New Energy Bill Is A Disaster
Press Release from The Global Warming Policy Foundation
London, 23 May: With the publication of its draft Energy Bill, the government has announced its intention to reverse the course of energy deregulation.
The Global Warming Policy Foundation warns that any attempt to turn back the clock to the dark period of centralised energy planning will not only damage Britain’s economy, but will almost certainly end in failure, just like other attempts to impose a centralised system of energy controls have failed in the past.
Nigel Lawson, the GWPF’s Chairman, who as Energy Secretary was the architect of Britain’s energy market deregulation in the 1980s, warned:
“The Energy Bill constitutes a disastrous move towards a centrally planed energy economy with a high level of control over which forms of energy generation will be favoured and which will be stifled. The government even seeks to regulate the prices and profits of energy generation.”
The government bases the case for green – and more expensive – energy in large part on the assumption that gas prices will significantly rise in the future. This argument is no longer credible in the light of the growing international abundance of shale gas, not to mention the likely shale gas potential in Britain itself.
North American gas prices have dropped from $15 per million British thermal units to below $2 in just 7 years. This price collapse is an indication of things to come in Europe, once its own vast shale deposits are allowed to be extracted.
“At a time when most major economies are gradually returning to cheap and abundant fossil fuels, mainly in form of coal and natural gas, Britain alone seems prepared to sacrifice its economic competitiveness and recovery by opting for the most expensive forms of energy,” said Dr Benny Peiser, the GWPF’s director.
In any case, the complex and inconsistent measures of the draft Energy Bill are unlikely to provide investors with the certainty they require to make substantial investments.
The proposed contracts for difference (CfDs) are extremely complex and convoluted. Neither the profit guarantees offered for different technologies nor the duration of CfDs is known. The government has not provided any numbers and price guarantees for its favoured green technologies. Investors are therefore thrown into limbo since they cannot calculate whether expensive renewables or nuclear reactors are viable and can compete with less expensive conventional power plants.
This lack of clarity will inevitably lead to constant government amendments and continual intervention, which will act as additional barriers to new entrants in the UK electricity market.
In light of government indecision and investors’ uncertainty, the Energy Bill proposes to give the Secretary of State the exclusive authority to offer green energy companies ‘letters of comfort,’ promising them that they will be guaranteed profits once the specifics of CfDs are finalised and introduced. This is both arbitrary and unconstitutional.
Moreover, it is doubtful that what is proposed is actually workable, let alone economically viable. After all, similar interventions in the past have proved inept and uneconomic. They will almost certainly prove to be highly unpopular when the costs of these measures are reflected in energy bills.
“The proposed contracts for difference (CfDs) are extremely complex and convoluted.”
Synchronised swimming with sharks!
Smokey says: May 23, 2012 at 4:25 pm
[How much is enough? ]
If you took 100% of all the wealth from 100% of all the billionares in the whole world, and gave all of the money to the European Union, then the European Union would Still owe over 5 Trillion Euros (they currently owe about 9.4 Trillion Euro).
So clearly 100% is not enough.
Perhaps zero is enough, good money after bad and all that.
When will the Five Year Plan be announced? Will it be called the Green Leap Forward? Will the Green Guards be put in charge of compliance? Will the British monarchy survive when the UK collapses into chaos being brought on by the Destroyers?
youngest – – – In a free market, there is no “effective monopoly” So why not try a free market? – free markets work. Centralized government control of markets always creates shortages. Inefficient, in a word. The poor suffer – they don’t get the energy they need – you want the Government to protect the poor, but it never can, it never does. Centralized economies do assure that poverty is more widespread. Maybe if everybody was poor it wouldn’t matter so much that there isn’t enough juice to keep the lights on or the house warm.
The method for dealing with this is.
1. Have a coal or wood stove (Install one if you do not have one already)
2. Have flyers, pamphlets, regulations and any other government or NGO printed presentations sent to you for free.
3. Burn this free fuel in your stove.
4. Do not tell your friends because you do not want the government to figure it out.
Didn’t the UK get the memo on the failure of central planning in the 20th century?
hopefully CAGW will unravel before more billions are wasted:
23 May: AFP: EU warns climate talks at risk of floundering
Europe warned at climate talks in Bonn on Wednesday that efforts to forge a new global pact to avert environmental disaster were in danger of floundering, and some pointed fingers at China.
