Sunday, 1 October 2017

How the Scottish Government could implement a 'subsidy free' scheme for community renewables


The Scottish Government (SG) should open discussions to establish a mechanism to enable ‘subsidy free’ community renewable  schemes. It is great news to see a decline in costs of offshore wind schemes, but as good as they are, they are not involving ordinary people. Community renewable schemes, using a definition given to me by Jon Halle of sharenergy are:

'Community renewable schemes are majority-owned and run by members of the public, including both people local to the scheme and supporters from further afield. They are open and democratically controlled, ensuring wide popular ownership of the energy system and maximising the sharing of both benefits and responsibility.'

This could apply to wind power, solar pv or micro-hydro. A 'subsidy free' scheme should be done on a pilot scheme basis to begin with.

Because of the decline in wind and solar power costs it seems likely that some renewable energy  projects in Scotland could be established assuming current levels of power prices that generators can receive on wholesale power markets. The projects would  certainly count as ‘subsidy free’. But they need long term assurances about income streams, something that the Scottish Government could provide at minimal risk to the public purse.

 A scheme could be established by the SG to set up a back-up loan facility to give ‘top-up’ payments for community renewable generators. This could  ensure that the generators received at least the income that they would do if wholesale power prices were at the current level of, say, £45 per MWh. Any loans paid would be paid back when power prices rose above the £45 per MWh level. This arrangement could be guaranteed for 20 years and could be enshrined in agreements issued by the SG to specific schemes. This would give schemes long term financial confidence that could allow them to raise money from banks and investors.
A pilot basis would consist of the scheme being restricted, for an initial proving phase, of no more than 100 MW of capacity.

A recent auction for community wind power projects in Germany saw the projects winning long term power purchase agreements for under £40 per MWh, and this is in a country with much lower windspeeds than are available in Scotland. See https://www.bloomberg.com/news/articles/2017-08-15/german-onshore-wind-power-costs-plummet-in-second-auction
The Clayhill solar pv scheme  has recently opened on a ‘subsidy free’ basis, and this is helped by being able to earn payments for electricity system services by co-locating the solar farm with batteries. See https://www.solarpowerportal.co.uk/blogs/inside_clay_hill_the_uks_first_subsidy_free_solar_farm

ARUP has published an analysis of market possibilities for ‘subsidy-free’ wind power suggested that schemes costing less than £50-£55 per MWh (in 2012 prices) would count as ‘subsidy free’. file:///C:/Users/Toke/Downloads/Enabling%20Investment%20in%20Established%20Low%20Carbon%20Electricity%20Generation%20(2).pdf

While the Westminster Government is reluctant to offer sufficiently good financial conditions to promote the development of much onshore wind, and solar pv, Scotland is in a good position to continue take a lead in promoting community renewable. Although £45 per MWh is not a large amount of money, it does at least ensure that the scheme is ‘subsidy-free’ and means that the Scottish Government, which does not have the power to levy charges on electricity bills (unlike Westminster), will not suffer large financial losses.

There are some harbingers that suggest that average wholesale electricity prices will rise in future years. These prices are dominated by natural gas prices. The UK is able to access a declining proportion of its gas from cheap British sources. The balance cones increasingly from Dutch and Norwegian fields, yet both sets of supplies appear to have peaked already and there is every indication that they may decline. This will leave the UK increasingly dependent on supplies of LNG from Qatar and other sources which are much more expensive than those from the North Sea or The Netherlands.

Brief financial risk analysis

Let us assume that the scheme was limited to 100 MW in order to demonstrate test the concept, and that this 100 MW consisted of wind power projects.  Even if the long term income available from power markets  was £10 per MWh less than the level of £45 per MWh that the SG would guarantee paid to  wind power generators (eg £35 per MWh compared to £45 per MWh) then the annual ‘loss’ payable by the Government would be less than £3 million (under this pilot scheme). Recently the wholesale power price has been around the £45 per MWh level. Of course if the average income stream is higher than a ‘strike price’ of eg £45 per MWh then there would be a surplus of income.


