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Monday, 12 October 2020
Tuesday, 29 September 2020
It is looking increasingly likely that the British Government is about to cave-in to EDF's demand that the British energy consumers should pay what could be massive cost overruns for building Sizewell C nuclear power plant. But what has not been discussed so much is how the contract the Government is likely to offer EDF will reduce deployment of renewable energy schemes.
A report in The Times signals that EDF chiefs is meeting the Chancellor to complete the details for how to dress up what is in effect a blank cheque for Sizewell C. It reported that the withdrawal of Hitachi from the Wylfa site was a 'shock'. Hitachi's move which has been expected for a year, is not a shock to people in the energy industry. It became apparent (to me at least!) long ago that new nuclear plant can only be built if they are given an effective blank cheque (that is the promise of an unlimited supply of cash) from some state-backed energy monopoly.
At the moment Hinkley C power plant is being built with the backing of the French state who will pay EDF's bills for the plant's cost overruns. But EDF has been told that the French state won't pay for another British nuclear power plant at Sizewell C. So EDF bosses are telling the Brits that they have got to have Sizewell C, and that the Government will have to promise a scheme whereby the Government will have to ensure that EDF' cost overruns are recompensed.
Of course we are treated to many press reports and consultants explaining that the costs of Sizewell C will be less than Hinkley C, but this somewhat begs the question of why it is then that EDF needs a promise that the British state will ensure payments of cost overruns.
What, however, is less understood is that EDF will be expecting the same sort of contract as given to them for Hinkley C which allows nuclear electricity generation to crowd out production from future renewable energy plant. EDF will be given so-called 'baseload' contracts that mean that when electricity wholesale prices are low or even negative they will still get paid the same level of high premium prices. Meanwhile future wind and solar pv projects will be effectively forced offline by the nuclear power plant because they will not receive premium prices.
This type of 'baseload' contract is another form of hidden subsidy to new nuclear power stations that raises the real price of nuclear power beyond the fictional prices quoted in government reports. Meanwhile the cost of this subsidy to nuclear power's (for generating power at a high price when the power is not needed) is borne by renewable energy, whose costs thus increase. Yet of course this hidden subsidy is entirely a creature of the biased contracts that the Government offers nuclear power. Nuclear power is given preferential contract treatment because it is called' baseload'. And yet it bears no penalty for being inflexible -that is unable to change its output to fit in which demand and supply patterns.
Given the wealth of alternative low carbon generation options, as well as the prospect of being able to balance the electricity system better without these nuclear power plant, there is no need to build these plant given their great expense, besides any other reason. However EDF not only has immense political clout as a big multinational corporation owned by the French state, but they also have the support of a large number of civil servants - indeed there is a much larger number of civil servants dealing with nuclear power compared with renewable energy.
Monday, 21 September 2020
Be careful what you wish for - why letting ex-pat Scots vote in an independence referendum might not give the result its protagonists want
What started off as looking like a whakky idea - allowing a Scottish independence referendum on the proviso that all people who would be eligible for Scottish passports - has now become almost mainstream in England (at least in right wing political circles). Those promoting the idea are opposed to Scottish independence, expecting such a proposition to deliver a 'no' vote in any referendum outcome. But these 'give the vote to Scottish expats' should be careful of what they wish for.
Because it might actually backfire and produce more votes for independence than votes against.
Sure, the opinion polls suggest, now, that there would be a healthy majority for a 'no' vote among the English residing expat Scots, but that's before the campaign starts, and certainly before the potential 'no' voters are informed of the benefits of obtaining an extra (Scottish) nationality.
These benefits are likely to be substantial given that Scotland is very likely (I would say almost certain) to quickly become a member of the European Economic Area (EEA) and therefore entitle Scottish citizens to the freedom of movement benefits that result from this. Travellers to the EU from the UK after the end of the year may well experience some irksome changes meaning people having to pay to take out health insurance cover, experiencing much greater difficulty in taking pets to the EU, re-imposition of mobile phone roaming charges and of course facing visa restrictions on the amount of time they can spend abroad.
We don't know as yet what the arrangements may be, but what I can argue with some logical argument in support is that the ideal relationship that Scotland would have with the EU after independence is not full membership of the EU, but membership of the EEA. This would allow Scotland, as is the case of Norway who is a member of the EEA but not the EU, access to the European Single Market and all of its benefits. For sure, this would include access to health cover as it is for Brits at the moment easy movement for pets, no mobile phone roaming charges and no restrictions on access to EU countries. Scotland would be also able to negotiate a close trade agreement with the rest of the UK, something it would need but would not be able to negotiate separately to the EU if it was a full EU member.
