please put any comments, as a comment, and or send to John Baldwin ASAP. There are only hours in which to make a submission.
The energy dimension to
A sustainable recovery pathway
Overview – a Green New Energy Deal
The pathway to recovery from this economic downturn must take us in a new direction, not return to the unsustainable model of the late 20th century. Extreme energy price volatility, climatic disasters and an unsustainable financial system have led to the present crisis and shown what we need to avoid in future.
That is why experts like Professor Lord Stern have called[1] for at least 20% of the economic stimulus packages now being put forward to be deployed on ‘green’ initiatives. Analysis[2] shows that President Obama’s recent package delivers about 12%, the Asia Pacific region led by China achieves 23% while France and Germany average 15%.
The UK package is yet to be fully defined, but is likely to require a green stimulus component around £10bn to match these aspirations. A major part of that investment should be deployed in the energy sector, led by energy efficiency. We can achieve a substantial benefit in jobs and progress towards the sustainable recovery pathway by investing a modest amount in renewable energy.
The immediate investment proposed totals [£465m] in the four areas summarised below. We support the proposal of creating a ‘Green Bond’ issue to fund this.
Decentralised energy
- ¶ Refinance and extend the Low Carbon Buildings Programme to 2011 with an additional £230m, creating some 10,000 jobs and establishing a trajectory to make government’s 2020 target of 7m sustainable homes realistic.
- ¶ Provide an additional [£75m] in Bioenergy Capital Grants to stimulate new biomass heat projects and 100 new anaerobic digestion facilities.
Bulk energy supply and transport energy
- ¶ A [£35m] package to fund biomethane production and injection into the gas grid, a demonstration heat network from a selected biomass co-firing power station and biogas vehicles for the 2012 Olympics. Supplemented by policy and regulatory reform to accelerate consenting and strategic investment.
Energy infrastructure
- ¶ A systematic large-scale smart metering roll-out trial, strategic upgrades to the distribution network and related services supported by regulatory reform to permit strategic investment and funded with [£45m].
Skills, training and awareness
- ¶ A total of [£80m] to provide skills training for 10,000 workers in the building services sector including installations on show homes around the country.
Further details mapping these proposals into a longer term recovery plan follow.
Crucially, special efforts must be made urgently to ensure that credit being made available to industry actually flows rapidly to companies in this emerging sector.
Policy context
The following outline provides further background to the immediate investment proposals, and puts them in the context of their contribution to a longer term recovery and growth plan.
These are structured against timeframes described as follows:
- o Short term: The next two years or so, in the depth of the recession, while additional stimulus is required. An excellent opportunity to make important strategic quantum changes while economic progress is slowed.
- o Medium term: The period to 2020 exemplified hopefully by economic recovery along a new and more sustainable pathway.
- o Long term: The period after 2020.
Energy policy needs to recognise that the long term objective is a wholly sustainable energy production and interconnection system. In this context measures like carbon capture and storage may be interim solutions, but the long-run trend will be to an ever more renewable energy mix.
Centralised power and fuel production and distribution will continue to provide a substantial contribution, but this system will involve a much higher proportion of decentralised energy. Policy measures need to evolve rapidly to accommodate energy users as well as suppliers, and to achieve a coherent balance between the two. These twin approaches are reviewed individually below.
Decentralised energy
The Energy Act has created for the first time a platform which enables decentralised energy to be addressed, by introducing innovative tariffs for heat and biomethane, and by extending the incentives for renewable electricity to energy users alongside the incentive the RO gives to suppliers.
Long term objectives
We would propose an objective to fully decarbonise the energy use of the nation’s building stock by 2035.
Medium term goals
Recent government strategy announcements plan for energy upgrades in 7 million homes by 2020 – and we would propose that be increased to 12 million. We must also ensure that the zero carbon standards to which new buildings will be constructed are robust and make full use of renewable energy incident on the site. Similar measures are needed in the non-residential building stock.
The overall cost of upgrading the homes with energy efficiency and renewables will run to billions. The introduction of effective renewable heat and electricity tariffs in 2010 and strong legislative measures supporting energy efficiency will enable the bulk of this investment to come from building owners and occupiers, supported by the financial sector. Government support will be needed as a market catalyst and for the social and rented sector and fuel poverty alleviation.
Short term opportunities
The electricity and heat tariffs will be the primary driver towards the target above and ideally both should be introduced together by the start of 2010. Alternatively, there is an opportunity to prepare the market for their introduction through extending and refinancing the Low Carbon Buildings Programme until 2011.
