Thursday, September 1, 2011

Greening the UK

Can the UK become a power-house for the green industrial revolution? The potential is there- the offshore wind, wave and tidal resource could if fully harnessed supply six times our electricity needs. But the government is relying mainly on inward investment to try to get offshore wind turbine manufacturing going in the NE and Scotland. That's a bit dicey- the US company Clipper wind has just pulled out of the giant 10MW Britannia Turbine project that was to be based in Newcastle. But Siemens, Vestas, GE, Gamesa are still planning major offshore wind turbine manufacturing investments in the UK.

The government has set up a series of new Enterprise Zones, with reduced planning controls and lowered business rates to help. Building on that, Hull is developing a 'Humber Estuary Renewable Energy Super Cluster' fussing on offshore wind turbine manufacturing. But this is all just good old fashioned regional business support policy, backed by cash strapped local councils, desperate for jobs, with very little money coming from central government. The government is more lenient about supporting nuclear (while saying there will be no state funding!). That's what the radical new Electricity Market Reforms are all about, via its new proposed market-led variable price 'Contract for a Difference ' (CfD) Feed In Tariff (which is not really a FiT at all). In the end it’s the consumers who will pay.

Some see the greening of the UK coming from the bottom up. But smaller scale stuff just took a big hit- the government has imposed savage up to 72% cuts to the existing (Labour government initiated) 'Clean Energy Cashback' (CeC) Feed In Tariff , for PV solar projects over 50kW. When the CEC was first introduced, it had a project capacity limit of 5MW- higher than some had envisaged. DECC explained ‘We want to give ourselves a bit more flexibility... to include projects like schools, hospitals and community schemes’. But now the effective ceiling is 50kW for PV. So no more community scale projects. That really is a preliminary to switching over to the CfD, which seems designed mainly to help big projects and especially nuclear. More FiT cuts are likely- the last Budget called for £40m to be shaved off it. In energy terms the CeC FiT is marginal stuff (it’s only expected to deliver 2% of UK electricity by 2020), but locally may be worth fighting.

Overall though the governments approach is all about spending less- and getting us all to expect less from the state- and also do more for ourselves and others in the wonderful new Big Society. So the emphasis is increasingly on personal action, and low cost 'nudges’, rather than politically sensitive financial or other aggressive measures aimed at changing consumer (or company) behaviour. Or on investment in new clean technology.

The Cabinet Office has just published a study of 'Behaviour Changes and Energy Use' which reviews 'ways that do not require a new legislative initiative or spending programme'. My favourite example of that was a New Zealand government campaign which included the use of the slogan: 'If you sing in the shower, choose shorter songs'.

Some of this may be useful for reducing demand, but some might feel that what we are seeing is an attempt to reform peoples behaviour and expectations so as to fit in with the 'needs' of an unregulated profit-led market and whatever technologies it happens to favour. Shale Gas is the latest, which may even replace nuclear, which may be looking a bit problematic to investors, as of course do most renewables. Apart perhaps from genetically modified advanced biofuels for cars and aircraft, and maybe a bit of wind power to run overnight-charged electric cars. As well as a few micro-generators flogged direct to consumers.

To be fair that is one area where the government does seem to be stepping in with real money, via the grant-aided Renewable Heat Incentive. But one of the main domestic micro-gen options they seem to be keen on is heat pumps, which could be because they would use excess overnight electricity from the nuclear plants the government is also still keen on.

Some of this may be seen as green, but otherwise we seem to be a long way from a sustainable energy future or a new industrial revolution.