Warwick & Leamington Liberal Democrats

Climate Change and Energy Beyond Politics or the "elephant in the kitchen"?

Climate Change and Energy

Beyond Politics or the "elephant in the kitchen"?

Matthew Rhodes

Good evening, and thank you for inviting me along tonight.

I'm going to talk about climate change, energy, and the implications for our society. This is a big topic to cover in half an hour, so I'm going to try to concentrate on the practical choices we face, and why I think the impact and opportunities will be local in the future - and eventually lead to big changes in politics as well.

The talk has broadly got four sections.

I'll start by briefly outlining the issues we face around energy and climate change - I'll do this fairly quickly because there's been a lot of media interest in this area recently, ….. what I want to do is move on to cover the many solutions that may in theory be available to sort out our problems for us.

However, having given you the good news - I also have to give you the bad news: so I'll go on to explain why none of these solutions will work in the UK as it is today.

But - and I hope this is a big but - finally, I do think there is hope. So I'll finish by explaining what I see as the way forward, and talking about some examples of how local communities and local authorities in particular are leading the way in tackling these issues, focusing on the choices we might face as individuals and as a society.

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So - climate change and energy: what's the problem?

Or rather, I should say, "what are the problems?"….because there are in fact two distinct, and very big problems we face as a society and as individuals.

Our climate is changing, probably irreversibly and unpredictably, largely due to the emission of greenhouse gases from the way we use energy. Left unchecked, this is likely significantly to affect the capacity of many parts of the planet to support human populations at present densities and lifestyles, and will thus probably cause significant migrations of people and all the potential for conflict that brings. For example, a 4 degree rise in global temperature will result in a 100cm rise in sea levels, and this will displace at least 15 million people globally (and there's no doubt at all this is already happening. For example, the average surface area of arctic sea ice has fallen by 20% - that's a fifth - over the past 25 years, and we have all noticed the increased frequency of floods and extreme weather events.).

The latest UK government predictions for Warwickshire are that by 2050 it will be 2.5 degrees warmer here, with a fifth more rainfall in the winter, and a third less in summer. There'll also be a third less moisture in the soil, which will affect our agriculture and our gardens.

That's the first problem - and note, climate change isn't simply an environmental problem, it's a serious social and political problem.

The second problem is the energy problem.

Nationally and globally we are running out of nice, high-density fuels, suited to the way our society is currently organised. It's difficult to understate the extent to which our whole society and its infrastructure is built around oil, gas, and coal.

In particular, in the UK we have passed the point where we can rely on our own supplies of gas and oil from the North Sea. From 2006 we will be a net importer of both. Worldwide, the best estimates are that we have perhaps 40 years of oil left and 60 years of gas, and this is before we try to account for the continued growth and development of economies like China, India (and indeed the whole of Africa were international development aspirations to be realised). The simple economics of this are already being felt by us all - in the past year domestic gas prices have risen by over 25%, domestic electricity prices by over 20%, and petrol prices by 25%. Upstream the rises are even greater - a barrel of oil today costs twice what it did last year, wholesale gas prices have risen 50% and electricity prices by more than 60% in the past year.

This is a direct threat to our lifestyle. It's a threat in obvious and immediate ways - like when fuel protesters stop us getting petrol for our cars, or airlines add surcharges to make holidays more expensive, but it's also a threat in more indirect ways - energy is an input into almost every manufacturing process, and into the distribution systems that bring cheap food from around the world to our tables.

It's also a major source of revenue to the government: the North Sea has contributed around £200 billion to national coffers in 30 years, and is still contributing in the region of £5-10 billion a year - but in the next few years this is going to stop. Fuel duty alone contributes 5% of treasury revenues a year (£22 billion) that's considerably more than council tax (£13billion) and just about the total budget of the Department for Education and Skills.

Just as an aside, this means that fuel efficiency improvements in cars are already costing the government £2billion a year in lost revenues - the Treasury have about the same degree of incentive to encourage energy efficiency as the big energy companies - it comes straight off their bottom lines.

The point here is that we may think energy is a dry subject, beyond politics, but the shape of our energy system has a major impact on the way government is funded, and the balance of power between central and local government for example. In other words, it is also an elephant in the kitchen….it may be sleeping - and may be a bit more visible to the Treasury or the White house than it is from Warwickshire, but it's definitely a big animal.

On the social side, there are very direct effects of rising energy costs. The UK already has the worst incidence of fuel poverty in the developed world - that is households where more than 10% of income goes on fuel bills. This is largely because we have the worst quality housing stock. In practical terms, this means that there are a portion of the population who can't afford to heat their homes properly in winter: they are thus more susceptible to illness, and they die. In the UK it's estimated there are around 24 000 avoidable deaths every winter due to fuel poverty.

And we mustn't think that as individuals we aren't part of the problem - houses alone account for 30% of UK energy demand, and transport a further 40% - that leaves just 30% under the control of industry/organisations and the government, rather than you or I as individuals.

So - these are serious issues and potentially very big problems.

What can we do? This is where I put on my technologist hat and get optimistic!

There are in principle lots of things we can do with our energy system to solve the problems I've just outlined… Let me run through a few of them.

We'll start with one in the news this week: nuclear power : there are two types of nuclear power - fission and fusion. We already get 20% of our electricity from nuclear fission, and we could get more - in France, the figure is 75%. Nuclear fusion is a somewhat more daunting technology - it just about works in the laboratory, and it works very well in the sun: if we can make it work on commercial scale we get almost limitless energy with no waste or safety issues.

In the UK, we are also fortunate to have just about the world's best wind and tidal energy resources. There is a tremendous amount of energy in the wind and the tides, and we have the technologies to extract this and make electricity - we can now buy off the shelf 5MW turbines standing 150m tall with 60m windspans - we can build tidal lagoons that trap the sea and release the water in a controlled way to power electrical generators; we can even site waterproof turbines on the seabed that generate electricity from undersea currents in exactly the same way that wind turbines work with air currents.

We also have fuel cells - there are two domestic ones operating not so far from here -in Leicestershire and Staffordshire. These convert hydrogen and oxygen into electricity, water and heat - a nice clean and safe reaction, with benign wastes, and they don't need any combustion.

And we mustn't forget coal - the UK still has 200 years of coal reserves at current consumption rates, and there are schemes to reopen mines, burn the coal in a clean way, and capture the carbon emissions and put it back in the empty mine - this is called carbon sequestration.

There are also lots of opportunities for saving and generating energy in our own homes. The government estimate that at least 30% of the energy we use to heat and light our houses is wasted, and we could theoretically save this without losing any money or changing our lifestyles. The technologies available to help us do this include:

- all the traditional insulation products, like

o loft and wall insulation, double glazing, draughtproofing

o low energy lighting and appliances

- and also more interesting modern technologies; things like

o micro-wind turbines, that you can install on your roof

o solar panels - for heat or electricity

o micro-combined heat and power - these are boilers that use waste heat to generate electricity

o ground source heat pumps - which use electricity to pump solar heat out of the ground into your home

o small-scale hydroelectric systems, generating enough electricity for perhaps 10 or 20 houses

- and on a slightly larger scale, local heat and electrical systems based on renewable sources, for example

o district heating schemes powered by gas, wood, or fuel cells, supplying heat to a network of homes in the same way that we currently share electrical generation

o combined heat and power systems, where the waste heat from a pool heating system might be used to generate electricity for neighbouring houses as well.

Most of these are established technologies that have 1 or 2 hundred years of development behind them, and are widely used in other countries.

So the question is - why aren't we just getting on with these things?

The answer, I think, lies largely not in technology, but in our culture and the way we run our society - and that means that very soon the elephant will be waking up and touching us all.

The technical solutions I've just run through can broadly be divided into two categories

- big technical solutions (nuclear, wind, wave, coal, hydrogen)

- small-scale lifestyle solutions (microgeneration, energy efficiency, local heat networks)

The first of these groups is currently going nowhere very fast because it fails economic tests, and faces significant planning and resource constraints.

For example - neither coal nor nuclear can be more than a stop gap really now. We have about 200 years of coal still underground at current rates of use, but if we wanted to go back to using coal as our main fuel for electricity generation that rate of use would at least treble, and carbon sequestration and clean coal burning is more expensive, so there is no incentive for markets to invest in it as long as there are more profitable options available - by the time the economics say invest, it will be too late.

Similarly, assuming the decision to go nuclear has already been taken - and I personally think it was about three months ago - the next fleet of nuclear stations we build will almost certainly be the last - and even then they will only maintain the level of nuclear electricity generation at today's level - about 20% of our use.

The EU estimate there are 39 years supply of mineable uranium left worldwide at current rates of use, and this doesn't allow for China's nuclear programme, or Iran's for that matter. The nearest mines to the UK are in Russia, Kazakhstan and Uzbekistan, so there are similar security of supply issues to gas.

Nuclear fusion may be the great hope, but this is subject to significant technical uncertainty - best (most optimistic) estimates 30 years to develop to commercial scale, and there are big numbers involved in developing it. A global consortium, including the EU, has just invested 10billion Euros in an experimental facility in France.

Wind power - which is a pretty benign technology in the scheme of things, fails in the end on scale - we would need 70000 2MW turbines to power the UK (60m blade diameter). That's one per 4 sqkm, or 60 times the number we've installed to date. This may cause some planning issues - judging by the difficulties there have been getting the first 1200 operational.

Tidal and wave power - again, we have a significant potential resource here, but it is challenging - hence expensive - to access. The best DTI estimates are that we might usefully get about a 7th of our electrical energy needs from the sea, and most of the devices to do this are still at prototype stage.

Hydrogen economy - the flaw is that we need to produce the hydrogen - so will create more load on electrical system.

So this leaves us with the other group - small scale technologies like solar power, local heat networks and so on

The second group is going nowhere very fast, yet, because central government and large energy companies are institutionally incapable of delivering these kinds of solutions, and the rest of us have largely forgotten that we might.

Microgeneration and energy efficiency - these are theoretically cheap solutions - for example, for the £56 billion cost of cleaning up the waste from the nuclear plants we are about to build we could insulate every loft in the country and replace every boiler with a micro combined heat and power unit generating electricity (the insulation alone would probably remove the need for the nuclear stations at all).

The problem with all these technologies is that the economics are always local. You cannot generalise about the costs and benefits of energy efficiency measures or solar panels or micro-wind turbines because their performance will depend on the local circumstances - in other words you can install the same piece of loft insulation in a modern family house or a old people's home - in the modern house it will have very little benefit because the house is empty most of the time and is built to very high standards already - whereas the old people's home may be 100 years old and kept warm all the time. The same with solar panels or wind turbines.

What this means is that you cannot sit in Whitehall or Centrica and make policy or design products in the abstract - on a one size fits all basis. You can't treat small scale energy technologies as commodities, like oil or gas or nuclear electricity. And you certainly can't deliver them in the same way: you have to treat every household and customer as unique.

Government and big energy companies are simply not set up this way.

So instead of doing anything practical, all these big institutions do is commission endless studies into the economics of energy efficiency and microgeneration, almost always asking the wrong questions - like what is the cost of solar power versus nuclear power - that are actually unanswerable in any meaningful way. These reports are then used to fuel a circular debate in which everyone can find numbers to suit their arguments, and nothing gets resolved. The UK argues amongst itself while China, America, Japan, Germany, Denmark, Iran, Norway, France and the rest of them get on with securing their economic futures.

The best that is likely to happen if we continue down this track is that belatedly the government do wake up to the potential of energy efficiency - perhaps when the elephant in the kitchen sits on the Chancellor's desk - and the only tool they have to make it happen is by draconian regulation - requiring every home to have certain types of technologies installed, or even demolishing whole swathes of energy inefficient buildings.

Fortunately there is an alternative - a much more attractive alternative in my book, and one that's already beginning to happen in one or two places across the UK.

This alternative is for local authorities and communities to take action into their own hands, and to take a lead on energy.

This is what's happened, for example, in Woking - where a very switched on borough engineer called Allan Jones - persuaded the council in 1990 to allow him to reinvest any savings made through energy efficiency measures in further improvements to the local energy system. Using only this money - in other words, at no net cost to the taxpayer - Allan then judiciously invested in locally-optimised energy solutions - like combined heat and power, or mixed wind and solar installations in optimal locations - over 10 years until the council is 99% independent of the national grid, and part owns a local energy services company that sells power to local residents. They are insulated against the effects of the current energy price rises, and have created a long-term source of jobs and wealth creation in the local community. Allan's now been recruited by Ken Livingstone to try to do the same thing for the whole of London.

This approach has been copied in Leicester, where another individual, Don Lack, applied a very similar approach on a smaller scale - systematically identifying opportunities for energy efficiency savings on public buildings, such as schools - and again local opportunities for reinvesting these savings in economically attractive small-scale energy projects - such as a scheme to rent solar panels to householders, combined heat and power plants and district heat networks.

Other authorities have adopted measures that work for them. Southampton has an extensive geothermal energy system that supplies heat and electricity to a network of commercial and domestic buildings in the city.

Sheffield has a waste-to-energy network that converts 115000 tonnes of waste a year into sufficient heat and electricity to power 3000 homes and public buildings - again, because they are directly connected to their local energy system, these homes and buildings will feel no impact of the fuel price rises that are affecting the rest of us.

Other local areas have taken a less targeted approach, and are using the planning system and local plans to require developers to engage on energy and environmental issues. So, for example, Merton Borough Council require all developments over 100 sqm to source at least 10% of their energy from on-site renewables. So do Calderdale in Yorkshire - they have an approach progressively increasing the proportion to 20% over ten years. Kirklees Council also announced this week they will require all new public buildings to source 30% of their energy from onsite renewables within 5 years - and these aren't random numbers - they're backed up by local studies that show these targets are economically optimal for the local community - even if this isn't visible to the DTI or Powergen.

So people are beginning to see that local action on energy is the only sensible future, and in their own long term interests. It's not just about costs or carbon emissions, either - its also about jobs and community cohesion. A direct impact of an effective local approach to energy is often bringing jobs into the community, rather than exporting them to Sizewell, Radcliffe-on-Soar or Cumbria.

So for example, we've just done a preliminary study for Warwickshire showing that sourcing 10% of electricity locally using biomass systems (that means crops grown for energy) would create 1200 skilled jobs and an on-going income stream of £5million a year for Warwickshire farmers. Thirty district heating schemes fired by biomass could supply heat to customers at about three quarters the cost of their existing gas-fired systems, and create another 50 jobs.

In conclusion, then - we face some serious challenges as a nation around the way we approach energy and climate change in the future.

In the end, in responding to these challenges we face a choice: - on the one hand we can consider energy as "beyond politics" and somehow outside our control (as it has been for most of the last century) - if we do that we will get - and pay for - increasingly desperate attempts by global energy interests to maintain supplies and access to diminishing high-density resources - such as oil and uranium, at ever increasing economic and human cost - as we have seen in the past few years.

On the other hand, we can recognise energy for the elephant in the kitchen that it is - and the importance of managing it coherently and in a way that preserves our democratic society. This means rising to the challenge locally, and taking advantage of the opportunities fundamental change in our energy system create for us.

I believe this second approach is the healthier, and I hope it's a vision that chimes with Liberal Democrat philosophy as well. That's why I've been delighted to be here tonight, and if anyone wants to go into more detail on any of the points I've raised, I'd be very happy to talk more with you - either after the meeting or at another time.

Thank you for listening.

matthew.rhodes@encraft.co.uk

t: 01926 771465