Archive for the ‘Energy’ Category

Natalie Bennett: We need a Massive Transformation

September 24, 2014

natben2015Green Party leader Natalie Bennett writes that Ed Miliband’s speech did not signal a break with the past and that his focus on green technology is too narrow.

Increasingly, when you talk to people around Britain about the lives of their children and grandchildren, their outlook is negative. They might not always have worked out an explanation of what’s wrong, but they’re sensing, entirely correctly, that we’ve got a society headed in all of the wrong directions: economically, socially, and environmentally.

They’re reflecting the still enormous levels of youth under-employment: young people employed on zero-hours contracts, graduates working as bar-tenders and shelf-stackers. And that the 1% keep getting richer while more and more of the rest of us struggle; even the formerly comfortable are no longer certain that they won’t end up in the food bank queue. And, as tens of thousands showed in marches around the country last weekend, they understand that climate change – and other environmental damage, to our seas and rivers, our lost biodiversity, the degradation of our soils – is a clear and present danger.

We need a massive transformation.

But there’s no sign that the Labour Party, on the evidence of its conference so far, understands that. Real change isn’t on its agenda; a bit of tinkering is about as far as it stretches.

Take the example of the £8 an hour minimum wage by 2020 promise. That’s a 25 pence per year increase over the course of the next parliament, starting from the grossly inadequate base of our current minimum wage, the value of which the former Labour government allowed to slide, a trend the Tory-Lib Dem coalition has continued and enhanced.

Contrast that to the Green Party policy I announced a couple of weeks ago: making the minimum wage a Living Wage immediately and increasing it above inflation after that so that it reaches £10 an hour by 2020.

This isn’t a bidding war: it’s an argument about a principle that there’s strong evidence the British public supports – work should pay enough money to live on.

Labour leader Ed Miliband said yesterday: “when the economy grows, the wages of everyday working people should grow at the same rate”. That seems to mean he’s content to maintain the current deeply unequal, historically extreme, division between the few high-paid workers and the rest of us. Contrast that to the Green Party, which says the top paid worker in an organisation shouldn’t be paid more than 10 times the lowest paid.

There’s grave concern about our National Health Service – I saw that when I walked for a day on the People’s March for the NHS. We know we need more medical staff, more support staff, more resources in general for the NHS. The offer from Miliband of an extra £2.5 billion is therefore welcome.

But this is from the party that, when last in government, ran wild with the disastrous Private Finance Initiative that will over its lifetime cost you and I billions, that raced ahead with the disastrous Tory model of competition. The Green Party, by contrast, says that the profit motive has no place in healthcare, and backs the transformatory principles of proposed NHS Reinstatement Bill.

And that mansion tax that’s to raise some of the cash for the NHS under Labour’s plans? Well once again it’s a pale imitation of our far more broad-reaching wealth tax – which recognises that rich individuals gain their wealth from our society, benefit from its services, and should make a fair contribution to their maintenance.

Then look at the cut in child benefit. It was, observers generally considered, an attempt to demonstrate Labour’s “fiscal probity”. Or alternatively, you could consider it, as many did, as a continuation of the Tory-Lib Dem policy of making the poor and disadvantaged, particularly women and children, pay for the errors, the fraud and the recklessness of the financial sector. No real change here – in fact no change at all, but a further bowing to the Conservative narrative that blames government spending for the debt and the deficit, when in fact we should be blaming the bankers.

And where were the words from Miliband about reining in the still out-of-control banking system, of tackling what even insiders are calling the continuing extreme fragility of the financial sector?

There were some positives in Miliband’s speech, and the broader conference, in terms of somewhat more substantial environmental changes. The focus on energy conservation, particularly home insulation, is welcome – the Green Party has long been saying that reducing demand is central to resolving the energy conundrum. Although this isn’t “new” money – it’s been taken from other areas of infrastructure spending, where much is needed. The backing for the one million climate jobs agenda is also welcome.

But the focus remains narrow – on “green technology”. Focusing on conservation, on renewable energy and a smart grid are essential steps, but they are only a fraction of the environmental essentials. What is needed is a modal shift in transport towards walking and cycling that would improve our health, and clean up our air and cut congestion. We need a return of food production and manufacturing to Britain to create jobs and dramatically reduce supply lines. These are the kind of changes that have to be a key part of the mix.

