Posted on November 10th, 2014 No comments
The UK Government’s Electricity Market Reform (EMR) is a moving feast, or “trough”, if you are of the opinion that any state subsidy is a subsidy too far. My, how people complained and complained about the Renewables Obligation (RO), perhaps one of the world’s best stimuli for pushing forward wind power development. Yes, some rich engineering firms and rich landowners got richer on the back of the RO. What do you expect ? The wealthy always leverage their capital. But at least the RO has produced some exceptional wind power generation numbers. In the period 2017 to 2018 however, the RO is set to be staged down and replaced by several elements in the EMR, most notably, the CfD or Contracts for Difference, otherwise affectionately and quite inaccurately described as the FiT CfD – Feed-in Tariff Contracts for Difference.
The basic plan for the CfD is to guarantee to new electricity generators, or old generators building new plant, a definite price on power sold, in order to ensure they can get debt and equity invested in their projects. However, this is a huge state intervention and potentially entirely scuppers the efforts to create a market in electricity. More dangerously, although the CfD is supposed to encourage the freeing up of capital to support new energy investment, it might fail in that, at least in the short-term, and it may even fail to make capital cheaper. This is due to the new kinds of risk associated with the CfD – particularly because of the long lead time from auction to allocation, and the cap on allocations. The CfD is designed to create project failures, it seems.
I recently attended an event hosted at the Queen Elizabeth II Conference Centre in Westminster in London, called Energy4PowerLive 2014 and managed by GMP. The first session I attended was in the RenewablesLive 2014 stream, and featured a panel discussion between Andrew Buglass from Royal Bank of Scotland (RBS), Philip Bazin of Triodos and Steve Hunter, Investment Director of Low Carbon.
What follows is not verbatim, and is based on my handwritten notes, and my handwriting is appalling, so that sometimes, even I cannot read it.
[ Andrew Buglass, Managing Director and Head of Energy, Royal Bank of Scotland (RBS) : "Financing CfD projects - initial impressions from a lender" ]
[You may have an interest in the actions of] RBS [heckle from the audience, "We own it !"]. We built our first renewable energy project in 1991 – an onshore wind turbine. Now we [have helped] finance 9 gigawatts of renewable energy. I have 15 minutes – only possible to scratch the surface of CfDs [Contracts for Difference - a subsidy under the UK Government Department of Energy and Climate Change (DECC) Electricity Market Reform (EMR))]. The EMR journey has been a very long one – four years. We have offered advice to the government – about the bankability of the policy. DECC have a different policy perspective – they are going over here [in this direction] whether or not… [Their aim was to] encourage new sources of investment debt and equity, [currently] not here in the UK. [...] Matt Hancock, new [energy] minister [...] £115 [billion ?] [...]. Half of £100 billion needed by end of decade. The EMR framework is [intended] to bring in new sources of debt and equity – its ability to track that into the market. I’m not going to review whether the EMR will be successful. It’s a “Nought to Sixty” question [reference to how quickly it takes for cars to accelerate], how quickly is capital going to be delivered [getting up and running]. There will be a big step up in terms of work [...] how are different counterparties [countersigning parties in the CfD contracts] responding ? Now is the time to deliver on the [practical economics] for those to decide whether to invest or not. Need to engage the ratings agencies – getting debt from bond markets – to convince Standard and Poor etc to convince [...] The first projects are going to take a long time – cutting their teeth. Cost, availability, terms of debt. The risks that will [come into play] :
A. OFFTAKE RISK – BASIS RISK
[At the start of the EMR discussions] we highlighted that small generators found it hard to get PPAS [Power Purchase Agreements]. With the CfDs “lender of last resort” “offtaker of last resort” [...] may support less strong balance sheets for PPAs. Great – because we need a lot more liquidity in PPAs. [However] the basis risks on the strike price compared to the reference price – if this is [changed, different] – a concern about whether they might be matching in the middle [and so conferring no benefit to having arranged the CfD]].
B. WHOLESALE PRICE RISK
In offshore wind – wild – the economics of generating. In onshore wind power, the wholesale price has less of a way to fall [because of many years of learning and maturing of supply chains etc].
C. INDEX INFLATION RISK
The CfDs are to be linked to CPI [Consumer Price Index] rather than the RPI [Retail Price Index]. This may seem like a not very important difference – but at the moment you cannot hedge against the CPI. [...] we recommend RPI – linked to lock in. Can’t do that with CPI.
D. FORCE MAJEURE RISK
[Risk] especially during construction. The CfD does not pick up during construction – need to see [how this pans out].
E. CHANGE IN LAW (CIL) RISK
Twenty pages of the CIL clause – doesn’t seem to give you much protection – what is a “foreseeable change in law” ? Unless you’re a big utility you will not have been tracking [policy and legislation] for the last ten years. Big risk ? In the RO [Renewables Obligation], CIL risk was set to the offtaker. Law firms are going to really agonise [over this in the CfD].
F. LIFETIME MANAGEMENT RISK
Risk relating to managing CfD contract during its lifetime. There is a risk from the termination of a CfD – more than in the RO. May need to do more work to keep lender involved to manage termination risk.
Leads to a gloomy approach – in banking paying back on time is good – anything else is bad.
The EMR has cross-party support, but this is the most interventionist approach since the CEGB (Central Electricity Generating Board market). The politicians are saying “no, no, we’d never change anything” – from three parties. It would help if there were a public statement on that (I get calls about “too many turbines”). Initial projects will probably take longer to start than [under] RO. Collectively fund pragmatic solutions.
[ Philip Bazin, Head Project Finance Team, Triodos Bank : "Financing CfD projects - initial impressions from a different bank" ]
Triodos was established in 1980, and started in the UK in 1995 with the acquisition of Mercury [...] Our portfolio in the UK is still relatively small. Over a third of the £500 million is in renewable energy. Our investment [...] basis of positive social and environmental outcomes. [...] Core lending of £1 to £15 million finance [...] construction [...] and up to 15 years [on loan repayment]. Smaller developers – best fit. The bank is almost becoming part of the supply chain in the bidding process. Give a forward fixed rate of interest. We’ve had to think about how we provide this derivative. Discussions with PPA providers. Feeling that most a lot of new players. The whole rush around CfD was quite unhelpful. We haven’t been engaging with any bidders for this round [of CfDs]. Our customers are small generators or community groups. Smaller projects are risk-averse and would [probably] use the RO instead of the CfD [for now]. These markets are going to find this new structure [offputting]. Not ideal if you’re a professional investor. [Andrew has explained the risks well] The biggest one for me is the risk of failing to achieve your LONGSTOP DATE [failure to start electricity generation by an agreed date], which would risk a termination [of the CfD subsidy agreement. This would destroy the economics of the whole project and therefore the investment]. What protections do you have as a sub-contractor ? Another point is about wayleaves. [If you can't get your wayleaves in time...] Fundamentally, the [CfD] mechanism is bankable. [However] in trying to fix a problem it [may] have created a total mess. Don’t know if more capital will be going into projects.
[ Steve Hunter, Investment Director, Low Carbon : "CfDs from an equity perspective" ]
[Our business is in] Solar PV, Onshore wind, CSP in the Mediterranean area. We get there when project developer is doing land deals. We have a cradle-to-grave perspective. Land planning and grid access are major risks [and the guarantee of biomass feedstock for a biomass project]. The WHOLESALE POWER PRICE RISK – someone needs to take it. Your view depends on your equity horizon. For us, the two big changes [from the RO] are the introduction of the ALLOCATION RISK and the removal of the power price risk. Don’t know the budget for allocation. Only know one month before the [CfD] auction ! The government has not released [a budget] for “emerging technology”. Timing : doesn’t really work for solar. The idea of CfD versus RO for solar will not work. [It's all down to the project lifecycle] – you could be waiting 14 or 15 months for a CfD allocation after making a bid, but grid connection deals are now closing in [at around 12 months - if you do not take up your grid connection permission, you will lose it]. At the moment there is no competition between technologies. Is there enough CfD set aside for offshore wind projects ? Yes. If CfDs are intended to deliver technology-neutral [energy mix] – it doesn’t yet. The REFERENCE PRICES for me are the significant risk. This is entirely new for CfDs. Because the CfD intended to bring lower cost of capital – there is an implication for return [on investment] to the investor. Government will set [the reference prices]. Government just released [for some technologies] – decreased [in a forward period]. The Government may have a very different view on forward power prices… These reference prices come out of the air [there seems to be no basis for them]. When is final not final ? When it comes from DECC. If consider 2018/2019 September, the tightest budget, you could afford 1,000 MW of offshore, [if there is a change in the reference price] you could only afford 700 MW. In the TEC Register from National Grid – download this – there is 1,000 to 1,200 MG in the pipeline onshore. If I was a wind developer with [grid] connection dates after the end of the RO, you can bet I’ve already bid [for a CfD allocation] already. The political risk of changing the RO. May be a small amount of solar – but anyway it’s too expensive. If the CfD is only to support onshore wind power – is it achieving its goals ? There will almost certainly be some modification [to the CfD or the reference prices ?]. Transparency ? Oversupply ? [Oversight ?] of setting reference prices. Increase in frequency of the CfD auction would be helpful. Would give developers more time to bid. Technologies like solar PV that could deliver large savings… If no large solar is built… They could put a minimum in [for the subsidy allocated to each technology] – more positive. CfD represents long-term support. If the industry drives down the cost of renewable energy, CfD gives us an infill fix on revenue. It will give that certainty to get debt [and equity] in. It may be the support mechanism we need in the long-term. It could be the support mechanism we need for renewable energy…Baseload is History, Big Picture, Burning Money, Carbon Army, Change Management, Conflict of Interest, Corporate Pressure, Cost Effective, Design Matters, Direction of Travel, Disturbing Trends, Dreamworld Economics, Economic Implosion, Efficiency is King, Electrificandum, Energy Change, Energy Crunch, Energy Revival, Financiers of the Apocalypse, Freemarketeering, Gamechanger, Green Investment, Green Power, Growth Paradigm, Insulation, Optimistic Generation, Policy Warfare, Political Nightmare, Price Control, Regulatory Ultimatum, Renewable Resource, Revolving Door, Solar Sunrise, Solution City, Stirring Stuff, The Myth of Innovation, Western Hedge, Wind of Fortune
Posted on November 9th, 2014 No comments
So I was in a meeting on a dateless date, at an organisation with a nameless name, with some other unidentifiable people in the room with me. For some reason I had been invited, I cannot think why. Ah, yes, I can. I was invited to attend because, apparently, I am a “campaigner”. I am, allegedly, somebody who buys into the notion that communications should serve the purpose of directing public attention and support towards a particular outcome, decided in advance by a political elite. And it seems, if I believe something is right, and that a message needs communicating, I will take action, but never invoice, because I am a believer. Well let me tell you right here and now, I am not that person. I may have that reputation, but really, I despise propaganda : the deliberate formation of a murmur of Tweet starlings, or the collective wall-to-wall newspaper coverage of the same story, the scandal story hauled out to scare the horses and herd them to the salt water shore, the faux narrative of collective political or social will for change.
I want to believe that even though I am occasionally paid to communicate a story (but most often not), that my narrative, and importantly my agenda, is my own. I will not be co-opted. I shall not be defined by storytelling, I shall not be paid for spreading information – for if I were to be telling money-backed tales, I may end up peddling lies. And I do not want lies to be spoken. I am an ontologist. My ontology is :-
There is no “therefore” in what I write. When I say “should”, like, “we should adopt renewable energy”, it’s your choice as to whether you agree with me. You shouldn’t read anything and be swayed or directed, except by the force of reason based on evidence. I am the photographer, the recorder, but not the public relations consultant. And I am especially not an unsalaried volunteer. I paint the future using my own perspective, my own understanding, my own research, my own best judgement, but I am not telling people what to think. Although I go slightly beyond merely noting and analysing what is happening, to articulate possible futures, I am not a persuader.
I do not want to write the script for the actions of the readers or listeners. I do not want to precipitate a revolution, or dehydrate the horses before leading them to the river bank. I want to describe rather than proscribe or prescribe. I want to scribe the way I see things, I do not do it in order to create waves or push buttons or light beacons. The facts should speak for themselves, and if anybody consumes my communication, they should be free to act as they feel fit, or suits. I am not a paid-for, paid-up, in-the-pocket campaigner. I am not spun round other peoples’ fingers like a talking puppet. I am a free person.
So, there I was in this meeting, and the people in the room were discussing an event that is likely to take place. It appears from some analysis that the next British Government could well be another Coalition Government, with the Conservative Party having only a shaving of a majority for rule. And when they have crossed the i’s and dotted the t’s and formed a currently impossible political marriage, which I’m guessing will involve the Green Party as well as the Liberal Democrats, then they will need to live up to their promise to hold a referendum on British participation in the Grand European Experiment – economic union with other European countries.
But nobody talks about Europe. Except to complain. In the meeting I attended, the hosts of the meeting were consulting for ways to highlight the Europe Question, and to give it a pro-Union light.
For me, it’s facile. The United Kingdom of Great Britain and Northern Ireland is just a bunch of mediocre-sized islands off the coast of the European continent. Something like 80% of UK trade is with European countries, because Europe is our gateway to the rest of the global market, and you always do the most trade with your neighbours. It’s natural. Can anybody seriously suggest we ditch the Common Market – the agreements that European countries have come to to ensure common standards of goods and services, common terms and conditions of trade and common legal processes regulating trade ? So we want to reserve some kind of sovereignty over some kinds of decisions ? Why ? The UK is heavily involved in the central European institutions and governance bodies. We have massive input. We vote for MEPs. Why should things not go our way ? And even if things don’t go perfectly our way, will the negotiated compromises be so bad ? Subsidiarity – making decisions at the lowest/best/most appropriate level of administration – that’s still going to keep a lot of British control over British affairs. Surely the UK suffers a greater risk of interference from any pan-Atlantic trade deal that it does from Europe ?
The UK have made commitments. Our Parliament has agreed that we need to work on climate change, social justice and economic stability. We have implicitly agreed that to address climate change we need Energy Change and environmental regulation; to achieve social justice we need human rights, justice, health, education and a benefits system; and for economic stability we need economic stimuli – for example, in national infrastructure projects. In terms of climate change and Energy Change there is so much we need to do. If we stay in Europe, all of this will be so much easier. Within the European project for energy market harmonisation is the work on standards to achieve gas and electricity grid harmonisation. The improvement and augmenting of interconnections between countries, and the provision of wider energy storage, will enable the balanced use of renewable energy. Governments need to create incentives for deploying renewable energy. Governments need to create mechanisms to leverage and facilitate renewable energy deployment. Without Europe, outwith Europe, it will cost us more, and be more complex. Within Europe, it will be easier.
So, in the meeting I attended, I put forward my vision : if the UK stays in Europe, it will be easier to handle problems of energy – improving and replacing infrastructure and plant, co-ordinating the uptake of new renewable energy technologies and dealing with emerging energy security issues. Why, the North Sea, as everybody knows, is draining dry, and we can only build certain levels of relationship with countries outside the European Union, such as Russia. If the UK left the EU, the EU would be competitors with the UK for Russian Natural Gas, for example. I said I thought that energy security was a good thing to explain to people and a good reason to raise support for UK’s continued participation in Europe.
So, somebody else in the meeting, who shall remain faceless and nameless, poured very cold water on this idea. They seemed to disbelieve that the UK faces risks to energy security. Instead, they suggested that the pro-Europe argument should be based on how the UK can “keep our place at the table”. How out of touch can one get, I thought to myself ? This kind of patrician argument is not going to wash. Appealing to some non-existent pride in the UK’s continued role as stakeholder in the European project is going to go down like a lead balloon. It’s a vote loser, for sure.
What most people care about first is money. Their money. Any appeal to their pockets is going to help. We live in tough times – thanks to Government austerity policy – and we still cannot get a handle on public borrowing and spending. Because of the Government’s austerity policy.
So how about we cast it like this : your energy is going to get much more expensive if the UK abandons the European community of nations. Plus, your lights could genuinely go out, unless you, the people, either as taxpayers or billpayers, fork out for new energy investments that the energy companies haven’t made for 20 years. Because of privatisation. Without taking part in the European energy market harmonisation, and the European development of new and renewable energy infrastructure, plant and networks, your bills could significantly rise/spiral out of control. If European companies were required to sell energy assets back to the UK, because the UK pulled out of Europe, we would be in a very fine mess indeed. Do you really want this kind of chaos ? Energy policy in the UK is already bad enough.
The facts are available to those who search : British production of oil and gas from the North Sea is declining at something like 6% a year. The UK became a net energy importer between 2004 and 2006 (depending on how you define it). The Netherlands will become a net Natural Gas importer in the 2020s. Norway’s Natural Gas will reach a peak some time in the 2020s. It’s no good thinking that because the UK is a “gas hub”, and that British finance can currently spin up gas imports to the UK, that this situation is going to remain true. Within 10 to 15 years, I think that the UK will face significant competition for Natural Gas supplies with other European countries. Better to be in the debating chamber, surely, rather than scratching at the wind-and-rain-splattered window from outside ? So can the UK forge a gas alliance with countries outside the European Union, and apart from Norway ? A gas import alliance that sticks ? And that isn’t demolished by competition from the rest of the European Union for gas supplies that come through pipes sitting in European Union territory ? OK, the UK might want to leave full European Union membership, and join Norway in the European Economic Area, but will this guarantee beneficial import status for Natural Gas from countries that supply the full members of the European Community ?
I said, instead of trying to talk about direct opposites – either Inside Europe or Outside Europe – let’s talk about how things can be helped by wider co-operation. The European Union was founded on energy treaties – coal and nuclear energy (and steel), and now Europe needs to move to a union forged on renewable power and Natural Gas – and later Renewable Gas – and it’s going to be so much easier to do if the UK stays at the party.
The North Sea needs re-developing. Not for oil, but for wind power. This is going to happen best with full cross-border co-operation. Already, the UK has agreed to play a large part in the “North Sea Offshore Grid” wind power project in league with Ireland, Germany, Denmark, Sweden, The Netherlands, Belgium and France. And Luxembourg, strangely, although it doesn’t have a coast. Unlike new nuclear power, which could be decades in construction, offshore and onshore wind in Europe can be quick-build. If you want new power, you pick wind and solar. And, despite policy fumbles, this is happening. Actually, in the end, who really cares about subsidies for renewable energy, when the most capital-heavy organisations in the world start backing renewable power ? In some ways, I don’t care who brings me low carbon energy, and I don’t care if I have to pay for it through my tax or my bills, I just want it to happen. OK, offshore wind power is for the big boys, and you’re never going to get a diversity of suppliers with this project, and the dreams of decentralised energy are vapours, whisked away by giant engineering firms, but at least renewable energy is going to happen. One day people will realise that for the newspapers to rehearse the arguments of High Net Worth Individuals, and for sheep-like energy ministers to complain about onshore wind power and solar farms, is just a way to keep small electricity generators out of the energy markets, and allow the incumbent energy players to keep making profits. But when the need for a multiplicity of small energy installations becomes critical, I think this tune will change.
I can see all this. But, because I am not a spin meister, or spin meistress, or a campaigner, I’m not going to be crafting fine messages to share with my networks on this particular subject. I did start (see below), but then I thought better of it. I dislike the use of social media, web logging and journalism to push an agenda. The trouble is, I know that the people who are vehemently against the European endeavour have so many trigger arguments tested and ready to deploy, such as : immigration, regulations, budgetary demands. None of these stand up to scutiny, but they are very easy props on which to deploy Corpse Factory scares and scandals, up there with the War on Terror. The pro-European segment of the population always stays so silent. If there were to be a Referendum on Europe today, I can pretty much guarantee a kneejerk exit. The British public act collectively by reflex. They never re-analyse their position. They mob, gang and plunder.
I don’t think pro-Europe organisations know how to sell Europe. But they shouldn’t need to “sell” Europe. European membership should be an obvious best choice. So why should I try to talk up Europe ? I couldn’t have any influence, as one lone voice, against the Daily Mails, Daily Expresses and Daily Telegraphs of this world. And anyway, it’s not really my fight to fight. I don’t have a job title that reads “arch propagandist”. I am not that person. It does not become me. I prefer straight-talking, not mind-bending.
I won’t get invited back. That’s just fine. I am not a volunteer campaigner. I’m not a political pusher. I’ve only played the role of “evangelist” on climate change, renewable energy and good policy because sometimes there is little else I can think of that might help or make a difference. But I don’t have any influence. And I don’t want any. I am just going to continue telling it the way I see it. Giving my perspective. I cannot guarantee any outcomes. And anyway, I prefer democratic engagement over salesmanship. Don’t ask me to sell your ideas, your policies, your projections. I don’t want to.
Full membership of the European Union is the logical option for the United Kingdom, no matter how many tired dead donkey corpses the rabid tabloid media keep digging up to appall us all. Sooner or later, we also need to consider joining the Euro currency, and I predict we will, but I’m not your convincer on that argument, either.
“What has Europe ever done for us ?”
Common Climate : Common Cause : Common Market
On climate change, the United Kingdom has secured the Climate Change Act, legislation with broad-based support across all political parties. The UK shares the concerns of other European countries about the potential risks and impacts from climate change in our geographical region. Society-level change in response to climate change includes energy change – changing the sources and use of energy – and changing policies for land use to include planting forests and energy crops. Within the European Community, the UK has worked to secure region-wide legislation on renewable energy, energy efficiency, waste control and air quality. All of these contribute to the response to climate change, and have developed action on climate change into a common cause. In addition to regulatory change, the European Community is seeking to develop trading mechanisms to enable carbon dioxide emissions control, and it working to develop a common market in carbon.
Common Future : Common Purpose : Common Interest
Common Values : Common Opportunities : Common Voice
Common Security : Common Goals : Common Networks
Common Infrastructure : Common Society : Common Protection
Common Standards : Common Framework : Common DevelopmentAcademic Freedom, Advertise Freely, Bait & Switch, Be Prepared, Big Picture, Big Society, Burning Money, Carbon Army, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Change Management, Climate Change, Coal Hell, Conflict of Interest, Cost Effective, Deal Breakers, Demoticratica, Divide & Rule, Emissions Impossible, Energy Autonomy, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Engineering Marvel, Fossilised Fuels, Freemarketeering, Gamechanger, Global Warming, Green Investment, Green Power, Hydrocarbon Hegemony, Landslide, Libertarian Liberalism, Low Carbon Life, Major Shift, Mass Propaganda, Media, Money Sings, National Energy, National Power, Nuclear Nuisance, Oil Change, Optimistic Generation, Orwells, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Peak Natural Gas, Peak Oil, Policy Warfare, Political Nightmare, Protest & Survive, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Gas, Resource Wards, Social Capital, Social Change, Social Chaos, Social Democracy, Solar Sunrise, Solution City, Stirring Stuff, Sustainable Deferment, The Science of Communitagion, The War on Error, Unsolicited Advice & Guidance, Vote Loser, Western Hedge, Wind of Fortune
Posted on May 7th, 2014 No comments
It was probably a side-effect of the flu’, but as I was listening to Christiana Figueres speaking at St Paul’s Cathedral, London, this evening, I started to have tunnel vision, and the rest of the “hallowed halls” just melted away, and I felt she was speaking to me individually, woman to woman.