Tuesday, 26 September 2017

Trust the Greens, not Labour, with renewable energy

John McDonell's speech to the Labour Conference came out with a lot of green sounding rhetoric on renewable energy but the commitments are vague and potentially fatally undermined by what could well end up as a commitment to centralised re-nationalisation of parts of the energy system.
Now I'm all in favour of the community owning our energy system provided it is local people - city councils, cooperatives, local not for profit companies, but not centralised monopoly nationalised industries. These aren't things that are controlled by the public or the Government, on the contrary they control the Government. This can be seen most graphically in the case of EDF, about which I talked in an earlier blog post:

http://realfeed-intariffs.blogspot.co.uk/2015/08/why-edf-is-good-example-of-why-we-dont.html

Really, one should not trust Labour's commitments, as vague as they are, as far as you can understand them, which isn't very far. I read John McDonnell's speech and the only renewable energy source mentioned was a tidal lagoon plant in Swansea. What about wind power or solar power? No mention - but, wait for it, whilst Jeremy Corbyn was busy saying he would cancel Hinkley C (really?), his junior energy spokesperson was busy telling people they would support a different nuclear project at Moorside.

Rebecca Long-Bailey interpreted the manifesto commitments on energy as consisting of ensuing 'that 60% of our energy comes from low carbon or renewable sources by 2030. To support projects like Swansea tidal lagoon and Moorside nuclear plant.' See http://press.labour.org.uk/

Oh I see, so renewable and low carbon involves nuclear power and a tidal lagoon scheme. Very clear.
Would Moorside be a better project than HinkleyC? No, it wouldn't. All proposals for new nuclear power faces the same crippling costs to reach modern safety standards. A terrible problem with a Labour Government is that its commitment to centralised public ownership could mean, in practice, a blank cheque to be given to nuclear developers who will gobble up lots of money that could otherwise be spent on solar and wind power. We would be left with never-ending nuclear building sites and little renewable energy.

The problem with Labour,  is that they can never stray far from their dinosaur pretensions kept alive (in their minds) by the GMB and others. That's what you'll get with their centralised visions of state ownership.

By contrast the green movement stands for decentralised, people's control of energy which will be thoroughly renewable, not nuclear. You can trust the greens to support that consistently, but not Labour.


Friday, 25 August 2017

Four plausible reasons why driverless cars might not be very green

Now, I'm not taking up an ideological position on this, and it may indeed prove to be the case that driverless cars end up reducing pollution by large amounts. But I feel that it is also plausible that we are going to end up being driven by a lot hype into a rather ungreen future or, more mundanely, into accepting a piece of 'modernisation' that makes little difference to pollution outcomes.

Now of course electric vehicles are to me something that represents a great gain, especially as electricity systems move more and more to be based on low carbon energy sources given the increase in renewable energy use. Of course also we need also to plan our environment so that other modes, especially walking, cycling and also buses and trains are given greater priority. We know (or at least I am sure) that these things will reduce pollution and improve quality of life.

But driverless cars and the sort of systems that they will involve are very unknown quantities. In many ways by comparison substituting electric for petroleum based vehicles is a fairly modest change in systems, give or take some changes in fuelling structure (which could have great benefits for balancing renewable electricity with demand). But driverless cars represent a completely new system. This brings me to four potential problems.

First, we do not know how how driverless cars will alter demand for road travel. What is there about a driverless system that would encourage people to travel less by car? Not much as far as I can see. Indeed, 'packages' sold to consumers might offer lower prices for using particular company offerings of ride contracts for driverless cars if they sign up to travel at least x000 miles a year which might actually encourage people to travel more. Alternatively why won't people simply buy their own driverless cars and carry on travelling as usual? After all a lot of people gain their identities form their cars! It will be necessary to offer them an incentive, that is to make things cheaper, and this may mean they will travel more.

