5 Reasons to be Cheerful About Clean Energy
After all the talk of energy shortages and black-outs over the past week, I thought it’s time to take a more positive look at the energy policy horizon. I’ve picked out a couple of highlights that might help us keep the faith through the long nights huddled around candles rubbing flints together:
i) London Array – the world’s biggest offshore wind farm – was officially opened today by David Cameron. It’s only one project and there are many gigawatts of projects in development, construction and operation around the coast of the UK, but London Array is totemic because of its size and complicated history. Its completion shows that large scale offshore wind farms can be delivered in the UK, even against a back drop of political uncertainty, investor withdrawals and complex planning challenges.
London Array generating at full capacity is an important reminder of the UK’s strength in this sector and can galvanise those seeking to deliver bigger and bolder projects.
ii) We had an early strike from DECC. Indicative Strike Prices (from which the level of government subsidy that will be available for renewables from 2017 will be determined) were announced ahead of schedule last week. Encouragingly for those attempting to build clean energy projects, they were within the expected ranges. There will now be a bun-fight over the terms of the contracts under which those subsidies will be paid. It is crucial that DECC keeps up this momentum and concludes the process as soon as possible so that investment decisions can be made to ensure that the next London Array will be delivered in time to meet 2020 targets.
iii) The EU ETS has finally started on its long road to recovery. The European Parliament yesterday passed a proposal to restrict the supply of EU Allowances into the system in the short term while it puts together a more comprehensive restructuring proposal.
This back-loading plan is intended to support carbon prices. A stronger carbon price in Europe is essential to ensure that dirty industries pay an appropriate price for their environmental impact. That includes coal-fired power stations that have recently been able to benefit from the dramatic slump in the carbon price.
It has been a tough struggle to get the politicians to agree to this back-loading proposal, but the fact that they have agreed opens the way to a more comprehensive solution. The UK government has made it clear that it will support tougher emissions targets for 2030, achieved through the EU ETS. If other EU governments follow suit and if reform is forthcoming the EU ETS could be rehabilitated as the EU’s first choice climate policy.
iv) The Americans are signing up. Obama’s Georgetown speech was a watershed moment when he set out (at long last) measures that will help address US emissions at a federal level. US States have been taking the matter into their own hands with a patchwork of renewable energy incentives that (along with stimulus money) started to put the US on the clean energy map. Carbon trading has also kicked off in California which has implemented a system founded on the principles of the EU ETS but without the supply flaws. On the international stage, the US has done a deal with China on HFCs and has started a trade negotiation with the EU which must include consideration of emissions standards.
But Obama’s public leadership on this issue remains the key to building momentum. With this speech, Obama has reignited the federal legislative and regulatory processes and his powerful rhetoric has given confidence that the clean energy revolution really is coming to America. The first set of new regs are already in front of him to sign!
v) But Obama’s not a patch on Prince Charles. His patched suit made headlines this week was a subtle nod to the make-do-and-mend mentality of austerity Britain. OK, it’s not really a clean energy story, but a bit more patchwork would bring our energy consumption down, which is such a key part of the clean energy revolution.
Besides when the lights go out in 2015 there’ll be nowt to do but needlework in any case. Now there’s a cheerful thought. Happy darning!