Miliband & the perpetual belief in perpetual motion

There's something very deep in human psychology that encourages people to believe in magic swords, universal elixirs, price forecasts, perpetual motion machines etc etc.  It's out there - and it just needs that little bit more human ingenuity to bring it to reality.

Ed Miliband is (we are told) a human, and clearly suffers from this syndrome.  Here are some of the things he believes in:

• a "net zero electricity grid" by 2030
• nuclear fusion as a practical source of power
• "negative CO2 emissions" from burning trees for power and burying the CO2
• hydrogen as a wonder-fuel of very wide practical application
• himself as a dominant force in a post-Starmer UK government

A man can dream: but he's spending our money on the first four of these (and indirectly, one might say, on the fifth).  In a harder-headed world, they would disqualify him from the fifth.  

Sadly, I don't think they do.    

ND

EDF and its nukes: "we're sh*t, and we know we are'

As so frequently stated hereabouts since forever (since 2007, to be precise), the whole point of French energy policy is to have someone else pay for France's humungous nuclear decommissioning liabilities. 

Now they'd like "negotiations" over Hinkley Point C and Sizewell C to be merged into one big financing deal.  Well, well.  

First of all, what "negotiations" are needed over HPC, pray?  We already have a definitive financing deal: a binding contract that clearly has EDF on the hook for the stonking cost overruns.  (Its alternative is to walk away: such is that inane deal, struck by the dickhead Osborne and signed by the fragrant May, that EDF is under no obligation to finish the thing at all.)  Do contracts signed by the French mean anything?  Silly question.

Second, why would we buy a second nuke - of the very same design - from the same imbeciles who clearly acknowledge they can't finish the first, under a different deal structure where we are on the hook for the inevitable overruns?

Is there any point in telling Starmer and Miliband to grow a pair - maybe just one pair between the two of them?  EDF are shit project managers; and successive governments have been shit negotiators.  Each deserves the other.

ND 

War to the knife with Greens: Starmer going for broke

Going for growth?  There's every sign Starmer is going for broke - a slew of deeply controversial decisions either made already, or being readied, all in a rush.  Someone's told him it'll be a compelling, critical-mass message for all those would-be investors in UK plc that he's really open for business and will trample down all nay-sayers into the building-site dust.  (And presumably McSweeney has told him that 'all at once' is the best tactic.)

• Support for Heathrow third runway (already signaled explicitly)
• 'Nothing to stand in the way of new nukes' (yesterday)
• 'Likely to grant Rosebank etc oil/gas production licences' (yesterday)
• Extension of subsidies for Drax (Monday, by all accounts)

Everyone has their favourite 'hate' - mine is Drax; & I approve of Rosebank - and there is many a Green (and Red-Green) who hates them all with equal passion.  Perhaps there is someone other than Reeves who loves them all?  The construction industry, I guess, although they get nothing from the Drax announcement because Drax won't be committing to it's putative, ridiculous next-phase project "BECCS" in the near future - in fact, maybe never.

Wow.  Has McSweeney decided there'll be a month of massive sound & fury, followed by the usual amnesia?  Are the lefties who've just had the Whip restored so pathetically grateful, they'll take the required vow of silence?  Will the construction unions come swinging in with big support?

And Miliband ..?  Ah yes, we've mused about him several times.  He's swallowed LHR3.  He is in favour of nukes, and can probably swallow Drax (with much sophistry).  But Rosebank?  Lots of pundits are tipping him to quit over this, but I reckon otherwise: check his performance at the ESNZ Select Committee last month (linked to in an earlier post) - he very studiously repeated the exact wording of the Labour manifesto pledge: no new exploration licences.  Rosebank et al don't need an exploration licence, just a production permit.  I reckon he's swallowed it already, but we may soon find out.  His substantial cred with the greeny-lefties is going to be stretched to breaking-point soon.  What spectator sport this is!

Interestingly, only the nukes on that list above involve government money - and even that has (thus far) been limited to the ill-judged, probably ill-fated Sizewell C.  Everything else will either be private money and/or subsidies levied on energy bills.  So none of these 'announcements' is anything more than permissory.  Performative policy, on the cheap.  May never happen (aside from Drax grabbing the new subsidies with both hands, of course).

So:  let's see if there's a lasting political cost.  Maybe, maybe not.

ND

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Sorry, no links on this post - not easy from a 'phone.  You'll need to google it all yourselves!

"50 new gas-fired power plants for Germany" - and UK?

