Renewables records reveal how clean energy is starting to light up the world

19 Aug 2014

Amonix solar panel field

It's happening, people. On Sunday, one out of every five light bulbs in your home was powered using wind energy. If you own three TVs and two games consoles (you know who are), one of those was powered using wind energy as well. You would need 10 light bulbs to find one that was powered using coal.

This surge in wind power was the result of particularly favourable weather conditions, but this weekend was not quite the anomaly its record performance suggests. According to new government figures, renewable energy generation was up 43 per cent during the first quarter of the year, meeting nearly a fifth of demand. Yes maths fans, you're right, that means every fifth light bulb was lit using renewables during those cold winter months.

Meanwhile, in Spain, comfortably over a third of power came from renewables during the first half of the year, while more than half came from low-emission sources once nuclear power's contribution is added to the mix – that is every other TV powered using zero-emission electricity. The picture was similar in Germany where coal generation fell during the first half of 2014 as renewables output soared to account for 28 per cent of the power mix – you can do your own light bulb calculations now. Even in the previously fossil fuel-addicted US change is afoot with a new government report detailing how close to five per cent of power now comes from the country's fleet of wind farms.

Something truly remarkable is happening. Renewables are working; in most cases even better than their advocates suspected was possible. The share of clean energy on the grid in many of the world's most powerful economies is increasing at a rapid clip, and all without the blackouts or serious technical challenges critics predicted. The idea of a renewables-dominated energy future is no longer the sole preserve of eco-activists, in fact in some influential quarters it is becoming close to orthodox thinking. Renewables are now part of the mainstream, statistically, conceptually, and politically.

Moreover, while the build-out phase for renewables coupled with a scandalous failure to tackle coal power across Europe meant there was initially little impact on emissions from the power sector to show for clean energy investment, there are now increasingly encouraging signs renewables can and will start to replace fossil fuels. There is now plenty of evidence to show you do not need backup fossil fuel power to cover every megawatt of renewable capacity you add to the grid, as well as proof that each MWh of clean energy generated helps avoid emissions that would otherwise have been released.

Of course, supporters of renewables need to be wary of any triumphalism sparked by this flurry of record performances, hugely encouraging as they may be. The renewables industry's recent progress comes with a lengthy caravan of caveats trailing in its wake.

First, the string of broken renewables records across Europe over the past 12 months are the result of both increased capacity and a remarkably wet and windy winter that gave a boost to both wind and hydropower output. Renewables' inherent intermittency issue remains present and correct, prompting the perennial question: what happens during a dry and still month? The answer, obviously, is that some backup power capacity is needed, be it through standby power plants, cutting-edge demand management technologies, or interconnectors to neighbouring regions where the rain is reliably falling and the wind is almost always blowing (or Ireland as it is otherwise known). The complexities of the energy market and the power of the incumbent suppliers in turn mean further incentives are needed to ensure they build this necessary backup capacity, resulting in a quasi-nationalised energy market where the absence of a strong carbon price means we subsidise clean energy generation and backup energy generation.

Second, the intermittent nature of renewable energy output also necessitates balancing payments, where wind farm operators, for example, are paid compensation to not generate power when peaks in supply cannot be matched to peaks in demand. You do not have to believe that wind turbines are the work of the devil wreaked on the English landscape as punishment for our immoral lifestyles to accept this is a frustratingly inefficient arrangement.

Third, the cost of virtually all kinds of renewable energy may be falling fast, but for as long as climate and health externalities associated with fossil fuels are kept off the books, cost concerns over clean energy alternatives will remain. The initial build-out costs for the renewable energy infrastructure that is now delivering record levels of output has pushed up energy bills (albeit not by as much as its critics claim) and that has created challenges for manufacturing industries and those living in fuel poverty. Although it is worth noting that the Telegraph reports today that the same British manufacturing industry that has spent several years warning it will be crippled by high energy costs is now lauded as the "lowest-cost manufacturing economy in western Europe".

Finally, regardless of your views on the aesthetic merits of wind turbines and solar panels, renewables have brought with them land use impacts that cannot be ignored. Whether it is wind farms changing the vista of upland landscapes or biomass power plants requiring fuel from local forests, the clean energy generated by renewables projects come with varying land use demands. Fossil fuel power plants obviously also impose their own land use demands, but the high energy density of coal, oil, and gas mean it is possible to argue they require less land, even if they bring with them much higher environmental risks overall through spills and climate impacts.

And yet nowhere is the arrogance of the anti-renewables commentariat more apparent than in its willingness to trot out this list of challenges as if no one in the green economy has ever thought of them. Not only is the renewables industry acutely aware of each and every one of these issues, it is also closer than ever to overcoming them.

