The Government has refused to rule out funding nuclear power through the 'Green Investment Bank' (GIB). In a response to the Environmental Audit Committee the Government said:
'Ministers will set the strategic direction of the GIB in due course. In view of the breadth of opportunities and challenges associated with greening the economy, the intention is to maintain a broad remit for the GIB. No decisions have been definitively taken as to what particular sectors might be prioritised at different times.'
With electricity giants such as E.ON and RWE having abandoned their interests in building nuclear power stations this leaves EDF struggling to put funds together to build their first power station at Hinckley C. Utilities are currently under great financial pressure at the moment to reduce risky investments (like nuclear power) and it seems likely that Centrica, EDF's partner, will decide not to take up their option of a 20 per share in nuclear investments. With private sector banks and pension funds unlikely to fund nuclear power stations, EDF's need for Government underwriting of its construction risks (or actual funds in advance of construction) is growing. In other words, nuclear power will not only need the 'same' subsidies as renewable energy, it will need a lot more! (this is on top of even the insurance and nuclear waste handling subsidies that nuclear power receives).
The total funding of the Green Investment Bank is slated as being £3 billion. This would not even fund half a nuclear power station, but, if EDF can reduce its risk, it might help it go ahead. It's just hard luck for the offshore windfarms or energy efficiency schemes etc who might hope to get the investment funds instead..........
See the Government Response on http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenvaud/1437/143704.htm
Friday, 29 July 2011
Friday, 22 July 2011
Nuclear power is less mature than renewables - says UK Government!
The UK Government's pro-nuclear mask has slipped. It has admitted, in the cold print of its latest formal Energy Policy statement, that nuclear power has to be given preferential types of subsidy compared to renewable energy. The reason, it says, is because nuclear power, along with CCS (carbon capture and storage), is less mature than a lot of renewable energy technologies.
On page 45 of the White Paper the Government states that onshore wind is a 'mature' technology, other renewables (offshore wind, solar, biomass) are 'rapidly maturing'. Meanwhile low carbon technologies like CCS or nuclear 'have less mature markets.'......'The sheer scale of the capital costs associated with these projects and the risks they face mean there is lower scope for new entry in the short term'. Yes, that is the Governement talking! They talk about the lack of possibilities for 'short term' market entry. Short term !!!!(????) nuclear power has only been going for 60 years as a major grid connected technology! All of this seems to support the view of nuclear critics such as Amory Lovins who has argued that nuclear power has been de-maturing as a technology whilst renewables have been maturing.
As I discussed in the last blog, the Government-appointed Committee on Climate Change has produced a piece of pro-nuclear propaganda in its claim that nuclear power is the cheapest low carbon electricity source. The Committee on Climate Change fail to account for the financial risks involved in building nuclear power stations which massively increase the costs compared to technologies such as wind power. Now, in their policy statement, the Government have effectively agreed with this criticism of the Committee on Climate Change’s analysis.
The Government suggestion (now hedged) that renewables feed in tariffs will be decided by 'auctions' or 'tenders' is still a policy that threatens to reduce the renewables deployment programme to a crawl. It would be a return to the Conservative Government's policies of the 1990s which led to a low implementation rate for projects. But for nuclear power, it seems, there will be some special terms.
The Government suggestion (now hedged) that renewables feed in tariffs will be decided by 'auctions' or 'tenders' is still a policy that threatens to reduce the renewables deployment programme to a crawl. It would be a return to the Conservative Government's policies of the 1990s which led to a low implementation rate for projects. But for nuclear power, it seems, there will be some special terms.
Of course the Government, having abandoned its (Tory and Lib Dem) manifesto commitments not to subsidise nuclear power, now says that (on page 9) that 'nuclear power stations should receive no public support unless similar support is available to other low-carbon technologies'. Yet the nuclear industry is pressing for extra subsidies and/or loan repayment guarantees to be given to nuclear power that will not be available to renewable energy. Certainly, reports from the financial markets indicate that without this there will be no nuclear power stations built in the UK anytime soon (or later). See, for example, http://www.reuters.com/article/2011/07/06/us-nuclear-citigroup-idUSTRE76548820110706.
