Thursday, June 30, 2011

The Carbon Price Support scheme will only waste money

This tax on the emissions of power companies "will do nothing to reduce carbon and threatens to damage the reputation of policies aimed at tackling climate change" according to the IPPR (the Institute for Public Policy Research).

The Carbon Price Support scheme, which is due to begin in 2013, is another plank of the UK Government's strategy to tackle climate change.

But the scheme will force up to 60,000 more UK households into fuel poverty as energy companies pass on the additional costs of paying the tax to consumers, the IPPR's analysis of the Government's own figures shows.

By introducing a floor price for carbon in only one of the European Union's ETS’s participating countries, IPPR says this will undermine the economic efficiency of the scheme.

“Because a floor price for carbon in the UK will depress the carbon price elsewhere in Europe, the UK will effectively hand over billions to European polluters," said Andrew Pendleton, its Associate Director.

The UK is failing to cut greenhouse gas emissions...

...but the world is warming faster.

The UK is failing to act fast enough to reduce greenhouse gas emissions and might have to purchase carbon offsets to meet its 2025 goals, according to the Committee on Climate Change’s 3rd Annual Report.

This news is given more urgency this week when it was reported that carbon dioxide concentration in the atmosphere increased by 2.60 parts per million in 2010, more than the average annual increase seen from 1980-2010.

"The indicators show unequivocally the world continues to warm," said Thomas Karl, director of the US National Climatic Data Centre (NCDC), releasing the 2010 State of the Climate report, backed by the American Meteorological Society, NASA, the National Oceanic and Atmospheric Administration (NOAA), and the Met Office.

It says the world's climate is not only continuing to warm, it's adding heat-trapping greenhouse gases faster than in the past.

The CCC said that schedules to reduce emissions slipped in several areas in 2010. For example:
  • the number of cavity wall and loft insulation installations dropped by 30%
  • implementation of carbon capture and storage demonstration projects have been delayed
  • “eco-driving" courses trained only 10,000 drivers compared with 350,000 required per year by 2020.

Without the cold weather last winter, emissions would have been broadly flat but needed to reduce by 3%. However, emissions in 2010 were still within the limits of the first carbon budget period of 2008-2012 because the impact of the recession caused a 9% fall from 2008-09.

The CCC’s chief executive, David Kennedy, acknowledged that massive emission cuts were never expected early in the first period. “The focus was always going to be on getting the policies in place, such as electricity market reform and the Green Deal (household energy efficiency programme),” he explained.

But he said that it was vital to insulate all lofts and cavity walls by 2015. Only 13,000 walls were insulated in 2010 and 20 million solid walls remain to be insulated by 2020. More effort needed to be done to decarbonise transport and shorten planning times for renewable energy projects too.

If it failed to take sufficient action, the UK would have to use carbon offsets purchased abroad to meet its 2025 CO2 reduction goal, he said.

In response, Energy and Climate Change Secretary Chris Huhne insisted the Coalition is on course, citing its “once-in-a-generation reforms of the electricity market, the Green Deal and the Green Investment Bank", which "show we’re serious about making the long-term structural changes that are vital to cut emissions and keep the lights on”.

David Kennedy cautioned that the electricity market reforms to be announced next month should include long-term contracts, such as so-called contracts-for-difference and prevent the existence of an “investment hiatus".

The CBI employers group supported the committee's criticism and called on the government to clarify a number of “grey policy areas", such as the Green Deal, electricity market reform and the Green Investment Bank.

Wednesday, June 29, 2011

World Bank attacked for encouraging climate change

The UK must stop funding World Bank aid until the Bank stops financing unabated coal power stations in developing countries, says the Environment Audit Committee in a new report on the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation.

Chair of the Environmental Audit Committee, Joan Walley slammed the World Bank, saying it "should not assume continued support from the UK unless it changes its ways".

She also had harsh words for the Department for International Development (DFID), arguing that it "needs to get tough and use its position as a major shareholder to vote down dirty coal powered energy projects and ensure that the World Bank’s portfolio isn’t making climate change worse".

Last year's Spending Review gave Overseas Development Assistance (ODA) an increase in expenditure, one of the very few budgets to get an increase, from £8.4 billion in 2010 to £12.0 billion in 2013. This is to honour a commitment to match the United Nations (UN) target of providing 0.7% of Gross National Income as aid by 2013.

This is not the first time that DFID's performance on the environment has been criticised. A 2006 report said its processes for environmental safeguarding of aid programmes was inadequate, and concluded that DFID's climate change policy lacked coherence, and was "directly and indirectly responsible for very significant emissions of carbon into the atmosphere".

This new report shows little has changed since then, a fact supported by a National Audit Office report from February of this year, Aid and the Environment, in which DFID claimed it is trying to become more “climate smart” but was unable to provide any evidence that it had integrated environmental sustainability into development programmes.

The EAC also attacks the Government's Export Credits Guarantee Department, saying its activities "are not in line with the Government's wider sustainable development principles" and need immediate reform.

It recommends that "the ECGD should not support fossil fuel projects. It should develop and publish strategies for implementing the Coalition Agreement commitment to shift its support to low carbon and green technologies."

The MPs say also want to see environmental impact assessments conducted "on all the projects that the ECGD supports, irrespective of size or repayment terms".

Climate loans "dangerous and irresponsible"

The U.K.'s relationship with the World Bank also came under attack this week from the World Development Movement.

In a report entitled "Climate loan sharks" it accuses the UK and World Bank of making developing countries pay twice for climate change measures because its help is in the form of loans which must be repaid with interest by already debt-burdened countries.

For example Grenada’s debt is already 90% of its GDP, yet it is to be lent a further $22 million, over 3% of its GDP. The WDM calls such lending "at best irresponsible and at worst wilfully dangerous".

How is this occurring? The UK is providing most of its climate finance for adaptation as capital that can only be dispersed as loans through the World Bank’s Pilot Program for Climate Resilience (PPCR). All but three percent of these loans' capital comes from the UK.

Eleven country proposals have been developed so far under this programme, and at least £704 million of their finance will be loans.

The WDM notes that the idea of climate loans was created by the UK Labour government "as an accountancy trick to make its balance sheet look better, a policy continued by the current coalition government".

In May the Institute of Development Studies (IDS) also criticised the Pilot Programme for Climate Resilience (PPCR), saying the involvement of the World Bank in climate finance is more about keeping its own status than anything else and will "frustrate the ability of those most vulnerable to climate change impacts to shape future adaptation funding flows”.

The World Bank and the Green Climate Fund

The United Nations Framework Convention on Climate Change (UNFCCC) has given the World Bank a major role in the design and management of the new Green Climate Fund (GCF). This Fund is the mechanism which will channel all the climate finance promised by developed countries to help developing countries that was agreed at the annual global climate talks in Copenhagen and Cancun.

Developing countries and civil society groups heavily criticise the World Bank's role in this because of the Bank's record, summed up by Teguh Surya of NGO WALHI Indonesia, at a UNFCCC conference in Bangkok in April. He said, echoing the EAC's criticism, “we deplore the appointment of the World Bank as trustee for the Green Climate Fund. The World Bank does not have any credibility to be involved in climate financing given its long track record in promoting and funding fossil fuel projects that exacerbate climate change”.

At the first meeting of the transitional committee tasked with designing the GCF, in Mexico City last April, three co-chairs were chosen in a behind-closed doors process, with no civil society observers admitted. All three were male, and former finance ministers, and one was criticised for a conflict of interest.

A raft of other criticisms of the bank's processes and outcomes have been highlighted by the Bretton Woods Project, set up to monitor the World Bank and IMF.

DFID's monitoring system

Currently, however, the EAC observes that DFID's power to affect the Bank's behaviour is limited by its lack of expertise and capability. According to the NAO and EAC, DFID has had relatively few indicators to assess performance in this area.

DFID's review of its aid programme has resulted in climate change becoming one of its six priorities in its business plan for 2011-15. Aid spending directly attributable to environmental protection and climate change by all departments has risen over the last five years from £102 million in 2005-06 to around £360 million in 2009-10.

