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« Fossil fuel Mann | Main | Young report on wind »
Thursday
Aug162012

Parsing the report on the draft Energy Bill

The House of Lords informal working group on the draft Energy Bill has reported. I have made some excerpts from their paper, together with my take on what is meant.

[1] We understand that the Government’s long term aim is that of a competitive market for electricity but we have serious doubts that it can be reached by the mechanisms proposed in the Draft Bill.

Translation: This is a shambles.

[2]...if these proposals are implemented, the process for awarding contracts to supply electricity will, for much of the time between now and the end of the decade, be largely at ministerial discretion.

Translation: You guys will be coining it though.

[3] The Government would have to estimate reasonable prices (“Strike Prices”) for electricity generated by each particular means (e.g. gas with or without CCS, off‐shore wind, nuclear etc.) for the duration the contract – presumably between fifteen and twenty five years. We do not see how the Government can do this in any credible way, even with the assistance of the System Operator.

Translation: Even though you couldn't run a whelk stall.

[4] Much of the risk arising from forward pricing of electricity generation by ministerial judgement could fall on the consumer and little or none on the generators or the supply companies.

Translation: Moreover, you are going to knacker your constituents' lives.

[5] We were somewhat puzzled by the DECC projections of future demand and were concerned that the most recent expectations of population growth were not incorporated in their forecasts.

Translation: Did you have to fiddle the figures quite so obviously?

[6] There is no guaranteed demand for renewable electricity and independent generators are unlikely to be able to conclude Power Purchase Agreements for their electricity at satisfactory rates.

Translation: Why are you even bothering with all this?

[7] We are also concerned that, given the very long lead times and the need to bring in significant amounts of new low carbon generating capacity before 2020, the shape of the generating system in the UK could well be set for several decades under a system that was both opaque and devoid of any serious external scrutiny.

Translation: Oh I see.

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Reader Comments (30)

This paragraph:

"No doubt the absence of some of this information from the draft bill is a
reflection of the difficulty of producing the details of a workable scheme.
This lack of clarity makes parts of the proposal difficult both for us and for
potential investors to evaluate."

Seems to be a polite paraphrase of "what are you recumbent bar stewards hiding from us!

Aug 16, 2012 at 1:29 PM | Unregistered CommenterCumbrian Lad

The LibDems will see this as merely off-message with their proposed reform of the Lords as the solution.

Aug 16, 2012 at 1:35 PM | Unregistered Commenterssat

Even though you couldn't run a whelk stall.

Priceless.

Why dont they just let the Lib Dems run the whole show? Surely a Conservative government can not be in favour of centralised control of our energy market? Can it?
Conservatives dont believe in big government.
Conservatives know whose money they are spending.
This lot would have been loved by Uncle Joe.

Aug 16, 2012 at 1:43 PM | Registered CommenterDung

I do think that someone who has been promoted to the rank of Bishop should know better than to use the Americanism "parse" for 'construe'. Especially since his fellows in the House of Lords will doubtless titter at the error, should he repeat it there.

Aug 16, 2012 at 1:45 PM | Unregistered Commenterdearieme


We are also concerned that, given the very long lead times and the need to bring in significant amounts of new low carbon generating capacity before 2020, the shape of the generating system in the UK could well be set for several decades under a system that was both opaque and devoid of any serious external scrutiny.

Translation should be ' To meet your targets you are going to bodge it and hide the detail from prying eyes'

Aug 16, 2012 at 1:58 PM | Registered CommenterLord Beaverbrook

Meanwhile, solar continues to go tits up economically in every country stupid enough to pile into it:
http://www.reuters.com/article/2012/08/14/us-solar-debt-idUSBRE87D0MK20120814

"Solar as an industry is going to continue to grow," said Brian Salerno, portfolio manager for Huntington EcoLogical Strategy ETF (HECO.K). "However, my belief is that for most of that time it's going to be profitless prosperity."

Profitless propserity! Marvellous! I bet Tim Yeo won't have the wolves at the door, somehow.

Aug 16, 2012 at 1:59 PM | Unregistered CommenterJustice4Rinka

Or, in other words: 'This whole draft Bill is a load of b*ll*cks simply designed to try to justify the government's headlong flight down the dead-end called renewables. Go away and try to come up with something which addresses long-term energy security at a price which consumers can afford'.

Aug 16, 2012 at 2:00 PM | Unregistered CommenterDavid

There is no guaranteed demand for renewable electricity and independent generators are unlikely to be able to conclude Power Purchase Agreements for their electricity at satisfactory rates.

What this means is that electricity produced by wind turbines has no intrinsic value. Who would pay money for an electricity supply that only works in unpredictable circumstances and produces unpredictable amounts of electricity?

