Had a good read, it says a lot of the right things in general terms, but is vague in costs & implementation, need more details; but so far it's the best energy policy I've seen from any political party.
I then went on to look at the other polices; all populist but with a few good points ... & then the Mass Deportation one ... it's like reading something from the National Socialist (Nazism) in Germany's Third Reich, blaming all the countries ills on 'The Immigrant Crises', & we all know what happened 1930-1945.
I would remind readers that ALL UK citizens are descended from immigrants, (Humans moved into the UK around 15,200 years ago, shortly after the last ice age began to retreat ).
It is said they borrowed a lot of analysis from the SDP which did some excellent work some months ago. Not a bad place to have started from, even if policy might differ.
Unfortunately it looks like the only solution to reducing electricity prices to a point they are internationally competitive is to move a significant amount (if not all) of the fixed and CAPEX costs into being funded through general taxation. Clearly not a conservative/reform philosophy and this labour government hasn't got the cash or political capital/willingness to go through with it
I am also getting more negative about the RAB model - the motivation here is clearly to accumulate the most assets and not maximise efficiency. And when you highlight the cost of additional transmission infrastructure is higher than constraint costs you have to wonder about the calculations being made to approve this stuff. I accept this is me giving into my cynical side.
We are into the territory of no easy answers. Bringing these costs into general taxation just hides them. I think we are already in a place where contracts are going to have to be broken, companies take big write-downs and assets left stranded. The longer this goes on, the worse it is going to get.
I guess the counterpoint to breaking contracts is the effect that would have on private sector trust in doing business with government and in the UK in general. Someone has to pay for the costs already incurred and definitely no easy answers as you say.
The message has to be that businesses that set up to be cost competitive and value adding will find government is a light touch, while corporate facists trying to bleed the country via subsidies and "royal" warrants granting them special privileges will find their future is limited.
If Miliband was a true socialist he would have made that his first action but hes not. Hes only interested in promoting himself so the UN gives him a plumb job so he can fly round the world spouting even more nonesense.
Well they have shifted 75% of ROC costs already and have several other fudge ups on industrial pricing so I would discount more action. Remember they can then socialise the cost onto taxpayers and save themselves the ignominy of even more costs being exposed on welfare
Certainly the calculations I have been doing on grid projects suggest that they will be very poor value for money, and really make you wonder how they passed muster at OFGEM. When you get senior people at Octopus querying the economics publicly you know they don't pass the sniff test.
Its been noticeable and quite fun to now the media fronting eco warriors of Jackson/Vince are both taking diverging views and outright question some of the govts policy.
Presumably abolishing the carbon tax means that revenue is lost to the treasury and will have to be made from tax/cuts/debt from elsewhere? Or does that money get paid out to somewhere currently?
Would be interesting to try and quantify that claim on the cost to the economy of a % increase on electricity prices and the subsequent tax take. A kind of laffer curve for electricity taxes.
Electricity demand is ~275TWh and gas is now a marginal generating source (in competition at times with batteries/pumped storage and some interconnector flows) about 60% of the time with a cost of about £20/MWh currently, so £12/MWh on average or about £3.3bn p.a. More realistically, power costs are largely set by hedging in advance, and that is essentially entirely gas based, so you could count close to 100% of demand on that basis, or £5.5bn p.a. What doesn't go to the Treasury benefits other generators not on CFDs or FiTs including other renewables, nuclear, hydro etc. It's a tariff subsidy for them.
Of course, carbon taxes also apply to other economic sectors, now including aviation. They have caused businesses to shut and be replaced by imports in cement, glass and ceramics, steel etc. so the economic damage is not just via electricity prices.
I’m not necessarily disagreeing, just saying to make the case for a tax cut needs to be different from making a case for a subsidy cut. I’m sure we’d all like a cut in our income tax for example and voters feel that more directly so the argument needs to be made for why cutting electricity taxes is particularly effective for economic growth.
Aren’t these exempt from the majority of carbon taxes through climate change agreements?
Any adjustment of taxes, allowances and subsidies has to be evaluated fully. Not something the OBR do, as they tend to confine analysis to immediate first order effects. A second order estimate can be made via Leontief input-output analysis, but although that tackles knock-on effects it assumes economic linearity which fails to note when businesses and industries will close or invest and grow and generate new businesses feeding off the outputs by including international competition and markets. It requires a lot of detailed studies industry by industry.
To give a flavour: when Grangemouth refinery shut down it ceased providing feedstocks to associated chemical plants (some of which need to be heated for processing), so increasing the input costs for imported feedstocks additionally. When the chemical production closes it affects all the industry that fed off the output, which becomes less competitive and may also close. More goods to be imported, fewer jobs paying taxes, more UB welfare. The effects multiply.
Reading David’s post has brought me back down to reality with a bump! It’s one thing to have long-overdue common sense spoken in a public forum, to the obvious discomfort of backbench haranguers, but it’s quite another to undo the damage, and I would call it deliberate damage, caused by so many years of malign, Malthusian, sado-masochistic, anti-growth climate and energy policies imposed on us by the Con/Lab/Lib Dem/SNP and now Green Uniparty.
I’ve just bought a book on Kindle which I hope is a useful addition to the canon of literature dealing with the climate change hoax.
From the blurb, it goes beyond just debunking the climate pseudoscience and engineering fantasies of transitioning away from fossil fuels. It examines the climate agenda “familiar patterns surrounding censorship, fear-based messaging, institutional pressure, media narratives, and the growing gap between open scientific inquiry and publicly accepted consensus” which also applied to the Covid agenda.
In other words, it “joins the dots” to examine the role of the deep state, working through Uniparty puppet politicians, in using such pretext agendas as weapons of political oppression.
Further to “pretext agendas”, I started campaigning against the climate change hoax way back in the last century. However my eyes were opened to what is really going on by the obviously-fake Covid malarkey, plus the obviously-deliberate mass immigration of cultural aliens which really took off around the same time (e.g. the Boriswave), plus the deliberately-engineered proxy war against Rusia in Ukraine, plus lots of other political oppressions designed to demoralise us and divide us.
Hence I’m always on the lookout for “conspiracy theories” (more like conspiracy realities) of how the deep state uses contrived situations to oppress the people to pursue their own nefarious aims.
For his troubles, Reiner has been banged up in prison on false charges for the last three years. He is now confident that within a few weeks his legal prowess will get him out of prison. Let’s hope he succeeds and starts active campaigning again: https://substack.com/home/post/p-198719055.
No sooner had I posted the above comment on political oppression of the people than up popped another “conspiracy theory” post, this time from Spiff of the Abyss exploring how the ruling class manage threats to remain in control: https://abysspostcard.substack.com/p/absorbing-and-ignoring-the-threats.
I think many of us had our eyes opened during Covid. For me it was so obviously hyped nonsense. But it worked well.
I generally avoid conspiracies. I think a lot can be explained with societal structures and incentive structures. Senior people often don't believe any of the hype, they are simply the most ruthless. People lower down a hierarchy are more normal and more gullible as a result. They tend to believe hype.
But a ruling class always exists no matter how well hidden. And they will always aim to remain in power.
Another sobering analysis of the mess the green blob have made of the UKs energy systems. The illiterate zealotry will continue until the wheels finally fall off the UK economy, which is nearly upon us. Heaven knows what damage will have been caused and how the hell it will be fixed? Worrying times for all except the Elites who either don’t care or are very very stupid.
