Treasury figures show poor hit hardest by energy price reforms

In the end the poor will burn the rich to heat their homes.

Is it really necessary to criticise small increases in energy costs for not being progressive enough? Do we really want a world where the price of everything is set by reference to the income of the purchaser rather than by it's actual value?

Modern pensioners are already doing just fine living off money that's been borrowed by from their unborn great-grandchildren... how about they make this tiny additional contribution towards the energy they use rather than passing that cost down to younger generations too?

The whole idea is to get money into big business pockets so the poor have to suffer.
Can anyone explain why, in 1980 or so 4000 transistors on a microchip cost $100 and a PV array took ten years to pay for itself. Now we can get 20,000,000,000 transistors on a microchip for $100, electricity is considerably more expensive in real terms and a PV array takes ten years to pay for itself?

Robert are you turning into a clone of N Robinson. I thought this was supposed to be about business but your last paragraph is just political comment.

The rush to "green" energy is misconceived, but not the need for new sources of energy.

"Third, there will be additional payments to those who create reserve capacity in the energy system"
Like the Ffestiniog power station? Hydro electric power is a green source and Scotland and Wales have the potential.

It should be possible to build "green" coal fired power stations with our present technology. Storage of carbon should be possible and a lot less toxic than nuclear waste, and eventually someone will find a use for all this carbon. Thanks to Maggie Thatcher we have considerable coal reserves in the UK.

Of course, the most power consuming organisations are in industry which is going to have to bear the greater costs, along with the poor of course who don't have much power.

Good to see the government is so friendly towards the industry sector. Bound up with red tape and expenses it's no wonder most has gone abroad, to China and India who worry greatly about their carbon emissions!

Why does the fact energy costs are increasing have anything to do with having the greatest impact on the poor? You could equally argue that its presents an added incentive for them to work harder!

Like deshnoodle says above, the future generations are going to have to pay for all of these benefits and the ongoing deficit this country is facing.

Taxing and penalising those that work hard, create wealth and actually pay tax - as opposed to those in the public sector who consume tax is not the way forward! They are the people who are going to get the country out of the mess its in!

Which government shot the starting pistol for the "Dash For Gas"?
Easy money for the newly privatized energy industries.
Now the same government wants to make up for their ineptitude and short termism, greed, by getting us all to pay. Big time.
Fear not. We the taxpayer will get the blame.
But it was actually the tories...

"...the innovative payments for spare capacity should provide an incentive to power companies to persuade the rest of us to turn off unnecessary power-consuming devices."

No. This is not how the current pricing system works. It seems that this carbon pricing will carry forward the 'principle' enshrined in the current pricing policies of energy providers (and water providers) that ensures that the more units you consume, the less per unit you pay. This is not an encouragement to pursue greater efficiency among the biggest and/or most inefficient consumers. And those who use less energy (and water) and/or improve the efficiency of their own use are penalised and must pay more per unit than those who do not. In other words, pricing already heavily favours those with money to burn and this policy will simply exacerbate this distortion. Rather than being rewarded for greater consumption and/or lower efficiency, perhaps the biggest consumers of energy and water should be encouraged to "turn off unnecessary power consuming devices" and improve the efficiency of their energy usage.

#3 MadTom

Technology moves on which means that you can get more transistors per square millimetre.

The laws of physics are immovable which means you get the same amount of energy per square metre from a PV panel. Give or take a few percent brought about by manufacturing gains.

"Second, those who invest in nuclear plant, wind farms and other forms of low-carbon energy will be..."

Ahh the old myth that nuclear is "low carbon". Its only low carbon if you ignore that vast amount of carbon used in mining and refining it... but that happens in "another country" so doesn't affect UK "targets".

The climate gets just as destroyed though....but it looks good politically.

Studies show that for the cost of a nuclear station you could provide double glazing to enough homes to reduce the REQUIREMENT for power by... around the output of one nuclear station. This has a significant impact on carbon as you reduce demand.

Unfortunately, as is always the case, the consumer will bear the brunt of the cost, and the shareholders and directors will CREAM off the profits...........

TYPICAL!!!!!

Welcome to rip off Britain...........

4 pietr8: "It should be possible to build "green" coal fired power stations with our present technology. Storage of carbon should be possible and a lot less toxic than nuclear waste, and eventually someone will find a use for all this carbon. Thanks to Maggie Thatcher we have considerable coal reserves in the UK."
Couldn't agree with you more. https://news.bbc.co.uk/1/hi/sci/tech/4468076.stm a lovely article by the BBC in 2005 suggests the same.
So many positive benefits not least the regeneration of coal field communities. I'm not an economist, I don't really know the energy market but I have run a business in an ex coal community and I know the despair, the benefit culture and the high levels of depression.
A crying shame having such a store of energy that we cannot use because our enlightened politicians find it difficult to invest in carbon based energy.

Well, it's not as if we could tax the rich to pay for infrastructre modernisation is it? I mean, the majority should struggle, perhaps freeze to death to ensure the greedy minority are happy. For goodness sake, the poor greedy wee lambs, they'd choke on their £50 lunch at the very idea!

And on minimum wage, no you won't be able to buy a warm winter coat, and extra duvet for the bed....... the greedy boss has to head off to Aus for a suntan so stop complaining and behave yourself by shivering.

5. At 17:42pm on 16th Dec 2010, unsilentminroity wrote:

An incentive for them to work harder?

So that would imply the cleaner on minimum wage is not working hard.....
And the check-out assistant is what, not incentivised enough to scan your microwave dinner or Pot Noodle....?

The market should be left to decide the bast way of generating and selling energy. Government can't pick winners and should not be involved in doing so. Humans are incredible versatile and inventive creatures. Government did not see the internet (did not even see the housing and debt bubble in front of their face) and will not see the best ay forward for energy. It could be micro-generation or macro - let the market sort it out with the key facet that user pays.

