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« Unqualified evidence | Main | The eagle has crash landed »
Friday
Dec202013

Davey's reckless gamble

Dieter Helm has a (paywalled) article in the Times this morning, taking Ed Davey and his predecessors to task for their reckless assumption that energy prices would rise inexorably.

By about 2020 it was assumed that expensive technologies such as wind farms and solar panels would be competitive against what would by then be much more expensive fossil fuels. Add in a bit of energy efficiency, and ministers could confidently predict that household energy bills would be 8 per cent lower by 2020 than they would have without their policies.

Almost everything that could be wrong with this is in fact wrong, and it explains the mess that British energy policy has got itself into. There is no shortage of oil, gas or coal. We are not running out of any of them. There is enough to fry the planet many times over. There is no reason to assume that oil and gas prices will go on ever upwards, and it is at least possible that they will fall, joining the sharp fall in world coal prices. If so, renewables are unlikely to become cost-competitive by 2020. The subsidies will not then wither away. They would be permanent. Therefore, bills would be higher than they would have been as a result of government policies, not lower as Mr Davey claims.

Where the corruption and personal enrichment ends and mere incompetence begins is hard to ascertain, but we will all be paying the price very soon.

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Reader Comments (61)

Where the corruption and personal enrichment ends and mere incompetence begins is hard to ascertain,

That's because they doesn't end, Bish.

Dec 20, 2013 at 9:28 AM | Unregistered CommenterStephen Richards

'There is no reason to assume that oil and gas prices will go on ever upwards,'

They got that one wrong and the one word that makes it wrong is TAX , governments ever huger for cash have been hitting fossil fuels for massive amounts of tax for years . In addition, there no sign at all of that changing. If the international market price drops the governments are more than willing to step in with more tax increases to take up any ‘savings ‘ from price reductions.

Dec 20, 2013 at 9:37 AM | Unregistered Commenterknr

Dieter Helm is surely wrong in accusing Ed Davey and his predecessors of a reckless assumption that energy prices would rise inexorably. The Greens want energy prices to rise inexorably. That is the plan. What Ed Davey and his predecessors are guilty of, is pretending that energy prices are rising of their own accord, and not as a result of their policies.

Climate change may not be man-made but energy prices certainly are!

Dec 20, 2013 at 9:51 AM | Unregistered CommenterRoy

Bottomline fossil fuels are just a free as renewables .. You just take them out of the ground. It's a green fantasy that somehow renewables are going to outcompete fossil fuels, by becoming cheaper than them. However if Sheik Al D Moni is sitting on large deposits with minimal extraction costs, is he going to leave it in the ground unsold? , rather that just reduce the price by $1.

- SuperTax the fuels in Europe = moving industry to other countries which choose not to super tax

Dec 20, 2013 at 10:07 AM | Registered Commenterstewgreen

Roy
I couldn't agree more.
I think — on the usual cock-up beats conspiracy basis — that incompetence is the driver though wherever it is possible corruption and personal enrichment will be sitting comfortably in the passenger seat.
The incompetence comes in several parts:
1. not doing anything in the way of due diligence when the scarier aspects of global warming were being touted (remember always: a) cui bono; b) follow the money);
2. not realising that the environmental lobby had its own axe to grind when it came to recession-mongering (good headline, that!) and that the demonisation of CO2 was a godsend to them;
3. letting a Liberal-Democrat within a thousand miles of the levers of power in any department involved with energy or the environment.

Dec 20, 2013 at 10:14 AM | Registered CommenterMike Jackson

Davey has the ear of the greens and appears to be happy to implement their recommendations.

http://www.telegraph.co.uk/earth/energy/fracking/10526811/Fracking-report-changed-to-include-more-negative-effects-following-lobbying-from-green-groups.html

Dec 20, 2013 at 10:41 AM | Unregistered CommenterMessenger

Messenger
A comment from "lowtoleranceforidiots" (!) on that story sums it up for me.

But Mr Davey decided that green non-governmental organisations Friends of the Earth, the World Wide Fund for Nature and Greenpeace should also be consulted
Exactly WHY would an elected politician who is paid by us to look after our affairs, decide the above asking these moronic institutions for their input
Time more people asked that question. What particular expertise do these people have that the rest of us don't? And why those three groups particularly? What do they know about fracking that the real experts don't?

Dec 20, 2013 at 11:02 AM | Registered CommenterMike Jackson

Bish: Is the first sentence: "...for their reckless assumption that energy prices would [not] rise inexorably." missing the 'not'?

Dec 20, 2013 at 11:12 AM | Unregistered CommenterSnotrocket

"There is enough to fry the planet many times over." Careful, Bish, you could be misquoted there by the malicious.