Pilot projects from around the world are demonstrating how a combination of demand management technologies, increased energy efficiency investment, interconnectors, and smart grid functionality – essentially harnessing the computing power we now use to look at videos of cats falling off skateboards to drag the power grid into the 21st century – can all but solve renewables' intermittency issue. Add the fascinating work being done to deliver cost-effective grid-scale energy storage technologies into the mix and it is possible to see how a renewables-dominated future is not just a pipe dream. We are one technological breakthrough away from making a cost-effective 100 per cent emission-free grid a reality. And as the IT industry has shown, we now live in a world where technological breakthroughs can be deployed at a pace much faster than was ever possible in the past.

Energy storage and smart grid functionality, both of which could feasibly become the norm within the next 20 years, also help address the cost challenges that renewables face. Allowing us to make use of every MW generated by a wind or solar farm and release it when we want it will drastically cut the cost of clean power. Although it is worth noting it is already falling fast without the help of next-generation storage technologies. Just as you would expect with a maturing technology-based industry, the cost of renewables has fallen drastically – so much so that some parts of the world are now seeing renewables compete with fossil fuels on price without recourse to either subsidy or carbon pricing. It is a trend that is only going to continue, as solar PV efficiencies in particular quickly improve.

Land use remains a challenge for renewables, and there is a credible and compelling argument for developing carbon capture and storage (CCS) technologies and next-generation nuclear power plants in order to take advantage of the high energy density these fuels can offer. But even here we are starting to see how community-scale wind and solar installations, not to mention floating wind and solar farms, can deliver renewable power without disrupting current land uses. Moreover, when asked, the vast majority of people still prefer a wind farm in a field to coal dust in their lungs.

I fully accept this analysis is more than a little Panglossian: global emissions are still climbing, renewables still make up a tiny share of the energy mix globally, and most experts agree the most likely course of action remains an extremely gradual transition towards a clean energy grid. But then again, there are a couple of graphs doing the rounds on Twitter comparing the wind and solar deployment predictions for the past 10 years or so from Greenpeace and the IEA with the real-world performance. Both predictions are too conservative, Greenpeace's fractionally, the IEA's massively. There is mounting evidence the energy incumbency could be getting its projections wrong again. Renewables costs are falling, barriers to its wider deployment look surmountable, and as the flurry of recent records prove, the technology is working.

The transition will continue to be messy. There will be years when renewables' performance falters, just as there will be markets where support is withdrawn too quickly, damaging the industry, and markets where support is clung on to for too long, damaging the industry's credibility. There will be an even fiercer fight back from the fossil fuel lobby than the one we have already seen. The renewables industry will face significant challenges as it scales up and battles to ensure the supply of new technologies matches soaring demand. But it would take a particularly one-eyed assessment to deny that a renewables revolution is under way. The records will keep tumbling. It really won't be that long until every light bulb is lit using clean power.

Government must tear down community energy barriers

15 Aug 2014


Almost everyone loves the concept of community energy. Right wingers love the air of old time self-sufficiency and autonomy that comes from a community owning and generating its own power. Left wingers love the co-operative element that underpins the funding of many community projects and the challenge the model presents to corporate power. The government loves the combination of clean energy, 'Big Society' thinking, and the potential for challenging the Big Six's dominance. Environmentalists love the boost to the UK's renewable energy capacity and the ability to engage communities with green issues. And even some within the energy and finance mainstream are starting to love the ability of community projects to help repair the battered reputation of the investment and energy sectors.

So why are proposals for community energy projects currently being rejected by the Financial Conduct Authority (FCA)? And why are senior figures within the fledging community energy sector increasingly concerned that the government is failing to live up to its ambitious new community energy strategy?

As The Guardian revealed today, the FCA has recently rejected around eight applications for the creation of energy co-operatives owing to an interpretation of arcane regulations governing how an organisation qualifies as a mutual that means they fail to qualify. According to the rules, a co-op must demonstrate that members are participating in the mutual through "buying from or selling to the society", "using the services or amenities provided by it", and "supplying services to carry out its business". This is, of course, easy for a co-operative retailer or bank that sells its services to its members, but according to the FCA it rules out some proposed energy co-operatives.

Well, yes, you could interpret it that way if you wanted to choke off one of the most promising developments in the energy sector in decades. Or you could recognise that anyone investing in a community energy project who then also consumes power from the grid is to some degree buying energy produced by the project. It may be a fractional amount, but if the power is being fed into the grid you can make a case that the co-operative member is using some of it, even if they are not sourcing it directly from the wind farm or solar array they have helped finance. Through their energy bills they are also funding the Feed-in Tariff that helps fund the vast majority of community energy projects.

As Shadow Energy Minister Tom Greatrex, Mark Lazarowicz MP and Claudia Beamish MSP pointed out in a letter to the FCA: "We understand that there has been some ambiguity about the meaning of the word 'participation' in ascertaining whether a project is a bona fide co-operative. Participation is clearly more than just a narrow question about whether the product of the co-operative is traded solely with members... There may be other forms of participation that the FCA has not considered. So long as this question remains open, we do not believe that the FCA can reasonably move to block future co-operative energy projects."

