Monday, 25 July 2011


The French government has cancelled a planned increase in gas prices and cut the size of electricity price rises in response to considerable public discontent with rising energy costs.

EDF (you’ll recognise that name, but maybe didn’t know that it stood for Electricité de France) requested the French government’s permission to have annual increases of 5.1% for the next four years, to take into account needed investments to upgrade France's 58 nuclear reactors.

But industry minister Eric Besson made it clear earlier this year that prices would rise only by a small amount.

According to the government's plan, electricity prices can rise by 1.7% this month and by 1.2% in the summer of 2012.

Likewise, France's main gas supplier GDF Suez (Gaz de France), which had been hoping for a further increase this month after a 5% rise in household gas prices came into force in April, was disappointed to be told that there would be no raise at all in gas prices.

In Scotland power companies are increasing the price of electricity by an average of 11% and gas by 18%..... because they can, although they trot out horror stories about increases in the gas bought on international markets. I guess the French must just go to better international markets.

I suppose it may also be because, Mr Ian Marchant, Scottish and Southern Energy’s big boss man, who was awarded bonuses of over £2 million on top of nearly £1M salary for reaching targets on profits. He’s an expensive man is their Mr Marchant. As my granny would say: “I’d rather keep him a week than a fortnight.”

I wonder how the greedy git would cope the government didn't allow him to put up prices by between 2 and 3 times inflation, and as often as he likes...or indeed if the public just said “Enough!”.


  1. Don't forget the effects of the lunacy enforced in Scotland by Mr. Salmond and in England by Mr Huhne which compels power companies to buy a minimum proportion of electricity from horrendously expensive, unreliable wind farms (more properly called subsidy farms). This is called the "renewables obligation". It is difficult to get a straight account of the actual cost but the government guarantees prices for wind and solar generated electricity which are several times the retail price we pay . The extra cost is built into our bills.Every wind turbine and solar panel increases the cost.

    For some reason, politicians in the UK are very keen on this and exceed even the "renewables" targets which the EU imposes on them. And it doesn't save the "carbon footprint" much either because conventional power stations have to be kept fired up in case the wind drops or the sun goes behind a cloud.

    The failure to build replacement conventional power stations is making us dangerously reliant on French nuclear electricity, delivered over the interconnector.

    The "renewables obligation" is a tax which should be shown as such on our power bills. For some reason, this is one sort of "transparency" which is not fashionable in the political class.

    O - and of course Britain is like the runt piglet sucking on the hind tit for power supplies because so much of our generating capacity is owned by EU companies. We are at the end of their lines. Funnily enough, the great expertise of the City of London has not been able to arrange a single British takeover in the profitable continental energy market. One gets the impression that the "level playing field" of the EU is not entirely what it is cracked up to be.

  2. Most European countries have some system of promoting renewable energy supply and in this respect France is no different.

    It uses a feed-in tariff system that offers long-term contracts to renewable energy producers, typically based on the cost of generation of each different technology. Technologies like wind power, for instance, are awarded a lower per-kWh price, while technologies like solar PV and tidal power are currently offered a higher price, reflecting their higher costs.

    Under a feed-in tariff, eligible renewable electricity generators (which can include homeowners, business owners, farmers, as well as private investors) are paid a cost-based price for the renewable electricity they produce. This enables a diversity of technologies (wind, solar, biogas, etc.) to be developed, providing investors a reasonable return on their investments. The compensation rates have been determined by means of scientific studies, subject to the provision that the rates identified should make it possible for an installation – when managed efficiently – to be operated cost-effectively, based on the use of state-of-the-art technology and depending on the renewable energy sources naturally available in a given geographical environment.

    As a result, the tariff (or rate) may differ to enable various technologies to be profitably developed. This can include different tariffs for projects in different locations (e.g. rooftop or ground-mounted for solar PV projects), of different sizes (residential or commercial scale), and sometimes, for different geographic regions. The tariffs are typically designed to ratchet downward over time to both track, and encourage, technological change.
    In addition, FITs typically offer a guaranteed purchase agreement for electricity generated from renewable energy sources. These purchase agreements are generally framed within long-term (15–25 year) contracts.

    The fact that the payment levels are performance-based puts the incentive on producers to maximize the overall output and efficiency of their project.

    More specifically the French policy for the promotion of renewables includes the following mechanisms:

    • Feed-in tariffs (introduced in 2001 and 2002, and modified in 2005) for PV, hydro,
    biomass, sewage and landfill gas, municipal solid waste, geothermal, offshore wind,
    onshore wind, and CHP.
    • A tender system for large renewable projects.

