Reasons Why Decarbonisation Target Argument is Folly

As the Energy Bill  hots up this week, it is essential that the government keeps its head and resists calls for a new target of 50gCO2/kWh by 2030.  Here’s how I see it:

Why now?

– targets that attempt to centrally mandate a rapid scale-up of renewables should not be set until there is more certainty on grid resiliance, energy storage, CCS and demand management.

– the problems of the UK’s planning system mean that there may be great difficulties in delivering the wind pipeline (CCC estimates 50GWs by 2030) that will keep the lights on in a decarbonised scenario.  Huge wind farms (mostly offshore) are essential if the decarbonised UK is to keep the lights on.  More time is needed to see if the changes to the planning system can help unlock the UK’s great wind potential, or whether nimbyism will win the day.

– the next carbon budget in 2016 will be the appropriate time to set out a clear message on the government’s intentions up to 2030, including decarbonisation.

Why legislate a target?

– the overarching emissions reduction target of 80% by 2050 is sufficient for the time being.  The CCC’s analysis that decarbonisation is essential to reach 80% by 2050 is based on modelling that may not prove accurate – witness the Bank of England’s growth forecasts. Even the CCC admits that the target should have ‘some flexibility’.  Why put it into the Energy Bill then?

– targets are a blunt tool.  Recent DECC noises suggest that setting an emissions target and letting the market work out how to meet it is the fashion for the time being.

– legislating a target does not eliminate political risk, as future parliaments could undo the target.  Therefore investment decisions on renewable projects will be based on signed and sealed strike prices and subsidies rather than long-term political targets.

– the argument that this target is ‘essential to secure UK jobs’ is lobbyists’ scaremongering.   Encouragement and incentives are one thing, but the notion that Siemens could hold the government to ransom over amendments to a major piece of legislation to facilitate a factory development is distasteful if it’s true.

Why jeopardise the gas-fired power sector?:

– encouraging a sustainable amount of gas plant is a cost-effective hedge against the uncertainties of energy demands in the next 15-20 years.

– there is a possibility that cheap shale could be the consumers’ choice for a large part of the energy mix in the 2020-2030 period.  Removing gas plant almost entirely from the UK through an unwieldy target may result in the plant just being rebuilt at higher cost if that is the will of the public – a wholly unsatisfactory scenario.

The Energy Bill has secured over £7bn in subsidies for renewables.  Most voters will expect that is a settlement that will deliver a sustainable and prudent energy mix within the emission reduction targets we have already signed up to.

With a guarantee it will be considered again in 2016, the argument for a decarbonisation target now is a folly that the renewables sector should not allow to jeopardise the current subsidy settlement.

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2 Comments on “Reasons Why Decarbonisation Target Argument is Folly

  1. Let’s “learn” I say – let’s learn that planners are quite right to make careful consideration of where wind turbines should be located, if at all! – let’s acknowledge that wind turbines should be kept at sea – BUT if that’s their ultimate destination, let’s learn that it takes an area bigger than Greater London of wall-to-wall wind turbines to generate the equivalent of one nuclear power station – let’s learn that we must remove the £100 energy “levy” that each UK household pays towards wind turbine associated subsidies because that is a nonsense – let’s learn why the US has seen energy prices reduce by 10% over the last 7 years while Europe has seen a 40% increase across the board – and let’s learn that if shale gas really is the US solution and Europe’s future, what are the real dangers to the environment? – if, as it seems, the chances that the dangers are negligible, should we not ‘go for it’ especially as today’s news is that the shale gas potential could be 20% greater than originally perceived? We can then knock the whole wind turbine debacle on the head, leaving our precious countryside alone in the process – and ‘do good’ with the cash savings that will be sloshing about in our pockets.

    • I agree we should push forward with shale exploration – the potential upside of shale is one of the reasons why the government’s gas strategy (to increase new gas capacity by up to 37GW by 2030) is a broadly sensible course. But it’s unclear how much shale we have so relying on gas does open up some price risk for the consumer. Also shale will run out eventually, just like North Sea reserves. The wind resource is ever-lasting and free. It will take a massive investment to build out the 50GW of wind plant, but once it is up and running, operation and maintenance costs are foreseeable and relatively low. Wind is the best way to secure long-term predictable prices for consumers.

      Basically we need both massive investment in wind and to ‘go for it’ on shale. However they both face the same obstacle – our planning system will not accommodate development of sites on a scale or within a time scale that will allow us to reap the benefits fully. Neither will reach their full potential. Polling shows people are less keen on shale rigs in their ‘back yard’ than they are of wind turbines. Unlocking the planning system is the key to unlocking the development potential for wind and shale that will secure a balanced and sustainable energy future.

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