We all have an action on our ‘to do’ list that gets bumped for something more important. Each week, it will sit at the bottom of a notepad, uncrossed and unloved, left stranded for the following Monday. For Whitehall ministers, it’s a clear and proactive renewable energy policy that continues to float at the bottom of the page.
At the recent World Economic Forum, it was widely agreed that wind and solar now provide cheaper energy than fossil fuels. The US is adding 125 solar panels every minute and even the Chinese have done a ‘renewables U-turn’ after decades of building coal fired power stations for fun. The UK continues to be muddled in its thinking, not really committing to anything, but trying to do a bit of everything, badly. A bit like a dodgy wedding buffet.
Trivial issues such as negotiating our way out of the EU, a prison system in crisis, quelling arguments with guards pushing buttons on Southern trains or trying to prevent the wheels completely falling off the NHS trolley all continue to hold the agenda.
But, unfortunately, we have carbon and environmental targets to hit and a looming energy crisis to navigate.
Unless Tony Blair gets his way, life after the EU in terms of our energy targets is unlikely to be much different as we’re tied into global climate change agreements. In fact, it might be easier to hit overall targets rather than the specifics as laid down by Brussels.
Under their directive, we’re benchmarked to produce 30% of our electricity from green energy sources, 12% of our heating and 10% on transport along with various recycling targets. The good news is in 2015 renewable energy contributed 25% of our electricity. Gas still leads with 30% with coal and nuclear around 21% each. The remainder comes from oil or is imported from France or the Netherlands. By not being in the EU, the UK can cherry pick the easier percentages, notably ‘electricity’ in order to hit its overall target of 15% by 2020……and 40% carbon neutral by 2030.
With coal, supposedly being phased out by 2025, which energy source will take up the strain?
The sensible answer is green energy due to falling production costs and rapidly advancing areas such as battery storage technology. Not to mention it is a much safer form of energy that won’t turn us into ‘Readie Brek’ kids if a few plutonium rods slip loose. Just ask the residents of Fukushima, where house prices are probably still keenly priced.
So why is nuclear still being pushed by the DECC? For year’s government policy has dictated plants are privately funded. Hence the French and Chinese stumping up £18bn to build Hinkley, however that policy may well have to change if that industry is to stand a chance.
With nuclear, all of the costs are front-loaded. Reactors take about 10 years to build which is a long time from the first spade breaking soil to any actual electricity going into the grid. Toshiba is a classic case in point. Project delays and a $3bn overspend in the US has seen it walk away from NuGen, a proposed plant in Moorside, next door to Sellafield which would have powered 6m homes. That was supposed to be connected up to the grid by about 2025 at the same time Hunterston B in Scotland (another reactor) gets shut down.
Nuclear power stations – of which the UK has seven, containing 15 reactors – have a life span of about 40 years, but take around 60 years to safely decommission. That doesn’t seem a great return, but nuclear does generate consistent power. If we were reliant on a stiff breeze, to turn the blades that boil a kettle life would be pretty frustrating.
So, to cover our electricity needs we’ll likely need a mix of renewables, nuclear and gas, but it’s the split that is crucial in order to meet our demands.
What about our EU heating energy and transport targets? Let’s tackle transport first.
Research points to 9,500 people dying each year due to air pollution. London leads the way in failure, as we return to pre-war ‘pea soupers’ with vans and lorries merrily chucking out diesel fumes at a rate so lung-cloggingly scary you might as well go back on the Benson and Hedges.
The advent of electric cars promises to change this, but (funnily enough) they need electricity, a lot of it and specifically ‘baseload’ electricity which will put a massive strain in the grid. According to TFL, if London went all electric, it would require two additional Hinkley’s. Expand that across the UK, that’s about 20 new nuclear plants, all costing about £20m, all taking 10 years to build. Essentially, a nuclear policy would leave our coastlines littered with semi-constructed, live or decommissioning plants which is unlikely to please the tourism industry.
Put simply, electric vehicles require need an energy solution before more of them start rolling off the production lines…..we’re back to the muddled thinking I mentioned at the start.
In terms of heating energy, we need to look at what biomass, anaerobic digestion, combined heat and power systems or geothermal heat pumps can fully achieve. 31m tonnes of food waste is produced each year and around half goes into landfill which means AD could be working harder. Many of the projects we’ve funded – especially within the agriculture industry – typically produce around 500kw, which is plenty to power that business and put decent amounts of clean energy back into the grid.
Solar is unlikely to the be the answer for the UK. Much like the dash to Tesco’s to buy coals, sausages and minted lamb kebabs for an impromptu BBQ when the weather is set fair, solar may not be a consistent enough form of power on a larger scale especially with the price or volume of land required.
Harnessing nature through wind and tidal is a more practical solution. We seem to have gotten over the upper class ‘blight’ windfarms contribute to our rolling hills or shore lines. And the team at CMF Capital has been busy funding various projects, each producing enough power for around 2,000 homes throughout the year. Admittedly our work won’t tackle climate change on its own, but business owner’s minds are now open to the opportunities these projects present.
The conclusion to all of this? Based on the rapid advances the renewables industry has made in the last few years it is now a compelling energy policy. Set against the complexities of nuclear and our need to meet climate change targets. The problem is the major power companies and leading governments are still not investing enough when it provides a truly compelling reason to do so.
