25 September, 2007
It must have been difficult writing Gordon’s first speech to party conference as Prime Minister. All that dead air to fill without mentioning the date of the next general election. Then there is the need to find some new policy announcement. This time the environment has benefited from the party conference tradition as the number of new “eco-towns” the government is set to see built doubles to 10. It appears there is some work to go on the fine details of what these towns with “low and zero emission homes” will look like. A key test of actually how green these eco towns are will be the extent to which they use environmentally friendly forms of decentralised energy.
What is decentralised energy?
It’s environmentally friendly energy that is locally produced to where it will be used. It actually covers a fairly wide variety of renewable technologies from solar panels on the school roofs, to windmills on houseboats, to geothermal boreholes at Buckingham palace or micro hydroelectricity
What is wrong with the centralised electricity system we have at the moment?
Actually lots. Only 22% of the energy input into the electricity system is actually used, The rest is lost during inefficient generation, transmission over vast distances through the national grid or in domestic energy inefficiency. When it comes to coal or gas powered power stations this represents a terrible waste of a finite natural resource.
The current system engenders a culture of energy passivity amongst the population. We just pay the bill when it arrives or even better leave it to Direct Debit. It puts power in the hands of large energy companies rather than empowering the consumer to think about the energy they use.
The technology used in centralised generation tends to be old hat and damaging to environment. Coal, gas, nuclear all have their problems. Environmental damage from the former two and nuclear waste that last centuries. Imagine if the Romans had had nuclear we would still be clearing up after them. Not intergenerational justice in my book.
Centralised electricity systems are also much more vulnerable to disruption in a variety of forms. I still don’t think that we are taking the threat of a truck bomb or plane attacking a nuclear power station seriously enough. It is also inherent in a centralised system that adverse weather events, which with global warming will increase in frequency, cause more damage when power-lines supplying thousands of homes can be brought down in one go.
Gas makes up 39% of our primary energy and oil 35%. Saudi Arabia, Iran, Iraq, Kuwait, UAE, Russia and Algeria are amongst the countries that are the world’s biggest producers of oil and gas. It can hardly be beneficial to our national interest to be reliant for a very significant section of our energy supplies from countries which have a serious track record of authoritarianism, war, terrorism and human rights abuse.
What are the benefits of changing to decentralised energy?
It’s greener. Renewable technology by definition wont run out causing shortages and price inflation, it also doesn’t emit greenhouses gases that would damage the ozone layer and cause global warming
It’s more efficient power. This is for two main reasons. Firstly the power that is generated is not dissipated by putting it through the national grid. Secondly the change from being a passive consumer to an active producer will mean more people taking an interest in their use of energy and consequent improvement in its efficiency.
Energy security. Decentralised energy is simply the most secure form of energy. Impervious to foreign interference, more resistant to extreme weather events, a target poor environment for terrorists and immune from fuel protester style civil disobedience.
Local government could agree an emissions target for their area in agreement with Whitehall who could set a national minimum floor. It would then be left to local government to devise ways to meet the target which national government could incentivise. It would be a good combination of national responsibility and local autonomy.
There are also serious financial benefits as there is no need to construct a massive transmission network. Energy policies incorporating decentralised cogeneration, renewables and energy efficiency measures could deliver global cost savings of the order of $2.7 trillion as against an estimated expenditure of $16 trillion to 2030 under the business-as-usual model. While this scenario predicts that generation costs would be higher given higher proportions of renewable generation, it also anticipates savings of 40% in transmission costs and 36% in distribution costs – potentially cutting overall costs by as much as 20% compared to the business-as-usual scenario.
What should the government be doing?
First up the government should produce a Decentralised Energy White Paper. It is important that the government show convincing leadership over the direction of travel that it wants to move energy policy in. Both the industry and more importantly the people would see substantial changes to how they use energy for which they should be properly prepared and support won.
All new building should have DE technology of one sort or another. I don’t think the government should get to caught up in some debate of solar panels verses windmills. People and companies are perfectly able to decide what technology would meet their needs. Governments role should be to insist on the standards that we require to meet our environment and social justice obligations.
All electricity suppliers to be required to purchase surplus electricity from domestic power generators, at rates that will ensure the take-off of domestic generation.
Inefficient, centralised power stations to be heavily penalised to reflect the damage they cause and to ensure that the most polluting are closed. One way to do this would be to tighten up the European Emissions Trading Scheme. In addition, supplementary fiscal measures could be enacted at UK level, such as a tax on waste heat.
Presently domestic users pay alot more for there energy than industrial users. If we forced energy companies to charge the same price for all their users this would instantly create an industry for environmental power generation for industrial sites as making your own would be cheaper than buying it in.
We should put power in the hands of the consumer. Local sustainable electricity systems to be encouraged through the removal of current limits on the development of private wires. Limits on the export of power from these sustainable local systems should be raised. Together these measures would enable electricity consumers increasingly to choose clean local power over dirty centralised power.
Reform of Ofgem. It needs to be less obsessed with the wholesale price of energy and more concerned with the total cost that consumers pay which included the cost of transmission through the grid an which decentralised energy would largely remove. It should also seek to change the market removing barriers to DE.