Thursday 12 January 2017

Keynes, Always Waiting in the Wings

"Plans for a £1.3bn tidal lagoon in Swansea Bay will be backed in a government-funded review on Thursday." 

Exclusive to all media, so it must be true.  Tidal lagoons for generating electricity (and, doubtless, trashing the marine environment).   Needless to say the tide-farmers' ambitions don't stop at a beggarly £1.3 bn, they have decided £40 bn sounds like a nice round number.  And of course ...
One of the key questions will be over the so-called "strike price" - the deal with the UK government to provide a guaranteed price for the energy the lagoons will generate.
Why yes - we didn't imagine these monsters would be economic, did we?  At the last major outing for this idea they were *floating* (sorry) a strike price of £168 / MWh, which looks kinda awkward alongside Hinkley's £92.50 (in 2012 coinage and it's index-linked).  Using the traditional smoke and mirrors, the tidal boys have now turned their demand into £89.90  (why not £89.99, fellahs?  You know that's how you came up with your number).  With a 90-year government-guaranteed contract (yes, that's what they want) plus a 120-year payback (sic), it's not a difficult trick.
The firms hope that as Theresa May's government has already embraced two mega projects in HS2 and Hinkley Point, it may be enthused by another plan for engineering on a heroic scale.
I'll bet they do: and in the 'real world' (the one where base politics dictates such things) this one may actually run.  It was in the Tory manifesto; and it's a neat maritime variation on Keynes' prescription for paying folks to dig holes & then fill them in again.  The tide will leave the hole, & then ...   And as the nature conservation lobby swings into action against it all - think of all the work for lawyers!

What's not to like?  What could possibly go wrong?



Electro-Kevin said...

As far as I know, we don't have electricity storage - so will office/factory hours now be based on the shipping forecast ?

More predictable than wind, I suppose.

I truly and utterly despair of this country. Shoals of gullible little green fishies being circled by sharks.

CityUnslicker said...

Is it worse than Nuclear though?

I think not. Clearly, there is no need for this or demand for it. However, given Chinese building nukes on dodgy French plans versus a (relatively) harmless barrier that produces tiny amounts of energy for 100 years or so. I prefer the latter.

This is a classic of spending other people's money; the main lesson I fear our politico's have forgotten collectively.

Anonymous said...

It is much worse than nuclear, because of the greater damage to the environment. And it doesn't generate power evenly throughout the 24 hours.

There is nothing new about tidal power. It was popular in the 17th century, and you can still see tidal mills at places like Bosham. Like windmills, they went out of use for a good reason: fossil fuels and (nowadays) nuclear fission provide reliable continuous power 24 hours a day, 7 days a week, 52 weeks a year.

None of the back-to-the-middle-ages devices do this.

Don Cox

Flagwaver said...

The Aussies have a cleaner approach to this sort of thing. The state funds, designs and builds the big projects. Then, once complete and running as a viable business, it privatises it.

Surely this is much better than projects bidding for subsidy.

andrew said...


like a reverse PFI deal?

superb idea.

Now, where is my bristol boating lake?

Dick the Prick said...

@Don - the environment aspect all goes tits up when some clusterfuck Fukushima happens in Somerset. I just can't get close to nuclear because of contingency planning - love the physics but hate the potential economics.

£1.3 billion to keep that Roger Harribin having a proper Skype wank on Rd4 this morning - ah, fuck it.

I'm quite liking the intransigent incrementalism of the whole energy agenda. If there's so much investment in renewables then one would hope that some inventions are gonna be ready sooner rather than later. Sure, we need capacity now and medium term but some of the options given credence have at least 30 year scheduling before full optimization. Little and often would be my approach - let's investigate mothballed mines and gas trading. Smaller, more efficient power stations and if they explode in a conflagration of hazard then it doesn't have a half life.

Blue Eyes said...

If it's such a good business, why does the government need to underwrite it? We keep being told there is a wall of money seeking long-term steady-yield investment opportunities.

It would be fun to approve this, though, if only to watch two parts of the green lobby tearing into each other.

Anonymous said...

I'd rather have tidal than nuclear any day of the week. The downsides of nuclear can be summed up in two words: safety and waste. It doesn't even have to be human error leading to disaster either. Has anyone considered the outcome of some nutter able to fly a plane into Hinkley et al?

Mind you a tidal barrier is probably a dastardly plan by WAG (Welsh Assembly Government) to become self-sufficient in energy prior to decaring UDI from the UK.

Bill Quango MP said...

My friends dad was a nuclear phsiscist.
He took us too the open day at the nuclear plant once. Must have been the mid 1970s.
I remember them showing us the modelling for a plane crashing into the reactor. They reckoned back then anything smaller than a 747 wouldn't do any damage at all. They were built to withstand just that threat.
And more.

They were mostly worried about conventional, non, nuclear, Russian missile strikes.
But the had plans for that too. I can't recall any of it now, but it's probably all online.

Demetrius said...

If the climate flips into a cold spell, as it might well do, this means lots more ice around and generally a fall in sea levels. Tricky.

Nick Drew said...

Then again, Demetrius, electricity prices will go up, and we'll have less to pay on the contract-for-difference

on two counts: payout = [amount of energy produced x difference (strike price - market price)]

(a) they'll produce less energy
(b) the market price will be higher - they may even have to pay us!

(then again, again, if they'd be needing to pay us they'd be bust anyway ... *sighs*)

James Higham said...

Speaketh to me not of Keynes, nor of Marcuse. I had to learn the former when laughably doing Economics at university.

Anonymous said...

Bit torn on this.

On one hand, we're not a nation that can support an awful lot of renewables, and storage tech is nowhere near ready for it.

On the other, if we get good at it, it's exportable tech to nations where it would be suitable.

Government may be terrible at picking winners, but it is good at fostering ideas. Half of the stuff in a modern phone was devised via state funding, but required the private sector to really make use of it.

Anonymous said...

Luvvie carpetbagger Tristram Hunt resigns, Stoke Central by-election. Interesting times.