Nobody has factored in the effect on ex-pat Scots when they realise they would get these benefits. Many of these potential referendum votes probably have no deep feelings about independence one way or another, but they may well be very keen on obtaining the useful benefits to themselves that might flow from independence. They might well suddenly warm to the blandishments of Nicolar Sturgean et al. In deed, in political science a famous theory propounded by Mancur Olson (about which political scientists have been arguing ever since) highlighted the crucial positive impact on recruitment to pressure groups of 'selective incentives'. Of course, as critics have pointed out, support for causes is very important, but so are perceived individual benefits.
A surprisingly large number of people could end up voting for the benefits given that everybody who has at least one grandparent born in Scotland would be eligible for Scottish citizenship. You might suddenly see a lot of people 'rediscovering' their Scottish identities for the sake of claiming holiday health insurance and fee mobile phone calls, even though some of them may never have actually set foot in Scotland.
Now, that might be upside. The downside however is that, in the event of a narrow 'no' vote result if the number of expat Scots voting in a referendum exceeds the margin of a 'no' victory then the Scottish nationalists will say that the vote has been rigged. The referendum will be robbed of its legitimacy. Once that happened the door is opened to all sorts of odious extremists who are willing to put other people's lives in danger in terrorist attacks in the name of 'nationalism'. At best there will be a movement of civil resistance and civil disturbance in opposition to what will be framed as a rigged result. Things could get quite difficult.
Maybe some of the protagonists of this 'give expat Scots a vote' strategy are being a bit tongue in cheek, and will become a bit more straight-faced if and when Scottish enthusiasm for another vote increases.
I hope so, because the consequences of such a crazy idea will almost certainly make these people regret coming up with the idea in the first place.
Monday, 31 August 2020
Why we're not heading for a 'no-deal' Brexit - the Brits will cave in and then claim the EU 'blinked'
I'm a student of the 'new normal' in politics - that's the post so-called populist revolution new normal - which means that the UK will do much the same in January with a last gasp concession to EU demands. In that case the substance was that there should be no border in Ireland.
Now I know we're all walking around in a sea of belief that somehow the 'EU blinked' in January - although what it blinked on I'm not sure, except that saying so saved face for the UK Government. See the discussion by the Institute for Government. The Irish/EU position had always been 'no border in Ireland' and that is precisely what they are getting. All this stuff about how the EU blinked on the backstop or something doesn't really wash since the backstop was a creation of the May regime to try to finesse away the objections of the DUP. In the end the DUP's objections were brushed aside to allow Ireland, backed by the EU, to avoid a border in Ireland, even if there is a border in the Irish Sea.
Of course, and getting to the present, a key reason why a 'no-deal' Brexit is to be avoided is that if there is a no-deal then the Irish Sea border will become a lot harder than it otherwise would be, exacerbating problems, and also, into the bargain, increasing the possibilities for a United Ireland. Shift focus to Scotland, and the chances of Scottish independence happening in the next few years increase from the quite likely to the near-certain. I suspect that in the event of a 'no-deal' there would actually be some minimum agreements to avoid the worst aspects of trade chaos and to keep the planes flying (not that too many of those are flying these days). But the economic effects would certainly be severely noticed when the 'no-deal' came into effect (I wouldn't entirely rule out some sort of extension either).
In political terms the obvious move for the British Government is to give the EU essentially what they want and simultaneously negotiate some face saving measure for the British Government (eg political institutions get new creative labels). This will enable the British Government to announce that the 'EU blinked'. The tabloids can announce a great British victory, and then carrying on decrying the BBC for not letting them sing 'Rule Britainnia' to celebrate this interpretation.
What does the EU want? Well, they want to know that British environmental and labour standards will remain complementary to EU ones and they want the UK to obey state aid rules. Of course a key objection from (some) Brexiteers to that is that such policies take away control from British institutions and lets the European Court tell the British what to do. Here the face-saving devices come into play in that new institutions will be invented to 'consult' about these things, except of course the back channel will be some recourse somewhere along the line to EU or International Treaty law with some binding arbitration mechanism.
A last minute deal will be done and neatly everybody will say they are happy. That's the new normal.
