The secret massive losses EDF is suffering in building Hinkley C

EDF faces massive financial losses as they continue to fund the building of Hinkley C. This is because they are paying for the power station from their balance sheet rather than use much cheaper UK Treasury loans that were originally agreed with the UK Government. In short, paying for the construction costs out of shareholders' dividends is very costly, something that depresses share prices and in effect loses tremendous amounts of money for the main shareholder, the French Government.

Originally when the contract to build Hinkley C was signed off by the UK Government and then approved by the EU Commission (required under 'state aid' rules), the plan was that the bulk of Hinkley C construction costs would be paid for by loans from the Treasury, which would be lent at relatively low rates of interest. But the Government insisted on a proviso for this to happen.This condition said that the successful commercial operation of the same nuclear technology (the European Pressurised Reactor or EPR) being built in France at Flamanville had to be demonstrated by the end of 2020 (1).

However EDF has never taken up the offer of loans from the UK Treasury, and the obvious reason for this is simply that the completion date for the Flamanville EPR has been pushed back and back - so much so that the earliest it can even begin its test cycles will be 2022. EDF cannot possibly meet the conditions enabling it to take up the loan guarantees. EDF has made a 'virtue' out of this necessity and declared it will not take up the Treasury loans.

Hence, in order to complete Hinkley C EDF can only do so by issuing its own bonds, and thus accumulating debt that rests on its balance sheets. Such mounting debt reduces the possibility for issuing dividends to shareholders and thus depresses share prices.

EDF's notional profits from the Hinkley C deal (attacked at the time for being too high) have only recently been hit by the announcement that there will be up to around £3 billion costs overruns on the projects (I'm sure there will be more such announcements to come), but really these costs overruns are relatively small compared to the losses that EDF is taking by financing the project on its own balance sheet.

The rate of return on the project was estimated to be around 9 per cent in 2013 (less now given the announced cost overruns) and borrowing costs would be less than this if it was mainly financed by (relatively) cheap Treasury loans. Yet the borrowing costs of financing the project on its balance sheet are, according to accountancy conventions, more like 15 per cent. Hence EDF faces a big loss, in accountancy terms, even if the project is finished on time and even if it then sold the project onto someone else (probably unlikely).

In fact way back in 2016 EDF's Chief Finance Officer Thomas Piquemal resigned after the EDF CEO refused to postpone making a decision about whether to go ahead with building Hinkley C. There were increasing concerns about the length of delays in building the EPR at Flamanville  - and because of the loan conditions set by the UK Treasury for funding Hinkley C such delays had a direct financial implication for EDF's finances if it went ahead with Hinkley C. Piquemal thought that a hasty decision could jeopardise EDF's finances (2).

In fact 85 per cent of EDF's shares are owned by the French state. EDF share prices have been depressed in recent years- they are now worth less than  third of what they were ten years ago, for example, but the Macron Government has long signalled that it is prepared to put state money into defending the project (3). Some might see this as a bizarre outcome that the French taxpayer is in effect bailing out what would otherwise be a huge loss making project in order to build a power station in another country - the UK. Many said that the 35 year contract granted to EDF for the project for £92.50 per MWh (2012 prices) was too much. In fact this seems to be proving very cheap compared to what a fully private company could afford to take on.

Some with expert knowledge have wondered how on earth EDF can still go forward with a project that looks like financial insanity for its own accounts. But at the end of the day this seems to be all about the politics, and national identity, which the elite French administrators appear to see bound up in the EPR technology - no matter how much it costs.

Just how damaged this identity will be depends in part on just how disastrous a construction project Hinkley C proves to be. Given that it is scheduled to be built in no more than 6 years, and that no currently operating British nuclear reactor has been built in the less than 8 years, the cost overruns seem only likely to mount.

But, the French Government may have the last laugh (or t least the next laugh) in that the British Government is now poised to fund the next EPR (at Sizewell C) under an opaque mechanism called the 'Regulated Asset Base'. This is alleged to offer cheaper means of financing. It will be cheaper for EDF of course, but in fact it transfers the risk of the inevitable cost overruns onto the British Government and our taxpayers. A fake price will be used to cover what is a blank cheque to be offered to EDF to build the power plant.

EDF may be burning up French taxpayers money for the lossmaking Hinkley C, but it will be the British taxpayers who will be paying the massive price of the next EPR project at Sizewell C. There are, of course, much cheaper options to produce ow carbon power, but EDF and the British and French Governments are not rabidly keen to advertise such options.



(1) For further details of this, see my earlier blog at https://realfeed-intariffs.blogspot.com/2019/02/new-funding-crisis-looms-for-for.html

(2) See report in the Financial Times 'EDF chief quits over decision to push on with Hinkley Point'
by Michael Stothard, March 7th 2016 https://www.ft.com/content/ef9d4de8-e3e9-11e5-ac45-5c039e797d1c

(3) See report in Guardian, 'France agrees bailout to pay for Hinkley C' by Terry Macalister, March 17th 2016, Guardian, https://www.theguardian.com/uk-news/2016/mar/17/french-government-edf-united-front-hinkley-point-money-nuclear-plant-union

How ammonia beats batteries to supply long term firm power from renewables

Not many people know this - yet - but ammonia is looking like being the best means by which wind and solar power can provide 'firm' power - that is ensure continuous supply of energy demand from renewable energy 100 per cent of the time. 

Ammonia, in this system, acts as an energy carrier for hydrogen produced from water which has been electrolysed - split into hydrogen and oxygen - by renewable electricity (mainly wind or solar). The hydrogen can be more or less simultaneously combined with nitrogen from the atmosphere to produce ammonia. The ammonia can be stored, and when needed, it can be burned in conventional-style turbines/engines or used in specially designed fuel cells to generate electricity when required. 

Currently much conventional wisdom has it that batteries are only the main means of storing renewable energy. Indeed batteries are very good for evening out balances in daily production and consumption of electricity - so peak demand can be reduced and the amount of firm power reduced. But we also need firm power for those days - under a 100 per cent renewable energy system - when there is little wind or sun. This is where ammonia comes in as a potentially better option for providing fim power. It is not a question of either batteries or ammonia, but simply that they can perform different functions providing short term and longer term storage respectively.

Ammonia (used as a hydrogen energy carrier) has a great advantage over hydrogen itself in that it can be stored much more easily than hydrogen. Ammonia is already stored for lengthy periods whereas long term storage of hydrogen requires development of the use of caverns or depleted gas fields.

In brief, there are various studies attesting to the likely practicality of this general type of system. A pilot project demonstrating the green ammonia to firm power concept was concluded last year at the UK's Rutherford Appleton Laboratories (1).

