Bishop Hill Political murder
Sep 24, 2013 Energy: grid The political classes do seem hell-bent on murder don't they? The murder of the UK economy I mean.
Today Labour leader Ed Miliband apparent promised a two-year price freeze on energy prices as well as proposing the total decarbonisation of the UK economy. I wonder if readers can spot the flaw in Miliband's reasoning?
There are some clues here, from Peter Atherton of Liberum Capital, whose job it is to analyse the deepest thoughts of our political leaders and consider the impact on the City:
This is a call to dis-invest. Price controls are a rubicon not to be crossed
Price cap must be illegal. If govt picks up cost I estimate it will cost at least £3bn. Also drives horse through EMR
Question for DECC - is govt imposed price cap a foreseeable law change under CfDs? If so then no one can sign them. EMR dead on delivery!
If anybody thought it was impossible to come up with a worse energy policy than that of the coalition, you now know better.
Reader Comments (76)
Clive Best on Sep 24, 2013 at 10:08 PM "P.S. the answer is nuclear fusion."
We will be waiting a long time for that.
We need something now! Not closing the coal fired stations might force Brussels to invade, but at least people here will be less likely to die of cold in the winter.
The complete lack of any coherent/sensible energy policy by LibLabCon is unbelievable. Well it would be unbelievable if we hadn't been watching it closely for 20 years and could see the disaster looming with every new energy minister (I believe we've had about 16 in the last 16 years. I don't recall the names of most of them, but none of them had a clue about how the electricity and gas markets operate and what is needed to keep the lights on. From what they said, I'm pretty sure that not one of the ministers knew the difference between energy and power.
"We need something now! Not closing the coal fired stations might force Brussels to invade, but at least people here will be less likely to die of cold in the winter."
Fully agree in the short term. The germans are building 19 coal fired stations and the dutch are building another 3. Recently I met a Dutch power engineer from Rotterdam who explained to me that for political reasons their coal station had been converted to burn wood pellets about 3 years ago. The furnace exploded because of residual water in the pellets. They quickly abandoned this "eco-project" and returned to coal. The policy of the UK decarbonizing unilaterally is analogous to the stoning scene in the Life of Brian . It is utter nonsense.
Dung
you need to set up a thread about living off-grid. Folks in the US do it - although they seem to have an unnatural love of belt-fed machine-guns.
Q. Is this any different to the 3 year price fixes already offered by many suppliers? ie. They just jack up the price a bit and offer you a freeze for a few years. Seems this would just be an industry wide requirement to offer a 20 month fix. This doesn't seem much different to the recent LibCon requirement for suppliers to simplify their tarriffs and ensure everyone was offered the cheapest tarriff. The net effect will be the same: higher prices for everyone.
diogenes
I am warming to the idea of belt-fed machine guns ^.^
Somebody upthread stated that MiliBean was not stupid and that he knew what he was doing but I beg to differ. To misquote Mr Gump; stupid is as stupid does. I do not doubt for one minute that MiliBean is highly intelligent and very well educated but he is not using those qualities when he decides his future plans, he has been sidetracked. There seem to be two obsessions which override intelligent thought; the need to be Prime Minister and the glory of being seen to be making sacrifices for the greater good. Unfortunately the sacrifices will be made by us and not MiliBean and the greater good he has in mind is a fantasy.
"The political classes do seem hell-bent on murder don't they? The murder of the UK economy I mean."
Not that they restrain themselves from the other kinds, of course.
There seems to be a sort of political singularity looming across much of the West. The US is dysfunctional in ways difficult to conceive as possible. The Eurozone is held up by....just what, exactly? The policies ignore reality, on energy, climate, education, food, taxation, public spending, etc.
Ed Sillyprat will be on BBC1 at about 7.20am defending his energy policy. I'll have to sit well back from the screen.
It could well be a shrewd political move. The price freeze is to last for only 18 months so the energy companies will be able to cover it by hiking prices before the election - i.e. under the evil Tories. Then brave Ed will come in and make everything right. Simple really.
Since much of the increase in the retail price of energy over the last few years has been politically induced (fossil fuel levy, feed in tariffs for solar PV and so on) freezing retail prices of energy should be relatively trivial - simply roll back the idiotic additional taxes and hey ho, retail prices remain frozen without putting a squeeze on utility companies. The problem is the promise to decarbonise. There is a technical term for this kind of promise. It's tosh! But perhaps thorium reactors can be built more quickly than I thought ...
So Milband brings in the Climate Change Act which increases everyones energy prices. A side effect of the act is the possibility of balckouts. Then he proposes to freeze prices so people don't pay more for their energy, blaming the evil power companies. The side effect of this new policy is the possibility of blackouts.