Not having a driver of course cuts costs to (driverless) car/taxi companies, but that still doesn't eliminate the costs of buying, servicing and maintaining the cars in the first place. Getting a driverless uber is still going to be very pricey compared to the fuel cost (or marginal cost) of taking that trip in your own car.

Now I'm guessing here. I could be wrong, and miss out something important. I don't know. But what is the point is that the people who are being (no doubt with good intentions) optimistic about the green-ness of driverless cars do not know much more than I do about how this entirely new system is going to work out and interact with consumer demand for travelling by motorised vehicle, driverless or otherwise.

A second factor is that we should be very wary of the modernisation-bandwagon effect. We are witnessing a process whereby this paradigm shift to driverless cars is being dressed up as an inevitable part of modernisation, and its benefits seem to be in a process of being elided with electrification, which, as I have said, is not the same thing necessarily at all. The danger here is that planning systems are given over to this new, 'inevitable march of modernisation' and other important considerations cast aside. This has happened before with urban planning, with everything from road design to high rise flats, to bad effect.

A third factor is that claims made about driverless cars is that they will be used more efficiently than individually owned electric cars. These gains may actually prove to be pretty marginal gains or even non-existent. A problem with new technological systems is that before the practical engineering and socio-technical ramifications become clear the technologies are presented in a utopian fashion (remind you of anything?). Even now we can see some slightly heroic assumptions being made about how cars are going to be made use of all of the time. This on its own may have the perverse consequence of incentivising the companies who own them to encourage people to travel more than they do now. I hear that driverless cars will be much more efficient at braking and using gears etc. Maybe, but I suspect that conventional electric driven cars are being and will be adapted to incorporate at least some of these gains.

A fourth factor is. well, the unknown unknowns. Former US Defense Secretary Donald Rumsfeld famously made the point that there are three types of risk: the risks which can be calculated; the risks that cannot be calculated, and the risks which we don't know about at all (unknown unknowns). In fact he was popularising a economist called Frank Knight who wrote about this in the 1920s as he was discussing the difference between risk and uncertainty. We know about the risks of electric cars and where the uncertainties lie. Or at least we have a much better idea than with driverless cars. But we don't know the unknowns that will almost certainly jump out to bite us in the case of driverless cars. Whether these are minor irritating gremlins, or big monster ones, we don't yet know.

 But the point is that there are all sorts of unknowns which really seriously undermine the now widely (and unreasonably) accepted claim that driverless cars necessarily represent a major green leap forward.



Thursday, 17 August 2017

UK offshore wind prices predicted to fall to 25 per cent less than Hinkley C - but it could still be done much cheaper!


Offshore wind prices are plunging fast. A leading wind expert says that the next round of UK contracts awarded (next January) for offshore wind projects will undercut the price given to Hinkley C by around 25 per cent. Not only this but the contract length will be only 15 years for the offshore wind projects compared to the 35 years for Hinkley C.  In Germany, meanwhile, the latest round of contracts for onshore wind are being issued at under £40 per MWh, a great deal less than anything a British gas fired power station could set up for. The last Danish offshore wind project at Kriegers Flak was awarded a contract last December for under £44 per MWh (no more than £55 per MWh after taking into account grid connection costs).

Gordon Edge, who served for over a decade as RenewableUK Policy Officer but who now runs an independent consultancy, is predicting that the 'strike price' awarded to offshore wind projects will fall to around £70 per MWh. Not only this, but Edge believes that over 3GW of offshore wind contracts could be issued to fit in with the Government's 'budget' for spending on power from new offshore wind projects. These prices are, however, calculated in 2012 prices as is done with the Hinkley C contract which is worth £92.50 in 2012 prices.

This could mean that in this second round of 'CfD' (contract for differences) allocation (the first was in early 2015) all of the 3GW+ of offshore wind contracts could be in place by 2022/3. This would generate over 4 per cent of UK electricity supply, possibly as much as close to 5 per cent.

