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  • Shell Shirks Carbon Responsibility

    Posted on November 19th, 2014 Jo No comments

    I was in a meeting today held at the Centre for European Reform in which Shell’s Chief Financial Officer, Simon Henry, made two arguments to absolve the oil and gas industry for responsibility for climate change. He painted coal as the real enemy, and reiterated the longest hand-washing argument in politics – that Shell believes that a Cap and Trade system is the best way to suppress carbon dioxide emissions. In other words, it’s not up to Shell to do anything about carbon. He argued that for transportation and trade the world is going to continue to need highly energy-dense liquid fuels for some time, essentially arguing for the continuation of his company’s current product slate. He did mention proudly in comments after the meeting that Shell are the world’s largest bioethanol producers, in Brazil, but didn’t open up the book on the transition of his whole company to providing the world with low carbon fuels. He said that Shell wants to be a part of the global climate change treaty process, but he gave no indication of what Shell could bring to the table to the negotiations, apart from pushing for carbon trading. Mark Campanale of the Carbon Tracker Initiative was sufficiently convinced by the “we’re not coal” argument to attempt to seek common cause with Simon Henry after the main meeting. It would be useful to have allies in the oil and gas companies on climate change, but it always seems to be that the rest of the world has to adopt Shell’s and BP’s view on everything from policy to energy resources before they’ll play ball.

    During the meeting, Mark Campanale pointed out in questions that Deutsche Bank and Goldman Sachs are going to bring Indian coal to trade on the London Stock Exchange and that billions of dollars of coal stocks are to be traded in London, and that this undermines all climate change action. He said he wanted to understand Shell’s position, as the same shareholders that hold coal (shares), hold Shell. I think he was trying to get Simon Henry to call for a separation in investment focus – to show that investment in oil and gas is not the same as investing in Big Bad Coal. But Simon Henry did not bite. According to the Carbon Tracker Initiative’s report of 2013, Unburnable Carbon, coal listed on the London Stock Exchange is equivalent to 49 gigatonnes of Carbon Dioxide (gtCO2), but oil and gas combined trade shares for stocks equivalent to 64 gtCO2, so there’s currently more emissions represented by oil and gas on the LSX than there is for coal. In the future, the emissions held in the coal traded in London have the potential to amount to 165 gtCO2, and oil and gas combined at 125 gtCO2. Despite the fact that the United Kingdom is only responsible for about 1.6% of direct country carbon dioxide emissions (excluding emissions embedded in traded goods and services), the London Stock Exchange is set to be perhaps the world’s third largest exchange for emissions-causing fuels.

    Here’s a rough transcript of what Simon Henry said. There are no guarantees that this is verbatim, as my handwriting is worse than a GP’s.

    [Simon Henry] I’m going to break the habit of a lifetime and use notes. Building a long-term sustainable energy system – certain forces shaping that. 7 billion people will become 9 billion people – [many] moving from off-grid to on-grid. That will be driven by economic growth. Urbanisation [could offer the possibility of] reducing demand for energy. Most economic growth will be in developing economies. New ways fo consuming energy. Our scenarios – in none do we see energy not growing materially – even with efficiencies. The current ~200 billion barrels of oil equivalent per day today of energy demand will rise to ~400 boe/d by 2050 – 50% higher than today. This will be demand-driven – nothing to do with supply…

    [At least one positive-sounding grunt from the meeting – so there are some Peak Oil deniers in the room, then.]

    [Simon Henry] …What is paramount for governments – if a threat, then it gets to the top of the agenda. I don’t think anybody seriously disputes climate change…

    [A few raised eyebrows and quizzical looks around the table, including mine]

    [Simon Henry] …in the absence of ways we change the use of energy […] Any approach to climate change has got to embrace science, policy and technology. All three levers must be pulled. Need a long-term stable policy that enables technology development. We think this is best in a market mechanism. […] Energy must be affordable at the point of use. What we call Triple A – available, acceptable and affordable. No silver bullet. Develop in a responsible way. Too much of it is soundbite – that simplifies what’s not a simple problem. It’s not gas versus coal. [Although, that appeared to be one of his chief arguments – that it is gas versus coal – and this is why we should play nice with Shell.]

    1. Economy : About $1.5 to $2 trillion of new money must be invested in the energy industry each year, and this must be sustained until 2035 and beyond. A [few percent] of the world economy. It’s going to take time to make [massive changes]. […] “Better Growth : Better Climate” a report on “The New Climate Economy” by the Global Commission on the Economy and Climate, the Calderon Report. [The world invested] $700 billion last year on oil and gas [or rather, $1 trillion] and $220 – $230 billion on wind power and solar power. The Calderon Report showed that 70% of energy is urban. $6 trillion is being spent on urban infrastructure [each year]. $90 trillion is available. [Urban settings are] more compact, more connected, there’s public transport, [can build in efficiencies] as well as reducing final energy need. Land Use is the other important area – huge impact on carbon emissions. Urbanisation enables efficiency in distributed generation [Combined Heat and Power (CHP)], [local grids]. Eye-popping costs, but the money will be spent anyway. If it’s done right it will [significantly] reduce [carbon emissions and energy demand]…

    2. Technology Development : Governments are very bad at picking winners. Better to get the right incentives in and let the market players decide [optimisation]. They can intervene, for example by [supporting] Research and Development. But don’t specify the means to an end…The best solution is a strong predictable carbon price, at $40 a tonne or more or it won’t make any difference. We prefer Cap and Trade. Taxes don’t actually decrease carbon [emissions] but fundamentally add cost to the consumer. As oil prices rose [in 2008 – 2009] North Americans went to smaller cars…Drivers [set] their behaviour from [fuel] prices…

    [An important point to note here : one of the reasons why Americans used less motor oil during the “Derivatives Bubble” recession between 2006 and 2010 was because the economy was shot, so people lost their employment, and/or their homes and there was mass migration, so of course there was less commuter driving, less salesman driving, less business driving. This wasn’t just a response to higher oil prices, because the peak in driving miles happened before the main spike in oil prices. In addition, not much of the American fleet of cars overturned in this period, so Americans didn’t go to smaller cars as an adaptation response to high oil prices. They probably turned to smaller cars when buying new cars because they were cheaper. I think Simon Henry is rather mistaken on this. ]

    [Simon Henry] …As regards the Carbon Bubble : 65% of the Unburnable fossil fuels to meet the 2 degrees [Celsius] target is coal. People would stuggle to name the top five coal companies [although they find it easy to name the top five oil and gas companies]. Bearing in mind that you have to [continue to] transport stuff [you are going to need oil for some time to come.] Dealing with coal is the best way of moving forward. Coal is used for electricity – but there are better ways to make electricity – petcoke [petroleum coke – a residue from processing heavy and unconventional crude oil] for example…

    [The climate change impact of burning (or gasifying) petroleum coke for power generation is possibly worse than burning (or gasifying) hard coal (anthracite), especially if the pet coke is sourced from tar sands, as emissions are made in the production of the pet coke before it even gets combusted.]

    [Simon Henry] …It will take us 30 years to get away entirely from coal. Even if we used all the oil and gas, the 2 degrees [Celsius] target is still possible…

    3. Policy : We tested this with the Dutch Government recently – need to create an honest dialogue for a long-term perspective. Demand for energy needs to change. It’s not about supply…

    [Again, some “hear hears” from the room from the Peak Oil and Peak Natural Gas deniers]

    [Simon Henry] …it’s about demand. Our personal wish for [private] transport. [Not good to be] pushing the cost onto the big bad energy companies and their shareholders. It’s taxes or prices. [Politicians] must start to think of their children and not the next election…

    …On targets and subsidies : India, Indonesia, Brazil […] to move on fossil fuel subsidies – can’t break the Laws of Economics forever. If our American friends drove the same cars we do, they’d reduce their oil consumption equivalent to all of the shale [Shale Gas ? Or Shale Oil ?]… Targets are an emotive issue when trying to get agreement from 190 countries. Only a few players that really matter : USA, China, EU, India – close to 70% of current emissions and maybe more in future. The EPA [Environmental Protection Agency in the United States of America] [announcement] on power emissions. China responded in 24 hours. The EU target on 27% renewables is not [country-specific, uniform across-the-board]. Last week APEC US deal with China on emissions. They switched everything off [and banned traffic] and people saw blue sky. Coal with CCS [Carbon Capture and Storage] we see as a good idea. We would hope for a multi-party commitment [from the United Nations climate talks], but [shows doubt]… To close : a couple of words on Shell – have to do that. We have only 2% [of the energy market], but we [hope we] can punch above our weight [in policy discussions]. We’re now beginning to establish gas as a transport fuel. Brazil – low carbon [bio]fuels. Three large CCS projects in Canada, EU… We need to look at our own energy use – pretty trivial, but [also] look at helping our customers look at theirs. Working with the DRC [China]. Only by including companies such as ourselves in [climate and energy policy] debate can we get the [global deal] we aspire to…

    […]

    [Question from the table, Ed Wells (?), HSBC] : Green Bonds : how can they provide some of the finance [for climate change mitigation and adaptation] ? The first Renminbi denominated Green Bond from [?]. China has committed to non-fossil fuels. The G20 has just agreed the structure on infrastructure – important – not just for jobs and growth – parallel needs on climate change. [Us at HSBC…] Are people as excited about Green Bonds as we are ?

    [Stephen Tindale] Yes.

    [Question from the table, Anthony Cary, Commonwealth Scholarship Commission] …The key seems to be pricing carbon into the economy. You said you preferred Cap and Trade. I used to but despite reform the EU Emissions Trading Scheme (EU ETS) – [failures and] gaming the system. Tax seems to be a much more solid basis.

    [Simon Henry] [The problem with the ETS] too many credits and too many exemptions. Get rid of the exemptions. Bank reserve of credits to push the price up. Degress the number of credits [traded]. Tax : if people can afford it, they pay the tax, doesn’t stop emissions. In the US, no consumption tax, they are very sensitive to the oil price going up and down – 2 to 3 million barrels a day [swing] on 16 million barrels a day. All the political impact on the US from shale could be done in the same way on efficiency [fuel standards and smaller cars]. Green Bonds are not something on top of – investment should be financed by Green Bonds, but investment is already being done today – better to get policy right and then all investment directed.

    […]

    [Question from the table, Kirsten Gogan, Energy for Humanity] The role of nuclear power. By 2050, China will have 500 gigawatts (GW) of nuclear power. Electricity is key. Particularly coal. Germany is building new coal as removing nuclear…

    [My internal response] It’s at this point that my ability to swallow myths was lost. I felt like shouting, politely, across the table : ACTUALLY KIRSTEN, YOU, AND A LOT OF OTHER PEOPLE IN THE ROOM ARE JUST PLAIN WRONG ON GERMANY AND COAL.

    “Germany coal power generation at 10-year low in August”, 9th September 2014

    And the only new coal-fired plants being built are those that were planned up to five years ago. No new coal-fired capacity is now being agreed.

    [Kirsten Gogan]…German minister saying in public that you can’t phase out nuclear and coal at the same time. Nuclear is not included in that conversation. Need to work on policy to scale up nuclear to replace coal. Would it be useful to have a clear sectoral target on decarbonising – 100% on electricity ?

    [Stephen Tindale] Electricity is the least difficult of the energy sectors to decarbonise. Therefore the focus should be on electricity. If a target would help (I’m not a fan) nuclear certainly needs to be a part of the discussions. Angela Merkel post-Fukushima has been crazy, in my opinion. If want to boost renewable energy, nuclear power will take subsidies away from that. But targets for renewable energy is the wrong objective.. If the target is keeping the climate stable then it’s worth subsidising nuclear. Subsidising is the wrong word – “risk reduction”.

    [Simon Henry] If carbon was properly priced, nuclear would become economic by definition…

    [My internal response] NO IT WOULDN’T. A LOT OF NUCLEAR CONSTRUCTION AND DECOMMISSIONING AND SPENT FUEL PROCESSING REQUIRES CARBON-BASED ENERGY.

    [Simon Henry] …Basically, all German coal is exempted (from the EU ETS). If you have a proper market-based system then the right things will happen. The EU – hypocrisy at country level. Only [a couple of percent] of global emissions. The EU would matter if it was less hypocritical. China are more rational – long-term thinking. We worked with the DRC. Six differing carbon Cap and Trade schemes in operation to find the one that works best. They are effectively supporting renewable energy – add 15 GW each of wind and solar last year. They don’t listen to NIMBYs [they also build in the desert]. NIMBYism [reserved for] coal – because coal was built close to cities. [Relationship to Russia] – gas replacing coal. Not an accident. Five year plan. They believe in all solutions. Preferably Made in China so we can export to the rest of the world. [Their plans are for a range of aims] not just climate.

    […]
    […]

    [Simon Henry] [in answer to a question about the City of London] We don’t rely on them to support our activities [my job security depends on a good relationship with them]]. We have to be successful first and develop [technological opportunities] [versus being weakened by taxes]. They can support change in technology. Financing coal may well be new money. Why should the City fund new coal investments ?

    [Question from the table, asking about the “coal is 70% of the problem” message from Simon Henry] When you talk to the City investors, do you take the same message to the City ?

    [Simon Henry] How much of 2.7 trillion tonnes of “Unburnable Carbon” is coal, oil and gas ? Two thirds of carbon reserves is coal. [For economic growth and] transport you need high density liquid fuels. Could make from coal [but the emissions impact would be high]. We need civil society to have a more serious [understanding] of the challenges.

    After the discussion, I asked Simon Henry to clarify his words about the City of London.

    [Simon Henry] We don’t use the City as a source of capital. 90% is equity finance. We don’t go to the market to raise equity. For every dollar of profit, we invest 75 cents, and pay out 25 cents as dividend to our shareholders. Reduces [problems] if we can show we can reinvest. [ $12 billion a year is dividend. ]

    I asked if E&P [Exploration and Production] is working – if there are good returns on investment securing new reserves of fossil fuels – I know that the company aims for a 10 or 11 year Reserves to Production ratio (R/P) to ensure shareholder confidence.

    Simon Henry mentioned the price of oil. I asked if the oil price was the only determinant on the return on investment in new E&P ?

    [Simon Henry] If the oil price is $90 a barrel, that’s good. At $100 a barrel or $120 a barrel [there’s a much larger profit]. Our aim is to ensure we can survive at $70 a barrel. [On exploration] we still have a lot of things in play – not known if they are working yet… Going into the Arctic [At which point I said I hope we are not going into the Arctic]… [We are getting returns] Upstream is fine [supply of gas and oil]. Deepwater is fine. Big LNG [Liquefied Natural Gas] is fine. Shale is a challenge. Heavy Oil returns could be better – profitable, but… [On new E&P] Iraq, X-stan, [work in progress]. Downstream [refinery] has challenges on return. Future focus – gas and deepwater. [On profitability of investment – ] “Gas is fine. Deepwater is fine.”

    [My summary] So, in summary, I think all of this means that Shell believes that Cap and Trade is the way to control carbon, and that the Cap and Trade cost would be borne by their customers (in the form of higher bills for energy because of the costs of buying carbon credits), so their business will not be affected. Although a Cap and Trade market could possibly cap their own market and growth as the sales envelope for carbon would be fixed, since Shell are moving into lower carbon fuels – principally Natural Gas, their own business still has room for growth. They therefore support Cap and Trade because they believe it will not affect them. WHAT THEY DON’T APPEAR TO WANT PEOPLE TO ASK IS IF A CAP AND TRADE SYSTEM WILL ACTUALLY BE EFFECTIVE IN CURBING CARBON DIOXIDE EMISSIONS. They want to be at the negotiating table. They believe that they’re not the problem – coal is. They believe that the world will continue to need high energy-dense oil for transport for some time to come. It doesn’t matter if the oil market gets constrained by natural limits to expansion because they have gas to expand with. They don’t see a problem with E&P so they believe they can keep up their R/P and stay profitable and share prices can continue to rise. As long as the oil price stays above $70 a barrel, they’re OK.

    However, there was a hint in what Simon Henry talked about that all is not completely well in Petro-land.

    a. Downstream profit warning

    Almost in passing, Simon Henry admitted that downstream is potentially a challenge for maintaining returns on investment and profits. Downstream is petrorefinery and sales of the products. He didn’t say which end of the downstream was the issue, but oil consumption has recovered from the recent Big Dip recession, so that can’t be his problem – it must be in petrorefinery. There are a number of new regulations about fuel standards that are going to be more expensive to meet in terms of petroleum refinery – and the chemistry profiles of crude oils are changing over time – so that could also impact refinery costs.

    b. Carbon disposal problem

    The changing profile of crude oils being used for petrorefinery is bound to cause an excess of carbon to appear in material flows – and Simon Henry’s brief mention of petcoke is more significant than it may first appear. In future there may be way too much carbon to dispose of (petcoke is mostly carbon rejected by thermal processes to make fuels), and if Shell’s plan is to burn petcoke to make power as a solution to dispose of this carbon, then the carbon dioxide emissions profile of refineries is going to rise significantly… where’s the carbon responsiblity in that ?

  • Contracts for Difference Risks

    Posted on November 10th, 2014 Jo 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…

  • European Referendum : Corpse Factory

    Posted on November 9th, 2014 Jo 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 :-

    SO
    IT IS
    AS
    IT IS.

    and not

    IT IS
    AS
    IT IS,
    SO…

    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 Development

  • Christiana Figueres : Love Bug

    Posted on May 7th, 2014 Jo 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 ?

