Public Sector Energy Editorial 8 December 2015

An analysis of the local authority energy market and the latest developments around the UK.

Policy & Strategy

The UN climate change summit has begun in Paris. This has made the national news on a regular basis, bringing the subject back to the forefront for the public. This time, the world leaders met first to reinforce their commitment to the process and now the hard negotiating takes place. Substantial coverage has been given to Barack Obama and other leaders, and David Cameron was amongst them. He warned of the ‘peril’ of climate change but his policies back in the UK will not stand him in good stead in this company: http://www.solarpowerportal.co.uk/news/cameron_warns_of_climate_change_peril_as_uk_joins_clean_energy_initiative

Although it is George Osborne who is bearing the brunt of the criticism, rather than the Prime Minister – or the Secretary of State for Energy and Climate Change for that matter: http://www.solarpowerportal.co.uk/editors_blog/incoherent_policies_the_order_of_george_osbornes_day_1471

Today it was reported that Arnold Schwarzenegger has spoken on farming and its impact on climate change. The man who once said in a film ‘you punch like a vegetarian’ is now apparently recommending not eating meat a couple of times a week! I mean, what’s the world coming to?

Jeremy Leggett is also there and reports on “150 world leaders speaking one after another about the threat that global warming poses to the futures of civilisation, humanity and life as we know it on the planet. They also recounted what they intend to do about it, individually and collectively. Over two weeks to come, civil society groups will be doing the same, and negotiators will be completing the best treaty that governments can manage.” According to him, there is a future still worth living in and it is still possible.

DECC is also getting in on the act, with its week-long #BackClimateAction tweetathons. It is asking for your questions to form part of this: simply tweet at @DECCgovuk using #BackClimateAction, in advance or live at the times indicated. Energy minister Lord Bourne will be taking questions on climate change and innovation on Wednesday, between 1430 – 1530. Energy Secretary Amber Rudd will be taking questions on COP summit in Paris and the UK’s commitment on climate change, Thursday 1300 – 1400. DECC urges us to follow the hashtag throughout the week and get involved! Find out more about its upcoming tweetathons with science experts and business leaders here: https://www.gov.uk/government/news/backclimateaction-tweetathon-2015

The question is often asked of how far can renewables go in terms of world energy? Energy Post features an article giving us the answer – it can go all the way:

http://www.energypost.eu/stanford-world-can-go-100-wind-water-sun-2050-save-money/

This new analysis from Stanford University has laid out a roadmap for 139 countries to power their economies with solar, wind, and hydro energy by 2050. It says the world can reach 80 per cent WWS (wind, water and sunlight) by 2030 and 100 per cent by 2050 with no impact on economic growth.

Here in the UK, on 26 November, the Committee on Climate Change published its fifth carbon budget advice, recommending the level of UK emissions in 2028-32, as required under the Climate Change Act 2008. The Committee recommends the fifth carbon budget is set at 1,765 MtCO2e, including international shipping. That would limit annual emissions to an average of 57% below 1990 levels.

The advice balances a range of factors the Committee must consider, keeps the UK on its cost-effective path to the 2050 legislated commitment to reduce UK emissions by at least 80% on 1990 levels, and continues the UK’s historical rate of emissions reduction.

Four carbon budgets have been legislated to date, in line with advice from the CCC. The Government must legislate the level of the fifth carbon budget by June 2016. Watch Lord Deben, CCC Chairman, highlight the key points of the advice in this video: https://www.youtube.com/watch?v=1JHvadEDeqk

And in Scotland, the Scottish Government has been critical of Westminster in many of the decisions it has made on renewable energy. However, it has been accused of hypocrisy after it emerged that the £10m Saltire Prize has been untouched since its high-profile launch in 2008. This piece is from the Press and Journal:

https://www.pressandjournal.co.uk/fp/news/north-east/764469/snp-urged-to-unlock-multimillion-pound-renewables-fund-following-ccs-decision/

Solar PV

This week Solar Power Portal reports from the REA’s ‘Renewable Futures’ event where both Greg Barker, former Energy Minister and Ed Davey, former Secretary of State were speaking. Greg Barker talked about the issue of PPAs and finding large users. It says: “He forecasted that in the absence of subsidies, large scale solar developers would now seek to build out solar parks on the back of signing direct wire power purchase agreements with utilities and other companies.”

http://www.solarpowerportal.co.uk/news/net_metering_and_private_ppas_form_greg_barkers_future_vision_for_solar_325

This is precisely the line we have been taking in our local government work. Focus has now shifted to different types of sites, where there is a potentially high electricity using organisation or business nearby. Whilst in Scotland last week I looked at a Council site next to a Spire hospital.  With 24/7 use, this would be an ideal site to build out for solar and then sell the entire output of the park to the neighbouring business.

Greg Barker also predicted net metering in the near future, once storage has become established. This is another way of supporting the solar PV industry without a direct subsidy.

And Flintshire Council in North Wales is in the news, following its decision to fit solar PV to 400 of its houses. This work will be carried out by the Council, as part of a Welsh Assembly Government package to meet housing quality standards: http://www.publicsectorenergy.co.uk/85-articles/news/solar/1521-flintshire-council-to-install-solar-panels-on-400-homes

And also this week in the Public Sector Energy news section, the Isle of Wight Council is looking today at making a £1.7m loan to a solar farm project.

http://www.publicsectorenergy.co.uk/85-articles/news/solar/1519-isle-of-wight-to-discuss-solar-farm-loan

Wind Power

Energy Minister Andrea Leadsom has written a letter giving further information about grace periods for early closure of the Renewables Obligation for onshore wind, which is reproduced on the Parliament website: http://www.parliament.uk/documents/commons-committees/energy-and-climate-change/Leadsom-to-chair-231115.pdf

Biomass

The Renewable Energy Association, supported by one of its members Olleco, the largest national food waste collector, has commissioned a report from Eunomia Research & Consulting to examine the business case for the separate collection of food waste.

The study aims to provide an independent assessment of whether businesses and local authorities can expect to make savings on waste collections by diverting additional biowaste away from the residual waste stream into composting or anaerobic digestion. It will also examine the extent to which current domestic and EU legislation may already require separate biowaste collections.

Whilst Scotland and Wales have already taken measures to promote the collection of food waste, England is lagging behind in this respect – although there are now indications that the new European Commission Circular Economy package may include a future requirement to separately collect biowaste.

There are clear environmental benefits to separating biowaste. When treated, it produces a valuable output of compost or digestate, which replaces fossil derived alternative fertilisers, and can also produce biogas that replaces fossil fuel. Composting and anaerobic digestion of biowaste are also preferable to landfill and incineration in terms of the climate change impact of the different treatment options.

However, there have been concerns that additional food waste collections could be expensive for councils and businesses. The study will test the validity of these concerns, and has the potential to pave the way for the introduction of legislation to mandate separate food waste collections in the short to medium term.

I have said for some time now that food waste collection and treatment as AD is a large frontier of work and investment that local authorities could control. Instead, we have become diverted by the impact of PFI schemes, the costs and administration of introducing separate collections and the inability of different local authorities (such as all districts in a County area, with the County Council) to work together to share risk and raise investment. This has to be done and this report might help make the case.

Anaerobic Digestion

The Government has issued new updated guidance on operation of AD plants:

https://www.gov.uk/government/publications/sr2012-no12-anaerobic-digestion-facility-including-use-of-the-resultant-biogas-waste-recovery-operation

Wave & Tidal Power

Re News reports that Tidal Lagoon Power, the company behind the Swansea Bay Tidal Lagoon project, has reduced its staff by almost one-fifth as it cuts costs to focus on getting its proposed Swansea Bay scheme over the line.

It reports that company would not confirm exact numbers but said the cutbacks to its around 100-strong staff were necessary as it concentrates on developing the proposed 320 MW Swansea Bay project, as well as full-scale lagoons planned for Cardiff and Newport: http://renews.biz/100651/tidal-lagoon-power-cuts-jobs

Energy Efficiency and Buildings

A group of business leaders and trade association heads have called on the chair of the Energy and Climate Change Select Committee in Parliament to investigate the government’s decision to abandon its commitment to a zero-carbon building standard.

Of all the negative announcements from the Government over the period from its election to the present day, this is the most damaging of all. Now a group of leading bodies, including the Energy Saving Trust, suggest it should be reviewed as the policy will not just impact on the Government’s ability to reach international targets, but will damage British business as well: http://www.nextenergynews.co.uk/news/energy-saving/ecc-committee-urged-to-investigate-zero-carbon-homes-policy-1017

On the same day that Secretary of State for Energy and Climate Amber Rudd announced a shift towards gas-powered power stations, Rupert Redesdale, founder and CEO of the Energy Managers Association, told delegates at the 40 percent Symposium that companies would need to start talking about energy efficiency in the boardroom.