Offshore wind contract prices have been plunging at a rapid rate in recent years, as can be seen from the second page graph on the KPMG report at https://home.kpmg.com/content/dam/kpmg/uk/pdf/2016/11/second-cfd-allocation-round.pdf

In general we are seeing a step change in declines in cost of wind power as 'capacity factors' (the average amount of time that a given generation capacity is operating) are rapidly heading upwards. Larger wind turbines with much increased 'swept areas' at greater heights are being deployed which can capture much more energy for a given wind speed per capacity installed. In the case of offshore wind costs are also declining because larger turbines reduce the large costs of installing each turbine, along with other factors such as greater experience in electrical connections and in financing offshore wind which reduces 'risk' and therefore cost.

Bernard Chabot, a wind economist predicts that this process will continue with wind power capacity factors climbing to 60 per cent.

Yet, the UK Government's own method of procuring offshore wind has become the least competitive and most expensive procedure in Europe. Gordon Edge's analysis reveals that in effect there are only three competitors in the race to pick up contracts under the current CfD round.

Competition is limited to a few companies that were granted leases some years ago, with no new leases being issued for several years now. And even in these three cases the companies have been saddled with sorting out planning and site investigation details - details which in other European procurement regimes are dealt with by Government agencies.

This 'laissez faire' process (ironically then micro-managed by Whitehall after contracts are issued) has also led to confrontations with RSPB over some Scottish offshore windfarm projects. On top of this the UK Government is setting onerous rules about how and when the projects that gain contracts should be deployed. All of this is in flagrant contrast to the freedom given to EDF to install Hinkley C. As I commented in my last blog post the Government needs to start the process of identifying new offshore wind sites. I commented in my last blog post that an urgent priority for the Government is that they should:

'Identify new sites for offshore wind deployment as well as quickly bringing forward the issue of power purchase agreements to existing projects with planning consent. The Government should take note of how, in Denmark, the uncertainties and thus the costs of offshore wind have been reduced by the Government taking on the task of researching and consulting on specific sites rather than leaving this to the developers. This only adds to costs which may be part of the reason why UK offshore wind costs are higher than costs in the case of Denmark, The Netherlands and Germany.'


Onshore wind prices, if only the Government awarded any contracts, would be likely even lower than the predicted offshore wind prices. Indeed wind power prices are now challenging prices for contracts for gas fired power plant if only they were awarded on the same basis. But the Government is giving backdoor preference to gas fired power plant over wind through the 'capacity mechanism'.

You can read Gordon Edge's analysis at https://www.linkedin.com/pulse/cfd-ar2-prediction-gordon-edge

Incidentally you can see my talk to the 'No to nuclear power, yes to renewables' conference held by CND in June at https://www.youtube.com/watch?v=1hMCbf_c4DY


Other References:

KPMG
















Monday, 14 August 2017

Six ways in which the energy costs review could reduce consumer costs and deliver green energy

The Government's review of energy costs is obviously a set-up designed to argue against a major emphasis on funding currently commercialised renewables and energy efficiency technologies, so here I critique this viewpoint and suggest some ideas for what a genuinely far-sighted clean energy effort to reduce costs might involve. Ideas which, I suspect, will be comprehensively ignored by the review.

The Government has given its review of energy costs to Dieter Helm whose opinions are hostile to promoting 'current' generation renewables and who is anyway excluded from considering the Hinkley C contract or other issues such as the smart meter roll-out which are pushing up electricity prices.

