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« Quote of the day, consumer care edition | Main | The underpinning of energy policy collapses »
Friday
Oct032014

Close down DECC

The Commons Public Accounts Committee has issued a report about the award of renewables contracts. It is not a pretty sight.

By awarding early contracts worth up to £16.6 billion to eight renewable electricity generation projects without price competition, the Department of Energy and Climate Change (the Department) failed to adequately consider how to secure best value for consumers. In committing 58% of the total funds available for renewable contracts under these transitional arrangements, the Department has severely constrained the amount available to be awarded under new arrangements through price competition, reducing the opportunity to test the market and secure the best value for consumers. Under the terms of these contracts the Department failed to defend consumers’ interest. For example, the risks associated with inflation will be met by consumers with inflation measured on the Consumer Prices Index. At the same time any benefit from excess profits will be retained by the developers as there are no claw-back clauses.

This is rotten timing for DECC, coming as it does, hot on the heels of yesterday's announcement that the official predictions of future oil and gas prices have been slashed; as I noted in yesterday's post, the policy of successive governments has been based on the assumption that oil and gas prices will rise every year.

As we look at UK energy policy now, DECC has had the country make a massive financial gamble on the back of a prediction that was wholly unfounded and which has been obviously so for many years. We now learn that DECC has also distributed this astonishing wave of public money in a manner that can only be described as monstrously incompetent, and which many will assume to be monstrously corrupt. And to top it all, no lessons have been learned at all, as the preposterous contract for the new Hinckley Point nuclear power station clearly demonstrates.

Any reasonable person would close down DECC right now and lay off all the environmentalists who staff it. This being the public sector, it goes without saying that nothing of the sort will happen: nobody will be held responsible and no lessons will be learned. The department will simply award everybody involved a bonus for good performance and they will carry on as before. There is simply nothing anyone involved in UK energy policy can do that will have any repercussions for them.

 

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Reader Comments (46)

Strategic action on the part of the consumer could actually make a difference and help get rid of DECC
This action is quite simple, and won't take long or cost the consumer anything.
Here's what they need to do.

Vote UKIP

Oct 3, 2014 at 9:08 AM | Unregistered CommenterRog Tallbloke

I totally agree.

DECC serves no useful purpose, and clearly demonstrates repeated institutionalised incompetence

Oct 3, 2014 at 9:10 AM | Unregistered CommenterJoe Public

@ Tallbloke

The irony that some first-time voters will never have experienced Global Warming, is delicious.

Oct 3, 2014 at 9:13 AM | Unregistered CommenterJoe Public

UKIP should do some stirring. This would worry the Conservatives, who may try to attach all the blame to Davey and the LibDems. The whole subject deserves much more publicity than it usually gets

Our energy policy is a hugely expensive fiasco and it is time something was done about it. Closing DECC would be a good start.

Oct 3, 2014 at 9:14 AM | Unregistered CommenterSchrodinger's Cat

I look forward to reading a detailed report of this in the Guardian Environmental Section which will reveal that , actually, all is for the best in the best of all possible worlds.

Oct 3, 2014 at 9:16 AM | Unregistered CommenterJack Savage

I have a relative who works at DECC, and has done since getting his masters. He's an environmental economist (one of many in DECC, I imagine), briefing the likes of Huhne, Davey, and Gummer. He appears to know nothing whatever about the climate question, but is fully invested in the warming scare (condition of employment, I guess).

Closing DECC would obviously benefit the country: but it would also benefit many of those who work there. My relative is not an untruthful man, but he has worked since leaving university in an environment where systematic untruthfulness and wishful thinking are the norm; an environment where the taxpayer would get better value if he were paid to stay at home and do nothing. He desperately needs to get out and find a real job (although his qualifications won't help with that).

This comment is anonymous partly because I don't want to foment a family rift, and partly because I am ashamed of having a family member employed in this way.

Oct 3, 2014 at 9:32 AM | Unregistered Commenterfen tiger

Behind DECC is the revival of Fascism with windmills and solar farms to enrich supporters of the planned return to Aristocratic Rule. The intention is force the population into subsistence farming or to the inner cities to die in Third World squalor. This was predicted in 1926 by H G Wells; Agenda 21 and IPCC pseudoscience were to facilitate the mass cull. It's them or us folks.

