Energy policy: market power versus political intervention

 

The UK’s energy policy has become increasingly market driven, in the belief that competition will reduce costs. All the support systems for renewables, from the early NFFO through to the Renewables Obligation and then the new Contracts for Difference (CfD) system, are all based on market competition- in the case of the CfD, via competitive contract auctions. That has contrasted strongly with what was done elsewhere in the EU, in Germany especially, where guaranteed-price Feed in Tariffs  (FiTs) have ruled. One result is that much more capacity has been installed, for example over 70GW of PV and wind in Germany, than in the UK (24GW total so far), which remains near the bottom of the EU renewable energy league table, despite having a better renewable energy resource base than almost any other EU country.   

However things are changing- though not for the better. In the UK, the new Tory government is trying to remove the last vestiges of direct support for new renewables, via further cuts to the small FiT than was introduced after much grass roots pressure. Though  that’s also happening elsewhere- FiTs have been cut across the EU, and are being phased out in preference to market based systems, including contract auctions, as in the UK. In part this is since, it is argued, renewables are becoming cheaper and do not need high levels of FiT support, with its impact on costs to consumers. There is some truth in that. The initial pass-through cost to consumers (for PV especially) was relatively high and some of the new technologies are becoming near competitive with conventional sources in some markets- although it has to be remembered, those sources also get subsidies (in fact much more that renewables), so it's not a level playing field. Although some renewables may prosper in the new competitive regime, others will not, especially the newer, less developed, options, and the end result of the cut backs could be a slow-down in the growth of renewables, due to what some see as a premature, and indeed punitive, removal of support.  Certainly, in the UK, that seems to be the intent of the removal of exemption for renewables from paying the Climate Change Levy (CCL).

While all this might be seen simply as the result of shift to the right, earlier on there was some speculation that the Cameron government was actually prepared to intervene in markets quite strongly. The hard right obviously saw the CCL and the FiTs as  unwarranted interventions, but, despite their competitive element, they were also not happy with the CfD for renewables, or with the capacity market that was said to be needed to maintain back-up.  In part this was since the hard right didn’t like renewables, even cheaper renewables like on-shore wind, sometimes due to concerns about local property values and views, but more generally since the new disruptive technologies were undermining profits in the conventional energy system.  So there was a multiple ideological backlash. The CCL was mangled, the CfD toughened up even more, with on land wind excluded, FiTs revamped and large solar blocked via new planning rules.

This harder line approach has spread to Germany, which is in the process of dismantling the FiTs and creating a new market-based system. It has also decided not to set up a separate capacity market. Instead all will be run through a direct competitive market. So, if anything, it has, in some respects, gone further right than the UK. This raises many questions: can price signals and competition really hold it all together, and ensure that enough balancing capacity, including demand management, is available?  And also stimulate energy saving? And reduce imports? www.bmwi-energiewende.de/EWD/Redaktion/EN/Newsletter/2015/07/Meldung/white-paper.htm

The main countervailing influence, the state imposed block on nuclear in Germany apart, is the belief that the EU Carbon Trading System (EU-ETS) will help restore some sort of balance, squeezing coal out. So far, with the carbon caps set much too high to stimulate much trading, that is something of a fantasy, although it is shared by the UK, which has even introduced its own unilateral top-up system, to try to force the price of carbon up. That seems a desperate interventionist attempt to breathe some life into the system- maybe so as to help nuclear survive. It rather undermines the basic attraction of the EU ETS, such as it is- that it is a market mechanism, creating a price for carbon and, in theory, stimulating trading in it. Interestingly, that has not endeared it to the right in the USA, who often see emission cap and trading systems as just a carbon tax. The US left (if such a thing really exists!) has instead mostly focused on local renewable quotas or, nationally, on direct emission regulation, and Obama’s new state-wide Clean Energy Plan goes a long way in that direction, aiming for a 32% cut by 2030. That is a brave intervention, but maybe will face the same sort of political problems that have emerged in the EU with the ETS- resistance by states/countries with high carbon dependence. 

What seems clear from most of the battles so far, is that, given powerful vested interests, markets don't work and intervention is hard. But it is not a static system: increased concerns about the costs of climate change and air pollution, and the rapid reduction in renewable cost, is accelerating the challenge. With the energy market also changing (not least by the rise of prosumers), some key energy/engineering companies are abandoning their fixed positions. Siemens, RWE, E.ON and so on have all now embraced renewables (and dumped nuclear), in the hope of maintaining profitability. They may look to competition still, but may also expect the market to be less skewed and for interventions to be more consistent. Political change is also always possible, so that new directions may yet emerge, even the UK!  Jeremy Corbyn has certainly outlined a radical new approach, via direct state intervention and new policy directions to support a more ‘open, competitive and sustainable energy market’: http://www.theecologist.org/blogs_and_comments/commentators/2978777/jeremy_corbyn_the_green_britain_i_want_to_build.html

The politics of energy transitions

‘Energy transitions are about who benefits and who is put at risk. They are about the power of regulatory institutions, the structure of markets, and the distribution of wealth. And they are about how people of all sorts work and live.’ So said the introductory paper in a special issue of the journal Science as Culture on energy transitions. It went on:  ‘It is not simply a question of whether to build infrastructure for renewable energy systems but rather how to approach such a task and what forms of intertwined social, economic, political, and technological arrangements get built and/or evolve to produce new forms of energy production and consumption’.

It argued that ‘Traditionally, energy transitions have been understood in terms of fuel sources, such as the transition from wood to coal, coal to oil, or oil to renewables. Viewed from a socio-technological systems perspective, this framing of energy transitions looks naıve at best. On one hand, transitions in fuels are inevitably accompanied by widespread social, economic, and political transformations that must also be factored into assessments of energy change. Even more importantly, neither fuels nor their associated technologies of extraction, generation, and use determine the social and economic forms that energy systems take over time. Rather, these technologies are interpretively flexible, like all technologies, and can be shaped into a range of diverse energy systems. Thus, the key choices involved in energy transitions are not so much between different fuels but between different forms of social, economic, and political arrangements built in combination with new energy technologies. In other words, the challenge is not simply what fuel to use but how to organize a new energy system around that fuel’. Clark A. Miller, Alastair Iles & Christopher F. Jones, ‘The Social Dimensions of Energy Transitions’ in Science As Culture Forum On Energy Transitions, Science As Culture ,Vol. 22, Issue 2, 2013: www.tandfonline.com/toc/csac20/22/2#.VSp3DIX1uv8

Taking that on board, in a new Palgrave Pivot e-book ‘Green Energy Futures: A Big Change for the Good’, I have tried to map out the technical options ahead and their likely social and economic implications. I start with the assumption that the use of fossil fuels has to be halted, and probably long before this is forced on us by the inevitable ultimate depletion of these resources. That will involve a major change- over 80% of the energy used globally comes from these sources, coal, oil and gas, used for heating, electricity production, and to power vehicles.  The book asks - can their use be phased out? With the divestment movement catching on and fossil companies worried out the economic viability of their fossil investment as governments tighten up emission regulations, change is underway.  But what will replace fossil fuel? 

