Tuesday 13 November 2012

Yes: A Virtuous Energy Subsidy!

Can this be ?  Has Drew come up with a moonbeams-from-cucumbers machine, and is looking for a sub from DECC ?  Or has he just invested in a windfarm ?

No, friends, I remain implacably hostile to these and a hundred other nasty little government schemes to undermine the workings of the market*.

But there is one energy sector where subsidy, or at least government-directed finance, is indeed merited.  Energy efficiency - like efficiency as a whole - is generally a Very Good Thing.

Not least, of course, because it ought to pay for itself - or rather, the efficiencies we want are the ones that do pay for themselves.  Furthermore, the higher the level of energy prices, the more likely is an energy efficiency scheme to pay its own way. 

Unfortunately, a very significant number of economically sound energy efficiency measures remain undeveloped.  One should be highly suspicious when the cry of 'market failure' goes up - Vince Cable, you know who you are - but in this instance it is often the appropriate analysis.  There are several reasons; the best-known being that the capital-poor, be they individuals such as social tenants, or cash-strapped corporations - just can't put up the readies for the necessary investments.  Or, to put things another way, they have too high an implicit investment hurdle-rate.

So with much crossing of fingers (and not wishing to be associated in any way with Greg 'anaerobic digestion' Barker) I am strongly inclined to support this ... this ... new DECC initiative.

There.  Said it.  


*Footnote: undermining energy markets, of course, is not the sole prerogative of the government : gas-market price-fixing is fairly effective as well ... to be continued


Blue Eyes said...

I couldn't see any actual proposals beyond energy efficiency stickers. I thought we already had those.

I got a very interesting brochure from my favourite domestic energy supplier (EON) which was mostly useless because I live in a flat so I control nothing. BUT! It did tell me that the biggest difference most people can make to their energy consumption is to buy a new fridge.

hatfield girl said...

Much of north London could be bulldozed with immediate energy and aesthetic effect. Those dreadful Victorian terraces leaking from every rotting roof, damp-course, wall with un-repointed brickwork,barely-holding-the-terrace-up foundations.

Swathes of NW1 need wiping out and replacing with decent-looking, energy efficient housing. I can't speak of the rest of suburban London, except that looking at it from the train windows it makes my wallet cower in the bottom of my handbag.

asquith said...

hatfield girl, and others, may wish to consult this book, which I have just read:


I was put onto a water meter free of charge in April, and my next bill was well below its predcessors, despite the fact that I've barely changed the amount of water I use (I occasionally do things like have a shower at my mum's instead of at home, which may be defeating the object, but also benefits me... so there).

I suspect this wasn't done out of the goodness of Severn Trent's heart, and that there was some government involvement somewhere, but as far as I can see everyone's a winner.

Likewise with the loft lagging and cavity wall insulation I got last year.

Demetrius said...

Moonbeams and cucumbers. At our farm shop I can get very good right angled cucumbers. Does this mean I have solved the space time continuum problem?

Electro-Kevin said...

Everything is subsidised in the UK.

Electro-Kevin said...

Private sector manufacturing's push towards energy efficient automotives has resulted in - guess what - the Government contemplating road tolls and increases in the cost of VELs and fuel duty.

Bill Quango MP said...

bloke on R5 just said that changing your old inefficient tumble dryer to a state of the art one can save you up to £20 an hour.

He didn't mention that that saving takes almost 15 years to equal the price of a mid range tumble dryer.

Bill Quango MP said...

Not £20 an hour. hat would be brilliant.
I meant £20 a year.

Rather less impressive. I could save £20 a year by buying one less belt.

James Higham said...

So it's a government statement on energy efficiency, rather than any new energy source itself? Have I got this wrong?

Nick Drew said...

it's a tiny bit more than that, James - a tiny step in a good direction IMHO, with modest amounts of public £££ being deployed