Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

UK's Green Energy And Nuclear Rout

Politics / Energy Resources Dec 16, 2012 - 11:33 AM GMT

By: Andrew_McKillop

Politics

GOUGE THE SHEEPLE
in Europe, among very strong national competition in clean energy price gouging, the U.K. government’s effort to expand renewable energy and nuclear power are now forecast as raising household electricity bills by 54% by 2020, according to Bloomberg New Energy Finance. In the UK case, as in France (but in few other countries) "renewable-based and low carbon electricity" also includes nuclear power. This is now an openly admitted high cost option, and the UK is so de-industrialized or uninterested in building nuclear plant that it cannot build reactors itself. As a direct result the UK government is locked into a process of promising France's government handout-dependent nuclear industry tariffs as high as 140 GBP (about $215) per 1000 kWh of power produced by French-built "new build" reactors in Britain. If these reactors are ever built in Britain.


In energy price terms this is equivalent to oil at around $325/barrel.

In France, even the ultimate high cost, white elephant EPR reactors of the Flamanville type are presently forecast by EDF and the French Cour des Comptes as producing electricity at about 80 EUR ($104) per 1000 kWh when Flamanville-3 comes into service "about 2015". Far away on the other side of the English Channel, however, French nuclear power is a luxury good. But "low carbon".

In the UK case as in other EU27 countries, the national "green energy programs", or REAPs are carefully not communicated by government as inevitably raising power prices. For the UK, the "UK mix" of nuclear and renewables will account for about 40% of the forecast 54% power price increase. The other three-fifths of the hike will be due to the closedown of the UK's ageing coal-fired power plants, the shift to wholesale-based power trading claimed as needed to integrate green/low carbon electricity, and the replacement, reinforcement and growth of power grids to handle increased amounts of green/low carbon power.

Able to cause legitimate fear of fuel poverty in UK households, especially lower income families, these present estimates of power price rises are only late-2012 forecasts for the year 2020. For the period 2005-2012, UK electricity bills rose by an average of 70%, due mainly to gas and coal price rises. Taking account of the extreme high cost of "new build nuclear", and extreme high cost of a national smart-and-super power grid, both of which are claimed as necessary for the UK, power price rises to 2020 may be far above 54%.

EXPENSIVE ENERGY AND "LOW INFLATION'
Prime minister David Cameron’s coalition government has trimmed subsidies for solar and wind power after a surge in installations, with an inevitable ripple effect in the renewable energy industry of closed plants, company shutdowns and layoffs. Official arguments are that "energy price inflation" has become so noticeable, to the voting public, that slashing subsidies to green energy and destroying jobs in the sector is now necessary. At the same time, the UK government claims Britain must relaunch its nuclear power plant fleet, using foreign suppliers, guaranteeing extreme high power prices.

The argument continues that due to green energy subsidies, utilities such as French GDF and Spanish Ibderrola-linked Scottish Southern SSE Plc, and Russian Gazprom-linked Centrica Plc, have lifted energy costs for UK consumers so high, that this threatens to curtail a very sluggish economic recovery. UK government claims for nuclear power, conversely, are that this low carbon power is "reasonable priced" despite all facts and figures to the contrary and despite ongoing negotiations with France's EDF and Areva on guaranteed extreme high power tariffs.

Behind the low carbon smokescreen, the UK policy shift to renewables, and back to nuclear power betrays the schizophrenia of deciders in the "old nuclear" OECD developed countries. This includes the US, but especially concerns European countries. Nuclear power was given years, or decades of benign neglect, while malignant neglect in the power sector has created a context where, according to German ulitility company RWE at least 40% of all coal-fired power plants in Europe, producing about 45% of Europe's total electric power supply must be replaced by 2030 or earlier. This is due to technological and industrial obsolescence, not "carbon correctness". Replacing them will be very expensive and the building work must start very soon, to avoid serial blackouts.

At the same time, the EU27 member state REAPs set targets for transforming the power generating mix to at least 20%, often 30% "renewable or low carbon" by 2020, largely at the expense of coal. Also due to government schizophrenia in Europe but not in the US, natural gas fired generation is considered firstly high carbon and polluting, and secondly high cost due to current gas import tariffs and the schizophrenic attitude to shale gas of several major European governments. This can be set as being prepared and happy to import shale gas from outside Europe in the form of overpriced LNG, but being unhappy about producing cheap shale gas at home.

Years of doing nothing in the electric power sector, followed by massive but contradictory programs to develop renewable energy, and nuclear power in the case of the UK, while preaching or enforcing energy saving and efficiency raising, with not-so-stealthy and ever rising state control of the energy sector, and the explosion of casino style energy trading produce worst-case results on the ground.  In the UK this also results in the present government stance that renewables and nuclear power are "the only possible choice". Ever rising power prices are the only possible result.

HIGH PRICED POWER
Observers already conclude that the only way UK households and businesses can mitigate the impact of higher electricity bills will be "by improving energy efficiency". In other words using less electricity. Even with this "carbon correct moderation", UK forecasters suggest that average UK two-person households will be paying about $1200 per year for electricity by 2020. Energy price inflation is alive and well - whatever happens to international energy commodity prices.

The move by Big Government in the UK to shift back to nuclear energy, under very close state control while also englobing, controlling and "restructuring" green energy can only generate massively high costs for final energy consumers and taxpayers. The reasons why UK governments before the present David Cameron administration first abandoned nuclear power on a de facto basis, without ever admitting it, were the extreme high costs of nuclear power and the existence of cheaper power generating alternatives, especially coal and gas.

Today, UK government has doggedly gone along with French nuclear price gouging because it claims that it is staying the course and continuing with the always-programmed but never achieved "rebirth of nuclear power" in the UK, which is saga dating back to the late 1970s. From the start of the UK nuclear power program in the mid 1950s, as in other countries using nuclear power, this was a government controlled, state dominated sector totally dependent on state financing. The flirt with green energy, then invasion by government of the green energy sector, and its present "restructuring" as a high-price power supplier under state control only dates from the 2000-2005 period.

Attempts at "privatizing nuclear" in the UK have been a long story of failure, serial bankruptcies and forced sale of assets at "penny on the dollar" prices. The result has been a massive break-up of the industry, explaining why the UK is now industrially incapable of building a nuclear power plant and must go cap in hand to the French, after trying a shortlist of other possible supplier countries. Current policy and action by the government of David Cameron threatens the same sorry final state for the UK renewable energy industry.

Proving the belated recognition of these clumsy endgame choices, the UK government has now moved to permit domestic shale gas exploration and development, while communicating the "consensus view" that shale gas, in the UK, will be unlikely to cause any major fall in gas prices relative to current extreme-high gas prices. For electricity produced from gas, therefore, prices will remain high. This conforms and complies with the higher policy goal - of deindustrialising the economy and pauperizing low income families, while preaching economic growth, human wellbeing and protection of the environment.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2012 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules