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06

Feb 2016

The Post-Paris Scene, Part 6: So what are the implications of all this for the UK?

06 February 2016 | Posted by Jonathon Porritt

Reposted from jonathonporritt.com.

Here’s something telling: for the first time (as far as I can remember) the UK did not have a presence at the World Future Energy Summit. China, Japan, Germany, France, South Korea, Italy – all present and correct. But no trace of the UK.

There’s both realism and symbolism wrapped up in that little decision taken by UK Ministers. Realism in that we have less and less to show the rest of the world, and are becoming an increasingly unattractive country for new investment – even our lead in offshore wind is rapidly disappearing. Symbolism in that it tells us a lot about the vacuum at the heart of the UK’s energy strategy.

With consummate timing, two announcements were made on the same day during the Summit. First, RWE Innogy announced that the UK Government’s recent policy changes made it impossible to take forward up to 500MW of planned investment in onshore wind in the UK. Second, Denmark’s biggest energy utility released its energy performance data for 2015, indicating that wind power accounted for a mighty 42% of all electricity produced across the entire year, the highest proportion for any country in the world.

And that means that Denmark is well on its way to achieving its target of 50% of its electricity coming from wind by 2020, and 84% by 2035.

By contrast, our 2020 targets here in the UK look more and more unachievable. Our overall 15% target (for total energy consumption) breaks down into separate targets for electricity, heat and transport. We’re doing OK on electricity, but are miles off the pace on both heat and transport. The only way we’re going to get to the overall 15% is massively to ramp up the share coming from renewable electricity – and literally everything Osborne has done since last year makes that all but impossible.

So what’s behind this astonishingly mendacious, manipulative attack on renewables and the whole zero carbon agenda? There’s certainly no economic rationale, as has been pointed out very trenchantly by Ed Davey, former Secretary of State at DECC during the Coalition Government. He was commenting recently on the refusal of the Treasury to produce its ‘financial workings’ regarding the spending cap imposed on the Levy Control Framework – the Government’s principal mechanism for supporting renewables. Davey believes there is now little if any likelihood of energy bills rising as fast as the Treasury has estimated they will, meaning that they’ve slashed renewable energy subsidies on a totally flawed premise: “This is Alice in Wonderland economics, which is butchering the UK’s successful renewables industry.”

But even Ed Davey, who had to work closely with Osborne during the Coalition Government, struggles to explain what’s going on here. Treasury’s deep apprehension about diminishing tax revenues from UK oil and gas companies; the embarrassingly desperate efforts to bring in Chinese money and nuclear expertise; Osborne’s need to ‘cultivate’ contrarian Tory backbenchers as he gears up for his leadership bid – all that is probably in the mix somewhere, but it still doesn’t explain such a wantonly irresponsible demolition job.

And it’s an incredibly high risk strategy anyway – with more and more dependence on fracking and nuclear to fill the generation gap. More and more industry insiders believe that Osborne’s hopes for massive new investment in fracking are almost wholly unfounded, and more and more commentators view the prospect for nuclear in the UK as increasingly forlorn.

(One major fly in Osborne’s nuclear ointment may be the parlous state of the Office for Nuclear Regulation – the industry’s principal regulatory body. A recent article in the Times (12/01/16) revealed that the ONR is currently without a Chief Inspector and without a Finance Director, and led by a CEO with zero experience of the nuclear industry. Dogged by problems over low pay and an ageing workforce, its inability to recruit quality staff to carry out appraisals of new reactor designs pretty much guarantees extended delays.)

And as for carbon capture and storage, so tediously eulogised by oil and gas companies out in Abu Dhabi, our Government unceremoniously cancelled its own CCS commercialisation programme – just four weeks before participating projects were due to submit their final bids, after three years of work!

As with all these decisions, it’s hard to detect any rhyme or reason behind the wielding of this particular axe, as the amount of money that will be saved is nugatory. Gobsmacked experts can only assume it’s just Osborne unpicking another part of the UK’s decarbonisation strategy, freeing up opportunities in the future for all that fracked gas he’s looking forward to coming to market as cheaply as possible, without being required to abate emissions of CO2 through CCS.

So, in conclusion, what are the implications of all this for the UK? Absolutely nightmarish.

