I wrote Energy Through The Looking Glass almost a year ago, before the energy crisis had reached its current severe proportions, and several months before the invasion of Ukraine by Russia. Even then it was obvious that we were running into pretty serious problems, and since then things have deteriorated greatly. At the time, it seemed clear to me that our reliance on inherently expensive and unreliable renewable energy was responsible for many of our difficulties. Yet, at the same time, the usual suspects (most obviously writers at the Guardian) were doubling-down on telling us that this wasn’t the case.

I stand by everything I wrote at the time and by the arguments I then presented to undermine the claims made in the Guardian. It seems, however, that debunking the debunkers will be an ongoing task. This week the Guardian’s website included an article by Simon Evans (Deputy Editor and Policy Editor at Carbon Brief) headed “Is net zero really to blame for soaring energy bills in Great Britain?” with his negative conclusion in the sub-heading: “Despite frequent claims in rightwing media, green levies make up fraction of bills and renewables are reducing costs”.

I think it’s worth running through the points made by Dr Evans to see how valid these claims are.

The first claim, sadly, seems to be one of traducing one’s opponents’ arguments based on who one’s opponents are. The first few paragraphs are devoted to pointing out that the argument against renewables is ”rightwing commentary”, with individuals being singled out as fitting this bill (David Frost, Nigel Farage, Allison Pearson, Tim Newark, Iain Martin, Leo McKinstry and Steve Baker, and of course Liz Truss). As if that isn’t enough to damn the argument forever, we are given the added information that Nigel Farage is apparently a self-confessed admirer of Vladimir Putin. Not that it’s relevant what Farage thinks of Putin, but it’s worth seeing just how far out of context that claim has been lifted. A link is supplied to an article in the Express which cites Farage admitting in an interview with Alistair Campbell in 2014 that he admired Putin as an operator, but in which he went on to say that he disliked him as a human being, didn’t approve of him politically, and wouldn’t want to live in Russia.

However, I digress. It’s just worth considering sometimes the extent to which the man, rather than the ball, is played.

Fortunately the rest of the Guardian article seeks to deal with the issue of energy costs, though I think it’s fair to say that it raises a number of aunt Sallies before knocking them down, while ignoring some inconvenient facts.

Green Levies

First the argument over green levies (based on Liz Truss’ claims that if she becomes Prime Minister she will suspend them). Dr Evans argues that they are playing no part in rising energy bills, indeed that the opposite is true (I struggle with that, since surely the opposite would mean that they are helping to reduce bills, or at least to reduce the amount by which they are rising, in other words, the levies would have to be negative). We are told that they have fallen since the summer to around £150 a year, an average of 8% of bills. And this may be true, but it ignores the fact that these levies are also paid by businesses (who don’t have the benefit of a price cap, unlike domestic consumers), who seek wherever possible to pass these additional costs on to their customers, and if they can’t do so they may go bust. Furthermore, while (as the linked Carbon Brief report states) green levies (including those for social policy objectives, such as the warm home discount and the energy company obligation) may be around 8% of domestic bills, they represent 12% of electricity bills, but just 3% of gas bills. Had the current spike in gas prices not occurred, then the plan was to impose significant green tariffs on gas bills too. Had it gone ahead, it would probably have added around £170 per annum to domestic gas bills. If you choose to get your information from the Office for Budget Responsibility rather than from Carbon Brief you might conclude that “green” levies will cost us £13.8 billion this year alone – (renewables obligation at £6.6Bn; CfDs at £2.1Bn; capacity market at £600M; Feed-in Tariffs at £1.6Bn; Green gas levy – assuming it goes ahead – at £100M; renewable heat incentive at £1.1Bn; and climate change levy at £1.9Bn). Although many of those costs might ultimately be borne by households only indirectly (via costs passed on to them as consumers of businesses who pay some of the levies directly) that works out at around £500 per household per annum, not £150. In addition, the OBR anticipates that they will rise to £17.5 billion by 2026/27.

And of course, no mention whatsoever is made of the way in which renewable energy destabilises the grid, nor of the fact that every bit of green energy coming on-stream reduces not one jot the need for reliable back-up power (to cover the unreliability of renewables). Why, for instance, no mention of this?

In Great Britain, we are in the middle of a transformation, with the energy we use increasingly coming from cleaner greener sources. In 2019, for the first time since the industrial revolution, most of our electricity came from low carbon sources [sic]. National Grid is at the heart of that energy transformation – investing around £1.3bn each year to adapt and develop our transmission network to connect new sources of low carbon and green energy to our homes and businesses.

Or this?

National Grid reveals £54bn wind power network upgrade plan

I reckon that alone isn’t far shy of £2,000 per household.

Almost a year ago I wrote this:

It’s also worth looking at the relative cost of electricity and gas in the UK. Admittedly the price of gas has shot up over recent days, and my domestic energy tariff is five months old, but even after recent gas price rises, gas is still cheaper than electricity, not least because – thanks to the unreliability of renewables – electricity costs have also shot up. My current domestic tariff is 14.795p per kWh for electricity, but a mere 3.921p per kWh for gas, making electricity almost four times more expensive than gas. Interestingly, the tariff it replaced had electricity at 10.269p per kWh and gas at 2.752p per kWh. Both had increased by close to 40%, but that wonderful renewable electricity hadn’t seen my electricity tariff rise by less than my gas tariff (actually, the electricity tariff rose by 44% while my gas tariff rose by 42.5%). What was that about renewables not suffering from from market-led problems? What was that about renewables being cheap? Surely, as the system relied more heavily on renewables when I renewed my tariff than when I signed up to my earlier one, that should have been reflected in my electricity tariff either having gone down, stayed stable, or at least not having gone up at the same rate as my gas tariff? Yet it wasn’t.

Since then, sadly, both my gas and electricity tariffs have increased substantially. Electricity is now charged at 28.02p per kW/h, while gas is 7.34p per kW/h. Electricity is now costing me 89% more than then, while gas is costing me just under 88% more. Gas continues to cost a little over a quarter of the cost of electricity. Shockingly, however much we all try to economise on our energy use, we will still now face significant bills, since the daily standing charge has risen (in my case) to 42.24p per day for electricity and to 27.22p per day for gas. As Carbon Brief acknowledges, these costs represent this:

Another 3% is due to the collapse of multiple energy suppliers last winter. The cost of managing the customers of these failed businesses is being passed on to households via their bills.

Of course, almost without exception, those energy suppliers claimed to supply “100% renewable electricity”. Note well also:

The National Audit Office estimates this will add £94 per household to annual bills, some £2.7bn overall. This excludes the cost [of] bailing out major supplier Bulb, which could reportedly reach £2bn.

Why are gas prices so high?

The next argument discussed is the suggestion that the net zero agenda has led to higher gas prices. A Daily Telegraph article is put up to be knocked down, it having made the claim that “’a conscious decision was taken to rapidly reduce the supply of fossil fuels’ in the UK.”