"German opposition leader vows to build 50 gas-fired power plants if elected", the story goes.  This is Merz, leader of the CDU and potentially Germany's next Chancellor (although see the 2025 Predictions compo).  50 is hyperbolic[1], but the point remains: Germany is hugely lacking in natural energy resources and, having bizarrely closed all its nukes on Merkel's whim, can't remotely rely on its large but actually not very impressive fleet of solar and wind power.  (Solar?  This is N.Europe.  Wind?  It has only a very small coastline, and that's in the wrong place.  Coal & lignite?   In abundance - but not "green", of course.)

So where would the gas come from?  Well, "imports": but lack of detail on this is just one element of the hyperbole, and his statement isn't any kind of practical plan.  But the point remains: the more wind & solar in a power fleet, the more strategic, long-term[2] backup power is required.  Right now, batteries aren't even remotely candidates for this, and won't be within a realistic planning period.   Pumped-storage hydro is great but in limited supply.  Imports of electricity are what Germany relies on right now but the Scandinavians are getting pretty testy about this - it plays havoc with their own markets - and may well pull the plug. 

Which brings us to our own shores.  Large-scale build-up of solar and wind - check.  Growing electricity demand (after more than a decade of decline) - check.  Declining nuclear capacity[3] - check.  Reliance on imports which might not be a practical proposition indefinitely - check.  So: continued, nay, growing need for gas-fired backup - check.  Even Little Ed Miliband realised this before the election, and now plans to retain the full 30-35 MW of our existing fleet[4] in his feeble "100% decarbonised by 2030, oops, make that 95%, it's what I always meant, it's the same thing" non-plan.

Here's the thing: these things are easy for a politician to say but that's not enough.  Capital plant can't equally easily be made to stand around doing nothing all year, but spring into life with ultra-high reliability on the odd, unpredictable occasion it's needed to be in action for a week or so.  That's not how the world works.

To be fair, HMG has gone one step further and has come up with a new subsidy for which backup gas-fired plants would qualify - but that's only the financial aspect.  The practical and physical aspects are legion, not least because if Mili's plans for decarbonising home heating progress[5] the overall scale of gas infrastructure[6] will be diminishing materially, and it would be comprehensive extant infrastructure paid for by someone else (as it is at present) that a rarely-used gas-based backup system would parasitically depend upon.

Yet another facet of the infeasibility of Miliband's plan.  He gave a very upbeat (and in fact, rather good - in political terms) performance in front of the Select Committee last week, and one can easily see how Labour MPs who don't understand the subject matter (evidently including Starmer and Reeves) would be inclined to view him very favourably and trust him implicitly.  But it's all destined to hit the rocks of hard reality at some point.  When?  I'm not sure.  Meantime, a heap of subsidy-contracts are gonna get taken by some players - and paid for by us.

ND

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[1] ... but music to the ears of hard-pressed Siemens!

[2] In this context, 'long-term' means weeks.  Batteries are only good for hours - which is very useful for some purposes, but not for Dunkelflaute

[3] Hinkley Point C start-up is a distant prospect, and the existing fleet is in decline, even if its life is prolonged to the max and the ONR throws safety considerations to the winds

[4] Numbers vary from document to document

[5] His targets won't be met, of course, but the gradual replacement of gas boilers with heat pumps is inevitable, even if at infinitesimal pace.  Ditto EVs

[6] By 'infrastructure' I mean not only the pipelines, storage facilities and LNG import terminals, but also the commercial and 'soft' aspects associated with there being a vast amount of gas sloshing around the UK all the time & particularly in winter:  lots of long-term supply contracts, gas traders, commercial, engineering & tech expertise, market liquidity etc etc - in other words, a thriving, extant gas industry of critical mass.   

German energy experiment lurches into new territory

At midnight on 15-16 of this month, Germany shut down its last nuclear power generation capacity - forever.  It was asked for one last hurrah over the winter (the Putin effect): but that's it now, despite dumb German politicians at the highest levels who seemed to think these things could just be switched on and off at will, and that actually we don't need fossil fuels or nukes at all.

Here's some dramatic irony.  For those that care about these things - and some people care a lot - the carbon intensity of the German power fleet on 15-16 April was 550 g/kWh**.  And what if Germany had maintained its nukes at the 2003 level, its peak in that country?  It would have been just 50 g/kWh, with no coal-, lignite-, gas- or oil-fired electricity required whatsoever on that day (peaking could have been provided by hydro and dispatchable biomass).  For comparison, the UK typically comes in at under 150g, having halved since 2012.  

So - as the usual suspects gear up to sue the EC for declaring nukes (and gas) to be "green", let them think on that 11-fold increase in carbon intensity which might, over-simplifying slightly, be attributed to the policy-driven closures of nukes in Germany.

