Wednesday, December 1, 2010

Scotland gets braver

While maintaining the SNP’s strong opposition to nuclear power, Scottish First Minister Alex Salmond has announced that Scotland's renewable electricity target for 2020 is being raised from 50% to 80% of electricity consumption, putting Scotland well in the lead in the EU.

Aided by a rapid expansion in wind power, it is already on course to exceed its interim target of 31% in 2011. And, according to the Scottish Government, much higher levels of renewables could be deployed by 2020 with little change to Scotlands current policy, planning or regulation framework. A separate study commissioned by industry body Scottish Renewables, reported similar conclusions- 123% was possible! And Scottish Green Party co-leader Patrick Harvie even called for setting a 100% renewable target, ‘perhaps even before 2020’!

Scotland already has 7GW of renewables installed, under construction or consented. And Salmond claimed that, given the scale of lease agreements now in place to develop offshore wind, wave and tidal projects over the next decade, ‘it is clear that we can well exceed the existing 50% target by 2020.’ He may be right, but 80% by 2020 is stunningly ambitious. Even CAT only looked to 2030 in their ‘Zero Carbon Britain’, and that was pushing it very hard. While visionary scenarios can inspire/ motivate people to try harder, they have to be at least in principle credible. But unless there is a crash, supercharged deployment/infrastructure development programme, beyond anything so far discussed, 2030 might be a bit more realistic.

The pay-off of course is not just reduced emissions, it’s also jobs. Scotland’s offshore wind industry could create 28,000 jobs by 2020, contributing £7.1 bn to the economy, according to a report commissioned by Scottish Renewables and Scottish Enterprise. Billed as the first comprehensive study of the potential impact of offshore wind on the Scottish economy, it suggests this new industry could create as many as 48,000 jobs - 28,000 directly, supported by a further 20,000 through related industries. But that assumes proper support by government- without that, it warns, not much will happen.

Scotland does seem to be trying though, with its own versions of support schemes that are much more ambitious than those so far introduced by the Whitehall government e.g. under the Renewalbes Obligation Scotland they offer 5ROCs/MWh for wave energy projects and 3ROCs/Mwh for tidal projects compared to the 2ROCs/MWh offered by the UK wide RO schemes. And it also has a direct grant support system for marine renewables, which has provided £13m for wave and tidal projects so far. In addition there’s a £10m ‘Saltire prize’ for marine renewables. There’s 1.6GW of wave and tidal now planed in the Pentland Firth area and companies from around the world are queuing up to demonstrate their projects at the European Marine Energy Centre on the Orkneys. Moreover, the Scottish government has now allocated £70m for port infrastructure upgrades to help develop its offshore wind industry, in effect dwarfing the £60m UK-wide allocation.

To push things on further , the Scottish Government has also outlined its plans for achieving ambitious targets for reducing emissions by 42% by 2020, after a draft order to set annual emissions targets for 2010-22 was laid in Parliament. The targets proposed in the draft order take account of advice from the Committee on Climate Change and the deliberations of a cross party working group over the summer. The annual targets for 2011- 2022 start at 0.5% for 2011 and end with 3% for 2022, peaking at 9.9% in 2013 - going further than those recommended by the Committee. Scottish climate change minister, Stewart Stevenson, said: ‘Scotland has the most ambitious climate change legislation anywhere in the world and these annual targets set a clear framework for achieving our 2020 target’.

It certainly bold stuff. The SNP clearly is more adventuristic than any Westminster outfit so far, with arguably both good and bad implications. It could overreach itself and unravel. But it seems much more interventionist- and less concerned about markets. Though some see it as just bolshy and rebellious. And that would never do!

Monday, November 1, 2010

The cuts- energy escapes

The governments spending review brought fears of big cuts- and even of the demise of DECC! But in the end DECC survived and the energy sector generally got off very lightly.

Predictably the 40% of DECCs budget that goes to nuclear clean up work was left untouched, and DECC was just asked to reduce resource spending related to the remainder of its activities by 18% in real terms over the next for years, with capital spending actually being allowed to grow by 41% in real terms. Specific commitments included:

• Up to £1 billion of investment to create one of the world’s first commercial-scale carbon capture and storage demonstration plants- ‘strengthening the UK’s position as a world leader in cleaner fossil fuel technology’. That’s less than hoped and there is no mention of the levy arrangment that Labour managed to get on the statute books, for but is does indicated the fact that CCS is near the top of the political agenda

• £860m funding for the Renewable Heat Incentive (RHI) to be introduced in 2011-12. ‘This will drive a more-than-tenfold increase of renewable heat over the coming decade, shifting renewable heat from a fringe industry firmly into the mainstream. The Government will not be taking forward the previous administration’s plans of funding this scheme through an overly complex Renewable Heat levy’. But there will be a two month delayed start, until June 2010. There had been much concern that the RHI would be shelved – and its still not clear how it will work- who pays and how?

• £200m for low-carbon technologies including offshore wind and manufacturing infrastructure at port sites- so the £60m promised by Labour for ports will go ahead.

The Department will also refocus some if its spending:

• Revenue raised (~£1bn pa) from the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme will be used to support the public finances, rather than recycled to participants. Clever- a stealth tax on companies in effect!

• Feed-In Tariffs will be refocused on the most cost-effective technologies saving £40m in 2014-15. ‘The changes will be implemented at the first scheduled review of tariffs unless higher than expected deployment requires an early review’ (presumably of high cost PV solar).

In parallel the Dept of Business Innovation and Skills will, ‘lead the creation of a UK-wide Green Investment Bank that will be capitalised initially with a £1bn spending allocation with additional significant proceeds from the sale of Government-owned assets, to catalyse additional investment in green infrastructure’. That’s less that the £3-4bn thought to be needed and the £2bn initially proposed, but it’s a start.

So it’s not all bad news...

The ports money is definitely welcome and should help draw new investment from other sources e.g: Tag Energy Solutions has secured £20m to build an offshore wind turbine manufacturing plant at Haverton Hill, Billingham. It said 400 jobs would eventually be created once the factory had been completed. The plant will specialise in building foundations for offshore wind farms. Steel producer Corus earlier announced a similar plan. It said it is to build a £31.5m offshore foundation plant in Redcar, Teeside, which will produce monopiles for the foundations of offshore wind turbines. The company believes the facility will create around 220 jobs. In July, plans were also unveiled to build a £400m UK offshore development centre near Immingham. Developer Able UK said the site could eventually create 27,000 jobs and help build the numerous North Sea projects lined up for development.