Meanwhile the current incumbents in power are wedded to the Climate Change Act and other associated futile policies that make life very expensive for ordinary folk. All caused by having politicians who are so monumentally stupid it beggars belief.
Why do we have so many staggeringly incompetent politicians in positions of power? What ever happened to the national interest? Lets sacrifice our economy on the altar of climate change, even though it won't make any difference to the world temperature in 100 years in any measureable way whatsoever - even if you belief in CAGW.
Clive Best (10:08 pm Sep 24) may be right when he says that "the answer is fusion" but Robert Christopher (same day 10:11pm) is right too "We will be waiting a long time for that".
I have just taken a look at ITER which is the successor to JET and currently the owner of the largest tokamak in the world. When it eventually runs hot, it hopes to produce 10x its power inputs so that consumption of 50MW will produce 500MW even if only for a short duration. That's some distance from having a design which is stable enough to couple to a grid.
The next design is DEMO (the objective is in the name) which should prove the business case for production scale tokamaks (2GW on a continuous basis producing 25x its inputs). In our lifetime? Depends on how old you are but DEMO doesn't plan any generation phases until 2033. Nothing Ed can bank on there for his decarbonisation target.
Excellent article at the Spectator
http://blogs.spectator.co.uk/coffeehouse/2013/09/ed-milibands-energy-announcement-may-be-nonsense-but-it-could-become-popular-nonsense-if-no-alternative-is-offered/
It still amazes me that so many politicians are willing to bet the - their constituents' - farm on wonky technologies.
I declare a bias because much of my work is in technical services to drilling for oil & gas, but I've also worked in "renewables" and like most people in technical services, keep in touch with what's happening and have a keen interest in any new developments. .
What seems apparent to me is that the favourites, solar and wind, after decades of public funding, are still not reliable grid contributors and perhaps (it must be allowed) never will be. They might be viable for remote offline set-ups...? We really would like these technologies to be viable but wishing doesn't make it so, nor does simply pouring in more money or taxing the alternatives. You can't make a racehorse out of a donkey.
In the same time frame, progress in improving the efficiency and cleanliness of fossil fuel use has been remarkable, but largely unacknowledged. Presumably because of a conviction that any fossil fuel use is bad, regardless of how efficient or clean, except perhaps when it's used to design, test, manufacture, transport, maintain, and back-up wind and solar (also largely unacknowledged).
Despite all their talk about The Science , we seem to have a couple of generations that are technically illiterate and think mechanical advances can happen as easily as software upgrades.
I have not read every comment so apologies if this is repitition of what others may have commented.
I have two points.
1. The politicians are hiding the true cost on your energy bill of their policies. Some months ago, the Chairman of SSE was interviewed on Hardtalk (the Bishop ran a link to the iplayer file of this interview). In this, the chairman clearly stated that only 505 of the electricity bill relates to the cost of supply. He was not entirely clear on what the other 50% consisted of and the BBC interviewer not unsurprisingly did not question him on this. But the Chairman was saying that 25% of the bill relates to government policies on subsidies for home improvement 9eg insolation double glazing cavity wall insulation) and assistance to those in fuel poverty. The implication was (but not expressly stated)0 that the remaining 25% goes to investment in the new renewable infrastructure (windfarms, connection to the grid, balancing the grid) but it might also include the cost that has to be paid to those supplying the grid with energy, the feed in tariffs as well as the higher costs paid to windfarms possibly when not producing electricity.
As i say, the BBC journalist did not question all of this so the precise detail was not clear. What was clear is that only half the bill relates to the cost of energy supply such that electricity costs could be halved over night if only the Government had a different energy policy. the position with gas is not so extreme. The gas bill is larger but some part of the bill pertains to government policies with respect to subsidised boiler replacement, home insulation and assisting those in fuel poverty. It may be that only 20%5 of the gas bill covers such matters and 80% of the bill pertains to the costs of supply. Electricity is disproportionally hit by the renewable scam.
The take home from this that customers are already paying about £250 (ie., about half of a typical £500pa electricity bill) plus about £200 (ie., about 20% of a typical £1000pa gas bill) as a consequence of the rush towards green renewables. It is worth listening to the interview if still available on iplayer (or perhaps youtube) since it is an eye opener.
2. Is the price freeze simply a price rise postponed? The Labour party suggest that the price freeze will be worth about £120 to the average user. But what will happen when the freeze in 2017 expires? Will the energy companies put up their prices not only to cover then current additional costs but also to reclaim back the lost £120 (possibly the lost £120 plus lost interest thereon). Accordingly one might see above normal 9whatever that be) price rises for the years 2018 to 2020 so as to recoup the lost £120. What is to prevent this?
In the long run is the consumer going to be any better off? Will the consumer obtain a short term reprise only to be stung hardly once the freeze is over?
