As energy ministers from around the world prepare for a clean-tech summit in London, Caspar Henderson asks what the host country – where the last industrial revolution began – can bring to the table.
Energy ministers from 23 leading economies including China will meet in London next week (25-27 April) at what is billed as a high profile global summit on clean energy and how to accelerate the development of a low carbon economy. The event will be co-chaired by Ed Davey, the UK energy and climate change minister, and Steven Chu, the US secretary of state for energy and will run alongside a meeting of the UN Sustainable Energy For All initiative.
The host government hopes it will boost Britain's reputation as a leading innovator in green energy technology and as a destination for investment, and is reported to be preparing to launch a blitz of initiatives at the summit. It will feature a series of ministerial visits to low carbon projects, such as Thanet offshore wind farm, a biomass plant at Tilbury, a nuclear centre in Sheffield and the Olympic site in London.
But what of the reality behind the headlines and the hype? What, in particular, does Britain bring to the table, both by way of good and bad examples and as a site for future opportunity and challenges? Some answers may be found in the International Energy Agency's first review of UK energy policy since 2006, which will be published during the summit. But ahead of that, here is a guide to some of the territory.
Though economic growth has been sluggish at best since 2008, Britain is still the world's sixth or seventh largest economy. It has a history as a pioneer of new energy technologies – from the industrial revolution beginning in the late 18th century through the invention of the steam turbine in 1884 to the world's first civil nuclear reactor producing electricity on a commercial scale in 1954.
Despite an early lead in nuclear power, Britain remained heavily dependent on coal for power generation until the 1980s when, after an epic struggle with the nation's miners, a Conservative government initiated the “dash-for-gas” in which gas turbines became the principal favoured new technology of power generation.
Thanks to this switch, declared carbon emissions fell for more than two decades even as the economy underwent one of the longest periods of uninterrupted economic growth by conventional measures in its history. In 2010, Britain was the world's tenth largest emitter of carbon. (Although, because it was the first and the largest emitter for most of the 19th century and one the largest for much of the 20th, its share of the historical total puts it closer to the top. In addition, a significant proportion of its carbon emissions are now “off-shored” to China and other places where the goods it consumes are now manufactured.)
From the late 1970s onwards Britain also exploited significant deposits of oil and gas in the North Sea, enabling it to maintain its historic energy independence for another three decades. Production from these reserves accessible by conventional means peaked around the turn of the millennium. In 2004, gas-fired generation accounted for approximately 40% of total electricity production, coal for 33%, nuclear for 20%, hydroelectricity for about 1% and other renewables 3.5%.
Successive UK governments have claimed to be early movers in addressing the challenge of climate change. Margaret Thatcher, prime minister from 1979 to 1990, first declared it a matter of paramount global concern in 1989. Since then, there has been broad rhetorical agreement across the political spectrum that radical, ambitious action to address the challenge is essential. So-called scepticism about the science of climate change has been largely confined to the far- and lunatic-right and has attracted little political support, at least until recently. The coalition (Conservative/Liberal Democrat) government that came to power in 2010 declared it would be the “greenest government ever”.
That’s the history, but what now? The Climate Change Act of 2008 commits Britain to reducing its greenhouse gas emissions by 80% below their 1990 levels by 2050. To do this, advises the Committee on Climate Change, an independent body set up to advise parliament, the nation will need to largely decarbonise its production of electricity by 2030 because other sectors, notably air transport, are thought likely to remain dependent on high-carbon fuels. And the conventional wisdom is that this will best be achieved with a triad of technologies: renewables, nuclear and carbon capture and storage (CCS) for emissions from gas and coal-fired power. In addition, a massive increase in energy efficiency and demand management measures isidentified as crucial.
Renewables such as wind and solar power currently generate less than 4% of UK electrical power. Total investment in this area was US$9.4 billion (59 billion yuan) in 2011, ranking Britain seventh in the world. This was up from US$7 billion (44 billion yuan) in 2010, but less than the US$11 billion (69 billion yuan) in 2009, which put the country in third position. Overall, the United Kingdom's green economy is said to be worth around US$191 billion (1.2 trillion yuan) a year, employing nearly a million people, and growing at 5% a year – much faster than the economy as a whole.
Britain is favoured with excellent conditions for wind power and currently leads the world in deployment of offshore wind, with the world's two largest arrays. Onshore wind remains more controversial, frequently opposed and blocked by conservationists and others who wish to protect the beauty of the landscape. Still, an onshore array with 370-megawatt capacity is now scheduled to go ahead on the Shetland Islands, despite strong local opposition and concern from bird conservation organisations. Generating enough power for 175,000 homes, it may prove to be the world's most productive wind farm.
Britain is not famous for sunny weather but support for photovoltaics has been relatively strong thanks to a feed-in-tariff that guarantees generous – some say over-generous – returns to households that invest in an installation. The country has large wave and tidal resources, capable of meeting around 20% of electricity demand, at least in theory. Britain is a lead centre for research but the technologies to exploit these resources are, however, immature. The government recently announced a US$30 million (189 million yuan) prize for companies developing promising new approaches.
