Owen Paterson speech

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