The Cassandra Effect and Insulting Climate Sceptics

There are two articles published today that are related. Bishop Hill posts about the “reverse Cassandra effect” and Jo Nova comments on Matt Ridley’s article in today’s Times on THE SCEPTICS ARE RIGHT. DON’T SCAPEGOAT THEM.

Bishop Hill refers to a Wired article on the late Julian Simon published some years ago:-

Simon always found it somewhat peculiar that neither the Science piece nor his public wager with Ehrlich nor anything else that he did, said, or wrote seemed to make much of a dent on the world at large. For some reason he could never comprehend, people were inclined to believe the very worst about anything and everything; they were immune to contrary evidence just as if they’d been medically vaccinated against the force of fact. Furthermore, there seemed to be a bizarre reverse-Cassandra effect operating in the universe: whereas the mythical Cassandra spoke the awful truth and was not believed, these days “experts” spoke awful falsehoods, and they were believed. Repeatedly being wrong actually seemed to be an advantage, conferring some sort of puzzling magic glow upon the speaker.

I believe that the Cassandra effect is still working. What is relevant is how you view awful. Take a classic example of the Cassandra effect. Ignaz Semmelweis found that doctors washing their hands between examining each patient reduced mortality rates. The implied “awful” truth that every experienced hospital doctor in 1840s Vienna had to accept was that, due to their ignorance, they had killed people when they were in the business of saving lives.

But for environmentalists the “scientific truth” that the human race is destroying the planet confirms their beliefs. Politicians whose mission is to make a real difference to the world – an honourable motive – can now take part in saving the planet from an evil menace. Maybe not as spectacularly as James Bond, or Flash Gordon, but they can still expect to receive plaudits and a place in history. Or at least a pat on the back from green activists in Bali, Copenhagen, Cancun….

For those who believe materialism is ultimately depraved; or humankind is inherently sinful; or capitalism will collapse through its inherent contradictions; or the rich got where they are through trampling over those like themselves; – all can latch onto the cause as well. For all these people the awful truth for the world is not so awful for them.

This is why the Cassandra effect is still very much with us. The awful truth is that politicians now find themselves in the same position of those doctors in 1840s Vienna. When they thought they were saving the world, they are in fact harming the futures of their constituents. As Matt Ridley points out in the Times today of climate change:-

Sceptics say it is not happening fast enough to threaten more harm than the wasteful and regressive measures intended to combat it. So far they have been right.

My next article will show that even the most extreme climate change believers can postulate a big enough harm from climate change than the wasteful and regressive measures intended to combat it.

Kevin Marshall

Understanding the US EIAs Levilized Cost of Electric Generation figures

At Watts Up With That?, Willis Eschenbach has a post “The Levelized Cost of Electric Generation“. These are estimated figures by US Energy Information Agency (EIA) for the costs of power by fuel source, for plants with construction started now that would enter service in 2018. The full table from the EIA in $/MwH is reproduced as Table 1 below.

Willis makes the valid point that every unit of “non-dispatchable” power (i.e. renewables with no power on demand) capacity, there must be an equal amount of dispatchable power to back it up. He does not follow this up. Non-dispatchable power does not need to be fully-covered by the expensive high-efficiency fossil-fuelled power stations. The most extreme conditions of peak power demands but no wind can be met by diesel generators. These are relatively low capital cost, but with high unit costs of output. They still add to the costs of renewables, along with reducing the CO2 savings. In terms of the large scale fossil-fuelled power stations gas is clearly better than coal. Combined cycle gas has half the capital cost per unit as conventional coal so dropping the utilisation will have a much smaller impact on unit costs. Further it can be switched on or off much quicker than conventional coal. Combined the actual additional cost of renewables is lower than he implies.

As I have been looking into the subsidies that renewables receive in the UK, I would like to observations. To understand these comments in the context of Willis Eschenbach’s post please note:-

  • In the UK, all generated electricity is paid the wholesale price (approx $0.09 kwh at present).
  • In addition renewables receive renewables obligation credits or ROCs. Biomass (wood pellets usually imported from USA) and onshore wind receive 1 ROC per megawatt hour. Offshore wind receives 2 ROCs. With a ROC worth $0.07 kwh (£42.02 MwH), onshore wind and biomass receives $0.16 kwh and offshore wind $0.23 kwh.
  • Currency conversion is at £1.00 = £1.66. Willis uses kilowatt hours for his simplified summary, whereas as the EIA uses megawatt hours.

Revenue is somewhat different to the costs, but there are a few observations possible.

  1. Capacity utilisation for onshore wind is assumed at 34% and 37% for offshore. For the UK, actual average utilisation as 26% for onshore and 35% for offshore. On that basis, US costs for onshore wind would rise from $0.087 to $0.117 kwh. Here are the figures from the most recent four available years.

