Chris Cullen, Sam Taylor and Adam Baddeley of Eunomia Research & Consulting analyse the problems of securing the UK’s future electricity supply
Affordable, secure and clean – these are the objectives for the future of electricity supply in the UK, as stated in July’s white paper on electricity market reform (EMR). The question of what levels of support should be given to each technology type is a relevant one. This should be prefixed, however, by asking what generation mix we need to meet the above policy objectives? Or, perhaps more pertinently, is it even possible that they can all be met?
The environment department (DEFRA) recently published a consultation on proposals to require larger companies to report their carbon emissions.
But speaking at an event in London on 16 May, Sainsbury’s chief executive Justin King said he was against mandatory carbon reporting. He argued that the need for companies to protect their reputations and competition between firms was a more important driver of environmental improvements. (more…)
It’s no exaggeration to say that the Fukushima nuclear reactor disaster in March has cast a shadow over plans for new nuclear power capacity globally, and it is too early to say whether this will fade with time. But it’s also having much wider indirect consequences which could yet cause a shift in Europe’s energy and climate policy and complicate global climate talks.
Many of the accident’s extreme circumstances were unique to Japan, so there may or may not be lessons to learn in other countries. But, rightly or wrongly, that message is rapidly becoming politically irrelevant amid the understandable trauma. (more…)
Conventional wisdom among climate policymakers holds to the idea that greenhouse gas mitigation, energy efficiency, and renewable energy targets will combine to deliver the EU’s 20% emissions reduction goal for 2020 relative to 1990, with a higher 30% target still on the table.
But the reality is that there is a long-standing and unresolved tension at the heart of the EU’s 2008 20/20/20 energy and climate package. And the bloc’s roadmap for 2050 (ENDS Report, March 2011), aimed at cutting emissions by at least 80% relative to 1990, has brought matters to a head. It’s not just about whether to go for 30% or a near offer, but about how the three elements work together, or do not.
The European Commission is deeply concerned that a renewed drive for energy efficiency, together with a continuing surge in renewable energy investment across the EU, will undermine carbon price signals in phase III of the EU emissions trading scheme (ETS) from 2013. Already in Germany, the power sector is battling low profitability from its conventional power plants which must now power down inefficiently when renewable electricity is available. These utilities are struggling to find the cash to invest in the vast amount of new low-carbon plant needed to decarbonise its grid, not least in back-up and baseload plants. (more…)
The government’s plan to simplify the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is starting to take shape. In January, the energy and climate department (DECC) published a series of discussion papers.
However, these still allow for a wide range of outcomes, many of which involve huge levels of complexity. On the surface then, there is still not much clarity on offer.
Latest thinking by the energy and climate department (DECC) over climate change agreements (CCAs) smacks of blue-sky thinking. It has floated ideas not only to reform but even potentially to scrap the instruments. The government should be careful before reinventing this particular wheel.
Last December, DECC organised a closed workshop including representatives of sectors covered by CCAs to discuss their future. It released a report on the meeting last week.
There is general consensus that CCAs need reform. The voluntary agreements to cut emissions now signed with 52 industry sectors have various shortcomings. These include difficulties with monitoring and benchmarking of progress and an uneasy mixture of absolute and relative targets in different agreements. (more…)
December was a month of extraordinarily bitter cold. A snowbound Britain found it hard to get excited about Cancún’s fitful progress towards an international agreement to tackle global warming.
But it was a very big month for Chris Huhne, secretary of state for energy and climate change.
His first big climate summit. Publication of an Energy Bill, introducing an ambitious scheme to shift billions of pounds of private sector capital into making Britain’s heat-leaky homes much more energy efficient.
And then, just before the Christmas holidays, the unveiling of still more ambitious and highly complex proposals for reforming Britain’s power generation system.
The last thing you could accuse the coalition of is being a one-club player. Instead, it is reaching for a bewildering variety of instruments to persuade investors to spend billions a year on a variety of low-carbon generating plant. (more…)
Before the election, the then shadow chancellor George Osborne used to give speeches about how Labour had given green taxes – fundamentally a good thing – a bad name.
Now, in the heat and rush of the comprehensive spending review, that is exactly what he has done with his last-minute raid on the CRC Energy Efficiency Scheme (see our coverage).
This was by far the most striking and concrete environment/carbon element of last week’s Comprehensive Spending Review, which left low carbon business largely in the dark. The green investment bank, the renewable heat incentive, investment in carbon capture and storage are all still to play for. (more…)
The phrase ‘greenest government ever’ has become a mantra for the Coalition, not least for David Cameron and energy and climate secretary Chris Huhne. And we are assured that at the heart of the vision is Britain’s commitment to a low carbon future.
Emissions should be cut by at least 34% by 2020 relative to 1990. Low-carbon businesses and technologies should help drive the UK out of recession and towards green growth.
We will see whether these ambitions translate into reality or get lost in a fog of fiscal expediency when the government publishes its spending review in less than a week’s time. (more…)
2010 has been a bad year for the climate.
Not just for climate treaty negotiations – few expect a deal in Cancún in Mexico this December after the failure in Copenhagen last December. But also for the carbon markets that ultimately depend on strong policies.
Huge interests are at stake. Pioneering investors feel let down and are warning they could go to the wall. The uncertainty could go on until Cancún, or even longer.
This is on top of uncertainty over the post-2012 status of the UN clean development mechanism. The CDM’s future is further clouded by European Union proposals to stop many types of UN offsets from entering the EU Emissions Trading Scheme after 2012.
Why should we worry? There are several reasons. (more…)