Smile of the day

We hope to be able to lodge an F certificate early in 2010

http://www.decc.gov.uk/en/content/cms/about/low_carbon/low_carbon.aspx

In seriousness, they are trying and every journey starts with a single step etc etc. Just 'hoping for an F' sounds more like me on a chemistry exam rather than part of the government on its own building efficiency.

Rebound Effect

(N.B. Obviously there is the excellent UKERC report on the rebound effect but don't tell anyone that I actually haven't read it fully, so I might just be repeating what they've said.)

While looking at MacKay's book, one point of discussion that came up was what would be the level of demand in the future. MacKay considered efficiency improvements in electrifying transport and heating, as well as having no electricity conversion losses, bringing demand from 125kWh per day per person down to 68.

Certainly this is possible, however we all know that improvements in energy efficiency can be cancelled out to some degree by increases in energy usage (the rebound effect). So I was thinking whether this would mean 68kWh/d/p is realistically possible and to what extent the rebound effect might reach.

Considering the direct rebound effect (e.g. engine efficiency improvements lead to driving more), I wonder if there are limits to it. For example:

• Insulating your house means you use and spend less on keeping your home warm. However if your home is already at 20 degrees before insulation you're not going to want more heat, so the rebound effect would be small (e.g. only from those in fuel poverty, who don't already have their homes at a comfortable temperature).
  
• Using electric cars rather than internal combustion may bring large energy savings. Although more people would be able to commute further or go on leisure trips more often, there is a limit to how much more driving people need, want or can do. People would obviously tire of 3 hour commutes, have only so much free time for other activities such as shopping and the average occupancy can only drop from 1.6 to 1.
  
• More efficient light bulbs means using and spending less on lighting. There is a limit to how much more lighting someone could want (lighting on all day in every room) and as most people don't currently go around in darkness, the rebound effect would probably also be quite small.
• and so on.

UKERC does estimate that these direct rebound effects might reach only 10-30% so obviously the question shifts to indirect rebound effects (e.g. money saved from fuel costs goes on a transatlantic flight).

Indirect rebound effects are harder to predict because of the multitude of economy-wide effects on different levels, so I'll just say to go read the UKERC report, and that they estimate it can often be over 50% of the reduction or even greater than 100%.

So this suggests that - in a developed country - reductions of energy use in the major categories: transport (domestic at least) and heating, could well reach the estimate of MacKay. However economic growth and the indirect rebound effect could see other sectors, I'd guess most likely electrical goods, would struggle and may well increase.

Considering that energy use (globally or otherwise) has only fallen noticably during recessions (and then by only a few percent) it does seem difficult to see a self-imposed drop from 125kWh/d/p to 100 let alone 68.

Although never say never.

It's over!

Apologies for being so quiet for the last few months, but my dissertation has finally been handed in.

For those that are interested, it was mainly a review of Sustainable Energy - without the hot air by David MacKay. Basically while there's a lot of good stuff (explaining climate change/the need for renewables, mythbusting, breakdown of current demand, explaining the physics behind technologies and a few other things), there's actually nothing new in the book.

His simplification of energy policy saw some errors creep in (wind out by a factor of 2, insisting that energy for imports be produced domestically, comparing real costs of renewables to projected costs of nuclear - £1.3billion per GW for Olkiluoto?? - and a few other bits). His sidestepping of economics and environmental concerns means the comparisons of technologies maybe interesting but of little practical use.

I also have concerns over the reducing a technology to a single figure and a few other things, but it doesn't really change his message that renewables will need to be on a large scale and we need to start saying yes to things. However the explosion of its popularity is surprising and MacKay getting the chief scientific advisor job at DECC was stunning. SEWTHA is certainly useful for anyone to read, but they'd need to have some understanding of energy policy already to see where the problems and issues are, and bearing in mind the general target audience of the book, you can kind of see why it has taken off so much.

Having said that, it's still far better than my dissertation.

Update

Following on from my last post, this mentions the number of fuel poor households is now at 5.4million. It's worth noting that the figure varies depending on whether it's households or people, or in the UK or England (because I thought I overheard on the news in the last few days, that a 4 million figure was just reached).

Either way it's a huge number, and arguably it's under-reporting. During her visit to give us a few lectures, Brenda Boardman said that the EU considers around a 7% target, but that even those spending 3 or 4% are in fuel trouble (in the UK, fuel poor is defined as 10% spent on energy)


I've been a bit busy recently trying to fit in dissertations, the beach, and considering a phd but I shall eventually split my coal vs nuclear post into two as otherwise it will be huge and never get finished.

Cough up?

