The new proposal from the Treasury to tax companies that introduce fossil fuels into the UK economy, which is at the heart of the current consultation on UK energy policy, has come under attack – by a group proposing that fuel supplier sales are controlled – but by a permit scheme that benefits the public, not the Treasury.
Under the Treasury's proposals, a single pensioner's fuel bill could rise by between 16% and 35% in 2020. Critics say that to compensate people for such bill increases, the cash should instead go to households.
The criticism comes from a group advocating Cap and Share, a policy measure which the Irish Government was giving consideration to trialling before that country's fiscal crisis. They call Cap and Share "a simple solution to climate change that is easy and relatively cheap to implement and puts cash in the hands of every citizen".
Just as with the Treasury's new proposal, Cap and Share argues that it's easier to cut down on the fossil fuels entering the economy than for each citizen to cut their individual use, and they think the 255 companies responsible should therefore pay for the right to pollute.
If they can be made to buy permits, as under the EU Emissions Trading Scheme, and the government issues only sufficient permits to match the country’s target CO2 emissions, reducing them year on year, this provides the cap.
The 'Share' part of 'Cap and Share' entails that all households would each receive an equal share of the permits which they may then sell to the fossil fuel companies. This would put cash in their pockets to compensate them for higher energy prices.
In other words the proceeds of the Fossil Fuel Levy - at a projected average £30/tCO2 - would come to households, not the Treasury.
Richard Douthwaite (author of The Growth Illu$ion: How Economic Growth Has Enriched the Few, Impoverished the Many and Endangered the Planet) says that Cap and Share is based on the Commons principle, and assumes that everyone has an equal share in the atmosphere.
As the Carbon Trust knows from experience, the most popular and successful climate-friendly policies are those which also save or give businesses and householders money.
By contrast, explains Cap and Share spokesperson Brian Davey, the EU Emissions Trading Scheme has seen allowances to pollute - carbon credits - given away to the big greenhouse gas-emitting companies, which they have been able to sell on and generate profits for themselves. In the case of the energy companies, they have also posted huge profits.
Davey and Douthwaite believe that on the other hand, if this benefit were split between every adult in the country, it would be both fair and popular.
Davey said, "With the perception that most climate change legislation is punitive and restricting freedom fuelling wider public scepticism of climate change, such a move by the Government could help swing public opinion back to favour the green economy."
Davey argues that the Treasury's proposal has not been thought through in its relationship to the EU ETS. "It is being made due to the failure of the ETS to provide sufficient stable incentives for the development of renewables. It's not just the low price of carbon but its volatility and unpredictability.
"However the criticism of the EU-ETS is muted and fudged. The result is that the proposal is to impose the scheme in addition to the ETS, but the interaction effects on an unreformed ETS are likely to be counterproductive.
"It is admitted in the Treasury document that the new scheme would likely lead to a fall in the demand for ETS permits and thus a fall in the ETS price but the implications of this are glossed over (in paragraph 5.24)," he continued. "Put bluntly, wWithout tackling the ETS, a rise in the UK carbon price may be matched by an offsetting fall in the European carbon price. What is needed is a revisit of the whole EU-ETS, which has been a complete disaster".
Thursday, December 23, 2010
Carbon tax to hit electricity generators
A second effective 'carbon tax' is to be levied - in addition to the Carbon Reduction Commitment for large electricity users - this time targeting all companies that import fossil fuels into the economy.
The proposal, together with various ideas as to the level of the tax, comes in two linked consultations being conducted by the Treasury and DECC in a search for policies that will stimulate the investment necessary to meet the targets set by the Climate Change Committee (CCC) and others for de-carbonising the economy and reducing overall greenhouse gas emissions.
The specific CCC target is a reduction in carbon-intensity of power generation to below 100gCO2/kWh by 2030. In 2009 this figure was around 490gCO2/kWh.
Ofgem has estimated that to achieve such a drastic reduction in nineteen years implies the investment of around £200bn in new generation, electricity networks and gas infrastructure.
