Boost renewable energy by giving more energy powers to Scotland

As can be seen in the story and letter in the Sunday Herald, myself and others are calling for energy powers to be devolved in Scotland even if there is a 'no' vote on September 18th. Establishing a Scottish Energy regulator will boost renewable energy (and also, potentially energy efficiency programmes) by allowing Scottish authorities to alter regulations to allow electricity network companies to be more proactive in investing in upgrades of electricity networks.

Currently planned renewable energy projects are saddled with high charges for connecting their projects to networks because the costs of connection are assessed on a scheme by scheme basis. This is as opposed to the Networks being able to take a forward looking stance and invest in upgrades that will allow more schemes to be set up on the basis that they will be charged lower connection costs. This will benefit both large and small schemes, and community renewables projects above all who are the least able to argue with the grid connection quotes issued by the Network Operators.

Since network charges are calculated and paid by consumers on a network by network basis, such a change would have no consequences for consumers outside Scotland. So why should energy regulatory powers over such matters be reserved to Westminster and OFGEM?

A second idea promoted in the Sunday herald is that the Scottish Government should be given a big slice of the low carbon energy funds to allocate as they wish, rather than is at present happening where low carbon energy spending is being parcelled out to meet English priorities rather than Scottish ones. Scotland is not going to build any nuclear power stations. It wants renewables and it wants to be free to be able to choose the options and the levels and types of incentives for those options, which should not be dictated by English priorities. If a Conservative Government is elected then they will decide to ban onshore windfarms, and no doubt most of the money will, according to Tory priorities, be spent on nuclear power with a bit of funding maybe left over for English rooftop solar and English offshore windfarms.

In fact of course the low carbon programme would be much more cost effective if it was spent on onshore windfarms and onshore solar farms, both of which are being increasingly squeezed by political pressure from the Conservatives. Yet the Scottish Government could promote both these technologies as well as innovative marine technologies such as tidal stream technology, if it had control over some of the incentives.

Under Electricity Market Reform Scotland has been stripped of its powers to set incentives for renewable energy. The Treasury says that it will not allow the Scottish Government (SG) to set incentives that will increase consumers' bills outside of Scotland. But the Treasury could still apportion part of the funds that it caps for spending on low carbon energy (under the 'Levy Control Framework' - LCF) to be disbursed by the Scottish Government. That would not increase consumers bills outside of Scotland, and it would help solve an area of significant political conflict between Holyrood and Westminster.

But even the Scottish Labour Party, who you would think would be a bit more imaginative, has so far not embraced ideas such as these. The only mention of energy in their devolution discussion document issued in April was about Scottish Islands - but even that did not mention how giving more energy powers to the Scottish Government (SG) could help them, and the rest of Scotland of course. See

http://s.bsd.net/scotlab/default/page/file/26e0eb4bdf4c775d14_ram6b81bk.pdf

Why not? Do they prefer English Conservative priorities to predominate over Scottish ones? Or maybe they are so supportive of nuclear power that they want to stop any powers being given to Scotland to promote renewable energy? Surely not.

Among the three biggest unionist parties, the Liberal Democrats appear to leave the door open for enhanced powers for Scotland in the energy sphere. Points 167 and 168 of their document on a 'Federal UK' issued in 2012 say:

'matters such as energy policy and transport policy could
be dealt with by partnership-working, where the Scottish Parliament would
enjoy freshly enhanced rights to influence decision on these matters.
168. Strategic decisions over the National Grid, energy planning and the security of
energy supply, carbon trading and renewable developments are clearly of
importance to both federal and Scottish Governments. A more federal structure
lends itself to sensible decisions over the UK electricity market'

By contrast, Labour and Conservatives focus on taxation and spending powers in the economic/welfare sphere. OK, that's a very important issue, but in some ways they appear to be talking big whilst ignoring, or distracting attention, away from other very important issues - including low carbon energy issues. But there are big differences of priorities between Scotland and England on this subject, so this (low carbon energy) ought to be the focus of proposals on devolution.

The pro-independence parties are intrinsically advocating more energy powers being given to Scotland, and the Scottish Government's proposals certainly stress having a Scottish Energy Regulator. However, the lines of authority are not drawn as clearly as you might think. In the Scottish Government's 'Guide to An Independent Scotland' there is some ambiguity about the control over incentives for renewable energy. The SG appear to want the English to carry on paying for new renewables in Scotland whilst ensuring that the Scots do not pay for rUK nuclear power. After 2020, at least, that seems rather hopeful. There are thus still unanswered questions about who would pay the incentives necessary for new schemes in an independent Scotland.