Despite this, it remains a relatively small but growing part of the aid programme. In response to the 2009 Copenhagen Accord, the UK government pledged £1.5 billion in aid for climate change over the period 2010 to 2012. Some £500 million of this was funded from the Environmental Transformation Fund (ETF - jointly funded by DFID and DECC) in 2010-11. Most of the remainder is funded from the International Climate Fund.

The Environment Audit Committee believes that DFID needs to publish a clear strategy on its approach to environmental issues to ensure that it gives them sufficient priority in its programmes and expenditure.

It says that UK aid should be helping developing countries to leapfrog high-carbon development and avoid locking in carbon-intensive infrastructure.

Therefore DFID should set targets for increasing energy access and the proportion of renewable energy usage in developing countries, and report such performance in its Annual Report.

Our privileged levels of consumption here in the UK relative to developing countries increases demand on production in these countries which leads inevitably to degradation of their natural resources.

The EAC exhorts the UK Government to ensure that our economic activity does not cancel out, or even reverse, the positive impact that UK aid is having overseas.

£20m promised for marine energy

The Government has promised up to £20 million later in the year to develop a pre-commercial demonstration of wave and tidal energy devices.

Climate Change Minister Greg Barker made the announcement yesterday while visiting marine power developer Pelamis Wave Power at Leith Docks in Edinburgh.

Pelamis is planning a wave farm project off Shetland using its snakelike 'P2' device, which will follow successful trials by E.ON at the European Marine Energy Centre off the west coast of the Orkney mainland. These have shown a very good conversion efficiency of around 70% in small seas.

Subject to state aid approval, the cash will come from DECC’s budget of over £200 million that is set aside to fund low carbon technologies and was announced in the Spending Review.

It will complement several other sources of support which together will help to progress the development of marine devices from the current large scale prototypes to larger arrays in the ocean.

Greg Barker spoke of the ability of Britain to be a world leader in marine power and support "thousands of jobs in a sector worth a potential £15 billion to the economy to 2050."

Barker is also in Scotland to chair the second meeting of the UK Marine Energy Programme Board at Edinburgh University. The meeting will discuss the setting up of Marine Energy Parks.

Scotland and the South West host the hubs where the main innovative development work in these technologies is already being carried out.

The funding will be in addition to money which the UK hopes to secure from the EU New Entrant’s Reserve 300 (NER300) fund. Of the five UK renewables energy projects submitted to the NER300, three were for tidal stream arrays and one was for wave energy arrays.

Hartlepool lobbies for offshore renewables

Barker's colleague at DECC, Charles Hendry, was yesterday at the Port of Hartlepool visiting other energy industries associated with offshore work: a leading cable manufacturer for renewable energy projects, JDR Cable Systems, and Heerema Fabrication Group, which specialises in the engineering and fabrication of large and complex structures, mainly for the offshore oil & gas and energy industry.

The local MP, Iain Wright, is working hard to attract companies in the renewable energy sector to the area via an initiative called Chain Reaction.

This group represents a cluster of companies including NOF Energy, EIC, JDR Cables, Narec, CTC Marine, TATA, The Crown Estate and the Port Authority, PD Ports Group, who all support Teesside’s ambition to become a centre of excellence for the UK wind energy market.

Both Wright and PD Ports told Hendry that it is imperative that the Government has a direct, clear and positive view of the renewables sector, including Renewables Obligation Certificates (ROCs), funding and planning.

“There is a major reluctance to invest in this sector until the Government sets the level for ROCs which will determine what proportion of their power that UK electricity suppliers must generate from renewable sources,” said David Robinson, CEO, PD Ports Group.

A banding review is underway for ROC levels in the UK, and the result is expected later this year. Currently, for example, under the banded Renewables Obligation, wave and tidal technologies receive an enhanced level of ROCs for each MWh of eligible generation produced.

“As long as the Government delays specifying the ROC level, it causes great uncertainly in the market and gives international companies no clear incentive to invest in UK facilities,” Robinson told Hendry.

A review by ARUP conducted for the review published earlier this month made some ambitious projections for marine power:
  • For wave power, there could be between 186MW and 279MW installed capacity by 2020 and 500MW and 2,520MW by 2030.
  • For tidal stream (marine current turbines) there could be 241MW - 406MW worth of installations by 2020 and 500MW - 2,160MW by 2030.
  • Tidal range deployment (barrages and lagoons) would only begin in 2021 and could entail 250MW - 1,000MW of power by 2030.

For comparison, offshore wind is expected to provide about eight times as much energy by 2030.

Friday, June 24, 2011

Planning permits for new generators need not take account of carbon emissions

The Government has ruled that the Infrastructure Planning Committee, which oversees all nationally strategic developments and will make the decisions on whether proposed developments should be given the green light, need not take into account the carbon impact of a particular plant before deciding whether to approve it.

The finalised Energy NPSs have been published by DECC, and, though yet to be debated in Parliament, provide a framework for planning and approving an expected £100bn of new energy infrastructure, including 33GW of new renewable energy capacity.

But in its response to the consultation on the NPSs the Government says that deciding on the impact of a development in relation to the UK's carbon budget "is a matter for wider Government intervention in energy markets, not a planning issue."

Five of the NPSs cover specific technologies: fossil fuels; renewables; gas supply and gas and oil pipelines; electricity networks; and nuclear. There is also an overarching energy NPS.

The latter sets out how the new system is compatible with the Localism Bill, retains the consultative approach (both on the NPSs and the consultation of local people in individual applications) and the transparency of the IPC system while increasing democratic accountability through returning the final decision to ministers.

The Nuclear NPS confirms eight sites across the country as suitable for new nuclear power stations by 2025 and lays out plans for how radioactive waste will be managed.

A Fossil Fuel NPS allows for carbon capture and storage to be fitted to new gas plants, as well as coal.

DECC also published yesterday new research into noise from wind turbines, and said it discussing with the Institute of Acoustics the establishment of a working group to develop best practice guidance for planners, developers and local communities.

Thursday, June 23, 2011

Microgeneration Strategy published - but will it over-achieve?

Installing solar PV modules on a home

The government's new strategy envisages the ideal cost of installing renewable microgeneration technologies to move to around £5-6,000 with a payback period of around five years so that millions of householders take it up. But it's worried that if its strategy is a success, then its support schemes may run out of money.

Its new Microgeneration Strategy and Action Plan for England, published yesterday, aims to remove non-financial barriers to the spread of these technologies, and calls for more demonstration homes, which are known to be the best way to promote uptake, and for industry, local authorities and government bodies to work together.

But the Government is worried about the scheme becoming a victim of its own success. Its accompanying impact assessment warns that implementing the strategy "could encourage greater uptake than we have projected" which ″could drive up subsidy costs of the schemes".

As a result it promises to keep tight watch on levels of uptake given that more funding would not be available over and above the 」15 million allocated to the Renewable Heat Premium Payments, 」850 million funding for the Renewable Heat Incentive or the 」610 million a year for FITs.

Launching the strategy and action plan, Greg Barker said, "The onus is on the industry itself to make the most of the opportunities presented by the financial incentives - supported by Government action to streamline regulation such as planning and standards, while at the same time ensuring consumers are protected."

As an example of what could be done, the Government proposes that information on financial incentives could be included in Energy Performance Certificates (EPCs) to stimulate take-up of renewables. Market research by Consumer Focus has shown that more people would take up renewable energy in their homes if this was included at the point of property sale or rental as part of the green deal advice process.

An army of skilled workers will be required to meet the demand but accreditation needs to be standardised. A survey is to be undertaken of all training schemes to recommend what's needed to create the competent installers of tomorrow to be completed by October 2012.

Industry must do its bit as well, including analysing the whole product life-cycle for each microgeneration technology to pinpoint where things could go wrong in advance and bolster customer confidence. It should do more to market the concept of microgeneration and the potential benefits to consumers with independent source of advice by September this year, and produce a guide on warranties and insurance schemes for customers and factsheets for each technology with information on maintenance and the longevity of key components, by April next year.

Micro-hydro will be removed from the Microgeneration Certification Scheme for the purpose of Feed-In Tariff eligibility to make it easier for customers to find an appropriate installer. Schemes under 50kW are already rigorously regulated under environmental and planning consenting requirements. The Chief Executive of the British Hydropower Association, David Williams, called this "a great relief".

Importantly, the strategy recognises also the value of heat pumps, micro-CHP and, into the future, compressors and absorption chillers which could provide solar-powered cooling.

Wood fuel is also considered vital and the Government is developing a Bio-energy Strategy for publication later this year, which will set out the government's strategic direction for bio-energy to 2020 and beyond.

Building Regulations and the Standard Assessment Procedure (SAP) will also be amended to better quantify the benefit of including renewables in developments.

Government and industry will work together to explore opportunities to expand the microgeneration sector by working with European level initiatives. This includes, for example, Smart Cities, which launched on 21 June, and addresses technologies, local production and energy networks, including electricity, heating and cooling.

Launching the initiative, Energy Gnther Oettinger said: "With an 80 million Euro package we plan to demonstrate smart integration of urban energy technologies in selected pilot cities. This will kick-start important new markets for European industry. Cities are key to the EU's objectives of 20% energy saving by 2020 and to developing a low carbon economy by 2050, because 70% of the EU's energy consumption takes place in cities." Manchester is the English city taking the lead in this imaginative scheme.

Community energy

Connected with this, the Government wants to encourage more communities to take up district level renewable energy schemes that would be owned by the communities themselves.

Currently there are many barriers forming an uphill battle to communities that wish to do this, such as lack of knowledge about planning, local awareness, skills, time and access to finance. DECC has pledged to do more to address these issues with a stakeholder group to be set up next month, including developing the Community Energy Online web portal and engaging in collective purchasing of renewable energy in order to get a better deal.

The latter opportunity was identified earlier this year in a BIS proposal, Better Choices: Better Deals. It cites the pioneering example of Barnet in achieving this and, in fact, many of the initiatives set out in the microgeneration strategy.

Good Energy in particular has welcomed the recognition in the strategy that community energy projects come in all shapes and sizes and could be as large as 20MW in capacity, and that the Government is committed to a wider distributed energy strategy as part of its Electricity Market Reform.

"Dark day for Europe" on the environment - Huhne

The European environment suffered a double blow in Luxembourg on Wednesday as moves to protect both biodiversity including fisheries - and the climate were scuppered on cost grounds.

One country alone - Poland - blocked progress on the Energy Roadmap 2050, which ministers had hoped would provide certainty and direction for the continent's climate policy.

The Roadmap calls for a 40% cut in carbon emissions by 2030, a 60% cut by 2040 and an 80% cut by 2050, compared to 1990 levels.

After a meeting of EU environment ministers in Luxembourg yesterday, UK Energy Secretary Chris Huhne described the mood by saying: "It is a dark day for Europe's leading role in tackling climate change."

Janusz Lewandowski, the Polish commissioner in charge of the EU's Euro130bn budget, even expressed scepticism over the science of climate change and the future of emissions policy.

"We already have overambitious agreements on CO2 emission reduction," he told a newspaper "There is a notion that the thesis that coal energy is the main cause of global warming is highly questionable. Moreover, more and more often there is a question mark put over the whole [issue of] global warming as such."
Poland gets 90% of its electricity from coal.

Lewandowski said the CO2 targets "are too ambitious for the Polish economy Polish politicians have to persuade that there cannot be a quick jump away from coal. For Poland it would be a disaster."

"It is unclear where we go from here," said a Commission spokesperson. "The Council's work programme for the next six months will be established by Poland. Today's result was unexpected."

Worryingly, Poland is to take charge of the revolving presidency of the EU from 1 July. Jason Anderson of the WWF said Poland's move showed a "shocking disregard for climate protection and economic revitalisation".

"It's terrifying that the man in charge of Europe's budget is someone you might expect to see in Sarah Palin's Republican party," added Greenpeace advisor Ruth Davis.

There was success in one area, however, on Tuesday.

The impasse over a new directive on energy efficiency for business proposed by energy commissioner Gnther Oettinger was resolved.

There had been fears that the energy savings generated would cause a surplus of carbon permits in the EU's emissions trading scheme and drive down their value. Climate and Environment Commissioner Connie Hedegaard had proposed setting aside some permits, but some businesses had opposed this on cost grounds.

The compromise allows adjustments in the supply of permits to be made instead, including setting some aside.

MEPs are also set to vote in the European Parliament on cutting carbon emissions tomorrow.

However, 23 Conservative MEPs are reported to be threatening to vote against David Cameron's ambitious policy of increasing the target from 20% reductions by 2020, compared with 1990 levels, to 30%. This is in the coalition agreement, and supported by other EU member states.


EU environment ministers also failed yesterday to endorse action proposed by the Environment Commissioner Janez Potočnik to protect biodiversity on cost grounds.

Some, including Italy and Denmark, even expressed reservations on the targets until more clarity is provided on what exactly is to be done and how it is to be funded.

Some cited the failure in Europe to meet its 2010 biodiversity targets as being due to the same lack of detail on the costing of precise actions, and didn't want the same thing to happen with the 2020 targets.

The UK, Austria, and Denmark proposed that funding could come through the EU's Common Agricultural Policy (CAP) but this wasn't unilaterally approved,

So, while adopting the conclusions of the EU 2020 biodiversity strategy, ministers felt they could not endorse 20 concrete measures that would support the six headline targets proposed within it.

Instead, the Council's conclusions stress "the need to further discuss the actions in order to ensure the effective and coherent implementation of the strategy".

Potočnik had argued that his proposals were "the minimum we need to do if we are to reach the EU 2020 headline targets adopted by EU heads of state and government. There is not much margin in the proposed strategy", adding that the Council did not have the luxury of time.

But after the meeting he put a brave face on its decision, commenting that "While the Commission would have preferred a greater level of ambition from Member States, particularly in the short term, I am satisfied that today痴 conclusions send an appropriate message regarding the level of seriousness with which the EU treats the issue of biodiversity loss.

"The importance of integrating biodiversity into sectoral policies, the ongoing reforms to the Common Agricultural Policy, the Common Fisheries Policy, and the discussions on the Multi-Annual Financial Framework has been recognised by Ministers."

Xavier Pastor, executive director of maritime campaign group Oceana, said the EU must structurally reform its fisheries policies if it is to halt biodiversity loss and restore the health of its oceans. "The biodiversity strategy was supposed to pave the way for an ecologically sustainable reform of the CFP, but today the Council adopted hollow conclusions".

Back in the UK, however, a pilot scheme is to start in 2012 that will test the radical new idea of biodiversity offsetting, or mitigation banks.

Developed by the Environment Bank Ltd. in collaboration with UK痴 Environment Agency, small, voluntary projects on the Suffolk and Essex coasts will generate conservation credits which developers will be able to purchase in order to offset any development impact they have in the area.

The scheme will be administered largely by local governments, with Natural England providing support to pilot areas.

Tuesday, June 21, 2011

Governments must work harder to avoid global catastrophe

Governments of developed countries must work harder to secure a climate pact to succeed the Kyoto Protocol, and avoid an approximately 3.2 degrees rise in average global temperatures this century.

Christiana Figueres, head of the U.N. Climate Change Secretariat, made this call last Friday, at the end of two weeks of fraught and only slightly productive climate talks in Bonn.

"There is a growing realisation and acknowledgment that resolving the future of the Kyoto Protocol is essential this year and will require high level political guidance," Figueres said.

Ambassador Jorge Arguello of Argentina, Chairman of the Group of 77 and China (G77) agreed, adding, "The chance to reach a successful outcome in Durban to consolidate and strengthen the climate change framework still depends on the level of political will that Parties can show."

Durban is the location of the next top level meeting in November/December. The EU and others have now conceded that an all-encompassing agreement on binding carbon emissions is unlikely to be achieved there.

What is the scientific position?

According to Climate Action Tracker, based on current commitments by nations, the world is headed for an approximately 3.2 degrees rise in average temperatures this century.