In the book I look at whether nuclear power can play a role, or whether there is there a way forward using renewable energy sources and energy efficiency initiatives to cut emissions from fossil fuels while avoiding nuclear power. Unsurprisingly I conclude that nuclear is unlikely to have much of a role in future, and argue that the pro and anti nuclear debate has absorbed too much time and energy over the years, to the detriment of what it sees as a more relevant, interesting and increasingly urgent debate over what sort of renewable/efficiency mix we need. That is my main focus in the rest of the book, which explores the implications of shifting to greener, cleaner energy sources.  It argues there is no one green future. There is a range of possible options of various types and scales: we need to choose amongst them. And drawing heavily on material from Renew, the newsletter I edit, it offers an overview of the technical, social, economic and  environmental issues to help, exploring what the technological mix might be, and what choices might be available.  The Science As Culture paper called for ‘robust empirical and theoretical inquiries into what current and future energy changes will mean for diverse groups of people across the planet’. I may not have achieved that, since my focus is more on the technological choices than on the harder to define social choices, but I hope I have made a start. http://www.palgrave.com/page/detail/green-energy-futures-david-elliott/?sf1=barcode&st1=9781137584427

It is certainly becoming urgent to make some decisions. And so it is good to see that the big fossil companies are being put under pressure to change. The bottom line will always no doubt be economics, but moral pressure also has a place. In that context, with the fossil ‘divestment’ movement making waves around the world, involving pension funds Universities, charities and churches, it is interesting that Pope Francis has spoken out on climate change, and that a conference of Islamic religious leaders has done so too.

The Pope’s views actually paralleled some of the analysis in the Science As Culture paper. In his papal encyclical he said  ‘We have to accept that technological products are not neutral, for they create a framework which ends up conditioning lifestyles and shaping social possibilities along the lines dictated by the interests of certain powerful groups. Decisions which may seem purely instrumental are in reality decisions about the kind of society we want to build’. The Islamic Climate Declaration was more specific and called on the people of all nations and their leaders to commit to ‘100 % renewable energy and/or a zero emissions strategy as early as possible, to mitigate the environmental impact of their activities’. That of course might be taken to include nuclear, but it goes on to call for investment ‘in decentralized renewable energy, which is the best way to reduce poverty and achieve sustainable development’. http://islamicclimatedeclaration.org/islamic-declaration-on-global-climate-change

Well given that, maybe Iran, and other Middle Eastern states, might even take note of the proposal by Amory Lovins for a post-nuclear switch to renewables: www.rmi.org/Knowledge-Center/Library/IransInvisibleOpportunity We can but hope! Meanwhile, globally, there is plenty to do in terms of selecting the right sustainable energy mix for the future, and ensuring that it gets adopted widely.

Nuclear Power: pushing up daisies?

 
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A photo of malformed daisies uploaded to Twitter from Japan went viral earlier this year, leading some to speculate that radiation from the Fukushima nuclear power plant disaster had led to mutation.  National Geographic was more cautious, quoting Jeffrey J. Doyle, a professor of plant biology at Cornell University. Although he said it was possible the flower deformity could have been induced by radiation ‘this is a pretty common mutation in daisies that I've seen sporadically in various places not associated with radioactivity.’ The daisy site was also around 100 miles away from Fukushima, so that high radiation levels would not be expected: http://news.nationalgeographic.com/2015/07/150723-fukushima-mutated-daisies-flowers-radiation-science/

However what is less disputed is that the global nuclear industry is in dire straights, with overall use static at around 11% of global electricity, and declining in some countries, with old plants closing and new projects being abandoned, while renewables are accelerating rapidly almost everywhere, supplying over 23% of global electricity. The 2015 edition of the World Nuclear Industry Status Report, noted that since 2000, wind added 355 GW and solar179 GW- respectively 18 and 9 times more than nuclear with 20 GW. And it won’t improve. Nuclear plant construction starts have fallen from 15 in 2010 to 3 in 2014, and of the 62 reactors said to be under construction at least three-quarters are delayed, some for many years, with 5 units having been ‘under construction’ for over 30 years. The most visible example have of course been the EPRs being built in Finland and France, both now many years late and vastly over budget, with new faults emerging all the time, making it even more uncertain that the UK version at Hinkley will go ahead.

The nuclear industry is not dead, but the overall picture was well summed up in the preface to the report by Jonathon Porritt: ‘Every year that passes reveals a widening gap between what is happening with the nuclear industry (forensically laid bare by successive Status Reports) and how so-called alternatives become a new paradigm (based on efficiency, renewables, energy storage and distribution), as portrayed by a wide range of commentators in the energy debate– from the International Energy Agency and mainstream investment banks through to entrepreneurs and NGOs’. With the projected costs of Generation III designs having increased eightfold (and none yet having been completed ) and more speculative nuclear options still decades away, he concluded that ‘the static, top-heavy, monstrously expensive world of nuclear power has less and less to deploy against today’s increasingly agile, dynamic, cost‐effective alternatives. The sole remaining issue is that not everyone sees it that way-as yet.’ www.worldnuclearreport.org/

Given this situation, it is certainly surprising that there is still support for nuclear in some countries.  The reports lead author Mycle Schneider said: ‘The gap between the perception of the nuclear sector by decision-makers, the media and the public and the general declining trend as well as the deep crisis that threatens the very existence of some of the largest players is puzzling. A thorough reality check is urgently needed, especially in countries like the U.K., where new nuclear investments- like Hinkley Point C- with huge public subsidies are still on the table.’

