That was tried in the late 20th century in places under oil embargo, and it failed to scale up for several reasons.
Generally, bio-fuels proved more practical using fermented alcohols or fat transesterification into B100. A genetic engineering solution for salt-water tolerant fuel crops or microbes is highly probable.
If I recall correctly, methanol powered vehicles would get significantly lower mileage per tank of fuel, and tended to damage petrol engines. =3
I suspect what they are alluding to is the perverse incentives that materialize when the market does not have an ability to adapt to real costs incurred based on the relative location between generators and consumers.
Food is a bad counter example here, as retailers are not prevented from adjusting their prices the further away you choose to live off major population hubs. OTOH electricity in many cases costs the same in the entire country (incl. UK.) This means that energy consumers are not incentivized by these expenses to consider the real costs of the grid. They will rather build a new factory/etc close to London where they might expect to have access to better workforce pool instead of in Scotland right next to the overproducing turbines.
NIMBYism against new grid infrastructure would also largely disappear overnight if the market actually made economic incentives (in a form of reduced electricity prices/fees) for people to accept infrastructure bringing that electricity to them. The way things stand today – when electricity costs the same to everybody in the country – of course you wouldn't want any works in your vicinity.
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