Dr. Sivan Kartha, senior scientist at the Stockholm Environment Institute (SEI), said that while developing countries have made credible commitments to address their part of the emissions gap, developed countries' promises are such that, with the current accounting loopholes on the table, their emissions could actually increase when they should be rapidly declining.

"You can't negotiate with science," he said. "You can't negotiate with the Earth's natural limits. At the moment, emission reduction pledges take us far over those limits."

Some progress made

The Kyoto Protocol remains fundamental and critical to success because it "establishes the key rules to quantify and monitor the mitigation efforts of countries" and "contains the market-based mechanisms which allow countries to reach their mitigation levels at cost effective levels," Figueres said in her concluding remarks to the conference.

"Climate [change talks] are the most important negotiations the world has ever seen, but governments, business and civil society cannot solve it in one meeting," she added, in response to criticism that progress is too slow.

Some progress was made at Bonn, on technical issues such as designing a scheme for sharing clean energy technologies, on a system for the measurement, reporting and verification (MRV) of national emissions, on the financing of a $100bn-a-year Green Climate Fund to support adaptation and emission reduction efforts in developing countries, as well as in forest protection and carbon markets.

Despite this, developing nations are feeling that they must resign themselves to expect a weaker deal from the developed world.

"This process is dead in the water," commented Yvo de Boer, former head of the United Nations Framework Convention on Climate Change (UNFCCC) during the talks. "It's not going anywhere".

Pablo Solon, head of Bolivia's delegation added that "there has been no advance in the substantive issue of pledges for reductions in emissions" by developed nations.

The minimum goal envisaged by developing nations is for a core group, led by the European Union, to extend the Kyoto Protocol.

Canada, Japan and Russia have all said they will not sign up to a second commitment period, and the world's two largest greenhouse gas emitters - China and the United States - are not bound by the Protocol. This leaves the European nations as the keystone nations upholding it.

During negotiations, the EU was challenged to sign up to the second period unilaterally, but the European Commission negotiator, Jurgen Lefevere, said renewal of the Kyoto Protocol alone "is not going to cut it", since it accounts for just eleven percent of world greenhouse gases. "We need a solution for the remaining 89 per cent as well," he observed.

The problem of transport

There is one big issue on which China and the United States, the world痴 two biggest emitters, agree: they both oppose the EU's scheme to regulate and reduce emissions from air and marine transport (known as 澱unker emissions.

These emissions were excluded from the Kyoto Protocol because countries could not agree on what to do about them.

They are the subject of a UNFCCC working group which made little progress at Bonn, as they are stalled pending the result of a legal case.

Earlier this year, the EU has got fed up with waiting for these sectors to take action on reducing their own emissions and proposed that they be included in the revised EU Emissions Trading Scheme (EU-ETS) from 1 January 2012.

China and four US airlines are challenging this in the courts and the European Court of Justice is to hear the case in July. The Court will probably not issue its judgment before the EU-ETS enters into effect. Until it does, the UNFCCC working group feels it cannot move forward.

Meanwhile, a proposed objective to cut the EU's transport emissions by 60% by 2050 was considered "too ambitious" by a majority of the EU's 27 transport ministers, meeting in Luxembourg last week, who want the goal to remain aspirational. They believe it would disadvantage European companies compared with their competitors in Asia or the US.

"In order to maintain the Union's competitiveness, similar commitments should be sought at international level. Today there are no alternative to fossil fuels [that is] competitive in terms of technology and price," ministers admitted in a statement.

It is the newer Eastern European members who are the most opposed to a binding 60% target. Others, such as Austria, believe it is achievable and should even be increased.

Soil carbon

Observers at the talks reported that some countries were introducing new market-based proposals such as 'soil carbon' markets into the negotiations which were unproven and had delayed the talks.

Michele Maynard, Policy and Advocacy Officer of thePan African Climate Justice Alliance (PACJA) said, "These markets are a false solution that will only fuel the land-grab in Africa and seriously undermine the ability of poor Africans to feed themselves."

Kate Horner, senior analyst at Friends of the Earth (US) said the United States continues blocking progress on the most important issues in negotiations, including how they will meet their pledges to the Green Fund.

"Perhaps the biggest contribution the US government could make to these talks would be to cut the carbon of sending people to negotiations who refuse to negotiate," she said.

What happens next

The next major milestone is the 17th Conference of the Parties of the UNFCCC and the 7th Conference of the Parties to the Kyoto Protocol, to be held in Durban, South Africa, in November /December 2011.

Before then, there will be a meeting about the Green Fund in Tokyo in July. A ministerial conference is planned for 2 to 3 July in Berlin, and ministers will also meet approximately a month ahead of the UN Climate Change Conference in South Africa.

South Africa is also considering a third ministerial consultation this year, and the incoming South African presidency and the current Mexican presidency are planning to engage heads of state and governments on the margins of the UN General Assembly in New York in September.

Monday, June 20, 2011

The Government fails to stand up for the Arctic environment

Greenpeace protest over Arctic drilling
On Friday Greenpeace's director Kumi Naidoo was apprehended while trying to board a drilling rig off the coast of Greenland, in order to stop Cairn Energy drilling for oil and gas in this critically sensitive environment.

Speaking before he set out to scale the platform, Mr Naidoo, said: "The Arctic oil rush is such a serious threat to the climate and to this beautiful fragile environment that I felt Greenpeace had no choice to return, so I volunteered to do it myself."

Greenpeace feels compelled to act because the UK Government won't.

Last week, Energy Minister Charles Hendry said in public for the first time what had thus far only been said in private - that it is UK policy to support drilling for oil and gas in the Arctic.

Since when did this become UK policy? And why has the House of Commons never debated it?

Hendry told an energy conference that Arctic drilling is "entirely legitimate" and that, "given the ability to carry out this work safely, this should be part of the work of the industry".

Energy and mineral companies are taking a great deal of interest in the area now that climate change has caused the ice cap over the Arctic Ocean to melt during the summer months more than ever before in recent history, thereby easing access to the seabed.

A report issued by the US Geological Survey in 2009 estimated that the Arctic contains as much as 13% of the world's remaining undiscovered oil and 30% of its undiscovered gas.

Of course, this is just speculation, but the melting ice has exposed something else: an absence of regulation to protect this fragile and beautiful environment.

Britain, not being an Arctic state, nevertheless has clear interests in the region. It is an observer on the Arctic Council, along with France, Germany, Netherlands, Poland and Spain.

The Council's full members are Canada, Denmark (representing also Greenland and Faroe Islands), Finland, Iceland, Norway, Russia, Sweden and the USA. It has several working groups which investigate the environmental and social aspects of developing the area.

But the Council is not a legally empowered body. It does not have the muscle to veto the actions of members, who in turn are not obliged to act in accordance with its deliberations.

In fact, it is a talk shop, which gives the appearance of collaboration between interested parties, while behind the scenes they frantically scurry to gain competitive advantage over access to the trillions of dollars of riches on the continental shelves surrounding the ocean. "There is in fact no strong consensus between the states," comments Anna Galkina, a researcher on this issue at think-tank Platform.

British companies BP, Shell and Cairn Energy are amongst those behind this struggle, which has recently seen BP spectacularly falling out with Russian giant Rosneft despite heavy UK government lobbying on its behalf.

BP's troubles seem all the more ironic when you know that on 14 January 2011 BP CEO Bob Dudley and Eduard Khudainatov, CEO of the Russian state oil giant Rosneft, following a meeting with Vladimir Putin, signed their original agreement in the presence of our Energy and Climate Change Secretary Chris Huhne.

In the absence of any regulatory body capable of controlling this oil and gas rush, it has fallen to NGOs to try and put a brake on exploration.

Cairn Energy is at the forefront of the rush and is about to commence drilling off the Greenland coast. Twice this year Greenpeace has attempted to stop them with direct action, and in response Cairn has just obtained an injunction preventing them from boarding their rigs.