Germany has of course already done that, and along with Austria, Denmark, Ireland and others, decided that nuclear was not a viable option. However there remain issues with the cost of making the transition to a non-nuclear future. The economics of replacing fossil energy with renewables is complex, given that market prices, for example for gas, can vary in the short term, but it is clear that long-term, renewables are getting cheaper, while the cost of fossil fuel will rise, as will the environmental and health costs of using them. That is arguably also true for nuclear, although phasing out working plants obviously leads to extra costs (e.g. from the loss of potential revenues) and some see a full nuclear phase out as being expensive in the short term, even if it does reduce risks (e.g. of accidents) and costs (e.g. of impacts and waste management) long term.

Meeting that head on, a new German Federal Environment Agency report by the Oko Institute and Fraunhofer ISI assesses the impact of a global phase-out of nuclear by 2050 on the costs of meeting global climate policy targets in 2020. The analysis is based on simulations of a reference scenario and a nuclear phase out scenario, using the global energy systems model POLES. By 2020, the phase-out of nuclear power decreases the global share of nuclear energy from 12% to 8% and increases greenhouse gas emissions by 2% globally. That’s evidently because a full switch to renewables will take time and will be hard for some countries, though in others it will happen more rapidly: indeed the report says that in a minority of cases, emissions will actually fall. However that is, they say, mainly since switching to renewables increases costs, which will reduce energy use. A rather gloomy view: it could equally well be argued that, longer term certainly, renewables/efficiency costs will be lower than nuclear costs.  Some already are.

However on the basis of its assumptions, the report says that, in Annex I (industrial) countries, as defined in the Kyoto protocol (KP), by 2020 greenhouse gas emissions rise by 7%, emissions in the EU decrease slightly- by less than 1%. Two policy scenarios, an Annex I ‘all trade’ scenario and a ‘KP 2 Parties only’ scenario, are modeled to look at impacts on carbon emission certificates, within the Kyoto-defined global carbon trading regime. That is seen as the key way ahead, perhaps surprisingly given the poor performance of the EU Emission Trading system so far. But Germany, and some others in the EU, evidently think it can and should be improved on and spread wider. Under such a regime, will all Annex I countries involved, the modeling shows that, compared to an unchanged reference scenario, with the nuclear phase out, the price of emission certificates increases by 24% and total compliance costs of Annex I countries rise by 28%. Compliance costs increase the most for Japan (+58%) and the USA (+28%). In contrast, restricted trading of emission certificates results in a lower demand and in lower certificate prices. When trading of certificates is available only to countries that committed to a second Kyoto period, the nuclear phase-out results in a substantial increase of the compliance costs for the group of Annex I countries (but not for the EU and Australia), more than in the ‘all trade’ scenario.

Overall, the report says the findings highlight the importance of certificate trading to achieving climate targets in a cost-efficient way, enabling ambitious greenhouse gas mitigation to be pursued. The 2020 analysis show just a moderate increase of costs for more ambitions mitigation policies compared to BAU mitigation policies. But that

presumably assumes that tight carbon caps are set globally. That sadly is unlikely, although there are still hopes for the upcoming Paris COP 21. But ambitious renewables programmes may still go ahead in any case, driven by the fall in cost of renewables, and the rising direct and indirect costs and risks of fossil fuel and nuclear.  Emission Trading may help, but it’s not the only influence, and perhaps not a reliable one in any case: after all, by increasing direct fossil costs, it also helps nuclear. 

www.umweltbundesamt.de/sites/default/files/medien/378/publikationen/climate_change_11_2015_knoche_nuclear_phase_out_komplett.pdf

Cutting the 'green crap'

Prime Minister David Cameron was alleged to have talked of ‘getting rid of the green crap’, which it was assumed meant, or included, the removal of the various green energy subsidies: http://www.dailymail.co.uk/news/article-2510936/Cut-green-c-p-Camerons-private-view-energy-taxation-horrify-environmental-campaigners.html After his election victory he and his team have set about doing just that. The cuts and changes proposed are stunning.

In a move that had already been put in motion, large solar projects have been blocked from access to the Renewables Obligation support scheme. And now it has been proposed that the support for small PV solar, and other small renewable energy projects, that is offered under the Feed In Tariff  (FiT) system is to be cut dramatically (by up to 87% for domestic PV) and capacity/payment caps set to limit deployment. But if that is not agreed, or is not deemed likely save enough money, the FIT scheme will be withdrawn entirely, early next year. Either way it will hit PV very hard.  In addition, on-shore wind is to be blocked from access to the Renewable Obligation (RO) system and also to the Contacts for Difference (CfD) system, while the planning regime is being changed to allow local objectors more influence.  In future renewables will also be subject to the Climate Change Levy - a scheme designed to support them by penalising fossil fuel use! The Green Deal domestic energy upgrade loan scheme has been wound up and the Green Investment Bank part privatized. The already watered down Zero Carbon Homes scheme has been abandoned.

The impacts will be significant.  There have already been reports of a 78% drop in planning applications for new renewables projects (mainly on shore-wind), while DECC says that overall, under the new wind policies, ‘around 250 projects totalling around 2,500 turbines are now unlikely to be built’. That’s maybe 7GW lost.  In its Impact Assessment, DECC also admits that the proposed new FiT cuts would lead to increased emissions since the gap will be taken up with conventional sources. The capacity cap probably means that only around 170MW of domestic roof top PV solar can be installed annually- compared to 660MW last year and near 4GW in all so far. As the trade lobbies have pointed out, all this will mean jobs will go. And rubbing it in, the imposition of the Climate Change Levy will, it has been estimated, cost the renewables sector around £3.9bn over the next five years. A punitive tax on renewables! 

The right wing press of course was overjoyed by all this, and, with funds shifting over  instead to shale gas, and government support for nuclear continuing unabated,  the prospects for an environmentally sustainable green energy future seem to be receeding.

