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back to article EDF: We'll raise bills 11% - but only 2% is due to energy costs!

EDF Energy is the latest of the UK's Big Six energy suppliers to announce brutal price rises, in this case an increase no less than 10.8 per cent - yet the company openly admits that energy prices would call for a 2 per cent rise at most. Why on Earth does the firm think it's OK to implement a price rise almost six times that …

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FAIL

Yes, lets focus on short term cost increases...

And ignore long term energy security... Yes, putting renewables in place is expensive, and we're all paying for it, but as is said time and time again, and seems to be ignored by certain journalists, the supply of oil and gas is not unlimited. It will run out. Would it not be better to shift to energy production which we can be sure won't suddenly disappear or suddenly increase in price due to another despot being overthrown?

At lease we can be sure wind will continue to blow, waves will continue to crash on the shores, tides will continue to go in and out, and the sun will continue to shine.

Not to mention efficiency drives, reducing costs in the long term. The place I work at has gone from a G rating to a B rating through improved efficiency - insulation, PIR controlled lighting, demolishing old buildings and replacing them with new energy efficient ones etc... Our power bill has dropped by 50% and our gas bill by about 60%. Everyone should be happy about that too, as its taxpayers money that is now going to be saved for the next few decades, as its a school.

Me? I'd be happier knowing we don't have to go out and import oil all the time.

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Re: Yes, lets focus on short term cost increases...

Love the downvotes - anyone care to give comment as to why?

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Holmes

Re: Love the downvotes

Because you obviously wear a hair-shirt?

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Anonymous Coward

Re: Yes, lets focus on short term cost increases...

There is a significant and quite rabid climate-change-denier cult around here, I daresay the votes will even out as the more reasonable people get a look in. It's just that the Lewis Page fanclub are quick to put the boot in to anyone with the slightest tinge of green to their views.

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Meh

Re: Yes, lets focus on short term cost increases...

"Love the downvotes - anyone care to give comment as to why?"

Because you miss the point. The price rises are not correlated with security of supply at all. In fact, the reverse. With the extensive roll out of subsidised wind farms, thermal plant is becoming less and less economic for the operators. But that's what keep your lights on in winter, not wind or solar. So then we will soon need to pay even more in the form of "capacity payments" to keep thermal plant available, and despite that you'll see all coal plant exit the market, reducing the fuel diversity, and making us more reliant on gas which we have limited storage facilities for (certainly at winter peak demand volumes).

Your comments about "waves continue to crash" ignores the intermittency of all forms of renewables. The modern world needs continuous high quality power, not third world levels of dependability. And since oil is the only volume transportation fuel, building any number of wind turbines won't make a blind bit of diofference to how much we import int he forseeable future.

And accepting that fossil reserves are limited, that should cause a gradual swing towards reneweables, not the pell-mell rush of vast subsidy fueled schemes, building assets that simply don't work well together. So wait on wind, let other people be the pioneers and get the scale up and costs down, work on research to address the intermittency, don't spend a penny on pointless low output solar panels. Instead, we're subsidising the wind build out, paying top dollar ((£18 billion so far) making it cheaper for everybody else (and incidentally using largely foreign companies to build wind turbines); the Germans are doing the most research into energy storage, and we're subsidising eco-wankers to put solar panels on their houses at the expense of the average bill payer.

You also make the point about energy efficiency. Well it it pays for itself, what were your facilities managers doing beforehand? Idle buggers are paid to sort this stuff out, and should do it without waiting for a prod with a sharp stick.

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Nev

Re: Yes, lets focus on short term cost increases...

Because "renewables" in the UK are an Eco-scam:

No amount of wind turbines and PV panels will solve the UKs looming energy crisis.

And the amount of energy expended in obtaining the resources for and then fabricating PV panels will always be more than they generate. (Assuming dirty panels, on fixed roof mounts in a northern European climate.)

Thumbs-up for the efficiency drive though.

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Re: Yes, lets focus on short term cost increases...

Fatuous, illogical, arrogant, unscientific.

Wind power requires an exact parallel capable system - usually fast-start gas fierd powered stations - in order for it to be viable.

The gas that this commenter says will run out is the same gas that will (or won't) power the stand-by facility when the available wind is unusable; which it is most of the time.