Hendry's phrase, "the ability to carry out this work safely", cannot be tested in public because Cairn refuses to publish its Oil Spill Response Plan despite a petition signed by almost 50,000 people and a highly unusual admonition by a judge in Amsterdam, who said that doing so would make absolute sense, even to the company concerned, if it really wanted to maximise the chances of preventing an accident.

I am putting in an FOI request to find out if Hendry, or anyone at DECC, had been shown Cairn's Oil Spill Response Plan for its Greenland operation before coming out with such unequivocal support. Because if he has seen it, why can't we all? And if he hasn't, how can he so confidently support the company?

Or has he forgotten BP's rather costly adventure in the Gulf of Mexico last year?

The US National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling concluded in its final report in January 2011 that "detailed geological and environmental information does not exist for the Arctic exploration areas and industry and support infrastructures are least developed, or absent

Lord Howell, at the Foreign and Commonwealth Office, is one minister heavily responsible for UK policy on the Arctic, and is involved in lobbying to support British oil companies' commercial interests abroad.

Yet the British Parliament has not had a chance to debate and decide this policy. The only time it has come remotely near to being discussed was in a poorly attended and very short debate in the House of Lords on the 6th December 2010, led at 8.02pm by Lord Jay.

There, Howell admitted that besides ostensibly protecting the Arctic environment, "our second aim is to protect crucial UK energy supplies from the region and promote UK business interests. Thirdly, we want to ensure access to fisheries and transport routes in the region, including the ones that may open up in the future-not just in summer but in winter."

Only then did he say that a fourth aim is "to promote wider UK Government objectives with regard to sustainable development, environmental protection and climate change".

It's not that he is unaware of the fact that all of this exploration is only possible because of climate change. He even commented on "the irony that the melting of the ice means that all sorts of possibilities open up for access to the huge hydrocarbon resources in the region." But he only talked of "how" - not whether - these "colossal reserves" might "be got out economically and in line with all the other restraints that the world wants."

I asked the Department for Energy and Climate Change if they would clarify their position. This is what I received in response: "regulation of Cairn's drilling proposals in the Arctic is a matter for the Greenland Government. As an observer in the Arctic Council, the UK has contributed to the development of the guidelines recently agreed by the Council on oil and gas, and supports robust provisions on environmental protection and sustainability in Arctic waters.

“More generally, the UK is participating in the G20 initiative to promote best practice and regulatory standards, to ensure that oil and gas activities carried out anywhere in the world align with industry best practice and are managed so as to ensure minimum impacts to the environment.”

Nothing about climate change.

The Arctic Council's guidelines on exploration were in fact agreed in 2009. They include acknowledgement of the principles of "polluter pays" and "the precautionary principle", and they recognise that the area "has high sensitivity to oil spill impacts and the least capacity for natural recovery".

Given the overwhelming threat of climate change, many NGOs, including Greenpeace and WWF, are demanding that no fossil fuels be extracted from the area. They are calling for the Arctic to become a scientific reserve, as the Antarctic is, and left alone.

There is, sadly, little chance of this. An important discussion document published in Washington in January this year - The Shared Future: A Report of the Aspen Institute Commission On Arctic Climate Change - supposedly takes "a hard and new look at climate change in the Arctic".

But does it call for a moratorium and a ban on drilling in the area? No. Its main recommendation is that "governance in the Arctic marine environment, which is determined by domestic and international laws and agreements, including the Law of the Sea, should be sustained and strengthen by a new conservation and sustainable development plan using an ecosystem-based management approach".

Amongst its 10 principles of Arctic governance is number 4: "Avoid exacerbating changes that may be difficult or impossible to reverse in temperature, sea-ice extent, pH and other key physical, chemical and biological ecosystem parameters."

It's hard to see how any exploration can go on in such harsh conditions which do not contain the risk of doing so. But the document falls short of admitting this.

Instead, it says that Arctic governments should take immediate steps to begin developing an Arctic Marine Conservation and Sustainable Development Plan by 2012, which "should also open the door to a new model of natural resource governance in the Arctic that promotes an ethic of stewardship and multinational use of best management practices".

Fine words. But while energy companies can't even publish their safety plans there is fat chance of this happening.

Diana Wallis, Vice President of the European Parliament and MEP for Yorkshire and the Humber, and the Green Party's Caroline Lucas are alone amongst legislators in pushing for stronger regulation. Wallis' website allows people to vote on whether there should be a moratorium on oil exploration in the Arctic. Two thirds of voters there think there should be.

What she and I want to know is: why isn't the British Government standing up for the Arctic? Why is it caving into commercial interests?

And why can't there be a proper debate in the House of Commons on this crucial issue?

Friday, June 17, 2011

The new post-carbon age business model

Google solar
The idea of providing a service of renewable energy - rather than a simple supply - and reaping a return on investment from selling any surplus generated to the grid, or by claiming the difference between the regular and premium rate, is emerging as the favoured business model for financing the low carbon revolution.

The latest example is the announcement from Google on Tuesday that it will finance a $280 million retrofit of residential solar power systems in the United States through a deal with startup SolarCity. This is the search engine's largest single renewable energy investment to date.

Upfront cash payments will enable householders who can't afford a large upfront investment to have solar modules installed on their roofs by SolarCity in a leasing arrangement. This allows them to pay a monthly fee for the modules that would be offset by savings and electricity bills.

The systems will be owned by Google who would earn a higher return on their investment than if the cash was in a bank.

This business model is now becoming established in the UK. The latest example was announced on Wednesday by the Foresight Group and Our Generation Limited, who have agreed an initial £10 million programme of residential solar PV installations in the UK over the next 3 months.

Energy services company Our Generation will make the installations and utility E.ON will be responsible for recruiting and managing the customer experience through its SolarExchange initiative.

15,000 of its customers will receive solar power installations costing as little as £99 and save up to £180 on their annual energy bill.

Foresight already manages solar power assets worth over £150 million.

The model is being used by many companies in the UK to finance the installation of solar PV modules on rooftops. The premium 41p/unit paid by the utility for solar electricity provides the return on investment.

Britain's forthcoming Green Deal and Renewable Heat Incentive will see many more examples of this model rolled out, with both large (Tesco, B&Q) and small companies seeing opportunities.

Thursday, June 16, 2011

Is anaerobic digestion an ideal sustainable technology?

Anaerobic digestion plant on a farm
Between three and five terawatt-hours of energy could be supplied by anaerobic digestion by 2020, according to the Government's new Anaerobic Digestion Strategy and Action Plan.

The Plan contains guidance on the cost and benefits of AD for developers and local authorities, and tactics for training and developing markets for the biogas and fertilisers produced by the technology.

″Getting rubbish and waste rot in landfill is madness when we can use it to power our homes and cars,″ said energy secretary Greg Barker. ″We are already making it financially attractive to turn waste into electricity under the Feed-in Tariffs scheme and soon there'll be similar incentives to generate heat too.

"The Anaerobic Digestion strategy and action plan will help us unlock the potential to get more energy from waste to reduce emissions in the fight against climate change.”

Rightly, the Strategy describes AD as a beautifully flexible technology - "plants can be built on many different scales, from large facilities treating sewage sludge or municipal waste, to smaller ones handling materials from a particular farm or a small community. The construction of AD facilities can be comparatively swift, and compared to some other waste management technologies can be relatively inexpensive.

"The inputs and outputs of the technology are also flexible, meaning that the plants can be designed to meet local requirements for feedstock or outputs, while remaining connected to the national electricity and/or gas grid."

It has further advantages, too, over other renewable energy technologies. "The energy is generated constantly, unlike wind, tidal and solar power, and can be stored in the grid (in the form of gas)" - methane.

Methane is one of the few renewable fuels suitable for Heavy Goods Vehicles (HGVs), and has the potential to reduce reliance on imported gas.

So it can process waste and produce heat and electricity.

And, "by providing low carbon fertilisers for agriculture, AD helps deliver a sustainable farming sector, where resources are reused on-farm to reduce GHGs and provide secure and sustainable inputs, particularly phosphate", the Strategy says.