They don't care. They're already making plans to take off far away from the madding crowd. I think I heard that Peter Theil has already announced he's off the Argentina. I bet other billionaires are thinking the same because the people are going to be very unhappy with what the billionaires have been planning for us plebs
Can you help me translate the impact that Figure 3 (Summary Total Subsidies and Grid Integration Costs (£bn)) will have on the energy price cap, i.e. how much will figure 3 cost the average household in the UK.
Would also be interesting to see the breakdown of how those subsidy and grid costs compare to the cost of gas fired generation - even when still paying carbon cost on the gas fired generation.
I don't know how they're ging to split the costs between domestic and non-domestic users, nor how much they might move onto general taxation. To give a flavour, CM + Network costs are currently about £119 per customer in the latest price cap. But NC includes distribution as well as balancing and transmission. But if those costs tripled, you can do the maths.
It depends what you choose as the cost of gas-fired generation. Existing plants short run or long run marginal costs. But if we say the £40bn in 2030/31 is spread across 300TWh of generation, then the subsidy and grid costs would be £133/MWh, plus wholesale costs at the time of say £80/MWh to give £213/MWh. That's well above even new gas generation. The Government estimates gas-fired generation to cost £111/MWh (£70 without carbon costs) at 93% LF, or £147/MWh (£106) @ 30% LF. At a more realistic 70% LF probably around £120/MWh (£79/MWh without carbon). But these are fag packet calculations.
There won't be much industry left, so consumers and direct subsidies will shoulder an increasing share. As it is, industry is being asked to pick up a damaging share of the tab, so either it closes due to that, or more cost goes to consumers to try to save some industry.
By 2029 approximately 90% of our electricity will be from Renewables. The critical infrastructure will be in place or contractually committed at great expense.
Realistically we are past the point of no return?
Aside from legal challenges and reputation damage, scrapping ROCs will push many suppliers into bankruptcy as they are no longer able to amortise debt/service abandonment liabilities
Where does the replacement supply come from and critically, within what time frame?
Nuclear is 2035 onwards?
Fracking is commercially unproven, no infrastructure and political suicide!
North Sea is 2035-40 assuming economically viable on sufficient scale? What will the oil price be in 2030 with Iran and Russia unrestricted, UAE split with OPEC and RoW fast tracking Renewables/energy independence?
There is very likely to be an LNG glut by 2028 but we’d need to source new turbines, build processing plants and distribution network. Be 2035-2040?
Current NS production and gas processing is declining whilst demand for electricity is increasing, especially data centres, electric cars etc.
It is nonsensical to believe that, come 2029, the Tories/Reform can U turn cost effectively and without horrendous energy short shortages 2030-2035/40
We're going to have a shortage of dispatchable power generation whatever happens to renewables. We need considerable standby capacity to cope with wind lulls and dark winter evenings. So getting rid of renewables doesn't alter that. You're right the lead time on new gas plants is prohibitive. That's why I now believe a return to coal is inevitable (shorter lead times).
If we continue down the current path, the economy will implode with ever rising energy costs. So, we have to change course and bring energy costs down. We need to maximise North Sea and get fracking.
I agree we are approaching the point of no return. It will be painful to reverse course, but we must.
Why ever rising energy costs? Subsidies will reduce as Grid upgrades eliminate Curtailment payments? CfD’s are effectively energy price hedges? AR7 pricing levels similar to France albeit different mechanics.
Battery technology/energy storage is the future game changer for Renewables.
You appear indifferent to the importance of energy independence? This seems a bit surreal as Iran holds the world to ransom! Iran are likely to emerge empowered and an even greater future threat.
Have you read the article? Subsidies forecast to rise. Subsidies will rise further if curtailment costs (included in balancing costs) fall. Grid integration costs rise even more sharply. Beyond 2030, in FES NESO forecasts curtailment charges to fall then rise sharply as more renewables capacity is brought online. The constraint then isn't grid, it's demand. More batteries increase CM costs, which is why CM costs triple. Transmission charges go up more than the increase in balancing costs.
Think about an LCOE calculation. Add say 4 hours of battery capex to a solar installation. Increased capex, actually lower output because of charging/discharging losses, so LCOE goes up.
Thanks but improved (extended life) storage is the long term solution. It may take 10 or 20 years but this is the direction of travel.
I believe that the UK is targeting 60% potential oversupply by c. 2035 so that Renewables can cover peak demand on low wind, cloudy days. Battery storage improvements will help and wind/solar producers are currently rolling out efficiency upgrades such as rotating panels/blades to capture more energy on days of low irradiation/wind.
The Govt claim that oversupplying (because so cheap to produce) means costs in the round are cheaper. We can debate this but imo it’s clear that future technological advances will favour Renewable economics. In 10 or 20 years there will be no debate!
And this ignores global warming and critical energy independence
NESO is actually trying to remove even more batteries from the queue under the connections reform policy which in itself is turning into utter shambles and further undermining the 2030 goal anyhow. The last update and of April was "there is still 14.8 GW above the top of the Action Plan battery capacity range for 2030 and 61.7 GW above the projected battery system need in 2035"
So even the govt doesnt see the rationale for batteries anymore and along with accepting we need 35GW of gas retained as good as saying Net Zero isnt theoretically possible.
Long term storage will require heavy subsidy because it doesn't turn over fast enough to have enough margin earning opportunities. That will limit the economic volume. It's another cost.
Oh well that's OK then. Lets just have a duplicate electricity grid, one that actually works with dispachable low entropy generation and one that does neither but allows people to glow in self righteous credentials.
Iran isn't holding anyone to ransom. the ships are not going through the straits in previous numbers because Lloyds have removed their insurance. if the US buggered off the lloyds decision based on 'war zone' issues would be reversed quickly and ships would sail.
Curtailment cost will reduce when the Eastern Green Links interconnector are commissioned sometime in the 2030's but they should have been constructed when Nat Grid first proposed them ten years ago. They would have cost considerably less than now and covered their costs. They weren't because OFGEM adopted its hairbrained connect & manage policy authorising huge amounts of onshore & offshore wind in Scotland in the full knowledge the transmission capacity wasn't there setting us up for this situation today where in some months when the wind blows ESO is spending over £300m on balancing primarily constraints and whats worse over 10TWh of clean energy lost in 2025.
Whats more in the ESO review of cost recovery of balancing charges recently its now determined they are under recovering and they need to uplift the BSUoS Tariffs going forward to cover for higher constraint costs.
Finally on energy independence its called the North Sea. Yes theres not much left but given Norway's recent exploration success theres likely to be more on our part of the North Sea. Given we are decades away from full electrification why not take what we have to see us through the transition.
Curtailment cost will continue to see erosion in per MWh revenues and lower turn up cost as more generation in the Dogger Bank/East Anglia comes on stream, meaning turn up is for inertia, not energy, and curtailment is of overall surpluses, not transmission constraint. Total volumes will rise sharply as we get more surplus hours, and bigger surpluses in the hours that are already surpluses.
But there seems little point in providing links for low/no value output to result in choosing whether you curtail Moray/Inch Cape/Seagreen or Sofia/Hornsea/Dogger.
Yes, and short circuit strength. I'm thinking of seeing whether there is evidence of response to thundery weather threatening lightning strikes like the one that triggered the August 2019 blackout.
