Tuesday, 29 April 2014

DECC survey reveals massive support for onshore wind compared to nuclear and fracking

The so-called 'wave 9' survey of public attitudes to energy technologies published today by the Department of Energy and Climate Change (DECC) shows just how out of step with the public the Conservatives have become in their policies. As detailed below, the Government's survey shows that the public is much more supportive of onshore wind - the technology they are determined to curb - compared to the technologies to which they want to give incentives, namely nuclear power and shale gas. The Conservatives want to stop premium price contracts being given to onshore wind and are busy stopping local authorities giving windfarm proposals  planning permission.  Yet onshore wind is, under Electricity Market Reform (EMR), until 2020, being given much lower incentives compared to nuclear power. So it is not as if the country cannot afford windfarms compared to nuclear power in particular, and shale gas cannot be a cheaper way of reducing carbon emissions!

When it gets going (they say in 2023) Hinkley C nuclear power station will be paid £92.50 for each MWh of electricity production for 35 years, and receive massive loan guarantees to boot, while onshore wind will, under EMR,  receive its £90 per MWh worth incentives for only 15 years and get no loan guarantees - and after 2020 according to the Conservatives onshore wind will get no premium rates at all. On top of all of this, the planning system will be reformed to be biased against wind power compared to nuclear power and shale gas!

Given that onshore wind power is much cheaper than nuclear power, and evidently by the Government's own reports it is much more popular, why on earth is the Government, after 2020, going to give massive quantities of incentives to nuclear power, various tax breaks to shale gas and at the same time cut off the much smaller incentives that are being given to onshore wind?

The answer of course is that the Conservatives think only of competing for votes with UKIP. Little else seems to matter. UKIP are promoting a virulent anti-renewables campaign, although this seems to connect up much more with a few of their own activists than with the public at large. The Conservatives, who so assiduously courted the centre ground at the 2010 election, are now abandoning the centre. Does this look like a Party that is heading for a majority government? I think not.

The DECC survey suggests the following results in public support or opposition to these different technologies, all in per cent (don't knows excluded):

                                 Support   Oppose

Onshore wind                 70       12
Offshore wind                77        7
solar power                    85         5
nuclear power                42        20
shale gas                        29        22

You can see the full results at:

Wednesday, 9 April 2014

Will Hinkley C be approved by the European Commission?

Stories of desperate lobbying by Department of Energy and Climate Change (DECC) Minister Michael Fallon are emerging as he struggles to justify the Hinkley C deal to the European Commission. In recent times Michael Fallon has variously been reported annoying both renewable energy interest groups by asking them to support the application to the EU Commission for state-aid to Hinkley C and annoying the Scottish Government. See
http://www.thesundaytimes.co.uk/sto/business/Companies/article1387859.ece and also http://www.heraldscotland.com/politics/wider-political-news/minister-sought-to-dissuade-msp-from-role-in-eu-inquiry-inquiry.239147%3Chttp://www.heraldscotland.com/politics/wider-political-news/minister-sought-to-dissuade-msp-from-role-in-eu-inquiry-inquiry.23914772 Indeed Alex Salmond has written to David Cameron to complain about being leant on by his Government. See file:///C:/Users/User/Downloads/Letter%20from%20FM%20to%20PM%20re%20Hinkley%20Point.pdf

Both sets of interests (renewables and the Scottish Government) have reason to fear the Hinkley C deal as it would plainly greatly reduce incentives available to renewable energy after 2020 given that the Treasury employs a formula called the 'Levy Control Framework' to reign in low carbon support payments. The Scottish Government fears that the Hinkley C deal would allow nuclear power to compete unfairly with renewables. Given that Hinkley C involves contract lengths that are more than twice as long as those to be offered to renewable energy and involve loan guarantees that will hardly, if at all, be available to renewable energy schemes, such arguments are very plausible to many observers.

Then again, Conservative policy (with the Liberal Democrats being carried a long way with them), seems to be turning green politics-as-we-know-it in the rest of the world on its head. Nuclear power is now 'green' according to Britain, whereas, according to the Conservative Party onshore windfarms 'are no longer environmentally friendly'. See http://www.telegraph.co.uk/earth/energy/windpower/10752424/Wind-turbines-are-no-longer-environmentally-friendly-says-Tory-chairman.html

Incentives for onshore windfarms will be scrapped just as they start for Hinkley C in the early 2020s (if all goes well for the constructors), according to Conservative Party policy.  Conservatives claim that onshore windfarms are 'unpopular' - although opinion polls have suggested they are still more popular than either new nuclear power or fracking which the Conservatives support, and the Hinkley C deal was hardly received by public opinion as a major triumph. Conservatives seem open to promoting offshore windfarms in theory, although there is great doubt whether they will provide sufficient incentives to get many (or any) more built after 2020. Similarly they are supportive of solar panels on rooftops, but not so much on the cheaper ground based solar farms. Tory policy is vulnerable to the charge that it stops cheaper renewable schemes on the grounds that they are 'unsightly', yet greatly limits offshore and rooftop systems because they are too expensive, and yet again the 'economic' objection does not extend to new nuclear power stations.

Meanwhile metaphorical trench warfare has erupted around the efforts by the UK Government to get the Hinkley C deal approved by Brussels. Among the objections sent in by British groups are the 'Nuclear Consulting Group' (to which I am a signatory) and also Friends of the Earth. See http://www.climatenewsnetwork.net/2014/04/nuclear-subsidy-deal-will-kill-renewables/

A commentary in 'Nuclear Energy Insider' gives a detailed account of some of the issues in the negotiations. See

Meanwhile renewable energy interests are held hostage to the application since the Government decided to submit the applications for the Hinkley state aid application and the renewable energy state aid application concurrently. The renewable energy application would not be subject to such delays if it was submitted separately.

What is the likely outcome? Certainly it is obvious that Michael Fallon is sufficiently uncertain about the outcome that he is pulling out all of the stops to get the Hinkley C state aid application approved. Certainly it has always seemed apparent that the Hinkley C application would take a long time to be resolved by the Commission. Personally, my own impression is that the usual horse-trading in Brussels would see the UK Government get the deal in exchange for a concession on another issue, although the somewhat strained public relations between the Commission and the UK Government may, superficially, at least, make this look problematic. A complete rejection of the Hinkley C state aid application seems unlikely. What still may be possible is that, initially at least, the Commission could ask the UK Government to think again about the length of the (35 year) contract. That would indeed be a deal-breaker, but for that reason, if no other, even this is less likely to stick. I suspect that Michael Fallon has a slightly easier wicket to play on than one infers from his 'desperate' efforts. The depth of  concern in DECC may be much to do with efforts to impress other parts of the UK Government to smooth the path towards acceptance and also in terms of 'expectation management' to bolster the department's claim to brilliant statecraft skills in the event of the likely approval of Hinkley C.

But we continue to live in hope that the deal will fall apart and that renewables funding will benefit as a result. However hope, in terms of what green groups wish for in British energy policy, is now in relatively short supply.

Monday, 7 April 2014

Are Tory plans to curb onshore wind a boost for Scottish Yes Vote?

You would almost think that the Government's, especially the Conservative's, succession of energy policy announcements over the past 10 months were almost designed to boost the 'Yes' campaign in the Scottish Referendum on independence. More support for the policy that the Scottish Government does not like (new nuclear power) and less support for the policy they want (renewables). What timing as well!

First, in the summer of 2013 came an announcement of 'strike prices' for renewables that were underpinned by a significant reduction in support because of the reduced contracts length (15 rather than 20 years) and inferior inflation proofing (CPI rather than RPI). It was bad news for offshore renewables in particular.

Then in October came the Hinkley C  announcement of what would have seemed inconceivable in previous times - guaranteeing to give the project more than twice as much incentives per unit of energy generated than is to be guaranteed to onshore wind (over 35 years) with a 65 per cent loan guarantee on top. This is directly against the non-nuclear Scottish policy. Previously people like me had been predicting that Scotland would have to pay much higher prices to reach its 100 per cent renewable energy target in an independent state compared to staying in the union. But now, the UK Government were predicting three twin reactor projects by 2030, most likely with similar incentive support as Hinkley C, and this will put up electricity prices by around 10 per cent for 35 years. On the other hand, with relatively cheap onshore wind deployment in Scotland going ahead at a rapid pace, it looked like Scotland could actually reach their 100 per cent renewable energy target more cheaply under independence if it relied on onshore wind to reach most of its target. The fact that the UK Government were now unlikely to fund much Scottish offshore renewables would not seem to make much difference to whether the Scots could reach their renewable energy target.

But things got worse. The Government has refused to come up with any ideas of how renewables will be funded beyond 2020 (certainly no renewables target for 2030). Then came the budget announcement that the carbon floor price would be 'capped'. The carbon levy itself makes little difference (it is mainly  tax revenue for the Treasury and a boost to EDF's nuclear income), but the problem for renewables is that the amount of money that will be paid to renewables is fixed by the Treasury, so the fact that the price of wholesale electricity will be less than expected (because of the cancellation of planned increases in the carbon floor price) means that there will be fewer incentives for renewables. This means less windfarms.

The final cut (to date) is of course the Tory promise that they will stop more onshore windfarms after 2020. Just in time to throw UKIP another sop before the local elections. This means that in the space of one year the renewable energy case for Scotland has gone from it looking like independent Scotland would face much higher power prices to fund their renewables targets to one where if they stay within the union they will have to pay much higher electricity prices to pay for nuclear power and will not achieve their renewable energy targets anyway!

Now don't get me wrong, I don't want Scotland to vote 'Yes'.  I would prefer a 'No' vote because of the rightward political shift that Scottish independence would mean for the rest of the country, and also because I believe there are too many nations and nationalisms in the world today as it is without adding one more. Alas, it now seems that David Cameron, a nice man really, may well go down as the man who not only 'lost' Scotland from the UK but who also paved the way for a referendum in 2017 that sees the UK exit from the EU. Cameron and the Conservatives have decided that it is much more important to listen to UKIP policies than to worry about the effect on Scotland or to risk the future of the UK in the EU. That indeed is the road to a literal little England, upon which the Conservative policy on windfarms is but a small, but very indicative, marker.