More Electricity Madness
Reports in the Sunday Telegraph (19th October 2014) that the Prudential Insurance company is planning to invest in large infrastructure projects is encouraging, but its choice of the Swansea Bay tidal lagoon project will, if confirmed, prove disastrous for Prudential’s pensioners and the British taxpayer.
In terms of average power output per £ of capital spent, which dictates the income from electricity sales needed to service the investment, tidal energy is even more expensive that off-shore wind. The plan for Swansea Bay envisages a highly variable output of only 55 MegaWatts averaged over the day, at a cost of £850 millions of capital. This amounts to £15 per average Watt, nearly three times the over-priced Hinkley Point C nuclear power station, and 12 times, yes 12 times the cost of a modern gas-fired station. Not surprisingly the Swansea Bay promoters are seeking huge electricity price guarantees, reportedly £168 per MegaWatt hour, exceeding even the £92 per MegaWatt hour foolishly agreed by the Treasury for Hinkley Point. The current wholesale price of electricity is £50-55 per MegaWatt hour and falling.
The fact that the Sunday Telegraph declined to publish these astonishing figures speaks volumes about the general sense of unreality which pervades the whole public discussion of electricity supplies. It’s not as if the costs for different electricity production systems are unknown – see for instance on this website Bush and MacDonald’s 23 page paper, “Secure Energy Strategy”, in response to the National Grid’s consultation of 2009. It outlines how to maintain UK electricity supplies to the year 2020 and proposals for a Secure Energy Strategy to 2050.
The Prudential board would be well-advised to replace their advisors and look for other infrastructure projects such as tolled motorways before they spend their pensioners’ money, or try to commit the British taxpayers to a giant subsidy on this doomed enterprise. They could do worse than consult the authors of the National Grid’s 2009 Consultation response, Prosyma Research Ltd.
