Ignorance is Everywhere

Ignorance is everywhere but in some places it is more deeply spread than in others and on some topics, such as the environmental protection I can find myself in despair about the ignorance.  Fox News is a good example, although it is not unique. I have seen similar ignorance displayed on the BBC and by the Advertising Standards Authority. Some may be well educated but education does not make you smart.

The following is a good and recent example of what I mean.

Wind Turbines and the foolishness of subsidising them

About ten miles north of Ramsgate, in the middle of the Thames Estuary some 175 offshore wind turbines have been installed and are now operating, as wind turbines operate, in their own misunderstood fashion. If it is windy, and not too windy, the turbines generate electricity. The publicity claims that the wind turbines will generate enough electricity for 470,000 homes but the publicity is imprecise. There are only 22.5 million homes in the United Kingdom and to power them all will need another 50 arrays of similar turbines but unfortunately it is not as simple as that.

Mindless Renewable Energy Targets

In the almost mindless race to meet the United Kingdom’s emission targets the government has decided to subsidise, at taxpayer’s expense, the generation of electricity in a way which will mean the creation of far more greenhouse gas emissions.

Energy Prices Set to Rise as Risk of Power Cuts Increases

Already it has started. First the rumours of an energy price increase have gathered momentum. Although most energy companies have rules out an increase for the rest of this year, unless you have fixed your energy price, expect a swinging increase in gas and electricity bills from January onwards. There are probably several reasons why you should expect a price increase.

1. Natural gas prices remain linked to oil prices and as the world come out of recession demand for natural gas and oil will increase. Most of the UK’s electricity is generated by natural gas. Most of the UK’s heating is provided by natural gas.
2. Natural gas remains a regionally priced commodity whereas oil is an internally price commodity. Most of the UK’s natural gas comes from European sources, as natural gas production in the North Sea declines.
3. As with any regionally priced commodity prices are high when demand is high and low when demand is low. Demand is always higher in winter, and there is still very little natural gas storage in the UK. We and the energy companies therefore los the opportunity to buy and store natural gas in summer when the prices are low.
4. We have been reducing the “spare” electrical generating capacity for many years. If we are to avoid the possibility of power cuts we ought to have a “spare” capacity of around 50%, so as to cover for a very cold long winter. At the moment we have about 14% spare capacity and OFGEM, the regulator, expects this to fall to 4% in 2015.
5. We have closed our coal burning power stations rather quickly, and although OFGEM appears to blame EU legislation for this, the truth is that the UK has been rightly closing coal burning power stations for years. What the government have not done is to build sufficient new power stations. I know that many think that governments in the UK do not build power stations – that is the job of the generating companies – but in truth the generating companies will only build power stations if they receive huge government subsidies. The government has very little tax payers’ money left and therefore no there are no subsidies as one by one the generating companies refuse to take the commercial risks of building new nuclear power plants.
6. There has been insufficient investment in energy saving; the energy we require each year will be significantly less in terms of that required for space heat if we required all buildings to be properly insulated.
7. Investment in renewable energy has been, so far, in the wrong kind of renewable energy. We have wasted much money on wind farms and photovoltaic panels which produces little effective energy saving because electricity cannot be stored but have not spent anything on solar water heating, a simple and effective technology where the energy created can be stored until it is need.

All of these factors will mean that energy – both heat and electrical – will come in increasingly short supply, which creates a perfect situation for the energy companies who can all raise their prices for something that we need and cannot generally buy elsewhere except in the case of solar water heating, where we can but the power plant and install it on our roofs.

The taxpayer will pay in higher energy prices and will risk power cuts in very cold weather, because successive governments’ failure to develop a sensible energy policy.

International Spending on Renewable Energy

If you measure climate change measures that each country adopts by money spent and targets you get a fair idea of the importance that each nation places upon climate change. Of course measuring targets is foolish; targets are fairly meaningless, can be easily fiddled and often miss the point. For example the United Kingdom

What Energy Policy?

