4. After the Energy White paper 

Initial reactions to the Energy White Paper (‘EWP’) were mixed.  On the political side, then DTI minister Alistair Darling had laid out his cards: it would be a ‘profound mistake’ to rule out building new nuclear plants. But some commentators were not sure about Gordon Brown. Although he has been on record as backing a new generation of nuclear stations, the Independent said ‘Brown has ruled out providing government money to help build the expensive plants and, despite the rhetoric, is less committed to all-out nuclear expansion than Mr Blair’.  The implication was that, with Blair gone, priorities might change. The other big political issue is the position of  Scotland- the SNP, now the ruling party, is opposed to nuclear power, as are the Scottish Greens and Lib Dems- see right.

In terms of the specific policies, the provision of double ROCs for offshore wind was welcomed by the British Wind Energy Association. The Institution of Civil Engineers online newsletter (23/5/07) perhaps rather disingenuously reported the belief of some commentators that ‘a new fleet of nuclear power stations would help maintain a higher wholesale price for electricity making it easier for renewables to compete’. They quoted Faber Maunsell director Bob Ayres view that the renewables sector should welcome new nuclear plants: “The retail price for new nuclear is high because the capital investment is high, the decommissioning is high and the clean up is high and so the energy price will remain high. This is good news for renewables.” However, other commentators saw the potential drawing away of funding to nuclear  as a threat to renewables.

It is true though that, if there is a high carbon price, then renewables would benefit as well as nuclear- the contentious point of course being should nuclear gain this benefit? After all ultimately it will be consumers money, paid as extra on power bills,that it relies on, since that’s what sustains the carbon market. Moreover whether the carbon market will be sufficient to support nuclear over the 40 years or so plants will operate for, and also for the subsequent waste management and decommissioning period, is unclear.  

UK Emissions rise despite ETS 

Asked in June in the Commons about the impact of the EU Emissions Trading Scheme, Minister Ian Pearson reported that, though UK emissions covered by the scheme had fallen in 2005 by 5 MtCO2, ‘the 2006 EU ETS results in the UK show an increase in emissions from 2005 of 8.8 Mt CO2’.  This was he said ‘due mainly to unusually high international gas prices leading to a switch to coal in electricity generation’. He added ‘It is difficult to assess what the level of emissions would have been if the scheme had not been in place, but they are likely to have been higher’.

So far the carbon market has been very unstable, and few if any emissions reductions having emerged in the UK (see box above) and the overall EU situation not being much better,  with each EU country having different cap levels and some being unwilling to set them low.

Alistair Darling argued (Observer 20/5/07) that the UK could act unilaterally to resolve this: ‘We could, in effect, put a floor on the carbon price which would influence decisions to go to low-carbon forms of production’. However, Prof Tom Burke commented ‘given that the current price for carbon is less than 1€ a tonne and the floor price needed to make new nuclear attractive would be much more than 20€ a tonne this would commit the Treasury to very large future expenditures’. But Darling seemed confident that the EU Emission Trading System could deliver: ‘I think phase two commitments will be stronger than people think’. The EWP also introduced a new UK cap and trade system for businesses- aimed at large commercial and public sector organisations, banks, supermarkets and central government departments. It said that ‘The new Carbon Reduction Commitment will be a cost-effective scheme that will save over a million tonnes of carbon per year by 2020, while enabling businesses to continue to show real leadership in tackling climate change’. Maybe that will help push up the value of carbon.  

However, though carbon prices are likely to rise over the next few decades, the carbon market may not help long term. The After-oil.co.uk web site commented ‘in 2006, the government’s Energy Review concluded that nuclear power can only be economic if its claimed low carbon status allows it to sell its “carbon credits” to carbon emitting generators requiring an off-set. As fossil fuels will be considerably depleted before the operational cycles of the proposed new fleet of nuclear stations end, the generators are asking for guaranteed carbon credits for a 100 years to justify their investment, in effect demanding a subsidy.’ Would the Treasury really be willing to underwrite carbon values that long?

Finally, the view that nuclear is needed since otherwise there will be a  ‘generation gap’ has been attacked by a group of anti-nuclear MP’s who wrote to the Guardian (23/5/07) noting that, although the government said in its response to the Environmental Audit Committee report on energy policy, that ‘the risk of having unserved electricity demand is unlikely to become substantively higher than today until around 2015,’ the government had admitted that, even so, ‘the amounts of shortfall between demand and supply are likely to be small and could therefore potentially be resolved by some companies voluntarily shifting their electricity consumption from peak to off-peak times in response to price signals’. The committee added the government had also admitted that ‘even with facilitating measures, new nuclear build is likely to make only a small contribution to carbon-emission reductions and security of supply by 2020’.