And after the Spending Review announcement , Siemens and General Electric confirmed their plans to develop UK offshore wind turbine manufacturing facilities last year that it would make £60m available for improving UK port infrastructure. Siemens plan investments of £80 million wind turbine production facility, while General Electric (GE) aim to invest £100 million to develop offshore wind turbine manufacturing base in the UK, in a move is expected to create 1,900 jobs in the UK by 2020, both in terms of direct employment and through associated manufacturers of towers, blades, nacelles and other offshore wind technology. And Spanish wind energy firm Gamesa has announced plans to make the UK the centre of its worldwide offshore wind business and invest £133.7 million by 2014.


There were however some losers. The Government is to abolish or downgrade many quangos (non-departmental public bodies) including the Sustainable Development Commission, and the long established Royal Commission on Environmental Pollution, along (less worryingly) with the Infrastructure Planning Commission. The full list of 200 or so includes British Nuclear Fuels, NESTA, the Design Council and crucially the Renewables Advisory Board, the Renewable Fuels Agency, and even the Regional Development Agencies- who have been strong in backing renewables locally. Still evidently under review (although not necessarily for abolition, just reorganisation) are the Environment Agency, the Carbon Trust, the Energy Saving Trust, and, perish the thought, the UK Atomic Energy Authority.

Some of this was just sabre (or rather axe) rattling, and some of the agencies were pretty defunct shells- e.g. most of the UKEAs work has been privatised, as has BNFLs. But some, like the SDC, RECP, RAB, and the (so far untouched) EST and Carbon Trust, might be seen as crucial to the proper development of a sustainable future- although some rationalisation could be merited.

And finally, the government ruled out public funding for the controversial Severn tidal barrage, which it says could cost £34bn. It also saw smaller barrages or lagoons as not viable.

The DECC/SWRD/WAG ‘Severn Tidal Power Feasibility Study: Conclusions and Summary Report’ does seem to finish off tidal range projects in the UK, at least for the moment. Although it did say that the results for other locations around the UK might be different, it is hard to see how they could do better than the Severn - the best site by far in terms of tidal range. Given that most environmental groups strongly opposed large barrages, the government decision not to provide support did not lead to complains from them about ‘ignoring green options’

The report says ‘the Cardiff-Weston barrage is the largest scheme considered by the study to be potentially feasible and has the lowest cost of energy of any of the schemes studied. As such it offers the best value for money, despite its high capital cost which the study estimated to be £34.3 billion including correction for optimism bias. However this option would also have the greatest impact on habitats and bird populations and the estuary ports.’

It went on ‘a lagoon across Bridgwater Bay (£17.7bn estimated capital cost) is also considered potentially feasible, as is the smaller Shoots barrage (£7bn). The Bridgwater Bay lagoon could produce a substantial energy yield and has lower environmental impacts than barrage options. It also offers the larger net gains in terms of employment’. By contrast ‘the Beachley Barrage and Welsh Grounds Lagoon are no longer considered to be feasible. The estimated costs of these options have risen substantially on investigation over the course of the study’ It added ‘combinations of smaller schemes do not offer cost or energy yield advantages over a single larger scheme between Cardiff and Weston’.

It noted that, in addition, the study funded further work on 3 proposals using innovative and immature technologies (the Severn Embryonic Technologies study). It said ‘Of these, a tidal bar and a spectral marine energy converter showed promise for future deployment within the Severn estuary - with potentially lower costs and environmental impacts than either lagoons or barrages. However these proposals are a long way from technical maturity and have much higher risks than the more conventional schemes the study has considered. Much more work would be required to develop them to the point where they could be properly assessed.’

So tidal range seems to been written out of the story for some while. Which leaves tidal current turbines - a much less invasive and rapidly developing approach. But it will interesting to see if the traditionalist large engineering companies and institutions who backed the large barrage can regroup: some are trying: see

Wednesday, October 6, 2010

Energy politics in Africa

Most people in Africa are not on the power grid and most new investment in energy systems seems unlikely to change that much. Instead its just part of the expansion of global capitalism. That’s the main thesis of a radical new book ‘Electric capitalism: recolonization in Africa on the power grid’ David McDonald et al,

It provides plenty of examples to buttress its case- the most familiar perhaps being the giant 100GW hydro project planned for the Congo river and South Africa’s (now thankfully abandoned) nuclear ambitions- the planned expansion of nuclear capacity and the development of the Pebble Bed Modular reactor have been shelved .

Major grid-linked projects like this may help boost the economy and some the wealth created may trickle down, but it’s argued that decentral community scaled projects are often much more relevant. However, it’s claimed that at present efforts at deploying solar and other renewables are marginal at best- just small tokens.

The book provides not only detailed political analysis and case studies but also a laypersons guide to the energy options- large and small. It’s mainly focused on Southern Africa, which is where most of the industrialisation is going on, and where most research on alternative options has been done: for example see the excellent 2006 Earthlife Africa study by Banks and Shaffler which, the book says, claims that South. Africa could get up to 70% of its electricity from renewables by 2050, even assuming continuing growth in demand for energy:

That included large hydro, which this book doesn’t support. A more recent Earthlife analysis suggested that over 50% from renewables was feasible (400TWh p.a by 2050), with for example the potential for on land wind being put at 50GW, the wave potential at 10GW, and the solar potential being enough in theory to supply the needs of the whole country. See:

But this S. African focus means that the book doesn’t look at large scale Concentrating Solar Power and supergrid export issues in North Africa. That too could be seen as a neo-colonial exercise by EU companies, but it doesn’t have to be that way, although the large scale capital involved with CSP/supergrids and the role of the export markets for some of the power, may make it hard to control.

Even so, it’s clear that the conventional energy options are far less relevant than renewables for Africa- but progress will take money, and political commitment, not least to avoid exploitation.

Progress on the ground

There are some signs of progress, although so far the emphasis has mainly been on technology and the economic potential of renewables. ‘The solar radiation Africa receives could make this continent the Saudi-Arabia of the future’. That was a summary of the conclusions from the recent ‘Power Kick for Africa’ strategy workshop on renewable energy policies organised by the World Future Council Foundation, in cooperation with the Energy Commission of Ghana. It brought together representatives from utilities, regulators, industry and civil society from ten African countries who are determined to expand their cooperation under the umbrella of the African Renewable Energy Alliance (AREA).

