Renewable energy: boosted or becalmed?

“… in terms of the electricity market we are at a moment of significant transition. The economics of every other potential source of supply will be measured against the falling costs of wind and solar…”
– Financial Times, 16 October 2017

“Spending on renewables in the UK is set to plummet 95% over the next three years…”
– New Scientist, 5 August 2017

So, who’s right? Are we entering a golden age of renewable energy, or is the growth of renewables faltering?

Falling short

One view, characterised by a New Scientist article published in August, is that renewable energy isn’t taking off fast enough to avoid major global warming. While acknowledging that globally renewables are growing extremely fast, largely thanks to China, the article notes that wind, solar, geothermal and bioenergy supply just 8% of the world’s electricity, and only 3% of total global energy use:

“Even counting hydro and nuclear, just 14% of or our energy isn’t from fossil fuels – and this figure has barely changed over the past 25 years.”

The article goes on to point out that most subsidy-free renewable projects remain unprofitable, even as they scale up. And the intermittent and variable nature of renewables calls into question the feasibility of getting all our electricity from wind and solar power.

An “unprecedented acceleration”

Others see the future of renewables in a rosier light. The International Energy Agency’s 2017 review of renewables noted that, as costs decline, wind and solar are becoming increasingly comparable to new-build fossil fuel alternatives in a growing number of countries.

The report highlighted the dominant role of China, which is responsible for 40% of global renewable capacity growth, and is also the world market leader in hydropower and, bioenergy for electricity and heat, as well as electric vehicles. But the IEA also noted the strong growth of renewables in India and the United States. And although the report indicated that renewables growth in the European Union would be 40% lower between 2017-22, compared with the previous five-year period, it pointed to significant progress in some EU countries concerning wind and solar power:

“By 2022, Denmark is expected to be the world leader, with almost 70% of its electricity generation coming from variable renewables. In some European countries (Ireland, Germany and the United Kingdom), the share of wind and solar in total generation will exceed 25%.”

Falling costs

Further signs that renewables are reaching a tipping point came in September, when the cost of offshore wind power in the UK reached a record low. The results of competitive auctions for new wind farm contracts to provide clean electricity showed that, for the first time, the cost of generating energy from offshore wind farms fell below the price that nuclear reactors will charge in future. The new wind farms will power the equivalent of more than 3.3 million homes.

The news prompted Liberal Democrats leader Vince Cable to call for a radical reappraisal of the government’s energy policy, while The Economist Intelligence Unit said the development showed “the trajectory of cheaper renewable technologies is irreversible”.

Government policy

However, while welcoming the announcement, cautious voices argue that renewables will not fulfil their potential without significant increases in government support. The Green Alliance – a UK environmental policy think tank – has called on the UK government for a rethink on renewables:

“…we are still in the midst of a renewables policy freeze, in place since 2015, under which onshore wind has been banned, solar auctions have been curtailed and energy efficiency measures have slowed. A rapid thaw is needed soon, the government can allocate the final five per cent it needs to spend to meet its climate targets (roughly £0.6 billion) to avoid the clean power gap that the Committee on Climate Change (CCC) warned of in its recent progress report.”

In October, the government published its Clean Growth Strategy, which sets out its proposals for decarbonising all sectors of the UK economy through the 2020s. While the Green Alliance welcomed the strategy’s aim to “secure the most industrial and economic advantage from the global transition to a low carbon economy”, the renewables sector was disappointed that the document contained little on the role of onshore wind to help move the UK towards its goal of reducing carbon emissions.

Putting things into perspective

Nearly a third of the UK’s electricity between April and June this year was generated from renewable sources – a new record, and up a quarter on the same period last year. But, while it’s clear that renewables are playing a greater role in UK energy generation, it’s important to maintain a sense of proportion. As the Financial Times has noted:

“Wind and solar are focused almost entirely on the production of electricity, which represents around 40 per cent of final energy demand worldwide and accounts for a slightly higher proportion of total emissions. The main areas of energy consumption — heat, transport beyond light vehicles and industrial use including the production of steel, cement and petrochemicals — are as yet largely unaffected.”

The outlook for renewable sources appears bright, but there’s clearly a long way to go before renewables can overturn the dominant position of fossil fuels in powering the planet.


If you enjoyed this article, you might also find this blog post of interest:

Is the sun setting on the UK’s onshore wind industry?

Eating or heating: tackling fuel poverty in the UK

nastural gas flame

It is a complete scandal that people die because they can’t afford to heat their homes. ‘I, Daniel Blake’ shows the tragic circumstances and daily dilemma of ‘heating or eating’ faced by many thousands of people in Britain today.”

