From Climate Scepticism

By Jit

… and the song remains the same

Yesterday came news that the energy price cap was going to rise by a hundred and fifty quid, or ten percent. Several outlets linked this to the earlier decision by teh Chancellor to remove the pensioners’ winter fuel allowance of £300. Put together, pensioners are looking at a rise of £450. But wait! They use more energy for heating than young folk, being stuck at home more, etc; so the total for them could be +£500. Still, at least they have the option to get on a heated bus for naught, and drive in circles.

It was against this background that I turned on BBC Radio 4’s PM yesterday. The price cap was centre stage, and the first interview was with Emma Pinchbeck, the head of Energy UK and rumoured to be the next chief of the National Destruction Committee.

The interview went on a bit, so I am not going to transcribe it here. You can listen to it at this link. The whole feature runs from 5 minutes in to 14 minutes in.

The set up was Ed Miliband blaming wholesale gas prices for the change, and pretending to commiserate with his hard-up subjects.

“It’s a direct result of our country’s exposure to international gas markets that are controlled by dictators.”

So said Ed. I think he was either referring to Norway or the USA. He went on to blame the last (he meant previous) government for this “legacy.” Then he paraded his carnival of delusions re: self-generated energy, clean, green, cheap, reliable, secure, something like that.

Delusional, and transparently so. Although not to the taxpayer-funded BBC. The laptop and latte class mostly believe in this nonsense. Well, you get what you vote for, and we are getting what we voted for. Good and hard as Mencken would say.

To the BBC’s credit, it then cuts to a couple of vox pops of people unhappy with the change.

Then comes Emma Pinchbeck. The opening question: what is behind the price rise?

Her answer: the UK’s reliance on imported gas, which means of course we need more domestically-produced gas.

[I’m sorry. I made the second part up. Of course she didn’t prescribe more domestic production, nor did she ever say the F word (frack).]

Next the BBC, missing the obvious, wonders whether profiteering might be to blame. No, says Emma. Energy retailers make no money. But the evil oil and gas companies! They do quite well when the price of hydrocarbons is high. [I paraphrase slightly.] Energy UK supports windfall levies to deter investment in new production – I mean to prevent producers from profiting in a crisis. She goes on to outline the protections available for those who are struggling with energy costs.

After a bit of waffle about customer service, we then get on to the “energy transition.” Here Emma has a good point. Things have to be fair and transparent. Customers want to know where their money is going re: the “transition.”

The following bit is loosely transcribed, capturing the essence, not the exactitude:

BBC: The government says that over time the energy transition will bring prices down. Is that correct?

Emma: They’re correct because the main pressure on energy bills is coming from the international gas market that we have very little ability to influence here. If you can’t reduce prices, you can do the next best thing, reduce your demand for gas, and renewables and insulation and other green technologies also help us reduce that gas demand. If the government can roll out more renewables, we will save money on our energy bills, and in fact delays to low-carbon policy were responsible for adding a couple of hundred quid to people’s bills during the crisis, because we were importing gas when we should have been generating from offshore [she might have said onshore; I can’t be bothered to wind it back to check] wind or living in homes that were more insulated and therefore burning less gas.

BBC: So how soon will we see the financial benefits of the shift to renewables?

Emma: It’s going to take time to build infrastructure. It does take time to build things and then it takes time for those benefits to come through.

Loose transcript ends.

People will need support for another couple of winters (implying that beyond that time we will have reached the sunlit uplands). What about standing charges? Should they be reduced? Well, says Emma, it’s complicated.

The BBC wants to know whether going for a decarbonated, I mean decarbonised, grid by 2030 rather than 2035 will mean higher bills?

Alas, Emma’s minions have not done the analysis on this yet, because the new government is so new. But in principle, the ambition by government might unlock more cheaper private capital. [“We’ve seen the opposite when governments are sceptical about the energy transition and Net Zero.”]

Which governments? Who knows? I would like to meet them, and shake their hands.

Lastly, the BBC asks Emma about the rumours re: her name being linked to the National Destruction Committee. She declines to confirm the rumours.

EDITORIAL

We have seen international gas markets blamed for our woes before. See When a Shortage Means You Have Too Much. That article is now almost three years old, and features a fresh-faced Kwasi Kwarteng [the then-Business Secretary] lauding the decision to shorten grid decarbonisation by 15 years from 2050 to 2035. Of course, our new democratically-elected government has idiotically reduced that to 2030. Remember guys! You get what you voted for. Good and hard, etc.

In that article, I noted that despite the international gas market, and despite the “fact” that the UK was unable to influence it, there were countries out there not in our trouble, with far lower gas prices than us. In particular, I noted that the US had gas that was far cheaper than the UK – the accompanying figure shows a five-fold difference.

I have just checked the current gas prices, and find the UK’s to be 88p/therm. The US’s is $2.02 for a million BTUs. The different units make comparisons a little harder to derive, but given that 1 mmBTU ~ 10 therms, and £1 ~ $1.32, you can conclude that UK gas is presently just under 6 times as expensive as US gas. Funnily enough, US gas is down 35% on the year, and UK gas is up 10%. No doubt this is because we are all slaves to the same international market, about which we can do nothing.

Next, I must point out to the BBC, and the expert in economy-scale decarbonisation, that our energy bills are not all electricity. The typical household uses more gas than electricity. Four times (ish) as much, according to Ofgem, in energy terms. Thus, unless we are forcibly switched to heat pumps, we are going to be slaves to this international market for decades. Except we are going to become more dependent on it, as we are driving out domestic production thanks to our stupid policies.

And this “cheaper” private capital? Does not the capital wish to make a profit? The present CfD system appears to offer the private capital a nice return… paid for by more expensive energy bills.

Finally, it is my duty to note that wherever we see greater penetration into the grid by renewables, we see increased domestic electricity bills. The free electricity, it turns out, is quite expensive.

As to Emma Pinchbeck, she seems like a good fit for the Climate Change Committee. I look forward to the announcement of her appointment.

MESSAGE ENDS.