Gas interconnection, decision made

I blogged earlier about the draft decision of the CER on the pricing rules for the gas interconnectors.

The decision is now final. I find the document hard to read, because it assumes that you are familiar with the draft decision, and it rambles between the actual decision, decisions that might have been, justification of the decision, and responses to comments to the draft decision. This is what I think was decided:

  1. The interconnector will be moved, legally, from offshore to onshore.
  2. Interconnector capacity will be auctioned.
  3. There is a reserve price for the auction.
  4. The reserve price is the long-run marginal cost.
  5. If the auction does not cover the costs of the pipe-formerly-known-as-the-interconnector, the difference will be split over ALL gas suppliers.

I am not sure whether there will really be an auction, or whether the reserve price will always hold.

The contentious point, however, is the long-run marginal cost. This implies that Bord Gais will have a guaranteed income on its assets.

Instead of forcing BGE to take a hit on what might turn out to be a bad investment in interconnection, the CER forces gas consumers to make up the difference.

This is wrong in principle. It is a transfer from gas users to the owners of BGE. And it distorts competition.

25 thoughts on “Gas interconnection, decision made”

  1. @Richard,

    I agree the CER’s decision document is poorly written and presented and I understand your difficulty in trying to identify precisely what the implications are. One needs to start with a clear understanding of the primary objective of the Government, the Minister, the Department, BGE, the ESB and all other parts of the expansive government apparatus with an involvment in the energy sector – the ‘powers-that-be’..

    This objective is to encourage Shannon LNG to fold its tents and disappear quietly in to the night. The eventual input of Corrib gas will reduce the use made of the ICs, but if Shannon LNG were to provide additional supplies the use made of the ICs would be reduced to very low levels. Since BGE is guaranteed a secure revenue stream on the ICs by the CER, under the current pricing arrangements the unit tariff on the interconnector would go through the roof. The entry of Corrib gas creates a problem; the entry of Shannon LNG gas will make the problem a lot worse; but it could be manageable if Shannon LNG were encouraged to go away.

    Prices going through the roof, of course, would never be allowed to happen, since the UK NBP (wholesale) price plus the IC unit tarifff sets the wholesale price at the Irish Balancing Point (IBP). To ensure that BGE continues to recover its €50-60 million a year on the ICs the CER has developed a cunning and elaborate wheeze.

    Gas Regulation 715/2009/EC (part of the EU’s Third Legislative Package on electricity and gas) mandates Entry-Exit (E-E) gas transmission pricing and proscribes contracting for, and pricing of, gas transmission capacity on a point-to-point (P2P) basis. The E-E mandate seeks to apply this pricing mechanism, originally developed by British Gas in 1992, throughout the EU. The proscription on P2P is an attempt to break the control of Gazprom over the capacity on the big transit lines delivering Russian gas through Central and Eastern Europe.

    There are relatively few subsea gas interconnectors between member-state and all operate on a P2P basis. However, the CER has decided to incorporate the ICs in to a single Irish E-E system so as to spread the recovery of any IC revenue shortfall over all suppliers in to the Irish market. The European Commission, in its eagerness to proscribe P2P transmission capacity, appears to have given its approval.

    Using LRMC to estimate entry charges is totally nonsensical when there is no real possibility of congestion on the ICs and a resulting requirement to increase capacity. But it will generate a relatively low unit tariff for use of the ICs that will be added to the UK NBP price to generate the Irish IBP price. However, as Corrib comes on stream and if or when Shannon LNG comes on stream the use the ICs will fall and IC revenues will decline.

    The CER proposes to recover any IC revenue shortfall from the other suppliers – primarily the Corrib Consortium and Shannon LNG. The Corrib Consortium will grumble but will take any hit that comes its way as its primary objective is to start producing as quickly as possible so that it can begin to recover the huge sunk costs (reported in excess of €2.5 billion) it has incurred. In contrast, Shannon LNG has relatively limited sunk costs in the development stage and it is possible that the application of these additional costs would seriously undermine the economics of the project. It is the earnest hope of the ‘powers-that-be’ that they will and that Shannon LNG will be forced to up stumps and leave.

