Fracking: shale gas reserves vastly over-estimated

Owl says: But just enough to desecreate the countryside and line a few pockets.

“The UK’s underground shale gas reserves may deliver only a fraction of the gas promised by fracking firms and government ministers, according to a study.

Research by the University of Nottingham found that early estimates may have exaggerated the UK’s shale reserves up to sixfold.

Last week government officials hinted that a review could be launched looking into loosening UK limits on fracking because shale “could be an important new domestic energy source”.

The University of Nottingham said it had used a new technique to measure the shale gas trapped in the Bowland shale basin in central England and found significantly lower levels than was suggested by a widely quoted study six years ago.

In 2013 the British Geological Survey (BGS) found there were likely to be 1,300tn cubic feet of gas. The latest study found there may be 200tn cubic feet, enough to meet the UK’s gas demand for around a decade.

Prof Colin Snape, of the University of Nottingham, said the BGS’s study had involved desk-based research based on the findings of shale developers in the US rather than actual reserves. The new research was based on studies of actual UK shales, using gas absorption data and field data, he said.

“We have made great strides in developing a laboratory test procedure to determine shale gas potential,” Snape said. “This can only serve to improve people’s understanding and government decisions around the future of what role shale gas can make to the UK’s energy demand as we move to being carbon neutral by 2050.”

It is the second major study in recent years to cast doubt on economic claims made by the shale gas industry. Researchers at Heriot-Watt University said the UK’s most promising shale gas reservoirs had been warped by tectonic shifts that could thwart efforts to tap them. …”

https://www.theguardian.com/business/2019/aug/20/uk-shale-gas-reserves-may-be-six-times-less-than-claimed-study?CMP=Share_iOSApp_Other

“Hinkley Point C: rising costs and long delays at vast new power station”

“The Hinkley Point nuclear site, on the Somerset coast, should have begun powering around 6m homes well over a year ago.

Instead, the 160-hectare (400-acre) sprawl is still the UK’s largest construction site more than a decade after the plan for Britain’s nuclear renaissance first emerged.

It will be at least another six years before Hinkley Point C, the first nuclear plant to be built in the UK since 1995, begins generating 7% of the nation’s electricity.

The price tag is expected to exceed £20bn, almost double that suggested in 2008 by EDF Energy, which is spearheading the project alongside a Chinese project partner.

At the time, EDF Energy’s chief executive, Vincent de Rivaz, said the mega-project would power millions of homes by late 2017. He pegged the cost at £45 for every megawatt-hour.

De Rivaz retired a decade later, but the promised switch-on moment remains distant. Delays have been blamed on protracted Whitehall wrangling over the project’s eye-watering costs: the price per megawatt-hour has since more than doubled.

Still, this summer workers carried out the UK’s largest concrete pour to complete the base of the first reactor. Simone Rossi, EDF Energy’s incumbent chief, said the milestone was “good news for anyone concerned about the climate change crisis”.

“Its reliable, low-carbon power will be essential for a future with no unabated coal and gas and a large expansion of renewable power,” he said.

The cost concerns have proved more difficult for executives and ministers to address.

The National Audit Office condemned the government’s deal to support the Hinkley Point project through consumer energy bills in a damning report, which accused ministers of putting households on the hook for a “risky and expensive” project with “uncertain strategic and economic benefits”.

Hinkley Point will add between £10 and £15 a year to the average energy bill for 35 years, making it one of the most expensive energy projects undertaken.

Under EDF Energy’s contract with the government, the French state-backed energy giant will earn at least £92.50 for every megawatt-hour produced at Hinkley Point for 35 years by charging households an extra levy on top of the market price for power.

The average electricity price on the UK’s wholesale electricity market was between £55 and £65 per megawatt-hour last year.

The dramatic collapse in the cost of wind, solar and battery technologies has made nuclear power even harder to swallow.

Despite its detractors, Hinkley Point has soldiered on because concerns over the project’s costs, although considerable, are still smaller than the concerns over the UK’s future energy supplies.

The project was first mooted under Tony Blair’s Labour government as an answer to the UK’s looming energy supply gap after years of underinvestment in the UK’s fleet of power plants.

The nuclear mantle was taken up in the coalition years by the Liberal Democrat energy secretary Ed Davey, before it was given the green light by the Conservative government.

Andrew Stephenson, the minister in charge of nuclear, said Hinkley was “key to meeting our ambitious target of net zero emissions by 2050”.

Nuclear power is controversial among environmentalists, many of whom do not consider the uranium-fuelled energy to be a sustainable option. But according to the government’s official climate advisers new nuclear reactors are needed.

