Friday, May 25, 2007

The Energy White Paper - a snail responds to an emergency

There's a feeling of deja vu about this.

We've been here before - twice in the last four years.

And still the Government refuses to take the bold decisions it needs to take to embrace the potential of mid and long term future renewable technologies, making the country a dynamic world leader in tidal, marine current, off-shore wind, wave, heatpump, CHP, solar water heating and other generators.

Significant investment (say, the amount spent on the wars in Iraq and Afghanistan) now in these would leapfrog us into the claimed twin goals of energy security and climate protection.

The government also refuses to outlaw high-energy-consuming behaviour, instead wanting to tinker round the edges.

Britain will need around 30-35GW of new electricity generating capacity (about one-third of existing capacity) as coal and nuclear plants retire over the next two decades, with around two-thirds of that needed by 2020.

The UK government's new energy strategy, said Alistair Darling, paves the way for a mandatory, auction-based carbon trading scheme for businesses, such as banks, supermarkets and central government departments.

It also promises, again, an end to fuel poverty, more renewable energy, technologies to bury heat-trapping gases and the possible expansion of nuclear power.

"I am quite clear in my mind that it is important that we have a mix of energy supply ... that we don't become overly dependent on imported gas," Alistair Darling told MPs.

Below I summarise some of the many policies signalled in the document, with its many accompanying downloads, that include the various consultations, whose deadlines begin half way through August. I also detail some reactions.

Demand management

Carbon Emission Reduction Target

This scheme will build on the Energy Efficiency Commitment (EEC) - a requirement on energy suppliers to bring real savings to their customers by encouraging prudent energy use. EEC2 (2005–2008) deliveed carbon savings of 0.50 MtC/y. The Carbon Emission Reduction Target (CERT) is expected to deliver 1.143 MtC/y and run until 2011. Ofgem and energy suppliers should prepare for its start in April next year. The carbon savings to be attributed to each energy efficiency measure allowed under CERT have already been published.
The government is continuing to investigate the feasibility of personal carbon allowances, and will develop further ways of educating consumers about energy efficiency.

Carbon Reduction Commitment

A UK mandatory cap and trade scheme, the Carbon Reduction Commitment (CRC), will secure savings of 1.2 Mega-Tonnnes of carbon per year by 2020. The Climate Change Bill will be used to introduce this. Under it, as many as 5,000 large firms and public sector organisations could be allowed to buy EU ETS allowances. Last year's energy review broached emission trading for large energy users not included in the EU ETS. Last winter's consultation showed that business supports the idea. CRC allowances will be issued to participants via an auction process. It will only affect organisations whose mandatory half hourly metered electricity consumption is over 6000 MWh per year. CRC will be revenue neutral to the Exchequer. The auction revenue will be recycled to participants by means of annual payments proportional to average annual emissions since the start of the scheme, with a bonus/penalty depending on how successfully they reduce emissions.

Smart meters

The Energy Demand Research Project, co-funded by the Government and industry, will involve several thousand households receiving meters displaying real-time energy use from 2008 to 2010. There is a consultation on the idea that energy suppliers will give all business users advanced and smart metering services within the next 5 years. This will not apply to the smallest business users, nor to larger businesses with half hourly meters. In addition all business premises will be required to have an Energy Performance Certificate when they are built, sold or rented out. This will describe its energy ratings and the steps to be taken to improve its performance.

Consumer electronics

The Market Transformation Programme is consulting on how the performance of energy using products will need to improve between now and 2020, including proposals for product standards and targets to phase out the least efficient products. An online calculator is to be developed which could be used by retailers and manufacturers to test if their products will meet the Government’s standards (e.g. for stand-by power and energy efficiency). It could be used to examine the scope for changing specifications or sales volumes to improve their carbon footprint and help retailers and manufacturers tell Government about their achievements and plans.


A Low Carbon Transport Innovation Strategy backed by funding of £20m is to be made available for public procurement of low carbon vehicles. A £30m R&D ‘Innovation Platform’ and a further £5m for the Energy Technologies Institute is intended to stimulate the developoment of low carbon transport.


The government already has an aim to deliver new zero carbon homes but the real challenge lies in the existing housing stock. For example, seven million solid-walled homes in the UK are technically difficult to insulate. A new 5–7 year research programme - the Technology Strategy Board's Innovation Platform on Low Impact Buildings - will look at cost-effective solutions for both by financing R&D into clear innovation gaps and building on existing work, such as the EST’s Best Practice Programme and microgeneration field trials.

Supply strategies

Nuclear new build

There is a key point in the discussion on nuclear power where it says that the Government has modelled different future scenarios as part of the Energy White Paper. "The modelling indicates that it might be possible under certain assumptions, to reduce the UK’s carbon emissions by 60% by 2050 without new nuclear power stations." However, it says, "if we were to plan on this basis, we would be in danger of not meeting our policy goals" of security of supply and cost-effectively reducing carbon emissions.
The choice is therefore to be made on economic grounds alone. However, the economics of nuclear are calculated as making sense with a price for carbon of at least €36 per tonne. Is this feasible? Perhaps: in May investment bank UBS said it thought the price will reach €30 in 2008.
A number of sites for new power stations are proposed in the south of England including Brighton and Oxford. This was inevitable after the new Scottish Assembly ruled out nuclear power stations in Scotland.
As for the nuclear waste legacy resulting from new build, a report from the NRA published with the White Paper estimates a required increase in the country's nuclear waste storage needs of half as much again.
The go-ahead for a new generation of nuclear power plants to replace the 18% of electric power the old ones provide, required by 2023, includes a consultation on how applications should be made. The accompanying proposed planning regime changes announced by Ruth Kelly are intended to speed up the planning permissions process.
None of this guarantees the building of a single new power station however.


The Renewables Obliation (RO) system and requirements to be put on energy utilities would triple electricity from renewables such as wind and tidal wave to 15% by 2015. This compares to the European Union target to get 20% of its energy (not just electricity) from renewable sources by 2020.
The RO will be banded to provide differentiated levels of support for different technologies and modified to maintain ROC (certificate) prices if they become oversupplied - but this won't take effect until 1 April 2009 at the earliest. A consultation is now on to determine what technologies (PV, CHP, biomass, etc.) should receive exactly what level of support.
The national grid will continue to be developed to accommodate new renewable and distributed generators.
Tidal power could in theory eventually yield a significant proportion of the UK's electricity needs. The Sustainable Development Commission (SDC) is currently investigating this and after it has reported in September the Government will decide on its strategy.

Local energy

To encourage more local or decentralised low-carbon electricity, the DTI and Ofgem will consult later this year on options for more flexible market and licensing arrangements within the licensed framework to be implemented by the end of 2008. The paper says all six major energy suppliers have now committed to publishing easily accessible export tariffs so installers will know how much they will get for the electricity they sell back to the grid. A new Distributed Energy Unit is being set up within the DTI to monitor the development of markets for these technologies.


There are few measures to support more sustainable heating, other than to publicise more widely the benefits of combined heat and power, and the biomass strategy.


The new Biomass Strategy sets out to stablise this emerging new fuel sector, and tease apart the many types of fuel and technologies to determine what level of suport is required for each. It looks at co-firing and the sustainability of biomass, including a requirement on larger generators to report on the source and sustainability of the biomass they incinerate.
Energy-from-waste is the most cost-efficient, but apart from this, the most cost effective options are small to medium commercial/industrial boilers operating throughout the year (80% load) on wood chips or, less cheaply, pellets.
It is currently cheaper to use biomass to heat buildings than convert it into a fuel for transport, so the consultation document looks towards second generation technologies to make biodiesel and bioethanol more competitively priced. At present imported sources for both biofuels are cheaper than those made from UK crops but have a higher carbon footprint.

Carbon capture

Details of a plan to build the world's first end-to-end carbon capture and storage (CCS) plant are also provided. The 300 megawatt plant is expected to be commissioned after 2011. Alistair Darling told MPs that Britain was at the forefront of CCS technology and that he foresees major export potential. After publication of the plan BP withdrew from bidding to build a CCS plant at a North Sea former oil well because the timescale had slipped too far. The grant award competition will start next November, but had previously been scheduled for March.


French power giant EDF welcomed the White Paper and said it and the world's largest maker of nuclear reactors, Areva, would ask British authorities to certify the latest "EPR" reactor.

Greenpeace director John Sauven commented: "Reaching for nuclear power to fight climate change is like an obese person taking up smoking to lose weight" and worried that finance for nuclear would distract from R&D for new renewable technologies. He continued: "The government had a good plan in 2003 which they failed to deliver on. Now they want to waste even more time and energy on nuclear power, a wasteful energy system of the past."

Last February the High Court found that the public consultation leading up to this White Paper was flawed. John Sauven said: "It appears the government has not learned from the verbal lashing it got in the High Court. Already Tony Blair has said the policy will not change."
The Energy Institute (EI), the leading professional membership body for energy professionals, welcomed the announcements on new metering, carbon capture and storage and energy efficiency but worrried about whether the UK had sufficient skill levels to meet the challenge.

Fuel poverty charity Energy Action Scotland thought the new meters "will not be sufficient, but that truly ‘smart meters’ are required which can be recalibrated and read remotely, thus avoiding the delays that can lead to debt build-up".

BWEA worried that the Government lacked sufficient conviction to turn its ‘aspiration’ to gain 20% of our power from renewables by 2020 into a firm target. It pointed out that, given the small amounts of heating and transport currently satisfied by renewables, the electricity target will need to go beyond 20%, "the only resource that can take us significantly beyond 20% is... offshore wind".

The Conservative Party said the White Paper "offers nothing definite on nuclear or anything else. It heralds the collapse of carbon capture, while continuing an irrational regime for carbon penalties and incentives. It provides little or no prospect of hitting renewables targets and it does not offer the security that the country so urgently needs."
The response from business however was concern about the 'energy gap' in eight years, between 2015 and 2020 when nuclear power stations start closing. "Time is against us if we are to avoid power shortages," CBI Director General Richard Lambert said.

However, it takes around 13 years to commission a new nuclear power station. "The White Paper suggests the government understands what is needed to avoid this energy crunch. The real test now will be delivering these proposals," Lambert concluded.

There is no clear evidence that private sector finance will be on offer for nuclear industry that needs huge initial investment, even if it can later generate power at relatively low cost. The mid-term energy future is still uncertain.

How to take part

A series of meetings will be held, advertised on the DTI website. The invited public will be demographically representative of the UK population through direct approaches to random homes on selected electoral registers. NGOs, industry, local authorities and many other organisations will be invited to send representatives to meetings to explore their views. The documents are on the following web sites:
> The Energy White Paper
> The nuclear consultation
> Consultation on consumer electronics standards

No comments: