Tag Archives: subsidy

All Animals are Equal

Four legs good, two legs bad

So runs the quote from George Orwell’s Animal Farm, which seems very apt on this day of lurid allegations about our Prime Minister’s bizarre sexual proclivities. What is probably even more bizarre is the person who dished the dirt, Lord Ashcroft, former Tory party deputy chairman. Hell hath no fury like a peer scorned. But, as we have learned already, today would be a great day to bury bad news. So let’s cast our eyes around to see what else was happening while we were laughing our socks off at David Cameron’s alleged porcine necrophiliac bestiality.

A bit of how's your father?

A bit of how’s your father?

Well there was the news that George Osborne was visiting China where he announced that the UK taxpayer would underwrite £2bn of risk, called a loan guarantee, for the proposed new nuclear power station at Hinkley Point. This is expected to rise substantially over the life of the project. But we can’t call it a subsidy, because that has a negative connotation. But that’s what it is. The UK government has already agreed to buy electricity from the new power station at a minimum price of £92.50 per MWh. For comparison, a power station burning natural gas can produce electricity at a price as low as £55 per MWh. Although if you read the DECC’s “Levelised Costs” i.e. fudged, nuclear appears to be competitive.

So in these austere times, why are we over paying for some new nuclear power stations? Saving the environment? You can Fukushima that. So it must be something else. What is a byproduct of nuclear power plants? Plutonium. The raw material for nuclear bombs, the prestige weapon of choice for the modern career politician. My guess is that these power stations are designed to keep the UK as permanent member of the UN security council. No nukes, no prestige.

Another item which reared it’s head over the weekend was the news that an anonymous “serving general” had said that there could be a mutiny if Jeremy Corbyn were elected as prime minister. This is a truly shocking story. You see, every member of the armed forces swears allegiance to the Queen, who is the head of the armed forces. But she no longer directs the armed forces because of the Royal Prerogative, which means that the power to direct the armed forces rests with government ministers. They can wield this power by decree if they wish, with no need to consult parliament to ask for permission. Which means that this anonymous general, if he exists at all, would be contravening his oath. Which would be treason, for which the death penalty is still on the statute books.

So why no investigation to find the source of this story? Well it could be something to do with publisher, The Sunday Times, which is owned by Rupert Murdoch and run by Rebecca Brooks, friends with David Cameron and his wife.

David Cameron and Rupert Murdoch

David Cameron and Rupert Murdoch

David Cameron and Rebecca Brooks

David Cameron and Rebecca Brooks

So it would seem that this is a non story, cooked up by persons unknown, in an attempt to smear the leader of the opposition and discredit him. Or it could be that the Prime Minister has already exercised the Royal Prerogative and ordered the anonymous general to talk to the press. Either way, this is a serious issue and it needs to be investigated. But will it?

Why does Scotland pay more for electricity?

It will probably come as no surprise that here in Scotland we have to pay more for our electricity than our cousins in England. Meanwhile the electricity companies who provide us with this electricity make heavy profits. Does this seem fair? No I don’t think so although you may have a different opinion. But how does this come to pass? Why do we pay more and how much more?

Well the following picture illustrates the cost of electricity bought from SSE/Scottish Hydro for a property in Aberdeenshire:

Electricity Costs Aberdeenshire

Electricity Costs Aberdeenshire

So you can see that the Tariff Comparison Rate (TCR) is 17.29 pence per unit (kWh). So for a property which uses 4000 units per annum the cost would be £691.60. So what about our cousins down south? Well the following table illustrates the costs of electricity bought from SSE/Scottish Hydro for a property in Southampton:

Electricity Costs Dingwall

Electricity Costs Southampton

As you can see the TCR for this property is 15.73 pence per unit which is 1.56 pence less than the Aberdeenshire property. So for our 4000 kWh user the bill would be £629.20 per annum. Which means that our Southampton property would pay £62.40 less than our Aberdeenshire property for their annual electricity. So our Aberdeenshire property pays almost 10% more than our Southampton property.

Here in Scotland we are having a renewable energy boom, which is mostly driven by Government subsidies, but it is to be welcomed none the less. Renewable energy has exceeded our demand for electricity on a few occasions recently and our carbon emissions have been drastically cut. Most of this boom in renewable energy is being driven by wind turbines, but we also have some biomass and solar in the mix too. In order to get the energy being generated to a customer the generator needs to be connected to the electricity grid, but this costs money as you would expect. But how much? The following table shows how much it costs to connect a generator to the grid across the UK:

Generator Connection Charges UK

Generator Connection Charges UK

As you can see, if you want to connect a generator to the grid in Scotland you will pay much more than you would if you were located in England or Wales. In some areas of England they will pay you to connect your generator to the grid. Here is another picture which illustrates the difference in generator connection charges:

Generator Connection Charges UK

Generator Connection Charges UK

The reasons given for these discrepancies are “a combination of a locational element that reflects the cost of providing incremental capacity to generation on an area of the main integrated onshore transmission system, and a non-locational residual element which ensures that the appropriate amount of transmission revenue is recovered from generators.” In other words it costs more to get the power from remote areas to the main users in built up areas.

The reality is that we in Scotland subsidise the rest of the UK, we pay more for the electricity we use and we pay more for the getting the power that we produce onto the grid. These extra costs are holding back our renewable energy sector and punishing the people with higher electricity charges.

So what can be done? We could re-nationalise the electricity grid. Then we could ensure that the transmission charges are the same no matter where you live or generate and then I could be paying the same for my electricity as someone in Southampton. Are there any bold politicians out there who would make this their policy?