Last year Dieter Helm argued that:

'new and emerging technologies, rather than international agreements, and the promotion of current generation renewables, will probably bring fossil fuel dominance to a gradual close.  To facilitate decarbonisation, energy policy should be directed at enhancing R&D and next generation renewables, instead of supporting existing ones'. (Helm: The Future of fossil fuels: is it the end http://www.dieterhelm.co.uk/energy/energy/the-future-of-fossil-fuels-is-it-the-end/)

Helm has apparently been oblivious to the fact that the enormous decline in costs that has happened in the case of solar pv and wind power has been driven not by original research (as important as that is) but by the feed-in tariff and other support schemes that have created mass markets in renewable energy technologies. Investment in renewable energy technologies now surpasses combined investment in fossil fuel and nuclear power throughout the world today. (eg see https://www.carbonbrief.org/renewables-growth-breaks-records-again-despite-fall-investment). Even in the UK renewable energy has expanded as a source of electricity from round 3 per cent in 2002 to over 25 per cent in 2015. It is remarkable that some economists can be apparently so oblivious to the fact that technology costs decline as markets for them are expanded.

Helm avoids this fact in favour of his own longstanding antipathy to renewables and he openly favours giving priority to new gas production saying: 'Now the oil and gas is worth more today than tomorrow, and hence it makes sense to maximise production now'

Essentially Dieter Helm seems to want commercial renewables incentives to be curtailed and, in effect, incentives should be largely oriented towards encouraging more natural gas generation. A few crumbs will be doled out to industry to research into 'advanced' renewables. The Paris Agreement is dismissed.

I suspect that, in the energy costs review, there will be little meaningful analysis of the medium to longer term prospect for natural gas prices, which tend towards increasing prices as Norwegian, British and Dutch production declines. This means the UK prices will rise as these countries supplies become further squeezed and prices tend towards the marginal suppliers such as expensive liquified natural gas from Qatar and other places. (see for eg https://www.platts.com/latest-news/natural-gas/london/analysis-doubts-stack-over-norways-gas-export-26390853).

Neither will there be much appreciation of the fact that the costs of renewables such as offshore wind and solar pv have plunged in recent years or that onshore wind has been deployed over the last couple of years through the Renewables Obligation for prices well below the Hinkley C contract (£70-£75 per MWh for onshore wind compared to £100 per MWh for Hinkley C in 2017 prices).

In addition the energy costs review seems likely to be a 'prices' review and not a costs review at all. If it was a genuine costs review it would look at how to reduce consumer bills, not prices, which means looking at how to improve the energy efficiency of the UK's energy system. Hence energy efficiency schemes will no doubt be seen as an addition to costs when in fact they have brought bills down by large amounts, as the Committee on Climate Change has discussed.

So below are six ways that the Government could reduce costs to the consumer, none of which are likely to be recommended by the Helm review.

1. Encourage the French Government to reconsider the Hinkley C project, eg suggest to them that it is not worthwhile putting more French taxpayers money into the project. If Hinkley C is not completed, then this will save UK energy consumers enormous sums of money since they are committed to paying (in 2017 prices) £100 per MWh for 35 years

2. Instead issue power purchase agreements to onshore wind, offshore wind and solar pv for projects in the £60-£80 range, using 15-20 year contracts by the end of which costs of renewables will have fallen further.

3. Abolish stamp duty for houses which incorporate energy efficiency, solar power and storage technologies which involve buildings which can generate more energy than they consume as studied by Swansea University’s Specific Innovation and Knowledge Centre (https://www.solarpowerportal.co.uk/news/solar_and_storage_could_save_homes_600_each_year_new_report_finds?utm_source=rss-feeds&utm_medium=rss&utm_campaign=general)

4. Take the disastrously implemented 'smart energy meter' rollout out of the hands of the electricity suppliers and put it into the hands of the Distribution Network Operators who are now becoming Distribution System Operators.They should use the smart meters as they should be used to ensure that implementation of 'time of use' charging for electricity to match variable renewables with the demand for energy

5. Abolish price competition in the domestic retail sector and replace it with competition between suppliers to supply energy efficiency (eg selling more efficient fridges, washing machines, incentivising different forms of insulation). This will encourage the suppliers to offer services that can reduce bills rather than playing games with contracts for energy prices. Common prices would be set by OFGEM using a tried and tested formula used in the distribution sector. 

