|
Written by SONE
|
|
Friday, 01 February 2008 |
VICTOR MELDREW SUMMED IT UP BEAUTIFULLY IN FOUR WORDS
It is decades since UK energy policy added up. Indeed, you could argue
that energy policy here and in Europe has never added up since OPEC
exercised its monopoly rights in the 1970s, if only because the
consumer has been – and still is - rewarded by the tariff structure for
burning more.
Until Sheikh Yamani, the Saudi Arabian energy minister, became a household name – and OPEC gatherings in Vienna attracted global summit attention – UK energy policy had a simple objective: security of supply at least cost. The fly in the ointment was the National Union of Mineworkers, with its propensity for national strikes. This meant that a nation built on coal had, as insurance, to seek a more diverse supply and nuclear power performed very nicely in that role, as we discovered in 1984-5 when Arthur Scargill overreached himself.
After 1973, energy conservation – hopefully described as “the fifth fuel” – and nuclear assumed new importance. The Government’s “Save It” campaign concentrated on cutting out waste and improving the efficiency with which all energy was used. But progressively OPEC price pressure eased, the North Sea began to pour forth its black gold and natural gas and Mr Scargill was left with a small union. We then embarked on what can only be described as an energy spree in which energy conservation and nuclear, beset by exaggerated fears caused by Chernobyl, were effectively abandoned.
Dire predictions of global cooling and a new ice age then gave way to an elaborate UN-endorsed certainty of fire, tempest, floods, water shortage, disease and unbearable heat caused by CO2- induced global warming. In these circumstances, you would have thought that largely CO2-free nuclear would have come into its own along with a serious national effort to increase the bangs we get from our energy bucks.
Far from it. The promotion of energy conservation is largely invisible. Of course, the Government, belatedly backed by the Conservative Opposition, recently produced a welcome on the mat for nuclear, while leaving it to private investors to deliver. Not a penny of public money, it said, would go into subsidising nuclear (even though the industry had not asked for a cent) while it continued to milk the consumer of billions to carpet our hills and coasts with useless wind contraptions that provide neither reliable supplies of power nor avoid much CO2 production.
Every conceivable “green” wheeze – for example, wind, waves, tides, solar, CHP, microgeneration, carbon capture and sequestration (CCS) and biofuels – is extolled, regardless of its feasibility, consequences and cost. The Greens are licensed to dismiss nuclear as a waste of time.
And the Chancellor of the Exchequer goads Ofgem, the regulator, into inquiring into energy prices while Greenpeace threatens to take the Government to judicial review over fuel poverty.
As Victor Meldrew put it: “I cannot believe it“.
OMINOUS SILENCE
We do not expect miracles. We do not underestimate the political difficulties of running a rational energy policy. Indeed, we have some sympathy for those who try to devise one. But we remain mesmerised by the inconsistencies in our current approach. It seems pretty clear that our objective is – or should be - security of supply at least cost while minimising the national output of CO2. Yet no one can conceivably argue that we are currently pursuing those three imperatives.
The reduction in CO2 emissions on 1990 output stems from the “dash for gas” out of coal in the 1990s. Now the soaring price of gas is eroding that benefit through the greater use of largely imported coal. Worse still, the Government faces an energy or, more likely, an electricity gap within eight years because of the closure of old coal and nuclear power stations. Given the time taken to secure planning permission and build any power station – let alone a nuclear plant – we are manifestly in difficulties, and as things stand only gas and coal power stations, with their massive CO2 output, offer hope of relief.
CCS is decades away and entirely unproven on the scale required. The limitations of renewables and CHP, the drastic consequentials of biofuels and the naïve nonsense of the micro-generators have been demonstrated. And, to repeat, we are not trying to influence attitudes about the need to improve energy usage, however limited the returns are likely to be, with a high-profile campaign. Instead, our politicians are preoccupied with the social consequences of the higher prices necessary to persuade people to save energy.
Ofgem, apparently under Ministerial pressure, has been moved to investigate the domestic pricing of gas and electricity and the Commons is also mounting its own inquiry into the structure of the market. Inevitably, there are social consequences of a rational energy policy and they are best dealt with through social policy. But there are also inevitable social consequences of an irrational energy policy – and they are likely to be far more severe if the power supply fails.
Where is the sense of urgency? It has gone ominously quiet since the door was opened to nuclear a month ago.
LAWSON SAYS IT’S “BIZAARE”
We are not the only restive critics. Lord (Nigel) Lawson, former Energy Secretary and Chancellor of the Exchequer in the 1980s, has delivered himself of a broadside in Time, saying he cannot recall a time when the energy situation was more dangerous – or more bizaare.
“All in all”, he writes, “the likelihood of the lights going out in Europe at some point over the next 20 years has never been greater. But the chances are that, although there may be occasional black-outs, the gap between supply and demand will be met partly by a substantial rise in the price of electricity and partly by reducing demand as Europe gradually becomes a manufacturing-free zone, as its industries migrate to China, India, Turkey, Morocco, or anywhere where planning delays are negligible and electricity is cheaper.
“This is not, of course, going to reduce global emissions at all. But we can perhaps console ourselves that it is a more useful form of overseas aid than most. But it is, as I said, bizaare”.
OFGEM: “IT’S NOT WORKING”
Ofgem is becoming more outspoken about the iniquities of the subsidy system supporting wind turbines. It bluntly told the BBC this month that it isn’t working. What is more, it does not believe that the Government is listening to its calls for change. This seems to be the case since Malcolm Wicks, Energy Minister, insists the system is making progress.
The first charge, endorsed by the European Commission, is that the UK’s system of renewables obligation certificates (ROCs) is fiendishly expensive. Only Italy’s system is dearer. The cost per tonne of CO2 avoided varies from £184-£481, far more than the much criticised European emissions trading scheme (ETS) at £12-70 a tonne or the UK climate change levy at £40 a tonne. It will be costing the consumer £1bn a year by 2010, rising to £3bn by 2020.
The second is that, for all the expense, it simply isn’t delivering. Last year 427MW of wind generating capacity was erected compared with 650MW in 2006, according to the British Wind Energy Association. The proportion of electricity demand met from renewable sources has scarcely moved over three years and was only 4.6% in 2006.
This is put down to the planning system rather than the fact that wherever a wind turbine is proposed there is a public outcry. This is perhaps not surprising if the Royal Institute of Chartered Surveyors, as reported by the Daily Mail, is right in estimating that the price of a house located close to a new turbine falls by 20 per cent, if the owners are able to sell at all.
The third charge is that, in view of the way the system works, existing wind farms are making ever bigger profits from a combination of higher subsidies and higher power price - so much so that Ofgem estimates that wind turbines in favourable locations could be profitable without subsidy. No wonder Peter Atherton, head utilities analyst at Citi Investment Research, said: “It’s a bonanza. Anyone who can get their noses in the trough is trying to”.
Wind turbines, it seems, are more monuments to greed than greenery.
CAP AND TRADE = POVERTY
Another aspect of the massive effort to avoid the obvious – go nuclear young man – is the various ways devised by man to reduce CO2 emissions.
Europe’s emissions trading scheme (ETS) is a fascinating model of national chicanery which rewards exactly the wrong people. Indeed, one of the binds about consumer energy price increases is the allegation that the silly system has dumped windfall gains on the energy companies.
Now, there has been a blast in the USA against the proposed cap-and-trade system there by Kenneth Green, a visiting fellow at the American Enterprise Institute. He argues that there are four reasons why that system is flawed, too. First, when the economy grows energy demand rises so demand for a limited number of carbon permits rises and strangles growth.
Second, everyone involved has an incentive to cheat – to overstate historical emissions and to exaggerate the benefits of new technologies.
What’s more, experience shows they usually get away with it. Third, those raking in the profits will call for ever tighter caps to protect their investment and campaign against other methods of reducing greenhouse gas emissions. And fourth, cap-and-trade raises the price of energy, goods and services. Indeed, if it doesn’t, there is no incentive to cut back on the use of energy and so reduce CO2 emissions.
BIO-FUELS – WORSE THAN USELESS
As if all this had not exposed the inadequacy, to put it mildly, of current approaches to energy supply and the environment, a new study of the effects of bio-fuels reveals how damaging apparently green ideas can be. Two separate scientific studies published in the journal Science show that a range of biofuel crops now being grown to produce “green” alternatives to fossil fuels release far more CO2 into the atmosphere than can be absorbed by the crop.
The studies looked at how much CO2 is released when a piece of land is converted to a bio-fuel crop. In Indonesia they found it would take 423 years of growing palm oil to pay off the carbon debt of converting peat lands into plantations. In the Amazon it would take 319 years of making bio-diesel from soybeans to cover the carbon debt of chopping down the rainforest. These land conversions release between 17 and 420 times more carbon than the annual savings from replacing fossil fuels.
Nor is this the end of it. For example, Brazilian farmers are cutting down rainforest to meet the shortfall in soybean production caused by American farmers ending their rotation cropping to go bull-headed for corn to meet bio-fuel demand. The good news is that the EU is having second thoughts about bio-fuels and is now doing what it ought to have done in the first place – properly assessing their cost/benefit.
