UK Announces Long-term Carbon Reduction and Renewables Strategies

Plans announced this week by UK Energy and Climate Change Secretary, Ed Miliband, have been met with cautious praise by industry and environment groups.

The plan has three components: the UK Low Carbon Transition Plan sets out how the UK will meet the cut in emissions set out in the 2009 Budget of 34% on 1990 levels by 2020. (According to figures from the government, emissions have already fallen by 22% from 1990.)

Also published this week is the Renewable Energy Strategy, which maps out the UK government’s strategy for reaching the EU target of 15% of the UK’s total energy consumption from renewables by 2020, from around 2% today, and the government’s Low Carbon Transport Plan, which sets out how to reduce carbon emissions from domestic transport by up to 14% over the next decade.  The strategy identifies a range of low carbon sectors with potential for job creation and growth. These include: wave and tidal power; civil nuclear power; offshore wind and ultra-low carbon vehicles. It also sets out the government’s strategy for removing barriers that are blocking the development of Britain’s full potential in these areas. 

Publication of the Renewable Energy Strategy follows a year-long consultation process. It recommits the government to a massive increase in renewable electric power generation going up from 5% today to 30% by 2020.

Among key points of the Low Carbon Transition Plan are a huge increase in employment in the low-carbon sector, energy efficiency measures in buildings and transport and an increase in low-carbon power. As envisaged, the plan will see:

• More than 1.2 million people in green jobs
• 7 million homes enjoying pay-as-you-save home-energy makeovers, and more than 1.5 million households supported to produce their own clean energy
• 40% of electricity will be from low carbon sources, from renewables, nuclear and clean coal
• The average new car will emit 40% less carbon than now.

Responding to today’s government energy announcements, John Sauven, executive director of Greenpeace, said: “If this plan becomes a reality, it will create hundreds of thousands of green jobs and make Britain a safer and more prosperous country. This will be good for the British economy and, in the long-run, save householders money as we reduce our dependence on foreign oil and gas.”

The government announcements said that around 50% of the annual emissions cuts between now and 2020 will be achieved by further greening of the electricity mix. “We expect 40% of the electricity we use in 2020 to come from low carbon sources — 30% from renewables, the rest from nuclear (including new build) and clean coal. We need to all-but eliminate carbon from electricity by 2050,” said Miliband.

The UK Renewable Energy Association said that “while delivery will be the crucial test, and concerns remain, the announcements made today undoubtedly demonstrate a step-change in political leadership that is desperately needed to ensure renewables can tackle the serious threats of UK energy security and climate change.”

How Much Wind Power?

Earlier this week, the UK’s Confederation of British Industry called on the government not to rely heavily on wind power in its energy planning. Reacting to today’s announcements, Maria McCaffery MBE, chief executive of the British Wind Energy Association, said: “We welcome the government’s commitment to delivering on the 2020 targets. They have rightly ignored the siren calls to abandon wind as the driving force for reaching the targets. The RES provides a clear routemap for the growth of a new £60 billion (US $96 billion) industry and the creation of 60,000 UK jobs. However, industry is now looking for a cross-party consensus on the detail of delivery. This will help convince investors that the country is serious about fighting climate change and developing domestic, renewable sources of energy.”

The British Wind Energy Association has calculated that, based on the figures in last year’s draft strategy, this implies that 22% of all electricity will come from offshore and onshore wind and another 2% from marine technologies.

Although the strategy places a strong emphasis on wind to deliver the bulk of the targets, BWEA said it is surprised that the government has not taken the opportunity to give confidence to investors by clearly stating its ambition for the size of the sector, especially offshore.

David Porter, chief executive of the Association of Electricity Producers, reiterated to the need for clarity. He pointed to the massive investment in the UK electricity system required and a number of serious issues that have to be resolved.  “Electricity companies need to invest well over £100 billion (US $160 billion) on new power production in the next 10 years and perhaps another £100 billion in the decade after. Companies want to invest, but, these are very large sums of money in a difficult financial climate. So, it is vitally important that the UK is an attractive place for energy investment,” he said.