Oct 3, 2014 at 9:33 AM | Unregistered Commenterturnedoutnice

A striking and unexpected degree of competence from the CPAC. Do we know who is the prime mover? Was this the result of testimony before the committee which we can refer to?

Oct 3, 2014 at 9:52 AM | Unregistered Commenterrhoda

Insufficient consideration given to consumers! Don't they know how ignorant and benighted 'consumers' are. They are to be led, forcibly as at present, to the promised land where no fossil fuels are to be burned, be that in our homes, our cars, or our power stations.

Of course it will be more expensive, and there will be transitional hiccups, but there is a planet to be saved and we cannot let the interests of consumers get in the way of that, can we? High salaries for the people handling this great challenge are of course essential, and you would be surprised at just how many people we need. There is no end of meeting with countless consultancies out there cajoling 'consumers', companies, local authorities, and other arms of hmg to follow good practice. Plus we must meet with a bewildering array of NGOs who provide us with useful advice, as well as staff, in exchange for being kept in the loop. Our EU and UN obligations as world leaders of planet saving through temperature control using renewables are also quite onerous - keeping up with the jargon and the fashionable terminologies by itself is quite stressful. But I may be forgiven for noting that we are jolly 'resilient' with all that stuff, and we are greening the use of our linear assets and vertical assets (roads and buildings to you consumers).

Oct 3, 2014 at 9:57 AM | Registered CommenterJohn Shade

Curious, this. The DECC is obliged to respect the public procurement guidelines, and the UK is expected to respect the OJEU guidelines for government-sponsored development programmes. It is obliged to seek competitive tenders, although there are probably some circumstances where single tender awards may be made quite legally.
It would be good to see an enquiry to establish whether there was a breach of the rules, and if so, whether it was due to administrative incompetence or attributable malfeasance. Does anyone know whom we need to contact to request such enquiry?

Oct 3, 2014 at 10:04 AM | Unregistered CommenterPaul_K

Being rid of DECC was one of the main arguments for voting YES. But then it would likely have been replaced with something worse.

UK Wind Power in The Doldrums

Here's something to keep DECC and the Met Office busy.

The lack of wind in the UK this year has already been in the news resulting in poor performance of UK wind farms. UK wind now has 11.2 GW [1] of installed capacity amounting to 13.5% of total generating capacity in the UK. In September the wind park generated 739 GWh amounting to 3.3% of UK demand [2]. The load factor was only 9%.

I also link to Clive Best's Supermoon weather forecast that I believe deserves some wider exposure. Watch the vid and listen to the cool music!

Oct 3, 2014 at 10:12 AM | Registered CommenterEuan Mearns

There can be no clearer demonstration that we already have a de facto fully nationalised power industry.

A sensible successor government would explore whether some of these contracts can be renegotiated, using a combination of the threat of a windfall tax (as applied e.g. to British Gas as a consequence of their monopsony power), revoking clauses deemed ultra vires, using the threat of corruption investigation and long jail terms, or otherwise.

Oct 3, 2014 at 10:14 AM | Unregistered CommenterIt doesn't add up...

"only be described as monstrously incompetent" - That would be Ed Davey then!

Oct 3, 2014 at 10:15 AM | Unregistered CommenterCharmingQuark

I note that among those giving evidence was Hugo Robson, Commercial Director, SRO for FID Enabling for Renewables.

He seems to be missing the letters DLE from his title.

Oct 3, 2014 at 10:18 AM | Unregistered CommenterIt doesn't add up...

[Snip - calm down]

Oct 3, 2014 at 10:19 AM | Unregistered Commenterturnedoutnice

Surely another example of why our current Government does not work to the benefit of the Public.
Margaret Hodge a Labour MP and chairman of the Public Accounts Committee has been highly critical of the DECC for many years now. You only have to look up the PAC's reports and you won't find one that is not critical.
Recently we had HC 103-i - the Public Accounts Committee Oral evidence: Smart Meters follow-up.
It turned out to be quite revealing.
1. Smart meters are not guaranteed to work.
2. Saving the cost of meter readers will benefit the supplier and be paid for by the consumer.
3. More to the point it will be up to the consumer to restrict energy consumption in order to save money. There is no automatic saving from having a meter
4. The Governments ultimate aim of forcing households currently using gas for heating and cooking to change to electricity is revealed.
5. Relying on renewables will mean a 24/7 electricity supply cannot be guaranteed. Meters and variable tariffs are necessary to coax the consumer to use electricity when the wind is blowing and the sun is shining. This is also revealed in HC-103 i.
In the PAC's current report there are six recommendations, but, I doubt any will be implemented.
Recommendations of the Select Committees should be put into practice, but are ignored by the Government of the day. Whitehall Departments like the DECC carry on in their own sweet way.
I would stress that Margaret Hodge is a Labour MP and it was Ed Miliband who introduced the Climate Change Act, which is the DECC's aim to implement.
Labour’s Leader and shadow Secretary of State for Energy and Climate Change have both promised to freeze prices for 20 months and set a 2030 power sector decarbonisation target.
Current and future governments are bound by the Climate Change Act.