Germany really is the poster-child for crass policy making across the spectrum, and it's unravelling at a rate of knots since Merkel headed off into the sunset.  I don't quite know where people get off on holding the country up as a model of rationality and consensus.  Good luck to them over the next few years, as they grapple with "new realities" for their energy, industrial, foreign and defence policies.  Not to mention the 1m+ refugees from the middle east.  Those Merkel memoirs will make for interesting reading.

ND

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** Was it perhaps a day with no wind?  No, there was a decent contribution from wind, ditto solar in the middle of the day.

Green Energy Day. Eventually.

Oh, what sport!  Is it to be Green Energy Day in a field somewhere?  No, it's to be Energy Security Day in industrial Aberdeen.  Oh, no wait, it's Green Energy again - in a nuclear fusion lab.

But are nukes green, as the French desperately (really desperately) want the EU to declare, or are they nasty old 20th century heavy industry?  HMG itself is out to consult on that question too: ministers are hoping a lot of ESG money will come swinging in if it's *serendipitously* concluded nukes are green.  Meanwhile, maybe nuclear fusion seemed suitably whizzy-hi-tech-future-ish and, well, green-ish, for the purpose.

Ironically, it's also a rather good metaphor for something costly that never actually arrives ... 

I haven't had a chance to read yesterday's monster documentation, so I'm afraid the usual C@W precis service is somewhat delayed.  Have a good weekend, all.

ND

At last, nuclear fusion! With one bound, we are free!

When my eldest was at school he was set on to write a story about being marooned on a desert island.  His tale read well for a couple of pages but it ended abruptly:  "And then they were saved."  I had the unkind feeling he was going to get docked a couple of marks for narrative failings.

With this unfairly critical eye of mine, I now read in the Grauniad that a

Breakthrough in nuclear fusion could mean ‘near-limitless energy’ 

Oh dear.  Are we back into the lands of "electricity-too-cheap-to-meter" and "do-we-believe-this" again?  I kind-of assume we'll be there on fusion by, maybe, 2050 ...   

I say "we", but I'll be dead and gone.  Unless, that is, the same lab has also come up with the Elixir of Life.   Well why not?  Elon Musk surely isn't too busy to turn his attention to that one?  

Often looks to me as though he's been trying a few of the early experimental potions on himself ...

ND

Nuclear Power in the UK: Scary Scenario Looms

At the end of last month, EDF called time on the Hunterston nuke in Scotland.  It's been plagued with cracks in the graphite core, and not generating properly for quite a while now.  They'd been hoping to nurse a few more years output from it.

Now obviously, if the UK power system has been managing without it for all that time, it isn't needed per se.  BUT - it's the same design as all the other currently-operation UK nukes, except for Sizewell B.  A grim example of "concentration risk" ...  Could we get by OK without any of them?  They are all being nursed along, with successive extensions having been announced to their lifespans over the years.  

EDF, of course, has every incentive to squeeze the last drop from them, and not just for the electricity sales-revenues.  Decommissioning is very expensive, and as I wrote in an earlier story, relating to the North Sea oil & gas sector: 

... abandoning North Sea platforms comes at a huge capital cost: so every day’s delay in recognising the inevitable is money in the bank. And every small thing that can be done to eke out its life is an effort well spent.

The range of options for a nuclear operator is not as great as for an oil company (safety considerations):  EDF doesn't have available to it any real parallels to the strategy adopted in the North Sea case I related there.   

Furthermore, EDF is not exactly flush with money ..!  -  if it's bad for them in the UK, their French decommissioning liabilities are astronomical, as we've been noting periodically since this blog first began.  There's a rather obvious scenario where this could get extremely awkward.

ND

Centrica: Tough Times, Hanging In

Centrica is a company we perennially find interesting, for a couple of reasons.  They've successfully remained UK-owned, which many of their energy-sector peers haven't;  their strategies have generally been noteworthy, indeed often quite smart - which kinda relates to the first point;  and it's rarely been plain sailing for them - which comes with the territory.

They're yet again at an awkward juncture,  needing a new CEO and some substantial asset sales, both to manage their debt and, frankly, to exit from a couple of increasingly difficult sectors - upstream oil & gas production and nuclear power, neither of which are flavour of the month for investors.

