It’s hard to believe a massive £32 billion pounds can be pulled out of nowhere when we’re being told about the need for austerity measures. But if that money can be found, the question must be asked, ‘Where is the best place to spend it?’

This money, like the millions they could save by keeping the 50p tax rate for our highest earners, could send countless young people to university who will otherwise not be able to afford the cost. Whilst the promise was made that only a few universities would charge the maximum rate for tuition fees, it seems most are now doing so. Bright young individuals are wisely avoiding the debt legacy that would stay with them for much of their working lives, but the result will be a less educated workforce. That will cost Britain heavily in future years by crippling our innovation and competitiveness.

So what is the overwhelming need that justifies diverting funds away from education and into a high speed rail link?

The argument can only be that regional economic development will follow further up country. But even if this were true, it simply moves jobs and money from area to another. And it’s hardly likely to be true anyway. The high speed link will only save 30 minutes journey time from station to station, which means the number of businesses that will benefit are a minute number with premises close enough to the stations for that to matter.

Anyone with urgent business needs will fly, which remains much faster. Those visiting out of town premises will do what they’ve always done, they’ll drive, because getting to the station is only part of the journey. The public won’t pay the extortionate ticket costs to visit family and friends, so the only people to benefit will be a handful of wealthy business people who happen to have offices near the stations.

Well not quite, the Government will be able to say the are doing something, even if it’s the wrong thing.

What would you rather do with £32 billion, send more young people to university or shave half an hour off the rail journey to the Midlands, destroying much of our dwindling countryside into the bargain? Take Our Poll

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Launched initially in the USA, Guernsey: Rachel’s Story is a combined volume of Rachel’s Shoe and sequel The Causeway.

The story begins during the wartime occupation of the Channel Islands and concludes at midnight on the eve of the millennium.

A UK release of this 434 page novel is anticipated during 2012 and a Kindle version will follow shortly.

Just in time for Christmas!

A Europe dominated by Germany and France was always inevitable when the single currency was created and it’s miraculous that it’s survived this long without either a crisis or the inevitable next step. Of course the nationalistic Europeans will resist and will rightly pronounce diminishing sovereignty if fiscal union goes through. But there are only two choices now and they all made their beds when they joined the Euro.

With Fiscal union, it will soon be evident that certain economies are contributing a great deal more than others and this won’t go down at all well. So what’s next? Increasing political union has to follow like night follows day, and a European superstate will be in the making – albeit a long way off.

In the meantime, here in little England and the rest of Britain, we will avoid most (not all) of the transitional pain and retain our, sort of, independence. Our currency, as well as our freedom should flourish a while longer!

The Government will offer ‘Feed In Tariffs’ on all of these next year so, as with Solar PV, we’ll get paid for the energy we produce. When stock markets and most other financial investments are falling apart, and with oil prices set to escalate in years ahead, it seems sensible to me to spend on something that will not only save money but help the planet as well.

Of course, it would help the planet more if Governments could divert a larger amount of of the money they spend on centralised generation towards micro-generation. Not only does this deliver energy at the point of use, but it avoids the environmental impact caused by power stations, wind farms, and the web of pylons covering our countryside.

If you are still undecided about PVs, you should be aware there is a strong possibility that Feed In Tariffs will be reduced in March 2012.

So how have we done so far?

Our 4 Kilowatt PV installation cost us £17,000 including VAT and it went live after a trouble free installation on October 19th 2010. The 30 degrees roof of an outbuilding was available and although this wasn’t the optimum orientation; it faces South East, this meant our house roof needn’t be used. We suffer from a small amount of shade late in the day but our location in Cornwall is one of the best for solar radiation in the country. The estimated income from Feed In Tariffs was £1353 and it was assumed we would save around £189 off our electricity bill. So far we have received £879 for the electricity we generated between October 2010 and June 2011. We estimate a further £546 will be paid for the period ending September 8th, which gives us £1425 earned with a month to spare until a full year is up. Given the poor summer this year, we feel pleased to have exceeded the estimate given.

As we can’t realistically monitor the coincidence of solar generation which is weather dependent, with actual energy use by the various devices in our home,  it isn’t possible to know what our savings have been on the electricity bill. We had only recently moved in when we installed the panels, so had no track record to compare with. But we suspect our savings have also been greater than the estimate as we installed an electric Aga which is programmed to take most of it’s power during daylight hours. However, if we use the estimated saving, our return in year one has been £1614 on an investment of £17,000 or 9.5%. Comparing this to my other investments including ISA Share Schemes that decreased in value, it’s looking good. Only one alternative investment that has delivered a steady 8% came close.

