VEGA News Item

Rewiring Britain will add costs of £60 a year for Brits - 08/10/2010

Let’s Not Forget the Costs and Environmental Costs of Fuel Miles

1.  Every householder must know the prospect that many well-recommended state-of-the-art devices installed 10 years ago are already out-of-date and may be in need of replacement while they are still apparently fit for purpose, but out of the shortening periods for which guarantees operate. We can ponder on electric light bulbs, with, apparently plenty of life left, that are replaced with subsidized and long-lasting and more efficient versions, which in turn will be superseded by LED (light emitting diode) lighting with still greater promise of efficiency and lifespan. Now come calculations on the big scale; an energy regulator called Ofgem (Office of the Gas and Electricity Markets) is warning that “annual fuel bills will rise by up to £60 in the next decade to help to meet the cost of rewiring Britain’s aging energy network” Ofgem dismissed objections to the plans for imposing an “unfair burden on householders while offering a boon to big business.” Richard Hall of Consumer Focus said that “funding network improvements is just one of a cocktail of costs energy customers are being asked to foot the bill for.” He warned: “Ofgem needs to be vigilant so that customers are not asked to write a blank cheque.”

2.  Alistair Buchanan, Ofgem’s chief executive, dismisses the concerns, saying that the rise in bills was essential to support a doubling of investment in Britain’s infrastructure, much of which dates from the 1950s and 1960s. He explains that much of the cash would be spent on building new high-voltage cables under the sea, linking Scotland with areas of high demand in central and southern England. Further reinforcements will be necessary for pylons between Scotland and England and in East Anglia where EDF (Électricité de France) is planning a giant nuclear plant at Sizewell in Suffolk and where several big offshore windfarms are mooted. Other projects are expected in Anglesey and in the South West, where EDF, RWE (Rheinisch-Westfälisches Elektrizitätswerk) and E.ON hope to build 3 nuclear power stations.

3.  The British wind energy industry welcomes the changes, which are expected to channel fresh investment into the industry. Over the next decade about a quarter of the UK’s out-of-date coal and nuclear generating capacity is set for retirement. By 2020 the Government hopes that 30% of all Britain’s electricity will come from renewables, up from less than 5%. Ofgem said that the extra charge was needed to fund a £32 billion investment in new pipes and wires to connect sources of electricity such as offshore wind parks in remote areas and new nuclear reactors.

4.  Ofgem also announced a new pricing regime which it claimed represented the “biggest change to the regulatory framework for 20 years”. It swaps the old inflation-linked model for an incentive-driven approach that rewards companies for finding ways to cut costs. Mr Buchanan accepts that the old system had served its purpose by keeping customers’ bills down, but it is a “blunt tool”. The new model, known as RHO will be applied over the next 18 months. It will set pricing caps every 8 years, rather than the present 5-year period and will penalize companies that perform badly.

5.  Conduction of electricity is involved in most of these fuel miles and by lengths of copper from source to end user, minimizing losses. Renewable sources of the metal must be assured, which involves electricals on all scales and the consequences in macro-and micro-engineering, in which Britain once excelled, but is now being overtaken by countries such as India and China, with shipyards both making ships and breaking them to recover valuable and reusable materials, among which copper is notable. Mining developments, eg in Africa will need stable political systems and lack of strife due to wars of all sorts. Britain must see a declining role and status in the world’s affairs, marked by a declining lack in financial matters and those invisible assets of the business world such as trustworthy banking.


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