So why is renewable energy so much more expensive in the UK compared to other countries?

British renewable energy is a lot more costly compared to renewable energy in other European countries, according to a recently published report. You can see this on: http://www.wua-wien.at/images/stories/publikationen/renewable-energy-versus-nuclear-power.pdf

Now, I don't doubt the reports general findings. Indeed my own research prompts me to say that renewable energy in the UK is not only rather more expensive compared to the rest of Europe, but also most of the rest of the world! But, the question is, WHY? A colleague recently popped me this question and it is one I have been asked before. One German renewable energy official commented to me a couple of years ago: 'How do you (Brits) manage to make renewable energy so expensive ?'

I don't think it has anything to do with 'purchasing power parity', that is what a pound will buy here as opposed to somewhere else when converted into the local currency (just look at the comparisons to see what I mean), so other factors will be in play, and my own studies of the energy point me very firmly in one direction:

The system of financing renewable energy schemes in the UK is designed (whether by intention or otherwise) to give a very large proportion of the income stream, earmarked for renewable energy and financed by effective levies on consumer electricity bills, to the major electricity suppliers rather than pay the renewable energy schemes themselves.

Under the Renewables Obligation (RO) (to cut a longer story short) the renewable energy (RE) generators are dependent on the major electricity suppliers to give them the long term contract they would need to raise the necessary bank loans and satisfy equity investors. They (the Big Six) take a big cut for doing this 'service' - which can amount to around 30 per cent of the income stream dedicated to renewable energy. In other words, if we had a system of German style 'feed-in tariff' contract that was available to anybody the money needed to pay for a given amount of renewable energy would be up to 30 per cent less. Yes, if RE was financed this way RE would be at least 25 per cent cheaper. Well, certainly for onshore schemes. The offshore wind picture is a bit more complicated since there are more uncertainties involved in that (eg you don't know how much the ships you need are going to cost to hire in advance), but the Germans still manage to do this a lot more cheaply!

Ah, you might say, the Government, under Electricity Market Reform (EMR) is introducing precisely this sort of system now. But, if you said that, you'd be dead wrong (admittedly a common fallacy). The 'contract for differences' (CfD) system being introduced is only available to electricity suppliers, or companies who can effectively act like electricity suppliers by trading on the UK electricity markets. Even then banks will tend to lend money at reasonable rates only to projects that are backed by the biggest electricity companies.

So, in short, the new CfD system replicates the existing ability of the electricity majors to siphon off up to 30 per cent of the incomes supposedly paid by electricity consumers for renewable energy.

You would be very welcome to ask why this is tolerated. Perhaps the simple answer is twofold. First, in the UK the Government has, by design or at least in effect, allowed the major electricity companies to cream off what economists call an 'economic rent' from renewable energy in order to compensate for the lost production from their power stations. I mean 'lost' in the sense that the power stations would be generating more if it was not for the renewable energy production.  - A sort of Faustian bargain. I have heard it said that RE is practically the only thing the Big Six can earn profits from now. Quite. This doesn't happen in Germany of course,where the electricity majors, as we hear, are suffering very badly indeed!

This leads us onto the second reason why this is happening. Now one can write lots of stuff about interest group theory to explain how this happens without there being any public discussion, but, again, the short answer is that it does not serve any of the major interest groups to raise the issue. Obviously the electricity majors like it; the Government is happy so long as they are happy and nobody else is able to make a big enough fuss, and the renewable energy industry is tolerant so long as they can carry on with their projects. The anti-windfarm/solar farm lobby won't be very interested in going on about how windfarms/solar farms could be a lot cheaper if the Government organised things differently.

The only interest groups that have tried to do anything about this are some independent renewables companies and some environmental groups. To give them their proper due. Friends of the Earth (FOE) actually published (two years ago) a report I wrote calling for German style feed-in tariffs (available to all-comers) to be established. See www.foe.co.uk/sites/default/files/downloads/david_toke_fits.pdf

I am very grateful to FOE for doing what they could here (it was certainly worth a try), but the report actually got rather more interest from abroad than it did in the UK! Some independent renewable energy companies tried pushing the boat out in the direction of looking for a broadly comparable solution, but sadly, they have too little political clout to make a crucial difference in political competition with the Big Six.

You have to remember that in Germany the independent renewables sector runs the RE industry. There the political interest group pressure is almost 180 per cent different to the UK. In this country it is the Big Six, give or take a couple of other multinational energy corporations, who will influence contractual terms. They are not too keen on opening up the market to real competition; indeed much nonsense is spouted in support of the the CfD system in that it is integrated to the British electricity market. Preserved for the sole indulgence of the big companies you mean! The biggest prize of course is to pay whatever it takes to preserve the idea of nuclear power, hence the likely bottomless incomes stream that will be opened up for Hinkley C and which will wipe out RE funding in the future. You can read my other posts on this I am sure.

I am not going to be completely pessimistic though. Smaller suppliers are entering the market, maybe even some ones backed by local authorities under what OFGEM calls its new 'supplier lite' scheme. That might change things. If we get Labour in power we might get a dedicated 'community feed-in tariff' - although that wouldn't apply to all independents, just ones owned in some sense by a community. But change in the UK is likely to come only slowly, and then under the impact of people doing things on the ground and building up the pressure that way. Small projects can gain funding under the small renewables feed-in tariff (in effect up to a MW or so). But that's only a start.

See below for some links to various recent argument on the subject. Note that there are a couple of comments below on the Government's new capacity mechanism. This now looks ever much more like a PR device that does little more than give more money to the Big Six and conventional power generators to try to keep them afloat from the threat of RE and other new technologies for that little but longer...........

http://www.independent.co.uk/news/uk/politics/community-energy-would-bypass-the-big-six-under-labour-9923413.html

http://www.theguardian.com/business/2014/dec/14/edf-3bn-windfall-existing-power-plants

http://projects.exeter.ac.uk/igov/britains-dinosaur-capacity-market-will-worsen-energy-trilemma/

http://www.intelligentutility.com/magazine/article/382571/are-virtual-power-plants-future-european-utilities

http://www.carboncommentary.com/blog/2014/12/22/the-uk-capacity-auction-a-backdoor-way-of-staving-off-the-utility-death-spiral

http://www.ft.com/cms/s/0/91987576-8795-11e4-bc7c-00144feabdc0.html#axzz3NCIJOIK2
19th December Tom Greatrex, Labour’s shadow energy minister, welcomed the broad framework of the policy. However, he repeated his argument that existing nuclear power stations — which cannot vary output in response to short-term peaks and troughs in demand — were being unnecessarily subsidised by the scheme.

http://www.theguardian.com/environment/2014/aug/15/green-energy-co-ops-blocked-by-government-regulator

http://realfeed-intariffs.blogspot.co.uk/2014/10/hinkley-c-deal-likely-to-wipe-out-uk.html

http://party.coop/wp-content/blogs.dir/5/files/2014/12/next-gen-final-web.pdf?8b5145&8b5145

Mass redundancies in social science and humanities likely if research funding proposals are implemented

The Government is not only cutting back on the amount of research money available to universities, but it is considering a plan that is likely to radically shift the balance of research funding away from the residual elements still given to arts and social sciences and towards science subjects. This will, using my back-of-the-envelope calculation, lead to the loss of around 6000 academic jobs in social sciences, humanities and arts.

The large bulk of the research money already goes to science. In the case of the Research Councils, who fund research on a project by project basis, less than 10 per cent of the money goes to social science, humanities or arts. It is the so-called 'QR' funding stream, awarded mainly on the basis of the 6 yearly ''research excellence framework' audits, that gives a larger amount of research money for non-science subjects (about 30 per cent of 'QR' funds).

But, as can be seen in the Guardian article (see link below), the Government is backing a plan to distribute the QR money in the future through the Research Councils. If the Research Councils distribute the funds diverted from QR in the same proportions to science, social science etc as they do now, then funding for social science, arts and humanities will be cut from its current figure of around £730 million to about £400 million - a massive cutback. How many social science and humanities academics do you lose for £330 million? - quite a lot!

Of course a lot of argument might persuade the Government to allow a higher proportion of total funds to be given to Research Councils such as the ESRC and AHRC than is the case now, but the losses to the social sciences arts and humanities compared to the present system are still likely to be massive. This is especially when you take into account the real decline in total research spending that is happening.

How can the Government get away with this? Well, maybe they hope to win by divide and rule. After all, the scientists, engineers etc will get more money...............

