Why we're not heading for a 'no-deal' Brexit - the Brits will cave in and then claim the EU 'blinked'

 I'm a student of the 'new normal' in politics - that's the post so-called populist revolution new normal - which means that the UK will do much the same in January with a last gasp concession to EU demands. In that case the substance was that there should be no border in Ireland. 

Now I know we're all walking around in a sea of belief that somehow the 'EU blinked' in January - although what it blinked on I'm not sure, except that saying so saved face for the UK Government. See the discussion by the Institute for Government. The Irish/EU position had always been 'no border in Ireland' and that is precisely what they are getting. All this stuff about how the EU blinked on the backstop or something doesn't really wash since the backstop was a creation of the May regime to try to finesse away the objections of the DUP. In the end the DUP's objections were brushed aside to allow Ireland, backed by the EU, to avoid a border in Ireland, even if there is a border in the Irish Sea. 

Of course, and getting to the present, a key reason why a 'no-deal' Brexit is to be avoided is that if there is a no-deal then the Irish Sea border will become a lot harder than it otherwise would be, exacerbating problems, and also, into the bargain, increasing the possibilities for a United Ireland. Shift focus to Scotland, and the chances of Scottish independence happening in the next few years increase from the quite likely to the near-certain. I suspect that in the event of a 'no-deal' there would actually be some minimum agreements to avoid the worst aspects of trade chaos and to keep the planes flying (not that too many of those are flying these days). But the economic effects would certainly be severely noticed when the 'no-deal' came into effect (I wouldn't entirely rule out some sort of extension either).

In political terms the obvious move for the British Government is to give the EU essentially what they want and simultaneously negotiate some face saving measure for the British Government (eg political institutions get new creative labels). This will enable the British Government to announce that the 'EU blinked'. The tabloids can announce a great British victory, and then carrying on decrying the BBC for not letting them sing 'Rule Britainnia' to celebrate this interpretation.

What does the EU want? Well, they want to know that British environmental and labour standards will remain complementary to EU ones and they want the UK to obey state aid rules. Of course a key objection from (some) Brexiteers to that is that such policies take away control from British institutions and lets the European Court tell the British what to do. Here the face-saving devices come into play in that new institutions will be invented to 'consult' about these things, except of course the back channel will be some recourse somewhere along the line to EU or International Treaty law with some binding arbitration mechanism.

A last minute deal will be done and neatly everybody will say they are happy. That's the new normal.

Why we shouldn't head back to the offices just to save the property owners from losing money

 Big Capitalism rarely gets as self-mocking as when it is crying out for state subsidies to preserve the failing out-of-date technologies of its biggest zombie corporations. It seems to me especially ludicrous  as the CBI calls upon the Government to get people back to work in city centre office blocks. It's not that ordinary people want to spend their days travelling on crowded trains and buses so that they sit in rabbit warren offices peering at their betters in lavish offices who get transported by motor vehicles. Indeed if a lot more people work from home this will save heaps of money, resources that can be channelled into other things that people actually need. 

It's just that property owners and property developers stand to lose a hell of a lot of money if the trend towards home working is not sharply reversed.

Of course there are a lot of city centre shops and cafes that are affected by this change, and they have my sympathies, but I suspect if it wasn't for the property owners and developers you wouldn't be hearing quite so much about the issue. But then I also sympathise with all those academics who get made redundant when student numbers fall. I just don't hear any clamour from the guardians of big capitalism for the state to stop such job losses - quite the reverse in fact, as we never seem to stop hearing about how there are too many students (statements always made by people who are graduates themselves of course). 

If the centralised office is a declining technology then so are big power stations (whether fossil fuel or nuclear), and, you've guessed it, the CBI is usually first in line to urge the state to direct multi-billions of pounds to support these dinosaur technologies. The CBI has been making special efforts to get the state to pour great sums into funding EDF's vastly unprofitable (before the massive handouts) nuclear power plant at Hinkley C and soon, we hear, Sizewell C. Sizewell C's funding will involve an unlimited cash transfer facility from the electricity consumer to EDF under a scheme (RAB) that is, with deceptive irony, labelled as something that will save money!

We've heard a lot about how low-interest rates encourages so-called 'zombie capitalism', that is firms which would otherwise be insoluble but which are kept alive because they can service their growing debts. But what is much more flagrant is the way that the CBI retards innovation and channels the state's resources into bankrolling the status quo of big, concentrated, financial and industrial interests. That's zombie state capitalism, and it is the worst kind. 

Some references:

https://www.bbc.co.uk/news/business-53925917

https://www.cbi.org.uk/media-centre/articles/build-new-nuclear-power-stations-and-invest-in-carbon-capture-to-reach-net-zero/

https://www.power-technology.com/news/cbi-nuclear-power-carbon-capture/

How Scottish independence will boost green energy

If, as now seems likely, Scotland becomes independent in the next 5 years, green energy should get a major boost. A Scottish Government will have the unconstrained ability to offer contracts to supply low cost renewable energy which could be sold not only to England but also to a European continent eager for renewable energy. Meanwhile Scottish electricity consumer prices could be reduced by avoiding the extra costs of building nuclear power stations in England and Wales.

Offshore wind power costs and also onshore wind power costs have fallen since 2017 so that today windfarms can be built for no more than around £40 per MWh compared to over £90 per MWh for nuclear power and around £60 per MWh for natural gas fired power plant.

Opinion polls are showing more consistent support for independence these days, and the UK Government consistently talks to an English audience rather than a Scottish one as it negotiates the fallout from Brexit. The story from London that surely the Scottish people prefer being run from Westminster than being run from Brussels indicates just how little they understand Scottish nationalism. Many nationalists would say that they would prefer to be run over by a bus than run by Westminster!

It is uncertain as to what level of integration with the EU would transpire, but there would certainly be a lot of interest in building more interconnectors to trade with the European continent, perhaps via Norway. The Germans in particular may well be interested in boosting their renewable energy by buying in wind power from Scotland. Although there are still substantial potentials from onshore wind, and also lots of potential for solar power, even this is dwarfed by the massive amounts that could come from Scottish offshore waters, especially using the developing floating wind technologies. If, on top of sufficient renewables to power Scotland's own energy consumption, say  40GWe of offshore wind was installed, Scotland could earn a billion pounds a year if the Government charged £5 per MWh export levy. This would be a very useful sum, although only around a tenth of the income that used to come from oil and gas revenues in good years.

It seems most likely that Scotland would continue to be part of the British Electricity Transmission and Trading Arrangement (BETTA) - tearing up lots of expensive transmission arrangments does not seem to make much sense to either England or Scotland. OFGEM would be responsible for electricity trading throughout Britain while control over dishing out electricity generation contracts in Scotland would revert to the Scottish Government (SG). At the moment under the terms of Electricity Legislation regulations covering electricity generation are the preserve of the Westminster Government.

The SG would have the ability to issue its own long term contracts for electricity supply (and also set up trading in demand side management). Importantly Scottish electricity consumers would not have to pay surcharges to fund new nuclear power. Hinkley C will not be online anyway by the time of independence, and certainly nothing else in the way of new nuclear. Westminster could still threaten to stop the payments of renewable energy obligation certificates for Scottish windfarms (it did in 2014), but by 2024 all of the windfarms will have paid off the bulk if not all of their bank loans anyway.

Meanwhile the Scottish Government could issue many contracts for large amounts of renewable energy contracts for wholesale power prices that are no higher than what would be paid anyway. Currently the power to issue such contracts - called contracts for difference (CfDs) are held by the Westminster Government. But in the case of Scottish independence this power would be held by the SG.

In the extreme event that Westminster demands that Scottish people pay for English new nuclear power stations as a condition for continued participation in BETTA (the ending of which would disrupt English electricity markets), then, at least in the medium term, Scotland could have its own independent electricity supply system.

Scotland could balance the offshore wind variability with various methods, including bigger use of batteries to even out daily renewable fluctuations, but it could easily be 100 per cent renewable using ammonia or some other substance as a means to store renewable energy in the longer term. The renewable energy would be stored at times when electricity prices, and therefore the costs of the renewable energy. Then the stored energy would be generated using what are very cheap gas turbines or gas engines when there was not enough renewable energy, battery or interconnector based etc supplies to meet demand. An ammonia based long term storage system is not just fantasy. It is coming soon. A facility to convert renewable energy into ammonia as a means of storing hydrogen is actually going to be deployed in Saudi Arabia. See also coverage by 100percentrenewableuk.

Indeed, for those of us that support 100 per cent renewable energy, we could almost wish the Westminster Government to throw its rattle out of its pram and scrap BETTA. That could make Scotland a world leader, perhaps the world leader, in clean energy technology.