It is hard to argue with this logic and hard to see how the FCA can think the rules were meant to be interpreted in this way. It is critical that the emerging community energy sector is properly regulated and financial risks are effectively managed, as one collapsed energy co-operative would inflict untold damage on the sector as a whole. But the current interpretation of the rules would reduce this growing sector to the handful of projects that are able to sell power direct to their members. Getting a community energy project is hard enough as it is, what with planning challenges and tough financial regulations, but this is just another barrier being thrown up in the way of viable clean energy projects.

Energy and Climate Change Secretary Ed Davey needs urgently to clarify these rules and make it clear that energy co-operative members do not have to buy power direct from the project to be 'participating' in the mutual.

He should also take this opportunity to reflect on whether the government really is doing all it can to make community energy a serious player in the UK. The government's recently published strategy talked a good game, but there are already serious concerns within the sector that a promised increase in the Feed-in Tariff threshold to help aid the development of community-scale projects could be shelved.

Equally, the FCA's concerns would prove academic if the government's much-trumpeted Licence Lite regime and its promise of making it easier for community energy projects to sell power direct to customers was delivering. Allowing community energy projects to cut out the middleman would only serve to connect people even more closely with the green energy they are using, but the scheme has singularly struggled to get off the ground.

It would also be worth asking what has happened to George Osborne's promised Green ISAs - the strangely abandoned proposals that could have proved one of the simplest and easiest means of mobilising green investment and driving public interest in low carbon infrastructure.

Almost everyone loves community energy. But love alone is not enough: government and regulators now need to follow up their warm words with action.

From polls to protests, the shale gas industry is its own worst enemy

14 Aug 2014


It is hard to know where to start with the shale gas industry's latest week from hell, not least because a fair few of its current woes spring from a report in which large sections were redacted. The campaign to build a domestic shale gas and oil industry now appears to be collecting PR blunders like the Russian oil industry collects spills, that is to say frequently and with a remarkable insouciance.

The week started badly for shale gas lobbyists, with Defra's heavily censored report on the Rural Economy Impacts of shale gas featuring the word "redacted" so many times it looked more like a national security report - although given the crucial debates surrounding fracking centre on questions of climate and energy security, I suppose, on some levels, that is exactly what it is.

Someone may have thought the scale and nature of these redactions would help protect the industry from yet more difficult questions, but as is so often the case with state censorship they have only invited further speculation.

Defra's highly contestable assertion the redactions are justified because early disclosure of parts of the analysis could "close down discussion", only fuels suspicion that it is seeking to suppress evidence that may hamper the government's pro-fracking strategy. This suspicion is further stoked by the extent to which the redactions appear to be weighted against those sections where you would reasonably expect concerns about fracking's impacts to be located.

The Institute of Directors' controversial estimate that shale gas investment could reach £3.7bn a year gets a full hearing (it is worth noting once again for comparison that renewables investment cleared £8bn last year), but the sections on social impacts, house prices and conclusions are heavily redacted.

The decision to redact an entire section on one of the three "social impacts" identified by the report is particularly egregious. The report acknowledged there could be impacts on house prices and local services from fracking, and then redacted the entire third part of the chapter, leaving readers to wonder whether fracking could also result in plagues of locusts and storms of fire.

What could this mystery social impact be? There is no way of knowing, but it is perhaps worth noting that you would expect a thorough report on the potential impact of shale gas on rural communities to at least acknowledge some of the "community cohesion" issues the shale gas boom has sparked in rural America as an influx of mostly male oil and gas workers have brought with them strip clubs and gambling dens to previously quiet rural towns. It is highly unlikely Balcombe is about to be turned into Sin City, but concerns about the social tensions of fracking are surely at least worth considering.

If anything, Defra's response to questions about the report's redactions and its focus on house price impacts only made things worse for the industry. "There is no evidence that house prices have been affected in over half a century of oil and gas exploration in the UK, or evidence that this would be the case with shale," a spokeswoman said, glossing over the fact one of the few parts of the department's own report that was not redacted admitted there was some evidence of falling property prices near fracking sites on the other side of the Atlantic. Apparently, the US shale gas experience is relevant when talking about jobs and energy costs, but suddenly irrelevant when talking about house prices.

As the venerable Geoffrey Lean observed in The Telegraph (hardly a cheerleader for anti-fracking protests), "rightly or wrongly [the report] can only raise suspicions in Middle Britain that ministers and the industry have a lot to hide on how fracking will affect its vital interests".

All of this would have been bad enough for shale gas industry lobbyists, but the row over the secret impacts of fracking also served to overshadow the release of their latest survey on the level of support for fracking projects - a survey which quickly found itself similarly mired in controversy.