But the social science and humanities academics had better wise up (and rise up!) pretty quick, or maybe just emigrate!

If you want to look at the stats and stories, see some references below:

http://www.theguardian.com/education/2014/dec/21/university-funding-reform-brain-drain-london

http://blog.universitiesuk.ac.uk/2014/06/12/funding-changes-impact-university-research-new-report/

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/332767/bis-14-750-science-research-funding-allocations-2015-2016-corrected.pdf

http://www.hefce.ac.uk/whatwedo/invest/institns/annallocns/

Renewable Energy near top of SNP shopping list in case of minority Labour Government

The left's hopes of keeping the Tories out of office rose significantly when Alex Salmond implied that the SNP Westminster MPs would support a minority Labour Government after the May General Election, assuming a 'hung' Parliament. But the SNP would be demanding concessions, including some key renewable energy demands, for this to happen. Of course if the SNP is to be seen to be seriously about keeping the Tories out of office it has to make demands that Ed Miliband and his team might accept. Giving concessions on renewable energy policy would seem to be high on the list of 'plausible' demands. And of course this agenda would overlap mostly with that of the Green Party. But what sort of issues could that include?

An obvious one would be to make sure that reasonable incentives continue to be available for onshore wind, but, in contrast to the Tory/UKIP hatred of onshore wind, the SNP would be pushing at an open door as far as Labour is concerned - so this would not really count as a concession. Labour would continue to support onshore wind anyway. But the position on other issues is not so clear.

First the SNP is likely to demand a scheme to ensure there is 'proactive' investment in electricity distribution networks in Scotland. At the moment many wind schemes are stalled are stymied because of high costs and/or long waiting times to be connected to the grid. Smaller and community owned schemes are especially vulnerable here.

Second on the nationalist/green shopping list is going to be grid connections for renewable energy schemes on Scottish Islands. Currently there is an impasse on this, with transmission charges to high for the projects to pay and no wires to carry the power to the mainland anyway.

Third is support for Scottish offshore wind power. SSE has been given a contract for difference (CfD) for the 500 MW 'Beatrice' windfarm, but are the terms good enough to execute this project? SSE seems to be waiting until the election to find out and negotiate further.

Fourth is the issue of support for marine energy, wave and tidal power. There is quite an astonishing contrast between the sort of loan guarantees offered for nuclear power and the limited support offered for marine energy projects by the UK Government. The Scottish Government is having to bear the responsibility of funding much of the R&D for marine energy out of its discretionary funds. So the UK Government will be expected to come up with more support here.

Fifth will be more influence for the Scottish Government generally on renewable energy policy. Although the Scottish and Westminster governments have been actively cooperating on issues that directly affect Scotland, the trouble is that a lot of the main policies underpinning Electricity Market Reform have been discussed and implemented with little account being taken of the views of the Scottish Government. Given the fact that Scotland sites such a large proportion of UK renewable energy this sounds strange. This must change.

Of course we don't know if the Parliamentary arithmetic will allow such pressures to bear fruit. But if the arithmetic does suggest that a Labour Government is plausible (and this is highly likely to be a minority one) then the pressures on both the SNP and Labour leaderships to come to a deal, even though it will be a 'supply and confidence' deal, will be immense. The renewable energy demands should be obvious parts of an agreement between Labour and the SNP.

New study highlights enthusiasm of British farmers for renewable energy

A new study published by 'Forum For the Future' highlights the enthusiasm for investing and deploying renewable energy by farmers on their farms. This comes out at the same time that the Government is trying to stop farmers installing solar pv on their farms in an effort to throw a sop to UKIP.

'Forum For the Future', in collaboration with Nottingham Trent University, blow away the alleged conservatism of British farmers by indicating how large quantities of British electricity supply (much larger than that provided by Hinkley C) could be installed by 2020 - And integrated with existing levels of food production and increased biodiversity protection.

Yet Environment Secretary Liz Truss is keen to stifle such moves. She has orchestrated the removal of farm subsidies from land that is used for solar pv. Meanwhile the Department of Energy and Climate Change has said that solar farms must compete with large scale. windfarms for the same limited pot of money for long term contracts.

The report can be be seen at:
http://www.forumforthefuture.org/sites/default/files/Farm%20Power_Size%20of%20the%20Prize%20report_Nov-2014.pdf

As Jonathon Porritt (the founder of Forum for the Future) says on his blog:

'The National Farmers Union loves it – and you can’t say that very often! It’s true, of course, that wind has fallen out of favour with your coalition partners, who are competing furiously with UKIP to see who can more effectively trash our wind industry while simultaneously hammering the rural economy.

Despite the media and political spin, the majority of Brits like wind power. But solar power is really very popular. Not just on roofs (farmhouses and farm buildings have lots of roofs pointing in the right direction, or so I’m told!), but mounted on the ground.' 

The blog entry from which this quote is drawn can be seen at:  http://www.jonathonporritt.com/blog/some-friendly-advice-secretary-state

Government implies it may not sign Hinkley C deal before General Election

The Government has refused to confirm that it it will sign a contract with EDF allowing Hinkley C to be built before April 2015, which is only a few weeks before the General Election. This can be seen in the text below which contains an answer to a Parliamentary Question tabled by Caroline Lucas. This evasive response underlines the shaky status of the Hinkley C nuclear project. See the text below:

The Department for Energy and Climate Change has provided the following answer to your written parliamentary question (215723):

Question:
To ask the Secretary of State for Energy and Climate Change, whether he plans to sign a contract with EDF for Hinkley C nuclear power station before April 2015; and if he will make a statement. (215723)

Tabled on: 24 November 2014

Answer:
Matthew Hancock:

The Government is continuing to negotiate with EDF on both the Contract for Difference and the UK Guarantee for Hinkley Point C, and plans to sign a contract in due course.

The answer was submitted on 28 Nov 2014 at 13:36.

The project was supposed to be backed by investments from AREVA and also Chinese state owned nuclear companies, but investment from both of these sources (around half of the total equity capital) is now under question. AREVA, the state-owned French nuclear constructor and parent of the failing EPR reactor design,  is going bust and cannot afford the Hinkley C investment on its current balance sheet. The Chinese nuclear companies apparently want a greater share of the work on the project than EDF is willing to give. This underlines the core of the surviving French interest in the project - the interest of powerful nationalised French corporations to preserve their jobs in a declining industry. They have the power of the state at their disposal, ranged against the political inclinations of the Hollande Presidency to try to stop the nuclear dinosaur that controls the French state from eating up so much of its resources.

Now EDF are courting the Saudis and the Qataris for equity investment. It seems very doubtful, given the catastrophic nature of the EPR building programme so far in France and Finland, that these oil states would consider investing in Hinkley C as an attractive money-making venture. France does have good relations with these countries through arms sales that it makes to them. But, logically, it may be the case that such investments may only be procured if the French (or/and British state) agrees some formula to 'guarantee' the investments made by Qatar/Saudi Arabia.

The UK has already agreed to guarantee two thirds of the notional cost of the project so that EDF can take out a bank loan, (note the word 'notional' as if many people still believe this window dressing). As discussed in other posts, the UK will doubtless be horribly burned for a lot more money than has even been committed now if, as seems all but certain, the project goes wrong. But some guarantee from the French state will also be needed. Has Hollande been bludgeoned into agreeing this? Will the Treasury be suckered into also effectively guaranteeing  part or all of the cost overruns in the likely future debacle? The resources of the British and French states are needed to preserve the French nuclear dinosaur!

The real secret letter from the Treasury about disastrous Hinkley C is revealed

Hot on the heels of news of further escalations of delays (and thus)  costs for EPRs being built in Finland and France there is news that the Treasury is conducting a 'secret' review of the EPR project that is scheduled to be built at Hinkley C.

See http://www.thetimes.co.uk/tto/business/industries/utilities/article4272779.ece

This is more pantomime nonsense broadly similar to all the facile Parliamentary deliberations about whether the £92.50 per MWh price to be paid over 35 years with a £10 billion Treasury loan guarantee is 'value for money'.....not to mention the EU Commission's irrelevant statements about 'protecting' UK consumers by saying that the developers should return money if the project ends up costing less than projected.

Costing less than projected! Costing no more than £92.50 per MWh over 35 years! And this £10 billion Treasury loan guarantee being just a notional sum that the UK consumers will not have to pay out!

All nonsense! It is isn't even self-deluding any more. The Treasury will now know full well that the only way the project will be built is if the Government gives full underwriting of all and effectively any costs involved in the project. Whether or not they admit or agree formally to that happening now is irrelevant, it is what will end up happening to get the plant finally built. The electricity consumer will be made to pay out far beyond the nominal prices so far agreed (see previous posts on this). The nominal price tag (£92.50 per MWh etc) mentioned in the Government's press releases is a fig leaf to hide the fact that the real price, costed on a commercial basis will be much, much, higher. As I have said in the past, in reality the project would be priced at being higher than that of an offshore wind project if it was costed using comparable criteria.

The Treasury, who actually have some financial analysts who have at least a passing grasp of energy economics and the realities of nuclear power economics, know full well that the Hinkley C scheme is a slow moving car crash.The latest leaked piece of news that there is a 'secret' review (if it was secret, why is it being announced to the press?) is merely another piece of apologia, a part of a cover story that will be reserved for roll-out in front of an inquiry some years later into what went wrong with the Hinkley C project. No doubt this inquiry will declare that there was good will on all sides, just a few well meaning mistakes made, and that the next nuclear project will work out as cheap as chips!

What is the 'real' secret letter likely to be from the Treasury:

'Dear Ed,

Given the worsening prospects for the Hinkley C prospect, including the virtual bankruptcy of constructors AREVA, the political meltdown surrounding EDF and the near certainty that the Hinkley C project will turn out to be much more expensive that even the price we have agreed, we do feel it is necessary somehow to signal that we have not been totally stupid in not noticing the sheer insanity of this project. For our part we want to emphasise that we are only going along with this project because of pressure from Number 10 to satisfy political pressure that 'nuclear power must be built', We also understand that you would prefer not to have to take responsibility for this fiasco, but you also know that your job depends on keeping up appearances about the project. So, we can circulate a story that we are conducting a 'secret' review into the project. This will demonstrate our concern, but allow some cover for us when the inquiry is organised in a few years time over how the project turned out to be so big a turkey without anybody in government appearing to notice.

We can all blame pressure from the PM's office to ensure that the deal was made for Hinkley C when that happens. Hinkley C construction is likely to begin to have problems before DC leaves office in 2019 or whatever, but the inquiry about the failures will take longer to appoint, and even longer to report, so he will be safely retired by the time blame is apportioned for the catastrophe. He can blame the French anyway.

It is still a shame, though, that it is the British electricity consumer who will have to pay out the countless billions of pounds of costs for overruns until probably at least the 2060s to get the power stations completed. But at least the money will not be available to spend on all of those awfully ugly wind and solar farms that your erstwhile green friends are so keen on !

Best Wishes,

George

pro-nuclear analyst calls for Hinkley C to be abandoned

Chris Goodall, one of those pro-nuclear greens who saw the radioactive light a few years ago but who didn't notice the sheer uneconomic nature of nuclear power has now realised that the Hinkley C project is such a shambles that it ought to be abandoned. He reports the comments of a nuclear engineering expert as saying that the Hinkley C EPR design is 'unconstructable'.

Goodall fears for the future of nuclear power if the project goes ahead. But then all EDF has to do is to take the UK Government for the complete suckers that they are since they have given the project a blank cheque in all but name to pay for what is all but certain to be a colossal financial disaster. It will be the UK Government, or more precisely, UK electricity consumers who will pay dearly, most likely well over and above the the facade of the £92.50 per MWh over 35 years price tag, complete with £10 billion of loan guarantees.

He says: 'by focussing on the increasingly unpopular EPR design, the country may have saddled itself with an unmanageable and hugely expensive construction project that will sour the prospects of all other nuclear technologies for another generation.

Perhaps those of us who still believe in the value of nuclear power should pray that sceptical investors refuse to commit their funds to the Hinkley project.'

I'm sorry Chris, but those of us who thought more deeply about nuclear  a long time ago realised the project was doomed in the post 1950s world. Goodall's article comes out with gems such as the notion that engineers could learn from one large nuclear power project to another is false since each project is unique for a given site so that there is little transferable learning. Well I'm sorry, Chris, but I remember Steve Thomas (now at Greenwich University) telling me precisely this way back in 1991 when I went to visit him when he was working at the Science Policy Research Unit at Sussex.

You're really not telling us anything we don't know already.

But now Chris is giving credence to the gathering nonsense about small 'modular'  nuclear reactors. Oh give me strength! Please........I know people go on about small PWRs in nuclear submarines. These things cost billions to build, not all on the reactors of course, but it looks like it cost hundreds of millions of pounds just to build a reactor that generates a few megawatts of electricity! And that's with an easy, implicit solution, to coolant supply problems.

What the latter day 'green converts' to nuclear power should recognise quickly is that the very nature of nuclear power, requiring expensive containment and other safety mechanisms to meet 21st century standards makes it a very unlikely possibility for solving the 21st century's problems.

You can see Chris's article at:
http://www.theecologist.org/blogs_and_comments/Blogs/2605273/unconstructable_hinkley_c_could_end_uks_nuclear_dream.html

If Hinkley C is cheaper than wind power why does it need loan guarantees?

As the pro-nuclear establishment is now keen to justify EU state aid for Hinkley C it is trying to argue, against the forces of reality, that the deal makes nuclear power cheaper than onshore wind. Hinkley C is getting £92.50 for 35 years with 65 per cent (£10 billion) loan guarantees. Onshore wind, from 2017, is getting at most £90 per MWh for 15 years with no loan guarantees. How can Hinkley C possibly be cheaper?

 Look at the further details and the notion that nuclear is cheaper looks even shakier. The Department of Energy and Climate Change (DECC) is conducting 'auctions' for wind power contracts under electricity market reform (EMR) which means that in practice the windfarms getting contracts will be paid less than £90 per MWh. If these schemes got loan guarantees then they would be even cheaper since the cost of borrowing would be much less. And then there is the difference in contract lengths, (15 versus 35 years)  for which the justifications are dubious. See my earlier blog post http://realfeed-intariffs.blogspot.co.uk/2013/10/wind-power-history-blows-away-ed-daveys.html

Of course in reality the likely cost overruns for Hinkley C will make the plant in practice rather more expensive than this 'deal' implies, and clauses in the contract that allow the Government to 'vary' prices paid to the nuclear operators will most likely be invoked to give the operators more money than the current 'deal'. In addition the British taxpayer is highly likely to have to pay out on the loan guarantees. The European Commission has done absolutely nothing to protect British electricity consumers and taxpayers from these problems. Far from protecting consumers, the whole point of the deal is to protect the developers. They know that once the project is started the UK Government will feel obliged to make sure the project is completed. See my post at http://realfeed-intariffs.blogspot.co.uk/2014/10/european-commission-issues-smokescreen.html

I hope to see the day that Hinkley C is completed. Now that is not because I want to see the plant built (far from it), but simply because I hope to live for many years longer!

So.......Its not just that onshore wind is cheaper than nuclear power, there's just no comparison between them.

Hinkley C deal likely to wipe out UK renewables spending

A comparison of the payments schedule for Hinkley C and government projections of renewable energy spending plans suggests that from 2023 spending on first Hinkley C, and later other nuclear power stations, will obliterate spending on renewable energy.

As can be seen from the National Audit Office's (NAO) report on the 'levy control framework' (LCF) , a device used by the Treasury used to monitor and control renewables spending, spending on renewables (paid from consumer electricity bills) rises by an average of around £500 million a year from 2014-2021. Yet, assuming that the projected 3.2 GWe Hinkley C runs at 90 per cent availability, and assuming recent wholesale power prices of around £50 per MWh, consumers will be paying just over £1 billion a year extra to pay for Hinkley C - over 35 years. This is TWICE the annual increment for new renewables allowed under the LCF at the moment. In addition to this electricity consumers or taxpayers will also be liable to pay for construction cost overruns because the Treasury is underwriting £10 billion of the loans for the project.

If one assumes that the Treasury continues to apply the same cap on 'low carbon' generation spending as it is doing at the moment the spending on Hinkley C would mean that there would not be any spending on new renewable energy schemes possible until 2027. The payments under the Renewables Obligation to renewable generators come to an end in 2027, releasing around £3 billion under the cap. Yet, after 2027 spending on new nuclear is likely to gobble up all or most of this budget.  Assuming the same cap on total spending remains, even after 2027 renewables spending is likely to be little or nothing. This is because spending on two further 3.2 GWe nuclear projects (Sizewell C and another nuclear project) will take up most (or quite possibly more than all) of the £3 billion 'cap' on spending on renewables released through the end of the renewables obligation.

