As the FT has noted today:
The UK is exploring a radical intervention in the power market, under which the state would make payments to energy suppliers when wholesale gas prices rise sharply in a bid to soften the blow to consumers.
The article is a little vague as to what this proposal might mean. It would seem that the idea is that the government should absorb the impact of some energy price increases at present but that the cost will be recovered when energy prices inevitably fall. At that time consumer prices will be maintained to repay money paid by the government now. In other words, the government will, in effect, provide a hedging mechanism to smooth consumer energy prices.
In principle, I have no problem with us. In practice, I do of course have an issue, which is that what this clearly implies is that the consumer energy market has completely failed and that as far as consumer pricing is concerned if such a scheme is to be put in place then government-regulated prices will be in operation into the foreseeable future, in which case the reason for private sector activity in the sector has to be questioned.
The economics of privatisation for the utilities, whether electricity, gas or water, were always dubious. History has proved that water privatisation has been a disaster and a simple mechanism for exploitation, and the current profit-taking implicit within any new pricing structures for consumer energy supply is also very clear indication that privatised energy companies do not act in the public interest. If, as a consequence, the state has to intervene to both take the risk and protect the consumer then there is almost no further role for the private sector to play in this part of the energy market, whatever they might do in generation or exploration. So, can we accept the inevitable and nationalise this part of the industry and deliver to the consumer what was always required, which is a single fair tariff for everyone?
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Wouldn’t it be wonderful if Starmer could see this simple fact and argue for it instead of forever being frightened of his own shadow – or is he in fact a new liberal conservative?
So we think energy prices have reached a peak, or will they continue to rise for some time? While much of the attention is directed at domestic energy, higher energy prices also affect business customers, with obvious results on activity and prices. Doesn’t this create an even greater incentive to invest more in renewables?
I wonder if there are any lessons to draw from the 1972-73 energy crisis, when OPEC raised oil prices within a few months from $3 to $12 a barrel. Did the UK introduce price controls then? Did they work?
So, soon after a deadly pandemic (Hong Kong fly) and a significant change in the relationship of the UK and the EU, under a Conservative government, we had increasing energy prices, domestic economic problems (NUM strike, three day week) and corruption scandals (Lonrho as the “unpleasant and unacceptable face of capitalism”), inflation, two general elections in 1974, and in the second Labour came to power…
It’s all a bit familiar….but Labour has to have a plan and Wilson and Callaghan did not
Starmer does have a plan, along with all the other Neo-Liberal politicians, come what may it’s business as usual.
Starmer is not Labour nor is the bulk of the MPs that tried to oust Jeremy Corbyn.
The problem we have in politics today, is most think that they think they are supporting a football team, if you are a Brexiteer, or a Remainer – neither side understands the real issue all along is Neo-Liberalism.
I do not believe you
Sorry – but for all his weaknesses if the Tories are business as usual he is nothing like it
I am under no illusions – I dismiss much of what Labour say as neoliberal
But what do you want to achieve by saying what you do? Another fascist win?
Richard – Without filling these pages with everything from Nicholas Ridley’s 1977 so called conservative research papers, or Thatcher’s Secret 1982 cabinet papers it is obvious that that the dismantling of the state has been planned and enacted over a very long period of time. Starmer has reneged on every pledge he made to get himself elected, at the Hustings he even stood up and called out all the lies and smears against Jeremy Corbyn, saying they were of course untrue and that it was a deliberate ploy to beat him with, then conducted the same tactics to get rid of socialists members within the party. Noting he has also buried the Labour Party report showing in detail what was happening by right saboteurs in the party, spoken out of their own mouths,.
His record in the CPS is also tainted, there are too many to mention here but he is also linked to Julian Assange being extradited to the US, when in office his department wrote to the Swedish legal system ,not to get cold feet in persecuting their case against him, when they were about to drop all charges.
