Wednesday, 30 July 2008

The energy bubble has burst when you need tar sands

Shell, BP and other oil companies at the centre of the tar sands revolution in Canada are facing a backlash from the Co-operative and other members of the ethical investment community determined to bring a halt to these operations for environmental reasons.

A joint report from Co-operative Investments and the wildlife charity WWF released today will be followed up in September by a meeting of the UK Social Investment Forum (UKSIF) to press for an end to this carbon-intensive activity.

The tar sands business, by which crude oil is produced through highly carbon and water-intensive extraction and treatment procedures, risks tipping the world into an irreversible process of global warming, critics claim.

The Co-op and WWF are calling for a global halt to new licensing for tar sands and similar oil operations known as “unconventional fuels”.

They want the UK and other countries to prohibit the sale and distribution of any oil products with higher emissions than traditional petrol.

The move comes as Shell and other industry leaders have pledged to spend more than $125bn (£63bn) by 2015 to develop these new sources of petrol at a time of very high crude prices and fears of supply shortages.

The oil companies say the world needs these reserves, which are expensive to produce but are located in a politically stable area, unlike the traditional reserves of the Middle East or Russia. But critics say the environmental price is disastrous.

Paul Monaghan, head of social goals and sustainability at the Co-op group, said: “The current rush to invest in unconventional fossil fuels is wholly inappropriate and, due to their carbon intensity, these projects risk dangerous levels of climate change.”

The new report, Unconventional Oil: Scraping the Bottom of the Barrel, will be used as the basis for discussion with the Co-op’s 6.5 million customers and for garnering support from more than 200 other members of the UKSIF.

James Leaton, senior policy officer at WWF-UK, said: “Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable.

“Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto [climate change protocol]. In oil sands we have an activity that is going against this imperative and undermining Canada’s Kyoto commitments, so it is time for investors to challenge this strategy.”

Shell said: “The global demand for energy is growing. This will mean greater demand for oil and gas, too. Supplies of accessible, conventional oil and gas cannot keep up with the demand growth. As a result, society has little choice but to add other sources of energy including ‘unconventional’ fuels like oil sands.”

BP said fossil fuels were still going to be needed well into the future even if there were tough restrictions on carbon dioxide emissions.

“Reserves of oil sands represent a significant untapped resource from a politically stable country. The Husky joint venture [BP is planning] will use a process known as steam-assisted gravity drainage, not mining, which produces oil in-situ with a significant reduction of both water use and overall environmental footprint,” it said in a statement.

BP added that it was a “keen” supporter of mandatory market mechanisms such as cap-and-trade programmes on greenhouse gases: “We support national and international trading programmes and have factored the future costs of carbon in our analysis of the project’s value.”

Source - The guardian

Eco-friendly green homes save energy

UK households could cut their domestic gas bill by a total of £4.6 billion annually by employing energy saving, eco-friendly measures, a new study suggests.

British Gas claims that its ongoing Green Streets Trial has seen some participating families cut the amount of gas they used by 50 per cent and that other households reduced their total energy use by 30 per cent.

This was achieved by fitting solar panels as well as energy efficient boilers and light bulbs.

Phil Bentley, managing director of British Gas, commented: “For every £3 we spend heating our homes £1 is wasted because of poor insulation.
“And whilst strict standards on new build are needed, most of the energy being consumed is in the ageing homes we live in today.”

Participants in the study were granted a budget of £30,000 per household to spend on energy-efficiency fittings for their homes

Source - London Stock Exchange

Wednesday, 23 July 2008

A hot summer for solar panels sales

Hot weather, rising domestic energy bills and concerns over climate change have conspired to make life easy for companies selling solar energy systems to householders. However, according to Cambridge UK based analysts, CarbonFree, some parts of the domestic renewable energy market are, themselves, starting to overheat with the benefits systems being oversold to householders.

Already a few renewable energy technology installers have made front page news in local newspapers for all the wrong reasons as customers discover that either promised benefits do not materialise or in some cases the systems do not work. According to CarbonFree the number of dissatisfied customers could increase this coming winter when the performance of solar energy systems fall. In addition, it believes that if the price of oil falls some householders, who were persuaded to buy at the peak of the market, may question the cost effectiveness of their new heating systems.