One student led project (at the University of Strathclyde), summed up the advantages of the system by pointing out 'The principle of having the storage tank connected to the National Grid would allow not only surplus wind energy to be stored as ammonia but all excess renewable resources from any power plant in the UK' (2). This project (2) concluded that ammonia would be a much better solution than batteries, owing partly to the fact that so much battery capacity would be required to do the same job, but also because of the value of the renewable energy that would also be wasted when there was excess production compared to electricity demand. 

Indeed supplying reserve power through ammonia (or some other storage vector, eg compressed air, biomethane etc) could be very cheap indeed since the storage solution would be generated using 'excess' renewable energy that was virtually, if not actually, zero cost.

One reason why ammonia is likely to emerge as a key part of progress to a 100 per cent renewable energy economy in countries like the UK is simply because ammonia is a very important industrial feedstock. The fertiliser industry, in particular, requires massive quantities of ammonia which are currently derived by a highly energy/carbon intensive process involving the 'reformation' of fossil fuels. The reformation (called the Haber process) releases hydrogen from the fossil fuel (usually natural gas or oil derived) which is then combined with nitrogen to produce the ammonia. 

A key point to remember is that the fertiliser industry is going to be under pressure to reduce its carbon footprint by deriving its ammonia from low carbon energy sources. Indeed there is increasing attention being given to the notion of 'green ammonia', and several research and demonstration projects into 'green ammonia' are being conducted around the world. Green ammonia will, in effect, be subsidised by the increasing quantities of otherwise zero cost renewable energy produced when renewabe energy is excess compared to demand (this phenomenon becoming more and more common as the proportion of renewable energy of total energy rises). As the fertiliser and other industries source their ammonia as green ammonia in larger quantitiesia then the availability of this will make the possibilities of it being used as a fuel increase.

It is certainly the case that the optimum processes involved in a green ammonia  system are yet to be determined. These include, if possible, improving the efficiency of the system. It also involving deciding which strategy is best to minimise nitrogen oxide production when burning the ammonia (this can be done by different techniques, or using the ammonia in adapted fuel cells). However, when compared with the complexities and problems of the rather-more-state-favoured nuclear or cabon capture and storage projects, the challenges facing using green ammonia as firm power seem simple to resolve. 

If it is the case that renewable energy can be effectively stored using ammonia to provide firm power (and I think it is the case) then not only can renewables provide firm power on days when there is little wind or sun but also ammonia could potentially be used to power aircraft. 

(1) Green Ammonia, Siemens, https://new.siemens.com/uk/en/company/topic-areas/sustainable-energy/green-ammonia.html

(2) Conclusion, Wind Energy Storage Project, University of Strathclyde, http://www.esru.strath.ac.uk/EandE/Web_sites/17-18/windies/index.html

https://phys.org/news/2019-08-ammonia-fuel-cells.html

https://phys.org/news/2018-01-link-solar-hydrogen-ammonia.html

https://www.sciencedirect.com/science/article/pii/S2542435118301788

https://www.solarpaces.org/missing-link-solar-hydrogen-ammonia/

https://www.sciencemag.org/news/2018/07/ammonia-renewable-fuel-made-sun-air-and-water-could-power-globe-without-carbon

https://www.youtube.com/watch?v=rXUOdXfF6ks&feature=youtu.be

https://www.fertilizerdaily.com/20190905-yara-and-nel-to-produce-green-ammonia/

Labour's 'nuclear is renewable' claim is an insult to dead uranium miners

In a 'boiler room' coup Labour seems to be secretly plotting to re-launch the new nuclear build programme by renaming nuclear power as 'renewable'. Their 'expert report' argues that the current level of nuclear generation needs to be maintained, which means building more nuclear power on top of Hinkley Point C. But they seriously expect nobody to notice this because they are calling the new nuclear renewable.

In fact even the report recognises that more nuclear power is not needed to meet Labour's decarbonisation targets. But what it does not stress enough is just how costly the new nuclear commitment will be, and swallows whole the nuclear industry's claim that the next nuclear power station will be cheap. In fact the report backs the Government's 'blank cheque' approach to nuclear funding in that the state will pay all the bills, whatever they are, and make it very difficult for anybody to do a comparison with renewable energy - because renewables would look much, much cheaper.

The biggest cheek of the report is to say 'For the purposes of this analysis, we have considered nuclear power as a contributing towards renewable and low-carbon energy supply' (Section 4.13) https://labour.org.uk/wp-content/uploads/2019/10/ThirtyBy2030report.pdf

Nuclear power cannot be considered renewable. These power plant will be fuelled by a non-renewable energy source, uranium. Apart from anything else uranium mining is associated with very high levels of lung cancer among its workers. That is according to research carried out by a section of the US Health Service dealing with occupational helath and safety . See
https://www.cdc.gov/niosh/pgms/worknotify/uranium.html

In their studies, amongst the increased levels of death, around 400 out of around 4000 miners studied dies from lung cancer - whereas the normalised rate for the study should have been several times less than this - less than 100. Various other diseases were found to be at much higher than expected levels. Altogether the study found that amongst the miners 1595 had died compared to an expected number of 986 deaths.
It really is an insult to these people and their families that they are being airbrushed from reality through the fake argument that nuclear power is 'renewable.

And of course all the reactors planned for the UK are URANIUM reactors.

https://beyondnuclearinternational.org/2019/10/19/edfs-pr-is-as-bankrupt-as-its-reactors/

https://www.ft.com/content/c63ebe88-bcde-11e9-89e2-41e555e96722

https://www.theguardian.com/business/2016/mar/07/edf-unions-call-for-hinkley-point-project-to-be-postponed

https://uk.reuters.com/article/us-edf-restructuring-strike/edf-unions-plan-massive-strike-to-stop-proposed-restructuring-idUKKBN1W21BP

https://www.ft.com/content/ef9d4de8-e3e9-11e5-ac45-5c039e797d1c

How the Fixed Term Parliament Act has destroyed our constitution

The coalition between the Liberal Democrats and the Conservatives tore a gaping hole in the British constitution that was not understood at the time but through which we are now falling headlong. It has allowed a zombie Government to stagger about in the middle of the greatest British political crisis for several decades when in fact it should already have resigned.

The hole was created by the Fixed Term Parliament Act (FTPA) which was seen at the time as a clever expedient to ensure that the coalition led by David Cameron could not be easily dismantled. But it had the unintended consequence of destroying the carefully woven set of conventions that underpinned the notion of confidence in the Government.

The Government is apparently ignoring the pre-existing convention that it should resign if it loses a vote of confidence using the excuse that its wish to call an election has been thwarted under the rules of the FTPA. But the way our constitution has always worked is that whilst the outgoing PM had the power to call a General Election, this has been subservient to the fact that PMs have only stayed in office if they have the confidence of the House of Commons. You can see this in some examples quoted by Catherine Haddon, below. For example Baldwin resigned, in 1923, only after losing a vote on his Queen's Speech following the 1923 General Election to allow Ramsay Macdonald to form a Labour Government.