Is it all as bad as it seems? Renewable energy technology is getting cheaper, in part due to the success of Feed In Tariffs around the world, with PV solar costs falling dramatically, albeit from an initially high level.  So less subsidy should be needed. Indeed soon some renewable energy projects could go ahead subsidy-free. Except that they will have to compete with conventional energy sources, most of which are still subsidized.  Some may be able to, but not many.  A bit more support is needed, and especially for the newer options which have not yet moved down their learning curves. For example marine renewables are developing rapidly but are still expensive, although some claim that they can get down to £100-130/MWh: http://uk.reuters.com/article/2015/08/05/us-tidal-energy-idUKKCN0QA1IX20150805 

By contrast, on-shore wind is already near competitive, with some new projects getting CfD strike prices of below £80/MWh. However, although cheaper than nuclear (Hinkley, if built, will get 92/5/MWh), that’s still more than the price of power from gas plants.  A new Policy Exchange report, ‘Powering Up: The future of onshore wind in the UK’, argues that, rather than being excluded, onshore wind should continue to receive Contracts for Difference, albeit with the subsidies phased out in stages, so that they effectively become 'subsidy free' by 2020. It predicts that this would help the onshore wind industry reduce costs from £85/MWh to approximately £60/MWh by 2020, putting it on a par with new gas plants. www.policyexchange.org.uk/publications/category/item/powering-up-the-future-of-onshore-wind-in-the-uk

The Solar Trade Association has made a similar case for PV solar. It’s Solar Independence report outlines a plan ‘for a stable glide path to subsidy-free solar.’ www.solar-trade.org.uk/solar-independence-plan-for-britain/

A tapered reduction approach to subsidies would certainly make more sense than sudden, abrupt, drastic cuts. As it is, unless these changes and cuts can be blocked or slowed, the renewables industry will have to soldier on and hope that the consumer market for PV (with returns cut to 4-5%) doesn't collapse, and that investors will still come forward for wind projects. So far, despite being the most expensive, offshore wind has escaped the cuts and new projects are still going ahead.  Let’s hope it stays immune…and prospers. Or will the ‘Blue Crap’ get it too?

Cuts seem to be endemic in the UK at present. But when the new FiT review was launched Greg Barker, who until recently was a pro-PV Tory energy minister, offered advice on how to survive them: ‘We need to focus on the fact that this review is a response to much faster and more successful clean energy deployment than anyone expected; exceptional growth that has made the UK the fastest growing solar market in Europe.’ He hoped that the sector would avoid ‘hysteria and self-damaging doom mongering’. Instead ‘the industry needs to work closely with DECC in a genuine spirit of cooperation and financial realism to target and stretch the remaining budget in the current Levy Control Framework, in the most cost effective way possible.’ http://www.solarpowerportal.co.uk/news/barker_urges_solar_industry_to_avoid_hysteria_and_self_damaging_doom_mo3456

Although, after the latest round of proposed PV cuts, offered in a hard-nosed  ‘take it or leave it’ framework, he apparently tweeted that the ‘draft domestic FiT looks very challenging indeed’.  He’s right.  And it seems we might all need to get a bit more angry. The cuts will save small amounts of money (the FiT is said to put around £7 p.a. on consumers bills), but do a lot of damage, potentially killing off a major area of green growth: http://www.carterjonas.co.uk/news-and-events/news-and-press-releases/Aug-15/renewable-energy-support.aspx

It looks grim. Though who knows what the future will bring, with Jeremy Corbyn currently offering some pretty positive energy policy alternatives:  http://www.theecologist.org/Interviews/2978738/jeremy_corbyn_big_six_under_public_control_a_solar_panel_on_every_roof_and_no_new_nukes.html

Climate change, energy and the developing world

It seems likely that climate change will hit most countries, but possibly the poorer developing countries the hardest. Adaptation to climate change may be urgent and mitigation of its causes may also be vital, but many poor developing countries don't have the financial or technical resources for either and certainty not both. They often claim that the rich countries, who have benefited in the past from burning fossil fuels, should shoulder some or even most of the cost, for example by contributing to aid programmes. Agreement in principle has been reached on establishing a $100 billion p.a Green Climate Fund by 2020, with donations from the major industrial countries: the USA recently provided $3 billion- though that may yet be blocked by a Republican backlash.

A perhaps more direct, but very aggressive, route may be adopted by those seeking compensation for victims of major climate change related events. But who to sue? One NGO report listed 90 global companies who it said produced 63% of the cumulative global emissions of industrial CO2 and methane between 1751 and 2010. They include big coal and oil companies. Some may be feeling bit nervous, although name and same list like this may be rather partisan and limited: see the Onion’s satirical take on it: we are all responsible http://t.co/gPQaXKQzAP.  Litigation may have its merits, but it mostly earns lawyers fat fees; what is really needed is changed policies for the future-though fear of litigation may lead to that. http://link.springer.com/article/10.1007/s10584-013-0986-y   The UN Sustainable Energy for All programme may be a bit more hopeful as a direct way ahead, helping developing countries to build up renewable energy capacity : http://www.iisd.ca/energy/se4all/2014f/html/crsvol181num7e.html

However all this is set in the wider context of the debate about global climate and energy policy. Should developing countries be allowed to expand their emissions for a while to catch up- e.g. using a ‘contraction and convergence’ approach, with all countries aiming to get to a set carbon per capita level by a specified date. But who would police it?

The use of per capita measures, although arguably equitable in human terms, does of course favour countries like China, with large populations, but in terms of global impacts, where the emissions come from is not important, just the total amount.  And on that basis, China now leads the world, with many other newly developing countries following them with ever-increasing emissions.  China may now aim to cap it’s emission by 2030, but the level at which they will be stabilised would, on current projections, be well beyond that of any other county, a claim forcefully made (and perhaps overstated) by those who objected to the USA’s much more stringent proposed emission cuts- 26-28% by 2025.. www.washingtonpost.com/politics/gop-congressional-leaders-denounce-us-china-deal-on-climate-change/2014/11/12/ff2b84e0-6a8d-11e4-a31c-77759fc1eacc_story.html

http://uk.reuters.com/article/2014/11/12/climatechange-china-usa-kemp-idUKL6N0T22IU20141112

Interestingly, some analysts in India were unhappy with the US-China deal. They felt much more was needed: www.downtoearth.org.in/content/us-china-climate-deal-maker-or-breaker 

And certainly many less developed countries will wonder why they should be expected to curb their emissions when the industrial countries are only making relatively minimal efforts.

