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- EMBARGOED UNTIL 15 OCTOBER 2014 8PM
- “Keeping the Lights On”
- Rt Hon Owen Paterson MP
- Global Warming Policy Foundation
- Annual Lecture
- 15 October 2014
- Check against delivery
- I would like to thank Lord Lawson and the Global Warming
- Policy Foundation for inviting me to deliver the annual lecture -
- an important event in the calendar.
- As a member of the Cabinet for four years I supported Coalition
- energy policy. However I have become increasingly aware from
- my own constituency and from widespread travel around the
- UK of intense public dissatisfaction with heavily subsidized
- renewable technologies in particular onshore wind.
- I have used the last three months since leaving the Cabinet to
- learn more about the consequences of this policy. And what I
- have unearthed is alarming.
- Our current policy will cost £1,300bn up to 2050.1
- It fails to meet the very emissions targets it is designed to meet.
- And it fails to provide the UK’s energy requirements.
- I will argue that current energy policy is a slave to flawed
- climate action. It neither reduces emissions sufficiently nor
- provides the energy we need as a country.
- I call for a robust, common sense energy policy that would
- encourage the market to choose affordable technologies to
- reduce emissions, and give four examples:
- o promotion of indigenous shale gas
- o large scale localised Combined Heat and Power
- (CHP)
- o small modular nuclear reactors
- o rational demand management
- The vital importance of affordable energy
- But first, let us consider what is at stake. We now live in an
- almost totally computer-dependent world. Without secure
- power the whole of our modern civilisation collapses: banking,
- air traffic control, smart phones, refrigerated food, life-saving
- surgery, entertainment, education, industry and transport.
- We are lucky to live in a country where energy has been
- affordable and reliable.
- Yet we cannot take this for granted.
- While most public discussion is driven by the immediacy of
- the looming 2020 EU renewables target; policy is actually
- dominated by the EU’s long-term 2050 target.2
- The 2050 target is for a reduction in greenhouse gas emissions
- by 80 percent relative to 1990 levels.
- The target has been outlined by the European Commission.3
- it is only the UK that has made it legally binding through the
- Climate Change Act - a piece of legislation that I and virtually
- every other MP voted for.
- The 2050 target of cutting emissions by 80 percent, requires the
- almost complete decarbonisation of the electricity supply in 36
- years.4
- In the short and medium term, costs to consumers will rise
- dramatically, and the lights would eventually go out. Not
- because of a temporary shortfall, but because of structural
- failures, from which we will find it extremely difficult and
- expensive to recover.
- We must act now.
- The purpose of my address today is to set out how.
- The 2050 Target – what it means in practice
- By 2050, the aim is to produce virtually all of our electricity
- with "zero carbon" emissions.
- Yet at the moment over 60 percent of our electricity is produced
- by carbon-based fossil fuel – mainly gas and coal.5
- emissions of this "carbon" portion have to be removed almost
- completely.
- Yet cutting carbon out of electricity production isn’t enough.
- Heating, transport and industry also use carbon based fuels.
- In fact, to hit the 80 percent reduction target, we will have to
- abolish natural gas in most of our homes. No more cooking or
- central heating using gas. Our homes must become all-electric.6
- Much of the fuel used for transport will have to be abolished
- too. 65 percent of private cars will have to be electric.7
- This is a point that is little understood. The 2050 target commits
- us to a huge expansion of electricity generation capacity,
- requiring vast investment.
- The EU’s suggested route to meet this target – and how it
- doesn’t work
- So where does such a supply of zero-carbon electricity come
- from? The European Commission offers several possibilities,
- but its particular enthusiasm is for renewable energy, under what
- it calls its "High RES" (Renewable Energy Sources) scenario.8
- In this scenario, most of the electricity comes from wind power.9
- This is regrettably entirely unrealistic.
- The investment costs of generation alone are prohibitive. They
- are admitted by the EU to be staggering. The High RES scenario
- alone would require a cumulative investment, between the years
- 2011 and 2050, of €3.2 trillion.10
- Even if you could find such sums from investors, they will
- require a return and a large premium to de-risk a very hazardous
- investment. The margins will be astonishing. As Peter Atherton
- of Liberum argues, the public will not readily accept profits that
- large for the energy companies.
- But if investment is tricky, we only need to consider the scale of
- construction.
- Wind capacity in the EU 27 must rise from 83 GW in 2010
- to 984 GW in 2050.1
- turbines across Europe, to nearly 500,000 wind turbines. This
- would require a vast acreage of wind turbines that would wall-
- to-wall carpet Northern Ireland, Wales, Belgium, Holland and
- Portugal combined.