  2. Biomass in the UK consists of burning non-fossil fuels in existing coal-fired power stations. It is more expensive than coal because (a) fuel cost per tonne is more than coal and (b) output per tonne is slightly less than coal. I would want to know why the capital cost per kwh is 20% lower and why the variable costs are just 45% higher. On fuel costs alone the 0.2 ROCs per Mwh would be more than generous for biomass. Based on figures from April to August 2013, the full year subsidy saving of this change would be in the order of £300m or $500m per annum.
  3. The transmission investment is vastly understated. Like in the UK, the cost of transmission for a power station investor is likely in connecting the power station to the nearest point on the national grid, regardless of the capacity of the line. To obtain 34% efficiency, wind turbines need to be placed in highly exposed areas, such as hill-tops. Population centres, and established grid networks, tend to be on the plains, or in sheltered valleys. In the UK, the best locations for wind turbines are in the far North of Scotland. To effectively connect this to main grid means upgrading about 400 miles of transmission lines to enable around 5-10GW of power at peak generation. This capital cost could be as much as the wind turbines themselves. Fossil-fuelled power stations tend to be located near existing power stations. These in turn are near to the existing grid infrastructure. The upshot is that wind turbines have much higher transmission costs than fossil-fuelled power stations. The difference could be a number of cents per kilowatt hour.

Kevin Marshall

The Nub of the Climate Change Policy Problem

Over at the Conversation, Climate Scientist Mike Hulme has a short article “Science can’t settle what should be done about climate change“. He argues the politics, not science, must take centre stage. He makes four points.

  • How do we value future public goods and natural assets relative to their value today?
  • Is “commodifying” nature appropriate?
  • The morality of technologies for mitigation or adaptation. For instance, fracking and GM crops.
  • The role of national governments against multilateral treaties or international governing bodies. Also the consequent impacts on democracy.

Christopher Wright (Professor of Organisation Studies at University of Sydney) commented

The one problem I have with the above analysis is that the focus on climate science has been a quite deliberate strategy by those seeking to deny or cast doubt on the urgency of the problem. This has meant the debate has continually stalled around issues of whether climate change is a problem or not. The science highlights that it is a very big problem indeed. However, while the science continues to be questioned, we will be unable to have the serious policy conversation about what we need to do to avoid catastrophic changes to our ecosystem.

My reply (with references) is

Science might point to a very big problem, but it cannot translate that into coherent policy terms. Nor can it weigh that against the effectiveness of policies, nor the harms policies can cause. Economics is central to asking those questions. The key figure that encapsulates the predicted harm of climate change is the social cost of carbon SCC, expressed in tonnes of CO2 equivalent. In 2006 Stern measured this as $85/tCO21. A year later the AR4 SPM2 stated a range of -$3 to $95/tCO2 from peer reviewed studies, with an average of $12/tCO2.

The key figure for the effectiveness to policy is the marginal abatement cost. Basically this refers to the marginal cost of preventing a tonne of CO2 equivalent entering the atmosphere. For policy to be of net benefit, MAC needs to be less than SCC.

$85 is about £52, and $12 about £7.50. In the UK onshore wind turbines receive a direct subsidy equivalent to £98/tCO23 saved, and offshore £195/tCO2. Then there are the extra costs of transmission lines, and other costs which could double those figures.

Then you need to recognize that a global problem will not be solved by unilateralist policies by a country with producing less than 2% of global emissions. So the UK is impoverished now by harmful, ineffectual, policies, and still future generations suffer >90% of the consequences of unmitigated climate change. Mike Hulme’s four points above are in addition to this, weighing further against mitigation policy.

Notes

  1. The Stern review noted on pages xvi-xvii

    Preliminary calculations adopting the approach to valuation taken in this Review suggest that the social cost of carbon today, is of the order of $85 per tonne of CO2……. This number is well above marginal abatement costs in many sectors.

  2. The UNIPCC AR4 Summary for Policymakers in 2007 stated on page 22.

    Peer-reviewed estimates of the social cost of carbon in 2005 average US$12 per tonne of CO2, but the range from 100 estimates is large (-$3 to $95/tCO2).

  3. The renewables obligation credit (ROC) buy-out price is currently £42.02 per megawatt hour, as determined by OFGEM. The British renewable industry lobby group renewableUK, uses DECC’s carbon saving figure of 430g/kWh, as stated in an appendix to the Energy Efficiency Innovation Review in 2005. £42.02/.430 = £97.67. Onshore wind turbines get one ROC per MWh generated, offshore wind turbines 2 ROCs.

Kevin Marshall

Jo Nova discusses Mike Hulme’s four points here.

Observations on the Shollenberger Survey

In late 2012 there was a lot of adverse comment about the paper Lewandowsky, Oberauer & Gignac – NASA faked the moon landing:Therefore (Climate) Science is a Hoax: An Anatomy of the Motivated Rejection of Science (in press, Psychological Science). I did my own quick analysis using pivot tables, which was referred to elsewhere.