    Rather than a transfer from consumers to BGE, it will be a transfer from new suppliers to BGE. Securing the revenue stream of BGE – at all costs and regardless of the implications – is the main driver. (The CER’s consultant, Oxera, goes so far as to assert that the CER has a ‘duty-to-finance’ – which makes a total nonsense of the relevant provision in the Gas (Interim) Regulation Act (and the relevant provision in UK legislation from which it was derived).)

    If Shannon LNG can be encouraged to depart the IC revenue shortfall will be smaller. If it decides to stay it will be forced to pay for the additional revenue shortfall that will emerge.

    You couldn’t really make this up. But it is modern Ireland in all its glory.

  2. I should, perhaps, add that the ‘powers-that-be’ will deny vehemently that they wish to encourage Shannon LNG to up stumps and leave. Indeed, they assert that they welcome any and all competition in gas supply with open arms. The effective intent of this decision, however, belies all these claims.

    They will also, of course, assert that, even if they are underused, the ICs will provide valuable security of supply in the event of supply failures by other suppliers. Directive 994/2009/EC on gas security of supply requires an N-1 redundancy standard. This mean that sufficient delivery capacity must be available if the infrastructure delivering the largest share of supplies fails.

    However, the recovery of the costs of providing this redundancy should, unfortunately, fall largely on gas consumers – since they enjoy the benefits. In the context of the E-E pricing mechanism decided on by the CER, the shortfall in IC revenue corresponds to this redundancy cost and the logical solution would be to impose some or all of it on exit charges. There is no rationale for imposing it on the entry charges paid by competing suppliers.

    And all this is completely separate to the scandal of the excessive network revenues being awarded to BGE by the CER.

    Welcome to modern Ireland.

  3. Tol
    I recommend you look at the UKs DECC PDF documents from July 2011

    Entitled
    PDF]

    Overall energy consumption in the UK since 1970

    [PDF]
    2011 Transport energy consumption in the UK since 1970 Summary

    http://www.decc.gov.uk

    In the first document Y1970 fuels(TPEC) was dominated by (chart 2)
    Solid fuels : 47%
    Oil : 44%
    Gas : 5%
    Elec. : 4% (Hydro / Nuclear)

    By 2000
    Solids : 17%
    Gas : 41% (changes in electricity area – the so called dash for gas)

    Chart 7 is also interesting
    Energy intensity of all areas (Domestic ,services , Industry ) have dived with the exception of transport which has remained pretty stable.

    What you are infact witnessing post 1970 is a deindustrialisation of a country with global rent flows helping to sustain the Transport sectors energy intensity.
    The “Free market” as you put it has exposed the UK to a dramatic energy cliff – with no strategic sense to the policey only other then make hay via the dash for Gas.
    Now with only a almost non existent Nuclear industry and 19th century railway cuttings to fall back on.

    The transport PDF document is perhaps more interesting
    With Y2010 transport consumption down to Y2002 levels(chiefly because of declines in air transport according to the doc.)
    With road transport accounting for 74%(40,995TTOe) of consumption(68% road passenger / 32% road freight)
    Air accounting for 22%(12,288TTOe)
    Water accounting for 3%( 1,469TTOe)
    rail accounting for 2%( 992TTOe)
    See chart 1.
    Of these only rail transport energy use fell 38% despite reaching post war highs & now all time highs in passenger numbers although with declining freight carriage.(1,611 TTOe to 992TTOe)

    Road transport increased 91%
    Water transport increased 14%
    Air transport more then tripled………

    The free market is not a free market – thats a illusion – this is the global energy / labour arbitrage coming collapse.

    This is not a age of sail with little Spanish Netherlands or habsburg trading towns.
    This is a energy black death which should be welcomed by the Labourers and toilers of Europe that somehow survive this coming entropy.

  4. All of this stuff is a waste of time and resourses – the British Isles (that includes us) and much of Europe are in the early stages of a dramatic energy collapse caused by a simple lack of high quality BTUs.

    All efforts should therefore operate on a emergency national and local level rather then a pretend free market when this is about national and local survival.
    On a national level this should orbit around Nuclear provision if a country has a capability in that area and also mainline rail operations.

    On a local regional level almost all available fixed capital resourses should be put into community rail like developments.

    We have now no time to Dick around with solar and wind

    I would ask anyone with a Brain to go into the above site and type 2010 energy flow chart into the search space.
    Hydro and wind amounted to a tiny 1.2MTOEe
    While domestic Biofuels was 5.3MTOEe…….