Thursday, 27 August 2020
Big Capitalism rarely gets as self-mocking as when it is crying out for state subsidies to preserve the failing out-of-date technologies of its biggest zombie corporations. It seems to me especially ludicrous as the CBI calls upon the Government to get people back to work in city centre office blocks. It's not that ordinary people want to spend their days travelling on crowded trains and buses so that they sit in rabbit warren offices peering at their betters in lavish offices who get transported by motor vehicles. Indeed if a lot more people work from home this will save heaps of money, resources that can be channelled into other things that people actually need.
It's just that property owners and property developers stand to lose a hell of a lot of money if the trend towards home working is not sharply reversed.
Of course there are a lot of city centre shops and cafes that are affected by this change, and they have my sympathies, but I suspect if it wasn't for the property owners and developers you wouldn't be hearing quite so much about the issue. But then I also sympathise with all those academics who get made redundant when student numbers fall. I just don't hear any clamour from the guardians of big capitalism for the state to stop such job losses - quite the reverse in fact, as we never seem to stop hearing about how there are too many students (statements always made by people who are graduates themselves of course).
If the centralised office is a declining technology then so are big power stations (whether fossil fuel or nuclear), and, you've guessed it, the CBI is usually first in line to urge the state to direct multi-billions of pounds to support these dinosaur technologies. The CBI has been making special efforts to get the state to pour great sums into funding EDF's vastly unprofitable (before the massive handouts) nuclear power plant at Hinkley C and soon, we hear, Sizewell C. Sizewell C's funding will involve an unlimited cash transfer facility from the electricity consumer to EDF under a scheme (RAB) that is, with deceptive irony, labelled as something that will save money!
We've heard a lot about how low-interest rates encourages so-called 'zombie capitalism', that is firms which would otherwise be insoluble but which are kept alive because they can service their growing debts. But what is much more flagrant is the way that the CBI retards innovation and channels the state's resources into bankrolling the status quo of big, concentrated, financial and industrial interests. That's zombie state capitalism, and it is the worst kind.
Wednesday, 22 July 2020
Opinion polls are showing more consistent support for independence these days, and the UK Government consistently talks to an English audience rather than a Scottish one as it negotiates the fallout from Brexit. The story from London that surely the Scottish people prefer being run from Westminster than being run from Brussels indicates just how little they understand Scottish nationalism. Many nationalists would say that they would prefer to be run over by a bus than run by Westminster!
It is uncertain as to what level of integration with the EU would transpire, but there would certainly be a lot of interest in building more interconnectors to trade with the European continent, perhaps via Norway. The Germans in particular may well be interested in boosting their renewable energy by buying in wind power from Scotland. Although there are still substantial potentials from onshore wind, and also lots of potential for solar power, even this is dwarfed by the massive amounts that could come from Scottish offshore waters, especially using the developing floating wind technologies. If, on top of sufficient renewables to power Scotland's own energy consumption, say 40GWe of offshore wind was installed, Scotland could earn a billion pounds a year if the Government charged £5 per MWh export levy. This would be a very useful sum, although only around a tenth of the income that used to come from oil and gas revenues in good years.
It seems most likely that Scotland would continue to be part of the British Electricity Transmission and Trading Arrangement (BETTA) - tearing up lots of expensive transmission arrangments does not seem to make much sense to either England or Scotland. OFGEM would be responsible for electricity trading throughout Britain while control over dishing out electricity generation contracts in Scotland would revert to the Scottish Government (SG). At the moment under the terms of Electricity Legislation regulations covering electricity generation are the preserve of the Westminster Government.
The SG would have the ability to issue its own long term contracts for electricity supply (and also set up trading in demand side management). Importantly Scottish electricity consumers would not have to pay surcharges to fund new nuclear power. Hinkley C will not be online anyway by the time of independence, and certainly nothing else in the way of new nuclear. Westminster could still threaten to stop the payments of renewable energy obligation certificates for Scottish windfarms (it did in 2014), but by 2024 all of the windfarms will have paid off the bulk if not all of their bank loans anyway.
Meanwhile the Scottish Government could issue many contracts for large amounts of renewable energy contracts for wholesale power prices that are no higher than what would be paid anyway. Currently the power to issue such contracts - called contracts for difference (CfDs) are held by the Westminster Government. But in the case of Scottish independence this power would be held by the SG.
In the extreme event that Westminster demands that Scottish people pay for English new nuclear power stations as a condition for continued participation in BETTA (the ending of which would disrupt English electricity markets), then, at least in the medium term, Scotland could have its own independent electricity supply system.
