The UK’s energy security prospects are once again making the headlines, as Ed Milliband this week announced the top 10 suitable sites for the next generation of nuclear power plants, describing nuclear power as a “proven, reliable source of low carbon energy”.

The announcement comes amidst heightened concerns surrounding the peak oil debate, with the UK ERC claiming that conventionally extracted global oil production could ‘peak’ and go into terminal decline before 2020.

However, the environmentalists have criticised the decision, warning of the “deadly legacy” of radioactive waste, and argued that investment should be focused on renewables instead. Interestingly, one of the oldest and most efficient windfarms in Britain will be dismantled at Kirksanton to make way for the nuclear plant, to the dismay of some locals.

Faced with the prospect of depleting supplies from the North Sea, the UK is now paying the price for its ‘dash for gas’, following the closure of the coal mines in the 1980s. To support the development of this next generation of energy infrastructure, the UK Government has announced a host of measures to reduce the planning constraints that are likely to hamper such large infrastructure projects, and hopes to have the first new nuclear plant operating by 2018.

Professor Barry Brook at the University of Adelaide has welcomed the announcements from the UK government, and encouraged the Australian government to take heed. He highlights that unlike the situation for uranium power, the electricity price is strongly tied to the fuel price for gas and therefore fluctuations in gas prices lead to price spikes in power prices.

Cheap uranium energy, on the other hand, provides a much more secure proposition to meet both energy security and climate change goals; and he adds that

“…there is enough uranium to provide the whole world with zero-carbon power for millions of years.”

Nuclear power is the only proven electricity generation technology that can simultaneously meet reliable baseload demand, anywhere, and yet emit no carbon dioxide when operating. Along with hydropower from dams, it is the only clean energy technology that has been shown to be scalable.

France is a case in point. It derives nearly 80% of its electricity from 59 nuclear plants and is the world’s biggest electricity exporter. It has the cheapest power rates in Europe, and has the lowest carbon footprint per person.

However, the significance of radioactive wastes and contamination threats should not be underestimated if we really want to promote sustainable development that considers the intergenerational impact and legacy of such technologies. In this vein, it might be argued that the significant funds for these large infrastructure projects would, in fact, be better targeted at scale-up and capacity building for renewable technologies such as wind, solar, tidal and others, which don’t generate such controversial by-products.  For now, the pressure is on in the UK to streamline the planning process to enable the speedy construction required to bridge the expected energy gap.

The Committee on Climate Change released its latest report today highlighting the devastating impact the economic recession has had on carbon trading schemes and investment for low carbon technologies. The report emphasises the vast investment needed in efficiency through green housing, power and transport in Britain, to service the goal of meeting the commitments in the Climate Change Act.

The Committee has called for ‘dramatic improvements’ in efficiencies across the economy, suggesting that more ‘forceful’ policies may be required to increase annual cuts in emissions by four-fold.

The Committee also recommends

- The introduction of 1.7m electric cars, with 3.9m drivers trained in fuel-efficient techniques, by 2020

- Building 8,000 new wind turbines, alongside four new coal power stations fitted with carbon capture technology and three new nuclear power plants, to slash emissions from the power sector by 50% by 2020.

The Government’s largest proposed clean coal plant to be fitted with CCS was shelved by E.ON last week, also reportedly as a result of the recession. However, the announced delay in the Kingsnorth project, which had become the focus of protests against climate change, heavily targeted by climate camp activists and the media; leaves politicians wondering how they might fill the expected energy supply gap in 2016.

The recession has also had a significant impact on the world’s emissions trading schemes - expected to be pivotal in driving market signals for low carbon investment. The drop in energy consumption, which led to the shelving of the Kingsnorth project in the UK, has also led to a drop in emissions in Europe, resulting in a surplus of carbon credits in the EU ETS. It is feared that this might result in a carbon price of just €20 a tonne in 2020, rather than the €50 a tonne used for its previous analysis.

The Committee has suggested that options to strengthen the carbon price, including the government underwriting a minimum price or intervening in the electricity market, should be “seriously considered”. On Friday, a report from Ofgem suggesting domestic energy bills could rise 14-60% by 2020 was seen by energy industry experts as an acceptance that the market-driven system has failed and the government needs to be more interventionist.