The way that the Government (aided implicitly by the Opposition in that they have so far not tabled a vote of confidence) have so far behaved is to make us look more unstable than Italian Government. In that case, as illustrated very recently, when it became apparent that he no longer had a Parliamentary majority (given Salvini's defection from the Govt), PM Conte tendered his resignation. He has only continued because a new Government coalition has been formed.

Yet Johnson, despite having no majority on the key issue of the day, has sat tight. The acid test of whether the British constitution has been totally blown is whether a) he will lose the vote on his Queen's Speech after October 14th and b) if he loses whether he resigns. If he does not resign, the UK will be an even bigger global laughing stock than it already is. Our constitution will be plainly totally shot, with conventions that no longer work in the light of the FTPA and the bankruptcy of British politicians.

It may not be the politicians' fault that there are deep divisions over Brexit, but it patently IS their fault that this zombie Government continues to stagger on. Either it should resign or the Opposition must no-confidence it under the terms of the FTPA if it won't go otherwise. Anything else is total lunacy.

http://theconversation.com/hung-parliaments-have-voted-down-the-queens-speech-before-heres-what-happened-79384

Is Hinkley C going the same way as the French and Finnish EPR disasters??

As EDF announces major cost overruns and delays after having only recently started major construction works for Hinkley C, it seems that this project is heading for the same sort of financial disasters suffered already by the other two European Pressurised Reactors (EPRs) being built in Finland and France. Yet the Government is going ahead with a financial model, the 'Regulated Asset Base' (RAB) to finance the next EPR at Sizewell C, that would mean electricity consumers would have to pay for cost overruns over and above EDF's own ridiculously low estimates of costs.

EDF has announced cost overruns of up to £2.9 billion pounds and delays for HPC that almost certainly mean it will not be generating in 2025. This is on top of the already high cost of building EPRs - at a cost to the electricity consumer of £92.10 in 2012 prices (now over £100 per MWh), and even that is only so 'low' because the contract involves paying this price (inflation uprated) over 35 years!

EDF, in its statement issued today talks about the project being 'first of a kind' (in the UK). But the project is not 'first of a kind' at all when we look at similar designs being implemented in Finland (Olkiluoto) and France (Flamanville), still uncompleted over many years and with costs in these cases having risen to more than three times their initial estomates. Who would put any money on this being the last cost overrun announcement for Hinkley C from EDF? Certainly not me!

In fact EDF only started 'pouring concrete' on the base of the plant in Spring this year, so if there are cost overruns and delays projected now, much much worse is likely to come.

The most outrageous aspect of this affair is that EDF expect us to believe that Sizewell C will be substantially cheaper to build than even the projections EDF made before the latest cost overrun announcement. The Government has in effect agreed it will swallow such a projection by EDF and then undertake to saddle electricity consumers with cost overruns over and above these absudly low estimates.

With offshore wind costs having fallen to well under a half of the cost of Hinkley C, it seems especially odd that the Government should be giving financial preference to new nuclear power. Yet new nuclear power will make integration of renewables more difficult since the nuclear power will, according to their contracts, always run meaning more times that there will be excess renewable electricity generation. Of course, as suggested in the my last post, any excess renewable energy generation (which would happen even without nuclear power beiung on the system) could  be used to generate hydrogen (via electrolysis). This could be used in fuel cells to produce electricity when there was a shortage of wind or sun. This beggars the question, though, of why we are not investing in this technology alongside renewables rather than pouting more and more money down a nuclear black hole and slowing down the decarbonisaion process as a result.

See https://www.ft.com/content/92102452-df62-11e9-9743-db5a370481bc

How renewable energy can provide its own reserve power through hydrogen

A regular complaint about variable sources of renewable energy is that they need so-called 'back-up' when the sun doesn't shine and the wind doesn't blow, but this problem can disappear if fuel cells powered by hydrogen are brought into play. When the electricity system is producing excessive quantities of renewable energy (as will happen as renewable generation increases) this energy can be stored in various forms, one form being hydrogen which can be stored and then used in fuel cells to produce electricity when it is needed.

An increasing number of demonstration projects are focussed on generating hydrogen from renewable energy sources using electrolysis of water. One project involves making hydrogen directly from seawater https://www.rechargenews.com/wind/1850034/floating-wind-to-hydrogen-plan-to-heat-millions-of-uk-homes These systems (renewable energy-hydrogen-fuel cell) are coming down in cost as their constituent parts (wind and solar farms, electrolysis and fuel cells) all come down in price.

Fuel cell deployment is increasing at a rapid pace around the world as an option to provide back up power for buildings, displacing the role that has been performed by diesel generators. A fuel cell, if you like, is a sort of reverse battery in that it converts a fuel into an electric charge rather than the other way around. Fuel cells are considerably more energy efficient in creating motive power compared to internal combustion engines.

Of course we can use lithium or other types of batteries to reduce the need for 'firm' generating capacity to complement variable renewable energy (especially as the increasing amount of electric vehicles can use their battery power to, in effect, store power to be used in the grid). However the need for any fossil fuel or nuclear generating capacity can be completely abolished by building up the volume of fuel cells powered by renewable (so-called 'green') hydrogen.

As the amount of renewable energy generated increases, so the amount of renewable energy (RE) that is sometimes surplus to demand will increase. - The other side of the variable RE coin of course is that often too much energy is generated -  This surplus renewable energy (which will be available virtually free of charge) can be used for hydrogen production.

Of course this doesn't mean everything can be powered by hydrogen - many services are better provided by electricity. For example, electric rather than hydrogen cars seem to be taking hold in the market. In the provsion of ordinary space heating it is certainly much more energy efficient to use (electrically powered) heat pumps, either in district heating or individual houses, to provide heat to domestic and commercial buildings.  But we do have the resources to produce for some specialised hydrogen markets, and (besides fuel cells providing reserve power as discussed) this can include some specialised industrial heat markets and also aircraft travel.

Hydrogen powered aircraft seem, as a futuristic proposition, to have the edge on electrically powered aircraft since their weight might be a lot lower than that provided by batteries. This weight issue is not quite so crucial on the land, where the refuelling infrastructure that exists in the form of the electricity grid gives electric cars an advantage over hydrogen powered vehicles. However aircraft hydrogen powered flight might take off quicker (joke?) than battery powered planes.

After all, for example, there's enough offshore wind resource in parts of the North Sea to generate over thee times the energy consumption of the entire EU. See https://realfeed-intariffs.blogspot.com/2019/06/offshore-wind-power-source-that-could.html

But there is a note of warning to be sounded - we should make sure the increase in hydrogen use comes from electrolysis of water, not from traditional means of obtaining hydrogen from reformation of gas or coal - that is the opposite of decarbonisation.