"Energy bills 'too low' to combat climate change" is sure to be a headline that will provoke a lot of anger from many people, and for the 3 million plus in fuel poverty it's understandable. However, as the article mentions, the price of energy has been artifically low due to not including the cost of carbon. Similarly, the Government considered the extra £4 billion a year due to financial regulation changes was a product of a more efficient market/better regulations, rather than an unsustainable model (imagine being on a desert island: chopping down the trees provided you with shelter but later on you'd have no food)

It reminds you of the phrase: a bird in the hand is worth two in the bush, people have gotten used to cheaper energy, effectively subsidised by future generations, and view a return to normal levels as a cost increase. It's a hard thing to say to the public, but it is required and so measures to help those in fuel poverty should be stepped up (I'm not a fan of the Winter Fuel Allowance, I'd rather the money was spent on improving the energy efficiency of peoples homes but that's for another blog)

A lot of what was said in the article is good stuff but doesn't seem to be anything new, I'd guess that's down to a seeming lack of government action more than anything else, however, I should of course have a look at the study itself.

The Guardian is often frustrating in that regard, as it rarely has links for its content. I've spent several hours trying to find the one mentioned here for example, UCL mentions it while the closest I could get was this (incidentally that Claverton site has a lot of interesting stuff on supergrids which I'll probably mention when I get round to it.)

So yeah, expect angry radio phone-ins and letters to the Daily Mail, but the reality of the situation needs to be accepted for solutions to be created.

No such thing as bad policy & Internet comparisons

One of the points discussed at the conference was how creating a policy, good or not, was better than nothing - prime example being the Renewables Obligation. I can see the reasoning behind it, something that helps a little is better than having nothing at all, especially when cumulative emissions are the important factor (it was mentioned that there have been something like 40 consultations in the last year, but despite groundbreaking targets, there has been little strategy or guidance to reach them). However, there's no guarantee that the policy helps rather than hinders, and it also assumes you learn from your mistakes adequately every time. Granted these maybe likely, but surely not certainties.

Take the example of biofuels, specifically first generation biofuels. Here and in the USA especially, reducing reliance on foreign oil is a key governmental concern, and when biofuels appeared to help with emissions as well, it hit two birds with one stone. Subsidies for growing biofuels were created and the market grew quickly. But because it became rather profitable, they competed (and usually won) against food crops as well as doubts being raised over their 'greenness'. So we are more aware of problems they can cause and future policies can take these into account, but has it had a net negative effect on biofuels or renewables in general, either in industry investment or public perception?

Something else I was watching today (featuring Robert Metcalfe) also mentioned corn ethanol and despite its problems, it may have paved the way for similar things in the future (Kyoto Protocol another example, not an great target, but was the first legally binding international agreement on greenhouse gases). In that video of a talk from a venture capitalist, who started in all things internet, I personally felt some of the things he said were a little too simplistic and disagree with others (we'll run out of fossil fuels so we'll stop emitting carbon and so there'll be no climate change and energy people have had their chance to solve the energy problem now it's his turn) however because he comes from a different viewpoint there were some interesting points.

• The IT community thought the future would see ever larger and more powerful computers, but of course we now have distributed computing (PCs, the web). Metcalfe suggested the same thing could happen with energy (microgeneration and supergrids). I can understand the comparisons but even though benefits of distributed energy (redundancy, capacity) are similar I'm not sure how likely it will happen, for a few reasons. The internet was in my opinion a solution looking for a problem; the infrastructure in the energy sector can last for up to 50 years and the monopoly of the big six energy companies is likely to be extremely difficult to shake (although the computing monopoly of IBM/AT&T was defeated in the early years). However if we do end up with a World Electricity Grid, instead of the web, we could call it the weg (okay needs work) or what Metcalfe called the enernet.
• Whether something similar to net neutrality issues (different level of services and/or access given to different people) occurs with energy. The debate is still going on regarding the net and I'd guess energy neutrality issues wouldn't come up until a decent sized super grid was in place, if at all.
• Early on they calculated the physical limit for bandwidth of copper cables was quite low (14.4Kbps - now its in Gbps) so they were concerned about maximising efficiency like we are today in energy. But for reasons I don't know they got past that, to the extent they had so much they didn't know what to do with, along with an ever increasing desire for bandwidth/information/speed. Metcalfe said he was in favour of efficiency, but it's not a primary concern. So with energy, is the need for efficiency paramount or having plenty of energy? (e.g. desalination, extracting CO2 from the atmosphere, social development). Certainly plenty of energy allows us to do great things, but surely energy costs a great deal greater than bandwidth so there are limitations not present in computing, meaning efficiency is the highest priority.
• Don't avoid technologies that appear non-scalable (energy is a huge problem, needs huge solutions, i.e. are scalable). Seemed to be something more appropriate to America (although there are probably examples in the UK) in the regard that niche products and ideas that don't immediately show full market potential are currently disregarded. Innovation and development are unpredictable so obviously I agree that ideas shouldn't be disregarded based upon short term analysis
• Look for the silver bullet. The previous paragraph showed a 'don't pick winners' ideology, whereas Metcalfes' explaination that we should actively look for silver bullets is in contradiction of that. Now I do think that there will be silver bullets, but it's incredibly difficult, if impossible, to know what they are, so we should continue with the 'don't pick winners' ideology in policy making. As an aside, Metcalf mentioned that nuclear storage is a tricky issue as we are looking for a solution to last 10,000 years. But that technological advancement is so fast and unpredictable that we should look to hold it for 100/200 years (on site) and a solution will have been found in the meantime. Having spent the odd hour looking at technology singularities, I can see the logic behind this, but again although it might be likely, it's not certain. Is that good enough for policy making though?
  

So food for thought.

Future Topics

I've been a bit too busy recently to post a great deal, but I've had time to think about this blog. Simply put, I'm not sure what kind of blog this should be: a collection of my thoughts on various topics, or more of a regular commentary blog. The former is what it originally set out to be, with the hope of having people comment so I could refine and adapts my thoughts, but it's questionnable that there's going to be a lot of visitors -and therefore comments - if there is a post or two a month. The former is what I'd prefer but I think there's still going to be the odd "something interesting I found" post to make it seem that this is still active.


On an aside, this is just a list of topics for me to think about posting in the future and I'll try to remind myself to update:

Desertec/Solar in the Sahara
EU ETS
Electricity grid/balancing
Electric cars
Fuel Poverty
Rebound effect

Falmouth Energy Week

So monday and tuesday saw our little conference in Falmouth take place, and despite not being a veteran of such things, I thought it was excellent. The weather was perfect, things ran smoothly, all the speakers were great and the event even got on ITV Westcountry. It was almost information overload with so many speakers and topics, so remembering interesting points and facts was tricky, however most of the presentations should be put on the website in due course. Looking forward to next year and a wealthy source of blog material...

Hansards

I'll get back to finishing off my previous post on coal and nuclear some day soon (final essays have been completed so bar Falmouth Energy Week and the dissertation, my time is a little free-er)

However for anyone bored enough to be reading this, my tip for the day is the printed transcripts for stuff that goes on in the House of Commons/Lords. I only found them recently after a New Energy Focus article linked to them and while they aren't a hugely valuable source of information, they certainly are interesting and worth reading if you have the time.

Indeed the ability and freedom to read the debates going on in parliament is a great thing that shouldn't be wasted (and usually they're free from falling into partisan contests unlike PMQs). Following that up with watching them afterwards on BBC Parliament (if it's on) is a nice way to put faces to the names as well. As I said I haven't known about them for a while so I haven't really looked in depth, but it doesn't seem you can't search by department/category, instead having to search by member (so Ed Milliband, Joan Ruddock, David Kidney/Mike O'Brien) but that's a minor hassle.

So here's the most recent one

Coal vs Nuclear

This is something I've been thinking since I started studying energy policy and it's one I'm still not sure about.

It's hoped - but increasingly not expected - that renewables will contribute significantly towards electricity generation by 2020 (target of 15% of energy, meaning around 30-40% of electricity). This still leaves the majority of electricity to come from other sources. Bearing in mind the lifespan of conventional plants (40-60 years depending on the type) and the need to reduce energy use emissions by 80% by 2050, these sources are going to need to be as low carbon as possible - ideally now, definitely then.

Gas (anyone else think very little has been said about gas recently, except for a little bit when Milford Haven LNG imports started in march?) is likely to continue to be a major source, but as we depend on imports more and more, it seems unwise to continue having it as the primary source of generation when its supply will probably be minimal as we near 2050. Fusion shouldn't be part of any plans, considering it has not been proved viable on a large scale yet - absolutely research and investment should continue, just it shouldn't be the basis of any sort of plan while it's nowhere near completion. Which leaves nuclear (fission) and coal (with CCS)

It's something that seems as a "lesser of two evils" kind of problem, and my preference has switched on more than one occasion as you learn more about each.


Both coal and nuclear are parts of a centralised system, whereas (most) renewables can be centralised or decentralised. While decentralised is potentially the preferable option (in some ways greater energy security, individuals more likely to be energy aware - helping demand reduction and other efforts) it is not a crucial aspect, e.g. consumers want cheapest energy and governments want secure supplies regardless of centralisation.