She talked a lot about investments, injustices and inertia, but I felt like she was personally calling me, nagging me, bugging me to show more love. She said she didn’t want us to leave thinking “That was interesting”, or even “That was inspiring”, but that we would leave resolved to do one more concrete thing to show our love for our world, and our fellow human beings.
I was a little defensive inside – I’m already trying to get some big stuff done – how could I do anything else that could be effective ? She said that we couldn’t ask people to do more if we weren’t prepared to do more ourselves. I wasn’t sure that any of the things she suggested I could try would have any impact, but I suppose I could try again to write to my MP Iain Duncan Smith – after all, Private Eye tells me he’s just hired a communications consultant, so he might be willing to communicate with me about climate change, perhaps.
Of her other suggestions, I have already selected investments that are low carbon, so there would be little point in writing to them about carbon-based “stranded assets”. My diet is very largely vegetarian; I buy food and provisions from co-operatives where I can; I don’t own a car; I’ve given up flying; I’ve installed solar electricity; my energy consumption is much lower than average; I buy secondhand; I reuse, repair, reclaim, recycle.
I don’t want to “campaign” on climate change – I don’t think that would be very loving. This should not be a public relations mission, it needs to be authentic and inclusive, so I don’t know what the best way is to engage more people in “the struggle”. I’ve sent enough email in my life. People already know about climate change, I don’t need to evangelise them. They already know some of the things they could do to mitigate their fossil fuel energy consumption, I don’t need to educate them. The organisations that are still pushing fossil fuels to society have more to do to get with the transition than everyday energy consumers, surely ?
So, how is it that this “love bug” bites me ? What do I feel bugged to be getting on with ? Researching low carbon gas energy systems is my main action at the moment, but what could I do that would be an answer to Christiana’s call for me to do something extra ? Join in the monthly fast and prayer that’s due to start on 1st November ? Well, sure I will, as part of my work duties. Network for Our Voices that will funnel the energy of the monthly call to prayer into a Civil Society “tornado” in support of the UNFCCC Paris Treaty ? Yes, of course. Comes with the territory. But more… ?
I noticed that Christiana Figueres had collegiate competition from the bells of St Paul’s, and it sounded like the whole cathedral was ringing. Then my cough started getting bad and I started to feel quite unwell, so I had to leave before the main debate took place, to medicate myself with some fresh orange juice from a company I chose because it tracks its carbon, and has a proper plan for climate sustainability, so I never answered my question – what do I need to do, to do more about climate change ?Artistic Licence, Babykillers, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Burning Money, Carbon Army, Carbon Commodities, Change Management, Climate Change, Climate Chaos, Climate Damages, Conflict of Interest, Corporate Pressure, Cost Effective, Demoticratica, Direction of Travel, Dreamworld Economics, Eating & Drinking, Economic Implosion, Efficiency is King, Emissions Impossible, Energy Change, Energy Crunch, Energy Denial, Energy Disenfranchisement, Energy Insecurity, Energy Revival, Extreme Energy, Faithful God, Feel Gooder, Financiers of the Apocalypse, Fossilised Fuels, Gamechanger, Global Heating, Global Singeing, Global Warming, Green Gas, Green Investment, Green Power, Growth Paradigm, Human Nurture, Hydrocarbon Hegemony, Incalculable Disaster, Insulation, Low Carbon Life, Major Shift, Mass Propaganda, Money Sings, National Energy, National Power, No Pressure, Not In My Name, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Emissions, Protest & Survive, Public Relations, Pure Hollywood, Renewable Gas, Social Capital, Social Change, Social Democracy, Stirring Stuff, The Power of Intention, The Science of Communitagion, Voluntary Behaviour Change
Posted on May 2nd, 2014 No comments
I took some notes from remarks made by Professor David MacKay, the UK Government’s Chief Scientific Advisor, yesterday, 1st May 2014, at an event entitled “How Will We Heat London ?”, held by Max Fordhams as part of the Green Sky Thinking, Open City week. I don’t claim to have recorded his words perfectly, but I hope I’ve captured the gist.
[David MacKay] : [Agreeing with others on the panel - energy] demand reduction is really important. [We have to compensate for the] “rebound effect”, though [where people start spending money on new energy services if they reduce their demand for their current energy services].
SAP is an inaccurate tool and not suitable for the uses we put it too :-
Things seem to be under-performing [for example, Combined Heat and Power and District Heating schemes]. It would be great to have data. A need for engineering expertise to get in.
I’m not a Chartered Engineer, but I’m able to talk to engineers. I know a kilowatt from a kilowatt hour [ (Laughter from the room) ]. We’ve [squeezed] a number of engineers into DECC [the Department of Energy and Climate Change].
I’m an advocate of Heat Pumps, but the data [we have received from demonstration projects] didn’t look very good. We hired two engineers and asked them to do the forensic analysis. The heat pumps were fine, but the systems were being wrongly installed or used.
Now we have a Heat Network team in DECC – led by an engineer. We’ve published a Heat Strategy. I got to write the first three pages and included an exergy graph.
[I say to colleagues] please don’t confuse electricity with energy – heat is different. We need not just a green fluffy solution, not just roll out CHP [Combined Heat and Power] [without guidance on design and operation].
Sources of optimism ? Hopefully some of the examples will be available – but they’re not in the shop at the moment.
For example, the SunUp Heat Battery – works by having a series of chambers of Phase Change Materials, about the size of a fridge that you would use to store heat, made by electricity during the day, for use at night, and meet the demand of one home. [Comment from Paul Clegg, Senior Partner at Feilden Clegg Bradley Studios : I first heard about Phase Change Materials back in the 1940s ? 1950s ? And nothing's come of it yet. ] Why is that a good idea ? Well, if you have a heat pump and a good control system, you can use electricity when it’s cheapest… This is being trialled in 10 homes.
Micro-CHP – [of those already trialled] definitely some are hopeless, with low temperature and low electricity production they are just glorified boilers with a figleaf of power.
Maybe Fuel Cells are going to deliver – power at 50% efficiency [of conversion] – maybe we’ll see a Fuel Cell Micro-Combined Heat and Power unit ?
Maybe there will be hybrid systems – like the combination of a heat pump and a gas boiler – with suitable controls could lop off peaks of demand (both in power and gas).
We have designed the 2050 Pathways Calculator as a tool in DECC. It was to see how to meet the Carbon Budget. You can use it as an energy security calculator if you want. We have helped China, Korea and others to write their own calculators.
A lot of people think CHP is green and fluffy as it is decentralised, but if you’re using Natural Gas, that’s still a Fossil Fuel. If you want to run CHP on biomass, you will need laaaaaarge amounts of land. You can’t make it all add up with CHP. You would need many Wales’-worth of bioenergy or similar ways to make it work.
Maybe we should carry on using boilers and power with low carbon gas – perhaps with electrolysis [A "yay !" from the audience. Well, me, actually]. Hydrogen – the the 2050 Calculator there is no way to put it back into the beginning of the diagram – but it could provide low carbon heat, industry and transport. At the moment we can only put Hydrogen into Transport [in the 2050 Calculator. If we had staff in DECC to do that… It’s Open Source, so if any of you would like to volunteer…
Plan A of DECC was to convert the UK to using lots of electricity [from nuclear power and other low carbon technologies, to move to a low carbon economy], using heat pumps at the consumer end, but there’s a problem in winter [Bill Watts of Max Fordham had already shown a National Grid or Ofgem chart of electricity demand and gas demand over the year, day by day. Electricity demand (in blue) fluctuates a little, but it pretty regular over the year. Gas demand (in red) however, fluctuates a lot, and is perhaps 6 to 10 times larger in winter than in summer.]
If [you abandon Plan A - "electrification of everything"] and do it the other way, you will need a large amount of Hydrogen, and a large Hydrogen store. Electrolysers are expensive, but we are doing/have done a feasibility study with ITM Power – to show the cost of electrolysers versus the cost of your wind turbines [My comment : but you're going to need your wind turbines to run your electrolysers with their "spare" or "curtailed" kilowatt hours.]
[David Mackay, in questions from the floor] We can glue together [some elements]. Maybe the coming smart controls will help…can help save a load of energy. PassivSystems – control such things as your return temperature [in your Communal or District Heating]…instead of suing your heat provider [a reference to James Gallagher who has problems with his communal heating system at Parkside SE10], maybe you could use smart controls…
[Question] Isn’t using smart controls like putting a Pirelli tyre on a Ford Cortina ? Legacy of poor CHP/DH systems…
[David MacKay in response to the question of insulation] If insulation were enormously expensve, we wouldn’t have to be so enthusastic about it…We need a well-targeted research programme looking at deep retrofitting, instead of letting it all [heat] out.
[Adrian Gault, Committee on Climate Change] We need an effective Government programme to deliver that. Don’t have it in the Green Deal. We did have it [in the previous programmes of CERT and CESP], but since they were cancelled in favour of the Green Deal, it’s gone off a cliff [levels of insulation installations]. We would like to see an initiative on low cost insulation expanded. The Green Deal is not producing a response.
[Bill Watts, Max Fordham] Agree that energy efficiency won’t run on its own. But it’s difficult to do. Not talking about automatons/automation. Need a lot of pressure on this.
[Adrian Gault] Maybe a street-by-street approach…
[Michael Trousdell, Arup] Maybe a rule like you can’t sell a house unless you’ve had the insulation done…
[Peter Clegg] … We can do heat recovery – scavenging the heat from power stations, but we must also de-carbonise the energy supply – this is a key part of the jigsaw.Academic Freedom, Alchemical, Artistic Licence, Baseload is History, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Bioeffigy, Biofools, Biomess, British Biogas, Burning Money, Carbon Army, Change Management, Climate Change, Cool Poverty, Cost Effective, Deal Breakers, Design Matters, Efficiency is King, Electrificandum, Emissions Impossible, Energy Change, Energy Insecurity, Fossilised Fuels, Fuel Poverty, Gamechanger, Global Heating, Green Gas, Green Power, Heatwave, Human Nurture, Hydrogen Economy, Insulation, Major Shift, National Energy, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Emissions, Policy Warfare, Political Nightmare, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solution City, Technofix, The Data, The Power of Intention, The Right Chemistry, Voluntary Behaviour Change, Wasted Resource, Wind of Fortune
Posted on March 14th, 2014 No comments
In the last few weeks I have attended a number of well-intentioned meetings on advances in the field of carbon dioxide emissions mitigation. My overall impression is that there are several failing narratives to be encountered if you make even the shallowest foray into the murky mix of politics and energy engineering.
As somebody rightly pointed out, no capitalist worth their share price is going to spend real money in the current economic environment on new kit, even if they have asset class status – so all advances will necessarily be driven by public subsidies – in fact, significant technological advance has only ever been accomplished by state support.
Disturbingly, free money is also being demanded to roll out decades-old low carbon energy technology – nuclear power, wind power, green gas, solar photovoltaics – so it seems to me the only way we will ever get appropriate levels of renewable energy deployment is by directed, positive public investment.
More to the point, we are now in an era where nobody at all is prepared to spend any serious money without a lucrative slap on the back, and reasons beyond reasons are being deployed to justify this position. For example, the gas-fired power plant operators make claims that the increase in wind power is threatening their profitability, so they are refusing to built new electricity generation capacity without generous handouts. This will be the Capacity Mechanism, and will keep gas power plants from being mothballed. Yes, there is data to support their complaint, but it does still seem like whinging and special pleading.
And the UK Government’s drooling and desperate fixation with new nuclear power has thrown the European Commission into a tizzy about the fizzy promises of “strike price” guaranteed sales returns for the future atomic electricity generation.
But here, I want to contrast two other energy-polity dialogues – one for developing an invaluable energy resource, and the other about throwing money down a hole.
First, let’s take the white elephant. Royal Dutch Shell has for many years been lobbying for state financial support to pump carbon dioxide down holes in the ground. Various oil and gas industry engineers have been selling this idea to governments, federal and sub-federal for decades, and even acted as consultants to the Civil Society process on emissions control – you just need to read the United Nations’ IPCC Climate Change Assessment Report and Special Report output to detect the filigree of a trace of geoengineering fingers scratching their meaning into global intention. Let us take your nasty, noxious carbon dioxide, they whisper suggestively, and push it down a hole, out of sight and out of accounting mind, but don’t forget to slip us a huge cheque for doing so. You know, they add, we could even do it cost-effectively, by producing more oil and gas from emptying wells, resulting from pumping the carbon dioxide into them. Enhanced Oil Recovery – or EOR – would of course mean that some of the carbon dioxide pumped underground would in effect come out again in the form of the flue gas from the combustion of new fossil fuels, but anyway…
And governments love being seen to be doing something, anything, really, about climate change, as long as it’s not too complicated, and involves big players who should be trustworthy. So, you get the Peterhead project picking up a fat cheque for a trial of Carbon Capture and Storage (CCS) in Scotland, and the sidestep hint that if Scotland decides to become independent, this project money could be lost…But this project doesn’t involve much of anything that is really new. The power station that will be used is a liability that ought to be closing now, really, according to some. And the trial will only last for ten years. There will be no EOR – at least – not in the public statements, but this plan could lead the way.
All of this is like pushing a fat kid up a shiny slide. Once Government take their greasy Treasury hands off the project, the whole narrative will fail, falling to an ignominious muddy end. This perhaps explains the underlying desperation of many – CCS is the only major engineering response to emissions that many people can think of – because they cannot imagine burning less fossil fuels. So this wobbling effigy has to be kept on the top of the pedestal. And so I have enjoyed two identical Shell presentations on the theme of the Peterhead project in as many weeks. CCS must be obeyed.
But, all the same, it’s big money. And glaring yellow and red photo opps. You can’t miss it. And then, at the other end of the scale of subsidies, is biogas. With currently low production volumes, and complexities attached to its utilisation, anaerobically digesting wastes of all kinds and capturing the gas for use as a fuel, is a kind of token technology to many, only justified because methane is a much stronger greenhouse gas than carbon dioxide, so it needs to be burned.
The subsidy arrangements for many renewable energy technologies are in flux. Subsidies for green gas will be reconsidered and reformulated in April, and will probably experience a degression – a hand taken off the tiller of driving energy change.
At an evening biogas briefing given by Rushlight this week, I could almost smell a whiff of despair and disappointment in the levels of official support for green gas. It was freely admitted that not all the planned projects around the country will see completion, not only because of the prevailing economic climate, but because of the vagaries of feedstock availability, and the complexity of gas cleaning regulations.
There was light in the tunnel, though, even if the end had not been reached – a new Quality Protocol for upgrading biogas to biomethane, for injection into the gas grid, has been established. You won’t find it on the official UK Goverment website, apparently, as it has fallen through the cracks of the rebranding to gov.uk, but here it is, and it’s from the Environment Agency, so it’s official :-
Here’s some background :-
To get some picture of the mess that British green energy policy is in, all you need do is take a glance at Germany and Denmark, where green gas is considered the “third leg of the stool”, stabilising renewable energy supply with easily-stored low carbon gas, to balance out the peaks and troughs in wind power and solar power provision.
Green gas should not be considered a nice-to-have minor addition to the solutions portfolio in my view. The potential to de-carbonise the energy gas supply is huge, and the UK are missing a trick here – the big money is being ladled onto the “incumbents” – the big energy companies who want to carry on burning fossil fuels but sweep their emissions under the North Sea salt cavern carpet with CCS, whilst the beer change is being reluctantly handed out as a guilt offering to people seeking genuinely low carbon energy production.
Seriously – where the exoplanet are we at ?Academic Freedom, Assets not Liabilities, Bioeffigy, British Biogas, Burning Money, Carbon Capture, Climate Change, Conflict of Interest, Corporate Pressure, Cost Effective, Design Matters, Direction of Travel, Disturbing Trends, Dreamworld Economics, Emissions Impossible, Energy Change, Engineering Marvel, Extreme Energy, Financiers of the Apocalypse, Fossilised Fuels, Gamechanger, Gas Storage, Geogingerneering, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Mad Mad World, Marine Gas, Mass Propaganda, Methane Madness, Methane Management, Money Sings, Mudslide, National Energy, National Power, No Pressure, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Orwells, Paradigm Shapeshifter, Petrolheads, Policy Warfare, Political Nightmare, Public Relations, Pure Hollywood, Regulatory Ultimatum, Renewable Gas, Solar Sunrise, Solution City, Technofix, Technological Fallacy, Technological Sideshow, Technomess, The Myth of Innovation, The Power of Intention, Ungreen Development, Vote Loser, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on January 5th, 2014 1 comment
I was talking with people at my friend’s big birthday bash yesterday. I mentioned I’m writing about Renewable Gas, and this led to a variety of conversations. Here is a kind of summary of one of the threads, involving several people.
Why do people continue to insist that the wind turbine at Reading uses more energy than it generates ?
Would it still be there if it wasn’t producing power ? Does David Cameron still have a wind turbine on his roof ? No. It wasn’t working, so it was taken down. I would ask – what are their sources of information ? What newspapers and websites do they read ?
They say that the wind turbine at Reading is just there for show.
Ah. The “Potemkin Village” meme – an idyllic-looking setting, but everything’s faked. The Chinese painting the desert green, etc.
And then there are people that say that the only reason wind farms continue to make money is because they run the turbines inefficiently to get the subsidies.
Ah. The “De-rating Machine” meme. You want to compare and contrast. Look at the amount of money, resources, time and tax breaks being poured into the UK Continental Shelf, and Shale Gas, by the current Government.
Every new technology needs a kick start, a leg up. You need to read some of the reports on wind power as an asset – for example, the Offshore Valuation – showing a Net Present Value. After it’s all deployed, even with the costs of re-powering at the end of turbine life, offshore North Sea wind power will be a genuine asset.
What I don’t understand is, why do people continue to complain that wind turbines spoil the view ? Look at the arguments about the Jurassic Coast in Dorset.
I have contacts there who forward me emails about the disputes. The yachtsmen of Poole are in open rebellion because the wind turbines will be set in in their channels ! The tourists will still come though, and that’s what really counts. People in Dorset just appear to love arguing, and you’ve got some people doing good impressions of curmudgeons at the head of the branches of the Campaign for the Protection of Rural England (CPRE) and English Heritage.
There are so many people who resist renewable energy, and refuse to accept we need to act on climate change. Why do they need to be so contrarian ? I meet them all the time.
People don’t like change, but change happens. The majority of people accept that climate change is significant enough to act on, and the majority of people want renewable energy. It may not seem like that though. It depends on who you talk with. There’s a small number of people who vocalise scepticism and who have a disproportionate effect. I expect you are talking about people who are aged 55 and above ?
Example : “Climate Change ? Haw haw haw !” and “Wind turbines ? They don’t work !” This is a cohort problem. All the nasty white racists are dying and being buried with respect by black undertakers. All the rabid xenophobes are in nursing homes being cared for in dignity by “foreigners”. Pretty soon Nigel Lawson could suffer from vascular dementia and be unable to appear on television.
The media have been insisting that they need a balance of views, but ignoring the fact that the climate change “sceptics” are very small in number and not backed up by the science.
Why does Nigel Lawson, with all his access and privilege, continue to insist that global warming is not a problem ?
Fortunately, even though he’s “establishment” and has more influence than he really should have, the people that are really in charge know better. He should talk to the climate change scientists – the Met Office continue to invite sceptics to come and talk with them. He should talk to people in the energy sector – engineers and project managers. He should talk to people in the cross-party Parliamentary groups who have access to the information from the expert Select Committees.
And what about Owen Paterson ? I cannot understand why they put a climate change sceptic in charge of the Department of the Environment.
Well, we’ve always done that, haven’t we ? Put Ministers in Departments they know nothing about, so that they can learn their briefs. We keep putting smokers in charge of health policy. Why do you think he was put in there ?
To pacify the Conservative Party.
But I know Conservative Party activists who are very much in favour of renewable energy and understand the problems of climate change. It’s not the whole Party.
We need to convince so many people.
We only need to convince the people who matter. And anyway, we don’t need to do any convincing. Leaders in the energy industry, in engineering, in science, in Government (the real government is the Civil Service), the Parliament, they already understand the risks of climate change and the need for a major energy transition.
People should continue to express their views, but people only vote on economic values. That’s why Ed Miliband has pushed the issue of the cost of energy – to try to bring energy to the forefront of political debate.
What about nuclear fusion ?
Nuclear fusion has been 35 years away for the last 35 years. It would be nice to have, because it could really solve the problem. Plus, it keeps smart people busy.
What about conventional nuclear fission power ?
I say, “Let them try !” The Hinkley Point C deal has so many holes in it, it’s nearly collapsed several times. I’m sure they will continue to try to build it, but I’m not confident they will finish it. Nuclear power as an industry is basically washed up in my view, despite the lengths that it goes to to influence society and lobby the Government.
It’s going to be too late to answer serious and urgent problems – there is an energy crunch approaching fast, and the only things that can answer it are quick-to-build options such as new gas-fired power plants, wind farms, solar farms, demand reduction systems such as shutting down industry and smart fridges.
How can the energy companies turn your fridge off ?
If the appliances have the right software, simple frequency modulation of the power supply should be sufficient to trip fridges and freezers off. Or you could connect them to the Internet via a gateway. The problem is peak power demand periods, twice a day, the evening peak worse than the morning. There has been some progress in managing this due to switching light bulbs and efficient appliances, but it’s still critical. Alistair Buchanan, ex of Ofgem, went out on a limb to say that we could lose all our power production margins within a couple of years, in winter.
But the refrigerators are being opened and closed in the early evening, so it would be the wrong time of day to switch them off. And anyway, don’t the fridges stop using power when they’re down to temperature ?
Some of these things will need to be imposed regardless of concerns, because control of peak power demand is critical. Smart fridges may be some years away, but the National Grid already have contracts with major energy users to shed their load under certain circumstances. Certain key elements of the energy infrastructure will be pushed through. They will need to be pushed through, because the energy crunch is imminent.
The time for democracy was ten years ago. To get better democracy you need much more education. Fortunately, young people (which includes young journalists) are getting that education. If you don’t want to be irritated by the views of climate change and energy sceptics, don’t bother to read the Daily Telegraph, the Daily Express, the Daily Mail, the online Register or the Spectator. The old school journalists love to keep scandal alive, even though any reason to doubt climate change science and renewable energy died in the 1980s.
Although I’ve long since stopped trusting what a journalist writes, I’m one of those people who think that you should read those sources.
I must admit I do myself from time to time, but just for entertainment.Assets not Liabilities, Bait & Switch, Baseload is History, Big Picture, Big Society, Burning Money, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Cost Effective, Delay and Deny, Demoticratica, Divide & Rule, Efficiency is King, Energy Autonomy, Energy Change, Energy Crunch, Energy Denial, Energy Insecurity, Energy Revival, Gamechanger, Global Warming, Green Investment, Green Power, Mass Propaganda, Media, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Orwells, Paradigm Shapeshifter, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Pure Hollywood, Regulatory Ultimatum, Revolving Door, Shale Game, Social Change, Social Democracy, Solution City, Stirring Stuff, Sustainable Deferment, The Science of Communitagion, The War on Error, Unqualified Opinion, Vote Loser, Wind of Fortune
Posted on October 16th, 2013 No comments
I listened to an interesting mix of myth, mystery and magic on BBC Radio 4.
Myths included the notion that long-term, nuclear power would be cheap; that “alternative” energy technologies are expensive (well, nuclear power is, but true renewables are most certainly not); and the idea that burning biomass to create heat to create steam to turn turbines to generate electricity is an acceptably efficient use of biomass (it is not).
Biofuelwatch are hosting a public meeting on this very subject :-
“A Burning Issue – biomass and its impacts on forests and communities”
Tuesday, 29th October 2013, 7-9pm
Lumen Centre, London (close to St Pancras train station)
Lumen Centre, 88 Tavistock Place, London WC1H 9RS
Interesting hints in the interviews I thought pointed to the idea that maybe, just maybe, some electricity generation capacity should be wholly owned by the Government – since the country is paying for it one way or another. A socialist model for gas-fired generation capacity that’s used as backup to wind and solar power ? Now there’s an interesting idea…
“Mind the Gap”
Channel: BBC Radio 4
Series: Costing the Earth
Presenter: Tom Heap
First broadcast: Tuesday 15th October 2013
Programme Notes :
“Our energy needs are growing as our energy supply dwindles.
Renewables have not come online quickly enough and we are increasingly
reliant on expensive imported gas or cheap but dirty coal. Last year
the UK burnt 50% more coal than in previous years but this helped
reverse years of steadily declining carbon dioxide emissions. By 2015
6 coal fired power stations will close and the cost of burning coal
will increase hugely due to the introduction of the carbon price
floor. Shale gas and biomass have been suggested as quick and easy
solutions but are they really sustainable, or cheap?”
“Carbon Capture and Storage could make coal or gas cleaner and a new
study suggests that with CCS bio energy could even decrease global
warming. Yet CCS has stalled in the UK and the rest of Europe and the
debate about the green credentials of biomass is intensifying. So what
is really the best answer to Britain’s energy needs? Tom Heap
00:44 – 00:48
[ Channel anchor ]
Britain’s energy needs are top of the agenda in “Costing the Earth”…
[ Channel anchor ]
…this week on “Costing the Earth”, Tom Heap is asking if our
ambitions to go green are being lost to the more immediate fear of
blackouts and brownouts.
[ Music : Arcade Fire - "Neighbourhood 3 (Power Out)" ]
[ Tom Heap ]
Energy is suddenly big news – central to politics and the economy. The
countdown has started towards the imminent shutdown of many coal-fired
power stations, but the timetable to build their replacements has
It’ll cost a lot, we’ll have to pay, and the politicians are reluctant
to lay out the bill. But both the official regulator and industry are
warning that a crunch is coming.
So in this week’s “Costing the Earth”, we ask if the goal of clean,
green and affordable energy is being lost to a much darker reality.
[ Historical recordings ]
“The lights have started going out in the West Country : Bristol,
Exeter and Plymouth have all had their first power cuts this
“One of the biggest effects of the cuts was on traffic, because with
the traffic lights out of commission, major jams have built up,
particularly in the town centres. One of the oddest sights I saw is a
couple of ladies coming out of a hairdressers with towels around their
heads because the dryers weren’t working.”
“Television closes down at 10.30 [ pm ], and although the cinemas are
carrying on more or less normally, some London theatres have had to
“The various [ gas ] boards on both sides of the Pennines admit to
being taken by surprise with today’s cold spell which brought about
“And now the major scandal sweeping the front pages of the papers this
morning, the advertisement by the South Eastern Gas Board recommending
that to save fuel, couples should share their bath.”
[ Caller ]
“I shall write to my local gas board and say don’t do it in
Birmingham. It might be alright for the trendy South, but we don’t
want it in Birmingham.”
[ Tom Heap ]
That was 1974.
Some things have changed today – maybe a more liberal attitude to
sharing the tub. But some things remain the same – an absence of
coal-fired electricity – threatening a blackout.
Back then it was strikes by miners. Now it’s old age of the power
plants, combined with an EU Directive obliging them to cut their
sulphur dioxide and nitrous oxide emissions by 2016, or close.
Some coal burners are avoiding the switch off by substituting wood;
and mothballed gas stations are also on standby.
But Dieter Helm, Professor of Energy Policy at the University of
Oxford, now believes power cuts are likely.
[ Dieter Helm ]
Well, if we take the numbers produced by the key responsible bodies,
they predict that there’s a chance that by the winter of 2-15 [sic,
meaning 2015] 2-16 [sic, meaning 2016], the gap between the demand for
electricity and the supply could be as low as 2%.
And it turns out that those forecasts are based on extremely
optimistic assumptions about how far demand will fall in that period
(that the “Green Deal” will work, and so on) and that we won’t have
much economic growth.
So basically we are on course for a very serious energy crunch by the
winter of 2-15 [sic, meaning 2015] 2-16 [sic, meaning 2016], almost
regardless of what happens now, because nobody can build any power
stations between now and then.
It’s sort of one of those slow motion car crashes – you see the whole
symptoms of it, and people have been messing around reforming markets
and so on, without addressing what’s immediately in front of them.
[ Tom Heap ]
And that’s where you think we are now ?
[ Dieter Helm ]
I think there’s every risk of doing so.
Fortunately, the [ General ] Election is a year and a half away, and
there’s many opportunities for all the political parties to get real
about two things : get real about the energy crunch in 2-15 [sic,
meaning 2015] 2-16 [sic, meaning 2016] and how they’re going to handle
it; and get real about creating the incentives to decarbonise our
electricity system, and deal with the serious environmental and
security and competitive issues which our electricity system faces.
And this is a massive investment requirement [ in ] electricity : all
those old stations retiring [ originally built ] back from the 1970s –
they’re all going to be gone.
Most of the nuclear power stations are coming to the end of their lives.
We need a really big investment programme. And if you really want an
investment programme, you have to sit down and work out how you’re
going to incentivise people to do that building.
[ Tom Heap ]
If we want a new energy infrastructure based on renewables and
carbon-free alternatives, then now is the time to put those incentives
on the table.
The problem is that no-one seems to want to make the necessary
investment, least of all the “Big Six” energy companies, who are
already under pressure about high bills.
[ "Big Six" are : British Gas / Centrica, EdF Energy (Electricite
de France), E.On UK, RWE npower, Scottish Power and SSE ]
Sam Peacock of the energy company SSE [ Scottish and Southern Energy ]
gives the commercial proof of Dieter’s prediction.
If energy generators can’t make money out of generating energy,
they’ll be reluctant to do it.
[ Sam Peacock ]
Ofgem, the energy regulator, has looked at this in a lot of detail,
and said that around 2015, 2016, things start to get tighter. The
reason for this is European Directives, [ is [ a ] ] closing down some
of the old coal plants. And also the current poor economics around [
or surround [ -ing ] ] both existing plant and potential new plant.
So, at the moment it’s very, very difficult to make money out of a gas
plant, or invest in a new one. So this leads to there being, you know,
something of a crunch point around 2015, 2016, and Ofgem’s analysis
looks pretty sensible to us.
[ Tom Heap ]
And Sam Peacock lays the blame for this crisis firmly at the Government’s door.
[ Sam Peacock ]
The trilemma, as they call it – of decarbonisation, security of supply
and affordability – is being stretched, because the Government’s
moving us more towards cleaner technologies, which…which are more
However, if you were to take the costs of, you know, the extra costs
of developing these technologies off government [ sic, meaning
customer ] bills and into general taxation, you could knock about over
£100 off customer bills today, it’ll be bigger in the future, and you
can still get that much-needed investment going.
So, we think you can square the circle, but it’s going to take a
little bit of policy movement [ and ] it’s going to take shifting some
of those costs off customers and actually back where the policymakers
should be controlling them.
[ KLAXON ! Does he mean controlled energy prices ? That sounds a bit
centrally managed economy to me... ]
[ Tom Heap ]
No surprise that a power company would want to shift the pain of
rising energy costs from their bills to the tax bill.
But neither the Government nor the Opposition are actually proposing this.
Who pays the premium for expensve new energy sources is becoming like
a game of pass the toxic parcel.
[ Reference : http://en.wikipedia.org/wiki/Hot_potato_%28game%29 ]
I asked the [ UK Government Department of ] Energy and Climate Change
Secretary, Ed Davey, how much new money is required between now and
[ Ed Davey ]
About £110 billion – er, that’s critical to replace a lot of the coal
power stations that are closing, the nuclear power stations that are [
at the ] end of their lives, and replace a lot of the network which
has come to the end of its life, too.
So it’s a huge, massive investment task.
[ Tom Heap ]
So in the end we’re going to have to foot the bill for the £110 billion ?
[ Ed Davey ]
Yeah. Of course. That’s what happens now. People, in their bills that
they pay now, are paying for the network costs of investments made
several years, even several decades ago.
[ Yes - we're still paying through our national nose to dispose of
radioactive waste and decommission old nuclear reactors. The liability
of it all weighs heavily on the country's neck... ]
And there’s no escaping that – we’ve got to keep the lights on – we’ve
got to keep the country powered.
You have to look at both sides of the equation. If we’re helping
people make their homes more inefficient [ sic, meaning energy
efficient ], their product appliances more efficient, we’re doing
everything we possibly can to try to help the bills be kept down,
while we’re having to make these big investments to keep the lights
on, and to make sure that we don’t cook the planet, as you say.
[ Tom Heap ]
You mention the lights going out. There are predictions that we’re
headed towards just 2% of spare capacity in the system in a few years’
Are you worried about the dangers of, I don’t know, maybe not lights
going out for some people, but perhaps big energy users being told
when and when [ sic, meaning where ] they can’t use power in the
[ Ed Davey ]
Well, there’s no doubt that as the coal power stations come offline,
and the nuclear power plants, er, close, we’re going to have make sure
that new power plants are coming on to replace them.
And if we don’t, there will be a problem with energy security.
Now we’ve been working very hard over a long time now to make sure we
attract that investment. We’ve been working with Ofgem, the regulator;
with National Grid, and we’re…
[ Tom Heap ]
…Being [ or it's being ] tough. I don’t see companies racing to come
and fill in the gap here and those coal power plants are going off
[ Ed Davey ]
…we’re actually having record levels of energy investment in the country.
The problem was for 13 years under the last Government
[ same old, same old Coalition argument ] we saw low levels of investment
in energy, and we’re having to race to catch up, but fortunately we’re
winning that race. And we’re seeing, you know, billions of pounds
invested but we’ve still got to do more. We’re not there. I’m not
pretending we’re there yet. [ Are we there, yet ? ] But we do have the
policies in place.
So, Ofgem is currently consulting on a set of proposals which will
enable it to have reserve power to switch on at the peak if it’s
We’re, we’ve, bringing forward proposals in the Energy Bill for what’s
called a Capacity Market, so we can auction to get that extra capacity
So we’ve got the policies in place.
[ Tom Heap ]
Some of Ed Davey’s policies, not least the LibDem [ Liberal Democrat
Party ] U-turn on nuclear, have been guided by DECC [ Department of
Energy and Climate Change ] Chief Scientist David MacKay, author of
the influential book “Renewable Energy without the Hot Air” [ sic,
actually "Sustainable Energy without the Hot Air" ].
Does he think the lights will dim in the second half of this decade ?
[ David MacKay ]
I don’t think there’s going to be any problem maintaining the capacity
that we need. We just need to make clear where Electricity Market
Reform [ EMR, part of the Energy Bill ] is going, and the way in which
we will be maintaining capacity.
[ Tom Heap ]
But I don’t quite understand that, because it seems to me, you know,
some of those big coal-fired power stations are going to be going off.
What’s going to be coming in their place ?
[ David MacKay ]
Well, the biggest number of power stations that’s been built in the
last few years are gas power stations, and we just need a few more gas
power stations like that, to replace the coal, and hopefully some
nuclear power stations will be coming on the bars, as well as the wind
farms that are being built at the moment.
[ Tom Heap ]
And you’re happy with that increase in gas-fired power stations, are
you ? I mean, you do care deeply, personally, about reducing our
greenhouse gases, and yet you’re saying we’re going to have to build
more gas-fired power stations.
[ David MacKay ]
I do. Even in many of the pathways that reach the 2050 target, there’s
still a role for gas in the long-term, because some power sources like
wind and solar power are intermittent, so if you want to be keeping
the lights on in 2050 when there’s no wind and there’s no sun, you’re
going to need some gas power stations there. Maybe not operating so
much of the time as they do today, but there’ll still be a role in
keeping the lights on.
[ KLAXON ! If gas plants are used only for peak periods or for backup to
renewables, then the carbon emissions will be much less than if they are
running all the time. ]
[ Tom Heap ]
Many energy experts though doubt that enough new wind power or nuclear
capacity could be built fast enough to affect the sums in a big way by
But that isn’t the only critical date looming over our energy system.
Even more challenging, though more distant, is the legally binding
objective of cutting greenhouse gas emissions in 2050.
David MacKay wants that certainty to provide the foundation for energy
decisions, and he showed me the effect of different choices with the
“Ultimate Future Energy App”. I was in his office, but anyone can try it online.
[ David MacKay ]
It’s a 2050 calculator. It computes energy demand and supply in
response to your choices, and it computes multiple consequences of
your choices. It computes carbon consequences. It also computes for
you estimates of air quality, consequences of different choices;
security of supply, consequences; and the costs of your choices.
So with this 2050 calculator, it’s an open source tool, and anyone can
go on the web and use the levers to imagine different futures in 2050
of how much action we’ve taken in different demand sectors and in
different supply sectors.
The calculator has many visualisations of the pathway that you’re choosing
and helps people understand all the trade-offs… There’s no silver
bullet for any of this. If I dial up a pathway someone made earlier,
we can visualise the implications in terms of the area occupied for
the onshore wind farms, and the area in the sea for the offshore wind
farms, and the length of the wave farms that you’ve built, and the
land area required for energy crops.
And many organisations have used this tool and some of them have given
us their preferred pathway. So you can see here the Friends of the
Earth have got their chosen pathway, the Campaign to Protect Rural
England, and various engineers like National Grid and Atkins have got
So you can see alternative ways of achieving our targets, of keeping
the lights on and taking climate change action. All of those pathways
all meet the 2050 target, but they do so with different mixes.
[ Tom Heap ]
And your view of this is you sort of can’t escape from the scientific
logic and rigour of it. You might wish things were different or you
could do it differently, but you’re sort of saying “Look, it’s either
one thing or the other”. That’s the point of this.
[ David MacKay ]
That’s true. You can’t be anti-everything. You can’t be anti-wind and
anti-nuclear and anti-home insulation. You won’t end up with a plan
that adds up.
[ KLAXON ! But you can be rationally against one or two things, like
expensive new nuclear power, and carbon and particulate emissions-heavy
biomass for the generation of electricity. ]
[ Tom Heap ]
But isn’t that exactly kind of the problem that we’ve had, without
pointing political fingers, that people rather have been
anti-everything, and that’s why we’re sort of not producing enough new
energy sources ?
[ David MacKay ]
Yeah. The majority of the British public I think are in favour of many
of these sources, but there are strong minorities who are vocally
opposed to every one of the major levers in this calculator. So one
aspiration I have for this tool is it may help those people come to a
position where they have a view that’s actually consistent with the
goal of keeping the lights on.
[ Tom Heap ]
Professor MacKay’s calculator also computes pounds and pence,
suggesting that both high and low carbon electricity work out pricey
in the end.
[ David MacKay ]
The total costs of all the pathways are pretty much the same.
“Business as Usual” is cheaper in the early years, and then pays more,
because on the “Business as Usual”, you carry on using fossil fuels,
and the prices of those fossil fuels are probably going to go up.
All of the pathways that take climate change action have a similar
total cost, but they pay more in the early years, ’cause you have to
pay for things like building insulation and power stations, like
nuclear power stations, or wind power, which cost up-front, but then
they’re very cheap to run in the future.
[ KLAXON ! Will the cost of decommissioning nuclear reactors and the
costs of the waste disposal be cheap ? I think not... ]
So the totals over the 40 or 50 year period here, are much the same for these.
[ Tom Heap ]
The cheapest immediate option of all is to keep shovelling the coal.
And last year coal overtook gas to be our biggest electricity
generation source, pushing up overall carbon emissions along the way
[ KLAXON ! This is not very good for energy security - look where the
coal comes from... ]
As we heard earlier, most coal-fired power stations are scheduled for
termination, but some have won a reprieve, and trees are their
Burning plenty of wood chip [ actually, Tom, it's not wood "chip", it's
wood "pellets" - which often have other things mixed in with the wood,
like coal... ] allows coal furnaces to cut the sulphur dioxide and nitrous
oxide belching from their chimneys to below the level that requires their
closure under European law.
But some enthusiasts see wood being good for even more.
[ Outside ]
It’s one of those Autumn days that promises to be warm, but currently
is rather moist. I’m in a field surrounded by those dew-laden cobwebs
you get at this time of year.
But in the middle of this field is a plantation of willow. And I’m at
Rothamsted Research with Angela Karp who’s one of the directors here.
Angela, tell me about this willow I’m standing in front of here. I
mean, it’s about ten foot high or so, but what are you seeing ?
[ Angela Karp ]
Well, I’m seeing one of our better varieties that’s on display here.
We have a demonstration trial of about ten different varieties. This
is a good one, because it produces a lot of biomass, quite easily,
without a lot of additional fertilisers or anything. And as you can
see it’s got lovely straight stems. It’s got many stems, and at the
end of three years, we would harvest all those stems to get the
biomass from it. It’s nice and straight – it’s a lovely-looking, it’s
got no disease, no insects on it, very nice, clean willow.
[ Tom Heap ]
So, what you’ve been working on here as I understand it is trying to
create is the perfect willow – the most fuel for the least input – and
the easiest to harvest.
[ Angela Karp ]
That’s absolutely correct, because the whole reason for growing these
crops is to get the carbon from the atmosphere into the wood, and to
use that wood as a replacement for fossil fuels. Without putting a lot
of inputs in, because as soon as you add fertilisers you’re using
energy and carbon to make them, and that kind of defeats the whole
purpose of doing this.
[ KLAXON ! You don't need to use fossil fuel energy or petrochemicals or
anything with carbon emissions to make fertiliser ! ... Hang on, these
are GM trees, right ? So they will need inputs... ]
[ Tom Heap ]
And how much better do you think your new super-variety is, than say,
what was around, you know, 10 or 15 years ago. ‘Cause willow as an
idea for burning has been around for a bit. How much of an improvement
is this one here ?
[ Angela Karp ]
Quite a bit. So, these are actually are some of the, if you like,
middle-term varieties. So we started off yielding about 8 oven-dry
tonnes per hectare, and now we’ve almost doubled that.
[ Tom Heap ]
How big a place do you think biomass can have in the UK’s energy
picture in the future ?
[ Angela Karp ]
I think that it could contribute between 10% and 15% of our energy. If
we were to cultivate willows on 1 million hectares, we would probably
provide about 3% to 4% of energy in terms of electricity, and I think
that’s kind of a baseline figure. We could cultivate them on up to 3
million hectares, so you can multiply things up, and we could use them
in a much more energy-efficient way.
[ KLAXON ! Is that 4% of total energy or 4% of total electricity ?
[ Tom Heap ]
Do we really have 3 million hectares going a-begging for planting willow in ?
[ Angela Karp ]
Actually, surprisingly we do. So, people have this kind of myth
there’s not enough land, but just look around you and you will find
there’s lots of land that’s not used for cultivating food crops.
We don’t see them taking over the whole country. We see them being
grown synergistically with food crops.
[ KLAXON ! This is a bit different than the statement made in 2009. ]
[ Tom Heap ]
But I’d just like to dig down a little bit more into the carbon cycle
of the combustion of these things, because that’s been the recent
criticism of burning a lot of biomass, is that you put an early spike
in the amount of carbon in the atmosphere, if you start burning a lot
of biomass, because this [ sounds of rustling ], this plant is going
to be turned into, well, partly, CO2 in the atmosphere.
[ Angela Karp ]
Yes, I think that’s probably a simple and not totally correct way of
looking at it. ‘Cause a lot depends on the actual conversion process
you are using.
So some conversion processes are much more efficient at taking
everything and converting it into what you want.
Heat for example is in excess of 80%, 90% conversion efficiency.
Electricity is a little bit more of the problem. And there, what
they’re looking at is capturing some of the carbon that you lose, and
converting that back in, in carbon storage processes, and that’s why
there’s a lot of talk now about carbon storage from these power
That I think is the future. It’s a question of connecting up all parts
of the process, and making sure that’s nothing wasted.
[ Tom Heap ]
So, is wood a desirable greener fuel ?
Not according to Almuth Ernsting of Biofuelwatch, who objects to the
current plans for large-scale wood burning, its use to prop up coal,
and even its low carbon claims.
[ Almuth Ernsting ]
The currently-announced industry plans, and by that I mean existing
power stations, but far more so, power stations which are in the
planning process [ and ] many of which have already been consented –
those [ biomass ] power stations, would, if they all go ahead,
require to burn around 82 million tonnes of biomass, primarily wood,
every year. Now by comparison, the UK in total only produces around
10 million tonnes, so one eighth of that amount, in wood, for all
industries and purposes, every year.