In addition, the Africa-EU Energy Partnership (AEEP) and the EU, together with the African Union , recently launched a 10 year Renewable Energy Cooperation Programme (RECP), and announced a planned contribution of €5 million to start the programme. It includes proposal for:

* Building 10,000 MW of new hydropower facilities;

* Building at least 5,000 MW of wind power;

* Building 500 MW of solar energy

*Tripling the capacity of other renewables

* Raising energy efficiency in Africa in all sectors.

Some of these targets mat be rather low, but slowly practical projects are getting going, with solar PV and micro-hydro already quite widely used across Africa, being joined by wind power, so far mainly in the North- for example Morocco’ s Power utility ONE is building a 200 MW wind farm outside Tarfaya while Egypt is planning a 1GW offshore wind farm in the Gulf of Suez, and 7.2GW of wind by 2020. In addition to several CSP projects in the North (Morocco has just commissioned 22 MW hybrid gas/CSP unit, and Egypt is nearing completion of a €250m 150MW hybrid unit near Cairo) and the various renewable energy projects in South Africa, there is also progress elsewhere.

For example, Kenya , which has an installed energy capacity of about 1.3GW, currently gets over 60% of it from hydro. However climate change has made this erratic. Renewable Energy World reported that ‘the Kenyan government has recently re-evaluated its power policies and is now encouraging the use of renewable energy for both industrial and domestic use. It is not only offering incentives to companies to invest in renewable energy production, but it is also leading the way in a planned $8 billion capital injection into renewable energy generation’.

It’s claimed that Kenya has the potential to install over 2GW of renewable electricity capacity over the next 3 years under the green energy initiative led by the government, including about 800 MW of wind, and 500MW of geothermal, along with biomass and municipal solid waste.

KenGen has set up a 5.1MW wind farm in Ngong on the southern outskirts of Nairobi, and plans to erect a second 10 MW wind farm in the area. The African Development Bank has pumped over $400m into what at 300MW is set to be Africas biggest wind farm in - to be built in the northern frontier district of Turkana. According to the Nairobi- based UN Environment Programme, Kenya has potential for up to 3GW of wind, especially in the north. And Geothermal is another interesting option. Keyna’s long term geothermal potential is put at 7GW.The government has allocated $137.5m in fiscal year 2010/ 2011 towards the development of geothermal.

So, in countries like Keyna, the technology is there and some funding is flowing. But how all this will pan out politically, there and elsewhere, remains to be seen. In the past much of the input came from companies like BP who launched PV solar deployment projects, but more recently have retired from the field. Money inevitably is a key issue and, with that, come problems of political control. Much as anywhere else.

Wednesday, September 1, 2010

Green Jobs

Towards Decent Work in a Sustainable, Low-Carbon World
UN Environment Programme

‘Economic activity and employment depend in fundamental ways on avoiding continued resource depletion and safeguarding ecosystems and ecological services. If action on urgent environmental problems, especially countering climate change, is not taken, many jobs could be lost to resource depletion, biodiversity loss, increasing disasters, and other disruptions. On the other hand, environmental policies not only protect existing jobs against these threats, but also stimulate new businesses and job creation’. So says this new UNEP report.

It takes a look at all the options for new and continued but sustainable jobs, but notes that ‘With regard to both nuclear power and coal, continued heavy investments may draw critical resources (R&D, investment capital, as well as scientists, engineers, and technicians) away from the pursuit of alternatives such as renewable energy and greater energy efficiency’. And so it focusses mainly on renewables.

It says ‘Renewable energy sources are expanding rapidly. We estimate current employment at about 2.3 million jobs worldwide. Given incomplete data, this is in all likelihood a conservative figure. The wind power industry employs some 300,000 people, the solar PV sector an estimated 170,000, and the solar thermal industry more than 600,000, many of the latter in China.’ Overall China had nearly 1 million working in the sector, followed by the USA and about 450,000 and Germany at around 260,000, in 2006/7.

However it notes that ‘about half of all present renewables jobs are found in the biofuels industry’ and ‘there are rising doubts about the environmental benefits and economic impacts of at least some types of biofuels. In addition, the bulk of biofuels jobs are found at sugarcane and palm oil plantations, where wages are low, working conditions often extremely poor, and worker rights at least in some cases suppressed. Many of these jobs can hardly be described as good or decent employment’.

The report stresses the need for ‘ just transition’ that avoid problems like this and it is not too keen on market competition as a means of promoting rapid development of sustainable approaches. It also points to issues of training and skill development, noting that ‘in many OECD countries, deindustrialization and offshoring of manufacturing have created a situation where companies in the fledgling green economy are struggling to find workers with the skills needed’ and in the developing world there are even more problems of skill gaps. But it says ‘In just two or three decades the entire global economy will need to be well on the way to being low-carbon and sustainable. The historical circumstances therefore demand that bold measures be taken to both expand the green economy and grow green jobs at a much faster pace in the developed world, and to ensure that the same process begins in earnest in the developing countries’.

Overall then, despite the problems, it is hopeful. Longer term it concludes that ‘Renewable energy is poised for continued expansion, and may generate more than 8 million jobs in wind and solar alone over the next two decades. If most or all new buildings were constructed according to higher efficiency standards, it would revolutionize the construction industry. Many additional green jobs can be created through extensive weatherization and retrofitting of existing buildings.’ Perhaps less convincingly it claims that ‘Similar change is possible in agriculture—switching the bulk of the world’s farming to organic and sustainable methods’.

For the EU, it notes that the MITRE modelling exercise ‘found that under current policies, there would be about 950,000 direct and indirect full-time jobs by 2010 and 1.4 million by 2020. These are “net” numbers—taking into account potential job losses in conventional energy and relating to renewables support mechanisms, which may result in lower spending elsewhere in the economy. Under an “Advanced Renewable Strategy,” there could be 1.7 million net jobs by 2010 and 2.5 million by 2020. These results are actually quite conservative in the sense that they cover employment just within the smaller EU-15 (i.e., before expansion), and exclude jobs supported by renewables exports to other countries. About 60–70 percent of the jobs would be in renewables industries (primarily biofuels and biomass processing and wind power), the remainder in agriculture. An analysis by skill level indicates that skilled jobs account for about a third of net employment growth’.