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WTF?

Re: Yes, lets focus on short term cost increases...

Rubbish, the market should take care of this, with the right incentives; most of the currently proposed/implemented 'eco' 'solutions' are uneconomical i.e. they will ironically result in HIGHER net construction and maintenance energy costs than current proven sources of power, maybe even be net negative power generation infrastructure for their full lifespan!

The amount of power saved by feasible, better power usage is trivial, and far most costly to retrofit to existing infrastructure; it will not make up for the power stations lost due to the frankly suicidal Fascist EU energy policies this government are allowing and assisting to be imposed on us!

Until there are practical and high enough capacity power storage system near so-called renewable power facilities they will not save any net energy and will actually cause extra cost to in addition to the uneconomical construction and maintenance for these facilities, due to the requirement for backup conventional power generation capacity.

Nuclear, when done correctly, is always net positive power for it's lifespan, even with shutdown costs.

This country needs to build new generation Nuclear Power plant sharpish, like Thorium Reactors, which are designed to never reach melt-down stage or release nuclear material during an unexpected event.

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Re: Yes, lets focus on short term cost increases...

Ok, so those saying that renewables don't cut the mustard here... What do you suggest instead to ensure the long term energy security of the UK? Nuclear? Nope, we have to rely on imports for that too.

People seem quick to lay into renewables but seem to consistently fail to provide any alternatives.

You know, a barrage across the River Severn could generate about 15GW of power, if put in the widest stretch. That is about 5% of the UK's total energy needs. And it would operate for around 120 years. Sure, it'd need something to cover the hours it wasn't generating during, or some form of energy storage (how about converting that energy to hydrogen or something), but its a large chunk of energy production.

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Re: Yes, lets focus on short term cost increases...

Nuclear power may rely on imported fuel but at least that fuel comes largely from friendly stable democracies like Australia, Canada and South Africa. In addition it is easy to store large amounts of fuel against shortages. The UK is a major nuclear fuel processor and one of a handful of fuel reprocessors, I wouldn't be suprised if we already had access to decades worth of raw materials for Mox fuel for conventional or fast fission plant.

Until the storage problem is solved wind, and wave are useless costly irrelevance. Once the problem is solved they become a sound and practical option.

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FAIL

Re: Yes, lets focus on short term cost increases...

"This country needs to build new generation Nuclear Power plant sharpish, like Thorium Reactors, which are designed to never reach melt-down stage or release nuclear material during an unexpected event."

Love it. Yes, let's build nuclear power stations with technology that doesn't exist.

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Mushroom

Importing nuclear fuel.

Actually, the UK's stockpile of plutonium could run PRISM reactors for 500 years.

http://www.guardian.co.uk/environment/2012/jul/20/richard-branson-obama-nuclear-technology

http://en.wikipedia.org/wiki/Integral_Fast_Reactor

"IFRs are able to withstand both a loss of flow without SCRAM and loss of heat sink without SCRAM. In addition to passive shutdown of the reactor, the convection current generated in the primary coolant system will prevent fuel damage (core meltdown). These capabilities were demonstrated in the EBR-II."

Intrinsically safe and it burns nuclear waste. What's not to like?

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Mushroom

Re: Importing nuclear fuel.

One more article:-

http://www.guardian.co.uk/environment/2012/jul/30/fast-breeder-reactors-nuclear-waste-nightmare

"Britain's huge plutonium stockpile makes it a vast energy resource. David MacKay, chief scientist at the Department of Energy and Climate Change, recently said British plutonium contains enough energy to run the country's electricity grid for 500 years."

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Re: Yes, lets focus on @localzuk

"You know, a barrage across the River Severn could generate about 15GW of power"

The economics don't look good. If you could fix those, you've still got the problem that the eco-lobby will be at war with themselves over such a scheme. Special interest groups are mostly against - RSPB, and National Trust for example are opposed.

Note as well that such a scheme still doesn't provide either baseload, or reduce the need for peak generating capacity, and that rather spoils the case, because you're then paying for two lots of generating assets. As with other renewables, energy storage is far more of a problem than the ability to generate random electricty.

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Facepalm

Re: Yes, lets focus on short term cost increases...

