17 Mar 2015, 13:13
Less than two months from the election, the Conservative party lacks a clear energy policy and has failed to deliver "much success" decarbonising the UK's energy infrastructure during its time in office.
Who says? Labour's Caroline Flint taking a break from explaining how a price "freeze" and "cap" are effectively synonymous to launch her latest attack on the Tories? Green NGOs that have never forgiven David Cameron for failing to live up to his early promise as an environmentally conscious moderniser? No, that is the measured conclusion of Conservative MP and member of the energy and climate change select committee Phillip Lee.
According to a report earlier this month from respected trade magazine Utility Week, Lee told a pre-election debate at the Energy Institute that he was deeply unconvinced by what passed for Conservative energy policy. He admitted that the party had relegated energy policy to a "second fiddle" issue in the election campaign and is still yet to set out an official position on a host of energy and climate issues.
He also said he did not think "we've done particularly well" with the government's flagship electricity market reforms, arguing that the wide-ranging measures would struggle to meet their "admirable" goals because they were trying to operate on "too many fronts".
Anyone looking for a further example of quite how partisan parts of the media have become in the run-up to a knife-edge election (although I have no idea why anyone would need any more examples of media bias given the events of recent weeks) should simply imagine the uproar that would have resulted if an influential Labour MP had publicly declared he had no idea what the party's energy policy was and implied that those bits he was aware of were not up to scratch.
The fact is Lee's comments were worthy of a much wider audience, not because they were a pre-election "gaffe" or evidence of a backbench "rebellion", but because they were entirely justified. With polling day fast approaching the Conservatives do not have anything approximating a coherent and comprehensive energy policy, and while the manifesto may yet surprise everyone there have been no leaks to suggest exciting developments are in the pipeline. On an issue that impacts on living standards, health, national security and climate security, the party that according to several recent polls is likely to have first go at forming a government on 8 May is strangely silent.
However, that is not to say we are completely blind to the energy and climate policies that will feature in the Conservative manifesto.
We know David Cameron wants to block the development of onshore wind farms that have not yet secured planning permission, although we do not yet know whether he intends to achieve this goal through planning reforms or subsidy changes, nor whether the reforms will affect devolved administrations such as Scotland that are much keener on onshore turbines.
We know several influential Conservatives are concerned about the deployment of solar arrays on agricultural land. But we do not know if they will ban such developments, nor how they plan to accelerate the roll-out of rooftop solar arrays that they claim to favour.
We know Cameron wants offshore wind, nuclear power and carbon capture and storage plants to play an increasing role in the energy mix and pick up the slack created by blocking onshore wind developments. But to date there has been scant detail on how a Conservative government would boost any of these sectors, what level of funding will be made available to support them post-2020 and how Tory ministers would respond to charges that these technologies are more expensive than onshore wind, solar power and energy-efficiency programmes.
We know Cameron wants to make the UK the most energy-efficient country in Europe. But we also know he diluted the government's flagship energy-efficiency programme, oversaw a faltering Green Deal financing initiative and launched a capacity market that allowed little space for innovative demand response schemes. We have no idea what a Conservative government would do to tackle fuel poverty and energy inefficiency, beyond an assumption it would continue with a Green Deal and ECO scheme that many critics regard as badly flawed.
Most importantly, we know the prime minister believes climate change is one of the biggest threats the UK faces and is publicly committed to working with other parties to set new carbon targets, agree an ambitious international climate treaty and phase out unabated coal. But we do not know what kind of targets he wants to set, when he plans to phase out the use of unabated coal nor how he plans to marry this decarbonised vision with his love of shale gas projects and desire to dish out tax breaks to North Sea oil and gas firms. We are also in the dark as to how Cameron plans to keep in check Tory colleagues (and potential UKIP allies) who remain resolutely opposed to any and all decarbonisation policies.