Aug 16, 2012 at 2:01 PM | Unregistered CommenterPhillip Bratby

The Government would have to estimate reasonable prices (“Strike Prices”) for electricity generated by each particular means (e.g. gas with or without CCS, off‐shore wind, nuclear etc.) for the duration the contract – presumably between fifteen and twenty five years. We do not see how the Government can do this in any credible way

But, but - we can predict CO2 levels and emissions 100 years into the future. We must therefore be predicting the cost of energy that far ahead too. And if we have 100-year energy price forecasts that are reliable enough we can base colossal taxes on them, predicting the price of electricity a mere 15 years out must be child's play.

Aug 16, 2012 at 2:04 PM | Unregistered CommenterJustice4Rinka

In synopsis = BS.

Aug 16, 2012 at 2:10 PM | Unregistered CommenterAthelstan.

He forgot to mention the power they consume when its too cold and that they have to be feathered when the wind is too strong.

Aug 16, 2012 at 2:14 PM | Unregistered CommenterMike

"...the shape of the generating system in the UK could well be set for several decades under a system that was both opaque and devoid of any serious external scrutiny."

"...Thank you, gentlemen. Although my Classics double first at Balliol means that the technical minutiae of producing and consuming electricity are happily a closed book to me, I flatter myself that I can still propose a perfect all-purpose Civil Service structure for administering anything, guaranteed to provide whatever service or answer you wish - indeed able to provide mutually contradictory answers at the same time.

Occasionally, I understand that various persons with "engineering skills" may be needed in this field - I have found that simply providing an open cheque to the Indian or Korean company which employs the greatest number of Minister's relatives solves this problem quite easily...

Sir Humphrey Appleby

Aug 16, 2012 at 2:24 PM | Unregistered CommenterDodgy Geezer

You missed:

"..We were somewhat puzzled by the DECC projections of future demand and were concerned that the most recent expectations of future population growth were not incorporated into their forecasts.."

Translation: "...and you are lying in order to make your figures add up.."

Aug 16, 2012 at 2:34 PM | Unregistered CommenterDodgy Geezer

Dodgy

Good spot - I've added it to the main post.

Aug 16, 2012 at 3:04 PM | Registered CommenterBishop Hill

And to think there are some who think the HoL isn't fit for purpose.

A magesterial put-down in the most polite terms possible.

it is time, is it not, that the occupants of the House of Commons got the message that 'renewables' are the deadest of ducks.

Aug 16, 2012 at 3:14 PM | Unregistered CommenterCheshirered

Quaa...........

Aug 16, 2012 at 3:44 PM | Unregistered Commenterspartacusisfree

From the DECC site;

"An informal Lords working group also met to consider the Bill’s draft provisions. The members of this group were: Lord Oxburgh (Chair), Lord Teverson, Baronness Maddock, Lord Jenkin of Roding, Baronness Worthington, Lord Grantchester, Lord Dixon-Smith, Lord Lawson of Blaby, Lord O’Neill of Clackmannan, Lord Judd, Lord Whitty and Lord Roper."

Interesting outcome. One wonders if it was consensus or voting numbers that swayed it.

Aug 16, 2012 at 3:57 PM | Unregistered Commenterssat

@ Mike: He forgot to mention the power they consume when its too cold and that they have to be feathered when the wind is too strong.

He also forgot to inform us that the gear boxes designed for a 25 year working life only last for 5 years, & they still can't solve the problem & the thousands of birds killed each year by them, they are an eyesore in the countryside, & that they have a carbon footprint the size of a small country in their construction & infrastructure! My God help them when they get these white elephants to sea! Barking mad the lot of them without a clue amongst them, & Yeo's as bent as hell he's making wads of dosh on it.

Aug 16, 2012 at 4:31 PM | Unregistered CommenterAlan the Brit

ssat: Well we know that Baroness Worthington, with her degree in English Literature, may have understood the words of the rest of the working group, but she wouldn't have had a clue what they were talking about.

Aug 16, 2012 at 5:09 PM | Unregistered CommenterPhillip Bratby

"Dodgy

Good spot - I've added it to the main post."


Um.. Bernard, "Somewhat puzzled" is VERY strong language. In Civil Service code it is considerably in excess of 'fiddled the figures'.

What it means is that the whole proposal just does not work - it is a complete abortion. 'Fiddled the figures' is, in fact, a mild compliment - it means that the figures now say what we want them to say. 'Somewhat puzzled', by contrast, means that there is NO way of seeing what we want in them. It means that even the Minister will be able to see through the fabrication. It means that the figures are not 'fiddled' - they are provable untruths. And the worrying word here is 'provable' not untruths...

It is unlikely that someone drafting such a report would remain in his post.....

Aug 16, 2012 at 5:28 PM | Unregistered CommenterDodgy Geezer

@ssat: "Well we know that Baroness Worthington, with her degree in English Literature, may have understood the words of the rest of the working group, but she wouldn't have had a clue what they were talking about."

She doesn't need to - the Civil Service code is plain for all to read.