See MITRE project site,

The UNEP report:

The prospects for job growth do look good. In the UK the government has been talking of 70,000 jobs form the offshore wind energy programme by 2020 and perhaps 60,000 from wave and tidal programmes by 2030. We could do better than that. I’ve been working on a Campaign against Climate Change report on ‘Climate Jobs’, making that case. A revised version of their ‘1 million Climate Change jobs now!’ booklet should be out soon. See

Sunday, August 1, 2010

Green Cuts and Delays

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thursday, July 1, 2010

CSP/Supergrid politics

The €400billion Desertec ‘energy from the deserts’ initiative was launched last year as a feasibility study by a group of large German energy companies and banks keen to install large Concentrating Solar Power (CSP) arrays in desert areas and transmit some of the power back to the EU by undersea High Voltage Direct Current supergrids. But although the launch attracted a lot of media attention, it seems to have backfired slightly- some of the North African countries who would be the likely hosts to CSP projects felt they had not been sufficiently consulted, according to Bernhard Brand, writing in Sun and Wind Energy 5/20/10. He noted that, while the Desertec group was trying to widen its membership with, for example, the inclusion of some Moroccan and Algerian companies, industrial based initiatives were likely to come into conflict with regional political sensitivities. In which case, you might think that political initiatives would be more successful. However, he reported that the Union of the Meds parallel Solar Med project was somewhat ‘stuck in the sand’- of diplomatic and bureaucratic wranglings. He suggested that within the N African/Middle East context, the most likely movement will be from companies which are controlled by powerful (usually Royal) families.

Sun and Wind also carried an interview with the leading Egyptian renewable energy supporter Prof. Amin Mobarak and others who are involved with a Masters course run jointly by the Universities of Kassel and Cairo, aiming to help local people to get on top of the technical and political issues. One point that emerged was that the use of CSP for the desalination of water might be more important locally than electricity production. In addition, electricity demand was rising rapidly in the region, so there might not actually be that much spare for the EU! However, electricity prices were was often subsidised locally (e.g. in Egypt) for social policy reasons, and that would be hard to change. So, initially at least, the relatively high price of CSP power might mean that it could only realistically be sold abroad. It was also pointed out that wind power was much cheaper, and was seen as the most promising option for the moment- the Desertec group has indicated that it will include wind projects.

Desertec is not the only player however. Transgreen is a French led supergrid project being developed as part of the Mediterranean Union’s Solar Med programme, which includes proposals for installing 20 Gigawatts (GW) of renewables by 2020, using a mix of technologies: around 6GW of wind, 5.5GW of CSP and nearly 1GW of PV solar in North Africa and the Middle east. And to link it up the Mediterranean Union has proposed a 'Mediterranean Ring' - a grid system linking up countries around the Med, including power from CSP in North Africa/the Middle East being transmitted to the EU via HVDC links under the sea. That’s where Transgreen comes in. It might be seen as a rival to the German-led Desertec project, given that Transgreen’s aim is it seems to bring together power companies, network operators and high-tension equipment makers under the leadership of French energy giant EDF. But the idea seems to be that Transgreen will just deliver part of the energy generated by the Desertec CSP projects to the EU- and there is already some overlapping membership. A €5m study phase is underway.

The energy potential for CSP is huge- there is a lot of desert! And the technology exists and its economics and performance is improving. So CSP could become a large-scale reality. And EU commissioner recently said that the first power could arrive in the EU in 5 years. But, as can be seen, it could be that institutional and political issues will be the main problem for CSP, as the big EU companies line up to develop this vast new resource and local interests begin to negotiate terms for access and control. So it may take time to reach any scale: despite talk of $400bn, at present the Desertec initiative is only just a concept- not yet a formally funded project, although some independent CSP projects are already underway e.g. in Egypt, Jordon Algeria and Morocco, which could become part of it. A 470 Megawatt (MW) hybrid solar/ gas fired unit, with 22 MW of CSP, has just been started up in Morocco, Egypt is nearing completion of a €250m 150MW hybrid unit near Cairo, while the UAE has plans for 1000MW CSP unit.

A fully integrated CSP/supergrid scheme- there’s talk to 200 GW (200,000MW) or more eventually - could offer benefits to all in terms of a major source of green energy, plus, locally, fresh water, jobs and income, but it also opens up range of new- and old- geopolitical and development issues. Not least who gets the power, and at what cost, and who gets the profits.

For more on renewable energy policy and developments see

Tuesday, June 1, 2010

Getting real on renewables

Much is often made of how China is pushing ahead with nuclear power - that has been used to justify the UK doing the same. China currently gets about 2% of is electricity from nuclear, and it plans to double that to 4% by 2020. Given that China’s energy use is very large, that’s a massive expansion. But what’s rarely noted is that renewables are being expanded very much more rapidly. They produced nearly 8 times more electricity in 2009 than nuclear - 540TWh from of renewables, including large hydro but excluding small projects, as against 70TWh from nuclear. And there are ambitious plans for expansion, which will continue and possibly extend that imbalance. The 11th Five-year Plan of the Development of Renewable Energy stipulated that 15% of primary energy consumption should be supplied from non-fossil energy sources by 2020, with renewables expected to generate 12-13% of the total energy supply, and that may well be raised to a 20% non-fossil target.

So the real story is that China is going renewable, with a little side bet on nuclear. It has already installed 25 Gigawatts (GW) of wind power capacity, on a par with the one-time wind leader Germany, and it expects to have 150 GW of wind capacity in place by 2020. That’s about the same as the EU might expect to get at some point in the future from a massive and full expansion of the offshore wind resource in the North Sea . Large hydro is of course the big source currently in China (the 2009 hydro total was 197GW), but, in addition to wind on and offshore, it is pushing ahead with less environmentally problematic small hydro, with a 2020 target of 75GW. And it’s also now launched a wave power programme- with a proposal being mooted for 10GW of coastal installations.

The EU is often seen as being big on renewables, and the potential is clearly large- several recent studies have suggested that the EU could get 100% of its electricity from renewables by 2050 and maybe even 100% of its total energy. But progress is slow, and the reality is that China may become the global leader- although the USA is also in the race. The US now has 35GW of wind plant in place- hardly surprisingly, since wind is now the cheapest source on the grid in many states. It’s also now given the go ahead to its first offshore wind farm. Obama has said that ‘the country that harnesses the power of the clean, renewable energy will lead the 21st century’. The race is on, with at stake not only the climate, but also huge potential employment and economic gains.

