Energy, just like old times - Josh 205

It's an all-out media war against the Green Energy Lobby says The GWPF

Excellent, carry on!

Cartoons by Josh

(and spelling corrected, thank you!)

A change in the shale story

PriceWaterhouseCoopers have issued a report on the impact of shale gas on the economy, which seems to take a rather different view to previous pontifications on this subject. According to BBC Business, PWC reckon that shale will add a trillion dollars to world GDP, with conventional producers like Russia being big losers. In a second story, on the Scotland pages, it is revealed that the report's authors expect oil and gas prices to be significantly depressed by a surge in shale production.

I'm sure Mr Cameron will see this as an opportunity to apply further taxes.

Update on Feb 14, 2013 by Bishop Hill

Correction: the report concerns only shale oil.

Bloomberg's baloney

Last week Bloomberg New Energy Finance had one of those silly "wind cheaper than everything else" articles that appear from time to time.

Unsubsidised renewable energy is now cheaper than electricity from new-build coal- and gas-fired power stations in Australia, according to new analysis from research firm Bloomberg New Energy Finance.

This new ranking of Australia’s energy resources is the product of BNEF’s Sydney analysis team, which comprehensively modelled the cost of generating electricity in Australia from different sources. The study shows that electricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme. However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas.

We now know from bitter experience that claims of this kind are usually feature one of a handful of magic ingredients that give the answer required:

• use of levelised costs
• heroic assumptions about gas and coal prices

Climate Spectator - a site that I believe is an upholder of the IPCC consensus - has rather taken the Bloomberg article apart showing that the second bullet is the favoured option:

In terms of wind being cheaper than combined cycle natural gas, the key assumption behind that conclusion is that new gas contract prices will rise from the $4 per GJ that most power plant are paying today, to $12 per GJ for new plant.

Bloomberg's baloney is so bad that even their allies are appalled.

SNP hammering the Scots

The Scottish Tories, armed with their bright and shiny new energy policy (which can be summarised as "we're not going to be quite as silly as the SNP"), have decided to let rip at the Holyrood powers that be accusing them of driving Scots into fuel poverty:

A Scots politician has claimed wind farm subsidies are plunging Scots into fuel poverty.

In a Scottish Government debate on fuel poverty, Mid-Scotland and Fife MSP Murdo Fraser attacked the SNP for its staunch backing of onshore wind projects.

Opponents of the Government policy have claimed the generous grants awarded to wind farm developers have pushed electricity costs through the roof, leaving Scotland with some of the highest energy bills in Europe.

The subsidies were introduced across the UK last year and are expected to have cost up to £1 billion.

They offer a huge benefit to the energy companies as they push ahead with wind power projects but their cost in added on to household bills.

All this is quite true, of course, but I think we have a long way to go before Holyrood sits up and takes notice. Fuel poverty and frozen pensioners are secondary concerns when there is the green vote to pursue.

Ofgem and the family bill

Bob Ward is trumpeting the latest propaganda sheet from Ofgem, which details the costs of environmental legislation on energy prices. The impact, he claims, is only around 10% of the average household bill.

Here's Ofgem's leaflet, and here are the relevant paragraphs:

Energy Company Obligation (ECO): A new domestic energy efficiency programme designed to create a legal obligation on certain energy suppliers to improve the energy efficiency of domestic households. ECO is estimated to cost a typical consumer £27 per fuel each year.

The Renewables Obligation: A Government support mechanism for promoting large scale renewable electricity projects in the UK. Ofgem’s estimate is that the cost of this scheme this year is £21 out of your electricity bill (there is no impact on your gas bill for this programme). The cost of this scheme is expected to increase in April 2013.

Click to read more ...

The 110 billion pound question

David Rose, in a blistering article at the Mail on Sunday, asks:

Why IS Britain about to pay £110billion to enter a new Dark Age?

There is considerable discussion of whether we should be focusing on developing nuclear fusion. That would certainly seem like a sensible way forward. Given that climate sensitivity looks to be only around 1.5, we have the best part of a century to bring such a project to fruition before GDP falls much below current levels.

In the meantime, Andrew Neil has been reading the tea-leaves of David Cameron's interview on the Marr Show this morning. On his Twitter feed Neil says he reckons the public is being softened up ahead of the UK losing its AAA credit rating. Adding higher interest rates to the burdens the public are having to endure is going to make it much harder for the political classes to continue along the path they are currently treading.

Food or fuel?

A survey of the Netmums website has found that a significant proportion of families are now having to choose between feeding the family and heating their homes.

Soaring energy bills are forcing one in four mothers to turn off their heating in the depths of winter in order to afford food for their children. Fuel poverty is resulting in thousands of families resorting to wearing extra clothes and using blankets in their homes.