Coal:

There are large deposits of coal in many developing countries, providing them with a cheap, secure and long term source of energy with which to develop, which is why many countries are planning an expansion in their coal generation. But coal is one of the most carbon intense fuels around and so a huge contributor to climate change. These countries see solving poverty/hunger/disease etc as more important than the environment and that increased energy use - coal or not - will let them mitigate and adapt to climate change better than otherwise. I'm not sure I agree
with the strategy of making the problem worse before you fix it (as well as the assumption it can be fixed later on) but regardless, there is a moral obligation of sorts for the developed countries to help developing ones, as not only does it benefit the progression of their society, but reduces the danger of climate change to everyone, including the developed countries.

This help obviously takes the form of carbon capture and storage, simply capturing the carbon dioxide and piping it into holes deep in the ground (usually). Trouble is, it hasn't been fully demonstrated yet, it's likely to cost a fair amount (the government is spending billions on full scale tests), it reduces the efficiency of a plant, it doesn't capture all of the carbon dioxide, and then there's the whole legal, technical and ethical minefield of storage. Some sites may cross national boundaries; how secure is it; how is it monitored; who is responsible if it leaks after 30 years etc. But humans are rather ingenious and could likely solve many of these problems, some might not get solved as well as hoped, but nothing is perfect and considering the threat of climate change, perhaps it's needed regardless of the drawbacks.

Which brings me onto nuclear.

There are a lot of people who dislike of nuclear, and that's because there's a lot to dislike, Chernobyl, nuclear weapons and so on, but there are some misconceptions for and against nuclear to be wary of. Historically coal has been more deadly and environmentally damaging than nuclear due to mountaintop removal mining, local pollution problems, heavy metals, ash tailings and so on. Nuclear is not 100% full proof but nor is it ready to blow at any second. It is however expensive, barely a week goes by without mention of the new plant in Finland costing twice the estimate and years late, or how the industry. It is currently intrinsically linked with nuclear weapons.

Require baseload?
Need infrastructure as well in developing countries? e.g. straight to mobile phones in africa, no landlines
Proliferation risk comes from enrichment/reprocessing - use world nuclear fuel bank when exporting tech?
Capital costs greater than coal/gas, difficulty getting finance, premium on finance because of risk/delays - http://blogs.wsj.com/environmentalcapital/2009/05/20/nuclear-revival-still-on-hold-mit-study-says/
http://www.guardian.co.uk/business/2009/jun/19/eon-chief-paul-golby-interview smart man, various interesting arguments to cover
CCS costs more than cost of carbon - http://www.publications.parliament.uk/pa/cm200708/cmselect/cmenvaud/654/654.pdf

So just like coal it's a question of is it needed so bad that it's worth the drawbacks. I'd have say yes, but I would still much rather see more renewables instead. If you want a nuclear dominated future, you're going to need tens of gigawatts of energy storage solutions because of the day to day variation in demand. But if you're building so much energy storage then that takes away one of the biggest problems of renewables.

To be finished and references put in asap

Performance based regulation

We students are helping set up a little conference down in Falmouth in a months' time and as part of that we are coming up with content to help promote the conference. I've taken this opportunity (or kick up the backside) to write about something mentioned a few weeks ago but that hadn't yet looked into: Performance based regulation. A guest lecturer from the USA said it how effective it has been on occasions (for example, utilities go down street by street with new fridges and swap them then and there if people bring out their old one). We had discussions about the ramifications of this, namely placing no emphasis on individuals to do anything about their energy use (but currently do they understand the problem/have the money/ability to change, is climate change such a problem that taking control from people is necessary/allowable?) So anyway, here's what I wrote:


The UK has set itself some rather challenging targets with respect to climate change and energy use. But while it is set to meet its Kyoto target, it is failing at others, from renewable electricity generation to eliminating fuel poverty. Current policies seem to either not be working fast enough or just not working, so is a change of focus required? From the Low Carbon Buildings Programme to the Act on CO2 advertisements, emphasis is placed on the individual to change and reduce their energy use. Getting information to people and persuading them to take action is notoriously difficult, so is there another way?

