Why another EU referendum is becoming inevitable

The Conservative Party led us into the EU Referendum in the expectation that one way or another, the issue of EU membership would be resolved. It hasn't been. The exercise has been a disaster and now the only two plausible scenarios that seem to hold at the moment is that either the UK will leave  the EU in what will be (at best) a continuing fog of uncertainty next March or that the UK's withdrawal will be cancelled.

What is pretty clear to me is that whatever the arguments may be about what we did or did not vote for as an alternative to EU membership, people did not vote either explicitly, or implicitly, for 'no deal'. Yet that is precisely the fate that awaits us at the end of March 2019.

Hence we need a further vote to determine whether the UK wishes to leave the EU without a withdrawal agreement.

The Leave campaign seemed pretty clear upon what it saw as the consequence of leaving when it said: 'It is overwhelmingly in the EU’s - particularly Germany’s - interests to agree a friendly UK-EU free trade deal.'   http://www.voteleavetakecontrol.org/briefing_trade.html


Well, it looks like it's not happening. No doubt many Tories will blame it on the EU, but whatever the cause (after all the UK is the country that wanted to leave), the point is that a central part of the case for Leave has collapsed. The notion of a 'friendly free trade deal' doesn't exist as a practical political proposition , or at least short of major shifts by the parties involved, it seems very unlikely to exist. The Leavers simply didn't base their argument on there being a 'no deal' - what they did do instead was base the argument on there being some sort of free trade (maybe with a lot of pluses) with the EU. The voters have been short-changed. This democratic deficit need to be urgently repaired.

At root the flaw in the Leavers position reflects a fundamental problem with the turn to nationalist-identity politics. They expect the EU to follow the same 'rational' economic logic that the nationalists have decided to ignore in favour of promoting their own sovereign identities.  What this doesn't take into account is the fact that the 'other' (in this case the EU) want to preserve their own identities, a strategic goal which ranks much higher than the prospect of tactical economic losses which are, in any case, relatively much bigger for the UK than the EU. Even states such as Austria, Poland, Hungary, most influenced by the so-called eurosceptic right in fact want to keep the UK in the EU partly because they want the UK as an ally within the EU.  

I cannot think of any plausible scenario whereby Mrs May can now deliver a withdrawal agreement with the EU. Briefly, the available options have been:

A) The 'Chequers' Agreement. The EU will not touch this with a barge-pole as it would threaten the integrity of the EU. It is a fundamental 'identity' issue for the EU that countries cannot 'pick and choose' elements of the customs and/or single market arrangements. The only value of Chequers has been to preserve the Government's notion that they have a plan. Apparently a bad plan is better than no plan!
B) The so-called 'Canada free trade deal'. This may well be acceptable to the EU provided the UK was willing to treat Northern Ireland as a separate customs zone. But this is  a non-starter for two key reasons. First because the DUP would not vote for it, scuppering any Withdrawal Agreement, and second because it is such a pale version of the current economic relationship with the EU that many Conservative MPs would not vote for it either in the Commons.
C) Staying in the EU Customs Area. This is more-or-less the Labour position, and which comes closer to solving the Irish border issue. But this is unacceptable to too many in the Conservative Party, especially as after negotiation it may resolve into the UK also being effectively in the Single Market as well. 
C) No agreement. In practice contingency measures would be put in place by both the UK and the EU so that there would be little, if any, immediate catastrophic impact at the end of March 2019. But after then it would be death by a thousand cuts as the necessary bureaucracy of VAT return forms, standards certification and so on are implemented, all proceeding in a fog of uncertainty which would dramatically reduce the UK's ability to negotiate with anybody about many things and put off anybody who wants to make long term plans about the UK.

If there could be an agreement about Ireland then possibly a Withdrawal Agreement and, maybe, a vague agreement on the future relationship could be signed between the EU and the UK and the details sorted out in the 'transitional' period which lasts until the end of 2020. But the EU, it seems, has had enough of vaguery, especially on the Irish subject.