That view does of course reflect the assumption that making the necessary change will be very expensive- and that may not be true. As the International Renewable Energy Agency and the International Energy Agency have both pointed out, renewables are getting cheap and may soon be competitive with most conventional energy sources in many locations. Some already are. www.irena.org/remap/

That assessment is based on simple levelised cost comparisons. If the immediate and urgent air quality related health issues and medium term but already apparent climate change impact costs are included, then many renewables already look like a better deal. Moreover, using them avoids the cost of having to import increasingly expensive fossil fuels. It's the same for energy conservation measures- they make sense now. Obviously the change over will be hard, and there will be incidental transition costs, but scenarios are emerging suggesting that, for example, India could, in theory, get up to 90% of its total primary energy from renewables by 2050, assuming major energy savings: http://www.wwfindia.org/?10261/100-Renewable-Energy-by-2050-for-India

And this in a densely and highly populated country without a lot of room for PV or wind.

In developing regions in Africa and elsewhere, the situation is very different and the potential may be even larger. For example, the International Renewable Energy Agency says that Africa has the potential and the ability to utilise its renewable resources to fuel the majority of its future growth with renewable energy. It adds ‘doing so would be economically competitive with other solutions, would unlock economies of scale, and would offer substantial benefits in terms of equitable development, local value creation, energy security, and environmental sustainability’.

www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=276

Clearly the interaction between global geopolitics and climate/energy policy is complex, as are economic development issues, but the technology is emerging to simplify the situation. What is now needed is the political will and vision to make the changes. The industrial countries are making some effort, some more so, others less, but the future may lie with what the others now choose to do. The rich world can help, with properly targeted aid programmes and technology transfer. The World Bank says it will henceforth invest heavily in renewables and clean energy and only fund coal projects in ‘circumstances of extreme need’, where no clean option was viable at a reasonable price, because climate change will undermine efforts to eliminate extreme poverty. www.theguardian.com/business/worldbank

That is good news- we clearly need new priorities. But the changes can’t be driven just by ‘top-down’ programmes, however altruistic. It’s a big responsibility, but, especially for developing countries without easy access to fossil fuels, the opportunities for doing it right may be large.  Of course all this would be easier if were not for the gross global imbalance in power and wealth and the dominance of multi-national corporations locked onto and defending the old path. But the new path beckons and may even be part of the revolution that will change the balance of power.  

Climate Changes again

 

It is incontrovertible that the climate is changing, and the cause seems clear- emissions of greenhouse gasses due to human activities including burning fossil fuels. However the scale, nature and pace of the changes, and their likely specific local impacts, are still  uncertain.  Changes continues around the world, but global average temperature rises have slowed over the last decade or so, leading some to doubt that the accuracy of the computer models, which predicted continuing increases. Revisions to the models have offered a variety of explanations for the ‘pause’, of varying degrees of plausibility, one being that the heat has gone into the depths of the seas.

Most contrarians are unconvinced by these explanations, and by the models in general, and the media has often amplified their doubts, adding to a sense of uncertainly. Certainly the possibility that bad impacts will be slowed has made it harder to maintain wide support for a sense of urgency when it comes to radical climate action. A delay in significant response could be tragic, if the overall models are right, since, whatever the cause of the pause, once it ends, they imply that we can expect rapid ‘catch up’ temperature rises and massive impacts.   But that is not certain.

So for some, climate change is a busted flush- not something that needs urgent attention, for others it remains a central concern, with any doubts balanced by a commitment to the precautionary principle: if a threat is large it is wise to take it seriously. Somewhere in between these two views are the various allegedly ‘least regrets’ pragmatic approaches. Prepare for the worst by investing in simple local adaptation measures, and /or in low cost low carbon energy supply/energy saving, but not in major costly technology or policy changes. If climate change turns out not to be significant, then we will not have wasted a lot of money, or set off on a costly path of unnecessary radical change.

There are problems with this. Will adaptation be enough and will it be cheaper than major mitigation measures? Far from new energy technologies like renewables being expensive, in fact they are getting cheaper, even leaving climate impacts out of the assessment. Delaying serious responses may end up costing a lot more, if climate impacts do turn out to be serious. So it may not actually be a ‘least regrets’ policy.

However there is another, arguably more nuanced approach- don't rely just on concerns about climate change to promote the development of clean green energy options. There are other drivers, including the huge and costly health impacts of burning fossil fuel. That’s not far off, it’s now, and very visible in terms of poor air quality, especially in newly industrialising countries like China.  Moreover, even without taking those costs into account, many renewables are now getting competitive with fossil fuel on their own merits; the green path can sell itself.  Will that happen fast enough to deal with climate change?  Probably not, if just left to market pressures. But, with pollution issues being very immediate, governments can impose regulator pressures which may also help with  subsequent climate problems. Very much a middle-way approach.

A much broader and more radical alternative approach is to link climate and pollution issues into a wider political campaign against globalization and capitalism- along the lines adopted by Naomi Klein in her new book ‘This changes everything’.  To some extent she has updated the old Marxist view that capitalism was fundamentally flawed and would come up against a final existential crisis. For Marxists it was the need to increase profits and expand markets, while lowering wages to maintain competition, a conflict which (to summarise awfully) was partly deflected by the advent of more productive technologies and a bit of ‘trickle down’ of affluence to some participants.   But that process led to ever-increasing exploitation of the natural environment. So the new crisis is climate change, and the wider attack on nature, as well as the continuing exploitation of labour globally, as markets grow and production expands. Which means that the poor, low paid workers, the dispossessed, and other politically excluded and marginalised communities across the world, are all recruited, along with the greens, to the struggle. Eco-socialist ideas have been pushed for some while and, with the global economy in a mess, they may now become more relevant, but, with capitalism still dominant globally and powerful culturally, locking aspirant communities into consumerism, an effective challenge to it seems a long shot.

More likely we will see a mix of all the above approaches being adopted, resistance and and denial, reforms and revolutions, unevenly in various parts of the world. Most of the  ‘old’ industrial countries have adopted quite radical long term climate targets: the UK and Germany aim for a 80% GHG cut by 2050, France now has a 75% cut by 2050 target, the US is working on it!  But now has a 26-28% emissions cut by 2025 target. Australia and Canada may be heading the other way, but China is taking it seriously, at least medium term (an emission cap by 2030). So far most of this has come from the top, technocratically, but it’s buttressed increasingly by grass roots pressure. Who knows, we may yet see radical change in the political climate in response to the threat of radical changes to the planetary climate.

