Monday, 20 October 2014

Energy: Large-scale Unintended Consequences

Wherever you look, 21st century energy policy has been hatched by people who know far less than they need to about the subject in hand.

It's sometimes necessary to diagree with the 'experts'.  Prior to liberalisation of the energy markets, the experts - all wedded to the extremely comfortable monopoly model - declared with absolute certainty that gas and electricity were inevitably and essentially matters for monopolies to control.  Not really commodities at all: something magical and different.  Competition ?  Trading ?  No, these were simply impossible.  Trust us.  We are as efficient as it is possible to be. (© Denis Rooke, 1985)

On that, the experts were utterly wrong.

But that doesn't give a licence to greenish, or green-appeasing politicians and civil servants, to announce that electricity grids can be run on windfarms and wishful thinking for zero CO2 emissions, when people who genuinely know better can prove otherwise.  Sadly this is not enough to stop them giving it a try, armed with vast amounts of our money.  But it ain't gonna work: and the harder they try, the more bizarre will be the unintended consequences.  To list a few that had already made themselves apparent a year or so back:
  • Germany, which has gone further and faster than any country (and, some would say, with the least planning) has seen record levels of expenditure on renewables, record high power prices to residential customers, and, yes, rising CO2 emissions
  • ... and, yes, rising CO2 emissions in the UK also
  • ... and around 50% of 'renewable' energy in the EU coming, not from the antiseptic, sunlit windfarms / solar farms / hydro plants of the brochures, but filthy biofuels, whose only claim to reducing CO2 emissions comes from the fact that they are deemed to do so, irrespective of the truth (which is that in most cases they don't)
And now we have the UK 'capacity market' in the electricity sector, being introduced this year to rectify the problem that in an era when no-one moves without a subsidy, no-one seems willing to build unsubsidised power plants to relace the coal stations that are closing with each passing year.  I may write on the technicalities of this 'market' another time, but for now we need simply to look at the recently published details of who are bidding into the auction process for being awarded 3-year or even 15-year wads of 'capacity payments' (i.e. standing charge contracts) for the 'new capacity' they promise to bring onto the UK grid.  

A fair chunk (by volume) of the bids are made by would-be developers of new CCGTs (large gas turbines in their most efficient configuration).  This is what the government hoped for.  But new CCGTs are costly, and unlikely to win at auction, because even more capacity is on offer from other sources, e.g. bids from companies offering to put old, mothballed CCGTs back into service (again, anticipated and welcomed by DECC).

Then come the unintended consequences.
  • one of the largest 'new build' CCGTs is in fact two-thirds already built, and starts up next year anyway, whether it gets a capacity contract or not!  (The capacity payments don't start until 2018)
  • a large chunk of the bids comes from owners of existing coal plants, offering 'new capacity' by way of eking out extended and better performance from their ageing kit
  • the biggest bidder is bloody EDF, hands out again, pretending that its long-announced life-extension projects for its existing UK nukes are also 'new capacity'.  Again, these are money-for-old-rope projects that will go ahead anyway

Needless to say, this is not what DECC or the greens initially expected from the capacity market, though the logic of it had begun to dawn on them over the summer.  The howls of outrage greeting the coal projects in particular are hilarious to hear.  Anyone could have told them: it's always cheaper to refurbish existing capacity than build new plant.

Looking back at several years' worth of C@W energy postings, I find I have invoked reductio ad absurdum several times: and it is time to roll out this venerable tool of formal logic once again.  The absurdities are there for all to see.   The logicians' answer is that the original assumptions must be wrong.  That's the correct conclusion, and one we urgently need DECC to draw.


Friday, 17 October 2014

The Eagle has crash landed

This social media thing is amazing.
There was veteran Labour obfuscator, Angela Eagle, sitting happily on the Question Time panel. She knew the 'big question' was coming. She was prepared. She knew she had right on her side and could expect a big round of applause once she'd said her prepared piece.

But it all went horribly wrong for the poor old moo.

Dimbleby asked the Lord Freud question.

" Should Lord Freud resign from his post as welfare reform minister following his comments about the disabled?"