This argument is dismissed in a number of ways, some good, some less so. First of all we are told that the rising gas prices are a function of market fundamentals, and to a large extent that is undeniably true (though I struggle with the irony that, as Dr Evans tells us, cold winters have led to a surge in demand).

We are then told, less convincingly I think, that although UK gas production has been holding steady, reserves are running out (and we are here offered a link to a National Audit Office report). That report tells us that what used to be called[t]he OGA [Oil & Gas Authority] estimates that the UK has 10 billion–20 billion barrels of recoverable oil and gas reserves”. However, (and here’s the rub), the report also tells us that:

It is primarily a commercial decision for operators as to whether they continue to extract oil and gas using existing assets or invest in constructing new assets to extract new reserves.

In a market economy, no sane managers of a fossil fuel company would invest large amounts of money in the construction of new assets to extract new reserves when they are being told that:

The Department projects that electricity generation from natural gas will fall by 63% between 2017 and 2035, although there is uncertainty around this as it will depend on the availability of alternative generating sources such as renewables and nuclear power.

In other words, it’s a little more complicated than simply saying that reserves are running out, so there’s nothing to see here. Campaigners regularly go to Court to try to obstruct new oil and gas field developments. There are precious few incentives and plenty of disincentives in the “net zero” environment to seeking to bring new gas reserves in the North Sea on stream.

Next we are told that fracking in the UK has experienced a decade of failure, so that’s rapidly dismissed. This equally ignores the relentless campaigning against fracking and the borderline absurd rules imposed on fracking companies (but on no other industry so far as I am aware) regarding the limits on permissible earth tremors. In addition, an effective moratorium on fracking has been in place in the UK for almost three years now, while fracking is banned completely in Scotland to all intents and purposes.

Ironically, on the same day as the Guardian article appeared, we also learn from the Telegraph that an “[e]nd to drilling ban could produce much-needed supplies as early as January, according to government source”.

There is even one fracking company who reckons they could even get some energy into the market by next winter if they were allowed to get cracking straight away,” said a senior Government source.

The firm, based in the north of England, has told the Treasury that if it is granted a fracking licence immediately, it is likely to be able to inject new supplies into the market by January.

Finally, regarding security of gas supply and price, the closure of the Rough storage facility some years ago is dismissed even more casually:

For the record, the decision to close Rough, formerly the UK’s largest gas storage site, was “nothing to do with net zero”, according to a government adviser at the time.

That may or may not be true, but I’d like more than a link to a tweet from Guy Newey (“helping clean tech companies thrive in the future energy system. Ex-PAD, SPAD, wonk, hack”) on 18th August 2022 saying “It has nothing to do with net zero” by way of substantiation. And whether the claim is right or wrong, the closure of Rough has undoubtedly left the UK seriously exposed, and a Government that wasn’t obsessed with net zero might surely have had a bit more to say about it at the time.

Renewables are “unreliable”

The final argument raised, only to be knocked down (albeit very unsatisfactorily) is the argument that renewables are unreliable and that they leave the UK exposed and dependent on foreign providers.

Well, they are unreliable, and unpredictable too. 2021 saw a wind drought, remember. Solar panels are little better than useless in winter, when energy demand is at its highest. As I write (it’s now after dark), the live status of the National Grid shows the UK’s electricity demand being supplied by coal (1.7%); gas (59.4%); pumped storage (2.3%); biomass – which many of us don’t consider to be “renewable” (10.2%); nuclear (15%); solar (0%, obviously); wind (3.1%); hydro (0.7%); and 4.6% via the interconnectors (with 2.9% attributed to “other”). Yes, you read that right – the much-vaunted wind was supplying 3.1% of our electricity. Not a terribly impressive performance on the part of renewables, in summer, when demand is low – hydro, solar and wind together currently supplying just 3.8% of our electricity needs, and therefore less than 1% of our total energy requirements. Sometimes, of course, renewables supply rather more. Reliable fossil fuel power plants are expected to ramp up and down at short notice to cater for the primary place given to renewables. It all adds to the cost. That extra cost never seems to be counted.

How does Dr Evans deal with the unreliability point? Well, he doesn’t. Instead he side-steps it. He simply states:

Yet renewables have generated enough electricity in 2022 to avoid the need for five times as much gas as the UK imported from Russia last year. Pearson is not only upside down but back to front: the more renewables the UK builds, the less “dependent on foreign providers” it will become.

No, Allison Pearson doesn’t have it upside down, or back to front. The electricity generated by renewables in 2022 has been generated unpredictably and unreliably. The existence of those renewables does not enable us to close our fossil fuel facilities – we still need them as back-up to cover the unreliability of renewables. I repeat, this doesn’t save us money; it adds to the costs, since we effectively need duplicate power-generating systems. The more renewables we have, the greater the costs.

If Alice’s adventures were written today, she would inhabit another looking-glass world.

48 Comments

  1. On reflection, I think I may have given Dr Evans too easy a ride in not really challenging too much his assertion that rising gas prices are simply the result of market forces. Specifically, in his Guardian article, he said:

    “The reality is that gas prices are soaring thanks to market fundamentals, from surging post-Covid demand to supply outages, cold winters, weak nuclear output and the invasion of Ukraine.

    On top of that, Europe’s worst drought for 500 years is hobbling hydropower, restricting deliveries of coal and further squeezing French nuclear, all as a rash of heatwaves spike electricity demand.”

    Gas prices were rising rapidly before Russia’s invasion of Ukraine and before this summer’s drought. Market forces having an impact on price are essentially the interaction of supply and demand. And while Dr Evans mentions some issues relating to both supply and demand, he underplays, to my mind, the fact that years of net zero dogma and signalling to the markets make it unrealistic to expect energy companies to invest significant sums in developing new supplies. That fact alone must, realistically, have massively hobbled the supply side of the supply and demand equation.

    An excellent article in the Telegraph by Juliet Samuel makes this point very well:

    https://www.telegraph.co.uk/news/2022/08/26/how-governments-cult-net-zero-wrecked-energy-market/

    Unfortunately it’s behind a paywall, but Paul Homewood has reproduced a significant section of it here:

    https://notalotofpeopleknowthat.wordpress.com/2022/08/27/how-governments-and-the-cult-of-net-zero-wrecked-the-energy-market/

    I think this says it all rather well:

    “Industry saw the writing on the wall. Utilities shut down their long-term gas contracting departments and began to buy gas at the going price on the day, fatally undermining security of supply and making new investment un-financeable. Fossil fuel producers began handing money back to investors. Even state-owned producers, like Qatar, cut investment on the basis that Europe (the UK included) had become an unreliable customer. In the first half of this year, even as Russia began to turn the screws, the West’s seven biggest oil firms spent more on dividends and share buybacks than on capital investment. They were only doing as they were told.

    And now? Well, now, as “big oil” might say: “We just walked in to find you here with that sad look upon your face.” Europe needs gas. It is pleading for gas. Instead of flying media to gas fields to court capital, the oil and gas men are being flown to the capitals of Europe and begged to invest. Despite the incredible prices, they hesitate.

