Committee on Climate Change: if we’re going to decarbonise, we need to know how

  • 23 May 2013, 11:15
  • Robin Webster

Investing in low-carbon technologies and decarbonising the power sector by 2030 could save the country £25 to £45 billion, according to the Committee on Climate Change (CCC) in a new report. But to get there the government must avoid a 'dash for gas' approach and think long term, it warns.  

The government is planning big changes to the power sector. It aims to shift to a low carbon system and maintain energy security - while keeping costs down - through a policy package known as Electricity Market Reform (EMR). But in a report out today, the CCC says that the government's lack of clarity about where energy policy is going, and particularly the suggestion that it might also be expanding the amount of power the country gets from gas, is threatening the entire process.  

If the country is really going to shift to a low-carbon energy system, the committee says the government must think more strategically.  

Defining a strategic approach 

What would a more strategic approach look like? The government has made a plan for how it's going to source 15 per cent of the country's energy from renewables by 2020. But the committee says the government must look far beyond that date.  

According to the CCC, this approach would include:  

  • Announcing how much funding it intends to commit to low-carbon technologies in 2030, as it already has for 2020, under the Levy Control Framework;
  • Publishing strategies for how it is going to develop the less mature low carbon technologies - for example offshore wind, or carbon capture and storage (CCS); 
  • Giving investors certainty on how much government support wind power will receive right up to 2019, and signing contracts with developers so they can start planning to build new wind farms in the 2020s;
  • Setting out options for how it is going to mobilise finance for the low-carbon economy - from banks, institutional investors, or the new Green Investment Bank. 

This all sounds to us a bit like the low-carbon industrial strategy that the government launched back in 2009. The strategy contained plans for how the country was going to build up supply chains for low-carbon technologies, develop new technologies like tidal power, and attract new manufacturing - of wind turbines, for example. We're not sure exactly how much of this plan ever emerged into reality, however, as little mention has been made of it since. 

Cost savings  

The committee reiterates its call for the government to decarbonise the power sector by 2030 - in more technical terms reducing emissions from the power sector to 50g per kilowatt hour of electricity.  

It argues that a clear commitment to hitting the 50g target would provide revenue certainty for investors, drive investment in low-carbon technologies and make the UK one of the 'early movers' in developing low-carbon technologies like carbon capture and storage and offshore wind. 

According to the CCC's modelling  in the long term this could save the country somewhere between £25 and £45 billion under its central predictions for the future price of gas and the carbon price. But this could rise to £100 billion with high gas and carbon prices. The cost savings would arise because the country avoids the cost of relying on gas, and of having to decarbonise rapidly in future because it would already have laid the foundations.  

What you aim for versus what you get  

The CCC is scathing about the government's gas strategy, launched last December. The gas strategy suggested three possible futures for UK energy policy - including a 'dash for gas' scenario where significantly more gas generation would be built. Publishing "such widely varying scenarios for sector development" has created confusion amongst investors, the committee says. 

There are some similarities between the gas strategy and the CCC's modelling. Both documents suggests that the country could reduce the power sector's emissions intensity to 100g of carbon dioxide per kilowatt hour by 2030 - and still hit its emissions targets. 

But in the CCC's report, this outcome is very much "Plan B". It accepts that energy policy is very uncertain and it is hard to make meaningful predictions. For example, nuclear power could turn out to cost more than the government expects; carbon capture and storage technology might not deliver; or offshore wind might turn out to be more expensive than hoped. 

In these cases, the country might fail to meet the 50g target, and emissions intensity might be reduced to 100g of carbon dioxide per kilowatt hour by 2030. But crucially, under the CCC's assumptions, the less mature low carbon technologies would still have been developed. The country would have a wide diversity of low-carbon technologies to rely on, not just gas and nuclear: 

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The CCC contrasts the government's approach with its own, saying:

"...a scenario with high nuclear deployment, but low investment in CCS and offshore wind during the 2020s (e.g. as assumed in the government's emissions projections) could deliver a similar emissions intensity but would leave the UK overly reliant on a single low-carbon technology. This would imply unacceptable costs and risks of achieving the 2050 target and/or of very high electricity prices required to deploy uncommercialised low-carbon options at scale after 2030."

As our teachers used to say: to fail to prepare is to prepare to fail. 

Pay now, save later

It's worth pointing out that the report is based on a crucial assumption - that the UK government and governments worldwide will be committed to decarbonising in the future. Indeed, the CCC's prediction of savings in the UK is based on there being an effective carbon price.

And in the UK, cutting emissions and reforming the electricity market continues to present a challenge to politicians focused on short-term energy bills, especially as the savings the CCC predicts depend on high renewable rollout - which will cost money.

In fact, in the short term, the CCC estimates that subsidies for low-carbon technologies will add £100 to consumer energy bills by 2020. The greatest economic benefits from investing in low carbon would come after 2030 - which, when the next election is in just two years, is a long time in politics. 

Chief executive of the CCC, David Kennedy, gave Carbon Brief his opinion: 

"Some people might say this is about the 2030s and 40's, so who cares? But lot of us hope to alive then, and so will our kids our grandkids. It's the same argument as about national debt or pensions. Energy is the same, you have to think long term. It's about not lumbering future generations with burdens they can't cope with." 

UPDATE 11am 24th May: The Guardian's ' EcoAudit' on the committee's report yesterday gave a bit more detail on the assumptions behind the committee's modelling. The modelling was carried out for the committee by consultancy Poyry - but the CCC hasn't released Poyry's writeup yet. The CCC tells us that it probably won't be released for a couple of weeks. We'll take a deeper look at it when it is. 

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