Most of the political establishment will view this as a policy success, I imagine, since ever-rising prices is seen as an important objective of energy policy, which will cause people to insulate their homes and so save the planet.

Scottish Power on cost of green policies

I was pointed to this brochure at last night's [Tuesday's] UKIP meeting (click for full size). It does seem to show that Ed Davey is trying very hard to make those in fuel poverty even poorer and even colder.

Green lobbying

Energy efficiency subsidy could cut UK demand 40 per cent

New Green Alliance and WWF report calls for efficiency feed-in tariff to be part of Energy Bill ahead of crucial ministerial meeting this week

Introducing a financial incentive for energy efficiency could help the UK deliver electricity demand reductions at far lower cost than building new low carbon generation capacity, green campaigners have said.

Click to read more ...

A treat in store- Big Energy Week

By Today's Moderator.

In advance of Big Energy Saving Week (w/c 22 October), Energy and Climate Change Secretary Edward Davey is writing to all Members of Parliament with advice for their constituents to help them keep energy bills down and their homes warm this winter.

Dear Colleague,

As winter approaches, I am writing to let you know how the Government is helping your constituents reduce their energy bills and keep their homes warm.

The Government cannot control volatile world energy prices, which account for around half the current domestic energy bill, but there are a number of ways it can help consumers to cut their energy bills, including additional support for those on low incomes and the vulnerable....[read on]

http://www.decc.gov.uk/en/content/cms/news/beswletter/beswletter.aspx

VAT on fuel

UK readers will be aware that VAT is levied on energy at a reduced rate of 5% - regardless of the source of the energy.

Here is how National Geographic describes the situation.

A reduced value added tax levied for the use of natural gas for heating fuel and power amounted to a subsidy of $4.4bn...in 2010. The UK also levies a reduced value added tax for petroleum and coal on a smaller scale.

Wow. That's quite a misrepresentation isn't it?

That's telling him

This just in from the Telegraph:

Peter Atherton, Citigroup’s head of utilities research, said the SNP’s radical renewable power targets require up to £7 billion of investment a year but the figure at the moment is only £750 million.

The industry expert, who advises the bank's clients where to invest their money, said utility share prices are “dire” and green energy manufacturers have proved a “terrible, catastrophic investment” in recent years.

It is “borderline fantasy” that this difference can be made good because banks and international investors do not think green energy schemes provide reliable returns, he said.

Murdo Fraser breaks ranks

Murdo Fraser is the deputy leader of the Conservative Party in Scotland. He seems to have a somewhat off-message view of energy policy. Here's what he thinks we should do.

Instead of the Government directing energy policy from the centre, let the people choose.

This would involve the scrapping of ALL subsidies for power generation, direct or indirect.  So all ROCs, FiTs, payments for nuclear decommissioning, tax breaks for gas extraction, and so on, would go.  The real whole-life cost of each technology would be apparent.  Each consumer could then choose the source, or mix of sources, for their electricity, in much the same was as at present one can choose energy supplier, or even a ‘green’ tariff, and pay accordingly.

Ordinary people deciding for themselves? Whatever next?

Green costs you more

The Guardian is highlighting DECC's energy costs calculator, a system developed by its chief scientific adviser, Prof David Mackay. The outlook, it appears is bleak.

Every person in Britain will need to pay about £5,000 a year between now and 2050 on rebuilding and using the nation's entire energy system, according to government figures. But the cost of developing clean and sustainable electricity, heating and transport will be very similar to replacing today's ageing and polluting power stations, the analysis finds.

The calculator itself is here. I'm not sure I'm reading it correctly, but it looks to me as if you have to have carbon capture and storage if you want to have gas-fired energy generation. If that's correct then I think it's fair to say that the calculator is a waste of time.

Update on Dec 28, 2011 by Bishop Hill

The No Hot Air site, which I  believe is much better informed on these matters than I, has more on MacKay's handling of the shale gas question.

(H/T J Heath in the comments)

Will renewables kill off Scottish independence?

H/T to a reader for this from the Telegraph a few days ago.

Thee Prime Minister cited an analysis by banking giant Citigroup that said Scottish home owners and businesses would have to provide £4 billion of subsidies per year to make wind and wave farms economically viable.

Distributed to companies across the world, the report warned them to exercise “extreme caution” over investing in Scotland before the SNP’s separation referendum as a ‘yes’ vote could render green energy plants “unaffordable”.

The Citygroup study said green energy currently relies on subsidies paid by all 27 million UK households and 4.5 million businesses. Scotland only accounts for eight per cent and five per cent of these totals respectively.

English and Welsh taxpayers would be highly unlikely to agree to continue paying this money to a “foreign country” post independence, it said, leaving green energy investors with “stranded” assets.

Now I see - Cameron's obsession with renewables is a way to keep the UK together.