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Gossage: Gossip Sept 15

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Measure for measure

My many thousands of devoted readers will recall that, over the years, I have become increasingly sceptical about the overall cost of the government’s commitment to see 53 million so-called smart meters installed in British homes and businesses in the next five years. I can quite see the value of the exercise to the Big Six electricity companies, who will be able to dispense with both meter readers and telephone complaint operatives. Confident that all bills sent to consumers will henceforth already be completely accurate.


However the official justification for this ever increasingly expensive folly is receiving accurate bills will enable consumers to reduce energy wastage so much, consequent savings will more than pay for the roll-out costs. Really? All the empirical research to date in other developed countries reveals that any such information has little more than a transitory impact upon consumption levels. Why? Because although smart meters provide a more accessible way of seeing the meter wheels go round than those dreary incomprehensible electricity boxes hidden under the stairs, the ones that have been authorised to be rolled-out simply don’t tell anybody precisely which of the myriad appliances functioning at any given time are actually causing the cogs to go round even faster.

Add to that the revelation from UK Power Networks in the south-east of England, where they operate the distribution network, around 1 in 20 of their trial installations don’t operate properly when first installed. And the admission from RWE Npower that it was seeing around 12% “incomplete installations” – simply because occupants either can’t or won’t provide access to their homes. Then we have the extraordinary cock-up by the Men from the Ministry, who not only have permitted kit being installed in homes not to be compatible with smartphone apps. But also, by allowing companies to vary so much how they deliver their systems, have ensured practically all consumers who want to switch suppliers will need to have an extra visit to ‘adjust’ the smart meter arrangements. All adding to the costs… We now do truly have a recipe for this exercise ending up as yet another government IT catastrophe.  Ask critics like the consumer group Which? Or the Institute of Directors. Both have called for an abandonment of the roll-out arrangements. As the DECC Select Committee so pointedly warned earlier this year, as a nation we are heading for yet another “costly failure.”


No competition, no vanity?
Here is a little quiz that strictly speaking every Electrical Review reader ought to get a 100% mark on. I am going to list ten common household appliances.

I am going to challenge you to consider, in the average British household,  just which item uses up the largest amount of electricity each year  when they are not in use. But left on standby. 
Place them in order from 1 to 10.
Microsoft Xbox 360
Set-top box (Freeview)
Nintendo Wii
iPad Charger
Compact HiFi
Set-top box (satellite)
Laser printer
Wireless Router (e.g.BT hub)

Quite right. I have put them in exactly the right order. But in ascending, rather than descending, order.
Which means that, whilst a modem left on standby wastes  just £6.09 a year,  your wireless router wastes £21.92 And a laser printer £18.26.Quite a thought. And if you left all ten on standby, you would have given your electricity provider £127pa for absolutely nothing.


Neither a borrower, nor a lender be
The energy secretary, Amber Rudd, has finally put the Green Deal Finance scheme out of its misery. This was the Pay-As- You-Save scheme where householders were supposed to install energy saving measures at no immediate cost to themselves, paying the money back on their (lower) electricity bills.

The relevant minister in the coalition government, Greg Barker, a Conservative, claimed that 14 million households would benefit. In the end, just over 10,000 ever bothered to get involved. No longer an MP, Barker now places the blame for failure squarely with the Big Six electricity companies. But it is worth noting since he launched it in January 2013, 11% of Green Deal assessors and 14% of Green Deal installers have been suspended or withdrawn from the scheme, due to non-compliance with the Green Deal scheme requirements. And that, prior to the plug being pulled, the Green Deal oversight body had reported no less than 93 issues to Trading Standards to 31 May 2015.  Plus the Energy Department has admitted “we are also aware of” 155 cases of unauthorised use of the Green Deal Quality Mark. So, perhaps not just EDF, SSE and Co to blame?

Give warning to the world
Here comes yet another serious player querying the wisdom of building Hinckley Point C nuclear power station. The nub of  the criticisms leveled by HSBC’s analysts is that the electricity produced by the reactors is likely to be too expensive, as European wholesale prices are expected to fall along with demand for electricity from UK users. The bank is warning of “huge difference between UK forward prices and the Hinckley price”.

Among HSBC’s eight key concerns is the reactors will be economically unviable due in part to a rising number of electricity grid links with the Continent providing a ready source of cheaper supply. At the same time the Bank pointed to projections by National Grid to 2025 of declining demand for electricity. HSBC said its own demand estimates are for an average fall of one per cent a year.

HSBC also highlighted the “bleak” future of large nuclear reactors that have – as we all know –  a history of escalating costs and sliding deadlines.

It is noticeable that HSBC has studiously eschewed involving itself with any of the multitude of companies involved with this boondoggle. It is also worth remembering that HSBC was one of the very few large clearing banks never to require any bailing out in the 2008 meltdown.

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