The details of the NAO's report on renewable energy spending can be seen at http://www.nao.org.uk/report/levy-control-framework-2/#

It should be noted that the Treasury actually projects spending on renewable energy to end by 2021. Within that spending on the 'feed-in tariff' for new small renewable projects tails off to almost nothing by 2018. See page 32 in the NAO report.

What this does reveal is that the Government effectively occupy a sort of 'through the looking glass world' where after 2021 renewable energy is expected to be a mature set of technologies not needing any premium price support whilst nuclear power is a 'new' (??!) technology that needs support for 35 years per project, along with state underwriting. The fact that renewable energy sources are much more popular than nuclear power (according to the Government's own polls as well as independent polls)  cuts no ice with this view.

The biggest joke on the consumer will happen when, as is perfectly likely, oil and gas prices fall back to the levels that have been common outside of oil crisis periods. Then consumers will have to fork out staggering sums for 'new' nuclear power stations, and certainly a lot more, each year, than the annual cost paid to renewables under the Renewables Obligation - for Hinkley C until at least 2058, even longer when other new nuclear power stations come on line.

How more nuclear will waste wind power

As noticed by Chris Goodall, in his column in the Guardian environment network, wind power production has for the first time exceeded nuclear. See http://www.theguardian.com/environment/2014/oct/06/uk-wind-power-bests-nuclear-power-for-a-few-symbolic-minutes

But what Goodall misses, it seems completely, is that building more nuclear power stations will simply waste more wind power. He seems to claim that 'all' the investment in wind power will be 'wasted' unless we build a lot more interconnectors etc to accommodate fluctuating wind power supplies. Well, we do need more balancing of a variety of types, including demand response, interconnectors and as it gets cheaper, various types of storage, but it is an exaggeration to say that 'all' wind investment will be wasted.

The big waste comes with the nuclear investment. The problem with the ability of the electricity system to absorb more variable wind power supplies lies with the inability, and unwillingness, of nuclear operators to turn down their production when there is more wind power than can be absorbed by the grid. So obviously building more nuclear power stations (which are more expensive, MWh for MWh anyway than onshore wind for example) will only make the situation worse - more wind power will be wasted than will otherwise be the case without the nuclear power.

It would be helpful if Chris made this point - but I can see why he doesn't, because he advocates more investment in nuclear power. This is the biggest problem as far as Chris Goodall's commentary is concerned. He should clearly re-think his support for building more nuclear power before he starts to implicitly criticise wind power for its variability.

European Commission issues smokescreen 'protection' to hide consumer exposure over Hinkley C

The European Commission, in signalling its intention to give the green light to the British Government's Hinkley C nuclear power plant deal under the 'state aid' permission procedure has failed miserably to protect British consumers against the consequences of what must be the highly likely outcome of cost overruns in building the Hinkley C plant. Instead it has issued what must be seen as a smokescreen of 'protection' to British electricity consumers by asking the British Government to introduce rules clawing back profits made by EDF. See http://www.reuters.com/article/2014/10/03/eu-britain-edf-nuclear-idUKL6N0RY3FE20141003?irpc=932

Observers might be forgiven for imagining that the 35 year contract for Hinkley C, underpinned by £10 billion of state loan guarantees paying higher premium prices (£92.50) than privately built onshore windfarms receive for only 15 year contracts, will give EDF and their Chinese partners big profits. However this impression is an artefact of the ludicrous propaganda perpetrated for many years that nuclear power stations are potentially profitable, competitive, operations. They are no such thing. Hinkley C is most likely to result in further major  commitments being made by British electricity consumers or taxpayers to bail out the near inevitable cost-overruns of building Hinkley C.  The fact that only state owned companies (French and Chinese) are prepared to undertake the risk of this project, and even then backed by what will emerge in the fullness of time as an effective blank cheque by the British state, is a testament to the sheer bankruptcy of new nuclear build as a commercial proposition.

The nuclear constructors may set dates for commissioning of the project, but in reality they have no idea when they will be finished. The firm probability is that they will take a lot longer to build the plant than what is said in the wishful thinking that passes for pro-nuclear reports on the subject. All three EPRs (the model being used for Hinkley C) being built in Finland, France and China are acknowledged by the constructors themselves as running considerably behind schedule. And we do not even know whether the plant will work very well when they are switched on!

Assurances that the British consumers will not face any further liabilities for building the plant are politically worthless. Why? because if, on the basis of experience, the plant are not build on time and (thus) cost, then the constructors are very likely to ask the UK Government for more financial support. The British Government is unlikely to say no in such circumstances, whatever the Department of Energy and Climate Change claim today. Are they going to allow a half-built nuclear power station to remain as a monument to British folly, to be mocked by people around the world? No, they will commit British people to spending more money on the project to complete the dinosaur, no doubt backed by a new application to the European Commission for 'state aid', which the EU Commission will be minded to accept (as usual). You think this unlikely? Well, it has happened almost exactly like this before. Sizewell B nuclear power station, using a relatively well known PWR design, was left financially stranded when British electricity industry was privatised in 1990 and the new private electricity industry said they could not finance its completion. The Government responded by levying a 'fossil fuel levy' on electricity consumers to pay for the plant to be completed. Indeed the European Commission went along with this on the condition that the levy ended in 1998.

It is about to start again. So is a new comedy show of building more nuclear power in the UK.

Daft rumours spread about wind turbines and noise without any scientific basis

Anti-wind campaigners have broken completely new ground today by using a piece of research that had absolutely nothing to do with wind power to claim that wind turbines damaged people's hearing. Even though the story was nonsense, this hardly matters for the media involved. Just like the nonsensical europhobic story about capacity power auctions (see previous blog) this is an example of how there is an expanding market to cater for growing, feverish, hysteria among the backwoodsmen right wing in British politics. I reproduce part of a media release from RenewableUK, the trade association, below, which, as far as I can see, gives a reasonable summary of this affair:

RenewableUK slams false media reports claiming wind farms affect hearing

RenewableUK says media speculation that wind farms can affect people’s hearing is incorrect and irresponsible.  

Several national newspapers wrongly claimed today that research published in the journal Royal Society Open Science showed a possible link between wind turbines and deafness.

The expert who wrote the paper, Dr Markus Drexl from the University of Munich, told RenewableUK that the media had misrepresented his work, saying “It is certainly misleading and an over-interpretation of our results to state that living close to wind farms may cause hearing impairment or deafness. Our research did not include any work at wind farms”.

RenewableUK’s Director of Policy, Dr Gordon Edge, said: “Unfortunately, some reporters got it wrong - this is a classic case of Bad Science. When you actually read the scientific paper, it doesn’t make any mention of wind farms whatsoever. That’s because the level of low frequency noise that the scientists used in their tests was significantly higher than anything that anyone living near a wind farm could possibly experience.

“The Australian government published some excellent research on this last year which stated that the modest level of low frequency sound from wind turbines is actually insignificant. It’s well understood by acoustics experts that low frequency sound doesn’t pose any health risk to communities around wind farms and frankly it’s irresponsible scaremongering to suggest otherwise.”

For further information, please contact:

·              Robert Norris, Head of Communications, 020 7901 3013 or 07969 229913, Robert.Norris@RenewableUK.com

·              Adam Wentworth, Communications Officer, 020 7901 3038 or 07791 702702 Adam.Wentworth@RenewableUK.com

Notes:

1.    RenewableUK is the trade and professional body for the UK wind and marine renewables industries. Formed in 1978, and with more than 575 corporate members, RenewableUK is the leading renewable energy trade association in the UK.

2.    Royal Society Open Science paper: http://rsos.royalsocietypublishing.org/content/royopensci/1/2/140166.full.pdf

Blind British Europhobia as Times tilts at subsidies to euro power plants

If ever there was a story that perfectly reflected the increasing frenzy of europhobia in the UK it is the story in today's Times newspaper headed ' Britons may foot bill for power plants in Europe'. The story springs from the fact that under the UK Government's new 'capacity mechanism' designed to build up power plant capacity in the UK, the auctions to procure this capacity will also have to be open, heaven forbid, to plant based outside the UK.

