The wisdom of the man in Whitehall
Sep 3, 2015
Bishop Hill in Energy: coal, Energy: grid

Yesterday came the news that another major power station is to close. Eggborough is a big 'un, its 2GW coal-fired capacity meaning that it generates as much as 4% of the UK's supply. According to the operators, electricity prices have now fallen so far that they cannot operate profitably.

Many might wonder whether this is a big deal or not. After all, businesses close all the time - markets have always weeded out the weak and old and uneconomic. But as the operators also point out, we are on the verge of blackouts this winter because of a lack of supply. Ofgem thinks they can avoid this, but only because the government is paying to have diesel generators on standby and because it is going to pay major industrial users to switch off when margins become unbearably tight.

So Whitehall has managed to get us into the situation where we are going to replace (relatively) efficient coal-fired stations and a productive population with inefficient diesel generators and (potentially) people standing around waiting for the power to come back on.

Such wisdom is not seen every day.

Thank goodness.


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