The Anaerobic Digestion and Biogas Association (ADBA) said the plan "should help make it easier to grow the industry. Developments such as a best practice scheme for AD will ultimately help break down barriers to plant development, reduce the risk of investing in AD and deliver the industry's potential to UK plc."


However, they qualified this by adding that the accompanying Waste Review "should have been bolder and called for as much organic waste to be treated through AD as possible.

"We are disappointed by the lack of recognition of the importance of source-segregating food waste, in reducing waste arising, allowing easier recycling of products from other materials such as plastics, and creating a quality fertiliser from AD which will help decarbonise food production. With 1.1% of overall UK emissions coming from artificial fertilisers, and oil prices increasing their costs and the cost of food all the time, this is a huge environmental and social issue."

And, the Action Plan does not offer the prospect of additional funding.

Instead "it promises that the Government is working to ensure that the financial incentives available for AD under the Renewables Obligation (RO), the Feed-in Tariffs (FITs) Scheme, the Renewable Heat Incentive (RHI) and the Renewable Transport Fuel Obligation (RTFO) provide the revenue support that investors need."

If AD is so good, it should be supported more than photovoltaics – and certainly should be made more attractive to developers.

New campaign for renewable energy launched

Bill Oddie
A new campaign Action for Renewables was launched yesterday - Global Wind Day - by senior business leaders, trade unionists, non-governmental organisations and grass roots activists to call for Britain to generate more clean, green energy from renewable sources such as wind, wave and tidal power.

RenewablesUK, which is coordinating the campaign, released figures showing that the UK is far behind key European competitors in the number of wind turbines per 100 km2, including Denmark and the Netherlands.

It cites public polling conducted by DECC which reveals that, contrary to received wisdom, only a fifth (21%) of the population wouldn't like to live within three miles of a wind farm - concluding therefore that most people would not object to more wind farms.

The Action for Renewables campaign launch culminated last night with a London screening of a film made by TV presenter Bill Oddie about innovative green projects around Britain, using hydro, wind and marine energy.

The launch is part of Wind Week, which lasts all this week.

“A bigger renewables sector will not only help to reduce our carbon footprints, but by generating thousands of new jobs it could support a new sustainable economic growth model for the UK," said Frances O'Grady, TUC Deputy General Secretary at the launch.

Monday, June 13, 2011

The Feed-in Tariffs review fiasco

With a stroke, DECC has undermined the competitiveness of the UK solar industry in the export market.

Over 80% of respondents to the Government's review of Feed-in Tariffs opposed the deep cuts to the incentives with most calling for more modest cuts and for the retention of high levels of support for community-scale installations for schools, hospitals and offices.

Many investors are now changing their minds about supporting the industry.

The funding for Feed-in-Tariffs comes from everybody's electricity bills - estimated at an average £3 extra per bill by 2016. DECC's argument for the its U-turn on tariffs is that the £860m pot allocated for it cannot get any bigger because consumers would not tolerate the consequent higher bills, especially at a time when energy prices are rising anyway.

Its prime aim is to encourage awareness amongst the general public of the need to save energy and the importance of renewable energy rather than cost-effectively tackle climate change.

Putting solar panels on lots of homes is seen as the best way to do this. It wants to put the money from the FITs into the pockets of householders and not into the pockets of larger concerns.

It's a shame that this is an either-or alternative.

Because unfortunately, those large concerns are not just big companies but community groups and farmers, which flies in the face of the Government's localism agenda. It needs to make an exception in these cases and reinstate the higher tariff bands for PV.

But how successful is the policy at tackling the aim of reducing the country's carbon emissions? Pound for pound of investment, solar PV does not represent good value for money when seen from an environmental point of view in the UK when compared to some other technologies.

The UK does not get a lot of sunshine, except in the very south and south-west, the sun only shines some of the time, and so investment in technologies that can produce renewable and sustainable power all of the time more efficiently will therefore produce more carbon savings [see p. 40-44 of this CERT doc. for the supporting evidence that shows which domestic-level measures produce the most cost-effective savings].

This is where anaerobic digestion (AD) comes in. With a feedstock that can keep it generating every hour of the year, it is also an emerging technology that requires support to get it up and running. It may not be as sexy as PV modules, but it does the job.

The AD industry lobbied for much more support and has been devastated by the result. What it got was an increase in the FIT rates of just 1p. They are now 14p/kWh for schemes up to and including 250 kW and 13p/kWh for schemes up to and including 500 kW.

This is not nearly enough to stimulate further investment in the technology, as Lord Redesdale, chairman of the Anaerobic Digestion and Biogas Association (ADBA) has warned.

With a capital cost of around £7,745 per kWe, AD has the highest cost per MWh of any form of heating for district heating schemes - almost £250; twice the cost of a community biomass combined heat and power (CHP) plant. But put this in perspective: it is not as much as an energy-from-waste CHP plant.

And it has other benefits besides producing heat and power - such as discouraging N2O (a very potent greenhouse gas) emissions and nitrogen pollution by processing farm slurries, and the production of compost which can be sold for soil enrichment.

It is ideal for district heating. The main benefit of moving to district heating a declared Government aim - is saving carbon emissions. Here, anaerobic digestion CHP scores way higher than all other technologies, at around 5,100 kg of carbon dioxide per year compared to a conventional system. (Incidentally, air source heat pumps used for this purpose actually cost carbon compared to a conventional system.)

By the way, these figures are taken from a report commissioned by the Department of Energy and Climate Change itself two years ago on renewable heat and district heating networks.

So it is surprising to hear DECC's Greg Barker say that there is not enough evidence to support the industry's case for greater help.

Its own research shows that if you take into account the implied carbon abatement cost, anaerobic digestion actually ends up being one of the cheapest forms of renewable district heating at less than one fifth the cost of a community boiler using natural gas.

It is still not the cheapest by any means, but this is because the plant is doing more than just burning a feedstock, and because the technology is relatively new.

And the whole point of the Feed-in Tariffs and Renewable Heat Incentive is to bring down the cost over time.

The National Grid itself has said it can see a time in the not too distant future when up to 50% of the gas in the networks is renewable, much of it coming from anaerobic digestion of organic waste.

The Coalition Government is to publish a new anaerobic digestion strategy later this month. While this is not expected to include any more financial help, the more it can do to boost this potentially highly valuable technology, the better.

Wednesday, June 08, 2011

Carbon market in a slump as climate talks continue in Bonn

Forest planted and managed for carbon offsetting
As world environment ministers and representatives meet in Bonn for climate talks this week, investors in the carbon market are hoping, probably in vain, for some kind of certainty as to what will happen after 2012.

After five consecutive years of robust growth, the total value of the global carbon market has stalled at $142 billion due to uncertainty as to what will replace the Kyoto Protocol's Clean Development Mechanism (CDM) after next year. The recession has also had an effect on the market.

A report from the World Bank, The State and Trends of the Carbon Market 2011, covering the last five years up to 2010 and issued last week, shows that the value of the primary CDM market fell by double digits for the third year in a row, ending lower than it was in 2005, the first year of the Kyoto Protocol.

The Assigned Amount Unit (AAU) market, which grew in 2009 with strong governmental support, shrank as well in 2010. Finally, the market that had grown most in 2009 allowances under the U.S. Regional Greenhouse Gas Initiative (RGGI) saw that year's gains erased in 2010.

This meant that the European Union's Allowances (EUAs) market became especially important. EUAs accounted for 84% of global carbon market value last year.

If you take into account the value of secondary CDM transactions, their share, driven by the EU Emissions Trading Scheme rose to 97%, dwarfing the remaining sections of the market. If it was not for Europe's commitment, virtually nothing would be happening elsewhere in the world.

Voluntary carbon market

There is good news, however, in another report released last week about the state of the voluntary carbon market, which posted a 34% gain in 2010, trading a record 131 million tons of carbon dioxide equivalent (MtC02e).

This is an annual report by Ecosystem Marketplace and Bloomberg New Energy Finance which gathers data from almost 300 market participants.

While the US accounted for the majority of trading activity, worth $424 million in total, market growth was strongest in developing countries.