    The meeting goes like this: “We need you!” say the politicians. The producers scratch their heads as they mull $20 billion, 20-year investments, and wonder whether, when the war is over and the green bandwagon rolls back into town, the politicians will still sound so sweet on them. “Your green targets still say we need to shut down by 2030,” they point out. To which Europe says: “Well, of course. Fossil fuels are evil!”

    The upshot is that the market is broken and it is governments and do-gooders who broke it. They broke it wantonly, recklessly, touting their saintly intentions, and now we are all reaping the consequences.”

    Paul also has another interesting article at his site, which plays into the question of conveniently ignored costs associated with net zero:

    https://notalotofpeopleknowthat.wordpress.com/2022/08/27/sses-billion-pound-pumped-hydro-plant/

    “Slated as the first large-scale pumped hydro storage scheme to be built in the UK for more than 30 years, Utility Week Innovate digs into plans to deliver up to 1.5GW and 30GWh of storage by 2030 at Coire Glas.”

    This is at a cost of £1 billion. As Paul comments:

    “The claim that it can power 3 million homes is the usual deceptive spin we get from the renewable lobby.

    But how long would 30 GWh really last us?

    In winter, the UK consumes about 1 TWh a day; that’s 1000 GWh, or 41 GWh every hour. Coire Glas will be able to supply this amount for 43 minutes.

    The article claims that this sort of long term storage is vital if high levels of wind power are to be supported:

    Large amounts of long-duration energy storage will be required to support accelerated renewable energy plans set out in April’s energy security strategy, in which the government increased its offshore wind target to 50GW by 2030 and committed to onshore wind and solar roll outs that could see 95% of power coming from low carbon sources by 2030.

    What’s more, a government document published in August discussing the deployment of large-scale and long-duration electricity storage concluded that it has an important role to play in achieving net zero, integrating and maximising the use of renewables, contributing to security of supply, and shaking up Britain’s technology mix.

    The reality is rather different. Less than an hour’s worth of storage is of little use, other than for balancing ups and downs in demand during the day, or hour to hour volatility in renewable generation. We would need hundreds of Coire Glas style storage plants to cover the periods of days and weeks on end, when the wind stops blowing.

    And at a billion pounds a time, who is going to pay the bill?”

    Net zero is an expensive and highly damaging fantasy that is wrecking the British economy and which might well end up destroying lives and businesses wholesale. Indeed, if people can’t afford to heat their homes this winter, it could well be fatal.

    Liked by 2 people

  2. Thanks Mark for the excellent summary of the terrible state of things and the desperate spinning that is going on to preserve the status quo. The arguments of Evans (and Ben Marlow in the Telegraph, also excerpted at Notalot) do not bear the slightest scrutiny. It was useful too of Juliet Samuel to remind us of the too-shiny Mark Carney and his blather about stranded assets. The assertion of a nincompoop or someone with vested interests. Neither he nor Marlow seems to have heard about supply and demand. You cannot reduce the supply until after you have reduced the demand.

    A key point that you mentioned – as did Samuel, and I think I did in https://cliscep.com/2022/08/09/why-i-am-against-net-zero/ is that if we ask the gas extraction companies to invest in new fields, they won’t. Because they know that as soon as the current fires have been put out, it will be their heads on the block again. The only thing likely to get them on board for the long term is a firm commitment that they won’t be cancelled again. And who can give such a commitment?

    I am a mild-mannered type, but it makes my blood boil to hear the sophistry that some folk engage in to keep the madness on track, to keep driving this country and its people into the ground. They will say anything except, “I am sorry. I was wrong.”

    There is hope for us, and everyone, because the cracks are showing. More people are prepared to say in public what sceptics have been saying in their siloes for years. Bravery inspires the fearful.

    Liked by 1 person

  3. Mark, it’s also on the front page. I think it’s a great idea. Let’s bang our heads against the wall some more to make our headache go away. The story also says that Boris is far more popular than either Truss or Sunak.

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  4. Mark,

    Sorry, it has taken me a while to get around to reading this. Keep flogging that dead horse. No one of any importance is listening, I’m afraid. 😦

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  5. John, whether or not these people are “of importance”, they’re certainly not listening!

    “Green Tories back Johnson’s call for successor to invest in renewables
    Outgoing PM to warn against focusing on short-term energy solutions in one of his final speeches”

    https://www.theguardian.com/environment/2022/aug/29/green-tory-back-johnson-call-successor-invest-renewable-energy

    Leading green Conservatives have backed Boris Johnson’s call for his successor to invest in renewable energy, amid concern that the Tory leadership frontrunner Liz Truss could rely more on fossil fuels to combat soaring prices….

    …Chris Skidmore, a Conservative former minister who set up the Net Zero Support Group within the parliamentary party and has become a leading Tory voice on green issues, said he was keen for Truss and Sunak to understand the need to invest in renewables….

    …“Net zero is now our way out of this cost of gas crisis. We have reached a tipping point where renewables are now far cheaper than fossil fuels and I genuinely believe that 2022 will be viewed by historians as the year that we recognised from this crisis that the world woke up to the need to deliver energy sovereignty through renewable and clean power.”

    Sam Hall, the director of the Conservative Environment Network, which has the support of 133 Tory MPs, half the parliamentary party backbench, said a commitment to net zero was “essential if we’re to tackle our dependency on dubious regimes for energy”.

    He said: “Boris Johnson is right that delivering net zero goes hand-in-hand with tackling the root causes of the energy crisis. Putin is weaponising Europe’s reliance on international gas markets for his illegal invasion of Ukraine, hoping that sky-high energy bills will weaken our resolve.

    “By rolling out more clean energy such as offshore wind and insulating Britain’s draughty housing stock, we will become less dependent on expensive gas which is putting up people’s energy bills.

    “Boris Johnson deserves a lot of credit for turbocharging the UK’s clean energy sector during his time in office. Because of these policies we’re buying less expensive gas than we would have been otherwise….

    Do these people live on the same planet as the rest of us? Have they not noticed that gas is producing around 60% (a proportion that has certainly not gone down of late_ of our electricity these days? Are they unaware that gas provides the essential back-up, required because of the general unreliability and uselessness of wind? Are they genuinely unaware of the costs that never seem to get counted – but which are nevertheless very real – associated with renewables, when they keep regurgitating their claims that renewables are cheap? Are they unaware that electricity in the UK is roughly 4 x more expensive than gas? And so on, ad nauseam…

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  6. Mark; great review of the current situation….SNAFU, of course.

    One other regular bleat from the windies is that they are “saving us money” on the basis that CfD rates are now well below market prices and producers are refunding the difference.
    As you probably know, they conveniently forget that only a minor part of wind output is covered by CfDs. Almost all onshore and over half of offshore are under the ROC scheme whereby they are paid about £50/MWh (onshore) and £100/MWh (offshore) on top of the market price. So they are adding to power costs, not reducing them.
    In a final twist the latest wind projects to come onstream have declined to take up their CfD contracts as they make much more money selling at the market price!