Check out the details in the Government's statement on the Electricity Market Reforms for yourself at http://www.decc.gov.uk/en/content/cms/news/pn11_061/pn11_061.aspx
Check out the details in the Government's statement on the Electricity Market Reforms for yourself at http://www.decc.gov.uk/en/content/cms/news/pn11_061/pn11_061.aspx
Tuesday, 14 June 2011
Climate Change Committee shows pro-nuclear bias
I suppose when you are evaluating the costs of various power sources, you have to interpret the data, but the Committee on Climate Change has interpreted it in a pro-nuclear direction. The Committee says that nuclear power is the cheapest low carbon option, even cheaper than onshore wind. Well, in that case how come,in the USA, that nuclear power gets both the same tax credit subsidies as wind power, but gets in addition loan guarantees from the Federal Government? How can nuclear be said to be cheaper than wind power under this set of circumstances when it requires much bigger state support than wind power?. Please Committee on Climate Change, explain this paradox to us.
The fact is that the Committee on Climate Change gloss over the fact that nuclear power would not get financed by pension funds and banks without some sort of guarantee that the loans and equity returns will be repaid. That is the only way that nuclear power stations in the West, currently only four power stations in the US (2), Finland (1), France (1), are being built. So how much is the Committee on Climate Change's calculations worth?
Judge for yourself.
One wonders how the Government is going to hide the need to give guarantees for nuclear loan repayments. Probably by being in as much denial and using as much smoke and mirrors as it is using to hide the nuclear power subsidies it is already planning as part of the electricity market reforms it published last December. It will be interesting to see how they do it - and hide the fact that nuclear will get financial guarantees denied to renewable energy sources.
For some further comments of mine on this subject, see the current issue of Renewable Energy Focus, pages 4-6: http://e-ditionsbyfry.com/ActiveMagazine/welcome/rrf/rrf110501130727.asp
Please also see my account of the electricity market reform proposals which was carried in the previous issue of Renewable Energy Focus, pages 24-26:
http://e-ditionsbyfry.com/ActiveMagazine/welcome/rrf/rrf110301131626.asp
The fact is that the Committee on Climate Change gloss over the fact that nuclear power would not get financed by pension funds and banks without some sort of guarantee that the loans and equity returns will be repaid. That is the only way that nuclear power stations in the West, currently only four power stations in the US (2), Finland (1), France (1), are being built. So how much is the Committee on Climate Change's calculations worth?
Judge for yourself.
One wonders how the Government is going to hide the need to give guarantees for nuclear loan repayments. Probably by being in as much denial and using as much smoke and mirrors as it is using to hide the nuclear power subsidies it is already planning as part of the electricity market reforms it published last December. It will be interesting to see how they do it - and hide the fact that nuclear will get financial guarantees denied to renewable energy sources.
For some further comments of mine on this subject, see the current issue of Renewable Energy Focus, pages 4-6: http://e-ditionsbyfry.com/ActiveMagazine/welcome/rrf/rrf110501130727.asp
Please also see my account of the electricity market reform proposals which was carried in the previous issue of Renewable Energy Focus, pages 24-26:
http://e-ditionsbyfry.com/ActiveMagazine/welcome/rrf/rrf110301131626.asp
Saturday, 2 April 2011
Are Liberal Democrats turning against nuclear?
Are the Liberal Democrats, led by Nick Clegg, turning against nuclear power? No. Statements recorded by Nick Clegg fearing that nuclear power will be too expensive to be funded by the private sector in a post-Fukushima world seem more likely to be an attempt to throw some verbal sops to anti-nuclear Liberal Democrats who are fighting the local elections. There is no sign that the Electricity Market Reform (ERM), published in December, will be dropped, and that the Government's proposals for secret subsidies to be given to build nuclear power stations will be seriously amended.
The Government has chosen a very obscure and confusing way of cross subsidising nuclear through its 'contract for differences' proposal in the ERM. Nuclear power developments will be given guaranteed premium prices which will be funded by electricity consumers. The obscurity helps to cloak the breach of Tory and Lib Dem election promises not to subsidise nuclear power.
