Defra tackles water shortages but ignores carbon

Defra's new vision for water management ignores the industry's carbon emissions.

Defra has set out its plans to protect the future water supplies of the country, and how water companies should become more efficient, but has failed to link water use to measures to tackle climate change.

The new White Paper, 'Water for Life', also explains how river water quality will be improved with the help of local organisations, and pledges to reform the water industry with further deregulation “to drive economic growth".

Business and public sector customers will be able to negotiate better services from their suppliers in order to cut their costs, the Paper says.

Market reform will also remove barriers that have discouraged new companies from entering the water market, which is currently supplied by 23 firms.

The Paper incorporates nearly all of the recommendations from the Environment Agency on industry governance, with one notable exception: whereas the Agency dedicates many recommendations to reducing the carbon emissions associated with water use, the White Paper completely ignores this.

The White Paper does take on board the EA's recommendations for more national management of water supply, by developing the concept of water trading and interconnecting pipelines.

Water companies will also be able to set new social tariffs for people who struggle to pay their bills, and there will be measures to tackle bad debt, which results in householders carrying the can for those who can't or won't pay, to the cost of ￡15 per year each.

Measures are also outlined to compensate those in the South West for the “historic unfairness" of water infrastructure in the region, by pledging to reduce their bills by ￡50.

Tackling water shortage

Launching the Paper, Environment Secretary Caroline Spelman said: “Currently we enjoy clean water at the turn of a tap, and watch it drain away without a thought. But parts of England actually have less rainfall per person than many Mediterranean countries."

Unprecedented dry weather conditions this year, and low water levels, led Anglian Water last week to ask the Environment Agency for a drought permit, in December.

The Agency says that if the dry winter continues, more drought permits are likely to be sought because river and reservoir levels across south east England are well below average.

“Making sure we’ve got enough water for everyone is going to be one of the major challenges this country will have to deal with in the years ahead. With water expected to be less predictable as time goes on we all have to play our part in ensuring our water supply remains secure,” said Caroline Spelman.

As Aecom Water regional director Peter Robinson has observed, household water use has to be rethought as the population of the south east of England is projected to grow over the next 25 years.

Not tackling carbon emissions

The White Paper contains much about how the water regime needs to change drastically in order to reduce the risks associated with climate change, such as water scarcity and environmental damage.

However, one glaring omission from the Water White Paper is that there is no mention of the carbon content of water, a matter of deep concern that has been raised by both the Energy Saving Trust and the Environment Agency.

The last available annual figures show that the UK water industry as a whole emitted five million tonnes of greenhouse gases through treating and supplying clean water, and dealing with wastewater and sewerage. This is 0.8% of the U.K.'s greenhouse gas emissions.

The Environment Agency has calculated that when household and water company emissions are considered together, 89% of emissions in the water system can be attributed to ‘water in the home’, which includes energy for heating water but excludes space/central heating.

The remaining 11% of emissions originate from abstracting, treating and supplying water, and subsequent wastewater treatment.

The Agency recommends, in its last bulletin on the subject, that any proposed supply options, such as a new reservoir or desalination plant, must be evaluated on a scheme by scheme assessment basis so to select the lowest carbon solution.

But the White Paper fails to address these concerns, except to say that some domestic water conservation measures, such as paying for water butts, will be covered by the Green Deal.

Catchment area management

Many of the policies in the White Paper also stem from the EU Water Framework Directive, which represents a long-term, sensible and radical overhaul of Europe's water management systems.

The White Paper takes credit for fostering a change to the way our water resources are managed to a catchment area-based system. This is actually the system that has been developed for the last twelve years in the Water Framework Directive (the Framework documents call it a River Basin Management Plan).

The reason for this approach is that water does not respect administrative boundaries, whether local authority or national ones, so only a catchment-based management system makes sense.

It means that neighbouring local authorities sharing the same catchment area must cooperate over its management.

According to the timetable of the Water Framework Directive, pricing policies at a national level should have been set in 2010 and operational programmes of measures are due to be introduced next year, with environmental objectives having been met by 2015.

Defra's White Paper acknowledges that the Environment Agency is already carrying out ten pilot schemes to test catchment-based management and is pressurising water companies to meet their obligations to produce River Basin Management Plans.

Farmers are being encouraged to change their land management processes to reduce contamination of waterways, particularly from nitrate pollution, and Defra is looking into simplifying the red tape regulating this area.

The government is also trying to get reforms made to the Common Agricultural Policy to help farmers adopt more of a custodial role for the natural environment.

More deferred action

Urban diffuse pollution of water courses is also a problem. Unfortunately its solution is being deferred; this is not tackled in today's paper but will be subject to a different national strategy to be published next year.

The Paper also outlines methods to improve bathing water standards around the U.K.'s coast; but they won't come in until 2015.

Water companies will have more pressure put on them to restore abstraction from their waterways to more sustainable levels in the price review process, but again this will be subject to a separate consultation next year, along with one on national standards for SuDS (Sustainable urban drainage systems) and a new approval system for sustainable drainage.

A National Policy Statement for Waste Water is also expected imminently. This will look at how planning for new sewage treatment facilities should be managed.

At the same time, Defra will look at using its powers to remove permission given to water companies to abstract water, without having to give them compensation for doing so. Barriers to trading in abstraction licences will also be reduced.

Water meters?

There has been much talk about whether water meters should be compulsorily introduced everywhere, for example in the Walker Review, of the water industry, and whether smart meters could be used which would benefit consumers through reduced costs.

The White Paper argues that it should be up to water companies themselves to decide whether to install meters in people's homes.

The draft Water Bill will be published in early 2012.

Exposed: world's top 50 anti-climate oligarchs

The world's top fifty wealthiest individuals who benefit from climate change by being involved in fossil fuel industries, and who use their wealth and influence to block climate-friendly legislation, are exposed in a new report today.

Coincidently, the latest British Social Attitudes (BSA) report, also released today, reveals a decline in public concern for climate change.

Taken together, it seems that the oligarchs' influence is having some effect on public attitudes, along with the recession.

Billionaires benefiting from climate chaos

The top 50 'Who's-Who' list of businesspeople who make money from financing climate change includes oligarchs from Brazil, Mexico, India and China; new elites who are recasting the global corporate power balance.

This is happening as heavy industry is accelerating its presence in developing countries, whose carbon footprints are correspondingly increasing; the so-called 'BASIC' countries who are this week resisting pressure for a global legally binding agreement on climate change at the UN talks in Durban.

"They are exposed in the IFG report for their get-rich-quick gambles to grab more land and resources, which, in turn, concentrates even more political power in fewer hands,” says the report's co-author and IFG board member from India, Dr. Vandana Shiva.

The International Forum on Globalization (IFG)'s report, Outing the Oligarchy: Billionaires Who Benefit From Today’s Climate Crisis is compiled from a great deal of often obscure research.

It profiles individuals chosen for their ranking on Forbes' list of the World's Billionaires, their investments and holdings in fossil fuels, and influence networks that block the transition from fossil fuels to more sustainable alternatives.

Among them are the already well-known Koch Brothers and the world's richest man known as “Uncle Slim".

The top three

1. Carlos Slim Helú and his family, from Mexico, worth $63.3 billion. President of Carso Infraestructura y Construcción, his company installs pipelines, erects chemical and petroleum facilities (through its subsidiary Swecomex), undertakes infrastructure and civil construction contracts, as well as owning his own media, including the New York Times, Rand Corporation and newspapers in Australia, Ireland, New Zealand, Northern Ireland and South Africa.

2. David and Charles Koch, from USA, worth $50 billion. Their political contributions to defeat climate legislation are believed to have exceeded those of the American Petroleum Institute (Big Oil’s own lobbying group) and Exxon (the country's largest oil company).