I can only assume it is because they think that downvoting people who point out that the party is going to end, is somehow going to keep the party from ending.

Sooner or later, the strategy of invading countries to secure energy supplies is going to fail.

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Re: Yes, lets focus on short term cost increases...

The entire renewables industry needs massive subsidy just to stay afloat, so no this is not a short term price hike.

Every christmas customers get bled along with the turkeys and every quarter following energy companies boast huge profits, this greed has to stop.

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Given that energy is a finite resource...

...it makes sense for it to be more expensive - at least expensive enough that people are thinking about how much they use. What does NOT make sense is the pricing model that the government and utilities are using.

There should be a minimum consumption level (enough for a person to live comfortably on*) below which prices stay around the same, and above which prices double or triple. That will promote efficiency and penalise waste.

The second thing is for government to subsidise green technology directly with money raied from taxes instead of passing the costs to consumers through the utilities. That way the burden does not fall disproportionately on those least able to afford it.

*of course this level in itself would become a matter for debate ut at least it's a start

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Stop

Re: Yes, lets focus on short term cost increases...

" demolishing old buildings and replacing them with new energy efficient ones etc"

And how long will it take to 'repay' the energy costs of creating that new building?

I do actually agree with you about energy security, but disagree completely about how it should be generated; lets have something reliable so we don't end up having a complete duplicate set of gas turbine generators to cover the periods when the sun doesn't shine, and the wind doesn't blow (oddly enough these two happen quite often at the coldest time of the year). Our governments energy policies over the last 20 years has been absolutely disgraceful; if we're going to massively subsidise anything then it should be proven Nuclear Plants.

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Re: Given that energy is a finite resource...

"There should be a minimum consumption level (enough for a person to live comfortably on*) below which prices stay around the same, and above which prices double or triple. That will promote efficiency and penalise waste."

So my elderly parents who are at home all the time, and therefore have a high domestic energy bill should pay extra, whereas young employed people who spend a few hours a week at home should get their energy cheap? You've put a whole lot of thought into this idea, haven't you?

And as for using taxes to pay for wanky, ineffective eco-tech.....that's going to work out well, isn't it? You really, really think that government could organise a piss up in a brewery? I've worked in Russia, where for decades utilities were priced at fixed levels to accomodate "the proletariat". It didn't work. The infrastructure is decayed, pollution is rife (and corruption). But if that's what you want then go there.

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Re: Yes, lets focus @ A J Styles

"I can only assume it is because they think that downvoting people who point out that the party is going to end, is somehow going to keep the party from ending."

Not sure why you got so many downvotes on that comment. But I think the question is how, and how quickly we transition to renewables. The current "plan" is a halfwitted panic, is expensive, ineffective and puts people off renewables. You're right that the party will end sooner or later. If we can use things like shale gas to prolong the oil age, then perhaps renewables can be developed to a level of cost and functionality that they will work.

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Mushroom

Re: Yes, lets focus on short term cost increases...

"You know, a barrage across the River Severn could generate about 15GW of power, if put in the widest stretch. That is about 5% of the UK's total energy needs. And it would operate for around 120 years. Sure, it'd need something to cover the hours it wasn't generating during, or some form of energy storage (how about converting that energy to hydrogen or something), but its a large chunk of energy production."

And the environmental and local ecological cost of your masterplan is what exactly?

And this non existent storage technology of which you speak, what exactly is it?

If you want to use less hydrocarbons then use less energy, it really is as simple as that, we cannot live the life we currently have and expect to meet our energy needs with wind turbines and solar panels.

So you have two choices, you either go nuclear, or you live a much simpler subsistence lifestyle and use less energy and have a lower overall impact on the planet.

Either way the current system where the government forces new incentive scheme costs on energy suppliers and then berates them for passing it on is not sustainable and nor is the mad flight to energy generating methods like wind and solar which are intermittent, inefficient, expensive and incredibly environmentally damaging to construct in the first place.

Unfortunately the eco mentalists like the way we live know and have this dream of using a few windmills and it will all be ok, unfortunately, reality is very, very different.

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Anonymous Coward

Re: Yes, lets focus on short term cost increases...

"Sooner or later, the strategy of invading countries to secure energy supplies is going to fail"

That's what you say.