Nine days into talks meant to set the stage for a United Nations gathering in Qatar in December where countries must adopt an amendment to the Kyoto Protocol on climate change, negotiators complained that procedural bickering was quashing progress hopes.
With only two days left in this negotiating round, the parties have failed to appoint a chairperson or agree on an agenda for a newly established body dubbed the ADP tasked with overseeing the drafting of a new pact by 2015.
“If this slow pace of negotiations continues … it poses the risk of unraveling the Durban package,” Danish chief negotiator Christian Pilgaard Zinglersen warned on behalf of the European Union…
Pilgaard told the Bonn gathering that some parties, which he did not name, wanted to rehash issues that have already been settled…
And Wael Hmaidan, director of activist group Climate Action Network, said China was “blocking the ADP” out of fear that rich nations were trying to shift more of the emissions curbing burden onto poorer states than was historically fair…
***As countries bicker, researchers recently predicted Earth’s temperature rising by as much as five degrees Celsius (9.0 degrees Fahrenheit) from pre-industrial levels, instead of the 2 C (3.6 F) limit being targeted…
But Zinglersen said Wednesday: “We are very concerned that success in Doha is currently far from certain. With only two days left in Bonn we have made very little progress on a number of key issues.”
***The United States had never ratified the Kyoto Protocol, while Russia and Japan have said they did not intend to sign up from next year. Australia and New Zealand have not confirmed their positions, while Canada withdrew from the protocol last year.
http://www.google.com/hostednews/afp/article/ALeqM5izDD4Hvuc840J7zG_PdlRSCs9M0A?docId=CNG.2a8f1c6c6ae3e9293d9ab2d9d9238115.271
the unilateral EU carbon dioxide aviation tax is dead as well, it seems:
23 May: Xinhuanet: Aviation conference sees EU carbon tax concern
An aviation conference in Beijing on Wednesday saw leaders of the industry voice strong concern over a European Union (EU) plan to tax international airlines for carbon emissions, and an EU official signal a more flexible attitude from the bloc.
Chinese and U.S. aviation authorities and industry associations reiterated opposition to the EU Emissions Trading Scheme (ETS) at the 2012 China Civil Aviation Development Forum, urging the EU to take a global and comprehensive approach to the issue.
Chinese airlines have not submitted the emission data required by the EU to assess the levelling of carbon fees and will not do so, Li Jiaxiang, head of the Civil Aviation Administration of China, told reporters at the event, taking place on Wednesday and Thursday…
New EU flexibility was shown at the forum, however, when Matthew Baldwin, director for the EU’s Air Aviation and International Policy, told reporters that the bloc, in recognition of the concerns, is committed to dialogue to seek a multilateral solution.
He said the EU is ready to “review and amend the ETS initiative” if a global solution can be reached…
Roberto Kobeh Gonzalez, president of the ICAO council, told Xinhua that the ICAO was not invited by the EU to join negotiations over the ETS…
http://news.xinhuanet.com/english/business/2012-05/23/c_123181562.htm
youngleftie says:
May 23, 2012 at 4:06 pm
It seems that you have stumbled into a conundrum. We don’t want the government to stifle the free market but at times it is the duty of the government to protect it’s citizens from corporate domination. Some people would call these unscrupulous or greedy corporations but this wrong. Corporations are merely a mechanism for a group of people to pool their resources to accomplish things that they could not as individuals. These people may be greedy or unscrupulous but the corporation is not. For our civilization to succeed we must be able to form corporations or we will always be limited by our individuality and our separate resources. When you talk about the government taking over any sector you are trading multiple corporations for ONE. After all, by the definition above, the government is just another corporation. The problem of the government corporation is that they don’t have to show a profit. If they did, you could understand and be prepared for their actions. What is the motivation of the government? To protect you? To make sure that you are not unjustly treated? Maybe in the beginning. However, once you start a government corporation, its goal quickly becomes to sustain itself. The importance of all else will fade into oblivion. So if people in the UK need the protection of the government from corporations so be it. But don’t replace four corporations with one all powerful master…unless you want to be a serf…again.
