A grim future?

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In my last two posts I looked at the way changes in technology interacted with employment and at how green energy technology might create new jobs. That's part of a wider process of economic change. I want to round off this discussion with some more high kevel thinking, before I get back to my more usual focus of   looking at what the technological options are. 

Technology is not autonomous- its development and deployment is driven by larger economic and political forces. As I described in the first post, it has enabled capitalism to avoid profit squeeze and productivity expansion crises. And some hope that with luck it may also help avoid terminal exploitation of the planet and its natural resources and ecological processing.  Maybe, for a while. But whether it can allow economic growth to continue unabated for ever is less clear.

The usual argument is that capitalism needs growth to survive- given  potentially terminal competition between rival chunks of capital. It can only continue if markets and demand continually expand. But this can’t continue for ever on a planet with finite resources and bio-carrying capacity, even with clever eco-technologies.

In a recent book, Capital in the Twenty-First Century. Thomas Piketty, a professor at the Paris School of Economics, doesn’t looks much at resources or the environment, but he does look at growth and capital. While he argues that the process of accumulation of capital is central and so is growth, he says they may not always coincide. He says that, globally, the rate of return on capital, which historically has been around 4.5%, rose during the industrial revolution to around 5% , but after around 1913 collapsed, falling to 1% , only recovering after about 1950. It is still rising, and will eventually, after 2050 or so, head back to nearly 4.5%. In parallel, economic growth (global economic output), which had historically been rising, accelerated even more in the 1950s and reached a peak of nearly 4%, but has recently begun to fall, and may never recover, falling to 1.5% after 2050. There was thus a golden (mid last century) era when both were rising with everyone doing well relatively, but now they are heading in opposite directions- capital up, growth down, a squeeze for the majority. He sees this as explaining the rise of the very wealthy- the so called ‘1%’, who own most of the wealth on the planet and will get more. He says its not just earning power (very high salaries) but the ownership and control of capital and crucially the ability to pass it on to offspring. 

www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

Be that as it may, it’s not too clear from his analysis why growth has fallen off  (are the rich just skimming more off?) and, perhaps more crucially, how the capital accumulation process can continue without growth, with its consequent major environmental and resource implications. Some of this wealth is created by manipulating and exploiting intangible or at least non- material assets such as ideas, information and money, and by speculation. It’s almost a virtual world, a big game- with presumably little direct environmental/energy impact, at least from the ‘gaming’ activities themselves. A bit like IT.  But there still has to be a real economy, with real trade in real good and services, if only to support the lifestyles of very rich elite.  And to maintain (albeit very unequal) social stability, some affluence has to spread more widely. That does have material impacts. And they are growing.  

Could it be that, to avoid dealing with that, and the small trickle down share getting out of control, and given ever reducing planetary resources, the elite will seek to limit this trickle down process to the minimum? That certainly is the assumption in may dys-utopian sci-fi films of recent years. A protected elite (in the extreme, off planet) and a vast suppressed underclass.  If so, then we are back to Marx, relentless immiseration, and, as a result, world revolution! And/or, optimistically, a shift to an egalitarian, stable state global economy, with less emphasis on materialism, using low impact technologies to meet genuine needs. 

Some of the necessary energy technologies are already emerging and are being adopted. The system is starting to run on a new fuel mix. But is that enough?  Unless social structures and social expectations change, probably not.

Some optimists see the rise of a new technocracy of middle ranking technical experts coming to the rescue. Certainly the new world of ICT does have some independence from the old capital owning classes, but not much, and it is reliant on a mass of addicted cyber consumers and poorly paid IT kit producers. Not much change there. See Lanchester’s upgrade of Marx: http://www.lrb.co.uk/v34/n07/john-lanchester/marx-at-193

We could be in for a rough ride. While the planet prepares to teach us the error of our ways.  A new NASA-linked report seems to come to similar conclusions: http://mic.com/articles/85541/nasa-study-concludes-when-civilization-will-end-and-it-s-not-looking-good-for-us

   

I would like to be hopeful, but that's hard given, for example, the spectacle of Australia being hit by an unimaginably dire series of major weather episode (droughts, fires, floods), but then going on to elect a government that all but abandoned  its climate policies. The situation elsewhere may be a bit better (even, now, in the USA), but overall, apart from some good but patchy efforts at local transitions and the continuing development of decent technologies, I’m not too hopeful for the future. A revolt by the global underclass is possible, mass defection from consumerism maybe less so. But either way that could lead to a global economic collapse- not something that many would benefit from in the short term, the poor would just get poorer. We need a more gradual transition. But is that likely, and even if it is, would slow be fast enough?  As far as I can see, the best those of us with technical skills can do is to ensure that the technology is ready. Showing that alternatives are possible does change the situation slightly…and may helps create a new basis for wider changes. 

 Is that possible?  I took some heart from Gary Alexander’s very positive, if utopian, new eGaia book: http://earthconnected.net/egaia-2nd-edition/buy-or-download-egaia/ . And from this World Futures Council report: http://worldfuturecouncil.org/fileadmin/user_upload/Climate_and_Energy/Cities/Policy_Handbook_Online_Version.pdf

Green jobs 2

 

It is claimed that a transition to green energy will create a lot of employment - maybe 20 million globally by 2020.  I looked in my last post at how the adoption of green energy  might be the logical outcome of historical trends. However the type of work can vary- and not all of it might be welcome. As one Trade unionist has put it, ‘a green boss is still a boss’.  There are all the usual issues of pay and conditions. For example, PV solar cell production has boomed in Germany, but much of this has occurred in the poor east of the country where wages levels are often low and trade union rights sometimes absent. More recently there has been a boom in PV cell manufacture and export in China, where wages are likely to be even lower and working conditions possibly worse, although improving (ILO, 2012). There has also been a boom in biofuel production for vehicles, with major plantations in developing countries like Malaysia, where working conditions may be very poor and environmental impacts significant, opening up a ‘food versus fuel’ and development policy debate.

