Energy policy

UK renewables auction pushes down costs

  • 27 Feb 2015, 08:10
  • Simon Evans

Contracts worth £315 million have been awarded to 27 renewable energy projects with a combined capacity of 2.1 gigawatts, the UK's Department of Energy and Climate Change (DECC) announced on Thursday.

The "strike prices" awarded to the schemes in the first-ever Contracts for Difference (CfD) auction were well below those expected. The strike price is the price paid for each unit of electricity supplied by the schemes, guaranteed for 15 years.

Carbon Brief's number crunching shows the government could have supported double the capacity if only the cheapest renewables such as onshore wind had been supported. It also shows that offshore wind projects awarded contracts last year could have been £2.2 billion cheaper, if they had been given the same support as offshore schemes contracted this year.

Most of the projects are windfarms

The majority of the 27 schemes are windfarms, including 15 onshore and two offshore schemes (the blue and green chunks below). The remaining contracts went to five solar farms (yellow) and five schemes that will burn or gasify waste to generate energy (black and grey).

Source: Department for Energy and Climate Change. Chart by Carbon Brief.

The total cost of the schemes is expected to be £315 million between now and the 2020-21 financial year. The schemes will cost around £4 billion over the full 15-year lifetime of the contracts, according to DECC figures quoted by the Financial Times.


How the EU's evolving Energy Union reveals underlying politics

  • 25 Feb 2015, 16:15
  • Simon Evans

Europe's energy system needs to be fundamentally transformed, shifting away from reliance on fossil fuels, according to the European Commission's proposals for an energy union.

A framework strategy for the energy union, published today, explains how the commission plans to achieve this transformation. The strategy attempts to create a coherent vision by synthesising all existing EU policies on climate and energy with a number of new initiatives.

Reactions so far suggest this synthesis has only been partially successful. Legal NGO ClientEarth says the strategy lacks clear rules on how EU targets will be met. Thinktank E3G says the strategy is "good on vision, but deeply confused on delivery priorities". NGO Greenpeace says the plan is "contradictory" and lacks coherence, while WWF says it has "blind spots".

Carbon Brief explains where the idea of an energy union came from and shows how the strategy text has evolved through several drafts, revealing evidence of the differing political priorities that have challenged creation of a clear and coherent strategy.

It's important to note that the commission proposal will be discussed by member state governments at meetings in March, April and June. They could propose further changes.

Moving on from Tusk's energy security union

The idea of an energy union was first proposed by European Council president and former Polish prime minister Donald Tusk in an April 2014 article for the Financial Times. Tusk's proposal emphasised energy security above all.

It called for region-wide purchasing of gas, linking and strengthening the EU's electricity transmission systems, and making "full use" of EU fossil fuel reserves, including coal and shale gas.

Earlier this month, Carbon Brief produced a detailed energy union briefing based on a leaked draft strategy dated 30 January. The briefing explained how Tusk's proposal had been transformed into a more holistic strategy with five "dimensions": integrated energy markets, a new deal for energy consumers, energy efficiency, decarbonising the economy and research.

Since then, a second draft was widely leaked, including to Carbon Brief. This draft shifted emphasis in a number of key areas while the final version moves things on again. So, how has the energy union evolved in recent weeks?


Five charts showing how BP's vision differs from a climate-friendly future

  • 19 Feb 2015, 15:00
  • Simon Evans

Oil firm BP says the world is still failing to do enough to tackle climate change, despite major policy announcements over the past year from the US, EU and China.

The latest annual Energy Outlook shows how BP sees the world changing in terms of economic growth, energy use and emissions. While BP expects countries to meet current climate pledges, it does not think they will be enough to avoid dangerous climate change.

Carbon Brief takes a look at how the media reported the Energy Outlook and how BP's vision differs from a climate-friendly future.

Rising energy use and emissions

The BP outlook predicts energy demand will grow by 37 per cent between 2013 and 2035, reports the Guardian. This is "at odds with the fight against climate change", the paper says.

A more climate-friendly future is set out in the International Energy Agency (IEA) two degrees scenario. This shows how energy efficiency must play a large part in limiting emissions.

Global energy demand increases by just 14 per cent between 2012 and 2035 in the IEA two degrees scenario, slower than over the past two decades (blue line, below). In contrast, BP expects the recent rapid growth in energy demand to continue (green line).

Global energy demand in the BP Energy Outlook and IEA two degrees scenario. Source: BP Energy Outlook 2035 and IEA World Energy Outlook 2014. Chart by Carbon Brief.

BP's outlook expects two thirds of the increase in energy demand to be met by fossil fuels, reports RTCC. Gas would overtake coal as the number one energy source, reports City AM.

The Financial Times reports BP saying that oil producers' cartel Opec will make a comeback while the Times and Independent focus on low expectations for the UK shale gas industry.