Angela Eagle waffled a little and then went in with "I do think he should resign. His comments were offensive. he has caused a great deal of offence to disabled people. His solution to weaken the minimum wage and make disabled people work for less than the minimum wage .. which is the legal minimum..he didn't go out and evangalise about the benefits of disabled people, talked about putting their wages down to £2 an hour"

Jeremy Hunt, Isobel Oakshott  and David Dimbleby ALL told her that the government would make up the difference to the minimum wage. So the worker would get the same as anyone else, but the employer, would pay less.

Then, in a very very rare event, the audience, which had been very left leaning, turned on her as well.
Two different, and unrelated, men both attacked the old bird for deliberately misunderstanding what the minister had said. The first man said Freud had expressed himself clumsily. But it was perfectly clear that his intent was to find a solution to how employers can be subsidised to take on severely disabled workers.

When the Eagle tried to imply again that the government was going to pay only £2 an hour because they were evil Tories, this chap was having none of it. And he told her so.  He even told her that she knew she was being deliberately obtuse, as evidenced by the semi smirk on her face as she answered the question.

The next man asked to speak retold the story of how the phrase 'not worth a full wage' had come about and the events surrounding it and explained that it was a poor choice of words. But the minister's intentions and the man who asked the question of him, were both seeking genuine solutions.

When Angela tried to stoke her outrage a final time the audience booed her. 
Actually, genuinely booed her. 

Not her opinion. but Herself. 
Booed and catcalled her for her faux outrage, pretend offense and her attempt to deliberately misunderstand an event for pure political gain.

That's social media. The audience, used to having a say on blog and media and webpage, were not being fobbed off with a platitude. They wanted to speak and they did.

The Eagle has crash landed.

 It was wonderful.

Thursday, 16 October 2014

BBC Question TIme :

From Newbury. Which is a nice part of the world. 
 Among the panelists tonight are Conservative health secretary Jeremy Hunt MP, Labour’s shadow leader of the commons Angela Eagle MP, former leader of the Liberal Democrats Menzies Campbell MP, author and commentator Isabel Oakeshott and broadcaster Giles Fraser.
Real 'B' list fodder.

BQ may just make it back in time to watch.

Q1 - Ebola airport screening. The right decision or, in light of the nurses catching it .. too late.
Q2. Are the disabled worth only £2 an hour. Dreadful bit of politicking. But its how these things go.
Q3. Unemployment at a 7 year low. So are tax receipts. Are we all on zero hours?
Q4. Why aren't the greens worth a seat on the debate? Apart from the obvious reason, I have no idea why they were potentially excluded...most strange.
Q5. Nurses and NHS strikes. Something about NHS..

Dimbletie - Could be the flying pigs one. Or the toasters..I'll go for the toasters.

1 or 2 points for each correct question asked. Depending on how close to the actual wording.
5 points for guessing the colour/design of  the Dimbleby tie. 2 points for nearest match if no outright winner

1 point for each witty comment/excessive punning/ lampoon/mock/clever theme  that you put into the comments
1 point for the first entrant each week 
1 point for random other reasons

Capitalists@Work BBC Question Time competition is proud to support Help for Politicians.
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Winners List 2014

Timbo614  2
Hopper  1
Malcolm Tucker  1

"UK Blocks Russian Deal" - Interesting

The issue of sanctions against Russia over Ukraine has gone a bit quiet of late:  they don't play at all well in Germany (I wonder how they are being circumvented ?) - and then there are those assault ships sitting in a French dockyard ...

Anyhow, in a rather passive manner the UK seems to have played the game with a straight bat by denying Mikhail Fridman a 'comfort letter' re: his planned acquisition of RWE's North Sea assets - something else that may not sit well with our German friends.

RWE, it will be recalled (click on label), along with its fellow German mega-utilities is right up a gum-tree, courtesy of Berlin's demented energy policies - wildly, infeasibly green + anti nuke.  They will all be making big asset sales in an attempt to steady the balance sheets: and RWE is in the bed nearest the door.  They need the dosh, and now we've stopped it.

This is the thanks Germany gets for letting the Hinkley Point nonsense go through the EC?!
EDF Radioactive Turd

But on that front, there is someone else with a mighty beef: the French have let EDF's CEO go !  Just hours after his Hinkley triumph.  Not green enough, they say.  Of course he's not:  FFS, he's the bright orange, glow-in-the-dark head of EDF !  Le Turd Radioactif lui-même !

Couldn't happen to a nicer chap:  I laughed until I stopped.  In this country he would have been given a peerage.  Perhaps Cameron will.