Take for example the electricity market. Currently in the UK, electricity is sold per unit (a kWh). Perversely the first batch of units cost more than subsequent units as the utilities also look to make a return on those who consume relatively little. This has several problems:

• There is no disincentive for the consumer not to use more energy when costs don’t progressively increase.
• There is no incentive for utilities to sell less or energy efficiency to the consumer, as they make more money the more units they sell.
• Cost cutting in a competitive market can mean reductions in operating and maintenance budgets, with resulting impacts on network safety and performance. The difference between 1 blackout a year and none is disproportionately large and as consumers suffer the effects of blackouts while utilities pay the cost of maintenance, it is sometimes not in their best interests to be 100% reliable.
• The most profitable course of action is not related to what is the most socially beneficial or acceptable one. For example, users of pay as you go meters tend to be those on low incomes and use smaller amounts of energy, but they pay more per unit than standard users.

So are there alternatives?

In parts of the US, they moved to performance based regulation after privatisation of the gas and electricity sector. This regulation revolves around regulators setting a base rate for each utility to charge consumers, with performance based targets giving those companies the chance to make their profits (or losses) and governments the partial ability to aid social goals. Targets might include employee safety, system reliability, customer satisfaction, lower pollution etc. The benefits of this system include:

• Cheaper and more stable electricity prices to the consumer. The base rate shouldn’t include the utilities profit margin, as profits would come from the bonuses awarded by governments for meeting or exceeding performance targets, so electricity would be cheaper. Potentially the overall cost through bills and taxes might be similar if targets are met, but if so, society should still have benefited due to the nature of the targets.
• By not restricting the methods companies choose to reach the targets, innovation is less restrained which potentially results in cheaper methods of supply.
• Switching the focus of energy efficiency measures away from individuals to utilities could take advantage of utilities larger capital reserves and greater buying power to speed up deployment of these measures
• The issue where a landlord pays for energy efficiency measures but the tenant gets the cost savings is avoided if the utilities take charge.

Performance based regulation does have its own downsides as well.

• The effectiveness is very dependent on the quality of the targets, too lax and companies can make excess profits (as has happened on occasion in California) or not well thought out enough, resulting in targets being met in undesirable ways or being contradictory.
• The cost of regulation is higher due to the effort in creating base rates and targets and overseeing the authenticity of utilities actions.
• The need for individual action or even awareness of climate change and energy use is greatly reduced. In the long term does the lack of connection mean you don’t take care of the solar panels on your roof or stop conservation measures after a few months or would it inspire you to go further?
• Does it place too much importance on the role of utilities in society, if they supply our energy and also decide for themselves how best to meet certain social goals?
• Does it permit a culture where governments see fit to take a more authoritarian role? (like ID cards etc)

This alternative viewpoint does promote interesting thoughts, but considering we have already gone down a different regulatory path post-privatisation, realistically is it possible to change? And although in theory it might be a better option, in practise how effective would it be? Parallels can be drawn to the EU Emissions Trading Scheme which is in theory the most cost efficient manner to reduce emissions in industry, but the structure of the scheme and other external factors have meant the actual reductions are questionable. Therefore would it be better to take certain parts of performance based regulation, for example more schemes in the idea of the existing Carbon Emission Reduction Target and combine it with changing the existing system to charge units more progressively?

*After showing this to Catherine and Bridget they say that the current system in the UK does have a lot in common with PBR, with CERT and EEC before it, and various transmission and distribution performances among others, but that they are limited in scope. So you learn something new everyday.

Cynicism

Following on from one of my earlier blogs, our class had a little discussion on two documents the Government has published recently. (New Industry, New Jobs and Investing in a low carbon Britain)

I said before that I was surprised the potential shift in fundamental Government philosophy wasn't given more coverage (at least that I was aware of) and I guess it seems you need a bit more experience in reading publications in this age of spin. The declaration of "new activism" is arguably little more than a new name for what goes on already and a publicly acceptable phrase for the supportive measures of traditional electricity generation. Governments have deliberately intervened before (via regulations, obligations, R&D funding, subsidies etc.) and will always do so, the latest case being support of coal (next blog I feel).

I can't say I like the idea of being a cynic by default, but I guess it's sort of a natural reaction to the apparent culture of political language nowadays that is high on promotion and low on substance. I mean we are all biased to some degree about everything, so it's entirely understandable the possibility (especially in a like-minded group like say, a masters class) that you might focus disproportionately upon the 'negative' actions of a certain group, while unaware of the constraints and demands they have faced or ignoring the good things they've done. It doesn't necessarily mean you're wrong of course, but there's this nagging doubt in your mind that you could be, because you can't prove things right, only wrong. That openness and flexibility is important when neutrality is required, like in Government, but has the downside of possibly appearing to lack conviction or taking relatively longer to form decisions.

Anyway, I'm rambling, it's getting late and I have two presentations and a research proposal for the end of next week, might seem a long time away but I know it isn't really.