So the recession has played its role in dampening the prospects of the low carbon investment opportunities, and strong leadership will be essential to deliver the ‘radical’ and ‘dramatic’ improvements that the Committee has demanded. With Ed Milliband’s small budget, and uncertainties over changes in government next year, the UK needs to dig deep to create green opportunities that rescue the nation from the dire straits, courtesy of the economic recession.

The G20 has just been and gone, but another London summit last month saw Prime Minister Gordon Brown, business secretary Lord Mandelson and climate change secretary Ed Miliband, talk of the danger that Britain would get left behind in the “global race” towards a low-carbon economy.

The flipside, they said, was an opportunity to create hundreds of thousands of jobs in renewable energy and other areas of carbon reduction at a time when unemployment is surging in the wider economy. Despite this, just four days after the summit, the government announced the suspension of funding for solar power schemes under its Low Carbon Buildings Programme (LCBP); which provides grants of up to £2,500 for the installation of microgeneration technologies in homes, community organisations and other public and private buildings, with PV the most popular type of application.

Britain has committed just £1.5 billion of its £25bn reflationary measures to green stimulus, according to HSBC. However, Jemma Robinson of the Renewable Energy Association (REA) comments that “They keep talking about this new green deal but there’s nothing concrete to grab hold of.”

A final strategy, based on responses from the summit and a consultation, is expected this summer. However, scepticism about the government’s resolve and ability to pay runs deep, not least in view of recent funding decisions.

The Department of Energy and Climate Change has said Phase 2 of the LCBP will not be extended and remaining funds, thought to total about £8 million, will be returned to the Treasury when the LCBP ends this June.

In contrast, the association is demanding £625 million be spent immediately to safeguard the UK’s existing renewables industry and to ensure 2020 targets on carbon cuts are met. It says £10 billion is needed in the long term to match the sums spent by other countries including Germany, France, the US and China - proportionate to GDP - and to meet investment levels recommended in the Stern report.

James Cameron, executive director of Climate Change Capital, said the government should issue “carbon bonds” along the lines of war bonds in the Second World War to bridge the gap in funding for renewable energy. The REA also backs the idea.

Despite the recession spurring people to save, the government may successfully encourage people to invest in bonds, which would appear more attractive investments as other financial instruments are viewed as risky or discredited.

Climate Change Capital has proposed this idea to the government, and Cameron comments “…in broad terms you either create a government bond for, say, a specific renewable energy project. Or you put a bunch of assets together linked to renewable energy, and the government provides some underwriting for that.”

Martin Berg, vice president, carbon emissions originator at Merrill Lynch in London, said the sums needed to develop the UK’s renewables infrastructure and meet renewable energy targets were too large to rely only on public borrowing alone.

“My view is that the UK has to unleash private sector money into this market but also get entrepreneurial money flowing in.”

He discusses that carbon bonds could take two forms:

1.     They could either operate in exactly the same way as gilts (UK government bonds), but with different branding. In theory investors would be content with slightly lower returns because they would have the satisfaction of knowing the money was ring-fenced for green development. 

OR as an alternative they could be

2.     linked to specific projects. Here the returns for investors would depend on the success of the revenue steam in question - often via carbon credits in the emissions market - but also on the level of risk associated with a particular project. As always, a higher-risk project would need to pay a higher return.

The details will need further attention to attract investment, but one things for sure - we need investment and we need it as soon as possible.

As UK Minister for Energy, Ed Milliband announces new plans to build a coal fuelled power station in the UK, global protesters are calling the government a “climate criminal”, accusing the new plans to be a death trap for the planet.

A joint protest from over 40 deveoping countries, are challenging Ed Millibands plans, and strongly advising him that these actions will result in the UK’s weakening position in international climate change negotiations, thus damaging the reputation and position that the UK has.  Protesters believe that the UK will not be in a position to persuade developing economies to cut their emissions.

The proposed plant is the dirtiest of fossil fuels, and according to the Clean Air Task Force (CATF) based in the USA, each new conventional coal plant threatens to create a 60-year stream of new carbon dioxide, as well as a multi-decade stream of toxic waste.  Coal-fired electric generating plants are the USA’s largest industrial source of harmful air pollution.   From lung damage to asthma attacks to acid rain, haze, and global warming, no economic sector has a greater impact on our environment.  

On th flip side, the coal industry is facing significant industry challenges; demand is falling as global industry, including demand from China in particular has fallen; material costs are uncertain and over the future hangs the worrying spectre of expensive and uncertain carbon capture and storage, international carbon markets and whatever else an anxious world may decide to do about climate change.

