How to guarantee your shiny new nuclear power plant is over budget

September 2012 – EPR reactor construction site – Flamanville, France © EDF, Morin Alexis

First of all, nuclear power is a safe and clean energy source. However, building nuclear power stations is really, really hard and they are often delivered over budget and behind schedule. You’d think, since we’re on the verge of building a new one at Hinkley Point, we’d be doing everything we can to make sure it’s done right. Right? Wrong. To incentivise its construction the government and EDF are doing everything they can to destroy any incentive of building to time and budget.

To understand energy investment in the UK today you need to understand the government’s energy market reform. Trust me I’ll keep it short and use bright colours.

The government doesn’t want to, and legally cannot, willy-nilly subsidise energy investment in the UK. One because they’re Tories and they don’t want any spending on balance sheet because they’ve fetishised the UK’s debt and two because EU state aid rules mean they’re just not allowed to subsidise private energy producers. In the next few years lots and lots of power stations are going to be retired because they’re old and nobody wants to replace them without a subsidy. We are at an impasse that leads to an energy crisis. Can an impasse lead somewhere? Yes. Shut up.

The solution is an elaborate system of contacts, payments, counterparties, bargaining, auctions and horseplay that we know as Electricity Market Reform. The system is really simple. You sign a contract agreeing to produce electricity and the government guarantees you for a set number of years a certain price per Megawatt hour. If the market price is below that contracted price consumers receive a surcharge on their bill, if the market price is above it they get a bonus. How often do you get the bonus? Shut up.

Eventually the contracts will be auctioned which should mean that payments to consumers occur roughly as much as payments from them. But to begin with the contracts will be negotiated. Because we’re in such a poor state generation wise we’re getting blackmailed by the French.

Taken from here.

EDF want to build a nuclear power station using a reactor developed by Areva called the EPR. In order to build it is reported that EDF are to receive £93-96 per Megawatt hour. This is more than double the current market price of electricity. To justify the investment EDF claim to need an ex-ante internal return of around 10%. Their problem isn’t that a nuclear power plant is an unproductive investment, they produce a phenomenal amount of electricity. It’s the construction.

Olkiluoto, the first EPR to be built will be 200% over budget and six years late when complete. Flamanville, the second EPR will be about 150% over budget and 4 years late. Linear projects are a fool’s game, but fuck it, at this rate Hinkley Point C will be two years late and double the cost expected. Since the UK is desperate for new, low-carbon generation EDF know they have us over a barrel and a likely cost overrun on their hands. Hence why we’ll be paying them double the market price for electricity.

It doesn’t end there though. If you thought the incentives were bad enough as I’ve describe, it gets worse. To prevent massive windfall profits the government are going to insert a clause into the agreement which will allow for excess profits to be clawed back. Mull that one over.

If EDF build over budget they’ll make a modest profit because they’ve been guaranteed a high energy price.

If EDF build to budget they’ll make a modest profit because government will confiscate the payments consumers pay to EDF because they’ve been guaranteed a high energy price.

As well as being an arsebackwards roundabout way of getting you and me to subsidise the building of power stations it completely eviscerates any financial incentive for EDF to run the project to budget and to schedule. I’ve a soft spot for giant infrastructure projects, complicated engineering and carbon free electricity, but we are running this project like we want it to fail and to cost everyone a lot of money to get there.

Filed under: Economics, Politics, The Media, EDF, EMR, Energy Bill, Flamanville, Hinkley Point, Olkiluoto, the French

What about a #Leveson looking at society?

Regulating the press is generally a shitty thing to do, but our press is generally shitty. This puts me in something of difficult position. Leveson looked into the culture, practices and ethics of the British press, but what about looking at the British people who maintain that press? The vast majority of the time the vast majority of the people get the press they want.

I have actually read the draft Royal Charter, beware those who haven’t (which is everyone, because it’s so dull). I dislike the regulation of the press on principle, but that there isn’t anything particularly dangerous in the charter other than this principle. It may ultimately be unworkable, but it isn’t currently oppressive. You can read my live tweeting of the Royal Charter here.

