Inflation

[River Don]

Fascinating factoid. Swiss inflation is currently running at only 2.5%!

How come there is a Central European state with such low inflation while all around inflation is running hot?

Possibly because only 1% of the Swiss energy mix is gas/oil. The vast majority of it is hydroelectric and nuclear.

There is a lesson to be learned there.

[Colemans Left Hook]

i had a few minutes to spare so thought i would play silly buggers

and look into this mountaneous tall story

so checked out the inflation rate in Andorra

https://www.imf.org/en/News/Articles/2022/06/17/imf-executive-board-concludes-2022-article-iv-consultation-with-the-principality-of-andorra

The Andorran economy rebounded strongly from the large contraction caused by the COVID-19 pandemic. Growth in 2021 (8.9 percent) was supported by a recovery in tourism, retail trade, construction, and professional services. Headline inflation rose to 4.9 percent in March 2022, the highest reading in the last 10 years. However, price pressures were more limited than in neighboring countries thanks to long-term contracts with foreign energy suppliers that mitigated the rise in electricity prices. Labor market conditions tightened due to declining unemployment and a sharp rise in job vacancies but did not create significant wage pressures. Despite the roll back of most COVID-related measures, the overall policy mix remained supportive in 2021.

Could say Andorra has had a rarebit of success on controlling inflation

[normal rules]

Fascinating factoid. Swiss inflation is currently running at only 2.5%!

How come there is a Central European state with such low inflation while all around inflation is running hot?

Possibly because only 1% of the Swiss energy mix is gas/oil. The vast majority of it is hydroelectric and nuclear.

There is a lesson to be learned there.

I’ve often wondered why we don’t use more hydroelectric in the uk.
Look at all the reservoirs and dams in Derbyshire for instance.
My sister lives near Ladybower. That Ladybower and Derwent dams could generate some serious leccy. Especially in winter when they are often full and overflowing down the plug holes.
Wasted potential. On a massive scale.

[wilts rover]

And I keep banging on about this but we are an island - why dont we use more tidal energy?

[BillyStubbsTears]

Fascinating factoid. Swiss inflation is currently running at only 2.5%!

How come there is a Central European state with such low inflation while all around inflation is running hot?

Possibly because only 1% of the Swiss energy mix is gas/oil. The vast majority of it is hydroelectric and nuclear.

There is a lesson to be learned there.

I’ve often wondered why we don’t use more hydroelectric in the uk.
Look at all the reservoirs and dams in Derbyshire for instance.
My sister lives near Ladybower. That Ladybower and Derwent dams could generate some serious leccy. Especially in winter when they are often full and overflowing down the plug holes.
Wasted potential. On a massive scale.

It's nowhere near high enough. For serious hydroelectric power capacity, you need huge reservoirs with hundreds of metres of drop down to valleys.

They do have a tiny HE power plant at Howden dam, but it is tiny.

Its pretty basic physics to be honest. 

[Colemans Left Hook]

article here from 2013

https://www.gov.uk/guidance/harnessing-hydroelectric-power

[SydneyRover]

And I keep banging on about this but we are an island - why dont we use more tidal energy?

The highest tides are in the Bristol channel, combined with all the hot air that comes from there it should be enough to fuel the whole of Europe.

[BillyStubbsTears]

The power output for a hydroelectric system is given by the formula Power = Flow Rate x Density of water x Height of Drop x Gravity Acceleration x Efficiency.

Can't find the flow rate of the River Derwent at Ladybower. Many miles downstream at Derby it looks like on average it is about 10m^3/s with a peak of about 250 https://www.researchgate.net/publication/317049054_The_potential_impact_of_green_agendas_on_historic_river_landscapes_Numerical_modelling_of_multiple_weir_removal_in_the_Derwent_Valley_Mills_world_heritage_site_UK.

I'd guess  the figures at Ladybower are about 20% of that so let's say 2 and 50.

Density of water is 1000kg/m^3

The height of the Derwent dam is 30m.

Gravity acceleration is 10m/s^2.

HE plants are very efficient, so assume 100%


That gives the average power of a Derwent HE system at 2 x 1000 x 30 x 10 x 100% = 600kW. That's about 0.015% of the output of Drax.

