Yet another example of fallacious argumentation in the energy industry:
The UK’s net zero ambitions are expected to be dealt a blow as offshore wind farm developers halt new projects because of a shortfall in government funding.
On Thursday night, no major new offshore wind projects were expected to be included in the latest annual round of renewable contracts to be announced on Friday, The Telegraph understands.
There were five major projects, with a total capacity of 5GW, that were eligible to bid for contracts to boost the country’s current 14GW of offshore wind.
But industry sources said it was “likely” that none had chosen to bid into the process, because the Government failed to offer sufficient prices for their energy.
The outcome will deal a blow to the Government’s ambitions to install 50GW of offshore capacity by 2030, and remove fossil fuels from the electricity grid by 2035.
The fallacy is that as wind has become more expensive therefore subsidies must rise so that we gain the same amount of future wind power. Which is indeed a fallacy - if wind is now more expensive then we desire to have less wind in our energy mix. As relative prices change so do the things we want to buy, of course.
And this is what is wrong with the general plan people are trying to work to. They’ve decided there should be this much production of this sort of energy, so much of that and so on. But what is the desired mix changes as prices do. And this then feeds through, up a level, to the basic idea of net zero by one or another date. How much climate change mitigation we do depends upon the prices of doing climate mitigation.
Our whole idea here is to maximise human utility over time. As the Stern Review went on (at 1200 page length) this does not mean “no climate change”. It means the right amount of climate change. Something which is determined by how expensive it is to mitigate, how expensive to adapt and the expense - all of these are the real expense, not mere money but the cost to human lifestyles - of just putting up with it.
As the various prices change therefore the right amount of mitigation, adaptation and just putting up with change. Which is the one thing that a plan for net zero by a certain date dosn’t take account of. Which is why it is a bad plan of course - because it’s violating the very aim of doing anything at all, that maximisation of human utility.
Because wind prices have changed we therefore desire a different amount of wind power. Further, because mitigation costs have changed we therefore desire a different amount of mitigation. Wind costs are up - OK, the correct answer is to have more climate change then.