I have written here before about seminars run by Westminster Energy Environment & Transport Forum (WEET). Sometimes I find them a useful way to alert me to developments of which I would otherwise be unaware. On other occasions, I simply despair at the amount of time and energy (and money) being spent on pursuing a fantasy. The conference that has just come to my attention probably covers both of those: “Next steps for digitilisation of the UK energy system”, to be held on 26th February 2024.
Energy Digitilisation Taskforce
First of all the conference details alert me to the fact that we in the UK have an Energy Digitilisation Taskforce. The level of expenditure and civil service/QUANGO effort with regard to all things net zero-related is so immense that it is almost impossible to keep up with it all. For instance, I completely missed the Energy Digitilisation Taskforce’s report from January 2022. At “just” 35 pages long, it’s a short document compared to many reports that I have had the misfortune to plough through on behalf of Cliscep readers. Yet despite its (relative) brevity, it reveals shocking complexity and immense costs being necessitated by imposing net zero on the UK’s energy system. The foreword’s opening paragraph lays this out quite clearly:
Our success in achieving net zero will require harnessing energy from low-carbon sources to power our homes, businesses, and vehicles. To achieve this, millions of installations — including solar panels, battery storage, heat pumps and electric vehicles — will need to be seamlessly integrated onto our electricity networks. This move to a more decentralised energy system will create more complex energy flows, which will rely on the digitalised exchange of data to be managed effectively in, real-time. This digitalised data exchange facilitates an energy system which can accelerate, automate, plan, and anticipate processes far better than at present.
Of course, Ed Miliband would have us believe that a Labour government can achieve this by 2030 (even Sunak and his Tories seem to think it could be a reality by 2035). I wonder if any of them have read even as far as the Report’s Introduction?
The future energy system will be profoundly different to the one that exists today; it will have to manage hundreds of millions of actions and assets every year, each interacting, engaging, and delivering value to customers and the stakeholders.
Customers will have the opportunity to access more complex, blended products through digital platforms and services, with algorithms and smart technology managing energy needs on their behalf.
Generators and storage vectors of all sizes will need to respond to demand profiles, optimising their assets in a more dynamic manner to unlock value in their respective business models. Stability will need to be managed throughout the system at all levels, with varied and multiple roles interacting with new actors and actions.
This is a significantly more complex operational environment and will require a different approach to the design, management, and governance of the system. Furthermore, these outcomes will need to be flexible enough to adapt to changes in the system as the energy transition evolves.
The Energy Digitalisation Taskforce aims to empower consumers and drive decarbonisation by outlining the digital journey that must be undertaken. Importantly, these benefits must be realised without compromising the high standards of system stability, security, and resilience.
Tucked away in page 11 of the Report is this gem:
Customers are starting to deploy a range of energy assets that will reduce demand for fossil fuels but will also drive-up electricity demand significantly such as Heat pumps and EVs. This sharp increase in demand could create a need for substantial network upgrades, however many experts believe that flexibility can help to make the best use of available capacity and reduce infrastructure costs. However, many of these energy assets lack basic smart functionality ‘out of the box’. This means the energy system has little visibility of their presence and actions but also means they cannot be flexible energy assets. This creates a huge risk for the future, removing a potentially valuable tool for Net Zero, and possibly creating the need for costly digital retrofit or premature replacement programmes.
Time and space do not permit a detailed examination of the proposals contained in the Report. I would urge readers to take a look for themselves, in order to appreciate the enormity and complexity of what is coming down the line. However, Recommendation 5 (“carbon monitoring & accounting”) is worth a quick look, in order to appreciate the extent of the hubris and delusional self-congratulatory thinking embedded in our net zero-obsessed establishment. This is what “they” believe:
Carbon data will provide government, companies, and consumers with the information that is needed to understand the potential impact of their carbon footprint and develop wider economic carbon policies. This could have global impacts with other governments and countries being able to follow the UK’s lead toward a Net Zero future…
…Carbon reduction is a global mission; the UK has already shown leadership by being the first major economy to set a legally binding Net Zero target. We now have an opportunity to become a world leader in carbon monitoring, data capture, and accounting. Accurate carbon metrics are key to supporting carbon innovators to deliver Net Zero and provide a solid foundation for future carbon policy.
Forget everything else. It’s all about those pesky emissions:
To improve the granularity and timeliness of carbon emissions data, Government should mandate that carbon data that is collected today should be reported at a more granular level, ideally aligned with settlement periods. In some cases, this may be commercially sensitive so it may be appropriate for an independent third party, such as the Future System Operator, to collect and aggregate data prior to publishing. In addition, the Regulator should consider requiring hardware-based emissions monitoring for all carbon emitting energy generation. There are a multitude of sensors available from low-cost environmental IR sensors to industrial grade specific emissions spectrometry. These should be deployed with the specific intention of measurement above the granularity of the current grid balancing settlement period, i.e., half hourly under current market design. As broad a spectrum of greenhouse gases should be monitored as appropriate, dependant on their source. This includes, but is not limited to, carbon dioxide, carbon monoxide, methane, nitrous oxide, HFCs, PFCs, nitrogen fluorides and sulphur fluorides. This breadth of data collection is a fundamental requirement to establish a more accurate carbon emission estimate for the energy sector…
Of course, China, India, Russia, Indonesia et al will be rushing to follow our “example”…..
Bottom line:
It is agreed that digitalisation of the energy system is not just a ‘nice to have’ but a core requirement in ensuring that we can accelerate the journey to Net Zero…
(Apparently the customer goes on a journey too). Anyway, thirty-five depressing and worrying pages of management-speak. One thing seemed to be missing from my quick look – any mention of the cost.
National Grid ESO Digitilisation Strategy and Action Plan
This was issued in June 2023, and runs to just 16 pages, including covers, contents page, foreword etc. You have to give it to the National Grid when it comes to optimism. See page 5, for example:
We will keep the lights on and get energy to people when they need it, maintaining today’s reliability levels in a rapidly decarbonising and decentralising world. We will ensure our control centres are resilient, flexible, and agile, with the ability to keep pace with the changing energy landscape. We will confidently and regularly operate periods of zero carbon electricity with high levels of renewable output and dynamic demand. The number of market participants will have increased significantly, as a result of growth in distributed energy resources, electric vehicles, and energy storage.
We will have invested and adapted ahead of need, to continue to operate securely and reliably through extensive automation, greater use of artificial intelligence and enhanced training and simulation, to deal with the vast amount of data needed to run the electricity system. There will be alignment with distribution system operation (DSO) to enable seamless planning and operational coordination to realise the benefits for consumers of a decarbonised energy system.
Page 11:
We will continue to drive delivery of efficient outcomes for consumers and remain conscious that everything we do has an impact on consumer energy bills. A key focus will be enabling whole system flexibility through the markets we operate. Our balancing markets will be decarbonised and distributed, to help achieve the UK’s commitment to net zero emissions. We will maximise consumer benefit by facilitating competitive markets and managing system costs, attracting high volumes of flexible energy, such as demand-side response and storage.
The optimism is most reassuring. Yet, by page 13, it all sounds just a little flat, even if the management-speak does its best:
We will seek the best whole electricity system solutions, working collaboratively with Transmission Owners (TOs) and Distribution Network Operators (DNOs) across transmission and distribution to deliver electricity to Great Britain’s homes and businesses as efficiently as possible. We will use our unique position in the industry to help Great Britain meet net zero through driving debate and collaborative action across the energy sector. This means stepping up and playing a crucial part in the transition to net zero – using our insights to identify and accelerate no regrets strategies that deliver consumer value over the long term. By taking a whole energy system view we will facilitate the transition to clean heat by helping prepare the energy networks and optimising between them. In doing so, we can drive the transition to a low-carbon energy system in a way that maximises benefits to consumers.
