Stuff their mouths with gold

In all the trailers for Amber Rudd's big energy speech today, the news that has struck me is not the phase out of coal, most of which was going to happen anyway because of low natural gas prices and EU regulations.

No, what is interesting is that Rudd will apparently admit that in order to get any gas-fired power stations built they are going to have to be subsidised. So a big "bravo" to the political establishment for managing to turn a functioning energy system into one in which everybody participating will be in receipt of taxpayer largesse. Oh well done indeed.

The six-million dollar question is, of course, just how much subsidy is going to be required to tempt investors back into the market. The political risk of taking part is going to be sky-high. Over the lifespan of a power station, governments will come and go. Will anyone want to risk that the bungs will survive so much change? My guess is that getting anything done is going to involve "stuffing their mouths with gold", and then some.

Update on Nov 18, 2015 by Bishop Hill

Perhaps I have done Ms Rudd a disservice. (This is what comes of my having treated the Guardian as a reliable source.) Here is the text of her speech:

We now have an electricity system where no form of power generation, not even gas-fired power stations, can be built without government intervention.

And a legacy of ageing, often unreliable plant.

Perversely, even with the huge growth in renewables, our dependence on coal, the dirtiest fossil fuel, hasn’t been reduced.

Indeed a higher proportion of our electricity came from coal in 2014 than in 1999.

So we still haven’t found the right balance.

We need a course correction using the tools we have already developed through Electricity Market Reform.

We know competition works. It keeps costs low and can deliver a clean and reliable energy system.

We want a consumer-led, competition focussed energy system that has energy security at the heart of it and delivers for families and businesses.

We want to see a competitive electricity market, with government out of the way as much as possible, by 2025.

Getting there will not be easy. The process of privatisation itself spanned five Parliaments.

Indeed, moving to a new model without risking energy security will require government to continue to intervene. But that should diminish over time.

We need to start that work now.

So how do we do that?

Zac paying greens to sue city bigwigs

A group called Client Earth is threatening to sue big UK businesses for not doing as greens tell them on the climate change front.

The Companies Act 2006 codifies directors’ duties in law for the first time. They must “promote the success of the company”, first by considering “the likely consequences of any decision in the long term”. Failing to plan for climate change is incompatible with this and other duties and leaves directors open to legal challenge.

The case for climate litigation against reckless directors grows ever stronger. Increased regulation, changing market dynamics and heightened risk to physical assets means maintaining the status quo is no longer an option for those keen to protect their finances and reputation.

We at ClientEarth are closely monitoring the activities of FTSE 250 companies. We will pursue those directors who fail to protect their investors from the challenge that climate change presents. Those intent on following a business-as-usual model, be warned: the “usual” has changed.

Even Guardian readers seem unimpressed.

So who is behind Client Earth? A list of their funders is quite interesting, including the City of London Corporation Charity and...wait for it...the personal charity of Zac and Ben Goldsmith. Yes that's right folks, the aspirant mayor of London is paying greens to sue the companies that bring the wealth to the city.

It's an interesting tactic.

Deccline and fall

The man running UK energy policy?According to an article in the Ecologist, DECC is now no longer much more than a shell. It seems that the Treasury and the new Infrastructure commission headed by Lord Adonis are taking all the decisions related to energy projects, leaving Amber Rudd with little to do beyond talking about the weather (or at least the climate) with colleagues from around the world.

Unfortunately Lord Adonis seems to be enthusiastic about wind energy, so the insanity may continue for a while yet. But at least energy policy seems to have been removed from the hands of the deep greens.

Congress to investigate Shukla

Via GWPF, we learn that the US Congress has decided to investigate the institution behind the RICO letter, which called for sceptical scientists to be prosecuted for racketeering. As everyone no doubt knows, some of the authors of the letter appear to have been lining their pockets with taxpayer dollars in a fairly brazen manner.

Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) today sent a letter to Dr. Jagadish Shukla, a professor of climate dynamics at George Mason University who founded the Institute of Global Environment and Society (IGES). IGES is a non-profit organization that has received millions of dollars in federal grants from the National Science Foundation (NSF), National Oceanic and Atmospheric Administration (NOAA) and NASA.

Don't you just love it when scientivists overstep the mark?

FiTs: a test of Cameron's conservatism

After Energy and Climate Change questions yesterday, several commenters wondered if the government might be about to backtrack on the swingeing cuts in feed-in-tariffs that were announced recently. MPs on both sides of the house had certainly been very vocal in their demands on behalf of their constituency energy companies and there was scarcely a voice heard in support of the proposals. MP after MP demanded that  FiTs be retained for renewables operators. Meanwhile, Aberdonian MPs wanted cash for North Sea oil operators as well. Pressure of the FiTs front continues today.

It's a vicious circle of course and the government risks getting generating a spiral of subsidy, with money having to be thrown at all market participants simply to keep them afloat.

This is going to be a test of Cameron's resolve. Is he going to play the Conservative, and put the consumer interest first, or is he going to cave into the producer interest?

We watch with interest.

ECC work plan

The Commons Energy and Climate Change Committee has just published its work plan for the autumn. Two of the inquiries look rather dull - lessons learned from attempts to improve energy efficiency and making the grid more welcoming for windfarms. (This is not precisely how they are described, but I think this is about the measure of what MPs are trying to achieve.)

One inquiry could be revealing, however.

Investor confidence in the UK energy sector. Stakeholders called for greater coherence, transparency, consistency and evidence in the policies coming from DECC. As a result, the Committee is now seeking views on the energy investment landscape in the UK and steps that DECC could take to increase investor confidence.

I'm not sure they are going to like the answer though.

Turnbull's not for turning?