3. Eike Batista, from Brazil, worth $30 billion. He made his money from mining gold in the Amazon and now owns OGX and EBX Group which is involved in oil and natural gas, coal mining, electricity production and shipbuilding. Batista was an ally and large campaign donor to Brazil’s ex-President Lula. Batista current enjoys a similar relationship with Brazil’s new leader, President Dilma Roussef. Both leaders vigorously pursue industrial growth policies that make Brazil one of the world’s biggest emitters.

47 more industrialists are listed in the report.

Its authors say that climate negotiations will not have "meaningful progress until we address today’s extreme concentrations of wealth and power that have corrupted any prospect of democratic decision-making.

"Climate negotiators know that they are not calling the shots; rather, they are all restrained by political pressure from the very people who profit most from polluting our planet," says the introduction.

Sceptical, belt-tightening Britons

In this context, the new results from the annual BSA study of the British public’s attitudes and values would probably provide encouraging reading for these wealthy individuals.

The report, from the National Centre for Social Research and widely reported in today's media, also finds that many Britons believe unemployment benefits are too high and that people should stand on their own two feet rather than rely on the state.

It pinpoints economic hardship and climate change scepticism as key factors contributing to the decline in Britain’s collective environmental conscience.

Since 2000 the number of people prepared to pay higher prices to safeguard the environment has fallen, from 43 to 26%.

So too has the proportion willing to pay much higher taxes to protect the environment: from 31% to 22%.

Alison Park, lead editor of the report at NatCen Social Research, said that “if government wants to do more to promote green behaviour, it needs to tackle scepticism about the causes of climate change and convince people that it represents a real threat”.

Support for the environment has fallen among all income groups. Just over a third (36%) of those in the highest earning households (defined as those with household income of over ￡44,000 in 2010) would be willing to pay higher prices to protect the environment, down from 52% in 2000.

The report also finds that people are slightly more sceptical about the credibility of scientific research on global warming, with 43% now considering rising temperatures caused by climate change to be very dangerous for the environment, 50% down from 2000.

There are some encouraging signs however. Recycling now appears to be mainstream, with 86% of people saying they ‘always’ or ‘often’ make the effort to recycle.

In addition, 39% say that they take steps to reduce their home energy use and 32% choose to save or reuse water.

Activities which require more of a lifestyle change, such as cutting personal car use, have yet to reach comparable levels; despite higher fuel prices, only 19% of respondents said they have reduced the amount of driving they do.

However, of those who think climate change is dangerous for the environmentally-friendly behaviour is more common with 52% saying that they make an effort to reduce their energy use at home, double the rate (21%) found among those who do not share this conviction.

The survey also found that 54% believed unemployment benefits were too high, up from 35% in 1983 when the annual study was first carried out.

UK gives big business millions in climate aid meant for world's poorest

£385 million of UK funding intended to help poor people get access to electricity instead is going to EDF and Walmart.

The UK is today announcing proudly that it has allocated more than two thirds of its Fast Start Finance, to help the world's poorest people combat climate change and adapt to the effects of global warming, and that it is well on track to meet its £1.5bn commitment by the end of 2012.

However, some of the projects financed under the initiative have come under severe criticism for not actually helping the people for whom they are intended.

The World Development Movement also says that far from being new funding, as claimed, one third of this money was already allocated before 2008, all of it comes out of the existing Official Development Assistance budget, and at least 86% is in the form of loans to countries that can least afford to repay them instead of grants.

Fast Start Finance amounts globally to $30 billion, that was pledged between 2010-12, by developed countries to vulnerable developing ones, at the Copenhagen climate talks in 2009.

The UK, contributing £1.5bn, is, alongside Germany, the third largest contributor after the USA and Japan.

The UK’s money is channelled through the government’s £2.9bn International Climate Fund (ICF), a programme jointly managed by the Department of Energy and Climate Change (DECC) and the Department for International Development (DfID).

The Government announced today that £1,056 million has been approved or spent so far, on specific multilateral and bilateral programmes (£569 million in 2010 and £487 million in 2011).

The World Development Movement (WDM) has produced several reports analysing the way these projects are funded; amongst them is Climate Loan Sharks.

A WDM spokesperson said the WDM “is not criticising the projects per se, but the way in which the funding is channelled".

She continued, “many of the projects being funded do not generate a return on investment in the capital sales, such as flood defence barriers. Therefore, how can these poor countries be expected to repay the loans?"

WDM has found that, for instance, a windfarm in Mexico for which the UK government provided £385 million channelled through the Clean Technology Fund, will produce electricity not for homes but for Walmart, the world's largest company and owner of Asda in the UK.

This is achieved through a loophole in Mexican law allowing the company to claim it has produced the power itself, whereas in fact it just owns a nominal stake.

In fact, the 65MW windfarm is owned by EDF, the French company which is the world's largest electricity utility.

Local activists are demanding and deserve cheap electricity, but were not consulted at all over the development of the windfarm which, says activist Bettina Cruz Velazquez, form part of an attempt “to grab indigenous lands and convert them into resources for the market.”

A WDM spokesperson told me, “indigenous people there have been forced to sell their land have suffered human rights abuses, and sign contracts in languages which they did not understand".

The project financing is managed by the World Bank, which, according to WDM, hopes will encourage up to 2,000MW of further private sector wind projects in the Isthmus of Tehuantepec, where the wind park is located, but which are resisted by local people.

The involvement of the World Bank in channelling these funds has been criticised by many, including the House of Commons Environmental Audit Commission, which advised in a report published this summer that the DFID should encourage the World Bank to develop a "new strategy [to] prioritise low-carbon strategies, affordable energy access for the poor and improve energy efficiency".

It said "DFID should use its position as a major shareholder to ensure that the World Bank’s portfolio is ‘climate smart’".

A windfarm is undoubtably in this category, but the World Development Movement is now arguing that its projects lack social and other environmental safeguards such as access to affordable energy and the protection of ecosystems.

UK Energy and Climate Change Secretary Chris Huhne meetings did his best to talk up the advantages of the projects, saying: “Africa is one of the areas which will feel the impacts of climate change first which is why we’re helping its people adapt to a warmer world and not become reliant on dirty fossil fuels.

“We have a moral responsibility to help the poorest countries. This not only benefits the most vulnerable but also helps all of us move towards a safer and cleaner future.”

Chris Huhne was announcing several new allocations under the fund this morning:

• £150m to fund the Clean Technology Fund, which will make it possible to support projects such as low carbon public transport systems and promote energy efficiency in Nigeria and save 47 million tonnes of carbon dioxide
• £38m to unlock $300m to help 250,000 farmers in Eastern and Southern Africa adapt farming methods to get 10% more farmed land and produce 20% more food
• £27.6m to bring electricity to 7,200 rural households in Eastern and Southern Africa
• £15m to help Ethiopia respond to climate change
• £6.7m to stimulate further investment in climate adaptation programmes in Kenya
• £10m for the UN Adaptation Fund
• £30m for the Least Developed Countries Fund
• £85m for the Pilot Programme for Climate Resilience (PPCR)

DECC has made available a video showing some examples of UK climate funding.

Will Britain exceed its carbon reduction targets? Post 2

This is the second of two posts that examine the UK's claims and efforts to reduce its carbon emissions.


Its conclusion: the UK must stop burning coal to win the battle to cut carbon emissions.

The Government claimed last week in its Carbon Plan that it is on track to meet its carbon reduction target, but this is contradicted by other independent evidence.

Emissions and carbon intensity are increasing

This evidence shows that the UK's greenhouse gas emissions actually increased last year by 3.5%; more than double the 1.3% growth in the economy, according to the PwC Low Carbon Economy Index published two weeks ago.

And this is a trend. The previous years' statistics from the UK government also show an increase in net carbon dioxide emissions of 3.8%.

If we carry on in this trend, the UK will undoubtedly miss its 34% reduction target.