That limited approach to the environment reflects the broader problem, identified by many observers, with the overall tone of this Labour conference. There’s been no break with the past, no signs of a search for a new model that takes us forward from our current economy that has clearly failed

Onshore wind much more popular among public than nuclear or shale gas says DECC survey

August 25, 2014

nothanksOnshore wind much more popular among public than nuclear or shale gas says DECC survey

The latest ‘tracker’ polls issued by DECC show that support for onshore wind among the public is 67 per cent, with just 11 per cent opposed. Solar power is the most popular renewable fuel (82 per cent support) with offshore wind a bit ahead of onshore wind in popularity. By contrast support and opposition for shale gas is tied at 24 per cent and nuclear power is supported by 36 per cent compared to 24 per cent opposed.

Once again this demonstrates just how out of step the Conservatives are with public opinion. The Conservatives, fond of fulminating against onshore wind and solar, want to cut off all funding for onshore wind after 2020. Eric Pickles delights in cancelling planning consents for wind and solar farms even when the planners have agreed to them.

Of course the Tories feel they are on the run pursued by UKIP who claim to oppose the alleged green frippery liked by the ‘political classes’. The opinion surveys suggest things are the other way around. Right wing political classes are ignoring the voice of the people and subverting it in favour of what one columnist (in today’s Financial Times) calls ‘sour censorious provincialism’.

Hopefully the Conservatives will reap the rewards of their dash to the right at the polls next May, and lose political office. As the Conservatives tilt ever more towards the right, the future of civilisation as we know it is dependent on this outcome!


By Dave Toke

Green energy co-ops blocked by government regulator

August 15, 2014

solar_powerThe future of community-owned green energy projects that ministers say are crucial to break the dominance of the ‘big six’ is being put at risk by the Financial Conduct Authority, according to co-operatives and the Labour party.

Thousands of towns and villages have clubbed together around the UK in recent years to set up energy co-ops to generate clean electricity from wind turbines and solar panels.

Ed Davey, the energy secretary, last year visited a community solar scheme on a tower block in south London and has said he “want[s] to see nothing short of a community energy revolution”, while the former climate minister, Greg Barker, said such projects were needed to “break the grip of the dominant big energy companies”.

But in the past six weeks the FCA, which registers new co-ops, has blocked several new energy co-op applications on the grounds that they would not have enough member participation, despite having authorised previous ones set up along the same lines.

Tom Greatrex, shadow energy minister, wrote a letter on Friday to Martin Wheatley, the FCA’s chief executive, warning that the shift in the FCA’s attitude put the future of co-operative energy in the UK at risk.

“David Cameron’s government talk a good game on community energy – but the reality is that future energy co-ops are being put at risk by a change of approach by the FCA. This sudden change threatens a model that combines the twin goods of decarbonisation and community involvement in energy,” said Greatrex.

“The FCA must urgently reconsider their approach – and Ed Davey needs to wake up and get a grip to prevent lasting damage to the prospects of more community energy projects in the UK,” he added.

Mike Smyth, chairman of Energy4All, which helps community groups set up energy co-ops, said that six weeks ago “completely out of the blue” the FCA stopped registering new energy co-ops, and had blocked six to eight applications that he was aware of.

“It has put a complete block on the development of this area of mutual activity, without any adequate explanation and showing a huge misunderstanding of what’s going on. The energy sector is completely appropriate for mutual involvement – there is huge amount of mistrust in energy companies – and they’ve [the FCA] put all that on hold.

“The government’s policy is that all new renewable energy generation from next year should be partially or more owned by a community energy organisation. And the FCA is actively undermining this policy by removing the most appropriate business for that. It makes things more difficult, stifles innovation, and precludes participation by people in the energy sector.”

At the heart of the issue is the question of whether energy co-operative members participate actively enough in the co-op. To register a co-op, FCA rules require a mutual to show participation which it lists as “buying from or selling to the society”, “using the services or amenities provided by it” and “supplying services to carry out its business”.

But unlike a co-op shop, which can sell direct to its members, energy co-ops are too small to apply for licenses that would mean they could sell electricity from a wind turbine directly to members – instead, they usually sell to the national grid via a broker, and divide the profits between members.

In the letter to Wheatley, signed by Greatrex, Mark Lazarowicz MP and Claudia Beamish MSP, it says: “We understand that there has been some ambiguity about the meaning of the word “participation” in ascertaining whether a project is a bona fide co-operative. Participation is clearly more than just a narrow question about whether the product of the co-operative is traded solely with members.

“There may be other forms of participation that the FCA has not considered. So long as this question remains open, we do not believe that the FCA can reasonably move to block future cooperative energy projects.”