In fairness to Conservative Central Office, the energy policies offered by Labour, the Lib Dems, UKIP, Greens and SNP all have areas where clarity is similarly lacking. Equally, as all parties struggle to adapt to the age of multi-party politics we do not know how negotiable those policies that have been announced are. For example, will the Lib Dems make continued support for onshore wind farms and the adoption of a decarbonisation target a condition of a second Con-Lib pact, or would these green proposals go the way of tuition fees? Would UKIP make scrapping the Climate Change Act central to any confidence and supply agreement with a minority Tory government? Could Labour and the SNP cooperate on phasing out unabated coal power even if neither wants a full coalition?
But if all of the parties face legitimate questions about their energy policies, it is only the Conservative party that is currently offering an energy strategy that is as opaque as Grant Shapps' CV. Meanwhile, all of the evidence suggests Chancellor George Osborne is more likely to use the last budget address of the parliament to heap praise on Gordon Brown than he is to sketch out a comprehensive energy policy for the next five years.
Regardless of your political predilections, this policy black hole matters and urgently needs addressing in the Conservative manifesto.
Whatever happens in May (and perhaps again in September) the next government faces a host of critical energy and environment issues. In a matter of months businesses and investors will simply have to know what is going to happen to decarbonisation policies post-2020, the energy efficiency sector needs reassurances that the Energy Company Obligation is not going to be allowed to fall off another cliff, other governments need to know what role the UK intends to play at the Paris Summit, and we all need to know precisely how the next government plans to accelerate the transition to a low-carbon economy. For good measure, green campaigners and Tory MPs are going to want to know what is happening with Heathrow as well. A functioning democracy should discuss each of these issues (and many more) in detail before the election, not after it.
All of the parties are wrestling with the challenge presented by the carbon bubble and the contradictions inherent in simultaneously pursuing high and low-carbon infrastructure. But they have an obligation to tackle those contradictions in front of the electorate with clear and coherent policies that at least attempt to live up their leaders' bold words on the non-negotiable need to decarbonise. As Phillip Lee's criticism implies, the Conservative party is currently struggling to honour that obligation. The upcoming manifesto offers a last chance for the party to present the credible energy policy that is currently notable by its absence. Let's hope they seize it.
13 Mar 2015, 12:05
The most important thing to do is to try and retain a sense of perspective. The news the IEA is prepared to declare global carbon emissions stopped growing last year is huge, gargantuan, brobdingnagian in its historical significance. This could be it. This could be the point at which global greenhouse gas emissions peak and we begin the long voyage towards a modern decarbonised economy compatible with the continuation of a climate that is conducive to human civilisation. We could be living through an era historians will one day herald as the dawning of an age of environmental and economic enlightenment. Like I say, it is important to retain some perspective, optimism can run away from you.
The reality is that the Financial Times' report this morning suggesting global carbon emissions failed to climb last year even as the economy grew three per cent comes with the usual troupe of caveats.
First, official emissions figures are notoriously difficult to compile as fugitive emissions silently seep into the atmosphere unheralded and certain industries in some countries routinely massage the figures they report. We will have to wait for accurate measures of atmospheric greenhouse gas emissions concentrations to get confirmation carbon emissions have really stalled.
Secondly, the halt in emissions growth will in no way bring climate risks down to acceptable levels. Celebrating an end to increasing emissions is akin to a man who weighs 25 stone popping open the champagne because they have stopped gaining weight. It is not so much a step in the right direction, as an end to stepping in the wrong direction. What we need is to cut emissions at breakneck pace for several decades. The fact today's news should be on front pages all around the world but has barely caught the attention of the mainstream media makes delivering this rapid transformation of the global economy even harder to achieve.
Thirdly, a year long hiatus in the near-uninterrupted upwards trajectory of global emissions does not necessarily mean they will peak. Yes, the manner in which emissions have stalled this time without the help of a crippling economic crash is hugely encouraging, but it does not necessarily follow this year we will be able to grow another three per cent and see emissions fall at the same time. The oil price crash could revive the fortunes of gas-guzzling cars and carbon intensive business models, the slowdown in China's emissions could be offset by new coal capacity in India, elections could see several leading economies water down their decarbonisation policies. All discussions of global emissions trends should be accompanied by the reminder that a Republican White House and Congress would make tearing up progress on clean energy one of its top priorities.