According to CarbonFree the problem of over selling is particularly acute with hot water solar installations, as the entry point into the market for small and relatively inexperienced installation companies is very low in terms of equipment and staffing costs. However, a report based on research CarbonFree carried out into microgeneration identified well-designed and professionally installed solar hot water heating as a relatively cost effective solution with a realistic payback period.

The report, “Householders as Energy Providers” catalogues a range of technologies that are deployed within microgeneration projects and describes government schemes vendors can use to increase take up of renewable energy equipment.

CarbonFree has identified energy storage as an important component in both microgeneration and large scale renewable energy installations. In its report “Watts In Store - Storing Renewable Energy”, CarbonFree predicts a growth in demand for equipment that can both even out short term peaks and troughs in solar and wind energy availability and also store energy during the summer for use in winter months. The report highlights “road energy” as an important technology in the energy storage market. In road energy systems, heat energy is taken from highways and airport runways during summer months and stored in aquifers to boost the performance of ground source heat pumps during the winter.

Source - PRweb

Tuesday, 22 July 2008

US Utilities Evaluate Solar Power

The Solar Electric Power Association (SEPA) has announced results of a recent fact finding mission to Germany. The mission, developed by SEPA in partnership with the World Future Council and Washington State University, was the first tour of its kind to expose U.S. utility executives and managers to the success that Germany has had in its climb to become the world's leader in solar deployment.

During the five-day fact finding mission, the delegation met with German electric utilities, executives from leading photovoltaic technology companies, and visited multiple small and large scale solar installations.

U.S. utilities are increasingly interested in exploring options that will help keep pace with the growing demand for electricity and address Renewable Portfolio Standard (RPS) mandates and climate change concerns.

In a period of rising energy costs, solar energy is becoming an increasingly important and valued part of a responsible portfolio to help solve the growing global energy crisis.

Education, in formats such as the fact finding mission, remains a key to addressing issues surrounding integration, scalability and reliability of solar technology options for electric utilities and their customers.

During the mission, direct interaction with influencers in the German energy market allowed the U.S. utility executives a unique opportunity to gather best practices and discuss with their German counterparts many areas of interest including feed-in tariffs, associated costs for solar modules and systems, and grid integration processes.

In meetings with investor owned utilities, municipal utilities, and the Fraunhofer Institute, the delegation learned that even with high solar penetration--commonly 20 percent and as high as 30 percent--grid integration issues have not been a problem for German utilities.

Prior to the trip, the participating utilities reported that their companies on average were likely to seriously engage in solar within two to five years.

However, after exposure to the German market and seeing what is possible today without negatively affecting the power grid, participants collectively reported in a post-trip survey that serious engagement is likely to happen within the next one to two years.

"Now that these U.S. utility decision makers have seen first-hand how integration of solar is providing tangible value to German utilities and society as a whole, they can translate these examples into solar activity here in America," commented Julia Hamm, SEPA executive director and organizer of the mission.

"In the past year, there have been a significant number of utility announcements about large-scale solar projects in the U.S., but what we have seen are only the tip of the iceberg--utilities will emerge as the solar industry's largest and possibly most important customer segment."

While in Germany, the delegation spent a significant amount of time learning about the policy that has driven the solar market in that country: the Renewable Energy Act, or EEG, which is also referred to as a feed-in tariff.

The EEG guarantees each plant operator a fixed tariff for electricity generated from renewable sources which are fed into the public electricity grid.

The tariff paid is dependent on the technology used, the year the installation was put into operation, and the size of the plant. Each grid system operator is obliged to pay the statutory tariff to the plant operator.

Momentum for a feed-in style incentive structure has been gaining traction at both the national and state levels within the U.S., and the delegation was eager to learn more about the EEG's impact on the German utilities.

"Germany has established a national renewable program that has achieved impressive results in terms of the large amounts of solar deployed and innovative developments in solar technology.

The technology innovations are directly transferable to the U.S. and will facilitate the scalability and competitiveness of solar," said Roy Kuga, vice president of energy supply at Pacific Gas and Electric Company and a member of the delegation.

"The potential for solar in the U.S. is great given the higher level of solar radiation compared to Germany, and PG and E remains committed to helping realize this potential within California at competitive prices."