Last week, Brandon Shollenberger produced a shorter survey that, though tongue in cheek, aimed to replicate the findings of the Lewandowsky et al. He wrote

As you’re aware, Stephan Lewandowsky has written several papers claiming to have found certain traits amongst global warming skeptics. I believe his methodology is fundamentally flawed. I believe a flaw present in his methodology is also present in the work of many others.

To test my belief, I’m seeking participants for a short survey (13 questions). The questions are designed specifically to test a key aspect of Lewandowsky’s methodology. The results won’t be published in any scientific journal, but I’ll do a writeup on them once the survey is closed and share it online.

This was published at the blogs Wattsupwiththat, JoanneNova and BishopHill blogs. The poll is still available to view.

A few hours ago Jo Nova published Shollenberger’s initial findings, as “Warmists Are Never Wrong, Even When Supporting Genocide“. Using the same methodology that Lewandowsky et al (LOG12) “demonstrated” that those who reject the climate religion have a propensity to believe in cranky conspiracy theories, Shollenberger showed that believers in catastrophic global warming have a propensity to believe in genocide, paedophilia and human trafficking. Like for the LOG12, I have run the data through Excel pivot tables to reveal that Shollenberger was successful in undermining LOG12.

Categorizing the responses

For the LOG12 I split the respondents according to the average response to the four LOG12 “climate science” questions.


Similarly, with the Shollenberger survey, I have categorised the respondents according to response to the three questions on global warming. This time I weighted the responses in relation to belief in catastrophic anthropogenic global warming. First I changed the 1 to 5 response to a 0 to 4 response. The weightings were then 1 for Ques 1, 2 for Ques 2 and 4 for Ques 3. By dividing by the maximum score of 28, I obtained a “believer” percentage. Questions are below.

Also, I have looked at the percentage with the outlier scores, along with the average scores.


Preliminary observations

Some brief preliminary observations that stand out from the pivot tables. These are the green bordered summaries below and the responses to the individual questions at the foot.

  1. Compared with LOG12, Schollenberger gets three times the responses and takes a week rather than 18 months to publish the results.
  2. Schollenberger shows the result of only publishing a survey on only one side of the global warming divide, whilst trying to analyse the other side. The vast majority of responses are from people you are not targeting.
  3. The three times response, in a much shorter time frame indicates that sceptics are far more interested in the subject of global warming than the believers.
  4. Proportionately, more far sceptics seem to visit “believer” blogs than “believers” visit sceptic blogs. This should not be controversial. Sceptics look to understand the view they oppose, whilst “believers” look for confirmation. Climate change is no different from many other areas, including many of the softer sciences.
  5. Schollenberger, in his three questions on belief in global warming captures a broader possible range of beliefs in the climate science, than LOG12 does in four questions. In particular it is possible to distinguish between those who believe humans have caused most of the recent warming, but it is fairly trivial, and those who (like the MSM) believes we are all doomed unless we abandon out cars for bicycles and go to 2W lightbulbs everywhere. The LOG12 questions were designed to polarize views into “pro-science” and “deniers”. Schollenberger thus achieves very quickly what millions of dollars spent on opinion surveys conceals. The extreme alarmism that justifies policy is not held by the majority who believe that anthropogenic global warming is an issue.
  6. Both surveys were uncontrolled for “scam” responses. That is for those on one side to be able to mischievously post as an opponent, but with reprehensible views. The Schollenberger survey had more, and (to a lesser extent) a higher proportion of scam responses. Given the knowledge of LOG12, this is not surprising. But, given the proportions of non-scam responses, “believers” seem to have a greater propensity to scam “sceptics” than the opposite.
  7. Thus Schollenberger can demonstrate that Lewandowsky’s conclusions are as much based on scam responses as his survey.



The Survey Questions


Number of Responses to questions 4 to 13, in relation to CAGW score.


Kevin Marshall

The Irony of Ironbridge

The traditional way of producing iron was in small batches, using charcoal as the fuel. In 1709 Abraham Darby I built the world’s first blast furnace fuelled by coke. This enabled a continuous process to be used for production, enabling much greater quantities to be produced. What is more, charcoal is derived from wood, which was by then becoming increasingly scarce in Britain. Coke comes from coal, of which there were increasingly plentiful supplies. The unit costs of iron production therefore came down for the reasons of increased productivity and a cheaper, more plentiful, energy source. Without this switch the industrial revolution would not have started. The reason for building the blast furnace in Coalbrookdale should be obvious.

Darby’s grandson Abraham Darby III used this cheap iron to build, in 1779 the world’s first bridge from fabricated from cast iron. The village by this bridge and the gorge encompassing Coalbrookdale are now known as Ironbridge. It is now a major tourist attraction.

There has been a coal-fired power station in the Ironbridge Gorge since the 1930s. The directions from the site of the original blast furnace are below. The original 200MW facility was replaced in 1969 and 1970 by the twin 500MW facilities seen today. In 2012, one of those facilities was modified to accept wooden pellets that are imported from North America. The will generate up to £100,000,000 a year in renewables obligation certificates, increasing the cost of the electricity to consumers by 75%.