As the emphasis moves from subsidized renewables, energy efficiency is ‘the only game in town’. Buildings 4 change reports: http://www.building4change.com/article.jsp?id=2705#.VmWj-IQjiFJ

Housing

EcoBuild Industry Insider reports on the new money for housing, which will be £6.9bn - a doubling of the budget for affordable housing - paid for by a tax increase for buy-to-let investors: http://www.ecobuild.co.uk/industry-insider?bid=5153514&cid=95474&seg=Cell1&lid=121746

Green Deal & ECO

There appears to be controversy already about the new ECO scheme that will replace the current incumbent. The new scheme is supposed to be cheaper but figures from the Association for the Conservation of Energy have suggested the new scheme is working off projected savings from the first year of the ECO scheme when it was at its most expensive and calls the Treasury’s claims into question. Next Energy News reports: http://www.nextenergynews.co.uk/news/energy-saving/treasury-has-dressed-up-figures-for-new-eco-scheme-says-ace

Heat Networks

Former Energy Minister Greg Barker has claimed that district heating networks will be the big development of the next decade. Barker has indicated that he expects district heating networks to take off between now and 2020, particularly with the level of smarter construction that is taking place.

As Next Energy News reports, Barker acts as chair of the London Sustainable Development Commission, which is currently working towards increasing smart networks inside London’s boroughs: http://www.nextenergynews.co.uk/news/power-heat/lord-barker-district-heating-networks-big-development-of-this-decade-3579

Finance & Legal

This week the Solar Trade Association brings us the depressing news that the European Commission has decided to extend the Minimum Import Pricing system, which was originally due to expire yesterday, Monday 7 December. It commented saying this was ‘disappointing’ but that it had been expected, as the Commission in effect had little choice.

Jamie Hailstone picks up the story for Public Sector Energy here: http://www.publicsectorenergy.co.uk/85-articles/news/solar/1533-sta-slams-european-commission-decision-to-extend-import-tariffs

However, the STA brings slightly better news in that the Commission can now, as part of its proceedings, officially consider whether the import duties are doing the EU and the European solar industry as a whole more harm than good - the so-called 'Union interest argument'. The STA has vowed to keep on opposing MIP until it is finally removed.

This will fortunately not affect those authorities now following the Medium Term Strategy, whereby large-scale solar farm developments are continuing on the basis that they will be built out without Government subsidy. This is because, in the absence of a private wire or PPA agreement over 8 pence per kwh in place, those projects would not be able to be constructed for another two years in any event. By that time MIP will definitely be gone and the price of solar cells will have fallen considerably more as well.

The next issue on finance is Value Added Tax (VAT). A consultation on VAT is expected this Wednesday about what the UK is going to do in response to the European Court of Justice ruling that low VAT rates for solar PV are against EU law. This could potentially have wide ranging consequences for the solar industry and so Public Sector Energy will be watching this issue carefully.

And the REA reports that Andrea Leadsom, Minister in DECC said at its Finance Forum last week that the Government is finalising its Feed-in Tariff policy at the present time. The Minister announced that members can expect an announcement in the "extremely near future" and reminded the room that Parliament will go into recess again on 17 December. She said that DECC intends to have published its decision by then, causing a cynical industry to speculate that this means it will be published on Xmas Eve when everyone has already gone on holiday. Think I’m joking? I am running a book on this at the moment ….

And on budgets, at the Parliamentary select committee meeting last week, EDF accused solar of being responsible for the Levy Control Framework overspend. As Solar Power Portal reports:

“EDF’s Paul Spence considered it an appropriate platform from which to accuse deployment of sub-5MW solar being at fault for the Levy Control Framework overspend. All this despite Solar Trade Association analysis revealing that even with the expected RO rush, sub-5MW solar would account for just 5.7% of LCF expenditure”: http://www.solarpowerportal.co.uk/news/select_committee_panel_pins_lcf_overspend_blame_on_solar_5892

Electric Vehicles & Transport

The Government issued a News Story on 3 December about electric vehicles, reaffirming its commitment that all vehicles should be zero emissions by 2050.

According to www.gov.uk, the UK was one of 13 international members of the Zero Emission Vehicle (ZEV) Alliance that signed a commitment to promote cleaner motoring and slash transport emissions, at the Intergovernmental conference in Paris. The UK was alongside Germany, Holland, Norway and California in doing this. It includes an agreement to make all passenger vehicle sales zero emission vehicles by 2050: https://www.gov.uk/government/news/uk-government-pledges-bold-ambition-for-electric-cars

And in the US, the city of New York is planning to procure a fleet of EVs to undertake the city’s work. This is similar to the plan that I had in Cornwall council, to replace large parts of the mileage allowance journeys, with a fleet of EVs: http://www.greencarreports.com/news/1101253_new-york-city-to-deploy-vast-electric-vehicle-fleet-by-2025

Grid

Kingfisher is to invest millions in renewables to reduce the amount of electricity it relies upon from the grid: http://www.publicsectorenergy.co.uk/94-articles/news/finance-legal/1524-kingfisher-group-to-invest-50m-in-renewable-energy

Community Energy

Solar Power Portal reports that there has been a surge in community investment, since the Government’s decision to end tax relief for such schemes (which is being challenged in court). It reports that a record £7.8m was raised by 15 community benefit societies for use on solar projects across the UK, with four funds securing investments of over £1m for their share offers: http://www.solarpowerportal.co.uk/news/community_energy_projects_raise_record_investment

And on that court action, Community Energy England has criticised the Government for not responding to its letter before claim on the removal of the tax incentives. This is the first step in a formal judicial review action and such a letter must be sent before court action can be launched: http://www.solarpowerportal.co.uk/news/community_energy_england_slams_treasury_over_lack_of_response_to_legal_2572

Flooding

The weather has once again caused flooding problems across the UK. Numerous weather warnings have been issued and the Government issued a severe weather alert for Northern roads: https://www.gov.uk/government/news/severe-weather-alert-issued-for-north-roads

Flooding is, of course, linked to climate change and it is good that this has been picked up in national news reports. I suppose that it does help that the Paris convention is on at the same time, but the clear fact is that a warmer climate means more moisture is held in the air and that leads to heavier rain. So the Environment Agency is going to have to go back to the drawing board in terms of the standards to which its flood defences are constructed. And that will put George Osborne’s budget figures under fresh pressure.

Local Authority Activity

As the COP21 Paris Climate Conference gets underway, which aims to establish the first international legally binding agreement on carbon emissions, Greater Manchester has signed up to the world's largest coalition of city leaders addressing climate change via the Compact of Mayors.

It is also asking other GM organisations and businesses to pledge to take action via an online commitment.

Additionally, some may know that the Low Carbon Hub is currently consulting on the draft Climate Change and Low Emissions Implementation Plan.

It has already received over 120 responses to the consultation from interested businesses, organisations and individuals.  The consultation on the new Plan (2016-2020) seeks views on what GM priorities should be for the next 5 years.  The opportunity to respond to the plan is available until 11 December 2015 and the online consultation questionnaire can be found here: https://www.surveymonkey.com/r/GreaterManchesterClimateChangeStrategyAndImplementationPlan

And further South, Bristol’s achievements in increasing its renewable energy supply have been recognised by a high-level international panel organised by the European Commission and featuring a Member of the European Parliament at the UN’s COP21 global climate talks in Paris.

Cllr Daniella Radice, Assistant Mayor for Neighbourhoods including the Environment at Bristol City Council, presented the city’s successes including its solar projects, which have helped the share of renewables in Bristol’s energy supply soar to 25%.

The session, ‘Renewable Energy: Energising The Future’ presented renewable energy projects already being implemented in cities around the world. It also investigated how to accelerate these developments.

Cllr Radice described one of Bristol’s Transformative Action Plans (TAPs), The Bristol Billion, which is designed to invest £700m making the city’s buildings more energy efficient to achieve significant carbon and energy savings. It would involve refurbishing 56,000 homes in Bristol – 30% of the city – to reduce energy use, help lift people out of fuel poverty and reduce health costs.

Bristol has the lowest per capita carbon emissions of all the large UK cities, but there are even more ambitious cities such as Vancouver and Malmo, which shows the challenge it has ahead in terms of being in the very top league internationally.

Bristol City Council has installed 1.3 MW capacity of solar PV on its own operational buildings. In 2015 alone it has rolled out 650 kW, with a further 250 kW planned before the end of this year. A total of 3,600 solar panels will have been installed, saving around 340 tonnes of CO2 each year. The council, which already holds 5MW capacity from two wind turbines since 2013, has plans to complete two solar parks with 10.2 MW combined capacity in the coming months.

Heat networks are also being developed in the city, connecting businesses and public buildings to energy centres powered by biomass and backup energy efficient gas boilers. Building developers within a major city development project, Bristol Temple Quarter Enterprise Zone, will be set to attract sustainability-orientated businesses with affordable low carbon heat.

Stephen Cirell