Semiotics here

The Government confirmed it was “looking carefully” at a wind industry proposal to continue public financial support for new turbines, despite a manifesto pledge to halt expansion.
Critics described the proposal as a con, and said the Conservatives’ policy had been “crystal clear” that the subsidies would stop.
Under the plan, households would still be forced to pay millions of pounds on their energy bills to fund new wind farms – but the payments would no longer be defined as subsidies.

The wind industry’s plan hinges on the fact that no new power plants are commercially viable to build at the moment without extra financial support from bill-payers.
If wind farms can be built at lower cost to consumers than alternatives, such as new gas plants, then payments to fund them should no longer be classed as “subsidy”, the industry argues.

In one word, no. In two, fuck no.

Perhaps more importantly, think how hard you’ve got to fuck things up that absolutely no technology at all can be built without subsidy…..

21 thoughts on “Semiotics here”

  1. If no form of energy generating equipment (nuclear, gas, oil, coal, wind, solar, etc) can be deployed without a subsidy, then that must mean a bunch of unnecessary costs are being loaded onto the construction projects. And those costs must be significant as it requires a subsidy for all or a significant portion of the equipments operational life.

  2. So Much For Subtlety

    How can power be uneconomic to produce and yet British power is so expensive?

    It takes genius to screw up the market this badly.

  3. This ties in with what I have been thinking for some time; that government meddling in energy (and housing) has reached a stage where the price system is fundamentally broken. If you regulate and tax, subsidise and command at a high enough level and for long enough (and change the rules every 5 minutes) it’s surely possible to effectively destroy the price signals that would normally drive rational economic decisions. Resulting in shortage, high prices, lack of investment and massive mis-allocation of resources.
    I suspect the UK is at that stage in housing and in energy. And probably in transport. So that’s 3 core parts of the economy. And we aren’t getting much economic growth, considering the massive stimulus in effect. Funny that.

  4. I’ve read the original article twice and I still can’t believe the Telegraph published an anti-RE piece.

    When looking at electric grids the first thing, that no seems to bother with, is separating generation from transmission.

    On the generation end subsidies are almost always a complete waste as has been argued here countless times. For the market to be effective no money should be given to any company to pay for commercially used capacity. For the situation when a technology produces large scale environmental damage, such as the acid rain causing sulphur dioxide or birds killed by turbines, punitive measures like fines are acceptable to me if the plant owner doesn’t take steps to mitigate the environmental damage they cause. I also have no issue with subsidies that fund research into new technology as long as they end once said technology is adapted by commercial generators.

    Transmission is a different beast as there is no way to concentrate users without massive population movements. If someone with more industrial knowledge would like to comment on the effects of removing transmission subsidies I would love to understand the issue better.

  5. “If this sounds a bit strong then consider this. We have wind producers getting paid for not producing power when it’s not needed. We have a system for paying consumers to not consume electricity when they want to but none is available (Demand Side Balancing Reserve) . We have a system for fining (punishing) FTSE listed companies for making business decisions in a mire of government made Green crap, and those fines will be paid by hard pressed customers and share holders that are normally pensioners. Electricity market reform is a euphemism for market abolition.”

    http://euanmearns.com/uk-blackout-risk-amber-warning/

  6. Liberal Yank,

    The U.K. electricity market already separates generation from transmission. One of the (many) problems of wind power is that it gets a hidden subsidy from the transmission company: those remote wind farms need new pylons, and the transformers and other kit need to be more advanced to cope with wind power’s unreliability. This isn’t accounted for in most calculations of the cost of wind power.

  7. Andrew M you just made my point.

    Transmission should only be considered to begin once usable power is inputted to the grid. As you correctly point out added kit is needed to make wind and solar power usable and so it should all be included in the generation, not transmission accounts.

    Thank you for restating what I failed to express properly.

  8. Does anyone really think that BluLab were going to bring the boom down on The Windwankers?

    The only business the Torags are in is telling mugs what they want to hear.

  9. Part of the problem is that windmill operators have a locked in subsidy for existing plant, and a regulatory regime that means they get first dibs on any demand. So they can sell at a negative price and still make money !
    Other operators have to a) compete with a market that sometimes prices their output at a negative price, and b) have to accept part load (or stop start) operation and rapidly changing demand in order to match not just the normal demand cycle, but also the added variation created by wind.
    Thus you have a situation where you have to build a plant, operate it at a sub-optimal efficiency, run it at part load (and so reduce income), do a lot of starts and stops (and/or wide output variations) which vastly increases wear and tear (and hence maintenance costs), and sometime find you are paying the customer to take your output. So a lot of the cost of wind (and other renewables) is an invisible subsidy from the other plant operators who suffer increased costs and reduced income in order to keep the lights on.

    It’s a natural result from a market – if the returns aren’t sufficient then people don’t play in it. That is TW’s area of expertise.
    That the market has been completely f**ked over is the fault of successive governments. That we are now having to provide price guarantees in order to get new plants built (such as for the new nuclear plants), or pay people to keep plants available (reserve capacity payments) is no surprise.

