back to article Price rises and power cuts by 2016? Thank the EU's energy policy

The closure of nearly two thirds of Europe's gas-fired power generation facilities by 2016 will lead to regional price hikes and make outages inevitable, Cap Gemini has warned. UK households are already feeling the squeeze of soaring energy bills but a particularly cold winter this year could mean that 1970s style blackouts …

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  1. Anonymous Coward
    Anonymous Coward

    Oh no, it will be worse than that ...

    The energy companies will send some toughs around in really badly fitting suits, and make comments along the lines of "gee, it would be a real shame if the lights started going out around here", and good old tax payer will somehow end up subsidizing them too.

    We are already paying subsidies for "green" sources and nuclear, so why not those to ...

    Yes, that last comment was in <sarc> tags ...

    P

    1. Anonymous Coward
      Anonymous Coward

      Re: Oh no, it will be worse than that ...

      "We are already paying subsidies for "green" sources and nuclear, so why not those to ..."

      Not sure why the sarc tag, as this is DECC's solution. It's called a "capacity mechanism", and it's arrangements are being drawn up as we speak, and involve paying people to maintain the gas plant in working order, whilst paying fat subsidies to the crappy renewables.

      Sitting in the hallowed halls of one of your energy suppliers, I can assure you that we don't send round toughs, and we don't have much clout with government. That's why you are at increasing risks of blackouts and higher energy bills, precisely because the politicians are idiots, and haven't listened to industry (or even their own regulator, who briefed MP's on these risks at least five years ago, if not longer). Note in particular that the cause of the risk is that you have (a) EU mandated closures of coal plant under LCPD, and (b) retirement of gas plant because under the current market rules set by government, these are unprofitable to run.

      Bear in mind that the risk of blackouts is rising, not absolute. If everything works as National Grid project, with no failures and no unexpected rise in electricity demand, then you'll be fine, the lights stay on, and everybody's happy (apart from at the rising bills to pay for the tree huggers follies). In the near term we have a bigger problem with gas, where a cold winter could tip us over the edge, because we don't have enough storage. Last winter we came within about 48 hours of losing gas supply, although in the first instance it will be big industrial users who are told to stop using gas (those in interruptible contracts).

  2. Pete 2 Silver badge

    A british thing?

    So why doesn't the UK do what every other EU country does why faced with a directive it doesn't like? ignore it?

    Most EU countries take a healthy, skeptical, pragmatic approach to EU "law". If it's in their favour (e.g. fishing rights) they embrace it and extol its virtues. If it is to their disadvantage they say "it doesn't apply to us" or "it's discriminatory", "we can't do it in time" or just do .... nothing.

    Laws anywhere, at any level, only work with the acquiesence of the subjects it's applied to. If they give it a gallic shrug, or a british V sign there's not much anyone else can do. It only seems to be in Britiain that everyone goes into a bit of a tizz and says "but it's the law" without realising that laws only work if people obey them and that our representatives helped shape them - and if it's to our detriment, they obviously didn't do a very good job of politicking.

    1. Fletchulence

      Re: A British thing?

      Tony Blair signed Kyoto on our behalf. Call me cynical, but any politician signing off on something that will win him votes today, but the cost of which won't be felt until he is long gone rings alarm bells.

      1. deshepherd

        Re: A British thing?

        Tony Blair signed Kyoto on our behalf.

        Also, I think from subsequent reports when they signed up to the emission reduction targets they only considered electricity and signed up on basis that 20% electricity from renewables was "doable" and only afterwards realized they'd signed up to 20% of all energy from renewables and since in UK the vast majority of heating is gas where there is no option to switch to a "renewable" source then to meet targets we need to switch 50-60% of electricity to renewable sources.

        1. John Smith 19 Gold badge
          Unhappy

          Re: A British thing?

          "Also, I think from subsequent reports when they signed up to the emission reduction targets they only considered electricity and signed up on basis that 20% electricity from renewables was "doable" and only afterwards realized they'd signed up to 20% of all energy from renewables and since in UK the vast majority of heating is gas where there is no option to switch to a "renewable" source then to meet targets we need to switch 50-60% of electricity to renewable sources."

          Not true.

          A quote from Tony Blairs office stated he knew the figure covered all UK energy and wanted the UK to face a challenging target.

          And of course he was a)Leaving power and b)Handing over to Gordon Brown. so signing up is a)No skin off his nose and b)Let's him stuff his hated rival big time in a way that can't be recovered from.

          Just another little "gift" to the British people, along with the Nationa ID card register, the children's database, longer ANPR data retention and a few others.

          Politicians, always ready to put settling old scores ahead of the public good.

        2. wookey

          Re: A British thing?

          A 20% reduction in gas usage isn't actually difficult. Just insulate a lot of houses properly. Much cheaper and easier (and more jobs) than trying to generate 20% renewable heat. People (and especially governments) always forget the negawats part of the energy system. Sadly the Green Deal which should be acheiving exactly this is a hopelessly expensive and bureacratic scheme that isn't going to do much. Cheap money for bankers to lend out: no problem. Cheap money for insulating houses: absolutely not.

          1. Alan Brown Silver badge

            Re: A British thing?

            "A 20% reduction in gas usage isn't actually difficult. Just insulate a lot of houses properly."

            Unless gas prices double, the payback period is too long to make it worthwhile in most cases.

            Setting a target is of no use whatsoever unless there's a way of incentivising getting there. Yes, you can mandate better insulation on new builds, but you can't do that for something prebuilt - and in a lot of cases it's impossible to improve insulation without incurring massive costs and/pr planning hassles due to NIMBYs and laws about "changing the visual character" of an area. (This has been widely used to prevent PVC doubleglazing being installed in various conservation areas. Alternatives are generally 3 times the cost. Insulating single-brick dwellings is even more fraught with issues as the best way to do it is to fit insulation as extrerior cladding)

  3. Nick Ryan Silver badge

    Well... all this and price gouging by the energy companies (shareholder return is the only thing that matters - investment is contra this) and the lunatic Green fringe's sway that means that nuclear power, even though it can be implemented safely and effectively, is largely dead in Europe.

    1. Anonymous Coward
      Anonymous Coward

      "Well... all this and price gouging by the energy companies (shareholder return is the only thing that matters - investment is contra this"

      Do please comment when you know what you're talkiing about. The reason that there is a risk of blackouts is because EU rules are forcing the shut down of most coal plant, and prior investment by companies in efficient gas plant is being undermined by the way government has mandated and bribed renewables developers to build wind turbines.

      Take SSE, simply because they are a UK listed company, and they are present right across the energy chain but with minimal foreign activity to confuse the numebrs. Their return on assets last year was a miserable 2.4%. My building society are getting that on my mortgage. Where's the huge margins? Where's the reward for the risks and skills needed to operate ten of thousands of km of network, to build, run, maintain and upgrade high relaibility power generation? Where's the incentives to invest, when previous investment has been expropriated by government, or made unprofitable by their policies? For the foreign owned UK power companies, but for the fact that there's no buyers, it would make sense to sell their UK operations.

