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Daily Briefing |

TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 05.04.2017
Engie sells NuGen stake to partner Toshiba for $138.7m, White House disavows two controversial tax ideas hours after officials say they’re under consideration, & more

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News.

Engie sells NuGen stake to partner Toshiba for $138.7m
Financial Times Read Article

Further uncertainty has been cast over plans for a new nuclear power station in north-west England after Engie, the French utility company, said it would force its partner in the project, Toshiba, to buy its stake for close to $139m. Engie is taking advantage of an agreement between the two companies that allows it to sell its 40% stake in the NuGen project at Moorside to Toshiba in the “event of a default”. Last week, Toshiba put its nuclear subsidiary — Westinghouse — into bankruptcy protection. The sale will further strain Toshiba’s finances and add to uncertainty over the project, says Reuters. Toshiba is now the sole owner of NuGen, but has said it is looking for more investors to join the $15-20 billion project or to sell out altogether. The project is already behind schedule, notes the Times; a planning application for the 3.8-gigawatt, three-reactor power station is targeted for this year, having originally been scheduled for 2014. Greg Clarke, the business secretary, has travelled to South Korea this week in a bid to save the project by appealing to Korean nuclear giant Kepco to invest, reports the Telegraph. Meanwhile, both Reuters and City AM report that Hitachi Ltd’s Horizon unit has applied to Britain’s nuclear regulator for a site licence to build its Wylfa nuclear project in Wales.

White House disavows two controversial tax ideas hours after officials say they’re under consideration
Washington Post Read Article

The White House yesterday dismissed two controversial options for their planned overhaul of the tax code – a carbon tax and a value added tax – after two Trump administration officials said earlier in the day that they were under consideration. “The President’s team is hearing input from experts on all sides of the tax reform debate as we formulate what will ultimately be the President’s plan to enact the first significant tax reform since 1986. As of now, neither a carbon tax nor a VAT are under consideration,” deputy press secretary Lindsay Walters said in a statement. This is the second time the administration has played down the chances of a carbon tax, says Reuters. Elsewhere, American coal companies Cloud Peak and Peabody confirmed that they have advised the Trump administration to stay in the Paris Agreement, says another Reuters article. “The last thing you want to do if you are a coal company is to give up a US seat in the international climate discussions and let the Europeans control the agenda,” said a US official familiar with the discussions. Staying in the agreement and trying to encourage “a more balanced, reasonable and appropriate path forward” on fossil fuel technologies seems like a reasonable stance, said Cloud Peak’s vice president of government affairs, Richard Reavey. Meanwhile, a survey of power generating companies by Reuters suggests they remain unconvinced of President Trump’s plan to boost US coal production. The utilities gave many reasons, such as cheap and abundant natural gas; falling solar and wind power costs; state environmental laws; and potential legal challenges to Trump’s regulatory rollback. Of the 32 utilities contacted for the survey, 20 said Trump’s order would have no impact on their investment plans; five said they were reviewing the implications of the order; six gave no response. Just one said it would prolong the life of some of its older coal-fired power units.

North Sea oil and gas industry cost UK taxpayer £396m in 2016
Guardian Read Article

Britain’s North Sea oil and gas industry was a net drain on the UK’s public finances for the first time last year, as the slump in the oil price hit company profits. The story picks up on analysis by Carbon Brief which shows that the sector received £396m, net of tax payments, from the government in 2016. This is compared with a contribution to the exchequer of £381m the previous year, and a contribution of more than £10bn as recently as 2011. “The sector is no longer the cash cow chancellors have come to expect over the past several decades,” Carbon Brief’s policy editor, Simon Evans, told the Guardian. Speaking to The Scotsman, a spokesperson from HM Treasury said: “The UK has one of the most competitive tax regimes in the world for oil and gas, and we have provided £2.3 billion of support to the industry over the last two years alone to support investment and jobs.”

London to bring forward new levy on most polluting vehicles
Reuters Read Article

London Mayor Sadiq Khan plans to charge the most polluting cars and vans a daily fee of £12.50 to enter the city centre from 2019. An Ultra Low Emission Zone (ULEZ), in which cars must meet stringent emissions standards to enter or pay a charge, will now be rolled out from April 2019 instead of September 2020 as previously planned by his predecessor, Boris Johnson. The Times, BusinessGreen, and Energy Live News also cover the news. Meanwhile, former chief scientific adviser to the government, Sir David King, says it was wrong to cut fuel duty on diesel vehicles, reports the Guardian. He said the government at the time wanted to encourage more people to drive diesel cars because they were said to emit less CO2 than petrol vehicles. But he says he was misled by carmakers over the amount of nitrogen oxides diesel cars would emit on the road. He also accused the car industry of carrying out emission tests in laboratories that produced “the results they want” and were far lower than when vehicles are driven on the road, reports the Evening Standard. However, Theresa May has hinted that drivers of diesel cars could be given financial help by the Government as cities across the UK prepare to introduce new taxes on the vehicles, says the Telegraph. Elsewhere, Reuters also reports that Europe’s industry chief said she saw diesel engines disappearing from markets much faster than expected as the European Parliament endorsed tougher rules aimed at preventing a rerun of the Volkswagen emissions cheating scandal.

