Energy Policy
It was the events of last Wednesday, when Mr Cameron appeared to be making energy policy up on the hoof – telling the House of Commons that he would make power suppliers offer the cheapest rates to all consumers – that might prove to be most damaging to his claim to that most vital prime ministerial asset: competence. Nuclear, which once provided nearly a quarter of our electricity and now is down to little more than 10%, remains stuck in a financial rut of its own. Many of the foreign power companies that originally championed new UK atomic plants, such as RWE and E.ON of Germany, have decided to leave the market, while EDF, the main cheerleader, has found its enthusiasm dented by a new and less sympathetic government on its home patch, France. EDF is now badgering for the highest possible financial incentives before agreeing to go ahead with its first planned station at Hinkley Point. It may yet get what it wants, but the chances of the once-vaunted nuclear renaissance in Britain seems pretty much dead for an international industry undermined by the aftermath of the Fukushima disaster and huge cost overruns at other new nuclear projects. We will learn on Tuesday about the prospects for UK atomic new-build when the Energy and Climate Change Committee meets. Similarly, we will hear on 5 November the government’s wider vision of how it will keep the lights burning through the final version of the energy bill and, in particular, its details on electrical market reform. This document is meant to show how Britain can provide itself with power, encourage even more lower-carbon generation and keep energy bills down at a time when fuel poverty is growing.
Observer 21st Oct 2012 more >>
Andrew Simms: Cutting household costs is vital, but that can only be part of a much wider approach to how we keep the nation going. If we ask questions such as how many jobs can be created, how much carbon can you cut and how much energy do you get back for the amount of energy invested, a mix of renewable technologies will be first in queue. Since 2008, two different governments have had the chance to create countless jobs, build a better energy system, ensure Britain has warmer homes in winter and tackle climate change by investing at scale in a “green new deal”. It is still the case that a tiny fraction of the public resources used to underpin the banking system could revolutionise energy generation and radically reduce consumption and dependence through energy efficiency measures in the nation’s building stock. Why not, for example, inject productive capital in a targeted way into the real economy through green bonds via the Green Investment Bank? The economic opportunity to invest at scale in energy efficiency and the insulation of Britain’s old, draughty building stock would more than pay for itself bringing jobs, lower fuel bills, warmer homes in winter and boost the overall economy. As it is, we suffer an uncompetitive market, with too little diversity of supply and a clean, renewables sector crying out for the investment conditions to expand, which is further hampered by a government too hidebound by economic doctrine to see the one policy – a green new deal – that could solve all these problems.
Observer 21st Oct 2012 more >>
Although deregulation of the energy market in the 1980s supposedly led to more competition, the reality is more similar to a monopoly within each region of the UK.
Independent 21st Oct 2012 more >>
Cutting energy costs, assistance to some industries as well as slashing corporate and personal tax are essential if the UK is to boost economic growth, according to a new report published today by Civitas. David Green, the head of the influential think-tank, has come up with a 10-point plan in his report, A Strategy for Economic Growth: A Modern Industrial Policy, which he claims would put fire back into the economy. He said: “It is significant the Government is now committed to a industrial policy but some of the details are a bit hazy. However, there are two policies it is pursuing which are undermining its own efforts to stimulate growth: over-enthusiasm for deficit reduction and blind commitment to reducing carbon emissions.” Dr Green adds that there is a golden rule of policy – do not make matters worse. “But this Government i s. Some of its climate-change policies are undermining the competitiveness of the UK by increasing costs for our companies relative to our main rivals,” he warned. In the chemical industry, for example, companies that make products such as insulating materials, will be driven overseas because of rising costs. Instead, he said the UK should move quickly towards its new tax regime for shale gas and delay the closure of coal-fired power stations which are not at the end of their cycle but are being closed because of European Commission regulations.
Independent 21st Oct 2012 more >>
New Nukes
The Energy and Climate Change Committee will hold the third public evidence session on ‘Building New Nuclear’ at 9.30 am on Tuesday 23 October, in the Grimond Room, Portcullis House.
