|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 ?
The shadow cast by the nuclear industry
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
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.
Image Credit : epeigne37
Yesterday evening, I was caught by the intensity of the London Sky – there was little air movement in most of the lower summer-heat space above the city, and virtually no cloud except very high strands and sprurls and bones and smears.
Most of the cloud was clearly the result of aeroplane contrails – numerable to small children and their educational grandparents on various buses.
| As the sun began to set, or rather, as the Earth rolled to curve away from facing the sun, the sky took on the colour of bright duck egg blue with a hint of pale green, and the sprays of high contrail-cloud took on a glorious orange-fuchsia colour with flashes of gold, bronze and vanadium reds, fading slowly to chromium reds as twilight approached.
At a certain moment, I understood something – as I watched an aeroplane high up, make its way west to Heathrow, the angle of the sunset showed its contrail as a murky ink, messing up the rest of the clouds as it brushstroked its way along, with its slate and muddy hues. As I watched, other parts of the clouds began to appear brown and grey, and since I knew that most of the cloud was jet engine exhaust that hadn’t moved because of the lack of high winds, I finally realised I was watching dirt, high up in the troposphere – careless, unthinking toxic waste.
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.
|Rex Tillerson, Chief Executive Officer of ExxonMobil, was recently invited to talk to the Council on Foreign Relations in the United States of America, as part of their series on CEOs.
His “on the record” briefing was uploaded to YouTube almost immediately as he made a number of very interesting comments.
The thing most commented upon was his handwaving away the significance of climate change – a little change here, a little change over there and you could almost see the traditional magician’s fez here – shazam – nothing to worry about.
In amongst all the online furore about this, was discussion of his continued Membership of the Church of Oil Cornucopia – he must have mentioned the word “technology” about seventy-five times in fifteen minutes. He clearly believes, as do his shareholders and management board, that his oil company can continue to get progressively more of the black stuff out of tar sands, oil shales or oil-bearing shale sediments and ever-tighter locked-in not naturally outgassing “natural” gas out of gas shales. At least in Northern America.
As numerous commentators with a background in Economics have claimed, well, the price of oil is rising, and that creates a market for dirtier, harder-to-reach oil. Obviously. But missing from their Law of Supply and Demand is an analysis of how oil prices are actually determined in the real world. It’s certainly not a free market – there are numerous factors that control the price of the end-product, gasoline, not least state sponsorship of industries, either through direct subsidies, or through the support of dependent industries such as car manufacture. At least in North America.
In the background, there is ongoing shuttle diplomacy between the major western economies and the assortment of regimes in the Middle East and North Africa (MENA) who still have the world’s largest pool of cleaner-ish petroleum under their feet. That, naturally, has an impact on supply and pricing : even though the strength of this bonding is not as tight-fast as it historically was, there appears to have been more of it since around 2005. Or at least, that’s when I first started monitoring it consciously.
In addition to that, there are only a limited number of players in the oil industry. It is almost impossible to break into the sector without an obscene amount of capital, and exceedingly good buddy-type relationships with everybody else in the field – including sheikhs you formerly knew from when you attended specialty schools. So, no, the market in oil is not free in any sense. It is rigged – if you’ll excuse the pun.
And then there’s foundational reasons why oil prices are artificial – and may not cause a boom in the “unconventional” production that Rex Tillerson is so excited about (in a rancher-down-the-farm kind of way). Oil is still fundamental to the global economy. In fact, the price of oil underpins most business, as oil is still dominant in the transportation of goods and commodities. Despite all the techno-wizardry, it is fundamentally more costly to drill for fossil fuels in shale, than from pressure wells where oil just gloops out of the ground if you stick a pipe in.
It’s not the drilling that’s the major factor – so the technology is not the main driver of the cost. It’s the put-up, take-down costs – the costs of erecting the infrastructure for a well, or putting underground shale heating or fracturing equipment in place, and the cleaning up afterwards. Some of the technologies used to mine shales for oil use an incredible amount of water, and this all needs to be processed, unless you don’t mind desecrating large swathes of sub-tropical scenery. Or Canada.
The price of oil production has a knock-on effect, including on the very markets that underpin oil production – so increasing oil prices have a cyclic forcing effect – upwards. It also has an impact on the prices of other essential things, such as food. One can see a parallel rise in the price of oil and the price of staple crops in the last few years – and the spiralling cost of grain wheat, rice and corn maize is not all down to climate change.
Oil companies are in a quandary – they need to have higher oil prices to justify their unconventional oil operations – and they also need good relationships with governments, who know they cannot get re-elected if too many people blame them for rising costs of living. Plus, there’s the global security factor – several dozen countries already have economies close to bust because of the cost of oil imports. There are many reasons to keep oil prices depressed.
Let’s ask that subtle, delicate question : why did Rex Tillerson espouse the attitudes he did when asked to go on the record ? Why belittle the effects of climate change ? The answer is partly to soothe the minds of American investors, (and MENA investors in America). If such a powerful player in the energy sector believes “we can adapt to that” about climate change, clearly behind-the-scenes he will be lobbying against excessive carbon pricing or taxation with the American federal administration.
And why be so confident that technology can keep the oil flowing, and make up for the cracks appearing in conventional supply chains by a frenzy of shale works ? Well, logically, he’s got to encourage shareholder confidence, and also government confidence, that his industry can continue to deliver. But, let’s just surmise that before he was shunted onto the stage in June, he’d had a little pre-briefing with some government officials. They would be advising him to show high levels of satisfaction with unconventional oil production growth (in America) – after all, this would act against the rollercoaster of panic buying and panic selling in futures contracts that has hit the oil markets in recent months.
So Rex Tillerson is pushed awkwardly to centre stage. Global production of oil ? No problem ! It’s at record highs (if we massage the data), and likely to get even better. At least in America. For a while. But hey, there’s no chance of oil production declining – it’s important to stress that. If everyone can be convinced to believe that there’s a veritable river of oil, for the forseeable future, then oil prices will stay reasonable, and we can all carry on as we are. Nothing will crash or burn. Except the climate.
Rex Tillerson’s interview on global (American) oil production may have been used to achieve several propaganda aims – but the key one, it seems to me, was to talk down the price of oil. Of course, this will have a knock-on effect on how much unconventional oil is affordable and accessible, and maybe precipitate a real peak in oil production – just the thing he’s denying. But keeping the price of oil within a reasonable operating range is more important than Rex Tillerson’s impact on the American Presidential elections, or even Rex Tillerson’s legacy.
Here is the second part of the transcription from the notes I took this morning in a seminar in the UK House of Commons. The meeting was convened by PRASEG, the Parliamentary Renewable and Sustainable Energy Group.
This transcription is based on an unverified long-hand paper-based recording of the words spoken. Items in quotation marks are fairly accurate verbatim quotations. Items in square brackets are interpolation, or explanation, and not the exact language the person used to present their thoughts.
[AW] How it [the Green Deal] hits the ground matters…
[Joanne Wade, Independent Consultant, UKERC]
The Green Deal is a very useful framework – a move to encourage people to pay for their own energy efficiency. The finance offering may be interesting to some. The quality [of the workmanship ? Guarantees under the Green Deal ?] is “utterly vital”. I don’t think it’s quite there. Outlining four areas (1) How the Green Deal engages (2) The low cost finance (3) Generally mainstreaming energy efficiency in peoples’ minds and (4) Fuel Poverty.
(1) Most people don’t care if they have energy efficiency [in their homes]. If we were really serious about this [our appeal would be along the lines of] you can’t sell a car with brakes that don’t work, but you can sell a house that kills you. [I just wanted to get that in up-front]. Nobody’s really cracked this yet [the messaging] is [still only] “reaching the usual suspects”. Trust is vital. Salience is key. We want people to understand this is not an add-on to all the other things they do. Community-based organisations fit the bill [we tend to trust these groups as members]. [We need to be asking] how does the Green Deal work with that ? The Green Deal providers – small to medium sized enterprises (SMEs) want to use their own brand – they are very good at marketing [and will be good at marketing the Green Deal as well]. But will that be enough to convince people ? The Assessments [that people will get at the start of the Green Deal process] will be detailed on what they can do. Some people are concerned about how much energy they use. Is that enough to go from a standing start to […] ? Are enough people going to be committed enough by the time [Green Deal is available] ? What I think we need – to prime people to be ready to accept [the Green Deal]. [The message would be] appropriate to come from local community groups. The Government is hoping for it – but no real drivers. There are examples – but how are they going to be copied ? The CERT / CES(P) results show that Local Authorities are key. Now that National Indicators 186 and 187 [From the Performance Framework – annual reporting requirements of direct and indirect emissions as a result of Local Authority operations] have been cut – there is no driver. The amount of attention has dropped. [Local Authorities are facing other problems] reducing staff and budgets.
(2) Access to low-cost finance. [The work to make this available from the Green Investment Bank is going ahead but] what about other soruces – for example mortgage providers ? In Switzerland for example, they are lending 114 billion euro every year to homeowners at low interest rates. We need to look at how to convince people. In Switzerland, people will pay more for energy efficient homes. The Green Deal needs to accept alternative forms of finance. Need to be able to access ECO [Energy Company Obligation – part of the Energy Bill – obligation energy suppliers to supply not only energy, but energy services such as energy efficiency and energy conservation] providers. We don’t know if the market will deliver [there are already grants/finance in this sector that people are not using].
(3) Can’t see the Green Deal mainstreaming. My builder – I did an [extension] and asked for 50% extra insulation and LED [Light Emitting Diodes – a very energy efficient form of lighting] – he thought I was slightly mad but now recommends LED lighting on all builds. Here’s the Green Deal. He would say – “Why should I tell people about that ?” Typical small builder. It should be that whenever anyone is doing a refurbishment they should just do it [extra insulation etc] – and so we’re back to [the big R] – regulation. [But look at the public outcry when the media considered] consequential improvements [the “Conservatory Tax”]. [Energy efficiency] “We need to make it the thing that people do.”
