Sunday, March 1, 2015

The Election: green energy issues

At the start of this election year, not to be outdone, RenewableUK (RUK)  produced its own Manifesto. It said that, by 2020 ‘wind should be meeting a quarter of the UK’s electricity need’ and that ‘by 2050 there is the potential for 50% of the UK’s power to come from offshore wind alone, depending on the development of an interconnected grid’.  It suggested that up to 20% of UK electricity could come from wave and tidal by 2050.  So, if fully achieved, that’s 70% in total by then, even leaving aside solar, biomass, hydro, and geothermal. Overall, RUK noted that, in the Committee on Climate Change’s projections, wind doubles or triples between 2020 and 2030 and wave/tidal expand 20 times. Why not? At least that. And more after.  If the political will is there.

On that issue, RUK said that a poll had found that  61% of Conservative voters, 72% of Labour and 79% of Lib Dems backed wind, as did (surprisingly) most UKIP voters.
A good pitch!

To push things on RUK said that whoever was in power needed to ‘set a clear path for investors by setting a 2030 decarbonisation target, with an accompanying extension of the Levy Control Framework, and an indication of how different technologies will play their part. The strongest signal of all would be a 2030 renewables target.’ Continued support was also needed for technological innovation to get costs down e.g. for offshore wind.

The cost of all this would certainly be a central political issue. While the right has made much of the alleged major impact of supporting renewables and the electricity market reforms, Ofgem said Feed-In Tariff related cost were £14m in 2010-11, £151m in 2011-12 and £506 m in 2012-13. And, looking at the Electricity Market Reform overall, DECC said ‘household electricity bills will on average be £41 (or 6%) lower per year over the period 2014-2030 under EMR compared to meeting the Government’s objectives with existing policies. For businesses, bills are expected to be 7-8% lower’.

However not everyone has been convinced by claims like this. The FT carried an energy policy Blog saying: ‘deals which guarantee index linked prices - from a starting point way above the current wholesale price for 15, 20 or in the case of new nuclear for 35 years are indefensible. Each element of the system should be competitive, with performance incentives, which allow suppliers and consumers a share of the benefits if the providers succeed in bringing costs and prices down. EMR should be scrapped and a review process created to come up with the details of a better scheme which can be implemented once the election is over.’

By contrast, Matthew Knight, director of strategy at Siemens UK Energy, told an energy fringe meeting at last years Labour Party Conference: ‘The UK is better off to the tune of 1.5% of GDP if it follows the decarbonisation path rather than doing nothing. It’s just a myth that this is all hopelessly expensive.’ And RUK pointed to local benefits:  ‘on average a wind farm contributes £100,000 per installed MW to the local community’, soa typical wind farm with five 2MW turbines represents a £1m investment in the local area through employment, contracts and community benefits over its lifetime’

Taking a very different line, earlier this year, former environment secretary Owen Paterson launched an attack against the ‘wicked green blob,’ and its climate views at the Conservative party conference: ‘There has not been a temperature increase now for probably 18 years, some people say 26 years’ UKIP meanwhile said it wanted to repeal the Climate Change Act and shrink the Dept. of Energy and Climate Change!

The nuclear issue may yet rise up the electoral agenda. In the euro election last year, the Lib Dems didn’t mention their  (U-turn) support for nuclear within the Con Dem coalition, Labour was and is also all for it, so is UKIP, and very hostile to renewables, leaving just the Green Party as the only pro-renewables anti-nuclear party, apart from the SNP in Scotland. The Trade Unions are mostly still backing nuclear, with employment being a key attraction, and jobs could well be an issue in the election. But that cuts both ways. RUK says that in 2013 the wind, wave and tidal employed 18,465 people directly and from the left, the Campaign against Climate Change trade union group has a new edition of its ‘1 million climate jobs’ booklet: 

With the impact of cheap oil and local resistance to dodgy shale gas also now on the agenda, the scene is set for some interesting exchanges. The EU will inevitably be central. In the Euro-election last year, the Conservative party outlined what it saw as its achievements in relation to the EU, including: halting EU attempts to ban further offshore oil and gas drilling, stopping EU attempts to over-regulate the UK’s emerging shale gas industry, and ensuring that the proposed 2030 renewable energy target is non-binding on individual EU countries. All very negative.

So what will be in the election manifesto’s for May? An on-land wind freeze from the Tories? They have indicated as much and it would appease those with anti-wind farm view in the shires.  Support for green gas from Labour? Labour’s energy spokesperson Caroline Flint has baked gas grid upgrades for green gas injection, so as to continue to provide heating, which she said would cost much less than for the electrification of the heating systems in the UK. The current government plan is to do that via electric powered heat pumps, which she said would need an electricity transmission and distribution system four times its current size.

Community energy is also a new political focus for nearly all the parties, most obviously the Greens. However, the Labour linked Co-operative Party wants German styled local ownership and mainstream Labour is also evidently keen on it:

Meanwhile, in its recent report on the development of UK energy networks, reflecting views from at least one part of the current coalition, DECC has been talking lyrically about a future in which ‘consumers will become active players in the energy system’ and in which ‘our electricity mix will no longer be dominated by a small number of large generators.’ DECC said it expected to see ‘a growth in the deployment of generation at the local level, where generation and heating can be delivered through a more integrated system which will also deliver storage’

In particular it said ‘increasingly, communities will come together to manage their energy needs locally, building their own generation, managing their energy use to maximise the use of locally produced electricity and using revenues to invest in energy efficiency and local amenities. This will enable communities and other smaller players in the market to establish local markets where they buy and sell their own energy and become increasingly self-sufficient’

All this is of course a long way from reality. As the problems and delays with the smart meter roll out programme have indicated, there are major implementation issues and there are also some institutional and legal problems facing community energy projects. The Financial Conduct Authority has changed the rules under which new energy co-ops can be established:   
And the Treasury has also cut access to tax breaks for some co-ops:

It is also hard to see how this all decentralisation fits in with DECC and the government’s love affair with large inflexible centralised nuclear plants. That commitment would no doubt remain unchanged under a Labour-led administration. It seems to be locked in place in establishment thinking. For example, DECC’s 2050 Pathways Team Leader, Katherine Randall, recently told the Lords Select Committee on Science and Technology that ‘while it is possible, technically ... to generate a pathway that does not use nuclear’, it is not desirable, because excluding nuclear would put significantly more pressure on supply and the use of other technologies, some of which, such as CCS, are unproven. It would, she told them, also require ‘a great deal more effort ... on the demand side’ which has so far proven to be difficult and a ‘significant effort on balancing’ the supply of electricity in the system.

So while on one hand DECC, and by implication the government, seems to have signed up to the decentralist green dream, it is also still locked into the exact opposite. Or does that just reflect a conflict between the LibDem and Tory parts of the coalition? One thing seems certain, the election will split it further. Though, with support for the Greens apparently growing, what that will mean in terms of new coalition options is anyones guess.