Globally forests are still declining. Wood is a scarce resource and expensive, with the price only likely to increase. Known coal reserves are sufficient to supply current global requirements for centuries, is cheap and the price is falling. Ironbridge can now claim to both a birthplace of the industrial revolution, and a symbol of sending the benefits of the industrial revolution into reverse. Spot the irony.

Is there a latent problem with wind turbines?

In a posting “Accelerated Depreciation” Bishop hill says

This article at a blog called Billo The Wisp is important if true. Turbine gearbox failures apparently happen typically after 5-7 years rather than the 20 years that we are normally led to believe wind turbines last for. Moreover, their failure can be completely catastrophic, leading to the destruction of the whole turbine.

My comment is quite sceptical.

I do not think that the thrust of this post is correct – that there is a problem that gearboxes in that they will only last for 5-7 years, that has been around for 25 years and that it was so serious that the US government set up a special department to investigate in 2007. Despite all of this, there is still a largely hidden and hugely costly problem of which people are not aware. Having been in the engineering industry for a number of years I would consider the following if involved in the decision to set up a wind farm.

First, wind turbines are electro-mechanical devices. They need servicing and occasional overhauling. Ease of maintenance is important, including the replacement of major components. I would want a recommended maintenance program, along with projected parts costs, required maintenance equipment (e.g. a crane) and standard labour hours.

Second, I would want data on long-term historical performance, service and maintenance costs of each manufacturer’s equipment.

Third, if there was a large wind farm, I would include some spare parts, including major components that should last the life of the equipment. This may include have complete sets of spare parts that can be quickly swapped out – so major maintenance can be done in a workshop and not 200 metres in the air.

Fourth, I would cross-check this against industry journals. Wind turbine manufacture is a huge business with a number of manufacturers selling into a large number of countries. Issues are discussed, like in any industry.

The largest wind farms cost hundreds of millions. Businesses are not naïve. Even with large potential profits, there is always more money to be made through proper investment appraisal and protecting that investment through a thorough maintenance programme. If a major component of a wind turbine only lasted a third the length of time of the main structure, then replacing that component would become a part of the life-time costs. There would be huge incentives to minimize those costs through better design, such as ease of replacement of bearings. The only issue is that the real costs of wind turbines will never come down to a level where subsidies are no longer required.

NB a source of the reliability claims is this June 2010 article, which is now 3.5 years old.

The rising costs of the Renewables Obligation Certificate Scheme

Summary

The cost of Renewables Obligation Certificate scheme ROCs to covert the UK to renewable electricity has more than doubled in less than four years. Whilst the majority of this increase is down to volume increases and inflation, a significant part is down to switching to higher levels of subsidy, particularly for offshore wind farms. This means that the unit cost of electricity from renewables is rising. One wonders if the DECC has factored this into its projected costs of energy to households.

Main Analysis

In my previous posting “Labour’s Hypocrisy on Rising Energy Bills”, I identified that the rise in energy bills over the last few years was mostly due to rising costs external to the energy companies. I only briefly alluded to the causes. This posting looks at the growth in “Renewables Obligation Certificates” (ROCs), the major vehicle to encourage the energy industry to switch to renewables from fossil fuels. Working out the proportion of the “other cost” increases is difficult to work out, but it could be up to a half.

On the 19th December, the Department for Environment, Energy and Climate Change (DECC), issued a great rash of postings to its website. Amongst these of particular interest was “Energy trends section 6: renewables“. This contains a spreadsheet of interest – ET 6.3 “Renewables obligation: certificates and generation”. This gives monthly data covering the period January 2010 to August 2013.

Not all renewables are equal. Different types of renewables attract different ROC rates per MWh (megawatt-hour) of electricity generated. These vary from 0.25 to 5.00. In practice more than 99% of renewable power generated falls into four bands – 0.50, 1.00, 1.50 and 2.00.

Charting the electricity generated in megawatt hours for the period gives the following graph:-


In less than 4 years there has been a spectacular growth in total electricity generated from renewables, from around 1.5m MWh per month in early 2010, to over 3.0m in early 2013. But there has been even greater growth in the generation of renewables with 2.00 ROCs, and the disappearance of the 0.50 ROCs. This can be better seen by the proportions of generation in each of the ROC bands.


In early 2010, less than 5% of renewables generated qualified for 2 ROCs, whereas by 2013 over 20% did. To show the impact more clearly I have devised three indexes. These include all ROC bands for declarations on a monthly basis. (A very tiny number of schemes have annual declarations.)

  1. Renewable electricity generated qualifying for ROCs.
  2. Renewable Obligation Certificates issued.
  3. The buy-out value of the ROCs. This value is declared by the regulator OFGEM, and inflated each year by the Retail Prices Index. The 2013/14 declaration is here, with all the previous rates.

The index is for 12 month periods, with the period January to December 2010 set to 100.


From the period Jan-Dec 2010 to the period Sept 2012-Aug 2013, volume of renewables electricity generated increased by 80%; volume of ROCs by 116%; and value of ROCs by 140%.

There is a rapid growth in renewables, but the real cost per unit generated is increasing more rapidly. In buy-out values terms, the ROCs issued were worth £862m for Jan-Dec 2010 and £2,069m for Sept 2012-Aug 2013. But what type of renewable is responsible for this real cost per unit increase?

The Growth in Wind Turbine generation and ROCs

A major component of renewables has always been wind turbines, but the proportion is increasing. They are split between onshore and offshore. There are three graphs showing this increase.

  1. The proportion of renewables generated from Wind Turbines


    This shows that not only has the proportion of generation from wind turbines increased from around 40% to nearly 60%. More than 100% of the increased proportion is due to offshore wind turbines with 2.00 ROCs per MWh generated.

  2. Wind generated ROCs as a proportion of ROCs issued


    The share of total ROCS for wind turbines now accounts for over 60% of the total. Around 30% is from offshore wind turbines with 2.00 ROCs per MWh generated.

  3. Index of Changes in Renewables Obligation Credits for wind turbines.


From the period Jan-Dec 2010 to the period Sept 2012-Aug 2013, volume of renewables electricity generated increased by 134%; volume of ROCs by 177%; and value of ROCs by 209%. In buy-out values terms, the ROCs issued for wind turbines were worth £426m (49% of the total) for Jan-Dec 2010 and £1,315m (64% of the total) for Sept 2012-Aug 2013.

The true cost of offshore wind power

This analysis has solely concentrated on ET 6.3. The “Renewable electricity capacity and generation” (ET 6.1) file has some useful data on load factors. For wind turbines I have extracted the annual data.


Offshore wind turbines have around 35% higher load factors than onshore.

The vast majority of income for wind turbines is in two parts. There is the wholesale price at around £60 per MWh and the ROC income, which is £42 for onshore and £84 for offshore.

Per annum, with 35% more load, the offshore wind farm can expect about 90% more income per MWh of capacity than the onshore to cover capital and maintenance costs. It is even worse when compared with the gas-fired alternative. The only income for the generator is the £60 per MWh from selling wholesale, but they have the additional costs of at least £20 per MWh for fuel.

Biomass

An area not covered is the growth in the use of Biomass / other fuels at coal-fired power stations. This will be in a posting next year.

Questions on the subsidising of offshore wind turbines

  1. Given that prior to 2010 offshore wind farms were being commissioned with ROCs of 1.00 and 1.50, how much of this increased rate of 2.0 accommodates greater costs (more distant from the shore, and in deeper water) and how much gives greater profits?
  2. Given that a gas-fired power station can cover its operating and capital costs with less than £40 per MWh, should we be considering alternative, and less reliable, forms of electricity generation that seem to need up to four times the income to operate?
  3. Was any independent studies done of the costs of wind-generated power in setting the ROC rates, or was it just on the advice of the renewables industry and a DECC desperate to meet its carbon budget?
  4. Have the DECC factored in the need to give ever higher levels of subsidies to meet renewables targets?

Kevin Marshall

Ed Miliband fails to link to New Year Message

At 2.05pm on 30/12/13 I got a New Year message from Ed Milliband


Manic Beancounter,

Later today, my New Year’s message for 2014 will be released. I want you to see it first.

Across the country this year, people often asked me if I understand the severity of the cost-of-living crisis, and what a Labour government could do differently to tackle it. It’s a good and fair question.

Here’s the answer I’ve been giving to the members, supporters and voters who ask — and which I also want to share with you:


Watch my New Year’s message

We’ve achieved an amazing amount together over the last twelve months: we’ve built our campaign across the country and — because of the generosity of supporters like you — we now have an organiser lined up for each one of our key seats.

If we work hard, listen to people, and make our case right, this will be the last full year of this Tory-led government.

With my very best wishes for 2014; I know we’re going to achieve more great things together.

Ed


 

 
 

Problem is, when I click on this message I get

Oops! Google Chrome could not find a_ction.labour.org.uk

Did you mean: labour.org.uk

We all make mistakes, but Labour seem to be making a habit of it. On the flagship “Freeze that Bill” policy

  1. No link to the policy content on the Labour Party website.

Go to http://www.labour.org.uk/home and you will still find


This still takes me to this page.


There is still no way you can link to Ed’s Energy Plan, as announced on 29th November, from the Labour Party Website. For those interested it can be found here.

2. On the video there is still a faulty link. 

At 1.22 to 1.26 Labour put up a websitehttp://www.labour.org.uk/freezethatbill

    When it should be

        http://www.labour.org.uk/freeze-that-bill


3. On Ed’s message is a bogus link

At http://www.labour.org.uk/freezethatbill there is a link to freezethatbill.com. This actually links in to

Labour are meant to be the party of slick presentation and spin. Clearly they are missing Peter Mandelson and Alistair Campbell.