The Leavers hopes of finding suitable allies inside the EU so that they could divide and conquer has failed miserably. If we treat this as an identity clash then clearly the EU will win and we will lose. Even the Irish (whose economy is now expanding rapidly) will lose much less with 'no deal' than us since only 13 per cent of their exports go to the UK. On the other hand well over 50 per cent of the UK's exports are dependent either on direct trade with the EU or on trade concessions organised through the EU, and which will not be available if we 'crash out' without agreement.

So we need a vote on this reality. A straight referendum choice between the only two clear options available at the moment: 'no deal' or Remain seems the best option, since these are the only certainties available.  The Brextieers for their part, now say that a 'no deal' is 'no problem'. They can say that if they want, but that was not what appeared to be the choice in 2016. Let's now put it to the voters. The Brexiteers have failed to generate a different option that can be implemented in the real world. The rest of us need to get on with life.

Some relevant references:
http://www.legislation.gov.uk/ukpga/2018/16/contents/enacted

https://uk.reuters.com/article/uk-britain-eu-ireland/eu-could-tweak-irish-border-backstop-to-win-britains-approval-lawmaker-idUKKCN1LK25C

https://www.qub.ac.uk/brexit/Brexitfilestore/Filetoupload,812529,en.pdf

https://theconversation.com/backstop-option-for-irish-border-after-brexit-the-difference-between-eu-and-uk-proposals-explained-97963

https://www.accountancyage.com/2018/03/28/uk-exit-eu-vat-regime-january-2022/

https://www.politico.eu/article/theresa-may-caves-in-on-brexiteer-amendments-to-head-off-rebellion/

https://www.irishtimes.com/opinion/a-no-deal-brexit-need-not-be-a-disaster-for-irish-exports-1.3636084

https://www.bbc.co.uk/news/business-43212899

https://www.bbc.co.uk/news/uk-politics-44845933

https://twitter.com/faisalislam/status/1018859164662190080

Labour's green energy plans are the surest sign yet that they are heading for Government

Labour's low cost and practical proposals for expansion of onshore and offshore wind, solar power, energy conservation and increases in renewable heat are the surest sign yet that they are the competent choice for Government. Their proposals need some elaboration in places and some work on detail, but seem to be in a different dimension compared to the Tory Government who seem increasingly certain to be heading for self-destruction on the anvil of Brexit.

Rebecca Long-Bailey is aiming for 85 per cent of electricity to come from low carbon power by 2030. This is an easily achievable target, and will be done at low cost if simultaneously Labour cancels the disaster-in-waiting project at Wylfa, and some way can be found to avoid Hinkley C being built.

As I indicated in a recent post, there's already enough offshore wind in the pipeline to ensure well over 50 per cent of electricity coming from renewables by 2025. See http://realfeed-intariffs.blogspot.com/2018/07/renewables-generated-close-to-30-per-of.html

Labour's plans for boosting offshore wind, onshore wind and solar pv will meet its 85 per cent of low carbon power by 2030, and, in doing so, also accommodate a substantial increase in transport and heating demand provided through electricity.

The Government could revivify the buildings insulation programme, reinstating the programme started by the last Labour Government but short-circuited by the useless and self-defeating so-called 'Green deal'.

Of course the Government will need to engender some much smarter thinking and regulation than is happening at present to integrate the coming expansion of electric cars. But this requires imagination rather than cost increases.

Although some see the target of providing over 40 per cent of heat demand from renewables as being problemmatic, we could go at least along way towards this target in a way that rests heavily on Labour's ideological strength in promoting municipal green socialism. Waiting in the wings is the developing technology in the form of industrial heat pumps. This, like a lot of other green technologies is one that is declining in cost. A Labour Government could empower local authorities to start up local green energy companies who would have a focus on developing community heating networks to be supplied with heating by industrial heat pumps. This technology, already being demonstrated in Denmark, operates by using electricity to turn energy in the air, ground or water into heat. The heat can be stored in hot water tanks so that it can be delivered when needed.

In short, there's still some loose ends in Labour's green energy proposals but the outline is good and getting to look more and more plausible in terms of practical measures.

Plans for breakthrough wave power device to be unveiled in Aberdeen this week

Hot on the heels of the opening of the new offshore windfarm in Aberdeen, cutting edge renewable energy activity continues at a meeting at the University of Aberdeen this Thursday, 13th September.