To put it another way, our payback will be around 10 years and after that we should earn a further £25,500 at today’s energy prices. This will take us to the end of the 25 year guarantee period.

In the long term, we don’t know if the capital cost has increased the value of our property by the amount spent, we don’t know if the savings due to escalating oil prices will accelerate, and we don’t know how long other investment alternatives will under perform. This makes the ‘opportunity cost’ difficult to predict. We haven’t any idea what would happen if we moved, it seems logical to me that the new owners should take over the tariff benefits, but even if they didn’t they would enjoy reduced energy costs. We don’t plan on moving so it’s not a concern for us but means ours is a ‘sunk’ investment and not one in which we’re expecting to recover the capital.

As I’m semi-retired, the reduction of recurring costs is almost as important as securing predictable income streams. So we’re keen to explore other opportunities to reduces our energy costs.

This is particularly the case as we’re converting an outbuilding into a holiday cottage to provide a modest boost to our income. It has no space or water heating so we have been exploring the alternatives. With Government grants of up to £1000 against installation costs, ‘Renewable Heat Incentives’ worth thousands of pounds and the forthcoming ‘Green Deal’, there are plenty of incentives for the various technologies.

But which to go for?

Air Source Heat Pumps are simple to install and promise a 4:1 to payback on energy use i.e. 1 kilowatt of electrical energy is needed to suck 4 kilowatts of heat energy out of the air and into your home. But can it really perform during the winter? Some say yes – it’s good down to minus 15 degrees Centigrade, others say no – you have to pump more power in to get a usable temperature out when the weather is cold. But then I hear there are new systems with more efficient pumps and better refrigerants and they can deliver – or so I’m told.

Ground Source Heat Pumps seemed a logical choice for us as we have anyway to dig a 200 metre trench to connect our cottage to our private drainage system. However, recent cold winters have provided a permafrost that reached some of the shallow installations which depend upon the ability of the ground to retain heat. Vertical bore hole installations can overcome this by using geothermal heat but they are more costly and judging by the water temperature from our 100ft fresh water bore hole, I’m sceptical about what can be achieved without an extremely deep hole.

Biomass boilers look very attractive and are certainly capable of delivering enough heat energy but I have concerns over the continuity of fuel supply. Premium wood chip pellets currently rely upon the waste timber from the construction industry – so what happens if there is a decline in that industry or demand rapidly increases for the pellets? I’m guessing prices will rise. The Tariffs should be indexed linked and well in excess of what will be paid for fuel, but the uncertainty over supply is worrying. There are also standard pellets produced from biomass crops like Miscanthus that grows like cane. However, the boilers that can use these require more frequent cleaning as the ash content is higher than premium pellets making them less user friendly, and the questions over supply still lurk.

Solar Water Heating systems, remain an attractive proposition although their ability to generate sufficient heat relies upon a large enough array and reasonable levels of solar radiation on a daily basis.

With most alternatives, the heat source needs to be permanently running to capture sufficient low level energy over a longer period of time than conventional oil and gas boilers. In the case of biomass, it is also to avoid having to relight the system.

For this reason, convecting radiators or better still, underfloor heating is preferred. That latter acts as a heat sink and although taking longer to heat up, retains it’s heat for longer when the temperature drops.

I haven’t considered the installation of a wind turbine for my home as a large enough installation would be too intrusive and noisy for us.

The conclusion

At the moment, I’m thinking I should investigate the claims further for the latest air source heat pumps and consider installing one with a solar water panel to pre-heat the water. The combination, in addition to my PV panel generation, might tip the balance sufficiently but I’m open to suggestions.

If anyone out there has some better advice, I’d be very grateful for their comments.

Otherwise, with the weather down here in Cornwall today, maybe I should do as we suggested in the book Passage to Redemption and engineer a device to produce electricty from rain fall!

Newsflash … they haven’t got any money to pay back their debts because the economy is on the floor and 2.5 million are now unemployed!

Of course when Labour was in, the Tories wouldn’t accept it was a World recession, so let’s not accept their excuses now for failing to deliver on growth.

But it’s OK, they afford to cut tax to the richest, find billions to give to businesses and overseas aid, and they have ‘found’ £800 million by not increasing council tax!

I should think not, considering the number of council workers they are forcing out of jobs, the libraries, police, coastguards, and other public services they’re cutting!

This is money local authorities would have received, not central government – so making it sound like a ‘hand-out’ is plain dishonest.

Few people doubt the need for cutting costs but it seems the Tories can ‘find’ plenty of money to spend when it suits their political agenda.

But where is effective opposition when you need it?

Not only do we have an inept Government kept alive by an opportunistic coalition, but we now have no opposition party either.  Labour seem equally unable to come up with a strategy for growth in one of the few remaining triple A economies in the world that sits outside the Euro disaster zone as a potential safe haven.

It would be great to see less politics and a lot more substance but the round of party conferences concluding this week just prove they haven’t learned anything yet.

Companies have done well since the 2008 crash and many have healthy balance sheets. They have learned to survive through difficult times and where access to borrowing has been required, it’s been at a very low cost. As ever, institutional investors follow like lemmings and fail to attack the root causes of their insecurity.

The real problems are; Governments spending on the wrong things, and the political drama which has led to the Euro crisis. Without fiscal unity, which very few nationals want, the Euro project is bound to fail. Against this backdrop, even the mighty US economy is powerless.

We live in an interdependent world, the US and China need healthy European economies to foster demand for their exports. Little wonder Obama has lost his patience with Europe’s’ inability to act decisively.

Europe is infamous for failing to take difficult decisions but unless they are taken, a meltdown is inevitable. There is an old saying. “you can’t kid a kidder”, do the European ministers really think they can kid investors? It’s about time they all got real and faced up to what has to be done.

Three tough actions are needed.

1) The European Central Bank needs to ring fence a crisis fund to provide short term support for the weaker member currencies. Germany and French taxpayers – who voted for the Euro, must meet this cost, supported heavily by China in return for long term market concessions.

2) An orderly exit of weaker members i.e. Greece, Portugal & Spain needs to be planned immediately – rather than allowing it to happen by default. Italy should also be considered for possible future support and managed exit. It may be that a new,  lower value European currency needs to be introduced to provide a half way house for countries on the way in, or out of the zone.

3) The UK needs to stop wasting money on half baked schemes and focus on stimulating growth in it’s own economy. A 6 months reduction in VAT to 10% would help as a starting point.

If the pound becomes a ‘safe haven’ our exports will become expensive at a time when demand in world markets is in decline.

When the going gets tough, the tough get going!

That was me yesterday in Plymouth Sound watching the America’s Cup. I couldn’t really have asked for a better position to watch the high speed cats as they rounded the buoys a short distance from the mooring I picked up. Although this picture shows the Oracle cats powering along, Artemis Racing took the glory followed closely by Emirates Team NZ.

In the relatively light 10 knot winds, there were no spills yesterday as the cats doubled the wind speed to achieve an average of around 20 knots through the water. Quite remarkable really.

I made it back to my mooring up the Tamar about an hour later, averaging 7 knots with a following wind and tide, motor on and a jib sail flying. A bit pedestrian by comparison!

You can see more below ..

Stirling Engine, Courtesy Wikipedia

….would you have a perpetual motion machine?

Or at least near enough to provide some useful domestic electrical energy?

The two technologies employed would be the engine, which  uses a small amount of external heat to expand a gas (could be air) and drive a piston, and the same principle that is used in ground source heat pumps. They work by utilising the latent heat embedded just below the surface all over our planet.

Both technologies are so widely accepted, they now attract UK Government Feed in tariffs, so how about using them together?

Zero greenhouse gases, zero emissions of any kind, zero fuel cost, scalable up or down, low production costs.

I wish I’d thought of this whilst we were writing ‘Passage to Redemption’, it might be a best seller by now!

Pete

Some might call this insensitive considering the recent riots, but whilst explaining in great detail why the state of the economy requires Educational Maintenance Grants to be scrapped, public sector pensions to be slashed and police numbers to be drastically reduced, it appears we can afford to give relief to those who get paid in excess of £150,000 per year.

Having been fortunate enough to be in the that bracket in the past, I can assure him, some of us didn’t object in the slightest to paying a higher rate of tax above that threshold if it went towards a better and fairer society.

To give tax relief to the well off at a time of national austerity demonstrates just how out of touch the chancellor is with ordinary people, and how little he understands about the causes of social unrest.

All in all it’s just another brick in the wall.