Households which contribute electricity from renewable sources to the UK National Grid are to receive payments under a new government feed-in tariff scheme, labelled the “Clean Energy Cash-back Scheme”.
Back in 2008 the UK Government outlined policies in “The UK Low Carbon Transition Plan, National strategy for climate and energy” White Paper designed to significantly reduce carbon emissions in the country by 35% by 2020 and by at least 80% by 2050. Now, as part of its recently released Renewable Energy Strategy designed to contribute to achieving these targets, the Secretary of State of Energy and Climate Change, Ed Miliband, has announced that a feed-in tariff rate will be introduced in the UK for suppliers of renewable energy who feed energy back into the grid.
The Clean Energy Cash-back Scheme is a more user-friendly term for feed-in tariffs (FITs), which other countries such as Germany have used so successfully to promote small as well as large-scale renewable energy production over the last decade. The UK Government’s decision to introduce FITs is intended to simplify the incentives for using renewable energy sources, since the current system – the Renewable Obligation (RO) – is a very lengthy and complex system designed for energy professionals who generate electricity on a large scale (50kW+). The Clean Energy Cash-back Scheme has therefore been designed to benefit micro-generators (households, communities and businesses with installations of up to 50kW), while larger installations of 50kW-5MW will be offered the choice of either the FIT or the RO scheme.
In a recent media interview, Mr Miliband told the BBC that the plan to give payments to households for contributing electricity to the National Grid will mean “we can harness people’s enthusiasm for getting involved” in tackling climate change and that “individuals and communities can both play their part in the kind of clean energy revolution that we need.”
The planned FITs will vary from one type of renewable to another, although exact rates still have to be agreed and implemented. Climate change minister, Joan Ruddock, has confirmed that the new scheme will come into effect from April 2010 for most renewable sources, but has warned that plans for a similar renewable heat incentive scheme for technologies such as solar and biomass heaters would be more complicated to develop and as such will not come into effect until April 2011.
The key now is to wait and see at what level the UK Government establishes the FITs, as previous experience in other countries has shown that setting them too low can lead to a lack of take-up of renewables, while excessively high limits become economically unsustainable and politically sensitive. Charles Hendry MP, the conservative shadow minister for energy, for example, welcomes the Clean Energy Cash-back Scheme, but shares the view that judgement should be reserved until the government confirms the level at which the new tariffs will be set. “It would be a tragedy if having got a [feed-in tariff] mechanism in place it was not set at the right level that solar and other technologies need,” he said.
Meanwhile, Mike Childs, campaigns director at Friends of the Earth, believes such schemes could play a significant part in meeting the UK’s climate change targets, although he points out that “payments have to be generous enough to reward people for investing in green power”.
Source - The Renewable Energy Magazine
Showing posts with label UK government. Show all posts
Showing posts with label UK government. Show all posts
Sunday, 16 August 2009
Friday, 17 July 2009
Ready to pay £200 a year extra for green energy?
The stark admission by Ed Miliband, the UK energy secretary, that UK energy bills will rise by an average of £200 a year as the UK looks to bring in more renewable energy is sure to catch the eye of many. Claiming that “no matter which route we go down” Mr Miliband has warned UK consumers and businesses that energy costs are certain to rise in the short to medium term.
The UK government has already signed up to a carbon reduction programme which will see an 80% reduction in carbon emissions between 1990 and 2050 with up to £100 billion spent on renewable energy by 2020. At a time when many in the UK are struggling to make ends meet the government is set to introduce a 20% tariff on the average energy bill to cover the £100 billion investment programme.
It seems that the UK government has acted on behalf of UK consumers in signing up to a program which will increase energy costs by 20% a year for the foreseeable future. History has shown us that even in periods of short-term fundraising it is highly unlikely that energy bills will fall after the initial fundraising period is over. So the UK consumer and UK businesses need to get themselves ready for a significant increase in energy bills, aside from any future increase in the price of oil or other commodities.