For its part the UK is still floundering about. Labour’s 40GW offshore wind target will still presumably be retained by the new coalition, but if we are still left with just the Renewables Obligation /ROC system to support it, there is no certainty it will be achieved. Before the election, the Lib Dems called for an expanded Feed In Tariff, so did the Tories, who also talked of abandoning the RO. But the coalition agreement simply alludes to ‘the full establishment of feed-in tariff systems in electricity- as well as the maintenance of banded ROCs’. So the RO stays.

The coalition agreement also, notoriously, said that Lib Dem MP’s must abstain when it comes to a vote of nuclear power. It seems they have been all but neutered on this issue. That tragically leaves just the Green Party and the SNP to fight that corner. But at least there is a commitment to ‘increase the target for energy from renewable sources, subject to the advice of the Climate Change Committee’.

That’s a step beyond what Labour was proposing, although most of the other energy policy commitments were similar to those that had already been made by the Labour government- backing CCS, marine energy, biomass AD and a green investment fund.

In other areas there were obviously some environmental gains, notably the abandonment of the third Heathrow runway, but the stitch up on nuclear is a major step backwards. The coalition says that there will be no public subsidies for nuclear. That of course is exactly the same as Labours promise. But the coalition agreement also makes a commitment to the ‘provision of a floor price for carbon, as well as efforts to persuade the EU to move towards full auctioning of ETS permits’. That will mean that electricity prices might rise, making nuclear look more economic – in effect an indirect subsidy paid for by consumers, but with the taxpayer having to step in if the carbon price falls. True this could also help renewables, but, with nuclear being strongly favoured, we are likely see increasing competition for public and private resources, with the expansion of renewables suffering as a result.

For more:

Saturday, May 1, 2010

All change?

The election is upon us. In terms of environmental politics, is there anything to choose between the reds and the blues – and the rest?

While of course there are many other key policy issues, their positions on renewables are significant. Both Labour and Tories profess strong support. As a litmus test of green orientation, a survey, carried out by ComRes for RenewableUK, the wind and marine energy trade body, found that only 7 per cent of the Tory candidates agreed strongly with the statement “expansion of onshore wind [farms] is essential if the UK is to deliver on its renewable energy targets”. The statement was strongly supported by 44 per cent of Labour candidates and 71 per cent of Liberal Democrat candidates. A total of 54 per cent of Conservative hopefuls, but no Labour candidates, disagreed with the statement. Among Liberal Democrats, 14 per cent disagreed.

Labour has a quite strong programme of renewable energy support- nowhere near enough of course and based still on competitive market principles via the lamentable Renewables Obligation/ROC trading system. Nevertheless it has managed to attract promises of inward investment from companies like Siemens, GE, and Mitsubishi, which should create several thousand new jobs soon in what could be an expanding offshore wind energy industry.

But Labour also has an increasing commitment to nuclear power, which somehow it says is going to expand without direct subsidies. There was talk of adjusting the carbon market to make nuclear economics look better, but maintaining a ‘floor price’ for carbon could require taxpayer back up- a subsidy. In practice though they don’t actually seem to mind too much about subsidies as long as they are very indirect- they offered an £80m loan to help a Sheffield steel company to link into the nuclear supply chain, and £20m for a ‘Nuclear Centre of Excellence’ along with ‘up to £15m’ for a ‘Nuclear Advanced Manufacturing Research Centre’.

In the run up to the election, the Conservatives published a new energy policy statement- ‘Rebuilding Security’ which similarly backed renewables and nuclear. It’s not clear just how much they actually will support renewables- many Tories are part of the anti wind lobby. However they do seem keen on marine renewables. Britain ‘ruling the waves’ may figure somewhere here, even if in reality it will mainly be Scotland, and the SNP is big on that!

Like Labour, the Tories say they will not provide any direct cash for nuclear. Even so, they want nuclear to expand rapidly- and like Labour saw a floor price for carbon as one way ahead. Or perhaps a revision of Labours Climate Change Levy on large energy users - converting it to a new energy supplier tax. Depending on how it was done that might put electricity prices up by 18%.

In the pre-election ‘wash up’ Labour just managed to squeeze through another levy- to support Carbon Capture and Storage projects. That could also put electricity bills up. So will its new Feed In Tariff system for small renewable projects – DECC admits it will cost consumers £3.1 billion to 2020 for a 2% increase in renewables. Bills will rise even more if the Tories carry out their plan to replace Labours expensive Renewables Obligation with an expanded Feed In Tariff system for all new renewables. A FiT may well be the best way forward (it will be cheaper than the RO), but the commitment to it, and the other Levys, seems to indicate that stealth taxes are still all the rage on both sides of the old political divide! Not much to choose between them then overall.

However there are supposedly going to be new allegedly more open and efficient political processes shaping our energy and environmental future. Labour has introduced the Infrastructure Planning Commission to over large projects. But that seems far from being a move towards more democratic approach, leaving an open goal for the Tories, who launched a planning green paper ‘Open Source Planning’ with proposals for getting neighbourhoods involved in planning decisions in order to encourage sustainable development via a system with a basic national framework of planning priorities and policies, within which local people and local government can produce ‘their own distinctive local policies’. IPC as such would be abolished, though it seems something similar would be retained for some large projects- a Major Infrastructure Unit.

So, single issues like Heathrow apart (and that has to be put alongside the Tories liaison with climate change deniers in Europe), there doesn’t seem much to choose between them in the end in this area either.

So we are left with rhetoric about democracy, but not much sign of the actual thing –or many real choices. While the Tories talk vacuously of ‘people power’, David Miliband, in an article in SERA’s New Ground, said that the ‘language of social responsibility cannot deliver the substance of national action- it is simply not enough to implore greater responsibility from individuals for problems that need organised collective action’. Fair enough, but, although he accepted that ‘our conception of politics has too often been based on active government and not enough on active citizens’ he pointed to the idea of ‘personal, tradable carbon allowances’ to produce new greener consumer behaviours. So more social control from above…

What about the others? The Lib Dems, coming on strong, says £3.1 billion of public spending will be used to create 100,000 green jobs and help Britain take its first step towards being a zero-carbon nation by 2050, with a target of 40% of UK electricity to come from "clean, non-carbon emitting sources" by 2020, rising to 100% by 2050 . They would ‘will increase the feed-in tariff to provide a 10% return on investment. We have also set out an eco-cashback scheme for the first year of government that will allow people to apply for £400 if they opt for microgeneration’. And they will ‘block any new coal-fiired power stations unless they are accompanied by the highest levelof carbon capture and storage facilities’ and they ‘reject a new generation of nuclear power stations; based on the evidence nuclear is a far more expensive way of reducing carbon emissions than promoting energy conservation and renewable energy’. And they will ‘Abolish the Infrastructure Planning Commission and return decision making including housing targets, to local people. We will create a third-party right of appeal in cases where planning decisions against locally agreed plans’.