Fourth, climate change is not the only potentially catastrophic environmental risk the global economy faces. There are no similarly encouraging figures in the pipeline revealing that we're making surprisingly good progress tackling biodiversity loss or resource profligacy. The reasons for this absence is because we're making hardly any progress at all.
Worst of all, evidence emissions have peaked could be seized upon by world leaders gathering in Paris this December to declare the current framework of flawed and inconsistent policies is working just fine, that the world has now decoupled emissions and economic growth, and all we need to do is continue as we are in pursuit of the apparently sunlit uplands of a 2C world.
And yet, while remaining fully aware of the need for caution, it is hard not be excited by the latest data. If the imminent IEA report were an outlier it would be easier to dismiss, but it fits into a pattern of increasingly encouraging emissions data. A series of official Chinese reports have shown coal use fell last year, while US emissions have been dropping for a while as a result of the shale gas revolution and a drastic increase in renewable energy capacity. In addition, the EU has been on track to meet its goal of cutting emissions 20 per cent by 2020 for some time.
There was ample evidence industrialised economies were able to continue to grow while cutting emissions well before the IEA revealed OECD nations grew nearly seven per cent over the past five years while cutting emissions three per cent. Taking the UK as just one example, a remarkable recent analysis from Carbon Brief detailed how emissions fell eight per cent last year. Yes, a mild winter played a role, but so did a long-running reduction in energy demand and continued increases in renewable energy capacity.
Logic dictated it was only a matter of time before the under-reported yet globally transformational emergence of clean technologies and effective climate change policies began to have a discernible impact. How could it not? Every wind turbine, every solar panel, every shuttered coal plant, leads to the generation of energy at a lower carbon intensity than that which has gone before. Every electric car or LED light bulb replaces dirty and inefficient technologies that pushed global emissions ever upwards. For decades developing economies have emulated or leapfrogged the business models and technology trends of OECD nations, it stands to reason the same would happen with clean technology.
Of course, the risk remains this encouraging development could lead to a degree of complacency among business and political leaders. But I'd argue it is more likely to give them the massive confidence boost they need to pursue ever more ambitious decarbonisation efforts. If the data is accurate it shows decoupling economic and emissions growth is possible at the global level, and all without compromising living standards or completely tearing up current economic, political and legislative systems.
The growing numbers of global businesses that are boldly pursuing zero emission, zero waste or 100 per cent renewables policies, and demonstrating that such an approach is commercially viable, will feel both vindicated and encouraged that they can now exploit their first mover advantage. Others will look on and start to realise that decarbonisation trends are something they have to adapt to whether they like it or not. A fossil fuel industry already struggling to offer a coherent and credible response to the divestment trend and warnings of stranded assets will be forced to recognise that the long term risks faced by its business-as-usual strategy are more acute than ever.
Keeping a sense of perspective is critical. There is no guarantee this is the point at which carbon emissions peak, and even if it is there are no guarantees we can deliver the vertiginously steep reduction in global emissions that is required. The challenge remains daunting in its enormity. The known and unknown climate risks that we all face still threaten potentially disastrous consequences. Much bolder policy reforms and as yet uninvented clean technologies are still needed to deliver the scale of emissions reductions that are needed. But if this is the emissions turning point it opens up a whole world of possibilities for the green economy.
Throughout history incumbent industries have a tendency to die very slowly and then really fast. Solar power, electric cars, energy efficient technologies, perhaps even new nuclear and carbon capture and storage, all have the potential to replace the polluting unabated fossil fuel industries that pushed global emissions upwards to this still potentially catastrophic point. To build a new future you first have to envisage it. Evidence that global emissions growth has stalled gives the world permission to envisage a greener, healthier, decarbonised future. Sometimes, and today is one of those times, you also need a perspective that allows for the possibility of such a future.
12 Mar 2015, 00:05
BusinessGreen is hiring. We're currently looking for someone to join our sales team and this week we're launching our new intern programme with a view to strengthening our award-winning editorial team.
