The Government’s energy strategy, like most Government strategies on absolutely everything, is going to fail…
Spad: Slight problem – You remember you agreed to let the EU shut down those 9 smelly old Oil and Coal fired power stations?
Minister: Oh yes. Very Green, wasn’t it?
Spad: Very brave, yes.
Minister: Brave? No! Surely not?
Spad: Possibly the most courageous thing you’ve ever done, Minister.
Minister: Oh no! This is a disaster…. is it a disaster?
Spad: Well obviously electricity rationing will be a bit of a vote loser…
Minister: Rationing?!
Spad: … and you’re going to need to build… (counts fingers) 10,000 wind farms…
Minister: 10,000?! Surely not! You can’t build one of those things without being swarmed by Nimbies. Perhaps we can build some more power stations?
Spad: Ah, yes, I thought you might suggest that, very wise – there is a slight, teeny problemette to deal with though: These power companies, you see, are a bit… reticent … when it comes to building new power stations.
Minister: What on earth for? I thought they liked making money?
Spad: Well, yes they do. But they don’t like EU regulations shutting down power stations because they’re not Green enough. That is the point, Minister, if you remember. No more coal and oil stations.
Minister: Oh, they’ve always been vindictive sods! Okay. So let’s have some more Nuclear then? That’s alright isn’t it? No CO2 and all that?
Spad: Any chance you might want to make it easier for people to build Nuclear power stations? Another burst of courage, perhaps?
Minister: Christ no! Obviously not. Well… what about that clean coal technology? Can’t we use that?
Spad: You mean the “Carbon Capture and Storage” concept? It’s wonderful on paper, Minister.
Minister: Ah. Fusion?
Spad: I’m afraid old age will get to you before Fusion powered energy does.
Minister: Right…. so, let’s see… what’s left? Gas? Is ‘Gas’ Evil too?
Spad: It’s still a fossil fuel and we’re dependent on imports – mostly Russia, actually. Assuming we can build the 10,000 windfarms we’ll need gas for, oh, 50% of our energy? Putin’s rather thrilled. Did you enjoy the hamper he sent?
Minister: Oh dear. That does not sound good. What can we do? Electricity rationing… please no! No! Not again!
Spad: Have you considered banning things that use electricity? For example, did you know that if you banned incandescent bulbs it would be equivalent to 70,000 cars off the road!
Minister: Really? Will it prevent the need for rationing?
Spad: Er no – for that you’re going to need to ban electric ovens, probably most LCD televisions, halogen lights, limit everyone to one television, ban microwaves, ban computers, ban vacuum cleaners and definitely ban electric heaters of any kind. For starters.
Minister: … and the people will prefer that to rationing?
Spad: Yes they will.
Minister: Really?
Spad: Probably.
Gareth Aubrey said...
1 Sep 09 at 10:20 am
The scary bit is that this blog piece represents the closest to an energy strategy this government has ever gotten…
Malcolm Todd said...
1 Sep 09 at 10:21 am
Okay, first of all, you’re apparently assuming that if it’s reported in the Telegraph it must be true. Frankly, I’d sooner believe the government.
Oh, hang on – it’s a Telegraph report based on government figures. It’s hard to know just what basis to ignore its predictions on.
What’s the libertarian strategy, I wonder? Abolish all planning restrictions so that companies can build as many nuclear power stations as they want? It’s a thought – but I suspect you’d also need to provide guarantees to protect the operators from liability for any accidental discharges or security lapses before they’d take the risk of building. Which sounds awfully like government intervention. With or without a ‘strategy’.
Neil Stockley said...
1 Sep 09 at 10:41 am
Charlotte,
Having spent a lot of time over the past 12 years immersed in “UK energy policy”, I share some of you scepticism about “UK energy strategies” — they fail because they try to come up with magic answers but do not take sufficient notice of: (a) how markets work in practice; (b) linkages with the EU energy market and governance; and (c) the ever more pessimistic science on climate change.
I have to ask though what a “libertarian liberal” energy strategy might look like. For instance:
What action would be taken on climate change and through what mechanisms – would carbon pricing (which needs govt action of some sort) be part of the strategy?
UK energy policy has arguably been market driven since the late 1980s (at least, that’s what we were told) — but has it delivered energy security?