Stewgreen's point is on the right lines. Ultimately, no energy source is renewable. Not even the sun. The relevant questions are only how much is there?, how long will it last?, and what is the cost of extracting it from the environment?

Compared to the popular MSM definition of "renewables", fossil fuels still win on all three counts. Nuclear is made more expensive by high regulatory/engineering costs associated with safety. We could have advanced a lot further without the "help" of misinformed and ignorant environmentalists.


I think Davey, Huhne et. al. certainly fall into the bracket of ignorant, if not worse. I suspect they may have been led to believe that all they had to do was create a market for "renewables" and the scientists & engineers would ride to the rescue, magic-ing the needed technologies out of thin air.

Simultaneously, they appear to believe that no engineer had ever thought about energy-efficiency before. How deeply insulting that must be for all professional engineers that have not yet left the country. Meanwhile, they are paying an increasing fraction of the available scientific talent to pursue research claiming that carbon dioxide is bad for the biosphere. I know at least one person who has spent much of my life working and studying in the field of organic (carbon) chemistry who is deeply insulted by that.

Dec 20, 2013 at 11:17 AM | Unregistered Commentermichael hart

Davey was reportedly indoctrinated at Oxford by FoE's Porritt. The latter has reportedly publicly called for a reduction of UK population to 30 million. The inference is that the intention of these policies may be to cull c. 35 million UK citizens as fuel poverty causes them to starve/freeze to death in the new Little Ice Age.

This is also the apparent intention of the Fabian/Common Purpose shadow EU government of the UK, using the windmills as a demonstration of Totalitarian domination of its UK province.

Dec 20, 2013 at 11:23 AM | Unregistered Commentermydogsgotnonose

How deeply insulting that must be for all professional engineers that have not yet left the country.
What? both of them?
Seriously, there are plenty of professional engineers who are gritting their teeth and trying to get on and do a decent job in the UK but life is not being made any easier for them. The DT report that Messenger linked to is a good example of why. They are not the academic scientists at whose feet we are all encouraged to worship and neither are they the grease monkeys that service your car or repair your central heating boiler and (unlike Germany where engineers are at least as highly respected as any other profession) we have never given them the respect they deserve.
I take my hat off to every one of them that contributes to this site and teaches me what is really happening out there in the real world instead of what is believed in in the ivory-coloured plastic towers at UEA and other hotbeds of academic arrogance.

Dec 20, 2013 at 11:27 AM | Registered CommenterMike Jackson

Not a reckless assumption.....more a self-fulfilling prophesy.

Dec 20, 2013 at 11:36 AM | Unregistered CommenterJack Savage

"Davey's reckless gamble"

I am not sure I would agree that Davey is gambling

Gamble - "to play at any game of chance for money or other stakes."

When you have a fairly unintelligent green zealot, there is no game of chance. Since they do not take into account any repercussions of their actions, it is really a matter of suicide. Unfortunately the public will have to pay for this folly.

Dec 20, 2013 at 11:55 AM | Unregistered CommenterCharmingQuark

I strongly concur with the view that what is needed is for professional engineers with real world experience to have much more influence on the energy debate. It is not an insurmountable problem at all, it just needs to clear the decks of pressure groups (oh and Bryony Worthington) and let the professionals get on with it.

Meanwhile, they are paying an increasing fraction of the available scientific talent to pursue research claiming that carbon dioxide is bad for the biosphere.

Yes the opportunity cost is beginning to really grate with me. I've been looking at some more of the Tyndall Group activities .

Seemingly intelligent, well meaning folk just wasting their efforts on this non-problem when there are so many other worthwhile endeavours that could use their talents.

I've said the same to RichardB, Tamsin and their ilk as well, they'll regret it in their dotage when they look back on their lives. Obviously talented folk just wasted on this boondoggle.

I found this from the Bish's twitter feed this morning. Risible justification of their failed models by generating yet more squiggles and finding one that isn't totally out of sync. Give it up guys.

It's just such a shameful waste of resources. A major shake-up is needed, has anyone got the balls to do it?

Dec 20, 2013 at 11:58 AM | Registered CommenterSimonW

At least Obama was honest with "under my plan... electricity prices will necessarily skyrocket" , Davey et al are deceiving for the "greater good" in fact displaying competence by sticking with the narrative and getting batshit crazy schemes in place.

Dec 20, 2013 at 12:00 PM | Unregistered Commentermousebat

But this would mean that Davy, Huhne and Milliband are liars, wouldn't it?

It's not like there's any proof for that accusation, like one of them being sent to prison for perjury and perverting the course of justice.

Dec 20, 2013 at 12:09 PM | Unregistered CommenterStuck-Record

From the Ecclesiastical Uncle, an old retired bureaucrat in a field only remotely related to climate with minimal qualifications and only half a mind.