Even in the industrialised countries, there are issues rated to safety and working conditions. Most renewables-related work is relatively risk free, and mostly compares well with that in other areas of energy supply (IRENA, 2012).  However, care has to be taken working at heights, and with the toxic materials sometimes used in making PV cells.  Some of the new work will be in factories, but much of it will involve on-site installation and maintenance, often in harsh environment, including offshore.  On the smaller scale there will be jobs fitting systems to houses and offices, with regular maintenance: the classic small company with a White Van. Some of this work may be outsourced to individual operators and much of it may be non-union.

Trade unions in the UK and elsewhere have been relatively quick to recognise the importance of this new pattern of employment. However, while they have welcomed the growth of green jobs, they also worry about pay and conditions.  The UK’s Trades Union Congress (TUC) has been campaigning for what are sometimes called  ‘Just Jobs’- green jobs which are sustainable and safe as well as properly paid, as part of a  ‘just transition’. The positive side of this reflects the workers’ plans for socially useful work that emerged in the UK in the 1970s (Wainwright and Elliott, 1982)

There is also a wider dimension to the transition concept. It is sometimes argued that, in order to deal with climate change and other environmental constraints, there will have to be a reduction in the level of economic growth. More immediately, the transition to renewables will mean the loss of jobs in conventional energy industries, where unions are often well established. These issues can lead to conflicts between environmentalists and workers, and sometimes quite bitter confrontations. While it may be true that longer-term there will be more jobs, in the short term there could be painful disruptions, especially for older people who cannot easily retrain or adapt.

The Unions have therefore sometimes fallen back on a more defensive line. For example, the TUC report 'A Green and Fair Future', says that union support for environmental policies is ‘conditional on a fair distribution of the costs and benefits of those policies across the economy, and on the creation of opportunities for active engagement by those affected in determining the future wellbeing of themselves and their families’.

However, in general, the trade union movement backs change via a Just Transition. In its policy document ‘Equity, justice and solidarity in the fight against climate change’ the International Trade Union Confederation says ‘Just transition is a tool the trade union movement shares with the international community, aimed at smoothing the shift towards a more sustainable society and providing hope for the capacity of a “green economy” to sustain decent jobs and livelihoods for all.’ (ITUC 2009)

The ITUC position emphasises the production process as well as products, as part of a transition to a ‘fairer, environmentally responsible society that respects human and labour rights’ and it is campaigning on that (ITUC 2010). It is a big project. Radicals hope that it will be pursued by grass roots initiatives, which can lay the basis for the new society. As Kolya Abramsky puts it ‘the most important single factor determining the outcome of this change will be the intensity, sophistication, and creativity of grass-roots social mobilization.’(Abramsky, 2010)  But he also recognises that there could be problems. For example, he says ‘The quest for renewable energy could result in a new and perhaps unprecedented land-grab by companies and investors, which would create the potential for even more extreme patterns of displacement and appropriation of land than other forms of energy have done’. He also points to disputes over pay, conditions and job security within the renewables industry.

While there are clearly battles ahead, there are some radical strands in union thinking, sometimes building on common interests. For example the American Wind Energy Association and the United Steelworkers have created a ‘Partnership for Progress’ to accelerate wind-power development and deployment in the U.S. The European union body ETUC has called for a binding EU target to cut greenhouse gas emissions 75% by 2050, and has called for a tripartite dialogue to address negative social effects of restructurings (ETUC, 2013). And in general, although some unions remain committed to nuclear power, most are very pro renewables, given their job creation potential and are keen to build links with environmental groups and campaigns.

For example, Guy Ryder, General Secretary of the International Trade Union Confederation has backed a radical energy transition proposal by Greenpeace. He commented ‘While many additional ‘Just Transition’ policies will be needed to ensure workers will reap the benefits of a new low-carbon economy- skills, social protection, quality of jobs; the Energy Revolution report introduces interesting ideas which will scale up investments in renewable energies, something crucial if we want to fight future unemployment in the energy sector and avoid the poorest of the planet, whose jobs depend on natural resources, paying the costs of business-as-usual’.

Moreover, pushing ahead to positive targets, a report from the UK Campaign against Climate Change Trade Union group called for ‘One Million Climate Change jobs now’, outlining how cutting emissions by 80% by 2030 would create jobs in energy, building, farming and transport sector (CaCC, 2012, 2014). Overall then there are some hopeful signs around the world (Räthzel and Uzzell 2013).

The availability of what the International Labour Organisation calls ‘decent work’ (congenial, safe, properly remunerated and sustainable employment), could be seen as an ethical requirement, a basic right. It seems possible this can be achieved as part of the process of converting to green energy, but it is not automatic. It will need political struggle- to ensure it is done right. Surely we do not want to have sweated ‘zero hours’ labour for low pay in bad conditions. It is not a matter of jobs at all costs.