Kevin Marshall

Labour’s Hypocrisy on Rising Energy Bills

If you go to the Labour Party’s website there is an announcement.

Clicking down will take you to energy price calculator. I found out with Ed’s policy I could save £112 per year.

Two weeks after the announcement, still no links to the actual plan, but there is a video to watch.

Just one minute and twenty-six seconds for a distinguished actor to say the following:-

How do you feel when you see your energy bill sitting at the front door and you know that it is going to be even higher than the last one?

And how do you feel when you read in the newspaper that your energy providers’ profits are up yet again?

Millions of ordinary families are struggling to keep up with bills. Bills that are rising faster than wages.

Since David Cameron became Prime Minister, he’s allowed gas and electricity to rise by an average of £300 a year and sat by as energy companies make record profits. Under this Government a privileged few come before hard-families. Ed Miliband and Labour are going to change that. Ed’s energy plan will mean a tough new regulator with the power to challenge the energy companies and keep prices down. Under Ed’s energy plan gas and electricity bills will be frozen. That’s right frozen. Under the Tories you have overpaid. Labour will fight the cost of living crisis and build an economy that works for working people.

The inference is that your bills are rising solely due to the ever-increasing profits of the energy companies. Further the nasty Tories had it in their power stop it. Along will come Labour and stop all that.

I have looked up the figures. Since the 2009, the energy regulator OFGEM has required the six big energy companies to produce financial data by five segments. That is for electricity generation, along with supply data for electricity and gas, each split between domestic and non-domestic supply. I have analysed all four years of data for the six companies, using links provided by OFGEM. There is, of course, no financial data available for 2013 as the year has yet to finish.

If Labour are correct in their inference of price rises being due to increasing profits then profits will be increasing as a percentage of sales. With the typical household’s bill rising by over 20% between May 2010 and the end of 2012, profits as a percentage of revenue would be rising sharply. The following shows the percentage components of revenue.

The narrow band in purple for profit increased from 1.8% of sales to 3.8%. It is not increasing profits that have caused the price rises. The reason for doubling is because, in total, the six major companies lost money on gas supply in 2009. Nor is there a sharp difference between domestic and non-domestic supply margins. You could claim that the energy companies are making more money on generation instead. They are not, as the full margins, by segment, by year, show below.

The total sales breakdown enhances the picture.

Although total are broadly the same in 2009 and 2012, revenue from domestic customers was 13%, whilst that from non-domestic customers was 17% lower. The reason Labour have a higher figure is they rely on OFGEM’s notional average user, who uses the same amount of energy year-in-year out. Real hard-working families have responded to rising prices by reducing consumption.

What is most important is why unit costs have risen. Labour are correct when they say it is not due to the wholesale price of energy. As already demonstrated, they are incorrect to say it is due to rising profits. The real reason is “other costs”. These rose from 32% to 40% of revenue in just four years. That is from £14.1bn to £17.7bn in just four years or a 25% increase. On declining volumes this is more significant for consumers.

These figures are corroborated by a breakdown by my energy supplier, Scottish Power.

With VAT at 5%, the Scottish power says that its charges to the domestic customer in 2013 are made up of 53% for fuel and 43% for other charges. This compares to the industry average in 2012 of 55.7% for fuel and 40.6% for “other costs” plus “amortization”. The higher proportion of other charges to domestic customers is to be expected, as small domestic customers have lower costs. The relevant domestic figures from the big six are 51.8% for fuel and 44.0% for other charges. Given the obviously rounded Scottish Power figures, they are remarkably close to the industry average.

The supply market is fiercely competitive, hence the real reason for the ability of customers to save money by switching suppliers. Therefore it is doubtful that internal costs will have risen. What has risen is the delivery of the energy to the home (National Grid, local delivery, and cost of meters), along with green levies. So it is likely over 75% of the price increases to the customer are due to factors outside of the energy supplier’s control.

Where does responsibility lie for the above-inflation price increases?

The dash for “clean” energy to save the planet is enshrined in the Climate Change Act 2008. It was pushed through the House of Commons when Ed Miliband was Environment Secretary. This accelerated the growth in green levies and the requirement for a more extensive grid network to carry the wind-generated electricity from remote turbines. Delve further in the profits on electricity generation and you will find that fossil fuel generation has margins of 10%. A price freeze will eliminate the supply profits in six months, and the generation profits in two years. The is a sure way to get a near monopoly in gas supply, and cause the rapid shut-down of three-quarters of generating capacity. It is an act of gross hypocrisy by Ed Miliband to threaten to destroy a competitive industry to remedy a problem that he is responsible for.

 

NB First time comments are moderated. The comments can be used as a point of contact.

Kevin Marshall

Tyndall Centre’s New Totalitarianism

Updated with more examples 14/12/13 11am

The Tyndall Centre for Climate Change Research (HQ at the University of East Anglia, with branch office just down road from me at Manchester University) held The Radical Emission Reduction Conference: 10-11 December 2013 at the offices of the Royal Society. Joanne Nova reporting on the conference quoted the following:-

Today, in 2013, we face an unavoidably radical future. We either continue with rising emissions and reap the radical repercussions of severe climate change, or we acknowledge that we have a choice and pursue radical emission reductions: No longer is there a non- radical option.