Take a look at the Plan to see for yourself the significant number of activities that are being undertaken to try to facilitate the madness while keeping the lights on. Given that the operators of our electricity grid are at the sharp end, I do wonder whether they believe this stuff, or whether they just feel that they have no choice but to go along with it. The optimism and positivity is great. I wonder how the reality will turn out?
Arup – Pathways to a digitilised energy system by 2035
Arup, it seems, were appointed in March 2023 by DESNZ to carry out a six-month feasibility study in partnership with the Energy Systems Catapult and University of Bath with a view to researching energy system ‘digital spine’ feasibility. In August 2023 they produced a report, which can be downloaded here. Arguably, the task handed to them represents something of a poisoned chalice, given this (page 7):
The UK government has set out ambitious plans to create a net zero power system by 2035, subject to security of supply. This involves a rapid acceleration in the deployment of wind and solar capacity, storage capabilities, nuclear power, heat pumps and electrolyser capacity to produce hydrogen. Whilst there is uncertainty regarding how the electricity system will decarbonise, the pathways presented within this paper focus on governance and could enable any energy mix that emerges.
It feels a bit like it’s all on a wing and a prayer (and that’s assuming decarbonising electricity production by 2035 – Labour’s 2030 target seems like pie in the sky). Also on page 7:
To achieve the UK’s net zero goals, our future energy system will need to be comprised of a series of new technologies. Integrating these will require massive structural changes to the ways in which we produce, distribute, and consume electricity.
Given that Arup knows about such things, paragraphs such as this are more than a little worrying:
The system is moving away from centralised sources supporting a large base load, such as energy generated in thermal power stations, towards smaller and distributed generation. A more decentralised model will provide greater flexibility to balance load demands resulting from more variable and distributed energy resources connecting to the grid. We will require specific localised understanding in energy production alongside more dynamic modelling of the energy system. These changes mean all stakeholders will need to fundamentally adapt their roles and responsibilities in the energy market.
The “more decentralised model” is awash with practical and logistical problems, yet Arup claims (politically expedient to do so, I wonder?) that more variable and distributed energy resources connecting to the grid (= problems, I should have thought) “will provide greater flexibility”. The rest of the wording in the paragraph does look like euphemistic language recognising the massive scale of the challenge, while seeking to present it rather as an opportunity (as politicians seem to believe, or at least hope).
I wonder what they got paid? The rather short conclusion looks like a determined attempt to dodge a bullet (or, to mix my metaphor, to avoid drinking from the poisoned chalice) and (to mix the metaphor still further), to thrown the ball back into the Government’s court:
Whilst good progress has been made in digitalising the energy system since the Energy Data Taskforce in 2019, our current pathway and the rate of change is not enough to achieve decarbonisation commitments. New thinking is required, considering alternative pathways to realise a digitalised energy system by 2035.
Within this paper, we have identified a range of pathways available to achieving a digitalised energy system, each with their benefits and challenges. We conclude that the preferable pathway is built around sustained coordinated collaboration between the regulator, government, and industry.
In exploring these different pathways, we intend not to recommend detailed actions but instead to initiate meaningful debate within the sector about the crucial roles that all stakeholders may play. This is to provide greater certainty and clarity so that next steps can be taken.
Back to the conference agenda, and I can see no real reference to costs (they are the elephant in the room, that really must be obvious as a huge issue, yet nobody wants to talk about them). Indeed, the whole thrust of the conference is around the eagerly anticipated consumer benefits to be achieved by net zero and digitilisation. It has sections talking about “increasing consumer participation and autonomy”; “opportunities for customers to engage directly with the energy system”; “managing energy use through smart technologies, tariffs and services in order to reduce [sic] bills”; “frameworks for supporting a competitive market for energy smart appliances, encouraging affordability, and removing demand-side barriers to smart technologies”; “considering how additional capacity from these smart appliances can be utilised”; “what will be required to meet smart meter rollout targets, looking at incentives and next steps for enabling smart households to benefit [sic] from a digital energy system”; and “building and maintaining consumer trust to work towards the wholesale adoption of data-led solutions”.