Norway has about half the lifting costs of UK thanks to cheap hydro and larger reservoirs. Most new UK oil will look expensive in a couple of years time when oil under $60.
There’s lots of wishful thinking but little pragmatism on this thread! We are where we are, a Reform/Tory Govt won’t be able to start ‘reversing’ policy until 2029 when we will be either at 90% or WIP committed to 90%!
Can someone please explain how the UK cost effectively transitions back to NS and fracking, within what time frame and without energy shortages.
We are so far down the Renewables road with high sunk costs. It must make economic sense to continue this transition now that we are through the worst, most expensive part. All alternatives involve significant new costs, delays and risk. There is no free lunch.
But we aren't, which is what the article shows. We have been ignoring that the worst is yet to come while listening to sirens selling LCOE instead of whole system costs, while renewables have been piggybacking on the existing grid and now face massive added grid costs to add capacity, and we now dimly perceive the need for massive overbuild at huge cost.
You know nothing about Norway’s upstream. They have actually imposed large extra costs on developments through such projects as the Tampen floating wind farm and expensive shore connections for electricity supply, which they are allowed to offset entirely against tax with a green bonus. A luxury green initiative. Otherwise they are operating in more hostile environments above 62N in deeper water that add to cost.
With CCGTs running less and less they can problem soldier on a while yet. It was also telling that they pretty well all stayed in the latest T-4 CM agreements at a far lower price than the previous two years. What im not sure is could they pull out and threaten to close to ensure that they are given a higher priced T-1 instead? (this happened with some coal stns a few years back). Anyhow the bigger issue is against current policy the CM model is surely unsuitable to fund them as pure standby power?
It wont reach 90% by 2030 c80-85%. None of the AR7 projects have even taken FID yet so wont be commissioned til 2031 earliest. The transmission buildout is falling out as well.
We have enough LNG gasification and storage to deal with the likely gas demand come 2030 even with paltry rates of heat pump takeup. Mind you some in the media are suggesting Starmer is about to turbo boost that presumably installing it for free for those that have no hope of ever affording one. On EVs they will increase penetration as long as we accept that we wreck what's left of UK and EUs car industry and give the market to the Chinese.
Of course our prime salvation so far has been deindustrialisation and now we are told by OFGEM domestic demand destruction as well (average usage reduced from 2700 to 2500kwh). On the latter that's no bad thing but doubt it has come from better insulated homes but from an affordability position (I for one reduced thermostat by 1.5c and no one moaned!!).
Bear in mind also that my post was before the Iberian blackout of April 2025 which showed the deadly danger of running the grid with too high a level of inertia-less renewables.
In any case Miliband’s 95% target is a cheat as the emissions from biomass electricity generation and interconnector-imported electricity are not counted, as David’s previous post explained.
Interesting that you think removing ROCs would be fatal for those wind farms. It's the ones that will be forced into commencing low strike CFDs from AR4/5 that are at far greater risk. They haven't benefited from the energy crisis bonanza that saw ROC generators making out like bandits and paying down their finance early.
As usual David your on the money pot on but my take is the populous at large are just not there (yet) on rolling back green energy. The Hormuz debacle unfortunately reinforces the view its all down to FF and with green energy eco evangelists of Miliband, Stark, Pinchback parroting there messages across the media we aren't shifting the dial yet. You would have thought the energy companies views would have been a wake up call thats things dont add up but there then portrayed as part of the problem as well.
Personally I just dont see Reform getting anywhere near a majority in 29/29 they are an excuse for people to voice their frustration largely currently and these votes will, reluctantly for sure, return to their homes come a GE. So that will leave us needing a coalition with Lab/LDs as equally possible as Reform/Torys and should the Greens achieve a wider breakthrough (highly unlikely) they would clearly go to the left side. So we will be back on the same treadmill. Thus will Burnham be the Joker in the pack? Historically supportive of renewables but hes proposing likely to be far more pragmatic than Starmer in some areas but as far as we are concerned he would need to ditch Miliband entirely. Thats a possibility as Starmer has to keep him to keep the centre left on his side but a solid Makerfield win for Burnham will empower him and whilst Miliband seat maybe Doncaster hes part of the London cabol Burnham says has failed the country.
Anyhow one thing we can be sure of David will have plenty to discourse every Sunday for sometime to come yet!
What a softball interview. He's essentially admitted we are moving to a grid with huge fixed costs because generation is nowhere near demand and we will no longer have electricity on demand, because we will need to be flexible to use electricity when the wind is blowing. I spotted the ear tugging too.
It did manage to reveal the poor quality of his thinking. That is probably more valuable at the end of the day than a hostile interview that merely results in stonewalling. The idea that the CEGB designed a cost effective grid 60 years ago and that therefore that should be the current aim too completely eludes him as he switches to net zero mode. Really think that the usual culprit think tanks have completely failed to realise that Albert is not going to be flexible, even if Angela Rippon whispers in his ear. (Radio ad for the uninitiated)
WEF Agenda 2030 David. That's milipeed's endgame, he's just not telling us because he knows what would happen. Larry Fink, CEO of Blackrock, on the other hand had no qualms about spillin it recently. "He admits that the trillions of dollars being used for Data centers (I would call them Digital Gulags more like) and power grids will come from ordinary people's savings and pension funds. He said it would be mandatory!
The AI infrastructure will come from forcing people to invest in it."
Larry has been in No10 talking to our PM & Co so I have no doubt this is the case over here as it is in the US. It's all part of the
"great taking" that David Rodgers Webb talks about.
They're engineering a financial crash where people's accounts will be "borrowed" to save the system. In other words gone. Manditory usage for power grids and Data centers, as Fink puts it🤷♂️ No wonder Ed is quiet about it, yet he's railroading this power grid change over through at pace and nobody in government is doing anything real about it. They all say token pieces but that's all. They're all in it together. Even Ofgem, who's supposed to be protecting us, the public, is gleefully upping the costs against us. We're being battered into the ground and nobody is standing up for us. The North Sea Oil and Gas sector are being trashed on purpose. Our countryside is being destroyed by ugly solar parks. Our farmers are being penalised into bankruptcy. Our government doesn't work "for" us. There is no democracy, It's all just an illusion. The will of the people is to live a quiet life with reasonably cheap energy, food and water. Instead we have extortionate costs above what most can afford right across the whole spectrum. That "will" is not what the government is giving us. I think they have their own collective agenda!
Thank you for this David. I've been following and appreciating your work for some time and from it and the work of others, I've learned of the costs and illusions surrounding rebuildable wind and solar. This latest post depicts for me a horror story of the consequences of a wrong-headed policy pursued for years, creating a contractual and hardware web that will be hard to undo.
Further, legislating and reneging on contracts, while arguably necessary, doesn't in itself build a robust electricity system, which will take years. Even a new government embarking on policies which make sense and telling the truth, won't score many brownie points with an ill-informed electorate told yet again "it was them, it wasn't us guv", and there's no quick fix. Increasing costs and supply fragility are now baked in, as you show.
My only crumbs of comfort are that even 'Edcase Miliband hasn't gone full Germany and repudiated nuclear power, and remembering a Portuguese political poster showing recent European leaders who had fallen from grace, bearing the simple slogan "Mentem, perdem" - "They lie, they lose".