We can also mention his membership to The Tri – Lateral Commission : https://labourheartlands.com/sir-keir-starmer-the-establishment-candidate-the-labour-leadership-race-and-the-trilateral-commission/
There are really no excuses any more, we either learn from past mistakes, as I did voting in favour of Tony Blair, he came to power on an anti Tory wave of protest and has proved to be as bad if not worse than the previous Tories, disguised under the Labour mantle, but in reality a wolf in sheep’s clothing. Think about the sexed up document, Hans Blix and the death of DR Kelly where even ambulance personnel said it was strange for someone to slit their wrists without any sign of blood anywhere.
We can be forgiven for making one mistake, and possibly a second time, thinking a leopard can change its spots, but to repeat the same a third time is truly unforgivable?
We shall have to agree to differ
Christ………………I can see a future headlines now:
‘Cuts to services needed to pay back the money Government borrowed during the cost of living crises’.
‘Army told to end paid soldiering and to use volunteers as cuts to pay for cost of living crises bite’.
or
‘NHS sold to Virgin’
Keep up – Virgin has been sold to a private equity company – Twenty20 Capital.
Today Javid is talking about introducing a schools academy model into NHS Trusts ! NHS thrives best on collaboration and co-operation – this with the new NHS Bill will mean american companies taking over the running of NHS Trusts. Its nearly game over, and instead the BBC concentrates endlessly on Covid and party gate.
Virgin or whoever Ali, it’s still the same thing. And it’s really not on.
Stuff “the headlines” scarcely anyone under 60 reads those papers anyway. Check the polls. Most of the people back nationalisation and most of the others are indifferent:
https://yougov.co.uk/topics/utilities/trackers/support-for-bringing-energy-companies-back-into-public-ownership
Considering Starmer’s admission that he doesn’t believe in nationalisation on the basis that ‘it doesn’t work’, although I doubt he could explain why, there is an opportunity for the Green Party to clearly and unambiguously outflank Labour on this issue.
Completely agree about market failure. Completely agree that this demands state control (not “more, freer markets” as the right would have us believe). But we need a detailed plan….. or detailed planS as water, energy and rail are quite different prospects.
I am reluctant to propose “buying out” current owners at today’s elevated stock prices, nor do I wish to arbitrarily confiscate assets with no compensation. So, across all three sectors I would tighten regulations and fines and squeeze profitability until the incumbents throw in the towel. Shareholders would then receive the depreciated cost of the assets they own rather than a random stock price. (EG SSE has a share price of £15 but a “book value” of £6. So, squeeze until the current owners sell to the state at (say) £7).
For rail just allow franchises to roll off as they expire. For Water there is no global price and UK suppliers are vertically integrated so the strategy I propose should make sense.
Energy is harder. Cue Mike Parr ??!!
I agree…paying for intangible worth makes no sense at all in a market where there can be none right now as margins have disappeared
if the govt deliberately worsens the operating conditions in that way, they will just get taken to court by the energy companies for compensation. I’m not saying we shouldn’t nationalise – we should do – but i don’t see your suggestion as being all that easy to avoid compensating.
The rules that the water companies operate under are not chiselled in stone for all time, they are reviewed periodically.
So, first, punish polluting activity to the full extent of the law. Second, when T&C under which these companies are permitted to operate their monopoly come up for review just take a hard line. Up to this point if the government threatened a hard line the response would be “OK, you do it” and the government would cave in. Next time they should just say “thank you very much we WILL do it.
Sure, it is not an overnight solution but it does achieve what is needed.
I like it
There is nothing “radical” about the intervention which addresses symptoms, high gas prices, which are due to factors far beyond the control of the UK “government”. The UK could be 100% energy independent through renewables. Price “shocks” would then be a thing of the past.
For this to happen requires a massive build out of mostly wind, mostly off-shore but also on-shore and PV on all buildings. This would need to be coupled to an industrial policy that ensured as much as possible of the equipment was made in the UK. This policy is wholly absent (because, after all – that would mean picking winners).