Clearly what needs to be done is that rather than shovelling a lot of money down a nuclear black hole (eg the Government's plans for giving a huge handout to EDF via their proposed 'Regulated Asset Base' mechanism), they should be putting some money into encouraging deployment of fuel cells, electrolysis and hydrogen production from renewable energy.

The real reason why the Government abandoned their plan to cut university tuition fees

The story emerging that the Government has abandoned its intentions to cut student fees (to £7500 a year https://www.thetimes.co.uk/article/plan-shelved-to-cut-tuition-fees-good-university-guide-2020-vlnfv2cl9) does give a boost to Labour and the Greens in their promises to end student fees, but it also ushers in a load of nonsense about the alleged 'poor value' of university education.

We live in a captialist consumer society where few people turn a hair at the conspicuous consumption that captivates society, yet the right wing press cannot stop spluttering with rage at the thought that some students get the opportunity to study subjects which they don't deem economically or philosophically worthy.

Yet the reality is that far from university education being overvalued it is grossly under-valued, even on market never mind philosophical criteria. People may rail at the spectacle of the not-so-trendy universities charging the full rate of student fees, but meanwhile the top earners get a tremendous bargain by their children being able to go to the highest ranking universities for little more than £9000 a year.

The really odd thing, if you want to look at things on a market basis, is not that the University of somewhere in the shires charges £9,250 a year but that few seem to realise Oxbridge, Imperial, UCL and others could charge an awful lot more if there was a real market in university fees. Just look at the USA where if you want a place at Harvard you're looking at paying $70,000 a year!

It seems the Government has too much to spend on Brexit preparation plans. This will no doubt include paying for the farm produce tariffs that will accrue once we leave the EU in order to avoid lots of British farmers going bust and blocking up the roads woith theoir tractors in protest if the Government doesn't help them. Hence the Treasury refused to fund a drop in fees - the other option, of course, that of just ctting university income would have achieved an incredible policy outcome if actually implemented. - Chaos on campuses as protests erupted and the threat by leading universities simply to go private and charge their own fee levels - with the result that fees at the highest ranking universities would increase by large amounts, the opposite of what the Government wants.

At the back of this is quite a lot of upper middle class disdain at the thought that universities should be open to people they think shouldn't get in (ie people who don't earn as much as them) - but of course these upper middle class people don't want to pay the higher fees that a really free market in university tuition would generate.

Of course a left of centre Government that wouldn't have to spend all the money involved in ameliorating a hard Brexit could afford to scrap all tuition fees and deliver university education as the public good it should be - for free.


https://www.theguardian.com/education/2018/apr/17/oxford-cambridge-universities-private-raise-fees

Has Johnson lost control?

Boris Johnson and his Government may be riding high in the opinion polls but two apparent decisions of  'strength' may, in retrospect, look like mad acts of self-destruction. As a result of prorogation and now, in today's news, a decision to effectively expel Tory MPs who back anti-no deal legislation, Johnson has at two strokes united the Opposition and formally divided his own Party. At practically any other time this would have been regarded as craziness, but in the unreality of Brexit politics to some at least this passes muster as 'strength and detemination'. With the benefit of hindsight this might look like the sheer madness people would have always thought such actions to be.

The Government, is being driven, (we're not sure exactly by whom - Boris Johnson or Dominc Cummings?) with their eyes mostly fixed on the rear view mirror trying to avoid being run over by the Brexit Party but not taking too much notice about what is on the road ahead. The cabinet membership meanwhile is (s)trapped in the back, incredulous at what they see, but unable to move or say much.

Of course we don't know at this point what will happen, with Harold Wilson's must quoted maxim 'a week is a long time in politics' looking extremely relevant today. Various people have drawn up flow diagrams to try to preduct at least the plausible outcomes; yet there are so many variables with unknown qunatities and interactions that in fact the outcomes could literally be 'off the wall'; certainly off the diagrams.

But in considering outcomes, we should bear in mind the base conditions and the rules of the game. It has been assumed up to now, that a pre-Brexit election was a big possibility with October 14th often beoing mentioned. This of course depends on the Labour Party playing along asnd agreeing to an election when Boris Johnson wants. But this isn't happening. In an unintended consequence of the Fixed Term Parliament Act (FTPA), Governments in general, and especially this Government, have lost control over the ability to call an election.

Johnson will need the support of Labour to get the two-thirds majority he needs to call a pre-'no deal Brexit' election, but Labour are now saying they won't sanction this unless there is not only a Brexit extension but also an agreement to hold another referendum. If they stick to this, Johnson will find it very difficult to call an election. He could order his MPs to con-confidence his own Government, but even in this weird scenatio he would have to wait 14 days before an election could be called. This would run the risk of a temporary PM being appointed by the Opposition, a prospect made more likely by the fact that quite a few Tory MPs will be efectively exp[elled from the Conservative Party!  In fact there won't even be 14 days in this prorogued Parlimentary session, and the no-confidence motion will fall because Parliament has been prorogued - so, Johnson would have to un-prorogue Parliament to trigger this procedure any time soon (???!).

Now Labour in (who in what has not been noticed so far) an act of prgmatism are saying that they now regard calling another referendum as the first option rather than election (and want an extension for that purpose). Many otherwise referendum-sceptical Labour MPs will be impressed by the argument that going for another referendum is a better bet to keeping their seats than calling an election now when some believe that Johnson will end the Brexit impasse in a 'clean' manner.

For Corbyn this is becoming much more a 'heads I win tails you lose' position. If, by his new strategy, the Government are forced to go for a 'no-deal' and there is an election after October 31st we are in new electioneeting territory. Here the Government has to own the consequences, including awakening the electorate to the fact that the problem of negotiating a relationship ith the EU is still there and which the Government currently appears to have no idea how to manage.

But if the Government is forced somehow to accept, through legislation, an extension to Brexit, it will begin to look a lot weaker, especially if the Opposition insists that there is another referendum.

