Energy Prices Will Rise but the Problem is More than Rising Prices

The British consumers of energy, both domestic and industrial, face the inevitability of even higher energy prices over the next few years. At the moment electricity prices are about the same in the United Kingdom as they are in continental Europe, but natural gas prices are just over half the price of natural gas. All that is going to change and if you feel that you are paying far more than you envisaged for energy now, then you will have to budget more carefully in several years’ time.

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.

The Shrinkage of the Green Economy

Mr Stern now thinks that he understated the consequences of climate change when he wrote his report. He also thinks that the government should engage the private sector in developing economic growth without increasing emissions. I cannot disagree but is not that what the government has been pretending to do for the past four years?

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.

Time to Kick Start the Renewable Heat Incentive?

I do not have much time to write a considered essay today, Luckily I have a lot of work to do and tonight will listen to what Mr Greg Barker, the Minister responsible for the Renewable Heat incentive, has to say about it. There will be many people concerned in microgeneration that will listen with interest to what he says. 

How to Save on Fuel Bills: Solar Water Heating

The Government of the United Kingdom has announced that it will enact legislation to force energy companies to offer no more than four tariffs and to advise their customers of the cheapest tariff. At a time when energy companies are making record profits from record margins the change is long overdue. Sometime son energy companies will no longer be able to confuse customers with a plethora of tariffs and they will be forced to abandon the so called legacy tariffs under which someone that has not to time or to skill to understand that the tariff they are paying is ridiculously high.

The Rationale for Green Policies

It seems that many people are blaming green policies for high energy costs and all our present economic woes. Green policies seem to be a convenient scapegoat. However there are good reasons why green policies should be continued, but I write those words on the basis that not all policies that pretend to be “green” are in fact useful or helpful for environmental protection.

Get the Government to pay you for heating your home’s water with Genersys Solar

Just in time for the cold weather British Gas is raising its prices by more than 8% for gas and electricity consumed by domestic residential households. I had personally expected that shame would probably keep the big energy companies from holding back their price rises until after Christmas, but I was wrong.

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.

My Response to DECC’s Consultation on the Renewable Heat Incentive

I set out below the questions in the RHI Consultation together with my answers. I have underlined the questions.