The Letter: "The subsidies will not then wither away". Certainly, but only if Parliament so decrees. The possibility that Parliament might reduce subsidies seems to have had some purchase with those who invest in wind farms because some investments seem to have been cancelled. Even if there is no actual connection between the two, fear of reduction of subsidies exists and presumably reduces investment. Has not this thought not also occurred to the warmist leadership and caused them to deplore sceptic efforts?

knr: "'There is no reason to assume that oil and gas prices will go on ever upwards,' They got that one wrong and the one word that makes it wrong is TAX". Again, this is up to Parliament. Come exodus from the EU and the inevitable revolution that, in due course, will cause MPs to represent their constituents rather than pursue their careers, taxes will reduce. No immediate prospect of that, however, and until it happens you are right enough

Mike Jackson to Roy: "letting a Liberal-Democrat within a thousand miles of the levers of power in any department ..." Is this not just a commentary of the way current political process works in negotiations over the formation of a coalition? Then, the green religion was agreed by all political parties and so unlikely to be an important battleground. So let the Libs have it. Harmless!

Mike Jackson to Messenger: "But Mr Davey decided that green non-governmental organisations ... WHY ..." Come off it, we all know. The Government, Davey, the aforesaid NGOs all have the same policy. Good chap that Davey, does the job he was given with verve and energy. So to bring policy into line with reality, it is no good asking questions about the detail of how he goes about his job or how well he does it. Instead ask the top of Government if Davey or any Lib with fixed green convictions should be in the job.

mydogsgotnonose: "FOE's Porrett" Our own would be Pol Pot then. And unless policy changes he might get his way and lives will be lost. And to get venal politicians to change policy so Porrett's wishes do not happen may well require a revolution and some blood on the streets. Not a happy prospect. I'm glad I'm old.

Stuck Record: "But this would mean that Davy, Huhne and Milliband are liars, wouldn't it?" But they are politicians and who expects anything different? The main skill of the politicians the current system gives us seems to be to deception: make your point in words that appear to mean what the public wants but actually can mean what you, the politician, want. Just watch the average politician measuring his words. They are all liars. No point in singling out individuals - it is the whole institutional set up that has to change.

Get real. Think radical.

Dec 20, 2013 at 1:09 PM | Unregistered CommenterEcclesiastical Uncle

Seasons Greetings, Michael Hart and Mike Jackson - from an engineer who seethes with frustration every time the British Gas ad comes on tv to tell me that they will send an 'engineer' to fix my boiler...!

Dec 20, 2013 at 1:17 PM | Unregistered CommenterSherlock1

It is a good article in the Times! I read the hard copy and it is worth reading in full.

Fossil fuels are coming down in price but electricity prices are increasing because the power companies were encouraged to buy fuel futures and our power station capacity is decreasing - due to EU regulations - so we need to limit consumption.

It is being arranged to close factories in the winter between 4pm and 8pm when there is a shortage in electricity supplies. No doubt, it will be when there is little wind!
http://www.independent.co.uk/news/uk/home-news/ofgems-plan-to-keep-the-lights-on-factories-to-be-paid-to-cutback-electricity-use-9016479.html

We are becoming a banana republic, without any bananas!

Dec 20, 2013 at 1:40 PM | Registered CommenterRobert Christopher

Some of us engineers are trying to hit back with the enemy's weapons.

Dec 20, 2013 at 1:48 PM | Unregistered Commenterdak

And my local paper, the Westmorland Gazette leas this week on "S Lakes fracking threat raises alarm".

There is no hope of us ever getting out of this green-induced horror show.

Dec 20, 2013 at 1:53 PM | Unregistered CommenterGeoffH

Where did he learn all this [green guff - save the planet from man made warming] rubbish?

mydogsgotnonose pointed at it:

Davey, was awarded his piece of paper from Jesus College Oxford, manifestly another nest of Marxist imbued intellectuals and who are given to preaching atavistic economic theory and green - is all of that.

Indeed, from the lofty chambers of Oxford to the new johnny-come-lately plethora of new universities - academia is riddled with this hackneyed, discredited left wing dogma, the doctrines of the green mania - probably because the politicians shower them with public money for preaching said tosh, it's an incestuous cabal of intellectuals and their political allies and perpetually protected by the powers that be - the political elite.

Tertiary education, is a big part of the problem, they need to haul themselves out of the 1960s.

Dec 20, 2013 at 1:58 PM | Unregistered CommenterAthelstan.

That seems quite a polite letter Dak. I hope you'll keep us informed. Of course, if Scotland votes for independence, might it theoretically then become possible that it would require an extradition warrant?

