On Wednesday 15 July 2009, the UK government published its plan to make the UK a low carbon economy. It is good on electricity, quite good on energy efficiency and heat, but bad on transport.
The most significant points on electricity are that the government will give the energy regulator, OFGEM, a new primary duty to promote the low carbon transition. This is potentially useful but has to be properly enforced. In addition, the Department of Energy and Climate Change (DECC) will use its reserve powers to operate renewable grid connection, so that new schemes have to wait less long. Speeding up grid connections, so that developers do not have to wait a decade before they can actually sell the electricity they produce, is essential. The government will give £60 million in grants to marine renewables and £120 million to offshore wind – this will include grants to manufacturers. The fact that the UK has Europe’s best wind resource but manufactures no large wind turbines is nonsensical and, because sterling has fallen significantly against the euro, costs for UK wind developers have increased about 30% over the last year. And with UK unemployment now approaching 2.5 million, and the UK steel industry closing plants, it is obvious for climate, economic, social and political reasons that we should build some turbines in the UK. Friends of the Earth and the trade union, Unite, are running a joint campaign to tell the Business Secretary Peter Mandelson to make this happen.
In his statement, climate secretary, Ed Miliband, said that energy bills will not go up before 2015, because of low carbon transition. By 2020 they will go up 8%. It isn’t at all clear how he thinks they will be kept stable for the next six years, but it’s good that the government is now saying openly that fuel tariffs will rise substantially. He also said that, after the current voluntary agreement with energy suppliers expires in 2011, social tariffs (which mean that the cost per unit is lower for low-income people who need to use more energy because they are unemployed, retired, ill or have young children) will be made mandatory. This is sensible and welcome. However, this still means two more winters when many people will die from cold unless action is taken to insulate their homes, or low-income groups are given more money to pay their bills, or energy companies do more on the existing, voluntary social tariffs.
In his response, the Conservative shadow DECC secretary, Greg Clark, said that many of these policies were taken from Conservative papers (which is broadly true), and that policy uncertainty adds to the obstacles and costs of renewables developers (definitely true). Unfortunately, the Confederation of British Industry (CBI), which is supposed to represent renewables developers as well as its other members, has added to the policy uncertainty by calling for the UK wind target to be reduced, and more emphasis be placed on nuclear. And the Financial Times is supporting the CBI call, despite accepting that “an Atlantic island certainly has a comparative advantage” in wind. This is illogical. The UK is third-from-bottom of the EU renewables league, above only Luxembourg and Malta. New nuclear power stations are needed as they are less damaging than fossil fuels, but will not contribute significant amounts of power before 2020.
We cannot afford to pick between different low carbon options. We must pursue all of them – or at least most. The first exception is nuclear fusion, on which billions have already been wasted. Fusion has been promised ‘in the next 20 years’ for the last 20 years, and we are still told that it is 20 years away. The second exception is biofuel for surface transport. At present, these are not actually low-carbon – they are often more damaging to the climate than the oil they replace, if grown with artificial fertilisers and pesticides. And if the indirect effects of forcing food to be grown elsewhere (which often results in deforestation) are included, many existing biofuels are significantly more climate-damaging than oil. Yet the government’s “low carbon transport plan” will promote biofuels, whatever their climate impact.
Surface transport should run on electricity. Future biofuels, grown organically and on land not suitable for growing food, should be used only for aviation. Policy Exchange, a centre-right think tank which is influential with the Conservative Party, is publishing a report on this next week.