Communities can apply for a separate mutual model, known as Community Benefit Societies, but Smyth said such societies were “less flexible” and “less appropriate”.

An FCA spokeswoman did not confirm whether there had been a shift in the authority’s stance towards energy co-ops, but said: “One of the conditions for registration is that the applicant must be a bona fide co-operative society where members participate in its business. When applicants cannot demonstrate this to the FCA, in accordance with the [Co-operative and Community Benefit Societies] act, we cannot register them.”

Source – The Guardian

Now it’s Fracking Bribery

January 14, 2014

The cynicism of the Con Dem government is staggering. It has deliberately driven Councils and Communities to desperation by cutting their budgets, and now it is bribing those same struggling Authorities to give permission for fracking that local communities have clearly rejected. If they do as the Government demands, turn a blind eye to the hazards, and the opinion of the electorate, they will be rewarded with extra cash from the fracking companies. Like some medieval torturer who, having starved his victim allows the smell of a succulent meal to drift into the torture chamber, so the Government waves the promise of cash at these desperate Councils. Inevitably this action will weaken further the trust between Councils and their electorate, as the Tories intend – residents will never be sure if a permission was given in the best interest of the community and country, or for the cash.

Cameron is now just acting as the industries mouthpiece. On the very day Total, the French energy company who are unable to frack in their own country because the French Government has banned it, announced a £30 million stake in UK fracking, he turns up at a drilling depot in Gainsborough. It just happens that Total have taken a stake in the companies that have exploration licences in Gainsborough. Doing the job of a company PR spokesman, he dutifully reiterated the claim that fracking will produce much needed investment, create jobs and lead to energy security, and that our robust regulations make it completely safe. There is no justification for any of these claims. They come from, a report commissioned by the frack company Caudrilla, headed by his friend Lord John Browne, ex of BP, that suggests that Britain can benefit by £3.7 billion a year extra revenue and 74,000 new jobs. These figures are just guesses. The 74,000 job claim included the extra staff needed in local shops to serve the security guards buying sweets! One wonders just how many of these 74,000 people will be security guards, such has been his governments and the industries failure to convince the British public that we need fracking.

To talk up the robust environmental regulations in the UK is to ignore the fact that the Conservative Party is doing all it can to abolish these regulations as ‘red tape’. It also conveniently ignores the fact that if the Transatlantic Trade and Investment Partnership negotiations with the USA that they are so keen on, does get the go ahead from Europe, then all such regulations will prove to be useless. Governments will do all they can to minimise green regulations for fear of being sued by corporations for loss of profit.

The dash for gas is a high risk strategy, not one that can lead to energy security. It is not known how much gas can be won or at what price. The demand for water will be colossal and will lead to escalating domestic water bills and water shortages. The cost of the disposal of trillions of gallons of polluted waste water is unknown and we can’t be sure that we, the tax payer won’t be left with the disposal bill. The same applies to the costs of the pollution incidents that will inevitably occur. And the gas will run out but we will be tied to a gas energy infrastructure, then what?

The one claim, that Cameron didn’t make and that has been quietly dropped by the industry is that fracking will lead to cheap energy. It will do nothing for energy costs since the gas, if it is ever produced will be sold on the open market just as the North Sea oil was, and we British consumers will have to pay a premium price, as we did for North Sea oil, so that the big energy companies can maintain their bloated profits.

In all, this is a thoroughly bad deal for the British energy consumer and tax payer. The only beneficiaries are the big energy companies and their shareholders who will send their profits off shore. It is an even worse deal because there is a real deal available that would give us affordable and secure energy. This is to use the free energy that blows over our heads, laps on our shores and shines in our faces. Yes, the wind, the sun and the tides are free energy, all we needed to do was invest in the infrastructure to capture them, store the energy as necessary and distribute it. No big deal any of that, just use the technology that’s already there. But, no one can take a monopoly on the wind, the waves or the sun, no one can threaten to divert it or switch it off if they don’t get their own way. No one can put it in a barrel or down a pipeline and sell it back to us at a profit. So this Government of millionaires, for millionaires isn’t interested.

There is only one Party seriously opposing fracking and that is the Green Party. We also have a clear and workable alternative energy strategy that would end fuel poverty and our reliance on fossil fuels. The only thing that will make the main parties rethink their fossil/nuclear energy [policies is a big green vote. Work with us to make this happen.

