APPENDIX 27
Friends of the Earth draft responses to
Energy Review questions
23 March 2006 (please note these are draft responses.
The final version for the Energy Review consultation may include
small changes. It will be on Friends of the Earth's website by
the 14 April consultation deadline)
Q.1 What more could the government do on the
demand or supply side for energy to ensure that the UK's long-term
goal of reducing carbon emissions is met?
If the Government is to retain any credibility
on climate change & energy policy, it must use the Energy
Review to create a long-term framework that will encourage investment
in clean technologies. Therefore it should accept a new law setting
legally binding year-on-year emission reductions of 3%, with an
annual climate budget to make sure we are on track. This proposal
now has the support of the majority of MPs. For more information,
see http://www.thebigask.com.
In addition to this, it must act in the following
sectors:
Electricity sector
Friends of the Earth produced research [1] showing
we could meet CO2 emission reductions of 48-71% by 2020 without
nuclear power. We could also stabilise or reduce gas use in the
electricity sector.
— Increase promotion of renewable energy
through more ambitious policies.
— Transform the energy sector by setting
targets for energy efficiency and stimulating the development
of a market in energy efficiency services.
— Boost incentives for investment in
Combined Heat and Power, highly efficient plants producing both
heat and electricity.
— Force coal-fired power station operators
to use state-of the art technologies to improve emission performance.
Close old, inefficient coal-fired power stations that don't use
these technologies.
Carbon capture and storage technologies could
potentially achieve further reductions.
Buildings, Offices and Heat sector
Homes are responsible for almost a third of
carbon dioxide emissions in the UK. The Environmental Change Institute
at Oxford University says emissions from the UK's housing stock
could be reduced by 60% by 2050. According to the Carbon Trust,
UK business wastes £1 billion a year in lost energy.
The government should:
— Introduce new fiscal incentives for
householders for energy efficiency: stamp-duty rebates, council
tax rebates, etc.
— Implement in full the EU Performance
of Buildings Directive and support efforts to amend it in order
to make it more ambitious.
— Support the Carbon Trust proposals
for a new mandatory consumption-based emissions trading scheme
covering both direct and indirect emissions which would apply
to companies and public sector organisations.
— Alternatively, raise the Climate
Change Levy; other more sophisticated fiscal instruments could
also be introduced such as a carbon credit tax on commercial and
transport sectors.
— Support proposals for a new European
Directive on promoting Renewable Heating and Cooling.
Transport and Aviation
The Government must push to get all the emissions
cuts possible from technology, such as greener cars and improved
or alternative fuels. Demand management measures will however
also be needed. These include reducing the need to travel and
improving alternatives to the private car.
These should be seen as a form of progression:
— Firstly, we should try to make it
possible for people to do what they want without having to travel
as much.
— Secondly, for the journeys that people
make, we should provide high quality, less polluting alternatives
so that use of private cars can be reduced. Price signals should
be used to incentivise this behaviour.
— Thirdly, for the journeys that people
make by car, we should encourage the use of greener cars and fuels.
The Comprehensive Spending Review should include
big cuts in expenditure on road-building. Road-building often
leads to large increases in traffic levels, locking in a carbon-intensive
pattern of development.
The Government must also push for a tough follow-up
EU emissions standard for new vehicles to replace the current
voluntary agreement.
The Government should conduct and publish an
aviation policy review. This policy review should:
— Rewrite the Aviation White Paper
to rule-out further airport expansion.
— Introduce an Emissions Charge on
aviation and include aviation in an EU Emissions Trading System.
The tool to stop the cost of flying falling
is increases in Air Passenger Duty (APD). Doing this would reduce
the rate of growth in aviation's emissions. If however the aviation
industry argues that the cost of flying is not falling, then according
to the Government's own figures there will be no need for new
runways.
Cross-sectoral policies
— Promote increased use of biomass
for electricity and heat needs. Introduce and deliver renewable
heat and renewable fuel obligations.