Worse, the PWc report shows how, globally, national economies' carbon intensities are increasing everywhere.

Carbon intensity is a measure of how much Gross Domestic Product is produced per unit of energy generated from fossil fuels.

PWc's modelling shows that globally, the annual reduction in carbon intensity required to meet the 2° reduction target in carbon emissions by 2050, required to avoid climate chaos, has increased in the last year from 4.7% to 4.8%.

The UK's requirement is higher than this global average. The carbon intensity of its economy is actually increasing by 2.2% a year, and the annual decarbonisation rate now required to meet the 2° reduction target is 5.6%.

Much of the cause of the previous decarbonisation of the UK economy is actually due to the “dash for gas" which happened in the 1990s and resulted in a decarbonisation rate of 3%.

Its recent rise, correspondingly, is due to an increase in coal burning. The latest energy statistics show that in the last financial year, instead of renewables generating 10%, as is commonly believed, they provided 6.5% of our needs.

We are burning more coal

Coal provided 35.7% and natural gas 48.9%, with the shrinking contribution of nuclear power contributing 5.2%.

(The global warming potential of coal is nearly three times that of natural gas: 910gCO2/kWh compared to 360gCO2/kWh.)

This increase in the burning of fossil fuels to generate our electricity underscores how unfortunate it is that the U.K.'s carbon capture and storage programme is suffering delays.

PWc observe that “the longer the delay in significant action to tackle emissions growth, the steeper the path becomes to stay on track with a 2° reduction target," and the more it will cost us.

In industrialised countries, meeting this target will require massive emissions reductions in the order of 80-95% according to another annual report, the EU Climate Policy Tracker, out today from ECOFYS and WWF.

On the other hand, energy intensive industries have been complaining loudly about the cost to them of carbon reduction policies, and in his Autumn Statement, the Chancellor George Osborne promised to reduce this cost, which has the effect of reducing their incentives to save carbon.

PWc warn that there could be a large funding gap in the amount of investment which the UK needs not just to decarbonise the power sector (£89 billion) but to meet energy needs with coal and gas (hundred and £10 billion).

The big 6 utilities in the UK would have to triple their investment to meet the government's target, and in the current economic climate this does not seem likely.

The government suggested last week that pension and insurance funds could contribute to the sums required.

But for this to happen there must be a stable return with limited downsides risk.

Matthew Brown, the CBI's head of energy and climate change policy, has said that although the government's Carbon Plan gives investors a "clearer" picture of how the nation can transition to a low-carbon economy, "we now need this to be backed by consistent, long-term policies, avoiding any sudden changes of direction which put investors off."

What is the solution?

In an ideal world there would be plenty of funding available for low carbon technology, shale gas would not have been discovered, the Fukshima nuclear disaster would not have happened, and the European Emissions Trading Scheme would be operating perfectly to give a high price for carbon that would allow the necessary investments to take place.

Instead, we have to live with what we've got. Either you believe that there is an almost 100% certainty that we have to reduce emissions very fast in order to his avoid global disaster, or you believe that we should have other priorities, namely, our short-term national economies.

The Chancellor clearly believes the latter. The U.K.'s Energy and Climate Change Department believes the former.

The Chancellor believes that European legislation is holding back British business.

But half of the environmental performance of the average European member state is directly related to European legislation. Without it, the European natural environment and carbon emissions would be in a much worse state.

While the UK is one of the better performers in the European Union in legislation to fight climate change, we must not forget that under the Spending Review the Warm Front Scheme was cut, and the aspirations or funding for the Renewable Heat Incentive, Zero Carbon Homes and Carbon Trust were scaled back.

The Carbon Reduction Commitment Energy Efficiency Scheme has now been transformed into essentially a carbon tax with revenues going to the Treasury instead of scheme participants.

Back in June 2011, the UK Committee on Climate Change warned that UK policies are failing to achieve the needed step change.

Since then there have been many delays in policy decisions and changes of tack, which all impact on investor confidence.

In just one snapshot of the challenge ahead, The Centre for Low Carbon Futures and the Energy Saving Trust warned on Monday that "one building every minute must be retrofitted with carbon cutting solutions to meet 2050 energy targets".

Their report argues that the Government must invest in interdisciplinary research which brings together technical, social and economic expertise.

This is both a huge challenge and a huge opportunity, both for job creation and to save energy costs.

I firmly believe that the nation is hungry for this kind of action, for the sake of jobs, the economy and reduction of energy bills.

But the most important thing we can do is to stop burning coal.

Will UK will exceed its carbon reduction targets? Post 1

This is the first of two posts about the UK's climate emissions and its plans to reduce them.


This first one represents the Government's current view:

David Cameron and Nick Clegg last week launched a Carbon Plan setting out the Coalition Government's policies to meet its long term commitments to cut carbon emissions.

These must, by law, be cut by at least 80% of 1990 levels by 2050. They have already been cut by more than 25%.

The Carbon Plan states that with the policies already in place the economy will significantly exceed the 34% target set for the first 15 years under the Climate Change Act, and would have done so even if the recession had not occurred.

The plan looks to the future in the light of the carbon budgets set by the Committee for Climate Change running from 2008-2012, 2013-2017 and 2018-2022.

However, the Environmental Audit Committee has warned that any loosening of the budget following the 2014 review urged by the Treasury could jeopardise the 2050 goal.

And an independent assessment says that the UK's greenhouse gas emissions are actually increasing by 3.5%; more than double the 1.3% growth in the economy, according to a recent report from PricewaterhouseCoopers' Low Carbon Economy Index.

Decade by decade

The Carbon Plan says that in the next decade the focus will be on energy efficiency, utilising the Green Deal, EU ETS, Climate Change Agreements and the CRC Energy Efficiency Scheme, as well as the benefits of the smart grid, which will help to reduce and manage peak and overall demands.
The average emissions of motor vehicles are expected to fall by a third, mostly due to more efficient combustion engines and sustainable biofuels.

Emerging low carbon technologies will be piloted, examined and deployed as they reach commercial levels.

During the 2020s, the successful technologies will move towards mass rollout, and this will include cheaper electric cars. The plan hopes that this will help the UK to "gain a long-term competitive advantage" in these technologies.

In the following decade, after the quick wins have been achieved, then emissions from the “hard to treat sectors, such as industry, shipping and agriculture will have to be tackled", Energy Secretary Chris Huhne says in his ministerial statement accompanying the plan.

Negotiating advantage

He says that its publication is timed to coincide with the United Nations climate negotiations taking place in Durban, “to show that the UK is walking the walk, demonstrating that even in tough times it can be done".

Mr. Huhne is on his way to attend the talks next week.

The UK's 2020 target to reduce emissions by 34% is much less than the EU's 20% below 1990 levels by 2020 (rising to 30% if other nations commit to comparable efforts under a broader climate pact).

"Our national economic interest is to be found in a cost-effective transition to low carbon, to an economy that is more resilient, innovative and efficient,” Mr. Huhne added.

The picture in 2050

The plan envisages that by 2050, emissions from heating and powering buildings will be virtually zero, and the roads will be filled with ultra-low emission vehicles.

In a closed-loop society, waste will be a thing of the past, and materials will either be reused or become an energy source.

However, we will need much more electricity, perhaps as much as twice the amount, to deal with peak demand and power vehicles and provide heating, despite a projected reduction in demand per head of population due to energy efficiency measures by up to 50%.

The government says it does not wish to pick particular technology winners, instead helping academia, industry and the market to work together to do this.

But the plan does outline different possible scenarios: a “higher renewables, more energy efficiency" scenario; “higher carbon capture and storage, more bioenergy" scenario; and a “higher nuclear, less energy efficiency" scenario.