    Like

  7. Mikehig,

    Yes, that CfDs are a farce has long been my understanding. I would love to write about this shambles, but I would wish to be on very firm ground before doing so, and my repeated attempts to get to the bottom of what appear to be hugely one-sided contracts (or options, as they may more accurately be described) have met with failure. I wonder why it’s so difficult to find out about them in detail? (I don’t really wonder – I suspect that I know why). Anyway, John Constable is a very impressive individual who really knows his stuff, so I am inclined to believe his description of the way in which they work (or, rather, the way in which they don’t work for the UK public).

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  8. “Electricity: Lack of capacity ‘holds back green energy'”

    https://www.bbc.co.uk/news/uk-wales-62687064

    Farmers and energy experts say a lack of capacity in the electricity network is preventing some renewable energy projects from seeing the light of day.

    NFU Cymru said more Welsh farmers and landowners want to produce clean energy to help reach net zero targets – which means not adding to the amount of greenhouse gases in the atmosphere….

    …Garry Williams, a sheep and beef farmer on the edge of the Brecon Beacons National Park, said: “We’ve got 3.9kw of solar panels on site at the moment. We’re looking at the possibility of expanding the renewable energy production as a form of diversification.

    “But we’ve got a major problem, and the problem is there isn’t the capacity in the National Grid to take the electric produced down the line.”

    According to NFU Cymru’s president, Aled Jones, the lack of capacity on the electricity network is a major barrier for farmers wanting to produce clean energy….

    …There are worries that the lack of investment in infrastructure could have an impact on larger scale energy projects in Wales.

    Plans are in place to generate electricity through floating wind farms off the coast of south west Wales. But lack of infrastructure means there are questions about how this project would be connected to the electricity network…

    …”Now things are changing fundamentally, with a lot more smaller assets connecting to the distribution networks.

    “So small scale renewables, solar, wind farms, and those might be rooftop solar panels on people’s houses or projects on agricultural land.”

    “The issue there is that now we’re putting electricity into the grid from the edges, and the problem comes if there’s too much electricity being pumped into the distribution network, and it isn’t used locally then it has to flow up the grid. If there isn’t enough capacity on the grid then there’s a problem because it can’t reach customers further away.”

    National Grid ESO, which operates the electricity system in Wales, England and Scotland, said it was “working closely with distribution network operators, transmission owners, customers and the Welsh government to support the development of a long term plan for the electricity networks in Wales, to resolve any existing issues with connections and to support delivery against shared ambitions for net zero.”

    Plaid Cymru’s climate change spokeswoman Delyth Jewell said: “This is yet another example of the dysfunctionality of an overcentralised UK, where the Welsh government is being hampered in its efforts to realise its renewable energy ambitions by not having control over decisions in terms of how the Welsh share of tax money which contributes to the National Grid is spent.”

    She added farmers were being told to contribute towards Wales’ climate change targets and want to do this by producing renewable energy, but were prevented from doing so because of a lack of grid capacity…

    Irony piled on irony. They’ve opened it up to a Have Your Say. Fortunately some readers have made more sensible comments than some of those quoted in the article:

    What a surprise. simply connecting generating plant to a national network in an ad hoc manner turns out to a somewhat more challenging than the simplistic model presented by those with no technical understanding.

    Just wait until the extra demands of electrified vehicles begin to kick in.

    It’s absolutely not the lack of capacity which holds back green energy. Rather it’s not the capacity to GENERATE that’s the problem, it’s the ability to STORE and subsequently supply on demand. Solar and wind are unbelievably inefficient and wasteful. The whole green programme is simply a disaster, with cheerleaders who don’t understand economics or science.

    The current energy price crisis has shown that renewables cannot be relied upon to run a modern economy.

    Like

  9. “The green roots of the energy crisis
    Alex Epstein on the cost of demonising fossil fuels.”

    https://www.spiked-online.com/2022/08/30/the-green-roots-of-the-energy-crisis/

    The direct cause is very simple – it’s about supply and demand. For the past 15 years or so, there has been a concerted effort worldwide to rapidly restrict the supply of fossil fuels, with the explicit goal of eliminating them. This has involved opposing fossil-fuel investment, fossil-fuel production, fossil-fuel refining and fossil-fuel transportation. All of this has artificially suppressed the global supply of fossil fuels. We were told this would not be a problem, and that we would more than make up for the loss of fossil fuels by turning to solar and wind power. But these sources are unreliable. And so we have a shortfall of supply relative to demand.

    We really saw the height of this irresponsibility in 2020, during the pandemic. In the middle of lockdown, our leaders saw the huge slump in demand for fossil fuels. This led them to think we would never need fossil fuels again and so we didn’t need to invest in future production. This never made any sense whatsoever. And it is now having terrible consequences.

    The other problem is that our elites have never really given much thought to the importance of energy – not only in terms of what it means to consumers, but also to producers. Because energy is an essential input in everything that involves machines. So it’s not just your household energy bills that go up when supply is restricted – the cost of everything goes up, too…

    …The narrative around the anti-fossil-fuel movement has now had to switch from ‘life without fossil fuels is going to be better’ to ‘it’s going to be worse, but we have to get rid of fossil fuels anyway’. In truth, the green narrative has always been dishonest. It says that if we act to eliminate humanity’s impact on the planet, somehow our lives are going to improve. That’s a contradiction. The way we make life better on Earth is through our impact on it, including by using the most cost-effective sources of energy, which most of the time would be fossil fuels. Meanwhile, ‘minimising’ our impact on the planet will lead to economic recession and human suffering.

    I think that the jig will soon be up. Many of our leaders – and Joe Biden would be in this category – still don’t want to admit that what they have been doing for the past 15 or 20 years has created this crisis. We need to make it clear that this is their fault and they are denying responsibility….

    Liked by 1 person

  10. Mark & Mike – Mark, from your The Daily Sceptic link – partial quote

    “We have seen in the last year that some wind farms have started to generate power but have not exercised their CfD contracts because the market prices that they expect to earn are so much higher than the CfD strike price. This is entirely up to them: the ‘contracts’ allow them to defer the start date or, indeed, to simply abrogate the agreement. One wonders who drafted these ‘contracts’ – the office cat?”

    I have no clue how CfD work, but I always thought a Contract was a binding legal thingy, seems not, chuckles the cat knows more than me.

    Like

  11. A few superb quotes here. The irony seems to pass the BBC by entirely:

    “Rationing energy is nothing new for off-grid community”

    https://www.bbc.co.uk/news/uk-scotland-highlands-islands-62686916

    People living in the remote off-grid community of Scoraig are used to making careful use of the wind and solar power that they generate.

    The area can only be reached by a boat journey or a five-mile walk from the nearest road, and has no connection to mains electricity or gas.

    The 70 residents produce their own wind and solar power, which can be topped up by diesel generators and using wood, oil and bottled gas for fuel….

    …”You never quite know when it’s going to be windy or not, or if the sun is going to appear,” he said.

    “This morning I couldn’t put the electric kettle on because there wasn’t enough wind.”

    Davy said the area’s energy supply was not consistent.

    “We are always juggling,” he told BBC Radio’s Good Morning Scotland programme.

    “It’s interesting to think about people on the grid having to juggle and be frugal as we’ve always been like that.”…

    …One of the big problems was finding a way to store the electricity generated from the homemade turbines….

    …Hugh said there were times when a diesel or petrol generator might be needed to keep the power system going, but there were other times when power was abundant….

    …Davy acknowledges that it would be difficult for urban communities to replicate the system that has been created in Scoraig.

    “We have the land and the blasts that come in from the Atlantic for the wind energy,” he said.

    “It suits us well, but that’s not transferrable to a city.”

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  12. Some recognition by Nils Pratley of the Guardian regarding the incoherent way in which renewables subsidies and “contracts” for difference work (or, rather, fail to work for the taxpayer and energy users):

    “Wanted: a new energy contract for renewables and nuclear projects
    Nils Pratley
    Encouraging energy firms with old-style contracts to switch to new charging arrangements could save £44.4bn over six months”

    https://www.theguardian.com/business/nils-pratley-on-finance/2022/aug/30/wanted-a-new-energy-contract-for-renewables-and-nuclear-projects

    Rishi Sunak, when he was still chancellor and was coming round to the idea of a windfall tax, noticed a key point about today’s energy market. Not all the corporate winners in the UK from soaraway wholesale gas prices are producing hydrocarbons in the North Sea. Some are generating power from nuclear power stations, solar projects, windfarms and biomass and are enjoying the same high wholesale prices.

    Those generators are benefiting from old-style contracts based on “renewables obligation certificates” (ROCs) and suchlike, rather than contracts-for-difference (CfD) arrangements that have been the main way of incentivising capacity in recent years. Under CfDs, excess revenues over the agreed “strike” price flow to the Treasury. That is not the case with ROCs, thus some spectacular improvements in corporate fortunes; the share price of biomass-heavy Drax is up two-thirds in the past 12 months, for instance.

    In the event, Sunak confined his “energy profits levy” to oil and gas producers. It seems the Treasury was deterred by the complexities in the generation market, which was understandable up to a point. Much of the power is sold under long-term contracts, rather than at “spot” prices, and intermediaries sub-divide output many times. It is hard to get a firm grasp on where, precisely, windfall gains arise.

    Here, though, is a proposal that cuts through some of the complexity. Encourage those generators with juicy old-style contracts to enter an auction to switch themselves on to CfD arrangements, suggests the consultancy Cornwall Insight. If they all did so, and if the price of power came out at £162 per megawatt hour – still high by historical standards but a lot less than the current month-ahead price of £435 – the resulting savings could be enormous. About £44.4bn over six months, it calculates.

    By way of incentive to companies to sign up, Cornwall says the new contracts could extend beyond the span of the old ones. In effect, the generators would get more certainty (and still a very nice price) over revenues in two or three years’ time in exchange for selling at sub-market lower prices today. Arm-twisting would also be in order, one could add: current returns are way beyond the original financiers’ wildest dreams.

    At one level, Cornwall’s proposed reform is a technical tweak, but it gets to the heart of an infuriating aspect of the current electricity market set-up: the fact that wholesale gas prices dictate all power prices, thereby creating today’s bonanza profits for some renewable and nuclear projects whose fixed costs have barely changed. Sunak had a crack at the problem and didn’t get far. If the potential gain over the winter could really be £44.4bn, ministers should take another look urgently.

    Like

  13. Good grief – where to start?

    “Liz Truss puts hard-right ideology above lives – and is backing oil and gas to prove it”

    https://www.theguardian.com/commentisfree/2022/sep/01/liz-truss-oil-gas-energy-climate-crisis

    New renewable energy capacity secured by the government will cost only £48 per megawatt hour – compared with the current cost of running gas-fired power stations, which has surged to around £450 per MWh. (And, depending on the impact of action from the EU, it could rise further.) Renewables, therefore, are around nine times cheaper and far quicker to plug into our energy system. What possible reason is there not to make wind and solar the central pillars of an effective strategy to build energy independence and help stop millions being plunged into destitution? What explains this suicidal strategy?

    It is undoubtedly that the ideological predilections of the Tory right are prioritised above the Earth’s survival, energy independence and people’s livelihoods. Renewables are indelibly culturally associated with dangerous lefty nonsense, while gas and oil somehow represent macho British tradition. That the case for renewables is based both on pragmatic economics and incontrovertible scientific facts is irrelevant. It is hard not to conclude, too, that an addiction to waging eternal culture war is at play. Much of the behaviour of the modern right is driven by a desire to offend their opponents; like announcing they have passed wind, they want you to be aware of and disgusted by their actions.

    If you want to see such ideological spite in all its glory, consider the fact that onshore wind is a mere £50 per MWh, but has essentially been banned by the government.

    I wonder if he reads newspapers other than the Guardian? I wonder if he’s aware of the Times story confirming that renewables operators are not taking up their low-priced CfDs, preferring instead to get paid market prices, since CfDs – it turns out – are not contracts at all, but one-way options?

    Do Guardian readers believe this stuff? Energy Through The Looking-Glass indeed.

    Like

  14. “The elite’s green fantasies are finally unravelling
    The desperate scramble for fossil fuels now makes the posturing of COP26 look almost otherworldly.”

    https://www.spiked-online.com/2022/09/01/the-elites-green-fantasies-are-finally-unravelling/

    …Looking back on COP26 now, amid our mounting energy crisis, it seems almost otherworldly. World leaders, royals, archbishops, UN dignitaries and NGOs were gathered in Glasgow with the main aim of banishing the very energy sources that we are now so desperate to get a hold of.

    Of course, there are still far too many among the elites who are clinging to their green dreams, even as they collide so painfully with reality.

    Take Ed Miliband, shadow climate and Net Zero minister and architect of New Labour’s Climate Change Act. Miliband blames the energy crisis on our alleged lack of climate action. He claims that energy bills are high because we don’t have enough onshore wind or solar. Then there’s Lib Dem leader Ed Davey, who says he’s ‘proud’ to have been the ‘person who basically stopped the fracking industry in this country’, despite the energy crisis. He plans to contest future by-elections on an anti-fracking platform.

    Such is the blind and obstinate commitment to green thinking that, even in the worst energy crisis of the century, there are still demands to make our energy supply even more scarce, even less secure and even more unreliable than it already is. But at least some light is finally getting through the cracks.

    The energy reverse-ferret is too little, too late, of course. There is simply not enough time before this winter to get enough projects online to save us from a severe and painful crisis. Years of elite complacency and green wishful thinking have left an unholy mess, which won’t be cleaned up overnight. Still, at least some are seemingly starting to realise that we can’t run an advanced, industrialised country without a secure supply of energy.

    Like

  15. Like

  16. “Time to Hit Pause on Net Zero”

    https://dailysceptic.org/2022/09/02/time-to-hit-pause-on-net-zero/

    …National Grid statistics for last year showed that on average renewables produced 22% of our energy [sic – actually 22% of our electricity, which is probably less than 5% of our energy], but this varied greatly, some days it was as high as 40% and other days as low as 5%. At the moment the grid can cope with these large swings in output because at 22% renewables are still only a relatively small part of the energy mix. As the contribution from renewables goes up or down then the contribution from gas-fired power stations is scaled down or up and this keeps everything balanced. But if, as foreseen in the Energy Strategy, renewables increase to 70% and gas-fired power stations are closed, then there is simply no way to compensate for the large variations in renewable output.

    To appreciate the scale of the problem, the National Grid statistics show that in 2021 there were two periods when there was a prolonged and very large shortfall in the output from renewables, the nine days between February 27th and March 7th and the five days between December 17th and 21st. These dates corresponded to periods of low wind speed and because they occurred in the winter then solar made little contribution because most of the time in the winter in the U.K. there is no sun; it is dark. If in 2021 we had been relying on renewables for 70% of our electricity and our gas-fired power stations had been closed, then the energy shortfall during each of these periods would have been enormous, 2,000-3,000 gigawatt-hours (GWh). This is equivalent to the whole of the U.K. being without electricity for several days. Power cuts of this magnitude would have a devastating impact on people’s lives. Homes would be without lights and refrigerators and in many cases heating and hot water. Businesses and national infrastructure, such as transport and communications, would all be seriously affected….

    Like

  17. More from Alice in Blunderland:

    “Switching to green fuel needs same urgency as Covid jab, says energy boss”

    https://www.bbc.co.uk/news/business-62753949

    The UK would be paying “billions” of pounds less for its energy, if it had stuck with plans to reduce fossil fuel use, an energy boss has said.

    Greg Jackson, chief executive of Octopus energy, told the BBC there should be a concerted push now.

    The same “sense of urgency” should be applied to the switch to green energy, as there was for finding a Covid vaccine, he said.

    The government said it had delivered a 500% increase in renewables since 2010.

    “Without the clean energy we have deployed over the past decade, bills would be even higher today,” a spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said.

    There were already plans to invest further in renewables, BEIS said.

    In 2013, the coalition government led by David Cameron made a series of changes, including cutting back support for energy efficiency and later ended subsidies for onshore wind.

    “If we hadn’t done that, energy bills this year would be billions of pounds lower than they are,” Mr Jackson told the Big Green Money Show on BBC Radio 5 Live.

    “It’s short term behaviour that has left us even more exposed than we need to be.”

    The BBC has opened it up to a Have Your Say, and comments perhaps aren’t going as planned, the top one being:

    The UK has massively invested in wind farms, both on and offshore, while the BBC routinely reports that on some days more than half the grid is being supplied by renewables.

    The scandal now, is that that wind energy is being traded at the same price as wholesale gas, which is ridiculous: wind generation costs have not quadrupled on last year.

    Green energy should now be offsetting gas prices.

    Followed by:

    Indeed – the green energy generators that have been helped with government money for decades are now making hay and pushing their prices up to the same as gas-generated electricity.

    Followed by:

    There needs to be a public enquiry [sic].

    UK households have been paying green levies for decades that have been used to build countless windmills everywhere, the energy from those should now be offsetting higher prices, however it is being traded and supplied at the same prices as wholesale gas.

    Why should consumers pay for investment in green energy if it is only ever priced at wholesale gas prices?

    Liked by 1 person

  18. More Through the Looking-Glass madness and Disinformation from the BBC:

    “Six ideas to combat high energy costs”

    https://www.bbc.co.uk/news/62507224

    1. “A bigger windfall tax”. But only on fossil fuel producers, despite the huge windfall profits made from renewable companies who are deferring their CfDs and charging at market prices instead.

    2. “Capping energy profits”. But only the energy profits of fossil fuel producers, not those of (mostly foreign) renewables energy companies.

    So, the first two plans will disincentivise fossil fuel companies from future investment, reducing supply, and making the cost of fossil fuels (most relevantly gas) even more expensive.

    3. “Taking over energy companies”

    As it happens, I think there is a discussion to be had about re-nationalising essential utilities, but the idea that nationalisation would, in the short term, enable prices to be kept low (other than robbing taxpayer Peter to pay energy user/taxpayer Paul) is simplistic in the extreme.

    4. “Sell clean energy at a discount”

    So now renewable energy is “clean” (despite the damage done to the environment in producing it – more pure and simple subliminal propaganda).

    In 2020, more than 43% of the UK’s electricity came from renewable sources (including wind and solar).

    But not in 2021, when we had a wind drought, which pushed up demand for gas. Why use out-of-date figures to mislead?

    The cost of generating electricity from renewable sources has tumbled in recent years so why isn’t this being reflected in electricity bills?

    It’s because the UK also relies on burning gas to generate electricity and wholesale gas prices are used to set all electricity prices.

    No, it hasn’t “tumbled”. It has fallen, but by nothing like as much as often claimed (see audited accounts of renewable energy companies). The modestly reduced price isn’t reflected in bills, because CfDs turn out to be an option, not a proper supply contract, and “clean” energy companies are behaving just like all those nasty capitalist fossil fuel companies by gaming the system that was naively put in place by the idiots who are responsible for energy plicy.

    Academics at the UK Energy Research Centre estimate that households could save between £70 to £300 a year.

    Some academics saying it doesn’t make it true. By the way, that’s a heck of a price spread, and as for £70 p.a., given what’s happened to bills, talk about p*ssing in the wind!

    But all this would involve reforming the energy market and some experts believe that the UK lacks the storage capacity for green electricity to make it worthwhile during the winter.

    “Some experts” again. I think on this occasion that would be anybody who doesn’t live in Cloud Cuckoo Land.

    5. “Store more gas”

    The UK’s storage is full but it only has 10.1 Terawatt hours of (TWh) of capacity. That’s much less than Germany, Italy and France.

    The UK had a large facility at Rough, off the coast of Yorkshire, which provided about 70% of gas storage.

    But it was mothballed in 2017, when the government refused to help Centrica pay for maintenance work to extend its life. It argued that spending money on the site would undermine investment in other projects and risk making the market dependent on public money.

    The government is now trying to get it reopened.

    The irony in a government that has massively subsidised renewables arguing that paying to keep gas storage open risked making the market dependent on public money is simply jaw-dropping. Perhaps if politicians had been less fixated on net zero, they might have better appreciated the importance of maintaining sensible levels of gas storage facilities.

    6. “Use less gas”

    But in the UK, so far, there’s been no government campaign to encourage people to use less energy. There are obviously lots of households who use relatively little to keep warm and who could not cut down in cold weather, but there are others who could turn down the thermostat.

    Welcome to net zero Britain.