A poll commissioned by the UK Onshore Oil and Gas (UKOOG) association and carried out by Populus found that 57 per cent said the UK should exploit shale gas reserves, while just 16 per cent were opposed and 27 per cent claimed not to know. The suggestion that around double the proportion of people supported shale gas than had done in previous polls immediately sparked suspicions among green groups, even before the government helpfully published its own poll showing the proportion of people who support fracking has fallen to 24 per cent, the number opposed has risen to the same proportion, and nearly half of people can't be bothered either way.

UKOOG's PR company attempted to put a quite remarkable spin on the contrasting set of results, suggesting the difference can be explained by their decision to give respondents to the question on shale gas development the chance to reply only 'yes', 'no' or 'don't know'.

"DECC offered a wide range of answer options including 'neither support nor oppose' - and 47 per cent of people picked this," they said. "In the UKOOG poll we wanted to get a clear view of people's attitudes if they had to make a clear choice, either supporting or opposing shale production (with a 'don't know' option offered). When given this choice 57 per cent supported shale gas exploration. A lot of people who would sit on the fence if given the option support shale gas production when asked to make a choice. The real finding of the DECC tracker is that 51 per cent of the population 'neither support nor oppose' production (47 per cent) or 'don't know' (four per cent)."

Leaving aside the fact that you know a lobbying effort is struggling when its argument boils down to 'look, we've spent all this money for three years and we're delighted the majority of people remain utterly indifferent to our technology', there is another 'real finding' from the contrasting surveys, namely that you can achieve a lot with leading questions.

The reduction in the number of multiple-choice options may have had an impact, but as polling expert Leo Baresi explained in an excellent blog post, so did the series of leading questions that presented context-free arguments for fracking. "This isn't an attempt to find out what the public think about fracking," he concluded. "It's message testing."

It would be informative to run a similar poll asking people about climate change, air pollution, traffic concerns and support for renewables, before then asking them what they thought about fracking. I say it would be informative; it would be informative as a means of demonstrating what leading questions can achieve. As a means of finding out what people actually think it would be pretty useless.

As if all this is not enough, the shale gas industry's woeful week is about to get worse. Up to 1,000 protesters are expected at an anti-fracking camp near Blackpool from today and, while many of them will fit the stereotype of unwashed eco-loons, their numbers will be swelled by the local residents hugely concerned about the impact of drilling in the area on house prices and quality of life.

The big problem for those who think shale gas has a major role to play in the UK's energy future is that this week forms part of a pattern for what must be one of the least successful lobbying efforts of recent times. The industry may have been able to convince the government to give it the relaxed planning rules and tax breaks it wanted, but its communications effort has been so confused that it has singularly failed to secure the public support it needs to gain a social licence to operate. The net result is protests, rejected planning applications and, for all the talk, a distinct absence of the test wells needed to demonstrate whether all this heartache actually has a purpose.

It all could have been so different. The shale gas industry could from the start have made a much more forceful case for domestic gas replacing coal and imported gas as part of a low carbon energy mix. It could have lobbied for a decarbonisation target, come out in favour of stronger carbon targets, pushed for more spending on carbon capture and storage, and made a genuine effort to build allies across the political and campaigning spectrum.

Instead, intentionally or otherwise, the government and the industry hyped the benefits of shale gas to a frankly unbelievable degree, while literally redacting the potential costs and risks. It buddied up with the climate sceptic commentariat and foolishly failed to stop support for shale gas becoming a political virility test for the right wing, alienating plenty of centrists in the process. It mismanaged planning issues and singularly failed to cut through with reassurances about the scale of local environmental impacts, allowing horror stories from the under-regulated US to gain traction. It stuck its head in the ground in response to the carbon bubble hypothesis, largely ignoring the mounting concerns about the long-term economic viability of the US shale gas boom. And all the while some of its more visible cheerleaders responded to legitimate concerns by attempting to shout down critics.

The big problem for environmentalists is that, firstly the shale gas industry's meandering from one PR fiasco to the next distracts from the real game-changing developments underway in the renewables, energy efficiency and nuclear sectors. And secondly, as Geoffrey Lean points out, the industry's continued failings mean it is in danger of ruling itself out from a potentially useful role in that greener energy mix.

Domestic shale gas may possibly play a part in a clean energy mix built around renewables, nuclear and, most crucially for the gas industry, carbon capture and storage technology. But it will have no chance of doing so if it can neither win over the public nor make common cause with genuinely clean energy sectors.

Intriguingly I was once told by a senior figure at a green NGO that opposition to shale gas was initially not the cut-and-dried issue for the organisation that you might expect. But its mind was quickly made up by the extent to which the fracking industry and its supporters in government angered the campaign group's rank-and-file members and rode roughshod over environmental concerns.  

UKOOG gamely insists everything is still to play for and, with over half of respondents to the government's poll expressing indifference towards the technology, the door does indeed remain ajar for some form of domestic shale gas industry. But it cannot expect to push open that door if it continues to experience weeks when fracking is associated with falling house prices, redacted reports, and controversial polls.