Since electricity networks would play an important role, they need to be nationalised. At the moment they are run as profit-centres for, mostly private equity outfits.
In the case of the companies that build the renewable projects, some are wholly private concerns, others government owned. Noticeable by its absence, any UK government owned project developers. The current contract-for-difference regime works well – forcing companies to “sharpen their pencils” when bidding and delivering prices very close to levelised costs.
Absent from all of the above is a wholesale electricity pricing regime that is fit for purpose in a renewable world. The current marginal pricing system is a relic from the fossil era and there needs to be a transition asap to a basket pricing approach. In the world of renewables, “competition” from a price setting point of view can only occur at the bid-stage for a project. This fixes a price for electricity from each and every renewable project. Once this price is fixed, competition cannot exist in a renewable world where zero marginal cost applies to any & all electricity produced by renewables (QED?).
Green hydrogen plays a role in the overall system with basket pricing providing a reasonably stable price for green H2. One then reaches a quasi-autarkic system of +/- total energy independence with prices (elec & H2) that are a function of historic capex and thus fairly stable.
As of now, none of the above will happen because neither toryscum or liebore understand energy systems (or even seem to be interested in understanding them).
The currency support implicit in that is also a massive economic issue
@Mike Parr, you are very knowledgeable about the energy market, what do you think of these renewable technologies?
https://www.theguardian.com/environment/2021/feb/08/powering-up-uk-hills-could-be-used-as-energy-batteries
https://alpha-311.com/
Short term, multi-hour storage is a crowded field. I wish the company luck. However, it is important not to lose sight of the fact that multi-day/multi-week storage i.e. seasonal storage is also needed, which is where hydrogen comes in. The transition to a low/zero carbon energy economy will be “interesting” from a tech point of view and there will be other developments in a similar vein.
Mike Parr rightly stresses the importance of future developments in renewables. Yesterday it was announced that an auction of development rights to a massive expansion of offshore wind farms in Scottish Waters will bring approx £700m to the Scottish Government. Estimated yield from the proposed developments is put at c25 gigawatts and the Scottish Government is endeavoring to ensure that capacity for production of equipment and components in Scotland is maximised. The CEO of Scottish Power (which was the largest bidder) was on TV last night clarifying that the estimated capacity output is vastly greater than Scotland’s power requirements and suggesting that much of this surplus could go into green hydrogen production for feeding into the UK gas network.
Here’s an article about it:
https://uk.news.yahoo.com/scotland-awards-wind-rights-double-141858950.html?guccounter=1&guce_referrer=aHR0cHM6Ly9yLnNlYXJjaC55YWhvby5jb20vX3lsdD1Bd3JJREtSRDcuWmhybndBR3lkM0J3eC47X3lsdT1ZMjlzYndNRWNHOXpBekVFZG5ScFpBTUVjMlZqQTNOai9SVj0yL1JFPTE2NDI1NTMyODQvUk89MTAvUlU9aHR0cHMlM2ElMmYlMmZ1ay5uZXdzLnlhaG9vLmNvbSUyZnNjb3RsYW5kLWF3YXJkcy13aW5kLXJpZ2h0cy1kb3VibGUtMTQxODU4OTUwLmh0bWwvUks9Mi9SUz04ZkkzZUFHSXZ2R2ttenBtTHl6S1N4TXN3T00t&guce_referrer_sig=AQAAACS7MWQRRUEJrp9FO5251kiF-qSYj4Hm1oW17Wd45gqBZnQ2lBepv-OMXBlnf3aD_OnFdPb7X0_eKznYoI96Sjo1iz_zvr_JUc2RGEp-g_p734iy0ZGXSJOfEKvy4uqvojwPtPEMR3cHaol4PE0glRNecZubwaNbUZB-CMpcx2-6
Scotland is the new Saudi Arabia…
Ken Mathieson
“The CEO of Scottish Power (which was the largest bidder) was on TV last night clarifying that the estimated capacity output is vastly greater than Scotland’s power requirements and suggesting that much of this surplus could go into green hydrogen production for feeding into the UK gas network”.