    Like

  19. Mark,

    You’ve missed the best one:

    7. “G7 to cap the price of Russian oil and gas.”

    …and sanction counties such as India, Turkey and China who are reselling Russian oil. Russia says that counties either have to pay the market price or there’ll be no sale.

    In other news; Gazprom has completely closed the Nordstream 1 gas pipeline, so Germans are going to be cold this winter.

    Like

  20. Bill: That’s completely unworkable. The price cap I mean. The closure of Nordstream 1 sounds pretty workable – though it is meant to be temporary.

    Like

  21. The gloves are off in the gas war it seems, mittens & onesies for me this winter. brrr

    Like

  22. Another cracking article from John Constable:

    “Know why your fuel bills are soaring? 20 years of ‘renewables’ lies, says JOHN CONSTABLE
    THE UK’s energy crisis has been in the making for more than 20 years and is the result of the incompetent policies of Mr Blair, Mr Brown, Mr Cameron, Mrs May, and Mr Johnson, and all their hapless energy minsters and advisors too numerous to name.”

    https://www.express.co.uk/comment/expresscomment/1663771/energy-bill-energy-cap-cost-of-electricity-gas-are-renewables-more-expensive-Putin-gas

    Liked by 1 person

  23. Richard

    The closure of Nordstream 1 looks to be fairly permanent now. There’s an explanation from Russian sources here:

    My understanding is that there were originally six of these pumping turbines. One is known to be held in Canada and another in Germany, I don’t what happened to the other three.

    Liked by 1 person

  24. Bill: The engineering and economics of a gas pipeline is not my specialist subject. Nor the impact of sanctions from the West thereon. But I’m sure Gazprom/Russia could solve the problem if they really wanted. It is being used as a weapon, as a retaliation for sanctions. My main point stands: Russia’s weapon works, the latest from the G7, the price cap, won’t. I’m reminded of Margaret Thatcher facing up to Arthur Scargill. The first year he tried to create havok and the new government backed down and gave in, because coal stores weren’t high enough at power stations to enter into a fight Thatcher knew they were bound to have. We should look the same, pragmatic way at Putin and our energy challenges and Ukraine and its military ones. Alexander Mercouris yesterday summarised the reality on all fronts very well, from my side. Our new prime minister from Tuesday likes to be thought of as another Thatcher. I hope the realism, caution and pragmatism of Thatcher, out of care for the British people, does indeed become her watchword.

    Like

  25. Much as I disagree with Boris, his comment about “mainlining” Russian hydrocarbons has a ring of truth about it inasmuch as Europe has become addicted to cheap Russian gas.

    Simply putting the drug of choice on a high shelf does not stop the palms from itching.

    Liked by 1 person

  26. Jit: To your Boris I raise you a George Bush and, if you’re not careful, a Donald Trump 😉

    It was this powerful passage from John Christy in August 2012 that I was taken back to on hearing from you about Boris’s ‘mainlining’. There is a Putin-specific part of what our outgoing PM was saying which I’ll come back to in a moment. But here’s Christy

    Permit me to digress into an opinionated comment. In 2006, President George W. Bush was wrong when he said we were addicted to oil. The real truth is, oil, and other carbon-based fuels, are merely the affordable means by which we can satisfy our true addictions – long life, good health, prosperity, technological progress, adequate food supplies, internet services, freedom of movement, protection from environmental threats, and so on. As I’ve said numerous times after living in Africa, – without energy, life is brutal and short.

    Folks with Hansen’s view are quick to condemn carbon fuels while overlooking the obvious reasons for their use and the astounding benefits they provide (and in which they participate). The lead author referred to coal trains as “death trains – no less gruesome than if they were boxcars headed to the crematoria.” The truth, in my opinion, is the exact opposite – carbon has provided accessible energy that has been indisputably responsible for enhancing security, longevity, and the overall welfare of human life. In other words, carbon-based energy has lifted billions out of an impoverished, brutal existence.

    In my view, that is “good,” and I hope Hansen and co-authors would agree. I can’t scientifically demonstrate that improving the human condition is “good” because that is a value judgment about human life. This “good” is simply something I believe to be of inestimable value, and which at this point in history is made possible by carbon.

    https://www.drroyspencer.com/2012/08/fun-with-summer-statistics-part-2-the-northern-hemisphere-land/

    That’s exactly why I dislike the drug-taking analogy for oil. Every bit as much as Just Stop Oil loves it.

    The stupidity of Western Europe in becoming so dependent on Putin for energy in many forms is a quite different thing. Trump famously warned Germany about it at the UN and they laughed in his face. That wasn’t addiction, it was prideful ignorance. Exactly what Thatcher didn’t have as she considered how she was to overcome Scargill. (She was given next to zero chance of doing so by many, let’s remember.)

    But the outworking of such wisdom now vis-a-vis Putin, given Europe’s past stupidity, is going to involve very large doses of humble pie. Not the drug of choice for most politicians. But we mustn’t rule anything out given the UK’s current regime change.

    Liked by 1 person

  27. For those claiming that renewables are the answer to our problems, this might enlighten them:

    “The 2021 European Wind Drought and Weather-Dependent power generation”

    https://edmhdotme.wordpress.com/2021-european-wind-drought-analysed/

    Lots of useful and interesting statistics, graphs and charts. I particularly like the conclusion:

    As Professor David Mackay FRS, (eminent Cambridge physicist and former chief scientific officer at the UK Department of Energy), said in an interview just before his untimely death in 2016, that the promotion of

    “Renewable Energy” was driven by an “appalling delusion”.

    The delusion is perpetrated by people who have no understanding of the mathematics, engineering and practicalities of Energy technologies.

    Would anyone ever buy a car that only works one day in five, when you never know which day that might be ? And then try to use its technology to power the whole economy.

    Like

  28. That’s very good Mark (4:15pm), because banishing the green religion from the halls of power is so central to O’Neill’s narrative. I also agree with him about Truss having to contront the dimmer kind of ‘free marketers’ in taking radical steps to keep industry as well as households in business. But actual achievement of any of this would be extremely impressive.

    Like

  29. “Heat pumps should be key to Truss’s energy strategy, urges expert
    Measures unlikely to include incentives for people to install devices, which cut bills and emissions”

    https://www.theguardian.com/environment/2022/sep/07/heat-pumps-should-be-key-to-trusss-energy-strategy-urges-expert

    Quite apart from the nonsense of trying to force people to use a heating system that leaves them colder and at great expense, while piling yet more pressure on a creaking National Grid, the numbers don’t add up even within the Guardian’s own article:

    Heat pumps need to be at the heart of any new energy strategy, to keep Britain’s homes warm and reduce greenhouse gas emissions, but so far there is little sign of the policy measures needed, one of the UK’s leading heating experts has warned….

    …Switching to a heat pump would knock more than £260 off the average household’s annual bills on current levels, Rosenow has estimated. …

    …Replacing a gas boiler with a heat pump costs about £10,500 for the average home, however….