We are looking on the one hand at a significant number of proposed,
and in some cases, under-construction or operating new-build biomass
power stations, but the largest single investment so far going into
the conversion of coal power station units to biomass, the largest and
most advanced one of which at the moment is Drax, who are, have
started to move towards converting half their capacity to burning wood
[ Tom Heap ]
Drax is that huge former, or still currently, coal-fired power station
in Yorkshire, isn’t it ?
[ Almuth Ernsting ]
Right, and they still want to keep burning coal as well. I mean, their
long-term vision, as they’ve announced, would be for 50:50 coal and
[ Tom Heap ]
What do you think about that potential growth ?
[ Almuth Ernsting ]
Well, we’re seriously concerned. We believe it’s seriously bad news
for climate change, it’s seriously bad news for forests, and it’s
really bad news for communities, especially in the Global South, who
are at risk of losing their land for further expansion of monoculture
tree plantations, to in future supply new power stations in the UK.
A really large amount, increasingly so, of the wood being burned,
comes from slow-growing, whole trees that are cut down for that
purpose, especially at the moment in temperate forests in North
America. Now those trees will take many, many decades to grow back
and potentially re-absorb that carbon dioxide, that’s if they’re
allowed and able to ever grow back.
[ Tom Heap ]
There’s another technology desperate for investment, which is critical
to avoiding power failure, whilst still hitting our mid-century carbon
reduction goals – CCS – Carbon Capture and Storage, the ability to
take the greenhouse gases from the chimney and bury them underground.
It’s especially useful for biomass and coal, with their relatively
high carbon emissions, but would also help gas be greener.
The Chancellor has approved 30 new gas-fired power stations, so long
as they are CCS-ready [ sic, should be "capture ready", or
"carbon capture ready" ].
Jon Gibbons is the boss of the UK CCS Research Centre, based in an
industrial estate in Sheffield.
[ Noise of processing plant ]
Jon’s just brought me up a sort of 3D maze of galvanized steel and
shiny metal pipes to the top of a tower that must be 20 or so metres
Jon, what is this ?
[ Jon Gibbons ]
OK, so this is our capture unit, to take the CO2 out of the combustion
products from gas or coal. In the building behind us, in the test rigs
we’ve got, the gas turbine or the combustor rig, we’re burning coal or
gas, or oil, but mainly coal or gas.
We’re taking the combustion products through the green pipe over
there, bringing it into the bottom of the unit, and then you can see
these big tall columns we’ve got, about 18 inches diameter, half a
metre diameter, coming all the way up from the ground up to the level
It goes into one of those, it gets washed clean with water, and it
goes into this unit over here, and there it meets an amine solvent, a
chemical that will react reversibly with CO2, coming in the opposite
direction, over packing. So, it’s like sort of pebbles, if you can
imagine it, there’s a lot of surface area. The gas flows up, the
liquid flows down, and it picks up the CO2, just mainly the CO2.
[ Tom Heap ]
And that amine, that chemical as you call it, is stripping the CO2 out
of that exhaust gas. This will link to a storage facility.
What would then happen to the CO2 ?
[ Jon Gibbons ]
What would then happen is that the CO2 would be compressed up to
somewhere in excess of about 100 atmospheres. And it would turn from
being a gas into something that looks like a liquid, like water, about
the same density as water. And then it would be taken offshore in the
UK, probably tens or hundreds of kilometres offshore, and it would go
deep, deep down, over a kilometre down into the ground, and basically
get squeezed into stuff that looks like solid rock. If you go and look
at a sandstone building – looks solid, but actually, maybe a third of
it is little holes. And underground, where you’ve got cubic kilometres
of space, those little holes add up to an awful lot of free space. And
the CO2 gets squeezed into those, over time, and it spreads out, and
it just basically sits there forever, dissolves in the water, reacts
with the rocks, and will stay there for millions of years.
[ Tom Heap ]
Back in his office, I asked Jon why CCS seemed to be stuck in the lab.
[ Jon Gibbons ]
We’re doing enough I think on the research side, but what we really
need to do, is to do work on a full-scale deployment. Because you
can’t work on research in a vacuum. You need to get feedback –
learning by doing – from actual real projects.
And a lot of the problems we’ve got on delivering CCS, are to do with
how you handle the regulation for injecting CO2, and again, you can
only do that in real life.
So what we need to do is to see the commercialisation projects that
are being run by the Department of Energy and Climate Change actually
going through to real projects that can be delivered.
[ Tom Heap ]
Hmm. When I talk to engineers, they’re always very passionate and
actually quite optimistic about Carbon Capture and Storage. And when
I talk to people in industry, or indeed read the headlines, not least
a recent cancellation in Norway, it always seems like a very bleak picture.
[ Jon Gibbons ]
I think people are recognising that it’s getting quite hard to get
money for low carbon technologies.
So – recent presentation we had at one of our centre meetings, was
actually a professor from the United States, Howard Herzog. And he
said “You think you’re seeing a crisis in Carbon Capture and Storage.
But what you’re actually seeing is a crisis in climate change
[ KLAXON ! Priming us for a scaling back of commitment to the
Climate Change Act ? I do hope not. ]
Now, Carbon Capture and Storage, you do for no other purpose than
cutting CO2 emissions to the atmosphere, and it does that extremely
effectively. It’s an essential technology for cutting emissions. But
until you’ve got a global process that says – actually we’re going to
get on top of this problem; we’re going to cut emissions – get them to
safe level before we actually see people dying in large numbers from
climate change effects – ’cause, certainly, if people start dying,
then we will see a response – but ideally, you’d like to do it before
then. But until you get that going, then actually persuading people to
spend money for no other benefit than sorting out the climate is
There’s just no point, you know, no country can go it alone, so you
have to get accommodation. And there, we’re going through various
processes to debate that. Maybe people will come to an accommodation.
Maybe the USA and China will agree to tackle climate change. Maybe
What I am fairly confident is that you won’t see huge, you know,
really big cuts in CO2 emissions without that global agreement. But
I’m also confident that you won’t see big cuts in CO2 emissions
without CCS deployment.
And my guess is there’s about a 50:50 chance that we do CCS before we
need to, and about a 50:50 chance we do it after we have to. But I’m
pretty damn certain we’re going to do it.
[ Tom Heap ]
But we can’t wait for a global agreement that’s already been decades
in the making, with still no end in sight.
We need decisions now to provide more power with less pollution.
[ Music lyrics : "What's the plan ? What's the plan ?" ]
[ Tom Heap ]
Dieter Helm, Professor of Energy Policy at the University of Oxford
believes we can only deliver our plentiful green energy future if we
abandon our attitude of buy-now pay-later.
[ KLAXON ! Does he mean a kind of hire purchase energy economy ?
I mean, we're still paying for nuclear electricity from decades ago,
in our bills, and through our taxes to the Department of Energy and
Climate Change. ]
[ Dieter Helm ]
There’s a short-term requirement and a long-term requirement. The
short-term requirement is that we’re now in a real pickle. We face
this energy crunch. We’ve got to try to make the best of what we’ve
got. And I think it’s really like, you know, trying to get the
Spitfires back up again during the Battle of Britain. You know, you
patch and mend. You need somebody in command. You need someone
in control. And you do the best with what you’ve got.
In that context, we then have to really stand back and say, “And this
is what we have to do to get a serious, long-term, continuous, stable
investment environment, going forward.” In which, you know, we pay the
costs, but of course, not any monopoly profits, not any excess
profits, but we have a world in which the price of electricity is
related to the cost.”
[ KLAXON ! Is Dieter Helm proposing state ownership of energy plant ? ]
[ Programme anchor ]
“Costing the Earth” was presented by Tom Heap, and made in Bristol by
[ Next broadcast : 16th October 2013, 21:00, BBC Radio 4 ]Assets not Liabilities, Big Number, Big Picture, Big Society, Biofools, Biomess, British Sea Power, Burning Money, Carbon Army, Carbon Capture, Carbon Pricing, Change Management, Climate Change, Climate Chaos, Climate Damages, Coal Hell, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Dead Zone, Demoticratica, Design Matters, Direction of Travel, Disturbing Trends, Dreamworld Economics, Efficiency is King, Electrificandum, Emissions Impossible, Energy Autonomy, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Energy Socialism, Engineering Marvel, Environmental Howzat, Food Insecurity, Forestkillers, Fossilised Fuels, Genetic Modification, Geogingerneering, Green Investment, Green Power, Growth Paradigm, Health Impacts, Hide the Incline, Human Nurture, Incalculable Disaster, Insulation, Major Shift, Mass Propaganda, Media, Money Sings, National Energy, National Power, Neverending Disaster, No Pressure, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Peak Coal, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Resource, Resource Curse, Resource Wards, Solution City, Technofix, Technological Fallacy, Technological Sideshow, Technomess, The Price of Gas, The Price of Oil, The War on Error, Tree Family, Ungreen Development, Western Hedge, Wind of Fortune
Posted on October 15th, 2013 No comments
Image Credit : Carbon Brief
After Gordon Brown MP, the UK’s former Prime Minister, was involved in several diplomatic missions around the time of the oil price spike crisis in 2008, and the G20 group of countries went after fossil fuel subsidies (causing easily predictable civil disturbances in several parts of the world), it seemed to me to be obvious that energy price control would be a defining aspect of near-term global policy.
With the economy still in a contracted state (with perhaps further contraction to follow on), national interest for industrialised countries rests in maintaining domestic production and money flows – meaning that citizens should not face sharply-rising utility bills, so that they can remain active in the economy.
In the UK, those at the fringe of financial sustainability are notoriously having to face the decision about whether to Eat or Heat, and Food Banks are in the ascendance. Various charity campaigns have emphasised the importance of affordable energy at home, and the leader of the Labour Party, Ed Miliband MP has made an energy price freeze a potential plank of his policy ahead of the push for the next General Election.
The current Prime Minister, David Cameron MP has called this commitment a “con”, as his political counterpart cannot determine the wholesale price of gas (or power) in the future.
This debate comes at a crucial time in the passage of the UK Energy Bill, as the Electricity Market Reform (EMR), a key component of this legislation has weighty subsidies embedded in it for new nuclear power and renewable energy, and also backup plants (mostly Natural Gas-fired) for periods of high power demand, in what is called the “Capacity Market“. These subsidies will largely be paid for by increases in electricity bills, in one way or another.
The EMR hasn’t yet passed into the statute books, so the majority of “green energy taxes” haven’t yet coming into being – although letters of “comfort” may have been sent to to (one or more) companies seeking to invest in new nuclear power facilities, making clear the UK Government’s monetary commitment to fully supporting the atomic “renaissance”.
With a bucketload of chutzpah, Scottish and Southern Energy (SSE) and Electricite de France’s Vincent de Rivaz blamed green energy policies for contributing to past, current and future power price rises. Both of these companies stand to gain quite a lot from the EMR, so their blame-passing sounds rather hollow.
The Daily Mail and the Daily Telegraph have seemed to me to be incendiary regarding green energy subsidies, omitting to mention that whilst the trajectory of the cost of state support for renewable energy is easily calculated, volatility in global energy markets for gas and oil – and even coal – are indeterminable. Although “scandal-hugging” (sensation equals sales) columnists and editors at the newspapers don’t seem to have an appreciation of what’s really behind energy price rises, the Prime Minister – and Ed Davey MP – have got it – and squarely placed the responsibility for energy price rises on fossil fuels.
The price tag for “green energy policies” – even those being offered to (low carbon, but not “green”) nuclear power – should be considerably less than the total bill burden for energy, and hold out the promise of energy price stabilisation or even suppression in the medium- to long-term, which is why most political parties back them.
The agenda for new nuclear power appears to be floundering – it has been suggested by some that European and American nuclear power companies are not solvent enough to finance a new “fleet” of reactors. In the UK, the Government and its friends in the nuclear industry are planning to pull in east Asian investment (in exchange for large amounts of green energy subsidies, in effect). I suspect a legal challenge will be put forward should a trade agreement of this nature be signed, as soon as its contents are public knowledge.
The anger stirred up about green energy subsidies has had a reaction from David Cameron who has not dispensed with green energy policy, but declared that subsidies should not last longer than they are needed – probably pointing at the Germany experience of degressing the solar power Feed-in Tariff – although he hasn’t mentioned how nuclear subsidies could be ratcheted down, since the new nuclear programme will probably have to rely on state support for the whole of its lifecycle.
Meanwhile, in the Press, it seems that green energy doesn’t work, that green energy subsidies are the only reason for energy bill rises, we should drop the Climate Change Act, and John Prescott MP, and strangely, a woman called Susan Thomas, are pushing coal-fired power claiming it as the cheaper, surer – even cleaner – solution, and there is much scaremongering about blackouts.
John Prescott on why it’s coal power to the people
12 Oct 2013
We can’t just stand back and give these energy companies money to burn.
It’s only 72 days until Christmas. But the greedy big six energy companies are giving themselves an early present. SSE has just announced an inflation-beating 8.2 per cent price rise on gas and electricity.
The other five will soon follow suit, no doubt doing their best to beat their combined profit from last year of £10billion.
Their excuse now is to blame climate change. SSE says it could cut bills by £110 if Government, not the Big Six, paid for green energy subsidies and other environmental costs, such as free loft insulation.
So your bill would look smaller but you’d pay for it with higher taxes. Talk about smoke and mirrors.
But Tory-led governments have always been hopeless at protecting the energy security of this country.
It’s almost 40 years since Britain was hit by blackouts when the Tories forced the UK into a three-day week to conserve energy supplies.
But Ofgem says the margin of security between energy demand and supply will drop from 14 per cent to 4 per cent by 2016. That’s because we’ve committed to closing nine oil and coal power stations to meet EU environmental law and emissions targets. These targets were meant to encourage the UK to move to cleaner sources of energy.
But this government drastically reduced subsidies for renewable energy such as wind and solar, let Tory energy ministers say “enough is enough” to onshore wind and failed to get agreement on replacing old
nuclear power stations.
On top of that, if we experience a particularly cold winter, we only have a reserve of 5 per cent.
But the Government is committed to hundreds of millions pounds of subsidies to pay the energy companies to mothball these oil and coal power stations. As someone who negotiated the first Kyoto agreement in 1997 and is involved in its replacement by 2015, it is clear European emissions targets will not be met in the short term by 2020.
So we have to be realistic and do what we can to keep the lights on, our people warm and our country running.
We should keep these oil and coal power stations open to reduce the risk of blackouts – not on stand-by or mothballed but working now.
The former Tory Energy minister John Hayes hinted at this but knew he couldn’t get it past his Lib Dem Energy Secretary boss Ed Davey. He bragged he’d put the coal in coalition. Instead he put the fire in fired.
We can’t just stand back and give these energy companies money to burn. The only energy security they’re interested in is securing profit and maximising taxpayer subsidies.
That’s why Ed Miliband’s right to say he’d freeze bills for 20 months and to call for more transparency.
We also need an integrated mixed energy policy – gas, oil, wind, nuclear and, yes, coal.
Bills have risen to pay for policy changes
Tuesday 8th October 2013
THE recent Labour Party pledge to freeze energy bills demonstrated how to have a political cake and eat it. The pledge is an attempt to rectify a heinous political mistake caused by political hubris and vanity.
In 2008, the then energy minister, Ed Miliband, vowed to enact the most stringent cuts in power emissions in the entire world to achieve an unrealistic 80 per cent cut in carbon emissions by closing down fully functioning coal power stations.
He was playing the role of climate saint to win popularity and votes.
I was a member when Ed Miliband spoke in Oxford Town Hall to loud cheers from numerous low-carbon businesses, who stood to profit from his legislation. I was concerned at the impact on the consumer, since it is widely known that coal power stations offer the cheapest energy to consumers compared to nuclear and wind.
So I wrote to Andrew Smith MP at great length and he passed on my concerns to the newly-formed Department of Energy and Climate Change that had replaced the previous Department of Energy and Business.
This new department sent me a lengthy reply, mapping out their plans for wind turbines at a projected cost to the consumer of £100bn to include new infrastructure and amendments to the National Grid. This cost would be added to consumer electricity bills via a hidden green policy tariff.
This has already happened and explains the rise in utility bills.
Some consumers are confused and wrongly believe that energy companies are ‘ripping them off’.
It was clearly stated on Channel 4 recently that energy bills have risen to pay for new policy changes. These policy changes were enacted by Ed Miliband in his popularity bid to play climate saviour in 2008. Energy bills have now rocketed. So Ed has cost every single consumer in the land several hundred pounds extra on their bills each year.
SUSAN THOMAS, Magdalen Road, Oxford
14th October 2013
[ Turned off: Didcot power station's closure could lead to power cuts. ]
Labour’s power failures will cost us all dear
THE Labour Party’s pledge to freeze energy bills is an attempt to rectify a horrible political mistake. But it might be too late to dig us out of the financial black hole caused by political vanity.
In 2008, then Energy Minister Ed Miliband vowed to enact the most stringent cuts in power emissions in the world to achieve an unrealistic 80 per cent cut in carbon emissions by closing down coal power stations. He was playing the role of climate saint to win votes.
I was in the audience in Oxford Town Hall that day and recall the loud cheers from numerous representatives of low-carbon businesses as his policies stood to make them all rather wealthy, albeit at the expense of every electricity consumer in the land.
I thought Ed had become entangled in a spider’s web.
I was concerned at the impact on the consumer as it’s widely known that coal power stations offer the cheapest energy to consumers.
I contacted the Department of Energy and Climate Change and it sent me a lengthy reply mapping out its plans for energy projects and wind turbines – at a projected cost to the consumer of £100 billion – including new infrastructure and national grid amendments.
It explained the cost would be added to consumer electricity bills via a ‘green policy’ tariff. This has now happened and explains the rise in utility bills.
Some consumers wrongly believe the energy companies are ripping them off. In fact, energy bills have risen to pay for policy changes.
The people to benefit from this are low-carbon venture capitalists and rich landowners who reap subsidy money (which ultimately comes from the hard-hit consumer) for having wind farms on their land.
Since Didcot power station closed I’ve suffered five power cuts in my Oxford home. If we have a cold winter, we now have a one-in-four chance of a power cut.
The 2008 legislation was a huge mistake. When power cuts happen, people will be forced to burn filthy coal and wood in their grates to keep warm, emitting cancer-causing particulates.
Didcot had already got rid of these asthma-causing particulates and smoke. It emitted mainly steam and carbon dioxide which aren’t harmful to our lungs. But the clean, non-toxic carbon dioxide emitted by Didcot was classified by Mr Miliband as a pollutant. We are heading into a public health and financial disaster.
SUSAN THOMAS, Oxford
CEOs demand reform of EU renewable subsidies
By Dave Keating – 11.10.2013
Companies ask the EU to stop subsidising the renewable energy sector.
The CEOs of Europe’s ten biggest energy companies called for the European Union and member states to stop subsidising the renewable energy sector on Friday (11 October), saying that the priority access given to the sector could cause widespread blackouts in Europe over the winter.
At a press conference in Brussels, Paolo Scaroni, CEO of Italian oil and gas company ENI, said: “In the EU, companies pay three times the price of gas in America, twice the price of power. How can we dream of an industrial renaissance with such a differential?”
The CEOs said the low price of renewable energy as a result of government subsidies is causing it to flood the market. They called for an EU capacity mechanism that would pay utilities for keeping electric power-generating capacity on standby to remedy this problem.
They also complained that the low price of carbon in the EU’s emissions trading scheme (ETS) is exacerbating the problem…
Well said, Sir Tim
Days after David Cameron orders a review of green taxes, which add £132 to power bills, the Lib Dem Energy Secretary vows to block any attempt to cut them.
Reaffirming his commitment to the levies, which will subsidise record numbers of inefficient wind farms approved this year, Ed Davey adds: ‘I think we will see more price rises.’
The Mail can do no better than quote lyricist Sir Tim Rice, who has declined more than £1million to allow a wind farm on his Scottish estate. ‘I don’t see why rich twits like me should be paid to put up everybody else’s bills,’ he says. ‘Especially for something that doesn’t work.’Assets not Liabilities, Bait & Switch, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Breathe Easy, Burning Money, Change Management, Coal Hell, Conflict of Interest, Corporate Pressure, Dead End, Dead Zone, Deal Breakers, Delay and Deny, Demoticratica, Design Matters, Direction of Travel, Divide & Rule, Dreamworld Economics, Economic Implosion, Emissions Impossible, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Energy Socialism, Foreign Investment, Fossilised Fuels, Fuel Poverty, Green Investment, Green Power, Hydrocarbon Hegemony, Insulation, Mass Propaganda, Media, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Orwells, Paradigm Shapeshifter, Policy Warfare, Political Nightmare, Price Control, Public Relations, Regulatory Ultimatum, Social Capital, Social Change, Social Chaos, Social Democracy, Stirring Stuff, Sustainable Deferment, The Power of Intention, The Price of Gas, The Science of Communitagion, The War on Error, Ungreen Development, Vote Loser, Wind of Fortune
Posted on July 15th, 2013 4 comments
I wonder to myself – how wrong can James Delingpole get ? He, and Christopher Booker and Richard North, have recently attempted to describe something very, very simple in the National Grid’s plans to keep the lights on. And have failed, in my view. Utterly. In my humble opinion, it’s a crying shame that they appear to influence others.
“Dellingpole” (sic) in the Daily Mail, claims that the STOR – the Short Term Operating Reserve (not “Operational” as “Dellingpole” writes) is “secret”, for “that significant period when the wind turbines are not working”, and that “benefits of the supposedly ‘clean’ energy produced by wind turbines are likely to be more than offset by the dirty and inefficient energy produced by their essential diesel back-up”, all of which are outrageously deliberate misinterpretations of the facts :-
“The dirty secret of Britain’s power madness: Polluting diesel generators built in secret by foreign companies to kick in when there’s no wind for turbines – and other insane but true eco-scandals : By James Dellingpole : PUBLISHED: 00:27, 14 July 2013″
If “Dellingpole” and his compadre in what appear to be slurs, Richard North, were to ever do any proper research into the workings of the National Grid, they would easily uncover that the STOR is a very much transparent, publicly-declared utility :-
STOR is not news. Neither is the need for it to be beefed up. The National Grid will lose a number of electricity generation facilities over the next few years, and because of the general state of the economy (and resistance to wind power and solar power from unhelpful folk like “Dellingpole”) investment in true renewables will not entirely cover this shortfall.