Energy and Climate Change Committee 19th October 2012 more >>
Nuclear Subsidies
Westminster’s ill-conceived moves towards a new generation of nuclear power have suffered a fresh blow as the European Commission announced intentions to require nuclear operators to hold tougher insurance cover. The UK Government currently caps the liability nuclear operators face for accidents, effectively providing a backdoor subsidy to the industry by guaranteeing that taxpayers will meet the costs beyond a defined threshold in the event of an accident. If nuclear operators were required to hold full insurance to cover themselves in the event of an accident, the costs to nuclear operators would climb sharply further eroding the economic viability of a new generation of nuclear power stations. EU Energy Commissioner Günther Oettinger announced the Commission’s intentions to legislate for tougher requirements, and is quoted as saying it is not his job to “make nuclear cheaper”. Commenting, SNP MSP Chic Brodie who sits on the Economy, Energy and Tourism Committee said: “It has long been a farce that the UK Government has provided a backdoor subsidy to the nuclear energy industry by not requiring them to fully insure themselves against the costs of a nuclear accident. “The EU is right to move to close this loophole so that taxpayers are not left picking up the costs in the event of a nuclear accident.
SNP 5th Oct 2012 more >>
Urenco
SOME of the most powerful names in private equity are considering a controversial swoop on Urenco, Britain’s government-backed nuclear fuel giant. Apax, KKR, Carlyle and CVC are studying a bid after Urenco’s biggest investors — two German utilities and the British government — put their stakes up for sale. Private equity interest in such a highly sensitive state-owned asset could ruffle feathers. Urenco specialises in the enrichment of uranium, which is used for nuclear fuel but also in atomic weapons.
Sunday Times 21st Oct 2012 more >>
Three Mile Island
The worst-ever U.S. nuclear energy accident occurred on March 28, 1979, when the core in Three Mile Island’s Unit 2 overheated and partially melted. The facility had come online just three months earlier. Lacking appropriate real-time monitors and training, operators didn’t realize they had a cooling problem and failed to prevent the accident, according to an accident summary posted on U.S. Nuclear Regulatory Commission website. Most of the radiation was contained and whatever was released had “a negligible effect” on people outside the plant, who suffered mainly from “mental stress” related to speculation about how serious the accident was, according to the presidential commission report released in Oct. 1979.
Bloomberg 20th Oct 2012 more >>
Iran
Obama administration officials say that the US and Iran are to have to one on one negotiations over Iran’s nuclear program agreed for the first time to, reports the New York Times.
ITV 21st Oct 2012 more >>
The White House on Saturday denied a report in the New York Times that said the Obama administration had agreed to one-on-one talks with Iran on its nuclear program.
Reuters 21st Oct 2012 more >>
Nuclear Weapons
THE SNP leadership is to be urged to obtain a written guarantee from Nato pledging that it would accept a nuclear weapon-free Scotland as a member. A resolution calling on party defence spokesman Angus Robertson to produce such a document from Nato will be tabled at the next meeting of the SNP’s National Council in December. Yesterday it emerged that the move will be made by Sandra White MSP, one of the key figures to argue against membership of the nuclear alliance at the SNP conference in Perth.
Scotland on Sunday 21st Oct 2012 more >>
Fracking
Government backing for new forms of gas extraction such as “fracking” are coming under acute scrutiny, after a sacked energy minister warned against “betting the farm” on them and green groups expressed alarm at links between the fossil fuel lobby and the Tories. An Observer investigation has established that energy trading giant Vitol, whose boss has given more than £500,000 to the Conservatives, has emerged as a major shareholder in a company bringing “hydraulic fracturing”, commonly known as fracking, and a related technology, coal bed methane (CBM) extraction, to the UK. But doubts are growing over whether such technologies can deliver the cheap energy prices the gas lobby claims. Writing in the Observer former energy minister Charles Hendry, who lost his job in the reshuffle, warns that shale gas “cannot bring the UK the same benefits as in America, where consents are much easier and prices are kept artificially low by the lack of export facilities”. Hendry writes. “Last year’s energy price rises owed more to rising global wholesale gas prices than anything else, so betting the farm on shale brings serious risks of future price rises.”
Observer 21st October 2012 more >>
Charles Hendry: In recent years, UK electricity and gas prices have been some of the cheapest in the EU because we had an abundant supply of our own gas and because, frankly, not enough was being spent to build new power stations. So we have to catch up now for that failure to invest over many years. It also goes to the heart of decisions about what sources of energy we use.As a minister, I recognised the continuing need for gas. Indeed, I approved more gas power stations and encouraged more licence applications for the North Sea than any previous minister. But our future can’t depend on gas alone. Shale gas can make a contribution (although not without community backlashes, I suspect), but cannot bring the UK the same benefits as in America, where consents are much easier and prices are kept artificially low by the lack of export facilities. As the International Energy Agency says, we may face a golden age for gas, but don’t assume it will be cheap. Last year’s energy price rises owed more to rising global wholesale gas prices than anything else, so betting the farm on shale brings serious risks of future price rises.
Observer 21st Oct 2012 more >>