    Looks like a 42 year payback to me. That’s on an optimistic basis. The Guardian article, as its wont, links to another Guardian article:

    https://www.theguardian.com/money/2021/oct/23/air-source-heat-pumps-how-the-costs-and-savings-stack-up

    This tells us:

    Don’t believe some of the quoted prices that have appeared in recent days, someone with a family-size three-bed house and larger can expect to pay £8,000-£15,000 in total to install a complete air source system, while fitting out a bigger home will cost more. Alongside the pump, that price will include a new hot water tank and labour. The final bill will depend on whether your existing radiators are large enough or need to be replaced. You are also advised to upgrade your home’s insulation at the same time, which could add considerably to the final bill, depending on your home’s construction. Fitting a ground source pump will cost much more – typically upwards of £15,000.

    Also:

    People ripping out an inefficient old oil-burning boiler should reduce their annual energy bill by going for an ASHP – but not by a huge amount. Those taking out a gas boiler are highly unlikely to see any savings and could well end up paying more each year. Octopus Energy says in a poorly insulated home it will cost as much as 40% more to run a heat pump rather than a traditional boiler. This is because the cost of electricity includes carbon taxes and subsidies to support low-carbon energy projects.

    Irony, it seems, is alive and kicking.

    Liked by 1 person

  30. Like

  31. For those who tell us that renewables are the answer to our current energy problems, may I just point out the state of generation on the grid right now?

    Gas: 71.1%
    Coal: 4.2%
    Nuclear: 20.6%
    Pumped storage: 2.4%
    Biomass: 7.6%
    Solar: 0%
    Wind: 12.8%
    Hydro: 0,5%
    And we’re sending more than 20% through the interconnectors to the beleaguered European system. Yes, we have cranked up oil and gas to do this, so that we’re currently generating 20% more than we need. We did this using expensive gas because guess what? You can’t just crank up renewables to fill a gap in demand when the sun isn’t shining and the wind isn’t blowing.

    Like

  32. Guardian reporters can give the lie to the claim that renewables are cheap when the context requires it:

    “With no new windfall tax on energy firms, a cap on nuclear and renewables is urgently needed”

    https://www.theguardian.com/business/nils-pratley-on-finance/2022/sep/07/without-a-windfall-tax-on-energy-firms-a-cap-on-nuclear-and-renewables-is-urgently-needed

    There will be no new windfall taxes on energy firms to help fund the £100bn-plus household and business rescue package, the prime minister has said – a predictable answer given her past statements. But what about the obvious alternative: a cap on the price of electricity that is generated by firms whose costs are unaffected by soaring gas prices?

    Not every nuclear, wind and solar project is currently making fat and unexpected profits, but many are thanks to an outdated system that ties their revenues to the marginal price of wholesale gas. …

    …And we know the UK government has done its own emergency work, because last week’s chancellor, Nadhim Zahawi, said so. It would be a version of the idea kicked around by various academics, consultancies and even the industry: oblige renewables generators operating under old-style “renewables obligations certificates”, which are currently supremely lucrative because they pay a premium above the wholesale energy price, to switch to contracts-for-difference (CfDs). In the latter arrangement, windfall profits don’t arise: revenues above an agreed “strike” price flow, in effect, to public coffers.

    Since conversations with the generators were being conducted by Kwasi Kwarteng – last week’s business secretary, this week’s chancellor – the new administration should be on top of the details. Yes, there are complications: generators will already have sold forward some power, so a semi-obligatory switch to CfDs may have to wait six months; and the terms of new 15-year CfDs would be crucial, since the government also needs to have an eye on long-term costs….

    Like

  33. “Tory MP begins ‘net zero tour’ of UK to highlight benefits of action
    Chris Skidmore urges new PM to ignore ‘tiny vocal minority in Westminster’ arguing against climate target”

    https://www.theguardian.com/environment/2022/sep/08/tory-mp-chris-skidmore-begins-net-zero-tour-of-uk-to-highlight-benefits-of-action

    Top green Conservative Chris Skidmore is to embark on a net zero tour to show that “normal people are getting on with” decarbonisation, and urge the new prime minister to ignore the “Westminster bubble” that is pouring scorn on the climate target.

    Well, that’s a through the looking-glass comment if I ever saw one. I think net zero is very much an obsession of the Westminster bubble, and most people care only about having a reasonable life without unduly expensive and unreliable energy. And they’d like to avoid blackouts.

    Like

  34. PS:

    Following the launch in the north-west of England, the tour will visit Yorkshire and Humber, the north-east, Scotland, the West and east Midlands, the south-west, Wales and Northern Ireland, London and the south-east, as well as East Anglia.

    I trust he will make the entire journey by train and/or EV.

    I can’t avoid foaming at the mouth at this:

    “…industry isn’t listening to the tiny vocal minority in Westminster that is claiming that net zero is costing money, which is just wrong,” Skidmore explained.

    Is he really oblivious to the massive subsidies paid to renewables companies, the huge amounts the Government is throwing at net zero, the £54Bn alone that is due to be spent on making the National Grid capable of dealing with the unreliable energy supplied by renewables in big and small amounts up and down the country? Is he really not aware of the cost of the smart meter roll-out programme (£18Bn last time I looked), of the costs of effectively running two energy systems in tandem and the extra costs to fossil fuel generators of having to ramp up and down on demand to fill the gap left in supply when the sun isn’t shining and the wind isn’t blowing? And all the other costs, too many to mention here? Really?

    Like

  35. John, I am trying to read the paper now. The supplementary information is 150 pages, so it’s hard going.

    Subtracting the Fast Transition from the No Transition estimates at a discount rate of 5%, yields total expected Fast Transition savings, up to 2070, of 31 – 255 trillion dollars. At the lower discount rate of 1.4%, the range of expected savings is 88 – 775 trillion dollars.

    I believe them. Don’t you?

    Like

  36. Jit,

    I’ll leave it to you to look into the detail, but I would be shocked if they have looked into the costs in anything like the thoroughness with which they have for the benefits.

    Like

  37. John & Jit – just the BBC lead in to the “study” makes it sound like it’s a no brainer – “Even if you’re a climate denier, you should be on board with what we’re advocating,” Prof Doyne Farmer from the Institute for New Economic Thinking at the Oxford Martin School told BBC News.

    “Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money,” he said.

    the Titanic springs to mind for some reason!!!

    Liked by 1 person

  38. read a bit on the Joule paper –
    “which are made using the stochastic version of Wright’s law.”
    “Since our study is not intended to be comprehensive, but rather to focus on cost declines for key green technologies, we do not consider liquid biofuels, geothermal power, marine energy, traditional biomass, co-generation of heat, solar thermal energy, or CCS (our results are nevertheless robust to these modeling choices; see Experimental procedures).”

    gave up after that

    Liked by 1 person

  39. Ben Pile has an excellent Twitter thread ripping to pieces the BBC article and the Oxford Martin School and its study claiming that renewables would save humanity trillions, if only we would sign up.

    Like

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