Renewable energy is intermittent and variable. If an anticyclone high pressure weather system sits over Britain, there could be little wind. And if the sky is cloudy, there could be much less sun than normal. More renewable power feeding the grid means more opportunities when these breaks in service amount to something serious.
Plus, the age of other electricity generation plants means that the risk of “unplanned outage”, from a nuclear reactor, say, is getting higher. There is a higher probability of sudden step changes in power available from any generator.
The gap between maximum power demand and guaranteed maximum power generation is narrowing. In addition, the threat of sudden changes in output supply is increasing.
With more generation being directly dependent on weather conditions and the time of day, and with fears about the reliability of ageing infrastructure, there is a need for more very short term immediate generation backup to take up the slack. This is where STOR comes in.
Why does STOR need to exist ? The answer’s in the name – for short term balancing issues in the grid. Diesel generation is certainly not intended for use for long periods. Because of air quality issues. Because of climate change issues. Because of cost.
If the Meteorological Office were to forecast a period of low wind and low incident solar radiation, or a nuclear reactor started to dip in power output, then the National Grid could take an old gas plant (or even an old coal plant) out of mothballs, pull off the dust sheets and crank it into action for a couple of days. That wouldn’t happen very often, and there would be time to notify and react.
But if a windfarm suddenly went into the doldrums, or a nuclear reactor had to do an emergency shutdown, there would be few power stations on standby that could respond immediately, because it takes a lot of money to keep a power plant “spinning”, ready to use at a moment’s notice.
So, Delingpole, there’s no conspiracy. There’s engagement with generators to set up a “first responder” network of extra generation capacity for the grid. This is an entirely public process. It’s intended for short bursts of immediately-required power because you can’t seem to turn your air conditioner off. The cost and emissions will be kept to a minimum. You’re wrong. You’re just full of a lot of hot air.Assets not Liabilities, Be Prepared, Big Number, Big Picture, Burning Money, Change Management, Coal Hell, Corporate Pressure, Cost Effective, Design Matters, Disturbing Trends, Energy Change, Energy Insecurity, Energy Revival, Extreme Energy, Extreme Weather, Insulation, Money Sings, National Energy, National Power, Optimistic Generation, Orwells, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Peak Energy, Price Control, Realistic Models, Regulatory Ultimatum, Solution City, Stirring Stuff, Technofix, The Price of Gas, The Price of Oil, The War on Error, Unutterably Useless, Utter Futility, Vain Hope, Western Hedge, Wind of Fortune
Posted on July 12th, 2013 1 commentAssets not Liabilities, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Burning Money, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Rationing, Carbon Taxatious, Change Management, Climate Change, Coal Hell, Contraction & Convergence, Cost Effective, Dead End, Demoticratica, Direction of Travel, Disturbing Trends, Dreamworld Economics, Eating & Drinking, Efficiency is King, Electrificandum, Energy Autonomy, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Extreme Energy, Feed the World, Financiers of the Apocalypse, Freemarketeering, Fuel Poverty, Gamechanger, Green Investment, Green Power, Growth Paradigm, Human Nurture, Hydrocarbon Hegemony, Incalculable Disaster, Insulation, Low Carbon Life, Major Shift, Money Sings, National Energy, National Power, National Socialism, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Energy, Peak Natural Gas, Policy Warfare, Political Nightmare, Price Control, Regulatory Ultimatum, Solution City, Stirring Stuff, Sustainable Deferment, The Price of Gas, Ungreen Development, Voluntary Behaviour Change
Posted on June 3rd, 2013 No comments
[ Image Credit : anonymous ]
Yet again, the fossil fuel companies think they can get away with uncommented public relations in my London neighbourhood. Previously, it was BP, touting its green credentials in selling biofuels, at the train station, ahead of the Olympic Games. For some reason, after I made some scathing remarks about it, the advertisement disappeared, and there was a white blank board there for weeks.
This time, it’s Esso, and they probably think they have more spine, as they’ve taken multiple billboard spots. In fact, the place is saturated with this advertisement. And my answer is – yes, fuel economy is important to me – that’s why I don’t have a car.
And if this district is anything to go by, Esso must be pouring money into this advertising campaign, and so my question is : why ? Why aren’t they pouring this money into biofuels research ? Answer : because that’s not working. So, why aren’t they putting this public relations money into renewable gas fuels instead, sustainable above-surface gas fuels that can be used in compressed gas cars or fuel cell vehicles ?
Are Esso retreating into their “core business” like BP, and Shell, concentrating on petroleum oil and Natural Gas, and thereby exposing all their shareholders to the risk of an implosion of the Carbon Bubble ? Or another Deepwater Horizon, Macondo-style blowout ?
Meanwhile, the movement for portfolio investors to divest from fossil fuel assets continues apace…Academic Freedom, Advertise Freely, Assets not Liabilities, Bait & Switch, Be Prepared, Big Picture, Biofools, Burning Money, Carbon Capture, Change Management, Climate Change, Climate Chaos, Climate Damages, Contraction & Convergence, Corporate Pressure, Cost Effective, Delay and Deny, Design Matters, Direction of Travel, Divide & Rule, Drive Train, Efficiency is King, Emissions Impossible, Energy Autonomy, Energy Change, Energy Denial, Energy Disenfranchisement, Energy Insecurity, Engineering Marvel, Environmental Howzat, Financiers of the Apocalypse, Fossilised Fuels, Freemarketeering, Fuel Poverty, Green Investment, Hydrocarbon Hegemony, Hydrogen Economy, Incalculable Disaster, Low Carbon Life, Major Shift, Marine Gas, Mass Propaganda, Money Sings, Near-Natural Disaster, Neverending Disaster, No Pressure, Nudge & Budge, Oil Change, Paradigm Shapeshifter, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Petrolheads, Protest & Survive, Public Relations, Pure Hollywood, Renewable Gas, Social Change, Social Democracy, Technofix, Technological Sideshow, The Science of Communitagion, Toxic Hazard, Unconventional Foul, Ungreen Development, Unnatural Gas
Posted on February 27th, 2013 No comments
The contribution of coal-fired power generation to the UK’s domestic electrical energy supply appears to have increased recently, according to the December 2012 “Energy Trends” released by the Department of Energy and Climate Change. This is most likely due to coal plants using up their remaining allotted operational hours until they need to retire. It could also be due to a quirk of the international markets – coal availability has increased because of gas glut conditions in the USA leading to higher coal exports. Combatting the use of coal in power generation is a global struggle that still needs to be won, but in the UK, it is planned that low carbon generation will begin to gain ascendance.
The transition to lower carbon energy in Britain relies on getting the Natural Gas strategy right. With the imminent closure of coal-fired power plant, the probable decommissioning of several nuclear reactors, and the small tranche of overall supply coming from renewable resources, Natural Gas needs to be providing a greater overall percentage of electricity in the grid. But an increasing amount of this will be imported, since indigenous production is dropping, and this is putting the UK’s economy at risk of high prices and gas scarcity.
Demand for electricity for the most part changes by a few percentage points a year, but the overall trend is to creep upwards (see Chart 4, here). People have made changes to their lighting power consumption, but this has been compensated for by an increase in power used by “gadgets” (see Chart 4, here). There is not much that can be done to suppress power consumption. Since power generation must increasingly coming from renewable resources and Natural Gas combustion, this implies strong competition between the demand for gas for heating and the demand gas for electricity. Electricity generation is key to the economy, so the power sector will win any competition for gas supplies. If competition for Natural Gas is strong, and since we don’t have much national gas storage, we can expect higher seasonal imports and therefore, higher prices.
It is clear that improving building insulation across the board is critical in avoiding energy insecurity. I shall be checking the winter heat demand figures assiduously from now on, to determine if the Green Deal and related measures are working. If they don’t, the UK is in for heightened energy security risks, higher carbon emissions, and possibly much higher energy prices. The Green Deal simply has to work.Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Burning Money, Coal Hell, Delay and Deny, Direction of Travel, Disturbing Trends, Efficiency is King, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Fossilised Fuels, Fuel Poverty, Global Heating, Global Warming, Green Investment, Green Power, Growth Paradigm, Health Impacts, Insulation, Low Carbon Life, Methane Management, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Peak Coal, Peak Energy, Peak Natural Gas, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Renewable Resource, Social Change, Social Chaos, Solar Sunrise, Solution City, The Data, The Power of Intention, The Price of Gas, Wasted Resource, Western Hedge, Wind of Fortune
Posted on February 26th, 2013 1 comment
As rumours and genuine information leak from central sources about the policy instruments and fiscal measures that will be signed into the United Kingdom’s Energy Bill, the subsidy support likely to be made available to new nuclear power is really straining credibility from my point of view. I am even more on the “incredulous” end of the spectrum of faith in the UK Government’s Energy Policy than I ever was before.
The national demand for electrical power is pretty constant, with annual variations of only a few percent. It was therefore easy to project that there could be a “power cliff” when supply would be curtailed from coal-fired generation under European legislation :-
The pat answer to how we should “Keep the Lights On” has been to wave the new nuclear fission reactor card. Look ! Shiny new toys. Keep us in power for yonks ! And hidden a little behind this fan of aces and jokers, a get-out-of-jail free card from the Coal monopoly – Carbon Capture and Storage or CCS. Buy into this, and we could have hundreds more years of clean power from coal, by pumping nasty carbon dioxide under the sea bed.
Now, here’s where the answers are just plain wrong : new nuclear power cannot be brought into the National Grid before the early 2020s at the very earliest. And options for CCS are still in the balance, being weighed and vetted, and very unlikely to clean up much of the black stuff until well past 2025.
When put through my best onboard guesstimiser, I came up with the above little graph in answer to the question : how soon can the UK build new power generation ? Since our “energy cliff” is likely to be in one of the winters of 2015 or 2016, and we’re not sure other countries we import from will have spare capacity, we have little option but to increase Natural Gas-fired power generation and go hell-for-leather with the wind and solar power deployment.
So no – it’s of no use promising to pay the new nuclear reactor bearer the sum of 40 or more years of subsidy in the form of guaranteed price for power under the scheme known as Contracts for Difference – they still won’t be delivering anything to cope with the “power drain” of the next few years. If this is written into the Electricity Market Reform, we could justifiably say this would destroy competition, and destroy any market, too, and be “central planning” by any other name – this level of subsidy is not exactly “technology-neutral” !
And offering the so-called Capacity Mechanism – a kind of top-up payment to keep old nuclear reactors running, warts and all – when really they should be decommissioned as they are reaching the end of their safe lives, is not a good option, in my book.
Offering the Capacity Mechanism to those who build new gas-fired power plant does make sense, however. If offshore wind power continues with its current trajectory and hits the big time in the next few years, and people want the cheap wind power instead of the gas, and the gas stations will be feeling they can’t run all the time, then the Capacity Mechanism will be vital to make sure the gas plant does get built to back up the wind power, and stays available to use on cold, still nights in February.
Oh, people may complain about the idea of new “unabated” gas power plants, and insist they should be fitted with carbon capture, but new gas plants won’t run all the time in future, because renewable electricity generation will be cheaper, so forcing gas plant owners to pay for CCS seems like overkill to me. And, anyway, we will be decarbonising the gas supply, as we develop supplies of Renewable Gas.
I say forget the nuclear option – build the gas !Assets not Liabilities, Be Prepared, Big Number, Big Picture, British Biogas, Burning Money, Carbon Capture, Change Management, Coal Hell, Corporate Pressure, Demoticratica, Design Matters, Dreamworld Economics, Energy Change, Energy Insecurity, Energy Revival, Energy Socialism, Green Power, Low Carbon Life, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Peak Coal, Policy Warfare, Political Nightmare, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Solar Sunrise, Solution City, The Power of Intention, The Price of Gas, Wind of Fortune
Posted on November 3rd, 2012 No comments
PRASEG Annual Conference 2012
“After EMR: What future for renewable and sustainable energy?”
31st October 2012
One Birdcage Walk, Westminster
Twitter hashtag : #PRASEG12
Dr Mayer Hillman of the Policy Studies Institute has contributed a summary of the questions that he raised at the PRASEG Annual Conference on Wednesday 31st October 2012, together with more background detail, and I am pleased to add this to the record of the day, and wish him a happy 82nd year !
PRASEG Conference 31 October 2012
Questions raised by Dr. Mayer Hillman (Policy Studies Institute) in the following sessions
The Future of Renewable and Sustainable Energy: Panel Session
I can only assume from the statements of each of the panellists of this session that their point of departure is that consumers have an inalienable right to engage in as much energy-intensive activity as they wish. Thereafter, it is the Government’s responsibility to aim to meet as much of the consequent demand as possible, subject only to doing so in the most cost-effective and least environmentally-damaging ways possible.
However as Laura Sandys pointed out in her introduction, “policy must reflect the realities of the world we live in”. The most fundamental of these realities is that the planet’s atmosphere only has a finite capacity to safely absorb further greenhouse gas emissions. Surely, that must be the point of departure for policy if we are to ensure a long-term future for life on earth. That future can only be assured by the adoption of zero-carbon lifestyles as soon as conceivably possible. Simply aiming to increase the contribution of the renewables and of the efficiency with which fossil fuels are used is clearly bound to prove inadequate as the process of climate change is already irreversible.
Demand side policy: The missing element?: Panel Session
Given that the process of climate change cannot now be reversed, at best only slowed down by our actions, continued development of means of matching the predicted huge increase in energy demand whilst minimising its contribution to climate change is seen to be the logical way forward. However, any burning of fossil fuels adds to the already excessive concentration of CO2 in the atmosphere.
The only solution now is the one advocated by the Global Commons Institute since 1996. The extent of GCI’s success, both national and international, is very apparent by looking at the Institute’s website http://www.gci.org.uk. Contraction and Convergence is the framework, that is the contraction of greenhouse gases to a safe level and their convergence to equal per capita shares across the world’s population.
Our chair for this session has been a supporter for several years. Why cannot the panellists see this to be the way ahead rather than taking small steps which, in aggregate, cannot conceivably prevent catastrophe in the longer term?
Keynote address by the Right Hon. Edward Davey, Secretary of State, DECC
The Secretary-of-State has just confirmed the fears that I expressed in the first session of this conference, namely that he sees it to be the Government’s responsibility, if not duty, to ensure that, if at all possible, the burgeoning growth in energy demand predicted for the future is met. To that end, he has just outlined stages of a strategy intended to enable comparisons to be made on “a level playing field” between different types of electricity generation as energy is increasingly likely to be supplied in the form of electricity. To do so, in his view, it is essential that a market price for the release of a tonne of CO2 emissions into the atmosphere is determined.
I have two great reservations about such a process. First, if the price is to cover all the costs incurred then, for instance, the real costs of large scale migration of vast populations fleeing the regions that will be rendered uninhabitable by climate change caused by the increase in the concentration of CO2 in the atmosphere (with more than 100 years continuous impacts) would have to be included. I fail to see how that could be realistically established, let alone its moral implications being acceptable.
Second, we know that we have already passed the stage that would have allowed us to reverse the process of global climate change – just consider the melting of the Arctic ice cap. That market price for the tonne of CO2 emissions, insofar as it could be determined, would have to rise exponentially owing to the planet’s non-negotiable capacity to safely absorb further emissions. Yet the market requires a fixed price to enable decisions affecting the future to be made.
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Posted on September 30th, 2012 No comments
Allegedly, the United Kingdom is about to break free from the Dark Ages of subsidies, and enter the glorious light of a free and light-touch regulated, competitive electricity market.
The Electricity Market Reform is being sold to us as the way to create a level playing field between low carbon electricity generation technologies, whether they be established or new, baseload or variable, costly-up-front or cheap-and-quick-to-grid.
Personally, I do not accept the mythology of the Free Market. I do not accept that a fully competitive, privatised energy sector can be delivered, regardless of the mechanisms proposed. The Electricity Market Reform is less Englightenment and more Obscurantism, in my view – the call of the Magic Flute is going to fall on deaf ears.
Who will play the pipe ? Who will call the tune ? Who will be the Counterparty ?
At the National Grid’s Future Energy Scenarios day conference-seminar on Thursday 27th September 2012, I listened carefully to several spokesmen from the companies, quangos and agencies deny that they would have anything to do with determining, underwriting or administering deals for the EMR’s proposed “Contracts for Difference” (CfD) – essentially setting a guaranteed lowest price for selling electricity to the grid, regardless of market movement. Mark Ripley of the EMR team at National Grid was very clear “National Grid will not be the contractual counterparty for the CfD”. I asked Jonathan Brearley of the UK Government Department of Energy and Climate Change (DECC) at a break who would be independent enough to set the “strike price” – the minimum price for which electricity generators could expect to sell electricity ? He suggested that perhaps the UK Government would set up an independent governing body – gesturing at arm’s length. I asked him rhetorically who could reasonably be expected to be seconded to this new quango – how could they be truly independent…I did not get an opportunity to ask how the CfD revenues and payouts would be administered. I didn’t know at that time about the rumours that Ofgem – the current electricity generation quango regulator – could be closed down under a new Labour Government.
The shadow cast by the nuclear industry
During the presentation by Jonathan Brearley of DECC, he indicated that back room discussions are going on between large potential electricity generation investors and the UK Government. Even before the ink has hit the paper on the EMR draft, it seems the UK Government is inviting large investors to come and talk to them about deals for guaranteed generation sales prices. As far as my notes indicate, he said “The first nuclear project has already approached us for a contract.” I asked him directly in the break if this kind of pre-legislation arrangement was going to allow the nuclear industry to cream off subsidies. He denied that Contracts for Difference would be allocated for current nuclear power plants. He did not admit that there are strong indications that the so-called Capacity Mechanism of the EMR could be applied, propping up the profits of the nuclear power plants already running, and encouraging them to apply for extension licences for their cracked reactors to keep running after they should have been shut down for safety reasons.
After the National Grid meeting, I went to an EcoConnect meeting, where Eric Machiels of Infinis said, in reference to the strong influence of EdF (Electricite de France) in proposing new nuclear reactors in the UK, “The EMR was set up to meet two requirements. [First] to justify incredibly high investments. [And] nuclear – if you need to invest £10 billion or more, 10 years away, you need regulatory certainty…[But you have to know, decisions on nuclear development] will rely on decisions made in the Elysee Palace and not in Number 10.”
Well, it seems clear that the steer is still towards the UK taxpayers and billpayers stumping up to support the ailing French atomic power fleet.
A bit of a big fudge
There is no reason to believe that the Curse of Enron will not haunt the UK energy trading halls if the EMR goes ahead with its various microeconomic policies. Everybody will play for profits, and the strength of over-competitive behaviour between the current market actors will not encourage or permit new market entrants.
At the EcoConnect meeting, Diane Dowdell of Tradelink Solutions warned of the risks of going back to the kind of electricity markets of former decades, “Unless you worked under the Pool, you wouldn’t know how it works. It is a derivative…DECC need to look at Ireland – their Pool system has been utterly destroyed. Please don’t follow in the footsteps of Ireland – get the balancing right.”
The big issue is the macroeconomic need to incentivise investment in new electricity generation plant and infrastructure – something that will not be achieved by flipping microeconomic market trading conditions to benefit low carbon generators. How can new low carbon generators come onto the grid ? By placing focus on investment decisions. New generation has to clear a higher hurdle than how much it can sell green power for on the half-hourly market. Funds and financing are not going to be directed to choose low carbon investment just because marginal costs (the Carbon Floor Price and the European Union Emissions Trading Scheme) are applied to high carbon players already in the market. The guarantees of profits into the future from the institution of Contracts for Difference (Feed in Tariff) and the Capacity Mechanism will maybe trigger a slice of investment in new nuclear power, but it won’t ensure that new gas-fired power plants are built with Carbon Capture and Storage.
At the EcoConnect meeting later on, another DECC man reported back on the UK Government’s call for evidence on the EMR. DECC’s Matt Coyne said that amongst the conclusions from the consultation with industry there were concerns about the conditions for Power Purchase Agreements (PPAs) under the EMR. (Securing a PPA is the guarantee that investors need to be able to commit to backing new electricity generation capacity). He said that developers are finding it hard to secure finance for new generation investment and that it was a widely-held view that the EMR would not improve that, although he said that “it is our view that the Contracts for Difference will improve things.” Other people at the meeting were not so sure. Diane Dowdell said, “I desperately hope the EMR works. It’s got to work. [Conditions] seem to be edging out the small- and mid-sized players.” Eric Machiels said, “The Big Six vertically integrated energy suppliers are in the best position to retain their position.”
In my notes, I scribbled that Michael Ware, a dealmaking matchmaker for renewable energy projects, offered the view that “Government does resemble toddlers driving a steam train – there are lots of buttons to push…[The UK is] just a rainy little island at the edge of Europe. Capital is truly international. It all feels much easier to do business elsewhere. [The EMR looks] almost designed to turn off investors.”
There were several calls to retain the Renewables Obligation – to oblige energy suppliers to keep signing up new clean power from smaller players if they couldn’t make it themselves.Assets not Liabilities, Burning Money, Carbon Commodities, Carbon Pricing, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Deal Breakers, Design Matters, Dreamworld Economics, Electrificandum, Emissions Impossible, Energy Insecurity, Energy Revival, Energy Socialism, Fair Balance, Financiers of the Apocalypse, Freemarketeering, Fuel Poverty, Gamechanger, Green Investment, Green Power, Insulation, Libertarian Liberalism, Low Carbon Life, Major Shift, Money Sings, National Energy, National Power, National Socialism, Non-Science, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Policy Warfare, Political Nightmare, Price Control, Regulatory Ultimatum, Revolving Door, Social Democracy, The War on Error, Unutterably Useless, Utter Futility, Vain Hope, Western Hedge, Wind of Fortune
Posted on September 9th, 2012 1 comment
Image Credit : epeigne37
Yesterday evening, I was caught by the intensity of the London Sky – there was little air movement in most of the lower summer-heat space above the city, and virtually no cloud except very high strands and sprurls and bones and smears.
Most of the cloud was clearly the result of aeroplane contrails – numerable to small children and their educational grandparents on various buses.
As the sun began to set, or rather, as the Earth rolled to curve away from facing the sun, the sky took on the colour of bright duck egg blue with a hint of pale green, and the sprays of high contrail-cloud took on a glorious orange-fuchsia colour with flashes of gold, bronze and vanadium reds, fading slowly to chromium reds as twilight approached.