People should note, however, that there is NO coded statement that 'renewable energy is a dead duck'. The tone of the report is "This is not a good enough defence of the spend", NOT that the spend should be withdrawn. If I were re-drafting the bill, I would probably minimise the "long term aim is that of a competitive market for electricity", and instead emphasis the need for 'close ministerial supervision' and 'pricing flexibility' - both of which points justify a shadowy direct civil service control process...

Aug 16, 2012 at 5:43 PM | Unregistered CommenterDodgy Geezer

Translation: Even though you couldn't run a whelk stall.

Among us Texians, we'd say "hotdog stand" instead. That led to the idea that perhaps they're peddling pork pies, and not all that well, at that. You think?

Aug 16, 2012 at 5:50 PM | Unregistered CommenterGary Turner

Phillip Bratby said:

What this means is that electricity produced by wind turbines has no intrinsic value. Who would pay money for an electricity supply that only works in unpredictable circumstances and produces unpredictable amounts of electricity?
No one in their right mind.

My gut instinct is that they would sooner mandate someone to consume the electricity somehow than back away from these monstrous plans.

Aug 16, 2012 at 6:34 PM | Unregistered CommenterGareth

I do love learning about the present state of the English language. Not long ago, American book editors objected to the word 'construe' on the grounds that their dictionaries limited its use to the shaping of molten steel. As used today in the USA, 'construe' can have the same meaning as 'understand'. 'Parse' usually means something along the lines of "break into parts for analysis." Parsing and construing can be very different in the USA and both words are needed here.

Aug 16, 2012 at 6:39 PM | Unregistered CommenterTheo Goodwin

[Snip - venting]

Aug 16, 2012 at 6:42 PM | Unregistered CommenterHarry Dale Huffman

Aug 16, 2012 at 3:57 PM | ssat

From the DECC site;

"An informal Lords working group also met to consider the Bill’s draft provisions. The members of this group were: Lord Oxburgh (Chair), [...]

Lord Oxburgh, eh?! Just how many pies does this eminent personage have his conflicted fingers in anyway?!

One wonders if there are actually any recorded minutes of the working group's deliberations - or if, in accordance with the Oxburgh principle™, they are non-existent (and those which might have existed have, alas, been destroyed).

Aug 16, 2012 at 7:10 PM | Registered CommenterHilary Ostrov

Although the points highlighted above are encouraging, there are parts of the report that should concern us greatly.

p9 mentions that once 10GW of coal fired capacity is taken off line in a couple of years time there will still be 20GW of coal fired capacity. It then goes on to suggest that the emissions performance critera should be applied to those. Does that mean they are suggesting shutting down the other 20GW as well?

p12 considers the likely reduction in costs from use of new indigenous gas sources (shale I assume) and then says "For this reason the Government may wish to build indexation clauses into some long term contracts" which I understand as lets make sure the consumer does not benefit from the likely savings.

p14 seems to mean that the public shouldn't be saddled with the costs of unproven technologies, which seems reasonable.

The section following discusses demand side management. p17 rather worryingly seems to advocate fairly hefty consumer demand management (i.e. power rationing) to reduce the amount of investment needed in new capacity .

In para 18 we have this: "While accepting the Government’s long term objective, we were unanimous that private arrangements made by ministers with individual companies on individual terms and on the
advice of a private company would be unlikely to be a satisfactory means of attaining it". I'm sure Dodgy Geezer can translate that for us, but it would seem that the recent trend of the last and the current Governments to dish out the goodies to those close to them has been spotted.

Aug 16, 2012 at 7:14 PM | Unregistered CommenterCumbrian Lad

"The section following discusses demand side management. p17 rather worryingly seems to advocate fairly hefty consumer demand management.."

This is exactly mirrored in the UK Government's 'Water Futures (2008)' document, which required demand management to force people to use a nominal 120L/day rather than 150L/day - a drop of 20%, which is to be achieved by water metering and price hikes. In the case of water there is no shortage whatsoever, so this is to be created in the SE of England by halting all reservoir building. You couldn't make it up! It is a green mantra that we must use less of everything, including water which flows through us in a cycle, so is never 'consumed' at all.

As regards para 18 the main implication that I can see is that arrangements between ministers and private companies seem to freeze out any possibility of anyone else getting a look-in, and the working group are concerned about this. I suspect they see their power of setting energy strategy being eroded.

Aug 16, 2012 at 9:08 PM | Unregistered CommenterDodgy Geezer

Re whelk stalls and hot-dog stands - Antipodeans would say 'couldn't run a bath or manage a good feed. My personal favourite, but only heard among rude people, is 'couldn't manage a cuddle in a knocking-shop with a fifty quid/dollar note in his hand'.
I love the variety of flavours available in the English language!

Aug 17, 2012 at 5:36 AM | Unregistered CommenterAlexander K

http://wattsupwiththat.com/2010/04/25/global-warming-the-oxburgh-inquiry-was-an-offer-he-couldnt-refuse/

Aug 17, 2012 at 10:32 AM | Unregistered Commenterspartacusisfree

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