The internships will be paid positions in line with the London Living Wage and we're keen to offer the roles to talented and ambitious individuals who are committed to working in environmental business journalism.
Here is how it will work. The plan, which like all plans may be subject to change at some point, is to offer three 12 week internships over the course of this year. The positions will offer the lucky candidates real journalistic experience - we are not looking for someone to make the coffees, in fact, as the office's resident caffeine addict I'll be making most of the coffees.
Instead, we are looking for an aspiring reporter who is capable of, well, reporting - quickly, accurately, prolifically, and to deadlines. In addition to reporting on the latest green business news, you'll help to expand BusinessGreen's social media presence, so we also want to see evidence that you can come up with exciting ideas on how to present engaging content online.
In return, we'll help ensure your stories reach a wide and influential audience and we'll help you develop the skills you need to work in environmental and business journalism.
There is no guarantee of a job at the end of each internship, but we are planning to expand our editorial team in the future as BusinessGreen continues to grow and as such, those interns who impress would almost certainly invited to apply for any permanent role that arises.
Interested? Here's how we'd like you to apply. We want to see a CV, because HR likes that sort of thing, but more important is evidence that you can write and are genuinely passionate about the topics we report on.
So, we'd like to see examples of two short news stories you think BusinessGreen should have run over the last month but didn't and a blog post of no more than 750 words on the green business topic of your choice. Please include these in the same document as your uploaded CV.
Remember, we only want content that is sharp, uniquely tailored for a green business audience, and challenging to conventional business-as-usual thinking.
If you are interested in applying, please submit your CV and story examples, alongside a short covering letter using this link. The deadline for applications is March 31st.
We're looking forward to reading your stories.
06 Mar 2015, 00:05
A couple of weekends ago I went on a friend's stag do. The trip got off to an inauspicious start when I got into work on the Friday morning to be greeted by an email from my wife telling me I had forgotten my toothbrush. Now, stag dos are not renowned for their strict adherence to the rules of personal hygiene, but there are limits. So before heading to the station I popped into a supermarket to see if I could buy a toothbrush.
And there it was. Alongside all the standard, common or garden toothbrushes was the cheapest electric toothbrush you will ever find, and from a recognised leader in dental care too. Its recommended retail price was £9, but the supermarket in question had cut the price in half to £4.50. So for just a couple of quid more than a standard, luddite, non-vibrating toothbrush I could get an all-singing, all-dancing electric toothbrush. The future was within my grasp, and all for the price of the coffee and croissant that necessitated the toothbrush in the first place. With the words of my dentist - 'do you use an electric toothbrush? If not, you should get one' - I bought it.
It was only after I go home a few days later that I realised this humble toothbrush was possibly one of the worst products I have ever purchased; a fact I shared this week with the audience at the Resource Event in London as various speakers discussed the opportunities and challenges presented by the circular economy.
Not only is the toothbrush woefully underpowered, the brush head, which two weeks on is already showing signs of wear, is welded firmly to the handle, meaning that in a few short months the whole thing needs throwing away and replacing. Although, I can't just throw it out because it includes a battery - which is supposedly replaceable but in reality is extremely difficult to get at - and a motor, both of which have their own special waste electronic and electrical equipment (WEEE) recycling requirements.
I've looked it up and electric toothbrushes are covered by the EU's WEEE directive, meaning I have bought a toothbrush that comes with its very own legislative burden. However, I remain doubtful that the checkout assistant at the supermarket would welcome me returning it for recycling under the directive's polluter pays principle.
Of course, not all electric toothbrushes are so woefully designed. You can get electric toothbrushes where you charge them using a special holder and replace the heads when they wear out. But these cost at least 10 times more than the £4.50 I paid for my disposable environmental abomination. The idea that a simple clip mechanism, which would allow me to replace the toothbrush head when required, explains the difference in price between a £4.50 toothbrush and a £45 toothbrush is, of course, absurd. The reality is the company behind the cheap toothbrush wants it to be disposable, it wants me to replace it in six months, and the last thing it wants is for me to be able to buy a replacement for just part of it. The motor, the head, the battery, every part of it has been designed to be thrown out and replaced in pretty short order. If that were not the case I'd be able to easily replace the brush when it wears out and keep using the handle that looks like it will last for aeons once it reaches its likely landfill resting place.