Finally, what about tax revenues. the energy companies will be making less of a profit, perhaps even a loss during this period. this will have a marked effect on government receipts. What will the government do about the shortfall? Will it cut back on expenditure on NHS, or welfare or on other projects? Will it raise taxes, possibly stealth taxes, to recoup the tax replace the tax revenues it is not recieving from the energy firms? If so, the consumer may be no better off and it will all be just smoke and mirrors. perhaps no surpirse there with politics and politicians.
,
I have one further point to add to my comment above. Incidentally, in the 2nd para, the sentence reading:"...the chairman clearly stated that only 505 of the electricity bill relates to the cost of supply." should have read:"... the chairman clearly stated that only 50% of the electricity bill relates to the cost of supply."
I consider that the announcement of this policy to be good news.
It is bound to lead to discussion in the MSM including the BBC. This in turn is bound to lead to comment upon how energy prices are derived, and why they are escalating so significantly. Sooner or later the costs of the government energy policy will come into the frame, and the general public are therefore likely to become better informed as to the full costs of the government's energy policy, and how this policy is directly impacting on escalating energy bills and will do so unless the government changes tack.
I consider that a rabbit has been let out of the hat. It will be interesting to see how this runs and what hoops it hops through.
Richard, further to your comment, it should also be remembered that a lot of the fuel poverty which consumers are coughing up for is created by the mandates and subsidies. It is a self-perpetuating cycle of money churning (with concomitant administration costs off the top).
If Labour really wanted to help consumers, they would stop increasing taxes inequitably through the back door. The whole point of a public taxation system is that it is transparent and accountable. What governments all over the world have pulled off via this scam is creating a shadow taxation system, which is neither transparent or accountable, under the guise of Saving the Planet. And, don't forget, they get to whack their own indirect taxes on top of the ever-increasing bills. It's scandalous.
Can anyone tell me if wind output actually touched zero at or around 4 a.m. this morning, as seems to be the case from the Gridwatch graph..?
John writes : " ITER ... will produce 500MW - DEMO doesn't plan any generation phases until 2033"
There is actually another possibility which is a called a hybrid Fusion-Fission reactor. ITER will produce 500MW of neutron power. That is a huge flux of neutrons which could be used to induce fission. A blanket of natural uranium or thorium around ITER would amplify that power up to ~3 GW of thermal energy which could generate up to say 2 GW of electric power. The dis-advantage is that you would get fission products - i.e. waste. However it would be inherently safe because the fission blanket can never become critical. A pure Fusion rector (DEMO) produces very little waste apart from activation of the reactor structure but is indeed 20 years away.
Throw away phrases like "decarbonizing UK energy" are meaningless. How does Miliband imagine that such a goal could be remotely possible with renewable energy? Certainly WIND could never do it. All 5000 turbinesin the UK during the last 2 days averaged 0.4% of energy demand. Last week it was windy and they managed to a record of 12% of UK demand on 1 day. On average however, they yield a mediocre 4.2%. So lets suppose we triple wind power over the next 10 years. Perhaps the government can on average meet its net target of 15% renewables. However, there will still be days when wind power nets just 1% of demand. What does Ed Miliband imagine will be able to supply the other 99% needed to keep the lights on ? Chicken Shit ?
Only an 80% nuclear baseload could decarbonize UK energy supply.
P.S. the answer is nuclear fusion.
Sep 24, 2013 at 10:08 PM Clive Best
Nuclear fusion has been 50 years in the future for the last 60 years. It seems likely to be 50 years in the future for ever.
Nothing wrong with nuclear fission. Cheap, reliable, safe and unlimited fuel if one uses breeders. Promising new technologies in the near future. Of course, that is what frightens people like Paul Ehrlich and his flock. They are still running a successful propaganda campaign to scare people off, unfortunately.
Sherlock1
See below data from todays Gridwatch dataset the turbines are recorded as dropping to zero output between 12-10-01 and 12-25-29.
244612 2013-09-25 12:10:01 424
244613 2013-09-25 12:15:02 0
244614 2013-09-25 12:20:26 0
244615 2013-09-25 12:25:29 523
If we relied totally on wind generation then I presume at this time everything in the country that was not generator backed up would have stopped working, imagine being on the operating table and the backup generator didn't start.
One possible scenario is that what Labour would like to do is force the energy companies into a corner so that they can be nationalised. This would appear to be entirely in line with their recent conference pronouncements.
CHAVEZ
- Price ceiling was his most unsuccessful economic policies
-he said "the price of milk in shops is too high, I will set the maximum price"
- Result ?? ... there was no longer any milk in the shops as producers preferred to sell to cheesemakers for a profit rather than retail for a loss.
So tell the people of Venezuela "the energy companies are scare mongering"
- New York Times, Wikipedia