Growing crops for fuel results in no significant
net increase in carbon dioxide as long as the harvested crops
are replaced. Many such crops could be harvested in the UK and
the EU, which could greatly help improve our energy security.
Q.2 With the UK becoming a net energy importer
and with big investments to be made over the next twenty years
in generating capacity and networks, what further steps, if any,
should the government take to develop our market framework for
delivering reliable energy supplies? In particular, we invite
views on the implications of increased dependence on gas imports.
A good market framework that ensure secure supplies
AND helps to meet climate change goals:
A-provides long term certainty to investors &
is adequately regulated
A new law setting a legally-binding target for
year on year reductions would greatly help to provide the certainty
that low-carbon investments will pay off in the future (see above).
Investment in new nuclear power stations does
not necessarily provide a long-term stable framework for secure
energy supplies. Nuclear power stations take long to build and
have a history of cost overruns.
Interestingly, the electricity company created
by the Woking Borough Council [2] to promote decentralised power
solutions and to reduce emissions locally was considered to provide
attractive and safe returns, enough to attract investment from
Danish pension funds.[3]
Woking Council has proven that it is possible
to have a more decentralised model for energy generation. However,
this requires a number of regulatory changes to become viable
more widely. Ofgem's mandate needs therefore to be amended.
B-promotes an efficient use of fossil fuels
Fossil fuels will continue to be used for a
few decades. Therefore we need to make sure we use fossils as
efficiently as possible. This means maximising the share of Combined
Heat and Power and the use of the most efficient technologies
to burn both gas and coal.
Friends of the Earth's "A Bright Future"
report [3] shows that the UK could at least stabilise, and in
many cases even reduce, use of natural gas in the electricity
sector. For example, in the "good mix" scenario, gas
use could be reduced by 33% in the electricity sector by 2020.
C-reduces the need for baseload power and over-reliance
on unflexible and large-scale nuclear
Over-reliance on large nuclear power plants
for base-load energy creates risks. In 2003 in Sweden, two large
nuclear power stations had to shut suddenly within a few minutes
of each other because of technical problems, at a time when other
nuclear power stations were already shut. This led to a huge blackout
affecting the whole of southern Sweden and Eastern Denmark, leaving
four million people in two countries without electricity, and
facing severe disruptions of trains and airports. The same year,
French nuclear power generation faced severe problems because
of the heatwave, which caused river water levels to run so low
that there was insufficient water for cooling purposes (nuclear
power stations need very large amounts of cooling water).
Instead, increased take-up of decentralised
power and energy conservation policies would reduce the need for
both peak demand and base-load.
D-promotes technologies that ensure reliability of
the system
A well designed renewable electricity system
takes advantage of different patterns of variability to smooth
the overall supply of electricity generated from a combination
of resources. [4]
As for wind power, a report for the DTI [5]
studied over 30 years of UK wind records in the UK finding that
there was not one occasion when the UK as a whole was becalmed.
Electricity from wind is produced at the right time of the day
and wind turbines produced more electricity than those in Denmark
and Germany due to more favourable wind conditions, it found.
The UK wind power source is located in various
parts of the country, ensuring greater reliability, because lower
wind speed in one region will be compensated by higher wind speed
elsewhere. [6]
Another technology that could help us reduce
the need for capacity investment is dynamic demand.[7] This means
controlling peaks in demand for electricity with smart devices
that control when fridges, air-conditioners, and water-heaters
consume electricity.
F-is able to respond quickly to disruptions
No matter what we do, these may occur under
any fuel mix scenario. The government should be prepared to respond
by "saving energy in a hurry". The International Energy
Agency published recommendations on this based on experiences
in California, Brazil, Norway, New Zealand and Japan and other
parts of the world. In these countries temporary shortfalls in
energy supply and/or price spikes have been successfully dealt
with through energy efficiency measures, leading to demand reductions
of up to 20% in a few months' time.[8]
Q.3 The Energy White Paper left open the option
of nuclear new build. Are there particular considerations that
should apply to nuclear as the government re-examines the issues
bearing on new build, including long-term liabilities and waste
management? If so, what are these, and how should the government
address them?