  • David MacKay : Heating London

    Posted on May 2nd, 2014 Jo 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 :-
    http://www.eden.gov.uk/planning-and-development/building-control/building-control-guidance-notes/sap-calculations-explained/
    http://www.dimplex.co.uk/products/renewable_solutions/building_regulations_part_l.htm

    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.

  • On Having to Start Somewhere

    Posted on March 15th, 2014 Jo No comments

    In the last few weeks I have heard a lot of noble but futile hopes on the subject of carbon dioxide emissions control.

    People always seem to want to project too far into the future and lay out their wonder solution – something that is just too advanced enough to be attainable through any of the means we currently have at our disposal. It is impossible to imagine how the gulf can be bridged between the configuration of things today and their chosen future solutions.

    Naive civil servants strongly believe in a massive programme of new nuclear power. Head-in-the-clouds climate change consultants and engineers who should know otherwise believe in widespread Carbon Capture and Storage or CCS. MBA students believe in carbon pricing, with carbon trading, or a flat carbon tax. Social engineers believe in significant reductions in energy intensity and energy consumer behaviour change, and economists believe in huge cost reductions for all forms of renewable electricity generation.

    To make any progress at all, we need to start where we are. Our economic system has strong emissions-dependent components that can easily be projected to fight off contenders. The thing is, you can’t take a whole layer of bricks out of a Jenga stack without severe degradation of its stability. You need to work with the stack as it is, with all the balances and stresses that already exist. It is too hard to attempt to change everything at once, and the glowing ethereal light of the future is just too ghostly to snatch a hold of without a firm grasp on an appropriate practical rather than spiritual guide.

    Here’s part of an email exchange in which I strive for pragmatism in the face of what I perceive as a lack of realism.


    To: Jo

    I read your article with interest. You have focused on energy, whereas I
    tend to focus on total resource. CCS does make sense and should be pushed
    forward with real drive as existing power stations can be cleaned up with it
    and enjoy a much longer life. Establishing CCS is cheaper than building new
    nuclear and uses far less resources. Furthermore, CCS should be used on new
    gas and biomass plants in the future.

    What we are lacking at the moment is any politician with vision in this
    space. Through a combination of boiler upgrades, insulation, appliance
    upgrades and behaviour change, it is straight forward to halve domestic
    energy use. Businesses are starting to make real headway with energy
    savings. We can therefore maintain a current total energy demand for the
    foreseeable future.

    To service this demand, we should continue to eke out every last effective
    joule from the current generating stock by adding cleansing kit to the dirty
    performers. While this is being done, we can continue to develop renewable
    energy and localised systems which can help to reduce the base load
    requirement even further.

    From an operational perspective, CCS has stagnated over the last 8 years, so
    a test plant needs to be put in place as soon as possible.

    The biggest issue for me is that, through political meddling and the
    unintended consequences of ill-thought out subsidies, the market has been
    skewed in such a way that the probability of a black-out next year is very
    high indeed.

    Green gas is invisible in many people’s thinking, but the latest House of
    Lords Report highlighted its potential.

    Vested interests are winning hands down in the stand-off with the big
    picture!


    From: Jo

    What is the title of the House of Lords report to which you refer ?

    Sadly, I am old enough to remember Carbon Capture and Storage (CCS)
    the first time the notion went around the block, so I’d say that
    progress has been thin for 30 years rather than 8.

    Original proposals for CCS included sequestration at the bottom of the
    ocean, which have only recently been ruled out as the study of global
    ocean circulation has discovered more complex looping of deep and
    shallower waters that originally modelled – the carbon dioxide would
    come back up to the surface waters eventually…

    The only way, I believe, that CCS can be made to work is by creating a
    value stream from the actual carbon dioxide, and I don’t mean Enhanced
    Oil Recovery (EOR).

    And I also definitely do not mean carbon dioxide emissions pricing,
    taxation or credit trading. The forces against an
    investment-influencing carbon price are strong, if you analyse the
    games going on in the various economic system components. I do not
    believe that a strong carbon price can be asserted when major economic
    components are locked into carbon – such as the major energy producers
    and suppliers, and some parts of industry, and transport.

    Also, carbon pricing is designed to be cost-efficient, as markets will
    always find the lowest marginal pricing for any externality in fines
    or charges – which is essentially what carbon dioxide emissions are.
    The EU Emissions Trading Scheme was bound to deliver a low carbon
    price – that’s exactly what the economists predicted in modelling
    carbon pricing.

    I cannot see that a carbon price could be imposed that was more than
    5% of the base commodity trade price. At those levels, the carbon
    price is just an irritation to pass on to end consumers.

    The main problem is that charging for emissions does not alter
    investment decisions. Just like fines for pollution do not change the
    risks for future pollution. I think that we should stop believing in
    negative charging and start backing positive investment in the energy
    transition.

    You write “You have focused on energy, whereas I tend to focus on
    total resource.” I assume you mean the infrastructure and trading
    systems. My understanding leads me to expect that in the current
    continuing economic stress, solutions to the energy crisis will indeed
    need to re-use existing plant and infrastructure, which is why I
    think that Renewable Gas is a viable option for decarbonising total
    energy supply – it slots right in to substitute for Natural Gas.

    My way to “eke out every last effective joule from the current
    generating stock” is to clean up the fuel, rather than battle
    thermodynamics and capture the carbon dioxide that comes out the back
    end. Although I also recommend carbon recycling to reduce the need for
    input feedstock.

    I completely agree that energy efficiency – cutting energy demand
    through insulation and so on – is essential. But there needs to be a
    fundamental change in the way that profits are made in the energy
    sector before this will happen in a significant way. Currently it
    remains in the best interests of energy production and supply
    companies to produce and supply as much energy as they can, as they
    have a duty to their shareholders to return a profit through high
    sales of their primary products.

    “Vested interests” have every right under legally-binding trade
    agreements to maximise their profits through the highest possible
    sales in a market that is virtually a monopoly. I don’t think this can
    be challenged, not even by climate change science. I think the way
    forward is to change the commodities upon which the energy sector
    thrives. If products from the energy sector include insulation and
    other kinds of efficiency, and if the energy sector companies can
    continue to make sales of these products, then they can reasonably be
    expected to sell less energy. I’m suggesting that energy reduction
    services need to have a lease component.

    Although Alistair Buchanan formerly of Ofgem is right about the
    electricity generation margins slipping really low in the next few
    winters, there are STOR contracts that National Grid have been working
    on, which should keep the lights on, unless Russia turn off the gas
    taps, which is something nobody can do anything much about – not BP,
    nor our diplomatic corps, the GECF (the gas OPEC), nor the WTO.


  • Failing Narratives : Carbon Culprits

    Posted on March 14th, 2014 Jo 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 :-

    http://www.greengas.org.uk/pdf/biomethane-qp.pdf

    http://www.r-e-a.net/news/rea-welcomes-environment-agencys-updated-anaerobic-digestion-quality-protocol

    http://adbiogas.co.uk/2014/01/30/biomethane-qp-could-boost-renewable-gas-to-grid-market/
    http://adbiogas.co.uk/2014/01/30/biomethane-quality-protocol-published/

    Here’s some background :-

    http://www.environment-agency.gov.uk/aboutus/wfo/epow/124111.aspx

    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 ?

  • The General Lightness of Carbon Pricing

    Posted on February 27th, 2014 Jo 1 comment

    I was at a very interesting meeting this morning, entitled “Next Steps for Carbon Capture and Storage in the UK”, hosted by the Westminster Energy, Environment and Transport Forum :-

    http://www.westminsterforumprojects.co.uk/forums/event.php?eid=713
    http://www.westminsterforumprojects.co.uk/forums/agenda/CCS-2014-agenda.pdf

    During the proceedings, there were liberal doses of hints at that the Chancellor of the Exchequer is about to freeze the Carbon Price Floor – the central functioning carbon pricing policy in the UK (since the EU Emissions Trading Scheme “isn’t working”).

    All of the more expensive low carbon energy technologies rely on a progressively heavier price for carbon emissions to make their solutions more attractive.

    Where does this leave the prospects for Carbon Capture and Storage in the 2030s ? Initial technology-launching subsidies will have been dropped, and the Contracts for Difference will have been ground down into obscurity. So how will CCS keep afloat ? It’s always going to remain more expensive than other technology options to prevent atmospheric carbon dioxide emissions, so it needs some prop.

    What CCS needs is some Added Value. It will come partly from EOR – Enhanced Oil Recovery, as pumping carbon dioxide down depleting oil and gas fields will help stimulate a few percent of extra production.

    But what will really make the difference is using carbon dioxide to make new fuel. That’s the wonder of Renewable Gas – it will be able to provide a valued product for capturing carbon dioxide.

    This wasn’t talked about this morning. The paradigm is still “filter out the CO2 and flush it down a hole”. But it won’t stay that way forever. Sooner or later, somebody’s going to start mining carbon dioxide from CCS projects to make new chemicals and gas fuels. Then, who cares if there’s negative charging for emissions ? Or at what price ? The return on investment in carbon capture will simply bypass assumptions about needing to create a carbon market or set a carbon tax.