Nuclear?  Yes, it's easy to forget they took a 20% stake in the old British Energy nuke fleet from EDF back in 2009, which didn't look so clever a short while later - so much so, they've never been able to shift it.  Why did they do it?  A couple of ostensible reasons: it was a package deal in which they offloaded some unwanted Belgian assets; and they thought of the nuclear electricity as both green(ish) and "a hedge against the vagaries of global commodity prices".  There was another (unstated) reason, too: in the 2000's they had very fairly made a bit of a name for opportunistically picking up big assets at distressed prices - several gas-fired power plants, a big gas storage facility and a huge tranche of electricity from BE - judging the bottom of the market very adroitly.  By 2009 they were just too pleased with themselves, and thought they could do no wrong.

Seems a long time ago now.  But they've stuck to their core strategy - excelling (well, doing OK) at retail energy as that sector gets more and more difficult, on a last-man-standing thesis.  Seeing weak hands all around them amongst both the Big 6 and the plethora of failing minnows we've talked about recently, they probably still reckon they made the correct bet there.  Even the burgeoning Ovos and Octopuses of this world aren't finding everything quite as straightforward as they hoped.  With the threat of asset-seizure under a Labour Government gone, and nobody likely to object about an energy retailer doing a steady job (Big-6 or not), Centrica will probably stick with this.

They still need those asset sales, though.  Nuclear is a mug's game - particularly being strapped to EDF, whom we'll look at in another post.

ND 

Nuclear Finance: Stuffed by the French Again

Later this week, we're told, the long-trailed announcement will be made of a new approach to financing nuclear power plants in the UK.

As we've long been warmed up to accept, no company is willing to take upon itself nuclear construction risk.  That was just about all that remained in the lap of developers, after EDF had blazed the trail with the outrageous Hinkley Point C contract that May so cravenly signed back in 2016 under stern instruction of the miserable tadpole Hollande (thereby proving to the entire watching world she was unfit to conduct the Brexit process).  But EDF itself quickly signalled that if we wanted any more nukes the next deal would need to be even better.

(Note always that HPC is a not-quite-free option for EDF - they still have no obligation to complete construction of the plant.  It can be argued they have no idea how to do it anyway, seeing that Flammanville has been put back yet another few years ...)

Still, the frogs are dangling the next one, Sizewell C, before the desperate eyes of HMG - and of course the Chinese and Japs and Koreans can all make their own offerings - if the contract is rich enough, and free of risk for themselves.

The chosen financing model to gratify their rapacity is the Regulated Asset Base model.  Details are awaited; but it's a familar enough tool, used across the USA in various forms for decades, and latterly for that grotesque and unnecessary project, the Thames Tideway.  But familarity alone is no recommendation.

The lazy headlines are that the 'taxpayer' stands to pick up the tab for the inevitable monstrous cost overruns.  Maybe; but it's even more likely it will be the poor old electricity bill-payer, which may seem a fine distinction but it highlights an important point.  Everyone needs electricity (and water) and their utility value to all of us is so great, we can be made to pay almost anything for them.  No new taxes required.  By these means we can be, have been, and will again be screwed into the ground, giving foreign firms the right to enjoy themselves on a grand scale at our expense for many decades to come.

The only possible argument in favour is that nukes have only ever been built by public finance, so we may as well don the nose-pegs and get on with it.  That assumes we need them at all - and I say we don't.  Or, if we do, we're f****d, because manifestly the French don't know how to build them within, say, 10 years of their airy estimates - so we'll always need large-scale Plans B, C and D.  Why not just settle for a good, cost-effective Plan B and have done?

Anyhow, knowing that several of our BTL regulars actually favour new nukes - have at it in the comments!

ND

A strange shade of Green

The ins and outs of the Green Party don't usually interest me; but just lately they've had an eye-catching scandalette, plus a tiny fanfare as their new two-headed leadership was announced.  So I had a cursory look at their website and assorted pronouncements.

(Declaration of interest: notwithstanding my long-term engagement in the energy industry, as a fairly reactionary conservative I consider myself an enthusiast for what I consider *green*, am an active proponent of energy conservation, and an active opponent of crazy 'renewable' schemes such as biomass for electricity.  Energy industry?  "Civilisation is energy-intensive" - Lovelock.)

Well.  What has 'green' to do with the Greens?  Environmental concerns doesn't get any more airtime in this piece than do Brexit, or Windrush.  "we will always campaign with others to oppose Brexit, we think it’s time to say loudly and clearly that the Green party will never be part of any vapid centrist blob ... we proud to say migrants and refugees are welcome here".  Not much doubt - and no surprisies - over which side of centre they take up their stand.

But what green ground, exactly, do they stand on?  Anti-fracking, of course: and pro unicorns & fairy-dust.  But, to invoke one of my touchstones, nothing I can find on their entire rambling website (complete with Philosophical Bases in 50 numbered sections) suggests they have set their faces against the tree-burners at Drax.  This, by the way, is in clear contrast to FoE, Greenpeace, RSPB et al who have long since recognised the 'renewable biomass' nonsense for what it is.