      1. MR J

        "Take SSE, simply because they are a UK listed company...(snip)...Their return on assets last year was a miserable 2.4%. My building society are getting that on my mortgage. Where's the huge margins?"

        They build them away, as any good listed does.

        The idea is to never make a huge profit, It is to build the money away in other projects that see those sub companies make huge returns, then people look at SSE and say "oh, they are not sticking us over"...

        I knew a pipeline company that was owned by the compression station that was owned by the well company that was owned by the huge international petrochemical company, and that pipeline was leased out to another company that leased it back.. When it was all said and done one petrochem company owned it all, but there was a huge trail. By the time customers were due to receive royalties on their natural gas wells (some of the best in North America) there was no money left, it all went to pipeline leasing. They were taken to court and told to "lower" their cost to something reasonable, but This is how they all operate.

        Let us also not forget "Regarding Green Stuff" that these same resellers/owners/providers were part of the reason the schemes started getting deployed like crazy. They all ran SolarPV schemes where they were going to get the most benefit, you didn't hear them objecting while they were doing installing or applying for subsidies. I have known people who work in this industry "regulatory capacity" who have been saying for a few years now that it's all about to fail again.. They have been slamming Renewables from the start. How many years now have a lot of these plants had the ability to build carbon capture into their existing infrastructure and not done it?...

        I know that in a couple of states in the USA they are complaining over something similar, it has to do with mercury toxicity... They say they cant operate with the harsh restrictions that are trying to lower mercury levels, the people of those areas know they cant eat more than 3 fish a month so the law is just a big pain in the ass, they will never be able to provide the customer with something good without putting prices up through the roof...

        It doesn't matter how much profit any of these companies make, It doesn't matter how sweet they have it. They will, like a child, never be happy with what they have or how they need to give it out.

        On a side note, in the UK You could build a battery backup system for your whole home, move to a economy 7 tariff and (after cost) save a few quid a year, plus unless that rolling blackout last over about 12 hours you would be okay :)..

        Second Side Note, I think the Inq has Solar Panels....

        1. Anonymous Coward
          Anonymous Coward

          "Where's the huge margins?"

          "They build them away, as any good listed does."

          Unfortunately that's rubbish for a single country based company. Any competent observer can track if cash is out of kilter with reported profits, or if the balance sheet is mis-shapen, or if the tax rate is inappropriate to the described business, or the dividends don't correlate with the P&L result. And there's nowhere for SSE to hide the money, added to which they are legally obligated to report costs and profits by segment to OFGEM, who do their own audit on those figures, over and above the normal statutory audits.

          If you were talking about a multi-national company, involved in multiple business lines, or with tendrils to opaque tax havens then you'd have more of a case, but that's largely the province of big US tax dodging tech & coffee companies, pretending that they buy licences or services at vast cost from offshore subsidiaries.

      2. wookey

        "The reason that there is a risk of blackouts is because EU rules are forcing the shut down of most coal plant"

        The operators have had 15 years warning, and the option of upgrading their plant so it's only horribly, not egregiously, polluting. They chose shutdown for many plants rather than improve them to a still fairly mild minimum standard. The EU are quite right to set limits on just how filthy and inefficient a coal station is allowed to be in 2015. It's actually quite clear that _all_ coal stations need to shut down sooner rather than later (or fit CCS), so this is hardly radical.

        It is true that in the brave new world there needs to be a capacity market as well as a supply market, precisely so that flexible gas plant can still be used, even though it'll get used less and less as low-carbon (and cheaper per kWh) sources are used instead.

    2. Destroy All Monsters Silver badge
      Facepalm

      "shareholder return is the only thing that matters - investment is contra this"

      Yeah. Not quite sure about this "business" thing, are you? Especially about capital-intensive ones?

      1. Anonymous Coward
        Anonymous Coward

        People are immensely ignorant when it comes to Energy companies returns, the numbers are something like on a £1200 yearly bill they make £60 which is hardly gauging, this is mostly the fault of Governments and Media misrepresentation.

  4. Anonymous Coward
    Anonymous Coward

    Biomass != fossil fuel

    Obviously it's Mr O's prerogative to rant about one of his hobby horses, but whatever else you might feel about the wisdom of burning biomass for electricity production, new growth wood burnt as biomass is not a fossil fuel.

    1. BoldMan

      Re: Biomass != fossil fuel

      So what - its still releasing CO2 and thats supposed to be evil!!! Or is it only evil when idiot greens say its evil?

      1. wookey

        Re: Biomass != fossil fuel

        "So what - its still releasing CO2 and thats supposed to be evil!!! Or is it only evil when idiot greens say its evil?".

        There is a difference between sending carbon round on a 40 yr cycle and digging up new carbon from inside the earth to put into the atmosphere. It's true that on a short timescale of a year or 5 there is no practical difference, but over the long term it's all the difference in the world. We've put a gigatonne of fossil carbon into the atmosphere in 250 years and are on track to put the second gigatonne there in 35 years. And that's our whole allowance - no more carbon for several hundred years - it has to stay in the ground or otherwise get seqestered. Running things on recyclable steady-state biomass carbon is a very useful contribution to that goal.

    2. Bodhi

      Re: Biomass != fossil fuel

      It is not a fossil fuel no. Shame the tendency is to burn a shedload of them in order to make the woodchips in the first place. And that's without going there on the mass deforestation needed to produce the wood in the first place.

      So basically, another "Green" technology that's actually worse for the environment than burning old dinosaurs.

      1. itzman

        Re: Biomass != fossil fuel

        There's a few dinosaurs at DECC I'd gladly burn...that would be excellent for the environment.

    3. Suricou Raven

      Re: Biomass != fossil fuel

      I assume he was referring to the production process. All those logging vehicles, trucks and such run on diesel. Producing biofuels on an industrial scale actually needs fossil fuels to power the process.

      1. Alan Brown Silver badge

        Re: Biomass != fossil fuel

        " Producing biofuels on an industrial scale actually needs fossil fuels to power the process."

        Yup - and in the case of USA subsidised corn-ethanol, there is more fossil fuel used in the process than equivalent ethanol energy produced at the other end.

  5. TheOtherHobbes

    Or we can do the reality-based thing and blame corporate greed, profiteering, lack of foresight and poor short-term planning.

    Funny how ever-increasing profits and rip-off price rises never figure in these 'analyses' . But they're never the fault of those who benefit from them.

    Very odd.

    1. codejunky Silver badge

      @ TheOtherHobbes

      "Or we can do the reality-based thing and blame corporate greed, profiteering, lack of foresight and poor short-term planning."

      Profiteering? To a point. Greed? So is your pension which relies on these industries. Lack of foresight? Your kidding. If you remember it was the last gov who refused to build adequate power generation but instead insisted that the hippies were right (no to nuclear) and built loads of monuments to the sky god in the hope he would blow on those phallic symbols and make everybody happy. Even when the evidence has done anything but support that idea. Current technology cannot make a working wind farm, it needs more work. How much of our energy bill is green tax's? Why if we must pay it is it not used to build a power supply?