Hmmm. I’m not sure that Scotland will produce all its energy requirements.
Does that include heating and transport?
Why can’t Scotland use electricity for them?
Is energy subject to speculation in the same way commodities are? What I mean is is energy bought in blocks from producers and then sold on for as much as possible? If so the governments plan to smooth out prices at a domestic level is going to raise the issue of government money supporting speculators.
That would be true if the industry was already nationalised
Is it not possible that the large oil companies can quite clearly see that their future profits are seriously threatened by the transition to renewables and are now determined to make hay while the sun shines. Is it not sensible that the taxing of oil and gas at the wellhead should now be restored at a tax level that will bring the markets under control? It shouldn’t be too difficult, we could ask Norway how they do it!
Virgin have just added another £3.25 to my broadband. It was already £40 a month. The money expert would say move to another provider and if I don’t, well it’s my fault. So is this my lot in life? to spend even more screen time online to find the best deal for now to have another price hike imposed, to move again, all the while changing wifi browsers needlessly and contributing to the technological mountain of waste, fuming over another no-show by the engineer, being put on hold for eons to be cut off mid-sentence?
Virgin have me by my bits (unit of digital information) and they and know it. It isn’t just about being unable to afford the bills, it’s the misery of just staying above water that comes with it.
At that price, you can move to Andrews and Arnold and actually have a competent ISP that displays some backbone when it comes to standing up for consumer rights.
The energy market is a rentier’s paradise – like many others too. Teaser rates to hook you then let inertia do the rest. So we get “U-switch” and others. Surely energy, water – reliable, safe, universal and equitably priced wherever you live – is a citizen’s right and not an opportunity for wealth extraction while investing as little as possible in the network?
You all need to read this..,
https://adventuresincapitalism.com/2022/01/18/oil-is-the-wrecking-ball-that-we-all-deserve/
I’m not sure that energy price rises are a short term blip.
The Energy Return on Investment (EROI) is falling.
In the 1950s, every barrel of energy used in the extraction process provided over 100 barrels of usable energy to the economy.
This figure has been dropping ever since and is getting to the point where it causes the price to rise and keep on rising. Supply can’t keep up with demand.
The economy was built on a 1:100 ratio. (all the “easy” oil has been had) Renewables won’t be able to creat a ration anything close to 1:100. Solar is 1:10 and wind is 1:15.
Tar sand oil is 1:5 !!!!!!!!!!
The link below is a lengthy breakdown of the different energy options. Non come close to the (historical) EROI of oil.
https://escholarship.org/uc/item/9js5291m
The economy is not a financial system, it is a (cheap/abundant) ENERGY system. Without the energy, economic activity grinds to a halt.
We are at the beginning of a decline in energy. This is the true reason for the price hikes.
More on it here
https://surplusenergyeconomics.wordpress.com/2022/01/01/219-the-unravelling-begins/
With all due respect your blogger’s post ” entitled: “The unravelling begins THE REALITY OF SCARCITY, THE SCARCITY OF REALITY: is a well-intended but surprisingly daft load of drivel.
To begin with, Energy Return on Investment has no direct relevance to consumer prices. As things are currently. ERoI for renewable energy producers may be low at the moment because their operations are newly established and still at a phase that involves the energy costs of building new plant and infrastructure. Once that plant is established, it can start paying off its fixed costs. When those are paid off ,the returns (both energy and financial) should be exceptionally good given that the variable (operational) energy costs for a renewables utility that has NO FUEL COSTS are negligible.
That brings us to the core point at issue here being that your blogger has fully lost sight of what the word “renewable” means. “SCARCITY” he says. “Scarcity” FFS? There is no scarcity of wind, tide or sunlight.
The obvious points I am making here are not mine. Jeremy Rivkin famously covered all this in detail years ago while an army of academics did so less famously.