As the promotion says on the Aberdeen Renewable Group diary says:

The University of Aberdeen is set to host a speaker meeting with Per Resen Steenstrup from Resen Waves, the wave energy engineering firm. The event, which will be held at the University’s Old Aberdeen campus in Room KCS15 on Thursday September 13th at 4pm, will give delegates the opportunity to hear about some of the challenges facing the wave industry. Resen will also showcase its innovative Wave Power Buoy which could replace conventional diesel generators in the oil and gas and renewables industries. If you are interested in attending the event, please contact Dr David Toke at d.toke@abdn.ac.uk

This is an exciting new  'bottom-up' approach to wave power. You can read more about this on a previous blog post at:
http://realfeed-intariffs.blogspot.com/2018/06/wave-power-new-bottom-up-development.html

I hope to see you at the meeting!

Why rooftop solar pv will be failed by the Government's so called market based approach

It's rubbish for anybody to claim that rooftop solar pv arrays  will be given a decent reward for the sale of electricity that they send onto to electricity distribution system through the competition existing, or likely to exist, on electricity markets.

Yet that would appear to be the direction in which the Government are heading, under an argument that the market will reward the small generators for the power they supply - Under the feed-in tariff regime small generators have been guaranteed around £35 per MWh for this 'excess' generation - on top of the feed-in tariff payments for all of the generation. But. it seems, this guarantee is  to be removed.

Feed-in tariffs are over for new schemes, and, so, barring a successful pushback by the solar lobby - will be guaranteed payments for excess (to home consumption) sent to the grid.

As the Government gets down to considering the response to its consultation about arrangements to follow its ending of feed-in tariffs for solar pv and other renewables, we need to call out the so-called market competition nonsense rolled out by the Government to justify its apparent wish to end all guaranteed payments for excess power sold to the grid.

For a start even £35 per MWh is a low price compared to the £45 per MWh or more that we have seen in recent times as the price of power on the wholesale power trading market. Even accounting for the costs of the variability of solar power this remains the case as the cost of such intermittency for the system is estimated to be less than £5 per MWh even in (hopefully) in the future when there is a dramatic expansion of solar pv. See the analysis at http://www.solar-trade.org.uk/wp-content/uploads/2016/10/Intermittency-and-the-cost-of-integrating-solar-Aurora-Energy-Research-September-2016.pdf

Under the way the grid is organised generation onto the grid by solar pv is counted as reduced consumption and worth nothing on power markets. Only if there is an arrangement whereby it is metered or 'deemed' - and then for the generation to be given the status of a tradeable commodity (which it would have to be if any electricity supplier could make money out of it) would the exported solar generation have market value.

 But even if electricity  suppliers could trade electricity generated by rooftop solar pv panels, there is no reason to think that they will give small solar pv generators much (if anything at all) for it. That's because the solar pv producer is also beholden to the electricity supplier's tariffs.

 It might just happen that an electricity supplier (let's call them 'Green Energy') might offer a tariff for solar pv exports, but the solar pv generator will also be an electricity consumer. It will be very difficult to tell whether the tariff that they are put on for their electricity consumption (when they are not using the solar pv generation) is inflated so that the suppliers claws back any money they get paid for their own generation.

Quite possibly, even if electricity suppliers claim to be green by offering tariffs to solar generators to sell electricity to the grid, the home-based solar pv owners will probably have no clear way of knowing whether they are actually getting paid much for that power - That is because the electricity supplier may well in effect charge the solar pv generator a higher bill for the privilege of being given the impression that they are being paid for the power they sell to the grid. The rules simply favour the electricity suppliers. If they can, the electricity suppliers will use a bit of greenwash to get the generation for free - and the system is opaque enough for them easily to do this.

The electricity suppliers won't pay out to anybody unless they have to. They don't have to in this case, so they won't.

The competitivity of the market depends on the rules, and their transparency, and there is little chance of the rules being effective in giving solar pv payments for their exports that reward their value to the electricity system - that's because the rules are designed for the big players, not the little ones. That wouldn't matter much if it wasn't for the principle - which the Government is supposed to buy into - that clean energy should be favoured - or at least be given an even break under the rules.

