Fantastic News. Awful News

This isn’t a case of good news, bad news:  This is Fantastic News on the back of Incredibly Painfully Awful News.  But it’s the same news.

Oil, Coal, Gas, and as result electricity prices, for those foolish enough to still fix prices, will be up by  over 100% up on last year’s prices.  This is the era of £1 pound a therm for this winter in old money,  3+ pence per kWh in new. That’s for gas.  Electricity:  the sky’s the limit but 13p a kWh has already happened and it may get worse yet.

Let’s not ignore the monumental impact of this super-spike or surge or whatever the cause: At the turn of the century,  even a smaller office or warehouse, larger restaurant etc about 300,000 kWhs annual volume etc, was ignored by many customers, suppliers and consultants. What the hell, it was only about a £2K spend tops.  Next year that same site is £10K or more.

The good news, is that if these kind of prices don’t concentrate the minds of buyers, nothing will.  This kind of money makes not only the cost  of new metering irrelevant, it makes new metering essential.

Solar, Wind or Ground Source investments now have pay back periods measured in two or three years as opposed to seven to ten or never as they were not long ago.  That is the fantastic news, for us and for the planet.

Birds and Bees

On the subject of climate change, politically  we sit in between Swampy and Jeremy Clarkson. That way we distance ourselves, while being close enough to see if anything interesting happens.

Unfortunately both sides often lend themselves to wholesale trivialisation of matters that are not just important, but extremely complex.  Above all NHO is about being climate change realists:  it ain’t going away however much JC would want it to, but the new Eco-Millenium isn’t just several years late – it’s arrival at all is in doubt.

Consider how complex things are when Bird Life International says that one in eight birds are threatened with extinction.  Yet RSPB Scotland got 10,000 people to sign a petition against the Isle of Lewis wind farm Chief among their complaints: The island is home to nesting pairs of the golden eagle and RSPB Scotland welcomed the refusal of the planning application. "The government has made it clear on this issue that renewables must be developed but not at any price," said society director Stewart Houston

We live on one planet, although recognising that fact alone is like a red flag to a bull like Clarkson. We can start working globally to save one out of every eight birds. Or we can act locally in the wrong fashion and save a handful of them. There are hard choices out there, although we think a choice between one in eight out of several billions of birds should count more than the odd nesting pair.  Perspective is needed.  Unfortunately people tend to emotionalise the closer to home they are,  and no one does nimby as good as RSPB. Maybe they should learn  from this quote “The loss of one human life is a tragedy.  Millions are just statistics”  This is from Stalin, unfortunate, but still true.

For some reason we can’t quite fathom, wind power has always attracted a bad press in Britain. Wind was never proposed as the sole solution. But rejecting it out of hand has given the UK a Beaufort Scale 1 wind industry. Germany, a country with a much smaller coastline is a world leader. Denmark and Portugal have exceeded their targets.  Their electricity prices won’t be rising by 100% like the UK. Nobody has cornered the market in wind. Even Texas is blowing up a storm with the world’s largest wind farm being built by one of the worlds biggest oil men. Here in the UK we have a miniscule wind industry.  But we have birds!

On the subject of bio-diversity, we’ve been following the collapse of bee populations worldwide as a portent of we-don’t-quite- know-what and not-sure-we-want-to-know-anyway. Perhaps we read too many end of the world comics when we were kids, but  this kind of story was often on the opening page.  It’s hitting food prices, so this may start going mainstream.

IBM’s solar breakthrough

We don’t think there is one single solution to the carbon problem: it contradicts what we feel that thinking in black and white is wrong and the application of grey matter will provide the solutions.  We subscribe to a lot of theories revolving around new technology and increased productivity.  This one is about both, how IBM has made solar 10 times more effective:    By using a much lower number of photovoltaic cells in a solar farm and concentrating more light on to each cell using larger lenses, IBM’s system enables a significant cost advantage in terms of a lesser number of total components. The researchers said that the concentration increases the power of the sun’s rays by a factor of ten, allowing cells that normally generate 20W of power to generate 200W instead.