Those were the words of I, Daniel Blake lead actor Dave Johns as he backed a report published in November 2016 by the charity National Energy Action. The report, which looked at the health problems related to fuel poverty, claimed that a child born today may never see fuel poverty eradicated from the UK unless more assistance is given struggling families.

Identifying the “fuel poor”

In England, according to the most recent official government statistics, more than 2.3 million (10%) households are living in fuel poverty. Leeds, Birmingham, Manchester, Liverpool and Cornwall are among the places worst affected. At risk groups include single parent households with dependent children, rural households, and those living in the private rented sector. Research also highlights that those customers who use prepay meters, which include a large proportion of the most vulnerable customers, are more likely to be “fuel poor” as they do not have the flexible tariff options and reduced rate deals which are offered to customers who pay via direct debit.

The picture is not much better elsewhere in the UK. A report produced by the Scottish Fuel Poverty Strategic Working Group estimated that there are currently over 800,000 households (35%) living in fuel poverty, with levels as high as 50% in rural areas. Meanwhile, in Wales the latest estimates suggest that 23% of households are currently living in fuel poverty.

heater gauge

Tackling the causes of fuel poverty

Not being able to afford to heat your home, or having to choose between eating or heating is the stark choice many families in the UK are being forced to make, however it is clear that fuel poverty stems from a number of different factors, including the cost of fuel, the price of energy, and rising energy consumption habits.

The latest Scottish Government strategy on tackling fuel poverty suggests that four drivers of fuel poverty need to be tackled before fuel poverty can be eradicated. These are:

  • Raising incomes  8 out of 10 households (in Scotland) in income poverty are also fuel poor.
  • Making energy costs affordable  in many cases the cost of fuel is rising faster than household incomes.
  • Improving energy performance in housing  people living in a home with low energy performance are 3.5 times as likely to be suffering from fuel poverty as those in a home with high energy performance.
  • Changing habits of energy use  adopting energy-saving behaviours can make a significant difference to fuel bills by reducing overall demand. There is also a need to better understand and increase use of “green energy”.

But what about energy suppliers?

In December 2016, a report from Turn2Us suggested  that two million households suffer from fuel poverty. Subsequently, the “big six” energy suppliers met at Westminster to discuss what they could do to help tackle fuel poverty. At the moment, there is no legal requirement for energy companies to take action to reduce fuel poverty. However, they are coming under increasing pressure to help tackle fuel poverty, by reflecting some of their profit margins in the rates they give to customers. The idea of automatically putting vulnerable or “at risk” customers onto the lowest fuel tariff was discussed. However the bulk of the discussion, according to reports, concentrated on how to increase awareness of existing options, including the government-led Warm Home Discount, individual support grants, the Cold Weather Payment, and practical support from suppliers themselves.warm fire

Practical strategies to tackle fuel poverty

A number of schemes have been developed to try to help tackle fuel poverty, with national roll outs being supplemented by more localised programmes often funded by local authorities or charities.

In November 2016 the Scottish Government pledged an extra £10m to be spent on tackling fuel poverty. £9m was allocated for councils and housing associations to make it easier for tenants to heat their homes. A further £1m is to be made available to provide interest free loans to help people make their homes more energy efficient.

Other schemes have also been introduced by local authorities to try and tackle fuel poverty, including Ready to Switch? Launched in November 2012, Peterborough City Council’s collective switching scheme uses the combined buying power of residents and businesses within the community to negotiate cheaper prices with energy companies. According to figures from Peterborough Council, to date, hundreds of households have switched to save on gas and electricity, with some reducing annual bills by nearly £150.

Boilers on prescription (BoP) is a new funding stream which is being tested in a number of local authority areas, including Sunderland. The fund is managed through NHS Clinical Commissioning Groups, and householders at risk of cold related illnesses are referred for heating upgrades via health professionals. One of the main ideas behind BoP is to reduce a resident’s need for NHS interventions by improving their thermal comfort at home. It is hoped that a warmer, healthier home could reduce the number of GP appointments or emergency admissions.

Energie

 

Altering the design of new homes and subsidising the retrofitting of older ones is also a key policy strategy for tackling fuel poverty. Providing homes which are designed or adapted to be energy efficient through improved insulation, the installation of solar panels or using appropriate lighting or heating systems will allow the government not only to reduce fuel poverty in the present, but should also reduce the likelihood of more people falling into fuel poverty in the future. Reducing the demand for energy by creating homes which use less of it may also help to drive down the cost of energy, resulting in even bigger savings. However, it is not just the responsibility of individual homeowners to carry out these improvements. Local authorities, housing associations and private landlords also need to (and have in many instances) recognise the vital role they play, particularly in relation to more vulnerable customers who are at increased risk of falling into fuel poverty. Retrofitting has been increasingly popular in other parts of Europe, as these case study examples show.