Nuclear power is not the answer to climate change.
A government advisory body, the Commission on Sustainable Development
[9] has drawn together the most comprehensive evidence base available,
to find that there is no justification for bringing forward a
new nuclear power programme. The report, based on eight new research
papers, finds that the problems with nuclear power outweigh the
advantages.
To justify this conclusion, the Commission on
Sustainable Development states that even if the nuclear capacity
of the UK was doubled, this would only achieve an 8% in CO2 emissions
by 2035, and no emission reductions before 2010. This is a small
amount, set against the country's commitment to reduce CO2 emissions
by 60% by 2050, and would not happen fast enough to contribute
in any way to current Kyoto targets. This, the Commission says,
must be set against five "major disadvantages":
1. No long term solutions for disposal
of radioactive waste are yet available, let alone acceptable to
the general public; it is impossible to guarantee safety of the
long-term disposal of waste.
2. The economics of a new nuclear programme
are highly uncertain. There is little justification for public
subsidy. If estimated costs escalate, though, the taxpayer will
be have to pick up the tab.
3. Nuclear would lock the UK into a
centralised distribution system, at exactly the time when opportunities
for micro-generation and local distribution network are stronger
than ever.
4. A new nuclear programme would give
out the wrong signal to consumers and businesses, implying that
a major technological fix is all that's required, weakening the
urgent action needed on energy efficiency.
5. If we build new nuclear power stations,
we cannot deny other countries the same technology as part of
international climate change negotiations. With lower safety standards,
plant in such countries may run higher risks of accidents, radiation
exposure, proliferation and terrorist attacks.
In addition, according to Friends of the Earth,
nuclear power is not a solution to climate change for the following
reasons:
— One of the arguments sometimes used
in favour of nuclear power is that it would be easy to build new
stations close to the existing ones. However, a report by government
agency Nirex reveals that at least 11 preferred sites are at risk
from flooding or coastal erosion from climate change. [10]
— Nuclear is not an "emissions
free" solution. The mining and transport of uranium, the
making of nuclear fuel rods, the building of nuclear power plants
and the storage of nuclear waste all lead to carbon dioxide emissions.
In addition, it is currently estimated that
the cost of nuclear waste disposal will be around £56 billion,
according the Government's Nuclear Decommissioning Authority (NDA)
which is an increase of £8 billion over previous estimates.
The Government's rescue of British Energy in 2003 is expected
to cost British tax payers £12 billion over the next 100
years.
Despite this, since 1974 the UK government has
spent £6.8 billion in research and development funding for
nuclear fission (compared to £540 million for renewables)
according to information from the International Energy Agency.
Q.4 Are there particular considerations that
should apply to carbon abatement and other low-carbon technologies?
The Intergovernmental Panel on Climate Change
(IPCC) has produced in 2005 a report assessing the technological
potential of carbon capture and storage. The draft IPCC report
does now suggest that there are no insurmountable technological
hurdles to implementing carbon capture and storage.
However, a number of legal, regulatory and liability
issues need to be resolved.
Also, there needs to be internationally agreed
criteria on storage standards, site selection and leakage. Large-scale
implementation of carbon capture and storage can only be supported
after these issues have been addressed.
There are some storage options which are less
understood and some which pose unacceptable environmental risks.
For example, while the petroleum industry has experience with
the injection of CO2 in oil and gas fields, there is limited experience
of injection into saline aquifers and limited geological knowledge
of potential sites. Also, the use of marine storage poses significant
environmental impacts on little understood and vulnerable ecosystems.
As the IPCC draft report states, the suitability of storage sites
can only be determined on a case-by case basis.
