The Real Cost of Electricity to Consumers With David Turver
The world is facing a massive increase in electricity prices, but nobody has a straight answer on why the prices are up hundreds of percent. We have a special guest, David Turver, a first-principles thinker who writes about Net Zero and Energy Policies. We will have our regular band of energy misfits — David Blackmon, Tammy Nemeth, Irina Slav, and Stu Turley. Buckle up for the truth.
In this eye-opening discussion, the panel uncovers the real factors driving today’s skyrocketing electricity costs from renewable subsidies and carbon taxes to grid infrastructure burdens and political mismanagement. David Turver breaks down how these policies have led to economic stagnation, industrial decline, and an uncertain energy future. Tune in to hear how the UK and U.S. are both feeling the impact, and what real solutions could restore affordability and reliability to our power systems.
This was an excellent follow-up to the article Wind Turbines are Made by Coal and Are Not Sustainable
Highlights of the Podcast
00:01 – Introduction
03:04 – The Real Cause of High Energy Bills
08:19 – Hidden Infrastructure Costs
12:59 – Political Pushback and Reform Party Response
14:59 – U.S. Parallels: Texas’ Two Power Grids
20:15 – Economic Impact: Stagnant GDP and Industrial Decline
23:07 – Carbon Border Taxes and Global Competitiveness
27:12 – Double Carbon Taxes in the UK
28:45 – Will Power Bills Ever Go Down?
34:18 – Wind Turbine Lifespans and Decommissioning Scandals
38:09 – Bureaucratic Capture and Net Zero Ideology
43:34 – Reliance on Interconnectors and Norway’s Discontent
46:50 – UK Politics and the Future of Net Zero
54:03 – Real Solutions: Cutting Subsidies and Redash for Gas
57:24 – The Case for Clean Coal and Energy Security
59:11 – Net Zero Equals Deindustrialization
01:00:05 – Closing Remarks
The Real Cost of Electricity to Consumers With David Turver
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Tammy Nemeth [00:00:12] Hello, everybody. Welcome to the Energy Realities podcast. We have a stellar crew today. We have a special guest. And unfortunately, Irina Slav isn’t with us today because she’s undergoing Dental surgery, dear. Goodness, I hope everything goes well with her today. So today we are talking about the real cost of energy and why are energy bills so high these days? And we have our usual gang here. We’ve got David Blackmon who’s in Texas. David, how are you doing today?
David Blackmon [00:00:47] Just beautiful. We got some rain yesterday and so I’m just so happy. I can hardly stand to be around myself.
Tammy Nemeth [00:00:54] No hurricanes, I take it.
David Blackmon [00:00:55] No hurricanes, just rain, blessed rain.
Tammy Nemeth [00:00:58] Yeah, blessed rain for sure help replenish those aquifers.
David Blackmon [00:01:02] Exactly.
Tammy Nemeth [00:01:03] And we have Stu Turley. Stu, are you in Oklahoma or Texas today?
Stuart Turley [00:01:09] Um, mentally, I will physically I’m in Oklahoma right now, but mentally I’m like on planet Mars, you know, I’m up there with Elon, so.
Tammy Nemeth [00:01:17] Excellent. Well, you know, maybe the Starship will will open it up for you. That was amazing last week, actually, with Starship, and that latest test. So looking forward to the next one. And we have, as a special guest today, David Turver, who’s a retired consultant and engineer, and he’s the author of the amazing Eigen Values Substack. David, how are you today?
David Turver [00:01:46] I’m great, thank you, and thanks for having me.
Tammy Nemeth [00:01:49] Yes, David’s in the UK, so…
David Turver [00:01:50] You’ve got my home pager
Tammy Nemeth [00:01:54] Well, I mean, it’s amazing. I highly recommend people subscribe to his sub stack. You always find some really interesting data and analysis there. So welcome to the podcast today, David.
David Turver [00:02:08] Well, thanks very much.
Tammy Nemeth [00:02:11] So, you know, it’s interesting. I know that in the UK we’ve been having this conversation about why are the energy bills so high? Why does the UK have the highest electricity in the Western world? We’ve got the United States with increasing power prices that are hitting consumers. And so there’s lots of different reasons circulating out there. Ed Miliband, who’s the… Secretary for or Minister of Net Zero and Energy, which is kind of interesting. But he says it’s because of gas prices. And in the United States, Bloomberg ran this lengthy piece at the end of September saying it’s all due to AI data centers. So, David, what’s your position on why energy bills are so high?
