Category Archives: Energy

Tory privatisation scams (2): the Hinkley Point C nuclear payola guaranteed by UK taxpayers for Chinese investors

If you think the London super-sewer is merely the exception in Tory privatisation economics, dream on.   It’s more the norm in a whole string of colossal financial scams, all put in place secretly and never sent to Parliament for approval.   Another flagrant example of privatising the gains and socialising the losses is the nuclear power station planned at Hinkley Point C in Somerset at a cost of £24.5bn, three times the original proposal, and using the UK taxpayer to guarantee to its French builder EDF  a price per unit of output no less than double its current UK wholesale price.    The government agreed this in November 2011, yet since then wholesale power prices have fallen by 16%; nevertheless the Tories are still guaranteeing the price of £92.50 a megawatt hour, inflation-linked for 35 years and funded through household bills.   So far from being the heroes of competition as they regularly claim, the Tories are driving a pernicious, underhand contempt for market forces to subsidise State-owned foreign companies whilst refusing to offer the same aid to a UK State-owned venture for the same project.

Just how bad a deal this is is shown by the fact that Hinkley will provide just 3 gigawatts of capacity, yet for the same price gas-fired turbines could provide about 50 gigawatts, onshore wind 20 and offshore wind 10.   The plant will not open till 2023 at the earliest, well past the date of the most acute energy shortage at the end of this decade.   And it will cost as much as the combined bill for Crossrail, the London Olympics and the revamped Terminal 2 at Heathrow – beat that for the most expensive white elephant of modern times!

It’s an anachronistic behemoth from the bygone age of energy dinosaurs when the world is rapidly moving towards distributed power via renewable energy.   It’s far too costly, and is it even needed?   First there is the UK’s declining demand for power, currently falling at a rate of 1% a year as energy-saving measures steadily take effect.   Then there is the expected threefold jump in the UK’s Interconnection capacity with continental Europe by 2022 which increases the ability to import cheaper supplies.   And third there is the litany of setbacks in price overruns and huge delays that have afflicted Finland, France and China over EDF’s European Pressurised Reactor which is the same type as is planned for Hinkley Point.

However nothing distracts the Tory nose from a good old-fashioned financial fix behind the scenes, especially when in this case it plays to their abhorrence of UK State involvement in meeting a public need.   So Cameron is off to Beijing in October to sign a final deal wit the Chinese president from which only Chinese investors will gain at UK taxpayer expense.

 

Renewable energy is finally coming into its own

The recent announcement by China that it will bring to the Paris summit this December a commitment to reduce greenhouse gas emissions by 60 % by 2050 is a sign of how sentiment is finally shifting even at the highest levels, though of course it does have to be actually delivered.   But this is not an isolated straw in the wind.   In 2013, for the first time, more new renewable capacity was built than fossil fuel-burning capacity, and future projections show that this excess wind and solar capacity over oil, gas and coal will steadily grow.   Indeed, according to the International Energy Agency estimates based on current trends, renewables could supply half of the world’s electricity needs by 2050, with solar energy alone representing more than a quarter of that amount.
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The Heathrow decision is a menu without the prices

Business in this age of market fundamentalism is cock-a-hoop with the Davies report decision to recommend Heathrow.   They would be, wouldn’t they, since the report has focused largely on the supposed economic benefits while claiming that all the toxic underside of the decision can be ‘managed’.   However the feasibility of the latter needs to be subject to a realistic appraisal, not just assumed.   It is said that night flights will be banned between 11.30pm and 6am, but ‘respite periods’ when some areas don’t suffer overhead noise will be reduced from half the working day to just a third.   The report allows for a huge 54% increase in passenger numbers (more than a quarter of a million a year), but claims this is compatible with a cap on aviation emissions just above current levels – in fact a wing and a prayer that is dependent on big increases in cleaner engines which may or may not be delivered.
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Oil companies bank on 4C climate catastrophe – with Cameron’s support

What matters in the lead-up to the world environmental summit in Paris in December is the internal dialogue between the US and China as to how much they are prepared to concede in combating climate change compatibly with not losing out to their global economic rival.   Meanwhile lesser countries like the UK make their own bargains, and here oil realpolitik rules.   The government gave its official blessing to BP, perpetrator of one of the world’s worst environmental disasters in the Gulf of Mexico, in securing a deal with the Russian energy firm Rosneft to exploit the huge oil and gas reserves in the Russian Arctic.   There were several considerations here for the government – fuelling Europe and the UK, the fact that 19% of UK pension fund annual income comes from BP and Shell, and perhaps most prominent of all the damage done to BP’s survival by its exposure to the colossal $40bn bill for the Gulf disaster.    Fears over the climate change impact of starting oil exploration in the pristine Arctic wilderness came well down the list, if indeed they featured at all.
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Tory manifesto like Emmenthal – more holes than cheese