NOT VOTER-FRIENDLY
The foregoing perhaps explains why the Conservatives, according to the Sunday Times, are to ditch green taxes amid fears of a blacklash from voters.
In a leaked paper, Greg Barker, the Tories’ environment spokesman, is said to admit that David Cameron’s green initiatives have not been popular. “From a wind turbine on his new house to the controversy over low cost airlines, to the endless green lifestyle newspaper supplements….solutions are often perceived to involve higher costs, more tax or some form of consumer sacrifice…too much of the burden and not enough of the opportunities being placed on consumers”.
You can say that again when delivering the UK’s contribution to the EU’s renewables target is expected to cost anything from £2.25-6bn a year.
Other signs of a growing resentment of an environment-driven energy policy is the mounting opposition to Gordon Brown’s plans for 10 eco-towns, with the attendant increase in fossil-fuelled traffic, across rural England.
THE RUSSIAN MENACE
Lying behind all this is an increasing public questioning of what is being done – and at what cost – in the name of Britain’s bid for environment/energy leadership. Not that it shakes the all-consuming prejudice of Sir Jonathon Porritt, chairman of the Government’s Sustainable Development Commission, who told the Independent this month that the Government had “got it completely wrong on nuclear power”, beset by “a sad and extraordinarily ill-judged illusion” that nuclear is “the only manageable megafix available”.
But perhaps even Sir Jonathon will think again in view of Mr Putin’s strategic dealing to cement his gas supply monopoly in Europe. First on January 18 he secured the commitment of Bulgaria to the construction of the South Stream gas pipeline to Greece, Italy, Serbia and potentially Hungary and Austria. That undermined two EU efforts to diversify natural gas supply via the Nabucco and Turkey-Greece-Italy (TGI) pipelines to bring gas from Azerbaijan and Central Asia independently of Russia to Europe.
A week later he secured Serbia’s co-operation on South Stream and Belgrade even sold its national oil company to Gazprom. And on the same day Austria handed over half its huge gas storage facility to Gazprom – a deal feared to be a prelude to Austria backing South Stream. Why, Austria has even suggested integrating the Nabucco and South Stream lines, which would wreck the independence strategy behind Nabucco.
Europe is clearly not in control of itself and is being picked off at will by Mr Putin. So much for the grand declaration of UK energy policy that Britain (at the end of any European pipeline) should not to be unduly dependent on any one country for gas supply.
We ask again: where is the urgency to develop nuclear power in Britain?
SECRETARY’S ACTIVITIES
It has been a busy start to the year for the Secretary who, as a consequence, found himself interviewed by Building magazine in the wake of the Government’s green light for nuclear’s development. The result rather accurately reflected the somewhat frustrated tone of this Newsletter.
The interviewer somewhat warily informed him that he was the subject of criticism in the nuclear industry for tending “to go over the top” in support of nuclear. He responded: “I am sure they do because I think they are under the bottom…Could I just say that I regard it as a badge of honour when people say that I’m over the top about nuclear power...If there is somebody [Greenpeace and Friends of the Earth] unrelenting in their opposition, somebody has to be unrelenting in their determination to get it to happen. I don’t apologise for that”.
OBITUARY
We regret to report the death of another member, Sir John Hill, former chairman of the UK Atomic Energy Authority, aged 86.
VISIT TO NATIONAL GRID
For our annual event for members we have arranged a visit to the National Grid’s HQ in Wokingham, near Reading, on Thursday, June 5, 2008. This will give members an opportunity to inform themselves about the operation of the National Grid, the problems of balancing supply and demand that any substantial element of intermittent renewables or micro-generation might present and the likely adequacy of future supplies.
The visit will begin at 11am and will include an explanation of what the National Grid does, a tour of the control room and a period for questions, followed by lunch. We regret that the SONE party is limited to 30. Directions and security arrangements will be given later. Those wishing to take part in the visit should let the Secretary know on 020-8660-8970.
PLUTONIUM BRIEFING
We are delighted to report very brisk demand for the new issue in the SONE briefings series, Plutonium in Perspective. Those who wish to acquire supplies should get in touch with the Secretary (his telephone and e-mail are given in the previous paragraph).
By way of reminder, we have the following other briefings available: The Looming Energy Crisis; Briefing Note (a factual document about nuclear power in the context of the energy scene); Uranium Availability; Renewable and alternative sources of electricity; The Hydrogen Economy; Micro-generation Briefing Note; and The Management of Nuclear Waste. |
|
Last Updated ( Friday, 07 March 2008 )
|
|
|
|