David Turver [00:03:04] Well, in one word, renewables. But if we just unpack that a little bit, the reason why all these people say, well, it’s gas that sets the price for electricity, the reason our energy supplies are so high is because gas sets the prices for electricity. To a limited extent, that’s true, in that most of the time it is gas that sets the wholesale price of electricity. So let’s get that out of the way. Almost an irrelevant fact, because there are lots of other things that go on to our bills that push up the price of electricity. So the first one is carbon taxes. So as we sit here today, the price for electricity in the UK is about 80 pounds per megawatt hour. About 55 pounds per mega watt hour of that is gas. And about 25 pounds is carbon tax of one form or another, so it was the carbon price support scheme. And there’s the emissions trading scheme. So the wholesale price is already pushed up by those net zero costs of the carbon taxes. But then the other thing that they never mention is the subsidies that we apply to all renewables, in fact, wind, solar, and biomass. So we pay… We’ve got three schemes in the UK. We’ve something called the renewables obligation, which is the biggest one. And that costs us about seven and a half, between seven and half and eight billion pounds per year. We’ve go feeding tariffs, which costs about two billion, which is mostly sort of domestic solar with huge cost per megawatt hour sort of. I mean, before I got into all this, I was working hard and we were putting a… An extension on a house. And my wife said, well, wouldn’t now be a good time to put solar panels on the roof? So I just thought, OK, fine. And it was subsidized quite well. And I didn’t really much think about it. But as I just said that we get paid, the wholesale price is about $80 a megawatt hour at the moment. I get paid over $750 a megewatt hour for the trivial amount of electricity. So that gives you an idea of the scale of these things. And then finally, we’ve got what is the current scheme, both the ROCs and the feeding tariffs are ended as far as new entrants are concerned, but we’re still paying for them and we’re continuing to pay for them for at least a decade. But now we’ve this other scheme called contract difference and that costs us about 2.7 billion. So altogether, those subsidies cost about 12 billion a year. And if you look at how much gas we used in 2024, at the average price of gas during 2024, that gas costs us about five and a half billion. That’s gas for electricity. So we’re paying twice as much in renewable subsidies as we are for gas to be used in electricity. And even that isn’t the whole story. Because wind and solar are intermittent, we then, So the wind gusts and it rises and falls and the sun goes behind clouds and obviously rises and sets in the morning and rises in the evening. So that gives quite a task for the grid operators to keep the grid in balance at all times. So supply must always meet demand and if it doesn’t then you end up with a blackout like they did across Spain in April this year. So those grid balancing costs cost about 2.7 billion. And then we have another thing called the capacity market, which provides a subsidy for suppliers to remain ready to provide backup in the event of a serious outage from the wind farms or whatever, or a dunkelflats period. And we pay another billion and a quarter for that. So together, that’s about another 4 billion. Probably about three-quarters of the cost that we spend on gas electricity. And that’s going to get worse so our national energy system operator forecasts that those grid balancing costs are going to roughly quadruple to up to over 8 billion by 2030 and our office of budget responsibility forecasts that the capacity market costs are going to rise to 4 billion by 2030. So taken together, that’s another 12 billion, which is, again, another element that’s cost more than twice as much as we spend on gas electricity. That’s the evidence that I’ve got for my sort of one-word answer earlier. These are the problem and if we’re going to fix it, we need to deal with them.
Tammy Nemeth [00:08:19] Okay, so what about the does the does that factor in the infrastructure costs like to put in the the lines and the sort of hardware that’s required in order to connect all of this diffuse energy onto the grid?
David Turver [00:08:36] No, it doesn’t and well remembered because I during that long exposition I forgot to mention that In 30, 40 years ago, we used to have power stations close to the source of demand. So we had big coal-fired power stations in the Midlands and in South Yorkshire, close to big energy users when we had a manufacturing industry to speak of. So the grid was quite easy to transmit the power from where it’s generated to where it is used. But now we’re using offshore wind, typically off the coast of Scotland, which is hundreds of miles away from the source of demand. And not only that, the wind farms themselves are dispersed. So you need more wires, first of all, to connect them together, then a great big wire to connect it to the shore, and then even more wires to connect to it from the shore to where the power is actually gonna be used, which is one of the reasons why our grid balancing costs are so high because we haven’t got enough transmission capacity at the moment. So if it’s too windy… We have to pay wind farms to turn off. So we literally pay money for power not to be produced. So if you went into the supermarket, I guess here Tesco, I guess over there, if you think Walmart, and they had say corn flakes on the shelf and you walked out with one packet of corn flakes and then they charged you for two packets of cornflakes because they had two in stock. That’s broadly what we’re doing with the power market. So, Ofgem, in the finite wisdom, shall we say, and it’s not necessary wisdom, have cottoned onto this as a problem and said, well, okay, so we need to spend lots more money on transmission capacity. And they have recently approved the first 8 billion of that. And their plan is to spend 80 billion by 2030. Which themselves, they would cost about, would add about 74 pounds to our electricity bills, which if I’m doing, if I do it ex-VAT, that’s probably eight percent-ish of the ex- VAT average electricity bill, just to transmit this stuff around. And of course, that’s hugely mineral intensive, it’s hugely capital intensive, and get people to do it. They have to give them a regulated return on that. So it basically attracts rent seekers who sort of like put the money up for this stuff and then get a guaranteed return for decades on end. And there’s precious little we can do about it. And then coming down the line, we’ve got what’s called allocation round seven. So every year we have an auction of renewables capacity. And two years ago, the money on offer wasn’t enough. So we awarded zero offshore wind contracts. Last year we awarded some at today’s price of about £85 per megawatt hour, so above the general wholesale price. And the flagship project of that was something called Horn C4, run by Orsted. And seven or eight months after they got awarded that contract last September, So they got awarded contact last September, I think it was in April, they canceled it because they said it was an economic. Even though they’re getting a guaranteed index link price for 15 years and above the current wholesale price it’s not economic. So that forced the government to then rethink about AR7 which is this year’s auction and in 2025 money they’re offering offshore wind 117 pounds per megawatt hour and they’ve extended the contracts to 20 years so these are now going to 20-year index link contracts. At prices, you’re roughly 50% above the current wholesale price set by gas. It’s absolutely ridiculous.
Tammy Nemeth [00:12:59] Wow.