At a certain moment, I understood something – as I watched an aeroplane high up, make its way west to Heathrow, the angle of the sunset showed its contrail as a murky ink, messing up the rest of the clouds as it brushstroked its way along, with its slate and muddy hues. As I watched, other parts of the clouds began to appear brown and grey, and since I knew that most of the cloud was jet engine exhaust that hadn’t moved because of the lack of high winds, I finally realised I was watching dirt, high up in the troposphere – careless, unthinking toxic waste. Read the rest of this entry »Academic Freedom, Breathe Easy, Burning Money, Corporate Pressure, Demoticratica, Direction of Travel, Disturbing Trends, Drive Train, Emissions Impossible, Extreme Weather, Freshwater Stress, Gamechanger, Hydrocarbon Hegemony, Major Shift, Neverending Disaster, Optimistic Generation, Paradigm Shapeshifter, Petrolheads, Policy Warfare, Political Nightmare, Regulatory Ultimatum, Social Capital, Stirring Stuff, Technomess, The Data, The Power of Intention, Toxic Hazard, Transport of Delight, Tree Family, Ungreen Development, Water Wars
Posted on August 5th, 2012 No comments
Disobedience only gets you so far. Resistance can be fertile, but intellectual ghettos can be futile. The human tendency to generalise creates too much negativity and prevents us from being constructive. We complain about the “evil” oil and gas companies; the “greedy” coal merchants and their “lying” bankster financiers; but refuse to see the diamonds in the mud.
We should obey the future. In the future, all people will respect each other. There will no longer be war propaganda carried by the media, demonising leaders of foreign countries, or scorn for opposing political parties. In the future, human beings will respect and have regard for other human beings. So we should live that future, live that value, have care for one another. I don’t mean we are obliged to give money to charity to help needy people in poor countries. I don’t mean we should campaign for our government to commit funds to the Climate Finance initiatives, whose aim is to support adaptation to climate chaos in developing countries. No, charity is not enough, and never matches the need. Philanthropy will not answer climate change, and so solutions need to be built into the infrastructure of the global economy, sewn into the design, woven into the fabric. There should be no manufacture, no trade, no form of consumption that does not take account of the climate change impacts on the poor, and on the rich, on ecosystems, on ourselves.
Yes, it’s true that corporations are destroying the biosphere, but we cannot take a step back, grimace and point fingers of blame, for we are all involved in the eco-destructive economy. We are all hooked on dirty energy and polluting trade, and it’s hard to change this. It’s especially hard for oil, gas and coal companies to change track – they have investors and shareholders, and they are obliged to maintain the value in their business, and keep making profits. Yes, they should stop avoiding their responsibilities to the future. Yes, they should stop telling the rest of us to implement carbon taxation or carbon trading. They know that a comprehensive carbon price can never be established, that’s why they tell us to do it. It’s a technique of avoidance. But gathering climate storms, and accumulating unsolved climate damages, are leading the world’s energy corporations to think carefully of the risks of business as usual. How can the governments and society of the world help the energy companies to evolve ? Is more regulation needed ? And if so, what kind of political energy would be required to bring this about ? The United Nations climate change process is broken, there is no framework or treaty at hand, and the climate change social movement has stopped growing, so there is no longer any democratic pressure on the energy production companies and countries to change.
Many climate change activists talk of fear and frustration – the futility of their efforts. They are trapped into the analysis that teaches that greed and deceit are all around them. Yet change is inevitable, and the future is coming to us today, and all is quite possibly full of light. Where is this river of hope, this conduit of shining progress ? Where, this organised intention of good ?
We have to celebrate the dull. Change is frequently not very exciting. Behind the scenes, policy people, democratic leaders, social engineers, corporate managers, are pushing towards the Zero Carbon future reality. They push and pull in the areas open to them, appropriate to their roles, their paid functions. Whole rafts of national and regional policy is wedded to making better use of energy, using less energy overall, displacing carbon energy from all economic sectors.
And then there’s the progressive politics. Every leader who knows the shape of the future should strive to be a Van Jones, or a Jenny Jones, any green-tinged Jones you can think of. We should enquire of our political leaders and our public activists what flavour of environmental ecology they espouse. We should demand green policies in every party, expect clean energy support from every faction. We should not only vote progressive, we should promote future-thinking authority in all spheres of social management – a future of deeper mutual respect, of leaner economy, of cleaner energy.
The future will be tough. In fact, the future is flowing to us faster than ever, and we need resilience in the face of assured destructive change – in environment and in economy. To develop resilience we need to forgo negativity and embrace positivity. So I ask you – don’t just be anti-coal, be pro-wind, pro-solar and pro-energy conservation. Where leaders emerge from the companies and organisations that do so much harm, celebrate them and their vision of a brighter, better, lower carbon future. Where administrations take the trouble to manage their energy use, and improve their efficiency in the use of resources, applaud them, and load them with accolades. Awards may be trite, but praise can encourage better behaviour, create exemplars, inspire goodly competition. Let us encourage the people with good influence in every organisation, institution and corporation. Change is afoot, and people with genuine power are walking confidently to a more wholesome future.
Protect your soul. Don’t get locked into the rejection of evil, but hold fast to what is good. Do not conform to the patterns of this world, but be transformed by the renewing of your minds. Be strong for goodness, even as you turn your back on a life of grime.
Live the Zero Carbon future, and make it come as soon as it can.Academic Freedom, Be Prepared, Behaviour Changeling, Big Picture, Big Society, Burning Money, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Climate Change, Climate Chaos, Climate Damages, Coal Hell, Conflict of Interest, Corporate Pressure, Cost Effective, Delay and Deny, Demoticratica, Design Matters, Divide & Rule, Dreamworld Economics, Eating & Drinking, Economic Implosion, Efficiency is King, Emissions Impossible, Energy Autonomy, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Environmental Howzat, Evil Opposition, Extreme Weather, Faithful God, Feed the World, Feel Gooder, Financiers of the Apocalypse, Food Insecurity, Fossilised Fuels, Freemarketeering, Fuel Poverty, Global Heating, Global Singeing, Global Warming, Green Investment, Growth Paradigm, Hide the Incline, Human Nurture, Hydrocarbon Hegemony, Incalculable Disaster, Low Carbon Life, Mass Propaganda, Media, Money Sings, National Energy, Near-Natural Disaster, No Pressure, Not In My Name, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peace not War, Peak Emissions, Peak Oil, Policy Warfare, Political Nightmare, Protest & Survive, Public Relations, Regulatory Ultimatum, Renewable Resource, Resource Curse, Revolving Door, Social Capital, Social Change, Social Democracy, Solar Sunrise, Solution City, Stop War, Technofix, Technological Fallacy, Technomess, The Data, The Power of Intention, Unqualified Opinion, Unsolicited Advice & Guidance, Unutterably Useless, Utter Futility, Vain Hope, Voluntary Behaviour Change, Vote Loser, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on July 14th, 2012 No comments
Rex Tillerson, Chief Executive Officer of ExxonMobil, was recently invited to talk to the Council on Foreign Relations in the United States of America, as part of their series on CEOs.
His “on the record” briefing was uploaded to YouTube almost immediately as he made a number of very interesting comments.
The thing most commented upon was his handwaving away the significance of climate change – a little change here, a little change over there and you could almost see the traditional magician’s fez here – shazam – nothing to worry about.
In amongst all the online furore about this, was discussion of his continued Membership of the Church of Oil Cornucopia – he must have mentioned the word “technology” about seventy-five times in fifteen minutes. He clearly believes, as do his shareholders and management board, that his oil company can continue to get progressively more of the black stuff out of tar sands, oil shales or oil-bearing shale sediments and ever-tighter locked-in not naturally outgassing “natural” gas out of gas shales. At least in Northern America.
As numerous commentators with a background in Economics have claimed, well, the price of oil is rising, and that creates a market for dirtier, harder-to-reach oil. Obviously. But missing from their Law of Supply and Demand is an analysis of how oil prices are actually determined in the real world. It’s certainly not a free market – there are numerous factors that control the price of the end-product, gasoline, not least state sponsorship of industries, either through direct subsidies, or through the support of dependent industries such as car manufacture. At least in North America.
In the background, there is ongoing shuttle diplomacy between the major western economies and the assortment of regimes in the Middle East and North Africa (MENA) who still have the world’s largest pool of cleaner-ish petroleum under their feet. That, naturally, has an impact on supply and pricing : even though the strength of this bonding is not as tight-fast as it historically was, there appears to have been more of it since around 2005. Or at least, that’s when I first started monitoring it consciously.
In addition to that, there are only a limited number of players in the oil industry. It is almost impossible to break into the sector without an obscene amount of capital, and exceedingly good buddy-type relationships with everybody else in the field – including sheikhs you formerly knew from when you attended specialty schools. So, no, the market in oil is not free in any sense. It is rigged – if you’ll excuse the pun.
And then there’s foundational reasons why oil prices are artificial – and may not cause a boom in the “unconventional” production that Rex Tillerson is so excited about (in a rancher-down-the-farm kind of way). Oil is still fundamental to the global economy. In fact, the price of oil underpins most business, as oil is still dominant in the transportation of goods and commodities. Despite all the techno-wizardry, it is fundamentally more costly to drill for fossil fuels in shale, than from pressure wells where oil just gloops out of the ground if you stick a pipe in.
It’s not the drilling that’s the major factor – so the technology is not the main driver of the cost. It’s the put-up, take-down costs – the costs of erecting the infrastructure for a well, or putting underground shale heating or fracturing equipment in place, and the cleaning up afterwards. Some of the technologies used to mine shales for oil use an incredible amount of water, and this all needs to be processed, unless you don’t mind desecrating large swathes of sub-tropical scenery. Or Canada.
The price of oil production has a knock-on effect, including on the very markets that underpin oil production – so increasing oil prices have a cyclic forcing effect – upwards. It also has an impact on the prices of other essential things, such as food. One can see a parallel rise in the price of oil and the price of staple crops in the last few years – and the spiralling cost of grain wheat, rice and corn maize is not all down to climate change.
Oil companies are in a quandary – they need to have higher oil prices to justify their unconventional oil operations – and they also need good relationships with governments, who know they cannot get re-elected if too many people blame them for rising costs of living. Plus, there’s the global security factor – several dozen countries already have economies close to bust because of the cost of oil imports. There are many reasons to keep oil prices depressed.
Let’s ask that subtle, delicate question : why did Rex Tillerson espouse the attitudes he did when asked to go on the record ? Why belittle the effects of climate change ? The answer is partly to soothe the minds of American investors, (and MENA investors in America). If such a powerful player in the energy sector believes “we can adapt to that” about climate change, clearly behind-the-scenes he will be lobbying against excessive carbon pricing or taxation with the American federal administration.
And why be so confident that technology can keep the oil flowing, and make up for the cracks appearing in conventional supply chains by a frenzy of shale works ? Well, logically, he’s got to encourage shareholder confidence, and also government confidence, that his industry can continue to deliver. But, let’s just surmise that before he was shunted onto the stage in June, he’d had a little pre-briefing with some government officials. They would be advising him to show high levels of satisfaction with unconventional oil production growth (in America) – after all, this would act against the rollercoaster of panic buying and panic selling in futures contracts that has hit the oil markets in recent months.
So Rex Tillerson is pushed awkwardly to centre stage. Global production of oil ? No problem ! It’s at record highs (if we massage the data), and likely to get even better. At least in America. For a while. But hey, there’s no chance of oil production declining – it’s important to stress that. If everyone can be convinced to believe that there’s a veritable river of oil, for the forseeable future, then oil prices will stay reasonable, and we can all carry on as we are. Nothing will crash or burn. Except the climate.
Rex Tillerson’s interview on global (American) oil production may have been used to achieve several propaganda aims – but the key one, it seems to me, was to talk down the price of oil. Of course, this will have a knock-on effect on how much unconventional oil is affordable and accessible, and maybe precipitate a real peak in oil production – just the thing he’s denying. But keeping the price of oil within a reasonable operating range is more important than Rex Tillerson’s impact on the American Presidential elections, or even Rex Tillerson’s legacy.Bait & Switch, Big Picture, Burning Money, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Climate Change, Conflict of Interest, Corporate Pressure, Delay and Deny, Demoticratica, Disturbing Trends, Divide & Rule, Dreamworld Economics, Emissions Impossible, Energy Insecurity, Engineering Marvel, Environmental Howzat, Feed the World, Financiers of the Apocalypse, Food Insecurity, Foreign Interference, Foreign Investment, Fossilised Fuels, Freemarketeering, Gamechanger, Growth Paradigm, Hydrocarbon Hegemony, Landslide, Mass Propaganda, Media, Near-Natural Disaster, No Blood For Oil, Not In My Name, Nudge & Budge, Obamawatch, Paradigm Shapeshifter, Peak Oil, Policy Warfare, Political Nightmare, Price Control, Public Relations, Pure Hollywood, Resource Wards, Revolving Door, Shale Game, Sustainable Deferment, Tarred Sands, Technofix, Technological Fallacy, Technological Sideshow, Technomess, The Myth of Innovation, The Power of Intention, The Price of Oil, Toxic Hazard, Unconventional Foul, Ungreen Development, Unnatural Gas, Vote Loser, Water Wars, Western Hedge
Posted on July 4th, 2012 1 comment
Here is the second part of the transcription from the notes I took this morning in a seminar in the UK House of Commons. The meeting was convened by PRASEG, the Parliamentary Renewable and Sustainable Energy Group.
This transcription is based on an unverified long-hand paper-based recording of the words spoken. Items in quotation marks are fairly accurate verbatim quotations. Items in square brackets are interpolation, or explanation, and not the exact language the person used to present their thoughts.
[AW] How it [the Green Deal] hits the ground matters…
[Joanne Wade, Independent Consultant, UKERC]
The Green Deal is a very useful framework – a move to encourage people to pay for their own energy efficiency. The finance offering may be interesting to some. The quality [of the workmanship ? Guarantees under the Green Deal ?] is “utterly vital”. I don’t think it’s quite there. Outlining four areas (1) How the Green Deal engages (2) The low cost finance (3) Generally mainstreaming energy efficiency in peoples’ minds and (4) Fuel Poverty.
(1) Most people don’t care if they have energy efficiency [in their homes]. If we were really serious about this [our appeal would be along the lines of] you can’t sell a car with brakes that don’t work, but you can sell a house that kills you. [I just wanted to get that in up-front]. Nobody’s really cracked this yet [the messaging] is [still only] “reaching the usual suspects”. Trust is vital. Salience is key. We want people to understand this is not an add-on to all the other things they do. Community-based organisations fit the bill [we tend to trust these groups as members]. [We need to be asking] how does the Green Deal work with that ? The Green Deal providers – small to medium sized enterprises (SMEs) want to use their own brand – they are very good at marketing [and will be good at marketing the Green Deal as well]. But will that be enough to convince people ? The Assessments [that people will get at the start of the Green Deal process] will be detailed on what they can do. Some people are concerned about how much energy they use. Is that enough to go from a standing start to [...] ? Are enough people going to be committed enough by the time [Green Deal is available] ? What I think we need – to prime people to be ready to accept [the Green Deal]. [The message would be] appropriate to come from local community groups. The Government is hoping for it – but no real drivers. There are examples – but how are they going to be copied ? The CERT / CES(P) results show that Local Authorities are key. Now that National Indicators 186 and 187 [From the Performance Framework - annual reporting requirements of direct and indirect emissions as a result of Local Authority operations] have been cut – there is no driver. The amount of attention has dropped. [Local Authorities are facing other problems] reducing staff and budgets.
(2) Access to low-cost finance. [The work to make this available from the Green Investment Bank is going ahead but] what about other soruces – for example mortgage providers ? In Switzerland for example, they are lending 114 billion euro every year to homeowners at low interest rates. We need to look at how to convince people. In Switzerland, people will pay more for energy efficient homes. The Green Deal needs to accept alternative forms of finance. Need to be able to access ECO [Energy Company Obligation - part of the Energy Bill - obligation energy suppliers to supply not only energy, but energy services such as energy efficiency and energy conservation] providers. We don’t know if the market will deliver [there are already grants/finance in this sector that people are not using].
(3) Can’t see the Green Deal mainstreaming. My builder – I did an [extension] and asked for 50% extra insulation and LED [Light Emitting Diodes - a very energy efficient form of lighting] – he thought I was slightly mad but now recommends LED lighting on all builds. Here’s the Green Deal. He would say – “Why should I tell people about that ?” Typical small builder. It should be that whenever anyone is doing a refurbishment they should just do it [extra insulation etc] – and so we’re back to [the big R] – regulation. [But look at the public outcry when the media considered] consequential improvements [the "Conservatory Tax"]. [Energy efficiency] “We need to make it the thing that people do.”
(4) Fuel Poverty. The money that can be coming through the ECO is £ 350 million per year (before VAT). Let’s not kid ourselves – the householders in fuel poverty are not going to take Green Deal finance. [The Climate Change Committee says] £4 billion a year is what we need to tackle fuel poverty. The Government needs to make sure that Green Deal finance is available the fuel poor (in an appropriate form) (overcoming the small potential).
[Alan Whitehead MP] How to address the LED enthusiast who isn’t a Green Deal enthusiast ? Helping “Jeff” [representative small builder in a sketch by the Secretary of State ?] getting sorted out – taking him from a sceptic to an advocate.
[Nigel Banks, Head of Energy and Sustainable Solutions, Keepmoat]
There are glass half empty people and glass half full. How can we be filling the glass ? Retrofitting communities via the Green Deal ? We do a lot of community regeneration – we’ve build [some of the] Zero Carbon homes. We renovate rather than demolish and rebuild. We get through to RP [registered providers of social housing] and Local Authorities. There has been the “boom and bust” of FiT [solar photovoltaic feed-in tariff] – Local Authorities are reticent to get involved [with the Green Deal].
With solid wall insulation [SW] we need to take up a gap. Currently, 80,000 per year are being driven by CES(P) – 94% of these are external wall. Under the Green Deal only 10,000 are projected next year – major concern.
How many measures meet the Green Deal ? The Golden Rule [the rule o Green Deal finance that the loans should come at no extra cost to the householder because the repayments are balanced by energy savings] ? [With some solid wall insulation, meeting the Golden Rule is easy, but...]
Problems with the Green Deal include : [no Green Deal finance generally available ?]. The cooling off period of 20 – 28 days. People now expect their insulation for free. How many [of the institutions of surveyors including] RICS [will value] properties with Green Deal ?
ECO is a big target – at least £540 million per year for affordable warmth. [However, this does not compare with what we have been able to offer up to now] – entire streets – entire communities [upgraded] for free at the moment – easier than under the Green Deal.
The £200 million cashback [is welcome]. Some of the Green Deal pilot schemes have been positive. It should be able to unlock private landlords [to making energy efficiency retrofits].
The Green Deal [is currently appropriate only to] a small proportion of society – it is vital to apply through communities – churches and so on – and it can tackle long-term unemployment problems.
The Green Deal [is not going to achieve major change] on its own.
[David Robson, Managing Director, InstaGroup] We do insulation, represent over 100 SMEs. How can we make the Green Deal work ? Provide employment in local communities ? 15 years of history of energy efficiency : in the early 1990s – no funding – we were doing 300,000 installs a year. Now we are doing 500,000 this year. “If anyone says subsidies haven’t worked, it’s not true.” It has got money out onto the ground quickly. The Green Deal has huge potential – removes capital barriers pre- energy efficiency [measures] – ome of the more expensive things are covered – anyone can access low cost finance – as long as it [the Green Deal] is given an opportunity to work. It also creates a framework to cover the non-domestic sector – and [landlord-owned] private domestic sector also. The Government…. [the Green Deal is] not ready. “Whatever any politician says, the legal framework is not in place until January next year.” The insulation installers and other companies are feeling they are being told “if you want to lead on the Green Deal, take it on your [own] balance sheet.” Everyone wants the Green Deal to work. We’ve invested. Our system is in place. The work we put into Green Deal finance – low cost – we think it’s important – the lower we can keep the costs of it. “If we can’t keep it [the Green Deal finance loan interest rate] below 6% we as an industry have failed.” The Green Deal is going to take time to build. Solid wall insulation – takes time to develop this industry. Hugely innovative concept. The man on the street will take some convincing “Will I be able to sell my house ?” [But] we can’t even give away insulation at the moment – then convincing people to borrow… 2013 is a real issue – how you bridge that cliff edge. Could [limit] the Green Deal getting off the ground. “For the Green Deal to be effective it needs to take the [energy efficiency] industry with it.” Small businesses are looking to us to guide them through the Green Deal. They can’t survive 6 months of losing money. Need to have some more continuity. The Green Deal does need something to help it through the transition process. How is the Green Deal good ? A robust framework. Belief in the Golden Rule – sacrosanct. Trying to sell the Green Deal will be a challenge for all of us. The Green Deal is very much underpinned by the ECO – but if the ECO is the only thing pushing, the Green Deal won’t work – constrained by the amount of money available. Regulation is key. If consumers are given sufficient time to do things it’s OK. Low cost finance is key. Access to low rates has to be competitive or the biggest players will take all the low cost finance. I’m concerned about a continuing level of political will. Generally the media are coming on-side over the Green Deal – but you only need to look at the media coverage of “consequential improvements”… It’s important that the Government recognise concerns about the Green Deal – [coming] from people who do want it to work.
[Alan Whitehead MP] Nice chance – ought to look at carbon taxes for the future – declaring part of that “tax foregone” and use that for the Carbon Reduction Commitment [CRC] : taking from the EU ETS [European Union Emissions Trading Scheme revenue] and the carbon floor price and using that to underpin the Green Deal – get that finance interest level down – a proper green tax – taxing bads and rewarding goods. “There can be no more good than making sure that everyone’s house is energy efficient” That’s all solved.
QUESTIONS FROM THE FLOOR
[Terry ? David Hunt, Eco Environments] Concerned that microgeneration is not to benefit. Concerned about companies self-marketing – as there have been misleading advertising (such as solar photovoltaic [PV] installers advertising old FiT rates). They should not mislead the public. Regulation – compared to the MCS scheme [all solar PV installers have to be registered for MCS] but still seen some awful installs. As soon as things get sold and are bad – this leads to media stories and a loss of confidence.
[Tim ? Tony Smith, Pilkington Glass] The statutory instrument that relates to double glazing and other measures – I’m looking for sunshine on a very gloomy day – double glazing in [some cases] will get no help from the Golden Rule [some discussion about the ratings of windows and replacement windows] – reduces the attraction to our industry in terms of reducing carbon emissions.
[ X from "London Doctoral Training Centre"] Homeowners… [The success of the Green Deal is] down to how people use their homes. No-one’s talked about education and how installers talk to householders…
[ X from Association for the Conservation of Energy] I’d like to hear the panel’s views on DG TAX [the European Commission Directorate Generale on Tax matters for the European Union] that the 5% VAT rate under the Green Deal is not compliant.