    We are deep trouble.
    The North sea in a massive terminal decline folks.
    Just saying like.

  5. Also
    Quarterly energy statistics: Energy trends and quarterly energy prices
    28 June 2012
    The main points for the first quarter of 2012 are:

    Indigenous production of fuels in the UK fell by 11.6 per cent in the first quarter of 2012
    compared with a year earlier. Production of oil fell by 13.0 per cent whilst gas fell by 14.1 per cent as a result of maintenance work and slowdowns on a number of fields.
    Total primary energy consumption for energy uses fell by 2.3 per cent. However, when adjusted to take account of weather differences between 2011 and 2012, primary energy consumption fell by 1.1 per cent.
    Of electricity generated in the first quarter of 2012, gas accounted for 27 per cent (its lowest share in the last fourteen years) due to high gas prices, whilst coal accounted for 42 per cent. Nuclear generation accounted for 17 per cent of total electricity generated in the first quarter of 2012, a decrease from the 19 per cent share in the first quarter of 2011.
    Onshore wind showed the highest absolute increase in generation in the first quarter of 2012, increasing by 51 per cent, from 2.4 TWh in the first quarter of 2011 to 3.6 TWh, as a result of much increased capacity. Large increases in generation were also seen in hydro (up 43 per cent – due to high winter rainfall), offshore wind (up 50 per cent) and bioenergy (up 21 per cent due in part to the conversion of Tilbury B to dedicated biomass).
    In addition, an article on renewables in 2011 (page 49 of Energy Trends) shows that renewable energy accounted for 3.8 per cent of energy consumption compared to 3.2 per cent in 2010, as measured against the 2009 EU Renewable Energy Directive.

    Dork – it must be said this increase in renewables is only acheived after massive in my view malinvestment in wind especially offshore stuff which has a very poor input output return if any.
    The British Nuclear Industry has been starved of funds since the 80s with the one and only PWR going on line in the mid 1990s so therefore most of the research & manufacturing costs was wasted.

    percentage change of a year earlier (2012 Q1)
    Coal production : -12.3 %
    Coal imports :+20.8%
    Coal demand :+15.8%
    (Of which power stations:+19%)

    oil production : -13%
    net imports :+35.3%
    Primary demand :-1.3%

    Gas production : -14.1%
    Gas demand :-11%
    of which electricity :-29.9% (56.8Twh)
    domestic :-1.8% (128.1Twh)
    Imports of gas decreased 6.3%
    LNG accounted for 23.2% of imports.
    Of which Qatar 23%
    Norway 60% (is not Norways fields declining also ?)

    WHERE IS THE GAS BABY ?

  6. I suppose I shouldn’t be surprised. An Irish economic regulatory body makes a spectacularly stupid decision – drawing on the previous (and continuing) misuse and manipulation of primary EU legislation (and legislation in another jurisdiction) and with the full support of the ‘powers-that-be’ – and all the wittering is about matters that are being and will be decided at the highest EU levels (and, in so far as they pertain to Ireland will be decided behind closed doors and a fait accompli issued). (I’ll try to ignore the Dork’s impersonation of Fraser in ‘Dad’s Army’: “Doomed. Doomed. We’re all doomed.”)

    In any event, the die is cast. It’ll be interesting to see if any of the parties affected to their detriment – and this includes the vast majority of consumers – will contest this decision and how and on what basis the decision will be contested. The CER – and the ‘powers-that-be’ behind it – are smugly confident that they’ve covered all the angles.

    We’ll see.

  7. Just to recap the UK first quarter figures

    There appears to be demand destruction manifesting itself in the UK electricity figures.
    First quarter fell 3.4% at 99.5Twh vs 103.1 Twh (this puts the hyped onshore wind contribution of 3.4Twh is some perspective despite much winder conditions when compared to the anticyclone cold winter of Y2010)

    This is the lowest first quarter electricity consumption figures since 1998.

    There has also been a dramatic shift to coal vs Gas because of high Gas prices.
    Coals electricity contribution
    Y2010 Q1 : 32.63 TwH
    Y2011 Q1 : 35.13 TwH
    Y2012 Q1 : 42.05 TwH

    Gas electricity contribution
    Y2010 Q1 : 48.24 TwH
    Y2011 Q1 : 38.34 TwH
    Y2012 Q1 : 26.68 TwH

    So much for that carbon thingy.