Some Key Investments and Steps

The strategy also sets out the first investments from the £405 million (US $665 million) for low carbon industries and advanced green manufacturing announced at Budget 2009. Key investments related to renewables include:

• Up to £60 million to capitalise on Britain’s wave and tidal sector strengths, including investment in Wave Hub – the development of a significant demonstration and testing facility off the Cornish coast – and other funding to make the South West Britain’s first Low Carbon Economic Area.
• Up to £120 million (US $192 million) to support the development of a British based offshore wind industry.  
• Up to £10 million for the accelerated deployment of electric vehicle charging infrastructure.
• £11.2 million (US $18 million) to help regions and local authorities prepare for and speed up planning decisions on renewable and low carbon energy whilst protecting legitimate environmental and local concerns.
• Up to £6 million (US $10 million) to start development of a ‘smart grid’, including a policy road map next spring.

Other related actions include:

• DECC (Department for Energy and Climate Change) to take direct responsibility from regulator Ofgem for establishing a new grid access regime within 12 months.
• Launch of the new Office for Renewable Energy Deployment within DECC to speed up the growth of renewables in the UK.
• The final shortlist of the schemes for the Severn Tidal Power feasibility study is confirmed as three barrages (including the Cardiff-Weston barrage) and two lagoons. Three innovative schemes have also won funding to support their development.
• A consultation covering the changes to the existing Renewables Obligation, such as extending the life-time of the RO to at least 2037 and the introduction of a 20-year limit on support, to make it capable of delivering some 30% of our electricity from renewables.
• Approval for the UK’s largest biomass power station on Teesside. The £500 million (US $815 million) 295 MW, Tees Renewable Energy Plant, located at Teesport in northeast England and being developed by British company MGT Power Limited, will be one of the largest-ever biomass plants to be built in the world, and one of the largest of all renewable energy projects.  The Tees Renewable Energy Plant will begin commercial operation in late 2012.

Growing the Workforce

Commenting on the strategy, Trade Union Congress general secretary Brendan Barber said: “That will require a highly-skilled workforce, and it is very welcome that the government is recognizing today the need to help re-train workers who have lost  their jobs in traditional manufacturing to give them the skills they need to take up jobs in the new, greener firms, and become part of the transition to a new style, low carbon economy … there is no conflict between economic success and a low-carbon world. Indeed the only prosperous future for the UK is to use our know-how to ensure that we become world-leaders in low carbon industries.”

Don’t Forget Heat

While the focus is on electric power generation and transport, heat is also an important issue. The Renewable Energy Association said that the announcement that renewable heat projects being built today will be eligible for the forthcoming Renewable Heat Incentive (RHI) should help ease the paralysis in the renewable heat industry. A similar announcement has been made for Renewable Electricity Tariffs. However, the REA is still pressing for the RHI to be expedited as heat is the biggest single use of energy in the UK and renewable heat still has no dedicated support.

Graham Meeks, director of the UK Combined Heat and Power Association also welcomed the announcements, “but they are still only half the picture. No comprehensive energy strategy can be thought complete without fully factoring heat into the equation. And it is noticeable that it is still the junior partner in the strategy documents published today … We need to see a fundamental change in perspective in energy policy if we are to meet the challenge of arresting climate change in the most cost-effective way. Integration is key, as is a holistic vision. Compartmentalising energy policy in the way we have seen today is simply no longer an option. Such an approach to energy policy may be convenient, but it isn’t clever.”

The Money To Deliver?

Several groups have warned that the government needs to ensure an appropriate long-term budget to make sure the plans can be delivered. Robin Oakley, head of Greenpeace’s climate and energy team in the UK, said: “If Miliband’s vision was to become a reality it would create hundreds of thousands of green jobs and make Britain a safer and more prosperous country. But that won’t happen with the paltry budgets being offered by the Treasury. It is scandalous that Miliband’s low-carbon ambitions, which have potential to create whole new green industries, are met with a budget that is only about half the amount the Chancellor allocated for bonuses for a bunch of failed RBS bankers.”