Feeds

Eco investors demand (even) more sweeteners for low carbon energy

Help us to help you save Gaia

Choosing a cloud hosting partner with confidence

When Nye Bevan created Britain's National Health Service in 1948 he faced resistance from private consultants – and famously had to "stuff their mouths with gold" to win them over. But at least there was a universal-payer health care system at the end of it. Renewable energy today is a commercial basket case*, and potential investors need yet more more public money if they're to support it, according to a new report.

It isn't phrased quite like that, but the message, in a forthcoming analysis from economics think-tank and consultancy Oxera, is that the government will miss its 2020 renewables target unless discount rates for investors are slashed. The report warns that the government will fail to raise the £70-£75m needed to meets it Renewables Obligation, according to monthly newsletter Investment and Pensions Europe (IPE).

The public pays the cost, the private sector reaps the reward: a fairly direct wealth transfer.

Oxera also warns of a "reputational risk" associated with being associated with expensive renewables, such as offshore wind farms, which raise energy bills for everyone. It's a reminder that the stench from expensive, Gaia-friendly eco energy leads right back to the perpetuators.

It should be noted that the nuclear industry has also joined the calls for lower discount rates, but then it is no stranger to seeking subsidies, and in Europe, diversified energy producers have their eggs in several baskets. Nuclear supporters will argue that pound-for-pound it's cheaper, safer (more people die worldwide putting up windmills) and that at least an operational reactor can keep the lights on.

Energy companies are keen to keep the true costs of Gaia Worship hidden – despite increasing demands to break out the real extent of the subsidies and other schemes on domestic consumers' energy bills. The sweeteners increase bills by 15 to 20 per cent, making it a harsh regressive tax with 5.5 million households already in fuel poverty.

In a sign of changing consensus, the Left-ish think tank the Institute for Public Policy Research (IPPR) has warned the "carbon floor price" introduced in this year's Budget will add even more to fuel bills. The regulation prevents conventional fuel generators from passing on low market prices for energy.

But the IPPR's hand-wringing at this late stage – laws have already been passed - may look a bit rich. In 2008, at the peak of the climate change hysteria, the IPPR joined the calls for steeper de-industrialisation targets, and conspicuously brushed the costs under the carpet.

The IPPR made several speculative punts that were typical of rhetoric at the time.

"Decarbonising the UK economy by 80 per cent would cost between one half and one tenth as much as doing nothing, based on Stern's estimate that climate change damage costs would reduce global GDP by between 5 per cent and 20 per cent," claimed the authors of "80% Challenge – Delivering a Low Carbon UK". The report was jointly authored with pressure group the WWF, and friend of the bird the RSPB.

Estimating the cost of action against the cost of future damage poses a problem. Taking a pound of investment out of the economy rebounds on future generations, and can cost thousands in the future. Economists use a discount rate, typically choosing one of around 3 to 5 per cent. For his 2007 report, Stern used one of 0.01 per cent – highly improbable, but the only way he could make "urgent action" appear attractive.

The IPPR authors also mused that if wind energy's "intermittency" problem could be solved, Britain's energy needs could be met from renewables.

Yes. And if my Auntie had balls, she'd be my Uncle. ®

*Bootnote Hydro-electric energy (today) and geothermal sources (soon) are perfectly plausible renewable energy sources, promising to be reliable and cheap. The public backlash against renewables today is directed against wind and solar, which produce energy far above market prices, leaving the public to pay the difference.

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.