If the market was allowed to let rip, might we become more dependent on imported gas? And the government wouldn’t try to prefer (i.e., subsidise) particular energy sources (like nuclear, which has never got off anywhere without some kind of public subsidy).
Energy efficiency is the most cost-effective energy “solution” — but its take up is frustrated by various forms of market failure.
Man in a Shed said...
1 Sep 09 at 10:43 am
There is another possible explanation. Labour are deliberately trying to engineer a crisis in the future.
This is one of the two explanations that fit the facts, either:
1) Labour minister are exceptionally and unnaturally stupid and incapable of listening to a word of the advice their civil servants give them.
2) They are still revolutionaries, as they were in their youth, and are looking to generate a large crisis to justify an authoritarian socialist utopia.
I’ve worked around this area and can tell you everyone who has any dealings with gas and electricity supply has known a crunch is coming for at least 15 years.
Newmania said...
1 Sep 09 at 11:08 am
It looks to me as if our big mistake was to fail to invest in Nuclear.I blame the Liberal constituency for this , I gather that gas is going to provide a cheap and expanding source in the near future though.
Newmania said...
1 Sep 09 at 11:18 am
PS On Natural Gas
“A proper global market for natural gas is also rapidly emerging. But unlike the oil market, it has no Opec cartel to dominate it. Previously, gas was only moved about by pipelines and customers had to accept what they were given. But the world pipeline system is being augmented by Liquified Natural Gas, or LNG, which comes in frozen on ships. The difference is absolutely crucial because LNG cargoes can be redirected, and that means they can be traded.Indeed, the average cargo is probably traded tens, if not hundreds, of times and can change course frequently before it reaches its destination.
So, if some nasty character at the end of a pipeline starts to turn it off, the customer can at last say: “Hah. I will simply get my gas from somewhere else, where they have democracy and the rule
of law.”
All is not lost then
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/6100536/A-new-age-of-cheap-energy-approaches.html
Thomas Byrne said...
1 Sep 09 at 6:22 pm
This made me giggle immensely.
Roger Thornhill said...
1 Sep 09 at 9:34 pm
Banning electric ovens and heaters? What, so people use, er, gas?
The Libertarian solution is to reduce or remove State distortions, so by just ignoring the recent codswallop EU directives would be Libertarian.
One would need to remove prohibitions on use of and mining of, say, coal. I would think that the UK has enough coal to last it until Fusion is in production and hundreds of years beyond.
However, War is Peace, so the spooked up “oops” no power will be used as an excuse to TAX us, to CONTROL us, to MONITOR us and to make us ask permission for living.
I am coming to the conclusion that the Socialists/Fabians and Statists in general have not got over the “golden age” of Wartime Britain where they had the most control. Britain had an almost total War Economy, almost the entire means of production mobilised. Global Warming along with “Turrr” is the new Fascism. Oh! The irony!
Jack Hughes said...
2 Sep 09 at 9:39 am
Just to remind posters of Orwell’s words:
“[the events] did not happen any the less because the Daily Telegraph has suddenly found out about them…”
The Great Simpleton said...
2 Sep 09 at 12:51 pm
“What action would be taken on climate change and through what mechanisms – would carbon pricing (which needs govt action of some sort) be part of the strategy?”
Follow Stern’s reccomendations of taxing CO2 at $85 per tonne and then let the market decide how to generate electricty. The one thing we do want is for the world to be a lot richer as the climate changes naturally and power cuts aint going to help.
Malcolm Todd said...
2 Sep 09 at 3:52 pm
“[the events] did not happen any the less because the Daily Telegraph has suddenly found out about them…”
And if you had any evidence for this story besides the Daily Telegraph that would be relevant.
You could, for example, take a look at the government report and appendix that the Telegraph is talking about. I’m such a sadsack that I did. (That’s an hour of my life I’m never getting back. I’m blaming you for that, Charlotte Gore.) Anyone who’s not interested in calm discussion of actual facts might as well skip the rest of this, ’cause it’s not short.