I have argued, as the lead author of the 'DREUD Report', issued last December, that an independent Scotland in pursuit of its renewable energy targets would not necessarily be worse off in terms of electricity prices compared to continued union. Certainly this applies to a UK where everybody is lumbered with an expensive nuclear programme, especially if the Conservatives ideas of excluding most onshore renewables developments makes the renewables programme more expensive as well. However, it is not clear that independence would be superior to a 'devoplus' solution which included the reforms suggested above.

There is still a clear policy vacuum because the pro-independence parties (SNP and Greens) have not sketched out what they would prioritise in the way of further devolution the event of a 'no' vote, and the unionist parties' proposals are at best minimalistic and seem, for the most part, to imply something close to the status quo. We need also to have a discussion about the options for further energy devolution in the event of a 'no' vote on September 18th. Certainly one would hope that in this event the SNP and the Greens would come out with some clear plans for energy devolution - and hopefully they (and preferably also the unionist parties)  would take up proposals that would at least give effect to the aims expressed in the ideas in this blog.

For coverage of these issues in the Herald on Sunday see:


http://www.heraldscotland.com/news/home-news/energy-experts-call-for-scotland-to-have-power-to-escape-nuclear.24618125

http://www.heraldscotland.com/comment/letters/control-of-energy-policy-is-needed.24604837

Ed Davey gets Scottish 'subsidies' argument wrong on BBC

Talking on this morning's BBC Radio Ed Davey commented:

'the problem that the SNP have is that the amount of these subsidies are going to have to come, to continue, within an independent Scotland.  The question is will that happen.?'   See http://www.bbc.co.uk/programmes/b047c3nl

Well, what will happen? Let's flash forward to September 19th, or soon after when a worried bevy of Big Six electricity companies talk to Ed Davey about what to do after the 'Yes' vote in the Referendum.


Big Six CEO: 'You're not serious about stopping the payments for the windfarms we have installed in Scotland are you? I am now off to see our lawyers about suing you for illegal retrospective legislation depriving us of our assets.'
 
Ed Davey: 'Well, that's I what told the BBC - the SNP would have to take care of this. Look, go and have a chat to Alex; he'll sort you out and arrange for you to be paid by Scottish electricity consumers''

Big Six CEO: 'I already have. He said he'd get hung out to dry by his constituents if he agreed to put up Scottish Bills to pay for your messing around. And we can't increase our electricity prices to make Scottish consumers pay because other suppliers without as much investment in Scottish windfarms will just undercut us.'

Ed Davey: 'Well we could stop people undercutting you so much by stopping electricity trading between England and Scotland. We can put an end to the 'British Electricity Transmission and Trading Arrangements (BETTA)' system - that would mean that Alex would have to cough up....hee hee!'

civil servant (interjects): 'But stopping electricity trading is against the rules of the European Network of Transmission System Operators for Electricity (ENTSO-E), so we can't do that'

Ed Davey: 'ENTSO-E - that's an EU body isn't it? Couldn't we stop Scotland joining? After all it will be a while before Scotland can join the EU and get that sorted out'

civil servant: 'Well, it would catch up with us pretty soon, and anyway Norway and Switzerland are members of ENTSO-E, and they aren't in the EU. On top of that Scottish Power are owned by Iberdrola, the Spanish electricity giant, and they would get the Spanish Government to reduce their resistance to Scotland joining the EU quickly'

Ed Davey: 'Hmmm, but what if WE leave the EU?'

civil servant: (guffaws): 'That's not Liberal Democrat policy'

Ed Davey: (looks flustered) 'Hmmm, you've got a point there........but anyway I'm sure there's some way we can make Alex cough up for all those windfarms, after all people in my constituency would prefer it if Alex sorts it out'

Big Six CEO: (looks sternly at Ed Davey) 'When your constituents find out that we're not going to build the power stations you want us to build because we can't trust you and anyway we haven't got any money left, they won't be very pleased when you start organising a three day week'

Ed Davey: (leans over and whispers): 'Well, maybe, and we don't mean it really - it is just that all that stuff about us stopping paying for the windfarms was damn good propaganda, - y'know, give 'em a good scare! And anyway with a bit of luck I'll be taking over as Business Secretary and I won't have to deal with it for much longer........I'm sure Vince will take care of things for you. He's quite good at doing u turns - look at student tuition fees - it was his department that did it, and they all blamed Nick Clegg and not him!

UK on track to miss EU Renewables target by large margin

The UK Government is on course to undershoot the EU Renewables target by a large margin. The Government is committed to achieving production of 15 per cent of final energy from renewable energy (RE) by 2020. On the basis of a good guess based on current projections of current production and future progress the Government is unlikely to achieve more than 10 per cent, quite possibly even less - this means an undershoot of at least a third.

As can be seen in Table 1, in 2012 the UK produced around 4.2 per cent of its energy from renewables. If the current annual rate of expansion of about 0.4 per cent of UK energy from renewable energy (RE) is projected forward to 2020 then the UK is likely to achieve just 7.4 per cent of its energy from renewable energy, just less than half its target. It maybe that the rate of expansion will increase in the remaining years of the target period, but this is unlikely to bring the total anywhere near the 15 per cent target. The Government seems well behind its targets on all fronts. The Government proclaims that it is still on course to reach the 15 per cent target, but this claim rests on what I would describe as a piece of, as they say in the trade, smoke and mirrors, with progress towards the target being dependent on a very rapid acceleration of renewable energy generation occurring in the last three years of the target period. However, it seems unlikely that the projected acceleration will be anything like that which the Government has projected in its 'National Renewable Energy Action Plan' (NREAP) which it lodged with the EU, as required in the legislation establishing the EU Renewables Directive  that was promulgated in 2009.

Table One   NREAP for the UK - indicative targets and actual achievement in per cent of total energy

	NREAP	Actual
2009		3
2010	3	3.3
2011	4.08	3.8
2012	4.08	4.2
2013	5.15
2014	6.15
2015	7
2016	8
2017	9
2018	11
2019	13
2020	15

The Government expects to achieve a large slice of its target from generating renewable heat. Indeed, in its low carbon plan published in 2011 it projected 72 TWh per year as coming from renewable heat in buildings by 2020. In 2012 DECC figures say around 15 TWh of renewable heat was generated. However, the latest figures from DECC (May 2014) suggest that not much more than 1 TWh is being generated from renewable heat as a result of the government renewable heat incentive policies which it began in 2011. This figure is increasing, but few outside government seem to think it will rise to the sort of levels demanded by the Government targets. The Guardian covered this subject in March, and included the following passage:

 "We have to ramp up renewable heat to meet our carbon budget," said David Kennedy, chief executive of the Committee on Climate Change. However, he said a whole suite of policies were needed to encourage take up of renewable heat; the RHI subsidy was simply too small to create a mass market on its own.' See http://www.theguardian.com/sustainable-business/will-uk-warm-renewable-heat

The  10 per cent of transport fuel from renewables target may not be attained - progress has stalled in real terms, and only appeared to increase in the last period because of a change in the way the statistics were calculated. As DECC said about the 'increase':

'This increase was a result of the introduction of double counting which provided further support for the most sustainable biofuels derived from wastes' See https://www.gov.uk/government/publications/second-progress-report-on-the-promotion-and-use-of-energy-from-renewable-sources-for-the-united-kingdom, page 2

Government projections of 30 per cent of electricity being obtained from RE by 2020 also seem unlikely to be met, although really we would need more like 50 per cent of electricity from renewables to come within even a respectable distance away from reaching the EU target given the shortfall in other sectors.

NOTE! The EU target is for FINAL ENERGY consumption, not electricity consumption! This is a frequent source of confusion. Electricity production/consumption counts for about one sixth of total UK final energy consumption. Hence whilst we will get a lot more than 15 per cent of electricity from renewables, this will be a long way short of getting 15 per cent of total energy from renewables.

With only around 8GWe of offshore wind likely to be deployed by then added to just under 14 GWe of onshore wind and around 4 GWe of solar pv, and taking into account a further (since 2012) probably 3.7 GWe of coal fired capacity converted to be fuelled by biomass, we can expect around 26 per cent of UK electricity supplied from renewable energy in 2020. See some projections in Table 2 calculated in terms of TWh of electricity production.


Table 2

Table 1 Likely annual RE production by end of 2020

Source                                                                        TWh

Biomass                                                                       41

Offshore wind                                                             25

Onshore wind                                                              32

Hydro                                                                              6

Solar pv                                                                           4

Total RE production                                                  108

UK electricity production                                         370

% RE in 2020                                                                   26 per cent

The failure to reach the UK’s EU target has little or nothing to do with the availability of RE – for example there is a copious cheap onshore quantities of wind and solar resource – but it does have a lot to do with changes in policies. This includes ‘rationing’ of money available to RE generators (from consumer energy bills) to top up  the payments they received for the energy they produce that was a consequence of the ‘Levy Control Framework’ (LCF) that was introduced in 2011, and also the Treasury’s decision, in the last budget, not to increase the carbon floor price. This failure meant that the money available under LCF will not be able to fund as many projects as if the carbon floor price had been increased in line with previous policy (announced in 2010). Eric Pickels’s much publicised action to ‘clamp down’ on onshore wind and ground mounted solar farms will not, in practice, do much to reduce the quantity of RE deployed, for the simple reason that the Treasury will not allow enough money to be spent to deploy the schemes already given planning consent.