    Nuclear despite its lack of investment for decades continues to beat the wind stuff and its erratic supply.
    Y2010 Q1 :18.18 TwH
    Y2011 Q1 :19.45 TwH
    Y2012 Q1 :17.20 TwH

    Wind (total offshore & on)
    Y2010 Q1 : 2.45 TwH
    Y2011 Q1 : 3.36 TwH
    Y2012 Q1 : 5.22 TwH…….. the increase is because of the variable North Atlantic Jetstream adding TwHs more then anything else in my opinion)

    Me thinks we have a deeply irrational domestic energy / transport policey driven by a rent seeking utility industry.

  8. @Paul
    I accept the Gas stations are now sunk capital.

    I think transport is a much bigger problem as we need something to stich our cities together.
    I want almost everything to go into trams trams and more friggin trams and the rest into heavy rail.

  9. @Dork,

    Do you, by any chance, have an opinion on the substance of Richard Tol’s initial post?

    Apart from mine there have been no comments that relate to the topic. I have set out a critique of this regulatory decision. So far as I can establish it has the full support of the ‘powers-that-be’. Yet there has been no comment supporting the decision or attempting to refute my critique. It may that all of those who might have some interest in this issue don’t read this blog. It may be that those with some knowledge and competence and who read this blog feel that their knowledge and competence is insufficient to comment. It may indeed be that there are vanishingly few people with some knowledge and competence and the probability of them visiting here and commenting is equally vanishingly small. Or it may be that comment – for or against – is viewed as being pointless since this is considered a ‘done deal’.

    However, I find it extremely difficult to give a measure of credence to any or all of these possibilities. It appears that too many people are compromised, conflicted, captured or constrained – or, quite simply, afraid to speak out. This silence contributed to the inflation of the ‘double-bubble’ – and the continuing silence is contributing to the absence of a solid economic recovery.

    The Government and its expansive apparatus have almost absolute power. Yet there is no overt suppression of dissent; it is simply ignored or dismissed. Those who express it are subject to redicule and are isolated or marginalised. There is every incentive to keep one’s head down and ‘play the game’, even though I suspect many have to suppress their better judgement and instincts.

    This is dangerous and damaging – and, in some respects, frightening.

  10. @Grumpy,

    All it needs are a few determined rams – the equivalent of cardinals and bishops preserving the tradition of ESB (and general semi-state) hegemony and maintaining the ‘custom and practice’ that protects the prerogatives and privileges as circumstances change over time; the rest are sheep – even elected governing politicians.

  11. @Paul
    Well given the catostrophic decline of the North Sea and the sovergin nature of the UK they can and will outbid us for scarce LNG in the future , so why have a terminal if we can’t afford the stuff ?
    Although I agree it does give us options which prevents the UK from assuming its tradional monopolistic position with regards Ireland.
    Ireland as a energy exporter (food) to extreme trade defecit UK.

    I see a decline to 1980s levels of domestic energy activity at the very least (pre credit bubble 1987) which means in reality Moneypoint will assume a much higher ratio of the load.
    (Indeed you can see a dramatic preference for coal in the above UK 2012 Q1 figures and a massive reversal of the Gas trend)

    Given the much higher population relative to the 1980s this will bring on a extreme fuel poverty crisis.

    As people dump their cars to sustain basic life support (heating , light etc)
    Goverment policey should orbit around saving old DMUs north and south from the scrapheap , buying second hand TFS trams from France , bringing back & converting old narrow gauge into tramlines such as the Blackrock / passage west line , rebuilding old railway lines such as New Ross to Waterford , buying high quality steel rails to upgrade existing lines.
    Encouraging oil heating dependent people to buy wood gas stoves.

    If we remain withen this monetary cage we must tax private cars off the road until it gets down to a much lower number (Y1990 800,000 ?)

    This is a regression to much earlier times.
    One can only blame Nigel Lawson types for encouraging boom bust economics which wasted such Titanic resourses on Grot and also his strange anti – scientific anti Fission beliefs which destroyed the British nuclear Industry.
    The Higgs Moron or Boson or whatever won’t get us out of this mess.
    This is a failure of the western model.