The only reason governments are striving for low carbon energy production is they see it as an area ripe for growth now the "latest must have gadget" enconomy has been pretty much exhausted. There is only so far you can exploit the populace with the latest iPratt product so attention is being diverted to any potential area with minimal investment to date and green energy with the mantra of saving the planet is perfect. Some scientists have argued all along that the green energy movement is a cynical corporate plot to entice - sorry frighten - investors into the next bubble. Guess who is lined up to pay for it in the long term.

There are however two problems, governments can't afford to invest themselves so carrots have to be dangled for a reluctant private sector to take it on and other than the highly unpopular nuclear fission the efficiency isn't good. Also there are still two sides to the environmental agenda, global warming yes/no?

Evening Robert,
thank you for providing a blog which is not just about banks.
Now, energy policy and the means to pay for it is vitally important to the speed of any recovery for the UK (if and when it comes).
It strikes me as an odd policy that the Government guarantees a price to the producers and the consumers (bill payers) have to pay it -regardless of how high it is!
The Government are giving away £5000 of taxpayers money to rich motor companies to pay for introducing their wretchedly designed and thought out electric cars. Why?
The whole purpose of Margaret Thatchers sell off of utility companies at a very attractive (nay ruinous) price was that THEY should be encouraged to invest in new plant and equipment. They have not done so but run the plant into the ground to produce profits for their shareholders abroad.
The whole suggestion of carbon taxes to encourage investment is stupid and the Government knows it. It is a mecanism which is open to immense FRAUD with no checking of the claims taking place.
This policy is NOT about nuclear reactors, although that is what they want you to believe, it is about paying for the massive off-shore wind farms and their infrastructure.
I have been unable to find out or understand why this country is determined to rely on wind power for our electricity supply. Don't these people (including the Greens) realise that wind only blows intermittantly at the correct speed necessary to drive these turbines?
Carbon capture technology for coal-fired power stations has not been used anywhere in the world so we are paying to develop a working prototype. Why?

When all of these grand plans were floated originally, Britain was a different place, we had plenty of money to spend (thanks to Mr Gordon Browns prudent financial management). Now it is different and the Government is trying to save £7 Bn on welfare payments which it claims is essential for the country's survival. So it's saving £7 Bn and proposing to spend £200 billion on these crazy schemes.
I have read the paper outlining UK energy policy and frankly it's a mess with poorly thought out concepts, optimistic costing and planning performed by the civil service (maybe even the MOD).

To our young friends at the start of this blog, it's not US that will have to pay for your green energy, it's YOU who will pay for this debacle for the next 50 years.
All I can say to you is good luck and thanks for the fish.

#4. pietr8
#11 Ilkeston_Tim

Carbon (actually CO2) Storage.

It scares the begezzers out of me that folk are proposing or are actually pressurizing up CO2 and storing it under ground or under sea.

CO2 is poisonous. There have been documented gaseous escapes of CO2 that have led to hundreds dead. In their beds. Google Lake Nyos.

I don't want to be camping and wake up dead. Nor do I want to be messing about in a boat or steamer and get gassed.
Nor driving along a road next to a pipeline and fall asleep forever.

First of all some figures would need to be presented and documented and maybe even certified as accurate. The political allies will insure that the highest possible price will be provided. This will benefit the current big energy producers and pay for their conversions and keep them in control. The taxpayers will be paying for things that would happen in the normal course of energy development.
It becomes harder to understand a free market system that basically receives advantages and pricing through a political process, but we are talking about government where words have no meaning.

9. At 18:00pm on 16th Dec 2010, NonLondonView wrote:

"Studies show that for the cost of a nuclear station you could provide double glazing to enough homes to reduce the REQUIREMENT for power by... around the output of one nuclear station. This has a significant impact on carbon as you reduce demand."

There are also studies to show that double glazing never pays for itself if you actually take into account the environmental damage and carbon footprint caused by making the stuff in the first place - but not many people bother about that.

To minimize the impact on old and poor we need to ensure their homes are properly insulated which in turn will reduce their energy bills. Poorly insulated old houses is the major issue in the UK leading to vast waste of energy

We could save huge amounts of energy if we turned off our computers and read an old book.

R.P. wrote:
'I should point out immediately that not everyone would accept that the government's climate change commitment is necessary. But let's park that point'

If you park that point, you may as well 'park' everything else.

#22 too true, we are going to spend £100 billion think we had better do it for the right reasons.

10000BC farming started population around 10 millions at most

1750 the industrial revolution started UK and a few other places population less than 500m

1900 coal and Oil around the world starts to take off population less than 1 billion

2000 all manner of Co2 generation with population 6 billion.

At some time the world has percived to start warming but that date is unclear.

The Earth/Gaia is a feedback control system with many time constants. If CO2 is a issue the time constant is important.

Most Co2 has been imitted since 1900 but warming started when before or after.
if it much before then we are in real trouble ,as it was already in place before we added more.

if it started after we are in real trouble as we have to get back to below 1900 levels.

or it might be that Co2 is not the issues and we are in real trouble as they are going to spent £100 billion on a problem that is not casued by Co2

Privatisation was supposed to bring dynamism to the market (no pun intended). Private companies could be relied upon to ensure continued supply of fuel in the future at a fair price, direct government control not needed!

Seems to me that the energy companies are not investing in the future without cast iron guarantees that they will get the right £/kW from the government.

What happens if they (they energy companies) don’t deliver in the next five years, does the government have to take responsibility for fuel by running the companies themselves?

Thanks Dempster - hadn't caught that wee line.

