UK earns Euros 1bn from emissions trading as prices rise - & the Treasury won't spend it on green tech

The United Kingdom is making huge profits from its emissions trading under the ETS, but not ploughing the revenue back into green investment.

It has earned more than one billion euros from the auction of EU Allowances since its first auction in Phase II of the EU Emissions Trading Scheme (EU ETS) in November 2008, according to a report by carbon offsetting company Carbon Retirement.

Only Germany earns more from these auctions.

The revenue goes straight into the Treasury's general pool, and despite European Commission proposals that at least half of auction revenues should be used to help reduce greenhouse gases, develop renewable energies and clean technologies, and shift to low-emission forms of transport, the UK has so far refused to do so.

An attempt by the European Parliament to force EU member states to comply when passing the Aviation EU ETS directive was rejected by the EU Council of Ministers.

Revenues raised through allowance auctioning are set to rise dramatically in Phase III, with aviation joining the scheme in 2012 and additional greenhouse gases and manufacturing processes being covered from 2013.

At a carbon price of €15 per tonne, the UK stands to generate €328.5 million this year. Using Carbon Trust estimates of a price of €28 per tonne in 2013 and €39 per tonne in 2020, the UK would earn €32-64 billion over the eight years of Phase III.

Earmarking this revenue for green projects works well elsewhere in the EU. Germany currently earmarks €400 million of auction revenues annually, with €280 million set aside for national projects and €120 million for international projects. The report says other EU countries also earmark environmental taxes for various related initiatives.

Energy companies pass on the cost of carbon to their customers in the form of price rises, as their own profits soar. Carbon Retirement comments that as a result the most vulnerable members of society are being tipped into fuel poverty, and the trend is likely to continue.

“Earmarking revenues from EU Allowance auctions for subsidised community energy generation or energy efficiency in social housing would be a very sensible way of balancing out the potential adverse effect of the EU ETS on this group.”

The money could also be used to help finance the Government's proposed Green Investment Bank.

Unsexy renewable energy technology is turned on... and will one day beat solar and wind in the UK

It's not as sexy as solar power or controversial and high profile like wind power. But a 'new' form of renewable technology is going to take off this year – the first of a series of plants was commissioned this week – and eventually it will be better value for money, more reliable and even contribute more energy to the UK's needs.

Its developers are now urging the Government to match the level of support offered to other renewable energy technologies such as wind and solar, through Feed-in Tariffs.

What is it? Well, unpleasant as it sounds, it's anaerobic digestion (AD) and it is a multiple-win technology that is set to revolutionise waste processing and energy generation.

AD also helps to divert waste from landfill, and reduce air and water pollution. Byproducts include transport fuel and renewable sources of soil nutrients and manures. These processes will all additionally create new employment.

The Coalition Government also believes AD can help the UK meet its climate change objectives by reducing greenhouse gases from waste and producing energy - including renewable heat - without significant land use changes.

AD makes power from the methane generated by composting organic food, sewage and crop waste without oxygen being present. As these materials are in abundant and continuous supply, it is more reliable than wind and solar power.

The National Grid has said that it believes that within 20 years, half the gas in the grid could come from this source. The gas can be burnt to make electricity and used to power vehicles too.

Pioneer plant opens

One of the first anaerobic digestion projects funded through the Government’s Environmental Transformation Fund was officially opened on Thursday.

The plant, at Staples Vegetables in Boston, Lincolnshire, one of the biggest producers of vegetables in the UK, will produce 11 million kilowatt hours of electricity per year by processing 40,000 tonnes of unusable vegetables and waste.

The digestate (what's left over after the composting) from the Staples plant will replace artificial inorganic fertiliser (which creates emissions) and be better for the soil (because of the organic matter it contains), the heat will be captured for office heating, innovative heat absorption coolers will chill the processing areas, and the electricity generated will power the plant.

Vernon Read, Managing Director at Staples says there is an additional benefit: “The project is giving us control not only over future pricing of power, but also over power security.”

There are three more Government-supported AD facilities opening this spring and over 30 in the planning stage. Some examples are highlighted towards the end of this article.

The National Grid has talked of the biogas from AD eventually replacing a significant proportion of fossil fuel gas in the mains in the future.