Now I'm probably getting ahead of myself, because there are lots of ifs, buts, and chaos on the road to such outcomes....and lots of chaos to come in which the lawyers may prove to be as important as the politicians. But it is ironic that in the last week the Italians, often scoffed at as having perpetual government chaos, have formed, for the moment a stable Government, whilst allegedly stable Britain is plunging into worse governmental chaos than ever seems to occur in Italy.



fall in cost of fuel cells https://www.energy.gov/eere/fuelcells/fact-month-april-2018-fuel-cell-cost-decreased-60-2006

big fall in cost of electrolysers predicted https://www.bloomberg.com/news/articles/2019-08-21/cost-of-hydrogen-from-renewables-to-plummet-next-decade-bnef?utm_source=twitter&cmpid=socialflow-twitter-business&utm_campaign=socialflow-organic&utm_content=business&utm_medium=social

https://www.energy.gov/sites/prod/files/2014/10/f19/ftco_early_mkts_fc_backup_power_fact_sheet.pdf

methane in fuel cells https://www.sciencedaily.com/releases/2018/10/181029130939.htm

https://www.powerengineeringint.com/articles/2018/06/new-fuel-cell-off-grid-power-solution-could-compete-on-price-with-diesel.html

https://www.nrel.gov/docs/fy17osti/67408.pdf

https://en.wikipedia.org/wiki/Bloom_Energy_Server#Usage

https://www.theverge.com/2019/8/14/20804257/zeroavia-hydrogen-airplane-electric-flight

https://orsted.com/en/Media/Newsroom/News/2019/08/Orsted-and-partners-secure-government-funding-for-hydrogen-project

http://www.hydrogenfuelnews.com/construction-starts-on-hydrogen-electrolysis-plant-in-germany/8537764/

https://www.forbes.com/sites/edgarsten/2019/09/09/fuel-cells-find-their-place-on-factory-floors/#709ae8855ee9

https://www.world-nuclear.org/Information-Library/Country-Profiles/Countries-T-Z/United-Arab-Emirates.aspx

FANR made over 400 adverse findings on this which postponed start-up by at least 18 months, to allow Nawah to take corrective actions on a wide range of technical, organisational and management issues

https://www.technologyreview.com/s/613325/how-greed-and-corruption-blew-up-south-koreas-nuclear-industry/

https://www.utilities-me.com/news/13626-barakah-nuclear-plant-in-uae-to-start-testing-third-reactor

https://www.rspb.org.uk/globalassets/images/campaigning-and-positions/love-minsmere/sizewell-c-public-faqs-_-10-dec-2018.pdf

http://sparkoffreedomfoundation.org/2018/01/17/climate-scientists-support-oppose-nuclear-power-reduce-emissions/

https://www.spglobal.com/marketintelligence/en/news-insights/trending/sl1qb3zdig52eymz4n7v-w2

No it wasn't the wind turbines that caused the blackout but batteries are likely to benefit from reaction

In the aftermath of last Friday's blackout the usual suspects are blaming wind turbines', but that's not what the electricity market nerds are saying. They are pointing to the fact that big power outages have happened before the age of large-scale renewable energy penetration and that stories of crisis at the National Grid are well overblown.

I certainly remember the blackout of 2008 which was caused by the near simultaneous disconnection of Sizewell B (nuclear) and Longannet (coal), but then of course we did not see anything in the media about how it was all the fault of nuclear or coal-fired power plant. This time a large gas fired power plant tripped, followed a little later by a big offshore windfarm. Now there is talk of how the grid has become more unstable because of increasing renewable energy penetration (now around 35% of electricity on an anuual basis) and how, depending on people's interest a) we ought to stop this nonsense and get back to having real large power plant or b) we need more batteries and/or other stuff.

In fact such an approach is decried by top electricity system management experts such as Nigel Cornwall. He tweeted in response to stories that the National Grid was beset with a splurge of 'near misses' and last-gasp efforts:

 “Near misses” and “last minute contracts” is the way the system - and all electricity systems - is designed to operate. (National Grid) has done a huge amount to modernise it’s balancing services, and I am struggling to understand whose agenda this is. 

Two large power stations failed at the evening peak, when the system was already calling for more output/demand turndown. This was almost an occurrence of Titanic probabilities. You can of course contract for a huge amount of extra reserve but at immense cost to consumers'

Of course two big blackouts in eleven or so years is two big blackouts too many, so, reasonably, the public will expect action to improve the situation. People are looking at how to do this. Jeremy Nicolson, another electricity market nerd commented: 

'We'll have to wait and see what emerges from Nat Grid's report to Ofgem and other enquiries. But I suspect the cost of ensuring adequate frequency control so a double generator trip doesn't result in outages of the sort that occurred last Friday would not be especially high'. -

In recent times batteries have emerged as a much quicker and increasingly cheaper means of ensuring fast response to drops in system frequency (that can be caused by unexpected power plant breakdowns). But despite the fact that batteries are seen as a friend to renewable energy, some battery interests seem to be jumping on an alleged increase in system vulnerability to demand a big increase in battery provision. Now we could do with more batteires simply to replace the need for large gas fired power plant, but it is sad if battery interests are also peddling myths of greater system vulnerability due to renewable energy.

If we want to stop the occasional grand blackouts from happening, or at least make them less likely, then increasing battery provision is one among several options. One analyst, Thamas Edwards,  who works for the consultant company that Nigel Cornwall runs commented that besides batteries 'there could be other things such as changing the frequency settings on relays, which could be cheaper'.

The 2008 blackout:

See

https://www.theguardian.com/business/2008/may/28/power.cuts

recent coverage

https://www.dailymail.co.uk/news/article-7344969/Experts-blame-UKs-reliance-wind-energy-worst-power-cut-years.html

https://www.theguardian.com/business/2019/aug/12/three-blackout-near-misses-in-three-months-says-national-grid

See a detailed analysis by Aurora https://www.auroraer.com/wp-content/uploads/2019/08/Initial-Thoughts-and-Analysis-on-the-Power-Outages-on-9th-August.pdf

“Near misses” and “last minute contracts” is the way the system - and all electricity systems - is designed to operate.

@ng_eso

has done a huge amount to modernise it’s balancing services, and I am struggling to understand whose agenda this is.

Two large power stations failed at the evening peak, when the system was already calling for more output/demand turndown. This was almost an occurrence of Titanic probabilities. You can of course contract for a huge amount of extra reserve but at immense cost to consumers.- Nigel Cornwall


We'll have to wait and see what emerges from Nat Grid's report to Ofgem and other enquiries. But I suspect the cost of ensuring adequate frequency control so a double generator trip doesn't result in outages of the sort that occurred last Friday would not be especially high. - Jeremy Nicolson

Yes, but there could be other things such as changing the frequency settings on relays, which could be cheaper. - Thomas Edwards

https://www.theguardian.com/business/2008/may/28/power.cuts

Government in cynical ploy to boost northern election hopes with fanciful smr power plant

In what must count as one of the most cynical election ploys on record the UK Government has attempted to link a faltering and unlikely 'small modular reactor' (SMR) nuclear programme with target seats which the Conservatives hope to win in the North in the forthcoming General Election. The (so-called) SMR programme seems highly unlikely on financial grounds alone as it would require a massive Government commitment, and and on top of that engineering questions undermine the credibility of the programme.

The Government has issued a press briefing mentioning 'Sheffield City, Cumbria, Lancashire and Cheshire' as sites for the SMRs. Like many of Boris Johnson's schemes, this particular promotion has little grounding in reality and the promotion of these sites seems to have more to do with a cynical election ploy than serious planning of a nuclear power programme.