Only reform of the electricity market can deliver this, DECC says. The consultation argues that such reform must include support for the price of carbon - the creation of a floor price - to provide long-term certainty for investors around the additional cost of running polluting plant.
This is an admission of the failure of the EU-ETS (Emissions Trading Scheme) to deliver this support so far. Currently the price of carbon is remaining stubbornly below 15 Euros, and needs to be at least double this to stimulate investment. It is also volatile and unpredictable.
Supporting the price of carbon
The proposals state that from 1 April 2013 a 'carbon price support mechanism' will be introduced by applying the climate change levy (CCL) to all fossil fuels used in electricity generation and taxing their use and, in the case of oil, removing rebates.
According to HM Revenue and Customs, there are 255 of these companies, which break down as follows:
Energy product No. of registered suppliers
Electricity: 117
Gas: 71
Solid fuels: 36
LPG: 31
The Treasury says that the exact rates for the tax will take account of the commodities’ average carbon content and will be known as the ‘CCL carbon price support rates’. The consultations discuss different levels - from £20/tCO2 to £50/tCO2, with the preferred rate being £30/tCO2.
According to the Treasury's own reckoning, the only scenario that leads to the required carbon-intensity of power generation by 2030 is a carbon price support starting at £3/tCO2 on top of the prevailing EU ETS price in 2013, rising to target a combined carbon price (support plus EU ETS) of £40/tCO2 in 2020 and £70/tCO2 in 2030.
However this scenario also results in the highest rise in domestic energy bills. A single pensioner's bill would rise by 35% in 2020, compared to 16% if the starting support price was £1/tCO2, rising to £30/tCO2 in 2020. Adopting that scenario, however, leads to a carbon-intensity drop to only about 120gmCO2/kWh.
Other policies
DECC, in a linked consultation about the best policy context for the tax, offers four scenarios, of which it prefers a combined set of policy tools that include contracts for difference and carbon price support plus Emissions Performance Standards and a capacity mechanism. One reason for this is that "the [cash] flows from government to generators would be lower than without carbon price support."
An Emissions Performance Standard (EPS) would limit how much carbon the most carbon intensive power stations - coal - can emit, and encourage carbon capture and storage.
Long-term contracts for feed-in tariffs, a revised Renewables Obligation, much more low-carbon generation, and demand-management strategies also figure in the consultation as collectively being necessary to secure the targets.
Capacity payments would be introduced to encourage security of supply through the construction of flexible reserve plants, a policy which acknowledges the intermittent and inflexible nature of much low-carbon generation.
"The key factor in the effectiveness of the policy is the reaction of potential investors, and whether the mechanism is “bankable” for the purposes of raising finance for new low-carbon generation investments," says DECC.
The proposal, together with various ideas as to the level of the tax, comes in two linked consultations being conducted by the Treasury and DECC in a search for policies that will stimulate the investment necessary to meet the targets set by the Climate Change Committee (CCC) and others for de-carbonising the economy and reducing overall greenhouse gas emissions.
The specific CCC target is a reduction in carbon-intensity of power generation to below 100gCO2/kWh by 2030. In 2009 this figure was around 490gCO2/kWh.
Ofgem has estimated that to achieve such a drastic reduction in nineteen years implies the investment of around £200bn in new generation, electricity networks and gas infrastructure.
Only reform of the electricity market can deliver this, DECC says. The consultation argues that such reform must include support for the price of carbon - the creation of a floor price - to provide long-term certainty for investors around the additional cost of running polluting plant.
This is an admission of the failure of the EU-ETS (Emissions Trading Scheme) to deliver this support so far. Currently the price of carbon is remaining stubbornly below 15 Euros, and needs to be at least double this to stimulate investment. It is also volatile and unpredictable.
Supporting the price of carbon
The proposals state that from 1 April 2013 a 'carbon price support mechanism' will be introduced by applying the climate change levy (CCL) to all fossil fuels used in electricity generation and taxing their use and, in the case of oil, removing rebates.
According to HM Revenue and Customs, there are 255 of these companies, which break down as follows:
Energy product No. of registered suppliers
Electricity: 117
Gas: 71
Solid fuels: 36
LPG: 31
The Treasury says that the exact rates for the tax will take account of the commodities’ average carbon content and will be known as the ‘CCL carbon price support rates’. The consultations discuss different levels - from £20/tCO2 to £50/tCO2, with the preferred rate being £30/tCO2.
According to the Treasury's own reckoning, the only scenario that leads to the required carbon-intensity of power generation by 2030 is a carbon price support starting at £3/tCO2 on top of the prevailing EU ETS price in 2013, rising to target a combined carbon price (support plus EU ETS) of £40/tCO2 in 2020 and £70/tCO2 in 2030.
However this scenario also results in the highest rise in domestic energy bills. A single pensioner's bill would rise by 35% in 2020, compared to 16% if the starting support price was £1/tCO2, rising to £30/tCO2 in 2020. Adopting that scenario, however, leads to a carbon-intensity drop to only about 120gmCO2/kWh.
Other policies
DECC, in a linked consultation about the best policy context for the tax, offers four scenarios, of which it prefers a combined set of policy tools that include contracts for difference and carbon price support plus Emissions Performance Standards and a capacity mechanism. One reason for this is that "the [cash] flows from government to generators would be lower than without carbon price support."
An Emissions Performance Standard (EPS) would limit how much carbon the most carbon intensive power stations - coal - can emit, and encourage carbon capture and storage.
Long-term contracts for feed-in tariffs, a revised Renewables Obligation, much more low-carbon generation, and demand-management strategies also figure in the consultation as collectively being necessary to secure the targets.
Capacity payments would be introduced to encourage security of supply through the construction of flexible reserve plants, a policy which acknowledges the intermittent and inflexible nature of much low-carbon generation.
"The key factor in the effectiveness of the policy is the reaction of potential investors, and whether the mechanism is “bankable” for the purposes of raising finance for new low-carbon generation investments," says DECC.
Saturday, December 18, 2010
Government removes 2.8 million from fuel poverty - by redefining it
The Government is proposing to change the definition of eligibility to its Warm Front scheme - which provides help to those on benefits in leaky homes - which will slash by 65% the number of households it has to help.
The Scheme - which has been so badly run that it is now temporarily closed to new applicants while it catches up with the backlog - aims to target those who need it most, such as the ill, elderly, and those with children on receipt of certain benefits.
The new proposals for eligibility introduce a thermal efficiency test for the home under which households can access Warm Front assistance only if they have a SAP rating of 55. Recipients would also need to be eligible for Cold Weather Payments - which means not just receiving Child Tax Credit (with an income of less than £16,040), as at present, but an award of Child Tax Credit that also includes an element for a disabled, or severely disabled, child or young person, or a child under the age of five.
Currently some 4.3 million households in England could qualify for assistance from Warm Front, of which 53% are believed to be fuel poor. But applying the new criteria would reduce the number to approximately 1.5 million households.
At a stroke, many households on low incomes with children will become ineligible for support. We also know that applying a benefits criteria to fuel poverty is problematic: an English House Condition Survey found that 57% of vulnerable households in fuel poverty do not claim the relevant benefits to qualify for the scheme, so would be ineligible despite needing help.
SAP - "Standard Assessment Procedure" - is a measure of how warm a building is, and the lower the number, the harder it is to heat. 100 is the most efficient. SAPs are related to Energy Performance Certificates (EPC) - a result below 55 will yield an 'E' rated certificate.
A SAP target of 65 to be achieved “wherever practicable” has been used in Warm Front since June 2005 (in Scotland the target figure is 60), so using a figure of 55 would capture fewer homes than before – another way for the Government to dodge its responsibilities.
One reason why this change is regressive is because the fuel prices used in the SAP calculation are normally fixed for 3 to 4 years. With the volatility in prices recently seen, this could mean that a home could need help when prices rise, without being considered eligible.