6. Identify new sites for offshore wind deployment as well as quickly bringing forward the issue of power purchase agreements to existing projects with planning consent. The Government should take note of how, in Denmark, the uncertainties and thus the costs of offshore wind have been reduced by the Government taking on the task of researching and consulting on specific sites rather than leaving this to the developers. This only adds to costs which may be part of the reason why UK offshore wind costs are higher than costs in the case of Denmark, The Netherlands and Germany. 

You can see my talk on how a renewable energy strategy comes out way ahead of of a nuclear one; to the 'No to nuclear power, yes to renewables' conference held by CND in June at https://www.youtube.com/watch?v=1hMCbf_c4DY


https://www.thetimes.co.uk/edition/business/energy-review-to-ignore-price-caps-profits-and-smart-meters-z2q6pdbd2



https://www.solarpowerportal.co.uk/news/solar_and_storage_could_save_homes_600_each_year_new_report_finds?utm_source=rss-feeds&utm_medium=rss&utm_campaign=general

Thursday, 27 July 2017

How, on current trends, peak demand for electricity is likely to fall in spite of rapid adoption of electric cars

Just as in 2005 the UK was rushed into an ill-judged nuclear programme by scare-stories of imminent power blackouts, we are now being herded into a panic mode by lop-sided projections of future energy demand out of fear of electric vehicles.

EVs are the future of motorised road transportation of course, and I'm sure it will happen quite quickly. But if you work out the figures based on past trends you find out that after re-working the National Grid's recent projections peak demand is actually likely to FALL, not increase.

There is always a supply-side bias in energy projections, and the numbers that are pouring out of the newspapers are the latest manifestation of this phenomenon.

One factor which almost everybody seems to have missed is that electricity demand has fallen since 2005 by around 12 per cent (in 2006 the Government talked about dramatic increases in demand). If you carry this forward to the future then this rate of decline would be more than the increase associated with the expansion in the number of EVs that was assumed by the National Grid in their most recent report. Given the fact that they identified opportunities for load shifting, in particular through 'time of use' charging that would reduce peak demand by up to 4.5 GW, that adds up altogether to a substantial FALL in the amount of peak generating capacity required in 2030.

In fact EVs supplied with electricity by sources such as wind, solar or marine energy are extremely efficient. First, the EVs themselves are, in terms of energy used to move a given distance much more energy efficient than conventional motor vehicles - and this difference is likely to increase as EVs mature as a technology. They have about a threefold advantage in energy efficiency. If the electricity is generated by these renewable energy sources then very little will be wasted (mainly grid losses) before the power is used in the vehicle. In fact the extra electricity needed to power the NG's projected expansion in EVs will be easily covered by the expansion in renewable energy if we assume recent trends continue.

Using the National Grid's assumption that around 9 million road vehicles constituting around one quarter of Britain's road transport fleet will be EVs by 2030 then some 108 TWh of petrol/diesel consumption will be replaced by around 40 TWh of electricity. Since 2012 renewable energy production has increased by over 40 TWh between 2012 and 2016.

There have been some ridiculously exaggerated numbers printed in one leading newspaper (I won't dignify them by mentioning their name) about the numbers of wind turbines needed to cover the extra production for EVs. In fact there are now around 7600 wind turbines in the UK. Given increasing sizes of offshore wind turbines (soon to be 10 MW each) and also increasing levels of efficiency for the newest models (with capacity factors approaching 50 per cent) then no more than 1000 new wind turbines would be needed to generate the demand for all of the EVs in operation by 2030. 

Now, for various reasons, including cutting carbon emissions and reducing our dependency on imported natural gas, we ought to be doing a lot more than that. Which, I suppose, if I were more cynical might lead me to forget about about countering the exaggerated stuff about the need for new power plant since this boosts the need for renewable energy. But getting further towards the objective of providing close to 100 per cent of our energy from renewables, as well as promoting energy efficiency, are good things in themselves and enough of an incentive to do a lot more than what we are doing now.