David Turver [00:12:59] And that’s causing some political reaction now, which is good. So reform who are the reform party who are sort of riding high in the polls have said that if any contracts get awarded in AR7, they will strike them down when they get in office. So I think that’s probably sending a powerful message to some of the investors that suddenly political risk is rearing its its its ugly head and. The UK has built its reputation on the rule of law and our legal standards. Permeate the world and lots of people write contracts that are governed by English law. I have to say, I think this is the right decision because Yeah, essentially, if we keep going the way we’re going, the country is going to be crushed. I liken it to the trolley problem. You might have seen that as a philosophical problem where there’s someone stood with a switch, and he can change the points on the train. And the train is heading towards five people on the track. And unless he does something, those people die. The trouble is if he flicks the switch and it goes down the diversion route, there’s one person on the truck who will die. So that’s a new unethical dilemma. However, in our case, his net zero switch is send, well, his switch is sending the net zero train to crush 65 million people. And he can flick the switch and essentially choose to crush the green blob instead. And I think most people choose to crush the Green blob.
Tammy Nemeth [00:14:44] David Blackmon, I’d like to bring you in here. Does this all sound familiar about, you know, all these different costs that are added on to the grid and consumer prices, at least in the Texas area?
David Blackmon [00:14:59] Yeah. I mean, this, this it, and it all explains why this canard that renewable freaks throw out about the levelized cost of energy on the grid is just nonsense and it’s irrelevant. As David said early on, it, it doesn’t matter to what your bill actually is. It’s just irrelevant. I mean we’re paying the, the S I like to put it in simplistic terms because I have a simplistic brain over the past 25 years. Here in Texas, we have made to build two separate power grids. One power grid of renewables that allows all the politicians to signal their virtues about green energy and saving the environment. And then a separate power grid, the pre-existing power grid that we’ve had to continue to expand, made up of coal and natural gas and nuclear, that actually keeps the lights on and your air conditioners running when it’s hot. And when wind and solar fail. And obviously, if you’re building two separate grids and the transmission, which is incredibly costly, associated with all of that, your bills are gonna go higher. And our bills in Texas alone, and we’re cheap compared to the rest of America, have increased by almost 50% now since 2020 as a result of all this nonsense. So it… I mean, David’s grasp of the details of this is just incredible. And, and, you know, it’s why we wanted to have you on the show. And, but people should not think that any of this is isolated to the UK. I mean the problem in the UK is massively many times worse than ours in the United States. So the, the utility rate y’all are paying is, oh my gosh, it is seven times what I’m paying at my home. Okay. The cost per human BTU. Uh, and the highest in the world. So it’s just, I mean, the UK presents this, uh, kind of canary in the coal mine of what’s coming to every other Western country. If we don’t get out of this climate alarm madness that has captivated our societies over the past 20 years.
Tammy Nemeth [00:17:14] Yeah, I wanted to just jump in on what you’re saying there, David, because that Bloomberg article that I mentioned at the beginning, it uses 2020 as the date from which they’re comparing to now, right? And then they say, oh, look, in the past year or two or five or whatever, there’s been this massive increase in bills. And it’s because there’s a correlation there. Well, they’re making a correlation argument that those bills have increased because AI data centers have been have been built in there, driving up the price and so on. But nowhere in that article does it mention how many gigawatts of coal and natural gas and nuclear have been removed from the grid and them building up and having these net zero commitments that have added more unreliable wind and solar and these battery fields or whatever that they claim can back everything up. All of that has been brought on with the contracts for difference and all of the different elements that David Turver has mentioned. And yet they’re trying to spin it now that all these increased costs have nothing to do with the amazing renewables out there. It’s all to do with AI and we better stop the data centers because they’re making your bills go up. So I just want to.
David Blackmon [00:18:31] Yeah. And isn’t that just a classic argument? I mean, that the entire environmentalist movement is over the past 20 years has been about literally working hard to increase the cost of energy of all kinds in order to force people in the Western world and developed countries to live smaller, more isolated lives in which they can just barely afford the basics and can’t travel as much, you know. Can’t drive as much in order to make us and our behavior easier for an increasingly authoritarian form of government that is evolving throughout the Western world over the same period of time to control our behavior. And they’ve succeeded to a great extent. I mean, in Germany, you know, some of the cities in Germany which is famous have been famous for their Christmas celebrations and the cities of light are having to cancel them now. Because of this nonsense and because of other societal maladies that are happening at the same time. And so again, you’re just forcing people to abandon the way they have lived in the past to fit into this green dream, which basically involves everybody living in fear and poverty and not being able to say what’s really on their mind. And that’s… Unfortunately, really manifesting itself more, more in the UK and Germany than in the United States, but the United states is on the same path. We’re just 10 years behind.
Tammy Nemeth [00:20:11] Stu, what do you think of all this? Oh, sorry, David.
David Turver [00:20:15] To amplify that, if you look at the stats, GDP per capita, i.e. GDP per person, has all but stagnated since 2008, which is both coincidentally the year of the financial crash but also the year that climate change came into force. And now the UK’s GDP per capital is lower than the poorest state in America. It’s below Mississippi. And Germany is not much higher up and will probably go the same way. It’s really frightening. And 20 years ago, I think we were probably middling in terms of the US, the UK versus the average US state.