      "Funny how ever-increasing profits and rip-off price rises never figure in these 'analyses' . But they're never the fault of those who benefit from them."

      Ever increasing prices vs governments putting them in a situation where they will likely shut down because they cannot afford to pay the workers, buy resources and SUPPLY ENERGY! It isnt complicated. If they are to be shafted out of the business they want money to wrap it up. Yes they want their profits because they are being forced out, and not by market forces. They are being betrayed and shafted. And we will suffer for it (already are).

      "Very odd."

      I find it odd when someone has thought through the implications of the situation. Instead we have devolved into "dem gud, dem bad....ug" mentality. Bankers, gov, power, thought.

      This is simple. Do we want power? The answer is yes except for nutty mud hutters (let em sit in a field). So we require generators. Not having enough capacity or resources to generate power works against our want for power. So why would we shut down power generation because some muppets make up a graph and make wild claims of doom? Surely we have answered this. We need power, so give us a working alternative. If you dont have one then come back when you do.

      1. wookey

        Re: @ TheOtherHobbes

        "Current technology cannot make a working wind farm"

        Nonsense. It works fine. Wind is now 12% of UK electricity supply and rising fast. It's the success of windpower that is making life difficult for gas station owners. The wind energy is cheaper (because the generators will sell it at any price as they have tiny running costs). Yes lots of non-dispatchable renewables require massive change in the grid and its operation and significant changes in the electricity market, but it's silly to claim they don't work.

        1. SImon Hobson Silver badge
          FAIL

          Re: @ TheOtherHobbes

          > Nonsense. It works fine. Wind is now 12% of UK electricity supply and rising fast.

          It depends on how you define "works fine" !

          If your definition is "it creates electricity, on average, to supply 12%" and leave it at that then yes - it does work fine.

          On the other hand, if your definition is "It generates dependable electricity when it's needed" then no, they really do not work fine. If they produced 12% day in, day out, day and night, 365 days of the year then that would be fine (ish). But they don't. The output is massively variable (anything from 4 or 5 GW to less than 200MW for the 7GW of metered wind generation capacity), and doesn't always produce when needed.

          Result ? At some times, demand is up but wind is down - this means other generators must fire up and fill in the gaps. At other times, wind is up but demand is down - so because of the stupid rules other generators must scale back. This (as the article points out) makes other generators unprofitable and so they are likely to shut down. When they are gone, all we need is another spell like the end of 2010 - very cold, extended period of cold and calm air over the country, naff all wind output, massive demand, and ... none of those useful gas powered stations to fill in the gap and keep the lights on.

          Now, if the wind (and other renewable) operators had to take care of their own intermittency - paying themselves for the negative effects they have on everyone else - then and only then would I have any sympathy at all with the massive subsidies they get. As it is, they are little but leeches - sucking out loads of money, and leaving everyone else to pay for the problems they cause.

          I'll add that in general it's hard to criticise someone for taking advantage of the situation - as someone I know put in when having his solar PV installed, "if they're handing out free money, I'll have some of that". No, the problem comes down right at the feet of the clueless f***wits in London who put in place such a broken system and ignored all advice about what were obvious consequences.

          Fail icopn - both for the policies, and for your comprehension (or lack thereof) of reality.

        2. codejunky Silver badge

          Re: @ TheOtherHobbes

          @ wookey

          I guess you open with a joke? Windfarms provide so little power at very high cost. Technically the technology sorta works. In reality it is not good enough to add power effectively or efficiently to our grid, especially as a replacement for our stable and capable energy sources.

          It isnt the success of windfarms causing gas plant trouble, it is the implementation of windfarms which do not work yet take priority which is causing problems for the energy sector and the tax payers/customers

      2. Alan Brown Silver badge

        Re: @ TheOtherHobbes

        "So is your pension which relies on these industries. "

        If you're under 50, I feel fairly safe in predicting you won't get much anyway.

        If you're under 40 then the odds are pretty good that retirement will be at age 75+ and pensions will be miserly.

    2. Bumpy Cat

      I'm not defending them 100%, but the energy companies only make a small profit percentage-wise. Of course it's billions of pounds - if you provide a service to millions of people you will be making billions.

      The lack of foresight and poor short-term planning is not really up to the energy companies, either - that's 100% the responsibility of DECC or whatever they're called these days. DECC under Miliband was really DCC, since they apparently didn't give a shit about energy provision.

    3. Steve Crook

      Doing the reality based thing...

      The Left like to monster capitalism, it's convenient and allows them to argue that politicians and unelected bureaucrats are far more altruistic and capable than those nasty fat-cats and their equally evil shareholders.

      "poor short-term planning". Ha! It's been a lack of any planning and foresight. That's by the last government mostly, who had over a decade to put in place a workable plan to ensure we kept the lights on. They also had more money than they knew what to do with and a generally supportive population. They *still* managed to fuck it up.

      If the government start to mess about in the energy market as per the the Labour plan we'll be no better off except in the very short term. Fuel prices might come down, everyone will feel good for a while, and we'll be sticking it to the greedy corporates. After that the money will be leached out of our pockets in some other way. As it always is because governments, particularly socialist governments, spend our money for us because they think they know better than we do.

    4. Destroy All Monsters Silver badge
      Flame

      These companies are not there to please your sorry arse. They would not even exist without "greed" and "profiteering". As for "lack of foresight", it is difficult to be had in this here century of permanent uncertainty regarding what our "leaders" will be cooking up in new reglementation tomorrow.

      If you want a kumbaya company running 0 profit you can set it up yourself. It might be a bit difficult to find investment partners, especially in the era of negative interest rates and it will probably die pretty quickly because it won't have any financial wiggling room, but it will have an immense feel-good factor associated to it. Not to mention long hair.

      1. wookey

        "If you want a kumbaya company running 0 profit you can set it up yourself. It might be a bit difficult to find investment partners, especially in the era of negative interest rates and it will probably die pretty quickly"

        EBICO is a non-profit power company that has been up and running for over a decade, and in fact has the best customer satisfaction numbers of all the power companies. They charge the same rates to poor people using cash meters as they do to rich ones, and very low users (no standing charge or tiered rates) (unlike all the others). So such things do exist, and are a social good.

  6. Anonymous Coward
    Anonymous Coward

    It's great having ideals......... But we can't afford eat, heat or have a bath.

    Get rid of the Lib Dem sandal wearing tree huggers and the Labour flat cap wearing commies and we might have a chance of getting rid of these green taxes.

    No one else bothers to follow the rules, it piles costs on to UK businesses, householders, while the rest of the world laughs at our uncompetitiveness. Do you really think anyone wants to follow our 'lead?'

    Even the Aussies are getting rid of some of their green taxes the old Government put in place.

    We just get poorer because of it, it's great having these fantastic ideals but the downside is we can't afford to heat our houses or buy food.

    1. returnmyjedi

      Poppycock.

    2. Anonymous Coward
      Anonymous Coward

      Re: It's great having ideals......... But we can't afford eat, heat or have a bath.

      @AC

      Its a shame such truth has to hide behind the anonymous option. Maybe one day such honesty can be discussed without being anonymous.

