23 Jan 2009

Getting our private wires crossed

Casey Cole takes me to task for being sloppy about the Zero Carbon consultation. Maybe he is right. I still haven’t read it all and I am beginning to lose heart. It is, in my opinion, an incredibly hard read. I’ve had something like ten attempts to “get to grips” with this consultation, but keep getting bogged down by the minutiae.

Try this paragraph, drawn (pretty much at random) from p.50

The principles set out in section 3 include incentivising reductions in emissions from the locality of the development. All of the measures that can be put in place to achieve the carbon compliance level (see section 5) are either on site or (in the case of directly connected heat) local. However, allowing the developer to provide the home buyer with an investment in LZC energy infrastructure is not necessarily tied to the locality.

Yes, it sort of makes sense, but somewhere in the last sentence I lose the plot. Maybe that’s because the last sentence doesn’t actually make sense grammatically. Or maybe, I am just not clever enough to understand exactly what they are saying. That’s why it’s a difficult read. If you try and plough through it, you keep getting cross references to different sections, which interrupt the flow. And if alternatively, you try to read it in bitesized chunks, you lose the thread and it makes very little sense.

What you can make out is that there’s an awful lot of local power for local people going on here, and my mind keeps flipping to that crazy shop in the League of Gentlemen. “We’re a local power station for local people.” I keep getting stuck with this image. It makes adult comprehension rather taxing.

My main problem with Casey’s arguments is that, as with much of the Zero Carbon Consultation, I barely understand them. They are complicated. But that doesn’t mean they are wrong. It’s just that I think this stuff should be easy to understand, and it’s not.

His main point seems to be that local electricity generators may have a future after all, because they still have one big factor in their favour, which I hadn’t considered, and that is that they will be able to undercut the big power suppliers because they won’t have to pay compliance costs associated with the Renewables Obligation and Climate Change Levy and from avoiding most distribution (DUoS) and transmission (TUoS) charges.

I take the point; I hadn’t considered the effects of the added Renewables Obligation Certificates and the Climate Change Levy. They might be enough to swing it, but equally, they might not. The added cost per kWh is not large, currently around 0.3p for ROCs and 0.45p for the Climate Change Levy (not applied to domestic customers).

And of course, however you look at it, it’s still featherbedding. These LZC ESCOs (see, I’m at last getting to grips with all the acronyms!) will only be profitable if they can avoid paying the levies that the big energy producers have to pay.

But will that subsidy be enough to tempt people to invest in them? Anyone setting up an ESCO for a zero carbon development is going to want to have a reasonable guarantee that there will be a steady income stream for, say, 20 years. What is to stop another European Court ruling coming along in a year or so, suggesting that this practise is also anti-competitive?

So I am still not convinced by Casey’s rebuttal of my original tract. I take the point that there may be a middle way between private wire and the full-on National Grid. I am just not convinced that it makes much sense.

On a brighter note, I have been invited to go to a Zero Carbon Afternoon to discuss the finer details of the Consultation. I have selected the event in Peterborough on Feb 18. I am rather hoping it will shed some more light on the consultation because, at the moment, I am losing the will to go on struggling with it.

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