Regardless of geography, customer demand for solar exists in the U.S. and will continue to expand based on rising energy costs and environmental concerns. Installation and utilization of solar in states across the country is now underway and will continue to pick up speed due to an increasingly friendly regulatory environment.

Returning from the tour, Gainesville Regional Utilities' Assistant General Manager for Strategic Planning, Ed Regan, said, "Many residents in my Florida community believe we should think globally and act locally, and we believe a commitment to solar energy does just that. Local and federal incentives have lit a fire under the amount of solar activity and investment going on here."

Source - Solardaily

Saturday, 19 July 2008

Gore urges total shift to renewable energy to avert disaster

Nobel laureate and former US vice president Al Gore on Thursday urged Americans to shoot for the moon and make a total shift from fossil fuels to renewable energy to avert a global crisis sparked by climate change.

"I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years," Gore told thousands of people who packed into a conference hall near the White House to hear the 2007 Nobel Peace Prize winner speak.

The shift to new energy sources was needed to ensure "the survival of the United States of America as we know it," Gore said.

"Even more, the future of human civilization is at risk," he told the crowd, who punctuated his speech with cheers and applause.

Nay-sayers would say the shift to renewable energy could not be achieved, or that 10 years was not enough time to make the transition.

But Gore dismissed them as having "a vested interest in perpetuating the current system no matter how high a price the rest of us will have to pay." He cited another history-making moment -- when, in 1961, Americans were called on to take a "clearly leading role" and put a man on the moon.

"When President John F. Kennedy challenged our nation to land a man on the moon and bring him back safely in 10 years, many people doubted we could accomplish that goal," Gore said.

"But eight years and two months later, Neil Armstrong and Buzz Aldrin walked on the surface of the moon," Gore told the crowd, eliciting another huge cheer.

"We must now lift our nation to reach another goal that will change history," Gore said.

"Our success depends on our willingness as a people to undertake this journey and to complete it within 10 years.

"Once again, we have an opportunity to take a giant leap for humankind," he said, echoing the words spoken by Armstrong when he became the first man to set foot on the moon on July 20, 1969.

The chief obstacle on the path to achieving 100 percent renewable energy in 10 years was a dysfunctional US political system that panders to special interests, said Gore, who served as vice president for two terms in the 1990s under Democratic president Bill Clinton.

"In recent years, our politics has tended toward incremental proposals made up of small policies designed to avoid offending special interests..." Gore told the rally organized by environmental activism group

Gore, who narrowly lost the 2000 presidential election to President George W. Bush, was awarded the 2007 Nobel Peace Prize jointly with the Intergovernmental Panel on Climate Change (IPCC), a UN body of 3,000 scientists, for work on global warming.

To a rousing cheer and standing ovation, the man who jokingly calls himself the man who used to be the next president of the United States called on Americans to take concrete steps to halt climate change.

Americans need to change "not just light bulbs, but laws," he said.

Source - Solar Daily

Wednesday, 16 July 2008

Weathering the energy storm with solar panels

A couple are hoping to weather the rising costs of fuel bills and make their home a more attractive purchase for the future by installing solar panels on its roof.

Although the panels will not provide electricity or domestic heating, they will provide a huge saving on the couple’s hot water bill.

Heat my Home, which is the company installing the panels later this month, says the panels can provide 70 per cent of a homeowner’s hot water needs and save up to 30 per cent on annual energy bills.

This could be money well saved as energy bills are rising, and some reports say they will increase by as much as 40 per cent this winter.

Mr Hayne, 72, a retired council highways inspector, said: “I was listening to the TV one night and it said houses in a couple of years are going to be built with solar panels, so I thought we might as well go ahead.

“We are hoping when we come to sell the house it will go easier and with the price rises on fuel, we may make a saving as well.”

The installation of the panels will also involve a new water tank being fitted, which will be large enough to cater for a family.

Mr Hayne said: “The solar runs all right even without sun, but if you get a cold spell then we might have to put on the immersion heater, so we will have that as a back-up.

“We decided to go ahead with it before the latest price rise, whether we make the back on the house by doing this.

“The main thing is our children will have no problem selling the house on after we are gone.”

The solar panels will only provide hot water, because the solar panel collection area needed to provide heating for a house would take up a far larger space than available on an average British home and would not be cost effective.