Another problem is that simply by installing a condensing boiler, 47 SAP points can be added - and a box ticked - but this measure alone would do nothing to improve insulation or remove draughts.
The Warm Front Scheme was criticised last year by the National Audit Office for being inefficient, and not well targeted. It said that over 635,000 households were helped between June 2005 and March 2008, "but as there were 1.9 million vulnerable households in 2006, this rate of progress will still leave many in fuel poverty in 2010".
Warm Front has experienced extremely high demand and diminishing budgets. In 2008-9, the last year for which statistics are yet available, the figure for homes helped was 233,594, down from 268,900 the previous year. Next year will see a reduction of 63,594 homes – 27% down - on an already very low figure.
Earlier this year, therefore, the House of Commons Energy and Climate Change Committee recommended that "the Government to move resources away from the Warm Front Scheme towards a CESP-style, street-by-street approach as advocated earlier, and for the Warm Front Scheme to move towards providing an emergency service for the most vulnerable people in fuel poverty with urgent heating needs."
This proposed change is part of the Government's response to this recommendation, as is the new Warm Home Discount, under which, from April next year, energy companies will be required to give a discount on energy bills to more of their most vulnerable customers.
But these proposed new criteria have more to do with reducing Government spending than providing proper help to those who need it most.
The Scheme - which has been so badly run that it is now temporarily closed to new applicants while it catches up with the backlog - aims to target those who need it most, such as the ill, elderly, and those with children on receipt of certain benefits.
The new proposals for eligibility introduce a thermal efficiency test for the home under which households can access Warm Front assistance only if they have a SAP rating of 55. Recipients would also need to be eligible for Cold Weather Payments - which means not just receiving Child Tax Credit (with an income of less than £16,040), as at present, but an award of Child Tax Credit that also includes an element for a disabled, or severely disabled, child or young person, or a child under the age of five.
Currently some 4.3 million households in England could qualify for assistance from Warm Front, of which 53% are believed to be fuel poor. But applying the new criteria would reduce the number to approximately 1.5 million households.
At a stroke, many households on low incomes with children will become ineligible for support. We also know that applying a benefits criteria to fuel poverty is problematic: an English House Condition Survey found that 57% of vulnerable households in fuel poverty do not claim the relevant benefits to qualify for the scheme, so would be ineligible despite needing help.
SAP - "Standard Assessment Procedure" - is a measure of how warm a building is, and the lower the number, the harder it is to heat. 100 is the most efficient. SAPs are related to Energy Performance Certificates (EPC) - a result below 55 will yield an 'E' rated certificate.
A SAP target of 65 to be achieved “wherever practicable” has been used in Warm Front since June 2005 (in Scotland the target figure is 60), so using a figure of 55 would capture fewer homes than before – another way for the Government to dodge its responsibilities.
One reason why this change is regressive is because the fuel prices used in the SAP calculation are normally fixed for 3 to 4 years. With the volatility in prices recently seen, this could mean that a home could need help when prices rise, without being considered eligible.
Another problem is that simply by installing a condensing boiler, 47 SAP points can be added - and a box ticked - but this measure alone would do nothing to improve insulation or remove draughts.
The Warm Front Scheme was criticised last year by the National Audit Office for being inefficient, and not well targeted. It said that over 635,000 households were helped between June 2005 and March 2008, "but as there were 1.9 million vulnerable households in 2006, this rate of progress will still leave many in fuel poverty in 2010".
Warm Front has experienced extremely high demand and diminishing budgets. In 2008-9, the last year for which statistics are yet available, the figure for homes helped was 233,594, down from 268,900 the previous year. Next year will see a reduction of 63,594 homes – 27% down - on an already very low figure.
Earlier this year, therefore, the House of Commons Energy and Climate Change Committee recommended that "the Government to move resources away from the Warm Front Scheme towards a CESP-style, street-by-street approach as advocated earlier, and for the Warm Front Scheme to move towards providing an emergency service for the most vulnerable people in fuel poverty with urgent heating needs."