The other one that always bears checking up is Nuclear.  They offer pro forma hostility: "fundamentally opposed to nuclear energy, which we consider to be expensive and dangerous"; but in contrast to (e.g.) many continental greens there is no hint of pressing for anything like Germany's policy and actual programme of rapid closure of nukes.  "Will be phased out" is all we get from our Greens.  

In this, they are much like FoE and Greenpeace UK, who similarly say that nukes are expensive (no, really?) and in the long run should go.   This actually puts them in opposition to many heavy-duty environmental activists who reckon the risks of fracking are nothing compared to those of nukes; want a German-style policy ASAP; and despair over the timidity of their leadership.

I suppose we should politely wish the new Green 'co-leaders' a happy time in office.  But if Windrushery is their idea of carving out a distinctive policy platform, there will still only be one Green MP ten years from now.

ND

Financing Nukes: A Big Fork in the Road

First of all, apols for lack of posting but it really is the busy season for transactions just now ("*despite, errrr, Brex...*").

Meanwhile, back in never-neverland: the various parties lined up to satisfy the government's cravings for new nuclear power plants have pretty much reached consensus that even the dreadful Hinkley deal won't be good enough for them in future.  Doubtless the developers coordinate carefully behind the scenes; and from each of the individual bilateral negotiating tables comes the word that unless the government is prepared to take more project risk, no kind of CfD deal alone (even of the one-sided EDF-Hinkley kind, see plentiful C@W comment on the Hinkley tag below) will suffice to get the show on the road.   The actors concerned in the respective red corners are of course EDF itself, considering Sizewell C (its next putative UK nuke project) and various Japanese and Korean players.  In the blue corner is always the utterly useless HMG, whose negotiating prowess was amply illustrated by the Hinkley debacle (not to mention Bre...), and whose leader, Mrs May, has the resolve of an indecisive blob of jelly.

Partly this situation comes about because the developers have spotted a soft touch, of course.  But it's not to be ruled out that a genuine issue lurks, namely that the whole history of nukes (and ever-tightening nuclear safety regulation) may fairly imply that commercial enterprises will never be the right kind of entity to undertake their development.  What's needed, this logic concludes, is an investor with the lowest-possible cost of capital, i.e. an AA-or-above government.  Also, guaranteeing the revenue stream alone (à la Hinkley, although the redacted parts of that deal guarantee even more) is not enough.  In particular, it's development risk the commercial players don't fancy.

Folowing this to its conclusion, some (and not just the vested interests, nor even those who believe all power plants should be state-owned) are now arguing that while the market model is ideal for optimising the day-to-day running of an energy network, it doesn't work for actually building the system.  It's not too hard to agree this in respect of the 'natural monopoly' aspects of the infrastructure (and almost everyone does).  But many of us felt we had reached a workable and indeed proven model for leaving the market to build new generating plant.   

Even we free-marketeers would need to accept a couple of qualifiers.   The trivial one is that the capital costs of renewables will need to fall yet further before anyone will routinely build them without subsidy.  True; but even such purely political programmes are greatly improved by auctioning the subsidies, making the whole thing at least semi-privatised, semi-market based, semi-efficient. 

The second major qualifier is this.  The longest-forward period that capacity markets operate tends to be 4 years, and likewise the tenor of forwards in commodities.  That should suffice to get (e.g.) gas-fired plants off the ground in good order on a market basis: construction takes 2-3 years and there are always inventories of shovel-ready projects; and companies can genuinely be expected to take their own views on commodity prices.

This still means that big, essentially one-off projects like nukes of >1 MW with lead-times that are way more than 4 years, are highly implausible candidates to be built on a purely commercial basis.  maybe one day small modular nukes will fit the 4-year bill, but not yetawhile.  So if, for maybe even compelling reasons of long-term planning and environmental politics, someone wants nukes, the best you'll get in the direction of competitive market dynamics is to auction the subsidies you are willing to give.

But when someone says, that alone doesn't cater adequately for development / construction risk, which must be borne at least in part by nation-states, they are steering us towards the traditional disaster-zone of governments needing to procure projects on a cost-plus basis.  Has there ever been a truly successful multi-billion, cost-plus, government procurement exercise in energy, defence, IT ..? 