Others say "leave it to the market, and all will be well".

What could possibly go wrong?

Party on dudes.

It CAN'T last forever without massive technological and social realignments. In fact it might not last much longer at all. It might be that the biggest transfer of wealth from poor to rich in recent history (in the US and UK) is because "they" know the "good times" will be over sooner than we're allowed to think.

[Hint to downvoters: tragedy of the commons]

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Re: Yes, lets focus on @localzuk

The barrage would provide baseload except for about half an hour twice a day when the tide turns, and as we know exactly when that will happen, we don't need fast start generators to cover it. Also interruptible supplies such as stored heat and cooling could be switched off during that half hour period to reduce demand.

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localzuk --> Posted Friday 26th October 2012 14:00 GMT

quote

(how about converting that energy to hydrogen or something)

end quote

therin lacalzuk lies the problem. If it was that easy then those pointless energy wasters : wind turbines would actually be worth having; ANY intermittent power source would be worth tapping.

unfortunately the most efficient means we have of storing energy is - oil & gas; after that comes nuclear.

You'll notice that both of these have one thing in common -- NATURE has provided these; free of charge; and we can not make them in a cost efficient manner

It is energy storage that is the limiting technology. No one has a method of STORING energy and then RELEASING it ON DEMAND in the quantities we need (currently approx 37GW for the UK; any idea of HOW to store 37GW of power; never mind releasing it efficiently )

Without a way to store industrial amounts of power on a use on demand basis; intermittent generation COSTS

energy to use. I'll leave it to others to work out what one hours supply of 37GW looks like; say as a lake and damn - now divide that by 10 - as that is the current approximate claimed faceplate value of wind turbines - look at the history of UK wind generation and realise we have to provision at least TWO weeks of wind free days

quote

a barrage across the River Severn could generate about 15GW of power

end quote

yes twice a day for about 1 hour each side of peak tidal flow.

It would also - twice a day round slack tide produce ZERO

on an intermittent basis that bears no relationship to demand

see this link for UK demand and supply figures; if you don't cry at the wind turbine contribution; or laugh at the wind power subsidy farmers' claims about its utility you do not understand what you are looking at

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Re: Yes, lets focus on short term cost increases...

Sadly, renewable energy is going to make the square root of Sweet Fanny Adams difference to carbon emissions.

http://www.templar.co.uk/downloads/Renewable%20Energy%20Limitations.pdf

We are paying for nothing we need or want.

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Re: Yes, lets focus on short term cost increases...

Because renewable energy doesn't solve the emissions situation and it's not even clear that emissions are a problem, and even if they were what Britain does is totally irrelevant. Its what China/India do that is the issue.

Neither is making us rely on gas co-operation, any sort of energy security.

In short renewable energy is an expensive way of failing to solve a problem that possibly doesn't even exist.

http://www.templar.co.uk/downloads/Renewable%20Energy%20Limitations.pdf

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Re: Yes, lets focus on short term cost increases...

No, even then (with some as yet undreamed of mass storage) they do not represent an economic or viable option. The energy density is low because the energy source is diffuse. That inevitably means huge areas of land or sea surface have to be devoted to power generation, and we need that land or sea for other things.

The only;y unique selling point of renewables is that is possible to sell it to gullible ecotards and politicians at vastly inflated profits. Beyond that, and keeping your caravan battery topped up in summer, it is as much real use as a chocolate teapot.

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Re: Given that energy is a finite resource...

E=Mc² tells you that Energy may be ultimately limited, but there is a **** of a lot of it locked up in various elements that have no other practical value.

Good farmland is far more scarce.

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Re: localzuk --> Posted Friday 26th October 2012 14:00 GMT

No one has a method of STORING energy and then RELEASING it ON DEMAND in the quantities we need (currently approx 37GW for the UK; any idea of HOW to store 37GW of power; never mind releasing it efficiently )

No, but power stations like the one at Ben Cruachan go some of the way to doing this. Anyway you are over dramatising the problem, we will never go from zero demand to a requirment of 37 GW.

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Anonymous Coward

Re: localzuk --> Posted Friday 26th October 2012 14:00 GMT

Sorry but any poster that apparently doesn't understand the difference between power (measured in e.g. GW) and energy (measured in e.g. GWh) doesn't start off all that well. Want to try again?