January 14, 2014 by 

‘Bribe’ anger as PM backs fracking

January 13, 2014

ImageThe Government has renewed its push to promote controversial “fracking” for shale gas, as French energy giant Total confirmed it was investing in the industry in the UK.

Prime Minister David Cameron announced that local authorities in England would receive 100% of the business rates collected from shale gas schemes, rather than the usual 50%.

It is the latest move by the Government to promote the exploitation of unconventional gas in the UK, which the Prime Minister claimed could bring the UK 74,000 jobs, more than £3 billion of investment and cheaper and more secure energy.

But environmentalists criticised the business rates incentive as a “bribe” to reluctant local authorities.

And they warned that it raised serious concerns over conflicts of interest if the councils benefiting from the money were the ones deciding on planning applications.

Opponents fear fracking, a process in which liquid is pumped deep underground at high pressure to fracture rock and release the gas in it, for shale gas will lead to the development of industrial sites and disturbance in the countryside.

Fears have also been raised over the potential for small-scale earthquakes and water pollution, and that a drive to exploit new gas reserves will turn the focus away from efforts to develop a low-carbon economy to tackle climate change.

Protests against a proposed fracking site at Barton Moss in Salford, Greater Manchester, have continued for almost seven weeks, with campaigners claiming hundreds of people turned out over the weekend to voice their opposition to the development.

On a visit to Gainsborough, Lincolnshire, in the area Total will be looking to develop shale gas wells, Mr Cameron defended the plans to push ahead with fracking, saying environmental concerns would be assuaged once people saw the benefits.

He said: “We have the strongest environmental controls in this country. Nothing would go ahead if there were environmental dangers. I think people can be reassured by that.

“But I actually believe it’s when these wells go ahead, when people start to see the benefit, when people see there aren’t environmental concerns, they will see that it is quite right that this is part of our long-term economic plan.”

Kathryn McWhirter, from Balcombe, West Sussex, where protesters took direct action while energy company Cuadrilla conducted exploratory drilling at a site on the outskirts of the village last year, claimed Mr Cameron was giving out more misinformation on fracking to the British public.

She said: “First, he said shale gas would lower prices and create vast numbers of jobs.

“Both claims have been shot down by his own advisers, yet he continues to repeat them.

“Now he wants to bribe local people and council planners – what a conflict of interest, what desperation.

“After two years’ sober research, we in Balcombe are all too aware of the hazards of modern fracking and our message to him is this: Our health and our environment are not for sale.”

Officials said the commitment on business rates would mean councils hanging on to up to £1.7 million extra a year from each fracking site.

The industry has already pledged to give local communities £100,000 for each test drilling – and a further 1% of the revenues if shale gas is discovered.

And today it was announced that the industry would further consult on how to deliver the money to communities, with options including direct cash payments to people living near the site or setting up of local funds directly managed by local communities.

The Local Government Association’s Mike Jones said that given the tax breaks proposed for shale gas and the impact it would have on local companies, payments should be higher at between 5% and 10%, in line with other parts of the world.

The community benefits of fracking should be enshrined in law, so they could not be withdrawn, and community payments should go into a charitable sovereign fund to be spent on local priorities, he argued.

But Green Party MP Caroline Lucas said that encouraging fracking by offering “bribes” to councils, and handing tax breaks to fracking companies, was ” beyond irresponsible”.

“It’s outrageous that councils are being put under financial pressure to accept this at a time when they’re being forced to make cuts to vital services.”

Friends of the Earth’s Jane Thomas said: “This latest Government move highlights the depth of local opposition to fracking and the desperate lengths ministers are prepared to go to overcome it.

“People are right to be concerned about the impact of shale gas extraction on their communities – especially as experts say it won’t lead to cheaper fuel bills.

“This move raises potentially serious concerns about conflicts of interest, if councils that benefit from this money are also the ones who decide on planning applications from fracking firms in the first place.

“The Government should be encouraging the development of Britain’s huge renewable power potential, instead of coming up with new incentives that keep the nation hooked on climate-changing fossil fuels.”

Energy Minister Michael Fallon said the 100% business rates incentive on offer was the same as for renewable technologies, such as wind farms and solar energy.

But Anna Jones, climate campaigner at Greenpeace, said: “Comparing the incentives for renewable energy to the naked bribery of the Government’s business rate bung simply isn’t comparing like with like.

“Renewable energy is a proven energy source that will not damage the environment. Compare this to the environmental damage and disruption that fracking for a dirty fossil fuel would cause, and which may be too costly to extract.