- There, at the heart of the Commission's "high RES"
- decarbonisation policy, is the fatal flaw. At any practical level,
- it cannot be achieved. It simply will not happen. Yet, as far
- as EU policy goes, it is the most promising option, on which
- considerable development resource has been expended.
- UK’s plans to meet the targets are no better
- See Summary Energy Balance Indicators (B), page 73 of 2050 Roadmap, Impact Assessment: http://
- ec.europa.eu/energy/energy2020/roadmap/doc/sec_2011_1565_part2.pdf
- It means an increase from 42,000 wind
- Knowing this to be unrealistic, no other country in the European
- Union apart from the UK has made the 2050 target legally
- binding.
- So having signed up to it, how does the UK hope to deliver
- all this carbon neutral electricity? The target is, in theory,
- technology-neutral. The Coalition Government acknowledges
- shortcomings in wind by making only “significant use” of the
- UK’s wind resources while taking into account ecological and
- social sensitivities of wind.11
- But if wind doesn’t make up the bulk of zero-carbon electricity
- supply, then that would mean building new nuclear at the rate
- of 1.2GW a year for the next 36 years. Put simply, that’s a new
- Hinkley Point every three years.
- In addition UK policy requires building Carbon Capture and
- Storage (CCS) plants which take CO2 emissions from gas and
- coal and buries them in the ground. But these are fuelled by
- gas or coal at the rate of 1.5GW a year. While nascent, this
- technology is known to cut efficiency by a third and treble
- capital cost.
- So the British nuclear-led option is no more realistic than
- the Commission "high RES" scenario or any other of the
- decarbonisation options. There is simply no plausible scenario
- by which the British government can conceivably meet its 80
- percent emission cut by 2050.
- And yet, despite this doomed policy, we provide subsidies for
- renewables of around £3 billion a year - and rising fast.12
- a significant cost burden on our citizens.
- In fact it amazes me that our last three energy secretaries, Ed
- Miliband, Chris Huhne and Ed Davey, have merrily presided
- over the single most regressive policy we have seen in this
- country since the Sheriff of Nottingham: the coerced increase of
- electricity bills for people on low incomes to pay huge subsidies
- to wealthy landowners and rich investors.
- Furthermore the cost is rising, not falling. DECC wrongly
- assumed that the price of gas would only rise. Four years ago
- the Energy Secretary confidently argued that renewables would
- be cheaper than gas by 2020. But this was based on a DECC
- forecast that gas prices would double.
- Instead gas prices have fallen. DECC has revised downwards
- its forecasts of 2020 gas prices to roughly what they were in
- 2011 - just 60p a therm.13
- with gas. But the drop in gas prices raises the costs of renewable
- subsidies, already ‘capped’ at £7.6 billion in 2020, by 20
- percent. This is unaffordable.
- Climate science
- Before I go on to outline an alternative, let me say a few words
- about climate science and the urgency of emissions reduction.
- I readily accept the main points of the greenhouse theory. Other
- things being equal, carbon dioxide emissions will produce some
- warming. The question always has been: how much? On that
- there is considerable uncertainty.
- For, I also accept the unambiguous failure of the atmosphere to
- warm anything like as fast as predicted by the vast majority of
- climate models over the past 35 years, when measured by both
- satellites and surface thermometers. And indeed the failure of
- the atmosphere to warm at all over the past 18 years - according
- to some sources. Many policymakers have still to catch up with
- the facts.
- I also note that the forecast effects of climate change have been
- consistently and widely exaggerated thus far.
- Wind power just isn’t competitive
- The stopping of the Gulf Stream, the worsening of hurricanes,
- the retreat of Antarctic sea ice, the increase of malaria, the claim
- by UNEP that we would see 50m climate refugees before now –
- these were all predictions that proved wrong.
- For example the Aldabra Banded Snail which one of the Royal
- Society’s journals pronounced extinct in 2007 has recently
- reappeared, yet the editors are still refusing to retract the
- original paper.14
- It is exactly this sort of episode that risks inflicting real harm on
- the reputation and academic integrity of the science.
- Despite all this, I remain open-minded to the possibility that
- climate change may one day turn dangerous. So, it would be
- good to cut emissions, as long as we do not cause great suffering
- now for those on low incomes, or damage today’s environment.
- The inadequacies of renewable energy to meet demand
- Let me briefly go through all the renewable energy options
- and set out why they cannot supply the zero-carbon electricity
- needed to keep the lights on in 2050.
- Onshore wind is already at maximum capacity as far as
- available subsidy is concerned. Ed Davey recently confirmed,
- if current approval trends in the planning system continue, the
- UK is likely to have 15.25 GW of onshore wind by 2020. This is
- higher than the upper limit of 13 GW intended by DECC.
