Tuesday, 5 April 2016

They Know, Really

Under a bold headline (that was doubtless written before even beginning to draft the article) -
Green policies are not responsible for the Tata steel crisis
- the Grauniad proceeds to cite all manner of confused and confusing stuff.  Credibility is not much enhanced by their quoting of that well-known authority and general arse John 'Bummer' Gummer: “There’s no evidence at all that there’s been offshoring of industry from Britain because of our green policies. For most industries, the energy element is extremely small and the amount of extra cost from the green levies is so small as not to be in any way crucial.

But they do also publish this handy and illuminating graph from DECC:

Michael White in the same organ on the same day doesn't want to blame Brussels, but can evidently interpret the graph perfectly well for himself.
Last but not least, painful for progressives to admit, Ed Miliband’s 2008 Climate Change Act, which committed Britain to being a “world leader in reducing CO2 emissions” didn’t help. It now looks like the kind of vanity project which has hurt UK industry without doing much good. And don’t forget that in his “hug a huskie” phase Cameron whipped Tory MPs to vote for the bill too. It was a pricing gift to rival steelmakers, an example of the kind of moral imperialism as arrogant and self-regarding in its own way as the old-fashioned variety or more recently unilateral nuclear disarmament. What a painful learning curve we are on.


Electro-Kevin said...

The Guardian (the Left) will contort itself in all sorts of positions rather than admit it is wrong.

There is a contortion trick I'd like to seem them do which ends with them disappearing somewhere unspeakable.

All will be blamed on Thatcher - even if we remain in the EU and the EU collapses.

Blue Eyes said...

There is an obvious solution to the industrial electricity price issue: to whack up prices for consumers and cross-subsidise heavy industry. Let's ask 25 million households to pay more so that 40,000 steel workers can work more profitably for their (foreign) owners.

EK I also enjoy the cognitive dissonance of the lefties. Green jobs! Decarbonisation! Heavy industry! Unionised labour! How they must be torn.

Anonymous said...

1 tonne of steel from Wales in the form of a slab = $300

1 tonne of steel from Swindon in the form of a car = $6000

There is a silence from Port Talbot's customers. Not one of them appears to be worried about filling the gap left in the supply chain.

Jan said...

"I also enjoy the cognitive dissonance of the lefties. Green jobs! Decarbonisation! Heavy industry! Unionised labour! How they must be torn."

Brilliant summary BE

Anonymous said...

"There is a silence from Port Talbot's customers. Not one of them appears to be worried about filling the gap left in the supply chain."

They weren't buying from Port Talbot anyway - that being the root of its problem.

rwendland said...

That chart is amazing, 9.55p/kWh ex-tax for extra large industrial customers! I can get my domestic Economy 7 at 7.2p/kWh (11.5p daytime), including VAT!! WTF.

So I dug into the source of these numbers to try to understand: DECC stats Table 5.4.3 (Ex-large ex-tax tab). My prelim quick view is:

1) other EU country suppliers generally give considerably larger discounts to large and extremely large industrial customers, by around 20% to 25% of price it seems. (aka gouge less)

2) our recent years slippage of rank, to most expensive in EU-14, is somewhat more due to price falls abroad rather than increases here. My guess because the £ increased in value v. Euro, and that Euro countries use more coal in generation (and maybe oil) than us so have benefited more from recent primary energy price falls.

3) the argument that this is mostly the fault of the Climate Change Act 2008 seems weak as back in 2008 we were already 13th most expensive of the EU-14 (Ireland was the most expensive), though the price differential has increased since then.

4) I bet that 9.55p/kWh is highly averaged, and that continuous 24hr per day users like steel plants get a much better price, mirroring Economy 7 differentials.

I’m sure the green policies have had some effect here, but the numeric analysis to determine the extent does not seem easy from the generally available DECC/EU stats.

Here are some selected historic ex-tax numbers to support my analysis:

Year / EU-14 Median / UK (ex-Large customers) [p/kWh]

2008H1 5.03 6.64
2013H1 5.30 8.74
2015H1 4.26 9.38

Year-where / Small cust. / Medium / Large / Extra large / ExLarge/Small%

2008H1-EU 8.62 n/a 5.29 5.03 58%
2008H1-UK 9.21 n/a 6.43 6.64 72%

2013H1-EU 9.4 6.57 5.78 5.32 57%
2013H1-UK 10.64 8.72 8.8 8.74 82%

2015H1-EU 7.55 5.02 4.58 4.26 56%
2015H1-UK 11.81 9.77 9.6 9.38 79%

NB EU-14 is EU-15 – Luxembourg which does not give Extra-large customer numbers.

Nick Drew said...

Anon - as it happens you are not quite right about that (I wouldn't have known but I've been doing some digging for professional purposes)

The Corby Metal Centre (also owned by Tata) buys steel from Port Talbot for its specialist production lines. Ditto ditto the Hartlepool Pipe Mill. They could, apparently, source the PT-output materials elsewhere, but not easily

or so I am told

Also a number of UK 'yellow goods' manufacturers (the big yellow dump-trucks, JCBs etc)

Nick Drew said...

Mr W - excellent research as always: thanks

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