But: the May government, like its Cameron / Brown / Blair predecessors, seems hell-bent on new nukes - so we are fairly likely to see a new model contract coming into existence in the coming months, to tackle some interesting and, I believe, genuine 'practical academic issues' around finance and risk, (as well as different types of practicalities on the commercial and strategic fronts).  I'm not sure any of us are particularly confident of the May adminstration's capabilities in any of these regards.  Time will tell; and it might be interesting.     

* * * * * *

Of course, all this entirely begs the question of whether anyone should build nukes...

ND

Nuclear Fallout for Macron - And Us

Longtime readers will be familiar with my decade-long refrain that the French badly need
other countries to dig them out of their nuclear morass.  Their fleet of nukes (across France and, let it be remembered, the UK) is the biggest in the free world: they are ageing badly:  they have not been making anything like adequate provision for decommissioning:  their chosen strategy of extending the lives of the monsters is equally unaffordable:  intelligent frogs (and readers of this blog) have seen this coming for a long time.  

Their solution will centre on blackmailing their neighbours into contributing to a nuclear version of the CAP.  Brexit muddies the waters a bit for them; but they have other plans for the UK's role in all this - the exorbitant but government-underwritten Hinkley Point electricity price, plus the local blackmail of what's to happen to EDF's 8 existing reactors in this country. And, lest we forget, we are frequently** downwind of France ...

Enter the shiny new socialist technocrat Macron, who knows all this as well as anyone.  His official plan is to cut French nuclear capacity from 75% of their total generation to 50% by 2025; and his newly-appointed energy minister, one Nicolas Hulot, is a prominent anti-nuclear Green.  They can't afford that plan, either - and sensible people know that, too.  Rumours of a push-back by EDF are already flying.

Fun and games ahead.  A shame we don't have the leadership to make the best of our hand.  I first concluded May was going to prove useless when she rolled over on Hinkley in the face of threats from Hollande, and nothing we've seen since really changes that.

ND

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** Mark W says: sometimes, but not frequently

Hinkley: Summer Finished, Winter Starts Here

Returning home from a very damp Paris to an equally damp London to read all about Hinkley: what a ridiculous state of affairs.  Is there anything to add?

I have seen a couple of half-hearted attempts to praise May for this craven decision.  Nick Butler (*spits*) in the FT gives her a convoluted, obsequious and yet condescending grammar-school mark - “VG 8½ out of 10. A good start to the term. Keep it up”.

And an un-named Chinese official tells China Daily (hoho!): "May has managed a good deal – she has managed to satisfy her domestic critics, satisfy her own cautious nature, and keep the Chinese on side". 

Well there's a thing.

Except here's one domestic critic who ain't satisfied.  Obviously we are never going to see the full text of the contract & related agreements, but (as with Cameron's lame Brexit 'negotiation') with the right creative approach there was a lot that could have been done - but not in seven weeks of cloistered, introspective worrying.

She really is no sort of negotiator, is she?  As well as being thick.

ND

Small Modular Nuclear Reactors

Here's something I missed earlier in the year (can't imagine what might have distracted me): the government is holding a competition for proposals to develop Small Modular (nuclear) Reactors.  Yes, really!  And there was us thinking they've bet the farm on the Hinkley white elephant.

Graphic:  Sarah Cohen  https://prezi.com/

SMRs are said to offer a corrective to the general direction of travel of 'conventional' nuclear plant development costs which, tracking EDF's ridiculous activities across Europe, are headed for the strato-sphere.  The first point about SMRs is, you build lots of 'em in proper factories, instead of one-offs in some remote and soggy field a long way from where engineers and manufacturing resources actually live.  So you get economies of scale & experience.

Post Piper Alpha (as I have written about more than once), pre-fabricated modular onshore construction revolutionised the costs of offshore oil & gas development - in the highly-desirable 'downwards' direction; it being even dafter to build stuff offshore than it is in a remote & soggy field. So the concept has a very encouraging precedent.

Secondly, SMRs being small and (so we are invited to believe) jolly safe, you site them near centres of population where the power is actually needed (unlike certain types of 'renewable' power plants we could all mention) - another big advantage.  Then you can run district heating off them, making use of the epic amounts of otherwise-waste heat that issues forth from nuclear power generation: yet another big advantage.  

The rather worthy Energy Technlogies Institute has done a lot of work on this, and concludes there are approx 50 towns in England & Wales (but not Scotland, hoho! - the SNP won't play) that could benefit from one or more SMRs.

But they ain't saying which towns these are!  The government wouldn't like premature publication ...

Zingy?!

So - come on, you thorium and molten salt enthusiasts!  BTW, on the subject of Hinkley did you know that EDF have given a name to the radioactive turd? It's Zingy?  Seriously!  Who said the frogs have no sense of humour?