(4) Fuel Poverty. The money that can be coming through the ECO is £ 350 million per year (before VAT). Let’s not kid ourselves – the householders in fuel poverty are not going to take Green Deal finance. [The Climate Change Committee says] £4 billion a year is what we need to tackle fuel poverty. The Government needs to make sure that Green Deal finance is available the fuel poor (in an appropriate form) (overcoming the small potential).
[Alan Whitehead MP] How to address the LED enthusiast who isn’t a Green Deal enthusiast ? Helping “Jeff” [representative small builder in a sketch by the Secretary of State ?] getting sorted out – taking him from a sceptic to an advocate.
[Nigel Banks, Head of Energy and Sustainable Solutions, Keepmoat]
There are glass half empty people and glass half full. How can we be filling the glass ? Retrofitting communities via the Green Deal ? We do a lot of community regeneration – we’ve build [some of the] Zero Carbon homes. We renovate rather than demolish and rebuild. We get through to RP [registered providers of social housing] and Local Authorities. There has been the “boom and bust” of FiT [solar photovoltaic feed-in tariff] – Local Authorities are reticent to get involved [with the Green Deal].
With solid wall insulation [SW] we need to take up a gap. Currently, 80,000 per year are being driven by CES(P) – 94% of these are external wall. Under the Green Deal only 10,000 are projected next year – major concern.
How many measures meet the Green Deal ? The Golden Rule [the rule o Green Deal finance that the loans should come at no extra cost to the householder because the repayments are balanced by energy savings] ? [With some solid wall insulation, meeting the Golden Rule is easy, but…]
Problems with the Green Deal include : [no Green Deal finance generally available ?]. The cooling off period of 20 – 28 days. People now expect their insulation for free. How many [of the institutions of surveyors including] RICS [will value] properties with Green Deal ?
ECO is a big target – at least £540 million per year for affordable warmth. [However, this does not compare with what we have been able to offer up to now] – entire streets – entire communities [upgraded] for free at the moment – easier than under the Green Deal.
The £200 million cashback [is welcome]. Some of the Green Deal pilot schemes have been positive. It should be able to unlock private landlords [to making energy efficiency retrofits].
The Green Deal [is currently appropriate only to] a small proportion of society – it is vital to apply through communities – churches and so on – and it can tackle long-term unemployment problems.
The Green Deal [is not going to achieve major change] on its own.
[David Robson, Managing Director, InstaGroup] We do insulation, represent over 100 SMEs. How can we make the Green Deal work ? Provide employment in local communities ? 15 years of history of energy efficiency : in the early 1990s – no funding – we were doing 300,000 installs a year. Now we are doing 500,000 this year. “If anyone says subsidies haven’t worked, it’s not true.” It has got money out onto the ground quickly. The Green Deal has huge potential – removes capital barriers pre- energy efficiency [measures] – ome of the more expensive things are covered – anyone can access low cost finance – as long as it [the Green Deal] is given an opportunity to work. It also creates a framework to cover the non-domestic sector – and [landlord-owned] private domestic sector also. The Government…. [the Green Deal is] not ready. “Whatever any politician says, the legal framework is not in place until January next year.” The insulation installers and other companies are feeling they are being told “if you want to lead on the Green Deal, take it on your [own] balance sheet.” Everyone wants the Green Deal to work. We’ve invested. Our system is in place. The work we put into Green Deal finance – low cost – we think it’s important – the lower we can keep the costs of it. “If we can’t keep it [the Green Deal finance loan interest rate] below 6% we as an industry have failed.” The Green Deal is going to take time to build. Solid wall insulation – takes time to develop this industry. Hugely innovative concept. The man on the street will take some convincing “Will I be able to sell my house ?” [But] we can’t even give away insulation at the moment – then convincing people to borrow… 2013 is a real issue – how you bridge that cliff edge. Could [limit] the Green Deal getting off the ground. “For the Green Deal to be effective it needs to take the [energy efficiency] industry with it.” Small businesses are looking to us to guide them through the Green Deal. They can’t survive 6 months of losing money. Need to have some more continuity. The Green Deal does need something to help it through the transition process. How is the Green Deal good ? A robust framework. Belief in the Golden Rule – sacrosanct. Trying to sell the Green Deal will be a challenge for all of us. The Green Deal is very much underpinned by the ECO – but if the ECO is the only thing pushing, the Green Deal won’t work – constrained by the amount of money available. Regulation is key. If consumers are given sufficient time to do things it’s OK. Low cost finance is key. Access to low rates has to be competitive or the biggest players will take all the low cost finance. I’m concerned about a continuing level of political will. Generally the media are coming on-side over the Green Deal – but you only need to look at the media coverage of “consequential improvements”… It’s important that the Government recognise concerns about the Green Deal – [coming] from people who do want it to work.
[Alan Whitehead MP] Nice chance – ought to look at carbon taxes for the future – declaring part of that “tax foregone” and use that for the Carbon Reduction Commitment [CRC] : taking from the EU ETS [European Union Emissions Trading Scheme revenue] and the carbon floor price and using that to underpin the Green Deal – get that finance interest level down – a proper green tax – taxing bads and rewarding goods. “There can be no more good than making sure that everyone’s house is energy efficient” That’s all solved.
QUESTIONS FROM THE FLOOR
[Terry ? David Hunt, Eco Environments] Concerned that microgeneration is not to benefit. Concerned about companies self-marketing – as there have been misleading advertising (such as solar photovoltaic [PV] installers advertising old FiT rates). They should not mislead the public. Regulation – compared to the MCS scheme [all solar PV installers have to be registered for MCS] but still seen some awful installs. As soon as things get sold and are bad – this leads to media stories and a loss of confidence.
[Tim ? Tony Smith, Pilkington Glass] The statutory instrument that relates to double glazing and other measures – I’m looking for sunshine on a very gloomy day – double glazing in [some cases] will get no help from the Golden Rule [some discussion about the ratings of windows and replacement windows] – reduces the attraction to our industry in terms of reducing carbon emissions.
[ X from “London Doctoral Training Centre”] Homeowners… [The success of the Green Deal is] down to how people use their homes. No-one’s talked about education and how installers talk to householders…
[ X from Association for the Conservation of Energy] I’d like to hear the panel’s views on DG TAX [the European Commission Directorate Generale on Tax matters for the European Union] that the 5% VAT rate under the Green Deal is not compliant.
[Tracy Vegro] For the 5% VAT rate, “we are ready to defend that” – as it impacts on our ability to offer other options. It’s weird since we’ve just signed a very strong [European Community] Energy Efficiency Directive. Behaviour change – that’s vital. The [Green Deal loan] Assessment will require heating controls turned down and relevant behaviour. Effectively, you’re not going to pay the interest on the loan if you change your behaviour and you will see the savings increase over time. The “conversion rate” [from Green Deal pilot schemes] was 98% “saved more than I thought” – community projects. The Ombudsman will be able to strike off poor installers. “The Consumer Protection on the Green Deal is the highest in the market.” Stringent. “If it’s proved we’re too draconian, it will come down.” [Re the question from Pilkington] You are slightly misinterpreting – this is not a barrier to that [kind of upgrade to windows] – it depends on the state of the property [for example the carbon saved is less if going from an F to and E than…] It may just be your interpretation – happy to go over that with you.
[David Robson] The MCS based accreditation is only checked once a year – a real issue. The hardest thing about MCS is – is your paperwork in order ? Not if you can do the job…
[Joanne Wade] The conversation about energy use – how to get people involved. We need more messaging – this is what this really is. If all levels of government [do the messaging] more effective.
[John Sinfield] The Minister mentioned turning up the heating and hoovering [vacuuming] in your underpants. The industry is responsible to [address that in the] owner’s manual. This is how you need to treat your house differently. The tax issue – madness. If the HMRC can’t do it [convince the EC/EU] then ignore them.
[Nigel Banks] Behaviour change is vital. The Green Deal providers who don’t put that in their package will come unstuck. Not as confident about carding [system of accreditation based on individual trades persons by trade] [not relevant to your particular skill] [skill specific ?]
[Alan Whitehead] I assume the Minister meant thermal underwear.
[Colin Hines, Green New Deal Group] Trust [is important] when the finance people are having fits over FiTs. What [are you] trying to do to the market ? Is the Green Investment Bank going to kick up some money for the Green Deal ? What about the drop in the Impact Assessment from £10 billion to £ 5 billion for the Green Deal [some confusion about what this refers to]
[Roger Webb, The Heating and Hotwater Industry Council] How do we bring “Jeff” to the party ? We are keen to see heating as part of the Green Deal. There are 90,000 small tradesmen working for 60,000 small companies. Will they think the Green Deal is rubbish ? They are the leads for the Green Deal – they need training. We need to incentivise them. A voucher scheme ? Use a little of the £200 million… I really welcome the work and [interest in] bringing microgeneration [?] business into the scheme.
[Neil Marshall, National Insulation Association] Regarding solid wall insulation – the IWI / CWI confusion [Internal Wall Insulation, Cavity Wall Insulation] – what solution is proposed for hard-to-treat cavities ? The hard-to-treats we are not able to do for another year. Need to drive more cavities and lofts. The Committee on Climate Change [CCC] have reported on a need for additional incentives outside the Green Deal – driving the uptake of the Green Deal – talk of incentives and fiscals. Gap-filling. The Green Deal [should be able to cover] able-to-pay loft insulation installations, able-to-pay cavity wall insulation, hard-to-treat cavities and solid wall insulation. If we are doing 1 million in 2012 under CERT / CES(P)…if there is no Green Deal finance we can’t sell anything [after 2012]. “There is a critical need for a transitional arrangement.” We have had high level discussions with DECC that have been very useful…
[ X from Honeywell ? ] The in-situ factors. [For example, father [in law] isn’t going to replace his boiler because the payback will be after he’s dead]. Multiple length of payback [period] for any measure that’s put in – old antiquated evaluation tool. The householder asks what’s in it for them [what they can put some energy into doing] – is the longer payback [period] less attractive ?
[ X from “Shah” ? ] Not much on solar / microgeneration. [Will the Green Deal become certified ?]
