More on the stupidity of politicians


And yes, it's stupidity about climate change again. Last week the Government released the subsidies that will be paid on feed in tariffs. The basic idea isn't silly at all. If people are going to use various forms of microgeneration then it does make (some) sense that they should be able to sell this to the grid. Storage technology for electricity is woefully inadequate, after all, so if some is generated it should be used.

It's also not silly that this price be higher than that for more conventionally generated electricity. Not entirely silly, at least: if we are trying to subsidise R&D into these new methods then there might be better ways of doing it and there might not, but the idea of a subsidy through price supports is not entirely insane.

The next step though can fairly be considered to be insane: for we've our old enemy government picking losers again. For they're offering different subsidies for each different form of microgeneration. And they've decided to calculate such subsidies so as to provide a guaranteed return on investment for each different type:

Tariff levels for different technologies:

The tariff levels for the electricity financial incentives (pence), calculated to offer between 5-8% return on initial investment in the technology are:

Aaaargh! No! Our aim is not to subsidise all and every attempt to generate electricity locally. It's to find out which is the best method of generating electricity locally! Thus whatever the subsidy is it should be uniform. So that those who generate at the lowest cost get the highest profit, leading to more installation of this lowest cost method.

For example, if medium scale hydro requires 4.5 p (per whatever unit) of subsidy and solar PV requires 41 p to make a 5-8% return then we absolutely do not want to be doling out 41 p to all those with solar cells. We want people to go build medium scale hydro instead. Perhaps the subsidy should be 4.5 p so that only hydro gets built, or 41p so that those building hydro make huge profits and thus resources flood into the most efficient method of doing this.

But to say to the solar PV folks, yes, we know your technology is wildly useless but here have lots of money anyway, so that resources are ploughed into this wildly useless technology, is simply nonsense.

Is there anything that politicians cannot make worse?