    I refer you to Steve from Virginas post – non sovergin Europe has become the new Saudi for sovergin countries such as the UK , Japan US etc.

    The Japanese Nuclear disaster did not prevent sovergin Japan from bidding for scarce liquid fuel – it did however push up the price for non sovergin Europe – creating a demand destruction loop.

    This looks like the future to me , with the UK the Japan of Europe.

    Given our now apparently accepted non sovergin nature we can only ask the UK to be nice.
    This involves them scraping all their road & Gas power plants and redirecting their resourses elsewhere.(Nuclear & rail)
    In the above video those passengers were seen to use the operational but non functional Crumlin station on the Antrim to Lisburn line.
    Crumlins population has exploded over this past decade yet the railway remains mothballed.
    Why is this ?
    The UK appears to be getting slightly comfortable with its sovergin position amongest non sovergin vassels…… with the recent scraping of the road fuel tax – this in reality means less fuel for us serfs.

  12. @Paul H

    I’d suggest the arguments you present above are way too complicated for the general public to decipher and hence the rush for the RTE version of events in such circumstances – which you and I both know will be the Govt/CERs side of the argument.

    This is the nature of the world we live in. Despite the plethora of communciation devices now available to the public the willingness of the masses to debate and get under the bonnet of most arguments I believe is a lost art form.

    Much easier to read the general version posted around the world and work on the assumption that its the correct answer and believe by reading it you implicity understand it and assume its the truth becomes the Govt says it so.

    Take for instance yesterdays announcement that getting back into the markets to borrow €500m was in some ways a good thing as presented by Govt and distributed through media outlets as implicitly a good thing. However the most basic analysis suggests that far from being a good thing it will actually cost the citizens an additional €1.3m in interest charges that the State, who is completely insolvent can absolutely avoid paying by not going the route the State have chosen to go. Now €1.3m is a lot of money but the State will proceed and effectively waste it for whose benefit exactly ?

    I’ve noted here many many times that the decision by the Financial Regulator insisting that the Irish covered banks hold core tier 1 capital way in excess of required levels (even Basel III levels) is a hugely damaging and daft policy choice in a depression. But the need for Govts to be seen to be doing something through its appointed Regulators trumps common sense and the nonsense continues and small businesses suffer – again for whose benefit ?

    So I feel your pain but it is extremely difficult to fight City Hall when the main media outlet in the country continues to be its VBF.

    Just so as I understand the nub of your analysis: Despite Shannon or Corrib gas appearing on the market over time (Shannon doubts aside) the likely move in gas prices for Irish consumers using BGE as their transmission provider will be upwards despite world gas price movement as the IC costs need to be recovered on the back of consumers rather than on the back of the financiers to BGE ?

  13. If we look at the 1990 energy balance…..

    Transformation input
    Public thermal power plants
    Coal :1,241 KTOe
    Peat : 592 KTOe
    Oil : 341 KTOe
    Gas : 819 KTOe

    Total : 2,993KTOe

    The Prov energy balance for 2011
    Transformation input
    Public thermal power plants
    Coal : 913 KTOe
    Peat : 473 KTOe
    Oil : 48 KTOe
    Gas : 2,576 KTOe
    Total : 3,834 KTOe (inc waste and landfill gas of 27 + 43 Ktoe)

    Will we see a return to lower quality fuels (coal & peat) with less final energy consumption ?
    Perhaps not in real terms – but the ratios are likely to return to late 80s /early 90s levels.

    PS
    Is the 3 boilers of Moneypoint fully operational ?
    Has it Got the capacity i.e. can it take a bigger load ?

  14. PS the prov energy balance sheet for Y2011 seems to suggest evidence of demand destruction for Nat Gas produced electricity possibly masked by the severe Winters of 2009 /2010.

    Transformation input Y2011 (nat gas)
    Public thermal : 2,330 KToe
    Combined heat & Power : 244 KToe

    Transformation input Y2010 (nat gas)
    Public thermal : 2,768 KToe
    Com. Heat & Power : 257 KTOe

    Total primary energy supply (Nat gas) Y2011 prov. :4,212 Ktoe
    TPES Y2010 :4,704 Ktoe

    That is the most significant contraction of Nat Gas for electricity and Nat Gas overall that I can recall.

