Windfall for Power Generators
A new report of a study for the WWF this morning detailing the windfall profits to power companies from the European emissions trading scheme (ETS) the EU’s flagship market-based mechanism for a progressive reduction of carbon emissions.
Power companies in Spain, Italy, Germany, Britain and Poland are all set to make massive profits from their gifts of free emissions permits. The trick is these companies can pass on the costs of the emissions permits based on the trading figure even though they did not buy the permits in the first place.
The figures are staggering, the companies are set to make 71Billion euros profits, British supplies are set to make between €6 and €15 billion Germany between €14 and €34 Spain between €1 and €4 billion Italy between €6 and €9 billion and Poland €2 and €9 billion.
The idea behind the scheme is that it delivers additional revenues to low carbon forms of generation and they are a benefit because they do not incur any additional costs themselves by having to purchase pollution allowances.
A further benefit to reducing carbon is that increased prices to the consumer will cut demand for power and also boost the sales of energy efficient measures.
Even more good news for power generators was released this morning when Carbon Positive reported that the prices of EU carbon allowances have seen an upward trend over the past month, climbing 13 percent since a low point in early March. Prices are now at their highest levels since the early days of January.
I am probably missing something important here, but I am quite sure that if our old government - you know the one we used to elect to run this country,- came up with a hair brained scheme that penalised us the consumers and incidentally the voters, whilst at the same time rewarding the main polluters, in order to reduce carbon so that we can all save the world. Ignoring the fact that no matter what cuts we do, or do not make, will make not the slightest difference, because the overall world production of carbon will increase, because countries like China can produce as much as they like, if our old government were to come up with such an idea, there would be a massive political price to pay, come the next election.
It cannot therefore be an unconnected factor, that the EU, by not having to face the voters, can do anything is likes without any political fallout accruing to itself. And of course we are all supposed to applaud the EU for taking such action and happily stand by and see our industry hobbled on the world stage, in the cause of equalising our relative standards of living.
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