Guardian: “Britain’s green ambitions have been dealt a blow as a big six energy company has pulled the plug on one of the world’s largest offshore windfarms, with the political storm enveloping the industry threatening the multibillion-pound investments needed to meet emissions targets and head off a looming capacity crunch.” Read more
Guardian: “The attitude of British billpayers to saving energy remains unchanged by the roll-out of the government’s flagship energy efficiency scheme despite widespread concern over rising bills, according to the government’s own opinion poll. It found that 28% of people were giving a lot of thought to saving energy in their home, the same as in September 2012.” Read more
Terry Macalister in the Guardian: “The bosses of the big six energy companies will appear before the energy and climate change select committee on 29 October. The powerful group of MPs, chaired by Tim Yeo, will grill them on green levies, profit levels – and why consumers face such big increases in their bills. These are the questions they should ask:” Read more
Telegraph: “The Deputy Prime Minister said he does not “fully agree” with Mr Cameron, who on Wednesday said he will next year “roll back” the environmental levies. Mr Clegg hinted that he could be prepared to take some green levies off energy bills and on to taxes. However, he made it clear that he will prevent any attempts to “scrap a whole system of levies”. Read more
Guardian: “British Gas has turned a consumer and political backlash over a 10% increase in energy bills into a public relations disaster after trying to head off criticism of the price hike by using social media.” Read more
Guardian: “The announcement that Chinese companies can take a stake in British nuclear plants was hardly a surprise: George Osborne had already told reporters that the UK welcomed Chinese investment in all its infrastructure – citing the sovereign wealth fund CIC’s existing investment in Thames Water and Heathrow.” Read more
FT: “Green policies will add 41 per cent to electricity prices by 2030 – according to the energy department’s own forecasts. Policies to promote low-carbon energy include a guaranteed “strike price”, expected to be announced within days, to support EDF’s proposed new nuclear reactors at Hinkley Point in Somerset – at double the market price.” Read more
Damian Carrington in the Guardian: “The overwhelming reasons for power bills soaring are that fossil fuels are getting more expensive and that two decades of underinvestment by energy companies in the UK’s now creaking energy system has left customers with a steep bill to catch up.”
FT: Alistair Phillips-Davies on the day SSE became the first of the big six utilities to raise gas and electricity prices, saying household tariffs would rise by an average of 8.2 per cent from November 15, says in an interview that SSE has been forced to act in part by the rising cost of green policies, such as subsidies for low-carbon power generation and the Eco energy-efficiency scheme. Read more
Guardian: “The UK’s fracking pioneer Cuadrilla was prevented by the Environment Agency from using a hazardous chemical at its drilling site in Sussex, local residents have been told. But permission was granted for another chemical despite concerns over its safety.” Banned: antimony trioxide. Allowed: oxirane. Known as an oxygen scavenger, it is used to prevent corrosion.
Guardian: “Senior bankers will face up to seven years in jail if they are found to have committed a new offence of reckless misconduct being proposed by the government as part of a series of measures to clean up the City in the wake of the 2008 banking crisis.” Read more
Jeremy Leggett describes in Green Futures how systemic risks to energy and finance also come with opportunities.
The scene: Slough, UK, September 2010.
An opening ceremony with a difference. Solar roof tiles, glistening on the roofs of eight homes as though rained on under a grey autumn sky, can provide all the electricity the homes use, with plenty left over to power the battery car that the families living in the community share. Four technologies are each capable of heating the whole of the airtight, triple-glazed, development: air-sourced heat pumps, ground sourced heat pumps, a biomass boiler, and solar thermal panels.
SSE, the British utility, and investor in Solarcentury, has built this development for some of its workforce, as a showcase for what could be done. Half Britain’s carbon emissions come from buildings. Half those come from residential buildings. These homes use no coal, no gas, no oil, no nuclear. They go beyond Zero Carbon.
Ian Marchant, SSE CEO, gives a speech.
This is a stunning glimpse into the future, he says. These homes took just 8 months from beginning building to occupancy.
Chris Huhne, Secretary of State for Energy and Climate Change, follows him.