The issue of fuel poverty in the UK does not appear to be going anywhere fast. Despite the attempts of governments across the UK to reduce the figure, in many areas the number of people falling into fuel poverty continues to rise. While there are individual areas of good practice aiming to help some of the UK’s most vulnerable families to heat their homes, it is clear that a wider commitment to combat the underlying causes of fuel poverty is needed, along with a recognition that there is a responsibility across the board to provide help and information to families suffering as a result of fuel poverty.


If you found this article interesting, you may also like to read our blog on the Dutch Energiesprong model and our research briefing on retrofitting (member access only).

Follow us on Twitter to see what developments in public and social policy are interesting our research team. 

Building Britain’s future: how the Infrastructure Act will affect local authorities

By Steven McGinty

After several months of debate, the Infrastructure Act was given royal assent on the 12th February 2015, introducing a number of important changes. The Bill was announced in the Queen’s Speech with the intention to:

“bolster investment in infrastructure and reform planning law to improve economic competitiveness”.

On the day of its assent, Transport Secretary, Patrick McLoughlin, expanded on this, explaining that:

“This act will hugely boost Britain’s competitiveness in transport, energy provision, housing development and nationally significant infrastructure projects. Cost efficient infrastructure development is all part of the government’s long term economic plan, boosting competitiveness, jobs and growth.”

The Act has resulted in a number of policy changes.  The majority of these are relatively mundane and are unlikely to engender much public scrutiny; however, there are a few high profile and controversial changes. Below I’ve outlined some of the most important changes for local authorities, as well as communities.

Land Registry

The Act has introduced changes to Local Land Charges, transferring responsibility from individual local councils in England and Wales to the Land Registry, which will be providing a broader range of services. This was recommended in the ‘Land Registry, Wider Powers and Local Land Charges’ report, which suggested a need to standardise costs and provide a more predictable service.

This has been criticised by the Local Government Association (LGA), who have suggested that local councils are best placed to meet the needs of businesses and local residents.  They have also raised concerns about the costs involved in making technical changes to local council systems, as well as the disruption it would cause to the property market. It’s estimated that local councils have about 20 million entries on their registers of Local Land Charges, across 350 local councils.

Community Rights and energy exploration (fracking and renewable energy)

Individuals within or connected to a community have been given the rights to buy a stake in renewable electricity schemes.  This appears to have been well received, as local residents are now able to receive some of the financial benefits of local electricity production.

However, changes to hydraulic fracking have been a lot more controversial.  The Act allows energy companies the right to exploit petroleum or deep geothermal energy, without notifying the owners of the land, as long as it’s at least 300 meters below surface level. They also have the right to put any substance underground, to change the condition of the land, and to leave material behind.

Not surprisingly, campaigners, such as Simon Clydesdale from Greenpeace UK, have criticised these changes, suggesting that the new legislation is encouraging fracking and is so loosely worded that it could possibly permit the burial of nuclear waste.

Discharge of Planning Conditions

The Act makes it clear that certain types of planning conditions can be discharged if on application to the local authority, the developer has not had a decision made within the prescribed period. It also allows the Secretary of State to make a development order relating to the discharge of a planning condition in an area. This would mean that local authorities would not be able to stop these developments for lack of written approval.

Mayoral Development Orders

These orders provide greater powers to the Mayor of London to grant planning permission for development on specified sites within Greater London. It’s been seen as a useful reform to make it easier for planning permission to be granted on complex sites that cross local authority boundaries. This has been viewed as important for tackling London’s housing shortage.

Although not all of the changes are as high profile as fracking, it’s important that local authorities take time to examine the Infrastructure Act, and to make sure that they are ready to respond to the new legislative environment.


Although many of the changes in the Infrastructure Act will not come into force until a later date, local authorities need to be aware of the possible impact on planning processes and procedures.

Over two thirds of UK local authorities use Idox solutions to effectively manage the property and development lifecycle.

The Idox Information Service can give you access to a wealth of further information on planning issues. To find out more on how to become a member, contact us.