I listened to the United Kingdom’s Energy Minister, Mr Ed Davey, speak on the radio about the proposals for nuclear energy. He spoke about the need for investors to see a clear return on their investment within a settled and predictable framework and that by putting a levy on electricity bills investors in the nuclear industry would see a clear guaranteed return (guaranteed by the consumer no less) and would therefore invest in the building of new nuclear electricity generating plants. It is a statement which sounds logical but is full of inaccuracies and has a great measure of hypocrisy.

Why investing in income streams from PV arrays is not such a good deal

I promised to explain today why I believe the income stream from PV panels over 25 years will not prove as good an investment as some people are led to believe. Certainly the income stream is guaranteed by the government; certainly all legal measures have been taken to ensure that the installation of PV panels will qualify for the feed in tariff; certainly the PV panels will generate electricity and certainly the electricity they generate will be properly metered and fed into the grid. However, they are not a suitable investment for securitisation in my view.

First, we have to consider the amount of electricity that will be generated. At the 25 year fixed feed in tariff of 43p per kWh (the top tariff shortly to be replaced by a tariff of half that amount) an average south facing roof covered with PV will produce an income from the government of around £1500. In the first year, that is.

Thereafter, the panels will degrade, like everything else degrades. PV installations have not been monitored for 25 years so the precise degradation in performance has not been measured properly. Best estimates are that the panels in themselves will produce 1% less electricity, on a compounded basis, year on year. That means that in ten years time the panels will produce maybe an income of £1000, rather than £1500.

Secondly, as climate change kicks in so it is likely that our summers will get hotter and hotter. That is a good thing if you like hot weather, but not a good thing for PV producing electricity. PV produces the best output at lowish temperatures. If you sit by a feed in meter and watch the production of electricity on a very hot day in July in bright sunshine you will see that electricity production is much less than in bright milder weather.

Thirdly, I expect some installations will break down from time to time. PV systems need an inverter because PV produces DC electricity which has to be inverted to AC before it can be fed in to the grid. Inverters break down and wear out and need to be replaced and there will be times over the life of a PV system when the PV array is not working because the inverter needs to be replaced.

Finally, I expect accidents will happen to PV systems, especially if the house owner is trying to sell his house and finds that the PV system is making that process hard.

The problem is not with PV, or indeed not even with the undesirably high feed in tariff. The problem is that instead of becoming a genuine micro energy investment for a home owner, PV has become a spiv type business, where unsuspecting people of good intentions are being persuaded to grant leases of their homes’ roofs for 25 years in order to profit a hard selling organisation that cares not for the environment but for their own profit.

Why Getting Free PV on your Roof is a Bad idea

The subsidies offered by the government for PV panels – panels that produce electricity – were for the past two years or so incredibly generous. In fact the subsidies were so generous that businessmen found it highly profitable to turn the subsidy into a derivative government bond. What these businessmen did was to offer the free use of PV panels on a householder’s roof so that the householder could get free electricity in the daylight and the owner of the panels would get the subsidy, paid on the basis of a metered feed in tariff. Having installed PV panels on many roofs the panel owners would sell the income as a bond offering a secure 25 year income stream to people or institutions that needed an investment.

The Incompetence of Governments

I have been running a thermal solar energy business in the United Kingdom (Genersys) for more than ten years. This deals in solar water heating panels and is a renewable energy technology, which provides almost emission free  energy. During that time I have been astonished by the incompetence of government when it comes to energy matters. Fossil fuel, or renewable, governments and civil servants do not understand what they are doing and seem incapable of making the very simple and basic decisions which would require common sense and intelligence.

Discriminate Against Canadian Oil from Oil Tar Sands

If you buy food you expect to know where the food was produced and how it was produced. It is reasonable to know, for example, if the food is produced in a way that may be hazardous to your health, or if the food comes from a country which you would rather not deal with. When it comes to buying wood products many people want to know, before they buy and as a condition of their buying, that the wood is produced from sustainable sources, rather than from illegal logging.