- This confirms what the Renewable Energy Foundation has been
- pointing out for some time – that DECC is struggling to control
- this subsidy drunk industry. Planning approval for renewables
- overall, including onshore wind, needs to come to a halt or
- massively over-run the subsidy limits set by the Treasury’s Levy
- Control Framework.
- However, this paltry supply of onshore wind, nowhere near
- enough to hit the 2050 target, has devastated landscapes,
- blighted views, divided communities, killed eagles, carpeted the
- countryside and the very wilderness that the “green blob” claims
- to love, with new access tracks cut deep into peat, boosted
- production of carbon-intensive cement, and driven up fuel
- poverty, while richly rewarding landowners.
- Offshore wind is proving a failure. Its gigantic costs, requiring
- more than double the subsidy of onshore wind, are failing
- to come down as expected, operators are demanding higher
- prices, and its reliability is disappointing, so projects are being
- cancelled as too risky in spite of the huge subsidies intended to
- make them attractive. There is a reason we are the world leader
- in this technology – no other country is quite so foolish as to
- plough so much public money into it.
- Hydro is maxed out. There is no opportunity to increase its
- contribution in this country significantly; the public does
- not want any more flooded valleys. Small-scale in-stream
- hydro might work for niche applications - isolated Highland
- communities for example - but the plausible potential for extra
- hydro is an irrelevance for the heavy lifting needed to support
- UK demand for zero-carbon electricity.
- Tidal and wave power despite interesting small-scale
- experiments is still too expensive and impractical. Neither the
- astronomical prices on offer from the government, nor huge
- research and development subsidies have lured any commercial
- investors to step into the water. Even if the engineering
- problems could be overcome, tidal and wave power, like wind,
- will not always be there when you need it.
- Solar power may one day be a real contributor to global energy
- in low latitudes and at high altitudes, and in certain niches. But
- it is a non-starter as a significant supplier to the UK grid today
- and will remain so for as long as our skies are cloudy and our
- winter nights long. Delivering only 10 percent of capacity, it’s
- an expensive red herring for this country and today’s solar farms
- are a futile eye-sore, and a waste of land that could be better
- used for other activities.
- Biomass is not zero carbon. It generates more CO2 per unit
- of energy even than coal. Even DECC admits that importing
- wood pellets from North America to turn into hugely expensive
- electricity here makes no sense if only because a good
- proportion of those pellets are coming from whole trees.
- The fact that trees can regrow is of little relevance: they take
- decades to replace the carbon released in their combustion, and
- then they are supposed to be cut down again. If you want to fix
- carbon by planting trees, then plant trees! Don’t cut them down
- as well. We are spending ten times as much to cut down North
- American forests as we are to stop the cutting down of tropical
- forests.
- Meanwhile, more than 90 percent of the renewable heat
- incentive (RHI) funds are going to biomass. That is to say, we
- are paying people to stop using gas and burn wood instead.
- Wood produces twice as much carbon dioxide than gas.
- Waste to energy is the one renewable technology we should
- be investing more in. It is a missed opportunity. We don’t do
- enough anaerobic digestion of sewage; we should be using AD
- plants to convert into energy more of the annual 15 million
- tonnes of food waste. But this can only ever provide a small part
- of the power we need.
- So these technologies do not provide enough power. But they
- also don’t cut the emissions. And if you’ll bear with me I want
- to explain why.
- Emissions reduction in practice
- We know that Britain’s dash for wind, though immensely costly,
- regressive and damaging to the environment, has had very little
- impact on emissions.
- DECC assumes that every MWh of wind replaces a MWh of
- conventionally generated power.
- But we know and they know that this is probably wrong at
- present, and is all but certain to be wrong in the future, when
- wind capacities are planned to be much higher.
- According to an Irish study, because wind cannot always supply
- electricity when it is needed, backup from gas and coal power
- plants are required.15
- added to that of the backup energy generators the impact on the
- environment is actually greater.
- System costs incurred by the grid in managing the electricity
- system, especially given the remoteness of many wind farms,
- make it worse still.
- When the carbon footprint of wind is
- And a wind-dominated system affects the investment decisions
- other generators make.
- So the huge investment we have made in wind power, with all
- the horrendous impacts on our most precious landscapes, have
- not saved much in the way of carbon dioxide emissions so far.
- What savings, if any, have been bought at the most astonishing
- cost per tonne?
- Four possibilities – achieving emissions targets, supplying
- energy
- So what is achievable? If we are to get out of the straight jacket
- of current policy, what can be done? I want to explore four
- technologies which, combined, would both reduce emissions
- and keep the supply of power on.
- The shale gas opportunity
- In contrast to Britain’s dash for wind, America’s dash for shale
- gas has had a huge impact on emissions.