Should the technical, regulatory, legal hurdles
and site selection hurdles be successfully overcome, within the
UK there could be a role for carbon capture and storage as part
of a transition to a low carbon economy. This recognition is based
upon the following understanding:
— That the latest scientific research
suggests that deeper cuts in carbon dioxide are needed sooner
than envisaged 10 years ago.
— The need for these bridging technologies
is also increased because the UK Government has failed to make
progress in cutting emissions (carbon dioxide levels are higher
than when the present Government came to power in 1997).
— The UK needs to simultaneously wean
itself off nuclear power whilst shifting from fossil fuels and
although the UK has a huge potential to provide its energy through
renewable sources it will take some time to realise this potential.
Therefore, the government should:
— Redouble its efforts domestically
and through European Union legislation to tap into the very large
and cost-effective potential for reducing demand for energy and
to promote renewable power.
— Develop, with others as necessary,
the legal, regulatory, and liability regimes needed for the development
of carbon capture and storage.
— Contribute to the adoption of international
standards for site selection and monitoring to ensure that there
is no leakage or that leakage rates are negligible and that environmental
impacts are minimal.
— Ensure that fossil fuel power plants
are modified to ensure they are using best available technology,
and that all new fossil fuel plants incorporate the ability to
implement carbon capture and storage.
— Ensure that when carbon capture and
storage is ready to be introduced that regulatory and trading
regimes ensure that fossil fuel plants implement carbon capture
and storage without government subsidies or other forms of public
support (which should focus instead on promoting energy efficiency
and renewable energy).
— Ensure that the promotion of carbon
capture and storage at an international level is not seen as an
alternative to binding international agreements on climate change
or to the promotion of energy efficiency and renewable power and
does not divert attention and resources from the latter.
Q.5 What further steps should be taken towards
meeting the government's goals for ensuring that every home is
adequately and affordably heated?
As a solution to fuel poverty the government
must enhance its energy efficiency policies, especially in the
domestic heating sector and housing standards. The UK has among
the most energy inefficient houses in Northern Europe.
Making sure products or houses that come on
the market are as efficient as possible and that financial support
is available for eg insulating homes or installing double-glazing
is good for fighting both climate change and fuel poverty. Microgeneration
and household scale renewables have low running costs. Therefore,
the spread of these technologies will be helpful for fuel poverty—if
the equipment is provided to those in fuel poverty free of charge
or at a subsidised cost. The development and promotion, for climate
change reasons, of such technologies and equipment will help bring
down their costs.
The government has in the past few years increased
energy conservation grants and developed initiatives for low income
over-60's, chronically sick and the disabled people. However,
many fuel poor households still fall outside the eligibility criteria
for these programmes.
In developing its fuel poverty strategy Woking
Council recognised that some fuel poor households in the private
sector needed top measures over and above the normal grants to
provide them with full energy conservation measures (eg, draught-proofing,
cavity wall and loft insulation).
Out of 32,500 private sector households in Woking,
over 12,000 households have so far taken advantage of the Council's
energy conservation schemes from 1996 to 2004, of which over 3,700
households have been provided with energy conservation grants
to provide full insulation measures.
Importantly, it is worth noting that by creating
a new energy service company, Woking Council was able to provide
energy at low prices for the fuel poor.
COMMENTS ARE
ALSO INVITED
ON THE
FOLLOWING ISSUES,
AS DESCRIBED
IN THE
TEXT
(i)The long term potential of energy efficiency
measures in the transport, residential, business and public sectors,
and how best to achieve that potential
The Performance and Innovation Unit's 2002 Energy
Review says the UK could reduce current energy use by up to 30%
through adoption of cost-efficient and existing technologies.
The Energy White Paper recognised this potential.
The current Energy Review, however, appears
from the very beginning to neglect and/or underestimate energy
conservation opportunities, despite stated intents. The consultation
document—and speeches given so far by ministers about it—put
a lot of emphasis on the question of how to tackle lack of awareness
of energy efficient options and their lack of take-up.