Never mind the fact that the only reason that this will happen is if the power plant can supply energy more cheaply than British based plant; never mind the fact that four out of six of our major energy utilities are owned by non-British companies anyway; never mind the fact that trying to build a common electricity market will actually help the UK (and every one else) achieve more secure sustainable energy supplies, it just adds to the mindless anti-EU feeding frenzy that is Britain today. The fact that such a system will help the common good doesn't cut much ice either since increasing numbers of Brits (you'd think by reading the press) would rather cross the other side of the road before helping anything called 'euro'.

See http://www.thetimes.co.uk/tto/business/industries/utilities/article4222871.ece

Of course it may not be too long before so-called 'back-up' capacity of power stations are not so important. Storage technology is developing, and some potentially revolutionary developments are in the pipeline. An HSBC report indicates that in Germany it  may not be too long before it is at least as economic to supply your power needs for solar pv using energy storage as deriving your electricity supply from the grid. See http://reneweconomy.com.au/2014/energy-storage-generators-biggest-losers-50615

In the UK, of course, this may be delayed as the premium prices awarded to nuclear power stations will allow nuclear power to supply power to supplant supplies from solar pv at least until 2058 (the earliest time that the Hinkley C power station will stop receiving its 35 year projected premium price). This decision, of course, is just about to be legitimised by the European Commission (some irony here).

Bring down the Cameron Government to stop Tories betraying devolution 'vow'

The shameful efforts of the Tories and English Nationalist 'UKIP' to renege on the vow to give extra powers to the Scottish Parliament by linking the issue to so-called English devolution need to be countered by forcing the Tories out of government - now!

Of course it is important to discuss the implications for the rest of the country of giving more powers to Scottish Government. But to delay the solemn pledges given by the Westminster leaders just before last week's referendum vote would represent a political betrayal of historic proportions - and this can only be answered by getting a Government as soon as possible that can implement the measures to give more powers to the Scottish Government as quickly as possible.

The combined weight of the Liberal Democrats and the opposition parties is easily enough to overthrow David Cameron. If the Liberal Democrats do the honourable thing and stick to their policy of giving Scottish devolution without ties, and if Cameron feels unable to bring his party with him, then Nick Clegg should tell Cameron to resign - and resign himself from the Government before formally voting it out of office.

The Liberal Democrats have felt they have had to compromise on a whole series of issues - but surely, surely, on this issue there can be no compromise!

If the Liberal Democrats supported a vote of no confidence then the Cameron Government would be defeated by at least 328 votes to the Tories 304, or at most 312 if they somehow convinced the DUP to support them. If you look at the Parliamentary arithmetic, even if the SNP abstained on a devolution package implementing the 'vow' then this should also win a Parliamentary majority, even if the Tories still all voted against it.

Failing that we should have a general election as rapidly as possible to sort the matter out. The Tories should not assume that the English will support their stand. Sure, there is a lot of support for the notion that English MPs should have priority in discussing purely 'English' issues in Parliament, but there is likely to be much less English (and Welsh and Northern Irish) support for reneging on the pledges given to the Scottish votes through linking the two issues together. Let's find an answer to the West Lothian question - but only after we have redeemed the pledges made to the Scottish people before they voted to stay in the Union.

If you cannot do this now, Mr Cameron, resign! - and if he won't resign, MPs must vote to end his government!

Give more energy powers to the Scottish Government!

The Westminster parties may have promised some big new powers for the Scottish Parliament, but little appears to be promised to try to close the policy gap between Holyrood and Westminster on renewables and nuclear power. Where are the proposals to give the Scottish Government some influence on how to spend incentives for renewable energy? At the moment, when it comes to financing, Westminster decides everything whatever the Scottish Government thinks.

The Westminster parties are planning to spend a lot of money on building nuclear power stations after 2020, and the Conservatives are promising to stop incentives for onshore wind. So where does this leave a Scottish Government which opposes building new nuclear power stations and which wants some ability to make its decisions on what renewables should be supported rather than being dictated to by Westminster based Conservatives? Anti-windfarm groups like the Renewable Energy Foundation say that Scottish consumers ought to pay more for Scottish renewables. Well in that case why should Scottish consumers pay for nuclear power stations in England and Wales? See http://www.telegraph.co.uk/finance/newsbysector/energy/11108541/Scottish-no-vote-what-next-for-the-energy-sector.html

There is a plausible way of solving the problem of giving more energy powers to Scotland. One way it could be done is simply to give the Scottish Government a portion of the 'Levy Control Framework' (a capped fund for renewables spending set up by the Treasury) to spend as they choose. Then renewables developers could choose whether to use the Westminster incentives (contracts) or the incentive schemes organised by the Scottish Government. If the Tories do cut off the funds for onshore wind then the Scottish Government could fund Scottish schemes instead.

Another way in which increased Scottish powers could help renewables would be to establish a Scottish Energy regulator who could have authority over rules governing investment in network distribution. Then pro-active work could be done to help community renewables and other schemes connect to a strengthened local network. This is rather than having the schemes stopped by them being given expensive demands for local grid strengthening which cannot be economic for one scheme on its own.

Then there is a wider case to give a Scottish Energy Regulator authority over incentives for energy efficiency, powers to help reduce fuel poverty and also to regulate energy prices for the domestic sector (where such competition is ineffective, opaque and self-defeating).

Scottish Renewables, representing the renewables industry in Scotland is not advocating a Scottish Energy Regulator, but it is proposing an increase in energy powers for the Scottish Government. This includes a formal role for the Scottish Government on the board of OFGEM, a formal role for the devolved Governments in regular strategic reviews of energy policy, and a grid connection plan to ensure renewable energy can be installed on Scottish islands. See http://www.scottishrenewables.com/news/scottish-renewables-post-referendum-paper-proposes/​

Westminster urgently needs to do something to change a situation where policy on energy is made in Westminster for English preferences, but not so much for Scottish needs. Generally, the Westminster parties will lose seats to the SNP at the General Election next May if they fail to have even a debate about shifting powers to the Scottish Parliament over energy (and other things). At the last election Labour won 41 Scottish seats and the Liberal Democrats 11 to 6 for the SNP. Labour and the Lib Dems are heading to lose a lot of these seats.......

Energy After the Referendum Meeting

Energy After the Referendum

Wednesday October 1^st

Robert Gordon University, Garthdee House, Garthdee Road, Aberdeen, AB10 7QE
Room N345 Riverside East. See http://www.rgu.ac.uk/contact-us/how-to-find-us

Regardless of the result on September 18th there is a big discussion on what increased powers for the Scottish Government mean. Can a Scottish Energy Regulator keep consumer prices down and boost renewable energy and fight fuel poverty? How can the Scottish Government increase control over the extraction and use of Scottish oil and gas resources? Come along to the 'Energy after the Referendum' event to find out.

12.00 Registration & Light Lunch

12.30 Professor Peter Strachan & Dr David Toke Opening Comments

12.40 Fergus Ewing. Minister for Economy, Energy and Tourism, Scottish Government

1.15 Andrew Faulk, former Senior Policy Advocate, Scottish Consumer Focus on prospects and impacts on consumer interests of establishing a Scottish Energy Regulator

1.45 Roger Cook, Research Director, Scotland Institute on what and how more energy powers for Scotland might make a difference

2.15 Norman Kerr, Director, Energy Action Scotland on how fuel poverty can be best fought in Scotland

2.40 Break & Light Refreshments

3.05 Martyn Tulloch, Tulloch Energy, The potential for offshore unconventional hydrocarbon production in the North Sea?

3.30 Dr David Toke, University of Aberdeen on prospects for renewable energy

3.55 Round Table discussion


4.30 pm close

Event organised jointly by Aberdeen Business School of Robert Gordon University and School of Social Science, University of Aberdeen

Is there a disinformation campaign to paint nuclear as 'green'?

Green groups in the UK are now being subjected to a withering assault on their anti-nuclear position, which is amounting at worst to a campaign of disinformation or at best wishful thinking by the pro-nuclear establishment.

Today's BBC4 report that Friends of the Earth has become pro-nuclear has been quickly denounced by FOE themsleves. See https://www.foe.co.uk/resource/press_releases/radio-4-report-nuclear-power_10092014

But this reflects a growing recent trend to target green groups to get them at least to be neutral on the subject of investments or new research into nuclear power if not outrightly pro-nuclear.