This proposed change is part of the Government's response to this recommendation, as is the new Warm Home Discount, under which, from April next year, energy companies will be required to give a discount on energy bills to more of their most vulnerable customers.
But these proposed new criteria have more to do with reducing Government spending than providing proper help to those who need it most.
Monday, December 13, 2010
Emissions credits surplus means developed countries need do nothing
Was Cancun a success? Well, countries, except brave Bolivia who dared to quote the science, did agree on something - which is an achievement of sorts.
But although progress was made on a number of issues to do with accounting for a nation's emissions and verifying their actions, none of the decisions made at Cancun are yet sufficient to lead to quantifiable changes.
According to Climate Action Tracker, which provides an independent peer-reviewed assessment of emission reduction proposals, the largest factors limiting emissions savings are:
Surplus emissions allowances
Countries will currently be able to sell and buy allowances originally meant for the period up to 2012 beyond that date. If so, this could mean that taken together, developed countries wouldn't need to do anything further to curb emissions until at least 2020. This would add about 3-9% relative to 1990 to the emission limits, and credits would still not be exhausted until 2025-2030.
Forests and land use
The options for accounting for the impact of a country's forests, land-based emissions, deforestation and reforestation are not finally agreed. By 2020 they could cause a nation's emissions to be 3% more than they would otherwise be relative to 1990.
Japan's get-out
Japan has a relatively ambitions 25% reduction target below 1990 by 2020, but it is likely to be met by offsetting in developing countries. As these actions would be counted by those countries, this would mean double-accounting.
American inaction
There's scant chance of federal greenhouse gas legislation in the USA. This means their 2050 target is unlikely to be met. Double counting of offsets is a problem for America and its partners too.
The gap between hope and action
With business carrying on as at present, global emissions by 2020 will be 56 billion tonnes CO2equiv/year. To limit warming to 2°C or 1.5°C, they would need to be in the range of 44-40 billion tonnes by 2020, a reduction of 22-29%, or 12-16 billion tonnes, at a rate of over two billion tonnes per year.
The promises made at Cancun lie in a range from low ambition to high. If the lowest were attained by 2020, there would be a reduction of just 3 billion tonnes, leading to an average global temperature raise that is highly unacceptable, of 3.2oC.
If the highest ambition targets were reached in 2020, this would only add another 1.3 billion tonnes of cuts, to 51.7 billion tonnes per year.
The gap is therefore between 8 and 12 billion tonnes per year in 2020.
How can the gap be closed?
The Climate Action Tracker has identified several options which would achieve more than enough to close the gap:
• The decision on how many emissions allowances could be carried over by nations after 2012 has yet to be taken. Therefor it is possible to eliminate new surplus emissions ‘built into’ 2020 reduction pledges; options for this are included in the negotiating text
• Remove crediting for forestry and land use that allow developed countries to increase their emissions
• Reduce international aviation and marine emissions up to half of the projected levels in 2020
• Increase ambition level of developed countries as a group - in line with the European Union's aspiration - to a 30% cut below 1990 in 2020 (without forestry credits)
• Ensure reductions of emissions in developing countries of 1.5 - 6.2 billion tonnes
• Halt deforestation by 2020.
Crucially, global long-term emission reductions are required as well: at least 50% below 1990 by 2050. The UK's Climate Change Committee advocated 60% last week. The Cancun climate conference did not include a goal for 2050.
But although progress was made on a number of issues to do with accounting for a nation's emissions and verifying their actions, none of the decisions made at Cancun are yet sufficient to lead to quantifiable changes.
According to Climate Action Tracker, which provides an independent peer-reviewed assessment of emission reduction proposals, the largest factors limiting emissions savings are:
Surplus emissions allowances
Countries will currently be able to sell and buy allowances originally meant for the period up to 2012 beyond that date. If so, this could mean that taken together, developed countries wouldn't need to do anything further to curb emissions until at least 2020. This would add about 3-9% relative to 1990 to the emission limits, and credits would still not be exhausted until 2025-2030.