Inequality

You know when you're browsing through the TV channels and you find something interesting on BBC Parliament (I know, always), well today there was coverage of the House of Lords second reading on the companies remuneration reports bill (caps on chief executive salaries, fairness in society, that sort of thing, the text of it is well worth a read). Although it's not hugely relevant to energy policy, there were some rather interesting arguments involved, one of the main ones being that relative inequality in society holds a strong correlation to its problems. There was a review in the Guardian (12th March) on a book called The Spirit Level: Why More Equal Societies Almost Always Do Better which was very interesting because of its fundamental analysis and now it's been mentioned further I might go rash and buy it.

Some of the highlights are details of the relative earnings between CEOs and average earners. Decades ago it was in the ball park of 10-1 and in Scandinavian countries (ranking top in Unicef wellbeing tables) the current figure is very similar, likewise Japan. Whereas USA, UK etc. that figure, in some cases, is in the several hundreds (interestingly the UK armed forces has a much better ratio). The idea has been that bright, creative people should be paid the market rate for their services, otherwise they would go elsewhere and society and that company would suffer.

The discussion really seems to highlight institutional problems in society. For me there seems to be three philosophies that need looking at:

• Living within your means. Your outgoings shouldn't be more than your income but probably because of cheap credit, many people on the street bought and consumed more with little long term thought. Companies too seemed to get greedy with derivatives this and short selling that.
• No-one wants to leave the gravy train. Primarily to do with companies/markets, that while the going is good, no-one wants to be the spoilsport. Companies fear they would lose ground to competitors and risk losing more money or getting taken over. Governments make more money when the going is good, enjoy the publicity of a healthy economy and fear the public backlash if it's found their regulations have caused this. In effect, jumping off a cliff holding hands.
• That society can effectively be dragged along on the tailcoats of the rich. This has been a fundamental Government philosophy for some time now, that the successful few provide extra crumbs for the rest of society to feed off. I'd guess it's why Governments have been so reluctant to sort out tax havens etc, in the belief that if they are taxed the same as the rest of the population, they will go elsewhere and everyone loses a little.
  

But this recession and in the statistics mentioned in Spirit level, appear to have proven that these beliefs are mostly a fallacy, based on greed, irresponsible risk taking and short-termism.

I really do recommend reading the transcript linked above, it's much better written than this blog if nothing else.

Note to self

I am a white British male, born into a middle class family and in nearly all factors of life, this is luckier than winning the lottery. I'd consider it a moral responsibility not to waste the potential I have by passing away the time or playing it safe.

Feel free to beat me over the head with this post whenever I lose sight of this.

So the scrappage scheme...

I'll forego the rest of the budget, at least for the time being, and look at the car scrappage scheme (covered here, here and lots here)

In order to help the car industry and retail trade, I can announce that a scrappage scheme will be implemented next month.

It will provide motorists with a £2,000 discount on new vehicles bought when they trade in cars over ten years old.

It will be a time-limited scheme until March 2010. My Right Honourable Friend the Secretary of State for Business will announce details shortly.

Sounds good surely? Newer models should be more efficient and therefore have less emissions and the motor industry gets a large boost. Except (as in the articles I linked to above) it's full of more holes than a block of swiss cheese.

• Although the full details are published yet, there seems to be no enforcement that the car must be more efficient than the previous one (people tend to upgrade to a more powerful car when they buy a new one)
• If the car is more efficient, the rebound effect means some of the savings (hard to place figures, UKERC suggest 50%) is lost as people drive more
• 80% or so of cars sold in Britain come from abroad, so the boost to British jobs is greatly reduced
• The cost in manufacturing the car isn't considered (defra link here suggests it's 10% of the lifetime emissions based on 10,000 miles per year for 13 years)
• It seems that the traded car is scrapped regardless of how roadworthy it is
• If the Government offers £2000 off, dealers may well reduce the discounts on their cars, reducing the benefit to consumers (who also still need to find £10000 or whatever
  
• It (arguably) continues to subsidise a bloated and environmentally damaging sector
  
• It continues to promote a message to the public that energy usage and climate change will have no impact on the way people can live and that the Government can still meet its legally binding emissions targets even with these policies
  
• No mention of funding or promotion for public transport/cycling/walking
• There might be more but that'll do for now
  

It's like trying to solve fuel poverty by burning money directly, yes it works, but it's hard to think of a more inefficient way of doing it.

Market knows best... but needs a hand sometimes

Thanks to Bridget for showing me this article in The Independent yesterday: Market forces must make way for interventionism, says Mandelson

(Strangely the Guardian's view on this story was little to do with a fundamental change in Government outlook, rather on the various "extra £2 billion on this and 3.5% decrease here".)