It’s at http://www.decc.gov.uk/en/content/cms/publications/lc_trans_plan/lc_trans_plan.aspx. Search for “unserved” in the pdf, or look for chart 25. Then – because it must by this time be obvious to you that the journalist has completely failed to understand what “expected energy unserved” means (quelle surprise) – check out this document, which introduces EEU (relax, nothing to do with the Belgian Empire) as a measure of security of supply: http://www.berr.gov.uk/files/file41822.pdf. None of it’s easy to understand, and I’d be delighted to hear from an industry expert who can explain it for me. However, some things are clear:
The EEU is never less than zero. It’s made that way. That’s not unreasonable: there’s no way of building a system that simply wouldn’t ever fail to meet demand in any conceivable circumstances. Grown-ups should understand this.
The scenario in Chart 25 is better than at least some scenarios envisaged two years ago, in the absence of the new government strategy, which you could spin as meaning that the strategy is expected to rescue us from a potential disaster. (Of course, that would be putting a silly partisan spin on the facts. Which we would never want to do.)
The DT report picks out the two single-year peaks in the graph, and presents those as if it were the future norm, which is quite clearly not the case. (If you believe the government’s figures, that is. But if you don’t, there’s no story in the first place.)
Finally, the potential outages in those two worst years would not mean “16 million families being without power for at least one hour during the year” as the DT implies. (By the way, does an average of 30–40 minutes’ power cuts per year sound like the end of civilization to you?) Observe their weasel words “the equivalent of” – industry and even (yes, really) government offices can take the hit, and it’s only “equivalent” to an accountant. At the point where they start talking about “the equivalent of the whole of the Nottingham area being without electricity for a day”, you should remind yourself that we’re talking about electricity supply across the whole of the UK for a year, so the comparison is utterly pointless. (Yesterday, the Guardian claimed that the amount of ice dropping off the Greenland ice cap was equivalent to “dropping a billion elephants into the ocean”. Top marks for inventive imagery, which is more than can be said for the Telegraph’s analogies, but nul points in both cases for meaningfulness.)
In short: a lazy – no, let’s be fair, a time-pressured– journalist for a right-wing newspaper has cobbled together a scare story based on a misunderstanding of a technical appendix and old-fashioned journalistic hyperbole and insinuation. It tells you absolutely nothing about the effectiveness or otherwise of government strategy on energy, or the effectiveness of government strategising in general. Of course, if you believe that all government planning is either evil, incompetent or both (and if it’s evil, of course, we should be glad that it’s incompetent), then you’ll carry on believing it. But please don’t cite this report as evidence for your belief.
sconzey said...
3 Sep 09 at 1:02 am
Nevertheless, when demand outstrips supplu, allow prices to rise. Demand’s fallen? Higher prices are encouraging investment in supply?
Job done.
In another story, the Libertarian solution would be to encourage bottom-up entrepreneurial innovation by removing structural impediments like taxes and regulation.
1. It needs to be cheaper to build and run a nuclear power station. Some form of bribery/coasean bargaining should take care of Nimby objections.
2. Great chunks of the national grid can be privatised. Ideally you want it to work something like the internet with packets of energy being routed across the country from areas of low demand and high supply to areas with high demand and low supply.
3. It needs to be cheaper to build and run any kind of power station. CHP on a neighbourhood basis is stupidly efficient. It should be profitable. It’s not profitable, otherwise people would be doing it. Why isn’t it profitable?
Richard T said...
3 Sep 09 at 1:11 pm
The stations that may be due to be shut are beyond the normal expectation of operation when they were built – the first started up in the mid 60s and apart from Drax all were operational by the mid 70′s so 40 to 50 years old by 2015. As I recall a life of around 30-35 years was planned so, in a way the deal with the EU is slightly artifical since they’d be facing closure anyway because the plant is knackered and time expired – dressed up 60′s technology.
The only choice I can see is to renege on the agreement with the EU and keep the coal fired plant (and the old nukes) running until they fall apart by which time we might have replacements designed and commissioned.
The problem is that there hasn’t been any work on design for new base load plant except the gas fired CCGTs so, assumimg we’re happy to go on burning gas, there isn’t a problem. If we’re not then there is nothing much else apart from nuclears kindly supplied by EdF and coal fired plant maybe with carbon capture. Renewables won’t fill the gap in any sensible time horizon of 10 years. Don’t even think Severn barrage as the silt in suspension in the river will stop that one dead.