From the Guardian……
There’s so much wrong with this story, I hardly know where to begin.
Analysis by the Department of Energy and Climate Change (Decc) published on Wednesday showed that 85% of the present average £1,250 bill cannot be controlled by the government because it is determined by international gas and electricity prices, transmission and metering costs. After energy companies have taken their profits, and VAT has been paid, government policies can only influence around 11% of the bill, said Davey.
I can’t fathom anyone actually believing that nonsense. It is the UK’s governmental policies which encouraged/mandated the renewable energy push in the UK. How does that renewable energy get from point A to point B? In the electric business, we like to call that “transmission”. Now, this is pretty easy stuff. Assuming all other things equal, the more miles of transmission, the higher the costs of transmission. Government can’t control transmission costs but they caused over double the miles of transmission? How stupid is that?
There’s vast amounts of gas just off shore Britannia which governmental policies could encourage exploitation. And, they could reserve specific amounts for domestic use. Now, I know this is a foreign concept for many in the government, but if supply is set at over the demand, then the cost of the supply (natural gas in this case) decreases. This is entirely within the control of the government. If one wished to do something crazy with that gas, say like, generate electricity with the cheap gas, then the cost of electricity would necessarily decrease ….. presumably, this would affect the pricing of electricity.
……… he claimed that energy-saving policies, better gas boilers, tighter building regulations, the coalition’s green deal loan scheme and smart meters could save householders around £166 a year by 2020. According to Decc, that is an 11% cut compared to the government doing nothing.
Smart meters are a different subject. Davey is correct. Smart meters could save households money. They won’t. But, they could.
The way smart meters should work is that the electric companies put them at your residence and then walk away. From there there is no more meter reading except done through the office. That saves the electric companies some money. Sort of, instead of paying the meter readers, they pay IT and database personnel. Still, if the outfit is large enough there would be significant savings for the electric company, which could lower electric bills. But, that’s not why those meters have come into existence. They came into existence to create new and inventive ways to bill the customer. Instead of just kWh, they now have kW, time of use, power factor, and all sorts of data with which they can use to charge the customer more. Further, because they are smart meters, expect a technological upgrade about every 5-6 years. After about two generations, this would require an entirely new system, from new meters to new servers. All of this will be done in the name of increased functionality, but the cost is always put to the consumers.
Government mandates of efficiency are always worrisome. Typically, efficiency is sought irrespective of government policies. Government intervention in this process typically happens after the various enterprise reach the point of diminishing returns. “Better gas boilers”, for example. The industry will always seek better gas boilers. They will build them when they can pay for themselves. Governments intervene after that point is reached, thereby increasing the costs, not decreasing.
Basic economics doesn’t get abolished by the wave of the hand or the silly utterances of a government head. If one increases the supply of cheap and reliable energy, then the prices go down. If they continue to pursue the idiotic countless sources of expensive and unreliable energy then the costs will continue to climb. And that lunatic says the government can’t control the cost of transmission? Yeh, what’s double, triple or more miles to maintain? Off-shore wind transmission is just about free, right?