Monday, 23 October 2017

Something Really Interesting in ... Flitwick!

I have been a big, unapologetic and, OK, obsessive critic of subsidies in the energy sector for a good few years.  I'll come on to a possible, partial defence of them in a second, but let's pause to acknowledge a Big Day in the history of "green" energy.  A subsidy-free** solar-plus-battery-park has opened in our very own Flitwick, Beds!
Rather dull photo: Anesco
Steve Shine OBE, Anesco’s Executive Chairman said: "For the solar industry, Clayhill is a landmark development and paves the way for a sustainable future, where subsidies are no longer needed or relied upon. Importantly, it proves that the Government’s decision to withdraw subsidies doesn’t have to signal the end of solar as a commercially viable technology."
Yes, the government is quite properly chuffed about this, as may we all be.  Maybe it will work out, maybe it won't.  Maybe it's a dumb use of large-scale batteries, which (I strongly suspect) could make even more money selling quick-reaction services directly to the grid.  Who cares - ? because it's private money!  People make and lose fortunes all the time with their brilliant / dumb ideas: it's what makes the world go around.  C@W, see?

The collapse in 'costs' of offshore windfarms since proper competition was introduced for access to those subsidy-pots is another good sign.  They still want - and get - subsidies, though; and aren't made to contribute to the cost of balancing their intermittent output.

Of course, it's early days, and outrageous subsidies are still being paid to / on offer to:  legacy projects;  Hinkley Point;  biomass-burning power stations that, disgracefully, actually increase emissions of CO2 vs even coal ...  the list goes on.  But hopefully the points are slowly being registered that (a) subsidies needn't be required; (b) subsidies can lead to grotesque unintended consequences, as well as unnecessary costs being heaped onto (in this case) electricity users; and (c) whatever scheme you are going to come up with, it will be better if you put it out to auction / competitive tender.

Not required?  The subsidy lobby (which includes people who aren't even beneficiaries! - and who probably be most dismayed to meet the flinty-eyed subsidy-farming bastards they have helped to enrich) would argue that without the R&D and the 'new industries' helped into being by the first decade and more of crazy bungs for crazy schemes, we'd never have reached the happy position where this may soon no longer be needed.  There is, of course, a soupçon of truth in this.

But (a) it could have been done better by (i) funding only the R&D and (ii) ensuring proper competitive conditions every step of the way.

And (b) it didn't need to be done by us!  Let other coutries waste their money on the R&D - they won't fail to sell their stuff to us in due course.   We know this, because that's exactly what they do right now.

If, of course, every penny spent in the last decade of British subsidies went to British universities, R&D shops, engineering firms and manufacturers on competitive terms, it might be seen in a more favourable Keynsian light.  As we know, that is far from how things have been.  And we're not done yet with this monstrous waste.

ND

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** Everyone is saying "subsidy-free" but I wouldn't be surprised to learn there is actually some modest form of subvention going on here in one form or another.  Cynic?  Moi? 

Friday, 20 October 2017

Brexit: An Old Negotiator's Story

Some years ago when I made a brief foray into the software business, a big overseas client ordered our top-of-the-range enterprise software suite.  I had a strategy / troubleshooting role and one day the CEO said; Drew, we have one of those 'strategic' situations you enjoy so much.

The idiot sales manager (whom he promptly fired), ecstatic with having landed a mega-deal, had omitted to send over our standard terms & conditions.  The client, however, had thoughtfully appended their own standard terms to the order and, our having allowed a month to lapse and already having started the implementation, they pointed out to us that under their Civil Code, we were bound by that contract.  I knew enough of the relevant law to be sure this was indeed the case.

Of course, their terms didn't at all suit our requirements (not least for revenue recognition).   We had only one immediate source of leverage - otherwise they wouldn't have bothered to talk to us at all - viz that their contract didn't suit them ideally, either.  It was manifestly a cut-and-paste turbine purchase agreement, with 'the turbine' tippexed out and 'the software' typed in its place.  It talked about the need for fireproof clothing for workers operating in the vicinity of the fuelling system etc etc; and the testing regime too was a complete nonsense in context.

Hence, we were summonsed to the negotiating table; but the overall weakness of our position was made very clear.

So, as we were leaving, I took our onsite team to one side and told them quietly to install a dongle.  A week or so later when the clients' staff booted up in the morning, a message appeared on their screens:  This software is made available under a temporary licence that will expire at midnight on 31st, after which the system will become inoperable

At our next negotiating session (some time before 31st) this matter was raised by the other side, as casually as they could contrive - and they weren't very good actors, the puddles of pee were there on the floor for all to see.  Oh, I said, don't worry about that - I'll have the lads put a one-month extension on it.  

And I never mentioned it again.  Didn't need to, really.  We got a fairly satisfactory deal, eventually.

Now, about that Brexit thing.  How about the next time the Irish gas and electricity grid operators import a big, vital slug of UK energy, something pops up on their screens ...

ND

Thursday, 19 October 2017

May's Brexit Weakness, Corbyn's Strength

Some very interesting developments at the Brexit negotiations farce.