      You got my upvote

    3. Anonymous Coward
      Anonymous Coward

      Re: It's great having ideals......... But we can't afford eat, heat or have a bath.

      "Get rid of the Lib Dem sandal wearing tree huggers and the Labour flat cap wearing commies and we might have a chance of getting rid of these green taxes.

      No one else bothers to follow the rules, it piles costs on to UK businesses, householders, while the rest of the world laughs at our uncompetitiveness. Do you really think anyone wants to follow our 'lead?'

      Even the Aussies are getting rid of some of their green taxes the old Government put in place.

      We just get poorer because of it, it's great having these fantastic ideals but the downside is we can't afford to heat our houses or buy food."

      Childish! Were all waiting to see you stamp your feet. You've already started kicking up a fuss and showing up your parents.

    4. Hairy Spod

      Re: It's great having ideals......... But we can't afford eat, heat or have a bath.

      I'm pretty sure that the original fuel escalator and quite a few other environmental taxes and initiatives were actually brought in by Maggie and Major.

      FWIW I still think they are good idea. We've known the framework for quite some time, surely someone worthy of their bonus can start to make plans based upon rather than around it.

    5. Anonymous Coward
      Anonymous Coward

      Re: It's great having ideals......... But we can't afford eat, heat or have a bath.

      Don't forget to get rid of the Privatising Tories, if they don't invest in alternatives to gas fuel bills will go sky high anyway.

    6. HMB

      Re: It's great having ideals......... But we can't afford eat, heat or have a bath.

      It's not a problem with ideologies. It's a problem with competence and having the backbone to do the right thing and that's a profound issue running across the entire political spectrum.

      It makes me so angry that something so basic as power generation is in danger. It's not the 1970s anymore. The economy can't afford the loss of basic infrastructure. Business doesn't run on pen and paper like it used to, it's mostly run on computers and networks.

      I'd like to see our civil servants held to account for any extreme dereliction of duty. I think that actual black outs on the power grid would amount to that as well.

  7. Piro

    If SimCity taught me anything

    It's that gas power plants are great. Relatively clean, with a decent power density.

    Beat the crap out of wind power. Shame hydro isn't in any SimCity past 2000, because of course hydro is the best.

    However, there's another thing we've totally missed that some other EU countries haven't. Waste to energy. I used to build waste to energy in the corner of the map (the desolate north?) and it took care of two problems at once.

    Look at countries like Denmark. There's basically no landfill. Waste to energy is the last step in the chain for almost all waste.

    1. Anonymous Coward
      Anonymous Coward

      Re: If SimCity taught me anything

      If SimCity taught me anything ....

      .... then it was we need a contigency plan in case of a Godzilla attack

  8. Steve Button

    leading to an increase in fossil fuel consumption with wood being burned

    Does wood count as a fossil fuel?

  9. wyatt

    I wonder how much electricity generated by 'renewable' sources actually costs compared to traditional 'fuel' generation? Subsidies should be scrapped or at least the correct cost shown to the consumer. Whilst I'm in no doubt that they are the way forward, until they can be shown to pay for themselves they should be considered not a source and more a way forward in the future. Nuclear and coal is the best short term solution, it's available and we know how to use it.

    Similar to the Toyota Prius. It costs more to build and than a normal car.. but one day it'll be the way forward (unless efficient hydrogen engines are developed!).

  10. Richard Wharram

    You didn't need the denier stance

    Just accepting that AGW is real and that we want to reduce CO2 emission these policies are still a fail. They are not reducing CO2 emissions.

    Using gas to replace coal would be a nice quick win on CO2 whilst realistic long-term options are invested in (nuclear). The current policy is counter-productive.

  11. FartingHippo
    Mushroom

    WTF is wrong with our politicians?!

    These plants... that are indispensable to ensure security of supply during peak hours... are being replaced by volatile and non-schedulable renewable energy installations that are heavily subsidized.

    I repeat: What the FUCK is wrong with our politicians?!

    1. Piro

      Re: WTF is wrong with our politicians?!

      The quickest answer is everything. The long answer is that it would be quicker to write the good things than the bad.

    2. itzman

      Re: WTF is wrong with our politicians?!

      There is nothing wrong with them.

      They just are not working on our behalf, that's all.

      They are not telling the truth, that's all.

      They do not care about us, that's all.

      They are POLITICIANS. That's all.

  12. Anonymous Coward
    Anonymous Coward

    "A gas plant needs to be operating at 57 per cent capacity to be economically viable, but EU regulations introduced to reduce CO2 emissions relegate them to standby duties, in favour of much more inefficient and costly renewable energy plants. This means keeping a gas plant open is uneconomical for the operator. Research outfit IEA, cited by CapGemini, reckons 60 per cent of gas-fired power stations will close by 2016 because they cannot cover their operating costs."

    We are all aware of climate change.

    Consume at current (and even increasing) and destory the planet, or, limit our power consumption and your kids live a decent quality of life. If the only way we can achieve a balance is to drive prices up, then that what must be done. After all, no one will reduce consumption voluntarily. We really do need to dumb it down and not assume society has ANY level of intelligence or that they even care!

    1. Anonymous Coward
      Anonymous Coward

      Or look at the real world and come up with sensible workable solutions to the climate change issues without becoming a second world nation.

      Unfortunately the powers that lead the powers that be have made a decision and it's quite mad, but they refuse to look at alternate options, and actively rubbish any attempt to counter climate change issues by anything other then reducing CO2 output.

      1. Richard Wharram

        "Unfortunately the powers that lead the powers that be have made a decision and it's quite mad, but they refuse to look at alternate options, and actively rubbish any attempt to counter climate change issues by anything other then reducing CO2 output."

        That's not even the problem. They are crippling our ability to keep the lights on and to afford our electricity without even making any difference to CO2 output.

        That's the crazy thing.

    2. h4rm0ny

      >>>"Consume at current (and even increasing) and destory the planet, or, limit our power consumption and your kids live a decent quality of life"

      Or choose door number three - build nuclear power stations.

  13. JimmyPage
    FAIL

    Funny how no one understands basic economics

    The less you have of something, the more it costs. It really is that simple.

    1. Sir Runcible Spoon Silver badge

      Re: Funny how no one understands basic economics

      No it isn't, it's more about supply and demand.

      The more demand you have vs supply, the more it costs. How much you have is irrelevant in the first instance.

  14. Khaptain Silver badge
    Flame

    Milking the bunnies

    The populations are using more and more energy for televisions, home cinemas, central heating, luxuries, iphone etc. etc...Surprisingly there are no viable energy solutions available for the ever increasing demand. So what do we do, nothing, we continue to consume as ever before..

    OK, changing your boiler for a new energy efficient one will help, a little, but it will not remove the requirements for continually using energy. We have found ways to improve energy consumption but what we needs are solutions that STOP energy consumption.. But that would be detrimental to the economy......catch 22.

    People want cake, no problem, but first learn they have to learn that cake is not going to be provided for free.... there is always a cost. Life is tough and I am convinced that it's going to get tougher for most but not all... just pray that you are in the latter..