[Nigel Banks] How do we do Green Deal for a boiler ? On 3rd January  will the big energy companies do it themselves ? Some measures won’t perform as predicted.
[John Sinfield] “If the Green Investment Bank doesn’t provide finance for the Green Deal we are in a world of hurt”. We need to engage with “Jeff” the trusted installed. The Government needs to drive consequential improvements through – if you have a new boiler, you will have wall insulation [crazy otherwise, as all that heat will be lost through the walls]. Not seeing where my £ 1 million invested in solid wall solutions is going now. The job is not done [cavities and lofts].
[Tracy Vegro] A lot of Local Authorities don’t distinguish between good debt and bad – money is there for them – but they aren’t borrowing to invest. We are retaining HECA [Home Energy Conservation Act]. [Mentions poor opinion about the Green Investment Bank] – talking the “jib” [GIB] down. The biggest risk is the lack of confidence in the Green Deal. [Working on the terms of the] Green Deal Finance Companies [GDFC] – still see if…. [Important to take the attitude of] not talking it down. If another equity slice [is added…] We are a broad church – open to new entrants. Most work will be done [under the Green Deal] – most retrofits. [With the ActonCO2 and other Government paid communications campaigns on climate change and energy efficiency] We didn’t really get the message across – our millions spent [on advertising and public relations]. [We will] do better – more and more things will meet the Golden Rule. Come and meet our scientists.
[David Robson] Heating – a huge opportunity – not a loan with British Gas – the boiler you want – add on solar [with a Green Deal loan] linking creatively.
[ X from ? ] [Brings up the thorny problem of which technologies and measures are possible under the Green Deal’s Golden Rule] 45 points [of requirements] to meet criteria. In the future, what technologies will be viable ?
[Tracy Vegro] The RHI [Renewable Heat Incentive] is not eligible – does not meet the [Golden] Rule.
[Further exchanges – becoming somewhat stressed]
[Alan Whitehead MP] Just as things were getting exciting…[we have to close] an interesting period over the next 18 months.
Here is a transcription of part of the notes I took this morning in a seminar in the UK House of Commons. The meeting was convened by PRASEG, the Parliamentary Renewable and Sustainable Energy Group.
This transcription is based on an unverified long-hand paper-based recording of the words spoken. Items in quotation marks are fairly accurate verbatim quotations. Items in square brackets are interpolation, and not the exact language the person used to present their thoughts.
[Alan Whitehead MP]
Will the Green Deal deliver ? In the last few days, in 140 character statements [Twitter], the Government have been telling has “all the hurdles have now been overcome.” But “is it really all systems go ?” What effect do we think the Green Deal will have on sustainability ? On carbon reduction goals ? Tracy Vegro from the Department of Energy and Climate Change (DECC) has been key in setting up the Green Deal.
[Tracy Vegro, DECC, Director, Green Deal]
“It’s been a busy old time for us.” We are in the final stages of passing the framework [of the Green Deal]. Just have the laws now [the legislation that is needed]. Those orders will come into force in October . There will be some parallel working – not a switch to the Green Deal all at once. I think it will open up a wider market in energy efficiency. We’ve been getting out and about [for the consultation process] – a women’s panel, an industry panel. We did it with an awful lot of help. “We’ve got to get energy efficiency moving in this country.” The CERT [Carbon Emissions Reduction Target – an energy supplier obligation] at the end of this year there will be “not an unlagged loft” [internal roof insulation over the top of ceilings]. There have been some gaps – with solid wall insulation numbers for example. “Whole swathes got nothing under CERT.” We have to to start delivering. I hope the Green Deal will drive it – with many more entrants into the [energy efficiency] market. Our roadshows with small businesses were encouraging. Beyond the framework we are trying to ensure a lot of choice. The Green Deal is going to have accredited goods and services in the whole thing. The [Office of Fair Trading] has been doing research to ensure [quality and competence] – “because at the end of the day it’s the bill payer who’s paying”. There’s a new oversight body. There will be a lot more data [coming back]. You know under the CERT, 300 million energy efficient lightbulbs were distributed [and we don’t know where they all went and whether they were all used]. We need to build confidence. Have the Local Authorities get behind the Green Deal assessments [process], and [capitalised on] community aspects. [We hope/aim to] see the market grow much faster. So far we can see that a lot of cavities got filled but [that’s only the beginning]. [We hope/aim that the Green Deal will be] driving demand. People will see their neighbours do this [and want to do it for themselves.] There’s the £200 million incentive scheme – that’s money in the bank. [Need to drive] confidence [not having people saying it’s just the] new FiT [Feed-in Tariff scheme – intended to drive solar photovoltaic uptake, but poorly managed]. The Green Deal is going to be conditional on minimum energy efficiency standards being undertaken [by those taking up the offer]. [This will determine] the order in which you do these [energy efficiency] technologies – “we need to get energy efficiency into peoples’ heads” – [where they may have been deterred previously by] mostly upfront capital. We have a new helpline. We need to make it a “no-brainer solution”. How are we going to ensure training ? People will be coming out of loft and cavity wall insulation into a new sector. These are asset skills, and a lot of money is committed. to funding [re]training and assessors. There are implications on people in existing roles – but “this is a finite market”. We’re confident in this business model – for the first time there will be competition – not just the Big 6 [energy companies : British Gas, Electricite de France (EdF), E.On, npower, Scottish Power (Business), Scottish & Southern (SSE) – companies that collectively supply 99% of the UK’s heating and lighting] delivering. It is slightly easier to explain [than other schemes]. We do need an awareness campaign – people in the industry don’t want this – they want to do their own communications to customers – to ensure demand is right. The [big] energy companies are to be mandated a lot. If the scheme is ECO (Energy Company Obligation) only – it would only guarantee a steady state [no growth in uptake of energy efficiency products]. The Impact Assessment has only been done for pure Green Deal.
[John Sinfield, Managing Director, Knauf Insulation]
CERT helped, but there is still a huge amount to deliver – need to approach the market in a different way. The deep retrofit of our housing stock – the only way to deal with Fuel Poverty and other problems. My early reaction to the Green Deal was hope, excitement, and confusion, followed by more confusion. It could deliver what no scheme has done before to 14 million homes [untouched so far]. We have to deal with the fabric [of the building] first – then deal with the occupant. The occupant is sometimes the barrier to energy efficiency. Could we use private money to leverage 20 times the amount put forward [for the Green Deal and Green Investment Bank] ? We could stop shifting 40 billion euro to the Middle East (and elsewhere) for our energy. Can we create ethical investment for pension funds ? Then I got to depression and confusion. In the draft Impact Asssessment, there would be a 93% drop in loft insulation installations and 73% drop in cavity wall insulations from Day One of the Green Deal. What’s going to happen to existing companies ? [I obviously have an interest here] I’ve invested in four factories. But it’s not only me, the Climate Change Committee (CCC) wrote to Government on the trajectory resulting not meeting our carbon cap. It’s not just insulation manufacturers and installers. I’m trying to understand where the policy’s going. Why are DECC against cheaper measures ? The Minister says that the “loft job” is nearly done. But DECC themselves say that 9 million lofts have inadequte insulation. Frankly, I doubt I’ll see that by the the end of the year. There are 7.5 million cavities to fill. The consultation on the Green Deal came back with good changes – but little to address the cliff edge – the significant drop in lofts and cavities [at the changeover to the Green Deal]. I’m veering between hope and despair. I hope the Government, deep down, really want this. They need to do more to drive this programme. I wouldn’t invest money if I didn’t think [they were really behind this.] What about other options ? Stamp Duty [on sale of properties], a carbon tax, a Local Authority mandate ? If the Government can drive the value of the Green Deal up – it makes it more attractive [to engage in the sector]. My hope is balanced off by a sense of despair – the mechanism will not be ready in time. The so-called “soft launch” of the Green Deal [is inadequate] – really has to be up and running by 1st January . The Green Deal loans have to have affordable interest rates. The Green Deal finance company is 9 months away from offering comprehensive finance – and how are they going to receive the money from the Green Investment Bank ? If the interest rate of the Green Deal loans are 7.5% (6% – 8%) then only 7% of the population will take them up. Where’s the market ? What’s going to drive the market ? Where we are challenged – the Green Deal doesn’t feel ready. The environment to work within – sorted. But the mechanism – for example the Green Deal finance – not ready. Need to bridge the gap. Do we need to extend the CERT / CES(P) (Community Energy Saving Programme) ? A bridge until a competitive rate of interest is available. If the Government is going to drive the deep retrofit, it needs to drive the take up. Putting in place the framework is not going to sell this scheme. Some [companies] here are ready to market this scheme – but all parts need to be there. If the Green Deal is not ready – when ?
Alan Whitehead MP
“So, an amber light there…”
|Bursting the Nuclear Bubble
The UK Government appear to have seen the light about their, frankly, rubbish plan to covertly invest in (by hidden subsidies) a spanking new fleet of nuclear power reactors.
Dogged by Electricite de France (EdF) as they have been, with Vincent de Rivaz continuing to proffer his begging bowl with outstretched pleading arms, it just might be that before the Energy Bill is finally announced –
|when the Electricity Market Reform (EMR) dust has settled – that this new thinking will have become core solidity.
After all, there are plenty of reasons not to support new nuclear power – apart from the immense costs, the unclear costs, the lack of immediate power generation until at least a decade of concrete has been poured, and so on (and so forth).
Gas is Laughing
It appears that reality has bitten – and that the UK Government are pursuing gas. And they have decided not to hatch their eggs all in one basket. First of all, there’s a love-in with Statoil of Norway :-
Then, there’s the new “South Stream” commitment – the new Azerbaijan-European Union agreement, spelled out in a meeting of the European Centre for Energy and Resource Security (EUCERS) on 12th June at King’s College, London :-
Meanwhile, the “North Stream” gas pipeline is going to feed new Russian gas to Europe, too (since the old Siberian gas fields have become exhausted) :-
And then there’s the amazing new truth – Natural Gas is a “green” energy, according to the European Union :-
The UK will still be importing Liquified Natural Gas (LNG) from our good old friends in Qatar. Never mind the political interference in the nearby region and the human rights abuses, although NATO could be asked to put a stop to that if Europe needed to bust the regime in order for their energy companies to take ownership of the lovely, lovely gas. I mean, that’s what happened in Iraq and Libya, didn’t it ?