Even at very, very rare peak flow, it woulf be only 0.4% the Drax output.

Just doesn't work in a country as flat as England. You need fast flows dropping big heights. The big HE plants in the Alps have flow rates of many 10s of m/s dropping over 1km!

[Belle_Vue]

Why don't all these big warehouses have solar panels on the roof?

[big fat yorkshire pudding]

Because they cost a fair amount of money for not enough return.  Until they're made more efficient it's unlikely you'll see the investment.  I'd still suggest nuclear is the answer but it doesn't seem to get the traction.

[SydneyRover]

Because they cost a fair amount of money for not enough return.  Until they're made more efficient it's unlikely you'll see the investment.  I'd still suggest nuclear is the answer but it doesn't seem to get the traction.

We had this conversation only a week or so ago pud

Added

try the 'climate crisis thread' #42 by Albie

''Solar is now ‘cheapest electricity in history’, confirms IEA''

https://www.carbonbrief.org/solar-is-now-cheapest-electricity-in-history-confirms-iea/

[Belle_Vue]

But yet they are found on farmers fields?

[River Don]

Why don't all these big warehouses have solar panels on the roof?

That is a very good question. If solar is so efficient why doesn't business readily utilise it on warehouse roofs?

I think the answer is intermitancy and the cost of storing the energy solar can produce.

[BillyStubbsTears]

Why don't all these big warehouses have solar panels on the roof?

That is a very good question. If solar is so efficient why doesn't business readily utilise it on warehouse roofs?

I think the answer is intermitancy and the cost of storing the energy solar can produce.

Not sure it's the storage cost so much as the cost of cabling to transmit it to the grid? A good sized warehouse with a roof covered in solar panels could produce 0.5 MW of power and I guess the transmission of that isn't trivial.  Just a guess as I'm far from expert on this and RTR would surely know better.

Certainly it's not the weight of the panels that is a restricting factor. They weigh maybe 5-10% of the weight that has to be factored in for normal industrial roof design. And with flat roofs, a critical load case is often wind causing suction tending to lift the roof up, so, counter-intuitively, a bit of permanent extra weight can often be a benefit.

Whatever the reason, I suspect the market will kick in now that electricity prices to the consumer have gone up from less than 20p/kWh to more like 40-50p. That's going to make solar panels a no-brainer in many cases.

[Not Now Kato]

Why don't all these big warehouses have solar panels on the roof?

That is a very good question. If solar is so efficient why doesn't business readily utilise it on warehouse roofs?

I think the answer is intermitancy and the cost of storing the energy solar can produce.

Not sure it's the storage cost so much as the cost of cabling to transmit it to the grid? A good sized warehouse with a roof covered in solar panels could produce 0.5 MW of power and I guess the transmission of that isn't trivial.  Just a guess as I'm far from expert on this and RTR would surely know better.

Certainly it's not the weight of the panels that is a restricting factor. They weigh maybe 5-10% of the weight that has to be factored in for normal industrial roof design. And with flat roofs, a critical load case is often wind causing suction tending to lift the roof up, so, counter-intuitively, a bit of permanent extra weight can often be a benefit.

Whatever the reason, I suspect the market will kick in now that electricity prices to the consumer have gone up from less than 20p/kWh to more like 40-50p. That's going to make solar panels a no-brainer in many cases.

I think one of the big inhibitors is the ridiculously low Feed In Tariffs currently being applied. When offset against the initial costs the business case would probably not stand scrutiny.

[albie]

The OP makes a good point about inflation being stoked by energy costs, leading to wider cost of living pressures as that increased energy price cascades through the economy.

The UK has stupidly become hostage to fortune on energy costs by failing to act early on greening our supply.

The answer is basically three steps.

1) Take energy back into the public sector.

This enables the sector to direct all income to renewing the infrastructure base in favour of low cost renewables, and gives the chance to make fuel poverty reduction overall aim of the sector.

No more excess profit taking to transfer money from the fuel poor to wealthy shareholders.

2) Rapidly increase renewable energy production, with storage, from the least cost alternatives.

That means wind and solar, with early delivery cycles. Reservoirs should be covered in floating solar, as should all south facing roofs.

Avoid expensive nuclear with long development cycles.

