The Gas industry is boosting its efforts to promote hydrogen heating at homes, and in doing so is likely to derail efforts to ban fossil fuel heating in new buildings by 2025. That is because a key demand of gas lobbyists is to insist that ‘hydrogen ready boilers’ be allowed to continue to be installed from 2025.
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Government’s new heat pump programme falls short of expectations
The Government’s much heralded ‘boiler upgrade scheme’ to boost installations of heat pumps is resulting in a disappointing uptake of the grants being offered. So far the daily rate of grant applications is a little less than half what could be expected if the Government’s annual uptake of approaching 30,000 heat pump installations was going to be achieved.
New EDF demand means that Hinkley C may not be fully generating until at least 2030
EDF have implicitly admitted that the construction of Hinkley C may take at least 11 years to finish signalling cost overruns of 70 per cent or more.
Bloomberg reports that EDF is requesting the Government that EDF be given another 15 months to complete the plant and be fully generating beyond 2029. Under the terms of EDF’s contract with the UK Government if Hinkley C fails to generate power by 2029 it will start losing the amount of subsidy it can claim. Adding 15 months to this as requested (under a ‘force majeure’ clause) will take us into 2030.
Hinkley C construction was begun seriously in early 2019, meaning a total construction period of over 11 years. The plant was supposed to be operating by the end of 2025 according the EDF’ earlier plans. Using the rule of thumb that construction cost is directly proportional to the length of construction time this would imply a 70% cost overrun. That could mean a cost rise, in today’s prices from around the original £20 bn to £34 billion. However, one should in no way assume this will be all the time that is needed. Things may well get worse.
The amount that EDF will get paid for power generated from Hinkley C is pegged at £92.50 per MWh in 2012 prices or around £110 per MWh in today’s prices. Under the agreed contract the premium price, which is payable for 35 years, can start no later than the beginning of 2029.
This also means that it will have to be the French Government who picks up the costs of the costs overruns, especially since EDF is soon to be fully taken into French state ownership. But France will have its revenge yet when, under the financing deal being discussed, it will be the British energy consumers and state who will pay for the cost overruns from the planned Sizewell C power plant. Delays with building Hinkley C will have a knock-on effect on Sizewell C since there will not be enough relevant workers (or supply chains!) to build two projects at once. This is likely to mean that Sizewell C is unlikely to be completed until after 2040.
EDF bases its force majeure claims, according to Bloomberg, on supply chain difficulties resulting from Covid and the war in Ukraine. Cynics may say that every nuclear construction is just once big force majeure waiting to happen. Who is surprised by this turn of events? Not me, that’s for sure!
Campaign for green buildings – Make solar panels on suitable buildings mandatory and ban fossil fuel heating in new buildings SIGN the petition here!
Why the Government would end up in domestic and international courts if it abolished the spending in the green levies
Little in energy terms exercises the political right quite so much as demands for the abolition of the green levies. But this demand, would, if taken literally, put the British Government in court, both domestically and internationally. It is likely to lose if this happened.
Oil prices to crash as futures prices fall
Oil futures prices are tumbling. They are down from $105 today to $87 next March. Indeed, oil prices are set for a longer-term fall as the switch away from oil-powered vehicles gathers pace.
OFGEM backs scheme to cut consumer bills by £140 a year using existing renewables
OFGEM has backed the idea of giving all or most renewable energy projects so-called contracts for difference (CfDs) as the simplest means of cutting consumers bills. They are right of course, and I supported this idea recently in a blog post entitled ‘How electricity consumer bills could be slashed by reforming the way renewable energy projects are financed‘.
Why would anybody invest in Sizewell C nuclear plant? – An unlikely proposition?
The Government has tasked Barclays Bank with finding investors for the proposed Sizewell C (SZC) plant. Reports surfaced in the Mail on Sunday that Centrica is planning on taking a stake in the company. Perhaps the fact that the report emerged in the Mail on Sunday rather than the Financial Times is a sign that the decision is still subject to vagaries.