I told this story at this week's Resource Event in London to illustrate a point (yes, Peter Ustinov would be proud, I am available for after dinner speaking): this kind of resource profligate design is everywhere. There are countless examples of this environmentally wasteful design, from the scourge of single use plastic bags to mobile phones where you can't replace the battery. There is encouraging progress being made in circular economy thinking, as evidenced by some of the projects now being pioneered by our leading retailers. But each and every day these same retailers are selling products that are horrendously inefficient - and we're buying them without a second thought.
There is huge potential for circular economy and resource efficient business models. From the dematerialisation of digital products to the emergence of sharing economy services and advances in recycling technology and material science, we can dramatically boost resource efficiency while growing the bottom line and cutting greenhouse gas emissions. Many companies are already doing just that.
But let's not kid ourselves, the challenge is akin to scaling a Himalayan mountain of toxic junk. Meanwhile, governments won't even tweak the tax system to reward re-use or ban the utterly wasteful practice of sending food and wood and plastic to landfill. Most businesses still seem to reckon the 'circular economy' is a business park off the north circular.
If climate change requires us to decarbonise our infrastructure, the circular economy requires that and more. It demands a complete re-engineering of global material flows, business models, and psychological consumer impulses. There is not much evidence of this happening any time soon on the scale that is required.
As a general rule I'm hugely optimistic about the prospects for the green economy and the manner in which it can improve all our lives, health, and economic competitiveness, while tackling the worst environmental threats we face. Some great work is underway to enhance resource efficiency in retail, construction, textiles, and numerous other sectors. But when it comes to the circular economy we've barely started on the journey that urgently needs to be undertaken. And if you doubt that, just look at the toothbrushes on offer in your local supermarket.
26 Feb 2015, 15:32
You would not expect a Contract for Difference (CfD) auction as part of the Department of Energy and Climate Change's (DECC) Electricity Market Reform (EMR) programme to command much attention. After all, I reckon a good journalist rule of thumb is that if you need three acronyms in the first sentence of an article you are probably on to a loser.
However, if the complexity of the EMR programme means it is unlikely to excite anyone outside the fiefdom of Whitehall energy policy wonks, the transformation it is about to enable will affect each and every one of us. You don't have to understand the finer points of CfD auction procedures to understand we are on the brink of a genuine revolution in how we generate and use energy.
Just look at the numbers. Today's award of CfDs guaranteeing power purchase prices for clean energy developers will, through one wave of projects, deliver 2GW of capacity, enough to power 1.4 million homes and cut greenhouse gas emissions by four million tonnes a year. And that is one wave of projects. Another wave will come in the autumn, and more will follow after that. The UK is firmly on track to source 15 per cent of its energy (that's energy, not power) from renewables by 2020 and could well deliver an entirely decarbonised power system within 15 years.
More important still, the concept of auctioning contracts to the developers who can put in the lowest bid (and penalising them if they deliberately bid too low and are unable to deliver as promised) has undoubtedly served to further accelerate the cost reductions the renewables' industry has already been achieving.
The £50/MWh bids put forward for two solar farms may prove to be unachievable outliers, but the £79.23/MWh for onshore wind and £80/MWh for energy from waste put them on a par with the £80/MWh levelised cost DECC estimated for new gas plants in 2013 and comfortably below the £92.50 contract offered to EDF for its proposed Hinkley Point nuclear power plant.
You could argue that gas costs only stand at £80/MWh because of the carbon price operators have to pay, but firstly, that is the taxation regime the UK currently operates under, secondly, why shouldn't fossil fuel operators pay for the pollution they produce, and thirdly, even without the carbon price some solar projects are apparently now in the same ballpark as gas. Coal may remain cost competitive (if you ignore climate change and air pollution), but the leaders of the three main political parties in the UK just agreed to work together to phase out unabated coal power, so I think it is safe to discount it as a long term option.