Expanding the LCBP to deliver 70,000 systems in 2010 would put us on course for the cumulative 2020 target of 7m upgraded homes. The non-domestic phase of the programme should be extended too. The following adjustments will enable the programme to achieve this growth:
- o Open up Phase 2 to competition from all suppliers and to new products
- o Reverse the funding limits imposed on Phase 1 in Nov 2006 and March 2007
The additional funding required for this extension would be £230m. Indicatively this would safeguard and create a total of nearly 10,000 jobs[3], many of them in the building services industry. Failure to prepare for the introduction of the tariffs will suck in imports and undermine UK competitiveness.
Decentralised energy will also make a contribution outside the building sector and there are opportunities to pump-prime this too. We propose that the Bioenergy Capital Grant Scheme is expanded with a further [£75m]. In addition to new biomass installations it should be opened up to biogas plants and biomethane injection.
Centralised and transport energy
Long term objectives
The government can provide better certainty for business by setting firm dates for establishing sustainable, secure and fully decarbonised electricity, gas and liquid fuels supplies. We support the 2030 date proposed by the SDC for decarbonising electricity and recommend early analysis to set a date for the gas grid.
Medium term goals
As milestones on the pathway to a sustainable energy infrastructure, the following targets should be set for 2020:
- o An internal target for 20% contribution of renewables to total energy (this would safeguard the probability of meeting the legally binding 15% EU goal).
- o Establish nationwide infrastructure for electric and fuel cell vehicles including renewably powered charging facilities and integration of the electric vehicle fleet and hydrogen as aspects of storage for the broader energy network.
- o Active support for R&D and commercialisation of second generation biofuels technology to enable a significant contribution to existing EU targets.
- o The capture and distribution of heat used in existing power plant, where feasible[4], and the requirement that any new non-renewable generating capacity is able to productively use its surplus heat and fit CCS (assuming it is proven).
The majority of the investment for these developments will come from traditional industry funding sources, provided that the regulatory regime is appropriate, clear and stable.
Short term opportunities
Immediate short term actions to accelerate activity in this area are:
- o Streamlined consenting both for generation projects and related infrastructure.
- o Extending the 17 year cap on eligibility for RO plant to at least 20 years.
- o Converting 100 buses to operate on biomethane (produced by the new AD plants above and gasification plant below) for use at the 2012 Olympics[5].
- o Reversing the decision to slow down the annual quotas in the Renewable Transport Fuels Obligation.
- o Ensuring that the policies implementing the Renewable Energy and Fuel Quality Directives give greatest rewards to the most sustainable biofuels.
- o Part-funding the installation of one demonstration large scale advanced waste gasification plant for the production of biomethane.
- o Identifying the most suitable existing (biomass co-firing) power station for early retrofitting of a heat network, and implementing it.
Many of these are policy actions rather than tangible investments, as bulk energy is inherently less relevant to projects over short timescales. The combined cost to the government stimulus package would therefore be [£35m].
Energy infrastructure
Long term objectives
There are changes required to our energy infrastructure, to accommodate a higher contribution from decentralised energy and changes to the bulk energy market including the potential development of a hydrogen network. These should be strategically planned and implemented to coincide with developments to the energy system.
Medium term goals
Some of the major medium term requirements are:
- o The development of a strategic on- and off-shore transmission grid to ensure capacity for all planned new generation capacity and improved connectivity with neighbouring countries.
- o To enable rapid development of the decentralised energy sector the distribution infrastructure also needs upgrading from passive to intelligent networks.
- o Future-proofing the user interfaces through the use of smart meters and interactive load management.
Short term opportunities
Immediate short term actions to accelerate activity in this area and create additional employment are:
- o Street-by-street smart metering roll-out trials in two local areas.
- o Provisions for the gas network to accept biomethane from renewable sources and early injection system demonstrators in four different regions.
- o Revision to the transmission regulation regime to enable strategic planning and investment in a coordinated electricity network both on- and off-shore.
- o Revision to the distribution regulation regime to permit strategic network reinforcement in advance of proven consumer need.
- o Upgrades to low rated switchgear and urban substations and reinforcement of distribution networks to enable connection of more decentralised systems.
- o Trials of new approaches to enable networks to provide acceptable connection for distributed energy, such as Active Voltage Management, autonomous control, demand-side management, dynamic ratings and associated controls.
- o Full funding of the Centre for Sustainable Electricity and Distributed Generation and the Electricity Networks Strategy Group so they can meet their objectives.
The combined investment in these activities is estimated at [£45m].
Skills, training and awareness
Long term objectives
This is a new industry sector expected to be the major energy provider in the long term and to contribute more in 2020 to the UK mix than either coal or nuclear energy. It is also a sector where the opportunity still exists to establish an early mover advantage and become a significant player on the world stage.
Medium term goals
Some medium term requirements are:
- o A major increase to the training and educational facilities reflecting the modern sustainable energy technologies, which will be adopted.
- o Research and development programmes co-ordinated between industry, academia and the various government departments and agencies involved.
- o A far higher level of awareness of the requirements for a sustainable economy including the implications of a sustainable energy system.
Short term opportunities
This is a prime area for supporting employment through re-skilling, especially in areas related to the hard-hit construction sector. We propose that government provides [£80m] for:
- o Training programmes in energy efficiency and renewables installation skills for 10,000 workers in building services-related industries.
- o The installation of advanced sustainable energy equipment on unsold show homes to provide on-the-job training and local demonstrators of the technologies – and to enhance their saleability.
[1] An outline of the case for a ‘green’ stimulus; Alex Bowen, Sam Fankhauser, Nicholas Stern and Dimitri Zenghelis; February 2009
[2] A Climate of Recovery? The Green Dimension to Economic Stimulus Plans; HSBC; February 2009
[3] A recent survey of members by the REA shows that companies in the decentralised renewables market employ on average 10 people for every £1m of turnover. They project incremental employment of 7 for every £1m of new turnover. Based on analysis elsewhere in the economy these figures can be multiplied by between 2 and 3 to account for employment up the supply chain.
[4] An estimated 4% of the UK’s heat demand could be met by capturing heat from existing non-CCGT stations: The contribution of heat to UK energy scenarios; Institution of Civil Engineers; March 2009
[5] At present there is a risk that London will reverse the trend towards sustainability established by previous Olympic Games and revert to fossil fuel powered transport
please put any comments, as a comment, and or send to John Baldwin ASAP. There are only hours in which to make a submission.
Note to Claverton from Joihn Baldwin:
URGENT TO GET CLAVERTYON FEEDBACK – get it to me and I will pass it on to REA
John Baldwin
MD, CNG Services Ltd
Tel office on 0121 707 8581
From: Philip Wolfe [mailto:pwolfe@r-e-a.net]
Sent: 03 March 2009 18:48
To: REA Membership
Subject: Stimulus package initiative – immediate feedback appreciated
Dear member,
We have identified an opportunity to make suggestions on specific renewable energy content in the proposed recovery stimulus package. Unfortunately the time window is very short and we will need to release this in the next couple of days. We have therefore drafted the attached and would appreciate any swift feedback on major errors or omissions.
<<0903GreenNewEnergy0-3.doc>>
Treasury has suggested that this should address areas where short term stimulus can bring immediate returns (especially in the form of jobs). This response is therefore weighted towards decentralised energy and small-scale applications, though we have also suggested several early ‘barrier busting’ opportunities in other sectors.
My understanding is that it is important to put a stake in the ground now (in time for the budget), but that the detailed implementation (and funding breakdowns) can follow at a slightly later date. We are doing more work to try to firm up the figures in brackets by noon tomorrow. Any numbers you can give to help build up these funding requests would be appreciated.
I am sorry to allow such a ludicrously short response time on this, but would appreciate any input you are able to give.
Best regards,
Philip Wolfe
Director General
Renewable Energy Association
17 Waterloo Place, London SW1Y 4AR
Tel +44 (0)20 7925 3570
Fax +44 (0)20 7925 2715
UK Renewables to expand ten fold! The EU Renewable Energy Directive requires the UK to meet 15% of total energy demand from renewable sources by 2020.
There is a vast potential for distributed energy in two fields which do not seem to have been mentioned above
1/. Development of a viable Biofuel from CO2 via Algae industry using the exit gases from anaerobic digester and other waste disposal technologies which produce CO2.
2/. Make use of the vast “un-developed” area of UK open air car parks by installing Solar PV above them. This would also catch rainwater. If a car park was near an aerobic or other CO2 producing facility, then the algae/co2 process – which requires sunlight – could be installed instead of PV.
3/. For domestic premises leasing/hire purchase of Air to Water Heat Pumps, and Offgrid PV for lighting circuits, could make a big contribution. Few householders have the capital to match grants and/or are in a position to borrow it
Muddled thinking rules. Our societies do not need ‘green’ jobs, they need jobs that will ‘maximize the value they add to society, at minimum resource intensity and loss’. Quality jobs in quality organisations, on the sustainabilty journey! http://trailblazerbusinessfutures.wordpress.com/2008/11/
Many will be in renewables, the effective use of energy and working to continually reduce the resource intensity of products and services.
By educating and working to liberate our creativity and ingenuity, many will be in industries and services not yet envisioned.
