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The Govt’s Fake Claims About Smart Energy Savings

April 21, 2017

By Paul Homewood

 

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https://www.thetimes.co.uk/article/revolution-heralds-change-in-balance-of-power-lz8xxz7rs

 

The article in The Times, Revolution heralds change in balance of power, that I mentioned today, contains this statement:

 

Last year the National Infrastructure Commission identified flexible demand as one of three innovations, alongside interconnectors and batteries, that could help to reduce the costs of Britain’s drive for green energy by up to £8 billion a year by 2030.

 

This claim has been quoted on many occasions in the last year, and dates back to this government press release from the National Infrastructure Commission on Smart Power:

 

The National Infrastructure Commission was asked to consider how the UK can better balance supply and demand, aiming towards an electricity market where prices are reflective of costs to the overall system.

The Commission’s central finding is that smart power – principally built around three innovations, interconnection, storage, and demand flexibility – could save consumers up to £8 billion a year by 2030, help the UK meet its 2050 carbon targets, and secure the UK’s energy supply for generations.

The report ‘Smart power’ makes practical recommendations to this end – not new subsidies or substantial public spending – but towards the creation of a level playing field and a better managed network.

https://www.gov.uk/government/publications/smart-power-a-national-infrastructure-commission-report

 

This statement by the NIC was based on Lord Adonis’ report “Smart Power”, which in turn relied on a 2015 analysis by Imperial College & NERA, Value of Flexibility in a Decarbonised Grid, commissioned by the CCC.

 

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CCC_Externalities_report_Imperial_Final_21Oct20151

 

 

Now you would be forgiven for thinking that we are going get £8bn a year in our pockets to spend on foreign holidays, wine and women!

But this is climate policy we are talking about, and for years the Government, Committee on Climate Change, National Grid and OFGEM have been conspiring to cover up the real cost of the Climate Change Act.

Far from saving consumers money, the most that all of this smart power (if it ever works) will do is make the frightening cost of decarbonisation slightly less than it might have been otherwise.

 

First, let’s look at the “up to £8bn a year” claim.

As we will see when we look at the detail, the cost analysis was calculated for two CO2 emissions scenarios, 50g/KWh and 100g/KWh. This came up with savings of £3bn to £3.8bn for 100g, and £7.1bn to £8.1bn for the 50g option.

So we can see straightaway that the £8bn claim is at the extreme end of the scale. But it gets worse.

As we all know, even the CCC admit that there will be massive costs involved in decarbonising electricity. These predominantly involve subsidies for low carbon energy and the cost of providing standby capacity. Analysis shows the annual cost by 2030, based on the CCC’s own modelling, will exceed £15bn.

But the CCC figures are all based around the 100g/KWh scenario. To achieve the 50g/KWh target, we would need  much more low carbon capacity, and therefore the subsidies would also be much greater.

So essentially we have the choice of being burnt or scalded. We can either pay out £15bn in subsidies, and get back £3bn from smart power. Or we can pay out much more in subsidies, in order to get back £8bn.

 

But the dishonesty does not stop there. Oh, no!

 

To understand this, let’s look at Imperial College’s Foreword:

 

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And the Executive Summary elaborates:

 

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In other words, the report accepts that these system integration costs of low carbon generation will be huge, and that they will escalate disproportionately as renewable generation increases.

But more importantly, the costs don’t only involve the commonly discussed ones of standby capacity.

They also include:

  • System balancing and
  • Reinforcement of transmission and distribution grids

 

Neither of these are included in the CCC’s budgeted costs in their Fifth Carbon Budget, which takes us through to 2030. When the cost of these items are included, the whole policy becomes even more unaffordable.

Put simply, the Government is claiming savings against additional costs it has not declared.

 

Figure E.2 gives some idea of where these supposed savings come from:

 

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Much of the supposed savings on the 100g scenario come from the need for less CCS, which we don’t need anyway, and and what they term D CAPEX. This latter actually refers to “distribution investment, which is driven by reinforcements triggered by increased reverse power flows in the UK distribution grid”.

It hardly needs to be said that none of these costs would arise if the Government was not bound by the Climate Change Act.

 

And if that was not bad enough, page 9 of the Imperial report tells us that the cost of smart meters and DSR are not even included in their analysis of “savings”.

The excuse is that smart meters are already being rolled out (even though there is no possible financial justification), and the cost of introducing DSR schemes is unknown!