The government and the industry urgently needs to build public trust and it should start by coming clean about the likely impacts of shale gas on rural communities. There is no justification for secret government reports on this issue. Once that is done it should also engage much more fully with the legitimate questions that are being asked about its impact on local habitats and climate change, not to mention the financial risks the sector faces from any carbon bubble.

Failure to tackle these issues would spark another question that may prove fatal to the UK's fledgling shale gas industry: with thousands being spent on the best lobbyists, could it be that the reason the public are failing to embrace fracking has less to do with the repeated communication missteps and more to do with the fact that the prospect of a domestic shale gas industry at a time when clean technologies are more popular than ever is just not that appealing?

Why Ed Miliband should raise the 'green flag'

01 Aug 2014

Ed Miliband

I've always rather liked Ed Miliband. There, I said it. I know the default setting for much of the UK's media is to treat the Labour leader as a Wallace-shaped Piñata, but I've always regarded him as a fundamentally decent, genuinely engaging, if occasionally flawed politician.

These qualities were made abundantly clear during the two years Miliband spent as the UK's first Energy and Climate Change Secretary. Obviously, others' recollections of that period will be different, but having covered the then fledgling Department of Energy and Climate Change (DECC) my impression was of a young and ambitious Secretary of State who quickly ran up a pretty solid list of achievements. He successfully launched a department that consistently punched above its weight, put the historic Climate Change Act on a firm footing, kept climate action on the political agenda in the face of a global economic crisis, earned the grudging respect of the energy giants, played a crucial and positive role at the UN international climate summit in Copenhagen, and (while the current DECC ministerial team may dispute this) laid a good deal of the ground work for the clean energy policies the coalition has subsequently delivered - he may not have delivered them, but pay-as-you-save energy efficiency schemes, more support for renewable heat, and an overhaul of the energy market to prioritise clean energy were all being actively considered on Miliband's watch.

Inevitably, there were some bad mis-steps along the way. The failure to include a clear mechanism for cutting feed-in tariff incentives over time was a mistake that meant the scheme's initial success was always likely to give way to instability. Similarly, you can construct a convincing case for saying he should have gone further, faster on prioritising energy efficiency, mobilising clean energy investment, sorting out the UK's nuclear energy impasse, and challenging the dominance of the Big Six and coal power.

The coalition allegation that successive Labour Energy Ministers singularly failed to do enough to drive investment in new infrastructure is entirely justified, but it is unfair to lay the blame for that scandalous under-investment solely at the door of Miliband's DECC. He by no means had all the answers, but during a relatively brief stint in the job Miliband attempted to correct many of the weaknesses in the energy market that were allowed to emerge during the Blair-Brown years. Conservative MP's may allege that high energy bills are a result of "Miliband's green levies", but after four years in government they have chosen not to remove them, even if a political panic last year led to some cuts to energy efficiency levies.

Most of all though, Miliband's stint at DECC established him as a surprisingly impressive politician. I say surprisingly because all the flaws that have been mercilessly exposed by the right wing press were already present and (in)correct. He could lapse into policy wonkish language, he could butcher set-piece speeches, he never looked at ease in TV interviews or at photo ops. And yet, when taking questions from the public or the press he had a rare ability to actually listen to and engage with the people he was talking to. It sounds simple, but you would be surprised (or perhaps you wouldn't be) about how few senior politicians can do it. I recall one conference where Miliband followed a deadly dull keynote speech with a lengthy Q&A that left pretty much every one in the room singing his praises. One of the PR execs hosting the conference returned to the press room following Miliband's performance with the words, "you know what, I think I've got the strangest crush..."

Nowhere were Miliband's strengths more apparent than in the clarity he brought to action on climate change. He championed the Climate Change Act, understood fully the importance of the green economy, threw his weight behind the low carbon elements of Peter Mandelson's industrial policy, and realised climate change had to be framed less as risk and more as opportunity. As he repeatedly observed, "Martin Luther King used to say 'I have a dream', not 'I have a nightmare'." Miliband was also much tougher than he appeared in public - just ask the senior energy executives and journalists who crossed him. It is fair to say none of the environment correspondents who covered Miliband prior to 2010 would have tipped him as a future Prime Minister, but equally I'm not sure they'd be entirely surprised that he now has a shot at the job.

It was Miliband's passionate commitment to climate action, more than anything, which established him as a contender and animated the young activists who helped him seize the Labour leadership. As left wing commentator Sunny Hundal observed in a recent column "When I first wrote that Ed Miliband should be leader of the Labour party back in 2009, it was because he inspired me too. At a time when Labour was intellectually bankrupt and devoid of energy, he worked tirelessly and spoke passionately about climate change and the challenges it presented. His tireless work at Copenhagen generated the sort of admiration across party lines that is still very rare."

All of which sadly begs the question as to what has happened to that Ed Miliband? Why has that rare ability to engage with the public not translated into better leadership ratings? Where has 'Green Ed' gone?