Mind you, it also doesn’t seem to think renewables can offer much either - judging by a DTI paper leaked by the Guardian in August- at best 9% of energy by 2020. Well below the EUs 20% target. So they say we’ll have to fudge it!  More in Renew 170.

The Heat is On 

The new EU target of getting 20% of EU energy from renewables by 2020 has led to some blistering critiques from some UK commentators, including Prof. Michael Laughton, who in a CPS paper says ‘such revolutionary development of renewable resources and the displacement of existing patterns of energy supply in each of the sectors will not and cannot be achieved by any stretch of the imagination, especially by 2020’.

They are not likely to see the new Energy White Paper as offering a resolution. That just aims for 20% of  electricity and yet again does not face up to the heat obligation issue. It simply says ‘The long-term  possibilities for large scale alternatives to gas for the production of heat may be through the production and use of hydrogen and low carbon electricity. However, development of hydrogen as a heating source would  require costly new infrastructure to manufacture and distribute the  hydrogen.’  And for the short term, it looks to CHP, micropower and biomass, all pretty ad hoc.

Nuclear Consultation 

‘I respect the views of someone who says they don’t want nuclear in any circumstances whatsoever. Fair enough. Right, tell me what the alternative is. If there was an easy answer that had low carbon, no cost, no eyesores somebody would have found it.’ Alistair Darling, Observer 20/5/07

The Governments Nuclear consultation exercise rumbles on. The DTI- now DBERR- is hosting ‘deliberative events’ across the UK ‘to enable us to understand the views of the public after they have heard the key facts and arguments in the consultation’. It says ‘discussion at the events will address the same key questions in the consultation document’.  It adds ‘The public taking part in the deliberative events will be recruited to be demographically representative of the UK population. Recruitment will be through direct invitation of randomly selected homes on selected electoral registers.’

In addition, there will be meetings with representatives from NGOs, industry, local authorities and many other organisations. And for the rest of us there is also an online consultation at:    www.direct.gov.uk/nuclearpower2007

In addition to the EWP consultations and other reports, a number of analytical and consultants reports have also been published at:      www.gnn.gov.uk/environment/mediaDetail.asp?MediaDetailsID=203153&NewsAreaID=2&ClientID=201&LocaleID=2

Also see the useful independent Rowntree Trust-backed web site by Dr Paul Dorfman: www.nuclearconsult.com 

Scotland resists  

The Consultation is likely to get short shift in Scotland.  Scottish first minister, Alex Salmond, told the BBC’s Politics Show(20/5/07): ‘There’s absolutely no chance of us allowing a new generation of nuclear power in Scotland. There is just no consensus in Scottish society or in the Scottish parliament to have foisted on us another generation of nuclear power stations.’

According to a new survey by Friends of the Earth Scotland 72 MSPs (56%)  oppose  new nuclear stations while 24 (19%) support this option and 33 (25%) either failed to respond or were undecided.

      Welsh views seem similar-see later.

Cabinet Environment & Energy Review 

Just before he relinquished power as  Prime Minister, in what seemed to be an addendum to the Energy White Paper, Tony Blair outlined the Cabinets view on how we should secure energy and protect the environment. In a foreword to the Cabinet Offices policy review paper ‘Building on progress: Energy and environment’, he called tackling climate change ‘the biggest challenge of our times’.

Otherwise, this new paper was all rather familiar - it looked at how the UK should tackle energy security and climate change threats and ideas on the roles that could be played by individuals, firms, local  communities and the Government.

www.cabinetoffice.gov.uk/policy_review/environment/index.as 

www.number-10.gov.uk/output/Page11847.asp

Peak Oil? 

The Energy White Paper assumed future prices for oil as: 2010 - $57/barrel, 2015 - $50,  2020 - $53, the implication being that there would be plenty. And it saw us using more,

However David Miliband has also made some more radical projections: ‘A post-oil economy is not an unrealistic prospect. Over a generation, it is possible to see the evolution of road transport initially towards much greater fuel efficiency, greater use of biofuels and hybrids, and ultimately fully-electric cars. The leading edge technologies already show startling performance in terms of speed and duration. The Lotus built Tesla has a topspeed of 130mph and the battery charge lasts for 250 miles. Over a twenty year period, it is possible to imagine the car industry providing the investment and innovation required to move to a post-oil economy, if governments, preferably across a major market such as the EU, can provide a clear long term signal about the regulatory landscape.  The EU has already proposed to replace the current voluntary agreements to reduce emissions from new cars, which expire in 2008-9, with a mandatory scheme... Our view is that the objective beyond 2012 should be to reduce average new car emissions to 100g/km.’ David Miliband at a WWF One Planet living summit in March.