Having the panels can increase the value of a home, especially now Home Information Packs (HIPs) highlight energy efficiency.

Last week, it was announced household energy bills could rise by 20 per cent to pay for the cost of meeting the European Union’s 2020 emissions target.

A report called Costing the Earth stated this, coupled with the soaring cost of oil also contributing to rising energy bills, could push a lot of households in to fuel poverty. Wind power is currently the most popular form of renewable energy used in Britain.

Source - Getwokingham

Sunday, 13 July 2008

Cupertino Looks To The Sun For Solutions

Leading residential and commercial solar installation company REC Solar announced it has been selected as a preferred solar electricity provider by Cupertino's "Cool Cities" program.

To celebrate, REC Solar is running a special summer program offering Cupertino residents group discounts on solar electric systems for their homes and businesses.

According to Lisa A. Giefer, Vice Chairperson of the Planning Commission for the City of Cupertino, "Members of Cool Cities, a division of the Sierra Club, have selected two leading vendors to provide group purchase discounts on solar installations.

REC Solar has the largest base of installed solar systems in the area and is the leader in residential installations. We are pleased that they are offering Cupertino residents and commercial building owners an incentive to purchase or lease cost effective solar systems."

Through the program home owners will have the option of purchasing a discounted system directly from REC Solar or contracting with the company's partner SunRun, Inc. for a solar energy service agreement.

Previously, REC Solar has also been chosen as a preferred provider by other Bay Area cities including Walnut Creek, Livermore, Pleasanton, and San Jose.

"There are several forces at play at present which make solar energy a smart decision including generous tax credits and rebates offered by the government and the fact that energy costs are rising on average more than 6% per year," said Matthew Woods, Director of Sales for REC Solar.

"The state of California has taken a leadership role in production of alternative energy and we applaud Cupertino for educating its residents and helping the state to achieve its goal."

Source - Solardaily

Wake up world! Peak oil is here…

The UK government’s renewables consultation called for a green revolution in energy. In doing so, it created a perfect tabloid rod for its own back. The proposed cost-to-consumer calculated by the Department of Business were based on the vanishingly unlikely prospect of an oil price as low as $70 a barrel in 2020. Expected additions to UK energy bills, at that oil price, would be 10-13% for electricity and 18-37% for gas, the government said.

Cue outrage. The tabloid press the next morning was full of angry headlines about inflating British energy bills. “Going green will mean five years of rising bills,” trumpeted the Daily Express. The adjacent headline read: “Fuel fears: Budget drove my dad of 92 to suicide.” The Daily Mail was more specific: “Price of turning green: Labour’s wind farm plan will cost every family £260 a year”. Neither they nor other similar articles in other tabloid papers mentioned the economic imperative of abating climate change.

Out-of-control climate change is going to land us all with bills that will make today’s energy bills look like pocket money. Nobody at all, that I saw, picked up the significance of the oil price, and peak oil, in the size of energy bills. Peak oil is going to send the oil price, high as it is today, through the roof. Gas and coal will go with it. Simply stated, fuel bills will be far higher if we stay with the status quo than if we go for a green renewables revolution.

The government did note that at $150 a barrel for oil 12 years from now, instead of $70, UK energy bills would be 35-40% lower than the figures that outraged the tabloids. But how much lower will they be at $200, $300, $400 and more for a barrel of oil?

On the same day the consultation was released, Gazprom boss Sergei Miller told the FT that OPEC has no control over world oil price and many countries are near peak oil. Prices are heading for “a radically new level” via $250 next year, he believes. As I constantly point out in these blogs, more and more people in and around the oil and gas industry are saying this kind of thing.

Perhaps oil traders are beginning to believe the forecasts of this kind. On the day the consultation was released, oil topped $140 for first time and shares plunged. Reflecting this and other woes, the Dow Jones hit its lowest level since 2006.

Proctor & Gamble gave us a clue, on the same day, as to how far-reaching the response to ever higher oil prices will be in the prescient quarters of the business world. P&G will shift to factories close to customers in order to cut its fuel bills, head of global supply Keith Harrison said. P&G have over 145 manufacturing plants in 80 countries supplying 3.5bn consumers. Their problems are about the cost of powering plants and well as the cost of having 30,000 trucks on the roads every day. By the end of 2009, half the electricity at a P&G nappy plant in Pennsylvania will come from onsite wind power, for example, and other renewables are being trialed, including of course solar. (Cue cynics: an opportunity to suggest once again that selling solar is surely all I care about in airing concerns about climate change and peak oil).

