Tidal energy price ‘will look cheap in 10 years’

THE chairman of Alderney Electricity confirmed to a roomful of residents that they would pay more for fuel from renewable energy than they currently pay for oil that is shipped in.

THE chairman of Alderney Electricity confirmed to a roomful of residents that they would pay more for fuel from renewable energy than they currently pay for oil that is shipped in.

Mike Richards, speaking at AEL’s first public forum at the Island Hall this week, said that under the terms of a contract signed between AEL and Alderney Renewable Energy, the former would pay a fixed price of 20p per unit of electricity generated via tidal turbines. The contract, thought to be worth some £35m., fixes the cost of power sold to AEL for 25 years.

At the moment the fuel cost component for every unit sold to the customer is 16.38p.

‘What people forget is that ARE subsidise the fuel cost component by 3p,’ Mr Richards explained.

The subsidy is part of the deal ARE signed with the States granting it rights to a section of seabed.

‘Without that the cost would be 19.38p today.’

He told the audience: ‘I don’t know where you think fuel costs are going to go in 25 years’ time but they are not going to go down.

‘It may not be a popular agreement at the moment but it’s going to look a very reasonable price in 10 years’ time.’

He said the infrastructure was capable of distributing the energy supplied by tidal turbines. But there was no route for households who micro-generated energy, for example by solar panels, to sell excess to AEL, he said. Nor was there any money in AEL reserves to subsidise the installation of micro generators.

AEL was seeing a year on year drop in fuel consumption of around of 3.2% – due partly to fuel efficiency measures in new products – but the price of electricity on Alderney was unlikely to come down, he said. At present all they could do was try to ‘control’ the upward slope of costs.

‘There’s a limit to what we can do to drive costs down,’ he said, adding, ‘we haven’t got any power in terms of buying.

‘We are lucky we can get anyone to come here at all. We don’t have any economies of scale – there are petrol stations in Jersey that buy more fuel.’

He said the only way to drive down electricity costs was to increase the customer base – attracting more residents and businesses to the island.

‘One business which is keen to come here, which is not terribly welcome, is a processing company,’ he said, referring to Continental Metals.

‘They will use quite a lot of power. We are going to have the dearest electricity in the world until we get more volume or an alternative source of power arrives.’

Comments for: "Tidal energy price ‘will look cheap in 10 years’"

Question

My question here is why. Why do we need to do this, is it not possible to run cables to France or Guernsey and purchase power from them, why can't we partner up with Guernsey and create the economy of scale being talked about. Would it not be more economically viable to join forces with Guernsey to generate and supply power to both Islands. Your argument does not make sense, more demand means more load on aging infrastructure which means "Due to the high demand we need to replace our old infrastructure to meet the demands" which means more costs and higher prices. Will is cost 19.38p with tidal generation - if it costs more then why do it??

I suspect we will be talking about Tidal power in 25yrs

seascape

If we did all these things that "question" suggests, there would be no highly paid jobs - for at least one of the directors and no £370 meetings (as was outlined by a questioner at the AEL q and a session last week) Also the ARE would be disbanded and who knows who is getting a rake off from that!

It does seem strange that we do not have a connection with France!

A.J.

Why not run a cable form France to Alderney and then continue this supply to Guernsey avoiding the need for a connection with Jersey.

Yes it is likely to cost more, but by how much?

seascape

For the reason I oputlined above I would imagine. No AEL, no ARE, no top heavy non islander board of directors, and no massive profits to be raked in forever and ever!!!

When will someone see the sense in getting this cable 8 miles across from France.

seascape

It doesnt stop with the cost of the units of course there is the cost of the oil to generate that electricity to take into account.