''I should point out immediately that not everyone would accept that the government's climate change commitment is necessary. But let's park that point'

Well, Robert, that very much depends on who controls the news agenda, and on what they are willing to spend their dosh on. Some would say the earth is flat too, but no one in their right mind would bother taking them seriously let alone mention them on a serious business blog. Or shall we constantly refer to the times when we thought we should give those accused of being witches a good dunking, too, and perhaps when the tourism industry claims Nessie is about we should ponder the possibility and never forget to mention that just in the interests of 'balance' and avoiding the upset some would surely suffer, the rage they would surely express, the bombardment of lobbyists they would surely unleash?

If we have journalists that just tow the line, rather than doing the investigative journalism they are supposed to, who fail to understanding what balance is .....

Still, it will all come out in court, just as it has been shown by pesky leakers in the past and no doubt in the future given that the number of 'leak journalistic organisations' that appear to be opening up all over the EU.

https://www.youtube.com/watch?v=KbVx1f0irTs
https://www.democracynow.org/2008/7/3/groundbreaking_lawsuit_accuses_big_oil_of
https://www.youtube.com/watch?v=QPrdK4hWffo

No let's move on and consider this:

Nuclear material for power plants is just like coal. Finite.
Nuclear material for power plants is just like oil. Finite.

Wind power can be stored. Or hasn't anyone every heard of the great scientific chemists who came up with the idea of, wiat for it...... batteries.

I would gladly pay more for green energy for our energy security, with conflicts over resources becoming more likley in the future.

The current energy pricing is more akin to the derivatives and investment banking landscape.

For example over supplying at a specified time could lower your price recieved, effectively shorting your profit.
It doesn't encourage investment, for example if you supply too much energy, achieving such a low price that your company goes out of business. Hence the carbon pricing to mitigate.

This is due mainly to the different supply chains and infrastructure needed for the renewable energy infrastructure to provide free energy, compared to the historical fossil fuel infrastructure and deregulation of the electricity markets to lower electricity prices.

It's not just about electricity either, for example powering our trains and transport, has the potential to massively reduce our carbon output, which is estimated to be approaching 40% due to transport if it hasn't passed that.

What is the tax saving on not having to import gas and being able to export oil and sell electricity to europe ?

10 out of 10 for stating the obvious RP. #22 spot on..awaiting your next post. #1 not far off either. We are all in the brown stuff its just the depth that varies....

It would help if the current two stage tariff with the highest unit charge for the first tranche of consumption was reversed thus reducing the impact on low usage consumers like the elderly but penalising the highest users - the wealthy.

Assuming the price of electricity includes the cost of building existing plant, then surely if we replace them there should be no need to increase prices. We would just need to pay for the new plant instead of the old plant.

Other point.

I thought wind was free, it's not like you've got to mine it.

Where is the disucssion on energy efficiency, if we can use less electricity we will need fewer generating stations. Electric everything is not only consuming the worlds power but is helping to make us overblown, unhealthy and lazy.

"To our young friends at the start of this blog, it's not US that will have to pay for your green energy, it's YOU who will pay for this debacle for the next 50 years."

Indeed, and the current and even previous generation allowed the sell off of the UK's nuclear power generation infrastructure to foreign companies like EDF. Maggie (milk snatcher) Thatcher not only sold off the furniture of UK plc but also allowed the ripping up of the floorboards, leaving Gordon (is a moron) Brown only the curtains to burn.

The consequences of Maggie's 'dash for gas' and the selloff of the utilities to supplant government finances will be paid for by the taxpayer for many, many years to come.

deshnoodle

"Modern pensioners are already doing just fine living off money that's been borrowed by from their unborn great-grandchildren... how about they make this tiny additional contribution towards the energy they use rather than passing that cost down to younger generations too?"

That isn't the fault of pensioners - and to suggest they are doing fine is a gross slur on those struggling on the basic pension income that they contributed through their lives for.
Its incompetent and unrealistic government that is to blame, just as this one will get its sums wrong on energy costs, those before have also been caught with their hand in the till - spending on frippery whilst the national infrustructure went downhill.

If we have anything to blame it is this nations on off love affair with socialism.

"Third, there will be additional payments to those who create reserve capacity in the energy system, to cope with surges in demand or unexpected cuts in supply."

In other words, when windfarms are delivering nothing because there's no wind or too much wind. So we shall pay through the nose twice for wind power. The more we rely on wind, the more we need backup, and the more expensive it all becomes.

When are politicians going to wake up and realise that this hippy technology is about as relevant for the twenty-first century as the horse and cart is for our transport needs.

It sems to me that there is a general low level of understanding of the electricity supply system. If the performance of the 2430 MW of wind turbines visible to the grid during the past three weeks of winter is examined, the value of this expensive method of production becomes clear. If it is scaled up to the projected 33GW of wind capacity and allowing for expected demand growth, the simple arithmetic shows that we will the need the same or more steam turbine plant as we have now.
Another myth is the constant reference to our ageing coal stations. The major part of the capital used in construction of this station type is in civil, electrical, electrical and auxiliary equipment. Old stations can be refurbished by replacing the heat affected and fatigued components for a fraction of the cost of new, giving another forty years of service.
Finally, the reality of Carbon Capture and Storage is that it is very costly and unlikely to be a practical engineering proposition.
If the entire fossil generation in this country was shut down tomorrow its global impact on co2 levels would not be noticed. One third of the worlds people do not have electricity but have aspirations to be like us. For many other reason the upward rise in demand for electrical energy is very steep.
Why don't we just carry on being self sufficient, free from dependence on risky imports and just carry on burning coal.

Modded Why?

25. At 20:10pm on 16th Dec 2010, copperDolomite wrote:
Wind power can be stored. Or hasn't anyone every heard of the great scientific chemists who came up with the idea of, wiat for it...... batteries.
----------------------------------------------------------

And this brings us back to hydro-electric, with pumped storage. A battery by all but name.