What this all means is that renewables industries that have existed at a commercial scale for a little more than a decade are now able to generate power at a cost that is comparable with polluting fossil fuels and a nuclear industry that has been going for half a century. Meanwhile, the renewables sector with arguably the biggest potential for providing industrial scale power, offshore wind, is clearly running ahead of schedule with its efforts to bring costs down to the nuclear competitive level of sub £100/MWh.
It will be fascinating to see how cost reduction curves evolve as the next few waves of auctions are delivered. All the evidence from clean tech manufacturers and developers around the world is that costs can keep falling. Throw in potential breakthroughs in energy storage and smart grids and costs will then fall still further. It is clearer than ever that we can decarbonise the power sector without breaking the bank.
Inevitably, the complexity created by all those three letter acronyms creates winners and losers. There is no doubt the CfD auction system has its imperfections (some would say downright flaws). The solar farm industry has got a particularly raw deal, as developers struggled to compete with the more mature onshore wind industry. Whether the falling cost of solar projects means the sector is more competitive in the next round of auctions, as some believe, or whether the risk inherent in bidding for a contract simply locks smaller developers out of market and drives consolidation in a previously competitive sector, as others warn, remains to be seen. The Solar Trade Association's complaint the sector has been exposed to full competition a year or two too early, leading to yet another boom and bust cycle, has plenty of merit.
There is also still a big debate to be had about the pace of renewables growth the government is willing to countenance and the public is willing to pay for. The cap on the CfD budget means viable projects that are ready to go will be shelved or cancelled altogether, proving a source of immense frustration for those of us who believe the threat presented by climate change requires the most urgent action possible.
It is easy to see why politicians of all stripes are wary of measures that could lead to further upward pressure on already politically toxic energy bills, but equally it can be argued that a more generous budget cap now would help further accelerate clean energy cost reduction, bringing the point at which cost parity with fossil fuels means subsidies are no longer needed even closer.
This is also where the inter-connected nature of every aspect of the energy and climate change debate comes into play. A more ambitious and effective energy efficiency strategy would reduce energy bills and create more headroom for clean energy funding. A bolder community energy strategy would provide an expansion route for those smaller renewables developers who are always going to struggle with the CfD regime. As is so often the case, failure in one area of government climate policy is creating challenges in another.
In addition, it is worth noting these policy problems are bad enough before you consider the volatile political context. Being able to compete with gas on a cost basis will count for nothing if wind and potentially solar farm developers are frozen out of the planning system by a Tory government bent on banning onshore renewables.
But while it will be of little consolidation to those companies that today missed out on CfDs the big picture outlook for the renewables industry and the wider green economy remains remarkably rosy. Wave after wave of clean energy projects are on the way, each one likely to deliver low carbon power at a lower cost than the last.
Meanwhile, other developments this week serve to hammer home the encouraging backdrop against which electricity market reform is playing out. A full blown Energy Union is on the cards across the EU, delivering new low carbon infrastructure, comprehensive energy efficiency programmes, and greater energy security. The reform of the emissions trading scheme promises to tilt cost arguments ever further away from fossil fuels and towards clean alternatives. Overseas, Obama is digging his heels in over tar sands pipelines, Shell is shelving carbon intensive projects, and China has seen coal demand drop for the first time in years.
Moreover, the UK's clean energy developers are building on increasingly low carbon foundations. As official government stats revealed today, UK energy consumption fell a staggering seven per cent last year, continuing a downward trend that started in 2000, while clean energy now accounts for over 35 per cent of our electricity share.
All these trends are well positioned to accelerate, right up to the point where the UK powers its energy efficient buildings using almost exclusively home-grown, low carbon, emission-free power. This point could well come within the next 15 years. All that is required is a bit of policy stability and continued technological ingenuity.
We are on the brink of an historic transformation of our economy and a host of other countries are willing and able to make precisely the same journey. Those confusing three letter acronyms really are more significant than they look.
ABOUT JAMES' BLOG
Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray