thus have a cost in the ballpark of £300 billion. The rough costs in table 28.3
add up to £870 bn, with the solar power facilities dominating the total – the
photovoltaics cost £190 bn and the concentrating solar stations cost £340 bn.
Both these costs might well come down dramatically as we learn by doing.
A government report leaked by the Guardian in August 2007 estimates
that achieving “20% by 2020” (that is, 20% of all energy from renewables,
which would require an increase in renewable power of 80 GW) could cost
“up to £22 billion” (which would average out to £1.7 billion per year). Even
though this estimate is smaller than the £80 billion that the rule of thumb
I just mentioned would have suggested, the authors of the leaked report
seem to view £22 billion as an “unreasonable” cost, preferring a target of
just 9% renewables. (Another reason they give for disliking the “20% by
2020” target is that the resulting greenhouse gas savings “risk making the
EU emissions trading scheme redundant.” Terrifying thought!)

Other things that cost a billion

Billions are big numbers and hard to get a feel for. To try to help put
the cost of kicking fossil fuels into perspective, let’s now list some other
things that also come in billions of pounds, or in billions per year. I’ll also
express many of these expenditures “per person,” dividing the total by an
appropriate population.

Perhaps the most relevant quantity to compare with is the money we
already spend on energy every year. In the UK, the money spent on energy
by final users is £75 billion per year, and the total market value of all energy
consumed is £130 billion per year. So the idea of spending £1.7 billion
per year on investment in future energy infrastructure seems not at all
unreasonable – it is less than 3% of our current expenditure on energy!

Another good comparison to make is with our annual expenditure on
insurance: some of the investments we need to make offer an uncertain
return – just like insurance. UK individuals and businesses spend £90 bn
per year on insurance.


£56 billion over 25 years: the cost of decommissioning the UK’s nuclear
power stationsE. That’s the 2004 figure; in 2008 it was up to £73 billion
(£1200 per person in the UK). [6eoyhg]


£4.3 billion: the cost of London Heathrow Airport’s Terminal 5. (£72 per
person in the UK.)
£1.9 billion: the cost of widening 91 km of the M1 (from junction 21 to 30,
figure 28.4). [yu8em5]. (£32 per person in the UK.)

Figure 28.4. The M1, from junction 21 to 30.