Voluntary offsetting is due to businesses' CSR (Corporate Social Responsibility) commitments. These markets are investing particularly in renewable energy and forests.

The need for political commitment

Loss of political momentum on setting up new cap and trade schemes in several developed economies such as the United States and in the Far East, is a further reason for the decline in the non-voluntary sector.

Last week, California's proposed cap and trade scheme was challenged in the courts and is likely to be delayed by a year.

Christiana Figueres, executive secretary for the UN Convention on Climate Change, lambasted the US for inaction on climate change at the Carbon Expo in Barcelona last week.

Andrew Steer, World Bank Special Envoy for Climate Change, summed up the message of the report at the Expo. "The global carbon market is at a crossroads. If we take the wrong turn we risk losing billions of lower cost private investment and new technology solutions in developing countries. This report sends a message of the need to ensure a stronger, more robust carbon market with clear signals.”

The report's authors predict that in the next two years the difference between the gross demand for the cumulative supply of carbon credits generated under the Kyoto mechanisms will be below $140 million, and virtually all of this demand will be from Europe.

Looking beyond 2012, although potentially the demand for emission reductions could reach 3 billion tons or more, so far the only certain demand is from Europe estimated at just 1.7 billion tonnes.

This means there is little incentive for project developers to invest further and create a future supply of emissions reductions.

This is the effect that political uncertainty is having on political and business efforts to combat climate change at a time when its threat is reported to be even greater than previously assumed.

"Carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest year on record, while global emission levels continued to rise relentlessly,observes Alexandre Kossoy, World Bank Senior Financial Specialist.

“At the same time, other national and local low-carbon initiatives have picked up noticeably in both developed and developing economies. Collectively, they offer the possibility overcome regulatory uncertainty and signal that, one way or another, solutions that address the climate challenge will emerge."

Eight countries receive $2.8m

The World Bank's response is centred around the $100 million Partnership for Market Readiness, launched in Cancun in December 2010, which aims to support mitigation activities.

Last week it dispersed its first funding to eight countries: Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand, and Turkey. Each received an initial grant of $350,000 to help design, pilot, and eventually implement market-based instruments for greenhouse gas mitigation. They will now develop a "Market Readiness Proposal" to detail their plans. Another seven countries will receive grants shortly.

The fund is supported by ten contributors Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States which together have pledged nearly US $70 million.

A number of the World Bank's carbon funds and facilities, such as the Carbon Partnership Facility, the second tranche of the Umbrella Carbon Facility, and a new facility for low-income countries currently under development, also respond to future needs by supporting scaled up mitigation and purchasing carbon credits beyond 2012.

Furthermore, the Forest Carbon Partnership Facility is supporting REDD+ initiatives which, to date, have not been included under the CDM. The Bank sees carbon markets as an important and versatile tool to provide incentives for a shift to lower carbon development paths.

Germany's proposed pathway to low carbon and nuclear free future

The conservative German government has published its draft strategy for closing all of its nuclear reactors by 2017. without building new coal fired power stations.

Chancellor Angela Merkel signed a bill last week committing the country to phasing out all nuclear power by the end of 2022. This eagerly awaited document, published by an agency of the German Environment Ministry, led by the conservative Norbert Röttgen, explains how it can do so - five years earlier than expected.

Defying those critics who said it couldn't be done, the study demonstrates how Germany can keep the lights on, avoid importing nuclear power from other countries, meet its carbon emission targets and avoid significant cost rises to consumers.

The question is, if Germany can do it, why can't the UK?

Currently, Germany relies on 23% nuclear and 17% renewables for its electricity.

The strategy proposed is almost the same as that proposed by the previous red-green coalition of social Democrats and Greens which Angela Merkel's conservative party originally opposed.

This strategy and policy reversal has potential worldwide significance, especially if adopted by Merkel and in a week when governments are meeting in Bonn to try and design what will succeed the Kyoto Protocol.

Switzerland has already decided to discontinue nuclear electricity (which provides about 40% of its current needs). Its five existing reactors will continue to operate until the end of their lifespans, the last one due to be decommissioned in 2034. They will be replaced by renewable energy.

Italy is to have a referendum on whether to build more nuclear power stations on June 12-13. Recent surveys show that most Italians are against nuclear power.

"A complete nuclear phase-out by 2017 will reduce the dangers and risks of nuclear power significantly," the summary in the German report concludes. "This will have substantial social benefits that outweigh the modest increases in electricity prices."

In brief, the strategy is to close Germany's 17 nuclear power plants (with a total net capacity of 20.5 GW) by faster development of renewable sources of energy, including biomass solar and wind, and constructing 5 GW of new natural gas combined cycle power generation.

Already, the German government has dropped its threat to impose a one-off cut to the solar feed-in tariff (FIT) in March 2012 a move welcomed by the PV sector for giving it genuine certainty over future policy. This should bring onto the market roughly 2.5GW-3.5GW of new PV capacity each year.

The investment in natural gas generation gives the grid the flexibility in meeting demand that it requires while also helping to meet Germany's targets for reducing carbon dioxide emissions, and the plants can realistically be built within the next six years.

Natural gas is the 'cleanest' fossil fuel, with the lowest emissions per MW, but still it is a fossil fuel. The study does not say whether the gas-powered plants will be fitted with carbon capture and storage which will have implications for Germany's longer term emissions reduction targets, as the power stations will continue to operate for twenty to thirty years.

The IEA put out a report called Are We Entering a Golden Age of Gas? this week, which argued that if the world were to choose a high reliance on gas which seems likely given the current worldwide boom in shale gas then this could lock us into a path of carbon emissions "consistent with a long-term temperature rise of over 3.5ーC" - which would be disastrous [link is to a YouTube video based on Mark Lynas' Six Degrees book].

"A path towards 2ーC would still require a greater shift to low-carbon energy sources, increased energy efficiency and deployment of new technologies including carbon capture and storage (CCS), which could reduce emissions from gas-fired plants", it said.

In the last few years Germany has been a net exporter of electricity. Its recent status as a net importer has been temporary, and the study discovered that imports of electricity have been based on price, not shortage of supply and this will continue to be the motivating factor as the reactors are taken off-line.

Many commentators have predicted that the cost of the transition would be high, but the study estimates that consumers will pay just Euro 0.6 to 0.8 cents more per kilowatt-hour. This amount is less than the price swings of natural gas and coal anyway during the past year.

The higher market price for electricity will also cut the cost of the country's renewable energy programme because the differential between the market price of electricity and the average cost of feed-in tariffs for renewables will be decreased.

The oldest nuclear plants and the Krummel nuclear power plants with a capacity of 8.4 GW should go out of service as soon as possible. There is sufficient excess of reserve capacity - around 10 GW - to permit this.

Additionally, Germany today has an estimated 20 GW of emergency generators, most of which are grid-connected, particularly in the areas of trade and industry, and which can be activated for a few hours a year if necessary.

Monday, June 06, 2011

Microgeneration may be eligible for £10,000 Green Deal support

Photovoltaic panels on council houses in The London Borough of Ealing installed by the Council this year when replacing the roofs
The Green Deal, the Government's flagship scheme for giving buildings £10,000 of energy-saving improvements, will include microgeneration technologies like heat pumps and solar power.

Climate Change Minister Greg Barker has published further details of how the Green Deal scheme will work, with a draft list of measures that the scheme will permit to be financed; a Green Deal Code to protect consumers; and details of the new Energy Company Obligation (ECO) to tackle fuel poverty.

Businesses as well as householders will be able to access up to £10,000 upfront to pay for energy efficiency work, repaying the costs through savings on energy bills from next year.

Consumers will get BSI quality assurance from a Green Deal Code of Practice which will cover providers and installers, and a Green Deal advice line will be set up.

The principle of the Green Deal is being called The Golden Rule, under which expected savings from measures will repay the costs over 20-25 years. The cost-benefit levels for each measure are still being calculated.

Consumer groups are welcoming the proposals. Audrey Gallacher, head of energy at Consumer Focus, said: "Particularly welcome moves are the introduction of an independent advice line and more robust complaints handling and redress measures. This should not only help consumers make informed decisions on products and services, but mean support is there if things go wrong.