The Green Party of England and Wales was the target of a well prepared effort to shift their position last Saturday, although of course the pro-nuclear amendment to the Party's policy was rejected by an overwhelming majority.

A worrying trend is that there is a drip, drip effort to insert support for technologies such as 'molten salt' (fast breeder) reactors, and thorium reactors as if such things were new. These technologies have been abandoned decades ago because they did not even function (if at all) as well as conventional nuclear reactors. But then people new on the scene do not know so much about the actual scientific evidence on the subject, allowing pro-nuclear advocates to pretend that such things are serious as economic and environmentally desirable'new' technologies.

The nuclear industry is now routinely described as 'green' in the British media, despite the opposition of actual green NGOs. Now there is a big campaign to get over that problem.

This establishment campaign is supported by various reports and studies which minimise (or in some cases entirely omit) the contribution of solar power, give exaggerated projections of future energy consumption and try and pretend that long-abandoned technologies such as fast breeders or thorium reactors (or small reactors come to that) are somehow 'new' and a serious force for the future.

Any apparent intellectual logic behind all this seems to have weight mainly because alternative scenarios do not get the same prominence or funding.

We in the wider green movement need to challenge this narrative. We have less resources, but we need to work harder. This is much more important than just opposing nuclear for its own sake, as important as that is. This is about stopping a massive diversion of resources away from real green solutions and towards dinosaur projects like Hinkley C.

See more coverage at http://www.theguardian.com/environment/2014/sep/10/friends-of-the-earth-nuclear-power-bbc-report

Is a European (nuclear?) war inevitable if Ukraine joins NATO?

Certainly we should deplore the Russian military intervention in Ukraine and the suffering in the East of that country, but is it worth risking a high likelihood that millions of people will die because the West ends up in a war with Russia? No. How can we save thousands of lives by a war that will kill millions? Yet we are running precisely that risk if we allow Ukraine to join NATO. This will mean that the West will have a duty to go to war with Russia if the Russians refuse an ultimatum to back down - and we should not trust the lives of millions on whether Vladimir Putin can stomach losing face over having to back down.

Certainly Putin is delusional. He is delusional to believe that if he succeeds in capturing large parts of Eastern Ukraine that there will be and end to fighting - it won't, and (unlike Crimea) he will find consistent armed resistance to his forces. Many in the East do not like the Kiev Government, but they do not want to be occupied by the Russian army either. Also Putin is delusional when he goads the west with statements such as: '"Thank God, I think no one is thinking of unleashing a large-scale conflict with Russia. I want to remind you that Russia is one of the leading nuclear powers." See http://www.telegraph.co.uk/news/worldnews/vladimir-putin/11064209/Vladimir-Putin-Dont-mess-with-nuclear-armed-Russia.html

The trouble is that this is precisely what is likely to happen if the Ukraine joins NATO. The road to the first world war was paved with such delusions - on both sides.

The West has long suffered under the logic of  'something must be done' without appreciating whether killing more people will actually make things better. Now I'm not a pacifist, but I do not think that we should take actions that make a bad situation into a catastrophe. Rather we should press the Ukrainians to settle for a solution that will eventually be more or less the same anyway - some sort of Federal relationship involving autonomy for the Donbas Region.

The Putin regime is very unsavoury, that is for sure, and he will come unstuck as he persists with his current strategy. But the best way to deal with him is to let have him have enough rope, so that he becomes more and more bogged down in a quagmire of an unwinnable war inside Ukraine. That way he either will have to come to terms or he will lose, but millions of people across Europe will not die in the process.

So why don't tidal stream projects get long contracts and loan guarantees like nuclear power?

Is the UK Government right to gain plaudits for the announcement of construction of a 6 MW tidal stream project in Pentland Firth? After all, they have come up with a £10 million grant. But, when you compare this with the deal offered to EDF for Hinkley C, there is a credibility gap.  There is talk of extending the tidal stream project from 6 MW to '398 MW', but there is very little chance of this happening unless the project gets conditions similar to that given to Hinkley C nuclear power station. First a much longer contract is required. The tidal stream project has to make do with a 15 contract during which time it will receive its premium prices. EDF gets 35 years. Second, EDF gets £10 billion worth of loan guarantees. That's not a grant of course, but it stands a very good chance of turning into one given the history of nuclear power construction cost overruns!  Tidal stream developers really need loan guarantees to turn their plans into reality.

But then, as we all know, nuclear power is much newer, more innovative, technology which needs much greater support than tidal stream technology (sarcasm implied here for anybody suffering a tinge of asperger-politics)

See the announcement at
http://www.renewableuk.com/en/news/press-releases.cfm/world-s-largest-tidal-energy-project-to-be-built-in-the-uk

Onshore wind much more popular among public than nuclear or shale gas says DECC survey

The latest 'tracker' polls issued by DECC show that support for onshore wind among the public is 67 per cent, with just 11 per cent opposed. Solar power is the most popular renewable fuel (82 per cent support) with offshore wind a bit ahead of onshore wind in popularity. By contrast support and opposition for shale gas is tied at 24 per cent and nuclear power is supported by 36 per cent compared to 24 per cent opposed.

Once again this demonstrates just how out of step the Conservatives are with public opinion. The Conservatives, fond of fulminating against onshore wind and solar, want to cut off all funding for onshore wind after 2020. Eric Pickles delights in cancelling planning consents for wind and solar farms even when the planners have agreed to them.

Of course the Tories feel they are on the run pursued by UKIP who claim to oppose the alleged green frippery liked by the 'political classes'. The opinion surveys suggest things are the other way around. Right wing political classes are ignoring the voice of the people and subverting it in favour of what one columnist (in today's Financial Times) calls 'sour censorious provincialism'.

Hopefully the Conservatives will reap the rewards of their dash to the right at the polls next May, and lose political office. As the Conservatives tilt ever more towards the right, the future of civilisation as we know it is dependent on this outcome!

See
https://www.gov.uk/government/statistics/public-attitudes-tracking-survey-wave-10

and

http://www.ft.com/cms/s/0/c322a272-2144-11e4-b96e-00144feabdc0.html?ftcamp=published_links%2Frss%2Fcomment%2Ffeed%2F%2Fproduct#axzz3ABQWe8Hy

Labour set to lose heavily to SNP after 'no' vote without strong devolution package

Labour's chances of being the largest party in the House of Commons at the General Election in 2015 are significantly blighted by the likelihood that they will lose several seats to the SNP - whatever the referendum result. Hitherto many Scottish voters who have voted for the SNP for the Scottish Parliament have taken the view that since Labour are likely to form a Government in London then they are more likely to be an effective champion their interest than the SNP. However, things are likely to change on May 7th  2010  when the voting takes place.

In the case of a 'Yes' vote in the referendum on independence the SNP will claim to be the most effective party in campaigning for a better deal for Scotland in the negotiations about terms for Scottish independence. In the case of a 'No' vote the SNP will claim they are going to be more effective in arguing for more powers for the Scottish Government and Parliament in the new devolution settlement that will be decided after the 2015 General election.

In the past many voters who would otherwise vote SNP for Holyrood elections have had a perceived common policy agenda with Labour and Liberal Democrats, in opposition to the Conservatives. Hence the need to vote SNP at Westminster elections to avoid Tory rule did not seem so convincing. But at the 2015 General Election a particularly salient issue for many Scottish voters will be more powers for Scottish Government - a specifically Scottish issue - and that is something upon which that the SNP will claim to focus more of their energy compared to the conventional UK- wide parties.

When it comes to reporting opinion polls most attention has been on the referendum, with the 'No' vote now heading for a win of 55-60 per cent for 'No' to 40-45 per cent for 'Yes'. But anything over 40 per cent will be loudly claimed by the SNP as a brilliant success, and without a major effort by Labour (and the others) to beef up their specific commitments for further devolution the SNP is likely to capture several more seats off both Labour and also a couple from the Liberal Democrats. The recent polls on party support within Scotland at the next General Election make pretty stark reading for the UK-wide parties. The SNP has a clear lead and has, according to the polls, literally doubled their support since the 2010 election. Labour and the Liberal Democrats are the biggest losers to the SNP. See :

http://whatscotlandthinks.org/questions/how-would-you-be-likely-to-vote-in-a-uk-general-election#line

and 

http://ukpollingreport.co.uk/blog/archives/category/scotland

A couple of dozen Labour (and even four or five) of sitting Liberal Democrat MPs are so well entrenched it is difficult to see the SNP displacing them but it is, giving the recent opinion poll figures, very plausible that the SNP will increase their MPs by a dozen, even taking into account the boost sitting MPs receive at General Elections to withstand swings in opinion. If Labour loses ten seats overall, and only returns 31 as opposed to the 41 seats it won in 2010 then this could well make the difference between there being a Labour as opposed to Tory led Government. The prize in the 2015 General Election is not so much who will win an overall majority, which will be difficult for either Labour or Conservatives to achieve, but who will have the most seats and who therefore is almost certain to form the next Government.