'24. At 20:07pm on 16th Dec 2010, Oldchap wrote:

What happens if they (they energy companies) don’t deliver in the next five years, does the government have to take responsibility for fuel by running the companies themselves?'



Nope

We'll be told they are too big to fail and will need further government funding (tax payer funding) in the form of a bail-out. Some will be nationalised, but we the people will have only one share and no power to make decisons, ala RBS

Oooh.

Stephanie Flanders and Robert Peston ticked off by Turnbridge Wells protester!

https://chr1sr0berts.wordpress.com/2010/12/16/uk-uncut-challenging-dominant-frames/

The tories privatised the energy suppliers in the 80`s just in time for their rich mates to clean up on the dash for north sea gas.
Now there at it again, Why are we paying for investment in new generation when these "private" companies should have been providing the money from there profits instead of lining the pockets of the rich shareholders.
This is nothing short of class war.

Green taxes - or paying at least some of our environmental costs are necessarily regressive.You pay them whether you are rich or poor. That is why you need progressive taxes and benefits at the same time. In this case, compensating the poor and pensioners through the welfare system.

But this is precisely what the coalition has cut, and savagely. So correct that under current taxes and benefits these green costs are imposed mostly on the poor - but they don't have to be.

Oh, and are the nuclear power station builders going to have to cost in cleaning up the waste? Or how about public liability insurance in case of a nuclear accident? I think not - so the nuclear industry will again be heavily subsidised.

https://www.civitas.org.uk/pdf/EnergyPolicyJune2010

Robert,
I wonder if you realise that we (the taxpayers) pay a subsidy to construct and erect wind turbines.
We then pay the producer 8 times the feed in tariff for other energy supplies.
When the National Grid asks the producer to not switch on the turbine (for whatever operational reasons) we pay the producer (at 8 times rate) to NOT produce electricity. Surely this is economic madness.
Oh and by the way I only realised the other day why the whole country is being switched to "smart meters". It is because the grid has a great deal of difficulty balancing supply and demand using a large percentage of wind power so the grid needs instantaneous usage figures. So much for helping the consumers to manage bills and yes the consumers (bill payers) will be paying for this roll-out proposed by the last Labour Government and recently endorsed by your friendly ConDem party.

All of this is madness, sheer madness and the majority of electors either don't know or don't care about what is happening, they are just trying to make ends meet until the next payday. They will only get upset when the tele doesn't work and they can't watch Corrie or whatever.

Another puzzle for me, feed in tarriff is 44p per Kw but I buy energy at 13p so who pays the difference?

Funny, I just looked at my last pay slip and I had these deductions called PAYE, NI & Pension contribution. Hmmm I thought I worked in the public sector so I just do not understand the comments by ‘unsilentminroity’ Guess the last part is probably misspelt!

Maybe the public sector should be privatised then we could be wealth producers as well. Although the “real” wealth producers would probably just whinge and whine about paying for the service.

Funny though that the balance of payments has been predominantly negative for years so how do these super human beings produce wealth. Well I have been told that there are these people, some call them bankers (not sure about the spelling), who buy and sell debt for a profit, they package up other countries debts and they make money off this. They also pay themselves very big bonuses for their shrewd deals and exceptionally good skills. But about 2 years ago they found that people in these countries stopped paying their bills and the whole thing collapsed. Then the public purse had to bail out these producers of wealth. Did they accept responsibility for this? The short answer is no, the long answer is also no. But they all got their well deserved bonuses, which we will be paying for a long time.

So how does this compare with energy you may well ask. I will expand.

These same super heroes bought the energy systems from a previous Tory government at a knock down price and proceeded to produce wealth (other wise known as dividends to their share holders). They actually reduced the price of energy to the general public and other private and public institutes and all was rosy in the great British garden. But to achieve this they made an investment into the system that was lower than required. They also promoted and sold the stuff (Gas & Electricity etc) like it just came out of the ground or out of a power station. But what the hell they produced wealth and who cares what happens when the national grid (both electric or gas pipeline) falls into disrepair or those big underground balloons of gas or oil start to empty because they can whinge and whine that they cannot possibly invest in the systems if they wish to make the Profit (for profit read wealth production).

In pre private industry the national grid (electric) had significant spare capacity now it has virtually non in certain areas. The equipment was in better condition when it was in the public sector, it is now at or about the same standard of some developing countries. But they did create wealth.

Talking about that wealth Those great producers of wealth just moved that money around, did not lend it to true wealth producers so the factories, ship yards etc which were replaced with call centres to move all of that wealth around and create more demand for electricity with their IT and air conditioning systems. But it created wealth. Funny thing but those call centre actually use a lot more power than the factories that they replaced, but they used that energy to move that wealth around.

Now we have outdated power stations, depleted oil and gas fields, a national grid that need significant investment, we no longer have the money to support the services that we all want. The local authorities are making so many people redundant that they will not be able to provide a good quality service any more. The NHS has to make savings of £20 billion over the next five years to fund the drugs that the government promised us when they where voted in.

Now the “wealth producers” are whinging because they don’t have jobs, bonuses earn less than they think they should. But they can vote in a very unsophisticated government who can just reduce the spending levels to a point that the “FREE SERVICES” that the wealth producers don’t want to pay for stop being provided.

Coming back to energy we need the correct mix of technologies, we need the nuclear energy, the other low or zero carbon technologies as well as the coal and gas fired power stations. We also need local CHP system in our larger establishments to reduce the strain on the national grid.

Now that the wealth that was produced by the market has all gone we will have to pay for it.