    Both the roads and Nat Gas power stations are capital assets that should be run down as the railways once were post Independence as more abundant and cheaper oil and buses slowly replaced narrow gauge.
    Unfortunetly now nothing is cheap.

  15. @Yields or Bust,

    Thank you. As for your more general observations I have a comment on another thread you may find of interest:
    http://www.irisheconomy.ie/index.php/2012/07/04/irish-economy-conference-preliminary-notice/#comment-305410

    As for your take on the nub of this issue:
    “Despite Shannon or Corrib gas appearing on the market over time (Shannon doubts aside) the likely move in gas prices for Irish consumers using BGE as their transmission provider will be upwards despite world gas price movement as the IC costs need to be recovered on the back of consumers rather than on the back of the financiers to BGE ?”

    .. this may need a bit more parsing. I agree, though, that it is difficult to reduce it to sound-bites that might penetrate and arouse public sentiment.

    The oil price indexation of much of the EU’s gas supplies frequently causes price fluctuations that are at odds with the underlying fundamentals of demand and supply. This indexation also operates on a 3 or 6 month lag. So even if oil prices are falling now, the effect of previously higher oil prices will be feeding in to current gas prices. In addition, although there are spot markets in North West Europe, whose prices should respond to the fundamentals, there is limited liquidity and participants will have every incentive to drive these prices up to the levels of the oil-price indexed supplies on the continent – and to capture juicy margins. (E.on, one the EU’s energy behemoths, has recently compelled Gazprom to agree to a reduction in the base price for indexation, which may have some limited impact.)

    All this is completely separate from the recovery of investment in Irish gas infrastructure – though it is extremely convenient for Official Ireland to conflate the two and to sow confusion among the public.

    The wholesale price in Ireland is, and will continue to be, the UK NBP (wholesale) price plus the unit cost of transmission on the ICs. The key issue is that when any sensible calculated estimate of the unit cost of transmission will be applied to the likely much-reduced volumes through the ICs it will not generate the annual cost recovery of €50-60 million BGE desires to secure.

    The CER believes it has a duty – and all of the ‘official’ parties are determined that it discharge this duty – to ensure that BGE does not experience a shortfall. The total annual network revenue (including the ICs) awarded by the CER to BGE is far in excess of the true economic costs – but BGE needs this extra revenue to finance/cross-subsidise its adventures in Northern Ireland and its electricity supply (and renewable energy) adventures in the Republic.

    The only appropriate solution is to (1) reduce network revenues to the level of economic costs, (2) develop a mechanism to generate an appropriate cost and volume-related tariff for the use of the ICs and (3) impose the recovery of any IC revenue shortfall on consumers via transmission exit charges and write-down the value of the stranded assets over time – this would progressively reduce the burden on consumers over time. If this were accompanied by a reduction in the overall level of network revenues, it is likely that consumers would be able to shoulder this initial burden and yet see a reduction in final prices – and this burden would fall over time and reduce final prices even more.

    Final consumers and the international capital market participants are the financiers of BGE. The state as the majority shareholder makes absolutely no financing contribution – indeed it extracts dividends. A pre-announced, phased programme to write-down the value of the investment stranded in the ICs wouldn’t phase international capital market participants.

    But this outline solution would deprive BGE of the proceeds of the ‘financing tax’ the CER imposes on final consumers on its behalf – and would curtail the financing of its adventures in Ireland and elsewhere. It would also force government to discharge its shareholder responsibilities.

    But we couldn’t have any of that now, could we? So the classic Irish solution to an Irish problem is to force the new or prospective suppliers to make up the IC revenue shortfall. You see the only reason a shortfall will arise is because these folks had the gall to discover gas or to develop a gas import project. If these developments hadn’t taken place or weren’t proposed, there would be no possibility of revenue shortfall on the ICs. So, in the perverted logic of the Irish official mind, these guys are causing the problem, so they should pay to resolve it.

    As I say, welcome to Official Ireland.

  16. @Paul

    Very interesting, or at least the bits I understood – quick question though, whats the solution, to this and the other examples of government capture by sectional interests you highlight?

  17. @rf,

    I know I’m struggling to cut though the self-serving propaganda and economic nonsense that Official Ireland is spreading around – almost totally uncontested (one’d swear we had no independently-minded economists in the country) – in this case. But I think the final paragraph in my last comment captures the perverted logic of Official Ireland.