Both Tories and Labour are supporting new capacity at Sizewell, on a coastal site vulnerable to sea level rise, at a cost over 4x that per unit of solar and wind.
You cannot quickly solve fuel poverty by this means.

3) Move domestic and industrial energy use into electrification, and give incentives to all large scale users to self generate on site.

I think the UK should develop a tidal energy sector, but on a unit cost basis it is unlikely to offer competitive prices to wind and solar.
Use the tax system to promote energy self sufficiency, across all ultra low carbon technology.

[BillyStubbsTears]

This thread from an ex-Prof of macroeconomics and member of the Bank of England Monetary Policy Committee is very, very important if you're going to get what's going on now.

https://mobile.twitter.com/t0nyyates/status/1553098620227952640

Inflation at the moment is primarily due to a severe increase in the cost of goods that we have no control over (foreign supplied energy, foreign goods).

The increase in the cost of things coming from abroad means we can buy fewer units of them as a country.

There are two ways of dealing with that. Neither is pleasant but each hurts different people.

The standard way to deal with that is for the cost per unit (litre of petrol, widget from China, whatever) to go up.

That is inflation.

Those saying we need to "get a grip on inflation" are basically saying we should take a different path. The way you deal with an external cost increase WITHOUT inflation is to reduce economic activity so that you have fewer people chasing the costly goods.

That's called a recession.

Inflation hits everyone's pockets.

Recessions only hit a few people - those poor f**kers who lose their jobs.

Like Prof Yates says, those Tories who are saying "get a grip on inflation" are going for the recession path. Which massively hurts a few million workers. Whereas they COULD allow inflation to work its way through the system and provide massive support for the poorest by windfall taxes and Govt benefits. But that would protect the poorest while hitting the richest. Because there'd be no money left for tax cuts for the richest, or for dividend payments.

Just think about that every time you hear a Tory say we have to "get a grip on inflation". They are basically saying "f**k the workers".

[danumdon]

BST, you also have to accept that Inflationary pressure is a double edged sward. Every time its let rip will result in less investment from people with money, and what do people with money do, they provide jobs.

If we wish to maintain our FDI alongside our internally sourced investment then we need to get on top of the cycle.

If we don't encourage entrepreneurs to create a successful business then who do we have to fall back on, we can't rely on the public sector creating none jobs that disappearance as soon as they land. As taxpayers we pay for this wasteful policy.

[BillyStubbsTears]

DD

Read what I posted again.

The current inflation is pretty much entirely due to external costs.

There IS an economic argument for deliberately suppressing economic activity to screw down cost if the increase in costs is due to your own economy running out of control. But it hurts like f**k because it puts millions out of work. We in South Yorkshire know that because we got f**ked over twice by it in the 80s and 90s. Remember?

Doing that when the problem is NOT of your own making does nothing to get costs down. Because the costs are not ours to control. So trying to drive down inflation by suppressing domestic economic activity doesn't change the core of the problem - that costs you can't affect have risen.

The left wing way to deal with this sort of cost increase is to let prices rise and help out those who cannot deal with that price increase. The rest of us have to take a snack in the face and accept that we are somewhat poorer than we thought.

The right wing way is to drive us into a recession where those in the most precarious jobs get beaten up and the rest of us sail on as if nothing had happened.

I know which I prefer. Which do you prefer, you being politically neutral?

[danumdon]

BST, thinking about what you have just said takes me back to the Blair years, with Brown as chancellor, how he was going to banish boom and bust, i remember talk of repairing the roof in summer for when the going gets rough in winter(words to that effect) and what did Broon do, he neglected to use the surplus to bring down the national debt, when it all kicked off a few years later guess who were left with their pants around their ankles and not a good position to deal with the situation.

Spring forward to your left wing way of dealing with the current issue, can we see where the wind will blow?

[SydneyRover]

looking back aye, and if that's what a good government should do I wonder why all the debt hasn't been paid off in the the past 12+ years and a bank built up for a rainy day? zero.

Failing that you'd think they would have at least gone for growth the tried and tested way to account for debt in the early years especially having the brains of osbourne & cameron to pick, hmmm that's another zero, ah well.