Further reading

Energy infrastructure: a heated debate

Energy_infrastructure_-_geograph.org.uk_-_1080396

Image: Hugh Venables, via Wikimedia Commons under a Creative Commons License

A country’s energy infrastructure is its central nervous system.  Gas and electricity transmission lines, power stations and renewable energy, are the drivers of economic development, as well as keeping our homes light and warm.

But in recent years, a growing sense of urgency has surfaced regarding the future of the UK’s energy infrastructure. Concerns about lack of investment in new power stations have fuelled media reports voicing fears about the challenges of keeping the lights on.

The headline writers may be guilty of some exaggeration, but their concerns are not without foundation. Forecasts by Ofgem, the UK’s energy regulator, indicate that the country’s energy margin (the difference between energy generation supply and peak usage) could fall from 6% at the peak of winter demand in 2014-15 to a possible low of less than 2% just a year later.

And just yesterday, National Grid was in the news with a warning that its capacity to supply electricity this winter will be at a seven-year low due to generator closures and breakdowns.

In stark terms, a report, published this year by the Institution of Civil Engineers (ICE) set out the state of the UK’s energy infrastructure:

“Significant quantities of the UK’s existing electricity generation capacity are expected to be retired soon, with major implications for security of supply unless the conditions to attract investment in new generation are provided. This situation is expected to be further exacerbated as the use of electricity for transport and residential heat increases demand.

And that’s without taking the unexpected into account. The recent serious fire at Didcot power station in Oxfordshire was just the latest in a number of incidents affecting power supply this year. Fires put two power stations in Shropshire and Yorkshire out of action, and four nuclear reactors have been taken offline until at least the end of the year for safety reasons. At the same time, plans for the next generation of gas-powered stations have yet to be enacted, and uncertainty surrounds the commercial viability of new nuclear energy capacity. Added to this complex mix is the contentious issue of fracking, which we focused on in a recent blog post.

For some, the answer to the energy gap lies with renewables, in particular wind power. Proponents argue that large-scale deployment of wind farms offers dual benefits: generating increasing amounts of energy, as well as minimising the effects of climate change.

A report, published earlier this year by the Royal Academy of Engineering (RAE) explored the implications of increasing the amount of wind energy on the electricity system. While acknowledging that large wind turbines have an impact on local communities, the RAE indicated that the installed capacity of wind could more than double to around 26GW, providing around 20% of electrical energy consumed. That might seem like a tall order, but figures from the Department for Energy and Climate Change (DECC) show that in 2011 9.4% of UK electricity came from renewable sources, up on 2009, when just 6.7% of electricity was renewable.

Others are not so sure about the impact of renewables. Recently, former Environment Secretary of State Owen Paterson called for the ground-breaking Climate Change Act to be scrapped. He claims that the targets in the Act for cutting emissions are unachievable, too costly and will not provide the UK’s energy requirements:

“In the short and medium term, costs to consumers will rise dramatically, but there can only be one ultimate consequence of this policy: the lights will go out at some time in the future. Not because of a temporary shortfall, but because of structural failures, from which we will find it extremely difficult and expensive to recover.”

Instead of investing in wind power, Paterson argues, the UK should be looking at four alternative policies: shale gas, combined heat and power, small modular nuclear reactors and demand management.

As the energy debate heats up at national level, some local authorities are taking their own initiatives. Security of energy supply is of great concern to Southampton, a city keen to address strategic priorities, such as tackling fuel poverty, sustaining public services, generating economic development and reducing city-wide carbon emissions.

And so, Southampton City Council has taken a leading role in collaborating with other local authorities to build capacity through local energy generation schemes, large-scale energy efficiency works and local energy networks. The investment shows how seriously the council is taking energy resilience.

At the same time, along with local councils in six countries, Southampton has been a key partner in the European Union’s Leadership for Energy Action and Planning (LEAP) programme. LEAP aims to share expertise among partners to reduce energy consumption and carbon emissions, and increase the use of renewable energy.

Measures such as these are relatively small in scale, but they might prove crucial as we head into another winter.


 

Further reading

The Idox Information Service has a wealth of research reports, articles and case studies on a range of environmental issues. Items we’ve recently summarised for our database include:

Low-carbon transitions and the reconfiguration of urban infrastructure

A new approach to electricity markets: how new, disruptive technologies change everything

Power blackouts in the information age: the impact on emergency services

Is there a future role for coal? (Energy supply)

Taking the lead in a low-carbon future (low-carbon redevelopment in Southampton)

When the lights go out (threats to energy infrastructure)

Crossed wires (energy infrastructure for property developments)

N.B. Abstracts and full text access to subscription journal articles are only available to members of the Idox Information Service.