Forests and land use
The options for accounting for the impact of a country's forests, land-based emissions, deforestation and reforestation are not finally agreed. By 2020 they could cause a nation's emissions to be 3% more than they would otherwise be relative to 1990.
Japan's get-out
Japan has a relatively ambitions 25% reduction target below 1990 by 2020, but it is likely to be met by offsetting in developing countries. As these actions would be counted by those countries, this would mean double-accounting.
American inaction
There's scant chance of federal greenhouse gas legislation in the USA. This means their 2050 target is unlikely to be met. Double counting of offsets is a problem for America and its partners too.
The gap between hope and action
With business carrying on as at present, global emissions by 2020 will be 56 billion tonnes CO2equiv/year. To limit warming to 2°C or 1.5°C, they would need to be in the range of 44-40 billion tonnes by 2020, a reduction of 22-29%, or 12-16 billion tonnes, at a rate of over two billion tonnes per year.
The promises made at Cancun lie in a range from low ambition to high. If the lowest were attained by 2020, there would be a reduction of just 3 billion tonnes, leading to an average global temperature raise that is highly unacceptable, of 3.2oC.
If the highest ambition targets were reached in 2020, this would only add another 1.3 billion tonnes of cuts, to 51.7 billion tonnes per year.
The gap is therefore between 8 and 12 billion tonnes per year in 2020.
How can the gap be closed?
The Climate Action Tracker has identified several options which would achieve more than enough to close the gap:
• The decision on how many emissions allowances could be carried over by nations after 2012 has yet to be taken. Therefor it is possible to eliminate new surplus emissions ‘built into’ 2020 reduction pledges; options for this are included in the negotiating text
• Remove crediting for forestry and land use that allow developed countries to increase their emissions
• Reduce international aviation and marine emissions up to half of the projected levels in 2020
• Increase ambition level of developed countries as a group - in line with the European Union's aspiration - to a 30% cut below 1990 in 2020 (without forestry credits)
• Ensure reductions of emissions in developing countries of 1.5 - 6.2 billion tonnes
• Halt deforestation by 2020.
Crucially, global long-term emission reductions are required as well: at least 50% below 1990 by 2050. The UK's Climate Change Committee advocated 60% last week. The Cancun climate conference did not include a goal for 2050.
Friday, December 10, 2010
Who's going to pay for new nuclear waste disposal?
The government has published a new consultation on the decommissioning of new nuclear power stations and what to do about all the new radioactive waste they'll create.
It specifies guidelines and principles for developers of new nuclear power stations in how to set up a Funded Decommissioning Programme. It underlines the principle that developers alone, not taxpayers, should pay for the decommissioning of plants and the storage and disposal of waste, which is covered under a separate consultation.
But the question is, will the cap on developers' costs be set high enough to avoid taxpayers one day footing some of the bill?
What does it cost now?
Existing nuclear waste is currently managed by the Nuclear Decommissioning Authority. Its 2010-11 budget is £2.8bn, of which £1.69 billion comes from the taxpayer via DECC. DECC's overall budget in this year is £2.9bn.
This means that the cost of managing existing radioactive waste is a staggering 58% of the Department's total expenditure. Because of its nature, this expenditure cannot, of course, be cut.
What will it cost in the future?
To avoid future waste adding to this bill, the Government says that a fund should be set up by developers to pay for new costs, and the consultations explain how the funds should be managed and what they should be used for.
The cost for each new power station is estimated to be about £1 billion. The question is, whether this estimate is sufficient, given the history of escalating costs in this area.
A parallel Waste Transfer Pricing Methodology explains how the cost of disposal will be determined, since the hypothetical (currently) Geological Disposal Facility has yet to be constructed. Rough costs for such a facility were estimated by the NDA a year ago, at around £20 billion, at current prices, but are dependent on the geology of the site.