Source - New Energy Focus
The UK government has already signed up to a carbon reduction programme which will see an 80% reduction in carbon emissions between 1990 and 2050 with up to £100 billion spent on renewable energy by 2020. At a time when many in the UK are struggling to make ends meet the government is set to introduce a 20% tariff on the average energy bill to cover the £100 billion investment programme.
It seems that the UK government has acted on behalf of UK consumers in signing up to a program which will increase energy costs by 20% a year for the foreseeable future. History has shown us that even in periods of short-term fundraising it is highly unlikely that energy bills will fall after the initial fundraising period is over. So the UK consumer and UK businesses need to get themselves ready for a significant increase in energy bills, aside from any future increase in the price of oil or other commodities.
Source - New Energy Focus
Sunday, 5 July 2009
UK households face rise in energy bills
Consumers will have to pay hundreds of pounds more on their electricity bills in future because the Government has failed to invest enough in cheap alternative sources like wind and solar power, the Royal Society has warned.
The UK Government has committed to cutting greenhouse gases by 80 per cent by 2050 to tackle climate change. Most of the cuts will have to come from switching from fossil fuels such as oil and coal to renewable energy sources like the wind or waves.
However a new report by the Royal Society has found a “disappointing rate of progress” on new technology such as offshore wind turbines, solar panels and biofuels.
The document by the country’s leading scientists said the UK will have to invest billions more in developing new technologies as well as building a new generation of nuclear power stations and investing in “clean coal”. The bill is most likely to be paid by energy companies through a system of incentives and taxes.
Professor John Shepherd, lead author of the report, said ultimately consumers will end up paying.
“We have to be prepared to pay more for energy as a whole than we have been used to in order to avoid the side effects on the environment and have cleaner sources of energy in the future,” he said.
Lord Turner, the Government’s adviser on climate change, has already warned that electricity bills may have to rise by around £500 per annum over the next decade.
Prof Shepherd said it was likely to cost the consumer hundreds of pounds every year. However he said the cost could be even greater if the UK continues to rely on fossil fuels as the cost of oil and coal continues to rise.
“Would a few per cent on your electricity bills really be too much to pay for a sustainable energy future?” he asked. “I do not think it would.”
Prof Shepherd also said the UK will have to invest in nuclear despite safety concerns. Britain’s nuclear watchdog recently admitted there were more than 1,750 leaks, breakdowns or other “events” over the past seven years.
Again Prof Shepherd said the Government has failed to invest in the technology but the industry could be developed by employing more engineers and experts from abroad.
Coal will also have to be used in the future despite concerns about the carbon emissions through investing in carbon capture and storage (CCS) technology. The Royal Society are calling for any new power stations to capture 90 per cent of carbon dioxide emissions by 2020 – much tougher than the Government’s “disappointing” current policy.
However in the long run Prof Shepherd, a climate scientist at Southampton University, said the UK must rely on renewables like solar and wind.
“For the sake of future generations we cannot afford to wait until our climate is changed dramatically or the oil runs out before we end our dependency on fossil fuels,” he warned.
Ed Miliband, the energy and climate change minister, said the UK will be setting out a vision for renewables in a white paper due to be revealed next month.
“We have identified ways to tackle the challenges – we will need a mix of renewables, clean fossil fuels and nuclear and we’re already making world leading progress in those areas,” he said.
Source - The Telegraph
The UK Government has committed to cutting greenhouse gases by 80 per cent by 2050 to tackle climate change. Most of the cuts will have to come from switching from fossil fuels such as oil and coal to renewable energy sources like the wind or waves.
However a new report by the Royal Society has found a “disappointing rate of progress” on new technology such as offshore wind turbines, solar panels and biofuels.
The document by the country’s leading scientists said the UK will have to invest billions more in developing new technologies as well as building a new generation of nuclear power stations and investing in “clean coal”. The bill is most likely to be paid by energy companies through a system of incentives and taxes.
Professor John Shepherd, lead author of the report, said ultimately consumers will end up paying.
“We have to be prepared to pay more for energy as a whole than we have been used to in order to avoid the side effects on the environment and have cleaner sources of energy in the future,” he said.
Lord Turner, the Government’s adviser on climate change, has already warned that electricity bills may have to rise by around £500 per annum over the next decade.
Prof Shepherd said it was likely to cost the consumer hundreds of pounds every year. However he said the cost could be even greater if the UK continues to rely on fossil fuels as the cost of oil and coal continues to rise.
“Would a few per cent on your electricity bills really be too much to pay for a sustainable energy future?” he asked. “I do not think it would.”
Prof Shepherd also said the UK will have to invest in nuclear despite safety concerns. Britain’s nuclear watchdog recently admitted there were more than 1,750 leaks, breakdowns or other “events” over the past seven years.
Again Prof Shepherd said the Government has failed to invest in the technology but the industry could be developed by employing more engineers and experts from abroad.
Coal will also have to be used in the future despite concerns about the carbon emissions through investing in carbon capture and storage (CCS) technology. The Royal Society are calling for any new power stations to capture 90 per cent of carbon dioxide emissions by 2020 – much tougher than the Government’s “disappointing” current policy.
However in the long run Prof Shepherd, a climate scientist at Southampton University, said the UK must rely on renewables like solar and wind.
“For the sake of future generations we cannot afford to wait until our climate is changed dramatically or the oil runs out before we end our dependency on fossil fuels,” he warned.
Ed Miliband, the energy and climate change minister, said the UK will be setting out a vision for renewables in a white paper due to be revealed next month.
“We have identified ways to tackle the challenges – we will need a mix of renewables, clean fossil fuels and nuclear and we’re already making world leading progress in those areas,” he said.
Source - The Telegraph
Wednesday, 25 March 2009
UK energy news update
Britain’s energy policy is in crisis, the successive failure of the UK Government to take any meaningful action on its innovative 2003 Energy Policy and its subsequent watering down in the 2007 Energy Bill has now been further compounded by it’s recent inability to make any decisions at all about anything argues Naturalchoices Editor Peter Shield.
On the upside the United Kingdom is blessed with a tremendous amount of wind power, both on and off shore wind, according to the Sustainable Development Commission, “The UK has the best and most geographically diverse wind resources in Europe, more than enough to meet current renewable energy targets”, in their report ‘Wind Power in the UK’ they find, “Onshore wind is one of the cheapest forms of renewable energy and increasing supply to 20 per cent by 2020 would present only a very modest increase in cost for consumers that compares well with other energy sources. Indeed, as fossil fuel prices increase and wind turbines become cheaper to build, wind power may even become one of the cheapest forms of electricity generation over the next 15 years.”.
After 3 years of total inaction, they undertook another re-look at their energy policy, maybe this time with the idea of actually doing something about it, the 2006 Energy Review lead to the 2007 Energy White Paper which reinserted the nuclear option.
Big energy companies have always had an on off relationship with renewables. They understand ‘traditional’ fossil fuel and nuclear plants, you put fuel in at this end it creates electricity at a fixed ratio, it is plugged into the grid in such as fashion and it yields ‘x’% return on investment over ‘y’ years. They know how to build them, run them, promote them and very importantly how to get funding from their banks, and tax breaks from governments for them. Renewables are altogether a different ball game, they involve R&D, they work with the national grid differently, they require demand side changes as well as supply side changes: In short they are a much bigger challenge, banks don’t understand them and are reluctant to fund them, and the civil servants who like the power companies themselves, were brought up on mega generators equally like to stay within their comfort zone. Last week alone we say Shell say it was going to sell its solar division, EDF and E.ON try and blackmail the British Government into lowering its commitment to renewables, and Scottish Power back away from its commitments to renewables. The UK Government is relying on these power companies to pay for its renewable commitments, and now they are saying no. Unless the Government take a firm stance both we regards to negotiations with the power companies and a renewed commitment to financially supporting renewable energy then the whole edifice could come crashing down.
