Sunday, November 25, 2012

United Kingtom: Consumers To See Increased Utility Bills to Pay For Green Energy Investment


November 25, 2012: the UK and the faux environmentalists may talk a good story, saying they want to shift from natural gas to wind, but reality sucks. In today's WSJ: BP seeks deal to get Russia gas for Britain. My hunch: four, five, ten years from now, the UK will wake up and realize they just spent hundreds of billions on wind (when the math never did work) when they could have been preparing for the future through a) natural gas; and, b) nuclear energy. Just a hunch.

Original Post

This is being posted foror archival purposes only. It sounds like this is "only the beginning" as the UK tries to sort out its long-term energy policy. 

This is an interesting story: scanning through it quickly it appears no one is really happy -- even the faux environmentalists are unhappy that carbon emissions targets were not established.

But the "green" energy investment (including nuclear plants) seems to be as much about as volatility of natural gas prices long term as carbon emissions.

The link takes you to a BBC story:
The government has published details of its long-awaited Energy Bill, designed to keep lights on and emissions down. 
It will allow energy firms to charge households an extra £7.6bn until 2020, which will go towards the development of low-carbon electricity generation. 
A decision about setting carbon emission targets for 2030 has been delayed until 2016, after the election. 
Consumers will pay a bit more in energy costs next year; these costs will increase annually, reaching about $200/year/household in 2020.

Two data points from the article:
  • Environmentalists condemned the bill, saying the lack of a 2030 emissions target would make it very hard to meet the UK's law on climate change.
  • But business groups said more needed to be done to mitigate the impact on firms of these extra costs, pointing to the loss of 900 jobs at a major energy user such as Tata Steel, as it cut back its operations in the UK. 
Energy costs in the US were well below those of the UK before this new additional cost, and now the delta will widen. It certainly provides a window of opportunity for American industry. 

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