In principle a free press is vital to the functioning of a free society, but the press we have actually agitates for a more authoritarian world – war, misogyny, xenophobia etc. The Media category on this blog is not a nice place. But the basic problem isn’t that the press and journalists are evil. Its a problem of a system not a problem of individuals. It is also a problem of supply not demand.

You see, I largely read the Financial Times and lots of blogs (many of which cross check one another). This is because I want reliable, truthful and insightful writing. Most people don’t want this. They want digestible infotainment that reinforces their prejudices and are largely indifferent to whether it is true or not.

People might not say they’re indifferent to the truth, or that they enjoy being lied to, but one look at what sells reveals what people actually want. Consider two statistics: On the one hand, The Sun outsells the FT 10 to 1. On the other, there are 150,000 online only corporate subscriptions to the FT and I cannot even find a comparable number for The Sun.

This is because companies and people face different trade-offs. It really doesn’t matter to the public whether or not their political opinions are correct or whether their prejudices are challenged or reinforced. The costs of becoming less wrong are high (between work and leisure I spend thousands of hours a year on this), whereas the benefits are very small. I mean, have you read this blog?

For a company though the calculus is reversed. The FT provides a very good value service of high quality, well sourced, reliable news. The benefits of this are concentrated within the firm in the form of a better informed, more productive workforce. Regulation won’t make the FT a more truthful paper but it might make The Sun a less entertaining one.

I am highly sceptical of the pursuit of social progress through press regulation. Legal and social censure of explicit racism and sexism worked, but the regulation we are moving towards isn’t taking aim at anything so easily targetable. Stories like Zoe Margolis‘s libel by The Independent need to become less rare and there are provisions within the Royal Charter which should achieve this. But the amount of editorial control required to prevent newspapers meeting the demand for misleading news entirely would be too much to countenance. You may as well shut them all down.

Regulation will change the press, but not much because there is a demand for the press we have. There are no shortcuts, if we want to change the culture, practices and ethics of the British then we have to win arguments. It’s back to the grass roots I’m afraid. Get off this blog and go talk to some people and change their minds.

Filed under: Politics, The Media

Hacktacular: The Guardian adapts The Daily Mail’s online strategy

What prompted this headline? One throwaway line uttered as a joke to an interview to another publication: [1]

“I can’t say I love the idea of a banker liking our music, or David Cameron,” the singer told Dazed & Confused. “I can’t believe he’d like [2011's] King of Limbs much. But I also equally think, who cares? … As long as he doesn’t use it for his election campaigns, I don’t care. I’d sue the living shit out of him if he did.”

I know the discovery of adulterated food, a helicopter crash and a kidnapping in Western Africa mean today is a slow news day, but does this really need to be on the front page?

Sean Michaels has bills to pay I’m sure, but this is a new journalistic low. And is, in case you were wondering, precisely the Daily Mail’s online business model but replicated for a Guardian audience.

Look at it this way. The Daily Mail may have a reputation as a conservative hate rag, but online it is a font of celebrity gossip and paparazzi shots, this has made the Daily Mail the biggest English language newspaper website. The Guardian attempting a similar technique here. But instead of an almost completely fabricated account of Kim Kardashian’s view of the Chipotle restaurant chain, you have a completely misleading story about Radiohead’s view of the coalition. It is the same form but with different content.

It’s quite cute in a way.

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[1] Link works but with http:// replaced with hxxp:// because you shouldn’t reward linkbait with links.

Filed under: Blogging, The Media

The Worst Review I Have Ever Read

I like Laurie Penny’s writing, but its not subtle. Laurie’s recent review of a Game of Thrones was so poor that it has driven me to write a review of her review. Necessarily, here be Spoliers, beware. Superficially Game of Thrones appears like a normal, goodies versus baddies fantasy adventure. Were it my job to write about it though, I might bother to gain more than a superficial understanding of the stories plots and themes. This is over a thousand words of take down, which is relevant to hardly anyone, so I’m putting the rest below the fold.

Filed under: Society, The Media, Game of Thrones, George R R Martin, Laurie Penny

Who’s responsible? You fucking are!

I see the press are doing their best to make mass murder look like an even better way of getting publicity than a contract with Saatchi and Saatchi.