Some notes:

Nissan leaf 30 KWh per 100 miles

Average miles per gallon uk
38 mpg or 2.6 gallons per 100 miles


10 KWh per litre of petrol or 46 KWh per gallon or 2.6xs 46 KWh per 100 miles =120 KWh per 100 miles

Electricity from RE is at least 3xs as efficient as a petrol driven motor. Or 120 divided by 3.3 = 3.6xs as efficient.

37 mtoe used in road transport in 2016

11.63 MWh in1 tonne of oil. 11.63 TWh in 1 million tonnes of oil or 430 TWh from 37 mtoe divided by 3.6 comes to about 120 TWh.
A quarter of this is 40 TWh if approaching 50 cf is reached no more than 10 GW of capacity is needed. Already got 7.600 machines.



National grid report https://www.theguardian.com/business/2017/jul/13/electric-car-boom-power-demand-national-grid-hinkley-point-c 9 million electric cars and vehicles in 2030 = 8GW of extra peak.

UK electricity demand has fallen from a peak of 406 TWh in 2005 to 357 TWh in 2016.
Renewable Energy Production has increased from 41 to 83 TWh from 2012 to 2016.

Monday, 24 July 2017

How Brexiteers are undermining their claimed objective of a free trade deal with the EU

British politicians are engaging in what can only be seen as a self-defeating series of postures on Brexit that undermine their self-declared aim of securing a free trade agreement with the EU.

As I commented last November,( http://realfeed-intariffs.blogspot.co.uk/2016/11/why-leaving-eu-is-bit-like-building.html ),
the best that the UK can hope for in the medium term is a Norweigian or Swiss type deal that leaves us in the Single Market with at best a face-saving deal to obscure the continuation of current rules on freedom of movement.

The Government knows that the much-touted 'free trade deal' will take several years to negotiate and that if the UK left the EU without them any government in power would become extremely unpopular because of the border and business chaos that would happen in March 2019. A sense of self-preservation has forced the Government to agree to the notion of a 'transitional' or 'implementation' phase that will last at least two years (more I'm sure). 'Hard Brexit' or the notion 'no deal is better than a bad deal' was never anything more, for the Government, than a phrase used as a party management device.

This  'implementation phase' will involve a Norweigian or Swiss type deal -and that includes free movement of people from the EU to take up jobs in the UK. British politicians debate the extent to which we can choose labour market rules. But it is all farcical. It is not up to them to choose. They can either take the EU's terms - which cannot, for obvious reasons be better than Norway or Switzerland's deal - or suffer the famed 'hard Brexit'. Hence their wish to avoid political disaster by bowing to the inevitable and agreeing to a 'implementation' phase. A comment from the EU on how the UK's wishes to 'cherry pick' the Single Market are unrealistic can be seen at http://www.epc.eu/pub_details.php?cat_id=4&pub_id=7865

The Brexiteers in the Government thus have faced a dilemma - resign or accept the notion of a 'transitional' phase.
But the Brexiteers, if they seriously want a good trade deal with the EU, are their own worst enemy. This is because the last thing the UK needs in negotiating a free trade agreement is a time limit for the talks. This is a set of bargaining that only the UK really wants. The EU would be perfectly satisfied with the status quo - that is the UK continuing to belong to the Single Market. It's only the UK who want what is, in trading terms an inferior  arrangement of a free trade deal which would leave a lot of areas, including access to services, uncovered (see https://www.niesr.ac.uk/blog/services-trade-and-free-movement). The UK only want it because of the illusion that getting rid of free movement of people into the UK will do it any good.

The point is that the EU aren't going to be in a hurry to agree to the inferior position of a 'free trade' deal. So if Britain wants one quick then it will have to accept whatever terms the EU want to offer - it will not have the time to argue about it!

That is the craziness of the Tory Brexiteer vision. Either they destroy their party electorally as they take the blame for a disastrous 'hard Brexit' or they destroy the UK negotiating position for a free trade agreement. Liam Fox may be the first minister in British history to be busy negotiating for international agreements that give the UK a worse economic deal than they have already!