- Thanks largely to the displacement of coal-fired generation by
- cheap gas, US emissions in power generation are down to the
- level they were in the 1990s and in per capita terms to levels last
- seen in the 1960s. Gas has on average half the emissions of coal.
- It has cut US gas prices to one-third of European prices,
- which means that we risk losing many jobs in chemical and
- manufacturing industries to our transatlantic competitors. We
- are sitting on one of the richest shale deposits in the world. Just
- 10 percent of the Bowland shale gas resource alone could supply
- all our gas needs for decades and transform the North West
- economy.16
- The environmental impact of shale would be far less than wind.
- For the same output of energy, a wind farm requires many more
- truck movements, takes up hundreds of times as much land
- and kills far more birds and bats. Above all, shale gas does not
- require regressive subsidy. In fact, it would bring energy prices
- Not only does shale gas have half the emissions of coal; it could
- increase energy security. Currently 40 percent of the coal we
- burn in this country comes from Russia.17
- Lancashire shale gas than Putin’s coal.
- So the first leg of my suggested policy would be an acceleration
- of shale gas exploitation. As Environment Secretary I did
- everything I could to speed up approval of shale gas permits
- having set up a one-stop-shop aiming to issue a standard permit
- within two weeks. But I was up against the very powerful
- “green blob” whose sole aim was to stop it.
- Combined Heat and Power
- But there is another advantage of bringing abundant gas on
- stream. We could build small, local power stations, close to
- where people live and work. This would allow us to use not just
- the electricity generated by the power station, but its heat also.
- Combined heat and power, or CHP, cuts emissions, cuts costs
- and creates jobs.
- The generous EU estimate of the current efficiency in
- conventional power stations is about 50 percent. The best of the
- CHP plants deliver 92 percent efficiencies.18
- Yet despite these attributes CHP is treated as the Cinderella to
- the European Commission’s favoured Hi Renewable Energy
- Strategy.
- Renewables – especially wind – have been showered with
- lucrative guarantees, in the form of doubled or trebled electricity
- prices – thereby absorbing available investment capital.
- Whereas the Commission attributes CHP’s failure to
- the "limited" efficiency and effectiveness of its CHP Directive.19
- Far better to burn
- I am a realist. CHP does have high capital cost and limited
- returns with payback periods longer than normally considered
- viable. Given the commercial risks, dividends from energy
- efficiency alone have not been sufficient to drive a large-scale
- CHP programme.
- But the Coalition Government recognise this too in seeking to
- promote energy efficiency in the NHS.
- Its buildings consume over £410 million worth of energy and
- produce 3.7 million tonnes of CO2 every year. Energy use
- contributes 22 percent of the total carbon footprint and, in its
- own terms, the NHS says that this offers many opportunities
- for saving and efficiency, allowing these savings to be directly
- reinvested into further reductions in carbon emissions and
- improved patient care.20
- In 2013, therefore, it decided to kick-
- start its energy saving programme with a £50 million fund,
- aiming to deliver savings of £13.7 million a year.21
- comprised a substantial part of this spending.22
- To kick-start a broader national programme, providing state aid
- or financial incentives would be appropriate, especially as the
- effect would be more cost-effective than similar amounts spent
- on renewables.
- In the United States, the value of CHP is beginning to be
- recognised as the most efficient way of capitalising on the shale
- gas bonanza. One state – Massachusetts – has delivered large
- electricity savings in recent years through CHP.23
- in the United States is currently 83.3GW compared with about
- 9GW here.24
- Actually, between 2005 and 2010, the production of both
- electricity and heat from CHP installations in the UK fell, a
- dreadful indictment of the last Labour government’s energy
- policy. The installed capacity of wind increased by over 500
- percent, despite a massively inferior cost-benefit ratio.25
- But I do want to highlight how revolutionary CHP technology
- can be in affording the localisation of the electricity supply
- system. Transmission losses, can account for 5-7 percent of
- national electricity production. A 20 percent reduction in
- transmission loss would be the equivalent of saving the output
- of another large nuclear installation.26
- deliver efficiency ratings of up to 90 percent: the system heat is
- produced where it can be used.
- For instance, Leeds Teaching Hospital and the University of
- Leeds together have financed their own dedicated power station,
- comprising CHP units and an electricity generation capacity of
- 15MW.27
- With this model, it is easy to imagine office buildings,
- supermarkets and other installations operating CHP units of
- 1.5MW or less.
- In fact, results from Massachusetts shows that 40 percent of
- total energy supply could be CHP. Freiburg in Germany is
- already producing 50% of its energy from CHP up from 3% in
- This is why CHP can
- Implemented nationally, this revolutionary programme of
- localised electricity production would massively increase the
- resilience of the system, considerably improve energy efficiency
- overall, and ease pressure on the distribution system. In total, we
- would save the equivalent of 9 Hinkley C’s.
- Small modular nuclear
- The third technology is an innovative approach with small
- nuclear reactors integrated with CHP.
- Our policy has consistently favoured huge nuclear and coal
- plants, remote from their customers. Given that 40 percent or
- more of the total energy production from a nuclear plant is
- waste heat, such plants are ostensibly ideal for CHP, but there is
- no economic way of using the waste heat.
- I think there is a further massive obstacle to achieving 40 GW
- capacity from large nuclear plants; there are simply not enough
- suitable sites and not enough time to build them.
- Small nuclear plants have been running successfully in the UK
- for the last thirty years. Nine have been working on and off
- without incident and the technology is proven.
- Factory built units at the rate of one a month could add to the
- capacity at a rate of 1.8 GW per year according to recent select
- committee evidence from Rolls-Royce. 28
- Small factory built nuclear plants, could be located closer, say
- within 20 to 40 miles, to users and provide a CHP function.29
- Installed near urban areas, they can deliver electricity and
- power district heating schemes or, in industrial areas, provide a
- combination of electricity and process heat.30
- I welcome the Government’s feasibility study into this
- technology. What is holding up full commercial exploitation is
- the cost of regulatory approval, which is little different from a
- large-scale reactor.
- I also note that the US Department of Energy has commissioned
- the installation of three different modular reactors at its
- Savannah River test facility, with a view to undertaking generic
- or "fleet" licensing.31
- We should learn from them as a key
- priority.
- Demand management
- The fourth leg of my proposal is demand management. The
- government is tentatively investigating smart meters and using
- our electric cars as a form of energy storage for the grid as a
- whole.32
- people might wake to find that their electric cars have been
- automatically drained of juice to keep their electric central
- heating on. This is crazy stuff!
- It is both impractical and yet not nearly bold enough. Dynamic
- demand would be a better policy for demand management that
- would also be cheaper.
- It requires the fitting of certain domestic appliances, such as
- refrigerators, with low-cost sensors coupled to automated
- controls. These measure the frequency of the current supplied
- and switch off their appliances when the system load
- temporarily exceeds supply, causing the current frequency to
- drop.33
- That is to say, in the future, on cold, windless nights,
- Since appliances such as refrigerators do not run continuously,
- switching them off for short periods of 20 to 30 minutes is
- unlikely to be noticed and will have no harmful effects on the
- contents. Yet the cumulative effect on the generating system of
- millions of refrigerators simultaneously switching themselves
- off is dramatic – as much as 1.2GW, the equivalent of a large
- nuclear plant.34
- In addition, we can imagine a future in which supermarkets’
- chillers switch off, and hospitals’ emergency generators switch
- on, when demand is high, thus shaving the peaks off demand.
- We have started this and we need to do much more.
- For this reason, I think the Short Term Operational Reserve
- (STOR), a somewhat notorious scheme whereby costly diesel
- generators are kept on stand-by in case the wind drops, is
- not as foolish as it sounds. It would be even more useful in a
- system without wind power. At the moment it has to cope with
- unpredictable variation in supply as well as demand.
- With as much as a 25GW variation during a day and with a
- winter peak load approaching 60GW, significant capacity has to
- be built and maintained purely to meet short-duration peaks in
- demand. The use and extension of STOR and like facilities can
- make a significant contribution to reducing the need for peak
- generation plants.
- According to one aggregator, removing 5-15 percent of peak
- demand is realistic, as part of the new capacity market.35
- could be worth up to 9GW, effectively the output of seven
- major nuclear plants, or their equivalent which would otherwise
- have to be built. As it stands Ofgem has already estimated that
- demand management could save the UK £800 million annually
- on transmission costs and £226 million on peak generation
- capacity.36
- Four pillars of energy policy
- And there you have it. Four possible common sense policies:
- shale gas, combined heat and power, small modular nuclear
- reactors and demand management. That would reduce emissions
- rapidly, without risking power cuts, and would be affordable.
- In the longer term, there are other possibilities. Thorium as a
- nuclear fuel, sub-critical, molten-salt reactors, geothermal plants
- connected to CHP systems, fuel made in deserts using solar
- power, perhaps even fusion one day – all these are possible in
- the second half of the century.
- But in the short term, we have to be realistic and admit that
- solar, wind and wave are not going to make a significant
- contribution while biomass does not help at all.
- What I have wanted to demonstrate to you this evening, is that it
- is possible to reduce emissions, while providing power.
- But what is stopping this program? Simply, the 2050 legally
- binding targets enshrined in the Climate Change Act.