What we must recognize that if we are to achieve this, whilst some businesses will lever an ethical stance to their advantage, most businesses cannot decide what constitutes adding value to society; only society can, in the form of customer’s wants and government’s willingness to let them be supplied.
dd
We need to ask how we can stimulate manufacture of the generators, gearboxes and control systems. all can be done in existing factories – if the front end design is pushed.
Qernard Quigg
Dave,
I agree that this is woefully inadequate, and needs to include the building up a renewable energy manufacturing industry. As I understand it there are no UK grid feeding (large) wind manufacturers in the UK, and all turbines (for wind farms) are imported, even if some components are manufactured here, eg blades by Vestas subsidiary. Once there were two UK manufacturers, WEG and Howdens, -at a time when the UK market was so small that they had to export to the California market. Both were allowed to withdraw from turbine manufacturing, or went out of business. At the time the ETSU managers thought that was fine, -renewables were a marginalised sector.
Now the UK has an expanding wind market but not manufacturers, -poor timing. The UK suffers from importing turbines, in that competing markets such as the US are larger, have more money, and can delay windfarm installation. Additionally, the weak pound makes these turbines expensive.
Rather than throw money at the car industry -or other examples of trying to prop up yesterday’s economy, a shift from that type of manufacturing to green energy manufacturing should be the policy.
West Midlands ex car component manufacturers are capable of producing gear boxes, and NW or NE UK industries are just as capable of machining and bashing metal as elsewhere. British design engineering is not inferior to German, Danish, US, or elsewhere.
One of the lessons of the credit crunch should be that Britain cannot live off a purely service type economy; it needs a more broadly based economy and manufacturing should not be given away, or “out sourced” on the scale it has been. Ownership of eg the electricity energy industry by British based interests seems to be at an all time low. This makes Britain vulnerable and lacking control over responses to world energy conditions.
This does not just apply to wind turbines; the new MCT marine current turbines are already using German gear boxes. Wave machines eg Pelamis will increasingly be manufactured elsewhere. I believe there is just one UK based PV manufacturer.
In a word, yesterday’s policy of de-industrialising Britain has failed, and is dead, -government needs to adjust.
Alexander Clarke.
From: Eric Hawkins
Sent: 04 March 2009 13:33
To: Dave A
Subject: RE: COMMENTS URGENTLY REQUESTED FROM RENEWABLE ENERGY FOUNDATION: Stimulus package initiative – immediate feedback appreciated you have only hours to react.
This stuff does not mention solar water heating at all. What are they thinking?
We should be cutting our need for gas and oil:
· Not be hostage to exporters of gas
· Reduce the impact of price rises and lower supply, one the economies of the world start improving
· Decentralize the energy generation/consumption
· Stop thinking of pumping gas all over the place
To that end:
· Reducing everyone’s heat consumption for hot water by putting a “pre-heating” solar panel on the roof, tied to an existing hot-water cylinder would have an amazing total effect. I don’t have actual numbers here, but even if the reduction is a modest 15%, that means the country uses 15% less gas/electricity to heat water. That must be a huge number.
· Get government to force/require these, and subsidise them for the homeowner by maybe 30%.
· Educate the public on solar hot water – once you install it, the energy is free and VAT-free, with zero-maintenance.
My thinking on this is because it does not give the government any money, or the Utility only benefits the buyer.
Eric
Eric Hawkins, (Export Director)
Powertech Solar Ltd
86 Cobham Road, Ferndown Industrial Estate
Wimborne, Dorset, UK BH21 7PZ
Tel + 44 (0)1202 854137
Sykpe: jayhawk10
Powertech Solar Ltd is registered in England & Wales at, Office A16, Arena Business Centre, 9 Nimrod Way, Ferndown, Dorset, BH21 7SH. No. 04131978 VAT No GB 777611402
Eric
Much better to put in piped heat supplies.
Compatible with Solar water heating.
See latest tax table to show you where piped heat sits in the overall situation.
Based on actual CO2 emissions when you burn a product.
Currently very poor use being made of biomass and the use of wood in buildings.
This system will optimise carbon capture from Biomass.
Interesting but carbon capture and storage is more important to apply to biomass than coal.
Gives the right signal not to burn good wood that can be used instead of brick and cement to build houses.
William
PS all very counter-intuitive but also logical.
W R H Orchard MA(Oxon) MBA CEng FIMechE MCIBSE MIET FEI
Managing Director
Orchard Partners London Ltd
2 Dunmore Road
London SW20 8TN.
email william
Tel +44(0) 020-8296-8745 Fax +44(0) 020-8947-5496
http://tx1.fcomet.com/~claverto/cms/carbon-footprints-of-various-sources-of-heat-chpdh-comes-out-lowest.html
Link to carbon footprints.
William Orchard