I have just listened to the Tory liberal Hume who obviously backs the wealth producers who have had their cake (wealth) and now want us to pay large amounts for that investment into the new energy and infrastructure when it should have been invested out of the profits over the last few decades.

3. MADTOM, silicon is far more expensive than it was 40 years ago. PV cells still use the same amount per sq metre as they did then. Transistors are cheaper because we can thousands of times more of them now versus then per square metre (Moore's law). The manufacturing cost plus poor sunlight conditions of the UK makes PV's ill suited as a solution.
Nuclear is an albatross cul-de-sac energy solution. We will be seeing peak uranium within five or so years after the first new stations come on line and we won't be able to afford the fuel rods for the stations. UK coal is a non starter due to the amount of it that will be able to yield a decent EROI (energy return on investment), plus the pollution and greenhouse gasses.

Snap up some woodland whilst it is still cheap and install a wood-burner.

38. At 21:37pm on 16th Dec 2010, copperDolomite wrote:
"Oooh.

Stephanie Flanders and Robert Peston ticked off by Turnbridge Wells protester!

https://chr1sr0berts.wordpress.com/2010/12/16/uk-uncut-challenging-dominant-frames/"

this is excellent, I recommend everyone read it.

It's true,the standard of journalism from R Peston, Stephanie, and the rest, is appaling. There's always an angle, it's always spun out, I don't read them. I only come here to read the comments.

I'd rather get the facts, from the likes of wikileaks. plus do my own research.

...and speaking of austerity, it is of course necessary.......if you don't ask the people at the very top, the rich, to pay their share that is.

Mr Peston

you write:

'I should point out immediately that not everyone would accept that the government's climate change commitment is necessary.'

I shall admit freely that I am a small minded pedant, but please when referring to a particular and specific group of individuals that are in governace over us would it not be better to write Government with a Capital 'G' ...?

The word 'government' is generic, and may linguistically and inadvertently reduce the Status of C and C and Co.

#1. warwick wrote:

"In the end the poor will burn the rich to heat their homes."

But, making a value judgement' would it not be preferable that the difference between rich and poor was narrowed by the implementation of less draconian measures? Such as a National Maximum Wage/Income? (Set at 20 time the National Minimum Wage - as suggested by David Cameron).

39. At 21:42pm on 16th Dec 2010, vindict wrote:

Exactly. Corporate welfare spongers the lot of them!

One of the biggest and richest energy companies in Europe are here in the UK....EDF..They want to build up to 6 nuclear power stations here in the UK, but they don't want to use their own money to construct these plants.....but want us the cosumer to pay an estamated £500 per year, per household.....
Now maybe I'm wrong here but I thought businesses were commercial enterprises, where upon they the businesses invested their money into their businesses and take the profit, Surely if we the cosumer have to pay for the investment on behave of these energy companys.....do we reap the profits as investors/shareholders???? another rip off for the Britsh public....From a foriegn company

another mysterious omission by the moderators at 45.
For anyone who wants to read it, click on my name.

47. At 22:26pm on 16th Dec 2010, John_from_Hendon wrote:
#1. warwick wrote:

"In the end the poor will burn the rich to heat their homes."

But, making a value judgement' would it not be preferable that the difference between rich and poor was narrowed by the implementation of less draconian measures? Such as a National Maximum Wage/Income? (Set at 20 time the National Minimum Wage - as suggested by David Cameron).'

I don't think that is reasonable at all.

Make the cap to be twenty times not twenty and I'm more likely to be convinced!
I mean mean the boss really doesn't need twenty times more food than me, a house twenty times bigger than mine, a garden twenty times bigger than mine.... in a time of austerity? Don't think so.

re #9
PVs and turbines are hardly carbon negative. Payback on a turbine is said to be down to three years but I suspect that does not include installation, maintenance, spare parts and transmission infrastructure. Some people are warning of a thirty year life at best for turbines and a lot less for some PVs.

In the meantime, because it is essential that we use less carbon, Government is going to close a load of Magistrates Courts and force everyone to travel more to access that facility.

Makes a change from closing Post Offices, I suppose.

re #14
Great if there was a market. But there is not. It receives subsidy and support and is a closed shop, a sort of 'cartel' with political influence.

It would make sense for us (aka the Government) to fund some alternatives to the private power companies to force them to be competitive.

re #36
Not on the scale required, I'm afraid, at present. An individual can get by with submarine batteries or similar but a small twon cannot.

So Robert we are all to believe that the treasury can predict what the energy price will be in 20 years time ???? who are they trying to kid , they cant even tell you something thats happening now let alone 20 years time.

Heres my guess, because of the worldwide government developed myth of global warming they are now transferring their major earner from oil taxation to carbon tax, this allows them to include so called green energy in the equation....

The bringing in of new consortia is like another heap of vultures landing on the corpse, they will just operate in the same way as the incumbent cartel,or at least find another creative way to swindle the consumer in similar fashion to banking.

My prediction is that UK prices will rise at 10% per annum and that during that time the VAT rate on fuel bills will also rise for some other mythical reason.



Whilst reading this blog i was also drawn to the Privatisation comment, they always state that privatisation is good for the consumer in some way or other and will result in investment....i didnt think long and hard but was unable to come up with ANY privatised industry that has benefited the tax payer and has invested in new technology or infrastructure without help from the tax payer....

Why is it that governments successively 'incentivise' those that can easily afford to do little to benefit. They pour massive amounts of OUR money into private firms in an attempt to get them to change their ways according to popular policies.

Why not incentivise the population (it is they who they serve anyway!) and pour said millions into micro energy systems individuals can directly benefit from.

. At 17:26pm on 16th Dec 2010, warwick wrote:
In the end the poor will burn the rich to heat their homes.