A Fossilised Future
So, despite all the green noises from the UK Government, the underlying strategy for the future (having batted away the nuclear buzzing insects around the corpse of British energy policy), is as Steve Browning, formerly of National Grid says – “gas and air” – with Big Wind power being the commercialisable renewable technology of choice. But not too much wind power – after all, the grid could become unstable, couldn’t it, with too much wind ?
There are several problems with this. First, the commitment to fossil fuels – even Natural Gas with its half the emissions profile of coal – is a risky strategy, despite making sure that supplies are secure in the near term. The reasons for this are geological as well as geopolitical. Natural Gas will peak, and even the UK Government accepts that unconventional gas will not keep fossil gas going forever – even with the “18 years” ultimate recoverable from under Lancashire of shale gas (that’s “18 years” of current gas annual demand – but not all drilled at once – perhaps amounting to about 1.5% of current UK gas supply needs per year, stretched out over 40 years) , and the billion tonnes of coal that can be gasified from under the sea off the east coast of England. As long as Carbon Capture and Storage can work.
Not only will Natural Gas peak and start to decline in the UK, it will also peak and decline in the various other foreign resources the UK is promising to buy. By simple logic – if the North Sea gas began depletion after only 30 years – and this was a top quality concentrated resource – how soon will poorer quality gas fields start depleting ?
Whilst I recognise the sense in making Natural Gas the core strategy of UK energy provision over the next few decades, it can never be a final policy. First off, we need rather more in terms of realistic support for the deployment of renewable electricity. People complained about onshore wind turbines, so the UK Government got into offshore wind turbines, and now they’re complaining at how expensive they are. Then they botched solar photovoltaics policy. What a palaver !
Besides a much stronger direction for increasing renewable electricity, we need to recognise that renewable resources of gas need to be developed, starting now. We need to be ready to displace fossil gas as the fossil gas fields show signs of depletion and yet global demand and growth still show strength. We need to recognise that renewable gas development initiatives need consistent central government financial and enabling policy support. We need to recognise that even with the development of renewable gas, supplies of gas as a whole may yet peak – and so we need to acknowledge that we can never fully decarbonise the energy networks unless we find ways to apply energy conservation and energy efficiency into all energy use – and that this currently conflicts with the business model for most energy companies – to sell as much energy as possible. We need mandates for insulation, efficient fossil fuel use – such as Combined Heat and Power (CHP) and efficient grids, appliances and energy distribution. Since energy is mostly privately owned and privately administered, energy conservation is the hardest task of all, and this will take heroic efforts at all levels of society to implement.
…Continued from https://www.joabbess.com/2012/06/12/gas-in-the-uk/
Questions from the floor
…increasing electricification of heat and transport. I was interested in what Doug said about heat. [If energy conservation measures are significant and there is] a significant reduction in gas use for heat…interested in the Minister’s response.
[Terry ? (Member of PRASEG)]
I’m interested in gas that would need CCS [Carbon Capture and Storage] [in future] …[since there would be no restriction there would be an] incentive to build new gas in next few years away from CCS-usable infrastructure. Maybe encouraging gas stations over next few years to be built in view of CCS.
[ ? ]
[There have been mentions of the] Gas [generation] Strategy and gas storage. Is it your intention to have both in the Energy Bill ? [Need to improve investor confidence.]
[Charles Hendry MP] I’m more confident than Doug on CHP…[in respect of energy conservation we will begin to increase our use of] CHP [Combined Heat and Power], geothermal energy, don’t need District Heating. I think we’ll see more people switch to electric heating. The likely pricing on gas will mean people have to look at other sources – such as localised heat storage, intelligent ways to produce hot water and heat in their homes […for example, a technology to store heat for several days…] The first [new gas power] plants will be where they are already consented – where originally coal plants – need to have identified in advance – no new plant is consented unless…We’ve asked Ofgem to ask re securing gas supplies. If we can stretch out the tail of North Sea gas – can stretch it out 30 – 40 years […] technology […] Centrica / Norway […] develop contracts […] Is there a role for strategic storage [Centrica asking] […] Buying and selling at the wrong price (like the gold) [widespread chuckling in the room]. Some of it may not need legislation. Gas Strategy will be published before the Energy Bill.
[David Cox] Get very nervous about gas storage. Don’t think there’s a need to put financial incentives in place to increase gas storage. We think the hybrid gas market is successful – a market and regulatory framework – [gas storage incentives] could damage.
[Doug Parr] I’m not downbeat because I want to be downbeat on heat. [Of all the solutions proposed none of them show] scaleability, deliverability. I’d love that to come true – but will it ? […] Heat pumps ? Biogas is great but is it really going to replace all that gas ? If we’re going to be using gas we need to make the best use of it […] Issues around new plant / replacement – all about reducing risks no exposing ourselves to [it] – security of supply, climate risks, issues about placement [siting of new plant]. If CCS can really be made to work – it’s a no-brainer – do we want all that carbon dioxide in the atmosphere or … ? Our entire policy becomes dependent on a technology that hasn’t even been demonstrated. Other technologies that people thought were great – years later they still haven’t arrived [for example, rooftop wind turbines]. If we say CCS is the only way it’s going to work – what’s Plan B ? We are going to use [fossil fuels] – should not become wholly dependent on technology not yet demonstrated.
[Alan Whitehead] Perhaps people should be asked – which would you prefer – a CHP / DH [Combined Heat and Power / District Heating] plant in the valley here, or a couple of wind turbines on that hill ? That would [shake things up].
Questions from the floor
[ X ? ] See […] as the ultimate destination. Most important – gas can be made zero carbon – not pie in the sky. 1. Start contributions of carbon-neutral gas and 2. will need far less if [we act] like Japan – force installation of microCHP. Their aim is to do same as for washing machines [bring prices down – make widely available for the home]. MicroCHP [with] heat pumps – reduction as good as decarbonising gas or electricity. But can also decarbonise gas.
[ X ? ] The Minister mentioned the importance of CHP but recently dropped […] mandate. If CHP so important what measures is the Government taking to ensure its installation ?
[ X ? ] Electricity is a rubbish fuel for heating buildings – very peaky load – need something cheap to store, cheap to […]. Fits very well with forcing down demand. Where we’re getting our gas from. At the moment our waste is being incinerated. For a cheap additional cost, where currently incinerating we can do anaerobic digestion [AD], producing a fungible asset – the gas – can gradually decarbonise our grid.
[ Thomas Grier ? ] …a decision [?] of London – CHP in London over the next few years. If we want to use electricity for heat, we need to reinforce the electricity grid [by 60% to 90% ?] In rural situations – use electrical heating. In urban, use decarbonised energy. [This model projection] shows the gas grid disappearing – it will collapse at some point if all we have on the gas grid is cooking.
[ X ? ] …[encouraged CHP then a few days later] stood up then said all support [removed ?] for CHP next year. A Heat Strategy that said there is enormous [scope / potential] for CHP. We want to see gas, we want to see efficiency. Are we moving towards […] without it they won’t build it.
[David Cox] Microgeneration – couldn’t get it down economically. Reliability [issues]. Full supporter of biogas – AD got a contribution to make – but never more than 5% – no matter how much [we crack it]. Electricity is not very good for heating – but how to we decarbonise the heat sector ? Always been an advocate of CHP. Government need to do more incentivising of that.
[Charles Hendry MP] Innovation and invention […] Government can’t support all emerging technologies. Best brains around the world [are working on] how we move fundamentally in a low carbon direction. On the waste hierarchy – burning of waste should be the final stage – finding a better use for it. [I visited] the biggest AD plant in Europe in Manchester – biogas and electricity generation. We are seeing Local Authorities taking a more constructive long-term view on how to manage waste. CHP – we all want to see more of it – to what extent does it need support ? That depends on whether new build – building a community around it. [By comparison, urban retrofitting is probably too expensive] Iceland [took the decision and] retrofitted almost every home – I’m now more convinced than before. What is the right level of subsidy and what makes good economic case ?
[Doug] We do keep missing opportunities. [For example in Wales, Milford Haven, the new Combined Cycle Gas Turbine at the Liquified Natural Gas (LNG) refinery to process the gas] should have been CHP. I am enthusiastic about lots of heat technologies [but the same questions/issues apply] scaleability and deliverability. District heating [DH] – an infrastructure asset ! [Can change priorities about what gets built – for example in Denmark (?)] they’re building large-scale solar farms to top up the DH. In the Treasury’s infrastructure plan [see DH could be…] Heat is the poor relation in energy debate. Other networks have been identified in the National Policy Statements (NPS) – but not heat.
[ Leonie Green, Renewable Energy Association ] [I must] defend heat pumps. In Sweden 90% of new builds [hav e heat pumps ?] – heat pump efficiency is a function of the energy-efficiency of the building […] Just on AD – National Grid report said it could provide 50% [of the nation’s supply. Our members think] that’s a bit too high – we think 25%. My question is really about the benefits. We are hearing anxiety about costs, but it’s piecemeal on benefits. We’ve been strong on jobs, balance of trade, exports [all benefits of renewable energy investment and deployment]. Pleased to see DECC put out [report from] Oxford Economics [on the] wider economic benefits. How can we get more and more balance in reports. [An example] Deutsche Bank renewable generation opportunities.
[ ? ] We would also support more than 5% from renewable gas – also about hydrogen – we used to do it when it was town gas – why not again ? As regards injecting biomethane/biogas from AD into the National Grid [last year ? to this year ?] 130 enquiries to connect AD to our network – none have progressed. Please sort these [registrations] out.
[ ? ] Minister, we’re not expecting you to fund all technologies – we need some logic – especially with transport. The Government doesn’t recognise the difference between Renewable Natural Gas if used in transport and fossil fuels. Would be simple – a tax on gas if used in a vehicle. What’s the problem over […] ?
