We have to admit we don’t understand Ed Miliband here

Obviously it is us confused for there is no possibility, at all, that the Secretary of State could possibly be acting upon incomplete or incorrect information.

Hundreds of new wind turbines are to be built around Britain’s coastline after Ed Miliband awarded yearly subsidies of up to £1.8bn to green energy developers.

Well, OK.

“It is a monumental step towards clean power by 2030 and the price secured in this auction is 40pc lower than the alternative cost of building and operating a new gas plant.”

We don’t understand that.

The Energy Department argues that the extra wind generation will reduce the wholesale cost of power, making the actual impact on bills far lower.

Nor that.

It is a constant explanation for the UK’s high energy prices that the wholesale price of electricity is set by the highest priced marginal producer. Gas generation that is. No one at all is suggesting that this - or any other expansion of wind power - is going to eradicate gas generation from the system. Simply because having more windmills in those times that the wind doesn’t blow produces the same amount of electricity as having fewer when the wind doesn’t blow: none.

So the statement is that gas will still be there, gas is more expensive than this new wind. Therefore this new wind should be massively profitable, given that the gas generation will set the price higher than the production costs of this new wind. We agree that this all could possibly be true. We’ll accept it as a line of argument at least.

But if this new wind is massively profitable - being cheaper than the gas which actually sets the price - then why is the near two large subsidy required? A massively profitable energy production system should not require subsidy. Or, of course, something that requires subsidy is not, subsidyless, massively profitable.

This is the part we’re not understanding. Cheaper than alternative means profitable and therefore not requiring a subsidy. But the subsidy is being proffered. So how can this be cheaper than the alternative if a subsidy is necessary?

It could be that we’re just not understanding things here, it could be that the Sec of State is being ill-advised - Unready, as with a former ruler of the country. We can rule out that third possibility, that Ed is simply wrong, for who could possibly believe that a politician planning the economy actually is wrong?

Tim Worstall