For some, the coal plant presents a new industry opportunity, but for others, this is a stark reality of future doom and gloom, and a highlight of how UK government has lost significant support from the public, environmental organisations and its political counterparts.  Surely the governments financial backing of various ‘green refurb’s’, the availability of £9 million of funds for the generation of new, micro generation technologies are all geared towards developing clean teachnologies and lowering emissions?  It must be questioned, where or if this new plant fits in to the UKs long term strategic plan.

The 27 groups of protestors to the UK plans, including campaigners from India, Brazil, Indonesia, the Philippines and Uganda, say they are “alarmed” that the UK government is considering  allowing new coal plants to be built, including one at Kingsnorth in Kent.   They blame emissions from rich countries for causing global warming and the “increased  floods, droughts, sea-levels and disease” that threaten the livelihoods of “hundreds of millions of people” (Source: The Observer)

Milliband has annouced plans to give 400,000 UK homes a ‘Green Makeover’ by 2015, extending to 7 million homes by 2020.  Milliband outlines his vision for all UK homes to have reduced demand for energy, and as a result, reduced emissions by 2030

 This plan will feed into the governments carbon reduction plans outlined in Climate Change Act 2008 to ensure an 80% reduction in carbon emissions by 2050.  Currently, homes account for 27% of the UK’s carbon emissions through heating and power and this refurb can cut emissions from homes by a third! (http://www.guardian.co.uk/environment)

 Under the proposals,  Minister for the Department of Energy and Climate Change, Ed Milliband outlined that cavity wall and loft insulation will be available initially for all ‘suitable’ homes. Financial incentives for householders will also be granted for low-carbon technologies such as solar panels, biomass boilers and ground source heat pumps, paid for by a levy on utility companies.   

Although there are no upfront costs to the household, a main incentive alone, over time, these energy saving materials will pay back the investor, through savings gained in reduced heating bills.  In addition, the Renewable Heating Incentive will encourage local community to develop small-scale energy networks to feed into the national grid from their power-generating facilities.  This can benefit the household by generating electricity for local consumption, whilst profiting from sales to the national grid for excess electricity production; a win-win situation.

 The ’Great British Refurb’ has been welcomed by most organisations, including Nathan Argent, head of energy solutions at Greenpeace UK who comments:

“A programme to upgrade the housing stock alone would require £3.5-£6.5bn per year until 2050.  Tackling energy efficiency is the fastest way to cut emissions, boost our energy security, revitalise the economy and create tens of thousands of jobs. And, obviously, this will cut household bills too. But this plan needs much more investment right now. The government needs to put their wallet where their mouth is.” (Source: www.guardian.co.uk/environment) 

Paul King, chief executive of the UK Green Building Council (UKGBC) also comments:

“As Lord Stern said yesterday” energy efficiency in homes and buildings should be part of a green stimulus. Financial incentives are needed to encourage major green refurbishments – the precedent has already been set with stamp duty rebates for zero-carbon homes”.  (Source: www.guardian.co.uk/environment) 

 As with every consultation and new product launched by the government, there are cynics of the scheme, including comments made by the Environmental Industries Commission (EIC) and the Energy Saving Trust (EST), accusing the government for not tackling the carbon issues directly, boldly or soon enough. 

This stimulates the question if Milliband is targeting the correct sector for stimulating a green refurb change?  Since direct global carbon emissions from the UK’s 100 largest companies amounted to 480 million tonnes of CO2 equivalent - about 73% of the UK total, as revealed in a report ‘The Carbon 100‘ published by Henderson Global Investors.  The question that remains is, will the impact of the green refurb simply be enough to reduce CO2?  (http://www.edie.net/news/news_story.asp?id=10094)

After years of planning and scores of proposals, attempts to generate renewable electricity from the Severn estuary drew a step closer this week; as the Energy and Climate Change Minister, Ed Milliband, unveiled the 5 diverse, but technically feasible shortlisted proposals. They range from the colossal 10 mile barrage that would block the entire Severn estuary to the relatively discreet series of lagoons with would harness the ebb and flow of the tide to generate electricity. With the common aim of becoming Britain’s single biggest source of electricity, the project could generate as much as 8GW, replacing around 4-5 polluting coal-fired power stations.