When are people going to get it? Within just a few years, peak oil is going to make them wish desperately that they had invested in renewables and efficiency today, or had a government willing to do so seriously on their behalf. There is no better way to avoid the inevitability of traditional energy-price inflation.

Source - The Guardian

G8 statement on carbon reduction is hot air

Leaders of the richest and most polluting G8 nations have said they will “consider and adopt” a goal of 50% cuts in carbon emissions by 2050. But does this actually mean anything in practice?

So how much progress was made on climate change at the G8 summit? At first glance, it looks promising: the leaders of the richest and most polluting nations are talking about 50% cuts in global carbon emissions by 2050.

Make no mistake, that’s a lot. Because developing countries will demand the right to pollute more for years to come, to lift millions of their people from poverty by burning coal to produce cheap energy, the bulk of the suggested cut must be made by rich countries - the G8. Britain could face up to 95% cuts in its carbon output within four decades to meet its share of the load - a staggering ambition.

Some have criticised the apparently weak wording of the G8 statement - the leaders say they will “seek” to “consider and adopt” the 50% target. In fact, presented in its true context, the pledge is what green campaigners have been calling for.

“We seek to share with all parties to the UNFCCC the vision of, and together with them to consider and adopt in the UNFCCC negotiations, the goal of achieving at least 50% reduction of global emissions by 2050.”

The alphabet soup stands for the United Nations Framework Convention on Climate Change, the official way that countries sort out global climate treaties - and the only way in which developing countries such as China and India get a say. This statement is the G8, and the US in particular, saying they will do things properly.

Many questions about the target remain: what year will the 50% cut be measured against, for example, and what will be the shorter term goals needed to make it happen? But it could be a starting point.

This is where it starts to get a little fuzzy. The UNFCCC is currently trying to agree a successor to its 1997 Kyoto protocol, to restrict emissions over the crucial next two decades. One of the key blanks in that emerging deal is the lack of a long-term goal, or vision, to set the speed of the cuts. It could be a 2C maximum temperature rise, or a 450ppm limit for CO2 in the atmosphere, or, at a push, a halving of global emissions by 2050.

So, has the G8 provided the answer? Not yet. The same G8 countries agreed to “seriously consider” the same 50% cut by 2050 last year. Then, just a few months later at UNFCCC talks in Bali, the US retreated from that position, saying it was premature to set a long-term goal.

The UNFCCC held a meeting in Bonn last month at which a long-term goal was barely discussed - yet a few weeks later the rich countries have presented one, albeit the same as 12 months previously.

So what’s going on? Britain claims the US has shifted its position, but Britain has been claiming that for years with little hard evidence. The acid test will be the UNFCCC meeting in Poland in December - any more US stalling on a long-term target will expose the G8 statement as hot air.

Once such a vision is established under the UNFCCC, then countries are effectively locked into a process that will lead to shorter-term targets to slash emissions, and action. A 2050 goal expressed through the G8 makes no such demands and is safer political territory. The US knows this full well. So do the developing nations and green groups, hence their reluctance to embrace it. There is a long way to go yet.

Source - The Guardian

Beware green energy tariffs

Signing up for so-called ‘green electricity’ doesn’t guarantee a cut in emissions. So what are the best clean energy options out there?

More electricity users are signing up to green energy tariffs every year, says UK electricity regulator Ofgem. But the truth is that if everyone on the national grid changed to a green tariff tomorrow, we wouldn’t have created any more green energy collectively. This, plus the growing uncertainty surrounding the role of renewables in the future UK energy mix, means it’s time for companies to start questioning the validity of their green tariffs.

In the UK, renewable energy generates Renewables Obligation Certificates (ROCs) that are sold on the market to electricity companies. By law, they have to buy a minimum 7.9% renewables into their energy mix in the year 2007/8. This figure will gradually increase to 15.4% by 2027, according to government targets.