Nuclear power

Nuclear power is currently projected to be the cheapest low carbon technology in the future, and the most cost-effective power mix using traditional cost analysis (based on the 'MARKAL' model, which has certain disadvantages that work against renewable energy) is anticipated to be 33 gigawatts (GW) of nuclear, 45GW of renewables and 29GW of fossil fuels with CCS.

The Government says that this would result in energy costs to consumers being reduced by £84/person/year.

This would involve tripling the amount of nuclear power currently installed. But this week, EDF Energy, currently expected to build the U.K.'s first new plant in three decades, at Hinckley, Somerset, said that its schedule was being put backwards due to extra safety checks.

Energy Minister Charles Hendry also revealed yesterday that the Government wants to build a new plant for processing nuclear waste, four months after a similar plant costing the taxpayer £1.4 billion was closed.

It will convert the UK’s giant stockpile of used plutonium into a form of nuclear fuel.

He said: “converting the plutonium into mixed oxide fuel is the most credible and technologically mature option,” and “any remaining plutonium whose condition is such that it cannot be converted into MOX, will be immobilised and treated as a waste for disposal".

Investment shortfall

In the next 10 years decisions have to be taken which will affect the picture 30 years later: switching from coal to gas powered generation and renewable electricity, which will also help reduce exposure to volatile fossil fuel prices.

In the following decade, carbon capture and storage and nuclear power are expected to be deployed alongside more renewables. Around 60 to 80 GW of new capacity will need to be built by 2030.

The main barrier to this is lack of investment. The current electricity prices driven mainly by gas power stations. The reform of the electricity market is partly designed to address this problem.

The Green Investment Bank is expected to be lending money from 2015, when most funding for the construction of Round 3 offshore wind is required.

A calculator, based on the 'MARKAL' model, has been made available on DECC's website which attempts to explain the total costs associated with powering the entire economy, averaged over the four decades up to 2050.

It includes the costs of the infrastructure and technologies required across all sectors (everything from family cars, to gas boilers to power stations), the costs of financing that infrastructure investment over time, and the costs of fuel and maintenance to keep those infrastructure and technologies running.

A revised online 2050 calculator also allows users to compare the cost of their chosen future energy system compared to doing nothing, or to other low carbon pathways.

UK Government calls for more investment in offshore wind

The Ormonde Offshore Wind Farm under construction in the Irish Sea, 10km off Barrow-in-Furness, with 30 REpower 5M wind turbines.

David Cameron is backing a call to investment funds, pension funds and sovereign wealth funds to invest in large offshore wind projects.

But potential investors will need more confidence that the government is not going to keep shifting the regulatory goalposts.

At a conference in London today, Ministers are meeting potential investors in offshore wind projects to establish what can be done to increase investment in this area.

Prime Minister David Cameron, said: “I see offshore wind as a significant energy and industrial opportunity for the UK, and one that I am determined to seize.

He said he believes "the UK will remain the world’s most attractive offshore wind market for many years to come," citing "abundant natural advantages and a world-leading marine engineering base".

He underscored the Coalition Government's "strong support for the growth of renewable energy in order to help diversify and decarbonise our long term energy mix."

The UK needs around £200bn of investment in new energy infrastructure to help reduce dependence on imported fossil fuels and boost our energy security, and the Government is looking to the banks and pension funds to fund it, as well as the UK’s current major energy suppliers.

Charles Hendry, Minister of State for Energy, said: “We have invited potential investors to London today to make the case for offshore wind as a stable, long-term and lucrative investment opportunity."

Risk management

Hendry added that "if people are not seriously considering investing here then I want to know why.”

Some of the answers can be found in a survey of 284 senior-level renewable energy executives, by the Economist Intelligence Unit (EIU), sponsored by Swiss Re, and published today.

It finds that operators are nervous about putting their money into renewables, and wind especially, because they need to feel confident about the security of the regulatory landscape, cost-effective insurance and protection from the vagaries of the weather.

In particular, investors will be wanting to know today that any government support on offer will be guaranteed for a long period of time in order to provide the security their business plans require.

Recent sudden changes to levels of support such as tax breaks and subsidies have not given them confidence.

Overcoming financial risks is another challenge perceived by the executives, affecting 76% of the survey's respondents. Renewable energy projects are often capital-intensive and highly leveraged, and up to 70-80% financed through loans.

A change in the weather

62% of respondents also place political and regulatory risk as important, while weather related risk is even more important for wind power producers (66%).

The impact of weather is more pronounced on wind than any other renewable energy. Returns may deviate by 25% from expected in any given year, whereas solar radiation levels typically deviate by no more than 4% from normal levels.

Of course, the deviation may be up or down, and it is a feature of climate change itself that weather is becoming more unpredictable.

Hans Bünting, CFO of German firm RWE Innogy, says that although weather variations might smooth out over the long term, “the main risks coming from instability are on the shorter-term weather risks. It creates volatility of earnings year to year.”

The need for insurance

Most operators therefore turn to insurance to manage this risk, according to Agostino Galvagni, Chief Executive Officer Swiss Re Corporate Solutions. "Risk management measures such as insurance will be key to encourage further private sector investment," he emphasises.

The Economist survey says that at present only 60% of respondents regard themselves as being successful at transferring risks this way, indicating that learning is still taking place.

Insurance company Swiss Re regards this as crucial to managing the world's safe transition to a post-carbon, climate-friendly future. "New technologies and innovation in renewable energy will be the only possibilities left should a global policy regime to reduce carbon emission not materialise" at Durban, says Andreas Spiegel, Swiss Re's Senior Climate Change Adviser.

"This is why Swiss Re is investing a great deal of research to better understand how insurance can mobilise financing for renewable energy projects and identify the most cost-effective ways to reduce risks, such as construction and operational risks as well as risks related to the intermittent nature of renewable energy production."

Only 4% of wind power producers use weather-based financial derivatives to protect themselves, due to their expense and complexity, but this is slowly increasing. One obstacle is that many offerings are currently not appropriate for small-scale projects.

This highlights a need in the insurance industry for more underwriters and risk engineers with specialised insight into the renewable energy industry, who can reassure investors that their cash will be safe and provide cheaper policies.

This is particularly true if the UK Government wishes to interest the big pension fundholders in this non-traditional type of investment.

Spreading the risk

One general way to spread business risk for developers is to take a portfolio of equity investors into a project, or to enter a project as part of a consortium or joint venture with other renewable energy developers or financial partners.

A recent example is the joint venture between DONG Energy and Siemens Project Ventures to acquire a 50% stake of Lincs, a 270MW wind farm project situated five miles off the UK coast.

Another way for investors and operators to reduce business risk is to buy into renewable energy developments at a later stage, once the riskier early stages of development are complete, and the renewable power assets are fully permitted or operational.

Potential investors can seek expert advice on potential investments from either government agencies, like the Carbon Trust, or external consultants, as do just over one-half of developers.

There is no shortage of these consultants, who, in the words of one of them, are there to "deliver the insurance and risk management services our clients require to capitalise on the opportunities the flourishing renewable/cleantech power sector presents”.

In the Economist survey, most operators feel they are successful in managing the various aspects of risk management: 70% say their companies are either “highly successful” or “somewhat successful” in identifying risks.

61% say they are similarly competent in assessing the scale and scope of risk.

However, investors might worry that they could end up with some of the 39% who aren't, and Charles Hendry could finish today wondering how he can help them to improve their confidence.

High energy users to get support to cut bills by up to 10%

Amongst the Christmas presents the Chancellor George Osborne is expected to give to the British economy today in his Autumn Statement, is one high on the wish list of energy-intensive businesses: relief on their carbon taxes.

But critics say that many of the have already been given a free ride, and have plenty of opportunity to reduce their energy costs.

It's expected that the combined effect of the compensations offered by Osborne will be to reduce energy bills for such firms by 5-10%.