  • In Confab : Paul Elsner

    Posted on January 23rd, 2014 Jo No comments

    Dr Paul Elsner of Birkbeck College at the University of London gave up some of his valuable time for me today at his little bijou garret-style office in Bloomsbury in Central London, with an excellent, redeeming view of the British Telecom Tower. Leader of the Energy and Climate Change module on Birkbeck’s Climate Change Management programme, he offered me tea and topical information on Renewable Energy, and some advice on discipline in authorship.

    He unpacked the recent whirlwind of optimism surrounding the exploitation of Shale Gas and Shale Oil, and how Climate Change policy is perhaps taking a step back. He said that we have to accept that this is the way the world is at the moment.

    I indicated that I don’t have much confidence in the “Shale Bubble”. I consider it mostly as a public relations exercise – and that there are special conditions in the United States of America where all this propaganda comes from. I said that there are several factors that mean the progress with low carbon fuels continues to be essential, and that Renewable Gas is likely to be key.

    1. First of all, the major energy companies, the oil and gas companies, are not in a healthy financial state to make huge investment. For example, BP has just had the legal ruling that there will be no limit to the amount of compensation claims they will have to face over the Deepwater Horizon disaster. Royal Dutch Shell meanwhile has just had a serious quarterly profit warning – and if that is mostly due to constrained sales (“Peak Oil Demand”) because of economic collapse, that doesn’t help them with the kind of aggressive “discovery” they need to continue with to keep up their Reserves to Production ratio (the amount of proven resources they have on their books). These are not the only problems being faced in the industry. This problem with future anticipated capitalisation means that Big Oil and Gas cannot possibly look at major transitions into Renewable Electricity, so it would be pointless to ask, or try to construct a Carbon Market to force it to happen.

    2. Secondly, despite claims of large reserves of Shale Gas and Shale Oil, ripe for the exploitation of, even major bodies are not anticipating that Peak Oil and Peak Natural Gas will be delayed by many years by the “Shale Gale”. The reservoir characteristics of unconventional fossil fuel fields do not mature in the same way as conventional ones. This means that depletion scenarios for fossil fuels are still as relevant to consider as the decades prior to horizontal drilling and hydraulic fracturing (“fracking”).

    3. Thirdly, the reservoir characteristics of conventional fossil fuel fields yet to exploit, especially in terms of chemical composition, are drifting towards increasingly “sour” conditions – with sigificant levels of hydrogen sulfide and carbon dioxide in them. The sulphur must be removed for a variety of reasons, but the carbon dioxide remains an issue. The answer until recently from policy people would have been Carbon Capture and Storage or CCS. Carbon dioxide should be washed from acid Natural Gas and sequestered under the ocean in salt caverns that previously held fossil hydrocarbons. It was hoped that Carbon Markets and other forms of carbon pricing would have assisted with the payment for CCS. However, recently there has been reduced confidence that this will be significant.

    Renewable Gas is an answer to all three of these issues. It can easily be pursued by the big players in the current energy provision system, with far less investment than wholesale change would demand. It can address concerns of gas resource depletion at a global scale, the onset of which could occur within 20 to 25 years. And it can be deployed to bring poor conventional fossil fuels into consideration for exploitation in the current time – answering regional gas resource depletion.

    Outside, daffodils were blooming in Tavistock Square. In January, yes. The “freaky” weather continues…

  • Gain in Transmission

    Posted on January 13th, 2014 Jo No comments

    It constantly amazes and intrigues me how human individuals operate in networks to formulate, clarify and standardise ideas, tools, machines, procedures and systems. Several decades ago, Renewable Electricity from sources such as wind power was considered idealistic vapourware, esoteric, unworkable and uncertain, and now it’s a mainstream generator of reliable electricity in the UK’s National Grid. Who would have thought that invisible, odourless, tasteless gas phase chemicals would heat our homes ? It’s now just so normal, it’s impossible to imagine that Natural Gas was once considered to be so insignificant that it was vented – not even flared – from oil wells.

    Judging by the sheer number of people working on aspects of Renewable Gas, I expect this too to be mainstream in the energy sector within a decade. What do others think ? I have begun the process of asking, for example, see below.

    =x=x=x=x=x=x=x=x=

    from: Jo Abbess
    to: Richard A. Sears
    date: Mon, May 2, 2011 at 11:59 PM
    subject: Question from your TED talk

    Dear [Professor] Sears,

    I was intrigued by your TED talk that I recently viewed :-

    http://www.ted.com/talks/richard_sears_planning_for_the_end_of_oil.html

    Yes, I am interested in the idea of “printing” solar cells, which is what I think you might be alluding to with your reference to abalone shells.

    But I am more interested in what you base your estimate of “Peak Gas” on. I recently did some very basic modelling of hydrocarbon resources and electricity, which look somewhat different from the IEA and EIA work and reports from BP and Royal Dutch Shell. My conclusion was that Peak Oil is roughly now, Peak Natural Gas will be around 2030, and Peak Electricity around 2060 :-

    http://www.joabbess.com/2011/02/11/future-energy-tipping-points/

    I am going to try to improve these charts before I submit my MSc Masters Thesis, so I am trying to find out what other people base their projections on. Could you help me by pointing me at the basis of your assessment of Peak Natural Gas ?

    Thank you,

    jo.

    =x=x=x=x=x=x=

    from: Richard A. Sears
    to: Jo Abbess
    date: Thu, Oct 24, 2013 at 5:30 PM

    Jo,

    I am just now finding a number of old emails that got archived (and ignored) when I moved from MIT to Stanford a few years ago. A quick answer is that I did about what Hubbert did in 1956. No detailed statistical modeling, just look at the trends, think about what’s happening in the industry, and make what seem like reasonable statements about it.

    A number of interesting things have happened just in the last two years since you wrote to me. Significantly, US oil production is on the rise. When you count all hydrocarbon liquids, the US is or will soon be, the world largest producer. This just goes to one of my points from TED. Don’t expect oil and gas to go away any time soon. There are plenty of molecules out there. I first said this internally at Shell in the mid 1980’s when I was Manager of Exploration Economics and since then I’ve felt that I got it about right.

    I did just look at your website and would caution you about extrapolating very recent trends into the future. The rate of growth in shale gas production has slowed, but there’s an important economic factor driving that. Gas prices in the US are very low compared to oil. With the development of fraccing technology to enable oil and liquids production from shale formations, the industry has shifted their effort to the liquids-rich plays. A few statistics. Gas is currently around $3.50/mcf. On an energy equivalent basis, this equates to an oil price of about $20/barrel. Brent currently sells for $110/barrel and the light oils produced from the shale plays in the US are getting between $90 and $100/barrel, depending on where they can be delivered. As a consequence, in the 3rd quarter of 2013, compared to one year ago, oil well completions are up 18% while natural gas well completions declined 30%.

    Yes, you are right. Printing solar cells is an example of what I was talking about with Abalone shells. Similarly, what if you had paint that as it dried would self assemble into linked solar cells and your entire house is now generating electricity. I was totally amazed at the number of people that didn’t actually think about what I was saying and called me an !d!*t for imagining that I was going to transform coal itself into some magical new molecule. […]

    In any case, I think it’s good that you’re thinking about these problems, and importantly it appears from your website that you’re thinking about the system and its complexity.

    Best regards,
    Rich Sears

    Richard A. Sears
    Visiting Scientist
    MIT Energy Initiative
    Massachusetts Institute of Technology

    =x=x=x=x=x=x=x=x=x=

    from: Jo Abbess
    to: Richard A Sears
    sent: Monday, May 02, 2011 3:59 PM

    Dear [Professor] Sears,

    Many thanks for your reply.

    I had kinda given up of ever hearing back from you, so it’s lovely to
    read your thoughts.

    May I blog them ?

    Regards,

    jo.

    =x=x=x=x=x=x=x=

    from: Richard A Sears
    date: Fri, Oct 25, 2013 at 5:03 PM
    to: Jo Abbess

    Jo,

    I have personally avoided blogging because I don’t want to put up with people writing mean comments about me. But the data is worth sharing. You should also know the sources of that data otherwise you open yourself to more criticism.

    The data on production comes from the International Energy Agency and a research firm PIRA. All of it was in recent press releases. The Energy Information Administration makes similar projections about future production. The data on well completions was recently released by API.

    No need to reference me. The data is out there for all to see. But if you do, fair warning. You will get stupid comments about how I used to be a VP at Shell so of course these are the things I’m going to say. […]

    By the way, there’s something else that’s very interesting in the world of peak oil and various peaks. I have long believed, as hinted in my TED talk that the most important aspect of peak oil is the demand driven phenomena, not the supply side. It’s worth noting in this context that US oil consumption peaked in 2005 and has declined about 10% since then. This data can be found easily in the BP Statistical Report on World Energy. This is real and is a result of economic shifts, greater efficiency, and the penetration of renewables. Future energy projections (references above) show that this trend continues. A big component of US energy consumption is gasoline, and US gasoline consumption peaked in 2007. I think that data can be found at http://www.eia.gov, although I haven’t looked for it lately. It’s a little factoid that I think I remember.

    Rich

    Richard A. Sears
    Consulting Professor
    Department of Energy Resources Engineering
    Stanford University

    =x=x=x=x=x=x=x=x=

    from: Jo Abbess
    to: Richard A Sears
    date: Sun, Jan 12, 2014 at 11:47 AM

    Dear Professor Sears,

    HNY 2014 !

    This year I am hoping to attempt the climb on my own personal K2 by writing an academic book on Renewable Gas – sustainable, low-to-zero carbon emissions gas phase fuels.

    I am not a chemist, nor a chemical engineer, and so I would value any suggestions on who I should approach in the gas (and oil) industry to interview about projects that lean in this direction.

    Examples would be :-

    * Power-to-Gas : Using “spare” wind power to make Renewable Hydrogen – for example by electrolysis of water. Part of the German Power-to-Gas policy. Some hydrogen can be added to gas grids safely without changing regulations, pipework or end appliances.

    * Methanation : Using Renewable Hydrogen and young or recycled carbon gas to make methane (using the energy from “spare” wind power, for example). Also part of the German Power-to-Gas policy.

    NB “Young” carbon would be either carbon monoxide or carbon dioxide, and be sourced from biomass, Direct Air Capture, or from the ocean. “Old” carbon would come from the “deeper” geological carbon cycle, such as from fossil fuel, or industrial processes such as the manufacture of chemicals from minerals and/or rocks.

    Precursors to Renewable Gas also interest me, as transitions are important – transitions from a totally fossil fuel-based gas system to a sustainable gas system. I have recently looked at some basic analysis on the chemistry of Natural Gas, and its refinery. It seems that methanation could be useful in making sour gas available as sweetened, as long as Renewable Hydrogen is developed for this purpose. It seems that there is a lot of sour gas in remaining reserves, and the kind of CCS (Carbon Capture and Storage) that would be required under emissions controls could make sour gas too expensive to use if it was just washed of acids.

    I don’t think the future of energy will be completely electrified – it will take a very long time to roll out 100% Renewable Electricity and there will always be problems transitioning out of liquid fuels to electricity in vehicular transportation.

    If you could suggest any names, organisations, university departments, companies, governance bodies that I should contact, or research papers that I should read, I would be highly grateful.

    Many thanks,

    jo.

  • Curmudgeons Happen

    Posted on January 5th, 2014 Jo 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.

  • Making The Sour Sweet

    Posted on January 1st, 2014 Jo No comments

    In the long view, some things are inevitable, and I don’t just mean death and taxes. Within the lifetime of children born today, there must be a complete transformation in energy. The future is renewable, and carefully deployed renewable energy systems can be reliable, sustainable and low cost, besides being low in carbon dioxide emissions to air. This climate safety response is also the answer to a degradation and decline in high quality mineral hydrocarbons – the so-called “fossil” fuels. Over the course of 2014 I shall be writing about Renewable Gas – sustainable, low emissions gas fuels made on the surface of the earth without recourse to mining for energy. Renewable Gas can store the energy from currently underused Renewable Electricity from major producers such as wind and solar farms, and help to balance out power we capture from the variable wind and sun. Key chemical players in these fuels : hydrogen, methane, carbon monoxide and carbon dioxide. Key chemistry : how to use hydrogen to recycle the carbon oxides to methane. How we get from here to there is incredibly important, and interestingly, methods and techniques for increasing the production volumes of Renewable Gas will be useful for the gradually fading fossil fuel industry. Much of the world’s remaining easily accessible Natural Gas is “sour” – laced with high concentrations of hydrogen sulfide and carbon dioxide. Hydrogen sulfide needs to be removed from the gas, but carbon dioxide can be recycled into methane, raising the quality of the gas. We can preserve the Arctic from fossil gas exploitation, and save ourselves from this economic burden and ecological risk, by employing relatively cheap ways to upgrade sour Natural Gas, from Iran, for example, while we are on the decades-long road of transitioning to Renewable Gas. The new burn is coming.

  • Mind the Gap : BBC Costing the Earth

    Posted on October 16th, 2013 Jo 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 :-
    http://www.biofuelwatch.org.uk/2013/burning_issue_public_event/
    “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)
    http://www.lumenurc.org.uk/lumencontact.htm
    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…




    http://www.bbc.co.uk/programmes/b03cn0rb

    “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
    investigates.”

    00:44 – 00:48
    [ Channel anchor ]
    Britain’s energy needs are top of the agenda in “Costing the Earth”…

    01:17
    [ 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.

    01:27
    [ 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
    barely begun.

    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.

    02:14
    [ Historical recordings ]

    “The lights have started going out in the West Country : Bristol,
    Exeter and Plymouth have all had their first power cuts this
    afternoon.”

    “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
    close.”

    “The various [ gas ] boards on both sides of the Pennines admit to
    being taken by surprise with today’s cold spell which brought about
    the cuts.”

    “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.”

    03:13
    [ 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.

    03:57
    [ 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
    expensive.

    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
    2020.

    08:06

    [ 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’
    time.

    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
    winter ?

    [ 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
    soon.

    [ 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
    needed.

    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
    we need.

    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
    2020.

    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
    their pathways.

    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
    by 4.5%

    [ 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
    unlikely saviour.

    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.

    16:19

    [ 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 ?
    Confused. ]

    [ 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
    stations.

    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.

    20:02

    [ 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
    pellets.

    [ 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
    biomass.

    [ 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
    high.

    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
    we’re at.

    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
    mitigation.”

    [ 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
    difficult.

    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
    they won’t.

    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 ? ]

    29:04

    [ Programme anchor ]

    “Costing the Earth” was presented by Tom Heap, and made in Bristol by
    Helen Lennard.

    [ Next broadcast : 16th October 2013, 21:00, BBC Radio 4 ]

  • James Delingpole : Worsely Wronger

    Posted on July 15th, 2013 Jo 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 :-

    http://www.dailymail.co.uk/news/article-2362762/The-dirty-secret-Britains-power-madness-Polluting-diesel-generators-built-secret-foreign-companies-kick-theres-wind-turbines–insane-true-eco-scandals.html
    “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 :-

    http://www.nationalgrid.com/uk/Electricity/Balancing/services/balanceserv/reserve_serv/stor/

    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.

  • Battle of the Lords

    Posted on July 12th, 2013 Jo 1 comment

    I don’t quite know what powers Lord Deben, John Gummer, but he looks remarkably wired on it. At this week’s PRASEG Annual Conference, he positively glowed with fervour and gumption. He regaled us with tales of debate in the House of Lords, the UK’s parliamentary “senior” chamber. He is a known climate change science adherent, and in speaking to PRASEG, he was preaching to the choir, but boy, did he give a bone-rattling homily !

    As Chairman of the Committee on Climate Change, he is fighting the good fight for carbon targets to be established in all areas of legislation, especially the in-progress Energy Bill. He makes the case that emissions restraint and constraint is now an international business value, and of importance to infrastructure investment :-

    “The trouble with energy efficiency is that it’s not “boys’ toys” – there’s no “sex” in it. It is many small things put together to make a big thing. We won’t get to a point of decarbonisation unless we [continuously] make [the case for] [continuous] investment. […] GLOBE [of which I am a member] in a report – 33 major countries – doing so much. […] Look at what China is doing. Now a competitive world. If we want people to come here and invest, we need to have a carbon intensity target in 2030 [which will impact] [manufacturing] and the supply chain. [With the current strategy, the carbon targets are] put down in 2020 and picked up again in 2050. Too long a gap for business. They don’t know what happens in between. This is not all about climate change. It is about UK plc.”

    To supplement this diet of upbeat encouragement, he added a good dose of scorn for fellow Lords of the House, the Lords Lawson (Nigel Lawson) and Lord Ridley (Matt Ridley) who, he seemed to be suggesting, clearly have not mastered the science of climate change, and who, I believe he imputed, have lost their marbles :-

    “Apart from one or two necessary sideswipes, I agree with the previous speaker. There is no need for disagreement except for those who dismiss climate change. [I call them “dismissers” as we should not] dignify their position by calling them “sceptics”. We are the sceptics. We come to a conclusion based on science and we revisit it every time new science comes our way. They rifle through every [paper] to find every little bit that suppports their argument. I’ve listened to the interventions [in the House of Lords reading of and debate on the Energy Bill] of that group. Their line is the Earth is not [really] warming, so, it’s too expensive to do anything. This conflicts with today’s World Meteorological Organization measurements – that the last decade has been the warmest ever. I bet you that none of them [Lords] will stand up [in the House of Lords] and say “Sorry. We got it wrong.” They pick one set of statistics and ignore the rest. It is a concentrated effort to undermine by creating doubt. Our job is constantly to make it clear they we don’t need to argue the case – the very best science makes it certain [but never absolute]. You would be very foolish to ignore the consensus of view. […] In a serious grown-up world, we accept the best advice – always keeping an eye out for new information. Otherwise, [you would] make decisions on worst information – no sane person does that.”