    Meanwhile prepared to be milked because it's all downhill from here on in.... until the populations are reduced by one means or another......it has to happen and everyone knows it but no-one wants to take a clear stance and offer "soft" solutions.......

    1. Anonymous Coward
      Anonymous Coward

      Re: Milking the bunnies

      "The populations are using more and more energy for televisions, home cinemas, central heating, luxuries, iphone etc. etc...Surprisingly there are no viable energy solutions available for the ever increasing demand. So what do we do, nothing, we continue to consume as ever before.."

      Globally yes. But in Europe in general, and the UK, no. UK and European total and peak power demand has been sliding for about five years now. The problems we now have aren't about excess or growing demand, they are about the move from having excess supply capacity to insufficient capacity. And where government should have thought about cost and security of supply, instead they spent all their meagre intellects and much money on the drive for renewables, which contribute only modestly to gross generation supply and nothing to peak capacity.

  15. J.G.Harston Silver badge

    Physics!

    It's ridiculous using gas to generate electricity in the first place. Convert gas into heat into motion into electricity, send it along hundreds of miles of wires, convert back into heat. Gas should be piped along the gas pipelines and used at the consumer end with only one conversion point.

    1. PsychicMonkey
      Mushroom

      Re: Physics!

      you assume that the electricity is being used for heating?

      I'm pretty sure that most heating in the UK is via gas or oil, although I have not stats at hand to back it up.

      1. phil dude
        FAIL

        Re: Physics!

        alas I'm afraid I have found that to not be true, whilst finding accommodation in Oxford. Gas is considered unsafe is "flats". My last flat was all electrics with non-storage heaters. The insulation was subpar.

        It was costing 100 GBP/month in winter for a 1 bed flat.

        Elect was 12p/Kwh, or 15/5 for Econ7.

        Just to add another number to this discussion, here in TN I just checked my bill. $0.08/KwH.

        Something is seriously wrong and needs to be done....

        P.

    2. Anonymous Coward
      Anonymous Coward

      Re: Physics!

      psss that's how gas boilers and cookers work, but gas wont power your lights, unless you have a generator in every house and that sounds like it may get a: dangerous and b: inefficient.

      1. Alan Brown Silver badge

        Re: Physics!

        There are some cogenerating boilers in the market (sterling cycle) but by all accounts they've not proved particularly reliable.

    3. Anonymous Coward
      Anonymous Coward

      Re: Physics!

      "Gas should be piped along the gas pipelines and used at the consumer end with only one conversion point."

      Sadly not. To simplify a range of complexities, the limited benefits of using waste heat from small scale local generators are more than offset by the low efficiency of small generation, the loss of economies of scale, and the grid context (need for full grid cover for peak demand, impact on baseload from embedded generation).

      Microgeneration at the household level is very inefficient, and uses noisy, short lived assets. I should know, having reviewed one of my employer's customer propositions in this space - it was laughable, and didn't even make financial sense with government Feed In Tariff subsidies. The quoted efficiencies by suppliers make the flawed assumption that the thermal and electrical outputs are needed at the same time, and ignores the grid context that means any material microgeneration output means tweaking down nice efficient baseload.

      Larger scale CHP has a little bit more going for it, but even then the capital cost is vast, around £5k per property, yet still requiring full grid cover because the power element can't be sized to meet peak demand. Put simply a small GT or large reciprocating engine will never have the efficiency of a decent CCGT.

      The correct solution for heat is actually to take the heat from big power stations and use that where circumstances permit (high density housing or business needs). For any big coal plant more than half the input energy is lost up the cooling towers. With suitable encouragement that could have been sold to residents and businesses in nearby towns and cities. Modern piping can easily shift heat long distances, so a run of up to ten miles to an urban centre wouldn't be a problem, but the limiting factor is the average network length per property, because insulated pipes cost at least £1,000 per metre (so detatched houses aren't economic to supply, and even semis are usually too expensive).

  16. Anonymous Coward
    Anonymous Coward

    Are you listening Cameron?

    I wonder if Cameron realises the fact if there is a blackout all his voters will desert to a party which promises to keep the lights on? I'm amazed he has allowed our coal powered plants to be shut with nothing to replace it. Europe is committed to Economic suicide with the Lib Dems as the main cheerleaders.

  17. red death

    Cloud cuckoo land thinking...

    Call me cynical but why on earth would I believe an energy sector player when they tell me they are going to close gas plants by 2016? It's either plain lies or disingenuous at best - the only reason to close plant capacity would be genuine end of life. If they had said coal then I could have believed it (due to the LCP Directive provisions kicking in on FGD).

    The idea that the UK is the only country which obeys EU legislation is utter nonsense and while it might seem a convenient excuse where is the evidence? A lot of EU legislation (in the forms of Directives) gives Member States a lot of leeway in how they are implemented so you would expect wide variations in implementation.

    Nuclear power - great (i'm massively in favour), but how much? Those championing nuclear as a solution clearly don't have much handle on the total costs - renewable subsidies have nothing on decommissioning costs.

    Green taxes - I have a degree of sympathy there with complaints, but context is everything ie how much of our energy prices are down to green taxes (and what are those taxes used for ie supporting the poorest and energy efficiency measures)? 10%?

    1. Anonymous Coward
      Anonymous Coward

      Re: Cloud cuckoo land thinking...

      "Call me cynical but why on earth would I believe an energy sector player when they tell me they are going to close gas plants by 2016? "

      Because the spark spread (look it up) is below the cost of keeping the plant open, particularly if your running hours fall due to subsidised renewables, and your effieincy is clobbered by the intermittency of the same renewables. If there's a prospect of the plant becoming economic in future then it may be mothballed rather than closed, but in the chaos of European and UK energy policy that still involves a risk.

      "Green taxes - I have a degree of sympathy there with complaints, but context is everything ie how much of our energy prices are down to green taxes (and what are those taxes used for ie supporting the poorest and energy efficiency measures)? 10%?"

      Don't mix up the green and social aspects. DECC already have, and it's a right pig's ear, albeit one that keeps me in a job. The social costs are about £2bn a year at the moment across industry (aggregate costs of WHD, CERO, HHCRO and CSCO schemes), and as there's 26.5m UK households, with average annual leccy bills of around £500, that's 15% just on social obligations - obligation costs are recovered on electricity bills, not gas bills. If you included gas bills then you could say that the average social cost was circa 7%, but for consistency you'd then need to include the £2bn spent on winter fuel payments by central government, pushing the aggregate figure back to 15%.

      The subsidies for renewables are hidden by the way that they are funded. Not only do you have direct subsidies like grants, tax allowances, ROCs and LECs, but you've got a market structure that meets demand by selecting the lowest marginal cost (not paid price) of plant that could meet total demand, and then pays everybody the highest marginal price. This worked well in the days when all generation could be despatched as required and before subsidies wrecked the merit curve, but now means that wind power enjoys an unintended must run status. As a consequence, in addition to the subsidy credits it also gets paid the same as the most expensive plant in the market. Unraveling the full value from this is difficult - the direct subsidies are about 5% of your bill, the benefits of system marginal pricing probably add at least the same again. And that's why developers are rushing to carpet both land and sea with wind turbines - despite their paltry and unreliable output, the economics are excellent.