The UK's SMR programme, such as it is, is neither modular or small or, for that matter, much in existence. The Government are backing plans by Rolls Royce, and have promised an initial £18million, but in reality even to build one prototype plant would require Governmen to commit to spending over a billion pounds. This is because even if the cost of the reactor were to turn out close to what Rolls Ryce claim (£500 million) it would require an additional several hundred £million for the rector design to go through the required 'General Design Assessment' (GDA) required of all new reactors (by the Office for Nuclear Regulation). As if this was not enough, I understand that Rolls Royce have demanded, as the price of going through a GDA, a Government commitment to effectively underwrite several reactors requiring a Government commitment to raise several £billions before there is any chance of any power ever being generated.

This financial background alone suggests that this SMR plan is a fantasy that is even less credible than Boris's plans for a Thames Estuary airport or even a bridge between Scotland and Ireland.

However, basic engineering questions also suggest that that the SMR plans will go nowhere very slowly. The idea of building what is, in historical terms, a medium sized nuclear power plant (440 MW), defies the logic of nuclear power development since WW2. This has involved building steadily bigger reactors in order to, apart from anything else 'calculate down' (in the words of Mycle Schneider) the costs of nuclear safety measures. Smaller(er) reactors may (or may not) reduce expensive delays in construction time, but they are counterbalanced by the lack of economies of scale. Indeed the size of the proposed Rolls Royce SMR is roughly the size of the UK's first grid connected 'Magnox' reactors. The number and scope of safety measures required for new reactors has increased dramatically since the 1950s (extra containment, redundancy in primary and secondary safety injection systems, back up diesel generator sets etc), so intuitively a smaller reactor does not seem the way to go.

Ordinary engineering rules suggest that costs will not be lower per kW. eg you still need to make the same number of many of the parts (eg reactor pressure vessel) even thought the parts may be smaller; hence savings in cost do not reduce propritionately to size. Rolls Royce plans, whose own projections of cheap generating costs must be treated with a wagon-load of salt, are highly unlikely to go very far, apart from that is in terms of uselessly soaking up a few tend of millions of pound of Government funds.

We can expect a lot more of this bull and fantasy in September when Boris's notion of 'green energy' is launched. Like many of his other pronouncements they are oriented to to seduce people by their apparent simplicity, but in reality are fatally undermined by their impraticality. Such is the dark allure of populist politics.

Rolls Royce plans:
https://www.rolls-royce.com/~/media/Files/R/Rolls-Royce/documents/customers/nuclear/smr-technical-summary.pdf

Why hydrogen and electric vehicles go together

http://www.itm-power.com/

Why Greens need a Progressive Alliance not a Lib-Dem-Green Alliance

As the UK faces the worst political crisis since WW2, with the political and economic dangers of a no-deal Brexit, the last thing pro-EU parties need to do is to actively split the forces trying to combat a no-deal. Yet, I fear, if a Lib-Dem-Green Alliance takes shape which treats Labour as a more or less  equal electoral foe compared to the Conservative and Brexit Parties, it may ensure a Boris Johnson victory. As far as the Green Party is concerned I am very concerned that they are moving towards a position of preferring the Lib Dems to Labour.

If it does become the case that Greens back the Lib Dems ahead of Labour in seats where Labour are the leading contenders with the Tories then I suspect that many Green Party members will wonder why they joined the Green Party in the first place. Even a deal involving Greens stepping aside to back the Lib Dems in contests with Labour could have disastrous impacts on the Green Party.

Now I want to make it clear that 'Remain' is my first option. However, simply having a general alliance between avowed Remain parties at the coming General Election may well play into the hands of what could well turn out to be a soft electoral alliance between Brexit Party supporters and Conservative candidates committed to tolerating 'no-deal'.

There was an effective soft alliance at the 2015 election between many UKIP sympathisers and the Conservatives; indeed it was a successful strategy so that where the Conservatives (committed to holding a referendum). were in close contention with Labour, including many northern seats, UKIP sympathisers often voted tactically for the Conservatives. Cameron won an overall majority. The danger of the current situation is that this general pattern could be repeated (with the Brexit Party replacing UKIP of course), this time in support for 'no deal'.

Ironically, as much as Jo Swinson may declare her dislike of Corbyn,  the main chance of getting another referendum is to get a (almost certainly minority) Government led by Corbyn to organise a three way referendum. This would be about whatever 'deal' he cooked up with the EU, remaining or no-deal. It is fairly transparent nonsense for Lib-Dems to claim that they will refuse to support a minority Corbyn Government (in confidence votes) so long it is following such a path. No, the Labour Party is not going to ditch Corbyn as leader in the week following a General Election at which the Conservatives have lost their majority. It strains credulity to think that the Lib Dems are going to (or even be allowed to) call another election in short notice (it could be very bad news if they did). Given that the Lib Dems cannot do a deal with Bojo, that doesn't leave many other options.

The Lib Dems were willing to be a full coalition partner in a five year austerity Cameron Government, tolerating xenophobic immigration initatives, Hinkley C, shale gas and so on, but are they seriously saying they won't even back a minority Corbyn Government on a short term basis? If they won't back Corbyn what would they do? Have another General Eection quickly so that Bojo could drive us into a no-deal Brexit?  And the Green Party is going to be at their side when this happens?

Having a pure Remain Alliance may work well in a place like Brecon where the Lib Dems are the most credible alternative to a 'no-deal is tolerable' Conservative, but it would be disastrous in a place like Peterborough where the choice was between a 'no-deal' candidate  and Labour. There was, in Peterborough, a wise decision not to have a pure-Remain alliance, but instead, to have an implicit soft tactical voting alliance to support the Labour candidate. That's the pattern we need. If, on the other hand Greens agree to back Lib Dems in battles where lib Dems and Labour are the leading contenders then whatever benefits the Greens get in return, strategically the Greens will then be dismissed as a an adjunct of the Lib Dems, and will lose left wing support.

If as seems very likely, there is a pattern of tactical voting between the Brexit Party and the Conservatives, then there needs to be an equivalent pattern of tactical voting between the anti-no-deal parties. Indeed, there ought to be one anyway, regardless of what Brexit Party voters do or not do. We desperately need to stop a no-deal? Comprendi? That's what I call a Progressive Alliance.

The bonkers politics (never mind economics) of a no deal Brexit

Much attention has been focussed so far on the extent to which the UK will suffer economically from a no-deal Brexit, but regardless of this to me the most worrysome aspects of this scenario are the political ramifications. That is not to minimise the likely economic consequences - but it is to emphasise how bad in political terms a no-deal scenario is for the UK. I will discuss some of these likely consequences below.

Ironically, support for this no-deal outcome seems to be rising under the argument that it is getting Brexit 'over and done with'. One is tempted to make a comparison with the metaphor of the condemned person about to be executed who wishes it all to be over quickly. The trouble is that this metaphor is erroneous, since, it seems, a lot of people actually believe that it is worth suffering some short term economic pain (greater or lesser) for a what they assume will be a political settlement, at least of sorts.

