Friday, 1 April 2016

Hinkley Point: of big energy projects and big government

It seems that politicians love to 'think big':
Futures Forum: Lobbying: big business and big government in East Devon
Futures Forum: Crony capitalism and lemon socialism in East Devon........ The costs of "substantial growth and expanding business"

Although there are 'smaller' and perhaps more effective approaches, whether in East Devon...
Futures Forum: Redeveloping Exmouth >>> "All it needs is a light touch refurbishment."
Futures Forum: Redeveloping East Devon >>> the alternatives to a heavy-handed approach

... or beyond:
Futures Forum: Small government and big banks........ "Small is Powerful: Why the era of big business, big government and big culture is over"
Futures Forum: "Small plus small plus small equals big" >>> 'There is a blind spot about economic regeneration in most local authorities'
Futures Forum: Decentralized Manufacturing

The problem being, that if you 'thing big', you can also lose big:
Energy giant is facing £2bn rise in Hinkley project cost | | The Times & The Sunday Times Hinkley C just got even more expensive | East Devon Watch
And you might end up with a big problem too:
Port Talbot is a big problem. But so is Hinkley Point | UK news | The Guardian
Tata today, EDF tomorrow? | East Devon Watch

This is the latest from the New Economics Forum, which questions the orthodoxies which have led to the impasse over Hinkley Point:

Energy round-up: who’s to blame for Hinkley?

Photo credit:   deccgovuk

Last week the chief executive of French state-owned power company EDF appeared before UK MPs to defend the controversial Hinkley Point C nuclear reactor. The bizarre testimony induced thinly veiled ridicule from commentators because of his unshakable confidence in a decidedly shaky project.
But the UK government’s approach to economic policy is just as much to blame for this disaster, for two key reasons.
  1. Aversion to state expenditure and investment
In purely economic terms, it’s nonsense. The price we’ve promised to pay for Hinkley’s power until about 2060 will be way above that of any renewables for most of that period. And the guarantees we’ve given to basically bailout the developers if it all goes wrong mean we’re bearing much of the risk as well. The sensible, most efficient way to finance and manage the project’s risk would have been for the UK government to build it.
This false logic of the government’s austerity project means it’s OK to commit future tax- and bill-payers to paying off Hinkley, but not the (smaller) cost of interest on public debt.
  1. Big centralised solutions
The government prefers big, centrally-directed, silver-bullet solutions to problems, instead of more complex local ones.
Big decisions are too often taken in secrecy by technocrats with little accountability. People affected by change are too often not trusted to be a part of the solution. Central government grabs more power from local people and hands it over to corporations. Just look at the recent announcement to forcefully change schools into academies, and the probable overruling of local authority decisions on fracking.
Building things like Hinkley or other huge coal and gas stations might feel good, but they aren’t necessarily the most cost-effective solutions. Investing more in energy efficiency and demand reduction aren’t typical vote-winning policies, but they could save money and reduce the need for more generating capacity. The same applies in other policy areas – local preventative healthcare would be a cost-effective way to reduce the demands on our NHS, compared to simply building more hospitals.
What should be done?
There seems to be practically no one left who thinks Hinkley is a good idea. Newspaper columnists are falling over themselves to condemn the project. Only UK Chancellor George Osborne and EDF’s CEO are left defending it. I suspect they privately wish it would disappear as well, but they have to save face.
But saving face is not a sensible motivation for national energy policy, and there’s wide agreement that everyone would be better off if we can find a way out.
The important thing is that such a scenario absolutely must involve much greater investment in renewables, storage capacity and smart grid technology. Otherwise the gap could be filled by more polluting technologies, as happened when Germany shut down its nuclear reactors following the Fukushima disaster.

Don't miss these:

  • Two nuclear reactors with the same design as Hinkley Point C are running way over budget

In other news…

Scotland turns off its last coal plant
Scotland is one of the first countries to completely end coal-generated power, having shut down Longannet power station last week. This is a mixed blessing: environmentalists will celebrate the demise of an exceptionally polluting technology, but the government is still without a decent, alternative future plan for communities that still bear the scars of the coal industry’s decline. The divisive issue underlines the call by some unions for a planned transition away from fossil fuel, creating jobs in new industries.
Arctic sea ice is disappearing very quickly
Scientists are adopting an ever more alarmed tone to describe the ongoing trend in Arctic sea ice – ‘unusual’, ‘crazy’, ‘unprecedented’, ‘crisis’, ‘disturbing’. It’s particularly concerning since the melting itself can fuel further global warming. Just as each successive year seems to be breaking records for average global temperature, the record for lowest level of Arctic Sea ice has been broken two years in a row.
Linking weather to climate change
The science of ‘extreme event attribution’ took a step forward with a study published this week assessing the current state of the art. It examined the conditions under which we can reliably say that extreme weather events have been caused in part by climate change. Nick Butler in the FT predicts that advances in this science could lead to more public demand for action on climate change.
Brexit and gas
Amid a string of Cabinet interventions in the Brexit debate, Amber Rudd, the Energy Secretary, argued that we must stay in the EU for the sake of collective strength in the face of Russian attempts to use gas supplies as a political bargaining chip. While there is a nugget of truth in this argument, the Russian embassy  complained that the Energy Secretary was exaggerating the issue for political convenience.
Ironic divestment
John D. Rockefeller started a highly successful oil-producing business that culminated in the economic behemoth ExxonMobil. Some of that wealth was poured into a charitable foundation, The Rockefeller Family Fund (one of a number of Rockefeller funds), which has now turned on its ancestor by cutting financial ties through divestment and calling the company ‘morally reprehensible’.

Energy round-up: who’s to blame for Hinkley? | New Economics Foundation

No comments: