What to do about a thing like a Green Bank ?
March 22, 2010
So the UK Conservative party want to build a Green Investment Bank to consolidate all the funding functions currently held by bodies such as The Carbon Trust and the Marine Renewables Deployment Fund.
Fair enough, seems like a good idea. Use ISAs to fund it ? Again, no objections there.
Here’s what it needs to be successful;
A strong research department.
That’s it. Nothing else. Just a set of market savvy investment analysts to make sure that the technologies and projects that are being invested in are not complete trash. It won’t be able to afford the best brokers or indeed the best analysts, but then its aim is not to outperform the market. It would be good for the country if it did, home-grown profits count double in this game, but there is no shareholder imperative to work against (or indeed with) so fiduciary responsibility is replaced by electoral responsibility.
The analysts need to have cross-sectoral visibility so that they are not working against each other but apart from that nothing special needs to be in place, except some independent oversight to build confidence in the market that these are kosher companies with realistic chances of commercial success.
Of course if the worst happens and all its investments come to nought, that could be a lot of cash that the govt has to refund to the ISA holders, but presumably there will be some form of hedge against catastrophic loss.
We’ll have to wait and see what Labour’s equivalent looks like when the last pre-election budget is announced on Wednesday, but Reuters is reporting a £2bn investment fund with half from assets sales and half from private investment. I’m sure that there will be more detail than that, but if Alistair Darling’s announcement conforms to the leak, sorry briefing, then it really isn’t very imaginative. Its just another pot of cash with another set of criteria. £2bn isn’t enough to kick-start any major infrastructure projects (the super grid is estimated at around £30bn, the high speed rail at £30bn and each of the 8-12 new nuclear reactors is supposed to be around £5bn (very roughly)), so you have to ask where is this money aimed at ? We’ll find out on Wednesday I suppose.
Forging ahead
March 18, 2010
Finally Sheffield’s Forgemasters has got the government assistance that it has been looking for to build a 15,000 tonne press needed to manufacture the largest nuclear reactor components. I say finally because the project finance team has been working for 2 years to finalise the deal, before that the forge was conceived and designed, so my guess is that at least 5 years of work has gone into this and without it UK plc would seriously loose out in any new nuclear build.
The help is in the form of an £80m loan so we tax payers aren’t going to get stung for the full £80m unless Forgemasters goes bust immediately. We are effectively paying just over half the interest on the total loan by standing 57% of the total £140m required to build the kit. So, rough guess on a 5 year loan at 10% pa, the tax payer is taking £40m off the total bill that Forgemasters will have to pay. Its an opportunity cost to us, rather than an expenditure. Westinghouse, Lloyds and the European Bank are actually putting up most of the money. If you want a comparison the new windturbine blade test facility in Blythe is receiving over £25m worth of grants and supporting infrastructure, but then that’s a brand new capacity for the country and it deserves help too. I don’t know about you but I’d rather my money went into manufacturing than banking, maybe that’s just me 
I have to say I don’t think that’s a bad deal with the nuclear industry going the way that it is and it is a big piece of the supply chain for the UK’s own new nuclear generating capacity. So whether you regard £40m as a speculation against later export revenue, an investment in reducing import expenditure, a way to retain some real, world-leading manufacturing expertise, or simply a way to create several hundred skilled jobs for the next couple of decades it can’t be bad news.
Right now 15kt presses are not exactly common with only Japan, China and Russia reported as having capacity on this scale, with South Korea and India both wanting to enter the field.
Other people’s comments;
The Dark Lord lays out the argument in this article from last year.
This article from the Institute of Engineers has a similar flavour.
The WNA’s view of developments.
Even the Guardian seems to accept the logic of the loan
There is a second interesting point within the funding announcement (its near the bottom) was that Forgemasters would be ‘overseeing’ development of Indian forging capacity in a £30m deal. That is a technology transfer deal, effectively to show the Indians how to forge the smaller components of nuclear power systems. So we gain access to their market at the expense of some of our older technology. Swings and roundabouts. The big money is in the big kit, but a £3m per year revenue stream from tech transfer is enough to pay quite a chunk of the loan interest without tying up too many resources.
