Hello Darkness My Old Friend

We are heading towards physical and spiritual darkness as the dark tetrad infiltrates DESNZ.

Introduction

Many readers will recognise the title as the opening line of The Sound of Silence by Simon and Garfunkel. One of the wonders of the English language is that words can have many meanings. Darkness can refer to literal physical darkness, or the absence of light. It can also mean a spiritual darkness, referring to the personality traits that make up the dark tetrad.

With that in mind, there are two pieces of news out this week that take us towards both meanings of darkness.

DUKES Data for 2023

The Digest of UK Energy Statistics annual data for 2023 was released earlier this week and it makes for depressing reading. Overall energy demand dropped to levels las seen in 1950s. Industrial and household use of energy dropped to the lowest levels in over 50 years (see Figure 1).

Figure 1 - Demand for Energy UK 1995-2023 (Source - DUKES)

Of course, 50 years ago was the dark time of the Three-Day Week in 1973-74 caused by miners’ strikes and a shortage of electricity. Today in our own dark time, electricity is effectively rationed by what is euphemistically called Demand Side Response (DSR), where large users are paid to turn off their operations at times of high overall demand.

Net energy import dependency was 40.8%, up 3.8% from 2022 (see Figure 2). That’s right we had to import a higher proportion of a lower overall demand. Electricity imports reached a record high.

Figure 2 - Net Import Dependency 1970-23 Percentage of Energy Supply (Source - DUKES)

We can expect import dependency to rise for two reasons. First, more renewables probably means greater reliance on the kindness of strangers through interconnectors. Interconnectors are presented as a virtue, but in fact they are symptomatic of weakness as we use them to import high-priced electricity at times of highest demand and pay others to take it away when demand is low. As more countries rely upon renewables, there no guarantee that sufficient interconnector capacity will be available when we need it.

Second, as the impact of the windfall tax, North Sea drilling ban and the fracking ban take effect we will need to rely upon gas imports even more. The recent FES report from NG ESO has us using lots of gas even by 2050 and import dependence rising to above 90% in one of their scenarios.

There is a real risk of physical darkness as we rely more on imports of energy.

AR6 Budget Increased to £1.5bn (£2.1bn in 2024 prices)

Another pall of darkness has come in the form of an increased budget for Allocation Round 6 (AR6) renewables auction. Under the previous Government, the budget was set at just over £1bn in 2012 money and has been increased by 52% to £1.55bn or nearly £2.2bn in 2024 money (see Figure 3).

Figure 3 - Overall CfD Budget by Allocation Round (£m 2024 Prices)

This is a stunning 585% more than was allocated to last year’s AR5. The budget figure represents the Government’s estimate of how much subsidy will be given each year to renewables developers who win projects. Of course, the actual level of subsidy will depend on the contract price and the market price of electricity when these projects come online. The £2.2bn compares to the £3.1bn in CfD subsidies that Ofgem has allowed for 2024/25 in its latest price cap (see Annex 2, Tab 7c).

The psychological darkness comes in the Government’s press release, where they make some extraordinary claims. They begin by claiming more renewables will boost energy security, secure cheap power for families and unlock economic growth and jobs. All three elements of this statement are false. Intermittent renewables cannot increase energy security because they rely on increased imports. As we see in Figure 4, all the renewable technologies are more expensive than current market rates of ~£65/MWh set by gas including carbon taxes.

Figure 4 - CfD Strike Prices in AR5 and AR6 compared to Market Prices (£ per MWh)

In fact, some of the technologies such as tidal and wave energy cost many times gas-fired electricity. If renewables really were cheap, they would not need subsidies. Finally, high energy prices damage economic growth and as we discussed before, the “green jobs” in wind and solar cost us about £250K per job per year.

They go on to claim again that this funding will “accelerate the delivery of “clean, cheap, low carbon electricity” which is another lie. The press release then says:

“Families across the country have suffered during the cost of living crisis, as the UK’s over-reliance on fossil fuel markets was exploited by Putin. Investing in clean energy is part of the government’s plans to make Britain a clean energy superpower. This will boost the country’s energy independence, so that families and businesses are never left that vulnerable again.”

First, gas prices rose well before Putin invaded Ukraine, second our imports from Russia were only ever a tiny fraction of gas supply and finally, Miliband has pledged to stop more development of our own resources in the North Sea and will maintain the ban on fracking. At the same time as he recognises a risk to gas supply, he cuts off our own sources.

Ed Miliband is then quoted in the press release saying:

“These subsidies are paid back when wholesale electricity prices are higher than the agreed Contract for Difference price. This was seen over Winter 2022/2023, when Contracts for Difference payments reduced the amount needed to fund government energy support schemes by around £18 per typical household.”

It is true that CfDs did pay back during the energy crisis, but the part he has missed out is that since 2017, CfD subsidies have cost us a net £8.4bn even after the savings in 2022/23. Figure 5 shows that the trend is now up again too.

Figure 5 - Total CfD Subsidies by Technology Jan 2017-Jun 2024 (£)

The only way these new subsidies will pay back is if a new gas supply crisis is deliberately engineered. Moreover, the CfD subsides do not include the £6-7bn each year in subsidies for Renewable Obligation Certificates and the £1.7bn spent each on Feed-In-Tariffs.

Conclusions

The tone of the press release is quasi-religious, almost as if they believe the words of the prophets are written on the DESNZ walls. In the dark tetrad, Machiavellians seek to use manipulation to further their own ends. Narcissists desire unearned status from others. The important thing for them is not status arising from competence, but seeking status for its own sake. As we saw before, the ministers and senior civil servants in DESNZ certainly have no competence in energy, so they must be driven by status for its own sake. Psychopaths are parasitic predators and sadists take positive delight in the suffering of others. Sadly, we can see all elements of the dark tetrad in this press release. They are manipulating the truth to satisfy their sadistic desire to impose high energy prices and suffering on everyone else by awarding contracts to parasitic predators and gain social status from doing it. The sound of silence from the factcheckers like BBC Verify and Full Fact is deafening and allowing the cancer to grow.

I fear we are heading to a very dark place, both physically and spiritually before we can alter course to a more sensible energy policy.

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