References

Abramsky, K (ed)  (2010) ‘Sparking a World-wide Energy Revolution’ AK Press, Oakland,  http://www.akpress.org

CaCC (2012, 2014)  ‘One Million Jobs- Now’, Campaign Against Climate Change Trade Union Group Campaign and Booklet, http://www.campaigncc.org/greenjobs

ETUC (2013) ‘ETUC Position on the Fight against Climate Change in Europe and the World’ European Trade Union Confederation, Brussels, http://www.etuc.org/a/11400

ILO (2010) ‘Study on Green Employment in China’, International Labor Organisation, http://www.ilo.org/wcmsp5/groups/public/asia/ro-bangkok/ilo-beijing/documents/publication/wcms_155395.pdf

ITUC (2009) ‘What is Just Transition?’  International Trade Union Confederation, Brussels, http://www.ituc-csi.org/what-s-just-transition

ITUC (2010) Resolution on Combating Climate Change through Sustainable Development and Just Transition’, International Trade Union Confedertaion, Brussels, http://www.ituc-csi.org/resolution-on-combating-climate

Räthzel, N. and Uzzell, D (eds) (2013) ‘Trade Unions in the Green Economy,  Working for the Environment’,  Earthscan, London

Wainwright, H and Elliott, D (1982) ‘The Lucas Plan’, Allison and Busby, London update at . http://www.redpepper.org.uk/a-real-green-deal/

Green Jobs 1

 

It is claimed that the transition to green energy will lead to more and better jobs.  I’m going to look at this issue in two posts, this first one focusing on the historical dynamic. 

A common starting point in the analysis of the relationship between energy and employment, and indeed technology and employment generally, is the distinction between capital intensive and labour intensive projects. In the former the hardware dominates, in the extreme in a completely automated plant, in the latter, workers dominate, in the extreme performing traditional farming or other purely manual tasks (though of course land is also capital).

On this view, everything else is strung out between these extreme and, as a society, we are in the process of moving from manual to high tech, with capital constantly replacing labour.  The main driver for this process is said to be the increased productivity obtained when machines replace (or at least augment) people. The result is increased profitability, on the assumption that the cost of investing in major new expensive capital plant will be paid back by an increase in output, and the reduction in the need to pay large numbers of workers. Industrial history has been shaped by this process, which has often displaced unskilled labour in some sectors, but also replaced skilled labour in others, as craft work and small batch production has been replaced by mass production in factories using unskilled labour. But, in turn, mass production has then given way to automated process production, with a few highly skilled staff. 

In reality the process is more complex, dynamic, and uneven.  While labour is replaced in some sectors, it expands in others e.g. in services and retail, until some of them are automated. The debate over the impacts of automation in the 1970s/1980s assumed that this process would continue. Optimists looked to a future of leisure with reduce work hours and a cornucopia of automated production, pessimists to a future of mass unemployment and deskilling, driven by a triumphant capitalism, benefiting only an elite. In the event, capitalism has triumphed, but so far has managed to spread affluence to some degree by accelerating growth in both production and consumption, using advanced technology.  We have seen the creation of mass consumerism and global markets, often based on new advanced products, with new groups of workers in newly developing

countries taking over from the earlier unskilled workforce and the rise of technically skilled workforce alongside a vast new service and retail sector.

Whether this process can continue indefinitely has long been the subject of debate. While exploitation of natural resources and the planet has deepened (O’Connor 1991), it has been argued that there may be internal economic contradictions in the process. Karl Marx saw this in terms of the falling rate of profit, as rival chunks of capital tried to expand, forcing capitalist to reduce wages.  The vast increase in productivity through technology has mostly avoided that outcome for the moment: some of the benefits have spread.  However there is of course a vast underclass of sweated labour, who barely enjoy any benefits, and the potential still for a major confrontation, and certainly continued struggle (WFTU 2011, Lanchester 2012).

The Marxist and radical view has also been updated into an analysis of the limits of technological advance.  For example in his seminal 1976 book ‘The Poverty of Power’, Barry Commoner argued that the cost of new more advanced capital plant was rising faster than the increases in productivity it would yield, so there would be a shortage of capital for continued expansion (Commoner 1976).  He focussed on energy technology and illustrated his analysis by showing how nuclear power plants were far more capital intensive than those they replaced, but did not yield sufficient extra profits to sustain further investment.  On this view the capitalist system was running out of productivity gains. It has replaced most labour, so there were few savings available from further replacement or exploitation (with lower wages) and there was no way for its raw capital base in the energy sector to improve and expand.

However, in the event, a new energy technology emerged that, for the moment, has avoided or limited, this problem, namely gas fired combined cycle turbines. From the 1990s onward in the UK and then elsewhere, there was a ‘dash for gas’, with cheap simple gas turbines using the cheap natural gas that had been found in the North Sea and elsewhere. The dash for gas also to some extend reduced the emerging problem of carbon emissions. Clearly, although it was cheaper than nuclear and even coal  (in the UK), this was no long-term solution. Despite the discovery of shale gas reserves, the resource was limited and it was still a fossil fuel. So although emissions per unit of energy produced were around half that from coal, expanding the use of gas would still lead to climate problems and in any case could not be continued indefinitely. 

If the capital expansion process was to continue, then given environmental and resource limits, a new technology would be needed. The initial default focus was back to nuclear: surely this could be made cheaper with new technology? So far the reality has proved different. Nuclear has become increasingly expensive, in part due to the need to ensure its safety after a series of major accidents. It is one of the few technologies that have negative learning curves (with prices going up not down as the technology develops) and as fissile fuel reserves are depleted that will get worse. Enthusiast still point to new technologies that they claim will be better (e,g. fast breeders using  thorium) but they are long off, with many unknowns, and it is clear that the renewables are already doing much better, with costs falling dramatically. Given that they are also by definition renewable, with no resource limits, it does look likely that this set of options will dominate.

In my next post I will look at what the employment implications for this new set of technologies.  UNEP say we might see 20 million people working in this area globally by 2030. What sort of work will that be?

Refs

CES/CNS Pamphlet 1, Centre for Ecological Socialism, Santa Cruz..

UNEP (2008) ‘Green Jobs’, United Nations Environment Programme, http://www.unep.org/publications/search/pub_details_s.asp?ID=4002

Commoner, B (1976)‘The Poverty of Power’, Knoph, New York

Lanchester, J (2012) ‘Marx at 193’, London Review of Books, Vol. 34 No. 7 · 5 April pp 7-10, http://www.lrb.co.uk/v34/n07/john-lanchester/marx-at-193

O'Connor, J. (1991) Capitalism, Nature, Socialism, Conference Paper

WFTU (2011) World Federation of Trade Unions, Conference declaration on Global Environmental Problems, Athens, http://www.wftucentral.org/wp-content/wftu_congress-documents_for-the-global-environmental-problems_2011_en_esp_fr.pdf

This post and the next draws on a chapter I have produced for a book on science, technology and environmental ethics: Engineering Ethics, International and Environmental Stability ed Marion Hersh, to be published by Springer.

Wires or pipes?

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There is a fascinating debate over whether long distance High Voltage Direct Current supergrids are the right way ahead for energy transmission. In theory they allow variable local supplies  and demands to be balanced across wide geographical areas and are much more efficient, in terms of energy losses over long distance transmission, than conventional AC links.

However there are problems.  It is much harder to shift power up and down from HVDC to and from local AC- expensive converter transformers are needed. That’s why HVDC is usually seen as best for very long distances, with transformers just at each end. Another approach, a bit of a compromise, is an HVDV ring, with tap offs along the way. Others argue that a HVAC overlay grid may be best for regional distribution.   It can get quite technical.  AC allows for easier local, regional or even national frequency balancing, whereas a fully optimised HVDV system would require central control of all the resources.  Some say that we ought to simply interlink national AC systems, so as to retain local autonomy, although some long distance HVDC could also be added as a feed in (and out) to and from strong points in the systems. At the extreme is the idea of local ‘island generation’, with each region operating more or less independently on AC, but linked to others for trade and balancing. That raises all sorts of grid stability and reliability issues as the experience in the fragmented USA shows.

Germany is planning a major series of HVDC ‘corridors’ 660 km long in an €10 bn project to shift electricity from the north, which is where most of the wind resource are located, to the south, which is where there are some large cities. http://carbonnation.info/2013/05/01/germany-jumpstarts-the-supergrid/ and http://carbonnation.info/2013/06/18/german-parliament-oks-bold-hvdc-grid-upgrade/

HVDC is of course already widely used for undersea links, and China has used it for bringing electricity from its huge but remote hydro projects to cities on the coast. A series of High Voltage Direct Current links have been built to East and South China, over distances of around 1,000 km, to transfer electricity from the Three Gorges hydro plant. The total capacity of the HVDC links is 7,200 MW, with line losses put at about 3%.

Another idea entirely is to down-play electricity transmission and make much more use of gas and gas transmission.  Energy losses are even lower and buried gas mains are much less invasive, once installed, than power grid towers and cables.  The gas grid already handles four time more energy than the electricity grid in the UK, and in effect acts as a buffer store, helping to deal with variable demand: demand for heat varies much more, both daily and over the year, than demand for electricity.  That approach can be expanded with large gas stores (gas is easier to store) and we could switch to green gas, methane from bioenergy sources (e.g. AD biomass using farm and food wastes) and from wind-to-gas electrolytic conversion, making use of the excess energy produced from wind at times of low demand. Some of the gas could of course be used to make electricity locally where needed.  Some of the gas can also be exported and imported. So we don't need electricity supergrids. Green gas could provide a cheaper and more flexible balancing and transmission option.  And if the combustion of green gas is combined with carbon capture and storage, then you get negative carbon emissions.  Sounds like a winner! Pipes not wires!

Some of these ideas are already being explored in Germany. Biogas is being added to the gas mains and 'wind to gas' projects are spreading, with some developing synfuel production using captured CO2 and electrolytically produced hydrogen: http://www.itm-power.com/wp-content/uploads/2013/04/Platts-April13.pdf and http://www.iwes.fraunhofer.de/de/publikationen/uebersicht/2010/towards_100_renewablesandbeyondpowerthepossibilityofwindtogenera.html.

Heat production, transport and storage is another possible winner –storing energy as heat is even more efficiently than storing it as gas, and although heat transmission is less efficient it can be sent quite long distances with low losses- the longest example so far is 65km from a rural waste to energy power plant to the city of Prague, linked with a 200MW capacity pipe.

www.copenhagenenergysummit.org/applications/Prague,%20Czech%20Rep-District%20Energy%20Climate%20Award.pdf

So rather than distributing electricity, or for that matter fossil or green gas, to individual domestic consumers for heating, wherever possible, heat could be supplied via district heating (DH) networks, fed from high-efficiency community-scaled green energy fired Combined Heat and Power (CHP) plants. While heat can be sent long distances, in economic terms, building local DH distribution networks only makes sense in urban and perhaps suburban areas where there are good heat loads. The heat can be from a range of sources.  Biomass and solar-fired DH is now moving ahead across the EU, usually linked to heat stores, and in some cases inter-seasonal heat stores. Most of these will be sited to meet local loads, but in some case long distance transmission might be appropriate. For example, Oslo’s district heating network is fed via a 12.3 km pipe from a waste burning plant in the city outskirts. In Denmark there is a 17km link from a CHP plant to the city of Aarhus. Helsinki has a CHP/DH system, supplying over 93% of Helsinki’s heat, including a plant linked in via a 30km pipe in a tunnel.  So that is an extension of the ‘pipe’ rather than ‘wire’ approach, with piped heat as well as piped gas.