- The 80 percent decarbonisation strategy, cannot be achieved: it
- is an all-or-nothing strategy which does not leave any openings
- for alternatives.
- It requires very specific technology, such as supposedly "zero
- carbon" windfarms, and electric vehicles. Even interim solutions
- can never be "zero carbon", so these too must be replaced well
- before 2050.
- In guzzling up available subsidies and capital investment "zero
- carbon" technology blocks the development of more modest but
- feasible and affordable low carbon options.
- Thus, in pursuing the current decarbonisation route, we end up
- with the worst of all possible worlds. When there is a shortfall
- in electricity production, emergency measures will have to
- be taken - what in Whitehall is known as “distressed policy
- correction”. Bluntly, building gas or even coal in a screaming
- hurry. The UK ends up worse off than if it adopted less
- ambitious but achievable targets. Reining in unrealistic green
- ambitions allows us to become more "green" than the Greens.
- We are the only country to have legally bound ourselves to the
- 2050 targets – and certainly the only one to bind ourselves to a
- doomed policy.
- In the absence of a legally binding international agreement,
- which looks unlikely given disagreement within EU member
- states and the position of the BRIC countries, the Climate
- Change Act should be effectively suspended and eventually
- repealed. Clause 2 of the Climate Change Act 2008 enables
- the Secretary of State by order to amend, subject to affirmative
- resolution procedure, the 2050 target which could have the
- immediate effect of suspending it.
- Then, energy efficiency becomes a realistic and viable option.
- Investment in energy efficiency, including the Government’s
- very welcome initiatives on insulation, offers considerable
- advantages over wind energy. It does not raise overall electricity
- costs, and may even cut them because the investment costs are
- matched by the financial savings delivered.37
- The moral case for abandoning the 2050 targets
- We have to remember too that the people who suffer most from
- a lack of decent energy are the poor.
- I have already mentioned that we are redistributing from those
- with low incomes to wealthy landowners through generous
- subsidies collected in high energy bills.
- The sight of rich western film stars effectively telling Africa’s
- poor that they should not have fossil fuels, but should continue
- to die at the rate of millions each year from the smoke of wood
- fires in their homes, frankly disgusts me. The WHO estimates
- that 4.3 million lose their lives every year through indoor air
- pollution.38
- The sight of western governments subsidizing the growing of
- biofuels in the mistaken belief that this cuts emissions, and in
- the full knowledge that it drives up food prices, encourages
- deforestation and tips people into hunger, leaves me amazed.
- The lack of affordable and reliable electricity, transport and
- shelter to help protect the poor from cyclones, droughts and
- diseases, is a far greater threat to them than the small risk that
- those weather systems might one day turn a bit more dangerous.
- Growth is the solution, not the problem
- Among most of those who marched against climate change
- last month, together with many religious leaders, far too many
- academics and a great many young people, the myth has taken
- hold that growth and prosperity are the problem, and that the
- only way to save the planet is to turn our backs on progress.
- They could not be more wrong. The latest Intergovernmental
- Panel on Climate Change assessment report states that the
- scenario with the most growth is the one with the least warming.
- The scenario with the most warming is one with very slow
- economic growth.
- Why?
- Because growth means invention and innovation and it is new
- ideas, new technology that generates solutions to our problems.
- The IPCC’s RCP2.6 scenario projects that per capita GDP
- will be 16 times as high as today by the end of the century,
- while emissions will have stabilized and temperature will have
- stopped rising well before hitting dangerous levels.39
- The history of the last century shows that dramatic technical
- breakthroughs are possible where incentives are intelligently
- aligned - but it’s impossible to know in advance where these
- will come from. Who predicted thirty years ago that the biggest
- breakthrough would come from horizontal drilling?
- We have some of the finest scientists and universities in the
- world. A fraction of the money spent on renewables subsidies
- should go towards research and development and specific, well
- defined goals with prizes for scientists and companies.
- Energy efficiency will develop very rapidly if encouraged to do
- so, cutting emissions.
- A common sense policy climate for climate policy
- The fundamental problem with our electricity policy over the
- last two decades has been that successive governments have
- attempted to pick winners.
- Pet technologies introduce price distortions that destroy
- investment in the rest of the market, with disastrous
- consequences.
- Even Nigel would admit that the liberalisations he introduced
- to transform the electricity industry in the consumer interest
- were frustrated. Sadly, the policies of the last decade or so, have
- undone many of his reforms.
- But like him, I would reliberalise the markets and allow the
- hidden hand to reach out for technologies that can in practice
- reduce emissions.
- Conclusion
- To summarise, we must challenge the current groupthink and
- be prepared to stand up to the bullies in the environmental
- movement and their subsidy-hungry allies.