      1. red death

        Re: Cloud cuckoo land thinking...

        Analysis in the Times today reckoned 9% for all green and social subsidies on electricity - made up of 2% for renewables, 5% for discounts/help for poor and elderly and 1% for the warm home discount.

    2. PatientOne

      Re: Cloud cuckoo land thinking...

      "Call me cynical"

      Okay, you're cynical.

      "but why on earth would I believe an energy sector player when they tell me they are going to close gas plants by 2016?"

      Because they are being told to produce less electricity from the plant, while the cost to maintain it isn't changing. If the plant's revenue drops below the cost to maintain and run it, then who pays the difference? What business on this planet would operate at such a sustained loss? That's why I'd believe the energy sector: That's what they're saying will happen, and why they will close down the generators rather than run them at a loss.

      "The idea that the UK is the only country which obeys EU legislation"

      No, there are others, but we are the only major player in the EU that pays more than lip service to EU law. Prime example is France, and how they conveniently forget to pay all the fines that have been levied against them. Go look it up sometime - France could bail out the rest of the EU if it ever did pay up what it owes (no chance of that, though).

      "Nuclear power - great (i'm massively in favour), but how much? Those championing nuclear as a solution clearly don't have much handle on the total costs - renewable subsidies have nothing on decommissioning costs."

      The cost to commission and decommission a nuclear plant is factored in and spread out over the expected lifespan of the generator. This is then balanced against the output and is used to calculate the cost of energy production from the plant. To simplify things, the 'bottom line' tends to be used, which indicates the cost of electricity from a nuclear plant is less than from wind turbines per KWh.

      Wind turbines have a cost to decommission. The cost is to remove the turbine and dispose of the materials used. It's either that or they will simply be abandonned at the end of their life. I've seen nothing to confirm or deny that this cost is covered the same way as with nuclear, but again the costs is simplified into per KWh costs over the expected lifespan of the wind turbine.

      "Green taxes - ... and what are those taxes used for ie supporting the poorest and energy efficiency measures".

      The 'Green tax' refers to the amount we pay to subsidise wind turbines and other green energy production such as solar and tidal. This has a larger impact on industry that has to buy 'carbon certificates' to show they're 'green' (this is why you see claims of 'we use 30% renewable power' from companies - they have no idea where the electricity is comming from, but they've got carbon certificates** to cover 30% of their power consumption, so that's okay*). Over all, we, the consumer, pay more as costs rise to cover those certificates, as well as the direct cost to us of electricity.

      *There is an exception: Some companies have installed solar pannels and wind turbine on their buildings to generate power locally. This increases maintenance costs of the building, but decreases electricity costs and generates the carbon certificates for the company rather than them having to buy said certificates from wind farms and other renewable power suppliers.

      **Some would argue this is what renewable energy companies are there for. Any power they produce is just a byproduct.

      1. red death

        Re: Cloud cuckoo land thinking...

        >>Because they are being told to produce less electricity from the plant, while the cost to maintain it isn't changing. If the plant's revenue drops below the cost to maintain and run it, then who pays the difference? What business on this planet would operate at such a sustained loss? That's why I'd believe the energy sector: That's what they're saying will happen, and why they will close down the generators rather than run them at a loss.

        But you don't need to run them at a loss, one of the major advantages of gas is that it is quick to start up and shut down. If there is demand not being satisfied due to lack of capacity then the spot price rises and the economic balance changes for how much of the time you have to have your gas plant running to make it profitable...no one is saying it should be run at a loss.

        The idea that any of the large power cpys are going to decommission valuable assets is frankly naive.

        >>No, there are others, but we are the only major player in the EU that pays more than lip service to EU law. Prime example is France

        The fact that France hasn't paid its fines for a particular infringement is not the same as your rather generalised point. How about Germany or the Netherlands - pretty zealous about implementing EU law.

        >>The cost to commission and decommission a nuclear plant is factored in and spread out over the expected lifespan of the generator.

        Err, no it isn't - a fairly shameful attempt to do so is made, but given that no one really knows the full cost of decommissioning yet (given that the normal decommissionining process means leaving things to cool for 50+ years) it is impossible for anyone to say the costs are covered during the life of the plant. That is before you even start trying to estimate the cost of looking after the intermediate and high level waste over thousands of years.

        >>indicates the cost of electricity from a nuclear plant is less than from wind turbines per KWh.

        Agreed (I did some uni research on precisely this topic), but only if you can't put a figure on decommissioning (which you can't).

        >>Wind turbines have a cost to decommission. The cost is to remove the turbine and dispose of the materials used. It's either that or they will simply be abandonned at the end of their life. I've seen nothing to confirm or deny that this cost is covered the same way as with nuclear

        It is covered (or at least it should be) and it is easy to do compared to nuclear.

        As I said, I'm in favour of nuclear new build as part of the energy mix (along with gas, renewables and even coal in the right circumstances), but lets not be naive or ignorant about the issues with each.

    3. HMB

      Re: Cloud cuckoo land thinking...

      > Nuclear power - great (i'm massively in favour), but how much? Those championing nuclear as a solution clearly don't have much handle on the total costs - renewable subsidies have nothing on decommissioning costs.

      Just to make that clear (it's been said above but buried in a larger reply.

      Nuclear decommissioning costs are minimal because new plants have the decommissioning cost paid up front gathering interest. Considering a 40 to 60 year period of operation, the amount up front doesn't have to be much even with low interest rates.

      1. PyLETS

        Re: Cloud cuckoo land thinking...

        "Nuclear decommissioning costs are minimal because new plants have the decommissioning cost paid up front gathering interest. Considering a 40 to 60 year period of operation, the amount up front doesn't have to be much even with low interest rates."

        It doesn't work that way. Unless you can find one example where the operator of such a plant has been required to post a bond up front. Politics prevents that, because at any given point of decision making time it's always politically easier for a future generation of humanity to pay the cost then than for the current generation to pay it now.

        So in practice it's a subsidy pure and simple.

      2. red death

        Re: Cloud cuckoo land thinking...

        >Nuclear decommissioning costs are minimal because new plants have the decommissioning cost paid up front gathering interest. Considering a 40 to 60 year period of operation, the amount up front doesn't have to be much even with low interest rates.

        Sorry but that just is not true!

        In the UK and France the state funded the building of the reactors and has taken on the massive liabilities of decommissioning. AFAIA* there has been no privatised nuclear reactor built where decommissioning costs have been paid up front.

        The UK Govt wanted operators to pay a bond to cover decommissioning costs (to prevent plants being declared bankrupt at end of life), but the billion dollar question is how much does the bond need to be to adequately cover decommissioning costs? If the costs are not known how can Govt guarantee that the state isn't going to have to step in to subsidise the decommissioning and storage at a later date???

        Given that we still don't know what the final decommissioning costs are going to be (let alone have a solution for long term storage of intermediate/high level waste) it is more than a little premature to claim that the decommissioning costs are minimal. By any stretch of the imagination they won't be minimal!

