Skip to content Skip to footer

Gossage: Gossip May 2017

Electrical Review Logo

Consistency is the hobgoblin of little minds

By the time you read this, it seems highly likely that Prime Minister Theresa May will be celebrating nine months in office, by intervening overtly in the prices that energy firms can charge their householders. And receiving congratulations from the tabloid newspapers for doing so.

Two simple points are worth bearing in mind. Point one is that during the most recent General Election – held just two years ago this month- it was the Labour party, not the Conservative party , that was promoting a policy of interference in the prices that energy companies could charge customers. And it was the Conservative party , cheered on by the tabloid newspapers, that was damning such interventions as economic illiteracy.

The second point is that, for fuel bill payers, the most important factor  is NOT just the costs  being charged per kilowatt hour. Equally important is the number of kilowatt-hours consumed each month. Over the past decade the overall number of kilowatt-hours bought has dropped heavily, by 15.2% in electricity’s case, by 32.8% in that of natural gas.

This means that the Big Six have been selling much less than they were anticipating. And must therefore have every incentive to maintain revenues up, by  keeping kilowatt-hour costs higher than strictly necessary. The law of Supply and Demand at work, Prime Minister, the law of Supply and Demand.


Gold turns to dust

If only Britain’s BNFL hadn’t sold Westinghouse. Just think of all that nuclear expertise lost: the sort that has just seen the company crash into Chapter 11 bankruptcy administration, with liabilities now up to $9.8 billion. It has pretty much ruined its’ current parent, Japan’s Toshiba, too.

Among the many things for which former Prime Minister Gordon Brown gets deserved flak, getting shot of Westinghouse while he was Chancellor definitely isn’t one of them: sold for $5.4 billion in 2006, or more than four times what Britain paid for it.

The subsequent tale is horribly familiar in this post-Fukushima world, where mega-nuke safety costs have rocketed: four Toshiba reactors in Georgia and South Carolina are now $10 billion over budget and three years late. All this is exacerbated by Westinghouse’s desperate purchase of the US nuclear construction outfit Stone & Webster, in an attempt to halt a legal fight over who was to blame for the ballooning costs.

There is an obvious lesson for Britain — and it is not the hand-wringing over who will replace Toshiba on the project to build the 3,800MW Moorside plant in Cumbria, a monster even bigger than Hinkley Point C.

It is that trying to build massive nuclear power plants are a licence to blow yourself up financially. And that is before the soaraway clean-up costs,  driven home by the botched £6.1bn contract for 12 Magnox reactors which has seen Business Secretary Greg Clark publicly grovelling for a “defective procurement” process that meant the deal agreed did not cover the work required. 

Indeed, Britain’s clean-up bill already stands at an incredible £117 billion. How many more nuclear disasters before the government finally wakes up?


Pure and most thoughtful minds

Following the passage of the 2008 Climate Change Act, Parliament created  the Committee on Climate Change to provide independent advice. Under the chairmanship of former Conservative environment secretary John Gummer (now metamorphosed as Lord Deben), it has sought to ensure that the UK has policies in place that will  deliver the ultimate objective – 80% fewer greenhouse gases emitted in 2050 than in 1990.

M’Lord Deben has surrounded himself with a board formed of the greatest scientific minds, drawn from our finest universities. It has consequently produced a series of excellent, well-researched publications, each intended either to cajole  or (less frequently) praise Government for staying the course with its carbon reduction policies. For instance, this spring it has just analysed whether Going Green had forced electricity prices up. And concluded, not much.

The Committee has just broken with precedent, and appointed to its board, not yet another scientist, but a business person. And not any old business person. Dr. Rebecca Heaton, has been appointed for a five-year term. She will also remain in her existing position as the Head of Sustainability and Policy at Drax in Yorkshire,

Unsurprisingly, environmental groups have condemned the appointment of a senior representative at what they claim is the world’s biggest wood-fired power station and the UK’s biggest coal-fired plant and carbon emitter. They warn it will seriously undermine the statutory body’s credibility, Dr Doug Parr, Policy Director at Greenpeace UK, said: “It’s surprising that the first business appointment to the Committee should come from a sector as controversial as biomass and fossil fuel.”

I suspect that, from now onwards,  Lord Deben & Co will have to work very hard to ensure they are beyond reproach in transparently examining future technological scenarios, especially on bio-energy and decentralisation, to maximise benefits for the environment.


Welcome to the snake pit

Senior officials in President Trump’s White House own up to $12.3 million in fossil fuel energy company stocks and shares, according to a Center for American Progress (CAP) analysis of White House financial disclosure forms.

While six members of President Trump’s staff hold a majority of these shares, there are at least a dozen more White House senior employees who have some personal holding in energy stocks, including shares of companies like Exxon Mobil and Chevron.

 “At best, these financial disclosures call into question the extent to which White House staff can be even-handed in their approach to energy and environmental issues. At worst, they illustrate a snake pit of potential ethical violations,” CAP senior campaign manager Claire Moser says.

If you thought that it was only a perverse ideology that is causing Trump deliberately to scrap every programme concerned with either renewables or energy efficiency, and  to promote everything to do with fossil fuel consumption, think again. It seems it may have far more to do with  lining the pockets of those surrounding him.



You may also like