Scotland could balance the offshore wind variability with various methods, including bigger use of batteries to even out daily renewable fluctuations, but it could easily be 100 per cent renewable using ammonia or some other substance as a means to store renewable energy in the longer term. The renewable energy would be stored at times when electricity prices, and therefore the costs of the renewable energy. Then the stored energy would be generated using what are very cheap gas turbines or gas engines when there was not enough renewable energy, battery or interconnector based etc supplies to meet demand. An ammonia based long term storage system is not just fantasy. It is coming soon. A facility to convert renewable energy into ammonia as a means of storing hydrogen is actually going to be deployed in Saudi Arabia. See also coverage by 100percentrenewableuk.
Indeed, for those of us that support 100 per cent renewable energy, we could almost wish the Westminster Government to throw its rattle out of its pram and scrap BETTA. That could make Scotland a world leader, perhaps the world leader, in clean energy technology.
Friday, 3 July 2020
As far as the prospect of solar farms in the countryside are concerned, I simply say 'the more the merrier'. Surely if we are facing a climate crisis then we should do our best to welcome cheap, clean, energy sources. And large scale solar farms that are now being proposed in quite large capacities are coming in very cheap to the extent that they are being developed on a 'subsidy free' basis.
Solar farms already constitute a very important contribution to renewable energy in the UK. A little over half of UK based solar electricity is generated from them, the rest coming from domestic solar installations or on commercial properties. I do often hear the refrain 'they should put the panels on roofs, not on farmland' - too often as far as I am concerned.
Well I'm certainly in favour of clearing away the contractual and regulatory obstacles that get in the way of putting solar panels on as many roofs as we can. However it is simply wrong to imply, if that is what people mean, that if planning consent for a solar farm is refused, then somehow the panels will magically reappear on some suitable roof somewhere else. They won't. We shall simply have that much less solar power generation. Neither are the solar farms easily transferable to some other piece of land that maybe preferred - land availability that is sufficiently proximate to the right electricity connections is in short supply.
Some say solar pv should not be on farmland. I disagree. Yes, there's a balance to be struck between localised food production and clean energy production - but in this case there's not really much of an argument that I can see, and not much of a balance. A small proportion of farmland in the UK will generate a massive amount of solar electricity.
Around 66 per cent of the UK is farmland, yet it would take coverage of barely 1 per cent of the UK's land to generate the equivalent of the UK's entire current electricity production. That's not much of a sacrifice really - the benefits of the clean energy surely outweigh the loss of a very small proportion of farmland. Are we really, seriously arguing, that in the teeth of what we call the climate crisis, that this is beyond the limit of what we can sacrifice. Surely not!
I am afraid also that I completely fail to understand the aesthetic arguments that are sometimes posed against solar farms. I must say I have no sympathy with the landscape objections to wind power either, and think that the noise issues are invariably overstated, but surely the local impacts of solar farms are even less? You cannot see them from a long distance, and indeed, when you can see them from a medium distance you can hardly often distinguish them from strawerry net cloches and polytunnels. I haven't heard many people complaining about the sight of them!
I don't see any biodiversity arguments against solar farms on farmland. Indeed, if they are placed on so-called 'prime' agricultural land they are almost certainly giving the land a break from the large quantities of chemicals that sterlise the land! I have heard arguments that solar farms will actually improve the biodiversity compared to intensive agriculture. What I am certain about is that they cannot be worse in ecological terms! The main difference will be that the land will be used to generate lots of clean energy rather than soak up chemicals!
If there are ever any ecological doubts about solar farms, it won't (in my view) be about the ones that are farmlands; rather this will be about the impact on areas of special wildlife interest.
Indeed recently there was a planning controversy about the Cleve Hill solar park, which was given ministerial approval in May. The Kent Wildlife Trust were very concerned about the proximity of the solar park to protected wildlife areas. However, there were some changes made and the Trust commented: 'we have secured larger buffers to the ditches, more mitigation land and better management, so even if it gets permission it will not be as bad as the initial application, and some species may even be better off'. Now that's hardly a ringing endorsement, as they say, but it doesn't suggest to me that it is the end of the world either.
On balance I am clearly minded to support this project. It is a project that is going to use come cutting edge technology, and it will also install some batteries that will help the balancing capabilities of the electricity grid. At 350 MW capacity this will add a substantial amount of solar generation. The UK's solar generation is currently up to around 4 per cent of UK electricity demand(from about 13.5 GW), as measured on an annual basis.
And also I'm glad to see there should be steady flow of larger solar farms coming up in the future. Australian owned company Macquarie is planning an initial 1 GW. It really should be a cause of great celebration that companies are planning solar pv farms without even any contracts being offered by the Government. We should be cheering, not wringing our hands over this.