    He encouraged us to encourage the dissenters on climate change science to view the green economy as an insurance policy :-

    “Is there a householder here who does not insure their houses against fire ? You have a 98% change of not having a fire. Yet you spend on average £140 a year on insurance. Because of the size of the disaster – the enormity of the [potential] loss. Basic life-supporting insurance. I’m asking for half of that. If only Lord Lawson would listen to the facts instead of that Doctor of Sports Science, Benny Peiser. Or Matt Ridley – an expert in the sexual habits of pheasants. If I want to know about pheasants, I will first ask Lord Ridley. Can he understand why I go to a climatologist first ? [To accept his view of the] risks effects of climate change means relying on the infallibility of Lord Lawson […]”

    He spoke of cross-party unity over the signing into law of the Climate Change Act, and the strength of purpose within Parliament to do the right thing on carbon. He admitted that there were elements of the media and establishment who were belligerently or obfuscatingly opposing the right thing to do :-

    “[We] can only win if the world outside has certainty about institutional government. This is a battle we have taken on and won’t stop till we win it. [The Lord Lawson and Lord Ridley and their position is] contrary to science, contrary to sense and contrary to the principle of insurance. They will not be listened to, not now, until UK has reduced level of carbon emissions, and we have [promised] our grandchildren they they are safe from climate change.”

    Phew ! That was a war cry, if ever there was one ! We are clearly in the Salvation Army ! I noted the attendance list, that showed several Gentlemen and Ladies of the Press should have been present, and hope to read good reports, but know that in some parts of the Gutter, anti-science faecal detritus still swirls. We in One Birdcage Walk were the assembly of believers, but the general public conversation on carbon is poisoned with sulphurous intent.

  • Birdcage Walk : Cheesestick Rationing

    Posted on July 12th, 2013 Jo 1 comment


    Yesterday…no, it’s later than I think…two days ago, I attended the 2013 Conference of PRASEG, the Parliamentary Renewable and Sustainable Energy Group, at the invitation of Rhys Williams, the long-suffering Coordinator. “…Sorry…Are you upset ?” “No, look at my face. Is there any emotion displayed there ?” “No, you look rather dead fish, actually”, etc.

    At the prestigious seat of the Institute of Mechanical Engineers (IMechE), One Birdcage Walk, we were invited down into the basement for a “drinks reception”, after hearing some stirring speeches and intriguing panel discussions. Despite being promised “refreshments” on the invitation, there had only been beverages and a couple of bikkies up until now, and I think several of the people in the room were starting to get quite hypoglycemic, so were grateful to see actual food being offered.

    A market economy immediately sprang up, as there was a definite scarcity in the resources of cheesesticks, and people jostled amiably, but intentionally, so they could cluster closest to the long, crispy cow-based snacks. The trading medium of exchange was conversation. “Jo, meet Mat Hope from Carbon Brief, no Maf Smith from Renewable UK. You’ve both been eviscerated by Delingpole online”, and so on.

    “Welcome to our own private pedestal”, I said to somebody, who it turned out had built, probably in the capacity of developer, a sugarcane bagasse Combined Heat and Power plant. The little table in the corner had only got room around it for three or at most four people, and yet had a full complement of snack bowls. Bonus. I didn’t insist on memorising what this fellow told me his name was. OK, I didn’t actually hear it above the hubbub. And he was wearing no discernible badge, apart from what appeared to be the tinge of wealth. He had what looked like a trailing truculent teenager with him, but that could have been a figment of my imagination, because the dark ghost child spoke not one word. But that sullenness, and general anonymity, and the talkative gentleman’s lack of a necktie, and his slightly artificial, orange skin tone, didn’t prevent us from engaging wholeheartedly in a discussion about energy futures – in particular the default options for the UK, since there is a capacity crunch coming very soon in electricity generation, and new nuclear power reactors won’t be ready in time, and neither will Carbon Capture and Storage-fitted coal-fired power plants.

    Of course, the default options are basically Natural Gas and wind power, because large amounts can be made functional within a five year timeframe. My correspondent moaned that gas plants are closing down in the UK. We agreed that we thought that new Combined Cycle Gas Turbine plant urgently needs to be built as soon as possible – but he despaired of seeing it happen. He seemed to think it was essential that the Energy Bill should be completed as soon as possible, with built-in incentives to make Gas Futures a reality.

    I said, “Don’t wait for the Energy Bill”. I said, “Intelligent people have forecast what could happen to Natural Gas prices within a few years from high European demand and UK dependence, and are going to build gas plant for themselves. We simply cannot have extensions on coal-fired power plants…” He agreed that the Large Combustion Plant Directive would be closing the coal. I said that there was still something like 20 gigawatts of permissioned gas plant ready to build – and with conditions shaping up like they are, they could easily get financed.

    Earlier, Nigel Cornwall, of Cornwall Energy had put it like this :-

    “Deliverability and the trilemma [meeting all three of climate change, energy security and end-consumer affordability concerns] [are key]. Needs to be some joined-up thinking. […] There is clearly a deteriorating capacity in output – 2% to 5% reduction. As long as I’ve worked in the sector it’s been five minutes to midnight, [only assuaged by] creative thinking from National Grid.”

    However, the current situation is far from bog standard. As Paul Dickson of Glennmont Partners said :-

    “£110 billion [is needed] to meet the [electricity generation] gap. We are looking for new sources of capital. Some of the strategic institutional capital – pension funds [for example] – that’s who policy needs to be directed towards. We need to look at sources of capital.”

    Alistair Buchanan, formerly of Ofgem, the power sector regulator, and now going to KPMG, spent the last year or so of his Ofgem tenure presenting the “Crunch Winter” problem to as many people as he could find. His projections were based on a number of factors, including Natural Gas supply questions, and his conclusion was that in the winter of 2015/2016 (or 2016/2017) power supply could get thin in terms of expansion capacity – for moments of peak demand. Could spell crisis.

    The Government might be cutting it all a bit fine. As Jenny Holland of the Association for the Conservation of Energy said :-

    “[Having Demand Reduction in the Capacity Mechanism] Not our tip-top favourite policy outcome […] No point to wait for “capacity crunch” to start [Energy Demand Reduction] market.”

    It does seem that people are bypassing the policy waiting queue and getting on with drawing capital into the frame. And it is becoming more and more clear the scale of what is required. Earlier in the afternoon, Caroline Flint MP had said :-

    “In around ten years time, a quarter of our power supply will be shut down. Decisions made in the next few years. Consequences will last for decades. Keeping the lights on, and [ensuring reasonably priced] energy bills, and preventing dangerous climate change.”

    It could come to pass that scarcity, not only in cheesesticks, but in electricity generation capacity, becomes a reality. What would policy achieve then ? And how should Government react ? Even though Lord Deben (John Gummer) decried in the early afternoon a suggestion implying carbon rationing, proposed to him by Professor Mayer Hillman of the Policy Studies Institute, it could yet turn out that electricity demand reduction becomes a measure that is imposed in a crisis of scarcity.

    As I put it to my sugarcane fellow discussionee, people could get their gas for heating cut off at home in order to guarantee the lights and banks and industry stay on, because UK generation is so dependent on Natural Gas-fired power.

    Think about it – the uptake of hyper-efficient home appliances has turned down owing to the contracting economy, and people are continuing to buy and use electronics, computers, TVs and other power-sucking gadgets. Despite all sizes of business having made inroads into energy management, electricity consumption is not shifting downwards significantly overall.

    We could beef up the interconnectors between the UK and mainland Europe, but who can say that in a Crunch Winter, the French and Germans will have any spare juice for us ?

    If new, efficient gas-fired power plants are not built starting now, and wind farms roll out is not accelerated, the Generation Gap could mean top-down Energy Demand Reduction measures.

    It would certainly be a great social equaliser – Fuel Poverty for all !

  • London : Array, Invest, Divest

    Posted on July 8th, 2013 Jo No comments

    Showcasing the London Array offshore wind farm in the last week at its official launch, the UK’s Prime Minister David Cameron said “[…] We are making this country incredibly attractive to invest in […] When it comes to green energy, I think we have one of the clearest, most predictable investment climates. And we’re going to add to that by completing the Energy Bill this year. So, we will have a fantastic market for investors to come and build in. […]” (see below).