The five proposals are:

1. Cardiff-Weston Barrage - 10-mile scheme costing up to £22bn could generate as much as 8.6GW - 5% of the UK’s energy needs

2. Shoots Barrage - Would generate around 1.05GW - equivalent to a large fossil fuel plant

3. Beachley Barrage - A small scheme which would generate around 0.625GW

4. Bridgewater Bay Lagoon - Would enclose a section of the english coast. Could generate 1.36GW

5. Fleming Lagoon - Would enclose a section of the Welsh coast. Could generate 1.36GW

“The largest proposal to harness the power of the tides on the shortlist could save as much carbon dioxide as all the residential emissions from Wales.” Ed Milliband, UK Minister for Energy and Climate Change. 

In addition, a further 10 proposals which did not make the shortlist have been allocated a share of £500,000, to develop ‘embryonic technologies’ including tidal reefs and tidal fencing. 

Harnessing renewable electricity from the Severn estuary, which has a tidal range of up to 14 metres (second largest in the world) would make a significant contribution to the UK’s commitment to generate 20% of energy consumption from renewable sources by 2020, whilst also increasing Britain’s energy security. However, environmental campaigners who are largely in favour of renewable energy generation from the estuary remain were dismayed that smaller more wildlife-friendly schemes were sidelined in favour of these larger projects, which threaten to destroy the areas biodiversity. 

Jonathan Porritt, Chairman of the UK Sustainable Development Commission which has advised the government on the Severn project, added that this polarisation of views remains “daunting“. The question is - are we willing to embrace a huge source of low carbon and secure energy at the detriment of the local biodiversity? Some supporters of the scheme argue that in light of the global climate change issue, such significant steps to decarbonise our consumption, would render other environmental concerns as irrelevant. However, those championing the environmental concerns argue that the consequences of irreparable change to these habitats, not to mention the political preferences set by the strong likelihood of breaching the EU directives protecting them, would be so dire as to negate the benefits of clean, renewable energy offered by the Severn. Ed Milliband added that…

“We have tough choices to make. Failing to act on climate change could see catastrophic effects on the environment and its wildlife, but the estuary itself is a protected environment, home to vulnerable species including birds and fish. We need to think about how to balance the value of this unique natural environment against the long-term threat of global climate change.”

The 3 month public consultation has now started. Whilst the final decision isn’t expected until 2010, it is interesting to note in the meantime that the “now or never” mindset is being adopted by a growing number, in light of tighter targets to address global climate change (through renewable options providing oil independence), which is really driving this project.

The UK’s Secretary of State for Energy and Climate Change, Ed Milliband, addressed  the UN Conference of Parties (COP) here in Poznan today, delivering the UK’s ministerial statement on climate change.

Ed Milliband, UK Sectretary of State for Energy and Climate Change, speaking in Poznan today

Echoing sentiments of Gordon Brown and other EU member states over the last week in Brussels, he stressed that the UK must overcome the challenge posed by the global finiancial crisis. The costs of adaptation and mitigation continue to rise the longer we wait - we must up the pace along the road to less discussion and more negotiation for an agreement at Copenhagen next year.

He praised the efforts of developing countries and stressed the need for developed nations to take on stronger targets, based upon the concept of common but differentiated responsibilities. Developing nations must consider substantial deviations from business as usual (BAU) and we must ensure that strong transfer mechanisms exist to support this effort.

The UK’s spirit of intent is reflected in the commitments they have made through the Climate Change Act, adopting challenging targets of 80% carbon reduction and 20% for generation of renewable energy, by 2050. The UK will adopt further commitments as part of the European Climate Package, which is expected to be decided in the next 48 hours. As part of the EU’s recently announced  Renewables Directive (20-20-20) the UK will adhere to plans to increase targets for generation of renewable energy from, 20% to 30% if other countries make significant contirbutions.

Milliband, stressed that “We must go further than 50% by 2050″  as the UK (and Obama) has committed. In addition, the UK is commiting further resources to the UN’s Adaptation Fund, and £100m to forestry issues (a statement on deforestation will be released tomorrow).

Milliband delivered a strong statement in amongst China and Austria, reflecting the UK’s vision to be a pioneer in the fight against climate change, and the large commitments the UK has adopted in the Climate Change Bill. The Committee on Climate Change released their first report (Building a low-carbon economy - the UK’s contribution to tackling climate change) on 1^st December, setting out the analysis which underpinned the target reductions and details of the level of the first 3 carbon budgets - up to 2022.