The EU has set a ‘40% by 2030’ GHG reduction target, conditional on other countries coming up with similar goals at the upcoming Paris UNFCCC Climate negotiations- COP 21.  That sadly may be yet another COP-out, and even if not, the momentum of and likely wider support for policy change will depend on whether climate change is taken seriously across the world.  That is not certain. So maybe it is wise to add some other policy drivers.  Can renewables be sold as simply a better set of less polluting, more socially appropriate and economically cheaper options?   That case gets stronger by the day, quite apart from the climate issues. There may of course be short-term reversals- fossil fuel prices are currently falling. But, longer-term, fossil fuels are bound to become scarcer and more expensive and, whatever the direct costs, the health impact of using them will continue to impose increasing social costs.  In my next post, I will look at the situation in the developing world, where pollution impacts are already significant and the climate impacts are likely to become even more so. And where, thankfully, renewables are expanding rapidly. 

Ethical engineering

 

Joseph Stalin, in an interview with HG Wells, offered this radical analysis on the social role of engineers: ‘The engineer, the organiser of production, does not work as he would like to, but as he is ordered, in such a way as to serve the interests of his employers. There are exceptions of course; there are people in this stratum who have awakened from the intoxication of capitalism. The technical intelligentsia can, under certain conditions, perform miracles and greatly benefit mankind. But it can also cause great harm....Of course, things would be different if it were possible, at one stroke, spiritually to tear the technical intelligentsia away from the capitalist world. But that is Utopia. Are there many of the technical in­telligentsia who would dare break away from the bourgeois world and set to work reconstructing society? Do you think there are many people of this kind, say, in England or in France? No; there are few who would be willing to break away from their employers and begin reconstructing the world.’

Joseph Stalin in conversation with H.G Wells in Moscow 1934 First published as a special New Statesman Supplement 27 October 1934.  Recycled by NS 18/414  www.newstatesman.com/politics/2014/04/h-g-wells-it-seems-me-i-am-more-left-you-mr-stalin

Is this the type of radical commitment that engineers must aim for? Stalin’s viewpoint was of course that of a revolutionary leader, in very different times, and in reality engineers (and many others) had a very hard time under Stalin’s gruesome rule. Certainly his actual political practices and record are not something many would now defend. However there is an element of truth in this specific analysis, and the consequent prescription: engineers need to be more proactive. A new book on the Ethical Engineering, to which I contributed, explores what that might mean by looking at a range of fields- from energy to medicine, and included a look back at how engineers fared in Communist Poland (actually, none too well). The most obvious area of ethical concern is of course engineers involvement with defence related technology, with drones being a recent issue, and there a chapter on that and another on the risk of the militarisation of space, but as I argue in my chapter on energy, there are positive involvement options too, although even with renewable energy care has to be taken to do it right.  We don't want to replace grim and dangerous work on fossil and nuclear energy with poor jobs in bad conditions, for example in biofuel plantations in Asia.  Or to develop environmentally dubious large-scale technologies like tidal barrages.

There is also range of implementation issues with ethical aspects. New technologies cannot simply be ‘parachuted’ into host communities in a development context.  The classic case of failure to understand local needs is the case of solar cooking (using parabolic dishes for focusing), an idea at one time offered, for example in India, as a seemingly obvious alternative to increasingly scarce wood fuel or the use of dung, the burning of which has environmental and health issues. What was not appreciated was that most cooking was done after sun-down, when people typically came home from work in the fields.  Simple implementation errors like this can be compounded by more subtle failures to understand local requirements and expectations, as some the examples (on medical ICT technologies) in this book illustrated. One of the conclusions that emerges is that there is a need for wide community participation in the implementation process, and indeed in the whole process of technology choice, design and deployment. Ideally the aim should also be to help host communities develop their own capacity to develop the necessary new technologies, so as to strengthen the local economy and local employment. The need for local involvement of course transcends the development context. Wherever they are working, engineers cannot operate in a social vacuum: they must engage widely with the community to try to ensure that the ideas that emerge are socially acceptable and reflect the needs of those they are meant to serve.

While the range of ethical issues raised by new (and old) technology is very wide, and this book only touches on some of them, the overall ethical aim seems clear. We are part of nature it, and, although our technology allows us to change our relationship with it, we need to coexist, choosing and using technologies that do not abuse the environment, people or other species. In this engineers have a special role. This book offers some insights into how that might be played out.

What are the practical implications? There have been attempts to produce charters for engineering ethics to guide professional activities, with modern environmentally-motivated versions sometime listing a series of absolutes in almost biblical terms – e.g.  thou shalt not use fossil fuels.  They can certainly provide overall frameworks, but may not provide an operationally realistic guide to day-to-day practice. Within the various professions, as environmental issues have moved up the agenda, technology selection and design criteria have been developed seeking to provide practical guidance, and environmental impact assessment techniques are now widely required to be used for many proposed projects.  They can be quite narrowly focused on physical impacts, but there are also wider approaches, more suited to project with broad social and environmental implications.

All of this puts a great responsibility on engineers.  Is it really fair to ask them to try to resolve all the world’s many problems?  Some of these problems are well beyond technical resolution, but engineers and technologists do help transform the material world and they have a responsibility to do this ethically. Of course the process of supporting and developing what are seen as sensible options and resisting others, may shade into assessment and promotion based on political views, given the difficulty of establishing moral ‘absolutes’ in some contexts. But in general there do seem to be opportunities, and indeed an urgent need, for engineers to express their views, and to act on them, adopting a precautionary approach. That is the least we should expect.