But anyway quotage time:

The document insists the Government will not "pick winners", opt for state ownership of industry, "override market forces or ignore market signals". Its new activism "does not imply a fundamental change in our view of the relationship between the market and the state.... However, the way the Government sees its own role in the market needs to change in order to deliver a more coherent and effective approach." This means "a readiness to intervene where necessary" by "supplementing" rather than "substituting itself for the market" and "correcting significant market failures."

...

While not denying Britain "the huge benefits of free enterprise," the Government recognises that the private sector "has important limits."

Typically Government opinion (and the directives of most regulators) has been to promote above all else, competition, in the belief that it is the most efficient method of production and as such the best method for increasing growth and reducing inequality in society. It may or may not be the best method, but the argument that Government can choose not to 'pick winners' seems inherently flawed. The Government creates the laws governing society and so creates the field in which the market operates, directly or indirectly this influences different aspects. For example for selling electricity on the market. Agreements between sellers and consumers are sorted out an hour before delivery and failure to supply the agreed amount results in having to pay for that shortfall to come from elsewhere, plus extras (even supplying a surplus can cost money). This is obviously a rather big drawback to many renewable energy sources who cannot guarantee their supply in an hours time.

There's nothing concrete on what the Government will do from now on so we shouldn't get carried away believing this is a paradigm shift, it's not improbable that this is merely substanceless spin based on a knee-jerk reaction to public opinion (although in fairness I don't recall seeing too many calls for more intervention or nationalisation). Nevertheless the act of saying this does represent a somewhat significant moment, even if it only meant badly needed extra financing during the recession for renewable energy etc.

Peak Oil again

Is peak oil a problem? Well the Government don't seem to think so, based on a Freedom of Information request by George Monbiot. (Don't worry, his articles won't feature in every one of my blogs, he can get slightly idealistic) The article highlights the stark differences in Government views on risk, between openly encouraging bankers to thorough assessments on smallpox. Reading some of the comments at the bottom of the article, I think it's important to point out Monbiot wasn't criticising the expenditure on smallpox necessarily after all:

"This is what Government is for: to prepare for the worst, however unlikely it may be."

is utterly correct.

Rather he highlights the Government's inconsistent view on one topic they rate as having no current threat but which could have a devastating effect and so requires attention and investment, and other topic they rate as having no current threat but which could have a devastating effect and so requires a head in the sand approach.

In one of his previous articles, (which upon reading again actually has very little different content) he interviewed the chief economist of the IEA, usually a rather conservative group, and he said:

"In terms of non-Opec, we are expecting that in three, four years' time the production of conventional oil will come to a plateau, and start to decline. In terms of the global picture, assuming that Opec will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau"

Which is obviously interesting considering the Governments view:

"The government does not feel the need to hold contingency plans specifically for the eventuality of crude oil supplies peaking between now and 2020."

So the conservative viewpoint is they 'expect' oil not to peak by 2020 which the Government interprets as 100% not going to. This viewpoint seems even worse when the mentioned Hirsh report states 20 years is required to implement a mitigation crash programme.

Why does the Government not believe peak oil to be a problem? Is it because it's outside of political timescales? Is it a belief that the market will provide the solution either by more investment in discovering conventional resources or new technology to improve non-conventional extraction? Are they lying to ease any fears because of the potential impacts it would have on society? (Think of the effect of the fuel protests in 2000 had for what was less than a week long and only a moderate campaign focused on a few key sites. People couldn't get to work, hospitals reduced their activities, schools closed, shops ran out of food. It's not hard to see that if supplies fell sharply for a prolonged period of time the chaos it might have on society. Incidentally if high fuel prices ever became a problem, the fact that UK fuel is something like 70/80% tax makes it a lot more flexible than countries with very little tax, but I guess that's not much consolation for the 99% of the rest of the time)

The truth is I don't know, only the Government does and they seem to want to keep very quiet about it. In my view this seems rather foolish, the Government should consider the real possibility of it in accordance with good practice, and if it does already, to do so openly. While the predictions of peak oil are still some time away, the disruption caused by fear and panic should be minimal and instead open discussion could help promote alternatives and convince the public of the need for change. Why delay what seems inevitable?

Is peak oil really a problem?

Following on from what I said in my last blog about that things aren't always simple, well I forgot to say something else that's crucial. Always be open to ideas, because the scientific method is based upon furthering knowledge by proving ideas wrong. Intuition isn't perfect because if it was we wouldn't need to do any research as we'd know it already, and history repeatedly proves this point.