As an escapee from the socialist utopia of the former great britain I would like to point out that the so called right wing government there has little power it can exercise without direction from the real rulers in Brussels, this smells strongly of EU diktat. Last year the country was saved from viscous power outages by cranking up the old coal fired stations, at odds with the EU rules. I cannot see any other way but for England to follow Greece down the tubes, a bankrupt country that has next to no manufacturing won’t need a lot of power!
youngleftie says:
May 23, 2012 at 2:24 pm
Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty….
____________________________
SIGHHhhhh…..
First who do you think actually CONTROLS the government??? The rich in society who pour money into election campaigns.
Second who do you think actually pay taxes???? The poor and middle class. The very rich have their money very nicely socked away in tax free havens, often in other countries.
Third how efficient do you think government is??? A study in the USA showed 1/3 of taxes were not collected, 1/3 were wasted in inefficiency and the other third went to pay interest to the BANKS who lend money to governments. A government can run up a huge tab before it actually bankrupts. Corporations do not have that option.
Fourth who do you think benefits from regulations? I will give you a hint. In the USA one of the biggest donors to both political parties was ADM who now reaps over $2 billion in ethanol subsidies. While the US economy is on the rocks ADM has record breaking profits.
SEE:
http://www.crocodyl.org/wiki/archer_daniels_midland
http://www.grain.org/article/entries/716-corporations-are-still-making-a-killing-from-hunger
And then there was the new banking laws Democratic (leftwing) President Bill Clinton signed into law along with the biofuel law above… http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?page=0,1
Breaking up monopolies and encouraging competition helps the little guy. Too much regulation means only the big dogs are left and everyone suffers except the very rich.
http://www.usatoday.com/news/opinion/forum/2010-10-21-mellor26_st_N.htm
http://www.ij.org/ijs-new-city-studies-want-to-create-jobs-remove-red-tape
The movie, in that form: Quite. Unwatchable.
With the book at least one had one’s imagination to get by with …
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The above is at odds with this:
Gail? Where do you get your numbers?
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Since WWII Britain gas been governed by socialists, with brief exceptions. The British on the whole prefer it that way. And it will continue with the decline of Britain as an industrialized nation. Just have a nice cup of tea.
By which time it may be too late.
The competition within the EU between UK and Germany to implement the dumbest energy policies proceeds apace. The Booby Prize will be spectacular economic and social implosion.
Robbie Burns, where are you now that you are so needed?
“O wad some Power the giftie gie us,
To see oursels as ithers see us!
It wad frae monie a blunder free us,
An’ foolish notion: “
youngleftie says:
May 23, 2012 at 2:24 pm
“Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society”
And when you have taken the money from the rich so they too become middle class, who will pay then?
_Jim says:
May 23, 2012 at 6:47 pm
========================
So, have you anything to say ?
In your own words.
William Abbott says:
May 23, 2012 at 5:09 pm
youngest – – – In a free market, there is no “effective monopoly” So why not try a free market? – free markets work. Centralized government control of markets always creates shortages.
=======
Deregulation and privatization of public utilities in Australia has not produced a single benefit to the consumer. Privatized electricity is more expensive and less reliable. There were less “shortages” of electricity under the public system. Private industries do “risk management” and “damage control” instead of forward planning.
We didn’t want our public utilities sold to private profiteers in the first place. See the comment by Jarryd Beck, for it is correct.
Russ in Houston says:
“These people may be greedy or unscrupulous but the corporation is not. “
=======
A corporation comprised of unscrupulous decision makers will exhibit unscrupulous behavior.
Self-regulated industries not accountable to anyone will inevitably exhibit unscrupulous behavior.
