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Briefing date 19.08.2022
UK: Industry unites behind plan for crisis fund to control soaring energy bills

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UK: Industry unites behind plan for crisis fund to control soaring energy bills
The Guardian Read Article

The energy industry has “united behind a plan to set up a crisis fund that could prevent bills from soaring next year”, reports the Guardian. The paper explains: “Energy UK, the trade body for the sector, has written to the chancellor, Nadhim Zahawi, to back calls for a ‘deficit tariff scheme’ to be established as a long-term solution to the energy crisis. Under the plan, commercial banks would put cash into the state-backed fund, which suppliers could then draw on to freeze customers’ bills at the current price cap, £1,971, for two years. The cost of the scheme would then be paid back over 10 to 15 years through a surcharge on bills or via taxation. However, the scheme could create a debt pile of up to £50bn.” The Guardian also has an explainer on the proposed scheme. However, as it would take time to set up, Energy UK urged the UK government to “immediately” top up a £400 rebate on all households’ energy bills this winter, warning that soaring prices would be “unaffordable for far too many”, reports the Financial Times. The trade body said a non-repayable rebate was the “most straightforward, practical way to immediately provide broad support to customers ahead of Christmas”. The FT adds: “This is despite the fact that some consumer campaigners have criticised the scheme, as the saving will go to all households, whether or not they can afford higher bills.” Energy UK also says that the UK needs a dedicated, focused government energy department after the last one was disbanded by Theresa May in 2016, reports the Times.

Energy regulator Ofgem is set to announce the new price cap, which will come into effect from October, next Friday, reports the Press Association via the Belfast Telegraph. Auxilione, an energy consultancy, said its final prediction is that officials will set the cap at £3,576 per year for the average household, the outlet says. The NHS Confederation, which represents NHS leaders, has warned that the UK faces a “humanitarian crisis” of worsening health outcomes unless the government does more to help with rising energy costs, reports the Press Association.

Meanwhile, Zahawi has “ blamed the Whitehall blob for frustrating attempts to boost Britain’s energy supply”, reports the Daily Mail. In a phone briefing with Tory MPs, the chancellor “tore into civil servants for ‘trying to shackle’ long-term projects just as British homes face a winter of sky-high energy bills and possible blackouts”, the paper continues. According to the Sun, Zahawi “warned the Conservatives risked looking like Nick Clegg – who years ago railed against nuclear power because the plants would not be ready ‘until 2022’”. The paper adds: “A source on the call said he launched into ‘an impassioned speech against Treasury orthodoxy on caution and bean-counting’…He said that many mandarins were too ‘uncomfortable’ taking a punt and should get used to ‘holding risk.”

The Guardian reports that a former executive of oil company BP has called for increases to the energy price cap to be scrapped and for suppliers that fail to help households struggling with bills to be nationalised. The paper says: “Nick Butler, who worked for BP for almost 30 years and was group vice-president for strategy and development, said that expected rises in the cap should be abandoned by the industry regulator, Ofgem, which he said had been ‘overwhelmed by events’ after turmoil in the global energy markets sent 29 British energy retailers to the wall.” Butler has written a comment piece in the Guardian.

Finally, Tory leadership hopeful Rishi Sunak has written in the Daily Telegraph that, “on my watch, we will not lose swathes of our best farmland to solar farms”. He writes: “Instead, we should be making sure that solar panels are installed on commercial buildings, on sheds and on properties. Likewise, we must protect our best farmland from rewilding, which should not take place at the expense of food production.” In the Daily Telegraph, commentator and landowner farmer Jamie Blackett also criticises the “drive to cover farmland with trees, solar panels, wilding projects, HS2 – almost anything other than crops and livestock”.

US federal study: New climate law to slice carbon pollution 40%
Associated Press via The Independent Read Article

A study by the US department of energy suggests the “clean energy incentives” within President Biden’s newly signed Inflation Reduction Act will cut US emissions by around one billion metric tonnes by 2030, reports the Associated Press. The first official federal calculations show that “between the bill just signed and last year’s infrastructure spending law, the US by the end of the decade will be producing about 1.15bn metric tonnes less carbon pollution than it would have without the laws. That saving is equivalent to about the annual greenhouse gas emissions of every home in the US”, the newswire says. It continues: “The Energy Department analysis finds that with the new law by 2030, US greenhouse gas emissions should be about 40% lower than 2005 levels, which is still not at the US announced target of cutting carbon pollution between 50% and 52% by the end of the decade.” The 40% figure is “supported by results from three independent modelling teams”, the Washington Post says, noting that “at the heart of these predictions are scientists’ highly complicated models of how the economy works, including how energy is used, which can both provide helpful forecasts for the future and are always somewhat inaccurate”. And Reuters reports that leaders of island nations in the Caribbean and Pacific have said that the bill “restores the country’s credibility as a leading player in UN climate negotiations”.

Associated Press also reports that the US oil and gas industry is an “unlikely beneficiary” of the new bill. It explains: “While the Inflation Reduction Act concentrates on clean energy incentives that could drastically reduce overall US emissions, it also buoys oil and gas interests by mandating leasing of vast areas of public lands and off the nation’s coasts. And it locks renewables and fossil fuels together: If the Biden administration wants solar and wind on public lands, it must offer new oil and gas leases first.” Politico reports on how “advocates for low-income and minority communities…say that once again their environmental needs have been sacrificed for political compromise”. DeSmog reports that climate campaigners were arrested yesterday after demonstrating outside Senate majority leader Chuck Schumer’s Manhattan office, “where they expressed opposition to the fossil fuel-friendly permitting reforms” in the new bill. Reuters reports that “a major expansion in tax credits for companies that capture and store carbon emissions” in the bill “could be a boon to the ethanol industry as it seeks to meet its mid-century climate goals”.

Commenting on the Inflation Reduction Act, Washington Post columnist Catherine Rampell looks at how Democrats hope the bill “will swing momentum their way ahead of the midterms”. And Atlantic staff writer Robinson Meyer says that “Biden’s climate law is ending 40 years of hands-off government”. (For more on the bill, see Carbon Brief‘s article, which explores the contents of the bill, the impact it is expected to have on US emissions and how the media has responded.)

In other US news, Bloomberg reports on the delayed retirement of a coal-fired power plant in Indiana “as a surge in wholesale electricity prices and uncertainty about some renewable projects undermines President Joe Biden’s push to decarbonise the grid”. And Bloomberg also reports on how the Biden administration is “taking steps to advance offshore wind development in the Gulf of Maine, setting the stage for potentially the first floating turbines deployed in US waters”.

Europe storms: Deaths are reported in France, Austria and Italy
BBC News Read Article

Powerful storms have battered areas of central and southern Europe, reports BBC News, killing at least 13 people including three children. It continues: “The deaths, most from falling trees, were reported in Italy and Austria, and on the French island of Corsica. Heavy rain and winds wrecked campsites on the island, while in Venice, Italy, masonry was blown off the belltower of St Mark’s Basilica.” The outlet notes that the storms “follow weeks of heatwave and drought across much of the continent”. Reuters reports on the “violent storms” in Italy and also on the deaths in Corsica, where “French president Emmanuel Macron said he had called an emergency government meeting by video conference on Thursday evening to respond to the crisis”. At the same time, Politico reports on how farmers in Europe “are reckoning with the prospect of a future where parched pastures and shrivelled fruits are no longer considered extremes but the norm”. And Bloomberg looks at how Seville in Spain is “rolling out measures to mitigate scorching heat”.

Elsewhere in the world, Agence France-Presse via the Guardian reports that Algerian firefighters were yesterday “battling a string of blazes, fanned by drought and a blistering heatwave, that have killed at least 38 people and left destruction in their wake”. In Russia, Reuters reports that “firefighters worked to tackle blazes burning through forests southeast of Moscow” yesterday as “residents of the capital complained of sweltering heat and the pungent smell of smoke”. Reuters also reports that torrential rain has hit parts of New Zealand for a fourth day today, “forcing hundreds of people from their homes as rivers overflowed their banks and waterlogged ground becomes unstable”. In the US, Reuters reports that California’s grid operator has urged the state’s homes and businesses to reduce electricity use “as a wave of extreme heat settled over much of the state, stretching power supplies to breaking point”. In the UK, BBC News reports that a drought has been officially declared in south west Wales. And the Guardian has an article on a “drought-resistant garden”. Finally, CNN reports on how extreme heat and drought conditions are battering the US, Europe and China “all at once”.

