Does the Government still care about its climate change targets?
- 20 Mar 2012, 12:00
- Robin Webster
The Friday evening press release is often a good sign an
organisation is attempting to bury bad news away from the attention
of newspapers, as it is designed to fall in the dead spot already
filled by Sunday supplements. So when DECC unexpectedly announced
new developments on gas policy in the middle of the night last
Friday, it's perhaps unsurprising that many green-leaning
commentators were sure it
was up to no good.
The announcement was aimed at reassuring energy companies that new
gas plant constructed now will be able to keep operating for
another three decades - without carbon capture and storage
technologies being fitted to reduce their emissions.
DECC says this is designed to maintain security of energy supply
to the UK. But others are worried: Greenpeace labelled it '
craven submission' to the Treasury and "easily their most
significant environmental decision since the coalition took power."
WWF called it a "
Treasury coup" of UK energy policy, while Richard Black for the
BBC suggested that the announcement should be subtitled "Abandon
hope" on UK climate change targets.
DECC however responded late yesterday that "...Friday's
announcement does not signal a change in policy
direction....Everything we are doing, including on gas, is
consistent with meeting our carbon budgets and 2050 goals".
So what's going on? Massive retreat or minor adjustment?
Emissions performance standards
We're talking here about the somewhat technical world of emissions
performance standards (EPS) - limits on carbon emissions which will
apply to power stations. For some time, DECC has proposed to set an
emissions limit for new power stations of 450g/kWh - that is, 450g
of carbon dioxide per kilowatt hour of power generated.
This rules out coal plants, which emit 800g/kWh. Gas plants are
cleaner, and an EPS at this level will allow new gas plants to be
built without carbon capture and storage (CCS) technology - which
sequesters carbon emissions instead of allowing them to be released
into the atmosphere. This sounds like good news for the gas
industry, because CCS doesn't exist yet at the scale necessary to
fit an entire fleet of gas plants.
But we knew about the 450g/kWh limit already. The key change
contained in
DECC's elusive midnight press release is:
Power stations consented under the
450g/kWh-based level would then be subject to that level until
2045, a process called 'grandfathering' which provides long-term
certainty to gas investors.
In other words, a gas power plant constructed now will be able
to continue emitting carbon at the same level for the next 30 years
or so. The EPS applying to those plants will not be tightened over
time in order to reduce emissions, which seems at odds with the
Committee on Climate Change's recommendation to rapidly reduce
emissions from the power sector as a whole.
The government had previously suggested that they might leave the
EPS
unchanged for new gas plant for 20 years, so this spells an
extension of that period by about a decade.
This looks like a victory for the '
gas is the future' camp - who have been arguing vociferously
over the last six months that wind power and other renewables are
expensive and unreliable, and that we need a new 'dash for gas' to
keep the lights on and energy prices down.
What will this mean for our carbon
emissions?
So the obvious question is what impact this will have on the UK's
climate targets.
Back in 2008, the Government's
Climate Change Committee recommended that the Government needs
to achieve a "substantial decarbonisation of the power sector" by
2030.
The blue line on the graph shows just how dramatic the Climate
Change Committee's recommendations for the power sector are:
In practice the Climate Change Committee's proposal means that
the carbon intensity of the grid as a whole would need to fall to
50gC02/kWh by 2030 - a level nine times lower than the 450g
limit.
The BBC"s Richard
Black has done a bit of number crunching on the Government's
announcement, concluding that if all the UK's electricity were to
come from gas at 450gCO2/kWh, the UK would bust the CCC's suggested
emissions reductions for the power sector by a factor of ten.
Will gas back up, or will it take over?
The Climate Change Committee itself seems remarkably sanguine
about the government plans. Its chief executive David Kennedy told
us that the Government announcement was "appropriate" and that
there is a place for gas fired power stations without CCS in the
energy mix - if they are used as a backup to renewables.
This would mean that gas plants wouldn't provide a constant, or
'baseload', source of supply, but would back up renewable power
when needed (when solar or wind conditions are not optimum) or when
energy demand rises. To achieve this, the Government is introducing
some fairly complicated restructuring of the way energy is bought
and sold on the energy market, including
payments to gas companies for not using their plants.
Crucially however, Kennedy points out that this plan only works if
the Government continues to put in place policy measures that
incentivise renewables over gas power
".… if the Government did not have the
policies in place for offshore wind and was not bothering with
nuclear, as a default [it] would go for shale gas, forgetting all
the issues that come with that….then I would be worried."
Abandon hope?
Both DECC and David Kennedy emphasised to us that other policy
measures are the main tools intended to bring renewables forward.
In its announcement last night, DECC told us:
"….we never intended to rely on the EPS
as a mechanism for decarbonising the electricity sector… The EPS is
a backstop measure, which helps to ensure that there is no new
unabated coal in the UK and that we have continued security of
supply."
This, however, means there is a lot riding on these policy
measures if decarbonisation is to go ahead. As we have previously
discussed, the carbon price imposed by the European-wide
Emissions Trading Scheme (ETS) hasn't delivered on emissions
reductions thus far - so the Government's plans need to be pretty
good.
What else is in the toolbox to decarbonise the power sector? Well,
there's a belief that CCS will materialise at some point - the "
miracle pill" that will reduce emissions from fossil fuel power
plants. But CCS is still unproven. There are the
policies to support renewables, which the Government is driving
forward, but these are under
sustained political attack on a number of fronts. There is the
promise of low carbon nuclear power, but that's at the mercy of the
private sector being willing to invest in new nuclear power plants.
And there's a complicated new suite of energy policies which are
supposed to make sense of it all.
So what's the prognosis for emissions cuts? It's clear that many
things are still up in the air. Perhaps the take-away point from
this episode is less about the policy, and more about the way it
was announced. Late-night DECC press releases featuring
extensive 'guest' quotes from a Chancellor who is perceived to be
antagonistic to green policies don't really inspire confidence,
particularly not the Friday before the budget.
UPDATE 27th March: Maybe the Climate Change Committee isn't so
sanguine after all. Its chair Adair Turner has
now written to Ed Davey expressing concern. Lord Turner's
letter states that the new approach "could be compatible with
power sector decarbonisation required to meet carbon budgets,
but also carries the risk that there will be too much
gas-fired generation instead of low carbon investment". This, the
letter says, could take emissions "beyond the limits implied by
carbon budgets".