- Paradoxically, I am saying that we may achieve almost as
- much in the way of emissions reduction, perhaps even more if
- innovation goes well, using these four technologies or others,
- and do so much more cheaply, but only if we drop the 2050
- target, which is currently being used to drive subsidies towards
- impractical and expensive technologies.
- This is a really positive, optimistic vision that would allow
- us to reinvigorate the freedom of the science and business
- communities to explore new technologies. I am absolutely
- confident that by doing this we can reduce our emissions and
- keep the lights on.
- Endnotes
- There is no agreed figure on the total costs of the policy, nor indeed any agreement as to what
- exactly the policy should comprise. Nevertheless, these sources offer credible estimates: http:/
- /www.businessgreen.com/digital_assets/4177/Powerful_Targets.pdf, and https://www.gov.uk/
- government/uploads/system/uploads/attachment_data/file/48072/2290-pathways-to-2050-key-
- results.pdf
- However, the European Commission estimates that the additional investment to achieve
- decarbonisation (over and above that which would be spent anyway) could run to €304bn a year,
- between 2011-2050, for the whole of the EU. This equates to UK expenditure of £1.3tn, see: http:/
- /eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011SC0288&from=EN. The
- International Energy Agency estimates global costs at $44bn. Apportioned on the basis of contribution
- to global GDP, this also equates to £1.3tn for the UK, see: http://www.iea.org/newsroomandevents/
- pressreleases/2014/may/name,51005,en.html
- The target was “endorsed” by the European Council in Brussels on 29/30 October 2009, as outlined in
- the Presidency Conclusions. As such, it is a political commitment, but not legally binding on member
- states. See: https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/110889.pdf
- European Commission, A Roadmap for moving to a competitive low carbon economy in
- 2050, Brussels, 8 March 2011, COM(2011) 112 final, http://eur-lex.europa.eu/resource.html?
- uri=cellar:5db26ecc-ba4e-4de2-ae08-dba649109d18.0002.03/DOC_1&format=PDF
- See: http://ec.europa.eu/energy/energy2020/roadmap/doc/sec_2011_1565_part2.pdf, and http://
- www.isi.fraunhofer.de/isi-wAssets/docs/e/de/publikationen/Final_Report_EU-Long-term-scenarios-
- 2050_FINAL.pdf
- 5 http://www.ref.org.uk/fuel/tablebyyearshare.php?valdate=2012 and http://www.bbc.co.uk/news/
- business-24823641
- The need to close down the domestic gas distribution network is not specifically set out in
- Commission or UK documents, but is largely accepted as a natural consequence of decarbonisation.
- See: www.energynetworks.org/modx/assets/files/gas/futures/Delta-ee_ENA Final Report OCT.pdf.pdf
- Homes will either have to go “all electric”, or rely on heat networks or heat pumps. Different scenarios
- offer different mixes.
- 7 European Commission, Energy Roadmap 2050, Brussels, 15 December 2011,
- COM(2011) 885 final, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?
- uri=CELEX:52011DC0885&from=EN
- Commission Staff Working Paper, Energy Roadmap 2050 Impact Assessment, http://ec.europa.eu/
- energy/energy2020/roadmap/doc/sec_2011_1565_part2.pdf
- European Commission, Energy Roadmap 2050, op cit.
- 10 See Fig. 25 in the Energy Roadmap 2050, Impact Assessment, op cit.
- The UK scenario is detailed here: https://www.gov.uk/government/uploads/system/uploads/
- attachment_data/file/42562/216-2050-pathways-analysis-report.pdf
- For a broad-ranging review of energy subsidies, see House of Commons Environmental Audit
- Committee, Energy subsidies, Ninth Report of Session 2013–14, 27 November 2013. http://
- www.publications.parliament.uk/pa/cm201314/cmselect/cmenvaud/61/61.pdf
- 13 The Daily Telegraph, Expensive green energy a 'bad gamble' as ministers slash gas price forecasts,
- 3 October 2014, http://www.telegraph.co.uk/earth/energy/11137332/Expensive-green-energy-a-bad-
- gamble-as-ministers-slash-gas-price-forecasts.html
- 14 National Geographic, 13 September 2014, “Extinct” Snail Found Alive—But for How Long?,
- http://newswatch.nationalgeographic.com/2014/09/13/snails-extinct-rediscovered-animals-science-
- seychelles-climate-change/
- The Energy Collective, 1 July 2012, Wind Energy CO2 Emissions Reductions are Overstated, http://
- theenergycollective.com/willem-post/89476/wind-energy-co2-emissions-are-overstated
- The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present
- in the north of England. Drilling companies have previously estimated that they may be able to extract
