Media

Don't blow our £100 billion on wind power

16th July 2009 media

Article in The Times - may also be found HERE.

Instead of pouring money into renewable energy, we should invest in technology that will really tackle climate change.

Climate change is an existential threat. It presents huge challenges to governments and, inevitably, we will have to pay a significant price to keep the temperature from rising by more than two degrees. Politicians across the world increasingly understand this. This is in itself a big step forward in the build-up to the Copenhagen Conference later this year.

But it is one thing to understand that there is a problem and another to find a way to address it. So far very little has been achieved. The carbon concentration in the atmosphere continues to rise at an accelerating rate. The test for the Government’s renewables White Paper, The UK Low Carbon Industrial Strategy, published this week is: will it make much, or indeed any, difference?

At a global level, the future of the climate depends heavily on coal. Before the recession, China was building about two large coal power stations a week, adding the equivalent of the entire capacity of the British electricity system each year. India relies heavily on coal, as does the US, and Britain is turning back to it as well. Whether climate change is limited to two degrees is very much about whether this coal is burnt in more benign ways, or replaced by other important technologies.

That is the question that climate change policy must address. It is immediately obvious that even if all the wind turbines the Government (and the Opposition) wants are built, they will make not even a tiny dent in the carbon concentration in the atmosphere. In a few weeks, China’s coal investments would swamp the savings.

And the emphasis on renewable energy could even make it worse: for the costs of commitment to it are great —£100 billion, and possibly a lot more — and may accelerate the migration of energy-intensive industries to countries such as China and India, where coal is dominant.

Britain —and Europe — measure carbon emissions on the basis of the production of carbon in their geographical areas. And, on paper, the performance in cutting emissions seems impressive. By 2005 Britain had reduced emissions by 15 per cent compared with 1990 —and the recession has cut them further still.

But this tells a very distorted story: while we have been producing less carbon, we have been consuming a lot more. If we add in emissions caused by producing goods imported from overseas (many of which used to be produced here) and take account of aviation and shipping, Britain’s record is awful: carbon consumption since 1990 had gone up 19 per cent by 2005.

Britain is but one country among many. But it does have an historical legacy and it should not duck its responsibilities. The question that should have been at the heart of the White Paper is this: given our (limited) resources, where can Britain add the maximum benefits to this global problem? Where can it make a difference?

The answer is largely in technology: we have some of the best scientists, very good engineers and best universities in the world. Where we can really help is by investing in developing carbon capture and storage (CCS), nuclear energy and new technologies for networks, batteries and the electrification of transport. The Government deserves credit for beginning to develop some of these.

If all the £100 billion or more going to renewables went to these areas it would really begin to make a difference —especially if the collaboration was international. Wind, of course, has a part to play. But putting so many eggs in this one basket is not a good idea.

CCS technology addresses coal head on —extracting the carbon, and putting it back in the ground. Britain has a big opportunity here: we have lots of depleted gasfields in the shallow North Sea. A coherent strategy is needed —demonstration plants, the development of a pipeline infrastructure and the co-ordination of storage facilities. Having been a pioneer in developing the North Sea gas industry, Britain is a natural location for developing an offshore CCS industry.

Then there is the scope for transforming electricity networks. Intelligent networks and smart meters open up the prospect for managing demand in an altogether revolutionary way — from the control of the grid itself to the management of electricity to the fridges, cookers and other white goods in homes. Add in batteries and the central problem of electricity supply —matching demand and supply instantaneously—begins to be solved through storage. Batteries are also crucial in moving cars from petrol to electricity.

These new technologies may do for energy what the internet has done for communications. But progress will not happen spontaneously: research and development is one area where government commitment, strategic vision and £100 billion would make a lot of difference. Even then it will take time for us to see the fruits.

But the White Paper is driven by hitting 2020 targets —the period within which we are largely stuck with existing technologies. This is not all the Government’s fault: the Copenhagen negotiations and the EU directive all focus on 2020. In trying to put together a global agreement for the period after 2012 when the first Kyoto agreement ends, there has been a overwhelming focus on the following eight years — a mere blip in the climate’s and the energy sector’s evolution. But even within this very short-term context a further question to ask of the White Paper is: what is the most cost-effective way of achieving the 2020 target?

These costs matter. The challenge is how to raise at least £100 billion by 2020. Where will the money come from? Who is going to pay? Putting aside that we are in the middle of an economic crisis, ultimately raising this money relies on taxpayers and customers. Will they be willing to pay? Will they even be able?

The White Paper is at least courageous in pointing out that bills will rise, but its estimates are conservative, and rely on all the energy efficiency measures actually working. Forecasts of green costs have been far too optimistic in the past: better to take the Government’s numbers and add a large margin on top.
Whether voters will recognise that these costs are yielding very little in terms of an impact on global warming and will continue to want to pay them remains an open question.