Why we should enthusiastically back solar farms in the countryside

As far as the prospect of solar farms in the countryside are concerned, I simply say 'the more the merrier'. Surely if we are facing a climate crisis then we should do our best to welcome cheap, clean, energy sources. And large scale solar farms that are now being proposed in quite large capacities are coming in very cheap to the extent that they are being developed on a 'subsidy free' basis.

Solar farms already constitute a very important contribution to renewable energy in the UK.   A little over half of UK based solar electricity is generated from them, the rest coming from domestic solar installations or on commercial properties. I do often hear the refrain 'they should put the panels on roofs, not on farmland' - too often as far as I am concerned. 

Well I'm certainly in favour of clearing away the contractual and regulatory obstacles that get in the way of putting solar panels on as many roofs as we can. However it is simply wrong to imply, if that is what people mean, that if planning consent for a solar farm is refused, then somehow the panels will magically reappear on some suitable roof somewhere else. They won't. We shall simply have that much less solar power generation. Neither are the solar farms easily transferable to some other piece of land that maybe preferred - land availability that is sufficiently proximate to the right electricity connections is in short supply.

Some say solar pv should not be on farmland. I disagree. Yes, there's a balance to be struck between localised food production and clean energy production - but in this case there's not really much of an argument that I can see, and not much of a balance. A small proportion of farmland in the UK will generate a massive amount of solar electricity.

Around 66 per cent of the UK is farmland, yet it would take coverage of  barely 1 per cent of the UK's land to generate the equivalent of the UK's entire current electricity production. That's not much of a sacrifice really - the benefits of the clean energy surely outweigh the loss of a very small proportion of farmland. Are we really, seriously arguing, that in the teeth of what we call the climate crisis, that this is beyond the limit of what we can sacrifice. Surely not!

I am afraid also that I completely fail to understand the aesthetic arguments that are sometimes posed against solar farms. I must say I have no sympathy with the landscape objections to wind power either, and think that the noise issues are invariably overstated, but surely the local impacts of solar farms are even less? You cannot see them from a long distance, and indeed, when you can see them from a medium distance you can hardly often distinguish them from strawerry net cloches and polytunnels. I haven't heard many people complaining about the sight of them!

 I don't see any biodiversity arguments against solar farms on farmland. Indeed, if they are placed on so-called 'prime' agricultural land they are almost certainly giving the land a break from the large quantities of chemicals that sterlise the land! I have heard arguments that solar farms will actually improve the biodiversity compared to intensive agriculture. What I am certain about is that they cannot be worse in ecological terms! The main difference will be that the land will be used to generate lots of clean energy rather than soak up chemicals!

If there are ever any ecological doubts about solar farms, it won't (in my view) be about the ones that are farmlands; rather this will be about the impact on areas of special wildlife interest. 

Indeed recently there was a planning controversy about the Cleve Hill solar park, which was given ministerial approval in May. The Kent Wildlife Trust were very concerned about the proximity of the solar park to protected wildlife areas. However, there were some changes made and the Trust commented: 'we have secured larger buffers to the ditches, more mitigation land and better management, so even if it gets permission it will not be as bad as the initial application, and some species may even be better off'. Now that's hardly a ringing endorsement, as they say, but it doesn't suggest to me that it is the end of the world either. 

On balance I am clearly minded to support this project. It is a project that is going to use come cutting edge technology, and it will also install some batteries that will help the balancing capabilities of the electricity grid. At 350 MW capacity this will add a substantial amount of solar generation. The UK's solar generation is currently up to around 4 per cent of UK electricity demand(from about 13.5 GW), as measured  on an annual basis.

And also I'm glad to see there should be steady flow of larger solar farms coming up in the future. Australian owned company Macquarie is planning an initial 1 GW.  It really should be a cause of great celebration that companies are planning solar pv farms without even any contracts being offered by the Government. We should be cheering, not wringing our hands over this.

Ten years to save the planet - Jonathon Porritt's new book

Dave Toke has interviewed Jonathon Porritt about his new book 'Hope in Hell - a decade to confront the climate emergency'.

Porritt talks about 100 per cent renewable energy, opposition to nuclear power, electric cars, clean meat and the need to tackle population growth. To see the interview, go to:  https://100percentrenewableuk.org/blog

Jonatthon Porritt is the most influential green political thinker in the UK and has occupied various leading positions in the green movement including Chair of the Green Partry in its earlier years, Director of Friends of the Earth in the period of its most rapid growth, Director of Forum for the Future and Chair of the Sustainable Development Commission.