Carbon capture and storage (CCS) is another area where Britain hopes to be a first mover. Earlier this month, the government announced that more than US$1.5 billion (9 billion yuan) of public funds will be allocated to a new push to develop the technology. Energy and climate change secretary Ed Davey predicted that a CCS industry could create 100,000 jobs and be worth US$10 billion (63 billion yuan) a year to the UK economy by the end of the 2020s, by which time there could be 20 gigawatts to 30 gigawatts of power plants using the technology.
Critics doubt these claims. CCS has been demonstrated on a small scale, and similar technology has been used for years to displace the last remnants of oil from depleted wells, but there has been no large-scale commercial demonstration on a functioning power plant. Any plant is likely to cost more than US$1.5 billion and the on going running costs will be much higher than conventional, or “unabated”, coal or gas power generation. Previous attempts to create a CCS industry in Britain have foundered. “If CCS is to have a second chance,” said Dustin Benton of the Green Alliance think tank, “we need an active industrial strategy, underpinned by smart regulation and credible finance.”
Progress on a new “clean coal” power plant close to Edinburgh, under development by a US-led consortium, which aims to capture nearly all its carbon-dioxide emissions will be watched closely by friends and foes alike.
The British government's plans to revive the nation's ageing fleet of nuclear-power stations with a wave of private investment were cast into doubt by the withdrawal of plans by two big German utilities RWE and E.ON to build two new reactors through a joint venture known as Horizon. This leaves the French state-controlled giant EDF with a near monopoly of nuclear power generation in the United Kingdom – an ironic outcome for a government committed to what it calls free market principles.
EDF, which bought British Energy in 2008, has eight reactors in operation in the UK and four in development. Two reactors like the ones it wants to build England are under construction in France and Finland and they are four years late and costing nearly twice as much as predicted. The ardently free-market publication The Economist recently went so far as to label nuclear power “the dream that failed”.
Recognising, perhaps, the way market incentives actually work in the absence of a meaningful framework for internalising the cost of carbon, the British government has set out proposals for what amount to a new “dash for gas”. In March, the chancellor, George Osborne, and the energy secretary, Ed Davey, announced plans to clear the way for a new generation of gas-fired power stations across the country. They insisted this would not hamper the fight against climate change, but squaring this policy with plans to radically reduce emissions will be hard.
To enable companies to invest with confidence, the government says it will set emissions performance standards (EPS) for new power plants at 450 grams of carbon dioxide per kilowatt hour. To comply with the recommendations of the Committee on Climate Change, that level would need to fall to 50 grams per kilowatt hour by 2030. Instead, the government has announced that any gas plant consented at 450 could still be polluting at that level in 2045. Barring dramatic progress with CCS, half of the gas plants expected in 2030 – US$16 billion (101 billion yuan) worth – will be “stranded”, in other words forced to switch off early, according to a 2011 analysis by the Green Alliance.
Advice to government ministers that hydraulic fracking for gas can be extended across the whole country, thereby potentially opening significant new reserves, is likely to give further impetus to the new “dash”. New research indicates that UK offshore reserves of shale gas could exceed 1,000 trillion cubic feet, compared to current rates of UK gas consumption of 3.5 trillion cubic feet a year, or five times the latest estimate of onshore shale gas of 200 trillion cubic feet.
A key element in the British government’s drive for energy efficiency is its Green New Deal, which it describes as the biggest home improvement programme of modern times. (As an early industrial nation, Britain has one of the oldest stocks of housing and one of the least energy efficient in Europe). “The vision is an ambitious and far-reaching one,” wrote Greg Barker, minister of state at the Department of Energy and Climate Change, in The Guardian. “It will put the consumer in charge, with nationwide brands, small local businesses and community organisations competing to deliver the best offers [in energy efficiency services] – competing not just on price but on quality and service.” The Committee on Climate Change meanwhile warns that, as presently envisaged, the scheme will only reach two to three million of the nation's approximately 30 million homes instead of the intended 14 million.
Developments in renewable energy and energy policy in the United Kingdom, then, suggest a mixed picture. As BusinessGreen editor James Murray recently suggested, there is real scope for Britain, with its remarkable mix of innovative companies, to help to deliver an industrial revolution in clean technology to match the first industrial revolution in the 19th century. What happens in practice may be another matter.
Dramatic game-changing developments that set the nation truly on course for a low-carbon economy are not impossible in the medium term. There is talk for interconnectors with Iceland and Norway, which could enable the exploitation of vast amounts of geothermal power from the former and access the storage capacity of hydroelectric facilities in the latter. Such projects could one day form part of a Europe-wide network of interconnection, stretching as far as solar power in the Sahara desert. For now, though, much of this remains on the drawing board.
An issue that may preoccupy ministers at the London summit is much more immediate: the price of oil and security of supply – and notably, the prospect of an Israeli-US attack on Iran's nuclear programme, which could send prices skyrocketing if Iran attempts to disrupt traffic in the Persian Gulf, though this threat appears to be receding as Obama talks to Tehran via back channels.
Britain is now heavily dependent on gas supplies from Qatar and, for what it is worth, the British position is that Iran can be treated as a rational actor whose nuclear ambitions can be contained and legitimate aspirations met. In this regard, Britain together with other members of the European Union could prove to be an important force for stability.
Caspar Henderson is an award-winning writer and journalist on environmental affairs.
Homepage image by Nuon shows the Thanet offshore wind farm.