Incredible though it may seem, they actually seem to believe this stuff.
Post-COP28: carry on regardless
Shortly after I received the email alerting me to the WEET digitilisation conference, I received another one, about yet another such conference, headed “Priorities for UK climate policy following COP28”. This one is to be held on 31st January 2024. Unlike the digitilisation conference, where many of the speakers were yet to be identified, this one’s speaker roles are filled, and we find the usual suspects present there in large numbers, with representatives of (inter alia) the Climate Change Committee; the Parliamentary Labour Party (in the form of the Shadow Minister for Climate Change); DESNZ (x 2); Glasgow City Council; Prospect (trade union); National Open College Network; Arup; Zero Hour; WWF; Durham University; Octopus Energy Generation; Heathrow Airport; Globalfields; and the Chartered Institute of Building. Joint Chairs are members of the House of Lords.
Areas for discussion might have been taken from my last jokey article, An A-Z of Climate Alarmism. As for COP28 “key outcomes and takeaways”, there is absolutely no reference at all to the determination of most of the developing world to slow down the phasing out of fossil fuels. Instead, there will be a discussion regarding “policy implications and legal commitments for the UK – next steps for delivering a green economy and for net zero targets”.
The next session will talk about “progress”: “assessing the UK’s position in relation to short and long-term climate goals – viability of current climate strategies to meet Paris Agreement ambitions – decarbonising key industries in the UK”.
A session dealing with international co-operation (with whom? India? China?) will discuss “aligning timeframes with globally agreed standards – standardising reporting and trading of carbon – opportunities for global cooperation”. They’re always opportunities, aren’t they? There’s never a down-side.
The next session is on finance and investment (remember, it’s always an investment, and the word “cost” must never be used). Here the talk will be about “next steps for funding infrastructure projects – assessing sustainable finance initiatives and strategies to promote green activity – improving public-private partnerships”.
A section on monitoring will discuss “plans for delivering better assessments of climate impact at global, national, sectoral and company-wide levels – promoting transparency and accountability – the role of ESG reporting”.
Finally, the magic (but so far as I can see, meaningless) phrase – the just transition. The conference concludes with a discussion regarding “strategic priorities for a people-centred and inclusive approach – opportunities for job creation and reskilling in phased-out industries – minimising negative externalities of green transition”. I suppose I should be grateful that there is some recognition that “the project” will result in “phased-out industries” and that it involves “negative externalities”. The insouciance with which these unpleasant aspects are approached, however, gives me no comfort at all.
Lest there be any doubt, whatever mutterings there may be from the Great Unwashed, it’s clear that the Establishment fully intends to carry on regardless. If you think that’s an exaggeration, then just look at the list of “key policy officials who are due to attend”. They will be there from the following:
APHA; Cabinet Office; CCC; CCS; DAERA, NI; DBT; Defra; Department for Communities, NI; Department for Infrastructure, NI; Department for the Economy, NI; Department of Finance, NI; DESNZ; DfE; DfT; DLUHC; DSIT; EA; FCDO; FSA; GLD; HMRC; HM Treasury; Home Office; Homes England; HSE; Isle of Man Government; MCA; MOD; NAO; NIAO; NIC; OBR; Ofwat; OGP; ONS; ORR; OZEV; UKEF; UKIB; the Scottish Government; and the Welsh Government – as well as parliamentary pass-holders from both Houses of Parliament.
Other than business people hoping for a slice of the very substantial pie, I wonder if anyone other than that lot bothers to attend these things?
Climate Scepticism 
And yet they can’t even manage a simple meter upgrade, a process involving undoing four wires and two pipes and replacing two boxes on the wall…
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The carbon footprint of consumers has no potential impact; it’s too small to measure.