UK Renewables Funding

Lord Truscott, then Parliamentary Under Secretary of State for Energy, outlined the governments record on funding renewables at the BWEA Conference in March.  

He noted that ‘since 2002 around £500 million has been committed to help develop low carbon technologies’.  In particular, ‘the DTI’s Technology Programme provides £20m a year for industry-led research and development of low-carbon technologies’ and was backed-up by focused initiatives that support demonstration and early deployment of low-carbon technologies. 

He noted that money that has already been allocated included: 

        •        £117 million for offshore wind;

        •        £66 million for biomass;  

        •        £35 million for Carbon Abatement Technologies and

        •        £15 million for Hydrogen and Fuel Cells.

He added that ‘Government will substantially increase funding for low carbon energy research and development through the new Energy Technologies Institute. This public/private sector joint venture will have funding of up to £1bn over the next 10 years.  We have also created a new Environmental Transformation Fund that will help support renewables and other technologies through demonstration stage and beyond.  Wave and tidal power stands to benefit from this boost to investment.’

But he said it was not just large-scale energy production we need to target, since around a quarter (23%) of all emissions come from our homes, which is why ‘we have allocated £80m over the next three years (2006-09) to the Low Carbon Buildings Programme to encourage both energy efficiency and micro-generation technologies in buildings’.

So he felt that progress was being made across the board.  However, although we now had 2GW of wind, there were some problems. ‘Emerging technologies such as offshore wind have not been deployed as successfully and quickly as had been envisaged. Our new proposals for amending the RO aim to bring forward further investment in the technologies that we need to develop.’

Wave and tidal power 

On marine energy he noted that ‘since 1999 the DTI has committed around £30m to industry-led research and development.  The total number of ongoing marine R&D projects supported under the DTI’s Technology Programme stands at 16- with grant support totalling over £17m. Some of these projects have already led to full-scale demonstrations. We expect others to follow later this year.’

He added ‘As well as support for industry-led activity we are supporting academic research. An example is the recently approved £6m-4 year “Supergen Marine” research programme. This brings together a consortium of UK universities that will carry out research into the fundamental science of marine energy.’  

He went on ‘We have also put in place a £50m Marine Renewables Deployment Fund (MRDF).... that seek to help these emerging technologies address the gap between R&D and market’.  He noted that ‘at the core is a £42m Scheme to support the first larger-scale grid connected wave and tidal demonstration projects’ but reported that ‘to date, the Scheme has not received any successful applications’.

No successful bids yet... 

Although, as noted in Renew 168, the Scottish Executive has funded some schemes directly, the lack of successful project bids under the UK-wide scheme certainly seems tragic, given the large number of projects emerging- see our Technology section.  Lord Trustcott commented ‘It is disappointing and surprising- that device developers cannot provide the 3-months testing at full-scale needed to meet the qualification criteria. However, we are working closely with developers and their representatives and are confident that successful projects will come forward over the course of the next year. We want to help those projects happen as soon as possible and so I want to announce today that the Scheme will now move to an “open call” process- with developers able to bid into the Scheme once they have the necessary time in the water.’

 He added that, also, the Scheme ‘is backed up by £8m to help provide the infrastructure that can help remove much of the risk and cost to early demonstrations’. He went on ‘This part of the fund has already helped the European Marine Energy Centre in Orkney complete a £7m project to build new facilities for the testing of tidal-stream devices. The Centre will also play host to the world’s largest wave farm- that will be built by Scottish Power with assistance from the Scottish Executive.’ 

Finally he reported that ‘The South West could also be the location of major wave projects in the future. The DTI has offered £4.5m to support the ‘Wave Hub’ project that will be located off the coast of North Cornwall. This £20m infrastructure project will provide a grid connection and simplified consents to early wave projects. If the project receives the necessary planning approvals and commitment from industry, then it could be commissioned as early as Summer 2008.’  As noted earlier the money now seems firmed up.

*The Scottish Marine Supply Obligation is in law but set to zero until capacity comes online

Next? The  Science and Technology Select Committee is being wound up,  following the hiving off of Science and Technology from DTI to  the new DIUS (see later), so its unclear  if it will still complete the  inquiry  it set up into renewable energy technologies and the state of UK R&D/ deployment.  It said it wanted to look specifically  at the UK Government’s role in funding R&D and providing incentives for technology transfer & industrial R&D. But maybe it will be halted

ETI Bids from five university consortia, all form the North/Scotland, have been short-listed to host the UK’s new £1bn Energy  Technologies Institute for non-nuclear low carbon technology innovation