But there will be no prospect of a political settlement. Indeed all we will get is an acceleration of political breakdowns. Really it is more like a descent into prolonged purgatory,

The Euro-experts, Arnand Menon and others, have pointed out that if there is a no-deal, exactly the same issue of the Irish border will remain to be settled (as well as all the trade issues), with all of the post-Brexit options still to be decided. The only substantive difference is that a political settlement with the EU will be made much more difficult by the political dislocation between the UK and the EU. The Brexiteers victory will be purely symbolic, and very pyrrhic

It should be (but apparently isn't  generally regarded as) an obvious fantasy to believe that if the EU haven't dropped, or amended the backstop and the Withdrawal Agreement, before the 'no-deal', then  they should give way any more afterwards. If we wouldn't give way why would they? Indeed, the more a British Government turns this into some sort of rhetorical war (for domestic political purposes) the more unlikely any 'blinking' on the EU's part will be.

Indeed the more the 'war' rhetoric continues, the more the UK will be hostage to whatever restrictions on goods and services entering France and other countries these nations seek to impose. Wars of any type (in this case trade and business) can't be stopped by threats unless you have overpowering advantage over your opponent (and not even always under this situation). We don't have an overpowering advantage. Anything but.

Really, the outcome of the Irish border issue hangs on the Irish Government, especially since they will have a veto over the long term agreements with the UK (done by a unanimity rule in the EU). The Irish are unlikely to be in the least phased by the talk of 'war' (read some history books on this one). Indeed the prospect that the number of people in the North favouring a united Ireland will increase will almost certainly make the Republic feel that their political strategy is making progress. They will be emboldened to keep a tough line with the UK.

Any thought that we are going to be rescued by a fast track Trade Agreement with the USA is very illusory. Apart from anything else, the Democrats appear hell-bent on stopping any UK-US trade agreement until, in effect, the Irish border issue is resolved to the satisfaction of the Irish Republic. Hence there is no prospect of a 'fast track track' trade agreement without the approval of the Democrats, so long as they control the House of Represenatives. The UK Government, would, under this scenario of putting more priority on a trade agreement with the US rather than the EU, become a political captive of the Trump Government. It would be captive sine the UK Government would need Trump not only to win the 2020 Presidential election, but assure a Republican majority in both Sente and the House.

And then there is Scotland............Faced with this political slide many more Scots are likely to plum for independence. Sure, Westminster can refuse to sanction another referendum, but we shall still live in a democracy, and a strong call for another Scottish referendum, in practice, cannot be resisted for very long. Under such circumstances the Unionist campaign to oppose independence in another indyref will be a shambles compared to the last effort in 2014.

At the end of the day a no-deal Brexit and, by extension, the whole Brexit project, is based on a failure to understand that it is not membership of the EU that limits UK sovereignty, but the very existence of the EU. Hence the logic for being part of a powerful bloc rather than a supplicant whose interests are by defintion treated as second order compared to those of its members.

https://royalsociety.org/~/media/policy/projects/hydrogen-production/energy-briefing-green-hydrogen.pdf

https://www.theccc.org.uk/wp-content/uploads/2018/06/Imperial-College-2018-Analysis-of-Alternative-UK-Heat-Decarbonisation-Pathways.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/819733/edr-final-evaluation-report.pdf

A layman's guide to the 'Regulated Asset Base' that will fund Sizewell C nuclear power plant

The Government's proposed new 'Regulated Asset Base' (RAB) means of funding nuclear has just been published, and it is living as far down to its expectations as could be expected. I've ploughed through the sometimes (deliberately?) convoluted description of the scheme and translated a few key passages to help you understand it all.

The Government failed to learn from the days when nuclear power were constructed from the 1950s to the 1990s. In those days nuclear power was very expensive, but the Government was able to con the public into believing that it was cheap. They did this by making sure the public could not understand the vaguaries of nuclear power funding and by putting all of the cost overruns that building the power stations involved onto consumer bills without them noticing. Basically, we are reurning to these days when the public was kept in the dark about the cost of building nuclear power plant and the same public will be paying for the cost overruns resulting from the project.

The Government made the mistake of giving a contract price for Hinkley C. Although it featherbedded the developers EDF by giving an ultra long premium price contract (35 years) and the promise of Government lending to cover the bulk of the costs, the contract (CfD) allowed some sort of comparison to be made with competitior sources. Solar and wind power's costs have fallen well below the price given to Hinkley C (£92.50 in 2012 prices).

So now the Government, having learned this mistake, has produced the RAB. This will allow the Government, though an appointed 'Regulator' to launder electricity consumer's money to pay for the inevitable cost overruns, whilst the Regulator assures the public that this all represents 'value for money'. The project that is earmarked for RAB funding is Sizewll C, involving the same reactor type (EPR) as is being constructed at Hinkley C.

What some key passages mean:

1. 'Despite the progress at HPC, the challenges facing the global nuclear industry have meant that replicating a CfD model for further new nuclear projects has proved very challenging. Few project developers have a balance sheet that can accommodate the £15-20bn cost of delivering a new nuclear project, and financial investors have been unwilling to invest during the construction phase given the long construction period and risk of cost increases and delays. We are therefore looking to work with the sector to develop an alternative funding model for new nuclear projects that can attract private finance at a cost that represents value for money to consumers and are considering its wider applicability to other firm low carbon technologies' (page 9)
Translation: The Hinkley C contract (CfD) was a big boobie by the UK Government since it showed just how expensive nuclear power could be even if we believe the developers own (French Government backed) hopes that the project works out as planned. The nuclear industry around the world has tanked - all the projects in the West this century have been monumental disasters and even the French EPR model built in China took twice as long to build as planned.  (As a rule of thumb the cost is more or less directly proportional to its construction time). So no private investor in their right minds would invest in nuclear power. So, essentially, we've got to give the next nuclear project a state-backed blank cheque and cover this up by having a Regulator publish a lot of accountancy jargon that will fool the public into thinking they're getting a reasonable deal.

2. 'A large-scale new nuclear project bears some similarities with the Thames Tideway Tunnel (TTT) project, in that it is a complex single asset construction project with a significant upfront capital expenditure requirement, long construction period and a long asset life. In developing a potential nuclear RAB model, we have taken the model used for TTT, which was also developed under a RAB, as a starting point, whilst recognising that new nuclear projects are greater in scale and face specific challenges that were not relevant to TTT' (page 11)
Translation: Nuclear power stations are not real power plant, but rather they are giant civil engineering projects involving lots of radiation when they get switched on, and thus complex measures to protect the public. However, this great complexity means they are much more prone to cost overruns compared to projects like the TTT, so we have to make sure that the consumer picks up the tab for the cost overruns, whilst pretending that this is a normal well run civil engineering project, which it isn't of course. 