China issues first national drought alert, battles to save crops in extreme heatwave
Reuters Read Article

The Chinese government has issued its first national drought alert of the year, reports Reuters, “as authorities battle forest fires and mobilise specialist teams to protect crops from scorching temperatures across the Yangtze river basin”. The newswire continues: “The national ‘yellow alert’, issued late on Thursday, comes after regions from Sichuan in the south-west to Shanghai in the Yangtze delta have experienced weeks of extreme heat, with government officials repeatedly citing global climate change as the cause. The alert is two notches short of the most serious warning on Beijing’s scale.” State broadcaster CCTV said as many as 66 rivers across 34 counties in the south-western region of Chongqing have dried up, the newswire explains: “Chongqing accounted for six of the 10 hottest locations in the country on Friday morning, with temperatures in the district of Bishan already approaching 39C. The Chongqing region’s infrastructure and emergency services have come under increasing strain, with firefighters on high alert as mountain and forest blazes erupted across the region.…The Chongqing agricultural bureau has also set up expert teams to protect vulnerable crops and expand planting to compensate for losses ahead of the autumn harvest.” Reuters also reports on a tributary of the Yangtze river running dry “amid an unprecedented drought across the region that could last another month”.

The New York Times says: “Faced with China’s most searing heatwave in six decades, factories in the country’s southwest are being forced to close. A severe drought has shrunk rivers, disrupting the region’s supply of water and hydropower and prompting officials to limit electricity to businesses and homes.” The heatwave is “putting pressure on the supply chain for lithium batteries and solar panels as providers of key materials in central Sichuan province comply with a government mandate to shut down industrial production to conserve electricity for household use”, reports the South China Morning Post. And in the western province of Qinghai, flooding caused by heavy rainfall has killed 16 people, with an additional 36 missing, reports Reuters.

Germany to slash VAT on gas sales to cushion price shock
Financial Times Read Article

Germany has unveiled plans to cut tax on “natural” gas sales to soften the blow of soaring energy costs for many households by offsetting the impact of a new gas levy that starts in October, reports the Financial Times. The paper continues: “Chancellor Olaf Scholz announced the cut in value added tax on gas sales from 19% to 7% on Thursday, telling reporters that more measures would be announced in the coming weeks to deal with Germany’s mounting energy crisis. ‘The question of justice is crucial for the country to stick together in this crisis,’ Scholz said, adding that gas suppliers should pass on the tax cut in full to their customers. ‘You’ll never walk alone,’ he said, repeating his often-used mantra.” Bloomberg reports that Scholz said the move could cost about €14bn in lost revenue. “Since a direct tax exemption is not possible under European law, a temporary reduction in VAT on gas is logical,” the German economy minister Robert Habeck is quoted saying. According to the outlet, Scholz and Habeck reiterated that the government is putting together a third package to help households and companies, which would be worth around €30bn. German outlets Tagesschau explains that all German gas users will have to pay a surcharge that will fund bailouts for gas importers. It adds that the levy will start at around 2.4 cents per kilowatt hour, with value added tax also applied. Reuters reports on a survey suggesting seven out of 10 Germans are using less energy “due to soaring prices”.