ND

(a) Surrounded by Idiots (b) Weekend Reading

A common complaint about standards of discourse in public life is that politicians & civil servants know nothing (I may even have said this myself), ditto journalists - and yet it is they who push to the front and dominate the field.  Where are the expert voices?

Well.  In my part of the universe one of the most prominent professional bodies is the Energy Institute, some of whose work is excellent.  It has just published the first results of its 'Energy Barometer', obtained by exhaustive polling of a 'college' of 850, selected to be representative of its 21,000 members.  One of the questions they answered was this:

In the UK, which technologies have the greatest potential to make a cost-effective contribution to decarbonisation, without subsidies, by 2030? (select up to 4) [my underlining]

And coming in at #2, with 42% of these sages voting for it, is   ...  Nuclear!  

Nuclear?  Without subsidies, by 2030?  And these are 'professional' people!  With jobs in the energy industry, and votes in elections, and things like that.  We may be thankful they didn't make it #1 (which was of course energy efficiency, at least they got that right).  Universal suffrage?  It's over-rated.

ANYHOW:  here's some weekend reading for you.  Don't be put off by the title ('Despair Fatigue') or the leftie breast-beating of the first third.  It gets round to addressing some of the serious themes we knock around in these parts - what's the reality of the UK economy; do we and can we survive on the back of the London 'financal services' industry; prospects for a genuine uprising of the disenchanted under Corbyn etc etc - all the big stuff. 

"... in many ways Britain [still] resembles an imperial economy: while it does export machinery, pharmaceuticals, plastics, petrol, and a whole variety of high-quality artisanal products, in sheer material terms it takes in far, far more than it sends out. So we must ask a simple question: Why do other countries continue to send their things to Britain? How is it that the island manages to take in so much more from the rest of the world than it gives them in return?"

Kinda germane to the whole Brexit thing, no?  Read on.  And as the frogs limber up to hurl their money at Hinkley Point ... Allez les rosbifs! - England for the Grand Slam!

ND
 

Energy Policy Goes Mainstream!

Guardian cartoon: detail.  (c) Steve Bell

It is not every day of the week that an energy topic becomes the subject of a major cartoonist's big OpEd piece  -  but today the great Steve Bell runs with Hinkley Point!

Yes, his Hinkley Point white elephant, lumbering and puffing as it is under George Osborne as jockey, nevertheless represents a "dead cert to win Grand National" as it powers ahead of the more worthy nags in the well-bent race.  Yes indeed, the fix is in.

But not to everyone's satisfaction evidently, as EDF's finance director Thomas Piquemal resigns in disgust at the stupidity of it all.  The EDF unions are pretty unhappy about it, too - they know EDF will need to sell down and slim down if it is to raise the dosh for its share of the Somerset monster, at the same time as completing the EPRs it's already started, rescuing Areva, and extending + decommissioning its vast French fleet.  Bon courage with all that, mes braves.

The French and UK governments would like it to be known that this doesn't change anything.  Indeed, they allow their whisperers to intimate that M.Piquemal was a hindrance they are glad to be shot of.  The City will be the judge of that.

The statement from Dave's mouthpiece - "President Hollande said himself on Thursday afternoon that it has the full support of the French Government" - was a bit loaded, I thought.  But Hollande is an ideal candidate for the opprobrium that may be about to follow, as and when reality bites home.

But, actually, it may never do so.  You really can suspend the law of gravity - for so long as you are willing to throw money at it.  Given the start-up date has already slipped 8 (that's eight) years - now 2025 and counting - Hinkley's electricity output doesn't feature directly in anyone's thinking.  So the primary ongoing costs of this endless farting-around are lawyers' fees and reputational damage.  Eventually, I suppose, the Chinese will get pretty pissed off at being associated with this shower, at which point any attraction of Hinkley for 'Genius' Osborne evaporates.

ND

Red Carpet for the Russians? Actually, No.

An interesting groundswell is taking place in the wicked EU, where (on a good day), having high regard for the basics of life like heat and power they are remarkably unsentimental about the green nonsense.

Thus we find a rolling-out of the mighty gas-based energy strategy (see here, and here) that is likely to find favour - broadly speaking - with some of our readers, I do believe.  Of course, it carefully pays lip-service to the Paris COP21 green-crap stuff; and burning gas is better than lignite (actually, lighting sheep-farts is better than lignite); but nobody seriously imagines that was uppermost in their minds at the time.

As has readily been divined by the green blob, haha.

