Sunday, 14 February 2016

Renewable energy: an uncomfortable position

I have been having a look at how the UK is doing against its EU renewable energy targets. These set us a target of having 15% of all energy from renewable sources by 2020. The Government would have us believe that all is well. It's most recent report (published last month) took great delight in saying that we comfortably met the interim target up to 2013/14. But is that really the right measure?. Interim targets are just that; interim, and it's always tempting for them to be made easy to push trouble down the road to someone else's term of office. So let's look at where we actually are in term of our final target, against the rest of Europe and against long term requirements.  As you might expect, this gives a far from rosy picture.

Firstly, let's look at how we have done. The baseline for the new targets was 2004 and in that year we achieved a pathetic 1.2% of energy from renewables. After ten years and by 2014 it was 7%. Some simple maths puts this into context. We needed an increase of 13.8% in 16 years and we have managed 5.8% in ten years. In over 60% of the time we have managed 42% of the target. If we carry on at the same rate we will only hit 10.5% from renewables. In fact according to leaked internal government correspondence they privately think we may only get to 11.5%. I have seen some analysis looking sector by sector and technology by technology which gives a range of 10% to 11.5%. That doesn't look at all comfortable.

Secondly, let's see if the international picture gives any comfort. The EU actually has an overall renewable energy target of 20% and has agreed country by country targets within this, with the U.K having a lower than average figure of 15%. The EU have recently published a progress report and nine countries have already achieved their final target (no interim target nonsense for them) and we are third furthest away from the end goal (only France and the Netherlands are further away). Despite the government's trumpeting, our 7% only ranks us 24th out of 27th. Outside of Europe we are behind most other countries including Canada, Mexico, Switerland and even the US. We are level with Australia and ahead of Japan and Russia. Being near the bottom of international league tables doesn't feel comfortable.

Thirdly let's think about where we are against the long term.  I hear DECC ministers talking gleefully about the deal they secured in Paris. Leaving aside the UK's role in securing anything, by 2020 we will be one third of the way from 2004 to the 2050 deadline by which time the global leaders expect the energy industry to be largely carbon free. I can't see how that can be achieved without renewables contributing over 50% to the energy mix and at current rate of progress, even if its maintained for another 34 years, suggests we will only get to around a quarter. So the long term doesn't provide much comfort either.

So all three perspectives feel uncomfortable and whilst progress in 2015 may be quite good this was  before the current Government's attacks on onshore wind and solar. 

One final bit of analysis. It is possible to turn the UK's likely shortfall into the electricity output measures of TWhours. On this basis the shortfall will be between 50 and 70Twh. (To provide context, the UK annual electricty demand is usually just over 300Twh ). There are obviously choices as to how they the gap could be filled but the UK government has ruled out using more onshore wind and solar and expects to boost heat and offshore wind. Given the UKs track record on heat (in 2014 we were bottom of the heat pile in Europe) I'm not optimistic and offshore wind, although it's getting cheaper, will always be more expensive than onshore. I've calculated that for every 1GW of onshore wind that isn't built but is replaced by offshore wind will cost the UK £100m every year ( that's 2.5Twh of output at a £40 per MWh cost differential). There's probably another 6 to 10GW that could be built so the total cost could get to as high as a billion a year. 

So we aren't in a comfortable position at all, however, you look at it and we seem to be making things more expensive and difficult than they need to be. A classic case of not accepting the short term headlines!



1 comment:

  1. Relax - the inter-generational game of chicken between the power station investors and the government is finally reaching its end game.
    The government and generation developers are now all hunkered behind the wheel, pedal to the metal staring to see the whites of each others eyes. There are no passing places, no time to brake. The investors have already thrown their steering wheel out of the window to signal "commitment" by ceasing all FIDs for anything that relies on electricity sales as its main revenue stream.

    The government have closed all the side roads (labelled CCS, biomass, and onshore wind) The only remaining options are gas fired generation or Nigerian style rolling blackouts (followed by gas fired generation a few years later). Utility company reputations take another dive, carbon emissions up, costs up, energy security down...

    Like every textbook game of chicken the worst possible outcome for all concerned.

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