    The quick answer to your question is adequately empowered and resourced Oireachtas Cttees commissioning those with knowledge and competence critiquing and reporting on policy proposals and policy implementation by the expansive government apparatus and using the findings of these reports to interrogate ministers, special advisers, senior officials and the various other denizens of Official Ireland in open hearings. It’s no panacea, but it would force a huge amount, that Official Ireland would prefer to keep hidden, out in the the open; it should reduce the incidence and severity of policy imbecility – this is impossible to eliminate; and it would certainly reveal the special pleading, woolly-thinking and perverted logic of various groupings intent on rent-seeking, subsidy-grabbing and monopoly profit-gouging.

    At the very least, provided out indolent media were prepared to give it appropriate coverage, it would provide some great entertainment.

  18. Paul

    It really is an interesting topic, (I can’t believe I’m saying that), that I’d like to know more about, but whenever I get down into the weeds I always become overwhelmed by data and a vocabulary that’s alien to me. I think that’s what you’re up against more than anything else.

    I’ve been trying to work out what it is that leads me to be so sceptical of the resolutions you’re offering, because logically I can’t find fault. I think this short paragraph I came across recently, on a US IPE blog, gets to the heart of what’s bothering me:

    “The US is not an outlier (even among advanced democracies) in terms of broad-based trends in growth, unemployment, inequality, pressures on the federal budget, increased polarization, the growth of finance, public sector bailouts of firms, or other metrics. This should cause us to look to global dynamics — which will affect all countries — rather than just local dynamics — which are idiosyncratic — for explanation. Not many people do that.”

    I can’t help but think there’s something bigger at fault here, a dysfunction in the global economy that needs to be resolved. That’s not to say we shouldn’t get our own house in order, just that I don’t think it will be enough.

    Dork

    Is that you?

  19. @rf,

    We’re drifting off-topic here, but not too far. The issues Richard raises in his post and failures of democratic governance are intimately related.

    Democratic governance is deficient at all times and in all places. And the nature and extent of the deficiencies vary similarly. Your reference to the US highlights a particular set of deficiencies there. But perfection of democratic governance is neither possible nor desirable; indeed such an outcome, even if it were possible, would be the very antithesis of democratic governance. The constant and continuing challenge is to minimise these deficiencies or, at the very least, to remedy detrimental impacts.

    I adhere to the old adage that if everyone sweeps in front of their own door the street will be clean. Using deficiencies elsewhere to justify a reluctance to tackle deficiencies in one’s own jurisdiction is counter-producitive and self-defeating – both at the national level and collectively in the various associations of nations.

    At the very core of the problem, which the CER is addressing superficially with this decision, is the political and economic power exercised by the managements, staff and unions of the dominant semi-states. In most cases, it is the ESB making the running. But BGE has learned well from the ESB’s application of its long-standing and successful strategy – and I expect the ESB fully approves, and might even be a tad envious, of BGE’s almost total success in this instance.

    Those who prevent government from governing in the public interest – and who suborn government and stautory agencies to decide in favour of thier narrowe sectional interests – are the government. It is a measure of the success of these semi-states that they have been able to conceal this from the public – who, quite rightly, are extremely jealous of thier absolute right to decide who governs – and to suborn successive governments and statutory bodies to present, comprehensivley and unambiguously, that pandering to these narrow sectional interests is in the public interest.

    It is truly remarkable. But it will prove impossible to sustain indefinitely.

  20. @RF
    No
    – but we share a obsession it seems.
    He could be my Doppelganger.

    Well it seems the powers that be have listened to me (not) about Corks hills and its negative effects on fuel consumption.
    Although that route is not the most extreme by a wide margin.

    I guess it makes no sense to have a trolleybus system if the bulk of the electricity is produced using this high quality fuel.(if it can be used for transport in this fashion its high quality although I have seen the Bus time table has been changed from July 15 – is it a bit slower?)
    Its best to burn high quality fuels directly as you get less transformation losses

    Still I think we will have a more “normal” fuel mix in future as electricity demand decreases – see 1990 energy balance.
    Therefore Trolleybuses are a option for the busier Hillier routes of Cork City.
    Good to see they are trying out something a bit non convential anyway.
    Its good to experiment.

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