The rebate will be worth a total of about £212 million for the period 2012-2016 to those affected by the EU Emissions Trading Scheme (EU-ETS) tax and the Climate Change Levy (CCL), and £250 million in the form of rebates and compensation for those affected by the upcoming carbon price floor.

High energy users, backed by free-market Conservatives, have been complaining that these taxes harm their international competitiveness, citing the fact that their German competitors, for instance, benefit from carbon tax rebates worth more than €5 billion a year, paying only €0.5 of a €35 tax.

For example, medium-sized cement manufacturer CEMEX faces an alleged £20 million bill for complying with carbon legislation, and the multinational Tata Steel has claimed that the tax proposals are making it think twice about a £1.2 billion investment in the UK.

Critics argue that a rebate will reduce the incentive on firms to save energy, saying that the Climate Change Agreements (CCA), which thousands of such firms have signed up to and which entitle them to reductions on the Levy in return for saving energy, are creating real savings in energy bills and carbon emissions.

The Department for Business will consult on the proposals soon.

Carbon price controversy

The EU-ETS sets a cap on companies’ carbon emissions. If they want to emit more, they must buy credits that each represent one tonne of CO2.

The Treasury's planned compensation for the effect of the EU-ETS on big emitters will total £12 million in 2012/13 and £50 million in each of the following tax years.

The new carbon price floor, to be introduced in 2013, will artificially increase the price of these credits from that set by the market to that set by the government; the Treasury's proposal is for this to be almost double the current, lowest-ever, market price: £16 per tonne of CO2 in 18 months' time, rising to £30 per tonne by 2020.

The effect of the price floor is therefore likely to be keenly felt, since the price of carbon is rock bottom now.

The compensation amount suggested to cushion this effect is £40 million in 2013 and £60 million in 2014.

The purpose of the price floor is to provide funding for investment in green technology; whereas the CCL revenue disappears into the Treasury's general accounts. (The Labour government had originally intended the CCL also to fund green investment, but Osborne grabbed it to pay off the defecit.)

The Treasury has also signalled that the discount on the CCL for those signed up to the CCA will rise to 90% from April 1, 2013, instead of the 80% already scheduled. This follows Osborne's reduction of it from 80% (set by Labour) to 65% earlier this year - another U-turn by Osborne.

This change will cost the taxpayer £40m over 2013-2015.

Furthermore, the energy-guzzling industries, which include the glass, paper, cement, chemicals, oil, metals, plastics and food sectors, will also receive protection from any price changes resulting from the measures to reform the electricity market currently being discussed.

"(The measures) will help make sure energy intensive industries are internationally competitive, but the government remains committed to the green agenda and to cutting carbon emissions by 80 percent by 2050," a Treasury source said.

Greenpeace was quick to criticise the proposals. “Energy intensive users already received a huge windfall when they were handed free pollution permits under the emissions trading scheme," said Doug Parr, its policy director.

"Now is not the time for George Osborne to be caving in to the special pleading of vested interests.”

I believe that several companies, such as Rio Tinto, are blaming carbon taxes simply because they want any burden reduced, whereas in fact it is the general reduction in demand for commodities and the higher price of fossil fuels that is the main cause of any economic woes. 

The voice of the poor needs to be heard at Durban

Through the clamour from business and political leaders, it's the voices of the world's poor to which we should now listen.

They are coming from Burundi, from Rwanda, from Uganda, Kenya, Tanzania and Zambia, from Zimbabwe and South Africa.

They are coming from all over Africa, and everyone whom they pass cheers them on and wishes them good luck, their hearts full of hope.

They are the Trans-African Caravan of Hope, and they are on a 17-day journey through ten nations, expecting to arrive in Durban tomorrow, along with the high-flying negotiators from 200 countries.

They are carrying messages from women farmers, from young people, from overwhelmingly poor people, which they hope will reach the ears of the negotiators from the rich nations.

Amongst them is 15 year-old Ashleigh Chimhenge of Townsend High School in Bulawayo. She is marching because she wants to "create awareness of the effects of climate change in my community″.

“A woman I know from my home in Lobengula in Bulawayo died recently due to the heat wave," she says, attributing it to climate change.

The marchers may be poor and relatively uneducated, but they are not stupid.

They know that if the average global temperatures rise beyond three degrees, as the recent World Energy Council forecast estimated to be likely if all the fossil fuel burning power stations currently planned are actually built, then their lands will become unfarmable.

Their crops will fail, floods or droughts will wash or burn away their hope.

Ashleigh knows this first hand, having seen droughts and poor rains in the Matabeleland Provinces among other provinces in Zimbabwe. She fears that soon, she or her children will have no choice but to leave her homelands or die.

If you are at the blunt end, the bottom, or the coalface if you like, of the world's economic system, then this is the stark reality.

It's the rich who pollute the most and the poor who suffer the most.

The caravan is organised by the Pan African Climate Justice Alliance (PACJA), a coalition of 300 civil society organiastions in 45 African countries.

The noises coming from the rich countries are causing alarm in Africa, in particular the talk that there will be no legally binding deal and no successor to the Kyoto Protocol.

Therefore the PACJA is trying to get Europe and the United States to listen to what they have to say about the dangers of continued procrastination against climate action.

Africa is already experiencing the effects of climate change. There are predictions of a reduction in crop yields by as much as 50%, the spread of disease, and increasing water stress for 75-250 million in some countries by 2020.

If such threats were being made in Europe or the USA, then Africans know that a far greater sense of urgency would prevail.

What will happen when the caravan reaches the Inkosi Albert Luthuli International Conference Centre in Durban, South Africa? Will they even be allowed within a mile of the halls? Or will they be kept well out of earshot of the delegates in suits?

At COP15 and COP16 there were attempts to split the African position on negotiations, and overt bullying of negotiators from poorer countries by those from the UK and the USA, in order to secure a deal that they could sell back home.

A report compiled by the World Development Movement, which campaigns on half of poor countries in the UK, contains testimonies from these negotiators that reveal how countries such as the UK bribed poor countries into signing up to the Copenhagen and Cancun agreements against their interests by making funding conditional on their acquiescence.

A variety of tactics and tricks, from speaking only in English, to back-room manipulation and intimidation, including outright deception and linking agreement to trade deals and aid, are catalogued, at COP15 and COP16.

At COP15, Ed Miliband, then the UK’s climate change minister, told negotiators they must accept the Copenhagen Accord, otherwise the UK would not “operationalise the funds”.

“If this would happen in FIFA the whole world would be scandalised!” claimed one developing country negotiator.

Another interviewee told the report's author that developing country negotiators who are outspoken "are taken out of delegations for one reason or another, or booted upstairs, or suddenly are transferred, or lose their jobs, as a result of external pressures, usually in the form of some kind of bribe (not necessarily money), or exchange".

In Denmark, the ‘Copenhagen Accord’ was negotiated by just 26 countries and then presented to a furious plenary.

Such insights into the murky corners of these high pressure talks illustrate the lengths to which parties will go when the stakes are so high.

But it is because they could hardly be any higher that it is the voice of the most vulnerable to which we must pay the most attention.

Ferrial Adam, the climate change and energy campaigner for Greenpeace Africa, speaking to a group of Randfontein community workers this week, said, "What was established in Cancun in terms of outcomes, we need more of that. Political pledges are not enough. We need ambitious targets so that we can hold countries accountable… Small steps will not get us there."

The caravan is taking many steps to reach Durban. They have courage and faith, which they hope is shared by the leaders of the world.

From tomorrow, Ashleigh and many others will be waiting and hoping for the outcome at COP17 which they, and the world, desperately need.

UK seeks legally binding climate agreement by 2015

The UK would like to see a legally binding "Treaty framework" on measures to combat global climate change "covering everyone now", but hopes it will be complete by 2015, Chris Huhne said yesterday.