It's all go on the political front. While attention here has been focused on Jeremy Corbyn, in Australia, staunch sceptic Tony Abbott has been ousted by the considerably more eco-emollient Malcolm Turnbull, news that has been greeted with considerably satistifaction by our green friends.

Unfortunately, Turnbull has now gone and spoiled it all:

.@turnbullmalcolm says no intentions to change #climate policy. "It's very well designed".

— ABC Environment (@ABCenvironment) September 14, 2015

Lucas to DECC?

Guido has just tweeted a rumour that Corbyn is to appoint Green Party MP Caroline Lucas to the DECC portfolio. If true, that should go down like a lead balloon with ambitious Labour party backbenchers.

I assume it's not true though.

Update on Sep 14, 2015 by Bishop Hill

Indeed, it was a bit unlikely wasn't it? The dear leader has filled the DECC shadow role with Lisa Nandy, an MP with little or no previous interest in the subjects of energy or climate.

Red, but not green?

The somewhat bizarre decision of the Labour party to elevate Jeremy Corbyn to the position of supreme leader (or is it "beloved" leader?) has prompted me to take a look at his positions on climate and energy. It's fair to say although he's a keen cyclist and doesn't own a car, green issues seem not to be at the forefront of his thinking. Indeed his major policy position in this area - the renationalisation of the power companies - seems unrelated to any concerns about the environment.

You get a similar impression by looking at his website, where there is not exactly a plethora of climate-related material, and there is not even a category for energy.

Still, he's a politician, so his own views on issues may not actually be a good guide to what he decides to put on the Labour party menu for the next election - that of course will be dictated by what he thinks will go down well with target groups of voters.

Update on Sep 14, 2015 by Bishop Hill

The ECIU has this quote.

"We can overcome the challenge of climate change and build a sustainable future – but not if we leave power in the hands of corporations only interested in short-term profit. We need democratic government acting in the long-term interests of people, not husky-hugging photo opportunities."

I'm not sure this changes my impression very much.

On Syria and climate change

Never a man to let a good crisis go to waste, Barry Gardiner MP is trying to use the deaths of Syrian migrants to advance his climate change agenda. If we want to understand the crisis, he says, we must look beyond Assad and ISIL to the weather and the "ruined farmers" - hundreds of thousands of them apparently - who left Syria's wheat belt for the cities. We learn, moreover, that 2010 was during the longest drought in Syria's records.

Now take a look at a graph of Syrian wheat production (data from here).

Tells a rather different story doesn't it? You can see that the drought wasn't actually in 2010 at all, but rather in 2007/8 and, although rainfall remained sub-par thereafter, by 2009 wheat production had recovered to near normal levels and remained there for several years.

Perhaps there is more to this than meets Mr Gardiner's eye.

Carwyn's car crash

The renewable energy sector is of vital importance to North Wales, [which] is becoming a powerhouse for renewable energy.

Welsh First Minister Carwyn Jones, December 2014

[W]e’ve been saying for a long time, as have Tata, energy costs in the UK are too high.

“When compared to other countries, even in Europe, it’s very difficult for our industries to use a lot of energy to actually be competitive.

Welsh First Minister Carwyn Jones, today

Wales has to move to a green economy as fast as possible, says First Minister Carwyn Jones...Mr Jones told a renewable energy conference in Cardiff that he had taken personal responsibility for energy policy within the Welsh government.

BBC News report, 2011

Shelling out for windfarm operators

A few weeks ago, and unnoticed by yours truly, David Davis MP took a step to address one of the most egregious practices of windfarm operators.

The big companies that build windfarms tend to put each of their developments in a separate shell company, with a small share capital and funding provided instead through a large loan from the parent company. With profits immediately passed up to the parent, the operating businesses will usually have no net assets, which means that if any large liabilities arise there is nothing available to meet them.

Click to read more ...

DECC a dead duck?

Hints are emerging that the government here in the UK is preparing to make further cuts in departmental spending. DECC is apparently first in the firing line.

The Energy and Climate Change department...has started to talk to its staff about the need to have a smaller workforce in future. The department is not yet talking about specific redundancies, but it is preparing for bigger cuts due in the comprehensive spending review, which will be unveiled on 25 November.

There are even suggestions that the department might close completely, with its duties split between Defra and BIS.

It would certainly be useful if all of the green tendency could be "locked away" in Defra, leaving the practical types to concentrate on keeping the lights on.

Social licences

A few weeks ago I chanced across an oil company executive who was expounding earnestly on his company's "social licence to operate". I raised an eyebrow at the time because it struck me as a case of big oil adopting the language of the environmentalists.

Interestingly though, it turns out that the whole concept of a social licence was introduced by a mining company executive:

[Jim] Cooney was racking his brain for a concept to describe why projects from Peru to Angola were getting delayed and shut down by protests. The companies lacked “social license,” he told the audience.

Click to read more ...

Today's top news: greens write a letter

Anti-capitalist green groups and crony capitalists are annoyed about George Osborne's decision to cut renewables subsidies and have written to the Prime Minister to say he's a bad boy. With depressing inevitability, the BBC has launched a full-scale PR campaign to back them up.

So we have a Roger Harrabin article about the letter here, a segment on the Today programme here (from 1:17.35), which is essentially an opportunity for a series of opponents of the new policy to air their views.  Interestingly, there was less quoting of green anti-capitalists this time round. Perhaps my criticisms of Harrabin's last piece made an impact. But not much of an impact - the nearest thing to a supporter of the policy changes was someone from KPMG, who thought the subsidy removal was necessary but taking place too quickly.

I gather the FiveLive phone in features anti-capitalist campaigner from Friends of the Earth as well.