    I think developers of solar energy in Britain would disagree quite extensively with his claim that there is a stable regime for green energy. The most effective stimulus tool, the Feed-in Tariff, was applauded and then mauled in short succession by the Conservative-Liberal-Democrat Coalition Government. Installation rates have simply not recovered from chewings from the Treasury attack dog. It’s been boom and then bust, bust, bust, with flurries of activity in summer, but not much more :-

    https://www.gov.uk/government/statistical-data-sets/weekly-solar-pv-installation-and-capacity-based-on-registration-date

    And this despite the yappy enthusiasm (perhaps “big, hairy”, or “big, sexy” ambition) that Greg Barker MP and his Dachshund, Otto, have for sun-fired electricity generation :-

    http://www.solarpowerportal.co.uk/news/barker_once_more_quotes_22gw_by_2020_solar_ambition_2356

    http://www.utilityweek.co.uk/news/news_story.asp?id=198770&title=National+Grid+analysis+clouds+Barker%27s+20GW+solar+ambition

    The Energy Bill should have been finished a long time ago, and I’m pretty sure it would have been, apart from the insane obsession with new nuclear power, which all along was predicted to consist of several kinds of big, chunky subsidy, and shows no signs of being anything other than a bankrolling exercise, even now (and too late to bridge Alistair Buchanan‘s “Crunch Winter” of 2015/2016).

    http://www.bloomberg.com/news/2013-07-02/edf-nuclear-deal-in-u-k-may-take-a-few-months-.html
    “EDF Nuclear Deal in U.K. May Take ‘A Few Months’ : By Alex Morales – Jul 2, 2013 : The U.K. may take “a few months” to agree the price that Electricite de France SA (EDF) will get for power from Britain’s first new nuclear power station in two decades, Energy Secretary Ed Davey suggested. The government has been in talks for months with EDF to agree a so-called strike price the French utility will get for power from a planned plant at Hinkley Point in southwest England. Davey told Parliament’s multi-party Energy and Climate Change Committee he won’t sign a contract with EDF unless it represents “value for money” for consumers. “Even if we agree in the next few months, a nuclear reactor at Hinkley point won’t be producing until the end of this decade at best,” Davey said today. “They have been very constructive negotiations. They are taking some time, and that’s because they are very complicated.”

    http://www.telegraph.co.uk/finance/newsbysector/energy/10164435/Rival-nuclear-companies-cheaper-than-EDF-Ed-Davey-suggests.html
    “[…] Mr Davey told The Guardian that EDF was aware of the strike price that he would agree to and that he was “not going to budge an inch”. He said: “Sometimes people said it is EDF or bust. I would like to do a deal with EDF but we don’t have to. I was in Korea and Japan recently talking to other investors and vendors. Their interest in the UK market was massive. I got the very strong impression that the sort of price I was happy to agree with EDF, they could match.” In the same interview he said: “We have other nuclear options. Hitachi are very live options. They bought Horizon only last year and their pace of progress is truly impressive.” He noted that Hitachi had delivered four reactors “on time and on budget”. […]”

    But the most serious contention that I have with David Cameron’s remarks is his painting a picture that the UK needs international capital to reach down from geostationary orbit, or where it is a bit lower, in transcontinential flight at 35,000 feet, to touch and bless the UK with its gilded finger of providence.

    Don’t we have any investors in Britain ? We may have only a few, small British companies that can build green energy for us, but we do have a lot of wealth lurking within these very shores, or representatives of a lot of wealth. Could we not demand that those who shore their cash in Britain, and take advantage of cheap corporate tax deals, invest in British green energy ? Could we not make green energy investment a sine qua non of the residence or passsage of wealth in and through the City of London ?

    Many people in Great Britain have pensions, and those pensions have funds, and those funds have fund managers. There’s a lot of money, right there. What are the criteria that govern pension pot investment ?

    And then there’s the banks. Almost everyone in the UK has a bank account. Are the banks held to policies to direct finance and investment towards green energy and clean tech ? Do their customers demand it ?

    Why does the UK Government not stipulate that “best value for money” as a criteria on all contracts of procurement – and investment – has to be matched by “best carbon emissions reduction potential” ?

    Or are we in such an austere position that we need to offer huge, fattened sweeteners from the Treasury tax honeypot, and permission to raise already high power prices for customers, to any international engineering firm prepared to pour concrete here, so that they can arrange for the finance this guarantees ? Why are we in a position where we are being forced to throw public money and billpayer burdens at private companies to guarantee new energy build ?

    This looks like a worse deal than PFI. In fact, it is much, much worse that the Private Finance Inititative, or the revamped new acronyms that replaced it. This is the wholesale gifting of large amounts of annual tax revenue and fingerlicking kilowatt hour prices to large, transnational corporations. If the economy gets worse, which it probably will, these big new construction projects may never get completed. And the new national energy infrastructure that does manage to get built won’t even be ours. Unless they go wrong, in which case the country will have to pay to mop them up. Or at the end of life, when the taxpayers and billpayers will need to pay to decommission nuclear reactors and dispose of radioactive waste.

    And while we’re on the subject of investment, I need to point out that not all big infrastructure projects are alike. Some development is good, some bad. I don’t really see how the Olympic building spree can be compared in any way to what’s necessary for creating a decarbonised energy system. And building larger ports, and roads, and airports, anticipates higher levels of traded goods – the kind of economic growth that caused climate change in the first place.

    If David Cameron wants to crow about big projects and be praised for it, he needs to de-select examples that are unsustainable.

    There really needs to be more focus on what we really need for the future, and that requires discernment in investment. It requires moving away from high consumption models of economy, of divesting from stocks and shares in waste, pollution, carbon emissions and unnecessary trade.

    Invest, yes, but divest, also.

    http://thinkprogress.org/climate/2013/06/25/2213341/invest-divest-obama-goes-full-climate-hawk-in-speech-unveiling-plan-to-cut-carbon-pollution/

    http://www.operationnoah.org/PR_southwark_resolution
    “4 July 2013: The Diocese of Southwark passed a resolution yesterday (3 July 2013) calling on the General Synod of the Church of England to consider disinvestment from fossil fuels.”




    https://www.gov.uk/government/news/prime-minister-champions-inward-investment-at-london-array-and-battersea-power-station

    http://www.guardian.co.uk/environment/video/2013/jul/04/david-cameron-windfarm-thames-estuary-video

    The UK’s Prime Minister David Cameron speaking outside at the London Array site :-

    “Well let’s be clear this is the biggest offshore wind farm anywhere in the world.
    And what it shows is Britain is a great country to come and invest in. And it’s meant
    jobs for local people. And it means clean, green energy for half a million homes in
    our country. It’s part of what we need to have secure, reliable supplies of electricity
    and to get investment and jobs for our people, so it’s a good day for Britain.”

    David Cameron speaking at the Press Launch indoors :-

    “Well of course, when I chaired the G8, I had to arrange everything, starting with
    the dress code. There was some criticism. Why wasn’t I wearing a tie ? What people
    didn’t realise of course was that President Putin wanted to do the whole thing
    barechested on horseback, and I of course had to negotiate him down to smart casual.
    We haven’t had that problem today.

    Sometimes people wonder, can we in the West, can we do big projects any more ? Can we
    do the big investments ? Isn’t that all happening somewhere else in the East and the
    South of our world ?

    And I think if you look at the United Kingdom right now you can see WE CAN do big
    projects. Not only did we do a superb Olympics last year, but underneath London,
    CrossRail is the biggest construction project anywhere in Europe.

    Not far away from here is Dubai Ports World London Gateway, which is the biggest port
    contruction taking place anywhere in Europe.

    And here you have the biggest offshore wind farm anywhere in the world.

    I think it demonstrates Britain is a great place to invest.

    I don’t want to have too much Schadenfreude, but it’s actually a fact that last year,
    foreign direct investment into Europe as a whole went down by something like 40%, but in
    the UK it went up by 24%.

    We are making this country incredibly attractive to invest in, and and that’s part of what
    this project is about.

    When it comes to green energy, I think we have one of the clearest, most predictable
    investment climates. And we’re going to add to that by completing the Energy Bill this year.

    So, we will have a fantastic market for investors to come and build in.

    So, a great win for Kent, a great win for renewable energy and a great win for Britain.”

  • Carbon Bubble : Unburnable Assets

    Posted on June 3rd, 2013 Jo 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…

  • Gas Strategy “Dangerous Gamble”

    Posted on February 11th, 2013 Jo No comments

    I had a most refreshing evening at Portcullis House in Westminster this evening – apart from the fact that the Macmillan Room was overheated, so you couldn’t possibly deduce that energy conservation is intended to be part of the UK Government’s strategy, making an example with the public sector.

    Tonight was the launch of the Greenpeace and WWF-UK report “A Study into the Economics of Gas and Offshore Wind“, which was commissioned from Cambridge Econometrics.

    Professor Paul Ekins got up to speak and actually had the gall to declare the Government’s “Gas Strategy” to be a “dangerous gamble”. It was at this point that I took heart again – there are still some sane, rational people in the “national energy conversation”, even though Ekins did admit that he wasn’t sure that the “Gas Strategy” was an actual thing. Oh, but it is. All eighty pages of it.