As we knew all along, the October Hostage Deadline will come and then go.  Well, who was ever going to sign up for "whatever amount you say it is, Monsieur Barnier" in order to move forward?  So now, according to the well-briefed Graun (which has faithfully taken dictée from its euro-source):
European Union leaders seek to publicly talk up [May's] efforts in the Brexit negotiations because they fear that the prime minister’s domestic weakness will leave her unable to make vital concessions on Britain’s divorce bill ... The member states are acutely aware that the prime minister needs to come out of the summit with her dignity intact if she is to get her cabinet and party to accept concessions on the divorce bill ... the instability of the British government makes it vital for them to soften the blow for the prime minister, who will need to take the political risk of further major concessions on the financial settlement in the weeks to come ... EU’s collective hope and expectation is for a deal in December, but diplomats insisted this need not be the end of the road. “If not, no one will be ready to throw in the towel, but we will be ready to think of another milestone, another threshold of time to move on.”
How charmingly considerate of them.   Another milestone, another threshold of time.  Another hostage deadline.

It's certainly true May is a hopelessly weak negotiator, as the awful Hinkley incident showed everyone all too clearly last summer.  If, in a funny sort of way, this actually parlays into a bit of a dynamic with the euro-wallahs, well, that's where we are anyway.  Perhaps ... perhaps they don't much like the thought of McDonnell either.  Why would they? - he's really hostile to the Lisbon Treaty, much more than (for example) I am.

Which brings us to the other development, which is that Corbyn is on euro-manoeuvres.  Well of course he is - or rather, the euros are on divide-and-rule manoeuvres.  Of course.

In principle there's a prize for them here, but (equally, in principle) a problem.  Nothing could be neater for them to arm Corbyn for a struggle that might end in (e.g.) a big enough revolt in the Commons for Brexit to founder.  The trouble is, Corbyn (or more cogently, McDonnell) wants the freedom to nationalise / selectively ban cheap immigrant labour / ignore property laws etc etc.  So the gameplan has always looked like: let the Tories do all the heavy lifting, and sweep to power in 2022 with a working majority and no EC / ECJ to worry about.  Five years to dismantle the armed forces / security services / NATO etc etc ... what joy!

So - no deal to be done between Corbyn and the EC?  Unfortunately, this is where Drew's 4th Law of Politics cuts in:  The lines of logistic in politics are short.  Nothing could be easier than to tell Jezza the Jejune over lunch that he can have his nationalisations and selective migration ban, in return for engineering a Commons defeat in coordination with a couple of pre-planned one-twos at the negotiating table.  Nothing in writing, mon cher Jérôme - but that's the way things are done, we know you'll understand.  Of course, we'll be asking you to join the Euro-defence force, and hand over GCHQ to us - but you never really wanted to get involved with all that stuff anyway, did you?  So much safer with us ... oh, and your seat on the Security Council, such an anachronism ...  yes that's right, you could raise taxes as high as you like!

Yep, that can happen in 20 minutes.  Doesn't mean they like him.  Doesn't mean they'll deliver on a word of it!  But it can happen.

ND

Wednesday, 18 October 2017

This Is One Smart Belgian

You'd kinda expect to hear more about this
The wi-fi connections of businesses and homes around the world are at risk, according to researchers who have revealed a major flaw dubbed Krack. It concerns an authentication system which is widely used to secure wireless connections. Experts said it could leave "the majority" of connections at risk until they are patched. The researchers added the attack method was "exceptionally devastating" for Android 6.0 or above and Linux
Presumably (if it's for real), the www & banking industries are in utter shock, as well they might be.  As well might we all.  As usual, the bigger the issue the less attention it gets...  

A sounds like a pretty thoroughgoing *patch* will be required.  A massive kick in the nuts for a priori reasoning about what's "mathematically proven" to be secure.  Safely encrypted?  In the real world, there's always a flaw!  No limits to human ingenuity - "what one man can invent, another can discover"  (S.Holmes, 1903).

It's worth taking a look at the lucid write-up** by Mathy Vanhoef, the bright Belgian who discovered the mighty cockup.  That is one articulate geek!  Beautiful prose on a complex topic in what, presumably, is not his mother tongue. The whole thing reads like the remarkable Enigma exploits of Turing, Tutte et al at Bletchley Park

If only all technical issues had such excellent advocates, eh?  (Bit of a coincidence, the timing of that cartoon).

ND

** in the original version of this post I linked to Vanhoef's 'KrackAttack' website.  Subsequently, McAfee has started warning about that site!  Who knows what to think?!  But I've removed the link.  There are plenty of places around the www where you can read Vanhoef's fine prose.     

Tuesday, 17 October 2017

Still no news on Brexit or interest rate rises...

It is both surprising and unsurprising that there is no movement on Brexit.


It is not in the EU interest to concede having set the field of battle on their terms, the longer they play hardball the harder the battle for the British to win.


Having said that, it is amazing that the Government is still struggling with strategy and tactics having taken to the field over 6 months ago. Everything that has happened was utterly predictable, indeed, the EU have simply stuck to their announced position.


The only two ways out are a capitulation by the UK on money and ECJ (read immigration) that leads to a Brexit in Name Only deal - really a lot of effort for no reward or a real move towards a 'no deal' type scenario where we just focus on stuff like how customs borders are going to work and how we keep the planes flying etc.


I don't see the civil service or the MP's/Lords allowing the latter so BINO it is at the moment. Which will amount to the most colossal waste of time ever!


Meanwhile, the Bank of England observes inflation at 3%. Thank the Lord it must be saying, after all no one in Government is planning to start living within our means anytime soon to inflating away the value of all those non-indexed UK Gilts is all part of the plan. The fact that wages are still shrinking is just a side benefit. Oh, and the oldies will do better again with higher interest rates than the young-uns with mortgages - what a blinder of a play. best leave them on hold for now, no point rocking the boat then...