The Government promised a decision on the rolling out of smart meters in May last year, they then delayed until November, they still haven’t made a decision. Dave Robinson, market development manager at smart meter developer Landis+Gyr, told The Guardian: “We’re still waiting for a decision on how this will be done and a start date for the roll-out. It’s very frustrating.”
Source - Heatmyhome
On the upside the United Kingdom is blessed with a tremendous amount of wind power, both on and off shore wind, according to the Sustainable Development Commission, “The UK has the best and most geographically diverse wind resources in Europe, more than enough to meet current renewable energy targets”, in their report ‘Wind Power in the UK’ they find, “Onshore wind is one of the cheapest forms of renewable energy and increasing supply to 20 per cent by 2020 would present only a very modest increase in cost for consumers that compares well with other energy sources. Indeed, as fossil fuel prices increase and wind turbines become cheaper to build, wind power may even become one of the cheapest forms of electricity generation over the next 15 years.”.
After 3 years of total inaction, they undertook another re-look at their energy policy, maybe this time with the idea of actually doing something about it, the 2006 Energy Review lead to the 2007 Energy White Paper which reinserted the nuclear option.
Big energy companies have always had an on off relationship with renewables. They understand ‘traditional’ fossil fuel and nuclear plants, you put fuel in at this end it creates electricity at a fixed ratio, it is plugged into the grid in such as fashion and it yields ‘x’% return on investment over ‘y’ years. They know how to build them, run them, promote them and very importantly how to get funding from their banks, and tax breaks from governments for them. Renewables are altogether a different ball game, they involve R&D, they work with the national grid differently, they require demand side changes as well as supply side changes: In short they are a much bigger challenge, banks don’t understand them and are reluctant to fund them, and the civil servants who like the power companies themselves, were brought up on mega generators equally like to stay within their comfort zone. Last week alone we say Shell say it was going to sell its solar division, EDF and E.ON try and blackmail the British Government into lowering its commitment to renewables, and Scottish Power back away from its commitments to renewables. The UK Government is relying on these power companies to pay for its renewable commitments, and now they are saying no. Unless the Government take a firm stance both we regards to negotiations with the power companies and a renewed commitment to financially supporting renewable energy then the whole edifice could come crashing down.
The Government promised a decision on the rolling out of smart meters in May last year, they then delayed until November, they still haven’t made a decision. Dave Robinson, market development manager at smart meter developer Landis+Gyr, told The Guardian: “We’re still waiting for a decision on how this will be done and a start date for the roll-out. It’s very frustrating.”
Source - Heatmyhome
Sunday, 22 March 2009
Warning over renewables as economic crisis leaves funding gap
Scant aid, too much hype and unrealistic targets threaten climate-change pledges by Terry Macalister and David Adam.
Green power companies are heading for "crisis" and Britain should no longer rely on them to meet its energy security and climate change obligations, some industry experts are warning.
The difficulties - triggered by the credit crunch, recession and a collapse in the carbon price - have led to new demands this weekend to ministers from companies warning that their renewables schemes are at risk without more financial aid.
Over the past week alone, the previously fast-growing renewable energy sector has seen Shell decide to stop building wind and solar schemes worldwide, the wave company Pelamis hit by technical and financial troubles, and EDF Energy warn that UK renewables targets would not be realised and should be scaled back to achievable levels.
In addition, a group of more than 40 businesses has taken the unique step of writing collectively to Joan Ruddock, the energy and climate change minister, warning her of the threats to a host of projects unless something is done.
"I think it's heading towards a crisis," said Andrew Mill, who sits on the government's Renewables Advisory Board. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The situation could be worse because green industry figures often suggest that everything is fine, argues Mill. "A lot of the [renewable companies] can't afford to talk about it as they need to be seen as a good investment. If they don't give out a good story then they can't raise money."