Dec 20, 2013 at 2:24 PM | Unregistered Commentermichael hart

I wonder when the penny will finally drop that wind power in the UK is now causing more fossil fuel to be burned than it saves. The real scandal is that wind also ends up causing more carbon emissions than without any wind on the grid. This is because wind generated electricity requires continuous back-up capacity of conventional power stations. The random intermittency of wind means that these back-up stations are ramped up and down at short notice. As a result their thermal efficiency falls very fast. This loss of efficiency causes more fuel to be burned than just generating 100% of it with gas. It is exactly the same effect as losing fuel economy by driving a car through thick traffic. Consequently the price of gas generated electricity also rises but the real cause for this rise is hidden from view. Wind is to blame.

No-one wants this out in the open because the whole subsidy infrastructure for wind power would then collapse.!

My only solution is to change the contracts so that wind farms MUST generate power on demand to receive payment rather than the current ludicrous situation which is to pay them double the market rate whenever the wind happens to blow - even at 3am on Sunday. That way the energy companies will be forced to solve the energy storage problem. Energy storage should be done on site at the wind farm. The current situation completely distorts the market and encourages everyone including gas suppliers to exploit the artificially high prices forced through by government policies.

Dec 20, 2013 at 2:28 PM | Unregistered CommenterClive Best

search result says this went up on the Guardian 24 hours ago, but it is undated. is it proper for BBC to be this involved?

Guardian: Tan Copsey: Communicating climate change
Reaching new, broad audiences requires diverse, innovative communication strategies
(Tan Copsey – the author – is research manager for the BBC Media Action project Climate Asia.)
On a frosty November morning in Warsaw, a workshop entitled Be the Movement brought together a wide variety of global climate change professionals to discuss practical strategies for building a stronger and more far-reaching global movement to combat climate change.
My contribution focused on the question of how people can communicate better about climate change and reach new audiences. To answer this, I started by asking my workgroup a series of smaller questions…
In our morning discussion group, we used BBC Media Action’s Climate Change Communication Toolkit, which includes Climate Communication Cards to stimulate discussion of how to reach diverse audiences, ranging from farmers in Kenya to voters in the United States. It was immediately apparent that a ‘one-size-fits-all’ communication approach does not work…
Content is also crucial. As Eliza Anyangwe of the Guardian Development Professionals Network said later, “A lot of effort is spent on trying to tell people that climate change is happening, but not very much on trying to give the people [...] a sense of what they can do.”…
As a young Kenyan climate activist pointed out, “I believe one person can make a difference.”
This idea was picked up by Rachel Kyte, vice president for sustainable development at the World Bank Group, in her motivational address. She encouraged the youth present to take action and join the global climate change movement. “If you want to make change, you’re going to have to take the brave fork in the road. That’s your challenge,” she said. (see the video of her talk here)…
This content is produced and controlled by Connect4Climate.
http://www.theguardian.com/connect4climate-partner-zone/communicating-climate-change

5 Dec: World Bank: Connect4Climate Competition Winners Announced
Connect4Climate is a global partnership initiative supported by the World Bank and the Italian Ministry of Environment. Connect4Climate Knowledge Partners include...(LIST TOO LONG TO EXCERPT, BUT GEORGE MASON & GEORGETOWN UNIS, MULTIPLE UN BODIES, AMONG THEM)

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23061504~pagePK:34370~piPK:34424~theSitePK:4607,00.html

Dec 20, 2013 at 2:38 PM | Unregistered Commenterpat

Why does the British government (or any government) have a "energy policy" in the first place?

Dec 20, 2013 at 2:43 PM | Unregistered CommenterSpeed

I'm an engineer with extensive experience in renewables, CCS and large power systems so I worked out a long time ago that people like me had to have been frozen out of the windmill-technology decision-making for a very nefarious purpose.

The Public is just about waking up to the homocidal intentions of the eco-fascists. Perhaps if the Utilities were to arrange a few major blackouts this Winter, say Westminster including Buckingham Palace, Kingston-on-Thames, Sheffield, Witney....you get the drift...........:o)

Dec 20, 2013 at 2:55 PM | Unregistered Commentermydogsgotnonose

The petrochemical industry in which I work frequently uses consultancies focussing on the energy, chemicals and related industries. Most companies in this sector subscribe to Nexant/ChemSystems, who issue detailed market reports and provide training services.

The Bish has often referred to Poyry’s analysis of how European gas prices could be affected by unconventional gas growth. Nexant market a model that allows gas supply, demand & pricing to be projected for each country. It was developed by a chap in Nexant’s London office called Brian Little. Details are in the attached link:
http://www.nexant.com/solutions/oil-and-gas/natural-gas-and-world-gas-model

It got me wondering how the DECC model forward gas prices for the UK – do they use such tools to develop their projections, or do they even take advice from such companies? Certainly that is what nearly all the energy companies do, despite the limitations of such models. At least one has a reasonable basis to work from.