If one assumes that during the election campaign the Conservatives increase their vote moderately (thoughout the UK) then one could bet on the Conservatives coming slightly ahead of Labour in votes, but maybe just a few seats behind labour in seats. That is the way the system works since fewer people vote in Labour held areas (eg Merseyside) compared to Tory held areas (eg Surrey). So if Labour loses a few seats in Scotland ......... Currently in Scotland Labour holds 41 seats, Liberal Democrats 11, SNP 6 and Conservatives 1.

Of course the SNP will claim that in a tight, hung, Parliament it will be in a good position to bargain with other parties, and in the meantime there will be pressure on the other parties to come up with strong proposals for more devolution....and this had better be more than just saying the Scots can have power to increase taxes on themselves!

By focusing mostly on taxation powers the UK-wide parties are missing out on large areas of regulation and policy discretion. Take energy for example. It is very practical for the Scottish Government to be able to regulate to control nearly half of their electricity bills, including supply costs, network distribution, environmental and low carbon surcharges. But are they talking about this? No. Not a murmur. Sure, Labour are proposing an energy price freeze across the UK, but I wouldn't be at all surprised if the SNP countered by saying that Scotland should be given its own Energy Regulator. And the Scottish Greens of course.

More on this issue to come....

Government cuts onshore wind deployment by 50 per cent and solar farms to zero

Yesterday the Government announced what amounts to a cut in deployment of onshore wind power by 50 per cent and a cut in the amount of large scale solar farms that can be deployed to more or less zero.

Since 2010 onshore wind has been installed at a rate of around 1000 MW (1GW) a year. But yesterdays announcement, with only £50 million per year of extra money allocated for new projects for so-called 'mature' technologies such as onshore wind and solar farms, means that there is not enough money for more than around 500 MW of onshore wind to be deployed a year until 2020. This means that only around 2500 MW,  less than half the 7000 MW of consented onshore windfarms (and none of the many proposed solar farms,) can be deployed.

(Note: £50 million a year will fund about 1.1TWh new electricity a year assuming around £45 per MWh is needed to make up the difference between a wholesale electricity price of £45-50 per MWh and a cost of £90-95 per MWh set by the Government to be paid to onshore windfarms. 1.1 TWh a year will be generated from around 500 MW of wind power).

The Solar Trade Association has highlighted the effective end of the large solar farm deployment programme. Less attention has been paid to the cuts in onshore windfarms, although RenewableUK have expressed their disappointment in the Government announcement. Both solar and wind will be competing for the same pot of money, and despite considerable falls in cost in recent years, solar is still likely to be undercut by onshore wind.

This policy speaks volumes about the Liberal Democrats lack of influence, and the extent of the policy victory won by Conservative opponents of onshore large scale renewables. Instead the Conservatives are succeeding in their policy of mainly funding only some of the more expensive renewables, namely  some offshore wind projects and some rooftop solar pv schemes.

This result falls in line with my earlier projections that the UK will miss meeting its EU renewable energy target by a large margin. See:

http://realfeed-intariffs.blogspot.co.uk/2014/06/uk-on-track-to-miss-eu-renewables.html
and the government's announcement of a 'boost' to renewable energy at:

https://www.gov.uk/government/publications/indicative-cfd-budget-notice-for-the-autumn-2014-cfd-allocation-round

Nuclear power: will it continue to fail as 'baseload' plant?

Nuclear power has a lot of the best Public Relations (PR) workers in the world, but nothing they can do can obscure the difference between the facts of UK nuclear performance and what is now wishful consensus thinking of the UK state. Should one get too annoyed with this? Or just smile? There is a cynical argument that one might as well not bother campaigning against nuclear power if you don't like it because its best enemy and destroyer is itself.

In Britain nuclear's recent record for availability is not outstanding - 65 per cent according to the Digest of UK Energy Statistics for the year 2008-2012. Remember this is for a technology that is supposed to be on for as much as the time as is possible, and the bulk of the downtime on the  figures is accounted for by unplanned, often sudden, outages that jeopardise electricity grid stability. At least you can usually make a reasonable prediction about wind output for particular windfarm, but you cannot predict sudden unplanned outages from nuclear. But we are told that nuclear is necessary as a 'baseload' plant. Well I suppose it is baseload as much as it operates some of the time, but not really if it often does not work when you want it to!

Of course the most modern plant, Sizewell B, has an average availability of around 83 per cent, and this is often held up as the comparator for the new nuclear developments planned by EDF. But Sizewell B was a very well known technology (PWR) when it was constructed, although despite that, it cost a lot more than was projected before construction started.

Hinkley C is a new, untried nuclear technology, the European Pressurised Reactor (EPR). It could well end up having at least some of the difficulties in operation as the British designed AGR nuclear plant. Ominously they took a long time to build (like the EPRs). The augurs are not good.

So we have a double risk - the usual likely outcome that nuclear construction costs will be even higher than those now projected (with the UK taxpayer guaranteeing to pick up a big tab of cost overruns) and the risk that the new power station(s) will struggle to generate much electricity, which will mean that the UK taxpayer will have to pay out even more money. Of course, without the effective UK Government blank cheque and the plant being built by a consortium of foreign state owned companies able to bear much greater risk than private companies we would  not have any Hinkley C deal at all.

It may well be that EDF will end up building only one (1.6 GW) of the twin reactor plant at Hinkley. There is, in reality, a very good chance that this will be the only one that will ever be built in the UK. By 2023 when the plant is supposed to be completed the project will no doubt be late, experiencing considerable financial difficulties, receiving more guarantees and more future support from UK electricity consumers than are planned at the moment. At the same time wholesale electricity prices will probably be less than they are now. Gas prices are sinking. This will make the Hinkley C deal look even worse than it looks now.

People complain now that renewable plant are being paid money that will increase electricity prices for many years. Yet the renewable plant funded by the Renewables Obligation cannot receive any premium prices beyond 2027. Future renewable projects will be on premium prices for only 15 years. On the other hand Hinkley C may have barely started operating by 2027 and will still have 35 years of premium prices to enjoy after that.

Of course you would think that the EPR programme is swimming ahead without problems. But all of the EPRs being built are increasingly behind schedule. The plants in France and Finland were begun in 2005, and the plant in China was begun in 2008. Yet the EDF PR teams manage to promote this is a success. The project, in China, at Taishan, receives glowing marks for progress. See
http://www.ft.com/cms/s/0/1061f90a-e272-11e3-89fd-00144feabdc0.html#axzz3869kNYCY

Yet, they say it is two years behind schedule. We can rely on it not taking any longer of course, because EDF says so! If they cannot get a nuclear power plant finished on time in a tightly controlled state like China, how are they going to do it in the UK?

Of course, when the Hinkley C plant proves to be uncompleted, financially ever more disastrous, and unnecessary by 2023 then we are unlikely to continue a policy of giving a blank cheque to nuclear power. And without that blank cheque it won't happen. But, I am not totally cynical. I think it is worthwhile campaigning against this, because otherwise resources could have been much better diverted elsewhere.

For some statistics and coverage see:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/279546/DUKES_2013_Chapter_5.pdf

http://www.iaea.org/pris/CountryStatistics/ReactorDetails.aspx?current=263

http://www.telegraph.co.uk/finance/newsbysector/energy/10688788/EDF-to-miss-its-own-deadline-for-Hinkley-Point-nuclear-decision-as-EC-state-aid-investigation-drags-on.html

Boost renewable energy by giving more energy powers to Scotland

As can be seen in the story and letter in the Sunday Herald, myself and others are calling for energy powers to be devolved in Scotland even if there is a 'no' vote on September 18th. Establishing a Scottish Energy regulator will boost renewable energy (and also, potentially energy efficiency programmes) by allowing Scottish authorities to alter regulations to allow electricity network companies to be more proactive in investing in upgrades of electricity networks.