[Colin Snape, University of Nottingham] We are looking at reducing the costs of carbon capture – we have a section of PhDs… One other gas source not mentioned – gas from underground gasification of coal [UCG]. In UK […] 2 billion tonners of coal – slightly offshore – on the energy coast of the UK – where all the action is on CCS – obviously UCG needs to be coupled with CCS to be carbon neutral. Would [be operational] in a very short time period […incentives…]. Significant proportion of UK needs.
[ ? ] What is the purpose of the Gas Strategy ? Shale gas isn’t a miracle. The “Golden Age of Gas” [report by the International Energy Agency (IEA)] doesn’t mean cheap gas, because [it will be put to] lots of uses. Renewable electricity and nuclear are not going to come until the 2020s. How do we avoid building loads of gas generation that is not necessary after that time ? What’s the role of mothballing (relatively cheap to bring CCGT out of mothballs comparing to build new). No sign of reduction in electricity demand reduction – therefore there will be high gas use.
[ Doug Parr ] On UCG, the IEA had two scenarios in the “Golden Age of Gas” – both took us over 3.5 degrees Celsius [in additional global warming]. Even if there is unconventional gas sources, still a huge danger of going down the road of unrestrained gas use. What is the alternative ? We should not end up becoming dependent on gas. Should not build gas to fill a short-term hole – they will lobby for their own interests – to keep open.
[ David Cox ] CCGTs won’t be built without guarantees greater than 20 years. Also renewable energy might not provide in the way that we hope. The CCC report – what caused the rise in energy prices ? The wholesale gas price – not renewable energy, green policies. However, that was slightly dishonest – the counter-factual was […] renewable energy significantly still more expensive than fossil fuel there. Until we can get costs of renewable energy down to the prices of fossil fuels… [The industry] don’t give the impression [they will build] on the basis of short-term need. Gas isn’t clean, I admit that […] CCS – that will work.
[Charles Hendry MP] A lot comes back to a need for a balanced approach – carbon targets and security of supply. If you haven’t sorted out security of supply, the electorate will not give permission to go low carbon. Gas is a hedging fuel currently but don’t know where costs going over time. As a politician, I like pipelines – know where it’s going (not like LNG, where there was limited use of new LNG import plant). If we want Scandinavian gas, we need security of demand to build the new pipeline. How we deal with issues of biomethane – in 2 years – need to make more progress. Some of these [techologies] will be gamechangers – some, look back in a couple of years… [Need a] permissive framework to allow a lot of ideas and technologies. There is no source of energy that hasn’t required subsidy in early days. Fanciful to suggest new forms of energy can come through without support. The letters we get [from the public, from constituents] are on vehicle fuel costs, not how much their gas bill went up last winter…
Official end of meeting
A gaggle of people gathered in the hallway to discuss some items further.
The Electricity Market Reform (EMR) was generally criticised – as it contains measures likely to specifically benefit nuclear power. Electricite de France was identified as very involved. The Government had said “no nuclear subsidy”, but the EMR measures are equivalent to hidden subsidies.
The Levy Cap was criticised as it would disturb investor confidence – if several nuclear reactors came on-stream in 10 years time, in the same year, they would eat up the whole subsidy budget for that year – and other technologies would lose out. If was felt that a number of the EMR proposals were “blunt instruments”, not overcoming shortcomings of former levies and subsidies.
Although the EMR was designed to addressed economic fears, it wasn’t assisting with financing risks – if anything it was adding to them. Rates of return have to be guaranteed for loans to be made – chopping and changing subsidies doesn’t allow for that.
Leonie Green said that the REA members don’t like the Premium Feed-in-Tariff (FiT). She also said later that they were not pleased about the cuts in support for AD.
Since my personal interest is in using Renewable Gas of various sources (including Biomethane / Biogas) to displace Natural Gas from the gas grid, I spoke with various people about this informally (including a woman I met on the train on my way home – who really got the argument about decarbonising gas by developing Renewable Gas, and using that to store excess renewable electricity, and use it as backup for renewable electricity. Although she did say “it won’t be done if it won’t confer benefits”.). One of the key elements for developing Renewable Gas is to create a stream of Renewable Hydrogen, produced in a range of ways. Somebody asked me what the driver would be for progress in Renewable Hydrogen production ? I said the “pull” was supposed to be the fabled “Hydrogen Economy” for transport, but that this isn’t really happening. I said the need for increased sources of renewably-sourced gas will become progressively clear – perhaps within a decade.
One of the persons present talked about how they think the Government is now coming out of the nuclear dream world – how only a few of the proposed new reactors will get built in the next decade – and how the Government now need to come up with a more realistic scenario.
It was mentioned that is appears that the Biogas technologies are going to have the same treatment as solar photovoltaics – some sort of subsidies at the start – which get cut away far too early – before it can stand on its own two feet. This was said to be the result of an underlying theory that only a fixed amount of money should be used on launching each new technology – with no thought to continuity problems – especially as regards investment and loan structures.
“The role of gas in the UK’s energy mix” 12 June 2012 17:30 – 18:30, Committee Room 5, House of Commons with speakers Minister of State for Energy and Climate Change, Charles Hendry; David Cox, Managing Director of The Gas Forum and Dr Doug Parr, Chief Scientist of Greenpeace UK. Chaired by Dr Alan Whitehead MP, Chairman of PRASEG, the Parliamentary Renewable and Sustainable Energy Group, who called the seminar : https://www.praseg.org.uk/the-role-of-gas-in-the-uk-energy-mix/
UNVERIFIED COMMENTS : Please check with the speakers to confirm their statements and do not take this account as verbatim.
[Alan Whitehead MP] Questions about gas. Will it be business as usual ? If not – too “much” gas ? What does that mean for Climate Change targets ? New gas generation – about 11 gigawatts coming on-stream in the next 5 years – “grandfathered” (no obligations to control emissions with Carbon Capture and Storage (CCS)) throughout the life of the power plant – does produce questions about Climate Change targets – CCS may change that landscape in the medium-term future. Question about emergence of biogas into system [which would bring] a down-trend in emissions.
[David Cox] The wonderful future that gas offers us. Have to look at whole low carbon [framework] – gas has a place. Not a war [between gas and renewable energy technologies]. Both needed [in the advance towards carbon-free] energy. Without gas, not going to make it. Make sure we can afford it. Gas has a role. The recent [International Energy Agency] IEA report on the “Golden Age of Gas” – tight gas, shale gas – has doubled reserves. Nobody knows for sure – there’s so much there. Perhaps 250 years of gas – no shortage of gas [although some of it is in] sensitive areas. Getting it from those areas with political problems. [There are uncertainties about] unconventional gas. There is plenty around the world – “pretty good”. Gas is not at war with renewables. Gas isn’t just a transition fuel – it’s a destination fuel. Got to prove CCS technically. If we can do that gas becomes a destination fuel. Can decarbonise not only electricity. Heat. Heat pumps won’t do it on their own. Sorry. [Gas can help decarbonise] transport – electrify the transport system – that’s what we believe is possible. Hope the Government will support CCS.
[Doug Parr] First and foremost – we are not going to eliminate gas from energy systems any time soon – don’t think of gas as a destination – I would warn against policy that gas is allowed to become the default and become too dependent on gas. A lot of policy on gas – but only over part of the energy system [electricity]. Heat is going to rely on gas fo a long time. If follow the Committee on Climate Change (CCC) logic – [heat is a] strategic sector – to getting away from carbon emissions. If gas is going to be what gets us out of energy problems – the so-called “trilemma” of decarbonisation, security [of supply] and cost. [New gas power plants amount to] 11 gigawatts [GW] over the next 5 years – 120 TWh – a quarter of current gas [still in service] out to 2030. If one take CCC target of 50 gC / KWh (grammes of carbon per kilowatt hour). Look at CCGT [Combined Cycle Gas Turbine gas generation power plant in operation] – that target is a fraction of [current] unabated [CCGT] – not that great. Any substantial role of gas has to make some pretty strong assumptions about CCS. Remember, this is not yet working – let us not have a decarbonisation policy relying heavily on CCS when not at the first stage. The CCC have warned that grandfathering of the 11 GW new generation – emit without restrictions – and issue until 2045. Can’t say gas is somehow the answer to decarbonisation issues. In media – don’t [swallow] the media froth. [As for] security of supply – already going to be quite reliant on gas for heating for quite some time – hard to see [otherwise]. Heavily reliant on imports – around 80%. Where do we import our gas from ? Qatar and Norway mostly. The former head of the Navy argued [recently] changing gas prices is the single most significant factor. DECC [UK Government Department of Energy and Climate Change] recent report on price shock. REA [Renewable Energy Association] said that just by hitting renewables targets would displace £60 billion of imports. [As for] shale gas : both Ofgem research and Deutsche Bank reports that shale gas is very unlikely to help on security [of supply] issue. Citing American example [of shale gas exploitation] is just irrelevant. [So the UK Government must be] supporting gas because of costs ? The biggest rise in consumer bills is from fossil fuel [price increases]. Not renewable energy, not green energy [measures] – it’s the rise in the wholesale gas price. Is that going to stabilise and go down ? Not according to Merrill Lynch and DECC – [strong] prices for Liquid Natural Gas (LNG) and therefore for gas [as a whole, will stay]. Clearly we will be using gas – as [electricity grid load] balancing. What I’m railing about is that gas doesn’t get us out of our energy trilemma. Gas will not [save us]. We know we can deliver through renewable energy, wind – acceleration of new technologies [such as tidal] – perhaps CCS will work, who knows ? and efficient use for example Combined Heat and Power (CHP) on industrial scale. If we are using gas we are using at it’s most efficient.
[Alan Whitehead MP] [recounts tale of how he got into trouble with Twitter commentators when he insisted the recent rise in consumer energy bills was due to the rise in the cost of wholesale gas, not green energy measures] [To Charles Hendry] I’m sure you don’t Tweet.