But before this can happen markets need to be created for the fertiliser, and for the gas as a fuel in transport. Different sectors, such as the water sector, need to be encouraged to process sewage this way. This was the subject of a Defra consultation last December, whose results have not yet been published.

AD is also subsidised through Feed-in Tariffs (FITs). In order to increase uptake, there is a study into the take-up of FITs for farm-based AD plants going on now at DECC, parallel to the review of Feed-in Tariffs and "solar farms".

Climate change minister Greg Barker believes there is "a huge opportunity" for farm-based AD but had been disappointed by the take-up so far. Developers agree and hope it will become eligible for FIT subsidies soon.

Pioneering AD plants

Because it is not yet cheap to set up. Gary Jones is the owner of a plant at Langage Farm, near Plymouth in Devon. He says that the project couldn't have happened without support from the ETF. "Due to the new concept involved with anaerobic digestion in the UK, the start up costs are very prohibitive.

″Hopefully when there are a few more established sites around the UK, the authorities concerned in the build and running of the sites have a better understanding, and good technology providers can be found locally the cost will reduce and the plants will become profitable without grant funding."

Several other exciting projects are nearing completion, funded by the Environmental Transformation Fund.

United Utilities and National Grid are expanding the already existing anaerobic digestion plant at United Utilities' Davyhulme Waste Water Treatment Works in Greater Manchester. Work is almost complete on converting 250 cubic metres per hour of biogas to grid quality biomethane. Half will be used to fuel a fleet of tankers and half injected into National Grid’s gas distribution network - sufficient to provide heating and cooking needs for around 500 homes.

In Driffield, East Yorkshire, anaerobic digestion company GWE Biogas Limited is constructing a plant to convert up to 50,000 tonnes of organic waste each year sourced from local authorities, food manufacturers and supermarkets, to generate approximately 2MW of electricity for export to the grid. The long term objective is to upgrade gas to bio-methane to supply a private heat and wire network for new housing.

Like Langage Farm, BV Dairy (pictured) in Dorset, which processes around 35 million litres of milk per year, is building an anaerobic digestion plant to process liquid waste and provide renewable electricity and heat for its site.

WRAP, with support from the Carbon Trust, is delivering the Anaerobic Digestion Demonstration Programme under the Environmental Transformation Fund particularly because of its role in cutting waste in the food chain. It's also supporting a Staffordshire-based AD project through its Advantage West Midlands (AWM) Programme, with an animal rendering and food waste collection business.

There is every reason to believe the claim of the Anaerobic Digestion and Biogas Association (ADBA) in ten years' time the UK will have a mature anaerobic digestion industry.

[PS - let's see how popular this post is - with words like sexy and turned on in the heading! - I noticed my post about naked supporters of Amen Awel Tawe windfarm making a calendar is my most popular so far!]

Blueprints for saving the world and producing green growth

Two new United Nations-sponsored reports offer hope that the world will be able to reduce the severity of climate change – and bring other benefits to its people.

One report from the United Nations Environment Programme (UNEP) argues that there are plenty of opportunities for creating wealth, jobs, a more pleasant environment and improved social equality by transferring subsidies that support polluting activities to those supporting low carbon ones, up to a value equivalent to about 2% of global GDP.

Another, Integrated Assessment of Black Carbon and Tropospheric Ozone, also argues that by imposing strict limits on emissions of "black carbon" soot, methane and tropospheric ozone - a greenhouse gas that is also a significant component of smog - would clear the air, reduce human deaths and improve crop yields.

It would also reduce the impacts of climate change in the short term by 0.5 degrees Celsius (0.9 Fahrenheit) to the equivalent of a carbon dioxide presence in the atmosphere of 450 ppm.

Black carbon, caused by incomplete burning mainly of fossil fuels and wood, is blamed for accelerating global warming by soaking up heat from the sun. Soot can darken snow and ice when it lands, hastening a thaw such as in the Arctic or Himalayas.

Ozone is not directly emitted but is produced from precursors including methane and carbon monoxide. The troposphere is the lower atmosphere; higher up, ozone is beneficial as un ultra-violet sunshield.

Many studies show that existing pledges made at Cancun for cuts in greenhouse gas emissions are insufficient to reach the 2 degree limit, widely viewed as a threshold to dangerous change from floods, heatwaves, desertification and rising sea levels. But the measures outlined in the report could buy the world more time to implement the measures in the other report, outlined below.

