Climate change: "we're doomed!" or perhaps not!

Lord Redesdale

Private Frazer’s catchphrase in Dad’s Army reflects the mood at many Climate Change discussions. The decarbonising targets of an 80% reduction by 2050 are challenging, to put it mildly. However, it may be possible to reach our targets on emissions, although there is a mountain to climb.

First the good news, since 1990 is that the UK has cut emissions by 42% while over the same period our economy has grown by two-thirds. The reduction has been achieved through the phase out of coal power stations, energy efficiency that accounts for 17% and the growth in renewables. These to an extent are the easy wins; the next steps are going to be harder and will have a significant cost.

The Government, through signing up to the Paris Accord, has agreed to an 80% reduction in emissions by 2050, although many scientists believe the 2050 target needs to be brought forward. This sounds great but, and there is always a but, delivering the reductions will need not only a move to decarbonising generation but also removing fossil fuels from heat generation and transportation. This may be the most difficult part. Is it feasible to replace gas boilers and fossil fuelled cars with electric? And where will the electricity come from?

Renewable heat is going to be one of the challenges that will need to be rapidly addressed and is one of the most problematic. The assumption that gas will be phased out for industrial and domestic boilers by electricity would, if achieved tomorrow, increase carbon emissions. Gas boilers in the home can be 95% efficient; if replaced by electricity then the losses from primary fuel to use need to be factored in.

Over 50% of our present electricity requirements are met by burning gas, large gas plants are around 70% efficient, that means thirty per cent of the energy is wasted through generation. Electricity transmission losses on the electricity grid are higher than the transmission losses suffered by the gas grid. According to the latest figures, a half per cent of gas is lost through transmission a year, and unused gas sits in the pipes whereas unused electricity is dissipated if not used. Finally, using gas efficiently at point of use has a far lower emission profile if gas is used in generation, but government targets are all based on electrification which makes no sense till we achieve 100% low carbon generation.

The UK will be reliant on gas in generation for at least the next decade, but if we are to move to replacing our heat requirements with electricity, we will need to quadruple the generation we presently have. Renewable heat is an issue the government has been grappling with and was the basis for the introduction of the Renewable Heat Incentive (RHI) scheme. Renewable heat is based on burning biomass with the idea that the carbon is recycled by the next crop grown for fuel. There is a timescale problem in terms of our targets and that is wood takes longer to produce than our targets allow.

Biomass also has higher carbon content for KWh produced than gas, so we may in fact, through moving to biomass, be increasing our C02 emissions in the short to medium term. The future of the RHI is also in doubt as there is no commitment by the Government to renew past the scheme’s present fixed term.

The next problem area in the progress towards a low carbon economy is that one third of our emissions come from the transport sector. To electrify the circa 27 million vehicles on the road would mean quadrupling the entire electricity generation of the UK to meet charging requirements.

Charging an EV at home can more than double the electricity usage of that home. The cost of the electricity makes EV ownership attractive on the cost per mile, at present around 4p, but will cause real headaches for the grid when mass roll out starts to happen. Software that charges only at off peak is a short-term solution but the sheer volume of power needed will mean that we will need to build a lot of new nuclear, wind and solar.

Governments have since privatisation achieved low energy prices by basically avoiding the cost of building new power plants and distribution infrastructure. Following the dash to gas in the eighties almost no new gas and no new coal plants have been built and the last coal plant opened was in 1987. There is no specified fund for this cost and any spare finance has been tied up in Hinkley Point C.

The present subsidies and cost of renewable roll out is met through several levies such as CRC, CCL to name two. In all probability, the Government will increase taxes on fuel to meet investment needs. This could hurt as, following the implementation of the new business energy efficiency taxation regime next year, 70% of your fuel bill will be taxation.

The new tax element will include past elements such as general taxation but will include the cost of ROCs, FiT, RHI, CCAs, CCL, CFD and up till April CRC. From April, these will all be wrapped into one tax - the business energy efficiency taxation regime collected through CCL, the climate change levy. This is the element that will add up to the 70%.

The move to a low carbon economy will cause the problems set out above but also should create major new opportunities for the energy management community. The business as usual approach will need to be challenged, but there is still the hope we will hit our carbon targets.

Join us at EMEX, The Energy Management Exhibition that will be held at ExCeL London on 21 and 22 November 2018.

Get your free tickets at from the link below.

Lord Redesdale

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