    Today was not the first time Professor Paul Ekins called out the Government on this, apparently, although I didn’t have a recollection of seeing the the mention in New Scientist before today.

    Other highlights of the evening were provided by Laura Sandys MP naming her political opposition Alan Whitehead MP as the leader of a “parliamentary roadshow” on Energy and Climate Change, and questioning the use of the term “energy efficiency”. “It’s energy waste, guys”, she corrected and said we should be using that term instead of the “effete word efficiency”, and encouraged the energy waste prevention industry to get the rest of us engaged with their products.

    A chap from Scottish and Southern Energy (SSE) – I think it might have been Kevin MacLean – got up during questions from the floor, and almost begged for a long-term framework – a plan for renewable energy – a “binding framework” to encourage investment and “get costs down”.

    It was pointed out during the evening, that, logically enough, that policy is important to energy futures, “if you have more certainty, you get more investment”. And there was encouragement to get Government Departments to think about this more. Yes, some subsidies and other forms of support are going to be needed to get the renewable energy revolution kickstarted, but “if [we] get benefits – isn’t that a price worth paying ?” The benefits outlined included potential for some small growth in the economy, around about 0.8% GDP, but good prospects for high value employment in depressed coastal towns where much of the offshore wind industry will host engineers, both for construction and ongoing operations and maintenance.

    Laura Sandys MP was ashamed to say that she may no longer be able to claim she has the two largest offshore wind farms in her constituency – as progress is being made elsewhere.

    Sarah Merrick from Vestas, the wind power engineering firm, emphasised that the economics of wind power stacks up and that it’s important to communicate this – despite the current dismissive media agenda – where she said it is important to defend the industry against certain media claims.

    Lord Alan Haworth brought up the inevitable question of renewable energy intermittency – “days of dead calm and dark nights”. He raised the statistic that weather systems in Europe can cover 1,500 kilometres, so if wind power is down in the UK, it’s going to be down elsewhere in the EU electricity networks – the countries we have interconnectors with. What he didn’t elaborate on was this – just as the UK is beefing (and I don’t mean “up to 100% horsing about”) up its connections with the European electricity networks, so too, Europe as a whole is beginning to reach out with its networks to satellite countries. What that could mean is that even if wind-powered electrons in the UK take a dive, electrons could still appear in the power network from very far afield, and shunt power to the UK.

    The speaker from the Crown Estate said that it was “sensible” to push for a good quantity of wind power – and that the report was a compelling argument. He regretted that it could not be guaranteed that the wind power-ed economy would necessarily have more of its supply chain in the UK – as various bodies have to comply with EU trade rules – but that there was a commitment in one part of the industry to 50% indigenous resourcing and employment (if I noted that down correctly).

    Long-term policy clarity was espoused. Disappointment was expressed in the Coalition Government’s flip-flop about gas – emphasising the development of gas-powered electricity generation at the expense of projecting high levels of renewables (65%, says the report, is perfectly feasible) – and that it gave mixed messages – which weren’t helping investment decisions. Sarah Merrick repeated the E.On line that UK electricity should be “balanced by gas, not based on gas”, although she didn’t explain that they weren’t necessarily talking about wind power being the mainstay of new generation capacity.

    It was generally agreed that David Cameron should lead and adopt the EU 2030 renewable energy targets – to enable billions of new confidence in the UK energy sector.

    Not having a strong lead on renewable energy and energy waste reduction would be an “abdication of responsibility on the part of the policy-creating machine”. And, “even if shale gas does materialise”, it would not provide much stimulus.

  • The Art of Non-Persuasion

    Posted on October 17th, 2012 Jo No comments

    I could never be in sales and marketing. I have a strong negative reaction to public relations, propaganda and the sticky, inauthentic charm of personal persuasion.

    Lead a horse to water, show them how lovely and sparkling it is, talk them through their appreciation of water, how it could benefit their lives, make them thirsty, stand by and observe as they start to lap it up.

    One of the mnemonics of marketing is AIDA, which stands for Attention, Interest, Desire, Action, leading a “client” through the process, guiding a sale. Seize Attention. Create Interest. Inspire Desire. Precipitate Action. Some mindbenders insert the letter C for Commitment – hoping to be sure that Desire has turned into certain decision before permitting, allowing, enabling, contracting or encouraging the Action stage.

    You won’t get that kind of psychological plasticity nonsense from me. Right is right, and wrong is wrong, and ethics should be applied to every conversion of intent. In fact, the architect of a change of mind should be the mind who is changing – the marketeer or sales person should not proselytise, evangelise, lie, cheat, sneak, creep and massage until they have control.

    I refuse to do “Suggestive Sell”. I only do “Show and Tell”.

    I am quite observant, and so in interpersonal interactions I am very sensitive to rejection, the “no” forming in the mind of the other. I can sense when somebody is turned off by an idea or a proposal, sometimes even before they know it clearly themselves. I am habituated to detecting disinclination, and I am resigned to it. There is no bridge over the chasm of “no”. I know that marketing people are trained to not accept negative reactions they perceive – to keep pursuing the sale. But I don’t want to. I want to admit, permit, allow my correspondent to say “no” and mean “no”, and not be harrassed, deceived or cajoled to change it to a “yes”.

    I have been accused of being on the dark side – in my attempts to show and tell on climate change and renewable energy. Some assume that because I am part of the “communications team”, I am conducting a sales job. I’m not. My discovery becomes your discovery, but it’s not a constructed irreality. For many, it’s true that they believe they need to follow the path of public relations – deploying the “information deficit model” of communication – hierarchically patronising. Me, expert. You, poor unknowing punter. Me, inform you. You, believe, repent, be cleaned and change your ways. In this sense, communications experts have made climate change a religious cult.

    In energy futures, I meet so many who are wild-eyed, desperate to make a sale – those who have genuine knowledge of their subject – and who realise that their pitch is not strong enough in the eyes of others. It’s not just a question of money or funding. The engineers, often in large corporations, trying to make an impression on politicians. The consultants who are trying to influence companies and civil servants. The independent professionals trying to exert the wisdom of pragmatism and negotiated co-operation. The establishment trying to sell technical services. Those organisations and institutions playing with people – playing with belonging, with reputation, marketing outdated narratives. People who are in. People who are hands-off. People who are tipped and ditched. Those with connections who give the disconnected a small rocky platform. The awkwardness of invested power contending with radical outsiders. Denial of changing realities. The dearth of ready alternatives. Are you ready to be captured, used and discarded ? Chase government research and development grants. Steal your way into consultations. Play the game. Sell yourself. Dissociate and sell your soul.

    I have to face the fact that I do need to sell myself. I have to do it in a way which remains open and honest. To sell myself and my conceptual framework, my proposals for ways forward on energy and climate change, I need a product. My person is often not enough of a product to sell – I am neuro-atypical. My Curriculum Vitae CV in resume is not enough of a product to sell me. My performance in interviews and meetings is often not enough of a product. My weblog has never been a vehicle for sales. I didn’t want it to be – or to be seen as that – as I try to avoid deceit in communications.

    Change requires facilitation. You can’t just walk away when the non-persuasional communications dialogue challenge gets speared with distrust and dismissal. Somehow there has to be a way to present direction and decisions in a way that doesn’t have a shadow of evil hovering in the wings.

    “A moment to change it all, is all it takes to start anew.
    To the other side.”


    Why do I need to “sell” myself ? Why do I need to develop a product – a vehicle with which to sell myself ?

    1. In order to be recognised, in order to be welcomed, invited to make a contribution to the development of low carbon energy, the optimisation of the use of energy, and effective climate change policy.

    2. In order to put my internal motivations and drive to some practical use. To employ my human energy in the service of the future of energy engineering and energy systems.



  • Greenpeace Windgas : Renewable Hydrogen

    Posted on October 6th, 2012 Jo No comments

    http://www.lngworldnews.com/gasunie-greenpeace-energy-choose-suderburg-as-windgas-location-germany/
    http://www.greenpeace-energy.de/presse/pressedetails/article/neuer-schwung-fuer-die-energiewende-windgas-made-in-suderburg.html
    http://www.greenpeace-energy.de/windgas.html
    http://vimeo.com/44094925

  • Enron, Fudging and the Magic Flute

    Posted on September 30th, 2012 Jo 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.

  • Obey the Future

    Posted on August 5th, 2012 Jo 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.

    Read the rest of this entry »

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  • Will the Green Deal Deliver ? (2)

    Posted on July 4th, 2012 Jo 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.

    Here are the papers supplied at the start of the meeting :  A B C D E F

    CONTINUED…

    [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 [2013] 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.

  • Will the Green Deal Deliver ?

    Posted on July 4th, 2012 Jo 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 [2012]. 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 [2013]. 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…”