At the moment, there aren’t even enough ROCs to go around the energy companies to satisfy these targets, says Ofgem. Companies could only buy 66% of the total ROCs needed to satisfy the 2006/7 target, down from 76% in 2005/6. The cost of the remaining deficit of green energy is paid into a buy-out fund, which is distributed to ROC providers for future investment.

The number of ROCs had been rising steadily by about three million a year from 2003 to 2006, but last year this faltered, with ROCs rising by under a million (Ofgem partly attributes the fall to tighter guidelines for the qualification of biomass/coal mix energy). Since first introduced in 2002, the ROC system has been criticized by environmental and pro-renewable energy groups and compared unfavourably to schemes in Germany, which provide popular feed-in tariffs to residents with microgeneration facilities.

What’s green?

According to dedicated UK green electricity supplier, Ecotricity: “The only green electricity that does anything to reduce CO2 emissions and our dependence on fossil fuels is the new kind, the stuff that gets built today and tomorrow.” The company argues “if you’re not building you’re not actually achieving anything green at all. It’s just marketing and spin.”

Ecotricity has published a table (featured) revealing the amount of money spent on renewable energy build per customer per year by the big six UK energy suppliers. Ecotricity claims that of the energy it supplies, 28% is renewable (mainly wind) generated themselves, adding that this figure is rising as they erect more turbines.

Ecotricity isn’t the only one with a bee in its bonnet about false green tariff claims. An Ofgem spokesperson told ClimateChangeCorp: “Ofgem is eager to clear up the confusion among consumers over green tariffs.” The regulator has been working on a rating system, which it will propose in July this year, that will make clear which tariffs offer genuine environmental benefits.

Ecotricity spend £555.63 per each new customer, compared to normal energy companies such as Eon, Powergen, Scottish Power etc who average at £4.00 per customer.

Source - ClimatechangeCorp

Thursday, 3 July 2008

Micro generation - Real green energy

Ministers could avoid building nuclear reactors by encouraging families to fit solar panels and other renewable energy equipment to their homes, a startling official report concludes.

The government-backed report, to be published tomorrow, says that, with changed policies, the number of British homes producing their own clean energy could multiply to one million – about one in every three – within 12 years.

These would produce enough power to replace five large nuclear power stations, tellingly at about the same time as the first of the much-touted new generation of reactors is likely to come on stream.

And, it adds, by 2030, such “microgeneration” would save the same amount of emissions of carbon dioxide – the main cause of global warming – as taking all Britain’s lorries and buses off the road.

The conclusions of the report – approved and partly financed by the Department of Business, Enterprise and Regulatory Reform (DBERR) – sharply contrast with initiatives hurriedly launched by Gordon Brown last week in reaction to the lorry drivers’ fuel-price protests.

In his most pro-nuclear announcement to date, the Prime Minister indicated that he wanted greatly to increase the number of atomic power stations to be built in Britain. And he met oil executives in Scotland to urge them to pump more of the black gold from the North Sea’s fast-declining fields – even though his own energy minister, Malcolm Wicks, admitted that this would do nothing to reduce the price of fuel.

Even more embarrassingly for the embattled Mr Brown, the report closely mirrors policies announced by the Conservative Party six months ago to start “a decentralised energy revolution” by “enabling every small business, every local school, every local hospital, and every household in the country to generate electricity”.

Yesterday Peter Ainsworth, the shadow Environment Secretary, said: “We have found that there are huge economic, social and environmental gains to be made by doing this. It is good that, at last, part of the Government seems belatedly to be coming to the same conclusion, and we can only hope that the Prime Minister can rise above his panic-stricken clutching at old technologies and grasp the opportunities microgeneration offers for clean and more secure energy supplies.”

The 130-page report, due to be launched by Mr Wicks, has been produced by a consultancy, Element Energy, after a wide-ranging survey of public attitudes on installing household renewable energy systems. It has been financed, and steered by, 14 official and other bodies including DBERR, the official Energy Savings Trust, five regional development agencies, British Gas, the Micropower Council and the Ashden Trust.

The department’s approval marks something of a revolution in itself, since its predecessor, the Department of Trade and Industry, was for decades hostile to renewable energy and microgeneration. Its mandarins hated the thought of allowing millions of ordinary people to affect energy supplies by generating their own heat and power.