A footnote on the wider effects of transferring ROC and some other subsidy costs to taxation:
The result is that for 12 months measured inflation is lower than it would have been, which affects many inflation indexed items of government expenditure for welfare payments and index linked purchases and index linked gilts. It even lowers the indexation of energy subsidies. You can see why Reeves was happy to go along with the idea, and may be plotting further transfers to manipulate taxation figures. The bigger the subsidy financed by government spending the lower the temporary measured inflation.
Once the step change is out of the reckoning of annual inflation rate calculations there is a residual effect that the indexation applied to CFDs, FiTs and ROCs is potentially lower than it would otherwise have been, but the effect is much smaller than the one off from taking spending out of bills altogether. The flip side is that government spending to be financed is increased until lower indexation kicks in on government spending, and that will likely push financing costs higher unless tax revenues are raised. Interest on gilts may be higher, pushing up inflation via financing costs for homes and businesses.
The back end is also interesting: it leaves a poison pill to the next government which would see bills and inflation jolt upwards sharply as subsidies are returned to bills in 2029. Even if ROCs are abolished, the residual effect on inflation is small, stealing the thunder of doing so. It's clear the policy was designed by malevolent people.
We shouldn't forget the other effort to manipulate measured inflation. The OFGEM cap was based on 3.1MWh of electricity and 12MWh of gas until the end of last year. Those "Typical Domestic Consumption Values" were revised down at the beginning of the year to 2.7MWh and 11.5MWh, and further revised down for the Q3 cap to just 2.5MWh and 9.5MWh respectively. Your bill is magically smaller, courtesy OFGEM's wheeze. Remember too its former CEO and co-author of the Climate Change Act, Jonathan Brearley is now Miliband's PUS at DESNZ. Two revisions in six months smacks of desperation.
Arghh interesting hadn't considered that ruse from moving it into general taxation. So thats 6B per yr on borrowing is going to cost 4% interest on average for every year they run it and presumably goes up with indexing each year as well.
Hows all the industrial support schemes being funded?
Finally hadn't realised Brearly now the permanent under-secretary we really are done for.
Hi David, I’ve read some of your posts and I particularly liked your one on Hornsea 3. You do often complain about the price of energy in the UK but I have a question. Where do you think the UK should get its energy from? By all accounts off-shore wind is fairly effective and has decent capacity factors in certain areas. Solar is cheap to deploy but would be far better suited to rooftop installations in the UK. Nuclear is well nuclear and the UK seems incapable of building it even with the French doing most of the work. Gas receives a vast amount of focus but how much gas does the UK even have left in the North Sea? Surely not enough to justify installing terminals, pipelines and refining capacity to barely make a dent in supply and prices. Given all this, what do you actually think is the best energy sources for the UK? To me, offshore wind doesn’t seem too bad of a shout.
Calder Hall was extraordinary never been done before anywhere in the world yet built in such a short time. Even the first wave of Magnox reactors took 5-6yrs to complete which were basically the same design although they let each construction group come up with their own iteration of the design which didn't help. The prototype AGR was completed quickly but upscaling it to production versions went badly and we all remember the Dungeness B saga. The irony was of course after teething troubles the AGRs went on to perform pretty well. Hinkley Point along with HS2 show just how far British engineering and construction has fallen from the heady days of the 1950s
Sizewell B Westinghouse reactor sold to EDF. Sizewell C to be European Pressurised Reactor estimated to cost £50 bn and be operating after possibly 13 years.
The Koreans built the first unit at Barakah so fast that the Emeratis hadn't managed to hire and train the operators to run it, so start up was delayed. About 4 years IIRC, which is what the best French builds were. $25bn for 5.6GW at Barakah. Cheaper still in Korea itself.
Let’s not get hung up on whether 80% to targeted 2030 95%, much hinges on grid connections from Norfolk. This is WIP and will happen, whether pushed into 2031 or 2030.. These massive infrastructure projects take years to implement and are now past the point of no return
They will for sure and there was plenty of wrangling back in the 50/60s in rural areas over the the buildout of the initial 275kV grid where the Energy Ministers of the day just overruled planning inspectors. So nimbyism isnt new. Mind you have to hand to the CEA and its forerunner the BEA for future proofing the 275kV tower design so it could be upgraded to 400 kV by just changing the insulator strings.
I have been talking to the team which has upgraded the local electricity main to half of our street. The contracts have been agreed and work is going ahead. The cost per house is around £4500. There are 30 million homes. This will be added to bills. One of the guys reckoned that at the rate that they were progressing they had enough work for 48 years! Is this incin the figures here
unlikely to be needed at every street as the one thing our forefathers got right back in the 50s was to over provision the distribution system particularly in suburban areas.
I'll have to see if I can find the WPD spec for street cabling. It started at 0.5kW per 3 bedroom home with gas supply for heat and cooking, adding on extra for things like electric showers, stoves etc., perhaps 1kW for a 5 bed. I guess they now have to add 7kW for EV charging. There was a lump overhead per circuit (about 25 homes per phase and cable to the local transformer), with the design relying on peak demand being intermittent or of too short duration to overheat the cables and transformer.
Waiting for them to establish rules that you can only have a cold shower while charging your EV! Flexible demand, Albert!
Have you read Restore’s energy policy paper? If not, you should.
Link please
Just search Restore Britain, go to the website. All of the policy papers are on there.
Thanks, will read.
Had a good read, it says a lot of the right things in general terms, but is vague in costs & implementation, need more details; but so far it's the best energy policy I've seen from any political party.
I then went on to look at the other polices; all populist but with a few good points ... & then the Mass Deportation one ... it's like reading something from the National Socialist (Nazism) in Germany's Third Reich, blaming all the countries ills on 'The Immigrant Crises', & we all know what happened 1930-1945.
I would remind readers that ALL UK citizens are descended from immigrants, (Humans moved into the UK around 15,200 years ago, shortly after the last ice age began to retreat ).
Yes. I think it's a good start, but ducks the question of transmission and CM charges.
Surely it’s a far more comprehensive policy paper than anything that the Tories or Reform have produced, therefore worth mentioning.
Yes, they published after I had written this. I will do a piece about it soon.
It is said they borrowed a lot of analysis from the SDP which did some excellent work some months ago. Not a bad place to have started from, even if policy might differ.
https://www.sdp.org.uk/sdp-publishes-energy-abundance-green-paper
Unfortunately it looks like the only solution to reducing electricity prices to a point they are internationally competitive is to move a significant amount (if not all) of the fixed and CAPEX costs into being funded through general taxation. Clearly not a conservative/reform philosophy and this labour government hasn't got the cash or political capital/willingness to go through with it
I am also getting more negative about the RAB model - the motivation here is clearly to accumulate the most assets and not maximise efficiency. And when you highlight the cost of additional transmission infrastructure is higher than constraint costs you have to wonder about the calculations being made to approve this stuff. I accept this is me giving into my cynical side.
We are into the territory of no easy answers. Bringing these costs into general taxation just hides them. I think we are already in a place where contracts are going to have to be broken, companies take big write-downs and assets left stranded. The longer this goes on, the worse it is going to get.
Definitely in the territory of no easy answers!
I guess the counterpoint to breaking contracts is the effect that would have on private sector trust in doing business with government and in the UK in general. Someone has to pay for the costs already incurred and definitely no easy answers as you say.
The message has to be that businesses that set up to be cost competitive and value adding will find government is a light touch, while corporate facists trying to bleed the country via subsidies and "royal" warrants granting them special privileges will find their future is limited.
If Miliband was a true socialist he would have made that his first action but hes not. Hes only interested in promoting himself so the UN gives him a plumb job so he can fly round the world spouting even more nonesense.
Well they have shifted 75% of ROC costs already and have several other fudge ups on industrial pricing so I would discount more action. Remember they can then socialise the cost onto taxpayers and save themselves the ignominy of even more costs being exposed on welfare
Certainly the calculations I have been doing on grid projects suggest that they will be very poor value for money, and really make you wonder how they passed muster at OFGEM. When you get senior people at Octopus querying the economics publicly you know they don't pass the sniff test.
Its been noticeable and quite fun to now the media fronting eco warriors of Jackson/Vince are both taking diverging views and outright question some of the govts policy.
An awesome piece of work.
Presumably abolishing the carbon tax means that revenue is lost to the treasury and will have to be made from tax/cuts/debt from elsewhere? Or does that money get paid out to somewhere currently?
Yes, but the loss to the Treasury is much less than the gain to the economy, <£2bn. This could be covered by ending EV & heat pump subsidies.
Would be interesting to try and quantify that claim on the cost to the economy of a % increase on electricity prices and the subsequent tax take. A kind of laffer curve for electricity taxes.
Electricity demand is ~275TWh and gas is now a marginal generating source (in competition at times with batteries/pumped storage and some interconnector flows) about 60% of the time with a cost of about £20/MWh currently, so £12/MWh on average or about £3.3bn p.a. More realistically, power costs are largely set by hedging in advance, and that is essentially entirely gas based, so you could count close to 100% of demand on that basis, or £5.5bn p.a. What doesn't go to the Treasury benefits other generators not on CFDs or FiTs including other renewables, nuclear, hydro etc. It's a tariff subsidy for them.
Of course, carbon taxes also apply to other economic sectors, now including aviation. They have caused businesses to shut and be replaced by imports in cement, glass and ceramics, steel etc. so the economic damage is not just via electricity prices.
Apologies I didn’t see this reply.
I’m not necessarily disagreeing, just saying to make the case for a tax cut needs to be different from making a case for a subsidy cut. I’m sure we’d all like a cut in our income tax for example and voters feel that more directly so the argument needs to be made for why cutting electricity taxes is particularly effective for economic growth.
Aren’t these exempt from the majority of carbon taxes through climate change agreements?
Any adjustment of taxes, allowances and subsidies has to be evaluated fully. Not something the OBR do, as they tend to confine analysis to immediate first order effects. A second order estimate can be made via Leontief input-output analysis, but although that tackles knock-on effects it assumes economic linearity which fails to note when businesses and industries will close or invest and grow and generate new businesses feeding off the outputs by including international competition and markets. It requires a lot of detailed studies industry by industry.
To give a flavour: when Grangemouth refinery shut down it ceased providing feedstocks to associated chemical plants (some of which need to be heated for processing), so increasing the input costs for imported feedstocks additionally. When the chemical production closes it affects all the industry that fed off the output, which becomes less competitive and may also close. More goods to be imported, fewer jobs paying taxes, more UB welfare. The effects multiply.
A few days ago I was cheered by a somewhat parochial event which took place in the Scottish parliament, namely common sense being spoken on the subject of energy policy for probably the first time since the “pretendy wee parliament” (© Billy Connolly) was opened in 2004. The event was the 10-minute maiden speech by newly-elected Reform MSP Duncan Massey, an oil and gas industry economics expert.
Video of his speech is here, courtesy of our friend Biologyphenom: https://biologyphenom.substack.com/p/scottish-parliament28-may-2026.
The text of his speech (and the entire debate) is here: https://www.parliament.scot/chamber-and-committees/official-report/search-what-was-said-in-parliament/meeting-of-parliament-28-05-2026?meeting=20163&iob=222892#orscontributions_M20999E391P964C3056362.
Reading David’s post has brought me back down to reality with a bump! It’s one thing to have long-overdue common sense spoken in a public forum, to the obvious discomfort of backbench haranguers, but it’s quite another to undo the damage, and I would call it deliberate damage, caused by so many years of malign, Malthusian, sado-masochistic, anti-growth climate and energy policies imposed on us by the Con/Lab/Lib Dem/SNP and now Green Uniparty.
I’ve just bought a book on Kindle which I hope is a useful addition to the canon of literature dealing with the climate change hoax.
From the blurb, it goes beyond just debunking the climate pseudoscience and engineering fantasies of transitioning away from fossil fuels. It examines the climate agenda “familiar patterns surrounding censorship, fear-based messaging, institutional pressure, media narratives, and the growing gap between open scientific inquiry and publicly accepted consensus” which also applied to the Covid agenda.
In other words, it “joins the dots” to examine the role of the deep state, working through Uniparty puppet politicians, in using such pretext agendas as weapons of political oppression.
The book is “Canary in a Climate World: Climate Realism vs. the Net Zero Myth”, advance publicity here: https://canaryinacovidworld.substack.com/p/something-big-is-coming-this-wednesday.
Further to “pretext agendas”, I started campaigning against the climate change hoax way back in the last century. However my eyes were opened to what is really going on by the obviously-fake Covid malarkey, plus the obviously-deliberate mass immigration of cultural aliens which really took off around the same time (e.g. the Boriswave), plus the deliberately-engineered proxy war against Rusia in Ukraine, plus lots of other political oppressions designed to demoralise us and divide us.
Hence I’m always on the lookout for “conspiracy theories” (more like conspiracy realities) of how the deep state uses contrived situations to oppress the people to pursue their own nefarious aims.
I found another just a few days ago in a powerful post from Alex Krainer entitled “Pandemics and the march of totalitarianism” on how deep state bankers drive the “plandemic” agenda (coming again soon?): https://alexkrainer.substack.com/p/pandemics-and-the-march-of-totalitarianism-1d6.
This is the same conclusion lawyer Reiner Fuellmich and his team reached in 2022, recorded in his closing arguments speech: https://metatron.substack.com/p/reiner-fuellmichs-grand-jury-court.
For his troubles, Reiner has been banged up in prison on false charges for the last three years. He is now confident that within a few weeks his legal prowess will get him out of prison. Let’s hope he succeeds and starts active campaigning again: https://substack.com/home/post/p-198719055.
No sooner had I posted the above comment on political oppression of the people than up popped another “conspiracy theory” post, this time from Spiff of the Abyss exploring how the ruling class manage threats to remain in control: https://abysspostcard.substack.com/p/absorbing-and-ignoring-the-threats.
I think many of us had our eyes opened during Covid. For me it was so obviously hyped nonsense. But it worked well.
I generally avoid conspiracies. I think a lot can be explained with societal structures and incentive structures. Senior people often don't believe any of the hype, they are simply the most ruthless. People lower down a hierarchy are more normal and more gullible as a result. They tend to believe hype.
But a ruling class always exists no matter how well hidden. And they will always aim to remain in power.
Another sobering analysis of the mess the green blob have made of the UKs energy systems. The illiterate zealotry will continue until the wheels finally fall off the UK economy, which is nearly upon us. Heaven knows what damage will have been caused and how the hell it will be fixed? Worrying times for all except the Elites who either don’t care or are very very stupid.
