Opinion

5.8.09

Festival fun without the emissions

This summer are you going to a festival to catch your favourite band, enjoy some ciders with friends and hopefully avoid trudging through muddy fields? Have you thought how you will be getting there – by car, coach or train? There are hundreds of festivals each summer ranging from the very small (1,000 people) to the very big (100,000+ people). The large majority of festival goers jump in their car to get there – because this seems the no hassle option until hitting the miles of tailback to get on and off site. So you may have thought about the congestion problems festivals cause, but have you thought about the carbon emissions created by all those individual decisions to drive?

The music industry has started to think about the carbon emissions caused by audience travel to their festivals and what can be done to significantly reduce carbon emissions with the help of Julie’s Bicycle (an organisation explicitly working with the industry on climate change action). It is estimated that audience travel to festivals generate 57,000 tonnes CO2e a year – equivalent to 68% of the festival sector’s emissions and this is around a quarter of all music audience travel emissions. The music industry is serious about reducing audience travel emissions because the UK is committed to an 80% reduction in carbon emissions by 2050 to help prevent dangerous climate change and the industry wants to do their share.

Julie’s Bicycle recently published Jam Packed, a study of audience attitudes and behaviours to 14 major festivals. The study found that the car was the most popular means of transport with 72% and 68% respectively using a vehicle to travel to a greenfield or peri-urban (near a town or city) site. The average occupancy of cars travelling to festivals was relatively encouraging at 2.6 people per car, but close to two thirds of cars travelling to festivals contained just a driver and a passenger – and sometimes only a driver. There was also a fairly poor level of awareness of alternative, greener, methods of travel such as public transport, with 55% of greenfield or peri-urban goers unaware of a coach service and 47% ignorant about train services to the site. Further, car pooling or lift-share services had a very poor level of awareness at just 26%.

A number of festivals are running programmes to encourage people to come by public transport, but more is needed to be done. A full coach has the lowest carbon emission impact, so better coach services and greater uptake of this mode by festival goers would reduce emissions and congestion. The recommendations of Jam Packed is build partnerships with event organisers, travel operators, and local authorities to develop joint strategies for reducing travel emissions and importantly to provide information resources and incentives to encourage festival goers to travel by public transport.

So if you are going to a festival consider going by public transport – check the festival website for information on the options.

Catherine Bottrill

Catherine Bottrill is a research scientist specialising in carbon measurement and reduction in the music industry. She is currently completing her PhD research, which focuses on how social networks affect energy use, with the University of Surrey’s Centre for Environmental Strategy. She was the principle researcher for the First Step Report into carbon emissions in the UK music industry (see http://www.juliesbicycle.com/research)

28.4.09

Fuel Poverty and Climate Change – Policy tensions or policy cohesion?

NEA is where action to tackle fuel poverty and climate change can find a common purpose. NEA was established after the major energy crisis of the 1970s to tackle social welfare problems identified by a Friends of the Earth Group in Durham with a specific remit to find solutions to the poor housing conditions of low-income households through energy efficiency.

NEA recognises the synergies and the tensions in policies which seek environmental goals but which have socially beneficial outcomes. For the 4 million UK households currently needing to spend more than 10% of their income on energy, the climate change agenda may often seem remote but there is a threat to all citizens of increasing global temperatures and more extreme weather conditions. Practical action which will deliver social justice in energy supply can contribute to overall reduced energy consumption targets necessary to stop temperature increase beyond 2°C – the critical level agreed by the International Panel on Climate Change.

The poor energy efficiency standards of the UK Housing Stock present challenges to both environmental and social objectives and improved heating and insulation standards represent the optimum means of tackling climate change and fuel poverty.

In 1988, NEA, the National Right to Fuel Campaign, Friends of the Earth and Heatwise Glasgow produced a report entitled ‘Warm Homes, Cool Planet’ in which we spelled out how, through a national energy efficiency programme targeted at the poorest initially, we could end fuel poverty and tackle climate change. This goal has remained a core element of NEA’s policies and is still the key ask. The poor are already greener – generally consuming less energy than average or above average income households, but, through much higher energy efficiency levels, we can also help them to have warmer homes and improve their well-being.

But, we also need to recognise where we may start to exacerbate fuel poverty in our efforts to reduce carbon dioxide emissions.

The estimated impact on household customer bills of the main climate change schemes introduced by Government amounted to £79 in 2008, expected to rise to £142-£194 by 2015 and by £268-£435 by 2020.

The Government also calculate that for every one percent increase in energy prices 40,000 families are added to the fuel poverty register.

The loading of costs to reduce carbon in energy production and improve the energy efficiency of our homes onto all energy consumers is a regressive means of meeting these targets and a publicly-funded programme would have a more equitable outcome. In this time of recession it could also create training opportunities and work. Ebico is to be congratulated on its support for Groundwork’s Green Doctor programme which is a means of offering help both to low-income communities and individuals within those areas seeking work.

The cost of social tariffs spread across all customers of the major supplier amounts to around £2 per customer per year. NEA believes that a mandatory social offering should be set by Government and that it should go to families and pensioners on the very lowest incomes. The income supplements that all pensioners receive via the Winter Fuel Payment have been criticised by some as not targeting those in need. This revenue cost to the Exchequer is now approaching £3 billion a year and the Fuel Poverty Advisory Group has recommended it should not be paid to pensioners on the highest rate of income tax, recycling the £220 million saved into extending payments to the poorest families. This might increase expenditure on fuel and carbon emissions – but this may be the best for those families in the short term.

The Stern Review demonstrated the cost of not taking action on climate change but perhaps we should also consider asking Treasury to do some analysis of the cost to the nation of failing to take action on fuel poverty. The Stern Report argued that energy policy and poverty solutions may not go hand-in-hand, the assumption in the quote from the report below is that energy prices will have to rise to meet the challenge of climate change.

“It is inappropriate to deal with poverty by distorting the price of energy. Addressing income distribution issues directly is more effective. There are a number of ways to achieve this. One is indexing social transfers to a price index, taking account of different consumption patterns of poorer groups in the relevant price index for those groups. Other more direct means include making special transfers to those with special energy needs such as the elderly, and the use of ‘lifeline tariffs’, whereby people using a minimal amount of power pay a sharply reduced tariff for a fixed maximum number of units.”

It is essential that in the context of the Government’s ambitions for a low carbon future, the needs of the poorest are not forgotten and the concepts of ’social justice’ and ‘fairness’ are realised in energy policy. Whilst it may not always be possible to shape climate change and energy policy to meet the needs of the poorest, we must seek means of mitigating the outcomes of higher costs. In relation to CERT, for example, this should be through a requirement that a high percentage of carbon savings are delivered in low-income households.

75% of current housing stock will be standing in 2050 when we are to have met the nation’s 80% carbon reduction targets. Tackling the hardest to heat will be expensive but we need to start now on a £5 billion-a-year improvement programme, starting with the poorest communities. In this way we may successfully align action on poverty and climate change.

Jenny Saunders

Jenny Saunders is Chief Executive of National Energy Action

www.nea.org.uk

2.9.08

Fuel poverty expert opens the debate

The problem of fuel poverty is now firmly on the agenda and likely to stay there for the foreseeable future, as world energy prices continue to rise. The numbers of households in fuel poverty doubled between 2004 and 2007 and are probably three times as many now. This rapid escalation brings into focus a number of issues that need to be properly debated.

Fuel poverty is the inability to afford adequate energy services for 10% of your income and it results from a combination of poverty and energy inefficient homes. The latter is defined in economic terms: for instance, the amount of warmth that can be purchased for a £. Thus, there are interactions between fuel prices, income levels and the efficiency of the equipment in use (boilers, insulation, light bulbs, etc). This brings to the fore my first issue:

What should be the balance between Government expenditure on higher incomes (such as the Winter Fuel Payments for all pensioners) and investment in better insulation and more efficient boilers, through Warm Front and action by the utilities to deliver the Carbon Emission Reduction Target (CERT)?

Politically, the Government is under pressure to respond to fuel price increases with fuel vouchers or income support, as people are having difficulty paying their bills this winter. These payments already cost £2 billion pa and will be required every year. Much less money is going into energy efficiency improvements, even though that is the only permanent way to reduce fuel poverty. The challenge is how quickly 4-5 million houses could be brought up to a high standard and low running cost. A further part of this debate is the extent to which low-income households should be given renewable technologies that earn them income as well as reducing their costs. This would provide proper future-proofing. Whether the expenditure is on incomes or measures, the money has to come from somewhere. So the next issue is:

How much of the money should come from taxation (which is progressive, as the poor do not pay taxes generally) and how much should come from the utilities, either in the form of a windfall tax or through required investment in residential energy efficiency (which is regressive, if the poor have to contribute through their fuel bills, like everyone else).

There is much discussion about the justification for a windfall tax and it is certainly true that the utilities have considerable, unexpected profits from the EU Emissions Trading Scheme. Another source of profits may have occurred as a result of the magnification of wholesale fuel costs: the Fuel Poverty Advisory Group in their 6th Annual Report, March 2008, identified that:

“prices paid by customers have increased by nearly £4bn more than the costs of fuel and between £1bn and £1.5bn of this can be explained by other cost increases. It seems that there has been a significant increase in margins along the supply chain of over £2.5bn, accounting for as much as 30% of the price increases.” (p39)

A third issue brought to the fore by fuel poverty relates to payment methods: for each individual utility, the difference between the lowest and highest costs to residential customers has grown considerably over the last few years. According to FPAG again, a household with two prepayment meters in 2007 paid £145 more than if they had been on direct debit (and internet accounts are even cheaper). This differential was £70 pa in 2004 (p9). The differential has grown considerably, even though there are now many more prepayment meters, so there should be greater economies of scale. So, this issue is:

Are differentials that hurt the poor an inevitable part of a liberalised market and if not, how can the market be made to deliver benefits for the fuel poor? Can it be done only through regulation and curtailing the market?

Linked to the issue of high differentials is the focus on social tariffs by the main utilities. Are they receiving credit for reducing costs they should not have been charging?

Over to you – let the debate begin.

Brenda Boardman

Dr Brenda Boardman MBE, FEI, is an academic and expert in fuel poverty, having defined the term in her book entitled ‘Fuel poverty, from cold homes to affordable warmth’ in 1988. She is a member of the Lower Carbon Futures Programme of Oxford University’s Environmental Change Institute.

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6.6.08

High oil prices are here to stay

Oil – and other primary commodity – prices are being squeezed by two powerful fundamental market forces: strong demand and tight supply. On the demand side, China and India are transforming the structure of the global economy bringing 2.5bn aspiring consumers to market. On the supply side, political constraints and rising costs inhibit investment in new production and refinery capacity, helping to force oil prices up. Neither is likely to ease significantly in the next five to ten years.

Despite rising oil prices, demand continues to grow strongly in China and India fuelled by a combination of rapid economic growth and domestic price controls and subsidies. Last year, China’s economy expanded by 12pc and India’s by 9pc – and oil use grew by 5pc in China and 7pc in India. Together two countries accounted for half of world oil demand growth of just over 1mn b/d in 2007. As consumers in China and India are protected from rising oil market prices by domestic controls and subsidies there is little incentive for them to become more efficient. Oil is also widely used for electricity generation – especially small diesel generators used to avoid grid blackouts.

At the same time, oil supply is getting tighter. Upstream, crude oil production outside the Opec countries is now falling, creating a gap that only Opec can fill. In the first four months of this year, non-Opec crude supply fell by 600,000 b/d (1.5pc). But, despite much higher oil revenues, Opec member governments are still not investing enough in new production capacity as they prefer to spend the money for other purposes. And with so much of the world’s remaining untapped oil reserves concentrated in Opec countries – especially in the Middle East – and controlled by state companies, it is becoming increasingly difficult to expand supply.

Oil prices collapsed after the two oil shocks of the 1970s because both demand and supply ultimately reacted to higher prices. Industrialised countries became much less dependent on oil as industry and power generation switched to other fuels, especially natural gas. And Opec lost its grip on the market as the international oil industry developed new fields in Alaska and the North Sea that kept a lid on oil prices. But this is unlikely to be repeated.

Demand is now concentrated in the transport sector where there are no cheap substitutes and most of the growth in oil consumption is coming from developing countries which need oil to fuel their transition to a more advanced economy. Oil remains a uniquely flexible fuel that can be easily distributed without the need for expensive infrastructure and applied to many end-uses. As a result, oil demand is less responsive to higher oil prices than it was in the 1980s, forcing oil prices even higher to slow the rate of growth of demand.

And there are no easy alternatives to Opec oil now that production has peaked in Alaska and the North Sea and started to fall in Russia and Mexico. Opec now supplies just over half of the world’s crude oil production and its members own just over three-quarters of the world’s proven oil reserves. And as governments in both Opec and non-Opec countries become more nationalistic about who develops their oil reserves, the international oil industry is finding it impossible to boost production. Growing barriers to investment together with rising costs, higher taxes and shortages of equipment and skilled staff mean that the industry cannot find enough new sources of oil to weaken Opec’s grip.

But that is not all. This year, oil prices are being forced even higher by a shortage of diesel. Diesel demand is growing at an unsustainable rate as oil refiners cannot make enough of the product. In the first quarter of this year, demand for diesel grew by 8pc compared with the same period a year ago. But demand for other key refinery products was either flat (gasoline) or fell (heating oil and residual fuel oil). Demand is growing fastest in China and India where diesel is being used both for transport and electricity generation – especially in small generators. Diesel demand was up 14pc in these two countries in the first quarter.

Oil refiners cannot cope with such a wide disparity in demand for the different joint products that they make. Although oil refineries have some flexibility to vary the mix of product yields, they cannot keep pace with surging diesel demand without producing a surplus of other unwanted products – especially residual fuel oil – that undermines their processing margins. In addition, diesel is becoming much more difficult to make as more countries require lower sulphur content for environmental reasons. As a result, diesel fuel is not only becoming more and more expensive relative to other products, but also driving up the price of oil in general.

Rapidly growing demand for energy and other primary commodities from developing countries is one of the biggest challenges facing the global economy. If everybody in China used as much oil per capita as the citizens of the United States, then China’s oil consumption would be equivalent to the entire world’s oil consumption today. Although more investment in upstream production and refinery capacity is urgently needed to ease the current tightness in the oil market, the fundamental problem remains – there is not going to be enough supply to meet potential demand unless we all become much more efficient in how we use oil and other sources of energy. Which is why the era of cheap oil is over.

David Long

David is an independent consultant and writer specialising in the oil, gas and carbon markets. He is the editor of the Oil Trading Manual (OTM), a widely-used and well-known comprehensive guide to the world oil market and Director of Oxford Petroleum Research Associates (www.oxfordpetroleum.com).

24.4.08

Government Policy Confusion on Nuclear and Wind

In the past three months, John Hutton, the UK’s government minister in charge of industry, has publicly backed an expansion of both nuclear and of offshore wind. Is this good for the UK’s climate targets? Possibly not.

One issue never gets mentioned. Both wind and nuclear need to operate as many hours as they can. For it to make financial sense to invest £60bn in offshore wind, operators need to be able to sell the power whenever the wind blows. Similarly, nuclear plants need to be ‘baseload’ and kept running day and night. Other plants, such as gas turbine generators can be turned on and off easily. The majority of their costs are fuel and it doesn’t matter very much if they work for ten hours a day, or twenty. They are a good complement to wind, whereas nuclear is in direct competition.

So Hutton’s support both for 32 gigawatts of wind and for a substantial increase in nuclear generation over and above today’s level is inconsistent. In early mornings, total UK demand for electricity falls to well below 30 gigawatts. In the first eight days of last month (March), for example, UK electricity demand varied between highs of 55 gigawatts at the tea-time peak and early morning lows of 32 gigawatts. During much of this period winds were blowing reasonably strongly over the whole of the UK. I believe that offshore wind farms with a rated capacity of 32 gigawatts would have been producing outputs of 20-25 gigawatts much of the time. UK nuclear plants have a total generating capacity of about 10 gigawatts today, although some are out of service for maintenance. So if we simply replaced the aging existing new nuclear stations, we would have too much power for the early mornings without considering any other generating plants. And John Hutton says he wants much more than this.

The implication of this is not understood. If we encourage large amounts of new nuclear capacity, we are likely to reduce the attraction of offshore wind to the point where it simply doesn’t get built.

The rest of the world is avoiding this problem by installing transmission lines to move electricity very long distances. This will guarantee that when the sun stops shining in Spain, the wind from Denmark can provide the power in Madrid. And when neither source is available, we can take electricity from Norwegian hydo plants which can be turned on and off at five second’s notice. But for the foreseeable future, the UK is effectively isolated from the main European transmission grids. Our cables to France and Ireland have very limited capacity. So when the winds blow and UK demand is too low, wind turbines will simply be disconnected from the National Grid’s transmission system

Unless we change this, pushing nuclear means we simply won’t get much more offshore (or onshore) wind. What’s possibly as important, we are also increasing the UK’s vulnerability to power shortages in the second half of the next decade. There are many things we need to alter if we are to get real growth in renewables generation, but the crucial task is to invest heavily in transmission infrastructure now.

Chris Goodall, an Ebico customer, is a writer on climate change. This article is a shorter version of a piece written for his newsletter, available free from www.carboncommnentary.com. His book on the most promising new technologies to reduce carbon emissions will be published by Profile in September.

1.2.08

2020 vision for renewable energy

THE EU HAS SET NEW TARGETS for cutting Europe’s overall carbon emissions by 2020. The goal is at least a 20 per cent reduction from 1990 levels, while aiming to generate 20 per cent of Europe’s energy from renewable sources.

For Britain, the challenge will be to increase ‘green’ energy generation to 15 per cent, while cutting emissions by 16 per cent.

The EU commission’s president, Jose Manuel Barroso, stated that European governments are now leading the way internationally with their package of plans to make Europe ‘the first economy for the low-carbon age’.

Barroso said that the plans would mean a cost of only €3 (£2.10) a week for every citizen in Europe – which adds up to around the price of three tanks of petrol over a year. There will be a 10-15 per cent rise in electricity prices – but Europe will no longer be so heavily reliant on energy imports.

The price rise will result from the EU carbon trading scheme, which is designed to achieve significant reductions in carbon dioxide and other greenhouse gas emissions. Europe’s biggest industrial polluters, such as power generators and oil refineries, must now buy and sell emission permits. As the price of carbon rises, the hope is that market forces will enforce the necessary cuts.

For industries such as farming, transport and construction, which are outside the carbon trading scheme, national caps will be enforced.

Member state targets

The EU executive has laid out varying targets for each of the 27 member countries in order to achieve both the 20 per cent emissions cuts and 20 per cent increase in renewable energy. After endorsement by MEPs and individual member governments, the targets will be enforced in 2009.

While richer nations must cut their emissions – Denmark and the Irish Republic each have a target of 20 per cent reduction – the poorer nations will still be able to increase emissions by a limited amount.

Britain must source 10 per cent of road transport fuel from biofuels, although this is provisional on establishing agricultural best practice for the process – they must not be grown on ‘land of high biodiversity’. The UK is also committed to developing other forms of renewable energy.

The British government is committed to achieving the EU targets and is already reviewing plans under way for further offshore wind farms and a major scheme to make use of tidal energy, particularly on the Severn estuary.

The EU commission claims the overall plans will both increase energy security and have a positive impact on climate change, while creating many new businesses and hundreds of thousands of jobs in the process. Barroso encouraged EU firms to lead the way in developing innovative green technologies.

Reactions

Reactions to the EU announcements have been mixed. While many see it as an encouraging step towards the projected 60 per cent cut in emissions by 2050, environmental groups believe the commission should be aiming for the higher target of 30 per cent by 2020 proposed in discussions in Bali in December.

However, the scheme is said to include ‘automatic triggers’ to take Europe’s cuts to the level of 30 per cent if the rest of the world comes on board with the protocol outlined in Bali.

Meanwhile leading scientists are arguing that all current targets are based on out-of-date science – and that we should be aiming for 80 per cent cuts in emissions by 2050 if we are going to act against the major devastation threatened by an increasingly unpredictable climate, melting ice caps and rising sea levels.

EBICO directors