Monday, 21 October 2013

Double Bubble

9th October 2013
He said: "I can tell you, first of all, that energy prices doubled under Labour, electricity prices went up by 50 per cent. And let me say this to you - there is one thing governments can't control and that is the international wholesale price of gas.

21st October 2013
David Cameron hailed the nuclear project as "brilliant news" for Britain, calling it a "landmark in our economic growth plan".

But the Government has come under fire for guaranteeing to pay £92.50 per megawatt hour of electricity produced - a so-called "strike price" double the current market rate.

18 comments:

Graeme said...

at those rates, only solar and wind power are more expensive, aren't they? This is the kind of deal that the great Gordon Brown used to make.

Ian Hills said...

Pity Cuadrilla can't afford to pay kickbacks too.

JimS said...

Isn't it a fixed-price that won't start being paid until the power station is in operation?
What will be the equivalent gas or fantasy-renewable price of electricity be then?

The Stigler said...

JimS,

You tell me.

For starters, solar will be cheaper, because solar is falling in price at quite a considerable rate.

But what's going to happen to the price of gas if fracking happens in the North West? Answer: the price of power will stabilise, maybe even fall.

If those companies think gas is going to get more expensive, why not just let them build and sell power at market rates?

Fact is, government is always a terrible negotiator. They may get lucky, but history teaches us that they rarely do.

View from the Solent said...

+50% = doubled? The 'E' in PPE didn't include arithmetic then.

Bayard said...

VFTS, he's a politician, FFS. It doesn't have to be correct, or even true, it just has to sound good.

JimS said...

Stigler: Well with half the politicians determined to shoot us in the energy foot who knows?

Solar is probably even worse than wind for reliability. On a domestic installation power output can easily swing over a 20:1 range in seconds. I dread to think what large 'field' arrays would do to the grid. To be practical surely they would need a hydrogen storage phase in between? It can't be long before someone points out that we are running out of the critical dopant or rare gas that is needed to produce large arrays!
Better start stocking up on propane gas tanks in the shed!

Marte said...
This comment has been removed by the author.
Kj said...

jimS: The second-by-second output from solar isn´t a insurmountable problem, you handle that with capacitors, flywheels and the like. Obviously, feed-in from domestic installations should be banned, the management of such on a large-scale would be hopeless, and it doesn´t have economies of scale. But large-scale facilities, that can smooth output, I´m sure is viable. But not in temperate areas. Even if the costs can go very low, the huge difference in seasonal capacities makes the value of solar much smaller than in hotter climates. I don´t think running out of critical elements is a big problem, but it can probably slow down the speed of solar going down in cost.

ukliberty said...

"Isn't it a fixed-price that won't start being paid until the power station is in operation?
What will be the equivalent gas or fantasy-renewable price of electricity be then?"

Well, the government estimates it will be about double what it is today - that's why they've agreed that strike price.

Bayard said...

JimS, the word on the street is to invest now in companies that produce batteries.

Apparently the Germans are now encouraging domestic solar panel owners to buy batteries. AFAIK, domestic owners are forbidden to use batteries in the UK, on pain of losing their FITs.

JimS said...

Kj: Capacitors no way, Flywheels, your having a laugh. Even the mighty Dinorwic is only good for 1650 MW for 5 hours.

All these so-called renewables are a joke, its like asking us to go back to using a candle to light the Albert Hall. We are being made to change from storable, transportable high energy density fuels to low intensity, unreliable toys. If we can't oxidize carbon then nuclear is the only option and Blair, Brown, Cameron and the idiot Clegg have frittered away our options with their capitulation to the green nutters and their ham-stringing legislation.

Kj said...

JimS: I´m not talking about smoothing out from day to day, but short-term management. In some climates, it might be viable. But I agree, we should let the market decide, not "policy", but that´s no reason to discount future technology potential.

Kj said...

-smoothing out between days.

Derek said...

Aah, Dinorwig: the UK's biggest capacitor. And one of my favourite engineering feats.

adamcollyer said...

You may be interested to know that the government's report into the viability of the Severn Barrage in 2010 cited a DECC standard assumption that electricity prices will fall in the long term.

Bayard said...

AC, I suspect that was because whoever wrote the report had been told that the conclusion had to be "no".

Mark Wadsworth said...

A complete and utter waste, the whole thing.

But I don't think that the UK government from time to time has any control over any of this, it all appears to be dictated by the EU or massive backhanders from vested interests.

As a contrast to this, apparently Callmedave said that they would look into reducing green taxes a bit to try and get electricity prices down. So who's going to pay for the nuclear subsidies?