- around 10% of this gas - equivalent to around 130 trillion cubic feet. With UK consumption at 3tcf per
- year, that equates to about 40 years supply. http://www.bbc.co.uk/news/business-23069499
- As steam coal – the total (2012) was 44%, see: https://www.gov.uk/government/uploads/system/
- uploads/attachment_data/file/170721/et_article_coal_in_2012.pdf
- 18 http://setis.ec.europa.eu/system/files/4.Efficiencyofheatandelectricityproductiontechnologies.pdf
- 19 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32004L0008&from=EN
- 20 http://www.ruh.nhs.uk/about/annual_report/documents/social_responsibility_report_2009-10.pdf
- 21https://www.gov.uk/government/news/new-nhs-efficiency-schemes-set-to-save-137-million-per-year-
- on-hospital-energy-bills
- 22https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/260921/
- list_of_successful_schemes_final_for_publication.pdf
- 23http://web.mit.edu/cron/project/EESP-Cambridge/Articles/Program%20design/
- ACEEE%20-%20January%202013%20-%20Frontiers%20of%20Program%20Design%20copy.pdf
- 24 http://www.epa.gov/chp/documents/catalog_chptech_full.pdf
- 25 http://en.wikipedia.org/wiki/Energy_in_the_United_Kingdom
- 26 European Commission, Action Plan for Energy Efficiency: Realising the Potential, Brussels, 19
- October 2006, COM(2006)545 final
- http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52006DC0545&from=EN
- 27 http://www.cogenco.com/uk-energy/ressources/documents/1/44529,Leeds-Tchng-Hosp-NHS-trt-
- Uni-of-le.pdf
- Also commenting was David Clarke, chief executive at the Energy Technologies Institute. He said:
- “Fundamentally, we see the small module opportunity driven by economics in terms of the
- potential for low-cost energy and reduced need for cooling water compared with big
- nuclear plants, meaning that you open up more opportunities for sites on which you can
- build these units, and then there is potential for siting them closer to centres of population
- so that you can use the waste heat off-site”. http://data.parliament.uk/writtenevidence/
- committeeevidence.svc/evidencedocument/energy-and-climate-change-committee/small-nuclear-
- power/oral/10962.pdf
- Icelandic experience is useful here: The Nesjavellir geothermal CHP plant in Iceland services almost
- the whole of Reykjavik and sends hot at water over 27km. In initial tests, its overall flow rate was
- around 560 litres per second. Water took seven hours to run the length of the pipe and only cooled
- by 2oC. See: http://geoheat.oit.edu/bulletin/bull17-4/art2.pdf The Akranes and Borgarnes district
- heating service provides the towns of Akranes (6600 inhabitants) and Borgarnes (1950 inhabitants)
- with geothermal water, as well as some farmhouses, along a 63 km long pipeline. See: http://
- www.geothermal-energy.org/pdf/IGAstandard/WGC/2010/3418.pdf
- Using that as a guide, the SMRs can be 20-40 miles from the districts they serve.
- 30 http://www.gen4energy.com/
- 31http://theenergycollective.com/dan-yurman/43216/hyperion-build-small-modular-reactor-savannah-
- 32 Euractiv, 29 April 2013, Electric vehicles sell power to the US grid, http://www.euractiv.com/
- transport/electric-vehicles-sell-electrici-news-519414, and
- Autoweek, 28 April 2013, http://autoweek.com/article/car-news/make-money-your-electric-vehicle
- 33 http://www.cired.net/publications/cired2013/pdfs/CIRED2013_0507_final.pdf, and https://
- pure.strath.ac.uk/portal/files/7103876/dynamicDemand_as_on_IEEE_site_1_.pdf
- 34 The Guardian, How 'smart fridges' could slash UK CO2 emissions and help renewables, 28 April
- 2009, http://www.theguardian.com/environment/2009/apr/27/carbon-emissions-smart-fridges-
- environmentally-friendly-appliances
- 35 http://www.kiwipowered.com/pr28.html
- 36 https://www.ofgem.gov.uk/ofgem-publications/57026/dsr-150710.pdf
- 37 http://ec.europa.eu/energy/efficiency/eed/doc/2011_directive/
- sec_2011_0779_impact_assessment.pdf
- After analysing the risk factors and taking into account revisions in methodology, WHO estimates
- indoor air pollution was linked to 4.3 million deaths in 2012 in households cooking over coal, wood
- and biomass stoves. The new estimate is explained by better information about pollution exposures
- among the estimated 2.9 billion people living in homes using wood, coal or dung as their primary
- cooking fuel, as well as evidence about air pollution's role in the development of cardiovascular and
- respiratory diseases, and cancers.
- http://www.who.int/mediacentre/news/releases/2014/air-pollution/en/
- 39 https://www.ipcc.ch/pdf/special-reports/spm/sres-en.pdf
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