Oct 3, 2014 at 10:22 AM | Unregistered CommenterShieldsman

I'm sure most of us here have written to DECC (via our MPs) about the catastrophic energy policy they have been pursuing and continue to pursue. I'm sure we've all had the standard brush-off letter saying they know what they are doing and we are just ignorant plebs (but couched in Sir Humphrey language). So yes, there is nothing that we can do about DECC and Government energy policy except via the ballot box.

Oct 3, 2014 at 10:29 AM | Registered CommenterPhillip Bratby

This is another example of why DECC should be closed:

https://decc.blog.gov.uk/2014/10/03/a-momentous-day-for-ccs/

Celebrating CCS is like dancing on the graves of taxpayers. At least in Canada it is predicated on CO2 flood EOR.

Oct 3, 2014 at 10:42 AM | Unregistered CommenterIt doesn't add up...

...reducing the opportunity to test the market and secure the best value for consumers
Say what!?!?! Do the PAC actually believe that windmills and PV is best value for consumers?? If they measured cost per kWh in a non-rigged market wind and solar wouldn't get a look in. As it is, I calculate the amount of the £16.6B put out in contracts that were 'renewable' was £9.6B !! Some very rich Ecoligarchs are about to get richer.

Oct 3, 2014 at 10:43 AM | Registered CommenterHarry Passfield

cCan we have a list of who was in charge of DECC when all that happened?

Oct 3, 2014 at 10:49 AM | Registered Commenteromnologos

With regard to the bird-chopping wind-turbines, has no-one researched the climate change that could be triggered by the removal of all that wind energy from the atmosphere? Surely, DECC, being a totally unbiased department seeking only the truth (sic) would have launched such an investigation, especially with reports that wind speeds are now lower than expected? They can’t be short of evidence by now, can they?

Oct 3, 2014 at 10:56 AM | Registered CommenterRadical Rodent

DECC **AND** the Environmental Agency - both need to go.

http://www.insidetheenvironmentagency.co.uk/

Oct 3, 2014 at 10:58 AM | Unregistered CommenterJeremy Poynton

At the risk of being snipped, surely even someone as stupid as Ed Davey can see there is a problem with the economics of renewables.

Oct 3, 2014 at 11:06 AM | Unregistered CommenterSteve Jones

fen tiger - Send this blog post and your comments to your relative, so he can respond?

Oct 3, 2014 at 11:27 AM | Unregistered CommenterRichard

Evidence of DECC stupidity has been mounting for years but that is all that seems to happen.

Come the Revolution!

Oct 3, 2014 at 11:38 AM | Unregistered CommenterJohn Marshall

Steve Jones.
No, Ed Davey is blind to problems that all others can clearly see, his is a faith whose high priests are WWF, Greenpeace and others of that ilk. The energy policy is insane, no sane person would adopt a system that closed down all industry in this day and age. But then this is Ed the wizard, believer in all things green.
I contacted OFGEN when they called for an enquiry into the Energy Companies, not interested but the Competitions Authority were. I complained that to single out the Companies was wrong, Ed had offered them a high price for doing what he wanted. A bribe in any language and third world corruption writ large.

Oct 3, 2014 at 11:39 AM | Unregistered CommenterDerek Buxton

Oct 3, 2014 at 11:39 AM | Derek Buxton

Sadly,

I think you are right.

Oct 3, 2014 at 11:47 AM | Unregistered CommenterSteve Jones

Start a trend #ClosedownDECC

Oct 3, 2014 at 11:47 AM | Unregistered CommenterBloke down the pub

@ Paul_K Oct 3, 2014 at 10:04 AM

"Curious, this. The DECC is obliged to respect the public procurement guidelines, and the UK is expected to respect the OJEU guidelines for government-sponsored development programmes. It is obliged to seek competitive tenders, ........."