It is true that there are declines in costs of onshore wind and solar pv, but such gains are counterbalanced by the fact that wholesale electricity prices are falling, meaning that the amount of money allowed to be spent on to support renewables from consumer energy bills will have to go further to support a given renewable energy output.

One solution to all of this that clearly appeals to many people in the UK is to withdraw from the EU. Good news for UKIP, bad news for the planet.

One cheer for the Government's community energy strategy

The Government has launched a discussion document aimed at ensuring that local people have the opportunity to gain shares or income from renewable energy developments, but in typically British centralising fashion it is ironic that this discussion seems to focussed on what the electricity majors want or are prepared to allow. The discussion documents can be seen at https://www.gov.uk/government/publications/infrastructure-bill-the-community-electricity-right

The proposals hinge on the form in which the big companies will give up to 5 per cent community interest in various ways (e.g. through share ownership) in renewable energy projects. Little attention is being paid to practical measures to encourage real community ownership through projects initiated and developed by local people, and as usual even the needs of independent (non-community) generators seem to be passed over in favour of the needs of the multinational companies.

Now of course I support investment by the big electricity companies in renewable energy. Indeed they should do more. Community renewable energy schemes, it must be emphasised are a necessary addition to, and in no way a substitute for investment by the major electricity companies, at least as far as the UK is concerned. But the electricity majors are not the ones to deliver a community renewables programme. Why should the system be tailored solely to their needs, even when, ironically, the object of the policy is in promoting 'community' renewable energy!

The received opinion is that local people just do not have the expertise to put up community renewable projects. However, this can never be more than a self-fulfilling prophecy and there is a growing number of examples, especially in Scotland, that undermine this judgement. Research already conducted (eg by SCENE Consulting and University of Edinburgh) demonstrates that such community renewable schemes have a very high rate of planning approval. A report by Smartest Energy reveals a rapid growth in renewable energy schemes organised by independent companies of various sorts in Scotland. See http://www.scotsman.com/news/environment/independent-renewables-can-power-for-million-homes-1-3463289 Outside of Scotland there are some (relatively) large schemes, in particular the now well known 6.5 MW Westmill project brought into being by Adam Twine and Energy4All, and still awaiting development, the 4 MW Awel Aman Tawe project which has gained planning consent against the odds in a long running planning saga.

The Scottish Government has established the CARES system wherein local community groups can be loaned up to £150,000 to deal with planning applications. Why cannot Westminster set up a similar scheme? But a lot more could be done for no extra cost to the taxpayer or electricity consumer to help community renewable projects. So what should DECC be spending more of its time doing rather than having longwinded discussions with the (community-reluctant) big companies?

I would suggest that DECC draw up a list of genuine measures to promote community renewable energy schemes. These will include:

• set up a community renewable energy loan fund similar  to that run by the Scottish Government to cover England and Wales (the latter in collaboration with WAG)
• Legislate to ensure that farmers who have signed away their renewable energy development rights to companies that do nothing about them can be released so that they can agree options with community schemes
• Give decent premium power rates to community renewable schemes and to independent renewable energy projects in general - under Electricity Market Reform only the electricity majors/electricity suppliers who can trade on the electricity wholesale markets can get the premium rates whilst community schemes over a a few hundred kWs of generating capacity will effectively be paid around 30 per cent less than a multinational corporation per MWh generated  
• Give Scotland energy devolution so that a Scottish Energy Regulator could allow the network electricity distributors to be more proactive in upgrading weak rural electricity networks - thus reducing grid connection costs for community renewable energy schemes  - preferably this regulatory reform could be applied to the UK as a whole as well 

Only when I see some action on items such as these which will give real extra opportunities to community renewable energy schemes will I be prepared to give more than one cheer for the Government's so-called community energy strategy.

See some comment on community energy by Jonathon Porritt at http://www.theguardian.com/social-enterprise-network/2014/jul/01/energy-community-carbon-cooperative-renewables?CMP=twt_gu