This could be a fruitful line of questioning for Peter Lilley during the Energy and Climate Change Committee’s next encounter with the DECC – how do they predict gas prices?

Dec 20, 2013 at 3:10 PM | Unregistered Commenterwellers

Global oil demand is projected to continue rising at around 1 mbd each year by OPEC. The IEA anticipate that this can only be met by the increased production from off-shore Brazil (where projects continued to see delays) and from the Middle East (where Iraq is negotiating with its partners to lower the targets it had originally set as it becomes increasingly obvious that the initial goals were unrealistic). The short-term gains in oil production in the US are facing the rapid decline in production from fracked wells that requires increasing numbers of wells to maintain production as the sweet spots are used up. The Alyeska pipeline continues to see falling production and may reach a point where it has to close until better ways of getting water out of the oil can be brought on stream. The history of Deepwater Gulf wells has been that they have had problems reaching targeted production dates and levels.
There is, therefore, evidence that we are starting to reach peak oil production - only keeping up by using reserves that are more and more expensive to produce, which makes some assumptions about price more realistic than Professor Helm would acknowledge.

Dec 20, 2013 at 3:20 PM | Unregistered CommenterHeading Out

GeoffH

There is no hope of us ever getting out of this green-induced horror show.
Yes there is, but it means you and every other like-minded soul in what was Westmorland taking your local paper to task every time they spout this drivel. It will be a long and possibly painful process. You may need to take your local reporter out for a drink (or in dire cases even to lunch) but it is essential that they listen and understand because as far as fracking is concerned it is the local press — not the nationals, not the TV companies, not even the regionals — that are going to make the difference.
They are the bottom of the journalistic pile (I should know; I was in there for 20 years) and by and large they know from nothing. The ecos think they are easy meat and to a point they are right but what those guys and gals are is honest and if they are convinced that fracking is good for South Lakes or West Sussex they will tell it like it is.
Give them the facts — all the facts — and the battle is there for the winning.

Dec 20, 2013 at 3:22 PM | Registered CommenterMike Jackson

I am looking at a proposal for heating a community building and the comparisons of various methods of heating. According to a report, over a 20 year life cycle and oil fired boiler would cost over half a million £s, whereas an air source heat pump would make total savings of £95k, ground source heat pump could save £250k and biomass could save £400k. Ground source and biomass would all attract payments from the Renewable Heat Incentive Scheme. I haven't quite got to the bottom of all this just yet, but I imagine the biomass heating will be decided upon.

With my hat on looking at the community benefit, it is hard not to go with the biomass proposal.

With my taxpayers hat on, it is outrageous that I, and everyone else, has to pay for this biomass heating which is made so ridiculously cheap in comparison with oil because of the levy on our own energy bills and taxation (or government borrowing that we are all going to be paying for for years to come).

I said the same thing somewhere else yesterday and while everyone else agreed with me on a personal basis, looking at it from the business' point of view, it makes it a nonsense not to go down that route.

And I think that is what makes me so angry about the energy policy we have. I am sure many businesses are jumping on the bandwagon as quickly as possible in case these "incentives" disappear or are reduced, yet payments will flow for 20 years.

Dec 20, 2013 at 3:29 PM | Unregistered CommenterGrumpy

Interesting that fracking for shale gas has entered this debate. Having been a firm believer that shale gas is around the corner and will come to the rescue sooner or later, I have been giving it serious thought and now I'm not so sure. An onshore gas field of sufficient capacity to make a meaningful contribution is an unsightly mess; numerous well heads (about four hundred to provide the same output as Morecombe Bay had) each with glycol injection facilities, kilometres of gathering lines and manifolds, trunk lines to gas treatment facilities, themselves the size of large oil refineries. Where's all that lot going to go? And how will the approvals be obtained before the lights go out? Somebody please tell me that I'm wrong.

Dec 20, 2013 at 3:39 PM | Unregistered CommenterVernon E

Grumpy, There is no guarantee that the payments will, in fact, flow for the full 20 years. The government that makes the rules can also change the rules.

Dec 20, 2013 at 4:12 PM | Unregistered CommenterSpeed

pat posted the link below:

http://www.theguardian.com/connect4climate-partner-zone/communicating-climate-change

which then takes you to this website from the BBC!!!!

http://www.bbc.co.uk/mediaaction/climateasiadataportal/article/developstrategy

What's the justification for the BBC providing this website? Blatant propaganda.

The green tentacles spread everywhere brainwashing and subverting the democratic process.