Hence the only way of giving solar pv generators a reward that reflects their value to the market is for the Government to continue the current system whereby solar pv generators are guaranteed a payment for power sent to the grid. That is the system employed by other Western states to reward solar pv generators.

Now the official consultation on this subject has (just) closed, the best way to argue on this subject is to write to your MP about it asking for a reasonable guaranteed sum to be paid for energy generated by rooftop pv producers

New nuclear plan means that consumers will foot bill for unlimited spending by nuclear contractors

So finally the Government has, after I feared so long it would, chosen the doomsday option to fund new nuclear power stations - one that will be disastrous for the consumers and taxpayers. After years of swearing that they would not offer subsidies to nuclear power, and saying that in the future the terrible drain of (historical) over-spending on nuclear power would stop, the Government has gone back to square zero. Essentially, under the Government's proposals for so-called 'Regulated Asset Base' (RAB) of funding nuclear power (described in a recent article in 'Unearthed', a Greenpeace publication), the nuclear developers will have no real limit on what they can spend to build the power stations. It is a recipe for national disaster.

No private developer is willing to take the construction risks of funding nuclear power in the UK, whatever 'strike price' is offered for the electricity that might be generated in future. Doesn't that tell you something? So EDF stepped up to the mark. EDF, the French state-owned company, may be starting the real part of the construction of Hinkley C in 2019/2020. The French state will pay for the inevitable cost overruns that come along with building the plant, combined quite probably, with an out-of-contract bailout by the British Government when the going gets tough.

But now the Government is casting around for another nuclear power plant to be built, - Wylfa or Sizewell C - but neither developer (Hitachi or now EDF) wants to take the risk of paying the almost inevitable losses on the project.

So enter the Government's new proposals which will no doubt be promoted as a simple accountancy trick to lower costs, but hide the fact that the state will take the losses, to be divided up between us as taxpayers (loss of guaranteed loans and construction risk guarantees) and electricity consumers (advance payments on top of electricity bills). And, note this, whatever ministers may say, the exposure by taxpayers and consumers in UNLIMITED.

Under the RAB arrangements electricity consumers will start paying extra on their bills from when construction starts, which could be anything from 7-10+ years ahead of any energy being generated.

This system has a lot of similarities with what has happened in South Carolina and Georgia where  nuclear power plant (around 2.2GWe each case) began construction in 2009 and have been subject to mounting delays and problems - so much so that in South Carolina the project was cancelled, part built. But consumers in South Carolina have been paying around $250 a year on average for the nuclear power plant. In Georgia consumers are paying around $100 a year.

Now remember, this is without a single KWh of electricity being generated.

In Georgia the project to build two reactors has only been saved because the Federal Government has agreed to lend $12 billion in loans to the project to build two 1100 MW reactors.

This looks like the shape of things to come in the UK.

Now how much renewable energy could you get online from the sort of spending the Government will end up ploughing in to the nuclear black hole for one nuclear scheme? Probably enough to supply most of UK electricity with plenty of any back up needed thrown in!

The recent Greenpeace research was well done - I must add however that I remember commenting to Doug Parr (of Greenpeace) several years ago that consumers could end up with a system like in the USA where consumers where locked into paying for the nuclear build in advance. The end result will very likely be the debacle we are witnessing in the USA right now! - Or, perhaps, what has happened at Sellafield with decommissioning contracts organised on a cost-plus basis. What's to stop people just chalking up whatever bills for the work they like? Well, under the RAB/cost plus system, not very much!

References

https://unearthed.greenpeace.org/2018/08/06/new-nuclear-plants-funding-regulated-asset-base/

http://www.governing.com/topics/transportation-infrastructure/gov-south-carolina-nuclear-reactors.html

https://www.myajc.com/business/georgia-power-customers-pay-139-million-less-toward-vogtle/jVuUQgzxG7EAyYvXf17DTM/

https://core.ac.uk/download/pdf/111605945.pdf

New report: How Scotland’s new energy company could revive renewable energy in Scotland

New report:  How Scotland’s new energy company could revive renewable energy in Scotland

In a new report published by Nuclear Free Local Authorities, Dr David Toke of the University of Aberdeen argues that the best business strategy for the Scottish Government’s proposed Energy Company will be to enable new renewable energy schemes to be established. To do this, the Scottish Government needs to offer long term guarantees of minimum electricity prices for electricity from new renewable energy schemes.