Meanwhile, Deutsche Welle reports that Germany is also in the process of trying to fill up its gas reserves ahead of the winter. Klaus Müller, the president of the Federal Network Agency, is quoted: “We fall short of an average of 95% by 1 November in all our projections…There’s hardly a chance of achieving that because some storage sites started at a very low level.” However, the Guardian carries a piece about one of five floating LNG terminals in Germany that is planned to be built by the end of the year, creating infrastructure that a study by the Fraunhofer Institute argued would be “vital to avoid cold homes and closed factories this winter”. It adds that “a 300-metre long tanker converted into a Floating Storage and Regasification Unit and chartered by the German government at a mooted cost of €200,000 a day, will dock at the jetty and turn liquid back into gas at a rate of about 10 hours per tanker load”. The floating LNG terminal in Wilhelmshaven should provide 8% of Germany’s overall gas usage before the start of the war, notes the newspaper. “As Germany has committed to being greenhouse gas-neutral by 2045, the pipelines on the North Sea coast would soon not be pumping LNG but green hydrogen”, Olaf Lies, the centre-left Social Democrat environment minister for the state of Lower Saxony is quoted saying. And Reuters reports that “Chancellor Olaf Scholz will sign a deal to establish hydrogen supply chains with Canada during his two-day visit to the country next week, officials said, as Berlin accelerates its green transition to reduce dependence on Russian gas supplies”.

In other energy news, Der Spiegel reports that the German government wants to ramp up the expansion of heat pumps massively, aiming for 500,000 to be installed each year from 2024 and six million by 2030. Reuters reports that the heating manufacturers such as Stiebel Eltron have gone up to working 24 hours a day “making the energy-efficient heat pumps that Germany needs to wean itself off Russian gas”. However, it says “supply bottlenecks, labour shortages and surging energy costs [are] making it all but impossible to meet nearly limitless demand”.

Finally, ZDF reports that the deputy head of Germany’s Free Democrats (FDP), Wolfgang Kubicki, sees it as the federal government’s top priority to open Nord Stream 2. “If more gas reaches us in this way, perhaps even the entire contractually guaranteed amount, that will help people not have to freeze in winter, and our industry will not suffer serious damage,” Kubicki is quoted saying. The outlet adds that Kubicki also “advocated exploring the possibilities of fracking in Germany to become less dependent on natural gas supplies”.

UN chief, in Ukraine, seeks to secure nuclear plant and explore peace talks
Reuters Read Article

UN secretary general Antonio Guterres said yesterday that he was gravely concerned by the situation at Europe’s largest nuclear power station after it came under shelling at the front lines in Ukraine, reports Reuters. Guterres, speaking to reporters after talks with Ukraine’s president Volodymyr Zelenskiy, said military equipment and personnel should be withdrawn from Zaporizhzhia nuclear plant, which was captured by Russia soon after its invasion of Ukraine and is still operated by Ukrainian engineers, the newswire explains. Guterres said: “The facility must not be used as part of any military operation. Instead, agreement is urgently needed to re-establish Zaporizhzhia’s purely civilian infrastructure and to ensure the safety of the area.” Russia’s foreign ministry rejected the proposal to demilitarise the area as “unacceptable”, reports Reuters, saying it would make the facility “more vulnerable”. Russia said it could shut the site down after it came under shelling at the front lines in Ukraine, another Reuters article reports, “a move Kyiv said would increase the risk of a nuclear catastrophe”. The newswire adds: “Ukrainian officials have accused Russia of planning to shut the plant to sever it from Ukraine’s power grid and switch it over to Russia’s – effectively stealing its output. Ukrainian state nuclear energy company Energoatom said shutting down the plant would increase the risk of ‘a radiation disaster at the largest nuclear power plant in Europe’. Disconnecting the complex’s generators from Ukraine’s power system would prevent them being used to keep nuclear fuel cool, in the event of a power outage at the plant, it said.” Separately, Reuters also reports that Zelenskiy has said he has agreed the parameters of a “mission” of the International Atomic Energy Agency to the nuclear plant at talks with Guterres and Turkey’s leader, Tayyip Erdogan. Zelenskiy said: “We agreed with the secretary general the conditions of a possible mission by the IAEA to the Zaporizhzhia nuclear plant, in a legal way, via territory free from occupiers.”

In further coverage, the Times reports that Ukraine has warned that Russia is planning to stage a false-flag attack on Zaporizhzhya today. The paper says that “the Ukrainian defence intelligence agency said it had obtained information that Moscow had told its workers there not to report for duty”. It adds: “The Times previously obtained video and witness testimony suggesting that Russian forces have staged false-flag attacks to sever the plant’s connection to the Ukrainian electricity grid and erode western support for Kyiv.” The Daily Telegraph and Guardian also have the story.