Of course, Miliband's position is nowhere near as bad as an increasingly partisan press makes out. For all his woeful leadership ratings and his apparent inability to eat a bacon sandwich, civil war in the party has been carefully avoided, solid progress has been made since Labour's biggest electoral defeat in a generation, and the party is both marginally ahead in national polls and more comfortably ahead in key marginal polls. The election result remains on a knife edge, but it is entirely possible Miliband will either form the next government or deny David Cameron the majority he craves.

And yet, it is equally clear that something is awry. Much of the mud flung at Miliband may be unfairly personal, but some of the criticism is self-evidently justified. His anaemic leadership ratings are a constant drag on Labour's electoral prospects, the grumblings about the effectiveness of Miliband's office are too frequent not to have some credibility, and, most importantly, while there may have been improvements in recent months the opposition's messaging still appears too scattergun to deliver the required cut-through with voters.

All of which brings us back to the topic of 'Green Ed' and the mystery that is the Labour leader's reluctance to make action on climate change a more central part of his offer to the public. There was a useful reminder of his views on climate change earlier this year when Miliband seized on the government's sluggish response to the floods that hit much of southern England by reasserting his view that climate change is a national security issue and we are guilty of "sleepwalking into a climate crisis". And then... nothing.

Miliband has highlighted climate change and green industries in several of his conference speeches (although he reportedly forgot the climate section during one of his note-free performances), and he has authorised his impressive shadow energy, climate change, and environment teams to put forward some pretty bold policy proposals, including commitments to decarbonise the power sector by 2030 and a crucial pledge to accelerate the phase out of coal power. But at no point has he made Labour's evolving climate change and green economic strategies a central part of his offer. There has been no big set-piece speech on the environment - just a handful of attacks on the Conservative's often contradictory stance on climate change - and there has been a complete failure to back up the energy price freeze pledge with a similarly bold and specific commitment on clean energy.

This is strange, not least because it is hard to identify a down-side for the Labour party of making green growth and climate action a central part of Miliband's pitch to the country.

The upsides are obvious. Firstly, as Hundal points out, focusing on a topic he clearly cares about would inspire Labour's base (crucial in what is going to be a tight election) and may even inspire some wavering swing voters. Secondly, if you have a 'leadership' problem, talking seriously and passionately about one of the biggest issues the world faces can only help. Thirdly, it offers a route for Labour to win back, if not business backing, then at least respect. There are arguably only two areas where the CBI is closer to Labour's position than the Conservatives, on Europe and the green economy - Labour should be doing more to take advantage of that potential alliance. Sir Stuart Rose may be anything but a Labour cheerleader, but Miliband would be wise to heed his prediction that the party that is brave enough to "raise the green flag" before the next election will find it to be a vote-winner.

And then there are the political calculations. A bolder green strategy from Labour would help shore up the support of those environmentally-conscious ex Lib Dem voters who have switched their allegiance (it is notable that the Lib Dem's have revealed this week they are planning an ambitious-looking new Nature Bill in an attempt to win back those self-same voters). It may also help hold off the challenge to Labour's left from the Greens, who are polling at their highest level in years and could yet deny Labour votes that may prove crucial in a close election. Most of all though, an ambitious green pitch from Labour would make life very awkward for David Cameron as he battles to keep a lid on the bubbling conflict between his own environmentally-concious modernising tendency and the outright hostility to green issues demonstrated by so many of his backbenchers and cabinet colleagues.

Finally, and most importantly, there is the public, who according to poll after poll are broadly supportive of clean energy and the green economy and place huge value on the environment. As Rose observed: 'People get it'. It may not be the top issue with voters, but is an issue that matters to many of them and it can help define a candidate in a way that dry discussions about the deficit or GDP growth rates won't. There is a clear electoral upside for Miliband in trying to take ownership of the political response to climate change, as he once did when he first made an impression on the national stage.

The one downside is that pushing climate change up the agenda would almost inevitably invite attacks from Lynton Crosby over the potential for environmental legislation to push up bills and damage the economy. Every discredited bit of "evidence" and suspect energy price projection would be used to try and paint Miliband's desire to deliver more ambitious climate action as a luxury the UK can't afford. You can see why Labour may be nervous about opening up this front, but equally they must know that any move to attack Miliband on climate change only serves to remind voters about Cameron's public embrace of that husky. Voters aren't stupid, Miliband has to be confident that this is an argument he could win, particularly when Cameron is on record as accepting that action on climate change is critically important.

Moreover, let's be honest, the people that an ambitious green strategy would upset are never going to vote Labour. Ed Balls could promise to tear down every wind turbine and dish out a free sack of coal to every house with an Aga and they would still refuse to put a cross in the box next to their local Labour candidate.