This report has me scratching my head so hard it hurts! Why would Centrica, which in 2016 abandoned plans to invest in Hinkley C partly because of ‘the lengthening time frame for a return on the capital invested in a project of this scale‘ now opt for an investment in SZC? After all the doubt about return on investments in SZC may be viewed as, if anything, even more threadbare, to that of Hinkley C.
How Sunak’s tax boost for oil and gas development will benefit China and not the UK
Sunak was right to avoid the term ‘windfall tax’ on his revised tax arrangements for the oil companies since it involves big tax breaks for oil and gas investments that will overshadow the small short-term increase in oil tax revenues that he announced. See E3G’s analysis of the oil and gas changes here. But this massive boost for oil and gas investments (which will bring tax relief for oil and gas investments to over 90 per cent) will only benefit China, and not the UK.
Government makes new cock-up in its home insulation programme
The Government has delayed the start of a new four year programme of the Government’s already minimal home energy conservation programme. This means that several tens of thousands of poor households will miss out on vital cost-saving measures. The Energy Company Obligation (ECO), whose funding is small compared to the tax concessions handed to oil and gas companies, is a pale reflection of the scheme which operated under the last Labour Government. Insulation rates funded by ECO have fallen by over 90 per cent since Labour’s scheme ended in 2012 (see page 112 of last year’s report by the Committee on Climate Change).
Are electricity suppliers using bureaucratic barriers to avoid having to pay for rooftop solar power?
Electricity suppliers are making people with solar panels on their roofs jump through unnecessary bureaucratic hoops before their electricity can start earning them money. This benefits the suppliers since timewasting allows them to keep receiving free electricity for longer.
Local Energy Pricing – Another madcap idea from the free-marketeers threatens to derail net-zero progress
For once I am moved to agree with big power companies and denounce the schemes for local energy pricing as a bad idea. This stupid idea has been dreamt up by the National Grid in a lazy effort to deal with the problem of balancing increasing quantities of renewable energy. It is stupid because it will both reduce the amount of solar and wind projects coming forward and make them much more expensive for the consumer.
How electricity consumer bills could be slashed by reforming the way renewable energy projects are paid
Consumer bills could be slashed by an average of around £140 per household per year if renewables incentives were reformed to give renewable energy generators long term security for their returns. Now, this sounds like a fairytale ending that keeps everyone happy. Is it? Well, it’s for real except that the big energy companies won’t like it. That is because they would prefer to carry on siphoning off profits from the sky-high electricity wholesale prices that are inflating the income generated from renewable energy projects funded under the Renewables Obligation (RO).
These higher than necessary payments for renewable energy generation are artificially inflating what consumers have to pay in their electricity bills. The price cap set by OFGEM would be lower as a result of sensible reform of the RO payments and consumer bills would be less.
The RO funds around 30 per cent of the UK’s entire electricity supply
If the UK installed as much onshore wind power as in Germany at least half our electricity could be coming from it!
If the UK installed as much wind power per square km as Germany does now, then, in 2050, the UK could be generating around half the level of UK electricity consumed in 2020 solely from onshore wind. This is despite the fact that Germany has a much larger proportion of its land reserved for nature protection compared to the UK.
Getting bigger but not safer or cheaper – the myth of Rolls Royce and its very big non-modular reactor
Rolls Royce’s so-called small modular reactor (SMR) is getting bigger, but is likely to have fewer special safety features compared to EDF’s increasingly pricey design for Hinkley C.
See the green buildings webinar – Sign the petition for green buildings
Please watch the Green Buildings webinar, held on March 16th by clicking here!
Hear about the campaign for mandatory solar panels and banning fossil fuel boilers in new builders. The speakers are first, Jonathan Porritt, longstanding green leader and founder of ‘Forum for the Future’; then Lucy Pedler a green building expert from the Green Register; Beccy Smart from the environmentally sensitive housing campaign; David Toke talking about the campaign and 100percentrenewableuk; and Charmian Larke talking about new buildings and energy poverty.
Sign the petition for mandatory solar panels on buildings and fossil fuels to be banned in new buildings. See the petition page here.
Please share the petition page link as widely as you can on social media. Please write to you MP asking for solar pv to be mandatory on all new buildings and for fossil fuel boilers to be banned in them.