Let's hope the brexit doesn't exacerbate the problem with an aging population, time will tell woth that one I guess, but there's a fall back position.

levelling up, PPE contracts for every working family. hooray!

[River Don]

Interesting then that Truss is promising to kick start UK economic growth after what she sees as 20 years of lacklustre performance.

If she can kickstart growth (doubtful) the demand for energy will run straight into the constrained supply of gas... More inflation.

[River Don]

I'm not sure where Sunak stands now but he's lost already hasn't he? He was all about getting inflation under control, which was clearly running the country into recession.

So, recession with Sunak, more inflation with Truss. The Tories and all Truss backers in the rightwing press seem to be going for inflation.

[SydneyRover]

off topic: new labor gov't Oz, 8 weeks in are refreshingly honest telling us that there is no magic money tree that it's going to very painful for many, the least well off of course. In the week before the election they defended a statement saying that workers on the the lowest pay should get a decent pay rise and challenged the sitting gov't and put a submission (of 5.1%) to the fair work commission saying so. The FWC gave a rise of 5.2% a few points above inflation. This only affects those on the lowest pay (award wages) but there should be a bit of flow on.

[BillyStubbsTears]

BST, thinking about what you have just said takes me back to the Blair years, with Brown as chancellor, how he was going to banish boom and bust, i remember talk of repairing the roof in summer for when the going gets rough in winter(words to that effect) and what did Broon do, he neglected to use the surplus to bring down the national debt, when it all kicked off a few years later guess who were left with their pants around their ankles and not a good position to deal with the situation.

Spring forward to your left wing way of dealing with the current issue, can we see where the wind will blow?
[/quo

BST, thinking about what you have just said takes me back to the Blair years, with Brown as chancellor, how he was going to banish boom and bust, i remember talk of repairing the roof in summer for when the going gets rough in winter(words to that effect) and what did Broon do, he neglected to use the surplus to bring down the national debt, when it all kicked off a few years later guess who were left with their pants around their ankles and not a good position to deal with the situation.

Spring forward to your left wing way of dealing with the current issue, can we see where the wind will blow?

Christ I give up.

The national debt under Blair and Brown before the GFC f**ked the national finances of every major country was lower in EVERY years than it was in all but 3 years of the 18 that Thatcher and Major were in power.

Under Blair and Brown, the debt when the GFC struck was lower than it had been when they came to power. It had been lower for every one of the previous 10 years.

And more importantly...what the f**k has any of that got to do with what we are talking about here?

[River Don]

Slightly off topic but I mentioned in another post my sister knew Liz Truss, they attended a public speaking group together. Truss wasn't very good at it. My sisters opinion of her at the time was, she's bonkers. My sister as aghast at what is happening now... Anyway.

It turns out, she even still has Liz Truss private email address. Who knows if ever there is anything we could want to contact the Prime Minister about!

She will probably never use it.

[SydneyRover]

''Bonkers'' the fan club will be in a bit of a tizz RD

[BobG]

43 years have passed by since Mrs Thatcher won her first election in 1979. Labour were in power between 1997 and 2010. That's 13 years out of 43. There was a Conservative led coalition for 4 or 5 years  And the rest has been Conservative  government. That is this country has had a Conservative Prime Minister for very, very nearly 70% of all the years since 1979. They've had 30 years to put things right. We can all see the results of Conservative leadership can't  we?

Roads? Shit
Police? Emasculated
NHS? Dying by a thousand cuts
Economy? Fantastic for those at the top with wage rises worth millions. Utterly awful for those in the gig economy
National wealth? Decimated
Mental healthcare? Destroyed
Armed forces? Pitiful
International standing? Perfidious Albion rides again
Energy security? Held to ransom
Green progress? Where?

It is hard, very hard, to think of a measure by which we can honestly say the Conservative Party has served the country well.

BobG

[River Don]

I can add to that Bob.

Fire service cut back by 10% in the last decade very noticeable during the recent heatwave.

Economy growth stagnant for the last decade and more. Now it's plunging into a recession.

2.1 million and rising, reliant on food banks.

[Sprotyrover]

And I keep banging on about this but we are an island - why dont we use more tidal energy?

Tidal energy is a problem as they can’t sort the rust issues at the moment