However, at the same time, carbon prices reached a new all-time low in Europe, raising fresh doubts over the ability of the markets to finance the technical solutions needed to fight climate chaos.

Speaking to Imperial College's Grantham Institute, with the COP17 United Nations Climate Change Conference in Durban just a few days away, the Energy Secretary called climate change "the biggest market failure the world has ever seen".

He said that at Durban, "we need major economies to commit to a global legally binding framework – building on what Kyoto started, but going much broader.

"And we need negotiations on this new agreement to complete as soon as possible, and by 2015 at the latest."

Expressing hope that this can be achieved despite major differences among nations, he emphasised that the UK has always backed a legally binding agreement under the United Nations, because "no pressing international problem has been solved without one".

He cited a recent survey which found that 83% of business leaders want such an agreement.

Mr. Huhne said he remains hopeful that a deal can be reached because "compared to world trade agreements, or non-proliferation talks, we are actually making good progress".

A successful deal, he said, would "move to a system that reflects the genuine diversity of responsibility and capacity", which recognises current sticking points such as mis-definitions of what makes a ″developing″ or ″developed″ nation by labelling richer Singapore as "developing" yet poorer Bulgaria "developed".

He said that the UK would also push for Europe to agree to a 30% cut in emissions by 2020 "early next year".

"We already have the solutions" - UNEP

On Wednesday the United Nations Environment Program (UNEP) warned that greenhouse gas emissions in 2020 could rise more than had been forecasted, to between 6 billion and 11 billion tons above what is needed to limit global warming to within the 2 degrees Celsius limit that is considered ″safe″.

"To stay within the 2 degree limit, global emissions will have to peak soon (and) total greenhouse gas emissions in 2050 must be about 46% lower than their 1990 level, or about 53% lower than their 2005 level," its report, Bridging the Gap says.

It emphasises that renewable energy and energy efficiency technologies are the way out of the problem. "The world already has the solutions to avert damaging climate change" it says.

Half of these measures, that are described in the report, "can deliver net cost savings over their lifetime; for example, from reduced fuel consumption or the use of recovered gas".

It continues, "Other measures to cut short-lived climate forcers would incur higher costs over a short-term basis, but can achieve major savings in other areas, such as the health improvements and reduced damage to ecosystems and crops associated with cleaner air".

Carbon price fall

But the prospect of delivering these, at least in Europe, took a blow yesterday when the value of carbon permits fell to their lowest level since 2007, partly as a function of reduced industrial production due to the Eurozone's sovereign-debt crisis.

The December 2011 energy contract fell 13.8% in two days, the biggest price decline in five months, on a fall in industrial orders of 6.4% in September, itself the biggest drop in almost three years.

This has reduced energy demand from Europe's 11,000 factories and their supply by fossil-fuel-burning power stations, which have to buy carbon allowances and credits in order to meet demand.

This has added to an existing oversupply of carbon permits in Europe thereby reducing the price further. The reduced demand for energy is also suppressing its projected future price.

In turn, this is affecting the business plans of renewable energy developers like SSE, who hope to double their renewable electricity capacity by 2015 by spending ￡1bn on new wind farms and hydro-electric plants.

The worry is that this may make companies and utilities continue to favour cheaper, more-polluting forms of energy, such as coal and gas.

The market is bracing itself for further falls in the carbon price as 300 million further carbon permits from the EU's post-2012 new entrants' reserve will be put on sale at the end of this month.

Speculators are wondering just how low the price can go.

UK measures

In more positive news, earlier yesterday, DECC had indicated that Tuesday's Autumn Budget Statement. by the Chancellor George Osborne, will contain ￡200m of new and additional Government funding to provide a ″special time-limited ‘introductory’ offer″ to increase the early take-up of the Green Deal energy efficiency scheme.

Furthermore, Energy Minister Charles Hendry issued a statement at the EU Energy Council, along with other coastal European countries, in support of the potential of the marine energy industry and asking for European-level leadership to maintain the region's competitive advantage.

Amidst this, back at Imperial College yesterday, Mr. Huhne tried to remain upbeat. He reminded delegates of the financial measures already allocated by the UK to developing countries to tackle climate change:

• giving more than half of its Fast Start finance, and much of its ￡1.5bn pledge
• budgeting for climate finance beyond the Fast Start period
• backing the Green Climate Fund
• setting up the International Climate Fund, which will account for 7.5% of UK Official Development Assistance (ODA) by the April 2015

.
At the end of his speech, Mr. Huhne quoted a South African tribal saying: "the elephant’s trunk doesn’t weigh it down".

Translated, he said this means: "we must all carry our own burden".

He said this referred to all nations as they approach the Durban negotiating table.

Or perhaps he was referring to himself. The Energy Secretary certainly has his work cut out for him.

Huhne claims that the Green Deal will cut business energy bills

The Green Deal will "kickstart £14bn investment over the next decade, supporting at least 65,000 insulation and construction jobs by 2015", Energy Secretary Chris Huhne claimed yesterday as he launched consultations on key areas of climate and energy policy enshrined in the Energy Act 2011.

Speaking prior to the defeat by 71 votes of the Labour motion to block the Government's proposed changes to the solar Feed-In Tariff on Wednesday night, Mr. Huhne told Parliament that "rising world gas prices will push up bills for both gas and electricity, but our prices will be moderated by our policies."

The Energy Secretary was referring mostly to domestic energy prices, which he said would overall be 7% or £94 lower in 2020 than if these polices were not in place and we had to rely on fossil fuels.

However, the story is not the same for businesses.

While many businesses are able to access the advice of the Carbon Trust, who, for example, recently pointed out that simply by switching to more efficient variable motors and drives, a medium sized business with an electricity spend of £50,000 could save £5,000 per year, Mr Huhne acknowledged that some firms are not able to make significant efficiency savings due to the nature of the industrial processes they employ.

Additionally, many businesses pay energy prices that are closer to the wholesale level, and therefore price rises seem to have a harsher impact: the Government's own estimates are that by 2020, policies could add 19% to the average energy bill of medium-sized business energy consumers, whereas the figure for large energy intensive users could be anywhere between 2% and 20%.

It is partly so that Government policies on climate change do not impair their international competitiveness, Mr. Huhne said, that "the Government is committed, before the end of the year, to announcing a package of measures for those energy intensive industries".

He said this is also why he is working with Vince Cable's Business Department, and giving more powers to Ofgem, such as allowing it to extend the role of Elexon in regulating the wholesale market, in another consultation that has been announced this week.

Announcing the consultation on the Green Deal as well as making the Annual Energy Statement, Mr. Huhne underscored that businesses as well as homes will be able to take advantage of the deal.

The scheme will let them install energy saving technologies such as insulation at no upfront cost, with repayments made over time out of the energy savings.

Mr. Huhne also claimed that there will be at least a 3% increase in green exports plus future growth from policies like the Renewable Heat Incentive.

Exactly how the financing of the Green Deal will work has yet to be explored, but he promised that up to £150 in cashback could be available for those taking out a Green Deal as part of efforts to make the scheme as attractive as possible.

Mr. Huhne even said that a net saving on domestic energy bills will be possible as early as 2013. "This assumes a central gas price estimate of nearly 70p/therm in 2020," he said. "If the gas price were to be higher, householders will be even better off."

Help for the fuel poor

Mr. Huhne confirmed that the Energy Company Obligation, which is also being consulted on, will force energy companies to provide £1.3 billion a year to target Green Deal measures at those in fuel poverty and solid walled properties.
But to ensure that not only the big energy companies benefit from the financial benefits of the work, the ECO consultation specifies that up to 50% of it should be executed by other providers, such as local authorities and other Green Deal providers.

Mr. Huhne said that this would "help make ECO more cost effective for consumers, and get more competition into the market" so that "smaller providers aren’t crowded out".

