Sunday, August 1, 2010

Green Cuts and Delays

The ConDem cuts programme has begun to eat into the governments green pretensions. Of the £85m the Department of Energy and Climate Change (DECC) is contributing to the new governments £6.2bn savings programme, £34m will come from cuts in low carbon technology.

For starters, DECC announced in May that £3m would come from closing the Low Carbon Buildings Fund early. That has left a major funding gap for domestic scale solar and renewable heating projects, since the proposed new Renewable Heat Initiative is not due to start until next April- always assuming it does still go ahead.

Subsequently, DECC announced that the other savings will come from cancelling the final funding rounds of the Bio-Energy Capital Grants and Bio-Energy Infrastructure Schemes; a cut on funding for development of Deep Geothermal energy generation; reducing the scope of the Offshore Wind Capital Grants Scheme, early closing of the Energy Saving Trust technology trials; reducing the scope of the Central Governments Low Carbon Technology programme, and a reduction in the grant to the Carbon Trust.

In addition, it seems that the coalition have decided not to provide £1bn to part fund the formation of its proposed Green Investment Bank through the sale of assets such as the Channel Tunnel rail link, as had originally been proposed by Labour.

Next came the news that DEFRA is to scrap its funding for the Sustainable
Development Commission, and abolish the long running Royal Commission on Environmental Pollution, in 2011. DEFRA says the Government now has ‘many such sources of expert, independent advice and challenges’.

The coalition has also decided to abolish the Regional Spatial Strategies (RSSs) planning framework- which set local plans in a regional context e..g. with regional renewable energy targets. This could well link up with a policy statement made by Lord Marland that ‘there should be no dramatic increase’ in current plans for around 14GW of on land wind power.

There have also been a whole host of delays. The revised National Policy Statement (NPS) on energy, including a final list of approved reactor sites for nuclear new build, is to be delayed until Spring 2011 at the earliest. That’s quite a delay- earlier it had been said that the NPSs would be finalised before the end of the current Parliamentary term. But on July 15th Energy and Climate Minister Charles Hendry said that the Government would be launching ‘a re-consultation in the autumn on the draft energy National Policy Statements following the consultation undertaken by the previous administration earlier this year, and in particular due to changes which have been made to the Appraisal of Sustainability for the Overarching Energy National Policy Statement’. He added ‘We intend to present the finalised statements to Parliament for ratification next Spring.’

He insisted that ‘plans for the first new nuclear power station to begin generating electricity by 2018 remain on course’ and said that ‘a detailed implementation plan for planning reform on major infrastructure- including transitional arrangements and a revised timetable - will be published later in the summer.’

He explained that ‘For large energy projects we need to give industry maximum certainty, so that if sound proposals come forward, they will not fall victim to unnecessary hold-ups. We have decided to take a further look at the Appraisal of Sustainability of our draft Energy Policy Statements to make sure that they are fit for purpose’.

In parallel, Energy Minister Greg Barker has indicated that the government was not yet in a position to make an announcement on the future of the Renewable Heat Incentive . He claimed the delay was due to government wanting to make sure it gets the RHI right ‘first time round’ and because it needs to ask questions about the scheme that he said Labour had ignored . The government has also missed its deadline for introducing ‘permitted development’ rights, which remove the need for planning applications, for micro-wind turbines and air source heat pumps. Barker blamed ‘logistical consequence of a new government’.

It’s not all bad news though. The Green Deal for households promised via new legislation in the Energy Security and Green Economy Bill, could be helpful. The plan to back biogas production via Anaerobic Digestion is sensible – it could be a lifeline to hard pressed farmers. The promise to back marine renewables more is also welcome- though there is still no news of the governments report of the Severn Tidal programme. It’s also good to see the last of the Infrastructure Planning Commission, although who knows what the new system will be like.

However, most of the 32’ actions’ outlined in the governments new Annual Statement of Energy are just promises, with a lot uncertainty surrounding them and the gaps between them e.g. we are still awaiting a proper definition of zero carbon houses. But we may have to wait some time for issues like this to be sorted : a new fleet of consultations taking us through to next year before anything much actually gets finally decided.

The only really clear thing is that nuclear still gets top billing- as long as it doesn’t cost anything. Or at least appears not to cost taxpayers anything. The reality is that money is finding its way to subsidise nuclear projects and support services- for example, the proposed £80m loan to Sheffield Forgemasters may be been withdrawn, but the £33m Nuclear Advanced Manufacturing Research Centre is going ahead in Manchester , as is the linked Centre for Nuclear Energy Technology. In addition public funding continues for the Nuclear Decomissioning Agency, with notoriously NDA staff having had £5m in bonus payments recently.

Over in Germany they do things differently. There is now a plan impose a €2.3 bn p.a. ‘windfall tax’ on nuclear companies profits to meet decommissioning and waste repository costs. Not a bad idea.

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