    But having said all that, we’ve *always* paid for reserve capacity etc. Back in the days when CEGB ran all the generation, and before that which is before I can remember), we had a centrally planned generation mix which included reserve capacity. But it wasn’t separately priced since it was a (I suspect) black box where money went into CEGB and electricity came out. The inherent cost of keeping spare capacity would have been just one small item in a big book of numbers.

  10. Does anyone any more actually feel like we’re getting a better deal than in the bad old days when it was nationalised? I think there’s an argument that replacing ownership with “regulation” has made things if anything worse.

    The problem is, that even with the grand privatisations, the crucial thing needed for a proper market- removing government from the equation- did not happen at all. All government is like the EU’s acquis communitaire (however it’s spelled). It’s a ratchet. Once a government takes the power over some sector of life from the citizens, they never give it back. What they do with the power may vary by degree. But the power itself, once taken, remains in their hands.

    They still decide energy policy as they always did. They just do it these days via a notional “market” that as Alex11 pointed out, appears to have reached FUBAR status.

  11. @ Ian B
    Yes, I do feel that it is better – we aren’t condemning men to a slow and painful death from silicosis by mining coal, we aren’t destroying Scandinavian forests with acid rain from the suphuric oxide emissions, we don’t employ three men for every two jobs, there is an independent regiulator who can punish those breaking the law, there are elements of competition (except where Ed Millionaireband decreed insane levels of subsidy for the well-off who can afford solar panels and/or windmills), there are no wildcat strikes holding the country to ramsom ….

  12. You’re assuming that an electric grid can function as a truly free market. The problem is that the amount of electrons going into the grid needs to be closely monitored. Without strict controls suppliers that can ramp up production quickly, like gas, will dump as much power into the system when prices are high. Likewise when prices are low suppliers will do everything to cut costs leading to brownouts.

    This will only change with the addition of large amounts of storage, which we currently can’t build economically. If consumers were able to buy and store a week’s worth of electricity then regulations wouldn’t be nearly as important.

  13. So Much For Subtlety

    Liberal Yank – “Without strict controls suppliers that can ramp up production quickly, like gas, will dump as much power into the system when prices are high.”

    When prices are high there is not enough power being generated. Why is the supply of more power when there is not enough a problem? Isn’t that, you know, the solution?

    “Likewise when prices are low suppliers will do everything to cut costs leading to brownouts.”

    Some time before brownouts hit, supply will be so low, prices will rise. Then those gas producers will dump more power on the market. Why do you think the supermarkets can get rich starving their customers?

    Managing the electricity market is difficult. But it shouldn’t be rocket science. The problem is the grown ups have left the building and the work experience children are in charge. We need to get out of renewables.

  14. Why so many mentions of acid rain and forests? I thought that had been debunked years ago. Die off in German forests was eventually shown to be due to local particulate pollution. There was some, very minor, acidification of lakes in Scandinavia. But in general, the huge issue made out of it was a beat up wasn’t it?

    Why is the supply of more power when there is not enough a problem? Isn’t that, you know, the solution?

    Lol, yes, SMFS. I think what LY is complaining about is that it’s so unfair that one particular technology is good at efficiently adjusting their output according to the demand. It’s just not right. They should be like solar/wind power generators who say “the sun is shining, wind is blowing, you need to spend a fortune to store that power now! We can’t be reacting to you!”

    Local storage (*not* local generation) will probably be an important demand smoothing factor at some stage. Despite the hype over Tesla Powerwalls, we’re not really there yet. Too expensive and they will barely pay back their cost over their service life. That’s even before any have been in service for a few years and failed, or caught fire. They will get there – the first generation of mobile phones had a briefcase size lead acid battery with a shoulder strap. But battery technology moves slowly. Most of the gains in allowing people to walk around with a mini computer in their pocket have come from more intelligent use of the stored energy, not increases in the battery capacity. Lower power use, longer battery life.

    One of the things that makes me laugh is the early adopters of home storage talking about recharging their batteries on off peak electricity. That’s fine for now. But if significant numbers start doing that, it won’t be off peak anymore. And the discount will evaporate.

  15. If consumers were able to buy and store a week’s worth of electricity then regulations wouldn’t be nearly as important.

    This comes under the heading of “if we had eggs, we could have eggs and ham, if we had ham”. It doesn’t exist yet and wishing won’t make it appear.

    There is nothing else that is a more perfectly balanced and responsive market than electricity. I think it was Steven Den Beste that wrote something like that if you don’t balance the supply and load, the grid will do it for you in ways you don’t want. You can’t ‘dump’ power into the grid because the price is high. The price is high because the demand is high. If there is nowhere for the energy to go, bad things will happen.

    Serious people in the industry know this. Non-serious people twitter about storage, free (but not controllable) energy, and renewables. Regulations that attempt to control how and where electricity is generated are not all that helpful

  16. So Much For Subtlety

    Ltw – “I think what LY is complaining about is that it’s so unfair that one particular technology is good at efficiently adjusting their output according to the demand. It’s just not right. They should be like solar/wind power generators who say “the sun is shining, wind is blowing, you need to spend a fortune to store that power now! We can’t be reacting to you!””

    Which, sort of, leads into the other reason for demanding more regulation – solar and wind depend on restraint of the competition. They want hydro providers to be reduced to storage systems for them. But does that make sense? If you owned a dam, would you want it to sit around waiting until the wind doesn’t blow? When it is newly built, you cannot afford to – they are capital intensive and the banks want their money back. You need to generate all you can. When they are old, they are inherently cheap. Why not run them all the time? So what if solar suffers? Why is that the hydro owners’ problem?

    So these idiotic forms of energy generation need everyone else to be held back if they are to work at all. They need some level of gas capacity on stand-by. OK, but why not run it if you own a gas plant? Why would you want to sit there doing nothing? Peaking power is going to have to be very expensive to make it worth their while not to.

    “Local storage (*not* local generation) will probably be an important demand smoothing factor at some stage.”

    I would be willing to pay a little bit more for local generation. I have been keeping an eye on combined heat and power installations. They are not really competitive, but if the government keeps screwing up the market like this, they could make sense. I think WhisperGen has gone out of business – they built a small Stirling engine that also provided hot water. Throw in some central heating and it would look better. Unfortunately it looks as if the central authorities are too incompetent to provide basic services and so we will have to.

  17. We already know how this is going to play out.

    Most big generation plant other than gas will close over the next 10 years (coal because it’s out of fashion, nuclear because it’s all life expired).

    We can’t possibly manage on wind, solar and interconnectors – it’s just not viable.

    Thus we will end up with fields of smallish gas turbine pocket powerstations which get ramped up every time the wind stops blowing.

    We’ve run out of time to build anything else, and unless someone stops them in the next year or so the various power companies are going to demolish the coal stations that represent the only remaining alternative option.

    It’s a situation of unbelievable stupidity, and hopefully when it all goes properly Pete tong some of the relivant people will get the kickings they deserve (that idiot Miliband in particular – it was his climate change act that made most of this mess, although various Lib Dems and the current bunch of retards have hardly helped)

  18. Brevity killed the message but it did allow other points to come up.

    “Managing the electricity market is difficult.”

    The key in this statement is that the electricity market has to be regulated. Unlike just about every other industry the electricity can’t just be put in a warehouse. Similarly if there isn’t enough generation capacity available customers can’t simply go without or easily switch to another energy source. This is not a situation where the store has no Fruit Loops so you simply replace the purchase with Frosted Flakes.

    “When prices are high there is not enough power being generated. Why is the supply of more power when there is not enough a problem? Isn’t that, you know, the solution?”

    Subsidies to wind and solar are what have caused the current mess. Anyone that bothers to read passed the sound bites should be able to tell you that current subsidies are stupid. The generation technology that should be getting subsidies is CNG in the “green’s” ideal world. This allows the CNG owner to pay his workers while the wind is blowing and the sun is shining. This only works if the subsidies for CNG are paid for(yes I know the cost will simply be passed on to consumers but it needs to be obvious that the extra cost goes to pay to keep your heat on during a calm winter’s night) by wind and solar.

    “I think what LY is complaining about is that it’s so unfair that one particular technology is good at efficiently adjusting their output according to the demand. It’s just not right.”

    First I wasn’t complaining. What I was trying to point out is that in the real world where electrons need to be moved in response to demand, no matter what the cost, to maintain stability wind and solar don’t make sense. For either of these options to work in an unregulated market the unreliability means that we need to be able to store RE energy. Lacking storage wind and solar are niche technologies that are worse than useless for grid generation.

    “Why so many mentions of acid rain and forests?”

    Because regulations were put in place requiring “scrubbers” on smokestacks. Once these were installed the acid rain problem disappeared. Is it possible that there was another cause which vanished at the same time? Yes. The only way to tell for sure is to remove the scrubbers and see if the problem returns.

    “Which, sort of, leads into the other reason for demanding more regulation – solar and wind depend on restraint of the competition. They want hydro providers to be reduced to storage systems for them. But does that make sense?”

    It does make sense if solar and wind get negative subsidies. As already stated they actually should be paying a tax which would get transferred to the damn dam owner so he doesn’t lose money in the same manner as CNG. Then we can have our “green” energy although electric bills will be much higher than they are currently.

    “Managing the electricity market is difficult. But it shouldn’t be rocket science. The problem is the grown ups have left the building and the work experience children are in charge. We need to get out of renewables.”

    I am willing to bet that the average person understands rocket science as well as managing an electric grid. Both need a highly competent engineer to make sure things do not go boom. Our current policy, just like that of Challenger, is to let the managers control key engineering based decisions. Personally I wish that children were in charge. At least we could spank them, after ensuring we are out of sight of CCTV, for the stupid mistakes they are making.

Leave a Reply

Your email address will not be published. Required fields are marked *