While creating awareness is hugely important,
a lot of what energy efficiency is about is good regulation and
good incentives. Setting minimum standards for products, buildings,
cars, etc, is key. The taxation system, and the regulatory framework,
are also hugely important. Behavioural change, although important,
will not deliver by itself.
Studies for the European Commission have identified
the potential to make significant cuts in electricity-use and
considerable financial savings by ensuring that industry uses
correctly-sized and super-efficient motor devices. There is the
potential to reduce electricity consumption by around six per
cent in the UK by 2020. [11]
Around one nuclear power station, or two medium
sized coal plants in the UK have to be kept running in order to
provide power for appliances not in use and on "standby"
mode. Around 24 nuclear plants are kept running throughout the
industrialised world for this purpose.
Replacing ordinary light-bulbs with energy efficient
light-bulbs could reduce electricity consumption by at least two
per cent (equivalent to one nuclear power station) by 2020. And
the potential is much higher if we implement a programme to replace
inefficient street lighting and lighting in the commercial sector.
Legislation [12] is currently being considered
by the EU to set minimum efficiency standards for a variety of
energy using products such as lightbulbs, but also including the
stand-by function (see below).
In addition to measures outlined earlier on
housing and the office and retail sector, further measures the
government should take to promote efficiency are the following:
Planning
— The minimum standards within the
Code for Sustainable Homes and PPS3 (Housing) need to be improved.
— Local authorities should also tackle
housing efficiency in new developments through the Local Development
Frameworks, where these exist.
— Planning consent should be informed
by anticipated energy performance; reform of planning rules.
— Local and regional authorities should
produce energy strategies.
— Spatial development plans should
be required to identify both renewable energy opportunities and
high-density heat demand suitable for community heating.
Product policy
— The EU Directive on Eco-Design of
Energy Using Products was approved in 2005; when implemented,
it will set minimum efficiency standards for many energy-using
products on the market. There is a very large potential for savings.
The UK should drive this process forward.
— Possible obligation on retailers
or voluntary agreement to sell increasingly efficient products.
— Establish government procurement
standards for a wider range of goods.
— Subsidy on best appliances, and higher
tax on worst appliances.
Taxation
— Increase green taxation. Green taxes
have decreased under Labour—despite a 1997 pledge to shift
the burden of taxation from employment onto environmental pollution.[13]
— End the anomaly whereby householders
are charged more than three times as much tax for buying materials
for saving energy as they are for using energy.
— Introduce nationwide council tax
rebates and cut stamp duty for low-carbon, energy efficient homes.
— Introduce a much higher zero-rated
tax disc (VED) for gas-guzzling vehicles. The biggest gas guzzlers
should pay at least £600.
— Introduce tax breaks, grants and
other incentives for householders to install micro-generation
systems.
An additional measure the government should
take is mandating differentiated tariffs for electricity that
penalise profligate users and reduce costs for those who use less.
(ii)Implications in the medium and long term for
the transmission and distribution networks of significant new
build in gas and electricity generation infrastructure
As explained above, there is a very large potential
to reduce the need to build new transmission and distribution
infrastructure if we implemented a policy to decentralise the
power system and to promote ambitious energy efficiency policy.
The International Energy Agency estimates in
its World Energy Investment Outlook [14] that at least $700 billion
in investment in generation, distribution and transmission could
be saved worldwide through even modest energy efficiency policies.
The types of investment needed in new capacity
and networks depends on whether or not the governments promotes
the development of decentralised energy systems and a more sustained
effort to promote energy conservation.
The Energy Review must for example take in consideration
the fact that a new decentralised energy system might need infrastructural
investments of a different kind—ie less focused on transmission
and distribution and more focused on eg smart metering. It is
important not to lock our electricity generation system into the
wrong type of investments.
(iii)Opportunities for more joint working with
other countries on our energy policy goals
— The government should accept the
principle of long-term year on year targets, and work to persuade
other industrialised countries in Europe and around the world
to adopt similar long-term approaches.