Just finally, that blog tries to dismiss the idea that current inflation problems are caused by well-known supply-chain issues without even attempting to provide any explanation as why that idea would allegedly be wrong, or why it is that current inflation has so neatly coincided with current supply bottlenecks. The blogger’s alternative view of inflation assumes a world of peak oil and ongoing fossil fuel dependence. Those assumptions might have some relevance in the short term but the associated suggestion of “scarcity” forever is obsolete.
Thank you
Marco.
But those renewables will need replacing in 40 years time and next time they will need replacing with renewable energy.
I am not sure I follow that…..
The renewables we are installing now have been created using fossil fuels.
When these renewables have come to the end of their working life in 40 years time they will need replacing. The energy to replace them will need to come from more renewables. We will need to create renewables just to create renewables.
The EROI of renewables is between 1:10-1:15 for their lifetime. It’s has no relationship to the price of energy at as such. It’s how much surplus energy it can produce for the economy. The complexity of the modern economy was built on a EROI of 1-100. 1-15 just isn’t enough to maintain that complexity. The economy will need to contract.
Of course we will need renewables to create renewables
Is that something that has only just dawned on you – that we will need to build an economy wholly renewables-based?
Or that we will still need energy?
Hi Richard and Vinnie,
I’m guessing that the point Vinnie is making with his reply to me is that, with renewables, the energy cost of replacing old plant will involve a new round of construction related costs.
I’m also guessing that Vinnie’s reference to “40 years” relates to the normal life expectancy of a coal plant which is about 40-odd years, or a nuclear plant (20 to 40 years).
There are two (at least) things to note with regard to that. One is that those life expectancy expectations don’t apply to renewable plant. Renewable plant doesn’t operate like a big dirty factory that gets old, eventually dies and needs to be replaced holus bolus. Renewable plant once established, usually operates as an assemblage of modular units (eg. solar panels, wind turbines) where the number of units can be increased, reduced or replaced as required. To that extent their ongoing capital costs are more analogous to the maintenance costs experienced by the old fuel-based industry. The old industry’s plant construction costs don’t apply in anything like the same way and the grid’s operations are different – more diffuse, less centralised, involving a variety of sources (including the panels on household roofs).
The more significant point here (once again) is that, with an absence of fuels and fuel costs as we know them, for renewables, there is no direct or useful analogy between renewable and fuel-based operations. The notion of Energy Returns on Investment does not apply in anything like the same way because the implicit assumptions about scarcity and entropy do not apply to renewables. Thus the word “renewable”. The sun, sea and wind resources are free and, for all intensive purposes, infinite.
Its all quite revolutionary.
Some quick reads:
https://graylinegroup.com/renewable-energy-developing-world/
https://theconversation.com/renewables-are-cheaper-than-ever-so-why-are-household-energy-bills-only-going-up-174795
https://www.ft.com/content/a37d0ddf-8fb1-4b47-9fba-7ebde29fc510
https://en.wikipedia.org/wiki/Nicholas_Georgescu-Roegen
https://www.forbes.com/sites/danielaraya/2019/10/08/the-green-new-deal-jeremy-rifkin-and-the-coming-collapse/?sh=5b569684053d
https://www.google.com/search?client=firefox-b-d&q=life+expectancy+of+a+coal+fired+power+plant
https://www.google.com/search?client=firefox-b-d&q=life+expectancy+of+a+nuclear+power+plant
Thanks
No doubt someone has thought about this in more detail, but there is a point about how much energy it takes to create the infrastructure, how long it last, and how much it produces.
If a old-style power station project “costs” 1 but produces 100 over 40 years then you get your investment (the embodied energy) back in less than a year. If it produces 40 over 40 years your first year is returning the investment and they you have 1 a year for 39 years.