A further smokescreen of proposed increases in carbon taxes is added to attempt to hide the subsidies, The Government, in a further attempt to hide all this says that electricity prices will be a lot higher in ten years time because of its proposals for increases in the carbon floor price. In ten years time, note, not now. How can the Government increase prices in ten years time when it will not do it now? It can't. They will not in ten years time either! But it is all part of a smokescreen to hide the subsidies for nuclear and the fact that the subsidies for renewables are being cut to in order to fund nuclear power.
Added to this, prospective nuclear developers want their investments to be guaranteed by the Government. They will probably achieve some sort of scheme to do this, even though this is a facility that is denied to renewable energy developers, such as offshore wind companies, who could very much do with such guarantees to reduce their costs. Whether we shall hear about this is another matter. Democratic consultation is being suspended for nuclear energy issues to enable the people who know better to make the choices that the ordinary people are not clever enough to make. Questions will be deflected on the grounds of 'commercial
confidentiality'. All in keeping with the Liberal Democrat manifesto, of course.
The Government has chosen a very obscure and confusing way of cross subsidising nuclear through its 'contract for differences' proposal in the ERM. Nuclear power developments will be given guaranteed premium prices which will be funded by electricity consumers. The obscurity helps to cloak the breach of Tory and Lib Dem election promises not to subsidise nuclear power.
A further smokescreen of proposed increases in carbon taxes is added to attempt to hide the subsidies, The Government, in a further attempt to hide all this says that electricity prices will be a lot higher in ten years time because of its proposals for increases in the carbon floor price. In ten years time, note, not now. How can the Government increase prices in ten years time when it will not do it now? It can't. They will not in ten years time either! But it is all part of a smokescreen to hide the subsidies for nuclear and the fact that the subsidies for renewables are being cut to in order to fund nuclear power.
Added to this, prospective nuclear developers want their investments to be guaranteed by the Government. They will probably achieve some sort of scheme to do this, even though this is a facility that is denied to renewable energy developers, such as offshore wind companies, who could very much do with such guarantees to reduce their costs. Whether we shall hear about this is another matter. Democratic consultation is being suspended for nuclear energy issues to enable the people who know better to make the choices that the ordinary people are not clever enough to make. Questions will be deflected on the grounds of 'commercial
confidentiality'. All in keeping with the Liberal Democrat manifesto, of course.
Monday, 14 March 2011
Renewable energy is more reliable than nuclear
Far from nuclear power being reliable and renewable supplies being unreliable, the facts suggest the exact opposite. We can forecast production from wind turbines or solar farms hours in advance, but you cannot predict the sudden breakdowns in nuclear power plant. You don't need to look at the Fukushima crisis to understand that - just look at the UK where Sizewell B, the most modern British nuclear power station, went offline in May 26th 2008 leading to widespread blackouts across parts of the UK. This sort of incident is much more dangerous to the task of keeping the lights on than anything reneweable energy will throw up. The sheer size of these nuclear power plants and their inherent instability is a major threat to the continuity of the electricity supply system. - That is before you even consider the safety issues.
We can cope with variable production from renewables with a variety of hi-tech, low cost, measures - and minimise the need for extra 'back up'gas power stations. These hi-tech measures include demand side management techniques which involve shaving off the peaks in peak demand (using price signals to shift demand from one period to the next), building more interconnectors to shift power around Europe and gain the benefit of systems such as storage offered by Norweigian hydro, and in the future using 'extended range' electric cars to manage the variability of renewable supplies. See previous blog about electric cars - you can shift between petrol and electricity modes in these vehicles according to the variability in renewable production using computerised price signals - the same principle which applies to demand management using smart grids and giving the National Grid more incentives to use demand management techniques.