 

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If a company came up with a prospectus like this, they would be had up for fraud, but somehow the climate establishment get away with it.

 

 

 

There is a bit more detail I would like to reveal, but I will save this for another post.

 

 

 

APPENDIX

 

Just for perspective, it is worth looking at what the study assumes as the 50 and 100g/KWh scenarios:

 

 

 

 

 

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10 Comments
  1. markl permalink
    April 21, 2017 11:20 pm

    More “wash, rinse, repeat” fake news hyping renewable energy savings. They must think the people are really stupid to keep this up. Meanwhile the people only have to watch their electricity bills as they continually climb to see the truth. This is why Trump, Brexit, and all the populist candidates are gaining traction. Next they’ll start telling the people that power outages are actually good for them because it will reduce the need for energy by getting people use to not having it.

  2. John F. Hultquist permalink
    April 22, 2017 2:55 am

    If elected and other government jobs did not pay so well, a once ethical person would not remain in the position of writing such stupendously stupid stuff.
    They have to be thinking of how to get their fair share of your tax money for personal gain.

  3. April 22, 2017 6:30 am

    Insanity rules, OK. How or why have we got into this mess, from which I see no way out? Any remotely sensible commentary on the mess is totally ignored, as we will no doubt find out when we get the government’s (civil servants’) responses to the consultation on ‘Building our Industrial Strategy’.

    Sometimes I am glad to be a baby-boomer.

    • Derek Buxton permalink
      April 22, 2017 9:34 am

      I fear we are governed by the least intelligent group of self seekers and crooks we have ever had. It is clearly a rationing of energy which cannot possibly be justified. How many deaths are going to be acceptable to these idiots? All in pursuit of a myth dreamed up by that most corrupt organisation in history, the UN.

    • Harry Passfield permalink
      April 22, 2017 1:43 pm

      I wonder how many Civil Servants think a battery is a power station. It might be why they think there are so many savings to be had.

  4. dennisambler permalink
    April 22, 2017 8:48 am

    All covered by “could” and “up to”……….

    Whilst not under the specific banner of the Imperial Grantham Institute, (Sir Brian Hoskins, IPCC), the ethos is there throughout Imperial College:

    http://www.imperial.ac.uk/environmental-policy

    https://www.imperial.ac.uk/environmental-policy/msc/msc-environmental-technology/options/environmental-economics-and-policy/

  5. April 22, 2017 8:50 am

    This is, of course, the age old marketing trick.
    If you buy my wonderful Climate Change Act at £15 Bn. you will save £8 Bn. to spend on something else. Wow!
    Unfortunately this trick works as seen in so many advertisements these days.
    Perhaps we should refer this report to the Advertising Standard Authority?

    Secondly: the third scenario is conveniently omitted; namely 340g/KWh. (? current level?).
    Here we would get a whopping £15 Bn saving!!
    Wow! – All that money just for doing nothing?

  6. Europeanonion permalink
    April 22, 2017 8:56 am

    I have two things to say about this, Oh and shame. Any country found to be using disinformation on this scale would be up in front of the UN. (No, perhaps not. That once august organisation is now but a pastiche. A forum where guilt trips are used by crafty regimes to shore-up their tyrannise and lack of purpose, a reference back to the Cargo Cult).

    We can only hope that with Brexit some of the more obscene right-on demands made by Europe will be binned. Today they are shouting about no coal day. So they would rather have no coal than keep on running atomic energy plant that is operating, flat out, well after the planned decommissioning dates. I feel that the disinformation is now getting so convoluted that it ignores facts because it is increasingly an argument between elements of the same conviction to the exception of alternatives.

    During the last war vast areas of Britain were covered in cardboard representations of fake materiel. We have a imaginative but impractical energy policy parked on our lawn and the great unwashed believe that to be a substantial and innovative scheme. The word complacency hardly seems to fit the bill anymore. We are reverse engineering some future age of vastly different technology and fixing it on the understanding of the world of the Dark Ages. What is happening makes the ‘Groundnut Scheme’ look like a qualified success.

  7. April 23, 2017 12:52 pm

    Reblogged this on ajmarciniak.

  8. Gamecock permalink
    April 24, 2017 9:25 pm

    It’s taken nearly 150 years, but government is killing central production of electricity. With all the benefits of scale it brings.

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