“It’s an obvious no-brainer that renewables are the energy of the future, not shale gas.”

Opposition to fracking has not stopped interest from oil and gas companies in exploiting potential shale gas reserves across swathes of the UK, with Total announcing its investment today.

The company has taken a 40% share in two gas exploration licences for drilling in the Gainsborough Trough, in an area between Doncaster and Lincoln.

Total, which is already involved in shale gas projects in the US, China, Australia, Argentina, Poland and Denmark, described the move as an important milestone for the company in the UK.

The initial exploration will be conducted by partner IGas, and Total will take over operations as the project develops.

The project is part of £1.2 billion annual investments in oil and gas production by Total E&P, which is set to make it the largest oil and gas producer in this country by 2015.

Source – Press Association – ‎13th‎ ‎January‎ ‎2014


March 19, 2013

isitsafeLabour today welcomed the Government’s decision to give the go-ahead for the first of a planned new generation of nuclear power plants in the UK.

Energy Secretary Ed Davey said the proposed 3,260 megawatt nuclear power station at Hinkley Point in Somerset would be built by French company EDF.
The decision also means EDF will be allowed to build rail and road networks to support the power station, as well as issue compulsory purchase orders on land needed for the project.
The news is a boost to the nuclear industry following a series of setbacks in plans to construct a new generation of reactors in the UK, which ministers say are needed to cut carbon and keep the lights on.

Shadow energy secretary Caroline Flint said she welcomed the decision.
She said: “Today’s announcement is an important milestone in the development of new nuclear build in the UK. There is no doubt about that.
“On behalf of the Opposition, I am pleased to welcome it and reiterate our support for nuclear power alongside an expansion of renewable energy and investment in carbon capture and storage as part of a clean, secure and affordable energy supply for the future.”

In his statement to the House of Commons, Mr Davey said the project would play an important role in ensuring a diverse supply of energy in the UK.
He said: “Affordable new nuclear will play a critical role and secure a diverse electricity supply for Britain and make a significant contribution to the transition to the low-carbon economy needed to tackle climate change.
“Therefore, this decision on planning aspects on the first new nuclear power station in a generation represents an important milestone in that process to decarbonise our electricity supply and economy.”

Mr Davey said the project would create a workforce of up to 5,600 during construction, and contract opportunities in the supply chain.
There would also be a new by-pass road as well as a community package to compensate to people living in the area, he said.
Mr Davey told MPs: “I also recognise that as these works are carried out, those who live in the area may have their daily lives disrupted one way or another.
“This disruption is in my view outweighed in the final analysis by the benefits the project will bring – chief among these is the very significant contribution it will make to the achievement of energy and climate change policy objectives.”

The new plant’s two nuclear reactors would be capable of producing 7% of the UK’s electricity, enough to power five million homes, EDF has said. It is thought the costs of the new power station would run to around £14 billion.  A final investment decision by EDF to go ahead with construction still depends on the deal being negotiated with the Government on the “strike” price paid for electricity generated by the plant.  Under electricity market reforms, low-carbon power such as nuclear reactors and offshore wind farms will have long-term contracts with a guaranteed price for their electricity, to give investors certainty to invest in projects with high capital costs.
Mr Davey said discussions on the strike price were ongoing, but he expected them to be concluded shortly.

Conservative Ian Liddell-Grainger (Bridgwater and West Somerset) declared it a “very good day for Britain” and a “phenomenally good day” for his constituency.
The decision, he said, meant the UK could “kick-start the civil nuclear programme”.
He said: “The innovation, the jobs and the input that we’re getting from across the industry is staggering.”

Mr Davey responded: “He is right that there will be some pain for some local members of the community during what will be a long construction phase, but I hope they and he feels that the recommendations of the panel and the decisions I’ve taken in addition to those will try to mitigate that as much as possible.”
nothanksLabour’s Paul Flynn (Newport West) raised concerns about the long-term costs to taxpayers of the project.
He said: “Does the minister agree with himself as the Lib Dem spokesman when he said that nuclear power is only possible with a vast – his word – taxpayer subsidy or a rigged market?  Does he agree with himself as a supporter of the Coalition Agreement that said there would be no subsidy on nuclear power?
“Can he now deny the claims that the strike price, originally £50 per megawatt-hour (MWh), is now being negotiated at £97 and the view that what we will be doing is giving a subsidy in the short term of £30 billion to a near-bankrupt French company that could turn out to be £150 billion in 35 years?”

Mr Davey said his concerns on nuclear power had related to price, acknowledging that the history of nuclear power showed it “has turned out to be expensive”.
He said: “That’s why this coalition Government and indeed the previous Labour government have gone about this third-generation nuclear power station in a very different way from the past, to make sure that the consumer, business and taxpayer are protected.”
The figures quoted, he added, “I just simply do not recognise.”

Tory former defence secretary Dr Liam Fox (North Somerset) said: “I congratulate the Government in finally getting the civil nuclear programme moving after too long a period of paralysis in this country, it is vital for our energy security and our low carbon generation.”
But he raised the issue of transmission from Hinkley through 450 kV cables, as opposed to the current 132, saying it would require electricity pylons more than twice the height of current ones.
He said: “Where is the overall green gain if we get green generation but the transmission results in a blight on our environment in some of prettiest parts of the country?”

Mr Davey replied he previously undertook to look into this issue during a meeting with Dr Fox.

Lib Dem Martin Horwood (Cheltenham) also raised the issue of costs and asked for confirmation that the planning decision did not actually represent a decision to go ahead with Hinkley C.  He said: “In which respect it pales into insignificance beside the strike price negotiation, which if he’ll accept my figures as hypothetical, but if the maths add up, at £97 megawatt-hour (MWh) for 35 years, would guarantee an uncompetitive French nationalised energy company nearly £90 billion over time from British bill payers.”

Mr Davey said the decision today was purely about planning, but he said he did not recognise the figures.
Former Tory DECC minister Charles Hendry (Wealden) said: “Can I say how delighted I am that the Secretary of State as a Liberal Democrat has now consented more new nuclear capacity than any minister I think since Tony Benn.”
He paid tribute to officials in helping to bring a “nuclear renaissance in the UK one big step closer”.

get_involved_festivalGreen MP Dr Caroline Lucas (Brighton, Pavilion) warned of the potential repercussions on energy prices.
She said: “There are much faster, cheaper, more affordable ways of tackling climate change than nuclear.”
She added: “The only two nuclear power stations under construction in Europe today are billions of pounds over budget and delayed by an ever increasing number of years.  Italy, Switzerland, Belgium, Holland, Spain, Germany, Sweden, Denmark are all rejecting new nuclear, even France is aiming to reduce its reliance by 25%.
“What do all of these countries know that we don’t and why is he locking consumers in the UK into artificially high energy prices for years to come to the benefit of the French government and not to the UK taxpayer?”

Mr Davey said when it came to tackling climate change the country needed “every form of low carbon generation possible”, adding: “The risk is so great, the challenge is so great, I think it is wrong for people who are worried about climate change to turn their back on this issue.”
Around the world he argued there were many countries who were looking again at new nuclear.
He said: “That is why we in our approach to these negotiations and our whole approach to the new nuclear programme are being extremely careful, learning the lessons of the past, learning the lessons from other countries so we do not repeat those mistakes.”

By Theo Usherwood and Elizabeth Barrett, Press Association Political Staff


February 8, 2013

NuclearPowerDespite the pledge in the 2010 Coalition Agreement and in numerous ministerial statements since that there would be “no public subsidy” for new nuclear, it has become increasingly clear that the government’s introduction of a carbon price floor and other measures in its forthcoming Electricity Market Reform (EMR) will result in huge windfall handouts for nuclear generators. It’s time to ditch the doublespeak and state the obvious: this is a subsidy by another name.

In the Backbench Business debate today, MPs will raise concerns about negotiations currently taking place between the Department of Energy and Climate Change and new nuclear suppliers to fix a ‘strike price’ in advance of the EMR legislation. Not only do these talks pre-empt the legislative process in a way which suggests that commercial interests are taking priority, there is also a worrying secrecy around exactly how much money taxpayers will need to cough up to pay for this increasingly expensive technology.

The truth is that the primary beneficiary of these policies will be the French state-owned nuclear company Edf, which will be gifted billions of pounds to cover the cost of the new power station at Hinkley Point in Somerset – particularly if secretive proposals to underwrite construction costs are successful.

The scale of the proposed investment at Hinkley is vast and the duration of the contract is long. At a strike price of £100/MW and a 30 year contract under EMR, this would require a subsidy of £1 billion a year above today’s wholesale electricity price – meaning £30 billion going straight from British households and businesses to Edf. If the 16GW of new nuclear anticipated by the Energy Minister Ed Davey were to be financed on similar terms, it would cost householders and businesses

£150 billion by 2050.