The Committee on Climate Change expects renewable energy to play a major role filling the gap in energy supplies. Offshore wind will increase tenfold to help meet its 2050 target to reduce emissions to net zero, and the climate watchdog has called for onshore wind and solar to play a far larger role too.

But the advisers predict that at least two new nuclear reactors, in addition to Hinkley Point, will be required to help the UK meet its climate goals.

The verdict means households are likely to be called on to stump up for EDF Energy’s follow-on project at the Sizewell site in Suffolk. It also leaves the door open for a resurrection of plans to build reactors in north Wales, and possibly a Chinese-led nuclear project in Bradwell in Essex too.”

https://www.theguardian.com/uk-news/2019/aug/13/hinkley-point-c-rising-costs-long-delays-power-station?CMP=Share_iOSApp_Other

“One in 10 [South West Water] pollution incidents in 2018 happened in East Devon, figures reveal”

“An Environment Agency (EA) report on the performance of water companies at managing pollution levels said South West Water (SWW) had a total of 98 incidents in 2018 per 10,000km of sewer.

An FOI request made by the Journal has revealed that 14 of those happened in East Devon.

Four of these incidents happened in Honiton – three of them over a 20 day spell in January 2018.

Axminster had four relating to the River Axe and the River Yarty.

Exmouth and Ottery St Mary had two each while Sidmouth and Woodbury had one.

SWW, which had the most pollution incidents in 2018 of nine companies across the UK, said it achieved the best wastewater performance last year but recognised there is still more work to do. …”

https://www.exmouthjournal.co.uk/news/locations-of-2018-pollution-incidents-revealed-1-6191933

“Households could foot the bill for new nuclear plants”

Ministers are set to unveil a controversial new method for funding nuclear power stations and carbon-capture projects — one that heaps cost and risk onto consumers.

The business department is expected to publish a consultation this week on regulated asset base (RAB) financing in the nuclear sector. It is a method used by water companies and Heathrow airport, allowing them to begin charging households years before a project has been built.

French giant EDF wants to pioneer the financing model at its proposed Sizewell C power plant in Suffolk. EDF is building the £20bn Hinkley Point C station in Somerset, but argues that it cannot afford to build any future plants in the UK without a new financing approach.

Ministers are wrestling with how to meet the UK’s power needs, with ageing coal and nuclear stations set to close. However, government plans to publish a full energy white paper this week seem to have been dashed by concerns over how to pay for the programme, and the change in Tory leader. The white paper is now expected in the autumn.”

Source: Sunday Times (pay wall)

Environment Agency severely criticises water companies about pollution risks

Water companies – you know, those privatised companies (with monopolies in their areas) that hand massive bonuses and dividends to their (often foreign) owners and shareholders.

From the report:

“… “This report shows that:

• with one exception, none of the companies are performing at the level the environment needs

• rather than improving, the performance of most companies has deteriorated, reversing the trend of gradual improvement since we introduced the EPA in 2011

• serious pollution incidents which damage the local environment, threaten wildlife and in the worst cases put the public at risk, have increased

This report is about 2018, but I am sad to say we are not seeing dramatic improvements in 2019. As a result we will toughen our regulatory approach!”

Click to access Water_company_performance_report_2018.pdf

Water, water everywhere, but ne’er a drop to drink …

“The owners of Britain’s water companies received almost £5 billion in dividends over the past five years, according to analysis by a union campaigning for renationalisation.

The GMB union said shareholders had “pocketed eye-watering sums” from the privatised water industry, which it called an “abject failure”, including a further £1.4 billion in the form of interest on loans.

Industry returns are in the spotlight after Labour vowed to renationalise the industry and after Southern Water was fined a record £126 million in penalties last week after systematically covering up sewage leaks over seven years.

There are 17 water companies in England and Wales. Three are listed — Severn Trent, United Utilities and South West Water, part of Pennon Group — and the rest privately owned.

The GMB analysis calculates £4.7 billion in dividends were paid out to shareholders between 2014 and 2018, including more than £800 million last year. It counted a further £264 million in other payouts such as share buybacks. It said owners of the water companies had also received £1.4 billion in interest on loans and had accrued a further £520 million in interest, giving a total of almost £6.9 billion it said shareholders had made.

Tim Roache, general secretary of the GMB, said: “If you needed a poster child for abject failure, the privatisation of the water industry is it. Bills up 40 per cent above inflation, billions of litres of water lost in leaks as families face hose-pipe bans and all the while shareholders are trousering billions in profit.”

A spokesman for Water UK, the industry’s representative body, said: “Privatisation of the water and sewerage industry has achieved a great deal over the last 30 years — nearly £160 billion of investment, a healthier environment, better water quality and improved service to customers.