"The Green Deal will be sold through a spread of providers from energy companies to DIY chains."

Confirming what I've observed myself before, Richard Lloyd, CEO of Which?, cautioned that: "Our latest research into cavity wall insulation uncovered inadequate inspections and poor advice. For this scheme to be a success, Green Deal assessors need to be held to the highest standards. £10,000 represents a major investment for most people, so the Government must ensure that the financing of the scheme is fair and good value for customers."

The £10,000 is not to be seen as a cap, however.

"Central to the scheme is the fact the repayments have to be lower than energy savings," said a DECC spokeswoman. "As long as the likely savings from a package of measures are more than the costs, the project will be financed. There is no cap."

This is great news for the most energy-inefficient buildings, for example in the rented sector, which could benefit from a host of much-needed measures.

The eligible measures

An industry-wide Call for Evidence and Literature Review on the costs and benefits of a range of measures was issued in March 2011, and the results are not yet in, so the published list is indicative only, but it includes the following:
  • Heating, ventilation and air conditioning: Condensing boilers; Heating controls; Under-floor heating; Heat recovery systems; Mechanical ventilation (non-domestic); Flue gas recovery devices

  • Building fabric: Cavity wall insulation; Loft insulation; Flat roof insulation; Internal wall insulation; External wall insulation; Draught proofing; Floor insulation; Heating system insulation (cylinder, pipes); Energy efficient glazing and doors

  • Lighting: Lighting fittings; Lighting controls

  • Water heating: Innovative hot water systems; Water efficient taps and showers

  • Microgeneration: Ground and air source heat pumps; Solar thermal; Solar PV; Biomass boilers; Micro-CHP.

When making an inspection of a building, Green Deal Assessors will draw from this list of eligible measures to make property-specific recommendations.

The assessor will then work out whether the estimated annual saving is expected to be equal to or greater than the expected annual repayment costs. If it is, then the work can go ahead.

Certain measures could have an extra upfront subsidy - via the Energy Company Obligation. Alternatively a householder could choose to pay a top-up to bring down the repayment cost.

As an example, the documents cite that external wall insulation could pay for itself in 30 years based on an installation cost of £7,600. With a subsidy, the repayment period could be significantly reduced and brought within usual finance periods of 20 to 25 years.

The list has been welcomed by the industry. "It's encouraging to have as wide a list of technologies as possible included," said John Alker of the Green Building Council.

He added that as the scheme allows people to top up the Green Deal financing with their own money, and includes microgeneration technologies, this would encourage them to invest in upgrades.

Friends of the Earth's Dave Powell commented that adding microgeneration technologies to the Deal could make it more attractive, but it might reduce the amount of money available for insulation and draughtproofing, which is always more cost-effective.

The Government has realised that often it only makes sense to install a measure while other renovations are occurring, such as under-floor heating, or to add an additional measure to a package, such as installing heating controls when fitting an upgraded boiler. Further guidance will therefore detail the effects of sequencing.

It is not yet clear how, if the Green Deal will cover microgeneration, it will fit in with the Renewable Heat Incentive (RHI) - kicking in at the same time for domestic properties - and Feed-in Tariffs (FITs) for renewable electricity.

The Energy Company Obligation

The ECO will make sure that cases will still receive attention where the Golden Rule will not work but where energy efficiency improvements are needed.

For these cases, it will mandate energy service companies and utilities to meet the needs of the lower income and most vulnerable first, followed in priority by those properties needing the next most cost-effective measures that do not meet the Golden Rule for example, solid wall insulation (SWI).

This is intended to boost the supply chain for SWI, which is still relatively small, and bring prices down, which will help the measure meet the Golden Rule.

The ECO's funding 'pot' is expected to provide between £1bn and £2bn a year, but will inevitably result in higher general fuel prices.

ECO support is intended to be integrated into the Green Deal framework so that where they combine to deliver improvements, the consumer will just see one seamless package on offer from a Green Deal provider.

Suppliers and Green Deal providers will therefore need to work together to provide an offer to the consumer that comprises the optimum mix of support between Green Deal finance and ECO subsidy.

Wednesday, June 01, 2011

Community energy sees a new dawn in the UK

Udny wind turbine
It's a historic week in Scotland where a new community wind power scheme will be commissioned by the end of the week, epitomising a wave of interest in community-led renewables.

The project is in Udny, Aberdeenshire and has been five years in development.

Whereas many so-called community wind farms in the country are actually developed commercially and the developers give a share of the profits to the local community, there are very few examples of real community-led schemes of the sort pioneered in Wales by Bro Ddyfi Renewables and others in WAles detailed in this recent Daily Telegraph article.

A Community Trust Company has been formed to disburse the profits from the 800kW Udny scheme - an impressive 」4 million over 20 years - which could go to fund projects such as a new community hall, a youth hut, a cinema or the expansion of a local paths network.

“The project serves two villages," Matt Kaye, its Development Officer, explains. "It's been installed in the last month and will soon be producing enough electricity to power 500 households."

The development of the project illustrates how hard it has been for pioneers of community energy so far to get projects off the ground although it is becoming much easier.

"The idea was introduced to the community council, the equivalent of a parish council in England, five years ago by one individual," Matt continues. "A group of five people then applied for a bridging loan of 」50,000 from Social Investment Scotland with which we set up a grid connection which then enabled us to proceed with planning and negotiations, and apply for further money.

"We got half a million pounds in grant funds from organisations such as Community Energy Scotland (CES) and the Big Lottery and Aberdeenshire Council, which helped us to do a feasibility study.

"We have set up two limited companies: one, the Udny Wind Turbine Company is designed to operate the wind turbine, the other disburses the profits."

They then hit a snag, which was that they had to pay back the whole of the 」137,000 grant to CES when it was found that if they wanted to be eligible for feed in tariffs, under European State Aid rules they couldn't also benefit from the grant.

Eric Dodd, of Community Energy Scotland, said this would ruin most companies but because they had already spent the money and it had done its work, they were then able to get a favourable 100% bank loan on the basis of the guaranteed income from the feed in tariffs and with the help of CES.

Dodd says, "The CES is currently supporting over 150 community energy projects in Scotland. Most of these are wind projects but about 15% are hydropower."

He attributes the recent increase in interest in community energy to the fact that many communities have now seen them become a success elsewhere and start generating significant funding for local projects. They want to do the same themselves to help them become more sustainable.

Dodd says Community Energy Scotland advises on funding and grid connection issues as well as obtaining planning permission.

In the Western Isles, for example, 900 kW of wind power is being installed without the need for agreed interconnector to the mainland by identifying how the local distribution system can adapt.

Dodd advises that "communities should start with an idea of where they're going, but things can change along the way."

British Gas support for community energy

In an attempt to make community energy projects easier to get off the ground, this week British Gas has launched a special tariff designed to help fund such projects and a website on which they can find support.

Geard Lane, managing director of British Gas New Markets, says its EnergyShare scheme will guarantee paying 」10 into a fund for every year that the customer stays on the tariff. It is being run in partnership with Hugh Fearnley-Whittingstall's River Cottage.

Individuals and communities register their projects on a website and consumers who are on the tariff will vote for projects they want to support.

British Gas has pump-primed the fund with 」500,000. It has a target of reaching 」15 million, which means signing up 290,000 customers.

Preapproved community projects will be able to bid for up to 」100,000 each, and it could eventually fund about 150 projects.

British Gas claims that between 300 and 400 groups have already registered projects on the site although they won't all be seeking EnergyShare funding, as it is also intended to help share best practice.

"We're seeing a genuine groundswell of interest around the country from communities wanting to do their bit to tackle climate change - and their own fuel bills - by generating their own clean, green energy and reducing the amount of energy they use," Lane said.

GoodEnergy already offers customers 100 per cent green energy tariffs and supports community renewable heatA and electricity projects, welcomed the initiative. Its CEO, Juliet Davenport, described decentralised energy as "the key to unlocking the potential for renewables" in the UK.