They don't care. They're already making plans to take off far away from the madding crowd. I think I heard that Peter Theil has already announced he's off the Argentina. I bet other billionaires are thinking the same because the people are going to be very unhappy with what the billionaires have been planning for us plebs
Thanks David, an informative but depressing read.
Can you help me translate the impact that Figure 3 (Summary Total Subsidies and Grid Integration Costs (£bn)) will have on the energy price cap, i.e. how much will figure 3 cost the average household in the UK.
Would also be interesting to see the breakdown of how those subsidy and grid costs compare to the cost of gas fired generation - even when still paying carbon cost on the gas fired generation.
I don't know how they're ging to split the costs between domestic and non-domestic users, nor how much they might move onto general taxation. To give a flavour, CM + Network costs are currently about £119 per customer in the latest price cap. But NC includes distribution as well as balancing and transmission. But if those costs tripled, you can do the maths.
It depends what you choose as the cost of gas-fired generation. Existing plants short run or long run marginal costs. But if we say the £40bn in 2030/31 is spread across 300TWh of generation, then the subsidy and grid costs would be £133/MWh, plus wholesale costs at the time of say £80/MWh to give £213/MWh. That's well above even new gas generation. The Government estimates gas-fired generation to cost £111/MWh (£70 without carbon costs) at 93% LF, or £147/MWh (£106) @ 30% LF. At a more realistic 70% LF probably around £120/MWh (£79/MWh without carbon). But these are fag packet calculations.
There won't be much industry left, so consumers and direct subsidies will shoulder an increasing share. As it is, industry is being asked to pick up a damaging share of the tab, so either it closes due to that, or more cost goes to consumers to try to save some industry.
By 2029 approximately 90% of our electricity will be from Renewables. The critical infrastructure will be in place or contractually committed at great expense.
Realistically we are past the point of no return?
Aside from legal challenges and reputation damage, scrapping ROCs will push many suppliers into bankruptcy as they are no longer able to amortise debt/service abandonment liabilities
Where does the replacement supply come from and critically, within what time frame?
Nuclear is 2035 onwards?
Fracking is commercially unproven, no infrastructure and political suicide!
North Sea is 2035-40 assuming economically viable on sufficient scale? What will the oil price be in 2030 with Iran and Russia unrestricted, UAE split with OPEC and RoW fast tracking Renewables/energy independence?
There is very likely to be an LNG glut by 2028 but we’d need to source new turbines, build processing plants and distribution network. Be 2035-2040?
Current NS production and gas processing is declining whilst demand for electricity is increasing, especially data centres, electric cars etc.
It is nonsensical to believe that, come 2029, the Tories/Reform can U turn cost effectively and without horrendous energy short shortages 2030-2035/40
We're going to have a shortage of dispatchable power generation whatever happens to renewables. We need considerable standby capacity to cope with wind lulls and dark winter evenings. So getting rid of renewables doesn't alter that. You're right the lead time on new gas plants is prohibitive. That's why I now believe a return to coal is inevitable (shorter lead times).
https://davidturver.substack.com/p/coal-not-cold?r=nhgn1&utm_campaign=post-expanded-share&utm_medium=web
If we continue down the current path, the economy will implode with ever rising energy costs. So, we have to change course and bring energy costs down. We need to maximise North Sea and get fracking.
I agree we are approaching the point of no return. It will be painful to reverse course, but we must.
Thanks for reply.
Why ever rising energy costs? Subsidies will reduce as Grid upgrades eliminate Curtailment payments? CfD’s are effectively energy price hedges? AR7 pricing levels similar to France albeit different mechanics.
Battery technology/energy storage is the future game changer for Renewables.
You appear indifferent to the importance of energy independence? This seems a bit surreal as Iran holds the world to ransom! Iran are likely to emerge empowered and an even greater future threat.
Paul,
Have you read the article? Subsidies forecast to rise. Subsidies will rise further if curtailment costs (included in balancing costs) fall. Grid integration costs rise even more sharply. Beyond 2030, in FES NESO forecasts curtailment charges to fall then rise sharply as more renewables capacity is brought online. The constraint then isn't grid, it's demand. More batteries increase CM costs, which is why CM costs triple. Transmission charges go up more than the increase in balancing costs.
Think about an LCOE calculation. Add say 4 hours of battery capex to a solar installation. Increased capex, actually lower output because of charging/discharging losses, so LCOE goes up.
Thanks but improved (extended life) storage is the long term solution. It may take 10 or 20 years but this is the direction of travel.
I believe that the UK is targeting 60% potential oversupply by c. 2035 so that Renewables can cover peak demand on low wind, cloudy days. Battery storage improvements will help and wind/solar producers are currently rolling out efficiency upgrades such as rotating panels/blades to capture more energy on days of low irradiation/wind.
The Govt claim that oversupplying (because so cheap to produce) means costs in the round are cheaper. We can debate this but imo it’s clear that future technological advances will favour Renewable economics. In 10 or 20 years there will be no debate!
And this ignores global warming and critical energy independence
NESO is actually trying to remove even more batteries from the queue under the connections reform policy which in itself is turning into utter shambles and further undermining the 2030 goal anyhow. The last update and of April was "there is still 14.8 GW above the top of the Action Plan battery capacity range for 2030 and 61.7 GW above the projected battery system need in 2035"
So even the govt doesnt see the rationale for batteries anymore and along with accepting we need 35GW of gas retained as good as saying Net Zero isnt theoretically possible.
Long term storage will require heavy subsidy because it doesn't turn over fast enough to have enough margin earning opportunities. That will limit the economic volume. It's another cost.
Oh well that's OK then. Lets just have a duplicate electricity grid, one that actually works with dispachable low entropy generation and one that does neither but allows people to glow in self righteous credentials.
Iran isn't holding anyone to ransom. the ships are not going through the straits in previous numbers because Lloyds have removed their insurance. if the US buggered off the lloyds decision based on 'war zone' issues would be reversed quickly and ships would sail.
Curtailment cost will reduce when the Eastern Green Links interconnector are commissioned sometime in the 2030's but they should have been constructed when Nat Grid first proposed them ten years ago. They would have cost considerably less than now and covered their costs. They weren't because OFGEM adopted its hairbrained connect & manage policy authorising huge amounts of onshore & offshore wind in Scotland in the full knowledge the transmission capacity wasn't there setting us up for this situation today where in some months when the wind blows ESO is spending over £300m on balancing primarily constraints and whats worse over 10TWh of clean energy lost in 2025.
Whats more in the ESO review of cost recovery of balancing charges recently its now determined they are under recovering and they need to uplift the BSUoS Tariffs going forward to cover for higher constraint costs.
Finally on energy independence its called the North Sea. Yes theres not much left but given Norway's recent exploration success theres likely to be more on our part of the North Sea. Given we are decades away from full electrification why not take what we have to see us through the transition.
Curtailment cost will continue to see erosion in per MWh revenues and lower turn up cost as more generation in the Dogger Bank/East Anglia comes on stream, meaning turn up is for inertia, not energy, and curtailment is of overall surpluses, not transmission constraint. Total volumes will rise sharply as we get more surplus hours, and bigger surpluses in the hours that are already surpluses.
But there seems little point in providing links for low/no value output to result in choosing whether you curtail Moray/Inch Cape/Seagreen or Sofia/Hornsea/Dogger.