If the equivalent renewable project costs 1 but produces 10 over 40 years (what is the expected lifetime of a solar panel, or a wind turbine?) then you it takes four years to generate as much as you invested, and you have 0.25 per year for 36 years. So you build four times as much. Fortunately wind and sun are free.
Is that so bad?
Richard and Marco.
Don’t get me wrong, I’m not anti renewables. I just don’t think that people a being honest/realistic about the amounts of energy that they will be able to produce.
Marco. You said.
“The sun, sea and wind resources are free and for all intensive purposes infinite”
This is just not true. To harness these resources has a price.
They do not come for free and I’m afraid that the infrastructure to harness the energy will not last forever and will need replacing.
The solar panels on my roof have s 25 life expectancy and I’m fully expecting the inverter to pack up before then.
Non of this stuff is “fit and forget”. Wind turbines don’t last forever either. It’s crazy to think that they do. How old is the oldest wind turbine? This stuff has been around for a while now. It’s not new.
The ERoI of a wind turbine has nothing to do with economies of scale and upfront capital costs.
It’s about the energy put in to creating it against the amount of usable energy you get out. This is the same ratio for a single turbine as for 100.
The ERoI isn’t just the energy at the point of manufacture either. It’s the whole energy input from mining, transportation, shipping, precessing, manufacture and installation.
The idea that the raw materials to create solar panels and wind turbines is also limitless.
The point about this generation of renewables being created using fossil fuels is s relevent one.
If we are to stop burning fossil fuels then the next generation of renewables will need to be made using 100% renewable energy. This includes the mining of the raw materials, transportation including shipping, processing/refining those raw materials, manufacture and installation (every 40 years). Switching all that production to renewables will require s whole lotta renewables!!!!!
Renewables can not just replace fossil fuels and we can all carry on as before. Yes, they can create energy but not at the levels that out complex (and ever expanding) requires.
There is going to be a big contraction and simplification of the economy with profound effects for all of us. The challenges are going to be huge. We need to be aware of the limitations of renewables if we are going to meet these challenges.
I stressed again to read this ebook Marco
(I’m guessing you haven’t yet as it’s a long read at 400 pages)
https://escholarship.org/uc/item/9js5291m
It explains all the energy options. Solar, wind geothermal, fussion, fission, hydro, bio crops, oil, coal, gas……
Their pros and cons and the scale of the energy required to maintain the present levels.
Energy saving is vital
Time will tell which hypothesis is correct.
As you say. It’s probably time to move on. I’ve nothing more to add on the subject.
(Quite chuffed I only had one typo in the last post though. Result!)
Good grief, Vinnie
This, from you:
“Renewables can not just replace fossil fuels and we can all carry on as before. Yes, they can create energy but not at the levels that out complex (and ever expanding) requires.”
is (with or without typo) is an obsolete conjecture.
As for this: “We need to be aware of the limitations of renewables” What “limitations” would that be then?
I don’t get the point of you repeating that which we have already acknowledged. Yes, renewables have fixed costs (capital costs, plant costs, whatever you want to call those) but when their marginal cost (the cost of producing an additional unit of energy) is near zero, the source of that energy is both cost-less and effectively infinite then we have a revolution that makes all previous notions of any “energy costs” somewhat redundant.
This author (who is admittedly from a renewables engineering firm) effectively explains that point well enough:
“the new energy technologies that we are increasingly relying on have a completely different cost profile. Renewable generators (solar and wind) are nearly entirely capital and other fixed costs. They have no marginal costs, as they produce when their cost-less fuel source (the sun and the wind) is available. Energy storage is also a capital-intensive technology.”
“A combined solar + energy storage plant where the storage charges from the solar power generated is another technology that is nearly 100% capital and fixed cost with 0% marginal cost.”
This change in technology has large implications for power markets”……
https://www.linkedin.com/pulse/new-merit-order-what-does-zero-marginal-cost-revolution-buryk
The wiki for electricity market “merit order” is quite good:
https://en.wikipedia.org/wiki/Merit_order
Lastly, it should be safe enough to say that the renewable plant and equipment costs you’ve referred to will be well and truly superseded in “25” or “40 years” time . Exactly how so remains to be seen.
Marco.
Don’t get me wrong. I think that our only option is to make as many renewables as we can before the EROI of oil drops too low.
I just don’t think we will end up (through renewables) with anything like the levels of usable (total generation minus inputs) energy that our complex, economy/society currently needs to function.
The idea that renewables are a limitless supply of free energy is at best flawed and naive. The resources to make them are not limitless on a finite planet. Like oil, the easy to get to stuff has already been got. Extraction will only get harder and will take up more of the total energy produced.
My 40 year lifespan for renewables seems to be over optimistic. 25 years is more like the average.
https://www.semprius.com/how-long-do-wind-turbines-last/
https://greencoast.org/solar-panel-lifespan/
I’ve read the links you posted. I think you are mixing up energy “costs” and financial costs.
An EORI has nothing to do with the financial costs of a unit of energy. The EROI is governed by the laws of physics not financial markets.
The energy required to boil a litre of water is fixed by physics. There is no “economies of scale”. If you were to boil 100 litre of water, then you don’t make a saving on the energy required per unit. (Litre)
The EROI of oil is falling because the remaining oil is harder to get out the ground. It takes more effort/energy to extract, so has less surplus energy for use in the economy. It is NOT because there is an actual shortage of oil. This is an important distinction.
My original post was regarding the spike in energy prices and that it may not be a blip. That it could be a result of a falling EROI of oil and gas. Will be interesting to see if the price falls back down or that it is here to stay and is only going to go up?
With an ever expanding global economy, my money is on the prices going up and up.
When the EROI of oil falls below a certain threshold, then it can’t supply enough surplus energy to the economy to maintain the present levels of economic activity. I’ve read that this level as 1:20.
Renewables have a EROI of 1:10-1:15 (depending on the technology). This too, is not enough to meet present energy demand, never mind an ever expanding economy. The option to just create more renewables has limits.
Let’s build as many renewables as is possible and see where we end up.
If we can’t produce enough to meet our present energy demands the the economy will have to contract. This will have profound effects on all our lives.
(Apologies if there are any typos. I’ve re-read a couple of times, but some may have slipped through)
Vinnie
I am entirely satisfied experts think you are completely wrong about this and I am not willing to host your further comments on this issue
Richard
Polls (such as the one linked below) clearly indicate that nationalisation is a popular proposition, more so now than ever. To ensure that no future government is tempted to exploit a public-owned monopoly, a new nationalised entity should probably come with a sound charter or constitution which sets out its limits and obligations.
https://yougov.co.uk/topics/utilities/trackers/support-for-bringing-energy-companies-back-into-public-ownership
For those that won’t click on that link the current results were:
“Tend to support” 32 per cent
“Strongly support” 27
“Don’t know” 27
“Tend to oppose” 10
“Strongly oppose” 3
Maybe that Corbyn platform isn’t quite as “dead” as some suggest.
In terms of the 1st link, Mackay and his “In Place of Hot Air” did something very very similar in 2012. Many of the assumptions then were wrong. (for example the amount of energy possible from off-shore wind). There was also the omission of energy efficiency. Taking one example, moving from Basic Oxygen furnace to direct reduction using hydrogen massively reduces the amount of CO2 emissions (coal) and in turn the amount of energy needed, circular economy measures could reduce primary steel production in the EU from circa 110Megatonnes/year to circa 20MT/year.
The “from the ground up” approach is outwardly impressive – but allows writers to obscure important assumptions. I’d note also that the document is US-centric.
There is also a tendancy to overlook tech development. For example: developments in material tech will by 2030 obviate the need for lithium in batteries (a combo of silicon-based aerogels and sodium will do the same job) . There are many other examples.
Agreed on the logic of your argument, and wholeheartedly agree on England’s water privatisation as being disastrous, but we are looking at the effects of political dogma not practicalities or what is best for the consumer.