My first reaction was

These people have not discovered logic or the real world outside of their groups. For instance

1. Where are the robust, unambiguous, forecasts of “severe climate change” impacts? Lacking this, the “do-nothing” scenario could be an alternative.

2. Radical emission reduction policies may not work. Useless policies could end up causing mass impoverishment, leaving future generations much less able to cope with the coming climate apocalypse.

3. Radical emission reduction policies may be both necessary and work in theory, but will never be enacted because “radical” activists have not learnt the art of persuasion and appreciating that other points of view are possible.

Following an initial reading of the conference abstracts, this initial reaction was somewhat understated. The 1.01MB file is at radicalplanabstracts.pdf. Some notes.

The Philosopher’s case for Totalitarianism

On pages 15 to 17 is ‘Responsibility for radical change in emission of greenhouse gases’

Page 16

Generally it is acceptable to frame scenarios of climate change in terms of cost-efficiency, percentages of emission reduction or the target atmospheric CO2 concentration. Yet we develop the argument that predefining the outcome of any change limits the possible processes leading to this change. In fact, when we already know the necessary outcome, the change that is necessary cannot be considered radical at all.

Page 17

For the radical change in greenhouse gas emissions the responsibility towards the radicalness of change means that those involved in the climate change negotiations and policy-making need to let go of their preconceived notions of climate, change, and general structure of cause and effect, science and human life.

And in conclusion

We argue that one cannot desire radical change without acknowledging that we (individuals and institutions) may be swept off our feet, that we may lose influence and control. We need to accept that modifications are not going to bring about radical emission reductions. What we need is radical change, including radical change in our own backyard, our understanding of leadership and in our own epistemic notions of what change means.

All that matters is saving the planet. It is not about saving the planet for future generations, as we humans do not matter. It is not about the climate models being accurate – as they are supposed to about modelling cause (increasing greenhouse gas levels) with the effect (catastrophic anthropogenic global warming). And it is not science.

The Economist’s case for Totalitarianism

On pages 7 to 9 is ‘Demand-side regulation in the policy mix to achieve radical CO2 reductions: modelling global decarbonisation with E3MG

Page 7

Radical reductions in CO2 emissions from reductions in consumption of fossil fuels across the economy could be modelled as coming from changes in life-styles, regulations or prices or a mix of all three. The main demand-side sources arise from the use of fossil fuels in buildings, transport and industry, and indirectly, via the use of electricity generated from fossil fuels. We assume that the power sector becomes decarbonised via a mix of emission trading schemes and regulations. We then consider the implications of a rapid reduction in demand-side fossil-fuel use coming from higher energy prices and regulation of equipment standards and energy efficiency.

To achieve the plan, all the advanced countries (and some not-so-advanced like Belarus) will introduce emissions trading schemes ETS with low tariffs in 2015, sharply escalating after 2020. Emerging economies (e.g. China, Brazil & Mexico) will introduce schemes in 2020 at lower rates. By 2030, in conjunction with tougher economic regulations, coal-fired power stations will be phased out.

With respect to the regulations

These effects are then strengthened from 2020 onwards, with the energy saving, the associated investment and increase in prices all rising by some 17%pa. By 2030 the strength of the regulations is about 5 times that assumed by the IEA. The scale of this increase gives an indication of just how strong regulations have to become.

Italics mine. The plan will only work if it far, far tougher than anything yet on the table. At least the models predict that there will be a small net benefit.

The Increase in investment, including indirect effects, is about 4% above the reference scenario by 2030. Combined with the effects of revenue recycling and the lower growth in world oil prices, it generates more output and employment, raising both growth rates by some 0.2 percentage points each year over the decade.

So in China, which has had near 10% annual growth for over two decades based on cheap coal-based energy, can switch to much more expensive and less reliable “clean” energy sources, with a small net benefit. Hmmm.

People will change their lifestyles if they are unable to afford to do otherwise. Businesses who do not respond will be expropriated for the common good, and their denialist bosses sent to be re-educated in labour camps. The plan will work, and the economic models are infallible. Any deviation from the plan will be therefore be due to economic sabotage.

The Psychologist sees a problem – but does not want to say so

On pages 12 to 13 is ‘Psychology of human acceptance and engagement

A short abstract, quoted in full

The need to voluntarily write off fossil fuel reserves is now clear. The continuing exponential nature of CO2 emissions tells us that none of the talk and action to date on climate change has produced a detectable dent in the trajectory. It also strongly suggests that since efficiency and innovation have gone hand in hand with emissions growth, they are, in themselves, more likely to be integral to the dynamics of growth than to enable mitigation. The exponentiality further suggests that a feedback mechanism needs breaking at the global system level; there is plenty of evidence that local reductions are absorbed elsewhere in the system, like a squeezed balloon.