There are no such benefits, in net. The existing system was superior – now rapidly being eroded. Any benefits that some consumers manage to wangle will come at the expense of other consumers – those who rightly expect to use electricity whenever they need it.
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There are no net benefits of increasing the complexity of a simple system. Common sense points to this. The maintenance costs will be higher. There will be more points of failure. Who would want to be the guinea pig for this grand scheme?
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Alternatively, we can adopt the South African model to achieve Net Zero.
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Mark:
Thank you so much for taking the trouble to uncover for us this treasure trove of utter absurdity. It’s sad and worrying that so many people – presumably most of them well meaning (and probably well paid) – are devoting their lives to such nonsense; nonsense that’s on course to bring social and economic disaster to Britain. And it’s depressing to consider – in the light of all these detailed reports, conferences etc. – just how firmly embedded the Net Zero madness is throughout the UK’s government and institutions. It confirms the view that we – Cliscep’s small band of reality warriors – are most unlikely to be able to change the minds of these people. However that doesn’t mean we shouldn’t keep plugging away. As Ben Pile said in the article I quoted yesterday on the UK policy thread, net zero scepticism is now a minor fixture of the mainstream. That’s something new – and I’ve no doubt that our efforts, together with those of other sceptics, can contribute to that important development. And, together with harsh reality, thereby bring about the policy change that’s so necessary.
I’ve forced myself to follow your advice and have a look at all this stuff. There’s so much I could say about some of the detail. But frankly I can’t be bothered: you’ve done enough to give everyone a good understanding of it. Two trivial comments: (1) the Taskforce Report is 67, not 35 pages long and (2) the ESO ‘Strategy and Action Plan’ has an interesting typo in the second paragraph of the Forward. It says: ‘We have committed to being able to operate a zero-carbon system by 2025 …’ Have they? By next year?
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The more complicated a system is, the more likely it is to fail and the more difficult it is to repair (at least when designed by ingenu(e)s). Think of the UK’s Air Traffic Control system issue of recent months where the whole shebang ground to a halt simply because two way points on a planned flight path had the same name.
And when the system includes lots of electronics/software the problem of debugging becomes very difficult compared to a mechanical system where the human eye can often find the fault.
I do hope somebody is looking into system robustness against failure mechanisms. Where is the failure modes and effects analysis (FMEA) or similar? And I have not even mentioned ‘bad actors’ and all the havoc they can wreak in a non-robust system.
I get the feeling that the whole house of cards is being kept afloat by enthusiastic amateurs who have not the least idea about the complex realities of the world they are forcing us all into.
What did Bunter say? “Cripes, chaps”?
Regards, John.
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John, you ask:
‘Where is the failure modes and effects analysis (FMEA) or similar?‘
So far as I can see, there isn’t one. The only references to failure seem to be about problems that might occur after their system is set up – not in the course of setting it up. Here’s an example:
I’ve no idea what that’s supposed to mean. This ridiculously complex plan breaks all the rules of good project management.
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Thank you everyone for your comments.
I regret that my “analysis” was overly brief, and that I possibly relied too much on extensive quotes from the documents I referred to. However, I think those quotes amply illustrated that there is an establishment obsession with reducing CO2 emissions which trumps all other factors; that this is a hugely expensive and complex project; that it is likely to make things worse for the consumer, rather than better; that there is massive scope for things to go wrong, whether through incompetence, the effects of unnecessary complexity, or the behaviour of bad actors; and that the people in charge don’t understand what they’re doing (or why).
However, the points you have all made have demonstrated those points for me better than I managed to do, so thanks again.
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Mark, Canadians were at first confused what Trudeau meant by Just Transition, but now they’ve figured it out:
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Though there does seem to be some pushback regarding the food transition:
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Robin:
I think that’s a good way of putting it. And across Europe, if this motley crew is right.
I’m thinking especially of the bit Peter Mandelson starts here
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I think their “flexible energy assets” in that context are appliances they can turn off whether it will inconvenience you or not. Hot water cylinders, if large enough capacity, may be OK and so can EV charging. However, do you really want them to turn off your heat pump as you get home to a cold house? What about ovens? Remember, no gas.