There also having to turn up to provide voltage support as so much of this generation is at the periphery of the grid not at the load centres.
Yes, and short circuit strength. I'm thinking of seeing whether there is evidence of response to thundery weather threatening lightning strikes like the one that triggered the August 2019 blackout.
Norway has about half the lifting costs of UK thanks to cheap hydro and larger reservoirs. Most new UK oil will look expensive in a couple of years time when oil under $60.
There’s lots of wishful thinking but little pragmatism on this thread! We are where we are, a Reform/Tory Govt won’t be able to start ‘reversing’ policy until 2029 when we will be either at 90% or WIP committed to 90%!
Can someone please explain how the UK cost effectively transitions back to NS and fracking, within what time frame and without energy shortages.
And without a truck load of fairy dust.
We are so far down the Renewables road with high sunk costs. It must make economic sense to continue this transition now that we are through the worst, most expensive part. All alternatives involve significant new costs, delays and risk. There is no free lunch.
But we aren't, which is what the article shows. We have been ignoring that the worst is yet to come while listening to sirens selling LCOE instead of whole system costs, while renewables have been piggybacking on the existing grid and now face massive added grid costs to add capacity, and we now dimly perceive the need for massive overbuild at huge cost.
You know nothing about Norway’s upstream. They have actually imposed large extra costs on developments through such projects as the Tampen floating wind farm and expensive shore connections for electricity supply, which they are allowed to offset entirely against tax with a green bonus. A luxury green initiative. Otherwise they are operating in more hostile environments above 62N in deeper water that add to cost.
With CCGTs running less and less they can problem soldier on a while yet. It was also telling that they pretty well all stayed in the latest T-4 CM agreements at a far lower price than the previous two years. What im not sure is could they pull out and threaten to close to ensure that they are given a higher priced T-1 instead? (this happened with some coal stns a few years back). Anyhow the bigger issue is against current policy the CM model is surely unsuitable to fund them as pure standby power?
It wont reach 90% by 2030 c80-85%. None of the AR7 projects have even taken FID yet so wont be commissioned til 2031 earliest. The transmission buildout is falling out as well.
We have enough LNG gasification and storage to deal with the likely gas demand come 2030 even with paltry rates of heat pump takeup. Mind you some in the media are suggesting Starmer is about to turbo boost that presumably installing it for free for those that have no hope of ever affording one. On EVs they will increase penetration as long as we accept that we wreck what's left of UK and EUs car industry and give the market to the Chinese.
Of course our prime salvation so far has been deindustrialisation and now we are told by OFGEM domestic demand destruction as well (average usage reduced from 2700 to 2500kwh). On the latter that's no bad thing but doubt it has come from better insulated homes but from an affordability position (I for one reduced thermostat by 1.5c and no one moaned!!).
Renewables won’t supply Miliband’s fabled 95% of grid electricity by 2030. I doubt if even 85% will be reached as posited by nickrl below.
In January 2025 I put on my layman thinking cap to try to work out what renewables penetration level might actually be possible by 2030 in this post to my MP (he didn’t reply): https://metatron.substack.com/p/climate-change-and-the-corruption.
My guestimate was a best case of 80% but I won’t be surprised if it turns out to be much less than that. A recent report from Montel showed that UK electricity generation emissions actually increased in 2025: https://notalotofpeopleknowthat.wordpress.com/2026/05/11/emissions-from-electricity-increased-last-year/.
Bear in mind also that my post was before the Iberian blackout of April 2025 which showed the deadly danger of running the grid with too high a level of inertia-less renewables.
In any case Miliband’s 95% target is a cheat as the emissions from biomass electricity generation and interconnector-imported electricity are not counted, as David’s previous post explained.
Interesting that you think removing ROCs would be fatal for those wind farms. It's the ones that will be forced into commencing low strike CFDs from AR4/5 that are at far greater risk. They haven't benefited from the energy crisis bonanza that saw ROC generators making out like bandits and paying down their finance early.
As usual David your on the money pot on but my take is the populous at large are just not there (yet) on rolling back green energy. The Hormuz debacle unfortunately reinforces the view its all down to FF and with green energy eco evangelists of Miliband, Stark, Pinchback parroting there messages across the media we aren't shifting the dial yet. You would have thought the energy companies views would have been a wake up call thats things dont add up but there then portrayed as part of the problem as well.
Personally I just dont see Reform getting anywhere near a majority in 29/29 they are an excuse for people to voice their frustration largely currently and these votes will, reluctantly for sure, return to their homes come a GE. So that will leave us needing a coalition with Lab/LDs as equally possible as Reform/Torys and should the Greens achieve a wider breakthrough (highly unlikely) they would clearly go to the left side. So we will be back on the same treadmill. Thus will Burnham be the Joker in the pack? Historically supportive of renewables but hes proposing likely to be far more pragmatic than Starmer in some areas but as far as we are concerned he would need to ditch Miliband entirely. Thats a possibility as Starmer has to keep him to keep the centre left on his side but a solid Makerfield win for Burnham will empower him and whilst Miliband seat maybe Doncaster hes part of the London cabol Burnham says has failed the country.
Anyhow one thing we can be sure of David will have plenty to discourse every Sunday for sometime to come yet!
I'm starting to think that Miliband is actually mad, as in stark staring bonkers, not as an ad hominem but as a clinical reality.
The problem is there are a whole bunch of them driving this lunacy in his department.
This is the problem with thinking you are the Messiah when actually you are just a very naughty boy.
Thats why he employed Chris "Stark" !!
Stark, staring, bonkers... and touching his ear every time he is about to lie
https://m.youtube.com/watch?v=ViUjIpl-S8I
What a softball interview. He's essentially admitted we are moving to a grid with huge fixed costs because generation is nowhere near demand and we will no longer have electricity on demand, because we will need to be flexible to use electricity when the wind is blowing. I spotted the ear tugging too.
It did manage to reveal the poor quality of his thinking. That is probably more valuable at the end of the day than a hostile interview that merely results in stonewalling. The idea that the CEGB designed a cost effective grid 60 years ago and that therefore that should be the current aim too completely eludes him as he switches to net zero mode. Really think that the usual culprit think tanks have completely failed to realise that Albert is not going to be flexible, even if Angela Rippon whispers in his ear. (Radio ad for the uninitiated)
disappointed didn't see what mission control actual is!
I did. But that was near Houston at NASA.
WEF Agenda 2030 David. That's milipeed's endgame, he's just not telling us because he knows what would happen. Larry Fink, CEO of Blackrock, on the other hand had no qualms about spillin it recently. "He admits that the trillions of dollars being used for Data centers (I would call them Digital Gulags more like) and power grids will come from ordinary people's savings and pension funds. He said it would be mandatory!
The AI infrastructure will come from forcing people to invest in it."
Larry has been in No10 talking to our PM & Co so I have no doubt this is the case over here as it is in the US. It's all part of the
"great taking" that David Rodgers Webb talks about.