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The Post-Paris Scene, Part 6: So what are the implications of all this for the UK?

06 Feb 2016 | Posted by Jonathon Porritt

Reposted from jonathonporritt.com.

Here’s something telling: for the first time (as far as I can remember) the UK did not have a presence at the World Future Energy Summit. China, Japan, Germany, France, South Korea, Italy – all present and correct. But no trace of the UK.

There’s both realism and symbolism wrapped up in that little decision taken by UK Ministers. Realism in that we have less and less to show the rest of the world, and are becoming an increasingly unattractive country for new investment – even our lead in offshore wind is rapidly disappearing. Symbolism in that it tells us a lot about the vacuum at the heart of the UK’s energy strategy.

With consummate timing, two announcements were made on the same day during the Summit. First, RWE Innogy announced that the UK Government’s recent policy changes made it impossible to take forward up to 500MW of planned investment in onshore wind in the UK. Second, Denmark’s biggest energy utility released its energy performance data for 2015, indicating that wind power accounted for a mighty 42% of all electricity produced across the entire year, the highest proportion for any country in the world.

And that means that Denmark is well on its way to achieving its target of 50% of its electricity coming from wind by 2020, and 84% by 2035.

By contrast, our 2020 targets here in the UK look more and more unachievable. Our overall 15% target (for total energy consumption) breaks down into separate targets for electricity, heat and transport. We’re doing OK on electricity, but are miles off the pace on both heat and transport. The only way we’re going to get to the overall 15% is massively to ramp up the share coming from renewable electricity – and literally everything Osborne has done since last year makes that all but impossible.

So what’s behind this astonishingly mendacious, manipulative attack on renewables and the whole zero carbon agenda? There’s certainly no economic rationale, as has been pointed out very trenchantly by Ed Davey, former Secretary of State at DECC during the Coalition Government. He was commenting recently on the refusal of the Treasury to produce its ‘financial workings’ regarding the spending cap imposed on the Levy Control Framework – the Government’s principal mechanism for supporting renewables. Davey believes there is now little if any likelihood of energy bills rising as fast as the Treasury has estimated they will, meaning that they’ve slashed renewable energy subsidies on a totally flawed premise: “This is Alice in Wonderland economics, which is butchering the UK’s successful renewables industry.”

But even Ed Davey, who had to work closely with Osborne during the Coalition Government, struggles to explain what’s going on here. Treasury’s deep apprehension about diminishing tax revenues from UK oil and gas companies; the embarrassingly desperate efforts to bring in Chinese money and nuclear expertise; Osborne’s need to ‘cultivate’ contrarian Tory backbenchers as he gears up for his leadership bid – all that is probably in the mix somewhere, but it still doesn’t explain such a wantonly irresponsible demolition job.

And it’s an incredibly high risk strategy anyway – with more and more dependence on fracking and nuclear to fill the generation gap. More and more industry insiders believe that Osborne’s hopes for massive new investment in fracking are almost wholly unfounded, and more and more commentators view the prospect for nuclear in the UK as increasingly forlorn.

(One major fly in Osborne’s nuclear ointment may be the parlous state of the Office for Nuclear Regulation – the industry’s principal regulatory body. A recent article in the Times (12/01/16) revealed that the ONR is currently without a Chief Inspector and without a Finance Director, and led by a CEO with zero experience of the nuclear industry. Dogged by problems over low pay and an ageing workforce, its inability to recruit quality staff to carry out appraisals of new reactor designs pretty much guarantees extended delays.)

And as for carbon capture and storage, so tediously eulogised by oil and gas companies out in Abu Dhabi, our Government unceremoniously cancelled its own CCS commercialisation programme – just four weeks before participating projects were due to submit their final bids, after three years of work!

As with all these decisions, it’s hard to detect any rhyme or reason behind the wielding of this particular axe, as the amount of money that will be saved is nugatory. Gobsmacked experts can only assume it’s just Osborne unpicking another part of the UK’s decarbonisation strategy, freeing up opportunities in the future for all that fracked gas he’s looking forward to coming to market as cheaply as possible, without being required to abate emissions of CO2 through CCS.

So, in conclusion, what are the implications of all this for the UK? Absolutely nightmarish.

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