He has written 10 books, starting with the seminal 'Seeing Green' in 1984, and in 'Hope in Hell' he mixes reviolutionary objectives and zeal with some reformist methods.

The populists are the deep state now! - and they are becoming unstuck

It is reported in the Financial Times by Jim Pickard that Dominic Cummings, a favourite of the Trumpian populists, has blocked implementation of Conservative manifesto promises to spend £9.2 billion on 'energy efficiency of homes, schools and hosptials'. He is reported to have said that energy efficiency is boring, and he wants to spend the money on new houses.

Apparently the Treasury and BEIS want to spend on energy efficiency to fulfill the manifesto commitment, but, it would seem, Cummings' view of the will of the people is not to be denied. Of course the Steve Bannons of the world claim that it is the career civil servants, closet liberals and socialists, who are the deep state.

But how can this be if it is the democratic wish of the nation as expressed through a manifesto which the self styled populists are trying to thwart? The Brexiteers have been keen on announcing that they are defending the will of the EU Referendum Result, but it seems now that it is just that the populists know best even when their views are different from what people voted for in a General Election. This attitude used to be called elitism!

Yet this instance of the blocking of energy efficiency is not an isolated case. There is now a creeping awareness that the so-called populist right, with their anti-statist and allegedly pro-personal freedom agenda, have backed the wrong horse when it comes to combatting coronavirus. They have made this a partisan issue, with their reluctance to support lockdown measures - or even to (in many cases) to embrace low cost measures such as facemask wearing, proper testing and proper contact tracing schemes.

But the majority of the population has not been going along with them. They have wanted strong measures to combat the virus, even if it means economic costs. The usual tropes of banging nationalist drums and blaming foreigners have certainly been tried (in the case of Trump and others), but people realise that shaking your fist at foreigners does not deter a virus. The populists are no longer so popular.  We can see this perhaps in the French local election results in which the far right slipped backwards. Hopefully we will see it a lot more in the US elections in November, although that is still sometime off.

But one thing that we need to do is to expose this theory about the deep state subvertng the popular will. The only deep state that is doing this is run by the right wing populists themselves. In the USA they have largely prevented an effective US response to the coronavirus, and in the UK they have damaged it. Who knows, but it may be that this virus crisis is the beginning of the end for the Trumpian populists.

EDF sanctioned by French Regulators for not coming clean to investors over Hinkley C

The chickens are coming home to roost for EDF for their questionable decision to go ahead with building Hinkley C -  a decision they took despite the lack of certainty over whether they would get enough backing from the British Government. Originally EDF was publicised as being offered  UK Treasury loan guarantees that had been widely touted as a vital basis for building Hinkley C. But now the French Financial Markets Regulator has sanctioned EDF for not flagging up how conditional such loan guarantees were. These loan guarantees have never materialised.

Essentially, EDF is now continuing to build Hinkley C using money borrowed on its own balance sheets - borrowings which are much more costly than UK Government backed guarantees and which reduce its own (EDF) profitability. The Finance Officer of EDF actually resigned at the time EDF decided to go ahead with building Hinkley C.

There is a commentary on the French Financial Market Regulator's decision at Bloomberg:
https://www.bloomberg.com/news/articles/2020-06-26/edf-faces-11-million-fine-for-opacity-as-u-k-nuclear-cost-rose

The British Treasury wanted to see that EDF could demonstrate the completion of its Flamanville EPR reactor (the same design as Hinkley C) by the end of 2020. But this has long since failed to be likely to happen. No Treasury loans should have equalled no construction of Hinkley C. But instead the construction has gone ahead. Did the EDF management expect the French Govenrment to bail out EDF? About a sixth of EDF's shares are owned privately, the rest being held by the French Government. The French Government has been pumping money into EDF, raising the spectacle that, in effect, French taxpayers are paying for a nuclear power station in Britain!
I discused the crisis facing EDF in an earlier blog post:
https://realfeed-intariffs.blogspot.com/2019/12/the-secret-massive-losses-edf-is.html

Of course all this is happening at the same time when we are being asked to believe that the next EPR (at Sizewell C) is going to be delivered at low cost to the consumer if the risk of building the plant is transferred from EDF to the British taxpayer and consumer! This is the so-called RAB mechanism, something that could well just turn out to be an almost unlimited cash facility for EDF to park their financial black hole in the centre of British finances (as well as those of the French).

Will we ever learn?

Photographer: Luke MacGregor/Bloomberg