Of course you could take the other view, that nuclear power is bad/unnecessary/expensive/foolish/dangerous whatever form it comes in and we shouldn’t help its development through taxpayer assistance, whatever form it comes in. Personally I can’t justify that opinion ethically or economically as long at we in the UK use medical isotopes and invest in other less proven energy sources, such as coal with CCS or solar PV. I can see the arguments, but I think that they are emotionally driven rather than empirically based. The argument against spreading nuclear power technology to countries that currently don’t use it is much stronger, but even there its not black and white.
So I think the Forgemasters deal is great for Sheff and good for the UK. Let’s stop fannying about and start building big kit. Don’t care if its 300m tall 10MW offshore wind turbines, giant steel sea snakes or nuclear pressure vessels, the sooner we start the better, then we can stop hand-wringing and get back to helping the last billion out of crushing poverty.
Monbiot vs Delingpole
March 5, 2010
As is my want in these cases, no comment on content as Monbiot and Delingpole have a quick tussle on BBC’s The Daily Politics (unusually a distinctly right-leaning BBC show)
Scientific Method as Strasberg’s Method
March 3, 2010
We’ve been hearing a great deal about science in the media in the context of climate change and new energy sources lately, and the quality of some scientific work has been called into doubt, and there have been calls for an increased understanding of science to try and stop misrepresentation by the media, blah, blah, blah. This call for dialogue between the fields of arts and sciences is happening on more and more occasions as science gets more difficult and mass media becomes less patient. Anyone still remember CP Snow ? So why don’t we look at things a slightly different way ?
Science is media
That sounds a bit odd, but philosophically science is a mechanism by which we try to understand the physical reality that we inhabit and mass media (especially news journalism) is also a mechanism to help understand the world around us. Their methods are different but their core goals are the same – enhanced understanding of reality.
So lets look at some recent science through a media lens. In fact let’s get PoMo on its ass !
Marshall McLuhan in ‘The Medium is the Massage’ posits that you perform the message that you wish to communicate. It doesn’t matter if that is verbally, ethically, artistically, mathematically or physically, what you do and how you do it IS what you say. On the other side of the coin if your performance does not tie in with your message the audience undergoes cognitive dissonance and the message is garbled, contradictory and ineffective.
Strasberg’s Method Acting technique is a great example of this. The actor does everything in his power to become the character in order that his whole performance reflects the experience of that being, in so doing the words and the physical body perform as one and, hopefully, the role is played well. The actor doesn’t actually become the character, that would be impossible, but he will take on or construct every aspect of that character that he can discover.
So if we take the recent CRU email scandal (yes, scandal), we have a set of scientists who perform their science under the scientific method which involves openness, respect for others results and views, self-criticism, peer-review and data validation. Over the years they have told us ‘trust us, we’re the best, we do good science’, in effect we’re following the scientific method, and now we find out that their performance is not backed up by their method. We thought that we were seeing the real thing, or at least a good approximation of the real thing with the scientists suffering for their art, but we were sold a poor performance. A shallow frontage. Its like finding out that a character that Al Pacino plays never actually liked coffee but Pacino forced a re-write because he couldn’t go without his morning joe.
For the record and as a former scientist I find the actions of the CRU scientists abhorant, but human (I never lived up to my own view of what a scientist is, which is why no longer call myself one, though I still perform the role of scientific critic). For me the affair doesn’t detract from the credibility of climate science as a whole, but its disturbing that their performance was more Lee Majors than Lee Strasberg.
They need to get their method back.
FIT Company breaks cover
February 28, 2010
The UK’s Feed in Tariffs for low carbon energy production are about to come into effect and in a bid to steal a march on any potential competitors one specialist supply company has broken cover.
Ownergy seems to have a business model eerily similar to one that I suggested last June in my post Energy Ideas Part Two. Not only is it going to do all the technical assessment, design and installation, but its also offering management and finance for the installations and will be covering all technologies that attract an FIT.
The guy who is running it, Phillip Wolfe, is a big cheese in the Renewable Energy Association and seems to have had a big hand in the design of the FITs in the first place, so I doubt that he’s a regular reader of this blog. Who says that only the major energy companies can capture government policy mechanisms