Probably though a mixed system would be best, capitalising on the strengths of each. However the best balance between heat, gas and electricity and which will, or should, dominate in future, is unclear. It will be influenced by the location of the sources and the demand. For example, access for pipes may be hard in some locations. Technological change could also tip the balance of advantage between these vectors. The wind to gas route may prove too expensive, whereas the availability of cheap storage of electricity might make electricity more attractive. The debate continues.

One way follow it is via the Claverton Energy Group e-conferences:

 http://www.claverton-energy.com/

*This post was delayed from its usual start of the month slot since I was away on holiday!

Politics and energy: election issues

Soon we’ll see election positions being taken up, with energy being one key issue: some first shots have already been fired- e.g. Labour’s pledge to freeze power prices. And (see below) its new ‘green gas’ commitment.

Setting the wider scene, the Conservative Party’s manifesto in the recent Euro election outlined what it saw as its achievements in relation to the EU, including: stopping EU attempts to ban further offshore oil and gas drilling, stopping EU attempts to over-regulate the UK’s emerging shale gas industry, and ensuring that the proposed 2030 renewable energy target is non-binding on individual EU countries. What will be in their 2015 national election manifesto? An on-land wind freeze?

www.conservatives.com/~/media/Files/Downloadable%20Files/MANIFESTO%202014/Large%20Print%20Euro%20Manifesto_English.ashx 

The Lib Dems oddly didn’t mention their support for nuclear in their Euro election bumph, Labour is also all for it, so is UKIP (and very hostile to renewables), leaving just the Green Party as the only pro-renewables/anti-nuclear option, the SNP in Scotland apart.

However, to be fair, investment in renewables has doubled under the present government, with renewables now supplying 15% of UK electricity, although whether they can claim to have aided or hindered that is another matter. In terms of overall expansion plans, a Parliamentary answer a minister indicted that by 2015 on shore wind was expected to deliver 5.6-6.6% of UK electricity, offshore wind 3.4%, solar 1.3 and nuclear 1.5-16.7% (Hansard 14/5/14 : Col 595W).

Will rival parties push for more in the election run up? And new support options? DECC had made proposals for an Offtaker of Last Resort (OLR) system, to support independent renewable generators by guaranteeing a route-to-market and therefore improving their ability to raise project finance. That seems to be designed to help small generators, but details are scarce. Could there be other new forms of support, or is it just the standard Contracts for a Difference system, shared with nuclear ? If so, then the new £205m p.a. CfD cap limit on renewables will slow things down.. https://www.gov.uk/government/news/over-200-million-boost-for-renewables

More immediately, there’s the Scottish Independence referendum. What does that means for energy and in particular, renewables?  Carbon Commentary.com  suggested that about 15 GW of 2020 renewables will be in Scotland or in Scottish waters and only about 18 GW will be in England and Wales. So Independence would mean that around 40% of total renewables will ‘disappear’, but only 10% of UK electricity consumption. The UK rump would have to import this green power to meet its targets. Also it claimed that Scottish renewables would only need a subsidy of on average £44/MWh as against £93 for England and Wales. (CarbonCommentary, quoted in issue 62 of NuClear news: http://www.no2nuclearpower.org.uk/nuclear-news/)

Whatever happens in relation to Scotland, there will be room for new interventions.  Labours energy spokesperson Caroline Flint says if Labour won the general election, they would commission the Committee on Climate Change, with National Grid, to report by the end of 2015 with advice and recommendations on reforms needed ‘to maximise the potential for the development of green gas’. She claimed that the cost of minor gas grid upgrades for green gas injection, so as to continue to provide heating, would be much less than for the electrification of the heating systems in the UK (the current government plan is to do that mostly via electric powered heat pumps) which would require an electricity transmission and distribution system four times its current size. It’s an interesting idea. Landfill gas and sewage gas production is effectively free and its use offers some of the cheapest electric power we have, but these are relatively limited resources, and probably best left for electricity production. AD biogas production is a potentially much larger resource, using farm and food wastes and possibly energy crops, like short rotation coppiced willow. Though it’s more expensive than using landfill/sewage gas. There may also be land use and eco-limits to the use of some energy crops: www.theguardian.com/big-energy-debate/biogas-green-energy-environmental-damage

However it’s surely vastly preferable environmentally to use biogas than (fossil) shale gas. And if, tragically, the wind programme stalls, or is stalled, and nuclear is delayed (which seems very likely) or abandoned (which would be sensible), then this, along with energy saving, might be part of the way ahead for heat supply, rather than massive reliance on electrification. And biomass/waste-fired CHP linked to district heating, ought to appeal to Labour, with its urban emphasis. 

I will be looking at some of these technical options in my next post.  But on the politics side, there was a time when the Labour left was anti nuclear and pro-renewables and the right pro nuclear and anti-renewables . However, these days energy choices don't always map onto politics in any immediately obvious way, at least in the UK. Elsewhere it can be different, though party positions do vary- who would have thought a right of centre German government would be pioneering a nuclear phase out and a green future? This sort of speculation may be of little value,  especially since policies and contexts keep changing (see Ben Sovacool and Scot Valentine’s  2012 Routledge book ‘The National Politics of Nuclear Power’), but one cross-EU study did find some clear left-right political correlations on sustainable energy and nuclear power: www.sciencedirect.com/science/article/pii/S0960148112002479. 