Some far-seeing companies that have already been installing solar PV systems under the FITs scheme, and who know that they are going to have to offer energy efficiency measures in future as part of the proposed changes to the way the scheme is offered to households, are already considering how they can take advantage of this opportunity.

The plight of those on low incomes was highlighted today by two new pieces of research from the Rowntree Trust which show that those in deprived neighbourhoods contribute the least to climate change but are likely to be the worst affected by it.

Understanding the social impacts of UK climate policies reveals that wealthier households have the highest energy use and people in the 45–55 age group emit 50% more carbon than the under-25s.

In terms of climate change impacts, Yorkshire and Humberside are the most disadvantaged regions due to the combination of high social vulnerabilities and high likelihoods of flooding, but nearly a quarter of all London neighbourhoods are most likely to suffer and least likely to be able to cope with the effects of heat waves.

The Trust is therefore calling not only for more support to address fuel poverty, but also protection for these regions from the dangers associated with climate chaos, and help for those who have difficulty in obtaining insurance against damage caused by it.

The Energy Statement was welcomed by RenewableUK, especially the news that the current cost to the ordinary household of support for wind power is 18 pence per week, and that in 2020, the cost to consumers of support for large-scale renewables will be less than £2 per week, or 3.5% of an annual energy bill, "far less than opponents of renewables claim".

“The figures in the Government’s Annual Energy Statement demonstrate this simple truth – that green measures, far from being expensive, can actually save us money," said RenewableUK Chief Executive Maria McCaffery, "and we’ll have tens of thousands of new green-collar jobs, thanks to that investment”.

Garry Worthington, Head of Green Deal for Climate Energy, commented that he was “pleased to see the proposal to appoint a Green Deal oversight body and an ECO administrator", and hoped they would "promote and facilitate regional and local Green Deal schemes".

Other features of the deal proposed by the consultation are:

• an accreditation framework for installers
• provision for collection of finance repayments through the electricity bill and remittance to Green Deal providers or nominated finance providers
• partnerships and localised delivery of the Green Deal and ECO to ensure that Green Deal finance and ECO support are seamlessly combined behind the scene
• a consumer protection regime.

New way of supporting solar PV floated as protests mount against FIT cuts

Caught between protests over cuts to feed-in tariff support for domestic solar PV installations and the need to reduce the impact on householders' electricity bills, the Government is considering a “capacity trigger” system to reduce the amount of the help larger systems are given, and spread the support over more installations.

It's one idea that will be proposed in consultation documents which DECC is expected to publish before the end of the year, and it is known to have the support of both the Secretary of State, Chris Huhne, and energy minister Greg Barker.

In Germany, FITs for solar modules will be reduced by 15% next year, but the amount of the tariff is reduced depending on the generation capacity of each installation.

The tariff is calculated by adding an overall reduction of the tariff (9%) to an amount relative to what is installed. For example, an installation above 3,500 MW of new PV capacity would entail a 12% reduction, while 5,200 MW would entail a 15% reduction.

A parliamentary advisor to Mr Huhne, Duncan Hames, is quoted as saying: “It would be naive not to plan for future cost reductions in panels. We need tariffs that will mirror reality and we should look to what they have been able to do in Germany to have a smoother path on the way to solar competing with other industries.”

The idea comes from a report looking at how to design solar PV tariffs to maintain rapid growth while limiting costs to taxpayers, which was published this summer by investment advisors Deutsche Bank, and called The German Feed-in Tariff for PV: Managing Volume Success with Price Response.

Under Germany's new Renewable Energy Action Plan, which is now based on ideas in the report, solar PV will generate 41 TWh of electricity per year for as much as 7% of 2020 consumption.

Wind energy will contribute 100 TWh or nearly half of the 217 TWh of renewable generation expected by 2020. Solar PV will deliver nearly 20%.

Policymakers are looking at ways to limit the cost of solar PV development not only in absolute terms but also relative to other renewables.

Triggers for cost reduction can also be time-based or cost-based.

As PV systems have seen a 50% cost reduction in less than two years, it is important that in 25 years time, the lifetime of the guaranteed tariff, electricity bill payers are not contributing what could by then be a completely disproportionate amount.

The Renewable Energy Association, which has fought the reduction in the FITs in the UK, has indicated that a capacity trigger "could be helpful to us" as "it would mean that if the price of panels doesn’t come down as anticipated, the model would account for that.”

One criticism of this solution is that, per installed unit of capacity, the cost of installing many separate systems is greater than that of installing a smaller number of higher systems. Therefore the cash available will support less, not more, generation capacity.

Judicial review

Chris Huhne has come under prolonged criticism over the FITs policy shift. Lord Teverson, LibDem spokesman on energy in the House of Lords, has said he should have thought through the changes earlier and had not shown “good management” of the process.

Almost three times as much solar capacity than expected by DECC had been installed by October, in 100,000 separate installations with over 400 megawatts of capacity.

Yesterday, the solar industry, backed by hundreds of supporters, took their protest to Parliament.

At a meeting chaired by Seb Berry, Head of Public Affairs for Solarcentury, a panel including Shadow Energy and Climate Secretary Caroline Flint, Caroline Lucas, the Greens' MP, Alan Simpson, the ex-Labour MP who helped design the Feed-in Tariff, and Chairman of the Solar Trade Association (STA) Howard Johns, attacked the cuts.

Friends of the Earth announced they had issued a request for a judicial review on the Government consultation's December 12 deadline for solar PV installations at the current tariff rate.

The campaign body's Executive Director Andy Atkins said, "The solar industry has been one of the UK's brightest success stories in the last two years, helping homes and communities across the country free themselves from expensive fossil fuels.

"We believe these plans are illegal as well as ill-advised - so we are taking action to bring ministers to court."

One casualty of the cuts in FITs has been a 26-acre solar farm in Chewton Mendip that was being developed by Ecotricity, which it says would have generated enough power for 1500 homes.

Also abandoned is a £6 million scheme to fit solar panels on 1,000 council houses in Kirklees.

The tariff rate for large installations like this has been cut by 70%.

UK Government nuclear policy slammed by Science and Technology Committee

Government funding, R&D and its attitude to the industry nuclear are retarding the chances of a nuclear renaissance in Britain.

Moreover, the issue of the legacy of nuclear waste is not being addressed with sufficient rigour.

Even more surprising, the Department for Energy and Climate Change seems determined to relinquish any responsibility for funding, or helping to secure funding, to maintain nuclear R&D capabilities and associated expertise in the UK.

These are the extraordinary views of Parliament's Science and Technology Committee, which has just released a report on the nation's Nuclear Research and Development Capabilities.

The Committee, headed by Lord Krebs, was tasked with examining whether or not the Government is doing enough to maintain and develop UK nuclear research and development (R&D) capabilities to ensure that nuclear energy is a viable option for the future.

Its conclusion is: "they are not".

The Government's avowed policy is for 16 gigawatts of new nuclear capacity by 2025, possibly rising to up to 40% by 2050.

But Lord Krebs says, "We're setting out on this journey with no map, no driver, and no mechanic to fix the car if anything goes wrong".

The Lords do not consider that Britain is seen by the nuclear industry outside Britain as a serious player, as it has no way of maintaining the breadth of R&D capabilities and associated expertise needed to meet the UK's future energy policies.

This is because successive governments have let the situation slide due to the touchy political nature of the issue.

The result is that the expertise of nuclear scientists, engineers and regulators is being lost as they retire.

Lord Krebs says that the current approach is an "Argos catalogue" one, by which he means buying a new generation of ready-made nuclear power plants from overseas producers.

This means that the UK will lack the skilled staff necessary to regulate the new industry, deal with the legacy issues of waste disposal, or develop, let alone export, new technologies.

The report concludes that ministers don't even recognise that there is a problem. Lord Krebs labels this "complacent" and "lacking credibility".