Low-carbon energy is going to be a massive industry, he says. Congratulations to all.
Back to London, I have a meeting at GE with Mark Elborne, their UK CEO. We have another demonstration project to talk about: solar schools, a flagship within GE’s sustainable cities programme. We are destined to hit the front page of GE’s website: a £50 million minnow partnered with a £100 billion giant.
I recount my morning with SSE to Elborne with a pride I can’t disguise.
Just wait until we marry this kind of technology up in a few years time with the storage technologies we are working on, he says. Then we’ll see some changes in energy markets.
This is a good day at work.
Back home in Holland Park, I am dragged back to earth. A meeting of my flat-dweller neighbours convenes. We have all been thrown in purgatory in past months as the owner of the mansion next door builds an underground cinema in his back garden. Platoons of Polish builders troop in and out of the mansion. Our flats shake all day in the incessant jackhammer hell they create. The owner of the mansion has moved out for the duration. We his neighbours can’t.
He is an investment banker. He is spending his bonus, or part of it.
The passage you just read is an extract from my book, The Energy of Nations: Risk Blindness and the Road to Renaissance, in which I set out my best-guess scenario for how systemic risks in our global energy and finance systems will play out in the years ahead, and analyse the implications. Amid the mega-risks there are also opportunities for society. As the story unfolds, a potential good-news future scenario emerges, which I think of as a ‘renaissance’.
Since the dot.com crash, I have developed an ex-academic’s passion for studying the patterns of play in energy markets, and in the financial markets where they pertain to energy. I have logged and analysed these patterns in a 2005 book, Half Gone and, since 2006, on my website [www.jeremyleggett.net]. Today I observe four global systemic risks directly connected to energy that threaten capital markets and hence the global economy. They involve oil depletion, carbon emissions, carbon assets, and shale gas. A market shock involving any one of these would be capable of triggering a tsunami of economic and social problems, and there is no law of economics that says only one can hit at one time.
There are other systemic risks in the energy sector, of course. Persistence with and proliferation of nuclear power risks spawning nuclear devices with which terrorists could take out cities, or weapons that could make nuclear war between nations more likely. The growing use of water in most forms of energy production could accelerate an already grave global water crisis. And so on. But in my book I concentrate on the four systemic risks that I have most direct vocational experience of.
I also write about a fifth risk. Ongoing systemic risk in the financial sector may at first glance seem to have nothing to do with energy. But I share a common view, fashioned with the benefit of hindsight as are the views of so many interested in the 2007 credit crunch and the 2008 financial crash, that they were indirectly connected to energy. Peak panic about the toxicity of mortgage-backed securities followed shortly after the highest ever oil price in history: $147 per barrel in July 2008. Could the high price of gasoline have had anything to do with all those owners of shiny new homes in American suburbs defaulting on their sub-prime mortgages? How could it not.
How best to describe the risks, and analyse the dangers? I have chosen to do this in the course of a historical account, rooted in my own experiences. I hope a chronological narrative approach will interest the reader more than a conventional format, while giving me the opportunity to recount how my own thinking has evolved over the years in the stoking of the serial crisis that faces society today.
Larry Elliot in the Guardian: “There will be those who say that this (recovery) is all an illusion – they are both wrong and right. Wrong, because it is clear from the data that the pickup is for real. Right, because growth is only meaningful if real living standards are rising, which requires wages and salaries to be going up more rapidly than prices.” Read more
Guardian: “Life bans on rogue traders and large company fines as Financial Conduct Authority and Ofgem launch investigations. The European parliament is expected this week to vote through tough new legislation that would allow Brussels – and London – to crack down much harder on rogue traders in financial and energy markets.” Read more
Observer: “Campaigners have warned that Britain is hurtling towards a new economic crisis, and call for a £50bn “Green New Deal” to create more sustainable growth and better-paid jobs and equip the country for a low-carbon future. ….Five years on from their first demands for a radical reworking of Britain’s business model, the Green New Deal group, which includes Green party MP Caroline Lucas, economist Ann Pettifor and tax expert Richard Murphy, says the need for an alternative approach is greater than ever.” Read more