For what it’s worth, very roughly, there is, as far as I can see, a spectrum in terms of positions on sustainable energy and climate change, but not often linked to governing party politics, from very progressive and radical to reactionary and conservative. So at one end, for example, there’s Denmark, Germany, Austria and Scotland and at the other extreme Russia, along with ex-Soviet countries like Hungary and Poland, and tragically now Australia, and maybe Canada.   I’d put the UK in the centre right in this range, drifting ever more to the right. Despite differing party policies, Spain and France seem to have ended up in the middle too. Where you might put China and USA in this framework who knows! China to the centre left, the US to the centre right?  It’s much easier to locate organisations within this framework, with for example the World Future Foundation, along with Greenpeace, WWF and maybe FoE, at one end and the Global Warming Policy Foundation and the UK’s Renewable Energy Foundation, plus many US anti-renewables groups, at the other!

Hard to place Renewable UK: it’s clearly progressive, but seems happy to accept nuclear power- or at least not oppose it publicly. Though it’s clear where its loyalties lie: in its self-styled ‘election manifesto’ it says onshore wind should be the cheapest new source by 2020, while offshore wind should be at £100/MWh, and by then ‘wind should be meeting a quarter of the UK’s electricity need’. It wants the Government to ‘set a clear path for investors by setting a 2030 decarbonisation target, with an accompanying extension of the Levy Control Framework, and an indication of how different technologies will play their part. The strongest signal of all would be a 2030 renewables target.’ There was also a need for continued support for technological innovation to get costs down e.g. for offshore wind. Interestingly it notes that 61% of Conservative voters, 72% of Labour and 79% of Lib Dems back wind, as do a majority of UKIP voters.  If so, then maybe renewables are in with chance: www.renewableuk.com/en/publications/guides.cfm/general-election-manifesto

 

Renewables are a mistake

It’s sometimes argued that renewables are too expensive to rely on, at least at present, and that, if emissions are of concern, we should focus instead on cleaning up fossil fuels via Combined Hat and Power (CHP) and Carbon Capture and Storage (CCS) and reducing energy use via efficiency measures, all of which could offer lower costs/tonne of carbon emissions avoided.  That may be true for some of these measures in the short term (maybe not CCS though) and some should be followed up (efficiency and CHP especially), but if that position is taken to the extreme, then that’s all we will do, right up to the point when we run out of fossil fuels.  So renewables won’t be developed seriously and their costs may continue to look high- until we are forced to try to deploy them in a rush when, despite all the fixes and fudges, it is finally clear to all that fossil fuels have become untenable economically and environmentally.

Basically, longer term, we can’t afford not to start deploying renewables, in order to get their price down- and that is already working. The ‘delay it’ argument may at base reflect a fundamental dislike of ‘disruptive’ renewables by those wedded to the status quo, who at best look to technical fixes and minor adjustments, or, if really pressed, to dubious and perhaps dangerous experiments with CCS, geo-engineering or nuclear fast breeders.

Their arguments against renewables can get quite tortuous.   In one version it’s accepted that, with renewables, the fuel may be free, but it’s noted that the technology itself is not renewable- it has costs and has to be regularly replaced. So, overall, systems using renewable sources are no more renewable than fossil systems, which can, with CCS, yield the same carbon saving at lower cost. The Renewable Energy Foundation’s Dr John Constable says, with current renewables ‘the cost of extraction, conversion, and delivery is very high compared to that for fossil fuels, largely because the density of renewable energy flows are so diffuse in comparison, requiring large machines to concentrate this energy. The capital and O&M costs of the conversion devices, the wind turbines, the solar panels, the delivery costs, have to be very low to become competitive with current fossil fuels’. www.scientific-alliance.org/energy-climate-change/scientific-alliance-scotland-launch-event  Well actually, some already are, despite the continuing heavy subsidies for fossil fuel … for example on land wind and PV. See my Ecologist article: http://bit.ly/1cLWwYI

The same sort of argument has come from the coal lobby. In an analysis for conerstone.net, Prof. Robin Batterham Kernot,  from the  University of Melbourne, argues that coal is a sustainable energy option: ‘Given that coal will be abundantly available for the next few hundred years, whether coal as a resource is exhausted is barely relevant in terms of the needs of future generations’. And it can be low emission too! ‘The fact that the public and governments have focused on renewables instead of low-emission energy puts the coal industry in a difficult position. The response of the industry must be to emphasize that coal can also be a low-emission energy source. By adopting this position, coal can be seen as just as worthy as any other technology, at least for the present. For existing power plants and their supply chains, the opportunities for emission reduction lie mainly in the upstream processing (mining, coal cleaning, and transport) and in carbon capture, use, and storage (CCUS). For new power plants, far more opportunities for emission reduction exist.’

Well CHP, and maybe eventually (at high cost) CCS, may allow for some fossil fuels to be used alongside renewables for while, with relatively low emissions. But is coal a long-term option? Here’s what the article says: ‘Coal use for power will cease when replacements are seen as more sustainable.’ Isn’t that where we are getting to now? www.pennenergy.com/articles/pennenergy/2013/12/winning-public-support-for-the-future-of-coal-power.html

In this context it’s interesting that leading German research group Fraunhofer ISE now suggests that any new coal plants would be expensive in relation to new solar and wind (onshore) within 15 years – and such plants generally run for 40-60 years. The ISE team don’t cover nuclear (as there won’t be any in Germany) but commenting on the study, energy campaigner Craig Morris, using the UK nuclear CfD price, said the proposed new   Hinkley nuclear plant would be more expensive than practically all solar and wind power by the time it went online. www.renewablesinternational.net/renewables-becoming-competitive-with-conventional-power/150/537/74751   So that’s coal and nukes seen off!  

