Decarbonisation: Yeo’s Heathrow Plan is a Trap for Greedy Greens

Decarbonisation is an ugly, overweight word.  On twitter it is cut to ‘decarb’; like a statutory pasta rationing regime.  But for green groups, it’s the rationing of targets not tagliatelle that is causing stomachs to rumble.

Let them eat targets!

Let them eat targets!

Not satisfied with emissions targets for 2050 and 2020, binding carbon budgets, EU renewables targets and global emissions pledges, some environmentalists are demanding another helping of targets.  Or perhaps this is the icing on a layered target cake.

The demand is for a specific decarbonisation target for the UK power sector.  The Committee on Climate Change (CCC) has recommended that the UK should bind electricity producers to serve up our electrons without producing more than 50gCO2/kWh by 2030.

This target would make most efficient gas-fired power stations obsolete by 2030.  In fact the CCC foresees that by 2020 unabated gas generation would provide only ‘back-up to wind’ and to ‘generate at peak times’ at ‘low load factors’ (quotes from the CCC 4th Carbon Budget).

While I agree in principle with the objective of decarbonising the power sector, this ambition is not currently feasible.   The current slow progress on nuclear deployment means gas power looks likely to continue to make up the lion’s share of the baseload capacity in 2020.  I don’t like it any more than the next environmentally conscious citizen, but after 13 years of Labour fudging capacity issues, it is where we are.

While Carbon Capture and Storage (CCS) remains unproven on a commercial scale, it seems likely to me that a tight decarbonisation target of the type proposed by the CCC would have a chilling effect on investment in gas-fired generation, thereby threatening the baseload capacity, and resulting in potential blackouts in 2015-2020.

Hmmm, wish I had built that CCGT now.

Hmmm, wish I had built that CCGT now.

But, even if you don’t accept that decarbonisation targets might threaten our electricity supply,  there are three further key points that need to be chewed on in the context of decarbonisation, and particularly the Yeo-Gardiner amendment to reinstate the target into the Energy Bill:

(i)  the immediate decarbonisation target was sacrificed by DECC in exchange for a huge increase in the levy that will secure funding for low-carbon generation to 2020/21.  Therefore financial support for renewables is hardwired into the Energy Bill.  Of course the renewables sector wants even more and longer term certainty, but £7.6bn is a quite a meaty commitment to put on the table.

(ii)  there is a head-pounding logic to the idea that any target for 2030 should be set in parallel with the carbon budget for the same period.  That will be in 2016.  If the CCC repeats its advice on decarbonisation in 2016, the government may have a problem if nuclear and CCS are still not being rolled-out (me thinks not).  But that is not a reason to bring the target-setting forward.    In the meantime, encouraging the building of gas-fired plant to cover the capacity crisis is a legitimate policy.

(iii) I suspect some pretty cunning politics is being played by the main cheerleader for the re-introduction of the target – Tim Yeo.  Mr Yeo tends only to delve in deeply on environmental matters where there is something in it for him.  This was brutally exposed in relation to Mr Yeo’s other cause celebre – a third runway for Heathrow.

Sadly for all those rushing to back Mr Yeo as the green knight fighting to amend the Energy Bill for the good of the atmosphere, the truth is that the third runway and decarbonisation of the power sector are not unconnected issues.

Here’s how:

(a) UK has a statutory carbon emissions reduction target for 2020 and 2050, that is likely to eventually include international aviation (decision to be taken in 2016);

(b) aviation is very unlikely to be able to reduce its emissions in the short term (due to limited opportunities to improve technology);

(c) if aviation wants to expand (or even remain at 2005 levels) within the statutory caps, other sectors will need to decarbonise to make up for aviation or the government will breach the law (what that means is unclear, but not good politics at least).

Therefore in order for there to be any chance of Heathrow expansion whilst trying to stay within the legal limits of the Climate Change Act, the power sector must decarbonise, and quickly.

With his business interests pushing him heavily on Heathrow expansion, is it too cynical to think that the Heathrow issue is the real reason Mr Yeo has taken up the cause of decarbonisation of the power sector so readily?

T5-VI-060222-064

‘Gas-fired power – bad; jet power flying me business class to China – good!’ explained Mr Yeo

Put simply, a decarbonisation target enshrined in the Energy Act would be an enormous help to Mr Yeo’s campaign to expand Heathrow as it would allow him to say that expansion will be offset by decarbonisation in other sectors (he loves this argument)….and just in time for the Davies Commission Report.

Here is a quote from the CCC’s fourth carbon budget that illustrates why Heathrow expansionists need decarbonisation of the power sector so desperately:

But it is unlikely to be optimal to reduce aviation emissions by 80%, since, unlike in
other sectors (e.g. power generation), alternative technologies which could make radical reductions feasible without major economic cost are less likely to be available. If we assume that International Aviation & Shipping emissions in 2050 are at 2005 levels, other sectors of the economy will need to cut by 85% in 2050.”

Combined with the other arguments of logic, I hope that this depressing insight into the politics at play will persuade environmentalists to abandon the Yeo-Gardiner amendment and support the perfectly adequate smorgasbord of targets that are currently on the table.

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