Filed under: Politics, Society, The Media

The Uppance Cometh

Mwahahaha. Remember, schadenfreude should be thoroughly enjoyed before policy analysis. It is good when people who professionally jeer at civil libertarians and cheer at heavy handed policing get a taste of poetic justice. This may have a chilling effect on free speech, but I doubt some mean bobbies will cause a rupture in over 100 years of boisterous British press history.

By the way, I was at the LibCon editorial meeting for this and this is an exact transcript:

Sunny Hundal: Hao! Dai ye! We won again! This is good, but what is best in life?

Hopi Sen: The open steppe, fleet horse, falcons at your wrist, and the wind in your hair.

Sunny Hundal: Wrong! Don! What is best in life?

Don Paskini: To crush your enemies, see them driven before you, and to hear the lamentation of their women.

Sunny Hundal: That is good! That is good.

Filed under: The Media

The Financial Times was once a paper of record – Elizabeth Rigby and Helen Warrell seem unhappy with that

So we have a profile of Theresa May, Home Secretary…

Theresa May is the head girl of David Cameron’s coalition. Famed for never putting a kitten-heeled foot wrong, the home secretary barely batted an eyelid this week when Ken Clarke rounded on her for claiming an illegal immigrant had avoided deportation because of his pet cat Maya.

It was a cat fight that the liberal justice secretary was doomed to lose, against a woman who has always done her homework and has the prime minister’s full backing to bear down on migrant numbers. Within hours, Downing Street had rallied to her defence, delighted at her crowd-pleasing attack on perceived abuses of the Human Rights Act. Mr Clarke had the backing of the Lord Chief Justice’s office, but he was still told to pipe down [my emphasis].

This spat is not interesting because two politicians had a difference of opinion, as is presented here by Elizabeth Rigby and Helen Warrell. This spat is interesting because one politician told the truth and one politicians made things up (or copied things made up by others) and the politician that made things up (or copied things made up by others) won the power struggle.

Ken Clarke was right to criticise Theresa May because she said something that was demonstrably untrue. It was, in fact, demonstrated to be untrue by her own department. The cat was “immaterial” to the reasons a certain Bolivian student was given leave to remain rather than reported.

Rigby and Warrell do not see fit to include this detail in their hagiography of Mrs May. They actually make light of the situation by closing with a pun that this is “just the sort of cat fight the party needs to keep the grassroots content.”

Real journalists would have pointed out that if the grassroots need falsehoods to keep the content then something is amiss at the Tory party conference. But it seems the Financial Times has decided it doesn’t need to employ real journalists anymore.

Filed under: Migration, Politics, The Media, Bolivia, catflap, Elizabeth Rigby, Helen Warrell, Human Rights, Ken Clarke, Migration, The Financial Times, The FT, Theresa May

Melanie Phillips is mad as a bag of hammers

Here.

Oh… and she’s a cunt for threatening a friend of mine with a vexation and shitty libel suit.

Filed under: The Media

Life Neutral Solutions for the World’s Largest Arms Fair

We, well this country, is currently hosting the world’s largest arms fair at the ExCel centre down the road from me. Lots of lovely dignitaries from vile and autocratic regimes are browsing all the best cluster bombs and torture equipment money can buy. It disgusts me but it is good to see something worthwhile proposed: Life Neutral Solutions, the photo atop this post was taken outside my house.

Based on a modest proposal to emulate carbon offsetting programmes to tackle the unfortunate side effects of weapons use. For every life lost Life Neutral Solutions make sure that a new life flourishes! I hope those working in the arms industry take note of Life Neutral Solutions’ message.

Filed under: Foreign Affairs, Politics, Society, The Media, A Modest Proposal, Arms Fair, Arms Trade, Cluster Bombs, Comedy, ExCel Centre, Life Neutral Solutions, Torture, Weapons

Speculation Time: I think there is a D-Notice in place for all riots in London

News seems quite quiet out of London Boroughs, but not from other places. Sensibly it seems news agencies have been asked to keep schtum, which will probably go some way to keeping tonight quieter than either Saturday or Monday. No evidence, just a hunch.

Making the police presence sound intimidatingly large, publicising the thoroughness with which riots will be met tonight and keeping very, very quiet any successful rioting sounds like an excellent way to intimidate people off the streets, which may be exactly what we need.

UPDATE: Nah, changed my mind. I think it is actually just relatively still in London tonight, especially compared to the other parts of the UK.

 

Filed under: Society, The Media

Not that bothered about soldiers

Via Timmy’s Other Place, I see that a number of defence charities have turned down some £3 million donations… These charities may well be snubbing the News of the World but it is the beneficiaries themselves who will suffer—you know, those brave troops who are supposedly the raisin d’être of these organisations.

So we get it, yes? DK thinks symbolic gestures that don’t harm organisations, only those they serve, are bad. Conlusion to this post?

…it means they’ll get nothing from me…

Basically, I’m not sure turning down the money was a good idea, but if it convinces journalists and the public that sometimes forgiveness is not easier to get than permission for the terrible things they do for money, it may be a good thing.

Filed under: Blogging, Society, The Media

Thoughts on Jeremy Clarkson

Now, I am firmly of the opinion that violent mass murders should not be given the time of day, so that means you shouldn’t expect a blog post on the killings in Norway, nor any platitudes about how awful it is, nor any analysis into what it really means. I don’t think people should show his photo, mention his name, or publicise his views, because frankly it might in some small way encourage someone else. Nobody should try to turn this guy into a Martyr.

However, he has brought to my attention the ludicrous opinion of Jeremy Clarkson that “[England] the only country in the world where the national flag is deemed offensive.”

Look at this photo…

Oh, and this one, including a brown person all not offended…

Look at this high-res image too. It is full of flags, because flags are not offensive. You get the idea by now surely.

People who don’t fly the Union Jack or St George are not “worried about the PC Brigade” or “worried about offending someone.” The lack of flying is a sign that flying flags all the time is just a bit vulgar, a bit passé, dare I say a bit American, and just not something the English have ever been particularly interested in.

It is not deemed offensive, it has just never been something the English have done for its own sake. Give us a party, or a new country, and lo and behold!, we start flying flags, but only as appropriate.

Jay-sus-ker-rice-st. You’d have thought someone who bangs on about Englishness would have noticed the fundamentally self-effacing nature of the English national character. I can’t believe this “flags are offensive these days” meme hasn’t been taken down already.

Flags aren’t offensive, they’re just a bit lame.

Filed under: Society, The Media

Why worry about who owns BSkyB?

I’m back from Glastonbury. Actually I was back a while ago and apart from sulking around the internet I haven’t felt moved to do much but blog. Sorry all. But the recent furore over the ownership of BSkyB has dragged me out of my stupor.

Yesterday Rupert Murdoch called off his attempt to take full ownership of BSkyB, in the wake of the News of the World hacking scandal. Robert Peston argues that this might be his biggest setback in over half a decade. That is hyperbole, Murdoch’s lost $1 billion on MySpace and has faced numerous lawsuits, but this is certainly one of his most high profile retreats.

High profile, but I’d argue not particularly important. If you care about media plurality or in mitigating Murdoch’s influence then this news is worse than irrelevant. Ownership of a laptop gives you control over it, ownership of a company does not.

Ownership does not imply control, only varying degree of influence. Even with only a 39% stake in BSkyB Sky News still employ people like Kay Burley and Adam Boulton. Even with only three (now two) newspapers, politicians still kowtow to Murdoch (secret meetings and all).

Murdoch will be annoyed about losing the opportunity to take full ownership of BSkyB not because he will lose influence, but because he will lose money. BSkyB is profitable, and Murdoch needs those profits to expand in Asia where demand for print and electronic media is expanding rapidly. Murdoch has influence without owning the whole of the company.

Let me offer an example. In BSkyB’s Annual General Meeting last year James Murdoch, Rupert’s son and protégé, was re-elected as Director with 98% of votes cast. Now admittedly, shareholder revolts are rare especially when nominating directors, but this illustrates that Murdoch can exercise an arms length influence even without full ownership.

In fact, Murdoch owns around a third of shares in, and works as chief executive of, News Corporation, which itself owns a 39% stake of BSkyB. Owning all of BSkyB is not necessary to be influential when you run a multi-billion dollar media empire.

So the influence of Murdoch is ephemeral even as some claim it is pervasive. If it worries you then the collapse of his BSkyB bid should be of little importance to you. The collapse of his bid is at best the start of any process to diminish his influence.

Filed under: Economics, Politics, The Media

Why are the Mainstream Media so bad?

What a lovely evening #Westskep with the West Minster Skeptics last night was. Personal highlights include briefly meeting the delightful and thoroughly understandably  lethargic Laurie Penny, shouting at Anna Chen, and the wonderfully restrained conflagration between Suzanne Moore and ex-Daily Star hack Richard Peppiatt. [1]

However, substantively, I was a little disappointed.

The problem with discussing the media, mainstream of otherwise, in a pub full of skeptics, is that a pub full of skeptics makes for a very unrepresentative  sample of those who consume the media. This, frankly, should have been picked up on and neon lit in front of the panelists.

Writing in general exists to either entertain, inform, explain, describe, argue, persuade and advise, or for no particular reason at all; quite often writing is just absent-minded scribble. The media in all its forms performs these roles every single day.

The Westminster Skeptics quite understandably see the media as a tool for informing the public, explain the facts and describe the situation. Laurie Penny no doubt sees the media as a tool to argue, persuade and advise others on things as diverse as Charlie Sheen and Saif Gaddafi.

However, I would argue that most people see the media as entertainment. People do not pick up the Metro to be informed on the way into work, or the Evening Standard just in case they missed something while at work. The Daily Star is entertainment, when you see it as competing with Angry Birds rather than the Financial Times it begins to make more sense as a product.

This was the elephant in the room when somebody asked “do the public deserve a more honest media?”

Honesty is boring. Asylum Seekers have never eaten a swan, but the story has legs because it is outrageous. Nobody has avoided deportation because of a pet cat, but people believe it because it gives them something to talk about. Jordon and Peter Andre are not getting back together, but people are interested because…well, okay, I don’t know why, but they are.

The truth is often a lot more boring, and almost always a lot more nuanced. Asylum Seekers do come to the UK because we’re wealthy rather than hang around in camps in Niger, but who blames them? It is wrong to deport people with close links to the UK, even if they built those links while here illegally, and Jordon and Pete probably still have some feelings for each other, but sometimes these things just cannot work out.

There is an abbreviation gap between the left and right and between liberals and authoritarians.

Pointing out a Bad Thing and saying something must be done, usually deportation, is easy. Job done. To point out the fallibility of the criminal justice system or the rigged nature of global flows of goods, services, capital and people is more complicated. As Alfred Charles William Harmsworth, 1st Viscount Northcliffe, founder of The Daily Mail knew, the British people love a good hate. It is quick clean fun, simple to parse and easy to discuss.

This abbreviation gap is key, until skeptics package the truth in nugget sized pieces, and swear to never use the word dialectic or phrase “fiat currency,” the mainstream media will remain bad. Bad but wrong is more entertaining than correct but boring, and changing that will do far more than giving the Press Complaints Commission more teeth.

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[1] In short, don’t fuck with Suzanne Moore.

Filed under: The Media

The 100 year old Daily Mail Business Model: “The British People relish a good hero and a good hate.”

So said Alfred Charles William Harmsworth, 1st Viscount Northcliffe, founder of The Daily Mail and Newspaper magnate extrodinaire over 100 years ago.

Plus ça change.

Filed under: History, The Media

Cunt Watch: Melanie Phillips

If still in doubt, try this thought experiment. Imagine the Government was planning to recognise polygamy and polyandry (marriage with more than one woman or man), or marriage between ‘zoophiles’ (people who have ‘loving and committed relationships with mammals’, or bestiality to you and me) and their, er, partners.

That’s correct, she comparing homosexuality and bestiality (via).

On a more serious note, I don’t have much problem with polyandry or polygamy, so long as all partners consent and the washing up is distributed fairly.

Filed under: Society, The Media

How accurate were my predictions for 2010?

Last year, at about this time I published some predictions and I thought I’d review how accurate I was. First off, the things I got correct, then those I kinda got correct, and then those which were rubbish.

1) Uncontroversially, I predicted that Labour would lose the General Election, but that the Tories do not win it. I was correct in predicting that this would result in a coalition between the Lid Dems and the Tories. 2) Part of this prediction was based on the recovering building pace throughout 2010. The economy certainly did improve, but as predicted, not well enough to get me a decent job. 3) Perhaps more controversial at the time, I predicted another round of fiscal stimulus, and although I was wrong in prediciting it would be passed via budget reconciliation, I was correct that it was delivered.

