"UK Energy Risks – Uncertain but not Unimaginable" – Global Energy Advisory

On the 23rd of February it was reported that one of the large six utility companies in the UK lost £172.5mn, in just three months, by trading a gas position. This loss could have been against a background of relatively low gas price volatility; presumably this “increase in wholesale cost” will now be passed on to end consumers? Who trades and who pays? Who invests and who pays?
The new Energy & Climate Change Committee is today taking oral evidence from the Secretary of State for Energy and Climate Change, Rt Hon Edward Miliband MP, in the House of Commons in London. The independent Global Energy Advisory White Paper entitled: Investment Failure, Fails Customers, was circulated to the Committee earlier this week.

The paper discusses the potential risks to UK energy security which are well known within the Industry. It also asks pertinent questions regarding the costs and consequences of the energy investment/trading decisions being taken at the current time.

This discussion will be continued at the Global Energy/Advisory Super Derivatives Seminar in London on March 5th – see below for full details.

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Bill Powell explains the reason for the financial crisis, and how to get to the root cause.

It is estimated that 70% of the money that circulates is created in the form of loans ’secured’ against ‘property’. They circulate as money until the loan is paid off. If loans stop the money money in circulation dries up. That’s what happened. That’s the origin of the credit crunch.
The bubble came about by banks enticing people to take on higher and higher loans with more and more ‘affordable’ payment terms, e.g. interest only, self-certified income, low teaser (aka ‘fixed’) rates for a couple of years. They competed with each other until the loan to earnings ratio became unbelieveable. Then the bubble burst!

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(IGCC) Integrated Gasification Combined Cycle for Carbon Capture & Storage

Abstract

This paper endeavours to give an objective account of the background to gasification based processes for power generation with carbon capture. Such processes are a development of IGCC plant designs in which coal or heavy fuel oil is first gasified and to produce a fuel gas for a CCGT unit. Although the IGCC concept does lend itself, very well, to high levels of carbon capture, and could lead the way to the hydrogen economy, it does create some important technical challenges. In particular, it restricts the type of gasifier that can be used to the high temperature entrained flow type. Furthermore, because the fuel gas that is produced in an IGCC consists of over 90% hydrogen, this will reduce the efficiency of the plant. Given that the hydrogen economy is some decades away, a more reasonable gasification-type option would be to produce natural gas from coal. This substitute natural gas could be used as a fuel gas in standard gas turbines (with no efficiency penalty) and can be used to supplement the UK and EU fast declining reserves of natural gas. The main drawback is that only about half as much carbon would be captured as in the IGCC “clean coal” systems currently being envisaged.

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Beyond Public and Private – Chris Cook

  From Beyond Public and Private Submitted by ChrisCook on Monday, 23 February, 2009 – 10:24 ByChris Cook Beyond Public and Private – Chris Cook, 20 February 2009 21st Century problems cannot be fixed by 20th Century solutions”….Dr Narsi Ghorban The Credit Crash marks the end of an era for the global financial system, and […]

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Professor Lowe notes connection between Birkenhead disaster and 'complex systems such as politics, globalisation and economics' – the banking crisis perhaps?

Note from Professor Lowe, All The following is taken from J.E Gordon’s book, Structures, or why things don’t fall down.  I can’t help thinking it has lessons for globalisation.  I particularly like the last sentence, which has an unintended application to politics and economics and to many complex systems. “A much better-known accident of this […]

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CHANCELLOR RECEIVES PROPOSAL FOR RESOLUTION OF REPETITIVE BOOM AND BUST

I am writing this open letter to you on behalf of the Coalition for Economic Justice (CEJ). In response to the seriousness of the current economic crisis a number of think tanks, charities and pressure groups across the political spectrum recently decided to join forces as the CEJ. We propose the introduction of an annual Land Value Tax (LVT) to replace or reduce existing taxes on enterprise and labour in order to prevent future economic crises and alleviate the current one. The resolution below, passed at our first meeting sets out our broad position. (Set out at the foot of this letter is a list of the organisations concerned.)

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