[Tracy Vegro] For the 5% VAT rate, “we are ready to defend that” – as it impacts on our ability to offer other options. It’s weird since we’ve just signed a very strong [European Community] Energy Efficiency Directive. Behaviour change – that’s vital. The [Green Deal loan] Assessment will require heating controls turned down and relevant behaviour. Effectively, you’re not going to pay the interest on the loan if you change your behaviour and you will see the savings increase over time. The “conversion rate” [from Green Deal pilot schemes] was 98% “saved more than I thought” – community projects. The Ombudsman will be able to strike off poor installers. “The Consumer Protection on the Green Deal is the highest in the market.” Stringent. “If it’s proved we’re too draconian, it will come down.” [Re the question from Pilkington] You are slightly misinterpreting – this is not a barrier to that [kind of upgrade to windows] – it depends on the state of the property [for example the carbon saved is less if going from an F to and E than...] It may just be your interpretation – happy to go over that with you.
[David Robson] The MCS based accreditation is only checked once a year – a real issue. The hardest thing about MCS is – is your paperwork in order ? Not if you can do the job…
[Joanne Wade] The conversation about energy use – how to get people involved. We need more messaging – this is what this really is. If all levels of government [do the messaging] more effective.
[John Sinfield] The Minister mentioned turning up the heating and hoovering [vacuuming] in your underpants. The industry is responsible to [address that in the] owner’s manual. This is how you need to treat your house differently. The tax issue – madness. If the HMRC can’t do it [convince the EC/EU] then ignore them.
[Nigel Banks] Behaviour change is vital. The Green Deal providers who don’t put that in their package will come unstuck. Not as confident about carding [system of accreditation based on individual trades persons by trade] [not relevant to your particular skill] [skill specific ?]
[Alan Whitehead] I assume the Minister meant thermal underwear.
[Colin Hines, Green New Deal Group] Trust [is important] when the finance people are having fits over FiTs. What [are you] trying to do to the market ? Is the Green Investment Bank going to kick up some money for the Green Deal ? What about the drop in the Impact Assessment from £10 billion to £ 5 billion for the Green Deal [some confusion about what this refers to]
[Roger Webb, The Heating and Hotwater Industry Council] How do we bring “Jeff” to the party ? We are keen to see heating as part of the Green Deal. There are 90,000 small tradesmen working for 60,000 small companies. Will they think the Green Deal is rubbish ? They are the leads for the Green Deal – they need training. We need to incentivise them. A voucher scheme ? Use a little of the £200 million… I really welcome the work and [interest in] bringing microgeneration [?] business into the scheme.
[Neil Marshall, National Insulation Association] Regarding solid wall insulation – the IWI / CWI confusion [Internal Wall Insulation, Cavity Wall Insulation] – what solution is proposed for hard-to-treat cavities ? The hard-to-treats we are not able to do for another year. Need to drive more cavities and lofts. The Committee on Climate Change [CCC] have reported on a need for additional incentives outside the Green Deal – driving the uptake of the Green Deal – talk of incentives and fiscals. Gap-filling. The Green Deal [should be able to cover] able-to-pay loft insulation installations, able-to-pay cavity wall insulation, hard-to-treat cavities and solid wall insulation. If we are doing 1 million in 2012 under CERT / CES(P)…if there is no Green Deal finance we can’t sell anything [after 2012]. “There is a critical need for a transitional arrangement.” We have had high level discussions with DECC that have been very useful…
[ X from Honeywell ? ] The in-situ factors. [For example, father [in law] isn’t going to replace his boiler because the payback will be after he’s dead]. Multiple length of payback [period] for any measure that’s put in – old antiquated evaluation tool. The householder asks what’s in it for them [what they can put some energy into doing] – is the longer payback [period] less attractive ?
[ X from "Shah" ? ] Not much on solar / microgeneration. [Will the Green Deal become certified ?]
[Nigel Banks] How do we do Green Deal for a boiler ? On 3rd January  will the big energy companies do it themselves ? Some measures won’t perform as predicted.
[John Sinfield] “If the Green Investment Bank doesn’t provide finance for the Green Deal we are in a world of hurt”. We need to engage with “Jeff” the trusted installed. The Government needs to drive consequential improvements through – if you have a new boiler, you will have wall insulation [crazy otherwise, as all that heat will be lost through the walls]. Not seeing where my £ 1 million invested in solid wall solutions is going now. The job is not done [cavities and lofts].
[Tracy Vegro] A lot of Local Authorities don’t distinguish between good debt and bad – money is there for them – but they aren’t borrowing to invest. We are retaining HECA [Home Energy Conservation Act]. [Mentions poor opinion about the Green Investment Bank] – talking the “jib” [GIB] down. The biggest risk is the lack of confidence in the Green Deal. [Working on the terms of the] Green Deal Finance Companies [GDFC] – still see if…. [Important to take the attitude of] not talking it down. If another equity slice [is added...] We are a broad church – open to new entrants. Most work will be done [under the Green Deal] – most retrofits. [With the ActonCO2 and other Government paid communications campaigns on climate change and energy efficiency] We didn’t really get the message across – our millions spent [on advertising and public relations]. [We will] do better – more and more things will meet the Golden Rule. Come and meet our scientists.
[David Robson] Heating – a huge opportunity – not a loan with British Gas – the boiler you want – add on solar [with a Green Deal loan] linking creatively.
[ X from ? ] [Brings up the thorny problem of which technologies and measures are possible under the Green Deal's Golden Rule] 45 points [of requirements] to meet criteria. In the future, what technologies will be viable ?
[Tracy Vegro] The RHI [Renewable Heat Incentive] is not eligible – does not meet the [Golden] Rule.
[Further exchanges - becoming somewhat stressed]
[Alan Whitehead MP] Just as things were getting exciting…[we have to close] an interesting period over the next 18 months.Advertise Freely, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Burning Money, Carbon Army, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Deal Breakers, Delay and Deny, Demoticratica, Direction of Travel, Disturbing Trends, Divide & Rule, Efficiency is King, Emissions Impossible, Energy Autonomy, Energy Change, Energy Disenfranchisement, Energy Insecurity, Energy Nix, Energy Revival, Energy Socialism, Feel Gooder, Financiers of the Apocalypse, Freemarketeering, Fuel Poverty, Gamechanger, Green Investment, Growth Paradigm, Human Nurture, Hydrocarbon Hegemony, Insulation, Low Carbon Life, Major Shift, Mass Propaganda, Media, Money Sings, National Energy, National Power, No Pressure, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Emissions, Peak Energy, Policy Warfare, Political Nightmare, Price Control, Public Relations, Realistic Models, Regulatory Ultimatum, Social Capital, Social Change, Social Chaos, Social Democracy, Solution City, Sustainable Deferment, Technofix, Technomess, The Power of Intention, Voluntary Behaviour Change, Vote Loser, Wasted Resource
Posted on July 4th, 2012 No comments
Here is a transcription of part of the notes I took this morning in a seminar in the UK House of Commons. The meeting was convened by PRASEG, the Parliamentary Renewable and Sustainable Energy Group.
This transcription is based on an unverified long-hand paper-based recording of the words spoken. Items in quotation marks are fairly accurate verbatim quotations. Items in square brackets are interpolation, and not the exact language the person used to present their thoughts.
[Alan Whitehead MP]
Will the Green Deal deliver ? In the last few days, in 140 character statements [Twitter], the Government have been telling has “all the hurdles have now been overcome.” But “is it really all systems go ?” What effect do we think the Green Deal will have on sustainability ? On carbon reduction goals ? Tracy Vegro from the Department of Energy and Climate Change (DECC) has been key in setting up the Green Deal.
[Tracy Vegro, DECC, Director, Green Deal]
“It’s been a busy old time for us.” We are in the final stages of passing the framework [of the Green Deal]. Just have the laws now [the legislation that is needed]. Those orders will come into force in October . There will be some parallel working – not a switch to the Green Deal all at once. I think it will open up a wider market in energy efficiency. We’ve been getting out and about [for the consultation process] – a women’s panel, an industry panel. We did it with an awful lot of help. “We’ve got to get energy efficiency moving in this country.” The CERT [Carbon Emissions Reduction Target - an energy supplier obligation] at the end of this year there will be “not an unlagged loft” [internal roof insulation over the top of ceilings]. There have been some gaps – with solid wall insulation numbers for example. “Whole swathes got nothing under CERT.” We have to to start delivering. I hope the Green Deal will drive it – with many more entrants into the [energy efficiency] market. Our roadshows with small businesses were encouraging. Beyond the framework we are trying to ensure a lot of choice. The Green Deal is going to have accredited goods and services in the whole thing. The [Office of Fair Trading] has been doing research to ensure [quality and competence] – “because at the end of the day it’s the bill payer who’s paying”. There’s a new oversight body. There will be a lot more data [coming back]. You know under the CERT, 300 million energy efficient lightbulbs were distributed [and we don't know where they all went and whether they were all used]. We need to build confidence. Have the Local Authorities get behind the Green Deal assessments [process], and [capitalised on] community aspects. [We hope/aim to] see the market grow much faster. So far we can see that a lot of cavities got filled but [that's only the beginning]. [We hope/aim that the Green Deal will be] driving demand. People will see their neighbours do this [and want to do it for themselves.] There’s the £200 million incentive scheme – that’s money in the bank. [Need to drive] confidence [not having people saying it's just the] new FiT [Feed-in Tariff scheme - intended to drive solar photovoltaic uptake, but poorly managed]. The Green Deal is going to be conditional on minimum energy efficiency standards being undertaken [by those taking up the offer]. [This will determine] the order in which you do these [energy efficiency] technologies – “we need to get energy efficiency into peoples’ heads” – [where they may have been deterred previously by] mostly upfront capital. We have a new helpline. We need to make it a “no-brainer solution”. How are we going to ensure training ? People will be coming out of loft and cavity wall insulation into a new sector. These are asset skills, and a lot of money is committed. to funding [re]training and assessors. There are implications on people in existing roles – but “this is a finite market”. We’re confident in this business model – for the first time there will be competition – not just the Big 6 [energy companies : British Gas, Electricite de France (EdF), E.On, npower, Scottish Power (Business), Scottish & Southern (SSE) - companies that collectively supply 99% of the UK's heating and lighting] delivering. It is slightly easier to explain [than other schemes]. We do need an awareness campaign – people in the industry don’t want this – they want to do their own communications to customers – to ensure demand is right. The [big] energy companies are to be mandated a lot. If the scheme is ECO (Energy Company Obligation) only – it would only guarantee a steady state [no growth in uptake of energy efficiency products]. The Impact Assessment has only been done for pure Green Deal.
[John Sinfield, Managing Director, Knauf Insulation]
CERT helped, but there is still a huge amount to deliver – need to approach the market in a different way. The deep retrofit of our housing stock – the only way to deal with Fuel Poverty and other problems. My early reaction to the Green Deal was hope, excitement, and confusion, followed by more confusion. It could deliver what no scheme has done before to 14 million homes [untouched so far]. We have to deal with the fabric [of the building] first – then deal with the occupant. The occupant is sometimes the barrier to energy efficiency. Could we use private money to leverage 20 times the amount put forward [for the Green Deal and Green Investment Bank] ? We could stop shifting 40 billion euro to the Middle East (and elsewhere) for our energy. Can we create ethical investment for pension funds ? Then I got to depression and confusion. In the draft Impact Asssessment, there would be a 93% drop in loft insulation installations and 73% drop in cavity wall insulations from Day One of the Green Deal. What’s going to happen to existing companies ? [I obviously have an interest here] I’ve invested in four factories. But it’s not only me, the Climate Change Committee (CCC) wrote to Government on the trajectory resulting not meeting our carbon cap. It’s not just insulation manufacturers and installers. I’m trying to understand where the policy’s going. Why are DECC against cheaper measures ? The Minister says that the “loft job” is nearly done. But DECC themselves say that 9 million lofts have inadequte insulation. Frankly, I doubt I’ll see that by the the end of the year. There are 7.5 million cavities to fill. The consultation on the Green Deal came back with good changes – but little to address the cliff edge – the significant drop in lofts and cavities [at the changeover to the Green Deal]. I’m veering between hope and despair. I hope the Government, deep down, really want this. They need to do more to drive this programme. I wouldn’t invest money if I didn’t think [they were really behind this.] What about other options ? Stamp Duty [on sale of properties], a carbon tax, a Local Authority mandate ? If the Government can drive the value of the Green Deal up – it makes it more attractive [to engage in the sector]. My hope is balanced off by a sense of despair – the mechanism will not be ready in time. The so-called “soft launch” of the Green Deal [is inadequate] – really has to be up and running by 1st January . The Green Deal loans have to have affordable interest rates. The Green Deal finance company is 9 months away from offering comprehensive finance – and how are they going to receive the money from the Green Investment Bank ? If the interest rate of the Green Deal loans are 7.5% (6% – 8%) then only 7% of the population will take them up. Where’s the market ? What’s going to drive the market ? Where we are challenged – the Green Deal doesn’t feel ready. The environment to work within – sorted. But the mechanism – for example the Green Deal finance – not ready. Need to bridge the gap. Do we need to extend the CERT / CES(P) (Community Energy Saving Programme) ? A bridge until a competitive rate of interest is available. If the Government is going to drive the deep retrofit, it needs to drive the take up. Putting in place the framework is not going to sell this scheme. Some [companies] here are ready to market this scheme – but all parts need to be there. If the Green Deal is not ready – when ?
Alan Whitehead MP
“So, an amber light there…”Be Prepared, Behaviour Changeling, Big Society, Burning Money, Carbon Army, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Conflict of Interest, Corporate Pressure, Cost Effective, Demoticratica, Design Matters, Direction of Travel, Economic Implosion, Efficiency is King, Emissions Impossible, Energy Socialism, Financiers of the Apocalypse, Foreign Investment, Freemarketeering, Fuel Poverty, Global Heating, Green Investment, Green Power, Growth Paradigm, Human Nurture, Hydrocarbon Hegemony, Insulation, Low Carbon Life, Major Shift, National Energy, Optimistic Generation, Peak Emissions, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Revolving Door, Social Capital, Social Change, Social Chaos, Social Democracy, Solution City, The Data, The Power of Intention, Voluntary Behaviour Change
Posted on June 14th, 2012 1 comment
Bursting the Nuclear Bubble
The UK Government appear to have seen the light about their, frankly, rubbish plan to covertly invest in (by hidden subsidies) a spanking new fleet of nuclear power reactors.
Dogged by Electricite de France (EdF) as they have been, with Vincent de Rivaz continuing to proffer his begging bowl with outstretched pleading arms, it just might be that before the Energy Bill is finally announced –
when the Electricity Market Reform (EMR) dust has settled – that this new thinking will have become core solidity.
After all, there are plenty of reasons not to support new nuclear power – apart from the immense costs, the unclear costs, the lack of immediate power generation until at least a decade of concrete has been poured, and so on (and so forth).
Gas is Laughing
It appears that reality has bitten – and that the UK Government are pursuing gas. And they have decided not to hatch their eggs all in one basket. First of all, there’s a love-in with Statoil of Norway :-
Then, there’s the new “South Stream” commitment – the new Azerbaijan-European Union agreement, spelled out in a meeting of the European Centre for Energy and Resource Security (EUCERS) on 12th June at King’s College, London :-
Meanwhile, the “North Stream” gas pipeline is going to feed new Russian gas to Europe, too (since the old Siberian gas fields have become exhausted) :-
And then there’s the amazing new truth – Natural Gas is a “green” energy, according to the European Union :-
The UK will still be importing Liquified Natural Gas (LNG) from our good old friends in Qatar. Never mind the political interference in the nearby region and the human rights abuses, although NATO could be asked to put a stop to that if Europe needed to bust the regime in order for their energy companies to take ownership of the lovely, lovely gas. I mean, that’s what happened in Iraq and Libya, didn’t it ?
A Fossilised Future
So, despite all the green noises from the UK Government, the underlying strategy for the future (having batted away the nuclear buzzing insects around the corpse of British energy policy), is as Steve Browning, formerly of National Grid says – “gas and air” – with Big Wind power being the commercialisable renewable technology of choice. But not too much wind power – after all, the grid could become unstable, couldn’t it, with too much wind ?
There are several problems with this. First, the commitment to fossil fuels – even Natural Gas with its half the emissions profile of coal – is a risky strategy, despite making sure that supplies are secure in the near term. The reasons for this are geological as well as geopolitical. Natural Gas will peak, and even the UK Government accepts that unconventional gas will not keep fossil gas going forever – even with the “18 years” ultimate recoverable from under Lancashire of shale gas (that’s “18 years” of current gas annual demand – but not all drilled at once – perhaps amounting to about 1.5% of current UK gas supply needs per year, stretched out over 40 years) , and the billion tonnes of coal that can be gasified from under the sea off the east coast of England. As long as Carbon Capture and Storage can work.
Not only will Natural Gas peak and start to decline in the UK, it will also peak and decline in the various other foreign resources the UK is promising to buy. By simple logic – if the North Sea gas began depletion after only 30 years – and this was a top quality concentrated resource – how soon will poorer quality gas fields start depleting ?
Whilst I recognise the sense in making Natural Gas the core strategy of UK energy provision over the next few decades, it can never be a final policy. First off, we need rather more in terms of realistic support for the deployment of renewable electricity. People complained about onshore wind turbines, so the UK Government got into offshore wind turbines, and now they’re complaining at how expensive they are. Then they botched solar photovoltaics policy. What a palaver !
Besides a much stronger direction for increasing renewable electricity, we need to recognise that renewable resources of gas need to be developed, starting now. We need to be ready to displace fossil gas as the fossil gas fields show signs of depletion and yet global demand and growth still show strength. We need to recognise that renewable gas development initiatives need consistent central government financial and enabling policy support. We need to recognise that even with the development of renewable gas, supplies of gas as a whole may yet peak – and so we need to acknowledge that we can never fully decarbonise the energy networks unless we find ways to apply energy conservation and energy efficiency into all energy use – and that this currently conflicts with the business model for most energy companies – to sell as much energy as possible. We need mandates for insulation, efficient fossil fuel use – such as Combined Heat and Power (CHP) and efficient grids, appliances and energy distribution. Since energy is mostly privately owned and privately administered, energy conservation is the hardest task of all, and this will take heroic efforts at all levels of society to implement.Academic Freedom, Assets not Liabilities, Big Number, Big Picture, Big Society, British Biogas, Burning Money, Carbon Capture, Corporate Pressure, Direction of Travel, Dreamworld Economics, Efficiency is King, Electrificandum, Emissions Impossible, Energy Change, Energy Insecurity, Energy Revival, Energy Socialism, Foreign Interference, Foreign Investment, Fossilised Fuels, Freemarketeering, Green Investment, Green Power, Hydrocarbon Hegemony, Insulation, Low Carbon Life, Marine Gas, Methane Madness, Methane Management, Money Sings, National Energy, National Power, Not In My Name, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Paradigm Shapeshifter, Peace not War, Peak Coal, Peak Emissions, Peak Energy, Peak Natural Gas, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Wards, Shale Game, Solution City, Stop War, The Power of Intention, The Price of Gas, Unconventional Foul, Ungreen Development, Unnatural Gas, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on June 14th, 2012 No comments
…Continued from http://www.joabbess.com/2012/06/12/gas-in-the-uk/
Questions from the floor
…increasing electricification of heat and transport. I was interested in what Doug said about heat. [If energy conservation measures are significant and there is] a significant reduction in gas use for heat…interested in the Minister’s response.
[Terry ? (Member of PRASEG)]
I’m interested in gas that would need CCS [Carbon Capture and Storage] [in future] …[since there would be no restriction there would be an] incentive to build new gas in next few years away from CCS-usable infrastructure. Maybe encouraging gas stations over next few years to be built in view of CCS.
[ ? ]
[There have been mentions of the] Gas [generation] Strategy and gas storage. Is it your intention to have both in the Energy Bill ? [Need to improve investor confidence.]
[Charles Hendry MP] I’m more confident than Doug on CHP…[in respect of energy conservation we will begin to increase our use of] CHP [Combined Heat and Power], geothermal energy, don’t need District Heating. I think we’ll see more people switch to electric heating. The likely pricing on gas will mean people have to look at other sources – such as localised heat storage, intelligent ways to produce hot water and heat in their homes [...for example, a technology to store heat for several days...] The first [new gas power] plants will be where they are already consented – where originally coal plants – need to have identified in advance – no new plant is consented unless…We’ve asked Ofgem to ask re securing gas supplies. If we can stretch out the tail of North Sea gas – can stretch it out 30 – 40 years [...] technology [...] Centrica / Norway [...] develop contracts [...] Is there a role for strategic storage [Centrica asking] [...] Buying and selling at the wrong price (like the gold) [widespread chuckling in the room]. Some of it may not need legislation. Gas Strategy will be published before the Energy Bill.
[David Cox] Get very nervous about gas storage. Don’t think there’s a need to put financial incentives in place to increase gas storage. We think the hybrid gas market is successful – a market and regulatory framework – [gas storage incentives] could damage.
[Doug Parr] I’m not downbeat because I want to be downbeat on heat. [Of all the solutions proposed none of them show] scaleability, deliverability. I’d love that to come true – but will it ? [...] Heat pumps ? Biogas is great but is it really going to replace all that gas ? If we’re going to be using gas we need to make the best use of it [...] Issues around new plant / replacement – all about reducing risks no exposing ourselves to [it] – security of supply, climate risks, issues about placement [siting of new plant]. If CCS can really be made to work – it’s a no-brainer – do we want all that carbon dioxide in the atmosphere or … ? Our entire policy becomes dependent on a technology that hasn’t even been demonstrated. Other technologies that people thought were great – years later they still haven’t arrived [for example, rooftop wind turbines]. If we say CCS is the only way it’s going to work – what’s Plan B ? We are going to use [fossil fuels] – should not become wholly dependent on technology not yet demonstrated.
[Alan Whitehead] Perhaps people should be asked – which would you prefer – a CHP / DH [Combined Heat and Power / District Heating] plant in the valley here, or a couple of wind turbines on that hill ? That would [shake things up].
Questions from the floor
[ X ? ] See [...] as the ultimate destination. Most important – gas can be made zero carbon – not pie in the sky. 1. Start contributions of carbon-neutral gas and 2. will need far less if [we act] like Japan – force installation of microCHP. Their aim is to do same as for washing machines [bring prices down - make widely available for the home]. MicroCHP [with] heat pumps – reduction as good as decarbonising gas or electricity. But can also decarbonise gas.