“Customers are now five times less likely to suffer from supply interruptions, eight times less likely to suffer from sewer flooding and 100 times less likely to have low water pressure than when the industry was in government hands. Nationalisation would risk turning back the clock to the days when service and quality failures were far more common, and cash-strapped governments wouldn’t pay for the improvements needed.”

Mr Roache called it a “complete disgrace” and urged the government to do “something about it”.”

Source: The Times (pay wall)

“Calls for compensation after regulator error causes £24.1 billion hike in everyday bills”

Owl cannot believe this was accidental.

“Regulators have allowed water, energy, broadband and telephone networks to overcharge customers by £24.1 billion over the past fifteen years, according to stark new figures from Citizens Advice.

The news comes after research found an initial investigation that unearthed £7.5bn of overcharging for connection to key services was just ‘the tip of the iceberg’.

In 2017 Citizens Advice found Ofgem made errors in setting price controls for energy networks, resulting in energy customers being overcharged £7.5 billion over an 8-year period. After the charity highlighted these concerns, three energy network companies returned a total of £287m to consumers.

But now the charity has found the same errors have been made by Ofgem over a much longer period and by regulators in other markets including water, broadband and phone networks.

This research shows misjudgements by the regulators Ofgem, Ofwat and Ofcom on key decisions have meant customers have been paying far too much for the pipes and wires that connect their homes to essential services over the last 15 years.

These sectors include companies that face little, or no, competition to drive down the price they can charge their customers. Instead, regulators tell the network companies how much they can charge by setting a price control. Customers then pay the charges for these networks as part of their water, energy, broadband and phone bills.

These overpayments partly occurred because regulators made forecasting errors. They predicted that costs, such as debt, would be higher than they became. Regulators also over-estimated how risky these businesses were for investors.

Citizens Advice is now calling for both widespread compensation and a fundamental change in the way these calculations are made.

Instead of forecasting costs, regulators should use available market data to calculate costs and adjust their estimates of investment risk, it argues. This would avoid consumers paying too much in future.

While several energy and water companies have taken steps to return some money to customers, Citizens Advice is calling for all firms to provide a voluntary rebate to their customers. If they don’t, the government should step in.

“Regulator error has meant customers have been charged too much by energy, broadband and phone networks for far too long,” says Gillian Guy, chief executive of Citizens Advice.

“At a time when so many people are struggling to pay their essential bills, regulators need to do more to protect customers from unfair prices. They have started to take steps in the right direction but it is vital they continue to learn from their past mistakes when finalising their next price controls.

“Companies need to play their part in putting this multi-billion pound blunder right. They must compensate customers where they have been paying over the odds. If they don’t government needs to intervene.”

In a statement responding to the research, the energy regulator Ofgem said: “Ofgem remains determined to drive the best deal possible for consumers. Overall, energy network regulation has delivered for consumers, with £100 billion invested, power cuts halved, record customer satisfaction and reduced costs.

“While we do not agree with Citizens Advice’s estimate of excess profits, we welcome their report and recommendations. We will continue to work closely with them and wider stakeholders to apply lessons learnt from previous price controls for the next price control period (RIIO2).”

Last week Ofgem confirmed its methodology for calculating their next set of price controls, including a lower return on equity of 4.3 per cent and a lower allowed return on debt. This would lead to customers’ bills being reduced by £6 billion over five years from 2021, calculations it says Citizens Advice supports.

Meanwhile, households were warned they could be hit with average annual energy bill rise of almost £210, or 20 per cent, as 60 fixed dual fuel energy tariffs come to an end this week according to switching service weflip, charities have called for immediate action to better support energy customers in vulnerable circumstances.

An independent report published this week says urgent action is required by all energy companies, regulators and government as well as price comparison websites – with support from consumer groups and charities – to better identify customers in vulnerable circumstances and improve the help and support given to them.

Joanna Elson, chief executive of the Money Advice Trust, who served as a member of the Commission for Customers in Vulnerable Circumstances, which produced the report, said the charity is increasingly hearing from people struggling to meet everyday household costs.

“This report puts the energy industry firmly under the spotlight. Significant work is needed to improve support for energy customers in vulnerable circumstances. As the report notes, there is good practice out there, but this support is inconsistent and varies greatly across the sector.

“Training frontline staff to identify customers in vulnerable circumstances is a crucial first step, while actions such as committing to not use High Court Enforcement Officers, can also make a big difference for the most vulnerable.

“There is also an important role for the third sector to play alongside suppliers through greater partnership working. This could be through signposting to debt or energy saving advice, and helping people access financial help and other essential costs.”

https://www.independent.co.uk/money/spend-save/regulator-error-24-billion-energy-broadband-telephone-connection-costs-a8937546.html