Given proper attention to renewables and efficiency, we do not face a coal or nuclear choice, as the Guardian’s George Monbiot keeps suggesting. www.theguardian.com/commentisfree/2013/dec/16/nuclear-scare-stories-coal-industry

Coal burning is clearly something we must stop as soon as possible and, even if CCS proves be successful, it would arguably make more sense to use it with biomass, to make the process overall carbon negative. Biomass-based carbon capture and use might also be helpful, creating new green synfuels (perhaps using hydrogen derived from surplus wind-electricity), as well as heat and power (via CHP).

However, overall, the simple truth is that renewables for all uses are getting cheaper and could accelerate dramatically if we didn't waste money trying to sustain the use of dirty, and ever more costly, fossil fuel, or resuscitate dangerous and expensive nuclear options. No one suggests there won’t be problems in redirecting the development of energy system along more sustainable lines, but claiming that we should leave renewables until some unspecified time in the future seems to display a tragic lack of vision.

In fact, renewables are doing well, supplying around 22% of global electricity from around 1,560GW of generating plant, and 19% of total global primary energy, according to the 2014 edition of REN21s annual renewable review: http://www.ren21.net/gsr

And the International Renewable Energy Agency say that, given proper support, by 2030 renewables could be supplying 30% or more of total global energy, with some leading countries getting around 60% of their electricity from renewables by then. www.irena.org/remap/  Heading on the way to, hopefully, 100% within a few decades, this is no time for faint-hearted rethinks.

Goodbye to FiTs

The European Commission is pushing for guaranteed price Feed In Tariffs (FiTs) to be replaced by more market-orientated funding schemes, despite their proposals being strongly opposed.  FiTs have been very successful at getting renewable capacity built, in Germany especially- about 70GW so far there.  But as renewable capacity grew, especially initially expensive PV solar, the FiTs had passed increasing amounts of surcharge on to consumer bills. The European Commission has now proposed new rules which will be phased in gradually, following a pilot phase from 2015-16. But from 2017 all member states will have to use tenders to support new green power facilities. The idea is to replace FiTs with auctions or bidding processes open to all green energy generators competing equally. In its draft paper ‘Services of DG Competition containing draft Guidelines on environmental and energy aid for 2014-2020’, it says, on ‘Aid granted by way of a feed-in-premium or feed-in-tariff’ that in future ‘aid is granted in a genuinely competitive bidding process on the basis of clear, transparent and non-discriminatory criteria’.

There are similarities with the Contracts for a Difference  (CfD) system now being introduced in the UK, which, in its latest variant, includes a competitive project assessment phases, and indeed also with the old  Non Fossil Fuel Obligation (NFFO) capacity auction system the UK started out with in the 1990s. That had proved very ineffective at getting capacity built:  some developers bid low to get the contracts but often were unable to go ahead with the project. Germany’s new premium market EEG system also has some similarities- FiT are mostly replaced by direct market competition. That has not gone down too well with critics like the World Future Council: ‘With this reform the German government ends its success story by putting the energy system back into the hands of those who have a deep interest in remaining with conventional, dirty fossil energy sources. The German government with its reform is slowing the rapid expansion of renewable power, as it forces investors to take higher risks when investing in a future-just energy system.’  http://power-to-the-people.net/2014/04/german-renewable-energy-act-reform-is-not-a-feed-in-tariff-2-0/

As with the new German scheme, the EC is proposing some exemptions for the EU wide scheme. As Reuters noted ‘Following extensive lobbying from companies, the new rules allow for exemptions in special circumstances, including sparing energy-intensive industries such as chemicals, metals, paper and ceramics from helping to pay for renewable power’ But, it added ‘That leaves ordinary household consumers to pick up the bill’, and, understandably, reactions from green groups have be very hostile. Claude Turmes, a member of the European Parliament representing the Green Party, told Reuters ‘Citizens will lose twice: they will pay for industries' new free ride and will continue to suffer from an outdated energy system.’ The European Wind Energy Association said that, while it was appropriate that the increasingly competitive wind industry be integrated into the market, the Commission should eliminate all fossil fuel subsidies as a priority. The EC was ‘ignoring the obvious market distortions that need to be tackled first, such as the majority of subsidies that go to fossil fuels and nuclear’.

 

Nuclear was included in an early draft of the proposals but, after protests, has now been excluded- developers/ governments have to make a special case for it, as in the case of Hinkley in the UK. But most of the rest of the proposals stayed. So now it’s goodbye to all the various variants of  FiTs . Instead, in most cases, there will be pressure to impose a one-size-fits-all market approach across the EU, with presumably the EC using the threat of baring other approaches under the ‘state aid’ subsidy rules, to police the system.

Views on all this will differ. Certainly the new market approach should reduce costs to consumers in the short term: that seems to be the ostensible aim, though that was not the result of the UK’s disastrous Renewables Obligation (RO) market orientated approach: that cost UK consumers  much more/kW and kWh than the FiTs used elsewhere. But just like imposing capacity caps (as in Germany and elsewhere), the market approach will no doubt slow the deployment of renewables- that’s how it will reduce costs. Though since increasingly expensive fossil fuel will therefore have to be used more, longer-term it will push prices up. However, despite the evidence from the RO and NFFO, devotees of market competition may argue that competition will lead to reduced renewable energy technology cost, so that may compensate, leading to more capacity for the same, or reduced, outlay. Place your bets!

http://uk.reuters.com/article/2014/04/09/eu-funding-energy-idUKL6N0N12FP20140409

EU energy market battles- who is in control?

