Planet Pickles Strikes Again

The following is reproduced from Edie. It speaks for itself.

Renewable energy company Ecotricity has hit out at the Government for its approach to planning, claiming it has introduced conflicting rules for certain projects.

Last week the Government announced that it will allow applications from business and commercial projects to be determined at national level, avoiding local level decisions.

However, at the beginning of June the Government announced that planning guidelines would give local communities earlier and better involvement in the siting of onshore wind farms.

Ecotricity founder, Dale Vince, said: "At the beginning of June, the government announced that it was going to give "local communities a greater say on planning" and as evidence of its apparent commitment to localism, it issued yet another set of planning guidelines that meant local communities had greater opportunity to veto onshore wind projects - this was supposed to be what Eric Pickles called "localism in action".

"Now, barely three weeks later, the government has announced that it is to allow projects such as food processing plants, theme parks, warehouses and hotel complexes to completely bypass those local communities and seek planning permission directly at national level. Where is the localism in that?

Vince backed the need to cut red tape and agreed that an efficient and effective planning process "that balances local opinion with national interest" must be put in place.

"Surely it should be consistent, rather than the situation we have now where a theme park is fast-tracked as nationally important infrastructure, while wind energy is left in a kind of planning ghetto, in the same category as a new garden fence," he added.

As I said - it speaks for itself - DCLG appears to be acting as incoherently as ever.

Electricity Capacity - Again

Golly gosh! We have a 122 page report from Ofgem telling us that the electricity system is getting a tad squeezed. We know this! Even this ill-informed blog has highlighted the problem on a number of occasions. The words "Rome", "fiddling" and "burns" spring to mind.

Successive governments have ducked and fudged the issue, failed to put sensible market mechanisms in place and generally failed the electorate. Given that energy is the starting point for the nation's value chain this represents an horrendous dereliction of duty. The current mob seems to me to be no better than its predecessors. Dare I say it? Bring back the CEGB with all its faults!

MPC - No Change

So the MPC voted for no change last week. This is hardly surprising given that Mark Carney had only been in post for a week or so. However, I have to say I was a little bit surprised at the strength of the statement about long term interest rate propspects. To be as explicit as the statement was risks a future conjunction of egg and face, although in this case I don't think that's too likely. I guess one underlying reason for the statement might be an attempt to drive a little volatility out of markets. We shall see.

No change to QE seems to me to be a good decision but some of the noise from commentators is a little concerning. Take KPMG, for instance. This is clearly suggesting that a future increase in QE is firmly on the cards. Don't we already have enough stimulus in the economy? (Although some of it is mad - such as the moves to prop up house prices - come on guys, let the market find it's own level). And there are some bonkers ways to creating stealth QE already up and running. Interest paid on gilts owned by the Bank as part of QE is now being handed back to Treasury. Isn't that just a tad circular? This is boosting money supply at just a time when it would appear, at least in the cases of households and private firms (excluding the financial sector, of course), that it's pretty good anyway.

As an ordinary Joe I'd like to see us moving to a position where interest rates are no longer at rock bottom, where it pays to save, where bond and gilt yields actually reflect inflation and expected growth, and where central authorities have managed to butt out of interventionist policies.

There is still a lot of pain to be borne, but isn't time we really took the medicine? Cheap money is propping up zombie firms and households. It's time they were purged from the system.

So Eco Bling Adds To the Value Of Your House

DECC has recently released research suggesting that energy efficiency measures can add to house sales values. The report suggests that, on average, moving up 2 bands on the EPC scale could add £14k to a dwelling's value. There are probably plenty of properties that could see that improvement for an outlay of less than £14k so, if the research is valid, this does provide an additional arrow in the retrofit trades collective quiver. Interestingly, the regional breakdown does not give any figures for the south east (where I live so appealing to my selfish side) - there's a footnote saying the results were not statistically significant. I haven't read the full report to understand what's going on here - perhaps the high average price of properties pushed any energy efficiency factor into the noise?

Centrica Boost to Fracking

Centrica has bought a 25% stake in the Bowland Shale exploration licence. What does this mean? Is it signalling that shale gas and fracking are truly on the map now for the UK, or is it just Centrica hedging bets? Afterall, the £40m it has paid to Cuadrilla and the £60m it is putting into exploration and apraisal hardly rates as a hill of beans for the energy giant. A bit of bet hedging is my assessment at the moment. Fracking may come but it is not yet (nor is it likely to be in my opinion) the game changer that many are suggesting.

Energy Costs and Competitiveness - A Cleft Stick

Ten days or so ago IGas released studies suggesting that shale gas resources in Great Britain are considerably higher than previously thought. I understand that the report said nothing about commercial development but there is clearly the potential for extraction of indigenous shale gas, possibly at advantagous cost.

This really points up the conundrum facing the government in its ongoing development of energy policy. The UK has some of the highest energy costs in the world, and since energy is the start of many a value chain this has a direct impact on the competitiveness of UK industry. But HMG is pursuing a low carbon energy route map (although recent decision might make you doubt that). It's difficult to see how the current crop of low carbon sources - wind, nuclear, solar, even CCS - will bring costs down.

Crunch time may come soon - could we be nearing the time when HMG pulls back from its domestic climate change goals in favour of ensuring that developing nations minimise their CO2 emissions?

New Nuclear - Nearly There?

Word on the street is that Cameron's meeting with Hollande a couple of weeks ago stitched up a couple of  "scratch my back and I'll scratch yours" deals and that a notable beneficiary of the new friendliness between the big boys is EDF - or more specifically EDF's nuclear ambitions in the UK.

There's still the issue of financing the project to be overcome - EDF has a rather rocky balance sheet but it looks a though some risk sharing with construction partners might just smooth away that issue.

And then, of course, there's the strike price to settle on. Both sides are in an "interesting" place on this one. HMG must be seen to be being tough in its negotiations. EDF desparately wants the project. Look for last minute concessions on the strike price here.

Watch this space.