Richard North, 22/07/2013  
 

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Oh for the good old days when you could just do a "hit and run" – a straightforward summary of a press story, a few comments and additional links, and you were done. An hour tops and you had another blog post under your belt. Now, as the energy market gets more and more complex, just trying to stay on top is becoming a full time job, and it is almost a day's work just to make one post.

This is especially when one is confronted with green propaganda masquerading as news, the like of which graced the Independent this morning, telling readers that we are about to subsidise "dirty" coal.

Actually, this is picking up on the energy market reform, which is being brought in by the Energy Bill, and we are beginning to confront the practical implications of the Capacity Market (see page 15), which is now a central part of government policy, part of the Electricity Market Reforms.

These reforms are going to have a direct and very significant effect on the level of our energy bills and, in a grown-up world, we would have the media – and especially the national newspapers – explaining the implications.

But you will struggle to find any detail outside the specialist media, and then you would have to know what you are looking for – plus much of the comment hides behind the paywall. This government report report helps, but there is still a lot of reading to do. We are drowning in paper.

The most recent "hit" is in a DECC press release from last week, introducing the consultation on the "draft Electricity Market Reform Delivery Plan", another 78 pages for you to read. And if you missed it, don't worry, so did I – as did all of the popular media. And you won't learn much from the jargon-ridden specialist media either.

Nevertheless, I know enough to recognise in the foreword by Ed Davey, pure government spin, but you will have to work very hard to dissect the detail. The report, for instance, says that "Electricity Market Reform is expected to reduce annual household electricity bills by an average of £62 (9 percent) over the period 2016 to 2030 (real 2012 prices), relative to achieving the same level of decarbonisation using existing policy instruments".

Compare and contrast with the Register which says we'll be paying £3,250 extra for gas and 'leccy in coming years, but then that piece doesn't make any reference to the Capacity Markets, nor any of the recent developments - to say nothing of Mr Daley's wondrous savings. 

What the government actually means when it claims a "reduction" – I think - is that, relative to the huge increases that we might have expected, the Capacity Markets are reckoned to reduce the increase by £62. This is like waking up from an operation to hear the surgeon tell you he has amputated your leg, but managed to save the top two inches of your thigh.

So where does that put us with the Independent story? Well, the point seems to be that coal-fired power stations are going to be allowed to bid in the 2014 Capacity Market auction - an innovation that we are going to have to write about more.  Whether they succeed is anyone's guess, as they will be having to pay the carbon price floor, and other taxes, which will probably make them uncompetitive.

A far more interesting story is that all your small diesel generators (<2MW) that will go to making up your Virtual Power Plants (and thus put lucrative bids in for the Capacity Market) seem to be exempt from Climate Change Levy, the Carbon Price Floor and excise duty. If I have understood this correctly, this means that the "dirty diesel" needed to keep the wind back-up going, is getting huge tax-breaks, as well as the £1 billion-a-year subsidy just to be available.

You might think that the Independent could run that as a story – or any other newspaper – except that we must now reconcile ourselves to the fact that newspapers don't do news any more – only propaganda and entertainment. If you want to know what is going on these days, you have to do your own homework. 






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