There was a line in Blackadder when a rather strict protestant lady quoted that 'The cold weather was gods way of telling us to burn more catholics'

The most insulated building in Britannia at the moment must be the house of parliament, people are struggling ( never mind who's to blame ) get us back on an even keel, then start putting the cherries back on the cakes.

Geothermal is at least part of the answer. Isn't it?

49. At 22:36pm on 16th Dec 2010, worldtuner wrote:
One of the biggest and richest energy companies in Europe are here in the UK....EDF..They want to build up to 6 nuclear power stations here in the UK, but they don't want to use their own money to construct these plants.....but want us the cosumer to pay an estamated £500 per year, per household.....
Now maybe I'm wrong here but I thought businesses were commercial enterprises, where upon they the businesses invested their money into their businesses and take the profit, Surely if we the cosumer have to pay for the investment on behave of these energy companys.....do we reap the profits as investors/shareholders???? another rip off for the Britsh public....From a foriegn company
======================
I think you will find that EDF is almost completely owned by the French Government.

I believe the current generating cost for gas & coal fired power stations is in the order of 3 to 4 pence per kilowatt hour and offshore wind is around 25 pence.

But you still have to build fossil power stations for when the wind doesn't blow, they only get used a few weeks a year making them hugely inefficient.

Then there is the reported cost of £200 Billion to upgrade the National Grid to enable homes to change from gas heating to electric heating & charge electric cars overnight.

Domestic gas boilers are 90% efficient whereas power stations are 40-50% efficient. If we go for carbon capture the efficiency drops still further.

Now an electric car may do the daily commute but what about visiting Aunt Maud who lives 100 miles away or the annual holiday?

Even the on the daily commute how far will you get on a freezing night in stop start traffic with a two or three year old battery, heater and headlights on?

So we are committing to a massive increase in energy prices when China, India and others are building cheap coal power stations. We are going to go bankrupt.

Try googling this - New NASA model: Doubled CO2 means just 1.64°C warming.

The whole thing is madness.

So here's the problem:

1) we are reliant on importing energy, often from unstable countries, and we cannot affect the future price we pay.
2) without this energy, we as a country are dead.
3) privatisation of our energy has not brought around an improvement in the situation, becuase the very large corporates that run our system have taken a short term view, rather than invest for the needs of this country.
4) government has not ensured that the large corporates have put enough back into the system
5) government has a poor history or running or building anything themselves, and we no longer have the UK based know how to do anything of substance in the energy generation field, due to previous government idealogy.
6) every day that passes, without action, leaves the UK in a worse state.

So the correct approach is to let market forces work. However the corporations, like the banks before them are more powerful than the government, and aren't interested in making the UK better. In order to do anything useful for us, they effectively have to be bribed with government money.

This stinks, but is reality. At this point in time, we really have no options. We cannot wait for new power plant to be started, we cannot continue to import energy, we cannot be more and more reliant on oil/gas.

Just pray that a future government can enact laws to eventually protect our needs first.

At 17:48pm on 16th Dec 2010, prudeboy wrote:
Which government shot the starting pistol for the "Dash For Gas"?
Easy money for the newly privatized energy industries.
Now the same government wants to make up for their ineptitude and short termism, greed, by getting us all to pay. Big time.
Fear not. We the taxpayer will get the blame.
But it was actually the tories...

Whilst the tories did create the dash for gas the current opposition party (the champagne socialists?) did next to nothing with regards to either reversing the sale of the energy companies, legislating to make these companies invest more in equipment, backup capacity etc.

In other words, its irrelevant who's in power at Westminster.

Govt is the poodle of big business which is pathetic. Big business makes demands and Govt. merely hands the tab to the taxpayer...

I agree there is a cartel in the power markets but its the same for the supermarkets too.

#56 they already do, unfortunately only to a limited extent.

By 2016 all new home builds have to be zero carbon (code 6) even by 2013 all new build homes have to be much lower carbon users (code 4)

Builders have worked out that the only way to achieve this is a combination of waste to energy plants (on large estates), biomass boilers or ground heat exchangers, and a lot of solar panels

Not perfect because we do not build a lot of homes these days but a decent start.

At the end of 2009 the former energy minister Malcolm Wicks published his report on energy security. In that he discussed new clean technologies and pointed out - as if we didn't know - that the UK Govt invested considerably less in energy R&D than any of our competitors. He put one of the reasons for this down to the very small energy industry base in the UK effectively saying that because the sector was mainly foreign owned we don't manufacture an awful lot of energy kit anymore.

Those of us in the industry knew this of course because we have watched for the past twenty five years as right across the sector companies were sold off to overseas buyers or others invested whilst we didn't and created the new tech companies we wouldn't.

So there's nothing much in these announcements for UK industry because we don't have much energy sector industry left.

Robert wrote: "However the Treasury has helpfully provided an assessment of the impact on businesses and consumers of the likely increases in power prices."

Yes, how very helpful......of the Treasury! Only their figures are completely at odds with others, e.g Uswitch.

I know you have to report Government spin in the way they want to get their message (propoganda?) out, otherwise they might not let you in next time......but do we trust what politicians say any more?

Their voice is so untrustworthy, their spin, their "official" figures more "manufactured" than a bank P&L and balance sheet, their credibility so lost, that the electorate now have to get their information from other sources that have more credibility.

The government says £28, the other says £500. No one believes the government any more. Seem to recall the government has "form." It said we'd only get 15000 Polish immigrants, we got 500,000. We were told no more boom and bust, we all know what happened next. We were told MP's were honourable, their expense claims said they were not. When it comes to figures the government has NO credibility!!

A government full of liars is a dangerous thing.

On its web-site, Network Rail says

'Network electrification is at the core of the rail industry's plans to reduce traction carbon emissions'

and

'We procure the electricity used by our train operators'

and

'In 2009 the Government announced a £1.1 billion programme of electrification'.

All of this agreed without sufficient consideration of where the electricity is to come from.

Why would anyone agree to fund projects that place greater demand on the grid when we know that power stations are due to be decommissioned with no alternative in sight for donkeys years or only with further subsidy?

Then look at the companies involved in rail and electricity. Look at the links between EDF, Areva and Alstom. Look at the ownership and ask

Who benefits from 'low carbon' strategies?

Who promotes them?

Who 'takes leadership' in Europe?

From the French Embassy in the United States website:

'Climate change policy and participation in the international climate change negotiations are one of France’s strategic priorities.'

No doubt about that or why!

It seems reading these announcements that the government has missed an obvious alternative.

Currently the proposals are all about subsidising private companies to provide energy generation capacity which the nation is in desperate need of. Whether that is a direct subsidy from HMG or via levies on energy users direct to these privatised entities.

If the market was effective then these companies would invest in the market for generation capacity to meet market demand to preserve their profits.

So what I would propose is rather than give in to what is basically blackmail - gives us some subsidies or we will watch the UK go dark - HMG should simply set up it's own not for profit power generation company and build the capacity required. Investment in capacity seems to require subsidy whatever so why not formalise the arrangement in national investment in infrastructure.

Set the market rules to favour low carbon and invest in that - i.e. specify the order in which capacity can be used according to carbon production thus guaranteeing the new company/ies break-even.

If the private companies want to continue to reap profits then they can add capacity required without subsidy - or they can quietly go into the night as their current capacity becomes obsolete.

Power is a nationally important strategic resource - to leave it to a handful of foreign owned companies is plain daft and always has been.

Having it privatised has produced precious little benefit, no strategic investment and only used up a scare fossil fuel resource rapidly forcing reliance on imported raw materials.

If the market decides to get with the programme and starts investing of it's own volition then plans can be modified and these national power generators can then be sold to recoup the investment.

After all - if the lights start going out it is not the head office of the power generators or the French embassy that the angry mob will descend upon - it will be the Houses of Parliament.

67. At 11:17am on 17th Dec 2010, Whistling Neil wrote:

Isn't the subsidy to dissuade them from building new gas-fired capacity which is the most cost-effective

#67

Its a great idea but our european 'partners' who have a vested interest in supply of electricity, the plant that is required and the equipment that uses it would never agree to it.

On another note, a project in the US between Constellation and EDF to build a nuclear power station in Maryland is teetering on the edge or has tipped over it, in part because of the cost of the loan guarantees that were to be provided by the US government.

Nothing is what it seems.

The £9Billion spent on the "Bread and Circus" of the London Olympics would have given us two "off the shelf" modern French designed PWRs up and running within 6 years.

Britain is run by immature, childish ,morons (of all three Parties.)

Could those who have commented, disagreeing that nuclear is the only sensible option, or that 'we just need some batteries or a few more pumped-hydro systems' to allow wide spread wind power usage - please read this book and discover just how many wind turbines you need to make a difference.

You can download it free, it's written by a physicist and contains unpoliticised maths. Especially interesting are his 'energy plans'.

https://www.withouthotair.com/

Efficiency improvements can not be relied on to save the day, and historically even if individual devices become more efficient, we develop new gadgets that add to the overall electricity demand. Given the need to eventually electrify transport and heating the overall consumption of electricity (but not necessarily net energy) can only go up.

Show me an energy plan that doesn't involve covering 10% of the UK in solar panels, and a similar proportion of the coastline in tidal generators and wind farms, WITHOUT nuclear power, and I would be very impressed...

It's something we know how to do, and it can be done right now.

>14. At 18:42pm on 16th Dec 2010, truths33k3r wrote:
>The market should be left to decide the bast way of generating and selling energy.


I wish I even had time to describe how moronic that statement actually is!

Instead go and read BETTA and the Grid Code. Once you understand the implications of the balancing mechanism on the market we shall continue.

>8. At 17:59pm on 16th Dec 2010, prudeboy wrote:

The laws of physics are immovable which means you get the same amount of energy per square metre from a PV panel. Give or take a few percent brought about by manufacturing gains.


As I have blogged before:

Average energy per sqm is over a kilowatt, total capture with current technology is the equivalent of trying to fry an egg by putting the pan next to the hob instead of on it.

If technology were to develop photovoltaic cells respondant to various photonic frequency ranges and layer these (eg UV picked up by the one layer, violet at the next through to sub IR at the other side) then PV cells could quite easily generate the averages house's electricity from its own roof.

Instead, as pointed out, with no investment to speak of the technology has barely progressed beyond the equivalent of the Commodore 16!

Yet look at how much is being invested into 3D TV instead...


So yes, the laws of physics are immutable.
But similarly those same laws will ultimately restrict the minimum size of a transistor- yet somehow I can't see any companies out there not bothering to improve their miniaturisation technology until they hit it!

2. At 17:28pm on 16th Dec 2010, deshnoodle wrote:
"Do we really want a world where the price of everything is set by reference to the income of the purchaser rather than by it's actual value?"

We certainly do not.

For goodness sake forget about climate change. If we eliminated our total carbon output tomorrow, per year it would still only be equivalent to one day in China.
What we cannot afford is to keep on importing energy because oil is running out and gas and imported energy costs could easily rise by ten times in the next ten years. If the UK does not have energy at a price that will allow us to compete in the world nothing any Govt. proposes can be done. In my view, despite denials by Ministers nothing has been done to stop the cities going dark within 5 years. We are so near the edge that I would not be surprised if next year was the first year of brown outs. If that happens in the winter we could be looking at 5 million deaths in the UK alone and people will kill for a bag of coal. Parliament is failing the Nation, get it done before we have to do it as a national emergency on a war footing.

"It would help if the current two stage tariff with the highest unit charge for the first tranche of consumption was reversed thus reducing the impact on low usage consumers like the elderly but penalising the highest users - the wealthy."

That would be a bizarre way of charging. "Penalising" is a rather odd word to use. Nobody is being punished for anything in the two stage tariff. It used to be that you paid a standing charge to cover the fixed costs and a per unit charge to cover the unit costs. Simple and logical. Some energy companies seem to still do this, but for whatever reason, many of them have turned to the daft idea of obfuscating the fact that every consumer has a fixed cost to pay and a per unit cost to pay by adopting the current two stage tariff system.

The premium you pay for you first however many units is your standing charge. It would help if that's what they called it on your bill.

#74 Leviticus

Yep I know all about the solar constant.
The point I was making is that the laws of physics limit the amount of electrical energy you can get from a PV panel. Silicon is as good a material as we are going to get. Frequencies and wavelengths don't come into the equation. Silicon does the lot. Not very well of course but until you can get Unobtanium we are stuck with it.
As for micro electronics, Moore's Law continues apace but will eventually limit due to geometries becoming similar to the wavelength of light etc and subsequent fringing. But technology has already given us a way forward by giving us multicore computers. Why bother having smaller micros when we can simply double, triple them up. Quad cores etc. The cost will continue to be brought down too. Economy of scale.
PV panels might well get cheaper but they will not get appreciably more efficient.
Particularly on short days like now.
We are coming up to the shortest day. The sun is low. How much energy per day is going to fall on your roof? You will have to keep it clean too. Pigeon poo doesn't do much for efficiency either. Heat pumps are the answer but even they have to live by the laws of thermodynamics.

#77

Yes, there is a difference between kilowatts used and kilowatts demanded. This is part of the pricing equation too.

I might be running toaster, hair dryer, microwave and tumble dryer at the same time which would place a demand on the grid which would be different from running this equipment separately. KWH used would be the same.

To be more precise, we use silicon for all frequencies because that is the only technology we have. Or so we are lead to believe.

I keep hearing rumours from friends in the energy industry about other materials which are far more efficient, but are limited in the wavelengths they utilise. And about how they are trying to get funding to work out how to manufacture these materials in laminated layers. Figures of double, triple, qaudruple or ten times current levels of power before they have even optimised anything get bandied about. Then I get a general rumour of funding drying up, and now I hear no more.

Meanwhile a certain automotive firm holds the patent on PV cells that are laminated into the safety glass used in car windows and sunroofs, powering the AC during summer months. This technology is not allowed to be used by other companies, but how useful would that be in so many other situations!

Whilst we fail to invest in solar power we're going to get almost zero in advancement. To assume that the laws of physics prevent technological advancement is pessimistic at best. It's just our ability to utilise them.

Quite frankly if a leaf can make better use of sunlight than a PV cell then we really aren't trying hard enough!

39. At 21:42pm on 16th Dec 2010, vindict wrote:
The tories privatised the energy suppliers in the 80`s just in time for their rich mates to clean up on the dash for north sea gas.
Now there at it again, Why are we paying for investment in new generation when these "private" companies should have been providing the money from there profits instead of lining the pockets of the rich shareholders.
--------------
My thoughts exactly! It is the company/shareholders who should pay to increase the value of their profits/dividends. I always knew the sell off of utilities would lead to this.

Like most people I have been brought up with the mantra '..don't invest in anything you don't understand....'.
As I, along with all the other UK citizen taxpayers will be expected to foot the cost of this 'initiative' by increased bills and increased taxes and the costs of all the 'essential' bean counting that goes with it, I must protest.
Like most people I have found it impossible to calculate and compare energy providers without the need for spread sheets and advanced mathematical formulea.
Privatisation of the energy industry was another government initiative which has now produced 'energy providers' who's tariffs are so confusingly different you need a computer programme to attempt to compare them. As soon as you switch to a better deal, a sure as day follows night the new tariff jumps up in price. This has just happened to me. Cunningly enough I am now locked in for a year otherwise penalties will be charged.
This new initiative involves the dead hand of government offering price guarantees to energy providers. I know who will win..

This is truly shocking and serious stuff for Britain as a whole.

The costs of ALL fuel use - whether petrol, diesel, electricity or gas are subject to VAT - an inflationary fixed tax that has to be paid by the poorest - whatever their income.

#83

VAT on gas and electricity bills is, I believe, 5%

On one of the coldest nights of the year (19th/20th December) in the UK, wind contributed 0.2% to electricity generation capacity.
Thats ZERO POINT TWO PERCENT.
Isn't it time the government stopped pursuing what is a purely political target, accepted that the nature of wind in this country has been as it is for millions of years (unreliable) and isn't about to change any time soon..? The only people who benefit from wind farms are the developers - energy companies if offshore, and landowners if onshore.
Regarding the 'price' of carbon - perhaps it is an appropriate time to remind the government that the Chicago Carbon Exchange has collapsed and closed.

Slightly off-topic (but only just) - electric cars.
I heard the quote the other day that if all the cars in the US were suddenly electric, the generating capacity would have to be THIRTYFOUR TIMES the size it is now.
Has anyone in governemt factored in this sort of figure..?

Re the 'bete noir' - carbon dioxide - why not site tomato farms near coal-fired power statios and pump the CO2 emissions into the polytunnels - its what growers do now (to concentrations of 800-1000ppm).

So what is new?it is always the poorest in Britain that have to pay the most in all ways.I note the usual pensioner bashing post here also,what a surprise(sic).I am old and it is so sad to see this great country deteriorated into one huge selfish society that it is today,me.me.me and money,money money is all that counts anymore,so very sad.