Household electricity bills could double under Boris Johnson’s plans to power every home using offshore wind farms by 2030, experts have warned.
Professor Gordon Hughes, who has completed one of the largest ever studies on the economics of wind power, found that, contrary to promises from politicians and the industry, the cost is actually rising.
It is feared the huge, foreign-owned companies that build wind farms will seek huge taxpayer or consumer bail-outs when the true “financial consequences” become clear.
Mr Johnson’s pledge to quadruple offshore wind capacity to 40GW within the decade, made at the Conservative Party’s virtual conference last week, could result in a doubling of consumer bills.
Prof Hughes told The Telegraph: “Any ambitious target is going to be expensive, because the system cannot deliver very large increases in capacity in a short period of time. It is like building the Olympics or High Speed rail – the costs just go out of control.
“Nobody knows exactly how much it will add to bills, because we are yet to see the detail of how it will be paid for, but I find it very unlikely that it would mean less than a doubling in household bills.”
He said the promise had to be seen alongside other pledges, such as the electrification of vehicles and heating, which could see household demand rise by 50 to 100 percent.
His analysis has been rejected by the Government and the renewables industry, which insists the UK’s power system needs to be updated and wind is the cheapest way to do so.
Mr Johnson may be forced to push on with his plan, regardless of cost, in order to meet the targets set under the Paris agreement to limit the global temperature rise to 1.5 degrees, set to be enshrined in the Brexit deal.
Dr John Constable, the director of Renewable Energy Foundation, a UK charity that will shortly publish Prof Hughes’ work, said: “The Prime Minister urgently needs an energy cost minimisation strategy to make a success of Brexit and to create an authentic economic recovery post-Covid.
“In his haste, he has seized the cost-maximising renewables industry by mistake. If Mr Johnson persists in this error, his successors, Labour or Conservative, will be clearing up the mess for decades.”
Prof Hughes, professor of economics at the University of Edinburgh, advised the World Bank on energy and environmental policy and has spent the last 18 months looking at the actual capital and operating costs for a large majority of the onshore and offshore wind farms built in the UK since 2002.
He found that, despite a fall in the wholesale price and almost universal claims that the cost is falling and will continue to do so, both the capital and operating costs have “increased significantly” in the last two decades.
For offshore wind farms, the average capital costs per MW of capacity have doubled since 2008, the analysis of accounts found, whilst the typical operating costs per MW have quadrupled between the same dates. As a result of increasing costs and lower yields as the turbines age, the revenues will be less than the operating costs.
The report compared the current offshore projects being built in north-western Europe to “speculative property development” which would require the wholesale price of power to increase by up to four times to enable lenders and investors to be repaid.
It warned: “This leads to the prospect of what is not so much a car crash as a motorway pile-up in the fog of ignorance. The looming crisis will require that those who finance wind power and its related ecosystem of companies are bailed out by either taxpayers or electricity consumers.”
Prof Hughes estimated that Mr Johnson’s pledge will come with a construction price tag of around £150 billion, including improving the network capacity of the grid, which will have to be paid for over the roughly 15-year lifespan of the project.
In addition, the operating costs and extra system and grid costs are estimated at up to £17 billion, costing taxpayers £27 billion a year in total.