All of that control will cost squillions to install, and the likelihood it will go wrong or be hacked is large. Whatever the outcome, the only thing for sure is the consumer will be the loser.
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I said above that this ridiculously complex plan breaks all the rules of good project management. But it’s worse than that – much worse. When I was CEO of a medium sized engineering company, I had a simple test for a new project: if after multiplying the planned timescale and cost by three it still made sense, we’d have a closer look at it – if not, a rethink was needed. But you cannot even apply that to the ‘zero fossil fuel electricity by 2035’ project. OK, making the end date 2057 might actually be a good idea. But the cost? Well, no one’s got any idea what the cost might be. Anyone coming into my office with an uncosted proposal would be shown the door.
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Robin,
1. When I worked in an engineering R&D company we had a rule of thumb regarding cost estimates:-
If what you propose has been done somewhere in the world before then multiply your cost estimate by pi. This is close to your figure of 3. However, if it has never ever been done before then mutiply by two pi (as a minimum).
2. This issue of incompetence (which in this context means people who have no idea what they are doing or how to do it and in addition have no idea of the risks involved, and perhaps do not even care about those risks because appearing to “go green & renewable immediately” trumps all other considerations) seems to litter the West’s current energy transition strategy. For example, here is a link to the Manhattan Contrarian (https://www.manhattancontrarian.com/blog/2023-11-18-at-the-new-york-krazy-klimate-konference) where the author writes about the mindless happy talk before concluding, “From the evidence of this Konference, it it completely clear that the people running New York’s supposed energy transition do not have the slightest hint of competence. I suppose that’s for the better, because people who were actually competent could keep the charade going for a much longer time. With this crowd, the collapse will come sooner, although not nearly soon enough.”
Perhaps we may dare to hope that on our side of the Pond the various charades will be exposed equally quickly and, ideally, with minimum damage having been inflicted on the economy and on ordinary people who (used to expect) a modicum of competence from government. Fingers and toes crossed.
Regards, John.
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Robin,
CA and Texas have been dealing with the complexities of keeping their grids up with higher levels of WWS of late. Doomberg has a post on the subject of preventing blackouts (and the limitations of various costs models) that may be of interest-
https://open.substack.com/pub/doomberg/p/inverted-priorities?r=25q8r&utm_campaign=comment-list-share-cta&utm_medium=web&comments=true&commentId=46479968
I referenced a CASIO report on the herculean efforts that the grid operators performed during a heat wave that prevented rolling blackouts. Unfortunately, my father-in-law had to prepare to evacuate during the heat wave as the Mosquito fire started not far from his location.
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Why this multiplication of a previous costing by pi or three? Is this a cause of, or the consequence of inflation. If the task had been accomplished for a set sum previously, why should it be costed so much more afterwards?
There would seem to be so much about engineering that I do not understand.
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All such rules of thumb require human evaluation of how often something like the task in question ‘has been accomplished previously’. I think back to John Collier giving the keynote address at the Rio Tinto exploration conference in 1991 in Salt Lake CIty and saying “We know IT is important but we don’t know why.” In trying to effectively database all mineral exploration data in a diverse conglomerate, gathered over more than a hundred years (which is what my company had been engaged to assist with in Newbury) he was backing his hunches. Sadly the climate sceptical Collier is no longer with us. But has he been proved right? I’m sure he has.
Same with building an faster version of a time series analysis algorithm combining Canonical Variate Analysis and the Akaike Information Criterion from around 1995. Was that going to be worth it? A hedge fund with $550 million under management using the resulting software would suggest so. But not before my fellow director urged me to can the project (or the agreement to co-develop it) “because these things always take twice as long and cost twice as much as you say at the beginning.” He was in fact right about that. But wrong to back his hunches and sell his stake in the new joint venture for far less than it turned out to be worth.