As an illustration, the pumped storage plant in north Wales at Dinorwig can generate 1.8GW for a duration of 5 hours (or less power for more hours, take your pick). Call it 10GWh of energy (in very round figures).

http://www.fhc.co.uk/dinorwig.htm

A series of relatively small tidal reefs in the Bristol Channel could be used to combine the best of both tidal power and pumped storage without the massive environmental disruption that a full barrage would inevitably cause.

There are serious suggestions that an HVDC link to Norway would allow the UK to use to use Norway for pumped storage. Probably only another few GW and GWh, but every little helps.

There are also folks who think that a fleet of electric vehicles (not necessarily cars) being repurposed to feed into the grid at peak times could also be a useful contribution. The numbers look quite interesting for (say) a hundred thousand vehicles each feeding 5kW or so.

There is, afaict, no single magic solution. A lot of engineering effort (and a lot less political interference) will be needed. And it should have started decades ago, but privatised utilities were and are never going to do forward-looking development of the kind needed. That was understood at the time of privatisation but ignored.

Here's where our energy came from today, this week, and for the last twelve months:

http://www.gridwatch.templar.co.uk/

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Re: Yes, lets focus on short term cost increases...

I'd be happier if the governments had built adequate nuclear capacity 20 years ago and maintained research into safer and safer forms of nuclear power.

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Re: Yes, lets focus on short term cost increases...

The market NEVER cares about anything that will affect the stock price in more than one to two years. PERIOD. Because all CEOs and Board members know that their own time at the table to rake in massive salary and bonus is statistically not much longer than that. So "the market" only cares about what will maximise short-term profit for the senior execs and board members to get paid bonuses on, and have their stock dividends vest nicely - not the fact that we will almost certainly run out of non-renewable energy sources in 10,20, or 30 years. Anyone who says otherwise has too limited business experience to even bother listening to.

Get this: THE MARKET is totally ineffective in planning around long-term change or threats. Even the big institutional investors know that if they have a large number of energy stocks, they can dump them totally in 6 months should they become non-viable. But they also know that in the lead up to total exhaustion, those energy companies are likely to have a huge run up, as they auction off the last of the non-renewables. The end result is that there is NO market correction mechanism.

But Lewis is really playing a blinder here - confusing Climate Sceptic with those looking for a proper, sane way out is just daft. Everyone knows wind, waves, etc. are costly playthings that will do nothing to solve the problem long term. Every adult at the energy table knows that the UK (and the US, et al) needs to embark upon a massive construction program of New-Gen nuclear reactors, in a standardised, non-market driven manner such as France has done. Every design identical, nothing customised, stamped out like cookie cutters. None of this "a few from GE, a few from Japan..." garbage that leads to non-standardisation, and higher support and development costs. Choose a single design (the French have some skill in that), and go build 20.

Every adult knows that is what needs to be done. And the market won't drive that until it is too late. But far better to raise electricity rates by 10% to fund those new nuclear plants, and have reliable year-round supplies, than continue down this road of half-measures with renewables.

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Re: Yes, lets focus on short term cost increases...

@localzuk

Of course it exists. The Brits trialled it back in the 1950's. The Chinese and Indians are creating such reactors today. Defence wants dangerously lethal plutonium and enriched uranium and the UK is a reprocessor of these fuels so that's the option we're given.

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Facepalm

@ledswinger

"You've put a whole lot of thought into this idea, haven't you?"

Actually no, the example you mention of elderly people did not occur to me, and no doubt there are many other factors. Still, I think waht I thought up in 5 minutes back-of-an-envelope is better than the status quo. And instead of just shooting down other people's ideas like 80% of the comments here, I'm proposing something.

From what I can understand of your comments about government incompetence etc, I guess that you're against government regulation and all for the free market.Well, in that case what you will see is EXACTLY higher prices that will mostly affect those that can least afford it. So do you have a solution that can reconcile the two?

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Re: Yes, lets focus on short term cost increases...