‘Ethical Engineering’ ed Marion Hersh, Springer, now out: http://www.springer.com/gb/book/9781447166177

All change: new energy, new institutions

 

‘There needs to be some sort of regulatory overseer with clearly defined boundaries, given to it by, and answerable to, Parliament’. That’s one of the main claims of a discussion paper from iGov, the Exeter University based energy research group: http://projects.exeter.ac.uk/igov/working-paper-public-value-energy-governance/

It argues that the current energy regulatory and decision making system is flawed, cumbersome and slow and does not reflect the changing energy context and the need for long term rational energy policy development and management. OFGEM, the main existing regulator, is primarily focused on economics, with competition seen as essential to drive down prices so as to meet social objectives. However, with responding to climate change now high on the agenda, this short-term market based perspective has limits: longer term strategic developments are needed and not all will necessary look cost effective in immediate terms. Meanwhile the market system itself is changing, with ‘prosumers’ and energy co-ops taking over from at least some of the traditional players. The old system of governance was at risk of being captured by, or some say was a creature of, the vested interests of powerful incumbents, and either way does not recognise, or even resists, this change. Certainly there is a potential for chaos, as old regimes break up, and the need therefore for some regulation, but the real fear seems to be about changed power relationships.

The iGov proposals seek to recast the structure and practice of regulation to take these emergent trends and requirements on board in a positive way by expanding the regulators purview and brief.  While there would still be an economic regulatory function, a mini OFGEM, there would be higher-level strategic body changed with what iGov call ‘ Public Value Energy Governance’. Overall iGov argues for ‘a shift in the balance of decision-making-power from ‘the independent Regulator’ to a ‘governance process’ which would establish a changing set of relationships between institutions, so that it moves from a delegated to a directed process’. That would entail ‘a re-balancing of power currently concentrated on the Regulator and National Grid across more, focused institutions which would make the process more flexible, more transparent and more accessible to the regulated companies and customers alike’ and for  ‘a move from a dominant economic ethos to one which broader dimensions, including greater focus on societal wishes and change’ so that this  ‘better meets the technical and social needs of the evolving energy system’. They say they favour ‘a body which is responsible for implementing energy policy, which is separate from DECC and which has heirarchial decision-making power over Ofgem, the system operator and other regulatory and governance institutions’.

They note that the Labour Party has talked about an Energy and Security Board, but iGov want to enlarged this to an ‘Energy, Security, Sustainability and Affordability Board’ (ESSAB) and on balance think it should be outside of DECC, to aid legitimacy. They see it as working with a new state owned and/or not for profit system and market operator (SAMO), which would ‘have responsibility for the technical transformation to a secure, affordable, low carbon energy (ie both gas and electricity) system’. It would ‘enable better integration of system operation, including the demand side, capacity markets / capabilities, storage, heat, interconnection, electric vehicles etc. However, the SAMO would not simply become a recast National Grid. Its roles is sometimes known as a system architect’, an idea also promoted by the Institute of Engineering and Technology (IET), to ensure a holistic approach to adapting the power grid to meet challenging and complex new requirements resulting from decarbonisation. http://mycommunity.theiet.org/energy/pnjv#.UrX5boUhtFw

There is no question that change in needed. Prof Catherine Mitchell for Exeter summarised the problems of the existing system by saying that there was  ‘a lack of legitimacy within our energy policy process which leads to an increasing separation between the policy wishes of Government and/or the energy industry incumbents and with society’ and also ‘a the lack of nimbleness in its decision-making, which means that there is a gap between removal of regulatory barriers and technology take-up, so that in practice change is slow’.  And in addition, there was ‘the way that its rules and incentives suits the characteristics of fossil and nuclear technologies and business practices, thereby undermining new business models and competition and perpetuating the current system and current ways of thinking’. http://projects.exeter.ac.uk/igov/new-thinking-first-past-the-post-politics-is-a-major-barrier-in-gb-to-a-legitimate-long-term-energy-policy-framework/#_ftn1

Would the new system be any better? Prof. Mitchell worries that it would still be prone to political direction, with all the regular volte faces and destabalising policy changes that can entail, but surely in a democracy we have to accept that, even if it leads to continual policy uncertainty. The alternative is a corporatist structure that may be more rational, but may become captive of vested interests or bureaucratic ossification, just as with the present system, though with even less opportunity for democratic scrutiny.  Some say that is what the European Commission amounts to, an unelected executive, only tenuously scrutinised by the European Parliament, albeit with overall direction given by elected (national) ministers serving on the Council of Europe. 

The new UK ‘energy agency’ version proposed by iGov is meant to be more open and decentralized. Indeed the team initially talked about ‘decentralized regulation’, reflecting their view that it should be more open to wider influences and options, including ‘new types of ownership and non-traditional business models reflecting a new public-private continuum’ and ‘new types of consumer or citizen involvement’. But their core belief seem to be that what is vital is a shift from the current OFGEM situation with ‘delegated types of decision-making via a law’ and on to a new system with ‘‘directed’ decision-making via new sets of mission statements, aims, objectives, processes, discussions, expectations and so on which come together as different relationships between those politically responsible and those responsible for implementaion’. 

That may avoid ‘corporatism’, but it won’t avoid political interference.  Whether the later can be made less problematic, or at least more coherent, by a shift away from the UK’s ‘first past the post’ election system, as Prof Mitchell seems to think, is far from clear. Multi-party coalitions may damp down extremes of policy changes, but may be no better at yielding programmes that address urgent problems than the current system.  We certainly need better governance, but we also need better governments, and that's not something that institutional adjustments, however radical, can deliver.   However, some say that multi-party systems open up more opportunities for inputting new ideas into government, and new institutions may also help, so iGov may be on the right track…

With the upcoming UK election likely to yield yet another coalition, we may have no option than to try to make a multi-party system work. Whether it could also tackle regulation remains to be seen.

Nuclear in not the answer to climate change

 

The Open Letter to Environmentalists produced by academics in Australia and backed by over 70 academics worldwide, calls on environmentalist to back nuclear power as a response to climate change. Their case is based on the counterintuitive claim that nuclear has lower environmental and health impacts than wind or solar power. The Open Letter, and the backup paper it refers to, admits that nuclear may not be cheaper (on-land wind is already cheaper), but says it is better in terms of land-use, and so biodiversity impact, and also in terms of fatalities. http://bravenewclimate.com/2014/12/15/an-open-letter-to-environmentalists-on-nuclear-energy/

The land-use claim is familiar enough; but calculations like this often ignore the land use implications of uranium mining, fuel processing and waste disposal. Indeed, Amory Lovins has calculated that, when the fuel nuclear fuel cycle is included, the nuclear option overall may actually use more land than a renewable energy system with a similar output: www.rmi.org/images/PDFs/Energy/2009-09_FourNuclearMyths.pdf