 

Last year the Times reported that ‘Brussels is threatening to block a subsidy scheme for gas-fired power stations that the Government hopes will keep the country’s lights on’- the UK’s plan to create a Capacity Market to allow gas plants to compete for subsidies by acting as peak back-up suppliers when energy demand is high and wind-power low. It would be funded by levies on consumers’ bills. However, the European Commission has warned that this contradicted the aim of creating an internal EU-wide energy market. Evidently it would prefer grid balancing to be achieved by using supergrid links across the EU, trading power excesses between countries to meet local shortfalls, and enhancing competition. www.thetimes.co.uk/tto/business/industries/utilities/article3924542.ece

In the UK’s case that would mean building more undersea interconnector
s- which is already planned. But the UK’s proposed Capacity Market was meant to be more than just a mechanism for subsiding gas peaking plants, it was also meant to support other grid balancing options, including demand side management and energy storage.  As Germany has found, with a big renewables input, you need incentives to maintain backup since renewables undermine the peak power market. German energy expert Frank Peter says ‘We need a suitable market design for the new conditions. In the future, gas power stations, partly also coal power stations, need to be able to be operated economically within this system. This is one of the main challenges that the German government needs to focus on’. So they also need something like a capacity market. www.dw.de/energy-expert-renewables-can-compete/a-17204519

Interconnectors can certainly help. Although  Frank Peter says ‘as costs for renewable technologies drop dramatically, long distance energy transportation makes less and less sense’, he goes on ‘ it does make sense to connect the production of renewable energy over a large area. Conventional power stations can serve as a model for this. In this way, there is a higher probability that some kind of renewable source can produce energy at any given moment. The argument for a network connection is no longer to do with costs, but the fact that more renewable energy can be used’.

The big utilities of course don't like any of this- they would prefer the status quo, ideally without disruptive renewables, and some see supergrids also as undermining their control of local/regional markets by introducing cross-EU competition for all types of power.  However they are loosing traction. For example, according to energycollective.com, with consumers (or ‘prosumers’)  now generating their own power and selling excess back to the grid, Germany's giant RWE energy utility is shifting their activities to sales, trading and decentralized power. It evidently wants to depart from its traditional developer and ownership roles in relation to large centralized power plants and instead use its expertise to help manage and integrate renewables into the grid. This was necessary since ‘the massive erosion of wholesale prices caused by the growth of German photovoltaics constitutes a serious problem for RWE which may even threaten the company's survival’.

RWE's share price has lost one-third of its value over the last three years due to the European energy transition and the company now looks to be addressing the possibility of further shrinkage in a dramatic way. Under the proposed new model the guiding principle is ‘from volume to value' with, according to a document quoted by  energycollective.com, the focus on ‘technologies ranging from large-scale offshore wind and hydro to onshore wind or photovoltaic’. But it added ‘ we will no longer pursue volume or percentage targets in renewables. We will rather leverage our skill set by taking a ‘capital-light' approach. Based on funds sourced largely from third parties, we will position ourselves as a project enabler and operator, and [as a] system integrator of renewables.’ It went on, ‘developing an innovative and profitable prosumer business model is a challenge we also need to address successfully, as we see a billion-euro market emerging alongside our traditional value chain.’

However there were some row backs and prevarications.  RWE Innogy told Power Engineering International that, ‘there is no RWE strategy to transform its business completely to renewables. The last target for renewables was 25% of the capacity (not production) in 2025’, although the German newspaper Handelsblatt reported that RWE Chief Executive Peter Terium wanted no further investments in fossil-fuelled powered plants: ‘In 2020, conventional forms of power generation should contribute no more than one fifth of the operating result’.

It may take a bit of time, but as Stephen Lacey of GreentechGrid put it last October:  ‘We may be about to witness one of the most profound transitions ever to occur in the utility industry’, with RWE evidently planning to transform itself ‘ from a traditional electricity provider into a renewable energy service provider.’

And all this at least partly because of the spread of grass roots power! It can’t happen here!  www.morningstaronline.co.uk/a-30b3-Energy-for-tomorrow#.Uoqc1nDTmM8 But we live in hope that DECC will have noticed that elsewhere in the EU local ownership is the driving force for change, with ‘prosumers’ and local energy co-ops now running much of the show, in Germany especially, including in some cases, city-wide distribution grids being taken over from the utilities.

Even with decentral systems like this, there will still be a need for balancing capacity and interconnectors, and someone has to run that, but a new system could be emerging in which grid services like this are shared under some form of collective control, as they used to be when power systems were publicly owned.  Far fetched? Well it’s interesting that one of the results of the recent reactions against utility price rises has been a swing in public support for the idea of re-nationalising energy, with in a You Gov poll last November, 68% of the public saying the energy companies should be run in the public sector, while only 21% said they should remain in private hands…

http://www.leftwards.co.uk/the-case-for-renationalisation/

http://www.independent.co.uk/environment/should-the-big-six-be-nationalised-8981112.html

Back in the now, however, the Chancellor, desperate it seems to squeeze ‘green crap’, has capped the Carbon Price Support rate at £18/ton of CO2 from 2016-17 until 2020, saying ‘this will save a mid-sized manufacturer almost £50,000 on their annual energy bill. And it will save families £15 a year on their bills too - over and above the £50 we’ve already taken off.’  What he didn’t say was that this attack on the carbon market will, by reducing the carbon tax on fossil fuel, reduce the incentive to invest in non-fossil options like renewables and energy efficiency - and also, perversely, given the government’s commitment to it, nuclear power.   We’re not there yet, but we could be heading back to free market for fossil fuels..and a coal and gas boom.