    Both tax reductions and capital grants are in place in order to promote bio-fuels.
    Stimulating the uptake of renewable energy schemes is done in three ways. Tax credits of 50% are available, a 5,5% reduction in VAT has been introduced for residential energy equipment using RES, and subsidies up to 40% are granted for biomass heating plants.

    Although not identical to the UK wide system of renewable obligations it is clearly similar and has similar cost implications for consumers. The point is that France is not unburdened with an expensive system of promoting renewable energy schemes and yet is still manages to control price rises for consumers.

    Clearly its major energy players like EON are not hobbled by the more rigorous French price controls as they are still in a position to acquire a sixth of our energy market as well. Once again our European neighbours put us to shame by not allowing unbridled profiteering by the free market nor by practises so restrictive that their home grown companies are not in a position to exploit our markets (in this case ours). Let’s all go and live in France!

  3. Don't you think, Mr S, that something as important as power, without which, of course our society would collapse (and in a cold country hundreds of thousands, millions, would die), is too important to be a totally commercial venture?

    Of course I'm not saying that Marchant's £3m is what did for us Scots, but the whole ethos of these people (for there will be more of them) who pay themselves well above what they are worth, simply because no one has the cojones to stop them, isn't reasonable for such vital services.

    As I'm not convinced (and as I've said before, as I'm not a climatologist I really don't know whether or not the climate change that we are experiencing is or is not manmade) of the need for wind farms, but neither am I convinced that we don't need them. So I can't really argue cogently in that area. (I always find it interesting though when governments, so politically directly opposed as the Scottish and English ones are, agree on something, especially when it is electorally damaging.)

    But, in as much as we have to buy more expensively produced electricity for the love of climate change, EDF in France has a massive bill (which IT will have to pay, not the government) for the update of the nuclear power stations, so I am dubious about that as an excuse for the massive price hikes. I’m inclined to think that chronic mismanagement and greed are at the bottom of it.

    Clearly the visionary Mrs Thatcher, who sold of the power companies in 1990 and signed the single market deal in 1986, didn’t foresee that these companies, so important to society, might fall into the hands of foreigners. Although, to be fair, utilities are not just owned by other EU countries; China owns some of them, and it is not part of the single market. (Added to which, as Mrs T didn’t believe in society, he notion might have floated over the top of her head.)

    What is wrong with the English centre of financial brilliance that it can’t arrange to take over companies providing electricity, gas and water in Europe, or Asia, or the new economies? Nothing, of course. It’s just that no one wanted to do it. There’s not a lot of money to be made if the government can come along and slash the price increase with which you are about to hit the people and provide a nice little earner for yourself.

    Once again, foreigners seem to have governments that listen to the mood of the people, which is what they are paid by the public to do in a democracy. If I employ a maid or a gardener, I expect her to do what I want, not what they want. He who pays the piper...

  4. I beg your pardon by EON should be EDF in that last post.....sorry!

  5. I agree that the national power supply is vital and needs to be properly regulated. We seem to have the worst of all worlds at the moment - intrusive, expensive, ineffective regulation and largely foreign rip-off artists taking the greatest possible advantage plus the complication of political interference to "save the planet". Google Climate Depot for up to date information on this front or Wattsupwiththat.

    It is of course entirely monstrous that public utility companies pretend that they need to pay such astronomical salaries "to get the best people". The banks supposedly did that - and look what happened to them! But their pals the politicians came and nationalised the losses whilst maintaining the bonuses.

    I have no doubt that there were inefficiencies in the nationalised power supply system and that, for a few years, commercially sound management stripped them out,reduced the cost of power and made good profits. Mostly this was done by people who had been running things before. It was just a matter of the right incentives and mindset. The situation now is right out of control,

    Perhaps someone can answer this query. My next door neighbour frequently travels up the A 74. He tells me that he sees complete wind farms with all the blades removed. Does anybody know why? Are they still being paid? I know that they have to be paid for power generated, even if the grid cannot use it.

  6. Mr S/Munguin: Thanks for your comments. I had to do some computer maintenance, which meant I couldn't use it for an hour or so, and now I'm heading off for the gym. Will reply to both later.

  7. Munguin. Sounds like a plan.

    The French government, despite the little peacock at the head of it strutting around like he was Napoleon, knows that its job is to govern according to the will of the people. I'm sure that they would like to be as pompous and up their own backsides as the lot in Westminster are, but the people disabuse them of that on a regular basis.

    The public in France don't want to pay vast crippling amounts for electricity, and if the price goes up, next year that little peacock with be a jobless little peacock.

    In case the suggestion is that it is only being done to satisfy a need to Sarko to be re-elected, it's fair to say that they did the same sort of thing last year.

  8. Yes Mr S, if paying a lot of money actually got some "good" people, then it wouldn't be so bad.

    I remember being stranded at King's Cross station in London; the train was going to be delayed due to a mechanical fault, then when we got going there were large stretches of the line near London where 10 mph was the fastest we could go because of embankment problems... and reading in the newspaper that very day, that the directors of Network Rail were getting massive bonuses for the fabulous way they had run their company.

    I'm afraid I can't give you an answer to the windmills sans blades. Could it be that they have built them, but not yet completed them?

  9. tris

    Yeah well my nephew and his mates recently bought 2 liters of lager in paris and it cost £60 not everything is cheaper in France...

  10. There is no need for any of these old types of technology any more as we could easily run cars on water and each home could have its own magnetic motor powering it - only these companies and governments do not want us to have the likes of these because then they could not rip us off.

    Watch the following videos to see what I mean - It starts a bit quiet because he forgot to switch his microphone on but it gets better.


  11. Dear me Niko. I fear they must have been in one of these places where they fleece rich Americans, Japanese and Chinese... and have dancing girls and the like.

    Take it from me. The average cafe in Paris doesn't charge £60 for lager.

  12. Well bring it on Billy... that's what I say.

  13. Oh, the lavish lifestyle that you Scots enjoy! A short ride through the tunnel and you're in Paris.

    By contrast, a short ride over the same distance from Kansas City, and I'm in Omaha. OMAHA! NEBRASKA! Geeeeze!

    I'm not rich, but I am an American who would like to be fleeced in Paris. Bring on the dancing girls!

  14. Ah, Danny, a short ride through the tunnel, and violà Paris! Yes, that’s true. But the problem is that you have to get to the station, and despite what Mrs Thatcher promised, the station is in London, a rickety, slow, if-you’re-lucky-6-hours away, depending on breakdowns, signalling failures, unsafe rails, unsafe bridges, bad connections (I’ve had them all, and I rarely use the train).

    I love the idea of being in Omaha, Nebraska... Why, you could, erm, do, hum, loads of stuff there... like for example you could, erm... oh lord, is that the time? Must dash.... laters....

    Anyway, when you do become rich, and come to Scotland, to be installed as a Knight of the Thistle, I’ll take you on the slow rickety late train to England, then the fast intercity Eurostar to France, and (as long as you’re paying) we can go see dancing girls at the Moulin Rouge.

    Of course if you guys can’t sort out the borrowing limits fairly soon, you’ll maybe not get to be rich, and I may have to come to Missouri instead, and take a train ride to Nebraska... (Are there trains to Little Rock, Arkansas by any chance? LOL)

  15. Paris sounds wonderful Tris. I've heard that there is an art museum there. But we'll only consider that if we have time after leaving the Moulin Rouge.

    Yes, the politicians in Washington continue to dither and posture while the clock ticks down to next Tuesday....US Treasury default day. So Omaha may in fact be a better bet for our trip.

    There must be SOMETHING to do in Omaha. Well, during the Cold War, it was the home of the Strategic Air Command of the US Air Force, and the site of the famous underground bunker from which the nuclear Armageddon of World War III would have been orchestrated. So today, they have the Strategic Air and Space Museum. You can go there and see virtually every type of American warplane built since World War II.

    Now if warplanes are not your thing, we can indeed get on a train and go to Little Rock. Omaha is just Omaha. But Little THERE is a city!.....LOL.

  16. Tris,

    Sacre bleu, mon petit ami - all right that's the extent of my French so in order to make myself understood by your French readers I will have to resort to SHOUTING LOUDLY IN ENGLISH - I understand that that works a treat and is much appreciated by that foreigners who are too lazy to learn English.

    Feck! I've forgotten, in my ramblings, what I was going to say - so I'll get back to you!

  17. Ah Mr B....

    Damned foreigners all over the world are the same. Thank goodness the Americans had the good sense to learn English, even if they do some very strange things with it.

    Anyway, nous t'attendons avec impatience, just get back to us when you remember what it was you wanted to say... and find you glasses... and your teeth, and your computer....

  18. Well Danny, I like museums of cars and trains so I suppose I'd like a planes one. So that's the first afternoon sorted in Omaha, Nebraska... What do we do for the rest of the time?

  19. That's when we board the train to Little Rock....LOL.

  20. Plan sorted then Danny!!!! ;¬)

  21. Aye CH, I wonder too... pretty big anyway.