The Lib Dems are of course not alone in pushing green policies hard. So, naturally, does the Green Party, which like the Lib Dems - and the SNP- is strongly anti nuclear and aims to obtain around half of the UK's energy from renewable sources by 2020 and ensure that emissions from power generation are zero by 2030. The Greens promised a £44 billion investment programme, which would include £25 billion investment in renewable energy in order to reduce carbon emissions by 2020. "Our investment would mean that one million jobs could be created over the next five years." They presented themselves as ‘Leftwing plus’.

It’s going to be interesting to see how it all turns out. Some hope for a breakthrough from the Lib Dems and even the Greens, and perhaps also some of the other more radical grouping. That might leaven a hung parliament….even if it includes some UKIP and even BNP, both of whom seem to be in denial about climate change and measure to deal with it- except nuclear!

It is possible that something new and wonderful will emerge for the centre left/ centre right parliamentary stalemate that the UK seems to have reached, but extra-parliamentary campaigns seem increasingly more important- with the growing links between radical greens and trade union groups. The Climate Change Campaigns booklet ‘One Million Climate Change jobs now’, was good start, setting out some of the possibilities. There are certainly a lot of new political alliances being formed outside the old political system- at the grass roots. Whether they will bear fruit in terms of effective action remains to be seen.

Saturday, April 3, 2010

Renewable energy and the supergrid

Renewables are moving ahead rapidly around the world – despite the best efforts of those with vested interests in the old energy system. It no longer seems fanciful to talk of getting at least 50% of global energy from renewables source by 2050, or earlier: see

The next phase will see some major changes as the developers gets to grips with some of the problems of renewables. One of these is that many of the sources are variable- the sun doesn’t shine all the time and the winds vary. One solution to that is to link up projects over a wide geographical area using long distance power transmission grids. It’s usually windy somewhere in Europe, so wind farms there can help balance shortfalls elsewhere, while hydro plant reservoirs can be used to store excess power from the wind and other renewable sources- pumping water up hill ready to be used for electricity generation when needed some where else on the grid net. The wider spread the geographical distribution, the more effective is the balancing of local variations.

Long distance transmission, using High Voltage Direct Current grids, can avoid the large power losses associated with standard AC grids- you might only get 2% losses over 1000 km instead of 10%. That means the grid could reach as far as North Africa- were there is a huge solar resource. Already there a plans and projects underway for giant Concentrating Solar Power (‘CSP’) mirror arrays, and in the decades ahead CSP solar could well rival wind power as a major source. Projects are already underway or planned in Egypt, Morocco, Algeria, Jordan and elsewhere. See

The renewable resource

For the moment however wind is the dominant renewable and the resource especially offshore, is vast. Perhaps 150 Giga Watts (GW) of generating capacity could be installed in the north sea and linked up to the supergrid. There is already 65 GW of wind capacity on land around the EU, and that too will grow. To put it in perspective the UK has around 75 GW of total generation capacity.

The EU is supporting a supergid programme initially focused on the North Sea and on offshore wind, but it is likely to grow across Europe. But focusing just on the EU may be suboptimal. The really big on-land wind resources are further east. For example Kazakhstan is estimated to have a wind potential of 210 GW as well as huge hydro and geothermal resources. Turkey similarly. And Turkmenistan also has a large wind resources. In addition, there are also major wind potentials in W. Siberia (350GW) Mauritania (105 GW), and Southern Morocco, (120 GW) . See LowCostEuropElSup_revised_for_AKE_2006.pdf

It could be that in the decades ahead supergrid links will be made to link to some of these, as well as the CSP solar projects in the desert areas of North Africa and the Middle East. In which case a whole new energy geopolitics would emerge - no longer determined by oil and gas, which by then in any case will be seriously depleted.


Clearly the supergrid would take a major effort politically, not least in terms of getting way-leave across national boundaries and negotiating power management and system control arrangements. It would also open up some new geopolitical issues. The EU would still be partly reliant on imported energy, and there is the risk that EU companies would simply grab land for development.

Clearly there would have to be fair trade arrangements to avoid exploitation, and also protection for the EU against being cut off. But with a dedicated grid system linked to the EU, unlike with oil, which can be stored and shipped elsewhere, it is hard to see how there would be much opportunity for supply blackmail or major price speculation. Moreover, the EU would also presumably be trading in excess wind and hydro-power from the north, so it could be a two way, hopefully co-operative, arrangement.

There will of course be a need for negotiation over prices. That has already been an issue in relation to the export of excess power from Danish wind projects and the import, during low wind periods, of hydro power from Sweden and Norway. It is vital to capture the advantage of being able to balance variable renewable supplies across wide areas, and conventional competitive market trading may not reflect this. One way to avoid price conflicts might be to develop an EU-based Cross-Feed Tariff, possibly also providing extra support for a suppliers able to offer stored renewable power.

There is the risk that a supergrid programme, utilizing energy from remote sources, might provide EU countries with an excuse for not dealing with their emission problems and developing their own renewable sources. But the imports would only meet part of the EU's requirement for electricity, the bulk would still come from local/national renewable sources.

There are of course political issues flowing from the fact that one part of the EU’s current enthusiasm for such a system is because it could help enhance competition in a pan-EU energy market. This might undermine some of the regional market control enjoyed by the current main energy players. Some of the large utility companies and some countries do seem less than enthusiastic about the single energy market, and also the supergrid. An additional issue might be that the EC and national governments may well look to the large energy companies for at least some of the funding for such a programme, something that the companies may wish to avoid.


This review has focused so far on projects in and near the EU, but clearly the concepts have wider implications. It is interesting for example to see that the USA has plans for new grid systems to link up with renewables, with talk of an ‘Interstate Transmission Super Highway’. China too is building supergrid links to large but remote hydro projects.
With large inputs from wind, CSP and from other renewables like wave and tidal power linked in, we could see a move to major supergrids around the world, fed and balanced by a range of sources from a range locations. If we are to respond effectively to climate change and improve energy security, this looks like at least part of way ahead- as long as we can avoid exploitation of local populations. If a fair balance can be achieved the prize could be a new geopolitics- no longer would Middle East oil or Russian gas dominate EU energy policy. Instead some of the relatively poor countries on or near the periphery of the EU could benefit.

Monday, March 1, 2010

Forcing nuclear through

According to the government's national policy statement (NPS) on nuclear power, it is planned to store the irradiated spent nuclear fuel discharged from the 10 proposed new UK plants at the reactor sites for perhaps 160 years. So communities hosting new reactors would get a nuclear waste store too- and for a long time. For several generations after a reactor stopped operating, the site would de facto become a radioactive waste disposal site. In these circumstances it is essential that our nuclear regulators require that these nuclear stores be safe and, for example, to be protected from terrorist attack to at least the same degree of robustness as demanded for the reactors.

So you would think that this issue would be at the top of the agenda for the new Infrastructure Planning Commission (IPC) the government has set up to deal with large projects like nuclear plants - since it is what local people in particular will want to raise. Think again. Here is what the governments NPS says: "The Government is satisfied that effective arrangements will exist to manage and dispose of the waste that will be produced from new nuclear power stations. As a result the IPC need not consider this question." The draft Statement goes on to say that ‘Geological disposal will be preceded by safe and secure interim storage’.

So it’s sorted and the issue should not be raised with or by the IPC. Fortunately it’s only a draft NPS and this recommendation, and much else, has been widely challenged in the consultation responses. So hopefully it will revised. Then again the IPC may not survive- the Tories have pledged to abolish it, although it seems they will retain something similar for some large projects.

The IPC certainly isn’t popular- it’s seen as top-down, autocratic and designed to steam-roller through unpopular plans rapidly. CANE, Communities against Nuclear Expansion, said ‘At a time when public confidence in our political process is at an all time low, government have decided to take to themselves more power to override people's wishes’.

The NPS was also roundly attacked. FOE's executive director, Andy Atkins, said: ‘The government's draft national planning statements on energy are fundamentally flawed. The consultation was insufficient, the alternatives were inadequately explored, and the policies are poorly justified’.

The Nuclear Consultation Group of leading academics submitted evidence to a Select Committee looking at the NPS proposals, concluding that, overall, the nuclear NPS was ‘unfit for the purpose of providing a framework within which the IPC can take fair, balanced and measured decisions on the location of new nuclear power stations’. The NPS appeared to be ‘confusing, tendentious, vague and poorly integrated’ and ‘a highly elaborate exercise to achieve premature legitimation for a predetermined policy, namely, the rapid deployment of new nuclear power stations.’

The Sustainable Energy Partnership (SEP), which I brings together nearly all environmental and fuel poverty NGOs and relevant trade groups, including ACE, AECB, BWEA, CPRE, CHPA, FoE, Green Party, Greenpeace, Micropower Council, NEA, PV-UK, PRASEG, RSPB, REA, SERA, Solar Century, WWF-UK, commented: ‘It defies common sense to approve a massive [nuclear] building programme to achieve the long term objectives of energy policy without a proper assessment of the future long term need for electricity and with a flawed process of assessing the medium term capacity need. This is no way to run a strategy. It means either that the government has taken leave of its senses and behaved completely irrationally; or that there has been, for some time, a hidden agenda: that the government decided a long while ago to build more nuclear power stations, regardless of any evidence of need. Whichever of the above scenarios is correct means that the government's current consultation is a sham and that the policy itself is, to say the least, of questionable legality’.

SEP notes that, there’s no proof to back up the rather weak assertion in the NPS that ‘by 2050 the UK may need to produce more electricity than today’. In fact the 2008 Nuclear White Paper says that, given attention to energy efficiency, by 2050, total electricity demand could ‘remain at roughly today's levels despite the UK's GDP being three times larger than it is today’. What the NPS does, say SEP, is to assert that ‘under central assumptions there will be a need for approximately 60GW of new capacity by 2025’- and then quotes a Redpoint study as the source for this. But Redpoints study simply looked at how ‘a goal of achieving around 28%-29% of electricity from renewables by 2020’ might be achieved, not at how or whether we could generate enough electricity without nuclear to meet demand.

The government is evidently aware that the longer term rationale for nuclear is a little weak (to put it mildly) and has commissioned a review of energy policy issues and options up to 2050- with it seems a ‘2050 Roadmap’ to be published along with the next Budget. Maybe, looking that far ahead, they will have some idea where the waste will go long term!

Monday, February 1, 2010

Climate Conflicts

The outcome of the UN Framework Convention on Climate Change 'COP 15' climate negotiations at Copenhagen in December was pretty thin, with no agreements on emission reduction targets. A very general ‘Copenhagen Accord’ was produced by the US, China, India, Brazil and South Africa, none of whom currently face legally binding emissions reduction targets under the existing Kyoto Protocol. Some developing countries objected to it- including Venezuala. Certainly it has only weak links to the main focus of the UNFCCC negotiations on a post-Kyoto agreement- and UNFCCC members simply ‘noted’ the Accord. Some blamed the US for what is widely seen as a weak outcome - but China was also a target. But apologists for the unilateral ‘Accord’ said that at least it was something to show for all the COP 15 efforts. And that it was something of a triumph for Obama to get China on board. Others however saw the fault line being between those who wanted a continued Kyoto type legal targets approach (including the EU and some developing countries) and those, like the US and China, who wanted the freedom to develop their own national plans within a loose Accord. This conflict won’t go away. It will no doubt resurface at the intermediary meeting in Bonn in June, and at COP 16 in Mexico City in December.

Meanwhile, under the terms of the Accord, UNFCC member countries were asked to submit national plans for emission reductions via mitigation actions by the end of January. Crucially, it seems that a proposed exclusion of nuclear projects from national mitigation plans was removed from the texts. So, the use of nuclear energy could be included in the list of mitigation actions to be sent to the UNFCCC. That too could lead to conflict. But then the January deadline was abandoned, so the whole thing seems to have gone in to (presumably only temporary) free fall.

Conflict have already emerged in relation to France’s attempt to introduce a carbon tax. Announced last year, it was aimed to cover all transport/household fuel use, but not electricity, and has been seen as possible template for other national programmes . It would be phased in gradually, starting at around 17 €/tonne of CO2, adding about 4 cents per litre to the cost of petrol and a 5% rise to the price of household gas. But it would be 'tax neutral'- with the revenue from it being returned via tax concessions. It would apply to all homes and enterprises, but not to the heavy industries and power firms included in the EU-ETS.