So I found this article rather interesting because, as the author says, it's generally held that as production of commodities (primarily oil) plateaus and then falls, price will rise and rise since the demand is likely to continue increasing. He states that rather than supply constricted, prices are demand led. OPEC has spare capacity of 5% plus which tempers some price fluctuation, as well as alternative sources take up some slack as the market sorts out its equilibrium again.

It's certainly an interesting read. It's given me some new ideas, but his main argument of there not being a large and continued price increase seems to be okay only in a free market where there are suitable alternatives available and in sufficient quantities. If the fall in oil production isn't matched by increased development of alternatives to compensate (in cost and capacity), then surely prices would rise (although perhaps offset slightly as people reduce consumption where not necessary).

The author says "demand for any commodity is price-elastic" but I would disagree, at least in the case of oil. Oil is rarely used in electricity generation, rather it contributes 98% or so (page 14) to the energy used in transport, and people will usually swallow oil prices rises because of the necessity of getting to work or doing the work (food distribution etc).

The various graphs on this website make for interesting reading as well, the average price has been $20-30 a barrel depending on what timescale you look at. Maybe the peaks are merely bubbles caused for one reason or another (wars, lack of confidence in the market, commercial squabbles, temporary lack of exploration investment?) rather than a sign of long term increases.

So do we think the future is rosy and we don't need to worry about it because the market will find the solutions, or do we need to press the government to make commitments to creating sustainable alternatives?

And in the beginning...

Hello, my name is Paul Robins and I'm currently studying a masters in Energy Policy and Sustainability at the University of Exeter. This blog is for my thoughts and feelings about the energy world and its place in society. So first blog and I guess it should be a 'why'.

Energy is fundamentally crucial to humans because (in a rather dry physics definition) energy is required to do work. Whether heating your house, powering a computer or driving your car, you require energy in some form or another. The source of all our energy is ultimately from three resources, the Sun (by far the majority), the heat created by radioactive decay deep inside the Earth (a small bit) and the tides caused by the gravitational pull of the moon (a very small bit). Arguably all of them are finite but although they may last for billions of years, the important factor for us is the finite amount of energy they supply each year,day or second. The amount of work or stuff we can do, from growing crops to generating electricity, is ultimately capped based on this amount.

Current world demand is around 16TW (tera = 10^12) while the amount of sunlight falling on the Earth is around 174PW (peta = 10^15) so it would seem our demands are four orders of magnitude less, i.e. tiny (and that doesn't include fossil fuel reserves or uranium). However it is not as simple as that. Firstly, only around half of the sun's energy reaches the surface, only around a third of which will be over land, a fraction of which is accessible, suitable or near areas of consumption and not to forget plants taking their share of the sunlight. So a rough guess (no figures, just guesstimation) is that about 1% of that energy is capturable for human use, so from being 10,000 times world demand it's now 100 times. That means current demand is 1% of renewables potential and that is a lot less wiggle room than before.

On the consumption side of things, while energy intensity and resource productivity continue to improve, worldwide demand for energy continues to increase as developing countries look to lift many of their citizens from poverty and developed ones to further their prosperity. Population has grown even greater than exponentially over the last 50 years and while this increase is predicted to slow to a maximum of around 9 billion people, there is no certainty that an unforeseen technological invention wont permit an even higher number.

Economic growth is arguably the greater factor in energy consumption, rising 3.8% annually compared to 1.2% for population and shows little sign of slowing or reaching a limit. If this 3.8% growth continued, after around 125 years our demand would breach that estimated renewables limit (fossil fuels are likely to have essentially been exhausted). Using that much energy might appear huge, but imagine 125 years ago when there were almost no cars, electricity grids were in their infancy, aeroplanes didn't exist, nor did televisions or computers and being warm in your house often meant another layer of clothes. 125 years also might appear to be a long time for a single person but it's a relatively short space of time in human society.

But yet again it's not as simple as that, look at this graph below, you can see the approximate exponential growth starting on the left hand side but which tapers off after time. Now cover the right side of the graph and imagine that you are making a prediction while you are some point in time while the graph is still exponential, it seems obvious that the growth will continue when it every situation it will eventually reach a tipping point and start to slow down whether it's population, food yield or percentage of everyone with a mobile phone/car/computer etc. Will we reach technological/financial/social/environmental limits before physical ones in that hypothetical 125 years?




The point here is that very few things, especially energy policy, are simple and easy. One of the first and most important considerations about energy policy is understanding how widespread and complex it can be because of its fundamental role in nature and human society.