Rather than using the total area of the wind farms, this type of approach uses the much smaller area used by the wind turbine towers and any access road:  the rest of the site can still be used for farming, or left wild. Biomass is of course land hungry and its use for energy can have impacts of biodiversity if not done sustainably, but solar arrays on roof-tops take no extra land, while off-shore wind projects (and wave and tidal farms) use no land at all. Moreover, it has been claimed that solar farm arrays protect land from other more disruptive uses and can actually increase biodiversity: http://solar-trade.org.uk/media/140428%20STA%20BRENSC%20Biodiversity%20Gudelines%20Final.pdf

On the basis of a /kWh comparison with nuclear, depending on how much offshore wind, wave, tidal and roof-top solar is included, there is probably therefore not much in it, indeed renewables may actually need less land, unless that is you want to claim the contaminated land in the Chernobyl and Fukushima exclusions zones as wildlife havens and as adding to (possibly mutant) biodiversity

The comparisons of health impacts can also be challenged, as being partial or limited, much like earlier attempts to make estimates: http://nextbigfuture.com/2008/03/deaths-per-twh-for-all-energy-sources.html and www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/ Yes people do fall off roof-tops while installing PV cells and there have been fatalities associated with wind turbine installation and maintenance- around 150 so far globally, with around 370GW of wind capacity now in place:  www.caithnesswindfarms.co.uk/accidents.pdf  But that has to be set aside the deaths linked to leaks from and accidents at nuclear power plants (with around 377GW in place globally at present) and also those associated with uranium mining.  Estimates vary dramatically: from a few dozen deaths (direct operator fatalities at Chernobyl) to many tens of thousands, when all the longer term region-wide impacts of radiation are included: www.chernobylreport.org.  The variations are in part due to different views on the impacts of low-level radiation exposure. It is usually argued that exposure to radiation from external sources at around background level is acceptable, but that may not hold up in the case when radio active material is ingested-  continual long term radiation from internalized sources can have large impact even if the source is weak.  

Independent  radiation expert, Dr Ian Fairlie, argues that "Contrary to the paper's (unsupported) assertions that nuclear is less of a problem than wind or solar, over 40 epidemiology studies worldwide indicate increases in childhood leukemias near nuclear reactors. The large spikes in gas emissions when reactors are opened for refuelling result in radioactive plumes which may cause high radiation doses downwind of nuclear reactors. In addition, the authors appear unaware of the recent compelling epidemiological evidence that radiation risks, especially from internal emitters, are greater than currently estimated. See http://www.ianfairlie.org/news/recent-evidence-on-the-risks-of-very-low-level-radiation/ The new studies have good statistical power, and are mostly from government or academic sources - indeed some are by scientists who used to work in the nuclear industry. Taken together, the new studies indicate that our current understandings about radiation risks, especially in infants and children, may be incorrect and may need to be revised upwards."

Even when we take account of the lower load factors achieved by wind (30%)/PV(10-15%) compared to  nuclear plants (70-80%), its hard to accept as proven that, long term,  nuclear is less hazardous/kWh of final energy supplied. 

Many of the other assessments made to buttress the Open Letter are similarly debatable, in that they seem to ignore or downplay some serious issues with nuclear expansion. For example we face increasingly worrying security and proliferation risks: www.theecologist.org/News/news_analysis/2680005/nuclear_power_and_biodiversity_dont_forget_wmd_proliferation.html And sites have to be found for nuclear plants that will be safe from flooding, sea level rise and the increased storms and tidal surges expected due to climate change. We also have to find safe locations for long-term disposal of increasing amounts of active wastes.

There are also some implicit strategic issues. For example, can we really rely on fuels which will inevitably become scare, with, as low grade uranium ores have to be mined and processed to make nuclear fuel, using fossil fuel, carbon dioxide emissions rising?

Overall, the Open Letter and linked paper’s attempt to make a case for nuclear seems unconvincing. Certainly other studies have come to very different conclusions. For example, a global life-cycle assessment of clean energy sources by an international team claimed that a renewable system could supply the world's entire electricity needs by mid-century without major problems with resource (materials) use or eco-impacts, including land use and biodiversity: www.pnas.org/content/early/2014/10/02/1312753111.abstract 

The EU’s Externe study estimated the extra social and heath costs of all energy systems, and found that nuclear had the highest: http://www.externe.info/externe_2006/

A subsequent study by Ecofys for the European Commission included estimates for climate change costs, and put the total nuclear social and environmental costs at €18-22/MWh, more than for any renewable: http://ec.europa.eu/energy/studies/doc/20141013_subsidies_costs_eu_energy.pdf

 

In reality there would seem no need to bother with a high cost, risky nuclear option, when there are better and increasingly cheaper options available. Renewables already supply twice as much electricity globally as nuclear (22% v 11%)  and are expanding rapidly, while nuclear is in decline in most places.  If for some reason nuclear is expanded, then given inevitably limited funding and other resources, it will divert support from, and slow down the expansion of, renewables - the only long term sustainable energy supply option we have.  Some say we can have both renewables and nuclear, but, quite apart from direct competition for funding, this ignores the fact that there can be operational conflicts. Nuclear plants are usually run at full power 24/7 to recoup their high capital costs, and their output cannot be run up and down to match variable renewables regularly and quickly without facing safety problems - the Xenon poisoning has to be given time to clear.  So, if there are large amounts of nuclear and renewables  available on the grid, more than is needed when energy demand is low, which plants give way? It make no more sense to curtail wind and solar than it does to curtail nuclear. Basically they are incompatible at any significant scale, and as we move to flexible systems of decentralised generation using smart grid dynamic demand  management and supergrid balancing, large infexible nuclear plants just get in the way.

Some look to small-scale possible more flexible nuclear plants, or fast breeder plants perhaps based on thorium, which could extend the fissile fuel resource, but they are all long off and very speculative, in terms of cost and, arguably, safety. Even longer term, some look to fusion.  But that is even more uncertain and far off. We need to deal with climate change now, so why not use the fusion reactor we already have- the sun.  Energy demand can be tamed- electricity use has fallen by 14% in the UK this century. And renewables can be ramped up to supply the bulk of our energy by 2050, as Germany, Denmark and others are planning, all without nuclear and with smart grid and supergrid systems helping to balance locally variable supply and demands. That’s the way forward.