        * the latest Finnish reactor might be the exception to that.

    4. Pete 2 Silver badge

      Re: Cloud cuckoo land thinking...

      > why on earth would I believe an energy sector player when they tell me they are going to close gas plants by 2016?

      Simply put. They are running a business. If the cost of running that business, or factory, or power station, is greater than the profit they make from running it, they'll close it. Why would they do otherwise? It's a free country and manufacturers are under no obligation to supply electricity or any other product. They will only do so if there's monkey to be made.

      We have heard the same warnings from car makers, steel plants, coal mines and many, many other parts of what old-timers used to call "british industry". They all closed. Electricity generation will stop, too, if a regulated market gets in the way of supply-and-demand and makes it unprofitable.

      There's no rule that says we *have* to be supplied with electricity, on demand, whenever we want, in whatever quantity we please. And just because we've had (largely) interrupted supplies for the past 100 years - that's no reason to suppose that they will go on forever. Up until recently it has been profitable for generators to make electricity and to sell it to us. That it's strategically important and without it you're looking at a cold and wet version of Angola: generating capacity: 1.16GW - though ravaged by war, rather than stupidity,

  18. izntmac

    Green Power Isn;t What it is Cracked up to Be

    The cheap natural gas has hit the US coal industry hard. Gas fired power plants are a "clean" fossil fuel as compared to gas and oil. Pushing them away to reduce carbon emissions is foolish for the UK and the rest of Europe. Renewable resources such as solar, tidal, wind, and other forms of energy aren't as reliable as fossil generation of electricity and cost a lot more per kilowatt hour. Europe trying to be a "leader" in reducing carbon emissions make them a fool. Newly industrialized countries such as China and India I'm sure aren't giving up their oil and coal plants and energy to reduce carbon dioxide emissions. Gradually moving to "green" power is not a bad idea. but to do it in the name of "leading" is foolish. If Europe leads then who is following?

  19. JimmyPage
    Flame

    Now watch how politics works ....

    The pie is shrinking, so there needs to be rationing. I can't see any government risking domestic power cuts except as a measure of absolute last resort. Also I see a media battle between the government (who will try and persuade people that it's all the fault of the power companies) and the power companies (who will blame the government, the EU and "the market").

    Bad move for the government, unless they decide to wade in with chequebook and legislation - the power companies will have dictated the contractual landscape, and made sure it's industry that goes offline first. Factories, big office complexes (and hopefully a few government departments ;) ). At which point (those of us who remember the 3 day week) you will start seeing the lay offs.

    And that's the price you pay for not educating the population properly AT SCHOOL so they had enough grasp of science to debate nuclear power rationally. Still, maybe if we burn a few media studies graduates, we can keep some lights on.

    I grew up in the 70s, and recall getting home from school, and lighting the candles for when my Mum got home from collecting brother from playschool. Giving thanks for a gas cooker (a preference I have never lost) and for my Dads inna te distrust of electricity (he was born in Southern Italy, where power cuts are a way of life) which meant he insisted on gas central heating. Being a real engineer, he rigged it up to run off a car battery, so it could run without mains.

    No power cuts in the 80s, no power cuts in the 90s, but in the past 4 years we have had at least 3 outages of over an hour. My suspicion is lack of capacity makes it harder to route around stolen cables.

  20. taxman

    Odd thoughts but...

    I've always wondered why we burn a limited resource of energy to create another type of energy.

    Gas may be cheap (really?) but is it now the best resource to be using to generate electricity? And how dependent are we in the UK on others to supply it to us? Who is going to pay for all the changes needed in domestic heating when the gas finally goes out?

    Oh I know, not in my life time so it doesn't bother me. Get your head out the sand DHs!

    Efficiencies in use of energy, insulation, new building materials - and massive decline in heavy industries that used electricity - should mean our demand for electricity supply decreased, but apparently not. So what are we in the UK using to burn up so much energy? And where is the proof? Just because the generators are turning doesn't mean that there is a light bulb on at the end of the line. Have we been generating more than required in the past and now paying the price?

    As for being uncompetitive, that's been the case ever since we started selling off our industries and knowledge to countries with a larger, cheaper workforce! A quick buck made at the time and now paying the consequence.

    As for being a tree hugger - as long as they are cider apple trees mate!

    1. Anonymous Coward
      Anonymous Coward

      Re: Odd thoughts but...

      "Efficiencies in use of energy, insulation, new building materials - and massive decline in heavy industries that used electricity - should mean our demand for electricity supply decreased, but apparently not.",

      It has. In 2008 UK electricity production was 385 TWh, by 2012 that had come down to 361 TWh, despite an increase in the population from 61m to 61.4m in the same time frame. The slow change reflects the fact that housing stock is (in the bigger picture) added to rather than replaced, and that the changes in British industry haven't been great over this time frame.

      "Just because the generators are turning doesn't mean that there is a light bulb on at the end of the line. "

      I believe you'll find that electricity requires a circuit, in which case you are accusing the electricity industry or others of hiding a ten trillion watt lightbulb somewhere. I think somebody would notice that, myself.

  21. MrXavia
    Facepalm

    four words... WE NEED NUCLEAR POWER

    We need new power stations, we need clean power therefore we need new nuclear power stations, but our bloody government is too stupid, ignorant and pig headed to fund them.....

    Why oh why do the conservatives always want everything private, labour want to waste our money, and Lib Dem are just too wimpy to do anything they promise.

    I just hope Lockheed's Skunkworks does what it claims with Fusion, or even better, I really hope some bright spark buried deep in a lab somewhere in the UK is working on a similar solution...

    100MW on the back of a lorry fuelled only by Deuterium and Tritium, that will be a power revolution!

    1. ZanzibarRastapopulous

      Re: four words... WE NEED NUCLEAR POWER

      Three words: It's Too Late.

      10-15 years, maybe 20 and British planning officers can turn any project into something that makes the Panama canal look like a DIY project. They've spent 15 years pondering a runway being built at an airport.

      We've fucked up big-style.

      1. Anonymous Coward
        Anonymous Coward

        Re: four words... WE NEED NUCLEAR POWER

        And four words: It costs too much.

        UK government are desperate to get EdF to commit to a new nuke at Hinckley Point to give them something to announce so that they can pretend their comedy energy policy is working. However, EdF don't want to sign and the sticking point is money. Even on starting cost projections EdF need £100MWh to make it work, compared to wholesale prices at the moment of £45 MWh - and that's assuming that new nuclear power doesn't have to shoulder the vast social obligations that government think should be in your electricity bill, nor the costs of subsidising renewables.

        Then you've got the problem that both previous EPR projects are six or more years late and three times over budget. If the French will bankroll the Hinkley Point over-run then that's fine by me, but if not then we're looking at £300 MWh, which is almost seven times current wholesale prices, even including EU and UK carbon taxes.

