Monday, 11 June 2012

Subsidy Junky - SE England

"Families will be forced to pay higher energy bills to fund subsidies to the French for a radical overhaul of the power market, the boss of one of the country’s largest energy companies has warned. Ian Marchant, the chief executive of SSE" (Sunday Times -10th June 2012)

An independent Scotland could choose to bring all public utilities back under public ownership -that would do prevent us paying more for a commodity we produce an excess of ...

The main control over power costs will come from the Scottish National Grid charges; which I trust will become a public utility once more. By having a 'Scottish National Grid' the Scottish Government will have leverage over energy costs.

Basically, if the energy companies try to charge Scots more to subsidise other non Scottish parts of their business they will find their transmission charges going up in parralel and current subsidies going the other way. This will work because these companies will make big bucks exporting Scotland's excess capacity and need to be able to access Scotland's reusable resources to meet Europe's future needs - so generators flouncing off in a huff is not on the cards as there will be others ready to take their place.

England is dependent on importing energy, especially electricity, to keep the lights on in London and the SE. London and the SE are especially reliant on the French HVDC interconnector and French surplus nuclear energy output. On Scottish independence the subsidy given to London and the SE under the current UK National Grid charging regime will also disappear forcing further price hikes in London and the SE as the market forces them to pay for Westminster's lack of thought and short termism over English generating capacity. Ironically the people of Northern Ireland could well benefit from the break up of the UK national grid as they will not be paying a London and SE premium on their power imports from Scotland.

The new French Presidency is anti-nuclear and so EDF, SSE and other operators in France sense they will see their current nuclear subsidies being cut with little Government money to promote the next generation of French AGRs, with these subsides being switched to promote France's alternative power resources.

All Ian Marchant is really saying is, as London and the SE are reliant on French nuclear power generation, it is not a big surprise that French generators are looking at the SE of England (aka Britain or the UK) to pay higher charges to help defray the costs. You can look at Marchant's comments as yet another good reason for Scotland to cut the ties that bind us to the London and the SE subsidy junkies.

2 comments:

  1. Scotland generates about 11% of the total UK's requirements but pays about 50% of the National Grid's charges.

    If you are close to London, you get a subsidy per KwH fed in. The nuclear plants, existing mainly get such a subsidy and the new planned ones will be sited near existing ones to continue that hidden subsidy.

    I am no engineer but now how to do a project financial analysis and have never seen a fully costed financial plan for a nuclear plant to include the scrapping cost and the cost of disposal of nuclear waste.

    It is Voodoo accountancy

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  2. Lupus -- your comments make this one of the best posts I've read on this matter.

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