As a result, Britain is almost bottom of the European league for exploiting renewables – above only Luxembourg and Malta – despite having the best resources in the entire continent. Though ministers claim their efforts have been “highly successful” in boosting these clean sources of energy, they now account for only about 4 per cent of electricity – compared, for example, with 14 per cent in Germany.

Ministers also boast that 100,000 British homes now have microgeneration, mainly solar thermal panels that heat water – but in Germany they adorn more than a million roofs.

Last year just 270 solar photovoltaic panels, which produce electricity, were put on Britain’s homes, compared with 130,000 in Germany. At this rate, David Orr, chief executive of the National Housing Federation told MPs last month, it would take the UK 1,500 years to equal the number Germany has. Britain’s only manufacturer of the panels, Sharp, calculates that less than a week of its year-round production actually gets installed in this country, with the rest exported to the continent.

The new report shows that, unlike in Germany, government incentives to householders fail to persuade them to invest in renewable energy. It concludes that they are daunted by the high initial cost of buying and installing them and want to see returns within three years.

The Government gives grants to help with the initial costs, but these are too small and too restricted to be effective. Indeed, ministers deliberately cut them back at the very point when they looked as if they were inspiring a rooftop revolution.

When first launched two years ago, the grants – which, for example offered up to £7,500 to install photovoltaic panels – were an instant hit. Payments soared to £1.4m in November 2006 alone, exceeding expectations more than four times over. But instead of welcoming it, ministers determined to dampen down the soaring demand. First they rationed payments to just £500,000 a month – with the result that, in February 2007, this entire allocation was used up in just two hours.

When this was ridiculed, they suspended the scheme altogether, relaunching it with the grant for photovoltaic panels slashed by two-thirds, and the one for wind turbines cut in half. Demand duly slumped.

For the past year, payments have been running at just £200,000 a month, far beneath the original target. But in April ministers rejected pleas from environmentalists and the renewable energy industry to increase the grants. Statistics to be released tomorrow will show that, partly as a result, only 18,000 new microgeneration installations have been completed over the past four years.

The new report instead suggests that Britain adopt the same approach as has been successful in Germany, which pays householders for feeding the electricity they produce from microgeneration into the national grid; the rate of these “feed-in tariffs” for photovoltaic panels is especially generous, fuelling their rapid expansion. At least 15 other European countries have also adopted them.

Last November, Gordon Brown appeared to back them, indicating that it should be “made easier for people to generate their own energy through microgeneration, and sell it on to the grid”. But little has happened since, with ministers promising only to “look” at feed-in tariffs. They failed to include them in the Government’s Energy Bill, sparking the biggest rebellion of Mr Brown’s premiership, when 33 Labour MPs last month defied the whips.

A staggering 278 MPs have now signed an early-day motion calling on the Government to adopt them. Yet, last Wednesday, speaking for the Government in a House of Lords debate, Lord Jones, a junior DBERR minister, called feed-in tariffs “a regulatory nightmare and extremely expensive”. He added: “If we were to change now we would destroy the consistency and stability that business craves and private sector investors need.”

The report also gives a fair wind to a proposal by the Micropower Council to set statutory targets for household renewables, to give the industry the certainty it needs to expand.

The confusion in Government over micropower echoes the chaos of its entire energy policy on display last week. Ministers panicked at the fuel price protests, which blocked the A40 on Wednesday, just as they did seven years ago when larger protests paralysed the country.

Then Gordon Brown, as Chancellor, rapidly backed away from green taxes, despite having promised to put “the environment at the core of the Government’s objectives for the tax system”. Last week he and his ministers were scrambling over themselves to react to the new protests, contradicting each other over whether they would perform U-turns over plans to raise fuel duty by 2p, and increase road tax disproportionately on bigger cars.

The Prime Minister also increased his backing for nuclear power. Previously he had only suggested that new reactors should be built to in place of old ones as they were closed down. But on Wednesday he said he would be “more ambitious”, adding: “We are pretty clear that we will have to do more than simply replace existing nuclear capacity in Britain.”

The report offers a very different future, as do the Tories, who see microgeneration as central to their philosophy of redirecting power to individuals. David Cameron sees “decentralised energy” as “a key part of our political vision, energy for the post-bureaucratic age”. He believes microgeneration could make Britain, and individual communities, “self-sufficient in energy”.