Seeking tenders for a new *anything* will undoubtably comply with procurement process guidelines; but if that new offshore wind subsidy-farm is not actually 'necessary', then ........

Oct 3, 2014 at 12:09 PM | Unregistered CommenterJoe Public

@ Bloke down the pub Oct 3, 2014 at 11:47 AM

"Start a trend #ClosedownDECC"

Apposite capitalisation will avoid misunderstandings, particularly by Mr Davey.......

"Start a trend #CloseDownDECC"

Oct 3, 2014 at 12:13 PM | Unregistered CommenterJoe Public

Not so much incompetent as negligent. Those at the top deserve to be held to account for mismanagement of public money.

Oct 3, 2014 at 12:25 PM | Unregistered CommenterDaveS

Pissing away other people's money is much less painful than spending a bit of your own.

Oct 3, 2014 at 12:33 PM | Registered CommenterMartin A

IDAU @ 10.42 : "A momentous day for CCS". 10 minutes research showed a capital cost of 8.7m euros per MW capacity with an unspecified (but not small) subsidy. The cost of power generated is 180% of non-ccs coal units.
The price of thermal coal has slumped in N.America , a situation not likely to continue considering the ambitions of China and India. The extracted CO2 is used to frack oil which will more than replace the "saved" CO2 emissions.
The long term viability depends on the inception of a high "carbon tax". As you say - a momentous day for Canadian taxpayers.

Oct 3, 2014 at 12:44 PM | Unregistered Commenterdiogenese2

Write to:

Rip Off Britain
BBC Quay House
MediaCityUK
Salford
M50 2QH

and/or

ripoffbritain@bbc.co.uk

Oct 3, 2014 at 1:16 PM | Unregistered CommenterJohn Silver

De Closedown CCid.

H/t J. P. & B. d. t. P.
===============

Oct 3, 2014 at 1:19 PM | Unregistered Commenterkim

This is what happens when you write end of the world justifications for spending money. When money is no object, people treat it that way.

Oct 3, 2014 at 1:49 PM | Unregistered CommenterTinyCO2

Your Grace,

Even the cheerleading nutters of "Doomberg" reported the story:
http://www.bloomberg.com/news/2014-10-02/u-k-seen-hurting-consumers-with-renewable-energy-deals.html

Oct 3, 2014 at 2:00 PM | Unregistered CommenterDiogenes

Will heads roll? Probably not. When was the last time a politician or a civil servant paid the price for failure? Even in the police and local government only two people resigned (one very belatedly) for their failure to protect girls from mass rape in Rotherham.

Oct 3, 2014 at 2:09 PM | Unregistered CommenterRoy

All this "free" energy seems very expensive.

Oct 3, 2014 at 2:25 PM | Unregistered Commentertom0mason

The increasingly sceptical-sounding Emily Gosden in the Telegraph has an article covering both this story and the preceding one about falling gas prices ("Expensive green energy a 'bad gamble' as ministers slash gas price forecasts").

I wonder if Emily reads BH?

Oct 3, 2014 at 3:30 PM | Registered CommenterPaul Matthews

I am sure these "contracts" would leave a very interesting paper trail indeed!

Oct 3, 2014 at 4:16 PM | Unregistered Commenterc777

Surely this procurement process does not comply with EU procurement regulations but I don,t expect anything to happen, The European Commission can be very selective in taking action incases like this.

Oct 3, 2014 at 5:27 PM | Unregistered CommenterSpen

No need to abolish the DECC, just return it to its previous incarnation as the DoE, cull the tree-huggers within it and turn over the control of funding of renewable energy projects to the DIBS. If the renewables industry has to put up a serious business case for further subsidies to DIBS, they would be stuffed, (without any further political interference).

Oct 3, 2014 at 5:36 PM | Registered CommenterSalopian

I suggest the following:

The Department for Energy and Climate Change should simply be renamed the Department for Energy.

Why..?

Because for eighteen years the climate hasn't changed - so they've NOT BEEN DOING THEIR JOB....!

Oct 4, 2014 at 2:19 PM | Unregistered Commentersherlock1

The DECC guy has replied to our comments Ashley Ibbett — 09/10/2014
@It doesn't add up...

Oct 18, 2014 at 6:29 PM | Registered Commenterstewgreen

mispost

Sep 25, 2015 at 2:45 PM | Registered Commenterstewgreen

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