3. 'A target total construction cost would be set for the project company which would be used as the Baseline for incentivisation and risk sharing. If construction costs increased above the Baseline, a portion of the additional costs would be added to the RAB, such that the impact would be shared between investors and suppliers (and through them, their consumers) (page 14)...(this approach will) 'provide clarity and certainty to investors, suppliers and consumers, which is particularly important for a large single-asset project with a complex and relatively long construction period' (page 15)
Translation: The Regulator will produce lots of impenetrable accountancy jargon based on hilariously optimistic projections about construction times and costs which the regulator will swallow whole. When the inevitable happens and costs overrun the investors will still get a reasonable rate of return on their investments and the electricity consumers will pay for most of the cost overruns.

4. 'Role of the Regulator
We currently consider that the Regulator should have responsibility for protecting the interests of consumers, whilst having regard to the ability of the project company to finance the project i.e. construction and operation of the plant' (page 19)
Translation: The Regulator will have no choice but to adopt the ridiculously optimistic cost projections and construction time estimates made by the developers (EDF). They will declare the whole project great value for money for the consumer, whilst in practice allowing the developer to run up whatever bills they want and pass most of them onto the consumer. A facade of an auditing system will be set up, but since EDF have all the information anyway, the Regulator will not be able to make more than token adjustments even if they wanted to.When the time comes for the consumer to shell out for cost overruns the Regulator will not want to point this out too much as they will get the blame.

'The EPR technology has now started commercial operations in China' (pages 8-9)
Translation: So far the constructions of the EPR have been disastrous in all cases, in Finland, France and even in China. The last one is a bit of a shocker. It took twice as long as planned to get the first reactor at Taishan generating electricity - that's despite the fact that the Chinese have a massive reserve of workers and engineers compared to us, and, as our Office for Nuclear Regulation has put it, a different approach to health and safety compared to what is practiced in the UK. Of course EDF are announcing a 'triumph' of early construction at Hinkley C - yet they have only just started seriously constructing the project in March this year having spent a lot of money since 2013 acheving remarkably little. But EDF have the French Government to rely upon to fund its own (French state owned) reactor model at Hinkley. In the case of Sizewell C, through the aegis of the so-called RAB mechanism, it will be the British electricity consumer who will be paying for the cost overruns.

You can read the Government's RAB consultation and make a response at https://www.gov.uk/government/consultations/regulated-asset-base-rab-model-for-nuclear

Zero carbon by 2050? Make it 30 by 30!

BY ANDREW WARREN

This month the UK formally becomes the first G7 nation to adopt as a legally binding commitment that we shall be living in a net zero carbon economy in 30 years’ time.

It is a clear and bold commitment, that has rightly been lauded practically everywhere..

The few cynics have concentrated upon the undeniable fact that practically all of the politicians taking the plaudits will long since have quit the public stage, well before the magic year of 2050. And thus won’t be around to face any difficult  questions . Or indeed to accept the congratulations that will be due.

That is undeniably a fair point. Doubtless a good reason why many are calling for more immediate targets to be created.  Like the “30 by 30 Energy Efficiency Act.” 

What is this? Put simply, a firm commitment and programme to ensure that around 27 million homes and 3 million non-residential buildings will be made completely energy efficiency. Completed by 2030. Hence the slogan: 30 by 30. 

Already we have the genesis of this, created by Theresa May, who ceases being Prime Minister  this month. Back in 2017, she launched the Clean Growth Strategy for the next thirty years. This identifies the enormous economic potential for  business to save fuel. At least one-fifth could very cost-effectively be saved. Interestingly, the vast majority of this potential (over 80%)  was to be released not so much by improving industrial processes . But significantly  by improving the way buildings are run. 

Doubtless that was one of the main motivations why as Prime Minister she launched  last summer her “Buildings Mission” in a speech at the Jodrell Bank observatory complex in Cheshire.

She promised that within twelve years- in other words, by 2030 - energy usage in all new  construction will be “at least half” of that  permitted under current building regulations . 

“Heating and powering buildings accounts for 40% of our total energy usage.
By making our buildings more energy efficient and embracing smart technologies, we can slash household energy bills, reduce demand for energy, and meet our targets for carbon reduction”, promised Theresa May.

She continued: “By halving the energy use of buildings, we could reduce the energy bills for their occupants by as much as 50%.”

Subsequently the Government has confirmed that whilst such calculations will for the first time  include energy usage from appliances within their calculations, they will not include transport usage. Presumably that caveat is to remove any recharging of electric vehicles from assessments.

Describing her initiative as the “catalyst for new technologies and more productive methods”, which she maintained could be “exported to a large and growing market”, acknowledging the enormous potential to improve the existing building stock. 

As part of the “clean growth and grand challenge mission”, the Government is also aiming to halve the energy costs for the existing building stock - both domestically and commercially by “reaching the same standards in existing buildings too.” 

And not just delivering ecological benefits. The social benefits of  the 30 by 30 programme are uniquely broad. Fusing the public’s clear rejection of continuing austerity and cuts with the growing desire to tackle climate change , it make this the key capital infrastructure investment priority. 

It provides occupants with comfortable living conditions in cold winter and high summer. It requires a massive training programme, resulting  in a wide range of jobs, both skilled and unskilled. Already far more people are employed in manufacturing, distributing, installing and maintaining energy efficient equipment than in any other part of the energy sector. The programme offers new business and investment opportunities in every single constituency. And it will, at last, abolish the scourge of fuel poverty forever.

We know  the technical potential exists to cut energy consumption levels by  over 50%.Achieving this target will require the adoption of world-leading quality standards for retrofitting and constructing buildings. 

This is a genuinely ambitious project. After all, the vast majority of buildings we will be living and working in by 2050 have already been built. Upgrading these has been likened by civil servants charged with delivery as being much akin to the challenge set in President Kennedy inaugural speech in 1961. This was to see a man walk on the moon before the decade was out. 

At that point, nobody knew with any precision how this noble objective would be achieved. But that speech became the catalyst. It ensured that in July 1969, a man named Armstrong would walk upon the moon.

I don’t really think that realising this buildings’ Mission is anything like as difficult. Unlike with space research, we do already have practically all the technologies around to achieve our goal. It is the delivery techniques we have to improve upon. Do that. And we shall have knitted together the most effective social and environmentally beneficial programme. So, 30 by 30 it must be.

Andrew Warren is Chairman of the British Energy Efficiency Federation, and this post is reproduced from an article by him published in the July/August edition of 'Energy in Buildings and Industry', page 10

 Note from David Toke: I asked Andrew if I could post this article because I thought it was very important to do so. This fact is underscored by the fact that this is the first time I have EVER carried a contribution by anybody else on this energy blog!