[Charles Hendry MP] No. absolutely not. I have enough people telling me I’m wrong without… We have to look at the role of gas. It would a dereliction of Government not to look at the role of gas going forward. […mentions developments in gas production…] seismic profiling [enabling better understanding of gas fields] horizontal drilling [improving access to complex fields]. [As for] unconventional gas – the IEA “Golden Age of Gas” – but don’t assume [it’s that simple – supply may go up but] demand for gas is going to go up dramatically. Japan – major user of LNG and diesel. Consequence of Germany’s decision to close nuclear power plants – will use much more gas. China…India…growth rate – massive growth of demand. Anticipate new resources to be found – Iraq for example – but cannot assume [what has happened in the United States of America with the development of shale gas where gas prices are now] a quarter [of what they were] – a massive boost to America – will they allow this to be exported to Asia – or use cheap gas to [relocating] industry back to the USA ? Have to look at implications for us. Reasons why shale gas is different in Europe – legal [situation] – the mineral rights [in the US, these can be acquired from underneath a landowner]. Don’t have the same commercial drives as farmers in the US. The reason why gas prices collapsed in the US and not here – if we saw a price benefit here, it would go out through the [gas] interconnectors [to neighbouring countries]. For real practical reasons won’t see shal gas develop [significantly] here. [It is a] global gamechanger – but… The US is fundamentally shifting from coal to gas – with the implications for emissions. The change from coal to gas was a major driver in European control of emissions [in the 1990s] […] Investment…technology…practical constraints. EdF [Electricite de France] will go ahead with new nuclear [by the end of the year ?] but the plant will not come online until the end of the decade. Major renewable energy resources also in 2020s [not immediate] – the cost of offshore wind power is two times that of onshore. We’re saying to industry to reduce by 40% by the end of the decade – otherwise simply not affordable. Contributions from tidal, CCS ahead. It’s going to be very end of this decade to see if CCS can work. Worrying gap [in power generation between now and next decade]. Megawatts (MW) of coal being turned off in 2015. [Coal plants are] getting through their [legally permitted] generating hours too quickly. By 2023, the only nuclear plant still operational will be Sizewell B. We have to have more gas in the mix. As we look towards more intermittent resources (renewables), gas is an important source of backup. [Will have/need] a capacity mechanism to ensure [optimisation when] mismatch between supply and demand – auction to include gas – could be [North Sea] gas, gas from the interconnectors [from abroad] or demand side response [demand reduction] – a more sophisticated capacity mechanism than historical. I’m more optimistic about CCS [than Doug Parr]. CCS is a requirement. It is something we have to deliver – no scenario I’ve seen where we’re going [to be] using less coal, oil and gas than today. [Out to 2035] our basic needs [will still rely for a good percentage on] fossil fuels. Broadening CCS [demonstration competition] out to pre- and post-combustion on coal – [expand] to gas. Can be applied to gas as well as coal. I think CCS is a fundamentally critical part of this equation. If so, can see gas as a destination fuel. The GW of gas being built in the next few years [some questions] – currently gas is being mothballed [some plants being shut down effectively putting them into disuse] because of [fuel] prices. I consented more in gas and also wind on- and offshore last year. But that gas is not being built. If we want that gas built we need a more coherent strategy. Look at what is necessary to encourage that gas – and carbon emissions [reduction] alongside. EPS [Emissions Performance Standard] […] to stop unabated coal – limit 450 gC / kWh – significant proportion of plant would need CCS. But ddin’t want to disincentivise gas. Have also said a point where CCS on gas will be necessary. But if we had people building gas now and then 15, 20 years later they would have to fit very expensive [CCS] equipment… Volume of gas coming forward meets our supply issues. Over the next few years, grandfathering. If see enough gas coming through can change the mechanism in due course. [We will be] responding officially to the CCC in Autumn. Need to [fully] decarbonise electricity in the course of the 2030s if we want to meet out climate change objectives. I think that [the] reality [is that] gas and important element. Nuclear is important. Want to see significant amount of renewable energy and what Doug is calling for – significant commitment to [energy use] efficiency in the country. [We should concentrate particularly on] energy efficiency.
The meeting then opened up to questions from the floor… To Be Continued
Public Enemy Number One in energy terms has got to be burning coal to generate electricity. Although the use of some coal for domestic heating to supplement varying supplies of biomass in home stoves is going to continue to be very useful, using coal for power production is wasteful, toxic and high carbon.
Public Enemy Number Two in energy terms is nuclear power – a weight round our collective neck. Costly to build, costly to underwrite, costly to decommission: although its proponents claim it as a low carbon solution, even they admit the management of nuclear power can be polluting, risky and wasteful.
Public Energy Number Three in energy terms has to be the incredible amount of water required to keep the first two enemies in operation. Climate change is already altering the patterns of rainfall, both in geographical areas and in seasons. Any energy solutions that don’t require water supplies will be preferable.
Many environmental researchers oppose a growing dependence on Natural Gas for power generation in industrialised countries – they claim it will lock in carbon emissions production without Carbon Capture and Storage (CCS). Carbon Capture and Storage is way off in the never-never land at present, so it should not be factored in to analyses of carbon management. Ignoring CCS, it can be seen that substituting in Natural Gas power generation where coal has been the principal fuel is in fact a very good way to lower greenhouse gas emissions in the near term.
Natural Gas is not forever, not even with environmentally-ensured unconventional production, such as shale gas. Yet the Natural Gas infrastructure is highly important for developed and some parts of developing countries too. If we can re-imagine the future of gas, making gas fuels renewable, the already existing distribution of gas and appliances and equipment that use it, become a valuable asset.
The climate change crisis is an energy crisis. My position is that we need three vital things to solve this energy crisis : rationalised energy, renewable electricity and Renewable Gas. My key projection is that a 100% renewable energy world is possible, and in fact, inevitable, and to get from here to there we need to use gas fuels, but they need to become progressively renewable in order to meet the climate change crisis.
Natural Gas can not only be a “bridge fuel”. Supporting its use now, on the understanding that it will be replaced by Renewable Gas in the medium term, will enable links to be made between society and the energy industry, and break down the barricades between those who are against high carbon energy and those who sell high carbon energy.
What annoys me most about the Solar Power Feed-in Tariff saga is not that the UK Government suddenly pulled the plug on the full rate for household-sized systems, or that they set the cut-off date before they finished their consultation, or even that that the Department of Energy and Climate Change (DECC) dragged out a legal appeal process.
Despite the truly pitiful sight of a Minister of State being sent out to bat with a miniaturised teaspoon to defend the indefensible decision, and despite the energy industry stooges that have placements inside DECC and are clearly affecting policy, no, the thing that really gets me is the focus on budgets instead of targets.
Here’s a summary from the Government’s own “long term trend” figures for energy consumption in Great Britain :-
Nobody can swear to me that the last few years are not just a glitch caused by economic instabilities, and that the re-localisation of manufacture in future in a recovering economy will not push this demand continually higher according to the trendline.
What are we using to supply this energy ? Here’s a summary :-
Despite the near exponential rise in renewable energy, it’s starting from a small base. The increase in energy consumption is being satisfied by a sharp rise in the supply of Natural Gas – something which the UK is producing increasingly less of these days. And for those who think that shale gas production would help, no, only a few percent of demand could be satisfied. This is an import-led energy supply, and the trend should ring alarm bells, but clearly doesn’t even tickle the ears of the average person in the street.
Electricity demand growth remains healthy, despite problems with unreliable supply from nuclear electricity (refered to as “outages” in the DECC Digest of UK Energy Statistics (DUKES) reports) :-
Now, in the future, with an envisioned massive rise in renewable energy, higher electricity use would be reasonable, as long as other energy consumption reduced. But the growth in electricity consumption charted here is not people driving more electric cars or using electric heating instead of Natural Gas-fired comfort. This is higher consumption, pure and simple, not “energy switching” over to electricity.
As an aside – the sum total of these figures indicates that the nation as a whole is not engaged in significant energy conservation, despite decades of campaigning.
All these trends add up to a very slight loss in dependency on fossil fuels for the UK’s energy :-
This is the critical trend. North Sea oil and Natural Gas production is falling like a large rock, and no amount of technological advancement and re-stimulating the drilling sector is turning this around. This means that without a rapid decrease in fossil fuel dependency, the United Kingdom is going to start haemorrhaging wealth.
Goodbye, First World.
This is why is it essential to ramp up renewable energy deployment by whatever means at our disposal.
Greg Barker MP bleating about keeping to budgets is not helping.
Carbon Detox 2012 : Shed Unwanted Pounds With Our Unique Formulation
George Marshall, well-known sustainable living guru, will be asking us to challenge ourselves, our routines and bad habits, and make a 2012 all-year resolution to shed the excess carbon from our lives.
On 21st January 2012 at a convenient central London location, he will ask us to take action to get control of our personal energy, and add vitality to our lives with new aims and goals.
|The aim of the event is to help us acquire the psychological tools we need to lead slimmer, healthier and more ethically satisfying lifestyles.
Speaking from the experience gained from his decades of research and practice in the field, and giving tips and tricks from his bestseller “Carbon Detox“, George will be guiding us expertly through the carbon counting maze.
One of our leaner life activities group said : “Cutting down has been hard work, but has become much more fun now I am involved in my local group. I am looking forward to meeting my buddies on Saturday.”
Tony Emerson, the coordinator for the ecocell 2 programme said : “In three years our household has managed to halve the amount of greenhouse gases we produce – by topping up loft insulation, converting to double glazing, installing a wood stove and learning how to best use it, new heavier curtains, wall insulation, changing to a green electricity supplier, continued monitoring of timings and temperature of the central heating – and of course taking part in the ecocell 2 programme. However we still have further to go and I am looking forward to hear what George Marshall has to say. One way we are encouraging people in ecocell 2 is to have a buddy system, whereby people pair up, or group up, by phone, so that people with similar houses can support each other.”
