper with extensive caveats and which makes gross simplifications displays either contempt for the established research, a deliberate intent to deceive, or else a total ignorance of the policy area on which CIVITAS is claiming to be an informed commentator.

CIVITAS even reference the UK Energy Research Council report, but choose to ignore the statistics it contains that inconveniently contradict their arguments. CIVITAS prefer to quote a cost of £16/MWh for extra system costs which is significantly higher  than the £2-3/MWh cited by the UK Energy Research Council report on system balancing (page iv para 11): “Globally, most studies estimate that the associated costs are less than £5/MWh of intermittent output, in some cases substantially less. The range in UK relevant studies is £2-£3/MWh.” CIVITAS have chosen a higher figure without recognising that it already includes additional costs for grid upgrades and reserve provision, costs that CIVITAS then add on unnecessarily in a “double counting” process.

In their report CIVITAS highlight the credibility of the author Gibson by pointing out that he was “Power Network Director at National Grid 1999-1997”. It is unfortunate that Gibson left some time ago as he may not know that National Grid have been engaged in almost continuous research and debate since early 2008 with industry, consumer representatives, OFGEM and the Government in an open forum. This started with the Electricity Networks Strategy Group which feed into the 2009 Operating the Electricity Transmission Networks in 2020 Consultation, which has been consulted upon and updated in 2010, and 2011.

These are the reports which address CIVITAS’s concerns. However they are detailed and require knowledge and understanding. Evidently CIVITAS do not appear to undertake this sort of analysis, otherwise they would have looked at page 74 of the 2011 report which gives the total cost in 2010 for reserve for wind of £21m with an installed capacity of 3.8GW. Using the figures in the National Grid Report you can easily calculate an annual energy yield of 9,998 GWh/Yr (3.8GW installed *8766 hours*30% capacity factor) to provide a cost of providing operating reserve of £2/MWh rising to £4/MWh in 2020. Figures that are completely consistent with reports cited above.

The other cost that CIVITAS draw our attention to is that “Transmission costs alone cost £31/MWh”, (which appears slightly confused as in their paper they cite £20/MWh) again these figures are caveated but justified as there was not better information available. Surely, CIVITAS must be aware that as a regulated industry National Grid has to submit detailed plans to OFGEM to justify their expenditure and charges?

Apparently not, as they have completely overlooked National Grid’s business plan submission (page 12) that the additional charge put through to households is £10 per household. It is untrue to assume that this is all attributable to wind (as it includes other costs such as nuclear, grid operations, smart grid and refurbishment etc.) even if we were to make the incorrect assumption that wind is entirely responsible then the average household consumes 15.1 MWh/yr giving an average cost of £0.6/MWh which with 20% wind generation would give a cost of £3/MWh.

CIVITAS claim that “transmission costs alone amount to around £31/MWh, on the basis of the Gibson Paper which is based on the cost of an existing line to central Scotland. Once again, it is worth stressing that he is hopeful that better data may be made available.” Better data is available; the latest set has been at available since July 2011, well before CIVITAS published their paper in January 2012.

[NB as a point of clarification the National Grid state on page 8 “Of the £14 billion capex capital expenditure programme proposed in our eight year business plan, roughly 40% is for replacing equipment the other 60% will be invested in facilitating the connection of new sources of demand and power stations including new nuclear, wind farms and gas powered generation”. The majority of this cost is recovered from generators and included in the levelised cost figures used by Mott MacDonald which Civitas refer to. Even if you assume every penny is spent only on wind, you achieve an average cost of £9/MWh; this far below the £31/MWh proposed by CIVITAS.(this can be calculated using excel’s PMT function to calculate the annual repayment cost and dividing by the energy yield for wind in 2020 - PMT(7.5%,40,8400)/70.47).]

To refute, secondly, the claim that the “estimates (from 2003) themselves underestimate the transmission costs due to their optimistic assumptions about 'capacity credit'”: 

The CIVITAS report is based on the absurd claim that you need to provide back-up for 100% of the rated capacity. CIVITAS’s response is obviously confused on this issue. They state “A ‘capacity credit’ of 20 per cent, as set out in the Milborrow article, really does mean that it takes five wind farms to deliver the nominal power of one” and suggest that this justifies a £24/MWh cost of providing extra reserve taken from that heavily caveated paper. But the Gibson’s calculation assumes you need to back up 100% of the nominal power of a site. If CIVITAS had read the UK Energy Research Council report that they referenced, then they could not have failed to notice “Box 2.4 Popular Misconceptions…. Wind turbines only operate 30% of the time, therefore we must provide 70% backup” (pg 15, reproduced below). Obviously they did not read the report otherwise they would not make the false assertion that “by drawing attention….. to the gap between a wind-farms nominal capacity and the 20 per cent capacity credit, [Ruth Lea] has served to advance public understanding”. Instead, CIVITAS has sought to advance a complete falsehood.

Instead, on system reliability where the UK Energy Research Council report states that “to maintain reliability of supplies in an electricity system, peak demand must not exceed the production capability of the installed generation at that time” (para 12 pg iv and a more detailed definition is given in para 21), “the cost to maintain system reliability lies within the range of £3-5/MWh under British conditions”. (para 23 pg vi).

This completely contradicts the £24/MWh figure presented by CIVITAS, but yet again CIVITAS has given caveats and claim that it is reasonable to use it even if it is contrary to all other non-caveated and reputable statistics and based on incorrect calculation.

So let’s do a final sum of the actual figures outlined above to show that the Parson Brinkerhoff figures were entirely plausible in their entirety and did not need additional caveated figures;

Taking the most pessimistic calculations, which are £4/MWh for operating reserve (from National Grid), £9/MWh for grid reinforcement (for the total new transmission expenditure required from National Grid) and £5/MWh for system reliability (from UKERC report) - A total of £18/MWh.

To take a more realistic calculation £4 for operating reserve (from National Grid) £3 for system reliability from UKERC, £3 for grid reinforcement (from the additional cost passed onto consumer and not recovered from generators from National Grid) - A total of £10/MWh.

This makes a fully inclusive cost range of £10-£18/MWh, which spans the Parson’s Brinkerhoff estimate of £16/MWh. As we have noted the Parson Brinkerhoff estimate is a fully inclusive cost of all the costs and these figures support that.

The CIVITAS report incorrectly sums the Parson Brinkerhoff estimate of £16/MW (attributed to system operation costs) with a figure from Gibson (with caveats) of £24/MWh for reserve capacity, and finally with a figure from Gibson (with caveats) of £20 for transmission. Not only are these costs ridiculously high, but it also amounts to blatant double-counting.

It is not, as CIVITAS suggest, that the Parson Brinkerhoff “estimate appeared very low if it was required to cover more than operational intermittency.” Rather, it is that the Gibson report which forms the basis of the conclusion they are looking to find, making simplistic – but caveated – assumptions, resulting in an absurdly high amount for costs of including low carbon sources such as wind into our energy mix.

To conclude, there is an enormous volume of quality research that would have allowed CIVITAS to easily check the heavily caveated figures they have used. CIVITAS have even referenced them. So why has CIVITAS chose to hide behind caveats? Either it is to purposefully mislead the public or because they simply because they do not have a sufficient grasp of the subject to give an informed opinion. 

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*End of response