The government expects that a cap will be set on the waste transfer price, but at a very high level - three times current cost estimates. But it's impossible to be certain that costs will not exceed this figure, so there will be an additional "risk free" to compensate the taxpayer for accepting this risk.
Companies interested in building new nuclear power stations have been lobbying the government furiously in an attempt to keep the cap amount down. But if the cap is set at the wrong level, the taxpayer will end up footing the extra bill.
The first plant is expected to be built by EDF and Centrica by 2018. However, on Tuesday, Alistair Philips-Davies, energy supply director at Scottish and Southern Energy, said he was now unsure whether this schedule could be maintained. "Often these things are a little bit more expensive than you think and come in a little bit later than you think," he told a committee of MPs, raising some wry smiles.
The current position held by the Committee on Radioactive Waste Management (CoRWM), which advises the government on this matter, is that "a range of issues, including social, political and ethical issues, arising from a deliberate decision to create additional wastes should be considered as an integral part of the new build public assessment process."
These issues are not covered in the consultation, however.
There is also a new consultation on the Strategy for the Management of Solid Low Level Radioactive Waste from the Non-Nuclear Industry in the United Kingdom. This includes waste from hospitals, the pharmaceutical sector, research and education establishments.
It specifies guidelines and principles for developers of new nuclear power stations in how to set up a Funded Decommissioning Programme. It underlines the principle that developers alone, not taxpayers, should pay for the decommissioning of plants and the storage and disposal of waste, which is covered under a separate consultation.
But the question is, will the cap on developers' costs be set high enough to avoid taxpayers one day footing some of the bill?
What does it cost now?
Existing nuclear waste is currently managed by the Nuclear Decommissioning Authority. Its 2010-11 budget is £2.8bn, of which £1.69 billion comes from the taxpayer via DECC. DECC's overall budget in this year is £2.9bn.
This means that the cost of managing existing radioactive waste is a staggering 58% of the Department's total expenditure. Because of its nature, this expenditure cannot, of course, be cut.
What will it cost in the future?
To avoid future waste adding to this bill, the Government says that a fund should be set up by developers to pay for new costs, and the consultations explain how the funds should be managed and what they should be used for.
The cost for each new power station is estimated to be about £1 billion. The question is, whether this estimate is sufficient, given the history of escalating costs in this area.
A parallel Waste Transfer Pricing Methodology explains how the cost of disposal will be determined, since the hypothetical (currently) Geological Disposal Facility has yet to be constructed. Rough costs for such a facility were estimated by the NDA a year ago, at around £20 billion, at current prices, but are dependent on the geology of the site.
The government expects that a cap will be set on the waste transfer price, but at a very high level - three times current cost estimates. But it's impossible to be certain that costs will not exceed this figure, so there will be an additional "risk free" to compensate the taxpayer for accepting this risk.
Companies interested in building new nuclear power stations have been lobbying the government furiously in an attempt to keep the cap amount down. But if the cap is set at the wrong level, the taxpayer will end up footing the extra bill.
The first plant is expected to be built by EDF and Centrica by 2018. However, on Tuesday, Alistair Philips-Davies, energy supply director at Scottish and Southern Energy, said he was now unsure whether this schedule could be maintained. "Often these things are a little bit more expensive than you think and come in a little bit later than you think," he told a committee of MPs, raising some wry smiles.
The current position held by the Committee on Radioactive Waste Management (CoRWM), which advises the government on this matter, is that "a range of issues, including social, political and ethical issues, arising from a deliberate decision to create additional wastes should be considered as an integral part of the new build public assessment process."
These issues are not covered in the consultation, however.
There is also a new consultation on the Strategy for the Management of Solid Low Level Radioactive Waste from the Non-Nuclear Industry in the United Kingdom. This includes waste from hospitals, the pharmaceutical sector, research and education establishments.
Monday, December 06, 2010
Environmental crime pays....
An article I wrote for BusinessGreen last week...
Is the government giving corporate criminals an easy ride?
Is the government giving corporate criminals an easy ride?