Tory policy over the last 3 years has been a desperate effort, against all the odds, to introduce a feel-good factor.   The sell-off of housing association homes, the hotspot in the Tory manifesto, was the latest attempt, seeking to regain the momentum of Thatcher’s Right to Buy when now the crisis in housing is not about ownership but about lack of house-building.    Another piece of chutzpah was Cameron’s seeking to rebrand the Nasty Party as the party of ‘working people’ whilst at the same time virtually prohibiting the capacity of trade unions to defend the living standards of their members by introducing a 50% minimum turnout threshold for strike ballots, a restriction imposed nowhere else in the world.   Then he announced that workers on the minimum wage of £6.50 an hour would pay no income tax, provided they worked less than 30 hours a week, whilst ignoring that they have been hit hard by higher VAT and tax credit cuts, let alone the huge £12bn welfare cuts still to come which are bound to hit low-paid workers because more than half of all households in poverty have a member in work.
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Tories override local resistance to bring a nuclear dump near you

Just as the Blairite official infamously emailed on the day of 9/11: “This is a good day to bury bad news stories”, so the Tory government took advantage of the last day of Parliament a fortnight ago to launch a similar device to slip through a deeply unpopular measure they would never have dared put to Parliament when it was in full session.   It enables the government itself to decide where nuclear storage dumps will be located however much  local inhabitants or pressure groups may object or demonstrate.   Previously this was decided on the basis of consent; now it will be settled on the fiat of a government minister.   The Tories have taken it upon themselves to bypass local planning procedures in order to enforce the burial of 4.5 million cubic metres of radioactive waste which for 50 years has remained unburied because no local population wanted it near them, even if they were bribed to take it.

The Royal Commission on Environmental Pollution in 1976 made the key judgement that it was ‘morally wrong’ to go on turning out nuclear waste without having first demonstrated that there was a safe mechanism and a safe location to store it.   But such was the lobbying power of the nuclear industry and so besotted were MPs and particularly the DTI with nuclear that the failure to find any solution by agreement has now led to dictatorial powers being vested in the hands of the Secretary of State for Energy (ironically, the current incumbent, Ed Davey, is a LibDem whose party are supposed to be against nuclear power).   The way this was pushed through Parliament was flagrantly underhand: MPs who had not already departed to their constituencies were asked in an unusual paper ballot to pass a short statutory instrument which, innocently, merely adds nuclear waste storage to the list of nationally significant infrastructure projects, without explaining the significance of this.

The alternative to ramming nuclear dumps down the nation’s throat is of course to speed up the dissemination of renewable energy.   But the Tory party in particular, as well as too many Labour MPs, remain strongly attached to nuclear irrespective of the storage problems.   Perhaps the new law overriding local opposition will itself generate a new level of resistance, as fracking has, which is politically untenable.   Significantly Radiation-Free Lakeland stopped Copeland borough council from setting up a nuclear dump near Sellafield on the grounds that there was no evidence that deep storage was safe and that the Cumbrian geology was unsuitable compared to, say, East Anglia (but that of course is strong Tory territory).   Maybe also it will make a difference when people realise that storing nuclear waster costs taxpayers £2bn a year: when did we ever agree to that?

The fossil fuel divestment drive is gathering momentum

The growth in global carbon dioxide emissions from fossil fuel combustion ground to a halt last year for the first time in 40 years without the presence of a full-blown economic crisis.   In that year the global economy grew by more than 3%, but the amount of carbon dioxide pumped out remained at the 2013 level of 32.3 gigatonnes.   One main reason is that China has cut its use of coal, one of the biggest sources of carbon emissions, and installed more hydro-electricity, wind and solar power.   At the same time electricity consumption, which had been growing at about 10% a year, has fallen to 3-4% as China imposes energy efficiency standards for industry, shuts older factories, and shifts away from heavy manufacturing which has driven its economic growth.   But there is a further reason which is likely to consolidate these pre-existing trends even if global growth takes off again.
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Fracking in the UK is out for the foreseeable future

Listening to Osborne waxing exuberant over Britain’s energy future because of his obsession with a fracking revolution in the UK to match that in the US, you might be excused for thinking that he had a trump electoral card.   Any such idea is nonsense, for several reasons.   The predicted fracking deposits in this country are only a fraction of those in the US and, an equal no-go area for Osborne, are largely located in traditional Tory areas where the public resistance has already shown itself to be formidable.   But there is another critical factor which rules out fracking for a long time ahead, maybe decades.   It is now utterly uneconomic.
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Cameron hands corporate lobbyists free play in Whitehall & EU

Cameron prophetically described lobbying in 2010 as “the next big scandal waiting to happen”, but by 2015 he has himself made it happen.   It was already revealed some months ago that senior representatives from the Big 6 energy companies had been seconded to the Department of Energy and Climate Change (DECC) to ‘advise’ ministers on energy policy – done quietly and secretly until it was leaked, not cash for access but just access for some of the richest and most powerful companies in the country.   Now, thanks to research by Greenpeace, it emerges that for the technical working group in Brussels formulating new limits on air pollution across Europe, 5 of the UK’s 9-strong delegation work for companies creating large-scale carbon and other toxic emissions, including the German companies RWE and E.0N and the French company EDF (the other 4 members being civil servants).   In all more than half of the members of this EU technical working group (183 members out of 352) are either employed by the firms that are supposed to be being regulated or by lobbyists working for those companies.  Nor did they give impartial advice: it is reported they repeatedly and forcefully lobbied for weaker pollution positions. The result was encapsulated two days ago by a (London) Evening Standard headline: Toxic London.
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