"This is not an alternative to carbon dioxide reductions, it's complementary," commented Johan Kuylenstierna, of the Stockholm Environment Institute, scientific coordinator of the report, produced also with help from the World Meteorological Organization and NASA Goddard Institute for Space Studies.

Proposed measures include cuts in flaring of natural gas, curbing gas leaks from pipelines and reducing methane emissions from livestock. Poor countries should make wider use of cleaner-burning stoves, and open-field burning of farm waste should be banned.

The scientists say that achieving widespread implementation of the measures they recommend would be most effective if it were done at a country or region level.

Transition to the green economy

The other report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, makes a number of positive suggestions, again with multiple spin-off benefits.

It argues that investing just 2% of global GDP into ten key sectors can kick-start a transition towards a low-carbon, resource-efficient economy. These include agriculture, buildings, energy, fisheries, forests, manufacturing, tourism, transport, water and waste management.

The sum, currently amounting to an average of around $1.3 trillion a year , backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast under current economic models.

The report comprehensively debunks the myth of a trade-off between environmental investments and economic growth and instead points to a current "gross misallocation of capital".

Removing existing and harmful subsidies in energy, water, fisheries and agriculture sectors, alone, would save 1-2% of global GDP a year, which could be used for the transition to the green economy.

The figure of 2% of global GDP assumed is a fraction of total gross capital formation; about 22% of global GDP in 2009.

The report says that greening the economy generates growth - in particular gains in natural capital (biodiversity and resources) - and in fact a higher growth in GDP and GDP per capita than business-as-usual. "It is expected to generate as much growth and employment – or more – compared to the current business as usual scenario, and it outperforms economic projections in the medium and long term, while yielding significantly more environmental and social benefits," the authors say.

The report contains many case studies to illustrate this, for example in India, where over 80% of the $8 billion National Rural Employment Guarantee Act, which underwrites at least 100 days of paid work for rural households, invests in water conservation, irrigation and land development. This has generated three billion working days-worth of employment benefiting close to 60 million households.

Such measures can therefore contribute to poverty alleviation because there "is an inextricable link between poverty alleviation and the wise management of natural resources and ecosystems, due to the benefit flows from natural capital that are received directly by the poor".

New jobs will be created, which over time exceed the losses in “brown economy” jobs.

The transition towards a green economy is already happening on a scale and at a speed never seen before.

Therefore, the report concludes: “world leaders, civil society and leading businesses must engage collaboratively to rethink and redefine traditional measures of wealth, prosperity and well-being. What is clear is that the biggest risk of all would be to continue with the status quo."

Tory MEP leader kowtows to heavy industry at cost to the environment

Martin Callanan MEP is using his position as leader of the UK Conservative MEPs to water down environmental legislation in favour of heavy industry, to the expense of small businesses and others.

Last week he pushed through new emissions targets for light commercial vans in the European Parliament that were severely watered down compared to what was originally proposed because of lobbying by auto manufacturers.

70% of new light commercial vans on the market will have to reach a carbon dioxide emissions target of 175g per kilometre from 2014. This will rise to 100% of the fleet by 2017. This represents a cut of just 14% on current emissions standards for these vehicles.

The cautious level of this cut was attacked in view of the fact that several models already on sale already exceed this standard - with Renault's Master van and Mercedes' Sprinter van (right) having made efficiency gains of 15% and 13% respectively.

Under the vans Regulation if manufacturers fail to reach a target of 147g of emissions per kilometre by 2020 they will be fined up to Euros 95 per vehicle per gram over the limit.

The target originally proposed was 135g per kilometre by 2020.

The European Automobile Manufacturers Association applauded the new law - they would, wouldn't they because it's what they lobbied for.

The bill was sponsored by Callanan who called it a "difficult balancing act" between the needs of the environment and car manufacturers. In fact, he threw his weight firmly on the manufacturer's side.

This is not the first time Callanan, who really doesn't like Europe anyway, has bowed to industry lobbying.

In November 2009 he attacked Liberal Democrat MEPs for "rabid environmentalism with little thought of the consequences (to jobs)" over the issue of giving free carbon emission permits to heavy industry under the European Emissions Trading Scheme after 2012.

