Who’s watching the cost of offshore wind farms?

This is a worrying extract from the PAC report:
“4. A fundamental aspect of good project planning is to evaluate all viable alternatives before selecting the method which will deliver the best value for money. In this case the Department and Authority have not put forward a convincing case for the licensing regime they have adopted. The consumers’ capacity for meeting the costs of these new offshore transmission licences through higher prices does not appear to have been considered. Instead the Department sought to justify the arrangement in calculations which concluded that the licence competitions would bring competitive benefits in line with the PFI market, an argument we question. We have not seen any evidence that the Department and the Authority rigorously assessed the relative value for money to consumers of other alternatives.”
I don’t know just how expert the PAC is in evaluating such things, because they are a political committee and do seem to relish picking fault with many who come before them. But PFIs were badly set up, and if the same attitude is adopted by the Civil Service to this then we should be concerned that our interests are not being competently protected.

“but who is making sure that the cost isn’t passed on to us?”
Come on Josh, that’s a bit naive, who always ultimately ends up paying?

Perhaps the real question is after taking all factors into consideration what is the best way forward, or combination of ways forward, for energy generation in general?
All forms of generation get some subsidy, oil, coal, gas, nuclear, renewables, and they all benefit in some form or other to varying degrees. That subsidy ultimately comes from us.
Where else can it come from?

What we should be doing is strip away all these “subsidies”, “guaranteed income packages”, “backhanders” etc. etc. and ask ourselves what is the best way forward? Also ask what is the fairest way to finance that best way forward?
Strip away “subsidy across the board and we might find some surprises when it comes to the real cost of some of these various alternatives. An awfully big “bung” is needed to get someone to build a nuclear power plant, and eventual decommissioning costs are staggering, not to mention the cost in the event of a “nuclear accident”. Are such elements factored in when comparing energy generation costs? I somehow doubt it.

To my mind questions involving a fundamental part of national infrastructure cannot be left to market forces, decisions cannot be based on shareholder profit potential.
So national control is really the best approach, re-nationalise energy generation and supply for the benefit of the nation rather than for benefit of shareholders of big business.

The big flaw in that argument of course is that we’ll need competent Government and I’ve seen little evidence of that for a very long time. The price we’ll all pay in the future is directly related to Government obsession with a market force approach and Government incapability of succeeding with a nationally run approach.

Grim and expensive future on the energy front for us all I’m sad to say.

End users end up paying, whether directly or through taxes. It is the government that has to set sensible contract terms to ensure the deal is fair to all – the user and the provider.