The plans were immediately attacked by green campaigners, who contrasted the continued role of fossil fuels with commitments to cut carbon dioxide made by the EU at the Paris climate summit two months ago ... "It’s like the Paris agreement never happened, and the commission is stuck on gas, dishing out a costly proposal that will keep Europe hooked on energy imports. Only if Europe focuses on renewables and energy efficiency will Europe meet its climate targets and reduce dependence on foreign supplies."  Claude Turmes, energy spokesman for the Green MEP grouping in the European parliament, called the strategy "rolling out the red carpet for Gazprom"

Excuse me?  Mr Turmes should follow developments a little more closely.  In point of fact, the rhetoric surrounding this whole policy-thrust is strikingly and explicitly anti-Russian, with some of the language being bandied at committee meetings in Brussels being distinctly undiplomatic.  In this aspect the eastern european countries that really are dependent on Russian gas have set the agenda in no uncertain terms.  One of the phrases being used is 'mandatory solidarity', which at a minimum means everyone sharing the available gas if Russia turns off the taps.  That's more than a slogan - it appears concretely in the latest EC proposals.

We first encountered this when we spotted the disingenuous Mandy musing how nice it would be if 'someone' negotiated all the gas buying for the whole of Europe.  Germany won't much like that, nor Italy - because they have sweetheart Gazprom deals of their own.  So it'll be interesting to see how these Poland-driven proposals fare in the long run.  

Which brings us to the baleful aspect of all this: the putative "European Energy Union" we fingered right from the start and under the auspices of which all this is rumbling forward.   Just as with the gas strategy, all Energy Union documents pay lip-service to everything (green crap for the green blob, nuclear for the French, 'security' for the Poles et al) - including markets for the Brits and readers of C@W generally.  Hence, the gas strategy:

"contributes to internal energy market legislation by prioritising market-based measures"

Yeah, right.  Actually, as with the whole Energy Union thing it is as dirigiste as all hell (and Hell is particularly dirigiste).   Not, however, without precedent:  for those like myself with dinosaur memories, the IEA cut its teeth allocating by fiat all the free world's oil supplies** back in 1973-74 during the Arab oil embargo.  Without this, the Dutch in particular would have been in serious trouble.  It was, however, strictly a 'wartime' measure and was reduced in scope to a rather light regime of mandated oil stocks thereafter. 

I have a strong premonition the Energy Union is an out-and-out policy-grab by Brussels, desirous of emulating the CAP.  Anyhow, for the time being let's sit back and watch the Germans and the greens fight it out with the eastern countries over the gas strategy.  Could be fun.

ND
______________________
** All conducted on an Exxon computer in Florham Park, New Jersey, for anyone interested ...

Hinkley recedes as 4 reactors have life extended

EDF's share price is far below what is was, even in 2008

See here.

Now the Guardian have a bit of form as the distributor of Greenpeace press releases when it comes to energy policy, but the state of EDF itself is a sight to behold.

Last week for example, EDF were told by President Hollande to spend €100 billion on French nuclear projects, that is 5x their current market value.

The Hinkley C project will add another cost equivalent to their entire market value to the slate.

At the same time the French Government is worried about their debt and wants the company to reign in its spending commitments - this is capitalism, French Socialist style.

All in all, with this as the main builder it is so hard to see a way through to the new nuclear plant ever being built in the UK.

So today we find the government magically issuing extensions to 4 of our current plants. This will help keep the lights on as the phrase goes.

Now we just need a dash for gas to actually, finally, have a sensible energy policy forced upon us.

So we wait in hope.

Even The Treasury is Fallible

So there we are, diligently reading the Boy Genius' George's latest masterwork Fixing The Foundations, a.k.a. the Treasury's "Productivity Plan".   Turning to the energy section - "The government aims to improve productivity in energy generation, production, supply and usage.  This will be achieved through ..."  -  we find the inevitable nuclear daydream, as follows:

... delivering a significant expansion in new nuclear power in the UK. The Hinkley Point C power station alone could generate 7% of the UK’s electricity needs 1

Well it could, but that's a rather pointed conditional.  And what's that little '1', the footnote at the end?  The eye falls to the bottom of the page where we read, in 6-point: 

1 Job stats from EDF

But job stats are there none!  Now we know the government and EDF are bosom buddies - how else to explain, well, anything UK-nuclear really - but what happened when someone at the Treasury was set on to ring up the froggies and ask them how many jobs Hinkley Point will create?  Did they just forget?  Surely not, at the Treasury!

Or did EDF say: not a single bloody job until you roll over on all our remaining demands and sign the bloody contract !  (Oh, and even then, the lion's share will be going to French firms.)

All entirely academic, 'cos it ain't gonna happen.

ND