Is the Government going to adopt these hi-tech measures in its 'electricity market reform' (EMR)? Of course not! The aim of the EMR is to cut back the renewables programme and shift the incentives to nuclear power. Far from incentives being given to encourage demand side management or energy efficiency in the electricity system, bungs will be offered to the electricity companies to build more power plant. In fact there's more than enough gas power stations coming on line to provide loads of 'back up' already. The only reason you might need all of this plant is to provide emergency supplies when nuclear power stations break down unexpectedly!
We can cope with variable production from renewables with a variety of hi-tech, low cost, measures - and minimise the need for extra 'back up'gas power stations. These hi-tech measures include demand side management techniques which involve shaving off the peaks in peak demand (using price signals to shift demand from one period to the next), building more interconnectors to shift power around Europe and gain the benefit of systems such as storage offered by Norweigian hydro, and in the future using 'extended range' electric cars to manage the variability of renewable supplies. See previous blog about electric cars - you can shift between petrol and electricity modes in these vehicles according to the variability in renewable production using computerised price signals - the same principle which applies to demand management using smart grids and giving the National Grid more incentives to use demand management techniques.
Is the Government going to adopt these hi-tech measures in its 'electricity market reform' (EMR)? Of course not! The aim of the EMR is to cut back the renewables programme and shift the incentives to nuclear power. Far from incentives being given to encourage demand side management or energy efficiency in the electricity system, bungs will be offered to the electricity companies to build more power plant. In fact there's more than enough gas power stations coming on line to provide loads of 'back up' already. The only reason you might need all of this plant is to provide emergency supplies when nuclear power stations break down unexpectedly!
Sunday, 13 March 2011
Oil price hike - it's not just Libya
Commentators have fixed on Libya as the explanation for the latest oil price spike - but this is a trigger, not the cause of a crisis that will only be (temporarily) relieved by a slowdown in world economic growth. The underlying cause is simply that expansion in oil supply activities is unable to keep pace with the expansion in demand for oil.
The discussion about 'peak oil' probably oversimplifies what has been a rather more subtle trend since the 1970s that expansion of supply of oil has increasingly been unable to keep pace with demand. The oil crises of the 1970s were initially resolved by world economic recessions, especially at the beginning of the 1980s, but then the oil supply issues were ameliorated by technological shifts away from using oil as a fuel source. Countries around the world stopped using oil in electricity generation, less oil was used in industry and less oil was used for heating. This technological shift gave the world the false impression that there were no more oil supply pressures. Oil prices fell, and also fuel efficiency of vehicles, which had risen during the 1970s and early 1980s, fell once again.
The problem the world faces now is that demand for oil use in transport, especially motor vehicles, has continued to surge, with there being no expected barrier to this continued expansion - that is short of considerable oil price increases which choke off demand and induce people to buy more energy efficiency motor vehicles. This is the underlying problem - Middle Eastern political crises are triggers that make a chronic problem into a crisis. The point is that this present oil price spike would have happened anyway, perhaps in one or two years' time, regarded of political developments in the Middle East.
The problem that the world has now is that the market will not deliver the required technological shift away from oil use in transport any time soon. The market response is to induce purchase of more energy efficient vehicles, but only so long as oil prices remain very high with an ever-present danger of oil price spikes which lead to recessionary consequences. In this situation there is no such thing as 'sustainable' economic growth in any sense of usage of these terms. Indeed, the economic outlook for the coming period is bleak in that a world economic slowdown seems inevitable. Then only way this oil crisis will be resolved is likely to be by economic recession.
Of course Governments could do more interventionist action - although it seems for many US Republicans you probably have as much chance of persuading them that Karl Marx was not such a bad guy after all as to convince them of the necessity of immediate tight restrictions on motor vehicle fuel efficiency. The US actually did some of this in the 1970s with 'Corporate Average Fuel Economy' (CAFE) regulations - but things have moved on since those days when regulatory action by the state was not regarded as being quite so much the work of the Devil as it is viewed today.
In fact even such action will not be enough on its own. We need a shift towards electric cars. The state could help shift this in the right direction by incentivising so-called 'extended range' engines. These use a small petrol (gas) engine to power an electric motor with a small battery that can be used for small range travel and topping up the engine. These fit well into an electricity system powered by variable (renewable) electricity sources. These energy sources will never run out, unlike fossil fuels and nuclear power.