        Feel free to help yourselves to nuclear electricity at that cost, but lets make sure that customers who don't want a seven fold price increase can opt out, leaving those who do to pay themselves. Technically and safety wise I think nukes are a fantastic power generating solution - its just the way we currently do them isn't economic. If that changes I'd welcome them with open arms, but I don't see that anytime soon.

    2. Piro

      Re: four words... WE NEED NUCLEAR POWER

      Goddamn right.

      I want to see some Thorium reactors, some Gen IV standard Uranium reactors, especially as we can turn our old waste into new fuel.. and so on.

  22. Mark 65

    Don't worry

    The windmills will save you all!

  23. PyLETS

    All energy sources are subsidised

    Has anyone noticed their climate-related building insurance premiums going down ? No, I thought not.

  24. Steen Larsen

    Soon taxes will subsidize fossils too

    The solution is easy: subsidize the coal and gas plants to be on standby!

    This is off course completely crazy. BUT politicians don't mind. :-( In Denmark they have spent billions on subsidizing wind power which has first priority on the grid. As a consequence the fossil power plants will close just as described in this article. The politicians have now introduced an "energy supply guarantee" tax which will subsidize fossil power plants! and probably also some biomass.

    So the energy market is now completely scr**ed! First they subside wind to get rid of CO2 and then they end up subsidizing CO2 producing energy to secure the grid. Seems like they are back to square one except that the energy consumer is getting hurt by higher prices for nothing. :-(

  25. Richard 12 Silver badge

    Profits? They have no margin!

    The margin the energy companies are allowed is pretty tiny - 5%

    Until the banking crisis, they'd make more money putting their capital in an ISA (or equivalent) instead of using it to buy fuels and sell gas, oil and electric.

    They only make notable total profits due to their scale.

    If I remember correctly, about 70% of the price rises over the last decade and a bit have been directly caused by the green charges and renewable obligations.

    So not much is due to either profits or the wholesale cost of energy, it's almost entirely the Polly-ticks.

    1. Mike Bishop

      Re: Profits? They have no margin!

      That's their retail margin; they make most of their money on the wholesale markup, which isn't regulated. So don't feel too sorry for them. Still, politicians of all colours should be deeply ashamed of their disasterous energy policies. They've been hoodwinked by an unholy alliance of tree-huggers and capitalists. Unfortunately it's the rest of us who are paying the price.

  26. Benjol

    Mandatory reading

    <a href="http://www.withouthotair.com/">Sustainable Energy without the Hot Air.</a>

    Seriously, read it.

    Please!

  27. Anonymous Coward
    Anonymous Coward

    If a Little Ice Age hits

    If we get the colder winters that some scientists are now predicting, Europe will be a disaster zone.

    So much for following bad science!

  28. AndyC
    FAIL

    It all started with...

    Thatcher. She privatised the CEGB (for those of you not old enough to remember, that's the Central Electricity Generating Board). They had control of the National Grid and the generators. Ever since they were privatised, the cost of electricity has gone through the roof.

    Utilities should never have been privatised. The government has no control over what they do, how much they charge (who owns the generators? The utility companies for the most part) and whether they invest in the long term energy security of the country or whether they invest to make a quick profit.

    Blair was so Tory he did want to nationalise anything. Had John Smith still been alive, and won the election, the CEGB may even now have built Sizewell C, Hinkley Point C and Wylfa B and we wouldn't be having this conversation.

    The government can moan all it wants, but it can do bugger all about it and we are left in the dark.

    Looking for the candles.

    1. Anonymous Coward
      Anonymous Coward

      Re: It all started with...

      " It all started with...Thatcher. She privatised...Ever since they were privatised, the cost of electricity has gone through the roof."

      That is crap, and you are either ill informed or intentionally dishonest. Which is it?

      Electricity prices fell fairly consistently from privatisation in 1990 right through to 2003. See chart 2.1.2 on page 10:

      https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65940/7341-quarterly-energy-prices-december-2012.pdf‎

      And that's when the government's Renewables Obligation kicked in, followed by the government's energy supplier obligations like CERT & CESP, then the EU's Renewables Directive, then EU's Emission Trading System, then the government's Energy Company Obligation & WHD, more latterly by the government's UK Carbon Price Floor, and soon to be joined by the government's Capacity Mechanism. Have you spotted how the words "government" and "EU" appeared rather frequently in that lot?

      And in your enthusiasm for state management and for the party that has repeatedly rained economic death on this country, you overlook that last time the state ran the whole show we did indeed have to get the candles out.

      "

      1. AndyC

        Re: It all started with...

        Okay, I stand corrected on that one (ill informed... sadly)

        However, I still believe that the gov should look into restarting something like the CEGB. After all, from what I understand, it wasn't until they were looking to privatise the CEGB that they decided that SXC HPC and WYB shouldn't get built.

        Oh, and I've never voted Labour in my life :)

        1. Anonymous Coward
          Anonymous Coward

          Re: It all started with...

          "Okay, I stand corrected on that one (ill informed... sadly)"

          OK, I'll stand down the dogs, and think about apologising for my tone...

          Certainly privatisation put the kybosh on plans for new nuclear, but you need to remember that the costs of Sizewell B were around £80/MWh even at 2000 prices compared to wholesale prices at the time around £55 (IIRC), and that from planning announcement in 1969 it took almost thirty years before it was operational, largely due to planning, but also design choices. Even the already built nuclear assets of British Energy became uneconomic, leading to the company going bust, renationalised and eventually sold to EdF.

          With reduced regulation the newly privatised companies sensibly undertook a "dash for gas" to build CCGT stations that cost far less to build and operate (excepting fuel), had less risk, lower complexity, no long term liabilities, and were more easily sited near to demand, reducing transmission losses (compared to middle of nowhere locations like Wylfa, which only justified its location because of the "over the hedge" location of a now closed aluminium plant).

          Centralised planning under CEGB left us with expensive and inflexible coal and nuclear assets, built in the wrong locations for reasons that had little to do with energy demand. In theory there's no reason why the state couldn't deliver low cost efficiency, but the practical evidence is that it never does, usually due to the sort of political meddling that they've now taken to with privately owned power companies, all in the name of "climate change". You might hope that simply reforming the market as DECC's current Energy Market Reform (EMR) is intended to do will fix these sorts of problems. But if I might quote from a Cambridge University report by their Energy Policy Research Group:

          "EMR displays a huge amount of economic illiteracy:

          – on the theory of finance

          – on the theory of optimal taxation

          – on the nature of supply and demand in markets

          – on economic instruments for reducing externalities…

          • EMR also suffers from a host of practical and implementation

          problems and has little empirical efficacy basis.

          • EMR, if it is ever seriously implemented in the UK, will fail to

          deliver at reasonable cost.

          • The contrast between the UK government’s unwillingness

          to accept economic analysis vs. its willingness to accept

          climate change science is striking."

          So to an extent, it doesn't really matter who owns the assets: You get real and tangible benefits from a competitive market, but sooner of later the dead flesh hand of government decides that it should have a share of the benefits to spend on its self-selected good causes. That then means that policy has and will continue to drive wrong and costly outcomes drives through selective interventions that compromise the ability of industry to meet demand efficiently.

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