The left felt the proposal would be ‘unjust’ and ‘inefficient’- a flat levy on fuel would hit low-income families, especially those in out-of-town areas who have no choice but to use cars, without helping clean alternatives. Segolene Royal said it would be better to ‘tax oil and energy companies based on the profits they make from fossil fuels’ and invest in electric cars.

The draft plan called for a levy of 32 €/tonne of CO2 emitted, rising to 100 €/tonne in 2030. That would add 0.077€ to the cost of one litre of unleaded fuel. Home heating costs would rise by 60-170 € p.a, depending on the type of building and method used. 50% of homes would see bills for transport and heating jump by ~ €300p.a. But to avoid a consumer backlash, the government said the levy would start at €17.

Former Socialist prime minister Michel Rocard, who headed the bipartisan panel that drafted the plans, admitted that ‘there is a real risk of social injustice.’ He added that the key issue facing the government was ‘how do we redistribute the money to people in a way that changes their behaviour, but without harming their overall spending power.’

Although painful, a 17 € tax wouldn't have much impact on consumer behaviour. Pascal Husting, the head of Greenpeace France, said excluding electricity and starting the tax at such a low rate meant ‘it would change absolutely nothing in terms of behaviour’ nor encourage energy saving or renewable energy. Over two thirds of the public were said to oppose the idea.

It was meant to start on 1st January, but has been blocked by a legal dispute.

Carbon taxes have their detractors: carbon emissions are hard to verify and quantify. Energy taxes are usually seen as easier, since energy is a familiar traded commodity which is easier to measure and value: as one quip has it, "if you want to keep a donkey healthy you don't regulate what comes out of it: you regulate what goes in".

But at what point should an energy tax be applied? If it is levied on all energy users, it can get very bureaucratic. It’s simpler to focus on just the energy generation companies and let them pass extra costs on to the rest, in their prices. In fact that would also work for a carbon tax since its easier to identify the fuels used /emissions produced by a few companies than by millions of energy consumers. But this ‘upstream’ approach means challenging the power companies head on, and some argue that individual consumer taxes have more of an educative value- making people more aware of their energy consumption.

One thing seems certain, we are going to pay more for energy in future. The only uncertainty is who we will pay, and how much. So far most of the energy companies have made very large profits from energy price rises. There is strong case for using taxes, including possibly a one-off windfall tax, to claw some of that back, for ‘hypotheticated’ re-investment in more efficient green energy technology. The private sector says that’s what it does with its profits, but in reality they often seem chary of taking risks with new technology. Could governments do better? Would a hypothecated tax, clearly devote to clean energy development, be more popular than tinkering with tax neutral systems to try to maintain consumer buying power?

Sources: Times, Guardian, BBC, AFP

Friday, January 1, 2010

Green protectionism?

During the battle over the closure of its wind turbine blade manufacturing plant on the Isle of White, Vestas told the Guardian (7/8/09) that UK turbine manufacturers were at a disadvantage compared with those in countries that insist that their windfarms use locally made components. In China, for example, at least 80% of components used must be made locally. In Spain and Portugal, windfarm developers must show how many jobs they will create by sourcing supplies locally in order to get planning approval for their projects. Vestas said “There is a strong political will in most countries to favour local manufacturers.”

However there are also arguments against ‘local content’ rules. Essentially they are protectionist- which is seen by some as undesirable since it limits open markets. Ontario’s new Feed-In Tariff for PV solar projects, which provides 44.3-80.2 cents/kWh for PV solar depending on size, includes a requirement that grid-connected solar projects must involve a minimum amount of ‘local content’: small rooftop PV must have 40% local content as a combination of labour and equipment, larger systems 50%. And in two years time that will rise to 60 %. The aim is to boost local employment. This has caused a stir in Germany, where PV manufacturers say Canada is breaching its obligations to the World Trade Organization. Germany’s solar-industries association, BSW-Solar, has protested against what it calls Ontario’s ‘local protectionism.’ It says ‘The actions taken in Ontario directly contravene Canada’s international trade commitments and place foreign solar equipment makers at a serious competitive disadvantage’. Ontario officials however say that ‘the domestic content rules have been developed in a way that welcomes investment from outside Ontario, because only a portion of the costs are required to be spent in Ontario’. See:

But is protectionism so bad? Are free markets so wonderful? Purely economic protection might be seen a too parochial and partisan- just defending local interest- but if the net impact is to create more projects and reduce more emissions, then globally surely that is to be preferred? It all depends on whether you think that open market competition is progressive and efficient, or whether you believe that it’s simply about profits- strengthening the dominant players and weakening rivals.

The evidence from the renewable energy field seems pretty clear. Competitive systems like the UK Renewable Obligation (RO) have been far less successful at building renewables capacity than fixed price Feed-In Tariffs (FITs): Germany now has round 25 Gigawatts of wind capacity in place, whereas the UK only has achieved just over 4GW so far- with some of that being offshore and supported by capital grants. And perversely the RO has cost consumers more: the UK’s ROC system cost consumers 3.2 pence/kilowatt hour, whereas in 2006 the German Feed-In Tariff only cost consumers 2.6/p/kWh- despite Germany having a much bigger wind capacity in areas with generally much less wind than in the UK, and also supporting the installation of a lot more very expensive PV solar capacity.

There is also the question of renewables such as PV being very much cheaper to produce in developing countries, such as China, due to manufacturing costs being so low. This had undoubtedly led to greater uptake of PV in developed countries as many individual consumers have voted with their wallets and bought the cheapest ‘green’ technology available. But this ‘market’ freedom has environmental and human costs, such as a non-regulated wages, no health and safety culture and possible environmental pollution in the production cycle. The same might be said of some biofuels grown, for Western vehicles to use, in the developing world. That booming market has deepened some local environmental problems.

That is not to say competitive markets can’t play some role- for example they can sometimes provide incentives for innovation. But innovation has hardly been stifled under FITs: Germany has developed a lot of novel wind and PV technologies and built major new expanding industries, whereas that can hardy be said if the UK- while we still have a research base (just!), we have no major renewable energy technology manufacturing plants and have to import technology from countries like Germany. Maybe a bit of green protectionism wouldn’t be amiss, although really what would make more sense is a FIT for all renewables, not just the tiny one planned for small scale projects. Then the UK might take a lead and win some exports as well.