With HMG’s obsession that market forces should dictate all and the Treasury obsessed with maintaining receipts, there is little to no appetite in government for radical reform rather than fudging a continuation.
Mike Parr makes excellent points on what COULD be done, but recognises the blockage as political self-interest and myopia, not a Tory only affliction.
IIRC some 25% of UK power is imported from Europe and 20% gas, the bulk being home produced. The price of UK production did not shoot up overnight, wholesale prices did, but HMG policy dictates the 75% and 80% are charged at the same rate.
A programme of energy conservation could have dramatically altered energy import requirements years ago, but successive governments have been dead agin it and the Treasury obsessing over it’s receipts.
Wind energy has made huge strides, further developments including “ever the bridesmaid” tidal will alter UK power production dramatically over the next decade, but where is the vision from government ?
The blockage is not technology or capability but political self-interest and myopia.
Please, an appeal. It is a wonderful resource to draw on expertise as in this blog, but technical terms MUST be explained to avoid the message being lost. As a retired lawyer, I am perfectly aware of the role played by technical glossaries, but they are only useful between the cognoscenti. It is not dumbing down to take account of this and I see little evidence of dumb people on this website.
Sorry -0 I sometimes just do not realise the scale of specialist knowledge I have that others do not share
It seems to me that the supply of domestic energy is a basic human need in a modern, supposedly civilised world. While energy supply is not in public ownership, the population and governments can be held to ransom. We have seen near record profits for shareholders while the public endures the highest ever energy costs forcing many into fuel poverty. Unacceptable! If governments hedge energy supplies, that’s yet more public money shoring up an already highly profitable, exploitative industry with zero benefit to the general public. The only answer is take the whole kit and caboodle into public ownership.
government shouldn’t be hedging energy prices whilst privatised energy supply companies are benefitting from that IMO. but is there not an argument that gov’t might want to hedge on some overseas-sourced energy sources if domestic energy supply was nationalised?
Anyway, i think Labour are missing a trick here. Tories have painted them as unpatriotic over the years, and the language of patriotism is powerful. If i were them i would paint the issues of privatised energy, depending upon foreign countries’ for energy as both a major national security issue, and an issue around patriotism and that phrase i despise for it’s misuse ‘the national interest’.
leaving UK energy supply to the market and being dependent on electricity generation from France, and fossil fuels from strategic overseas rivals, is a really bad look in terms of national security.
I think arguing that we have to tackle renewable energy generation, efficiency, and (part) nationalisation of the energy industry as a cornerstore of national security and independence is an easy and persuasive argument that will cut through even with those who are climate change sceptics and not environmentally minded. Given the fact that huge swathes of people believe, or are sympathetic to the argument that the Iraq war and disastrous foreign policy around the middle east in recent were all about oil, I think this yet another building block of this argument which will click together in people’s minds when brought in the correct way.
Starmer – don’t just drape yourself in a union flag. Actually make arguments about what the country needs in terms of its strategic long term interest, and recapture the narrative around patriotism and the national interest. The unpatriotic ones are those that don’t believe in the UK government being able to run anything successfully and instead farm out the responsibility to successful overseas state run companies.
Don’t get me started on trains.
‘Don’t get me started on trains.’
Oh go on – be a devil.
Some of us like the odd diversion onto trains
Just been reading a biography of the Stephensons – why bother with fiction when such is available. When borders are finally crossable I shall be visiting L’pool (& the London B’ham line) . 7500 miles of line built in 25 years – only using manual labour. The “challenge” of renewables is trivial compared to what was achieved in 25 years in 1830 – 1855 in the UK.
Exactly
And remember that the entire Wst of England main line was regauged in a weekend in 1892
As previously stated, why don’t we just follow the Norwegian model?
https://www.lifeinnorway.net/norway-announces-record-oil-gas-revenues-in-2021/
because she might think that we’re stalking her.