(Especially in the absence of very widespread CCS), a global constraint on the extraction of fuel is a ‘must have’. All actions can therefore be viewed in terms of their contribution to the conditions under which the global socio- economic system might shift to one in which humans have voluntarily agreed to leave fuel in the ground. Such conditions are more than the cocktail of science, politics, technology and economics to which most climate change analysis, including the above summary, is constrained. The most critically lacking element is the psychology of human acceptance of and engagement with a problem such as climate change, characterised by its abstraction, uncertainty and inescapably global systemic nature. We need to view this as an unsolved mystery, the most ignored part of the puzzle and critical to bridging the void between rationale analysis and policy.

My interpretation is that human beings do not want to sacrifice their immediate interests to some ill-defined and distant goals spoken by some “Johnny foreigners” who do not share their values. Further, leaders of energy-producing authoritarian countries will not leave these fossil fuels in the ground when they know that to do so would lead to economic collapse, swiftly followed by a violent overthrow of their regimes and their possible deaths.

The Social Scientist’s case for a Dictatorship

On pages 23 to 25 is ‘Social science prospects for radical change’

The only acknowledged truth is from the UNIPCC and the Stern Review. No acknowledgement that contrary perspectives are possible.

Social psychologists, among others, have drawn attention to the potential for climate mitigation which could be unlocked through the application of insights into the affective, cognitive, value-based, and social and broader contextual determinants of people’s actions.

Social Scientists must change the way we think.

Despite the acknowledged need to understand and influence the role of the individual in contributing to climate change, the disparity between what might be and what has been achieved has become discomfiting.

 

They are not getting the message across, and they cannot understand why.

 

With the exception of the establishment of a small number of iconic behaviours such as recycling, it has proved extremely difficult to bring about meaningful transformations in personal emissions at either the individual or societal level. On the basis of a number of reviews, it would seem that whilst some change is achievable, there are profound limits to what can be accomplished using current, conventional approaches.

 

Translation – we need more power.

 

Current methods of persuasion have failed. We need something different.

 

First up is control of the press, followed by enforced re-education have been the historical approaches.

 

There has been an expectation that change be confined to small-scale and undemanding changes in behaviour (for example, switching off unused appliances); a concomitant neglect of highly impactful activities because of the perceived political infeasibility of doing so (for example, levels of consumption);

 

Translation – we need more power.

 

… a reluctance on the part of social scientists to take strong normative positions (specifically, to see themselves as advocates for change rather than disinterested theoreticians);

 

Translation – we need stronger and more dogmatic beliefs in the cause.

 

…. and a lack of integration – and at times outright hostility – between different disciplinary traditions (for example between behavioural science and social practice based approaches).

 

Translation – we need only achieve this power if we unite into a unified force.

 

In the first instance, we suggest that a radical social science of climate change mitigation would set out deliberately to enter territory which is complex and often seemingly intractable – but where personal emissions are significant.

 

Basically ban the use of cars and forget about foreign holidays in aeroplanes. Persuade people to do without the elements of consumerist society, such as designer clothes, televisions, computers, washing machines, Christmas etc.

 

That these behavioural changes are nothing to do with combatting a global climate change problem is shown by a very telling omission. There is no mention of any country other than the UK.

 

Democracy and human rights may have to be suspended

 

On pages 25 to 26- ‘Is wartime mobilisation a suitable policy model for rapid national climate mitigation?

 

The abstract concludes

 

We find that, while wartime experience suggests some potential strategies for rapid climate mitigation in the areas of finance and labour, it also has severe limitations, resulting from its lack of democratic processes. Furthermore, since restructuring the existing socio-economic system to mitigate climate change is more complex than fighting a war and since the threat of climate change is less obvious to non-scientists, it is unlikely that the public will be unified in support of such executive action.

 

Again, nothing about the global economy, just the UK.

 

And opportunities exploited for a radical redistribution of emissions

 

On pages 27 to 29 is ‘Personal carbon trading in a radical future

 

Personal carbon trading (PCT) is a radical and innovative mitigation policy which offers an equitable means of reducing emissions from household energy use and personal travel. PCT offers two dimensions of fairness – firstly, everyone gets an equal carbon allowance, a ‘fair share’. Secondly, modelling of the impacts of a PCT scheme shows it would be progressive and would disadvantage fewer low-income people than an alternative policy of carbon taxation.

 

Everyone will be allocated an equal share, and the computer models show that it will work.

 

What is left out is the problem of rolling this out globally to solve a global problem.

 

As I always say, compare and contrast my interpretations with what is actually written. When a publicly-funded body brings together a number of academics from different disciplines, all calling for massively increased power, there is something amiss. When it is held within the UK’s “academy of sciences” building, it is being given an official veneer of respectability.

 

NB First time comments are moderated. The comments can be used as a point of contact.

Kevin Marshall

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