Dec 20, 2013 at 4:35 PM | Unregistered CommenterMD

By coincidence I have written to Nick Clegg today having received a non-response to an earlier letter. The text of my letter is set out below

Dear Nick

Thank you for your letter of 12 December and the copy letter from Ed Davey

I think you will agree with me that Mr Davey has failed to respond in a clear and transparent way to the concerns I have raised.

Government policy has been to shift generation away from fossil fuels to renewables. As a citizen of this country I think I am entitled to know what the real cost of this policy is.

Clearly government policy has impacted the cost of wholesale generation - I know it is difficult to quantify this cost but it is not correct for government to claim on the one hand that its policies cannot influence the cost of wholesale generation when on the other hand it claims those same polices are capable of controlling global climate. I am sure you can see there is a bit of a disconnect there?

So what is the best estimate of DECC of the effects of government policy on the cost of wholesale generation?

Similarly, on the question of network costs, how much is due to the shift from fossil fuel generation to renewables?

And Mr Davey seems to be admitting that 1% of the final cost is due to balancing costs. Why do DECC not acknowledge this when making their pronouncements?

What the citizens of this country are entitled to is clear and transparent information. What they get is endless obfuscation. As my elected representative I am sure you will agree with me that this is entirely unacceptable.

Perhaps the most egregious part of the announcements from DECC is the entirely spurious claim that we are? or will all be better off than we otherwise would be. The basic premise is that by spending more money we are better off. If this was a financial product DECC would be subject to a very serious charge of mis-selling policy.

Part of the logic (if indeed anything that comes out of DECC has any connection to logic) is that by 2020 the cost of fossil fuels will have increased to such a level that the cost of renewables will seem reasonable. I am sure that being an educated man you will be able to see the many flaws in this 'logic' but in case you have not applied your mind let me enumerate some of them for you:

1. renewable energy is inherently unreliable (intermittent as the industry likes to call it as it sounds somehow better than unreliable)

2. that means we need backup generation on permanent stand by - in the absence of nuclear this is a role that only fossil fuels can fulfill - so we are still locked in to fossil fuel reliance.

3. with nuclear and coal coming off line over the next few years we need new capacity but that will either not be built at all (because of perceived political risk) or only be built on the basis that the government underwrites the return on investment all of which means this new capacity will be unnecessarily expensive if it ever gets built.

4. having renewables on the grid makes all forms of generation intermittent and hence less efficient and more expensive

5. DECC is betting the wealth of the nation, built up over many hundreds of years, on the price of fossil fuels rising substantially over the next few years. You may have heard of Dieter Helm? I think I have referred you to his work in the past. He is undoubtedly an expert in a field where expertise is a rare commodity. He has today written about this gamble in The Times (precis here - http://www.thegwpf.org/dieter-helm-lost-gamble-forcing-energy-bills/). You will see that based on current data the bet that DECC is making with our money might best be described as reckless.

The danger is that DECC will manufacture a position where the cost of generation by whatever means in the UK is so great that energy will be out of the reach of many millions of its citizens and that, all industry that can, will re-locate to low cost energy jurisdictions. What we currently have is a blueprint for third world status within 15 years.

And what of global CO2 emissions? How do you think they are going to react to this heroic plan? With thousands of coal powered plants in planning and construction, not only in India and China, but also in Germany, atmospheric CO2 levels will continue to rise unabated.

All this against a background that policy is not based on science but the output of unreliable computer models which diverge further from reality with each passing day as the period of non-warming exceeds 17 years.

Can you explain to me, please, why you are wedded to this stupidity.

Kind regards

Dec 20, 2013 at 4:57 PM | Unregistered Commenterdolphinlegs

Here's the 'Keeping The Lights On' column in the current Private Eye:

With mid-winter upon us and the nights growing colder, the increasingly alarming pronouncements about the difficulty of keeping the lights on prompt Old Sparky to review progress in 2013 towards securing the nation’s electricity supply.

• Capacity of power stations closed: 6 gigawatts (about 9 percent of total capacity)
• Newly completed replacement capacity: less than 4GW
• Safety margin of supply over peak demand: 6 percent and falling (20 percent is generally regarded as comfortable)
• Number of shale gas wells completed: nil
• Number of new gas, coal or oil-fired power stations starting construction: nil
• Number of new nuclear power stations starting construction: nil

Yes, for the sixth consecutive year since French firm EDF came to the UK promising to build four new nukes here, it has failed to make an unconditional commitment to build any, despite the government’s ever more frantic efforts to throw money at the firm.

Full-scale gas-fired power plants – the only type that can be built to order for keeping the lights on reliably – take around three years to build, so the coalition’s excuses for this situation will run out next year. Ed Miliband’s “energy price freeze” has had the predicted effect of scaring off investors: the National Grid has announced a reduction in the amount of new grid connections being sought by would-be new power plant developers.

A dismal year: and since we know what new power stations will be completed before the next election (i.e. not enough), we can say with a high degree of certainty that the safety margin will get even worse. It will fall below 5 percent next year and below 4% in 2015.

Politicians of all parties are pretending this can be fixed without energy prices going through the roof. It would be a comforting thought at Christmas – if only it were true.

‘Old Sparky’

Dec 20, 2013 at 5:01 PM | Registered CommenterRobin Guenier

Heading Out ...

For more complete coverage of the IEA report (one more complex and nuanced than your Peak Oil view), see this FT article.
http://www.ft.com/cms/s/0/d005f176-4ad8-11e3-8c4c-00144feabdc0.html#axzz2o2KmsLJP

Or visit the IEA here ...
http://www.worldenergyoutlook.org/publications/weo-2013/#d.en.36200

Dec 20, 2013 at 5:28 PM | Unregistered CommenterSpeed

Mike Jackson:

"Yes there is, but it means you and every other like-minded soul in what was Westmorland taking your local paper to task every time they spout this drivel"

Afraid not, Mike. The Gazette is so far up Tim Farron's fundament and he's already pronounced. So the argument in S Lakes is over. We will not get fracking, no matter how essential, useful or beneficial to the UK energy economy as a whole.

My name is Geoff H not Sysiphus. I'm well into retirement and if younger folks than me want to go down the the 'green' route, then let 'em. I'll be well out of it when they realise they've beed 'ad.

They will bear the pain and misery they've caused for themselves. Not me.

'tis a pity I don't believe in the hereafter as I could then look down and tell 'em "Told you so"

Dec 20, 2013 at 5:30 PM | Unregistered CommenterGeoffH

Mike Jackson/SimonW

Sadly it's the case that those running professional engineering institutions appear all too willing to support the current energy lunacy. As reported in a comment at the time, some idiot at the Institution of Chemical Engineers wrote a nauseating letter of support to Davey earlier this year after one of his crazy speeches (when he claimed that 'sceptics' had too much influence, and other such garbage). IChemE also gave an honorary fellowship to Beddington on his retirement. I suspect that those attracted to participate in running institutions like this tend to be establishment types by nature.

Dec 20, 2013 at 5:35 PM | Unregistered CommenterDaveS

Heading Out; it might be prudent to take projections of oil demand from OPEC with a smidgen of salt. You give a few reasons for reviving the peak oil theme but, as I expect you are aware, there are many reasons for dismissing it - as has happened so many times. Believing in peak oil is to bet against human ingenuity in the pursuit of resources and thus riches: not a good bet.

Vernon E; where did you get your info? Glycol injection on each wellhead? 400 such installations? Gas treatment facilities the size of oil refineries? That sounds more like the extraction and treatment of gas/oil keragens in places like Green River. A while back there was a thread on here which showed shale gas wellheads within the city of Fort Worth - nothing like your description. (Update - here is the thread: http://www.bishop-hill.net/blog/2013/8/6/the-full-horror-of-shale-gas-extraction.html).

Dec 20, 2013 at 5:59 PM | Registered Commentermikeh

The FT article doesn't disagree with my position, and I have written about the IEA projection, which I consider too optimistic at Bit Tooth Energy .

I note that the IEA is becoming more pessimistic about the long-term production of oil from the tight shales in the US as the realities that a number of us have been pointing out start to happen. OPEC run totals each month that are more honest than some in showing what is being produced (they list what the country says it produces and then what others say they have produced) and it is their figures that help KSA decide how much oil to put on the market each month. (Note that despite the optimism of others that KSA will increase production they are continuing to confirm that 10 mbd is about all they intend to produce into the future).

In the same way that you can't get power from nonexistent power plants you can't get oil from nonexistent wells.

Dec 20, 2013 at 6:56 PM | Unregistered CommenterHeading Out

I read articles, such as this, I get more and more angry and frustrated. How is it possible for us to be landed with two such stupid governments?

Dec 20, 2013 at 7:35 PM | Unregistered CommenterPeter Stroud

Perhaps I am a realist or even a pessimist, but I believe our crazy energy policies will continue for at least a couple of years. There are many reasons for this:
Ed Davey will do anything he is told by Greenpeace, WWF, FoE and others.
The rest of the establishment is happy for the Green scam to fill their pockets.
Milliband in opposition is just as bad as Ed Davey.
The greens want the total destruction of civilisation as we know it and will never back down.
The press with few exceptions still support the CAGW myth.
The BBC is a cheer leader for the alarmist movement.
Most of the public have been brainwashed by propaganda from all of the above.

The only events that may cause ripples in the above "consensus" are the mass exodus of industry (and jobs), frequent and prolonged power outages and winter deaths approaching 100,000.

Of course, by then it will be too late and there will be no plan B.

Dec 20, 2013 at 7:39 PM | Unregistered CommenterSchrodinger's Cat

As Enoch nearly said, it's like watching the Westminster lot busily engaged in heaping up the Nations own funeral pyre.

Dec 20, 2013 at 8:44 PM | Unregistered CommenterMartyn

I concur with most of what has been said above but would add the following. We need to change the language of the debate as the greens / liberal left have done over environment and politics.

In the context of this article we should all refer to oil and gas as hydrocarbon fuels and not fossil fuels. It is almost certain that only a tiny amount of the methane is as a result of organic action of microbes and decay, and oil is likely to be the same, albeit there is much to learn. Coal is a different case. The world fossil reinforces the notion that gas and oil are limited and about to run out, and it also conjures up that we are some how doing something wrong. If we continue to debate on the terms set by the green lobby we will always be at a disadvantage.

If every time a sceptic whilst being interviewed corrected the interviewer calling gas and oil by its proper names it would have the effect of putting them at the disadvantage and allow us to get our points across. Just being right is not enough, we have to control the debate.

If someone asked Ed Davey what methane was made of and its chemical formula I bet he couldn't answer; yet most school kids would know the answer. And most BBC and C4 interviewers would be little better.

Dec 20, 2013 at 9:19 PM | Unregistered Commenterpetermg

Should the 'greenest government ever' consider resource use in the generation of electricity?

For every MWh generated, wind turbines use 11.5 times more steel and 9.7 times more concrete than is used by a current LWR nuclear power station: http://idiocyofrenewables.blogspot.co.uk/

In a world of diminishing resources should this concern true environmentalists?

Dec 20, 2013 at 9:50 PM | Unregistered CommenterColin Megson

I strongly concur with the view that what is needed is for professional engineers with real world experience to have much more influence on the energy debate.

Most of my time in 30-odd years in the drilling industry has been spent with engineers and technicians and other people like me who work with engineers.

I'd say they do not get involved in public debate because they can be somewhat other-worldly and tend to think the best technical solutions will rise to the top no matter what the public thinks, that non-engineers are emotional and wouldn't understand anyway, and that the facts are so obvious that people will not be able to resist acknowledging them eventually. They tend to underestimate the influence of greenie activists because they find them ludicrous and think any other sensible person would too.

Those engineers in oil and gas have also noted that all the huffing and puffing against "fossil fuels" has had absolutely no impact on demand which has continued to rise even in the wealthy countries doing all the huffing and puffing.

Even the "greenest" societies like the "fossil fuel free' "Tinkers Bubble" admits to using the internet, which is not built, run or maintained without hydrocarbons.

Knowing all this, most see little point and have little interest in speaking out, and if they are good engineers are so focused on what they are doing they have little time for public debate anyway.

Dec 20, 2013 at 10:47 PM | Unregistered Commenterkellydown

Bear in mind that all the main UK political parties are just following orders from on high: there is no scope for diverging from the current energy regulations and directives, despite the energetic smoke, mirrors and Kabuki theatre from them all.

Ed's next crusade? Arcade machines in betting shops ffs. That's the sort of stuff our national leaders are left with - dog shite and streetlights.

Dec 20, 2013 at 10:48 PM | Registered Commenterwoodentop

The American Interest reports ...

Cameron to Brussels: Paws Off Our Fracking

British Prime Minister David Cameron is opening up the UK’s countryside to drilling—and, yes, that includes fracking—and he’s got a message for the EU: don’t rule out our shale gas.

100,000 is an important number for Britain’s shale aspirations. It’s the number of square kilometers being opened up for oil and gas exploration, and it’s also the number of pounds on offer to communities affected by fracking. The UK has sizable reserves of shale gas—roughly 1,3o0 trillion cubic feet—but has so far struggled to overcome strident local opposition to exploratory well drilling.


http://www.the-american-interest.com/blog/2013/12/20/cameron-to-brussels-paws-off-our-fracking/

Dec 20, 2013 at 10:57 PM | Unregistered CommenterSpeed

@Speed:

Which is exactly the huffing and puffing I'd expect. We've had the same over immigration. Note how that has morphed from "immigration" to "net immigration".

We're signed up to various things which tie the hands of our (mostly willing) politicians, who then go out of their way to pretend that they're really in charge.

Puff piece but read between the lines:

http://www.telegraph.co.uk/news/politics/10518120/New-EU-fracking-law-plan-threatens-Britains-shale-gas-boom.html

Dec 20, 2013 at 11:19 PM | Registered Commenterwoodentop

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