He supported the move to give away 40% of all the permits issued, worth a total of €40 billion, to the cement, steel, aluminium and chemical sectors, who argued that making them pay for permits would cause “leakage" of CO2 emissions to countries outside Europe with no environmental benefits.

The Greens/European Free Alliance group in the European Parliament has condemned the legislation on vans. "An already weak Commission proposal on CO2 emissions limits was further weakened by the Parliament and Council, with the full implementation of the initial binding limits delayed until 2017," said German MEP Rebecca Harms, a Greens/EFA group co-president.

She said it was now too weak to stimulate innovation among manufacturers and fell short of the necessary steps to tackle climate change.

Kerstin Meyer, senior campaigner at T&E, a campaign group on transport and the environment, said the legislation was bad news for fleet owners.

"The [auto] industry used a short dip in sales to justify weakening a 10-year strategy to improve fuel efficiency, that would have saved van operators money for many years to come. When vehicle manufacturers cry wolf yet again, policymakers should take a long term view."

She said companies which use this class of vehicles should always look for the most fuel efficient models. "Because CO2 emissions and fuel efficiency are directly linked, weaker emissions standards mean vans will use more fuel. Fuel is a major cost to small businesses who depend on vans to run their operations."

Did Spelman invite GM firm to join Green Economy Council?

Why has a GM firm been invited to join a new body set up to liaise with three government departments on developing the 'green economy'?

At the Green Economy Council's first meeting, held yesterday, amongst the 23 representatives from the sector was one of the world's top companies developing genetically modified seeds - Syngenta - which, despite being Swiss, likes to think of itself as the "British Monsanto".

Its Chief Scientist, Mike Bushell, met with ministers including Caroline Spelman and Vince Cable from the Department for Business, Innovation & Skills (BIS), the Department of Energy and Climate Change (DECC) and the Department for Environment, Food and Rural Affairs (Defra).

Syngenta, formed in 2000 from a takeover of Novartis, is one of the world's top four seed patent owners (with Dupont and Bayer), who between them control more than half of the world’s seed patents.

It is also one of the big three companies looking to commercialise GM crops in the UK in the near future. They have have carried out a small number of GM crop research trials in the UK including research into Genetic Use Restriction Technologies (GURTS/traitor technology) and GM wheat.

It has been called "perhaps the most successful GM crops company at co-opting the sustainable development agenda" (by Corporate Watch).

Bushell might have been co-opted onto the forum because of the company's backing of research into the causes of the epidemic facing honey bees.

However, Caroline Spelman, Defra's beleaguered minister, is a known supporter of GM. Until 2009 she was a director of the food and biotechnology lobbying company Spelman, Cormack and Associates, which she set with her husband, Mark Spelman, in 1989.

Spelman and Syngenta are not strangers. Last month, the Final Report of the Foresight Global Food and Farming Futures Project was published by BIS. Spelman co-wrote the foreword to it.

It highlights GM crops as one solution to the threat of food security, and in particular a "public-private partnership between Syngenta and the International Maize and Wheat Improvement Center (CIMMYT) [that] will focus on the development and advancement of technology in wheat through joint research and development in the areas of native and GM traits".

Most of the British public remains to be convinced what GM crops have to do with sustainable development, social equality or environmental caretaking - the only green thing about Syngenta's GM activities is that they grow seeds.

We need a state of war on climate change

Calling all climate sceptics. Listen here all you who think that climate change is a conspiracy of scientists who want to keep their well-paid jobs, or of left-wing governments who want to tax everybody to the hilt, or of liberal greenies who think they know better than everyone else.

Pay attention Senator James Inhofe, seen in the video in that link testifying last week against Environmental Protection legislation, and the likes of you Koch Brothers, oil billionaires who fund the climate denial machine.

Last month, members of the World Economic Forum, surely among your rich and powerful friends, and who belong to none of the above three sets, decided that climate change is the biggest threat facing the planet.

Never mind your vested interests who try to deny it, these elite businessmen and politicians are very spooked.

I say, it's about time they turned on their friends - people like you - who still make money out of polluting the atmosphere and shamed you into action. Shame, shame, shame you.