[ X ? ] The Minister mentioned the importance of CHP but recently dropped [...] mandate. If CHP so important what measures is the Government taking to ensure its installation ?
[ X ? ] Electricity is a rubbish fuel for heating buildings – very peaky load – need something cheap to store, cheap to [...]. Fits very well with forcing down demand. Where we’re getting our gas from. At the moment our waste is being incinerated. For a cheap additional cost, where currently incinerating we can do anaerobic digestion [AD], producing a fungible asset – the gas – can gradually decarbonise our grid.
[ Thomas Grier ? ] …a decision [?] of London – CHP in London over the next few years. If we want to use electricity for heat, we need to reinforce the electricity grid [by 60% to 90% ?] In rural situations – use electrical heating. In urban, use decarbonised energy. [This model projection] shows the gas grid disappearing – it will collapse at some point if all we have on the gas grid is cooking.
[ X ? ] …[encouraged CHP then a few days later] stood up then said all support [removed ?] for CHP next year. A Heat Strategy that said there is enormous [scope / potential] for CHP. We want to see gas, we want to see efficiency. Are we moving towards [...] without it they won’t build it.
[David Cox] Microgeneration – couldn’t get it down economically. Reliability [issues]. Full supporter of biogas – AD got a contribution to make – but never more than 5% – no matter how much [we crack it]. Electricity is not very good for heating – but how to we decarbonise the heat sector ? Always been an advocate of CHP. Government need to do more incentivising of that.
[Charles Hendry MP] Innovation and invention [...] Government can’t support all emerging technologies. Best brains around the world [are working on] how we move fundamentally in a low carbon direction. On the waste hierarchy – burning of waste should be the final stage – finding a better use for it. [I visited] the biggest AD plant in Europe in Manchester – biogas and electricity generation. We are seeing Local Authorities taking a more constructive long-term view on how to manage waste. CHP – we all want to see more of it – to what extent does it need support ? That depends on whether new build – building a community around it. [By comparison, urban retrofitting is probably too expensive] Iceland [took the decision and] retrofitted almost every home – I’m now more convinced than before. What is the right level of subsidy and what makes good economic case ?
[Doug] We do keep missing opportunities. [For example in Wales, Milford Haven, the new Combined Cycle Gas Turbine at the Liquified Natural Gas (LNG) refinery to process the gas] should have been CHP. I am enthusiastic about lots of heat technologies [but the same questions/issues apply] scaleability and deliverability. District heating [DH] – an infrastructure asset ! [Can change priorities about what gets built - for example in Denmark (?)] they’re building large-scale solar farms to top up the DH. In the Treasury’s infrastructure plan [see DH could be...] Heat is the poor relation in energy debate. Other networks have been identified in the National Policy Statements (NPS) – but not heat.
[ Leonie Green, Renewable Energy Association ] [I must] defend heat pumps. In Sweden 90% of new builds [hav e heat pumps ?] – heat pump efficiency is a function of the energy-efficiency of the building [...] Just on AD – National Grid report said it could provide 50% [of the nation's supply. Our members think] that’s a bit too high – we think 25%. My question is really about the benefits. We are hearing anxiety about costs, but it’s piecemeal on benefits. We’ve been strong on jobs, balance of trade, exports [all benefits of renewable energy investment and deployment]. Pleased to see DECC put out [report from] Oxford Economics [on the] wider economic benefits. How can we get more and more balance in reports. [An example] Deutsche Bank renewable generation opportunities.
[ ? ] We would also support more than 5% from renewable gas – also about hydrogen – we used to do it when it was town gas – why not again ? As regards injecting biomethane/biogas from AD into the National Grid [last year ? to this year ?] 130 enquiries to connect AD to our network – none have progressed. Please sort these [registrations] out.
[ ? ] Minister, we’re not expecting you to fund all technologies – we need some logic – especially with transport. The Government doesn’t recognise the difference between Renewable Natural Gas if used in transport and fossil fuels. Would be simple – a tax on gas if used in a vehicle. What’s the problem over [...] ?
[Colin Snape, University of Nottingham] We are looking at reducing the costs of carbon capture – we have a section of PhDs… One other gas source not mentioned – gas from underground gasification of coal [UCG]. In UK [...] 2 billion tonners of coal – slightly offshore – on the energy coast of the UK – where all the action is on CCS – obviously UCG needs to be coupled with CCS to be carbon neutral. Would [be operational] in a very short time period [...incentives...]. Significant proportion of UK needs.
[ ? ] What is the purpose of the Gas Strategy ? Shale gas isn’t a miracle. The “Golden Age of Gas” [report by the International Energy Agency (IEA)] doesn’t mean cheap gas, because [it will be put to] lots of uses. Renewable electricity and nuclear are not going to come until the 2020s. How do we avoid building loads of gas generation that is not necessary after that time ? What’s the role of mothballing (relatively cheap to bring CCGT out of mothballs comparing to build new). No sign of reduction in electricity demand reduction – therefore there will be high gas use.
[ Doug Parr ] On UCG, the IEA had two scenarios in the “Golden Age of Gas” – both took us over 3.5 degrees Celsius [in additional global warming]. Even if there is unconventional gas sources, still a huge danger of going down the road of unrestrained gas use. What is the alternative ? We should not end up becoming dependent on gas. Should not build gas to fill a short-term hole – they will lobby for their own interests – to keep open.
[ David Cox ] CCGTs won’t be built without guarantees greater than 20 years. Also renewable energy might not provide in the way that we hope. The CCC report – what caused the rise in energy prices ? The wholesale gas price – not renewable energy, green policies. However, that was slightly dishonest – the counter-factual was [...] renewable energy significantly still more expensive than fossil fuel there. Until we can get costs of renewable energy down to the prices of fossil fuels… [The industry] don’t give the impression [they will build] on the basis of short-term need. Gas isn’t clean, I admit that [...] CCS – that will work.
[Charles Hendry MP] A lot comes back to a need for a balanced approach – carbon targets and security of supply. If you haven’t sorted out security of supply, the electorate will not give permission to go low carbon. Gas is a hedging fuel currently but don’t know where costs going over time. As a politician, I like pipelines – know where it’s going (not like LNG, where there was limited use of new LNG import plant). If we want Scandinavian gas, we need security of demand to build the new pipeline. How we deal with issues of biomethane – in 2 years – need to make more progress. Some of these [techologies] will be gamechangers – some, look back in a couple of years… [Need a] permissive framework to allow a lot of ideas and technologies. There is no source of energy that hasn’t required subsidy in early days. Fanciful to suggest new forms of energy can come through without support. The letters we get [from the public, from constituents] are on vehicle fuel costs, not how much their gas bill went up last winter…
Official end of meeting
A gaggle of people gathered in the hallway to discuss some items further.
The Electricity Market Reform (EMR) was generally criticised – as it contains measures likely to specifically benefit nuclear power. Electricite de France was identified as very involved. The Government had said “no nuclear subsidy”, but the EMR measures are equivalent to hidden subsidies.
The Levy Cap was criticised as it would disturb investor confidence – if several nuclear reactors came on-stream in 10 years time, in the same year, they would eat up the whole subsidy budget for that year – and other technologies would lose out. If was felt that a number of the EMR proposals were “blunt instruments”, not overcoming shortcomings of former levies and subsidies.
Although the EMR was designed to addressed economic fears, it wasn’t assisting with financing risks – if anything it was adding to them. Rates of return have to be guaranteed for loans to be made – chopping and changing subsidies doesn’t allow for that.
Leonie Green said that the REA members don’t like the Premium Feed-in-Tariff (FiT). She also said later that they were not pleased about the cuts in support for AD.
Since my personal interest is in using Renewable Gas of various sources (including Biomethane / Biogas) to displace Natural Gas from the gas grid, I spoke with various people about this informally (including a woman I met on the train on my way home – who really got the argument about decarbonising gas by developing Renewable Gas, and using that to store excess renewable electricity, and use it as backup for renewable electricity. Although she did say “it won’t be done if it won’t confer benefits”.). One of the key elements for developing Renewable Gas is to create a stream of Renewable Hydrogen, produced in a range of ways. Somebody asked me what the driver would be for progress in Renewable Hydrogen production ? I said the “pull” was supposed to be the fabled “Hydrogen Economy” for transport, but that this isn’t really happening. I said the need for increased sources of renewably-sourced gas will become progressively clear – perhaps within a decade.
One of the persons present talked about how they think the Government is now coming out of the nuclear dream world – how only a few of the proposed new reactors will get built in the next decade – and how the Government now need to come up with a more realistic scenario.
It was mentioned that is appears that the Biogas technologies are going to have the same treatment as solar photovoltaics – some sort of subsidies at the start – which get cut away far too early – before it can stand on its own two feet. This was said to be the result of an underlying theory that only a fixed amount of money should be used on launching each new technology – with no thought to continuity problems – especially as regards investment and loan structures.Academic Freedom, Alchemical, Assets not Liabilities, Be Prepared, Big Number, Big Picture, British Biogas, Burning Money, Carbon Capture, Carbon Pricing, Carbon Taxatious, Climate Change, Corporate Pressure, Design Matters, Direction of Travel, Dreamworld Economics, Drive Train, Efficiency is King, Electrificandum, Emissions Impossible, Energy Autonomy, Energy Insecurity, Energy Revival, Engineering Marvel, Fossilised Fuels, Freemarketeering, Gamechanger, Gas Storage, Global Warming, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Methane Management, Money Sings, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Coal, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Shale Game, Solution City, Sustainable Deferment, Technofix, Technological Fallacy, Technological Sideshow, The Myth of Innovation, The Power of Intention, The Price of Gas, The War on Error, Unconventional Foul, Unnatural Gas, Utter Futility, Vain Hope, Voluntary Behaviour Change, Wasted Resource, Zero Net
Posted on June 12th, 2012 No comments
“The role of gas in the UK’s energy mix” 12 June 2012 17:30 – 18:30, Committee Room 5, House of Commons with speakers Minister of State for Energy and Climate Change, Charles Hendry; David Cox, Managing Director of The Gas Forum and Dr Doug Parr, Chief Scientist of Greenpeace UK. Chaired by Dr Alan Whitehead MP, Chairman of PRASEG, the Parliamentary Renewable and Sustainable Energy Group, who called the seminar : http://www.praseg.org.uk/the-role-of-gas-in-the-uk-energy-mix/
UNVERIFIED COMMENTS : Please check with the speakers to confirm their statements and do not take this account as verbatim.
[Alan Whitehead MP] Questions about gas. Will it be business as usual ? If not – too “much” gas ? What does that mean for Climate Change targets ? New gas generation – about 11 gigawatts coming on-stream in the next 5 years – “grandfathered” (no obligations to control emissions with Carbon Capture and Storage (CCS)) throughout the life of the power plant – does produce questions about Climate Change targets – CCS may change that landscape in the medium-term future. Question about emergence of biogas into system [which would bring] a down-trend in emissions.
[David Cox] The wonderful future that gas offers us. Have to look at whole low carbon [framework] – gas has a place. Not a war [between gas and renewable energy technologies]. Both needed [in the advance towards carbon-free] energy. Without gas, not going to make it. Make sure we can afford it. Gas has a role. The recent [International Energy Agency] IEA report on the “Golden Age of Gas” – tight gas, shale gas – has doubled reserves. Nobody knows for sure – there’s so much there. Perhaps 250 years of gas – no shortage of gas [although some of it is in] sensitive areas. Getting it from those areas with political problems. [There are uncertainties about] unconventional gas. There is plenty around the world – “pretty good”. Gas is not at war with renewables. Gas isn’t just a transition fuel – it’s a destination fuel. Got to prove CCS technically. If we can do that gas becomes a destination fuel. Can decarbonise not only electricity. Heat. Heat pumps won’t do it on their own. Sorry. [Gas can help decarbonise] transport – electrify the transport system – that’s what we believe is possible. Hope the Government will support CCS.
[Doug Parr] First and foremost – we are not going to eliminate gas from energy systems any time soon – don’t think of gas as a destination – I would warn against policy that gas is allowed to become the default and become too dependent on gas. A lot of policy on gas – but only over part of the energy system [electricity]. Heat is going to rely on gas fo a long time. If follow the Committee on Climate Change (CCC) logic – [heat is a] strategic sector – to getting away from carbon emissions. If gas is going to be what gets us out of energy problems – the so-called “trilemma” of decarbonisation, security [of supply] and cost. [New gas power plants amount to] 11 gigawatts [GW] over the next 5 years – 120 TWh – a quarter of current gas [still in service] out to 2030. If one take CCC target of 50 gC / KWh (grammes of carbon per kilowatt hour). Look at CCGT [Combined Cycle Gas Turbine gas generation power plant in operation] – that target is a fraction of [current] unabated [CCGT] – not that great. Any substantial role of gas has to make some pretty strong assumptions about CCS. Remember, this is not yet working – let us not have a decarbonisation policy relying heavily on CCS when not at the first stage. The CCC have warned that grandfathering of the 11 GW new generation – emit without restrictions – and issue until 2045. Can’t say gas is somehow the answer to decarbonisation issues. In media – don’t [swallow] the media froth. [As for] security of supply – already going to be quite reliant on gas for heating for quite some time – hard to see [otherwise]. Heavily reliant on imports – around 80%. Where do we import our gas from ? Qatar and Norway mostly. The former head of the Navy argued [recently] changing gas prices is the single most significant factor. DECC [UK Government Department of Energy and Climate Change] recent report on price shock. REA [Renewable Energy Association] said that just by hitting renewables targets would displace £60 billion of imports. [As for] shale gas : both Ofgem research and Deutsche Bank reports that shale gas is very unlikely to help on security [of supply] issue. Citing American example [of shale gas exploitation] is just irrelevant. [So the UK Government must be] supporting gas because of costs ? The biggest rise in consumer bills is from fossil fuel [price increases]. Not renewable energy, not green energy [measures] – it’s the rise in the wholesale gas price. Is that going to stabilise and go down ? Not according to Merrill Lynch and DECC – [strong] prices for Liquid Natural Gas (LNG) and therefore for gas [as a whole, will stay]. Clearly we will be using gas – as [electricity grid load] balancing. What I’m railing about is that gas doesn’t get us out of our energy trilemma. Gas will not [save us]. We know we can deliver through renewable energy, wind – acceleration of new technologies [such as tidal] – perhaps CCS will work, who knows ? and efficient use for example Combined Heat and Power (CHP) on industrial scale. If we are using gas we are using at it’s most efficient.
[Alan Whitehead MP] [recounts tale of how he got into trouble with Twitter commentators when he insisted the recent rise in consumer energy bills was due to the rise in the cost of wholesale gas, not green energy measures] [To Charles Hendry] I’m sure you don’t Tweet.
[Charles Hendry MP] No. absolutely not. I have enough people telling me I’m wrong without… We have to look at the role of gas. It would a dereliction of Government not to look at the role of gas going forward. [...mentions developments in gas production...] seismic profiling [enabling better understanding of gas fields] horizontal drilling [improving access to complex fields]. [As for] unconventional gas – the IEA “Golden Age of Gas” – but don’t assume [it's that simple - supply may go up but] demand for gas is going to go up dramatically. Japan – major user of LNG and diesel. Consequence of Germany’s decision to close nuclear power plants – will use much more gas. China…India…growth rate – massive growth of demand. Anticipate new resources to be found – Iraq for example – but cannot assume [what has happened in the United States of America with the development of shale gas where gas prices are now] a quarter [of what they were] – a massive boost to America – will they allow this to be exported to Asia – or use cheap gas to [relocating] industry back to the USA ? Have to look at implications for us. Reasons why shale gas is different in Europe – legal [situation] – the mineral rights [in the US, these can be acquired from underneath a landowner]. Don’t have the same commercial drives as farmers in the US. The reason why gas prices collapsed in the US and not here – if we saw a price benefit here, it would go out through the [gas] interconnectors [to neighbouring countries]. For real practical reasons won’t see shal gas develop [significantly] here. [It is a] global gamechanger – but… The US is fundamentally shifting from coal to gas – with the implications for emissions. The change from coal to gas was a major driver in European control of emissions [in the 1990s] [...] Investment…technology…practical constraints. EdF [Electricite de France] will go ahead with new nuclear [by the end of the year ?] but the plant will not come online until the end of the decade. Major renewable energy resources also in 2020s [not immediate] – the cost of offshore wind power is two times that of onshore. We’re saying to industry to reduce by 40% by the end of the decade – otherwise simply not affordable. Contributions from tidal, CCS ahead. It’s going to be very end of this decade to see if CCS can work. Worrying gap [in power generation between now and next decade]. Megawatts (MW) of coal being turned off in 2015. [Coal plants are] getting through their [legally permitted] generating hours too quickly. By 2023, the only nuclear plant still operational will be Sizewell B. We have to have more gas in the mix. As we look towards more intermittent resources (renewables), gas is an important source of backup. [Will have/need] a capacity mechanism to ensure [optimisation when] mismatch between supply and demand – auction to include gas – could be [North Sea] gas, gas from the interconnectors [from abroad] or demand side response [demand reduction] – a more sophisticated capacity mechanism than historical. I’m more optimistic about CCS [than Doug Parr]. CCS is a requirement. It is something we have to deliver – no scenario I’ve seen where we’re going [to be] using less coal, oil and gas than today. [Out to 2035] our basic needs [will still rely for a good percentage on] fossil fuels. Broadening CCS [demonstration competition] out to pre- and post-combustion on coal – [expand] to gas. Can be applied to gas as well as coal. I think CCS is a fundamentally critical part of this equation. If so, can see gas as a destination fuel. The GW of gas being built in the next few years [some questions] – currently gas is being mothballed [some plants being shut down effectively putting them into disuse] because of [fuel] prices. I consented more in gas and also wind on- and offshore last year. But that gas is not being built. If we want that gas built we need a more coherent strategy. Look at what is necessary to encourage that gas – and carbon emissions [reduction] alongside. EPS [Emissions Performance Standard] [...] to stop unabated coal – limit 450 gC / kWh – significant proportion of plant would need CCS. But ddin’t want to disincentivise gas. Have also said a point where CCS on gas will be necessary. But if we had people building gas now and then 15, 20 years later they would have to fit very expensive [CCS] equipment… Volume of gas coming forward meets our supply issues. Over the next few years, grandfathering. If see enough gas coming through can change the mechanism in due course. [We will be] responding officially to the CCC in Autumn. Need to [fully] decarbonise electricity in the course of the 2030s if we want to meet out climate change objectives. I think that [the] reality [is that] gas and important element. Nuclear is important. Want to see significant amount of renewable energy and what Doug is calling for – significant commitment to [energy use] efficiency in the country. [We should concentrate particularly on] energy efficiency.
The meeting then opened up to questions from the floor… To Be ContinuedAcademic Freedom, Be Prepared, Big Number, Big Picture, British Biogas, Burning Money, Carbon Capture, Carbon Pricing, Carbon Taxatious, Coal Hell, Cost Effective, Design Matters, Drive Train, Efficiency is King, Electrificandum, Emissions Impossible, Energy Autonomy, Energy Change, Energy Insecurity, Engineering Marvel, Foreign Interference, Fossilised Fuels, Gamechanger, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Low Carbon Life, Marvellous Wonderful, Methane Management, Money Sings, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Peak Coal, Peak Emissions, Policy Warfare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Shale Game, Technofix, Technological Fallacy, Technological Sideshow, The Price of Gas, The War on Error, Transport of Delight, Unnatural Gas, Wasted Resource, Wind of Fortune, Zero Net
Posted on May 22nd, 2012 2 comments
Public Enemy Number One in energy terms has got to be burning coal to generate electricity. Although the use of some coal for domestic heating to supplement varying supplies of biomass in home stoves is going to continue to be very useful, using coal for power production is wasteful, toxic and high carbon.
Public Enemy Number Two in energy terms is nuclear power – a weight round our collective neck. Costly to build, costly to underwrite, costly to decommission: although its proponents claim it as a low carbon solution, even they admit the management of nuclear power can be polluting, risky and wasteful.
Public Energy Number Three in energy terms has to be the incredible amount of water required to keep the first two enemies in operation. Climate change is already altering the patterns of rainfall, both in geographical areas and in seasons. Any energy solutions that don’t require water supplies will be preferable.
Many environmental researchers oppose a growing dependence on Natural Gas for power generation in industrialised countries – they claim it will lock in carbon emissions production without Carbon Capture and Storage (CCS). Carbon Capture and Storage is way off in the never-never land at present, so it should not be factored in to analyses of carbon management. Ignoring CCS, it can be seen that substituting in Natural Gas power generation where coal has been the principal fuel is in fact a very good way to lower greenhouse gas emissions in the near term.
Natural Gas is not forever, not even with environmentally-ensured unconventional production, such as shale gas. Yet the Natural Gas infrastructure is highly important for developed and some parts of developing countries too. If we can re-imagine the future of gas, making gas fuels renewable, the already existing distribution of gas and appliances and equipment that use it, become a valuable asset.
The climate change crisis is an energy crisis. My position is that we need three vital things to solve this energy crisis : rationalised energy, renewable electricity and Renewable Gas. My key projection is that a 100% renewable energy world is possible, and in fact, inevitable, and to get from here to there we need to use gas fuels, but they need to become progressively renewable in order to meet the climate change crisis.
Natural Gas can not only be a “bridge fuel”. Supporting its use now, on the understanding that it will be replaced by Renewable Gas in the medium term, will enable links to be made between society and the energy industry, and break down the barricades between those who are against high carbon energy and those who sell high carbon energy.Academic Freedom, Assets not Liabilities, Big Picture, Big Society, British Biogas, Burning Money, Carbon Capture, Climate Change, Coal Hell, Conflict of Interest, Corporate Pressure, Demoticratica, Emissions Impossible, Energy Change, Energy Insecurity, Energy Revival, Engineering Marvel, Evil Opposition, Fossilised Fuels, Gamechanger, Global Heating, Green Investment, Green Power, Human Nurture, Hydrocarbon Hegemony, Low Carbon Life, Major Shift, National Energy, National Power, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Paradigm Shapeshifter, Peace not War, Peak Emissions, Peak Natural Gas, Realistic Models, Renewable Gas, Renewable Resource, Resource Wards, Social Capital, Social Change, Solution City, Technofix, Technological Sideshow, The Power of Intention, The Price of Gas, The War on Error, Wasted Resource, Western Hedge, Zero Net
Posted on April 20th, 2012 No comments