Stuart Turley [00:20:58] Yeah, I got about 19,000 questions, but let me, let me start with this one. Um, uh, I had so much fun over the weekend. Let me, uh add this. I put this article out on my sub stack and then it’ll put it out on LinkedIn. And I have not, it’s a long time having this much kind of fun when you have people just absolutely I put out. Wind turbines are made by coal and are not sustainable. Holy cow, Batman, that threw a gasket. They’re fiscally incapable of sustaining themselves from day one and face catastrophic failures at three to eight years. I’ve got the maintenance numbers. I had to have the maintenance number to put this article out there. And when you see eight years happen, you see. The wind turbine companies going out and asking for increases in fees at eight years, that is fiscally unsustainable day one, but at eight years and president Trump, when he was talking to Ursula said, they don’t last eight years. And this threw some serious cognitive problems around LinkedIn. I had a blast doing that article. But… I absolutely love this one. That’s exactly the agenda. And I do want to ask this question. Um, the EU, the CCDDS, M-O-U-S-E, uh, you know, the thing that they’re putting out with the carbon, uh and everything else, and Cutter said, we’re not going to be shipping you any LNG to the EU if you put this out. I have a feeling president Trump’s going to say the same thing as he calmly went to shark week. I mean, the UN week. Dressed up in a shark outfit that we talked about on this show. I think president Trump’s going to tell them to stick it in their ears. So you’re going to have the U S and cutter, not selling LNG to the EU. Will, uh, the UK fall in line with the CCD, the carbon.
Tammy Nemeth [00:23:07] Corporate Sustainability Due Diligence Directive.
Stuart Turley [00:23:10] Thank you. I went to Oklahoma state and I can’t count. So you’ve got to figure is this going to be a problem for the UK in the corporate sustainability thing that the UK, that the U S and cutter. Cause this is a huge, it all ties in because as Texas, as David was saying on ERCOT, ERCot averages, I believe, about 92 megawatts. Of demand that they have to supply. We have 180 megawatts on the Texas ERCOT grid. That’s a lot of power that we had to pay for in transmission lines and everything else. Oh, wind and solar.
David Turver [00:24:00] I’m not familiar with that directive. I know it here is something called the CBAM, which is carbon border adjustment mechanism, which is essentially a carbon tax on imports. It’s crazy, no matter what, how you look at it, we’ve put up our energy prices so we can’t afford to make anything here anymore. So, you know, steel’s closing, chemicals closing, fertilizers closing. So, yeah, we can make steel, we cannot make fertilizer and we can not make explosives. So we can feed ourselves or defend our walls. So then we outsource that manufacturing to China. And then because that’s carbon intensive, we’re then going to put an import tax, a tariff, essentially a carbon tariff on those imports to make it even more expensive.
Tammy Nemeth [00:24:53] To equalize, to equalize it.
David Turver [00:24:56] Yeah, but all it does is raise the cost of everything and it doesn’t make our industries more competitive because countries that are outside the sea ban are going to be cheaper anyway. It’s just, it’s just ridiculous. Uh, and you know, one of our, um, you know most important industrialists, Jim Radcliffe, uh, who founded and built INEOS, uh, he announced a few weeks ago, he’s not investing any more money in Britain. Is sending $6 billion of investment to the U.S. And we can’t run a society without these critical chemicals and compounds, petrochemicals. I think the one that closed in recent is acetalels or something. I can’t remember what it was. But I think our last fertilizer factory closed two years ago. So we can make ammonium nitrate anymore, which you need for explosives, you need for a fertilizer. It’s very, very frightening. And I think we’ve just got too many people in positions of power who just do not understand how the physical world works.
Stuart Turley [00:26:07] I think that goes to my comment that I put just as a joke, but I think we hit the spot. Is Ed Miliband a Muppet or a Wallace and Gromit actor? I’m not sure because the math does not math up.
David Turver [00:26:22] Indeed, it doesn’t. I think he’s worse than all those things, because I think, actually, he’s quite intelligent. So he did a further maths A level. So he’s got to be numerate, or at least he was numerate once. I think his more is being captured by, essentially, a doomsday cult, because his whole body language persona is that of a zealot.
Tammy Nemeth [00:26:49] Yeah, very ideologically driven. David, I’m wondering, David Turver, can you maybe reply to SRB? I believe you covered it, but if you could just kind of mention it again. SRB has the comment here who says, to add insult to injury, the EU applies a CO2 tax on energy generators, and he’s curious to know if the UK does this as well.
David Turver [00:27:12] Yes it does. It does in two ways. One called the carbon price support mechanism which adds I think from memory £18 per ton of CO2 equivalent and we also add the emissions trading scheme which was probably about £55 per ton of CO 2 at the moment. Earlier this year it was about £35 because we decoupled our emissions trading from the EU. And then Starmer, in his, again, finite, not wisdom, decided that he wanted to align our emissions trading scheme back again with the EU’s trading scheme, which is much more expensive. So our carbon prices have been rising over the past 10 months or so. And they’re up probably 2 thirds or something like that. So even though gas has been stable around 80, 85 for the past few months. Our wholesale electricity price has been creeping up because the carbon tax has gone up.
Tammy Nemeth [00:28:20] So I’m wondering, let’s say that the UK does manage to put everything into wind and solar and batteries and they don’t have to pay as much in the carbon tax because maybe they reduce the of natural gas have more nuclear, will power bills go down?
David Turver [00:28:45] Um, no, uh, for the, for some of the reasons that I described earlier. So, uh one, you know, they’re putting huge subsidies on AR seven, which they need if they’re going to hit their clean power by 2030 plan. So that will add much more to our bills. Um, secondly, those grid balancing costs are going to roughly wealth, triple or quadruple by 2030. The backup costs are going to… Triple or quadruple by 2030. And then we’ve got all these extra transmission line costs as well, another 80 billion spending on it. So the energy supplier bosses were at the Commons Energy Select Committee hearing last week. And they said that even if wholesale prices half by 2030. Electricity bills will still go up by 20 percent. And that means if wholesale prices stay the same, elections bills are going up much, much more than that. So they, and what was a surprise is that that appeared to be a surprise to the MPs on the select committee. But I actually made a submission to that committee. And I think I counted three of us who did what you might call a net zero skeptical response to that. And I pointed all that out in great detail. I went through all the subsidies were why our bills were so high. And if they were concerned about the cost of electricity, they needed to attack the root cause and not just fiddle about with moving money from one pocket to another. And it’s interesting that none of the three of us who put in vaguely skeptical things have been called to give oral evidence. It’s like they’ve got their fingers in the air going, la, la, they don’t want to be told the truth. Now, I saw a question go up there about zonal pricing. I did a piece about this a while ago. I think that is a complete and utter red herring. And certainly, the original piece of work that was done for octopus by FDI Consulting, if you forgive me for being direct, I think it was garbage. Because they said, well, we will get very cheap power on the Scottish shores. And therefore, our bills are going to fall down. But what they said in their actual report was, but we’re not counting the cost of subsidies. So it was just absolute nonsense. And then Greg Jackson has flip-flopped from saying, well, no, we don’t need things to. We don’t need factories to move up to Scotland, we can save money even if they stay where they are, but the original thing, its original report was based on you having either a hydrogen electrolyser right on the Scottish shore or a data center on the Scottish shore, but then they’ve forgotten that they would need to have new transmission lines if they’ve got a data center because you still need to power it even if the wind is blowing. I mean, it was just, it was just absolute nonsense. So. But nevertheless, people like Greg Jackson, who’s now sitting as a non-executive director of the cabinet office or something, is still pushing it, he hasn’t given up on it.
David Blackmon [00:32:29] I want to show another comment here. We need to pass a law that says any new energy added to the grid must be affordable, reliable, resilient before it can be anything else. But isn’t the problem there that the, that the liberals in government would just define whatever new law that is, they’d add a definition that would include wind and solar and pretty much nothing else.
David Turver [00:32:53] Yeah, I mean, I understand the sentiment behind that, but I think.
David Turver [00:32:57] We’ve got too many laws and too many regulations and actually we need a sort of like a mille figure to just do afuera on some of the stuff, starting with the climate change act and then the market side and I suspect we will see power prices fall pretty rapidly.
Stuart Turley [00:33:17] Um, Hey, I want to throw this one out. Hey, good morning, Tom. Um, Paul, uh, I believe most wind turbines need to be replaced every 10 years, not sure on the panels. Uh, Tom, I just threw a gasket into some people’s, uh minds over the weekend on this, on LinkedIn. And the scheme in the U S has been nameplate upgrades every few years in the inflation reduction reduction act. Or the porculous bill is Dan Bongino calls it, um, allows them to name plate, upgrade the parts on the turbines and then they get extra money for it. So it has actually been, yeah, it’s been actually less than that eight years. And, and so eight years, they’re fiscally unsolvable, especially without Subsidies without subsidies. We’re going to see a lot more problems in the U S I don’t know about the UK.
David Turver [00:34:18] My numbers are slightly different to that. I did some work a little while ago looking at some offshore wind farms. And typically speaking, the load factor sort of like starts to drop significantly from about year 12. And then it goes on a sort of downward spiral.
Tammy Nemeth [00:34:40] Literally.
David Turver [00:34:42] Yes, literally.
Stuart Turley [00:34:44] See, the capitalists in the US have been taking advantage of the nameplate upgrades.
David Turver [00:34:50] Yeah, we call that we call it repowering here. I think that’s what they’re trying to do on some of the onshore wind farms to there’s a whole there’s an emerging scandal on decommissioning costs. So they’re supposed to make provision for decommisioning costs by actually creating some ring fund cash. But they do it just by sort of like downgrading the asset value if they do that at all. They haven’t realized what the impact I think is under realized in the investment community what the impact of that would be when if those decommissioned liabilities actually crystallize. I’ve done quite a bit of work on that recently and the the announcement by the TOR is a week or two ago that they will cut the carbon taxes that we just discussed and the renewable obligations that the subsidies will. Essentially bring forward the decommissioning date of all these rock-funded wind farms, of which there are a lot, and I think that asset values will collapse and we would see bankruptcies in that in that case. I’ve done quite a bit of work on that.
Stuart Turley [00:35:59] In the US, there’s 79,000 wind turbines in the US. I’ve calculated out with my OSU math, one, two, three, oh, 89 billion dollars in order to get land reclamation. That’s partial land reclamation, 89-billion-dollar liability that we have just on wind.
Tammy Nemeth [00:36:23] It’s crazy.
David Blackmon [00:36:24] And that doesn’t include taking out the enormous foundations. They’re, they’re never going to be reclaimed.
Tammy Nemeth [00:36:31] Can I ask you to put Rodney McInnes’ comment on there about the agenda of anarchy and destruction? Because he makes a good point here about the bureaucracy. He says, unfortunately, the bureaucracy plays a long respecting authority instead of executing their trusted responsibility. It’s very disappointing but predictable as shown in Yale’s Milgram experiment. However, Katherine Porter seems has an argument that The bureaucracy is full in support. Of the ideology around net zero. And so it’s not just that the bureaucracy is playing along, but they’re actually pushing it, not just because if you have a government, let’s say reform gets in, or advance UK or some alternative party. They’re beholden to that bureaucracy for the knowledge, the institutional memory, whatever, and they have their own agenda, which is why Catherine’s made the case on Trigonometry podcast about how when the conservatives were there, they weren’t getting appropriate information from the bureaucracy because they wanted the net zero programs and they were fully on board with the climate change committee and all that kind of stuff. And so, there is an issue with bureaucracy in the UK, I think in the United States, it’s a little bit different. There’s more flexibility there to remove people within the bureaucracy who could be holding things up. I don’t think Trump’s got it all under control. There’s still people there who are a problem. But David, what’s your take on that? Would you with Catherine that the bureaucracy is is pushing this.
David Turver [00:38:09] Yes, and from what you said, I really don’t think it’s the bureaucracy playing along. I think to a large extent the bureaucracy is driving it.
Tammy Nemeth [00:38:19] Driving it. Yeah.
David Turver [00:38:22] Partly because of the way we’ve structured things. So the climate change committee is effectively beyond parliamentary control. We’ve given it all this power to set the carbon budgets, which the government is almost by law duty bound to follow, but there’s no check and balance to really challenge what the climate committee is saying, except all the numbers on which climate change committee basis recommendations are not to define a point on it complete and utter garbage. So the capex costs for offshore wind are less than half. What companies are actually spending to build offshore wind farms. So and then you know they have a low cost of capital and then they put up and then, they have unrealistically high load factors and so on. So they come up with a number of 44 pounds per megawatt hour for an offshore wind farm delivering in 2030 and you know lo and behold the government is is offering 117 pounds per megawat hour which will deliver in probably 29 or 30 if they win any contracts this year. So that’s like a factor of three difference. And all of their then alleged benefits from moving to net zero are dependent upon those low costs. Because then suddenly if those costs are low, then it makes sense to have a heat pump, and it makes to have an electric vehicle, la, la. But if the costs are actually three times higher, and actually for floating offshore wind, that’s more than double fixed bottom offshore wind. And to hit the capacity targets that they need, pardon me, the overall capacity targets they need they need floating offshore wind as well as fixed bottom. So they’re a country mile out on their costs. So all their calculations that say, we’ll have a net cashflow benefit from about 2037 or something is absolute nonsense. Absolute nonsense. And they’re even out by a factor of almost two on solar. A couple of solar farms have come online this year that cost roughly well just under a million pounds a megawatt. Predicting you’re less than 500. And it’s notwithstanding that grid scale solar in this country is, the World Bank said it was the second worst country in the world to do it. I mean, the physics don’t work, the economics don’t work, it’s absolutely ridiculous. Now, maybe a different argument in Texas where you’ve got 25% low fax instead of 10 and less seasonal variation and so on. But here it’s completely pointless. You know, because it produces most on summer days when our demand is lowest and you know we’ve got very little air con and you when our demanded highest is on a cold winter evening when obviously the sun’s gone down because the sun sets about four o’clock in January so so it’s absolutely no use whatsoever
David Blackmon [00:41:37] Yeah, in Texas, I mean, we get a little more use out of it, but, you know, it’s, it’s like everywhere. And I think it’s exactly the same everywhere, wind and solar are used. If the weather’s great, then you can get a lot out of wind and solar on our grid in Texas. As long as the weather is good. The problem is when you have a weather emergency, when the weather is really bad, like we had in 2021, where the big winter storm comes through and freezes all the wind turbines, freezes, covers all the solar panels in snow. And suddenly they’re the first to drop off the grid and then everything else starts to freeze up and you end up with 300 dead people as a result. The one thing that the most certain aspect of both wind and solar is they’re going to fail when you need them the most. And that’s another thing people just don’t want to face about these alternative forms of energy. They’re completely unreliable when there’s an emergency. And so you have no choice but to maintain a separate power grid to try to avoid those emergency situations. And it’s just insane. It’s just we’re doing the same things over and over again with the same result. But we expect, I guess, something different with each new tranche of this renewable nonsense.
Stuart Turley [00:42:57] Yep. Meredith England in her book, shorting the grid covers that. And I absolutely love Meredith England and, and she’s it’s a, it’s a number that they used to have David, uh, 10% on the U S grid. I’m not sure about the UK grid that you could calculate at OSU, um, 10 percent of your power needs in case you needed spare capacity. Now you have to do it. Hundred and eighty percent. Because of wind and solar, as soon as you add those on there, it just does not math up again.
Tammy Nemeth [00:43:34] Well, I think, you know, the mantra is that they can rely on the interconnectors. So when the weather’s not good here in the UK, then they can rely on interconnectors from the nuclear in France or somewhere else, right?
Stuart Turley [00:43:49] How’s that interconnector going to work in Norway when they get an election and the people in Norway are tired of paying higher prices because they’re exporting electricity to the UK?
Tammy Nemeth [00:44:00] Well they had their election and unfortunately the Labor Party got back in with the Greens holding the balance of power. So I mean it’s kind of sad that that’s how it turned out in Norway but I’m not sure what that’ll mean for the interconnectors because they haven’t renewed it and the government again is still new and I don’t know how they’re progressing with that because the people were really upset.
Stuart Turley [00:44:23] And they just announced they’re expanding their North Sea because now they like suddenly four years ago before the Russian Ukraine conflict, they were shutting down their natural gas. Now suddenly the sovereign wealth fund in Norway likes the North Sea and they’re investing a couple billion in there to start drilling when the UK is killing the North sea. So it just doesn’t make sense.
Tammy Nemeth [00:44:47] On their side, I know, it makes no sense.
David Blackmon [00:44:50] So the tough question.
David Turver [00:44:50] The So their hydro plants are very low. So unless they get an unseasonably wet autumn, then relying upon their hydro for in our winter, we can’t do it, I don’t think. And yes, Tammy’s right. There’s significant disquiet in Norway about how their interconnectors are causing high prices in Norway because they’re supplying us, supplying Germany. And I think Denmark as well.
Tammy Nemeth [00:45:29] Denmark, yeah.
Stuart Turley [00:45:31] So even, even the green party, Tammy may be facing a mob and that mob baby saying, we don’t want that contract renewed, which puts the UK back into Holy cow, Batman, uh, we’re Gotham city now, um,
Tammy Nemeth [00:45:46] Yeah, but you know, the Green Party campaigned on retiring the oil and gas assets. So I don’t know how that’s going to jive with their support of the Labor government. I’m hoping that the Labor Government in Norway is able to sort of defang that push, but they held these climate assemblies, they did all this stuff. In order to try and increase the number of representation they have in the parliament on the basis of retiring the oil and gas assets to base them out.
Stuart Turley [00:46:22] When is a politician lying?
Tammy Nemeth [00:46:27] I don’t know.
Stuart Turley [00:46:28] When their lips are moving.
David Blackmon [00:46:30] Thinking of politicians and the UK, you know, a big part of your problem in the UK and I would like David’s views on this, is that you know the conservative party ruled over this climate change madness for 15 years, the first 15 years of it. Now the Labor’s party been in, What, for two years now?
Tammy Nemeth [00:46:54] No. One!
David Blackmon [00:46:55] Just one year and making it exponentially worse, you know, because that’s what the labor party does. You know, you’re going to make it much, much worse. But if you, yeah, I know Keir Starmer’s, uh, approval rating is in the toilet and, uh you know single digits or low double digits. Um, so, I mean, I guess there’s pressure now to call a, a new election, but will they do that? And even if they do do that. Is there any sort of political relief coming should the conservatives take over or the reform party as the poll show, uh, would most likely end up with most of parliament, I mean, would that provide any relief from all this madness or would it just keep going along? I, I just, I don’t have a good feel for.
David Turver [00:47:46] My feeling is that a significant proportion of the Tory party has had an epiphany and they now realize it. So Claire Coutine, well I think in February or so, Kenny Banninok, the leader of the Tories, sort of said well we don’t think net zero is doable by 2050 and then at the Tory conference they announced that they would repeal the Climate Change Act, disband the Change Committee. Get rid of renewable obligation certificates and cut the carbon taxes. So that’s quite a big thing.
David Blackmon [00:48:20] That is.
David Turver [00:48:22] Reform fought the last election on, you know, essentially ending net zero, but they they haven’t really painted a picture of how they would go about that. So I think their heart’s in the right place, but they haven t done the detailed work to work out how to do it yet. On the election cycle, I’ve got sort of what I might call cognitive dissonance in that I can’t see how the current Labor administration can struggle through to 2029. But equally, I can’t see how we get rid of them, because they’ve got over 400 seats, so they’ve got, I don’t remember the number, but it’s a huge majority, well over 100, I think. So for them to voluntarily call an election would be essentially the proverbial Turkey voting for Christmas. However, or thanksgiving, however, I think there are signs that there’s sort of like cracking in the Labor Party. So some of the unions have come out and said that net zero is a daft thing to do. There was a Labor MP asked a very net zero critical question at Prime Minister’s questions last week. So there’s signs of some cracks there. And Lord, what’s his name, Morris Glassman, I think. I can’t remember his surname. As you know, the Battle of Ideas Festival at the weekend, and they did a sort of like a Planet Normal podcast, and they had this, Lord Glassman, I think his name is, he’s a Labor peer and the founder of what’s called the Blue Labor Movement, which is what you might call the moderately sensible wing of the Labor Party. And they asked him how things, and I’m gonna swear in a moment, but they asked them. Uh how we thought labor was going this is well i’m on the planet normal podcast and the labor party’s on planet uh.
Tammy Nemeth [00:50:30] Oh my gosh.
David Turver [00:50:35] Yes, so I guess there are signs that it might crumble and there’s the former Labor leader Jeremy Corbyn who’s now setting up his own party called Your Party or some of us call it Jezbollah and there may be a link between them and the Green Party who are forming You’re very, very hard left. Yeah. Grouping and that may sort of like peel off some of the more of the nut cases in the Labor Party which might mean that then the governing party is smaller and then is more vulnerable to fall. I don’t know but I mean I hope they fall before 2029 but I’m not quite sure how yet but I think it will probably be well the other thing is we’re heading for some sort of fiscal crisis so Yeah, we’ve got like 150 billion pound per annum deficit. And they had a sort of like a meager attempt to try and cut spending over the summer and the back benches voted it down so I Think the bond market will say something soon as well. So all our long-term bond yields have been going up recently and uh what’s her name Rachel Reeves is going to be increasing tax in the budget but I think we’re well beyond the peak of the Laffer curve so any increase in taxes she makes in tax rates will probably reduce tax take, which then makes the deficit even wider and probably makes growth even slower, which puts us on a physical trajectory of a banana republic, really. So, and I suspect something significant will have to happen and that may cause a split in the Labor Party because they don’t want to be seen as a party of austerity, but I think austerity will be forced upon them.
Tammy Nemeth [00:52:30] Yeah, with respect to the conservatives, I mean, after Kemi Badenok made her speeches, there was the green wing of the conservatives came out expressing their upset and disappointment and whatever. We had Rishi Sunak and…
Tammy Nemeth [00:52:47] Theresa May,.
David Blackmon [00:52:48] Theresa May.
Tammy Nemeth [00:52:50] These people who I would call chinos conservatives in name only and and you know they were brought in by David Cameron who really put the conservative party on that sort of green trajectory and you know I don’t know how the party deals with that wing because they’re not they’re still there. They’re still in the party. They are still pushing back. And so let’s say, and then there’s all this discontent about Kemi as the leader. So I think this policy direction is contingent upon her remaining the leader, but if she goes away, then what happens with all the net zero plans or whatever? And then to come back to the idea of bills and how much people have to pay to basically compensate for all of this unreliable energy on the grid. What do you think the solution is at this point? Because there has been all this wind, the solar is being green lit, some is coming online or whatever. What’s the solution to bring the prices down by, you know, let’s say labor leaves in 2029 gets replaced. What’s a solution here?
David Turver [00:54:03] That’s a very good question. So those two things that Claire Cotino mentioned the other week, cutting the renewables obligations and the carbon taxes, I actually made those two suggestions in a sub stack I wrote probably in August. So I strongly support those. And those are sort of starting to attack the root of the problem. I would just cancel AR7, so we just don’t have any more of the offshore wind. I think we can then also cancel the spending to expand the transmission grid because the impact of taking off the renewable obligation certificates and the carbon tax will make both onshore and offshore rock funded units uneconomic and probably the ones that are operating on a merchant basis too and they will probably go bankrupt and go. That will then leave us with our slightly de-prepared gas backup. Yeah. And that in itself is the problem because that’s not been invested in as well as it might, and a lot of our gas fired generation is coming towards its end of its life. So we sort of need an emergency, uh, sort of redash for gas, so to speak. However, the lead time on gas fired turbines is about eight years. And I just don’t think we’ve got eight years Um, so although I’m not a huge fan of coal, because not really because of CO2, but more because of the sort of particulates and stocks and not, I think we might be forced to rebuild coal. Uh, and that will be certainly, um, both cheaper and cleaner than burning trees at Drax. Um, uh, which we still do. I mean, we chop down your forest and we send them over to us and burn them here Thank you. Which is, you know, again, dreadful economics and dreadful physics.
Tammy Nemeth [00:56:05] Um, so I’m thinking.
David Turver [00:56:07] And we should also fix you there on the supply side, so we should cut the taxes on North Sea oil and gas operators, and we should lift the ban on drilling both onshore and offshore, so that we can be more secure in ourselves. And then over the medium to long term, we need to fix our nuclear regulation, which is ridiculous because it costs as much to build nuclear power station in this career and then essentially you know, gas to nuclear strategy. So you’ve got nuclear for base load and gas for, you know short term supply demand flex
Stuart Turley [00:56:46] coal, coal mining in the UK has gone away. Um, that is, I think you’re, I, yeah. Wow. Uh, I thought you’re I think your spot on, uh, David, on your assessment. And, um, I I think that coal is going to help keep America lit again, I think is, you know, make coal great again, is actually a slogan that makes sense in the U S. Um Uh, fortunately we haven’t turned all of ours off yet. We’ve turned a lot off, but, um, it’s going to get interesting.
Tammy Nemeth [00:57:24] There is clean coal technology where it reduces the amounts of
Stuart Turley [00:57:28] Particulate matter out. Yes, absolutely.
Tammy Nemeth [00:57:31] And some of the new tech out there is amazing, and there’s no reason why you couldn’t implement that. And it makes no sense for the UK to have just not mined any more coal when they’re importing coal from Japan in order to keep the steel mills going. And you know, there’s supposed to be this whole new emphasis on defense production, you know because the boogeyman of Russia is out there, World War III is around the corner and yet they have no capability anymore really to. Defense production going in this country to end up having to be reliant on imports of all different kinds of things.
Stuart Turley [00:58:09] I can say this because I’m sitting here in the U S not in the UK. The boogeyman from Russia is not the ones trying to start the war. Seems to me like Zelensky and the UK and the EU are trying to start world war three. When he puts a duct tape on drones and throws them over into Poland and going, look, Russia’s drones are in Poland. That seems a little odd to me.
David Blackmon [00:58:38] Well, don’t leave out Lindsey Graham and the rest of the warmongers in the US in it as well
Tammy Nemeth [00:58:42] Yeah, they want it.
Stuart Turley [00:58:46] That’s how they make their money. The bank of London, uh, the war mongers, Zelensky, no, I who’s the bad guy in the room, we need to ask that real question.
Tammy Nemeth [00:58:56] Net zero is a bad guy.
Stuart Turley [00:58:59] That zero equals deindustrialization and prove me wrong. I can’t find anything on that that says net zero is good.
David Turver [00:59:11] No, I can’t write it.
Tammy Nemeth [00:59:13] Yeah, especially it’s supposed to reduce emissions and keep the temperature low, but what is, you know, the UK’s contribution? Is it 0.7% of global emissions? 0.8? Yeah. Yeah. So, I mean, you shut everything down, de-industrialize, and there’s, it’s imperceptible. But hey, we’re supposed to lead by example, apparently.
Stuart Turley [00:59:38] I am in discussions with some folks with clean coal technology on a new company coming out that will change energy and have a significant impact. But I can’t talk about it yet because the patents are just now, oh, the patent office shut down thanks to the Democrats. So, you know, it’s kind of fun. Excuse me. There are things coming around the corner.
Tammy Nemeth [01:00:05] Well, David, thank you so much for taking the time to talk with us today and to join us on the podcast. Thank you to all the comments. I think we’ve run up to our hour and thanks everybody and hopefully see you all next week.
David Turver [01:00:20] And thanks for having me. It’s been a blast.
Tammy Nemeth [01:00:22] Thanks David.
David Blackmon [01:00:23] Thank you, sir. Y’all have a wonderful week.
David Turver [01:00:25] Thank you
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