As well as being required to show how this can possibly represent good value for money, DECC also needs to explain how its parallel objective of bringing down the wholesale price of electricity is supposed to be compatible with the proposed Edf contract – since it would seem that the amount of subsidy would have to increase as a result of those lower prices. By signing up to a fixed price, this contract would surely then eliminate any benefit to consumers that might result from lowering the price of electricity.

The positive PR campaign orchestrated by nuclear companies in the weeks following the Fukushima disaster gave us a glimpse of the power that the nuclear lobby wields in Whitehall. With the benefits of investing in renewables, energy efficiency and demand reduction becoming ever clearer, we need to see far more transparency around the decisions about where our electricity will come from in the decades ahead.

The government should therefore halt the nuclear contracting process and allow the Public Accounts Committee to examine whether the public subsidy being offered for new nuclear power through EMR is really the right solution to deliver an affordable, sustainable and secure energy future.

Will the Government Write a Blank Cheque for Nuclear Construction?

October 21, 2012

The government’s plans for new nuclear power stations are on the rocks, and it would require desperate measures to save them. Some evidence of the desperation emerged when John Hayes, the recently appointed minister for energy said, in an interview with the Daily Telegraph, that he is ‘mulling over’ the possibility of underwriting plans for building new nuclear power stations. He appeared to be referring to the last remaining ‘live’ proposal by EDF’s for a 3.2 GW nuclear power plant at Hinkley C in Somerset. Mr Hayes would be well advised not to sip from the poisoned chalice (underwriting) he has been presented by nuclear supporters via the Daily Telegraph.

Underwriting means telling EDF, in effect, that the government would foot whatever bill it took to build the power plant. Nobody knows for sure how much that would be given than similar plants still being built in Finland and France are now terribly over budget and a long time behind schedule. Underwriting would blast a hole through specific Conservative pre-election commitments not to underwrite nuclear power construction, not to mention Ed Davey’s pronouncements about there being ‘no blank cheque’ for nuclear. Underwriting would make a complete nonsense of any notion of nuclear power being competitive with renewable energy sources such as wind power and solar power which certainly are not in receipt of ‘underwriting’ commitments.

The energy consumer would be funding such a blank cheque, this would effectively mean that nuclear power costs were being nationalized and billions of pounds handed over to a multinational company in an unlimited commitment. Despite the long history of the financial uncompetitiveness of nuclear power we still see assertions by the engineering establishment that it is cheap, cheaper than renewables, and so on. This is always based on the notion that the next design will be much cheaper than the last one. It never is – on the contrary, the trend in costs seems to be upwards. Banks refuse to invest in new nuclear power stations without the loans being underwritten. In theory, EDF can borrow money off the markets to fund Hinkley C. The problem is that EDF shareholders would take the risk of falls in dividends and share prices. Credit ratings agencies will not be amused if EDF’s debt-to-earnings ratios rise and seem imperiled by highly uncertain nuclear investments in the liberalized British electricity market.

Although, in the past, the costs of nuclear power stations have been sunk in the accounts of nationalized industries and the consumers made to pay the costs through being beholden to monopoly suppliers, this time the cost comparison with other options seems painfully clear. Nuclear is more expensive than renewables – now – never mind in the future as renewable costs decline. The government, in their Electricity Market Reform, have set up what is in effect a competition to deliver low carbon sources at the cheapest ‘strike price’ – that is a price that the electricity consumer would pay for each unit of ‘low carbon’ electricity generated. The trouble for nuclear power is that when it comes to the crunch they need rather higher amounts set as a strike price than what the government is willing to set to pay for onshore wind power and even allegedly expensive offshore wind power and solar power.

Anti-windfarm groups are fond of attacking the subsidies going to onshore wind, but the price needed to be given to onshore wind developers will be much, much, less than what would have to be paid to EDF for new nuclear power. Public support for paying more to nuclear than renewables for producing a given amount of electricity is likely be very low indeed. So, nuclear supporters are hoping for a fix that avoids the spectacle of being declared too expensive. That is where underwriting comes in. But, politically, (as well as cost-wise for the consumer) that sinks like a lead balloon, no matter how the brilliant nuclear PR spinners want to pitch such a proposition. It is not as if the UK needs any new nuclear power stations to supply electricity, for which demand has fallen by 8% since 2008. This is regardless of whether you look at a conventional picture of the fact that gas power stations can be built much quicker than nuclear ones or, preferably, at green ones where renewables, smart grids, energy efficiency and other techniques contribute towards decarbonisation of the economy.

What is my bet on what happens? Well, the government could take the easier option, which is simply to blame EDF for not coming up with the goods. In return, EDF could blame the government for not offering them enough ‘certainty’ on future electricity payments. Regrettably, meanwhile attention has been drawn away from the lack of support proposed for renewable energy. The terrible irony of the government’s proposals is that the renewable energy support mechanisms proposed in the Energy Bill have been hamstrung by the political drive to give priority to a nuclear power building programme that may never actually materialize.

Dr Toke is the author of a report Fixing Renewables, a new report published by Friends of the Earth and he is also Senior Lecturer in Energy Policy at the University of Birmingham. He is also a member of the Green Party of England and Wales.

Follow David Toke on Twitter:

End the Big Six energy rip off

March 1, 2012

Writing for Central Lobby, Green Party MP Caroline Lucas says it is time to stand up to the Big Six energy cartel.

In recent months, our newspapers have been filled with stories of excessive profiteering by the UK’s Big Six energy companies, coupled with big pay awards for their top executives.
French-owned EDF, Centrica, parent company of British Gas, and Scottish Power have all announced billion pound profits at a time when consumer bills are rising.

With household incomes being squeezed, people are finding it increasingly difficult to meet the high cost of those bills. I have had many letters and emails from anxious constituents who are fearful that keeping warm in their homes is becoming an unaffordable luxury.

Average annual household bills for gas and electricity have increased from around £600 in 2004 to around £1,200 in 2011. USwitch has predicted that by 2020, this could rise to a massive £3,202.

It is estimated that over 5.5million households in the UK are now facing fuel poverty, with an estimated 3,000 premature winter deaths attributed to the problem of living in damp, cold and leaky homes.

And it’s not just households that are struggling. Small businesses with tight overheads are also feeling the pinch from the increasing cost of energy.

Meanwhile, energy company profit margins appear to go up unabated, leading to an OFGEM warning that profits on dual fuel deals only last October had increased from £15 per household to £125 – a 733% rise.

The energy regulator has said that although fossil fuel price rises – in particular, wholesale gas – are the driving factor pushing up bills, on top of this, the Big Six are actually increasing their margins on each bill.

And just this weekend, an IPPR report that found as many as 5.6 million people may be being overcharged as a result of pricing policies by the big companies which, it believes, prevent new companies from gaining a foothold in the market.

Meanwhile, despite the scaremongering, environmental costs as a proportion of the average bill have remained broadly static over the last four years. DECC figures show that, excluding the EU Emissions Trading Scheme, energy and climate change policies account for around 5.5% of each bill.

So, given their huge profits, it’s clear that energy companies could comfortably reduce their prices and still make a reasonable profit.

But the Government seems unwilling to hold them to account. That’s why a group of NGOs, politicians, public figures, and academics have come together behind the ‘End the Big Six Energy Fix’ campaign, calling for a better deal for consumers.

To tackle the over-charging of customers, and challenge companies over their failure to invest in energy efficiency measures or protect the poorest from the impacts of price rises, we are calling on the Government to do the following:

First, impose a levy on energy company profits – similar to the one imposed on the North Sea oil companies and big banks, and the kind used by the Conservative Government in 1981 to claw back the excessive profits of the high street banks.

In spite of OFGEM’s efforts to create a competitive energy market, nearly two decades after privatisation, the Big Six still control more than 99% of the retail market. A windfall levy would be one way of addressing this market failure and ensuring that the companies pay a premium for their privileged market position.

The money raised should be ring fenced for a mass home insulation and efficiency programme, which would help create thousands of new skilled jobs, as well as enabling the Government to meet its fuel poverty and emissions reduction targets.

Second, to prevent energy companies from passing the cost of any levy onto consumers and make energy prices fairer, the Government should give OFGEM more powers to cap prices and – importantly – the mandate to use them.

Third, the Government should initiate a public inquiry into the Big Six energy companies. Not a Competition Commission inquiry – rather, a truly independent public one with a broader remit than just that of prices and competition.

There is huge public support for these measures. A YouGov poll commissioned by Compass and Friends of the Earth found that 71% of voters support a levy on the Big Six profits, 77% support the revenues being spent on home insulation and energy efficiency measures, and 86% support an independent public inquiry.

Failure to stand up to the Big Six cartel will result in ever more households being pushed into fuel poverty, where the choice really does become one between heating or eating. And that is not a choice anyone should have to make in Britain today.