Around half a million Americans were killed by VIOXX…
http://www.theamericanconservative.com/articles/chinese-melamine-and-american-vioxx-a-comparison/
Not following … (literally: please bring a point saliently to the fore)
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I read elsewhere today that the US wholesale contracts for 2015 electricity supply were between 8 and 20 times as expensive as the previous auctions…I just can’t wait for my $3200 electric bill in August of 2015. But it is a successful campaign promise for the Obama administration. “Prices will necessarily have to skyrocket…”
So Britain isn’t alone, all this because of the EPA’s war on coal.
to give the Secretary of State the exclusive authority to offer green energy companies ‘letters of comfort,’ promising them that they will be guaranteed profits
===
Fantastic. Everyone and I mean everyone in the UK can quit work and jump on the green energy bandwagon. Guaranteed profits. You sure can’t get that working for a living where they can declare you redundant. Guaranteed profits, why work at anything else?
I’m in favor of the UK this bill if only to prove (in a tragically compelling example) that a green base load will decidedly fail ratepayer expectations. And the world wouldn’t have to wait too long to witness the failure. By 2020, close to 25% of the UK current electric base will have been retired; this includes “dirty” coal burners and a few aged nuclear plants (and assumes that the growing number of windmills are actually maintained). Yet with the draft energy bill, the UK boldly asserts they can have their green and make the world cooler, too! After all, there is a consensus on cAGW, you know!
By incentivizing a desperately desired green base load (as if such a beast does or could exist), as well as tolerating the CfDs to support the still “dirty” gas plants as a supplemental load for when the intermittent (at best) renewables fail to provide a base, the UK (and please let it not be Ofgem that does the regulating) will have effectively reversed 120+ years of applied power engineering. That engineering has asserted successfully that cheap, reliable, and plentiful fossil fuel and later nuclear plants be used for base load and more costly fuels and renewables be used for peak load. This has consistently made economic sense and has resulted in the cheaper (if not cheapest) electric prices – government tinkering (e.g., a mandatory renewable component, “free” energy audits, and means-tested income subsidies) is what tends to drive the price upwards for the great majority of ratepayers.
But to accomplish this reversal, the UK needs to pretend that certain technologies (and unicorns) exist. The draft energy bill introduces an emissions cap for new, electric plants. The cap exists solely to ensure that any coal-fired plants are built with carbon capture and sequestration (CSS) capabilities – even though the UK pilotsmodels on the same have been abandoned as technologically infeasible – at this time, of course. The brilliance of this logic is… inspiring – and thoroughly British!
So, let the UK reverse more than century of sound engineering application. Providing it’s willing to wait and let the Earth warm another 0.084 deg C by 2020 (only the IPCC can claim such accuracy on a global anomaly for it is an august body devoid of hubris), the world will benefit from this “pilot project’s” preordained failure. To modify a wrongly-phrased quote (to support a wrongly-crafted bill) “Qu’ils mangent de l’vent” or “Let them eat wind!”
Economic illiteracy exemplified (literally: “on display”)?
Do you think ‘the rich’ (like, the Ford family, Bill Gates, Andy Grove, Michael Dell etc):
(a) Have stacks of silver certificates or Gold coins stashed in their mattress or perhaps laid-away in Swiss bank accounts
or
(b) Have ownership of companies represented in the form of stock(s) and bond(s) in on-going operational concerns and businesses like Ford Motor Corp, Microsoft and even Intel (NYSE, NASDAQ and NASDAQ respectively listed) which in turn own property and employ people in order to make and sell things?
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Natural Monopoly from wordig.com:
“In economics, a natural monopoly is a persistent situation where a single company is the only supplier of a particular kind of product or service due to the fundamental cost structure of the industry.
This applies where the largest supplier in an industry, or the first supplier in a local area, has an overwhelming cost advantage over other actual or potential competitors. This tends to be the case in industries where capital costs predominate, creating economies of scale which are large in relation to the size of the market, and hence high barriers to entry; examples include water services and electricity.”
We can deregulate, but the result will be higher prices to the consumer. Market participants will have excess economic profits because of barriers to entry, as outlined above, and the fact that the market will assign a cost/value to capital placed at risk. It has never made sense to deregulate electrical power production. Maybe someday it will, but it doesn’t now.
_Jim says:
May 23, 2012 at 7:45 pm
u.k.(us) says May 23, 2012 at 7:19 pm
…
So, have you anything to say ?
In your own words.
Not following … (literally: please bring a point saliently to the fore)
==============
Nicely worded response, while avoiding the question.
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