>"You know, a barrage across the River Severn could generate about 15GW of power, if put in the widest stretch. That is about 5% of the UK's total energy needs. "

Unfortunately we only have one major estuary, the Severn, in which to put such a barrage. so whilst it could reliably generate about 5% of our total energy needs we still need to find the remaining 95%.

So whilst every little helps, we've yet to find a real alternative to coal, oil, gas and nuclear. Which as time goes by it would seem that only nuclear (in one form or another) is our only contender as a long term high quality energy source. This isn't to rule out other energy sources, only I don't see any ready for prime time.

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Re: Given that energy is a finite resource...

>So my elderly parents who are at home all the time, and therefore have a high domestic energy bill

Doesn't automatically follow!

My elderly parents and in-laws who are also at home all the time have significantly lower energy bills than my family do, even though our houses are similar sizes and mine is the newest !

Part of the reason for this is that they have made significant investments in energy efficiency and by fitting solar panels (effectively purchasing 20+ years of electricity upfront) ...

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Megaphone

Energy price rises

Unfortunately, energy price rises are par for the course. And if you must blame somebody for this situation, try blaming successive governments imagining that fossil fuels were not going to run out while they were in power. Just be grateful that there is actually still some electricity to be bought; because generating capacity is reducing even while demand is increasing, and it's a matter of time before demand outstrips supply.

About the only way out of this mess is to generate your own electricity.

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Re: Energy price rises

It's not just about electricity - most people use more gas than leccy.

There's a flip side to this potentially. I predict a glut of people recommissioning old fireplaces and/or installing woodburners, as I have done. My local telephone exchange supply me with a supply of wooden pallets, or I can raid random skips I see in the street. I chop up this free supply of energy in the back garden and burn it all winter. Good for me as it massively reduces my gas bill, as an incidental side effect having a woodburner is a lovely thing and the missis and cat love it. On the downside, despite it being clear act compliant I can't imagine it being as clean per unit of energy produced as burning relatively clean gas. So if more people like me start doing this, pollution and carbon emissions will perversely start climbing.

Thus - renewables could lead to an actual INCREASE in pollution by people heating their houses by alternative means.

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Re: Energy price rises

Pollution possibly, although a electrostatic scrubber is easy enough to fit in a chimney (although never seen one in a residential property).

Carbon - no. Wood is great. You burn it it releases carbon, but where do you think all that came from in the first place? Ah yes. The air. Efficient wood burning stoves are awesome, provided you feed them with wood from fast growing sustainable forests (i.e. replant as much as you burn).

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Re: Energy price rises

Ah, but those 'fast growing' plantation forests are terrible for the environment. They are practically lifeless ecosystems where natural flora and fauna cannot survive and to supply enough wood to heat all the homes in the UK would mean the creation of such forests on a vast scale. Anyone who still use a wood burning stove or fireplace can tell you that they go through fuel at a staggering rate. Pine and other fast growing softwoods don't even make great fuel for fires, they burn quickly and kick out little heat in the process. There is a very good reason that coal and not wood became the major fuel for fires in the 19th century.

Never mind the fact that even if you tore up half the countryside tomorrow at the loss of arable land, grazing land and nature reserves to plant those trees it would be 30 years before we could start harvesting.

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And Profit?

Of course, their profits must also rise faster than the increases in energy costs. To keep pace with the other big energy companies, naturally.

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Anonymous Coward

Re: And Profit?

Go and see what returns on capital the energy companies are making before posting ill founded rubbish. Taking SSE because they're UK owned and have no international exposure, their return on capital employed was 9.01% last year, which was barely enough to cover their cost of capital.

If you hate profit so much, then we can renationalise the lot, and you'll see the headcount balloon about four fold back to the levels that the CEGB and REC's oversaw, efficiency will disappear, and your energy costs will go up even more (noting that the whole point of recent price increases is government interference). Oh, and the renationalisation will add about £100 bn to the national debt. That'll be a good deal.

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Re: And Profit?

I suggest you look at the BILLIONS in profit declared every year by every single energy company - and that's just what the accountants can't hide from the tax man.

Re-nationalize the energy companies into 1 national service and all that profit can be forgotten about as it is no longer needed to pay shareholders. Constant profit growth is also something that can be forgotten about as there are no shareholders to keep happy.