To register for this free, all day event, including a selection of facilitated workshops and to receive your take-home worksheet pack, please email Tony at firstname.lastname@example.org
For photographs of the day’s events, and feedback from the workshops, please contact Jo on 0845 45 98 46 0
NOTES FOR EDITORS
a. Climate change activist and author George Marshall will be addressing green Christians during an all-day conference on Saturday 21st January 2012 in Central London.
b. The Christian Ecology Link ecocell project team will facilitate workshops on “living the truly sustainable life” at the Magdalen Centre, St Mary’s Church, Eversholt Street near Euston train station between 10.00 am and 5.00 pm 
c. George Marshall, author of the easy-to-read book “Carbon Detox : Your step-by-step guide to getting real about climate change” will be offering his fact-packed and lighthearted insights into action on climate change, drawn from his experience of over a decade of community and policy work. 
d. The event will be suitable for anybody already taking part in the ecocell project, or anybody interested in starting. The workshops on the day will be pitched at several levels.
e. The ecocell-1 workshop group will look at the introductory programme to help your family or church group take their first steps to reducing their impact on the environment. 
f. The ecocell-2 workshop will look at the more in-depth project, to provide mutual support for those who want to reduce their carbon emissions to sustainable levels within five years. 
 The Magdalen Centre, St Mary’s Church, Eversholt Street, London NW1 1BN is located about 7 minutes’ walk north of Euston train station.
For details of Christian Ecology Link, please phone Jo on 0845 45 98 46 0 or email email@example.com
To all Renewable Energy Deniers,
Things are getting so much better with renewable energy engineering and deployment – why do you continue to think it’s useless ?
We admit that, at the start, energy conversion efficiencies were low, wind turbine noise was significant, kit was expensive. Not now. Wind and solar farms have been built, data collected and research published. Design modifications have improved performance.
Modelling has helped integrate renewable energy into the grids. As renewable energy technologies have been deployed at scale, and improvements and adjustments have been made, and electricity grid networks have adapted to respond to the variable nature of the wind and the sunshine, we know, and we can show you, that renewable energy is working.
It’s not really clear what motivates you to dismiss renewable energy. Maybe it’s because you’re instinctively opposed to anything that looks like it comes from an “envionmentalist” perspective.
Maybe because renewable energy is mandated to mitigate against climate change, and you have a persistent view that climate change is a hoax. Why you mistrust the science on global warming when you accept the science on everything else is a continuing mystery to me.
But if that’s where you’re coming from when you scorn developments in renewable energy, you’re making a vital mistake. You see, renewable energy is sustainable energy. Despite any collapse in the globalised economy, or disruption to fossil fuel production, wind turbines will keep spinning, and solar panels will keep glowing.
Climate change has been hard to communicate effectively – it’s a huge volume of research, it frequently appears esoteric, or vague, or written by boffins with their heads in the clouds. Some very intelligent people are still not sure about the finer points of the effects of global warming, and so you’re keeping good company if you reserve judgement on some of the more fringe research.
But attacking renewable energy is your final stand. With evidence from the engineering, it is rapidly becoming clear that renewable energy works. The facts are proving you wrong.
And when people realise you’re wrong about renewable energy, they’ll never believe you again. They won’t listen to you when you express doubts about climate change, because you deny the facts of renewable energy.
Those poor fools who have been duped into thinking they are acting on behalf of the environment to campaign against wind farms ! Wind energy will be part of the backbone of the energy grids of the future.
We don’t want and we can’t afford the concrete bunkers of deadly radioactive kettles and their nasty waste. We don’t want and we can’t afford the slag heaps, dirty air and melting Arctic that comes from burning coal for power. We don’t want and we can’t afford to keep oil and Natural Gas producing countries sweet – or wage war against them to keep the taps open.
Instead we want tall and graceful spinners, their gentle arms waving electricity from the breeze. We want silent and dark photovoltaic cladding on every roof.
Burning things should only be done to cover for intermittency in wind and sunshine. Combustion is very inefficient, yet you support combustion when you oppose renewable energy.
We must fight waste in energy, and the rising cost of energy, and yet you don’t support the energy resources where there is no charge for fuel. Some would say that’s curmudgeonly.
When you oppose renewable energy, what is it you’re fighting for ? The old, inefficient and poisonous behemoths of coal hell ? We who support renewable, sustainable energy, we exchange clunky for sleek, toxic for clean. We provide light and comfort to all, rich and poor.
When you oppose renewable energy, you are being unbelievably gullible – you have swallowed an argument that can ruin our economy, by locking us into dependency on energy imports. You are passing up the chance to break our political obedience to other countries, all because wind turbines clutter up your panoramic view when you’re on holiday.
You can question the net energy gain from wind power, but the evidence shows you to be incorrect.
If you criticise the amount of investment and subsidy going into renewable energy, you clearly haven’t understood the net effect of incentivisation in new technology deployment.
Renewable energy has a positive Net Present Value. Wind turbines and solar panels are genuine assets, unlike the liabilities that are coal-fired power stations and nuclear reactors.
Renewable energy deployment will create meaningful, sustainable employment and is already creating wealth, not only in financial terms, but in social welfare terms too.
Renewable energy will save this country, so why do you knock it ?
|The UK Government has a neat plan – meet a considerable proportion of the nation’s electricity needs by burning biomass and biofuels : wood, waste wood, agricultural residues, palm oil, maize ethanol and such-like.
They are even considering setting up a generous subsidy, the kind of subsidy that would encourage massive imports of biomass and bioliquids.
|Without care and regulatory checks and balances, the net effect will almost certainly be rainforest deforestation, land grabbing in under-developed nations, and economic problems for the growing biomass heat movement in the UK.
Most people probably think burning wood, wood waste and plant-derived fuels to make power sounds like a good energy idea – stop burning coal and start burning trees – has to be better for the planet, surely ?
She said the UK Government has apparently heard concerns about the burning of bioliquids such as the biofuel bioethanol for power generation, and it shouldn’t be included in the subsidy arrangement.
However, biomass-fired power generation is still set to receive support – although it is still being depicted as making use of agroforestry residues, and all sourced within the country – judging by a recent permission for a biomass burning plant in Yorkshire.
Generous subsidies for burning biofuels to generate electricity will encourage the combustion of food-quality oils, imported from across the world, exacerbating the existing problems with the destruction of tropical rainforest for commercial gain.
Offering significant subsidies for burning biomass for power generation will most probably trigger further logging of virgin rainforest, as it would be cheap to produce and export to Britain.
Even if biomass were sourced in the United Kingdom – with restrictions on imports from areas of the world where there is extensive land grabbing and deforestation occurring – the subsidy would encourage the burning of wood products for generating power instead of being used in the most efficient way – to heat homes.
Almuth Ernsting said, “the big energy companies are going to burn that much wood, small heat providers won’t be able to compete.” The same would be true of street-scale biomass combined heat and power (CHP) proposals.
Almuth Ernsting and others have pointed out that the UK Government public consultation on the subsidy ends on 12th January 2012, but that even after that date, people are being encouraged to write to their Member of Parliament to express views.
Another group, nope, is also calling for citizen action :-
In an e-mail to joabbess.com, Almuth Ernsting offered extra resources :-
“All the materials related to our campaign against subsidies for biomass and biofuel electricity can be found here :-”
“A briefing about the impacts of ROCs for biomass, biofuels and waste incineration :-”
“A briefing to hand or send to MPs :-”
“A guide to lobbying MPs on this :-” https://www.biofuelwatch.org.uk/2011/mp_guidance_rocs/
“We have got two email alerts on one page just now (https://www.biofuelwatch.org.uk/2011/rocs-alerts/), though we will take down the one to respond to the DECC Consultation when that closes next Thursday, while keeping the one to MPs. However, we very much encourage people to write personal letters or, even better, visit their MPs, which will have much more impact than taking part in a standard email alert.”
Public infrastructure and utilities are the skeleton of the national economy; the spokes of the wheel; the walls of the house.
Private corporations can in many cases put muscle on the body, a tyre on the bike, and furnish the rooms, but without the basic public provision, private enterprise cannot thrive.
Without taxes being raised – asking everybody for their appropriate contribution – there would be no guaranteed health service, education system, roads, water supplies, power networks.
Federal or central government spending is essential, and often goes without question or inspection – including subsidies, cheap government loans, tax breaks and even rule-bending and regulatory exemption for specific sectors of the economy. This policy lenience also applies to private companies that take on the provision of public utilities.
This explicit, but often glossed-over, support for public services means that private business can rely on this national infrastructure. Small businesses can rely on a power supply and waste disposal services, for example. Large businesses can rely on a functioning postal service and road network.
It is questionable whether for-profit enterprise would be able to survive without the basic taxation-funded provision of public services and utilities.
I can understand why governments feel the need to get public spending off the balance sheet, and outsource public utilities to the private sector.
There is a lingering belief that private enterprise makes public services more efficient; makes manufacturing more reliable; makes construction better quality.
In some cases, this belief in privatisation is justified. Where companies can genuinely compete with each other, there can be efficiencies at scale. However, the success of privatisation is not universal.
Many parts of a developed economy are monolithic – there is no real competition possible. You get electricity through your power socket from a variety of production companies – you cannot choose. The road between your house and your office is always the same road – you don’t choose between different tarmac suppliers. Your local hospital is your local hospital, regardless of who owns and runs it – you have no choice about who that is – and the government contract tendering process is not something open to a public vote.
Added to this lack of competition, in some cases, it is impossible to make a profit by operating a public service by a private concern.
There should be no rock under which private business can hide when it claims to be operating profitable train and bus services – without public subsidies, public transport cannot be run at a profit.
Liability for daily operations may have been outsourced to the British private train companies, but not the full cost of the services. Costs for locally-sourced services cannot be driven down because they cannot be made fully open to global competition.
By contrast, the globalisation of labour has been making manufacturing industry significantly cheaper for decades.
In order for globalised trade to work, finance has to be liberated from its nation-bound shackles, and so along with the globalisation of labour to nations where it’s cheapest, there has been the globalisation of finance, to the tax regimes less punitive.
The globalisation of trade is a two-way bargain between those that want to see the development of primitive economies and those who want to create wealth for their companies and their shareholders.
Globalisation has created a booming China, for example, and filled the pockets of any Western company that imports from China.