That’s what I got right. I was middling on a few other predicti0ns. 1) I jumped the gun on the failure of a referendum on introducing AV; however, I was correct that an AV referendum would be scheduled. We remain to see whether this referendum will succeed or not. 2) I predicted a right wing blogosphere torn apart by fraternal infighting and a leftwing blogosphere in ascendency. The left is certainly doing well, but the right wing blogosphere seems to be marked by boring relative decline rather than entertaining implosion. 3) I predictioned there would be no more major terroist incidents in the west, but I was wrong to say that major piracy in the Gulf of Aden and its subsequent militarisation would leave to trouble in Yemen. Trouble in Yemen appears to be happening anyway.

I was wrong in my more international predictions, perhaps showing I’m not as clever as I thought. 1) Whereas there was much labour unrest in China (when isn’t there) it did not reach the scale, nor provoke the harsh crackdown I predicted. 2) Iran saw no democratic (or at least anti-autocratic) revolution, a prediction I am sad to have got wrong. 3) Likewise, my prediction that an Orwellian memo being leaked proved wrong. The idea that a “Doubt is out Product” style document is out there by prominent Climate Change denial outfit remains my belief, but we may never find it. 4)

My final prediction is neither right, wrong, or middling, I think it is just premature. I predicted that we were poised on the brink of some major immigrant scapegoating in 2010, that didn’t materialise (in fact, the BNP were routed). However, I don’t think I am wrong here, I just thing 2011 is the year. I have no plans at the moment to make further predictions, but consider that a preliminary outing – 2011 will not be a good year to be a foreigner in the UK.

Filed under: Economics, Politics, Society, The Media

I’m not saying the Economist are spying on me ’cause I’m so great…: UPDATED with more self congratulatory onanism

…but if the Economist want to hire me then all they have to do is ask.

August 24th 2010, Left Outside.

India has not grown as dynamically as China has, and the last decade has seen a clear divergence between the successful India and the very successful China. In the medium to long term however, we are likely to see each system stress tested; for a variety of reasons I think it is very likely India will prevail in any contest.

2nd October 2010, The Economist.

Despite the headlines, India is doing rather well. Its economy is expected to expand by 8.5% this year. It has a long way to go before it is as rich as China—the Chinese economy is four times bigger—but its growth rate could overtake China’s by 2013, if not before (see article). Some economists think India will grow faster than any other large country over the next 25 years.

Were I not so ambivalent towards intellectual property I’d be seeing if Jack of Kent would help me sue for piracy pro bono.

+++Update+++

Scott Sumner is also thinking along similar lines.

Last year the professors at George Mason asked me for my most outrageous belief.  Initially I couldn’t think of one; I thought my views on the Fed were sufficiently outrageous.  (Of course that’s before Fed officials themselves started calling current policy “restrictive.”)  I finally ended up with a post predicting that India would have the largest economy in the world 100 years from now.  Unfortunately, events are moving so fast that this prediction no longer seems outrageous enough, and I plan to move the date much closer to the present.

Filed under: Economics, Foreign Affairs, The Media

Matthew 25:31-46 I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me +++ Alternatively titled; Those who treat immigrants like scum will probably treat everyone like scum, given the chance

Migration Watch are infamous bastards who pick on immigrants; I hold this truth to be self evident.

One reason I don’t like those who are prejudiced against immigrants is that it is usually a good proxy for whether some one is a cunt in general or not; as Jesus would have said if he was a swear blogger.

So that Migration Watch as suing Sally Bercow for libel does not surprise me.

Immigrants are vulnerable (and also laudable) people, if you go out of your way to pick on them there is probably no base act to which you will not stoop.

Filed under: Migration, Politics, The Media

Tony Benn interviewed by Nicky Wire of the Manic Street Preachers

From The Quietus via Labour List.

As only a politics junkie like would notice, Benn sounds like notorious rightist Hayek when he says: “Every night when I go to bed I’m relatively more ignorant than when I got up that day because the growth of human knowledge is so great.” Interesting that.

Filed under: Politics, Society, The Media