U.K. Said to Seek End for Clean Energy Goal That May Sour Brexit
Bloomberg Read Article

Britain is looking for ways to scrap its 2020 clean energy targets while maintaining everyday trade in Europe’s energy market, reports Bloomberg. Officials in the Treasury and the business department are looking for a way to abandon the national goal of getting 15% renewable energy by 2020, according to a person with knowledge of the matter. At the same time, the UK wishes to preserve its link to the market and smooth cross-border trading of electricity, the person said. Meanwhile, Reuters reports that EU nations are considering lowering targets on energy savings after 2021. The text drafted by the Maltese presidency of the European Council proposes new annual energy savings targets of 1.4% through 2030, down from 1.5% proposed by the European Commission. The change was requested by a number of EU nations afraid they would not meet the more ambitious targets, a spokesman for the Maltese presidency told Reuters, adding the target is still open for discussion. And elsewhere, former Business Secretary Vince Cable says the UK risks ‘reversing’ its successful decarbonisation efforts unless it takes a stronger stance in support of green objectives in its new Industrial Strategy, reports BusinessGreen.

EU will release 60 million euros to help Britain repair 2015-16 flood damage
Reuters Read Article

Britain will receive £51.3m from the European Union to repair damage caused by the floods last year. Britain had asked for EU support to rebuild infrastructure damaged by heavy rains in the winter of 2015-16. European Parliament lawmakers will approve the grants today, clearing the way for the funds to be disbursed, parliament officials said. “When one member state has a problem, others actively collaborate and help. The UK will benefit from EU solidarity despite Brexit and the triggering of Article 50”, said the lawmaker in charge of the dossier, Spanish conservative José Manuel Fernandes.

Comment.

What Financial Markets Can Teach Us About Managing Climate Risks
Michael Greenstone, New York Times Read Article

Last week, President Trump signed an executive order about climate change that runs counter to insight from financial markets, writes Michael Greenstone. Currently, the social cost of carbon is set at about $40 per metric ton of carbon released, but Trump’s order “appears to be putting us on a path toward valuing climate damages at much less — possibly less than $5 per metric ton of carbon,” Greenstone says. But financial markets tell us that spending a little extra now as insurance to protect against potentially disruptive risk is a wise strategy. “If those risks don’t materialise, there will have been costs to spending today on climate mitigation. But if those risks are real, using a low discount rate to choose the degree of climate mitigation today will be like having invested in gold before the Great Recession,” he concludes.

Science.

Demand for biomass to meet renewable energy targets in the United States: implications for land use
GCB Bioenergy Read Article

A new study suggests there is significant potential to meet renewable energy targets in the US by expanding biomass, without conflicting with food crop production. The authors find that demand for biomass ranges from 100 million metric tons (MMT) to 310 MMT, depending on the policies implemented, but that 70% can be met by crop and forest residues. The remainder can be sourced by devoting 3% of cropland to energy crop production, predominantly on marginal land.

Cold- and heat-related mortality: a cautionary note on current damage functions with net benefits from climate change
Climatic Change Read Article

New analysis challenges the finding from some economic assessments that as temperatures rise, the reduction in the number of cold-related deaths will overcompensate for increases in heat-related mortality. The FUND model, for example, currently projects a net reduction in the overall death rate of 380,000 per year for 1C of warming. But correcting for two potential flaws in the assumptions reverses the result, say the authors, projecting a net increase compared to today of 150,000 more deaths globally per year.

Future climate forcing potentially without precedent in the last 420 million years
Nature Communications Read Article

By the middle of the century, the unabated use of fossil-fuels could see CO2 in the atmosphere reach values not seen since the early Eocene, 50 million years ago, according to new research. The paper looks at variations in total solar irradiance and greenhouse gases over geological timescales, and their effect on global climate. The authors add that if CO2 continues to rise into the 23rd century, the Earth would be forced to respond to a situation that is without geological precedent in nearly the last half a billion years.

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