The Guardian view on rare earths: mining them can’t cost the Earth
Editorial, The Guardian Read Article

An editorial in the Guardian comments on “worrying” EU plans to lower regulatory barriers to mining the raw materials needed for a green transition. (See news coverage from Wednesday in the Financial Times for more details.) The paper says: “Crucially, climate solutions – such as solar energy, wind energy and electric vehicles – depend on rare earth elements, which have unique magnetic and luminescent properties. The trouble is that their production and disposal is environmentally destructive.” It continues: “To get to net-zero, Europe will require up to 26 times the amount of rare earth metals in 2050 compared with today. Demand is also increasing because of digitalisation. The EU, like the UK, is dependent on imports, while the geopolitics of supply chains are increasingly unstable.” However, the paper argues, “the transition to climate neutrality cannot mean replacing a reliance on dirty fossil fuels with a dependence on raw materials, the extraction of which leaves large tracts of the Earth uninhabitable”. What is needed, the editorial concludes, is “to enact tougher regulations to stem the damage done by mining companies and then for the UN to get an enforceable agreement on high global standards for rare earth extraction and processing”.

The energy bills emergency has barely begun
John Burn-Murdoch, Financial Times Read Article

John Burn-Murdoch, chief data reporter of the Financial Times, looks at the potential impact of soaring energy bills on British households, warning that millions “are already on the brink – and the months-long squeeze is only just starting”. he writes: “In the absence of any new support come the spring, disposable income after housing costs would fall by almost 7% in real terms across the population as a whole…This is by far the biggest contraction since records began in 1961.” He continues: “Monthly outgoings for the poorest 10th of households would be £155 higher next April than today, instantly wiping out 17% of net income. For a group whose post-tax income already falls short of covering essential spending, this would be nothing short of catastrophic. The typical household in this bracket has just over £1,000 in liquid financial wealth to fall back on. They would burn through those reserves in just five months at April-level prices with no scope to cut back elsewhere short of choosing between heating and eating.” Millions of British households “are already financially underwater and a tsunami is bearing down”, concludes Burn-Murdoch: “To avert disaster, fresh support packages must be rolled out well in advance of the spring, and they must far exceed what is already on the table for October.”

Meanwhile, in the Financial Times, Prof Helen Thompson – professor of political economy at the University of Cambridge – writes under the headline, “a winter energy reckoning looms for the west”. She warns that “world economic growth still requires fossil fuel production, but long-term climate ambitions must stay in place”. Also in the Financial Times, Megan Greene – a senior fellow at Brown University and global chief economist at consultancy Kroll – writes that “Europe must use all its financial firepower to fund the green transition”. And in the Times, Douglas Murray – associate editor of the Spectator and columnist for the Sun and New York Post – criticises the “default presumption” in the UK that “every problem can be answered by an increase in public spending, and that swelling the public sector and squeezing higher earners is the obvious answer to most questions”.


Increased extreme swings of Atlantic intertropical convergence zone in a warming climate
Nature Climate Change Read Article

A new study projects a more-than-doubling of “extreme swings” in weather patterns in the Atlantic “intertropical convergence zone” – a rain belt spanning from northern South America to the west coast of Africa – under a very-high-emissions scenario. The authors analyse rainfall, sea surface and surface wind data and assess simulations of swings of the Atlantic intertropical convergence zone in 40 climate models. The study finds that the frequency of “extreme swings” increases from one swing event 20 years in the 20th century to one swing every nine years in the 21st century. The authors note that an increase in extreme northward swing events could result in a higher risk of severe droughts in central-eastern Amazon and floods in northern South America.

Historical patterns and sustainability implications of worldwide bicycle ownership and use
Communications Earth & Environment Read Article

Approximately 414m tonnes of CO2 emissions could be avoided if everyone in the world cycled 1.6 kilometres every day, according to a new study. The authors assemble the first global dataset of bicycle ownership and use by country over 1962-2015. They also collect data on the production, trade and stock of bicycles. The study suggests that a “worldwide pro-bicycle policy and infrastructure development” can lead to “significant” climate and health benefits, but it also finds that high bicycle ownership does not necessarily lead to high bicycle use, the authors say.

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