The 100bn you quote as the cost of renationalisation could be paid off within a few years on the profits alone, but it won't be anything like that figure as you conveniently forget about the billions in subsidies the energy companies currently receive that will no longer have to be paid.

Once the cost of renationalisation has been dealt with then the profit can be split between lowering bills for everybody and investing in new technology and infrastructure. The only people who won't be happy are the managers, directors and shareholders of the big energy companies as they will no longer be able to make obscene profits off the back of people who cannot afford it.

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Re: And Profit?

The big six energy companies have typicall being making £50-£70 profit per customer per year over the last few years. This is a measely amount given the safety, technical, regulatory and budgetary risks they have to run. These companies are making about 5% profit at the moment and are all investing £100's millions in new plant for which they are having to borrow. The margins are no longer there to justify the investment which is why they are all stopping investing in anything that doesn't farm huge renewable subsidies.

The energy indusrty is also subject to the whims of the politiicians who can at the stroke of a pen wipe out business models or rebalance the profitability of whole swathes of the industry. Drax Power for lost 25% of it's value in a morning on the basis of the draft white paper on Energy Market Review.

The public is massively ignorant of the energy industry and sees big numbers as a big problem. Companies with 7 million customers will make large profits even with modest profit per customer. They forget their misplaced love in with unrealistic green policies has an impact on their bills.

Also why does everyone think the shareholders of utilities are cigar smoking fat cats ruining lives just to afford the next ivory back scratcher. It's pension funds and the like that own the majority of these companies and these relatively meagre dividends pay for peoples old age.

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Anonymous Coward

Re: And Profit?@ EyeCU

Of course they make BEELLEEEOONNSSS (capitals to emphasise how profit is EVIL), because they've got hundreds of billions of quids worth of assets.

It's a common lefty fallacy that if something is publicly owned you don't need to make a profit. That's bollocks, because at the operating level you need a surplus to reinvest in asset renewal, and you need to service the incremental national debt.

The bulk of the problem is bungled state control, state interference, and regulation. Your solution is to hand control to the people that have made the problem. On the one hand I'm pleased that you have such touching faith in government, with it's proven track record of waste, stupidity and incompetence. On the other hand, I'd rather not have my power subjected to even more of DECC's fuck witted bungling.

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Re: And Profit?@ EyeCU

I didn't say that a public service doesn't need to make a profit. I said you don't have to show continuous growth in those profits because it would have no impact on share value as there won't be any shares. I also stated that the profit should be used to re-invest in the infrastructure and reduce the price to the consumer instead of lining the pockets of people who are already stinking rich.

And of course, no private company has ever suffered from a proven track record of waste, stupidity and incompetence, have they?

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Re: And Profit?

If you hate profit so much, then we can renationalise the lot, and you'll see the headcount balloon about four fold back to the levels that the CEGB and REC's oversaw, efficiency will disappear, and your energy costs will go up even more (noting that the whole point of recent price increases is government interference). Oh, and the renationalisation will add about £100 bn to the national debt. That'll be a good deal.

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How do you figure? In nationalising it we just fired most of the sales and cancellations teams, and the entire marketing department.

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Re: And Profit?@ Chad H

"How do you figure? In nationalising it we just fired most of the sales and cancellations teams, and the entire marketing department."

I think you'll find that the single largest marketing budget going is the public sector's, so expect no savings there. And speaking as an industry insider, I can tell you that firing the sales and cancellations teams would save about £30 a year on an average bill of almost a thousand quid, which will be offset by public sector incompetence to the tune of about five times that sum. Even our back office services are much cheaper than government's, despite having a tiny fraction of the government's payroll.

But if you want the CEGB back, write to your MP. I'll be guaranteed a job for life, a fat pension, and no real responsibility, and you can pay for me.

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Well, a few of will be going cold this winter.

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Price fixing cartel

The energy companies are all part of a price-fixing cartel. Nothing more, nothing less. They all raise their prices at around the same time (and almost always just as winter kicks in), but the sequence of which energy company blinks first is normally rotated to "balance" the playing field and to attempt to entice customers to jump ship.

If I turn my thermostat down one more degree, then I might as well remove my central heating system (I already have loft insulation, cavity wall insulation, energy efficient light bulbs etc. etc. )

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