The problems stretch across the industry, he said, from small marine energy companies to large-scale investments in offshore wind farms that are expected to form the cornerstone of ambitious plans to generate 15% of Britain's energy from renewable sources by 2020. "The big utilities are struggling to raise project finance for inshore wind farms, and they were supposed to be the easy projects."
"There is a serious problem," agrees John Constable, head of policy at the Renewable Energy Foundation (REF). "I warned a year ago that the industry was being set up for a fall and now it has happened. There has been too much hype and the government was always far too unrealistic about what could be achieved."
David MacKay, a Cambridge University professor and author of a new book, Sustainable Energy - Without the Hot Air, also agrees. "It may well be that renewables has been overhyped and there is a backlash against it ... There is a big, big problem compared with a year ago. I know a number of people who are unable to get investment for the kind of new technology we need for a low-carbon future."
Leading companies such as BT, Marks & Spencer and United Utilities have told Ruddock that they are "concerned over the current barriers to renewable energy investment and generation by the corporate sector".
The British Wind Energy Association, which usually paints an unfailingly upbeat picture and which has just wrung a series of new subsidy concessions from ministers, will demand in a budget submission to be unveiled in two weeks' time more help for an industry hit by a shortage of bank finance, the plunging value of the pound and mounting equipment costs.
The London Array, potentially the biggest offshore wind farm in the world, is already known to be under threat because of the changed economic conditions. Shell pulled out last year and Centrica and E.ON have both voiced major concerns about the prospects for big wind schemes, which are essential if the UK is to meet its targets for renewable power.
The Carbon Capture & Storage Association has also written to the chancellor, Alistair Darling, saying government hopes of meeting carbon-reduction targets using CCS are doomed "without a serious and urgent commitment to funding from the UK government".
The REF says that some of the £1bn annual subsidy that already goes into green schemes through the Renewable Obligations Certificates should be used to bolster the "utterly disgraceful" low levels of research and development funding.
Constable also believes that Britain could be left having to use more gas or even coal plants to keep the lights on, accepting that even the "super-critical new efficient coal plants like the one E.ON wants to construct at Kingsnorth would leave us breaching our carbon-emission targets".
Source - The guardian
Green power companies are heading for "crisis" and Britain should no longer rely on them to meet its energy security and climate change obligations, some industry experts are warning.
The difficulties - triggered by the credit crunch, recession and a collapse in the carbon price - have led to new demands this weekend to ministers from companies warning that their renewables schemes are at risk without more financial aid.
Over the past week alone, the previously fast-growing renewable energy sector has seen Shell decide to stop building wind and solar schemes worldwide, the wave company Pelamis hit by technical and financial troubles, and EDF Energy warn that UK renewables targets would not be realised and should be scaled back to achievable levels.
In addition, a group of more than 40 businesses has taken the unique step of writing collectively to Joan Ruddock, the energy and climate change minister, warning her of the threats to a host of projects unless something is done.
"I think it's heading towards a crisis," said Andrew Mill, who sits on the government's Renewables Advisory Board. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The situation could be worse because green industry figures often suggest that everything is fine, argues Mill. "A lot of the [renewable companies] can't afford to talk about it as they need to be seen as a good investment. If they don't give out a good story then they can't raise money."
The problems stretch across the industry, he said, from small marine energy companies to large-scale investments in offshore wind farms that are expected to form the cornerstone of ambitious plans to generate 15% of Britain's energy from renewable sources by 2020. "The big utilities are struggling to raise project finance for inshore wind farms, and they were supposed to be the easy projects."
"There is a serious problem," agrees John Constable, head of policy at the Renewable Energy Foundation (REF). "I warned a year ago that the industry was being set up for a fall and now it has happened. There has been too much hype and the government was always far too unrealistic about what could be achieved."