These were speculative software projects, which is different from other types of engineering. We pulled them off, of which we were justly proud. But when I began to probe climate science and policy, from around 2000, red flags appeared unbidden, not least because of this experience.
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Alan, I think the factor of 3 or pi is not really to do with inflation but essentially to do with a lack of knowledge, notably relating to the details of the project and specifically its crux points i.e. the most difficult parts of the project.
Just because somebody somwhere has tackled the issue before, they will not necessaily have communicated all the details to the world, for example, for commercial reasons. And the way you tackle a project the first time is different from when, say, you turn it into a mass-produced item.
Hence when you are making your first time/cost estimates you will not foresee all the unknown unknowns (as Donald Rumsfeld was fond of saying); and if the project has never been tried before you would be wise to allow for even more unknown unknowns. In short, this factor of 3 or more is simply cautiousness by making allowance for the learning (or relearning) curve in action.
Regards, John.
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So how are we to get to Neverland? I know, just think wonderful thoughts. But remember, it also takes faith and trust, and just a little bit of pixie dust!
Yes, we can fly, we can fly!
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Thanks to all for a fascinating discussion, and apologies for going AWOL. I have been unavoidably engaged in something else all day. I’m glad to see, however, that the discussion has been excellent in my absence (possibly improved by my absence ;-)).
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It should be apparent that I am no fan of net zero, digitilisation et al. Meanwhile, here’s an update on another aspect of the mess – constraints payments:
“CAPACITY AND EXCESS PROVISION”
https://scotlandagainstspin.org/2024/01/capacity-and-excess-provision-stephen-lucking/
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Alan – John Cullen in above comments answers as I would.
as an ex Aerospace design engineer using CATIA (computer-aided design (CAD)” my last company would bid for sub contracts from Airbus/Boeing/Spirit etc.
the winning bid timeline was always below what was possible in the time frame given.
we, the design/stress engineers had to work all hours to meet stupid deadlines & still overrun.
you say – “There would seem to be so much about engineering that I do not understand”
seems you are ideal candidate for “project manager” 🙂
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PS – only other thing I would add, in engineering, once a project starts, design & stress get the ball rolling. but the manufacturing/machining hub for components have to prepare to produce & they don’t want to stand idle.
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John writes:
“I think the factor of 3 or pi is not really to do with inflation but essentially to do with a lack of knowledge, notably relating to the details of the project and specifically its crux points i.e. the most difficult parts of the project”
I have been involved in many engineering projects but have not come across this rule of thumb before. In principle the first preliminary cost estimate for a project should make worst case assumptions for the unknowns. Then as more information becomes available, eg test drilling results for foundation conditions, subsequent cost estimates should reduce. In practice worst case assumptions are rarely made and cost estimates tend to increase in later design and construction phases as the unknowns are investigated.. A good example of this is HS2 where the cost estimate increases are roughly a factor of three, remarkably in accordance with the rule of thumb noted by Robin and John.
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potentilla,
Indeed, HS2 is a classic example of the cost over-runs that are all too common in public sector infrastructure projects. Everyone in government should learn a very important lesson from the HS2 debacle, but they won’t. What bothered me most about the digitisation plans is that for all the reports I read and referenced above, not one, so far as I could see, even mentioned an anticipated cost. They haven’t a clue what it will cost, and perhaps equally worryingly, they don’t even seem to care.
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Mark:
Just to say thanks for bringing this up through this thread Mark. In the private sector competitive pressure can lead to deliberately, unrealistically low cost estimates. But at least there’s something to go back to, perhaps with lawyers in tow, later. John’s right that what you’ve uncovered here (and in so many other places) is Peter Pan economics.
But I have a quibble even with John’s satirical take. Is it really “Peter Pan Teaches the Kids to Fly”? Surely rather “Peter Down-the-Pan Teaches the Kids to Despair”. That’s what’s driving the Net Zero madness. The ridiculous optimism that doesn’t need a single cost estimate is driven by the ultimate nihilism. Not a good combo.