Currently planned renewable energy projects are saddled with high charges for connecting their projects to networks because the costs of connection are assessed on a scheme by scheme basis. This is as opposed to the Networks being able to take a forward looking stance and invest in upgrades that will allow more schemes to be set up on the basis that they will be charged lower connection costs. This will benefit both large and small schemes, and community renewables projects above all who are the least able to argue with the grid connection quotes issued by the Network Operators.

Since network charges are calculated and paid by consumers on a network by network basis, such a change would have no consequences for consumers outside Scotland. So why should energy regulatory powers over such matters be reserved to Westminster and OFGEM?

A second idea promoted in the Sunday herald is that the Scottish Government should be given a big slice of the low carbon energy funds to allocate as they wish, rather than is at present happening where low carbon energy spending is being parcelled out to meet English priorities rather than Scottish ones. Scotland is not going to build any nuclear power stations. It wants renewables and it wants to be free to be able to choose the options and the levels and types of incentives for those options, which should not be dictated by English priorities. If a Conservative Government is elected then they will decide to ban onshore windfarms, and no doubt most of the money will, according to Tory priorities, be spent on nuclear power with a bit of funding maybe left over for English rooftop solar and English offshore windfarms.

In fact of course the low carbon programme would be much more cost effective if it was spent on onshore windfarms and onshore solar farms, both of which are being increasingly squeezed by political pressure from the Conservatives. Yet the Scottish Government could promote both these technologies as well as innovative marine technologies such as tidal stream technology, if it had control over some of the incentives.

Under Electricity Market Reform Scotland has been stripped of its powers to set incentives for renewable energy. The Treasury says that it will not allow the Scottish Government (SG) to set incentives that will increase consumers' bills outside of Scotland. But the Treasury could still apportion part of the funds that it caps for spending on low carbon energy (under the 'Levy Control Framework' - LCF) to be disbursed by the Scottish Government. That would not increase consumers bills outside of Scotland, and it would help solve an area of significant political conflict between Holyrood and Westminster.

But even the Scottish Labour Party, who you would think would be a bit more imaginative, has so far not embraced ideas such as these. The only mention of energy in their devolution discussion document issued in April was about Scottish Islands - but even that did not mention how giving more energy powers to the Scottish Government (SG) could help them, and the rest of Scotland of course. See

http://s.bsd.net/scotlab/default/page/file/26e0eb4bdf4c775d14_ram6b81bk.pdf

Why not? Do they prefer English Conservative priorities to predominate over Scottish ones? Or maybe they are so supportive of nuclear power that they want to stop any powers being given to Scotland to promote renewable energy? Surely not.

Among the three biggest unionist parties, the Liberal Democrats appear to leave the door open for enhanced powers for Scotland in the energy sphere. Points 167 and 168 of their document on a 'Federal UK' issued in 2012 say:

'matters such as energy policy and transport policy could
be dealt with by partnership-working, where the Scottish Parliament would
enjoy freshly enhanced rights to influence decision on these matters.
168. Strategic decisions over the National Grid, energy planning and the security of
energy supply, carbon trading and renewable developments are clearly of
importance to both federal and Scottish Governments. A more federal structure
lends itself to sensible decisions over the UK electricity market'

By contrast, Labour and Conservatives focus on taxation and spending powers in the economic/welfare sphere. OK, that's a very important issue, but in some ways they appear to be talking big whilst ignoring, or distracting attention, away from other very important issues - including low carbon energy issues. But there are big differences of priorities between Scotland and England on this subject, so this (low carbon energy) ought to be the focus of proposals on devolution.

The pro-independence parties are intrinsically advocating more energy powers being given to Scotland, and the Scottish Government's proposals certainly stress having a Scottish Energy Regulator. However, the lines of authority are not drawn as clearly as you might think. In the Scottish Government's 'Guide to An Independent Scotland' there is some ambiguity about the control over incentives for renewable energy. The SG appear to want the English to carry on paying for new renewables in Scotland whilst ensuring that the Scots do not pay for rUK nuclear power. After 2020, at least, that seems rather hopeful. There are thus still unanswered questions about who would pay the incentives necessary for new schemes in an independent Scotland.

I have argued, as the lead author of the 'DREUD Report', issued last December, that an independent Scotland in pursuit of its renewable energy targets would not necessarily be worse off in terms of electricity prices compared to continued union. Certainly this applies to a UK where everybody is lumbered with an expensive nuclear programme, especially if the Conservatives ideas of excluding most onshore renewables developments makes the renewables programme more expensive as well. However, it is not clear that independence would be superior to a 'devoplus' solution which included the reforms suggested above.

There is still a clear policy vacuum because the pro-independence parties (SNP and Greens) have not sketched out what they would prioritise in the way of further devolution the event of a 'no' vote, and the unionist parties' proposals are at best minimalistic and seem, for the most part, to imply something close to the status quo. We need also to have a discussion about the options for further energy devolution in the event of a 'no' vote on September 18th. Certainly one would hope that in this event the SNP and the Greens would come out with some clear plans for energy devolution - and hopefully they (and preferably also the unionist parties)  would take up proposals that would at least give effect to the aims expressed in the ideas in this blog.

For coverage of these issues in the Herald on Sunday see:


http://www.heraldscotland.com/news/home-news/energy-experts-call-for-scotland-to-have-power-to-escape-nuclear.24618125

http://www.heraldscotland.com/comment/letters/control-of-energy-policy-is-needed.24604837

Ed Davey gets Scottish 'subsidies' argument wrong on BBC

Talking on this morning's BBC Radio Ed Davey commented:

'the problem that the SNP have is that the amount of these subsidies are going to have to come, to continue, within an independent Scotland.  The question is will that happen.?'   See http://www.bbc.co.uk/programmes/b047c3nl

Well, what will happen? Let's flash forward to September 19th, or soon after when a worried bevy of Big Six electricity companies talk to Ed Davey about what to do after the 'Yes' vote in the Referendum.


Big Six CEO: 'You're not serious about stopping the payments for the windfarms we have installed in Scotland are you? I am now off to see our lawyers about suing you for illegal retrospective legislation depriving us of our assets.'
 
Ed Davey: 'Well, that's I what told the BBC - the SNP would have to take care of this. Look, go and have a chat to Alex; he'll sort you out and arrange for you to be paid by Scottish electricity consumers''

Big Six CEO: 'I already have. He said he'd get hung out to dry by his constituents if he agreed to put up Scottish Bills to pay for your messing around. And we can't increase our electricity prices to make Scottish consumers pay because other suppliers without as much investment in Scottish windfarms will just undercut us.'

Ed Davey: 'Well we could stop people undercutting you so much by stopping electricity trading between England and Scotland. We can put an end to the 'British Electricity Transmission and Trading Arrangements (BETTA)' system - that would mean that Alex would have to cough up....hee hee!'

civil servant (interjects): 'But stopping electricity trading is against the rules of the European Network of Transmission System Operators for Electricity (ENTSO-E), so we can't do that'

Ed Davey: 'ENTSO-E - that's an EU body isn't it? Couldn't we stop Scotland joining? After all it will be a while before Scotland can join the EU and get that sorted out'

civil servant: 'Well, it would catch up with us pretty soon, and anyway Norway and Switzerland are members of ENTSO-E, and they aren't in the EU. On top of that Scottish Power are owned by Iberdrola, the Spanish electricity giant, and they would get the Spanish Government to reduce their resistance to Scotland joining the EU quickly'

Ed Davey: 'Hmmm, but what if WE leave the EU?'

civil servant: (guffaws): 'That's not Liberal Democrat policy'

Ed Davey: (looks flustered) 'Hmmm, you've got a point there........but anyway I'm sure there's some way we can make Alex cough up for all those windfarms, after all people in my constituency would prefer it if Alex sorts it out'

Big Six CEO: (looks sternly at Ed Davey) 'When your constituents find out that we're not going to build the power stations you want us to build because we can't trust you and anyway we haven't got any money left, they won't be very pleased when you start organising a three day week'

Ed Davey: (leans over and whispers): 'Well, maybe, and we don't mean it really - it is just that all that stuff about us stopping paying for the windfarms was damn good propaganda, - y'know, give 'em a good scare! And anyway with a bit of luck I'll be taking over as Business Secretary and I won't have to deal with it for much longer........I'm sure Vince will take care of things for you. He's quite good at doing u turns - look at student tuition fees - it was his department that did it, and they all blamed Nick Clegg and not him!