I speculated this month somewhat idly on whether the UK or US energy secretary would be the first to quit his post. Many in the gossipy world of Westminster politics are betting on an imminent departure of Chris Huhne. But after one of the stormiest weekends of his political life, it is difficult to say whether he is now stronger or weaker.
The story that might yet kill Huhne’s political career, at least in the short term, is entirely non energy-related. Police are considering whether to investigate claims that he asked another person to take driving penalty points on his behalf for a speeding offence. He denies any wrongdoing.
The UK has decided to put forward 12 projects for consideration by the European Investment Bank for its New Entrants Reserve, the €4.5bn pot to spend on CCS and “innovative renewable projects”.
There are seven CCS projects and five renewable ones.
The UK government has a big decision to make next week: whether to endorse the proposals by the Committee on Climate Change to set stringent emissions reductions targets for 2030.
The so-called “fourth carbon budget” (the other three have already been made policy) sets out that the UK should cut its greenhouse gas emissions by 60 per cent on 1990 levels by 2030.
Chris Huhne (pictured on the left), the energy secretary, is broadly in favour, having put tackling climate change at the heart of his department’s agenda. But he is facing resistance from an unexpected source: his Lib Dem cabinet colleague Vince Cable (on the right).
The numbers from today’s report by the Carbon Trust into the potential of marine energy are impressive.
According to the report, the total global market for wave and tidal could be worth up to £40bn per annum by 2050. UK companies could realistically capture around 22 per cent, or £76bn, of the total market theoretically accessible to them, the report concludes, generating 68,000 jobs in the process.
But before green campaigners in the UK jump with joy, there are a number of conditions attached to these projections, not least of which is the idea that other renewable sources have to suffer in order for marine energy to snatch this much market share.
Rolling out intelligent energy meters could help the UK reduce its energy usage by up to 15 per cent, five times current government estimates, the world’s biggest smart meter maker has said.
Answering Energy Source readers’ questions, Cameron O’Reilly and Steve Cunningham, the CEO and UK and Ireland chief (respectively) of Landis+Gyr, said the UK was being too pessimistic in their forecast for how much impact smart meters could make.
Even if the immediate benefit seen by home owners is the 2-3 per cent saving that the UK government’s model assumes, it is still a profoundly valuable exercise.
But we seriously doubt that those conservative savings will be the best that the UK achieves. Landis+Gyr’s experience is that deployments which have focused on encouraging energy budgeting have delivered usage reductions of 10-15 per cent, even when they have had far less sophisticated capabilities than those planned here. Our energy retailers are some of the most innovative in the world – it would be a surprise if, in partnership with their customers, they couldn’t at least match those figures.
The group of UK solar companies behind the campaign against the reduction of the subsidies for larger projects has asked the courts to quash the government’s review altogether.
Greg Barker, energy minister, announced in March that the government intended to cut the level of public subsidy for large solar farms after a brief review of feed-in tariffs.
The companies have filed a claim in the High Court for judicial review against Chris Huhne, energy secretary, and hope they can get the energy department to start all over again on the process of deciding which projects get which subsidies.
The groups have included four arguments in their case:
- The energy department previously indicated that the review would take place in 2012, with changes being implemented in 2013.
- There was a suggestion that an early review could take place based on a certain “trigger point”, but that trigger point was never set.
- There is no evidence of the “excessive deployment” of large-scale solar power about which the energy department warns.
- Large-scale solar is more cost effective, and so reducing subsidies at the larger end to balance the cost to the consumer doesn’t make sense.
George Osborne reiterated today the UK government’s “determination to be the greenest government ever”. But given what we already knew, most of the new information contained in Wednesday’s Budget seems to be set against that agenda.
Let’s take the measures one-by-one:
1) CCS support. We already knew that £1bn was pledged for round one. The new information in the Budget is that round two will be funded largely by the carbon floor price.
But as Mr Osborne himself admitted, this won’t be enough (at least at the level it has been set) on its own. Further money will be required from general taxation, which leaves second round CCS projects fighting alongside everything else for a rapidly diminishing pool of government spending.
David Cameron may regret saying he wanted the coalition to be the “greenest government ever”. Not because he didn’t mean it, but because as ministers strive to keep to the tough spending allowances granted by the Treasury, it is an aim that seems to be slipping further and further away.
The last week has seen a slew of announcements that appear to signal a retreat by the government from its green ideals. Firstly, we had the cut to solar subsidies in the form of the feed-in tariff.
Officials at the energy department claim the changes to the feed-in tariff are primarily aimed at redistributing the money away from large-scale solar farms and towards households and small businesses, rather than cutting it. But if this was the case, the amount of money that had been cut from large producers would surely have been recycled in the form of higher subsidies for smaller ones.
The government points out that its proposed reduction in feed-in tariffs for large solar arrays will not apply retrospectively. Only new entrants after August 1 this year will be affected by the plans.
But it can take 12–18 months to set up a big solar power scheme. In practice, plenty of companies are part of the way through the process of securing planning permission from local authorities and connection permits from network operators.
They will already have spent large sums of money – yet the proposed changes could rob their schemes of any commercial viability. Philip Wolfe is the founder and managing director of Ownergy, a company that helps customers install and maintain solar arrays.
Greg Barker, the UK energy minister, has completed his review of subsidies for solar power under the feed-in-tariff scheme, and, as expected, he has reduced the amount of money available for installations that provide over 50kW.
Ministers say the idea behind this review is to make sure that large-scale solar farms don’t hoover up money that was meant for households and small businesses to install a small amount of solar power (usually with solar panels on roofs).