— The UK should work with the Internal
Energy Agency and the EU to set up global initiatives on energy
efficiency standards.
— It should support international initiatives
to promote decentralised power and energy efficiency around the
world. Decentralised power can be a very efficient way to bring
energy services to the 2 billion people in the world currently
without them. The UK should take the lead in promoting the take-up
of these technologies. And by developing them here, it will support
technological developments that will help tackle both climate
change and the challenge of growing global energy demand.
— The UK could join efforts by other
governments investigating proposals to import electricity from
large-scale solar power plants in the Sahara. This cutting-edge
technology is currently being investigated by the German government
in cooperation with other countries including Italy, Spain, Morocco,
Jordan and Israel. It is also being studied by UNEP, the World
Bank and the IEA. [15] Electricity is already traded throughout
Europe, with plans to expand the grid into North Africa.
(iv)Potential measures to help bring forward technologies
to replace fossil fuels in transport and heat generation in the
medium and long term
Opportunities to reduce carbon emissions from
heating have been explained in the answer to Q1.
In the transport sector, the current best bet
long-term alternative to the use of fossil fuels is hydrogen fuel
cells. Widespread use of hydrogen as a fuel for private cars is
at least 20 years away, as substantial progress is needed in research
and development into hydrogen storage and transfer. Another key
issue to be addressed is how the hydrogen will be generated. Hydrogen
made from electricity produced at fossil fuel-fired power stations
will still generate carbon. Nor, as explained above, is the use
of nuclear power the answer. The "dream ticket" would
be hydrogen produced from electricity from renewable energy sources.
This would require a step change in the renewables sector. Measures
to ensure this happens are addressed above.
The development of hydrogen-based transport
fuels offers huge potential. The Government should ensure that
there is sufficient investment in the development of hydrogen
storage and transfer for this country to benefit from this potential.
However, as has been explained above, technological
measures alone will not deliver the emissions cuts needed. Measures
to change travel behaviour are also essential.
REFERENCES
[1] Friends of the Earth, "A Bright
Future", March 2006.
[2] Woking Council pioneered a network
of over 60 local generators, including cogeneration and trigeneration
plants, photovoltaic arrays and a hydrogen fuel cell station to
power heat and cool municipal buildings and social housing. Cutting
CO2 emissions by 77% in 15 years. It was funded through capital
raised through energy efficiency savings. For more information
on Woking: http://www.theclimategroup.org/index.php?pid=548;
[3] http://www.dti.gov.uk/renewables/publications/pdfs/f0300178.pdf
http://www.foe.co.uk/resource/reports/bright_future.pdf
[4] Wind Power and the UK wind resource,
p 7. Also, Oxford Environmental Change Institute submission to
the Science and Technology Select Committee of the House of Lords,
"The Practicalities of developing renewable energy stand-by
capacity and intermittency", 2005.
[5] Environmental Change Institute, University
of Oxford (2005), Wind Power and the UK wind resource.
[6] Wind Power and the UK Wind Resource,
p 3.
[7] http://www.dynamicdemand.co.uk
[8] International Energy Agency, "Saving
Electricity in a Hurry", 2005; IEA, "Saving Oil in a
Hurry", 2005.
[9] Commission on Sustainable Development,
"Nuclear power in a low-carbon economy", March 2006.
http://www.sd-commission.org.uk/pages/060306.html
[10] Full details of the study available here:
http://www.sundayherald.com/53111
[11] Fore more information: see http://energyefficiency.jrc.cec.eu.int/pdf/HEM_lo_all%20final.pdf
[12] The so-called implementing measures of
the Eco-Design of Energy Using Products Directive, which was approved
in 2005.
[13] In 1997, green taxes stood at 9.5% of all
taxes; by 2004 this had slipped to 8.3%.
[14] International Energy Agency, World Energy
Investment Outlook, 2002.
[15] Several studies on this technology are
available here: http://www.solarpaces.org/library.htm
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