For example, the Secretary of State for Energy told the Committee that he could envisage a future in which fossil fuels will dominate. This led the Committee to say, "This apparent inconsistency causes us to question whether the current policy framework is sufficient to encourage more secure, low-carbon sources such as nuclear energy and renewables".

The report criticises the confusion in Whitehall about which government department, BIS or DECC, is responsible for UK nuclear R&D capabilities and associated expertise.

This has "led to BIS and DECC tending to look to the other to tackle gaps in R&D capabilities and associated expertise".

They therefore recommend that "for the avoidance of doubt", DECC should be the lead department "in developing a national nuclear policy and R&D roadmap, outlining what R&D capabilities and associated expertise are necessary to support its policies".

This roadmap would detail the co-ordination of R&D and associated expertise, maintain a healthy research base to attract new people and skills, set up international collaboration partnerships, and provide industry with the clarity it needs to encourage them to invest in R&D and associated expertise in the UK.

It should then set up an independent Nuclear R&D Board, made up of experts drawn from the Government, industry and academia.

This board would advise, monitor and report to DECC on the development and implementation of the roadmap and the Government's nuclear strategy, as well as identifying R&D gaps and, where necessary, commission research to fill them.

Funding gap

The National Nuclear Laboratory, which is supposed to help reduce the cost of clean-up and decommissioning, maintain the skill level and attract new people to the industry, is unique amongst similar bodies in other countries in that it receives no funding from central Government.

The Committee wants to see its remit extended to cover applied long-term R&D, under the direction of a nuclear R&D Board, in areas for which no body currently has responsibility, such as advanced fuel recycling and reprocessing and deep geological disposal.

The Coalition is split on nuclear power however, with the LibDems adamant that public money should not be spent on developing new civil nuclear capability.

The Lords therefore hope that funding for this "might come" from the nuclear industry or the reallocation of funding from elsewhere. It suggests taking 1% of the £2.8 billion allocated to DECC to decommissioning and clean up each year.

Nuclear waste

The Lords draw attention as well to the "urgent need to deal with the clean-up of legacy waste" and notes that no body has responsibility for R&D on deep geological disposal.

They lament the lack of a long-term research programme to deal with the UK's plutonium stockpile.

But they also think that the way in which the NDA is developing the framework to deal with the problem of waste from new build nuclear power stations is inadequate, and call on the Government to "clarify the NDA's responsibilities" in this regard, and urgently put forward a credible solution.

On nuclear safety, in the light of the unremitting bad news from Fukushima (unsafe levels of caesium have now been found in Japanese rice for the first time), the report says that the Office for Nuclear Regulation should immediately set up a new Nuclear Safety Advisory Committee.

The last one was disbanded in 2008, with responsibility transferred to the Health and Safety Executive.

The prognosis for nuclear

In the light of this and other recent developments, such as the decision of some companies to withdraw from nuclear newbuild in Britain, and the escalating expense of new nuclear, I myself will be very surprisd to see more than one or two new nuclear power stations built in this country.

I have never been convinced either by carbon capture and storage.

The way forward is, with increasing clarity, energy efficiency and renewables.

Were your gadgets manufactured with renewable energy?

Major brands are backing initiatives to promote renewable energy, with the spotlight particularly on IT companies.

Motorola, Lego and Deutsche Bank are just three of the major brands to sign up to a new scheme that backs wind power.

Many other companies, too, are finding competitive advantage in promoting the fact that they source green energy, while those which do not are experiencing a public backlash.

WindMade is a new label that you might start seeing on products, that will signify that they have been manufactured using electricity generated by wind turbines.

It is being launched by Danish turbine-manufacturer Vestas, through a non-profit organisation, also called WindMade.

Its mission is to accelerate the adoption of renewable energy by appealing to supporters to favour those products bearing the label when making purchases.

“Any company that uses at least 25% of wind energy can adopt the “WindMade” label, a company that recognises companies that focus on using wind as a renewable energy source,” Bragi Fjalldal of WindMade explained.

In support of its mission, Vestas' marketing chief, Morten Albæk, quotes the results of a survey the company has commissioned: "67 percent of 31,000 consumers globally have told us they would favour WindMade™ products, even at a premium,” he says.

Deutsche Bank's Group Sustainability Officer, Sabine Miltner, says that they have joined the scheme because “we believe clean growth is good economics”.

She says that Deutsche is “committed to leveraging our core business expertise towards a cleaner and more energy efficient global economy", and that the bank believes "in leading by example".

Deutsche Bank has increased its use of clean electricity from 7% to 65% over the last four years.

She says that the "market transparency" afforded by the label is important.

Other brands are recognising this too, as a means of gaining competitive advantage.

Unfriend coal

The highly visible campaign to get Facebook to "unfriend coal" has been remarkably successful.

Stimulated by the fact that the company chose to power its first two self-owned data centres primarily with coal, the Greenpeace-backed campaign was started a year ago.

It celebrated on 27 October when Facebook’s spokesperson Michael Kirkland announced that it has chosen a site for its new data centre in Luleå, Sweden, which "will be the first Facebook data centre powered primarily by renewable power. It's a really important consideration for us".

Facebook has yet to release more information on exactly how the centre will be powered.

Recent research by Justin Ma and Barath Raghavan from the University of California, Berkeley and the International Computer Science Institute, estimates that the internet consumes between 170 and 307 GW, or just under two percent of the entire world's electricity use.

Looking at the impact of the ubiquitous mobile phones and laptops they also estimated that a mobile requires 1GJ to manufacture and a laptop 4.5 GJ.

Yet the average smartphone is kept for just two years and the average laptop three years.

Greenpeace's Guide to Greener Electronics surveys top IT companies' environmental performance each year. It still finds that most electronic gadgets are made using coal-fired generators.

Dell and Hewlett Packard are the best performing manufacturers, sharing a target to increase their use of renewable energy to 100 percent by 2020.

Apple, on the other hand, is not a green Apple, because it has no external verification of its energy use and no target to reduce emissions.

Sony has also earnt the ire of green campaigners for actually lobbying against stricter energy efficiency standards in California.

Google is another firm taking the issue seriously. Its electricity use was 25% renewable in 2010 and it has a target of 35% in 2012. The search engine is investing heavily in renewable electricity, especially solar power.

Google recently released the environmental footprint of several of its data centres and “cloud” services in the interests of transparency.

It says its motivation is "to enable users to hold their service providers accountable for minimising their environmental impact, as well as to manage their own footprint", and clearly sees a competitive advantage in doing so.

Other brands from many different sectors, from vehicles to white goods, are promoted on the Top Ten USA website, which lets users choose the most efficient products and save energy and money in running costs using (except for vehicles) the Energy Star logo.

Motorola has also pledged to begin taking advantage of renewable energy sources, promising to acquire at least 25% of its energy from wind, as part of the WindMade campaign.

Its director for sustainability and stewardship, Bill Olsonin, said part of Motorola's motivation for participating in WindMade was to encourage greater use of renewable energy sources like wind and solar around the globe.

Other WindMade corporate pioneers and founders are: Bloomberg, LEGO, PwC, DK, medical technology suppliers BD, personal care product provider Method, Better Place, which makes electric car infrastructure, hearing aid manufacturer Widex, advertising agency Droga5, solar company G24 Innovation, textile producer Engraw, HVAC maker RenewAire, and communication technology supplier TTTech.

Bloomberg's head of sustainability, Curtis Ravenel, commented on the WindMade initiative that “the supply side of the clean energy sector can clearly deliver, but now it is time to galvanise demand. It is now up to the corporate community to demonstrate leadership by committing to clean energy development. WindMade™ provides us with a roadmap for achieving this”.

Any company or organisation that procures and uses wind-generated electricity as part of their global operations can apply for a WindMade label for their operations.

WindMade's Technical Standard for Products will be released in 2012.