David MacKay, a Cambridge University professor and author of a new book, Sustainable Energy - Without the Hot Air, also agrees. "It may well be that renewables has been overhyped and there is a backlash against it ... There is a big, big problem compared with a year ago. I know a number of people who are unable to get investment for the kind of new technology we need for a low-carbon future."
Leading companies such as BT, Marks & Spencer and United Utilities have told Ruddock that they are "concerned over the current barriers to renewable energy investment and generation by the corporate sector".
The British Wind Energy Association, which usually paints an unfailingly upbeat picture and which has just wrung a series of new subsidy concessions from ministers, will demand in a budget submission to be unveiled in two weeks' time more help for an industry hit by a shortage of bank finance, the plunging value of the pound and mounting equipment costs.
The London Array, potentially the biggest offshore wind farm in the world, is already known to be under threat because of the changed economic conditions. Shell pulled out last year and Centrica and E.ON have both voiced major concerns about the prospects for big wind schemes, which are essential if the UK is to meet its targets for renewable power.
The Carbon Capture & Storage Association has also written to the chancellor, Alistair Darling, saying government hopes of meeting carbon-reduction targets using CCS are doomed "without a serious and urgent commitment to funding from the UK government".
The REF says that some of the £1bn annual subsidy that already goes into green schemes through the Renewable Obligations Certificates should be used to bolster the "utterly disgraceful" low levels of research and development funding.
Constable also believes that Britain could be left having to use more gas or even coal plants to keep the lights on, accepting that even the "super-critical new efficient coal plants like the one E.ON wants to construct at Kingsnorth would leave us breaching our carbon-emission targets".
Source - The guardian
Friday, 20 March 2009
UK ends solar panels grant funding
In yet another case of governments underestimating the willingness of citizens to install solar panels systems, the UK government has ended a controversial program well ahead of time.
As has been the case in in Spain, Florida and Ontario, Canada in relation to gross feed in tariff systems, the UK Department of Energy and Climate Change (DECC) has found that applications for grid connected solar power projects on public buildings has far exceeded their expectations.
Half of the £50m funding set aside for the low-carbon buildings program been used up by solar projects within just a few months.
Seen by many as a token effort from the UK government, the program was also meant to encourage the uptake of other renewable energy sources and carbon reduction initiatives. Critics believe that the other half of the funding will sit mostly unused and should therefore be accessible to solar power projects, and any funding from failed projects should be returned to the pool to and also made available.
Solar panels industry supporters have also said that the ending of the funding will see the local solar sector experience a gap in government support for over a year, which flies in the face of Gordon Brown’s plans of of creating 400,000 green jobs to boost the economy and combat climate change.
Funding instability for the industry will also discourage investment, leading some to accuse officials of retarding progress towards a low-carbon economy for the UK by remaining too sympathetic to fossil fuel companies.
Source - Energy Matters
As has been the case in in Spain, Florida and Ontario, Canada in relation to gross feed in tariff systems, the UK Department of Energy and Climate Change (DECC) has found that applications for grid connected solar power projects on public buildings has far exceeded their expectations.
Half of the £50m funding set aside for the low-carbon buildings program been used up by solar projects within just a few months.
Seen by many as a token effort from the UK government, the program was also meant to encourage the uptake of other renewable energy sources and carbon reduction initiatives. Critics believe that the other half of the funding will sit mostly unused and should therefore be accessible to solar power projects, and any funding from failed projects should be returned to the pool to and also made available.
Solar panels industry supporters have also said that the ending of the funding will see the local solar sector experience a gap in government support for over a year, which flies in the face of Gordon Brown’s plans of of creating 400,000 green jobs to boost the economy and combat climate change.
Funding instability for the industry will also discourage investment, leading some to accuse officials of retarding progress towards a low-carbon economy for the UK by remaining too sympathetic to fossil fuel companies.
Source - Energy Matters
Sunday, 13 July 2008
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
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
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