An explicitly green economic strategy from the opposition would not only help Labour, it would also help the wider green economy. For those of us who are not Labour Party members a clearer commitment on climate change from Miliband would have the positive effect of forcing all the main parties to respond. The Lib Dems would have to up their game still further to cling onto their traditional position as the greenest of the main parties and the Tory leadership would be forced to finally stake out a clear and coherent position on one of the biggest challenges the world faces - something Cameron has been studiously avoiding for several years now.

What should Miliband do? Labour already has the bones of a solid green manifesto, it should now urgently strengthen it and then look to tie it explicitly to the Party's core messages. Miliband's "responsible capitalism" should become "green responsible capitalism", a million new homes could become a million green homes with better building standards, and industrial strategies should be laser focused at low carbon sectors such as green automotive and the circular economy. Policy commitments could be translated into more appealing voter offers. How about solar panels (or site-appropriate renewables) on every school and hospital? What about using the Green Investment Bank's proposed freedom to borrow to offer ultra-low interest loans to help everyone make their home warmer? Why not introduce legislation to ensure anyone living near a renewables project or investing in community renewables gets a rebate on their energy bills?

Most of all though, Miliband needs to talk about the topic that once animated and defined him. All of his best moments as leader of the opposition have come when he has led the debate on topics that he clearly cared about and where Cameron was in an awkward position. Climate change should be one of those topics. If your biggest problem is that people don't think of you as a leader, then the best thing to do is to get out there and demonstrably lead.

Green policy takes two steps forward, one step back

25 Jul 2014

Nick Clegg and Ed Davey

It has been a disorientating week for the green economy as good news and bad news has wrestled for supremacy in a confusing battle that has left observers simultaneously delighted and despairing. It is a bit like watching a Commonwealth Games judo bout without knowing any of the rules, only to find that said rules can change every 30 seconds, and that the eventual prize could be either a gold medal or a criminal conviction. Suffice to say, people are feeling confused.

Let's start with the good news. The week started with confirmation the UK's fourth carbon budget would be retained in its current form, bringing to an end uncertainty over the future of the target and reasserting the political classes' support for the long term decarbonisation of the UK economy. This was followed by proposals from the European Commission for a new energy efficiency target, which may have fallen short of the level of ambition green groups wanted but did provide further reassurance the EU remains committed to climate action. The triumvirate of encouraging green policy announcements was completed when the UK set out its new strategy for tackling fuel poverty and enhancing energy efficiency post-2020, outlining plans for new legal targets and minimum building standards to address the issue.

Each of these policies may have their detractors and all could be more ambitious, but they offer green businesses and investors yet more evidence that decarbonisation policies are set to continue post-2020.

Meanwhile, there was yet another poll indicating that the public is overwhelmingly in favour of clean energy deployment and the now familiar march of positive stories detailing how clean technologies are fast maturing and big businesses are embracing more sustainable operating models. Particular highlights this week included Frost and Sullivan's confident predictions solar revenues will double by 2020 to $137bn, Sainsbury's innovative £200m green loan and its ambitious clean tech roll out, and Mars' revelation it is planning a global renewable energy investment drive of a similar order of magnitude to IKEA's €1bn commitment.

So everything is looking up, right? Having finalised emissions targets for the mid-2020s and processed the Committee on Climate Change's warnings that the country is not on track to meet those targets Ministers have surely begun work on beefing up the UK's low carbon ambition? Well, not exactly. Instead, in a disorderly flurry of announcements designed to clear the decks before the summer recess the government has revealed that policies covering everything from energy efficiency to clean energy investment and resource security to nuclear waste disposal are, if not in disarray exactly, then looking extremely frayed around the edges.

Take the confirmation this week from DECC that £205m will be made available each year to support the new contracts for difference (CfD) clean energy subsidy regime. This should have been a welcome clarification of how the primary mechanism for ensuring the UK meets its renewable energy and decarbonisation targets through to 2020 and beyond will operate. Instead it has left virtually the entire renewables industry wondering whether there is enough money to go round and whether Ministers are being entirely serious when they say they want to deliver decarbonisation at the lowest cost.

As the Telegraph reported, the decision to earmark £155m for immature technologies such as offshore wind means the government is likely to be able to confirm support for just one of the five offshore wind farms in the pipeline this year. Meanwhile, the decision to assign just £50m for contracts that will be auctioned to onshore wind, solar, and other mature clean technologies places serious constraints on these sectors, despite the fact they can deliver clean energy at a much lower cost than the offshore wind projects the government evidently favours. Add in the continuing uncertainty over the future of the UK's long-awaited "nuclear renaissance" - underlined this week by the relaunch of the previously thwarted attempt to identify a location for a nuclear waste facility - and the promise of policy certainty that accompanied the passage of the Energy Act looks as illusory as ever.