IBM isn’t thinking too far outside it’s box here:  Silicon for computing, or silicon for solar,  the physics are pretty much the same.

Two Books for Energy Buyers. And smart people as well.

Predictably Irrational: The Hidden Forces That Shape Our Decisions
By Dan Ariely

Nudge: Improving Decisions About Health, Wealth, and Happiness
By Richard H. Thaler and Cass R. Sunstein

Book Review of  two books Ofgem  and your energy consultant would rather you not read. 

Two reasons to take this seriously:  Both  are based on the work of Daniel Kahneman founder of behavioural economics.  Your energy consultant may try to tell you they are smarter than some Yank psychologist,  but then again, they didn’t win the 2002 Nobel Prize for Economics.

Secondly, both authors are advisers to Barack Obama.   Whatever comes of his campaign,  you can bet your bottom pound  that David Cameron and Gordon Brown are now in a mad rush to use the same  ideas for a UK audience.
Obama rejects heavy-handed regulation and insists above all on disclosure, so that consumers will know exactly what they are getting.
The key word is disclosure and the other key word is feedback.  UK energy consumers get neither, but are expected to keep on paying.  They won’t keep happily paying, or voting, without  some feedback or correctly framed default options.

Streetlight Serenade

Lets consider the streetlight. Or to be more exact for most businesses, the parking lot/driveway light.

You could have a boring one. With wires, lot’s of digging to install and a bill for life. Or you can do something different. What’s more useful for your business? To be a leader…Or you could do boring but still different enough to be interesting.

Either way, there’s free power falling out of the sky every single day. Too expensive to pick up?  At $50 barrel of oil, perhaps.  At $120+?

I’d like my council to go solar streetlight.  It might me be a bit more expensive today, but solar doesn’t cost the earth, or hard cash, tomorrow.

And if disaster strikes? You’ll live

Consider if  electricity prices quadrupled over night.  How disastrous would that be? The people of Juneau, Alaska found out.  The place is still on the map.

Juneau, the state capital is geographically isolated from the rest of the state with a population of 30,000.  It was supplied with hydropower until a recent avalanche knocked out pylons and the city became dependent on back up oil generation.  At today’s prices,  definitely a case of being in the wrong place at the wrong time.

Security of supply itself wasn’t an issue.  What was doubtful was public reaction to high prices.  But guess what?  Demand has been cut by over 40%.

The epilogue to this story, what happens once prices revert to hydro prices will be interesting.  Demand will bounce back for sure, but to what level?

Key paragraph here :  Energy conservation is a hard sell in much of the U.S., but the situation in Juneau seems to be evidence that people will change their ways if the financial incentives are big enough.

An aside:  How come energy customers of all levels, in what  can only be kindly described as the ass end of the middle of nowhere,  get automated meter readings and never an estimated bill, a luxury that the UK government says would cost too much even for business consumers?

Not so Energy Intensive User’s Group

From The Economist  a quick glance at Energy Intensity per Unit of GDP, which is falling worldwide.  As regards the UK, this is interesting as the rate of decrease is far slower than that in the US and Denmark for two examples.   Some of the  US figure is based on export of smokestack industries, but what’s the UK’s excuse?  The US would appear to have embraced the idea of efficiency, and Denmark is reaping the benefits of it’s wind industry.  The UK, as usual, is just muddling along.

We can never pass up an opportunity to highlight the counter-intuitive  and here is a big one:   despite a common perception that China is enveloping itself in coal smoke while causing the current price spike by slaking an insatiable thirst for oil and gas,  China is far more successful in lowering energy output per unit of GDP than all the others, and is more energy efficient on that standard than the UK.

UK based but with a global scope, No Hot Air provides information on various energy issues but especially in the global implications of shale gas.