They're engineering a financial crash where people's accounts will be "borrowed" to save the system. In other words gone. Manditory usage for power grids and Data centers, as Fink puts it🤷♂️ No wonder Ed is quiet about it, yet he's railroading this power grid change over through at pace and nobody in government is doing anything real about it. They all say token pieces but that's all. They're all in it together. Even Ofgem, who's supposed to be protecting us, the public, is gleefully upping the costs against us. We're being battered into the ground and nobody is standing up for us. The North Sea Oil and Gas sector are being trashed on purpose. Our countryside is being destroyed by ugly solar parks. Our farmers are being penalised into bankruptcy. Our government doesn't work "for" us. There is no democracy, It's all just an illusion. The will of the people is to live a quiet life with reasonably cheap energy, food and water. Instead we have extortionate costs above what most can afford right across the whole spectrum. That "will" is not what the government is giving us. I think they have their own collective agenda!
Thank you for this David. I've been following and appreciating your work for some time and from it and the work of others, I've learned of the costs and illusions surrounding rebuildable wind and solar. This latest post depicts for me a horror story of the consequences of a wrong-headed policy pursued for years, creating a contractual and hardware web that will be hard to undo.
Further, legislating and reneging on contracts, while arguably necessary, doesn't in itself build a robust electricity system, which will take years. Even a new government embarking on policies which make sense and telling the truth, won't score many brownie points with an ill-informed electorate told yet again "it was them, it wasn't us guv", and there's no quick fix. Increasing costs and supply fragility are now baked in, as you show.
My only crumbs of comfort are that even 'Edcase Miliband hasn't gone full Germany and repudiated nuclear power, and remembering a Portuguese political poster showing recent European leaders who had fallen from grace, bearing the simple slogan "Mentem, perdem" - "They lie, they lose".
A footnote on the wider effects of transferring ROC and some other subsidy costs to taxation:
The result is that for 12 months measured inflation is lower than it would have been, which affects many inflation indexed items of government expenditure for welfare payments and index linked purchases and index linked gilts. It even lowers the indexation of energy subsidies. You can see why Reeves was happy to go along with the idea, and may be plotting further transfers to manipulate taxation figures. The bigger the subsidy financed by government spending the lower the temporary measured inflation.
Once the step change is out of the reckoning of annual inflation rate calculations there is a residual effect that the indexation applied to CFDs, FiTs and ROCs is potentially lower than it would otherwise have been, but the effect is much smaller than the one off from taking spending out of bills altogether. The flip side is that government spending to be financed is increased until lower indexation kicks in on government spending, and that will likely push financing costs higher unless tax revenues are raised. Interest on gilts may be higher, pushing up inflation via financing costs for homes and businesses.
The back end is also interesting: it leaves a poison pill to the next government which would see bills and inflation jolt upwards sharply as subsidies are returned to bills in 2029. Even if ROCs are abolished, the residual effect on inflation is small, stealing the thunder of doing so. It's clear the policy was designed by malevolent people.
We shouldn't forget the other effort to manipulate measured inflation. The OFGEM cap was based on 3.1MWh of electricity and 12MWh of gas until the end of last year. Those "Typical Domestic Consumption Values" were revised down at the beginning of the year to 2.7MWh and 11.5MWh, and further revised down for the Q3 cap to just 2.5MWh and 9.5MWh respectively. Your bill is magically smaller, courtesy OFGEM's wheeze. Remember too its former CEO and co-author of the Climate Change Act, Jonathan Brearley is now Miliband's PUS at DESNZ. Two revisions in six months smacks of desperation.
Arghh interesting hadn't considered that ruse from moving it into general taxation. So thats 6B per yr on borrowing is going to cost 4% interest on average for every year they run it and presumably goes up with indexing each year as well.
Hows all the industrial support schemes being funded?
Finally hadn't realised Brearly now the permanent under-secretary we really are done for.
Hi David, I’ve read some of your posts and I particularly liked your one on Hornsea 3. You do often complain about the price of energy in the UK but I have a question. Where do you think the UK should get its energy from? By all accounts off-shore wind is fairly effective and has decent capacity factors in certain areas. Solar is cheap to deploy but would be far better suited to rooftop installations in the UK. Nuclear is well nuclear and the UK seems incapable of building it even with the French doing most of the work. Gas receives a vast amount of focus but how much gas does the UK even have left in the North Sea? Surely not enough to justify installing terminals, pipelines and refining capacity to barely make a dent in supply and prices. Given all this, what do you actually think is the best energy sources for the UK? To me, offshore wind doesn’t seem too bad of a shout.
Offshore wind is intermittent, remote and expensive. It will always be a poor choice.
I think the future is coal and gas to nuclear. But as you say we need to fix regulation and technology choices.
We built the first commercial reactor at Calder Hall in the 1950's in 33 months.
With the will and right regulatory and incentive framework we can rebuild our nuclear capability.
I wrote about it here (also links to an article on how to bring costs down)
https://davidturver.substack.com/p/nuclear-power-everywhere-all-at-once?utm_source=share&utm_medium=android&r=nhgn1
Calder Hall was extraordinary never been done before anywhere in the world yet built in such a short time. Even the first wave of Magnox reactors took 5-6yrs to complete which were basically the same design although they let each construction group come up with their own iteration of the design which didn't help. The prototype AGR was completed quickly but upscaling it to production versions went badly and we all remember the Dungeness B saga. The irony was of course after teething troubles the AGRs went on to perform pretty well. Hinkley Point along with HS2 show just how far British engineering and construction has fallen from the heady days of the 1950s
Sizewell B was built for £6bn in 8 years in 1993.
Sizewell B Westinghouse reactor sold to EDF. Sizewell C to be European Pressurised Reactor estimated to cost £50 bn and be operating after possibly 13 years.
The Koreans built the first unit at Barakah so fast that the Emeratis hadn't managed to hire and train the operators to run it, so start up was delayed. About 4 years IIRC, which is what the best French builds were. $25bn for 5.6GW at Barakah. Cheaper still in Korea itself.
Let’s not get hung up on whether 80% to targeted 2030 95%, much hinges on grid connections from Norfolk. This is WIP and will happen, whether pushed into 2031 or 2030.. These massive infrastructure projects take years to implement and are now past the point of no return
They will for sure and there was plenty of wrangling back in the 50/60s in rural areas over the the buildout of the initial 275kV grid where the Energy Ministers of the day just overruled planning inspectors. So nimbyism isnt new. Mind you have to hand to the CEA and its forerunner the BEA for future proofing the 275kV tower design so it could be upgraded to 400 kV by just changing the insulator strings.
I have been talking to the team which has upgraded the local electricity main to half of our street. The contracts have been agreed and work is going ahead. The cost per house is around £4500. There are 30 million homes. This will be added to bills. One of the guys reckoned that at the rate that they were progressing they had enough work for 48 years! Is this incin the figures here
No. What you are describing is distribution costs. I haven't covered those.
135 bn is quite a lot.
Ovo just changed our smart meter because the old one wasn't working. It never did. It took 2 hours. £400? All on the bill.
unlikely to be needed at every street as the one thing our forefathers got right back in the 50s was to over provision the distribution system particularly in suburban areas.
I'll have to see if I can find the WPD spec for street cabling. It started at 0.5kW per 3 bedroom home with gas supply for heat and cooking, adding on extra for things like electric showers, stoves etc., perhaps 1kW for a 5 bed. I guess they now have to add 7kW for EV charging. There was a lump overhead per circuit (about 25 homes per phase and cable to the local transformer), with the design relying on peak demand being intermittent or of too short duration to overheat the cables and transformer.
Waiting for them to establish rules that you can only have a cold shower while charging your EV! Flexible demand, Albert!