Renew On Line (UK) 58

Extracts from NATTA's journal
Renew, issue 158 Nov-Dec 2005

9. UK Energy Policy Developments

Energy R&D falls

On 27th June 2005, DTI Minister Lord Sainsbury, commenting on the report by the Council for Science and Technology in May, which had alleged serious weakness in the UK energy research capacity, said  ‘the Government are concerned about the decline in research, development & training in energy and have taken action to increase the amount of publicly funded R&D. DTI and research council expenditure on energy R&D increased from £34m in 1998-99 to an estimated £60m in 2004-05. That amount is projected to rise to at least £95m by 2007-08. The Government are also supporting a range of demonstration activity worth more than £300m between 2002 and 2008. A UK energy research partnership, bringing together public & private funders of energy research, is being set up and the Energy and Utility Sector Skills Council is working with industry to develop a strategy for training and development.’

In response Lord Ezra noted that the level of R&D and training in energy ‘now represents a mere 5% of what it was pre-privatisation, and only 10% and 20 % respectively of what is being spent in France and Germany’.

Lord Sainsbury agreed that there had ‘obviously been a very considerable fall over the years in spending on R&D’, but added that ‘The major part of that has been the fall in nuclear R&D’.  That did not go down well with everyone.

Lord Tanlaw asked what percentage of the spending on R&D covers hydrogen production and storage-in particular, hydrogen storage linked to wind or water turbines. The answer was £50m. 

Lord Redesdale asked how much is being spent on R&D in tidal and wave power, ‘because the sums seem to be dwarfed by those that are being ploughed into how to deal with the legacy of the nuclear industry’?  The answer again was £50m.

Questioned on graduate numbers in engineering & technology- he said this was ‘the one weak area in the number of young people doing science. The figure has gone down from 87,000 in 1997-98 to about 80,000, but has stabilised at that level in the past few years.’

Lord Tordoff asked about the proportion of women engineers. Lord Sainsbury noted that ‘over 40 %- I think- of young people doing science & technology, the number of which has increased by 120,000 since 1997-98, are women’.

Lord Howell rounded off by asking the inevitable  question- what about training and support for nuclear workers, and when would a decision be made on a new nuclear programme?  To which Lord Sainsbury replied that the sector skills council in this area has been doing work on training issues and in terms of the overall progamme that ‘the Prime Minister has made it quite clear that during this Parliament a decision will have to be reached on the whole nuclear question’.

* Confirmation that the UK is lagging behind the rest of the Western world in funding research into new forms of energy, came from the International Energy Agency. It has noted that France spent $500m (£285m) on energy research in 2001, the most recent year for which the IEA has complete figures, while the British Government contributed only a tenth of that amount towards research into renewables, fossil fuels and nuclear fission and fusion. The US and Japanese governments together spent more than $6bn. UK investment in energy research has been in decline since the early 1990s. According to EU figures, the UK spends 1.8% of its GDP on research, compared with an EU average of 2%.

Energy Policy challenged

The Government’s energy policy and attempts to reduce emissions by favouring wind power show ‘a lack of coherence in establishing priorities’,  according to a damning report ‘UK’s Future Generation Mix’, from Ernst & Young, the city consultancy.   The Government is criticised for a “lack of long-term clarity on key aspects of policy” ; there is a “critical need for greater regulatory and policy certainty”.  The report concludes that the private sector, which will plough £20bn into new plant over the next 15 years, will suffer a “deferral of the necessary investment or, at best, short-termism in the evaluation and choice of technology”. The report says that while the Renewable Obligation, which  costs energy users £300m each year, promotes certain renewables, particularly wind, it has been detrimental to other technologies, such as nuclear and ‘clean coal’.  The UK had only spent £13m on the later over the last 6 years, while the US has pledged $1bn.

Energy Muddle  A House of Lords sub  Committee on Science and Technology has called on the government to clean up the muddle on  energy efficiency. The were too many agencies and no  overall plan. More in Renew 159

How not to Cut Carbon  

“Each dollar invested in electric efficiency displaces nearly seven times as much carbon dioxide as a dollar invested in nuclear power, without any nasty side effects”, says Amory Lovins. But you would never think so from the approach being adopted in the UK. As the Nuclear Free Local Authorities Nuclear Monitor  (No. 8 May 2005) noted: ‘The 2003 Energy White Paper set out a programme to achieve cuts in emissions from the domestic sector of 5MtC by 2010. The subsequent Energy Efficiency Action Plan (EEAP) launched in April 2004 17 watered this down to 4.2 MtC. The Association for the Conservation of Energy has described the new target as “wholly unacceptable” and a majority of MPs signed an Early Day Motion backing the original 5MtC target. The Energy Savings Trust told the Environmental Audit Committee that it does not agree with the new 4.2MtC target.’ 

The NFLA say that ‘the Government has basically scrapped policies that could easily make up the extra 0.8MtC. For example, the Energy White Paper expected savings of 0.4MtC from increasing the uptake of A-rated household appliances. This in itself was a reduction from the 1MtC suggested by the Energy Savings Trust. In the EEAP this was mysteriously dropped to 0.1MtC with no explanation. Similarly, the contribution from gas condensing boilers in the EEAP also appears to have been lowered.’

It claims that ‘micro-CHP, can replace domestic central heating boilers. As well as generating heat for central heating and hot water, they can produce around 50% of a households electricity needs, and use less energy than the standard heating boilers of today. By 2020, 13 million central heating boilers are likely to have been replaced in the UK. If micro-CHP boilers are used instead of conventional boilers, these homes could be producing around half the electricity produced by our current nuclear programme. A number of companies in the UK are already marketing domestic micro-CHP boilers. The BG Group, one of the pioneering companies, says micro-CHP could potentially achieve cuts of around 5.4MtC. In drafts of the EEAP, a saving of 0.1MtC was listed for micro-CHP, but this was dropped from the final plan, despite the fact that VAT on micro-CHP has been reduced. Admittedly the plan only runs until 2010 and most micro-CHP boilers are likely to be installed between 2010 and 2020, but the deletion of this target still displays a worrying lack of ambition.’  In addition to micro-CHP, it says that  ‘millions of homes and offices could have their own electricity generators, such as solar roofs, & roof-top wind turbines by 2020’.

But not everyone is just sitting back.  Ken Livingstone, the mayor of London, has overturned a council decision to build a new school on playing fields in Blackheath because developers failed to incorporate renewable energy.  Livingstone rejected plans that had been approved by Lewisham Council last December, noting that the London Plan calls for new developments to generate at least 10% of their energy on site. The London Borough of Merton has already  adopted that target- and the Greater London Authority has now set up a private-public Energy Service Company (ESCO) to help promote sustainable energy development, following the lead given by Woking Council, with Allan Jones recruited from Woking to run Londons new Climate Change Agency, which aims to help London reduce its CO2 emission by 20% by 2010. 

In addition, a new EU draft Directive on energy disclosure  promises to make it easier for consumers to monitor the amount of energy they are using and to identify what sort of energy is being supplied to them. The EU wants ‘smart meters’ to replace the traditional type, thus allowing consumers to check at a glance how much energy they are using, and at what cost.  And new ‘disclosure’ rules will mean that bills will include details of the type energy of  supplied  (e.g. by annual % from nuclear, renewables, coal, gas) and information about the environmental impact of their energy use.

See the Environmental Change Institutes ‘4CE’ report: ‘Consumer Choice and Carbon Consciousness: Electricity Disclosure in Europe’.

And for more from the NFLA see: www.nuclearpolicy.info

How to Invest in the Future

Writing in the Guardian (29/6/05) Polly Toynbee came out strongly in favour of direct state intervention to support renewables.  She noted that “Picking winners” was ‘not what modern market economics thinks governments can do’, but said that the UK renewables industry needed ‘the same kick-start from government that these industries had in Denmark and Germany. Private investment alone cannot bear the whole risk of manufacturing at a loss until it reaches the critical volume where costs come down to market prices’. She argued that ‘renewable energy has other compulsory goals as well as market success. Imagine contributing to wind-turbine factories in the West Midlands, employing thousands of ex-Rover workers. The chances are that it would make Britain the premier manufacturer of offshore wind technology, selling to the world. But what if it didn’t quite make it into profitability? It would be no Concorde-sized loss because the money still goes on targets for renewable energy, never a cost-free option. Enhanced capital allowances are tax remissions companies can claim for new drilling installations for oil or gas; perversely, they don’t cover installing wind turbines. If they did, that would pay a quarter of the gap between market and actual cost. Offshore costs extra because of the expense of undersea cables to the grid- a cost the government could cover. That would set offshore wind whirring into profit and, without further subsidy, the industry would take off on its own to double its output and hit the 2020 target of generating 20% renewable electricity. What would it cost the state? £800m over five years.”  which she compared with the expected cost of IDcards-  £7bn (or was it £19bn as the LSE claimed?).

Personal Carbon Quotas

A “domestic tradable quotas” scheme could help the UK comply with the Kyoto Protocol, the Tyndall Centre for Climate Change Research has suggested. People would be issued carbon units- each equivalent to say 1kg of greenhouse gases- to use when buying products such as flights and petrol. If they needed more then they would have to buy them in from those who had some spare- so there would be a carbon market. Environment Minister Elliot Morley said that although for a lot of people personal carbon allowances falls into the unthinkable category, “I don’t think we should dismiss these approaches. There might be a decade of debate in it before we get anywhere with it, but my job is to consider quite radical new approaches.”

 * Prices for EU Emission Trading Scheme carbon      credits have risen to nearly 30 euros/tonne.

..and finally: the EAC Review

The Environmental Audit Committee is comparing the cost & potential of nuclear, renewables & microgen in the context of dealing with Climate Change and energy security.  It noted fears that uncertainties about the role of nuclear might  ‘damage future investment in renewables and energy efficiency’.  This is likely to be an important review feeding into the Government proposed new energy review next year…