Of course, there are still encouraging signs that clean energy investment has increased substantially in recent years and it remains vital that the government retains tight control over the subsidy pot for fear of a backlash over the impact on energy bills. And yet, the whole electricity market reform programme is looking increasingly confused. If cost and decarbonisation are the top two priorities, why are the lowest cost renewables getting a smaller slice of the subsidy pot, and why have we not seen more rapid progress on carbon pricing and subsidy auctions, both of which will help cut costs? If cementing the UK's position as a leader in offshore wind is also a priority, why are there not sufficient funds to deliver the projects in the pipeline in a timely manner? If phasing out unabated coal represents the most effective means of cutting carbon, why is the government ignoring the loopholes that will allow coal power to continue well into the 2020s and why is it raising the prospect of subsidies for the industry through its new capacity mechanism? If the cash really isn't available to deliver the next wave of big clean energy projects, why spend years talking up the need for these projects and encouraging businesses to invest in their development? These questions urgently need answering, if the electricity market reform strategy is to ever deliver on its promise.

All of which brings us to another crucial question: if investing in new energy capacity, be it high or low carbon, is so expensive, why is there not much more focus on cost effective energy efficiency improvements?

The government's energy efficiency strategy has been a conveyor belt of crises in recent years as constant policy changes have led to a slump in insulation rates and thousands of lost jobs. And this week brought a series of further blows to the punch-drunk energy efficiency sector as the government first trumpeted the success of its latest Green Deal incentives, only to close the fund three days later after receiving £70m worth of applications for the crazily generous grants in less than a week. As one industry source complained to me this morning, the whole thing "smacks of amatuer hour" and it is hardly suprising Labour wants the Public Accounts Committee to investigate. Add in the on-going scandal, confirmed this week, that is the Big Six's pocketing of a windfall from the changes to the ECO scheme, and the fact that the promising new energy efficiency targets for the 2020s are fatally undermined by proposed legislation that only requires ministers to deliver improvements that are "reasonably practicable" and you can understand why efficiency firms are today oscillating between anger and despair.

It always feels a little uncomfortable criticising Ministers and policies that are clearly well-intentioned, but the chopping and changing of energy efficiency schemes and incentives and the see-sawing between restrictively tight cost controls and staggering largesse with taxpayers' money is little short of incompetent. This is no way to build an industry. It is no way to tackle fuel poverty. And it is no way to deliver emissions savings. The most cost effective means of decarbonisation is being hampered at every turn by policy confusion and cravenly short term political expedience - jobs and livelihoods are being lost as a result.

Although, at least Ministers seem interested in improving the UK's energy efficiency, however flawed the policies they have enacted. As MPs concluded this week, more than four years into the parliament and the government's resource security and waste strategy still "lacks ambition and leadership", resulting in a "throwaway society" that leaves remarkably accessible economic and environmental gains unrealised. Owen Paterson's controversial handling of the floods and badger culls, coupled with his combustible temperament, may have lost him his job, but virtually anyone you speak to in the waste industry could have told you his disregard for resource policy was arguably the biggest failing of his time in office.

The simple fact is that while the setting of climate change targets and carbon budgets is hugely welcome, it is also the easy part. If they are to be delivered you need a bold, ambitious, co-ordinated, and competent effort from government and businesses. You can't set an emissions target and then deny the economy the policies it needs to meet the target. You can't talk up the importance of cost-effective decarbonisation and then threaten to block onshore wind farms and deliver a policy train wreck for the solar and energy efficiency projects that deliver low cost carbon savings. You can't tout the merits of not "picking winners" and then attempt to do precisely that in almost every aspect of energy policy. And most of all you can't identify climate change as an existential threat and then fail to deliver a co-ordinated response that is commensurate to the challenge.

I remain of the view that the coalition has delivered more progress on the green economy than it is given credit for, not least in the form of the continued growth of the sector and the huge surge in clean energy investment. Moreover, there are undoubtedly aspects of the government's green policy landscape that have proven highly effective. But as the government moves into its final year the past week demonstrates how several of the coalition's green gains are in serious danger of unravelling.

For green businesses the only response is to keep on keeping on. Growing numbers of mainstream businesses, like Mars and Sainsbury's and many others, realise decarbonisation and climate resilience make sense regardless of the policy landscape. Virtually every clean tech firm understands that the policy environment becomes a million times easier if they can continue to deliver the cost reductions that increasingly allow clean technologies to compete with high carbon alternatives on cost. Every policy change and funding cut of the past few years has prompted understandable howls of protests from those affected, but for the most part green businesses and have survived and are continuing to innovate and grow. The latest round of policy setbacks will not derail the green economy, it is far too established for that.

And yet it is also about time that Ministers realised once and for all that decarbonisation and the huge benefits that come with it would be much simpler to achieve if they genuinely prioritised green policies, genuinely prioritised the most cost effective means of cutting carbon, and genuinely prioritised policy stability. If the government really wants to be remembered as the greenest ever it needs to end the boom and bust cycle and bring an end to the two steps forward, one step back approach that defines the UK's decarbonisation journey. Politics is ultimately about choices. Having chosen to the set an ambitious carbon target for the 2020s it is time the government chose to deliver on it.

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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray

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