However, the tide of globalisation has reached the shore, and the power of the waves is being stilled by solid earth realities. Labour costs in previously under-developed economies are starting to rise significantly, as those economies start to operate internal markets as well as maintain export-led growth.
It could soon be cheaper to have manufacturing labour in the United States of America than China. But when that happens a curious problem will arise. Manufacturing industry has been closed down in the so-called industrialised countries – as companies have taken their factories to the places with the cheapest labour and the most lax tax.
Wealth creation potential in developed countries has been destroyed. And it is for this reason that Western governments feel the urgent need to privatise everything, because their economies are collapsing internally, and public budgets may no longer be able to sustain current government spending.
However, privatisation doesn’t work for everything. It doesn’t work for health, education, water, public transport. The European Common Agricultural Policy (CAP) is a vehicle to compensate for agricultural sectors than cannot make a profit. I would contend privatisation doesn’t work for the energy supply and distribution sector either – but for a special reason.
Normally, it is possible to run energy stations at a profit. The privatised sector inherited power stations and grid networks that were fully functioning, and the sales of power and Natural Gas were almost pure profit.
However, much energy plant needs to be lifecycled after decades of use – replacements are in order, and this demands heavy public investment, in the form of subsidies, or pricing controls, or tax breaks or some such financial aid, in order to avoid crippling the private companies.
Like the rail network, there is direct public investment in the power grids. This is to support new access for new energy plant. However, I think this doesn’t go far enough. I would argue that much more public tax-and-spend is required in the energy sector.
In future, most electricity generation needs to become low carbon and indigenous. The primary reason for this is the volatility of the globalised economy – it will no longer be possible to assume that imports of coal, Natural Gas and oil for power station combustion can be afforded – especially in economies like the United Kingdom, where much wealth creation has been destroyed by de-industrialisation.
It used to be easy to ignore this – as the North Sea was so productive in oil and Natural Gas that the UK was a net energy exporter. This is no longer the case.
To avoid the risk of national impoverishment, energy independence is dictated, spelled out by a deflating British economy and by the depleting North Sea reserves.
The easiest and fastest way to a power supply that is low carbon is by healthy investment in wind power and solar power. Yet with the turbulence in the global economy, spending on renewable energy has also been rocky.
Now is the time for the UK Government to stop tickling corporate underbellies to get them to invest in British energy, and to start collected tax revenues to spend explicitly on the energy revival.
It can be “matched” funding – the Renewables Obligation, for example, has drawn in massive levels of private investment into wind power. And the feed-in tariff scheme for solar photovoltaics had, until recently, been pulling in high levels of personal individual and private company investment.
This is the kind of public-private financing that works – create a slightly tilted playing field to tip the flow of money towards new energy investment, and watch the river flow.
Without public money ploughed into public infrastructure in non-profitable areas such as public transport and energy, private enterprise will not be able to make a contribution – they would quickly bankrupt themselves.
The result of capping public subsidies for renewable energy is a halt to renewable energy deployment. Those who resist wind farms are in effect destroying the country. Those who cap public subsidies for solar power want to break the nation.
We need socalist financing of new energy technology deployment, for the future wealth of our country.
|Throughout 2011, I changed a number of things in my domestic arrangements in order to reduce energy consumption at home.
What I found was that in order to make progress I needed to measure more things and be more organised. I also needed to acquire more equipment.
|This is rather ironic, since there are embedded emissions in all manufactured products. However, with careful use and maintenance, they should last a long time.
The daily electricity and gas consumption I was personally responsible for at home dropped fairly significantly (approximate figures) :-
Based on the average of the monthly daily averages, I should have consumed 766 Btu (8,094 kWh) of Natural Gas over the whole year, and 1,065 kWh of electricity for 2011. However, due to dropping demand, I actually used only 433 Btu (4,572 kWh) of Natural Gas and 1,034 kWh of electricity.
This compares to Ofgem’s analysis of medium household consumption figures of 16,500 kWh of Natural Gas and 3,300 kWh of electricity.
This puts my consumption at 28% of the medium in Natural Gas and 31% in electricity. It’s going to be hard to reduce both of these figures.
I came up with a number of personal solutions for reducing space heating in 2011, which enabled the use of Natural Gas to drop.
I had already come up with a number of changes in power consumption in 2010, which explains why the electricity use did not drop so fast or so far in 2011.
However, I’m still working on cutting my domestic power consumption.
One of those ways is trying to adopt a more vegetarian diet. You see, when you eat vegan or virtually vegan, you don’t need so much refrigeration. Frequently over the last year the only things in the fridge have been milk, spread, yoghurt and green vegetables (plus a couple of half-used jars of pesto or mayonnaise, the regulation bottle of lemon juice and a jar of Marmite). The freezer has been off for months.
So I thought to myself, after checking the power consumption of the fridge – does the house need a smaller fridge ? I mean, the large fridge is useful when there are guests or someone throws a party, but it’s not fully used all the time. I could keep the green vegetables in the coldest, unheated room of the house, and buy fresh more regularly. What if I get hold of a mini fridge to use on a day-to-day basis ? And so, into my life has come the Mobicool W35.
Technically, it’s not a refrigerator – it’s a “cooler box”. A thermolectric one. And despite the E energy rating on the packaging – at 290 kWh a year, it will have less than half the power consumption of the Big Fridge. Plus, since I don’t need to run it all the time, I can cut power use further by only having it on 18 hours a day (or less, as dictated by the weather), controlled by a timer.
The next adaptations to my energy use will entail significant expense. Here are some options :-
a. Upgrading the windows
I will need to save up to replace the windows completely, so I am looking for intermediate solutions.
For the biomass option, I have found a tree surgeon in North East London with whom a win-win arrangement could be developed – with me offering to take unseasoned wood from the loads of sawn waste that otherwise would cost money to dispose of.
In the meantime, I need to address draughtproofing. The sudden cold spell has shown me that there are still opportunities in this regard.
|After the recent notorious Panorama programme on energy prices, and yesterday evening’s debate on renewable energy and the costs of green energy policy, in the House of Commons, a number of people have commented that Members of Parliament and Ministers of the UK Government appear to know very few facts – and those they can remember they seem to quote in the wrong context.
This state of affairs is disgraceful, and allows mendacious narratives to persist in the mainstream media.
|RenewableUK contacted me and asked me to embed a YouTube offering some corrective information. I was very pleased to do so. I can assure my readers that I have not and will not be paid for doing so.
The key problem is not the cost to energy bill payers from direct subsidies such as the solar photovoltaic feed in tariff. The contribution from this is minor. The largest effect on energy bills is likely to come from two sources – the Energy Company Obligation and the plans for Carbon Pricing and other measures in the Electricity Market Reform.
Date: 9 November 2011
From: tim b
To: jo abbess
Just picked up on your blog following leads on Tom Heap – I’m writing a piece for my website (www.biggreenbang.co.uk) on the panorama / KPMG saga – just wanted to say what a great blog it is~!! Don’t find so many to-the-point sites in the UK – have picked up on guys like Joe Romm in the States but you seem to have your finger right on the pulse in the UK!
…Should explain that my site has been initiated by a load of IT techie nerds who are already working in telecoms and are about to launch a zero carbon mobile phone company (by a combination of using low carbon technology, buying into renewable power and carbon offsetting) They are committed to putting part of their profits into green projects and are setting up BGB in the hopes that it will be a vehicle for making sustainability issues available to a wider public – they have ambitions to develop it as a community resource too – They obviously hope to get spin-off business for their mobile phone network but I believe their motives are genuinely good and they seem to be giving me a fairly free rein!
look forward to hearing from you
Date: 10 November 2011
From: jo abbess
To: tim b
Good luck with the Panorama research.
…Keep the green flag flying !
|On Wednesday, I received a telephone call from an Information Technology recruitment consultancy. They wanted to know if I would be prepared to provide computer systems programming services for NATO.
Detecting that I was speaking with a native French-speaker, I slipped into my rather unpracticed second language to explain that I could not countenance working with the militaries, because I disagree with their strategy of repeated aggression.
|I explained I was critical of the possibility that the air strikes in Libya were being conducted in order to establish an occupation of North Africa by Western forces, to protect oil and gas interests in the region. The recruitment agent agreed with me that the Americans were the driving force behind NATO, and that they were being too warlike.
Whoops, there goes another great opportunity to make a huge pile of cash, contracting for warmongers ! Sometimes you just have to kiss a career goodbye. IT consultancy has many ethical pitfalls. Time to reinvent myself.
I’ve been “back to school” for the second university degree, and now I’m supposed to submit myself to the “third degree” – go out and get me a job. The paucity of available positions due to the poor economic climate notwithstanding, the possibility of ending up in an unsuitable role fills me with dread. One of these days I might try to write about my experiences of having to endure several kinds of abuse whilst engaged in paid employment : suffice it to say, workplace inhumanity can be unbearable, some people don’t know what ethical behaviour means, and Human Resources departments always take sides, especially with vindictive, manipulative, micro-managers. I know what it’s like to be powerless.
|Once again, the BBC has allowed to pass unchallenged the impression that green power policy and renewable energy investment are behind the dramatic rise in British domestic energy prices.
Disappointingly, this has come from John Craven, whose accuracy is renowned.
However, on this occasion, he has allowed a blooper meme to consolidate in the public mind.
Here’s how Countryfile went yesterday evening :-
[ Countryfile, BBC One, 16 October 2011, 18:25. Part way through recording, starting at approximately 20 minutes 32 seconds. ]
[ Ellie Harrison ] Earlier in the programme we were looking at the expected huge rise in wind power across the UK. But in the race to create more of our energy this way, who will win and who is set to lose out ? Here’s John again.
[ John Craven ] Earlier, I discovered how the plan to put wind power at the heart of our future energy supply is creating a building boom in wind farms, both on land and out at sea. With billions being poured into wind power, and with it being at the centre of the Government’s strategy on renewables, the future seems certain. So who will the losers and winners be in this wind revolution ? The most obvious winner is the environment as less fossil fuels are burnt. But who else benefits ? Well, another clear winner is big business. Companies building the wind farms get a generous price for the electricity they produce. […]