The discussion about 'peak oil' probably oversimplifies what has been a rather more subtle trend since the 1970s that expansion of supply of oil has increasingly been unable to keep pace with demand. The oil crises of the 1970s were initially resolved by world economic recessions, especially at the beginning of the 1980s, but then the oil supply issues were ameliorated by technological shifts away from using oil as a fuel source. Countries around the world stopped using oil in electricity generation, less oil was used in industry and less oil was used for heating. This technological shift gave the world the false impression that there were no more oil supply pressures. Oil prices fell, and also fuel efficiency of vehicles, which had risen during the 1970s and early 1980s, fell once again.
The problem the world faces now is that demand for oil use in transport, especially motor vehicles, has continued to surge, with there being no expected barrier to this continued expansion - that is short of considerable oil price increases which choke off demand and induce people to buy more energy efficiency motor vehicles. This is the underlying problem - Middle Eastern political crises are triggers that make a chronic problem into a crisis. The point is that this present oil price spike would have happened anyway, perhaps in one or two years' time, regarded of political developments in the Middle East.
The problem that the world has now is that the market will not deliver the required technological shift away from oil use in transport any time soon. The market response is to induce purchase of more energy efficient vehicles, but only so long as oil prices remain very high with an ever-present danger of oil price spikes which lead to recessionary consequences. In this situation there is no such thing as 'sustainable' economic growth in any sense of usage of these terms. Indeed, the economic outlook for the coming period is bleak in that a world economic slowdown seems inevitable. Then only way this oil crisis will be resolved is likely to be by economic recession.
Of course Governments could do more interventionist action - although it seems for many US Republicans you probably have as much chance of persuading them that Karl Marx was not such a bad guy after all as to convince them of the necessity of immediate tight restrictions on motor vehicle fuel efficiency. The US actually did some of this in the 1970s with 'Corporate Average Fuel Economy' (CAFE) regulations - but things have moved on since those days when regulatory action by the state was not regarded as being quite so much the work of the Devil as it is viewed today.
In fact even such action will not be enough on its own. We need a shift towards electric cars. The state could help shift this in the right direction by incentivising so-called 'extended range' engines. These use a small petrol (gas) engine to power an electric motor with a small battery that can be used for small range travel and topping up the engine. These fit well into an electricity system powered by variable (renewable) electricity sources. These energy sources will never run out, unlike fossil fuels and nuclear power.
Wednesday, 2 March 2011
New book on the politics of renewable energy published
Ecological Modernisation and Renewable Energy, published by Palgrave this month, discusses the emergence and development of the new renewable energy industry. David Toke reinvigorates ecological modernisation (EM), a key theory of environmental development. Renewable energy was developed from the grass roots into an industry that is challenging the position of conventional fuel sources by maintaining a distinct identity which attracts popular support. Toke analyses this 'identity EM' and highlights the continuing role of alliances between the renewable industries and environmental NGOs. The politics of technological identity are explored in several case studies which include studies of California in the 1970s and 1980s and the USA since the 1990s. Other countries discussed include Denmark, Germany, Spain, UK, Australia and China. Examination of what policies are needed to promote renewable energy is carried out through analysis of institutions, interest and discourse to cut through stereotyped debates about whether 'market based' or 'command and control' strategies are better.
In its concluding section the book also contains a critique of David Mackay's work, in particular for MacKay's numerical treatment which appears to reduce the importance of renewables compared to other ways of interpreting the statistics. Toke questions MacKay's wisdom of relying on a strategy which is heavily reliant on development of nuclear power.
See entry on Palgrave website: http://www.palgrave.com/products/title.aspx?pid=327250
In its concluding section the book also contains a critique of David Mackay's work, in particular for MacKay's numerical treatment which appears to reduce the importance of renewables compared to other ways of interpreting the statistics. Toke questions MacKay's wisdom of relying on a strategy which is heavily reliant on development of nuclear power.
See entry on Palgrave website: http://www.palgrave.com/products/title.aspx?pid=327250
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