Dr Toke said “The Scottish Government has a great opportunity to become the UK leader in the supply of green energy. It can achieve this if its proposed Energy Company is able to offer long term power purchase agreements for new onshore wind and solar projects. But if the SG’s new Energy Company relies on the common practice of electricity companies of sourcing renewable energy from projects that have already been established on the back of Westminster based incentives then it will fail to impress – and also miss out on a great opportunity to steal a march on its energy supply competitors. The Scottish Government needs to offer guaranteed long term pries for electricity generated from new renewable energy schemes”

Executive summary

The Scottish Government’s commitment to start an energy company could re-energise renewable energy in Scotland and deliver electricity at competitive prices for the consumer. The key objective for a new Scottish Energy Company (SEC) must be, in marketing terms, to demonstrate how it can offer a superior product compared to its competitors at a price that is no higher than that offered by its competitors. The SEC could out-sell rival competitors by giving long term power purchase agreements to new renewable energy schemes. This will achieve a ‘quality’ selling point that will be unmatched by other electricity suppliers. Although various electricity suppliers boast that their supplies come from renewable energy, usually they only offer PPAs to renewable energy schemes that have been given support on Westminster incentive schemes, the Renewables Obligation and feed-in tariff - and which thus already exist.  The Energy Company initiative should be backed by activities of the Scottish National Investment Bank to offer loans to new renewable energy projects. There are a number of potential renewable energy projects that can be implemented for prices at or below recent levels in wholesale power prices meaning that the Scottish Energy Company could give PPAs to such companies and deliver electricity to consumers at the same or lower prices than other electricity suppliers.

A copy of the report can be accessed at http://www.nuclearpolicy.info/briefings/nfla-policy-briefing-177-how-scotlands-new-energy-company-could-revive-renewable-energy-in-scotland/

For some coverage see 
http://www.thenational.scot/news/16389541.expert-backs-plan-for-publicly-owned-scottish-energy-company/
and:

https://www.energyvoice.com/other-news/178109/scottish-publicly-owned-energy-firm-could-bring-cheaper-bills-expert-claims/

Renewables generated close to 30 per of UK electricity in 2017: set to top 50 per cent by 2025

Today's UK energy statistics reveal that renewable electricity generation increased by around 20 per cent in just one year so that 29.3 per cent of electricity consumed came from renewable energy in 2017. If at least 80 per cent of the offshore windfarms now in different stages of planning (let alone other renewable energy sources) come online, as could be expected, in the next 7 years, then renewable energy will comprise half of total UK electricity generation by 2025.

In 2017 renewable energy's proportion of electricity consumed increased from 24.5 per cent in 2016 to 29.3 per cent in 2017. Making up the 29.3 per cent figure around 15 per cent came from wind power, 4 per cent from solar pv, 2 per cent from natural flow hydro and 8 per cent from various biomass sources. All other major categories fell, with natural gas supplying around 40 per cent, nuclear 21 per cent, and coal just 7 per cent.

As if the massive and continuing increase of renewable electricity (up from around 3 per cent in the year 2000) wasn't enough of a slap in the face for the industrial establishment's earlier sneering at green energy projections, electricity consumption fell once again in the year 2017 compared to 2016. Electricity consumption is now 9 per cent less than it was in 2010.

Meanwhile over 20 GWe of offshore wind are in various stages of planning and construction. In total these would generate around 25 per cent of UK electricity. Since the Government are saying they will hold auctions for offshore wind and some other renewables in 2019 and 2021 this means that a lot of them will be built by 2025. Of course we are going to have substantially more onshore wind and solar by 2025 to buttress these figures (although the Government are doing very little to help) meaning that electricity generated from renewable energy will top 50 per cent of total consumption in 2025/6.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/729379/Ch5.pdf