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Alan, you said: ‘There would seem to be so much about engineering that I do not understand.‘
Me too – although. surprisingly perhaps, I ran several engineering businesses. And did so successfully. My multiplication of a new project’s proposed cost and timescale was no more than a method of getting an initial feel for the project’s likely viability – a feel based on past experience. It proved very useful.
But the reason for mentioning it was to highlight the utter madness and irresponsibility of pursuing a major project such as Net Zero without any idea of what it might cost.
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Richard, you said (re the lack of a cost estimate for net zero): ‘The ridiculous optimism that doesn’t need a single cost estimate is driven by the ultimate nihilism.‘
I’ve a horrible suspicion that, if supporters of the policy were challenged on this point, they would say that it’s so desperately important that cost is irrelevant.
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Robin, the closest I came to your experiences was when I worked for Amoco in Calgary. I had very limited links to Production (which housed most of those with engineering experience) working mostly in Exploration as an expert in carbonate plays. Long after leaving Amoco it dawned on me that I was being groomed for higher things and commonly worked alongside the exploration manager (who made all the important decisions) in the place usually occupied by the Senior Geologist). So in this role my advice was sought (or so I thought) commonly about exploration proposals Involving costings. I certainly don’t recall any rule of thumb involving a magnification factor applied to past costs for similar proposals. Most of our time and effort concerned evaluating geological risks of failure vs success.
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Alan, you say: ‘I certainly don’t recall any rule of thumb involving a magnification factor applied to past costs for similar proposals. ‘
I’m not surprised: (1) it was a personal thing that worked for me; (2) it applied to proposed costs for new projects – unconnected with ‘similar proposals’.
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Perhaps the conference is short of numbers – they have sent out another email, drumming up business. In “relevant developments”, it includes this:
and link:
https://committees.parliament.uk/committee/127/public-accounts-committee/news/197947/delayed-smart-meter-programme-fails-to-hit-targets-and-secure-public-support/
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“Tim Dowling: our robot thermostat is playing God – and has decided we can all freeze”
https://www.theguardian.com/lifeandstyle/2024/jan/20/tim-dowling-our-robot-thermostat-is-playing-god-and-has-decided-we-can-all-freeze
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The “more decentralised model” is awash with practical and logistical problems,
wrong. it’s loaded with practical opportunities
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Steven M. It’s possible for both statements to be correct – they are not necessarily mutually exclusive.
However, a short and simple statement such as the one you have made doesn’t really advance or clarify the subject. Please can you explain (against the background of what I wrote and the comments of others below the line), why I am wrong, as well as providing a bit of detail as to the practical opportunities you claim, along with associated costs implications.
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Oh dear! Now we shall be subjected to 1) an absence of any response from Steven to Mark’s reply or, alternatively, 2) Storm Mosher. Any discussion, argumentative or not, is unlikely to reveal the truth, so in this instance Steve could be correct.
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Alan. I welcome debate. Whilst it is of course gratifying to receive lots of comments agreeing with me (and expanding and improving on the points made in my article), it is possible that I am wrong, in whole or in part.
One of the many things that bothers me regarding what passes for UK energy policy is what seems to be almost unanimity of opinion and absence of debate and challenge in the Westminster and Holyrood and Senedd echo chambers.
Steven is welcome to make his case. So far he has asserted that I am wrong but not explained why. I hope he doesn’t respond with a “storm”, but if he returns with measured and reasoned arguments then he will be welcome on this thread so far as I am concerned.
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Steven has posted a comment on my latest article denying that truth can be ascertained through argument or debate. So when he says Mark’s statement was wrong, we should give him the benefit of the doubt and take it that he wasn’t meaning that the statement was untrue but that Mark was wrong to make it. It looks like he is doing what I said in my article, morphing risks into opportunities because that is deemed the correct way of thinking.
Of course, I may be wrong. And if Steven remains true to form, I may never know.
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