Wednesday, December 01, 2010
Loft and cavity wall insulation figures down
Figures have been released that show that the number of cavity wall and loft insulations in Great Britain is falling.
Cavity wall insulations in the last quarter fell from 128,000 to 95,000, a fall of 25%, and a staggering 45% below those installed in the same quarter last year.
Also, the number of professional loft installations fell by 32%, and is 38% below the number installed in the same quarter last year.
DECC has published the figures, which also show that at the start of July 2010:
• 12.3 million homes had loft insulation of at least 125mm
• 10.3 million homes had cavity wall insulation.
In Great Britain 23.2 million homes have lofts and 18.6 million have cavity walls. This means that 47% of eligible homes do not have sufficient loft insulation and 45% have no cavity wall insulation.
What the figures do not reveal is the level of effectiveness of the installations. Those which the author of this article has seen leave much to be required, i.e. gaps that mean that their ability to keep heat in is severely curtailed.
This implies that they cannot be relied upon to generate the carbon savings that will be assumed in government figures.
Moreover, the figure of 125mm for loft insulation is not sufficient. Current building regulations require a roof to have a thermal resistance U-value (a measure of their insulation value) of at least 0.13W/m2K, which would typically be achieved with 300mm of loft insulation.
DECC says that a threshold of 125mm is used in these statistics since homes with less than this would expect to see significant improvements in energy efficiency from a top-up.
It also says in its Departmental Business Plan 2011-15 that this measure will be one of its key impact indicators to track progress on insulating homes.
But if it really wants to show the scale of work required and monitor improvements, it should be using its own Building Regs figure of 300mm of loft insulation.
In addition, the width of cavities in walls varies considerably. Just because a wall has cavity insulation does not mean that it meets any building regulation requirements for thermal resistance of outer walls.
The figures are obtained via surveys from the English Housing Survey and equipment for Scotland, Wales and Northern Ireland.
Most of the statutory work has been carried out through the Carbon Emissions Reduction Target requirements. Only a small proportion has come from Warmfront, which targets the fuel poor. DIY loft insulation is currently done at around twice the rate of professional work.
Cavity wall insulations in the last quarter fell from 128,000 to 95,000, a fall of 25%, and a staggering 45% below those installed in the same quarter last year.
Also, the number of professional loft installations fell by 32%, and is 38% below the number installed in the same quarter last year.
DECC has published the figures, which also show that at the start of July 2010:
• 12.3 million homes had loft insulation of at least 125mm
• 10.3 million homes had cavity wall insulation.
In Great Britain 23.2 million homes have lofts and 18.6 million have cavity walls. This means that 47% of eligible homes do not have sufficient loft insulation and 45% have no cavity wall insulation.
What the figures do not reveal is the level of effectiveness of the installations. Those which the author of this article has seen leave much to be required, i.e. gaps that mean that their ability to keep heat in is severely curtailed.
This implies that they cannot be relied upon to generate the carbon savings that will be assumed in government figures.
Moreover, the figure of 125mm for loft insulation is not sufficient. Current building regulations require a roof to have a thermal resistance U-value (a measure of their insulation value) of at least 0.13W/m2K, which would typically be achieved with 300mm of loft insulation.
DECC says that a threshold of 125mm is used in these statistics since homes with less than this would expect to see significant improvements in energy efficiency from a top-up.
It also says in its Departmental Business Plan 2011-15 that this measure will be one of its key impact indicators to track progress on insulating homes.
But if it really wants to show the scale of work required and monitor improvements, it should be using its own Building Regs figure of 300mm of loft insulation.
In addition, the width of cavities in walls varies considerably. Just because a wall has cavity insulation does not mean that it meets any building regulation requirements for thermal resistance of outer walls.
The figures are obtained via surveys from the English Housing Survey and equipment for Scotland, Wales and Northern Ireland.
Most of the statutory work has been carried out through the Carbon Emissions Reduction Target requirements. Only a small proportion has come from Warmfront, which targets the fuel poor. DIY loft insulation is currently done at around twice the rate of professional work.
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