Source - The Independent

The UK’s energy future

UK Energy has become the currency of nations. How it’s sourced, bought, traded and used is now at the heart of national political and public debate.

Today, the UK faces an energy crunch from all directions. Securing supplies is at a critical phase - this year we will import around 40pc of our gas supplies, and by 2015 it will be 75pc.

Britain now faces the fastest growth in gas imports of anywhere in the world and the cost of those imports is being driven by the oil price - as on international markets the gas price is set by the oil price - and by the worldwide demand for liquefied natural gas (LNG).

These factors are creating a global gas market in which the UK is currently being outbid by Japan, Korea and China.

We’re also being squeezed by the dysfunctional European energy market, in which the UK acts as a gas bank of last resort: when European gas prices are higher than ours, gas flows to the Continent - however, when our price is higher, there is no certainty gas will flow back. Price volatility drives up costs.

UK users have yet to feel the full impact of these new price pressures. As our evidence to the Commons Business and Enterprise Select Committee last week made clear, energy suppliers are now paying a wholesale cost of more than £1 a therm for gas this coming winter - nearly double last winter’s price - yet it is currently being sold on at 60p a therm to customers.

That position is unsustainable if we are to generate the money needed to invest in secure supplies for Britain’s future.

Electricity production faces similar challenges. Spare capacity that meets spikes in demand is declining and a quarter of UK power stations will be retired by 2015 as older coal and nuclear plants reach the end of their life. And demand continues to rise.

So how can the UK best tackle this looming squeeze on energy? First, on the demand side, energy efficiency has a huge role to play. If we were able to achieve the levels of energy efficiency of Germany, for example, which has 200 times the amount of installed domestic solar capacity, this could potentially reduce our domestic consumption and customers’ bills significantly.

Second, on the supply side, the Government has taken two big steps forward in the past week in grasping the nettle of self-sufficiency with its Commons victory for the Planning Bill, and the publication of its renewable energy strategy.

I fully acknowledge that some elements of the Planning Bill are controversial, but as it moves to the Lords for its first reading there I believe it’s vital to keep in sight what is in the national interest - maintaining a degree of the energy security that Britain has enjoyed for centuries.

Streamlining planning is vital if we are to develop the offshore wind farms, power stations, gas storage facilities and transmission grids this country needs. The UK’s limited gas storage capacity means we are always exposed to price spikes on mid-winter, high-demand days.

Yet there are storage projects held up in the planning process that could double this capacity.

None of us wants a planning regime that steamrollers local democracy and takes ministers out of the decision-making process.

That is why the proposed National Policy Statements are a key tool in strengthening democratic accountability. They will be thoroughly scrutinised by Parliament, ministers will maintain responsibility for setting the Government’s policy via these statements, and they will then go to public consultation.

Centrica plans to invest £1bn a year to secure future energy, including an interest in participating in new nuclear builds alongside our major investment in offshore wind farms. But we cannot afford a process that took BAA seven years, 37 different planning applications under seven different pieces of legislation and multiple decision points before Terminal 5 became a reality.

On those time scales, it would be 2015 before we could start building any new gas facilities or generation capacity, well after a number of existing plants would have to be retired.

The Government’s renewables strategy heralds an exciting leap forward towards a low-carbon future, with householders empowered to play a significant role alongside large-scale generators. It will open up opportunities for British Gas and other suppliers to install solar panels, heat pumps and other renewable and energy-saving technologies in millions of UK homes, while at the same time increasing the amount of offshore and onshore wind generation 10-fold.

I believe this is both achievable and essential if we are to deliver a low-carbon world, but the investment needed is on an unprecedented scale - £100bn on the Government’s own estimate, which equates to around £1,600 for every man, woman and child in the UK over the next decade.

On top of this comes investment in new nuclear power, replacement gas generation, clean coal generation and, of course, standby generation for when the wind isn’t blowing. We also need to see further investment in energy-saving measures, particularly at the domestic level, to help to reduce continued growth in energy usage.

And we need more targeted support from the Government and suppliers for those households unable to cope with the higher-priced energy environment of the future.

This is almost certainly the largest investment programme in any sector of our economy. Without it, not only will Britain fail to meet its commitments on tackling climate change, but also our customers and our economy will continue to be at the mercy of volatile international commodity markets.

Source - The Telegraph