For there are few more powerful incentives to change behaviour than the disgust of your peers.

The UK government knows that insurance companies can put pressure on industry to behave.

But that's not strong enough. It's not shame.

The WEF at Davos endorsed the Economics of Climate Adaptation (ECA) Working Group's report Shaping Climate-Resilient Development, published by an insurance company, which shows that easily identifiable and cost-effective measures – such as improved drainage, sea barriers and improved building regulations, among many others – could reduce potential economic losses from climate change.

In making that judgment, the business elite also connected the dots between climate change and economic disparity (ranked 3), extreme weather events (ranked 5), extreme energy price volatility (ranked 6), geopolitical conflict (ranked 7), flooding, food and water security.

The Food and Agriculture Organization (FAO) last month reported that world food prices hit a "historic peak,' the highest in the 20 odd years since they first began the index. It was high food prices that were the last straw helping to trigger the revolutions in Tunisia and Egypt.

All these things are connected. The consensus emerged at the WEF that the entire world is in deep and desperate trouble.

What should be our collective response?

It used to be fringe groups which called for climate change to be treated as if we were at war. Now it is the mainstream which is doing this.

Writing on a blog on the Foreign and Commonwealth Office website, Richard Burge, Chief Executive of Wilton Park - the "neutral and discreet environment for off the record discussions on the most pressing global problems" said last week that climate change should be "on the same footing as counter-proliferation of WMD".

He was writing after a high level discussion on nuclear non-proliferation. He continued:

"In the global debate on climate change, preparedness and adaptation for such change is often spoken of in whispers. To be more vocal results in being accused of defeatism or diverting attentions for the “real” task of emission reduction.

"The consequences of significant rises in global temperature are truly catastrophic, in terms of the loss of life, displacement of people, and the shortage of resources, it is on the same scale as the use of weapons of mass destruction (WMD). It will be a process of containing the damage, retreating to areas that can be secured, and making horrendous decisions on who lives and who dies. Large areas of our inhabited planet will be abandoned."

It can't be denied. We are at war with a horrific enemy: a future none of us wants.

In World War II anyone not helping with the war effort was heaped with opprobrium. Neighbours were ostracised if they left a light on during a blackout in an air raid.

From now on, the same degree of shame must be heaped upon you who needlessly use fossil fuel energy - and threaten the rest of life on earth - for a very different reason.

Treasury told carbon floor price would subsidise nuclear

Green groups have said Treasury plans to impose a floor price on carbon used in electricity generation amounts to giving billions of pounds to the nuclear industry – something the coalition government said it would not do.

They said that it was a secret way of subsidising the nuclear industry, which could benefit by up to £3.4 billion.

The Treasury's consultation on the “carbon price floor" closed at the end of last week.

Greenpeace and WWF said this would breach the coalition's agreement not to subsidise nuclear power.

The £3.4 billion figure is based on a minimum carbon price of £40 per tonne. However, sources suggest it is more likely to be lower, perhaps half that figure. Nevertheless the resultant amount going to the nuclear industry, of £1.7 billion, which would be over 13 years, is still a considerable amount.

These figures are based on the existing amount of nuclear capacity and do not take into account any new nuclear plants, which would increase the amount.

WWF and Greenpeace are calling for a windfall tax on existing nuclear generators alongside the carbon floor price mechanism, that would be used to support energy efficiency and emerging renewable technologies through the Green Investment Bank.

They have issued scenarios which describe how the world could power itself by up to 95% renewable energy by 2050, and regard nuclear power as unnecessarily risky and harmful.

Dr Douglas Parr, Chief Scientific Adviser and Policy Director, Greenpeace UK said: “This is yet another taxpayer handout to a failing nuclear industry. The economics of nuclear power have never added up and it has been continually propped up with money from hard-working families."

The eventual policy is to be determined in concert with the ongoing Electricity Market Reform (EMR) consultation.

Vital new tool sorts out the climate-friendly from climate-hostile materials

An important new tool that could help to drastically reduce buildings' climate impacts has been made freely available.

It is a revolutionary update of a “bible" on the embodied energy of hundreds of materials - anything from carpets and concrete to timber, insulation and plastics.

The widely used and authoritative ICE Database - 'Embodied Carbon: the Inventory of Carbon & Energy (ICE)' - is aimed at the manufacturing, construction and refurbishment industries, including designers, architects and policymakers.

It provides an invaluable means of telling specifiers what to avoid and what to use in the struggle to reduce the environmental impact of construction and other products.

What is embodied energy?

To reduce the level of climate change it is necessary to reduce emissions of global warming gases. These occur at every point in the life of a material or product, giving rise to the "life-cycle carbon footprint".

The “embodied energy" component of this overall figure is that used in the manufacturing process and is distinguished from the "operational energy" – that used in its lifetime. Then there is the environmental cost of its final disposal – whether it is landfilled or recycled etc.

If, for example, the product is concrete, it will take account of all the energy involved in quarrying, transportation and manufacture.

Usually, the impacts of other global warming gases like methane and HCFCs are converted into carbon-equivalent values for ease of comparison.

Why is it useful?

All products contain materials and in particular buildings can be with us for between 30 and 100 or more years. The building sector is responsible for 21% of global carbon dioxide-equivalent emissions: 8% through emissions from primary fuel types and 13% from the electricity demand for residential and commercial buildings.

As buildings become more energy efficient in operation, the embodied energy component of their overall footprint becomes proportionally more significant.

A recent report from the South West Regional Development Agency (SWRDA) on sustainable offices summarised that the embodied carbon impacts (construction, plus demolition) accounted for about a third of the whole life carbon impact.

Similarly, the RICS redefining zero report estimated the contribution of embodied carbon to be 20% for supermarkets, 30% for houses, 45% for offices and an incredible 60% for warehouses (usually unheated).

Last autumn the final report was published of the UK Low Carbon Construction Innovation and Growth Team (IGT), chaired by Paul Morrell (the UK Government Chief Construction Advisor). It had been asked by the government to consider how the construction sector could meet the low carbon agenda.

It made many recommendations, and on embodied carbon said that "as soon as a sufficiently rigorous assessment system is in place, the Treasury should introduce into the Green Book a requirement to conduct a whole-life (embodied + operational) carbon appraisal and that this is factored into feasibility studies on the basis of a realistic price for carbon".

Further, "that the industry should agree with Government a standard method of measuring embodied carbon for use as a design tool for the purposes of scheme appraisal".

A wealth of information

ICE is such a tool. It includes annexes on methodologies for metal recycling and explanations of how the values for carbon impacts have been calculated.

Summary sheets for each material expand into detailed fact sheets and graphs, giving a breakdown of the components of the impact, and how it has varied over the last 15 years.

For example, we learn that the impact of aggregates has been reduced by 1/5, because the UK energy mix has changed to include more natural gas.

In the important area of insulation, we learn that cellulose, typically made from recycled newsprint, has by far the lowest embodied energy (a maximum of 3.3MJ/Kg) even compared to other natural materials.

Rockwool is at 16.8, but polystyrene and other plastic insulation boards and foams, widely used in industry, are in the range of 99-109MJ/Kg. That is 30 times more than cellulose.

This means that cellulose should really be used universally by builders and refurbishment programmes in preference, despite the fact that it might take up more room.

It's important to realise that the global warming effects of the manufacture of products happens from the moment they are made, whereas the energy-saving benefit of insulation is only in the future.

Natural materials also contain carbon that has been locked up from the atmosphere during their growth (although ICE gives an average figure for the embodied energy of timber of 9.43 MJ/Kg).

So if there is a choice between timber and uPVC windows or doors, for example, uPVC has an embodied energy 10 times greater, of 94.7MJ/Kg.

The spreadsheets also include CIBSE data on material properties.

ICE is a major achievement, and is produced with the non-profit Building Services Research & Information Association (BSRIA). It is available to purchase and free to members.

The University of Bath, where project lead Craig Jones is employed, has charitably made a free Excel file version available.

Also for those with an interest in whole life carbon in buildings is this Sustain report on operational versus embodied energy.

Other sources of information

There are are other sources of comparable information:

• The Institute of Civil Engineers (ICE) Civil Engineering Standard Method of Measurement 3 (CESMM3) which includes carbon and prices for every material and unit of work, enabling users to calculate not just the economic, but also the embodied carbon of projects.
• The Hutchins 2010 UK Building Blackbook (The Capital Cost and Embodied CO2 Guide, Volume two: major works) which now includes both cost and embodied carbon for construction works.
• The Royal Institution of Chartered Surveyors (RICS) working group examining embodied carbon.
• The Institution of Structural Engineers (IStructE) soon-to-be published short guide on embodied carbon.
• BS 8903:2010 Principles and Framework for Procuring Sustainably
• PAS 2060:2010 Specification for the Demonstration of Carbon Neutrality.

Feed-in Tariffs review: let’s subsidise what works

The Government has announced a review of the Feed-in Tariff subsidies (FITs) for solar photovoltaic installations.

Energy Minister Chris Huhne is worried that large PV 'farms' of over 50kWp will soak up most of the budget for FITs. The Government said it would cut the amount it would spend on FITs up to 2014-15 by 10% to £360 million in the November Spending Review.

The industry is crying 'foul'. It complains that other technologies are allowed up to 5MW per installation and that no solar farms greater than 1MW are in planning. It accuses the Government of attacking jobs in the very green tech sector it says is going to bring growth to the UK economy.

But it's worth asking: what are the subsidies for? Here are a few possible answers:

1. Huhne talks of making renewable technology seem normal by being visible on lots of roofs.

2. It's said that households with the modules become more conscious of green issues and energy efficiency.

3. By increasing demand, the price of modules is supposed to come down over time.

4. It creates jobs in an emerging sector.

5. It cuts carbon emissions.

But do these stand up to scrutiny and represent value for money?

FITs are a fantastic success, particularly for PV, in stimulating demand for renewable energy among the public. There are now over 21,000 schemes of all technologies registered.

Up to the end of December, when there were 16,384 installations, PV had the vast majority with 15,236 - over 15 times more than wind in second place with 977 with hydro lagging at 154.

Are these large PV schemes? No. By the end of last year there was only one over the 50kW size, at 55kW. The vast majority were under 4kW with the average at 2.6kW. Most of these will be receiving the full tariff value of 41.3p per unit.

On the other hand almost all the hydro and wind installations were over 4kW, many over 10kW. Most of these will be receiving only 26.7p per unit.

By contrast, if PV farms were to register for the Renewables Obligation subsidy - an older, different subsidy for larger schemes - they would receive payments of around 8p/kWh plus export payments of 5p/kWh (though this is to be reviewed).

So PV receives almost twice as much under FITs as wind and other technologies. You can see why it is so popular. But is it value for money?

Let's remember that the installed capacity of PV doesn't equate to what will be generated: this depends on the location - the amount of sunshine.

Solar module manufacturers quote figures for the “peak power” of their products. These are what they would generate if one kilowatt per square metre of the sun’s energy were to fall on them.

But for most of England and Wales, the summer insolation is a fraction of that figure. London gets 198W and Edinburgh 172W in July. In December, the figures are 22 and 13 respectively - a lot less - and that’s when you need more power.

By contrast, wind and hydro ratings are significantly closer to what you actually get out of the plant.

So if you're looking for saving the most carbon per £, these technologies are a better choice for support.

But let's remember also who pays for the subsidies. The money comes off a levy on everyone's electricity bills. This means we all help pay the income of those who can afford to install the solar modules.

Since those on low incomes pay a disproportionate amount of their income on fuel, they are essentially subsidising the better-off.

On that basis the Government is right to prevent this subsidy going to large landowners and companies seeking to install solar farms.

Instead, it should support installations by such groups as housing associations like the Peabody Trust, who are putting PVs on the roofs of social housing.

(However it is cheaper to build larger installations than smaller ones – because savings on overheads and systems mean costs are reduced per kW. So these would make financial sense if the cash came instead from investors.)

In America this week, Energy Secretary Steven Chu announced that he wants to spend $27 million to cut the cost of installed solar power by 75 percent to about 6 cents per kilowatt hour in order to let the US compete with China's takeover of the solar market.

Fine for them - the southern states are where solar power works brilliantly. By contrast, even in the UK's southernmost counties, the financial paybacks are 30-50 years - all costs included.

What the UK is rich in are wind and ocean resources. If it wants to generate future jobs and save carbon, with renewable technologies that can work domestically and be exported throughout the world, it should focus its limited resources on these.