Like buses not one but two reports on renewables costs come out in one week. Both are very encouraging on future renewables costs and broadly say the same thing about two different technologies. The first report to come out was on offshore wind. At the moment other than tidal/wave this is the most expensive renewable by far. DECC and the increasing UK supply chain have been working hard to get the costs down on this technology (the UK has more capacity than any other country). The DECC target has been 10p/unit generation cost. Judging by this weeks report this target will easily be exceeded. By 2020 offshore wind will be competitive with gas. By 2025 it should be cheaper.
The second report on renewables costs is on PV. Essentially its saying the same thing. By 2020 PV will be at grid parity for ground mounted PV and soon after for rooftop solar in the UK. In fact some systems might be at grid parity now.
This has all happened at the same time that the government has cut the energy efficiency targets for new homes, the green deal, ROC support for ground mounted PV up to 5MWp and onshore wind. This at the times when renewables costs are almost but not quite at the point where they should be -subsidy free. Short sighted or what.
The picture shows Walney 1 & 2 in the Irish sea I took from a ferry the other week, at 370MWp capacity it was the largest offshore wind farm in the world at one point.
I read in yesterday’s Observer newspaper that a community benefit society is being set up in Scotland to provide cheap energy to households in fuel poverty. Unlike a COOP a community benefit society is set up to benefit the wider community rather than just its members. The community benefit society idea was created by the last labour government to encourage social enterprises, that is enterprises run on private sectors lines but that reinvest all their profit in their company for the benefit of the community.
This community benefit society has been launched by a whole heap of housing associations (some of which people at church work for) and one council. The idea has been covered before on this blog. But this is a very ambitious scheme hoping to reach 200,000 people. The idea is simple they hope to initially buy power more cheaply on mass and then generate some using renewables. Such companies already exist, I am signed up to the only Christian energy company, which is a social enterprise. I signed up with them for social reasons. Everyone pays the same rate and in effect I am helping to subsidise their lower income customers. There are also many community benefit societies based around local renewable energy schemes. This new community benefit society is a great idea and hopefully will help a real need.
Is it going to be a good year for foraging? Last week I went on the train to a family funeral shortly after going on holiday. What’s interesting is going to different parts of the country to see how agriculture or at least plants are faring. As I went further south I expected the plants in the fields and gardens I saw to be ahead of mine. What is interesting is its less clear cut than that. Even in my locality I see plants that I have in my garden are behind my near neighbours. On holiday on the Isle of Man I saw plants that I grow were generally behind my garden in Scotland, although there were exceptions.
What is surprising is that after such a cold May is what a good year we going to have for fruit and foraging. On the train the embankments were covered in brambles, these were coated with in flowers or developing fruit. Looking at Apple trees these were the same, from one end of the country to the other the harvest is also going to be very good. My apple tree much to my surprise after coming into flower too early compared with its pollination partners and then suffering a period of cold weather is going to have a great crop (as long as we do not have gales). There are exceptions though. My gooseberry bushes have not cropped as well this year and my vegetables are at least a month behind (in the case of some root vegetables such as parsnips this may mean no crop). At the hotel I was staying at before the funeral there was a cherry tree in the grounds. It was covered in ripe cherries of which I sampled a few after foraging. Delicious they were too -its going to be a great year for foraging.
The current low oil price is not just down to geology but also economics. Over what is nearly a year this blog has put forward a number of theories as to why the oil price has fallen. The latest oil price falls suggest that economics is playing its part as much as extra production or other reasons suggested for the continuing low oil price. The Euro crisis and the more importantly the slow down in China in the last few days have forced the oil price down as well as prices of other commodities lower. How long this will continue is anybodies guess. The effects are mixed, bad for for alternatives to traditional sources of energy such as nuclear, fracking and renewables. Good for food prices. Bad for climate change. Luckily renewable energy looks unstoppable with its price falling rapidly.
Are asylum seekers the key to a climate agreement? This thought has struck me over the last few days as the horrendous news from Calais and the Mediterranean has unfolded (and the UK with someone falling out an aircraft). As NGO’s and others consider their stance for Paris in December should this be their main line of argument?
There is little doubt we have a problem both with people driven by conflict and economic reasons trying to get into the developed world (mostly the UK and US). There is also little doubt that governments really don’t have clue what to do about it. As I blogged about previously there are already a very large number of climate refugees already. There is little doubt that climate change will make the problem of asylum seekers and refugees far worse. There are not only the problems of rising sea levels and environmental degradation but also increased likelihood of conflict and economic dislocation. Certainly that well known liberal environmental organisation the US military thinks so. The only problem is we cannot say for certain how bad the problem is going to be. It seems likely though the problem of asylum seekers and refugees is going to get far worse and is one reason alone to seal the climate deal. At times like this I am reminded of two things. Walls don’t work and Jesus was a refugee (Matthew 2v13-15).
Six Energy facts as highlighted by BP…. Last week I looked at some of the facts BP seemed less keen to draw attention to.
1) Thanks to shale oil USA becomes largest oil producer questioning peak oil theory. What I say in response is… Hubbert to the best of my knowledge never considered shale oil and even the IEA suggest that conventional oil has peaked in 2006. In addition the IEA suggest US shale oil (not so far replicated elsewhere) will peak in about 2018.
2) Second of the energy facts from BP is that oil production in non-OPEC countries soars undoing a long decline. What I say in response is… As BP point out a lot of this is due to US shale oil not making this such a different point to 1).
3) Energy demand grew by only 0.9% whilst the global economy grew by 3.3% last year. The long term average is about 2%. This is due to weather related issues in the US and Europe and a slowing economy in China. What I say in response is… Maybe this is part of a trend. With more efficient appliances and LED’s it could be that energy demand will fall. A lot depends on what happens in China and India.
4) 4th of the energy facts. Coal use declines in China. What I say in response is… According to BP’s data this is looking like a trend. Pollution in China is a huge problem with protests taking place which in itself will worry the Chinese government. This could be very significant but depends on what happens to the Chinese economy.
5) Carbon emissions from energy use rose at only 0.5%, the slowest since the 1990’s. BP say this is due to the slowdown in China. What I say in response is… Remember this is due to energy use and ignores emissions due to agriculture and forestry for example. The overall situation is actually more encouraging with an overall fall in emissions last year.
6) Last of the energy facts is that renewables had a mixed year. The growth in output was below its longterm average of about 15% but was still a robust 12%. Only 3% of global energy comes from renewables. What I say in response is… Everyone underestimates the growth of renewables.
Image from BP.
Both the pope and the IEA have called for climate action this week. Whilst both have been saying the same type of thing they have been saying it in very different ways. The pope’s encyclical is apparently more about the moral case for climate action. I have not read it yet but will be writing a blog post on it when I have done so. The IEA is suggesting a technocratic approach. The IEA wants to see four general outcomes these are;
- A peak in global emissions by 2020.
- A five-yearly revision of targets set out in Paris to see how things go and “raise ambition”.
- “Lock in the vision” a long-term goal on emissions, this would effectively set a global carbon budget.
- Monitoring emissions and fossil fuel use in the energy sector. The IEA suggest some ways of climate action here such as reducing leakage of methane in oil and gas extraction (easy to stop apparently but few bother), to more difficult such as phasing out old coal powered power stations and a huge in increase in renewables and energy efficiency
On the positive side the IEA see a huge reduction in the costs of solar PV and electric vehicles by 2040 with most of the cost reductions in both happening in the next 5 years (see IEA graphs below). They also note that emissions fell last year when the global economy grew – a first.
Oil and gas reserves show signs of peaking. These are two of the first facts I noticed in the latest BP Statistical Review of World Energy (one of the big two energy data events of the year). In this post I will be looking at the stuff BP have not chosen to highlight.
We have covered on this site before the possible peaking of gas reserves, but not oil and gas reserves together. In 2014 the natural gas reserves increased very slightly by just 0.3%, this is just behind consumption, which increased by 0.4%. This time the oil reserves have also shown a fall (the first for many years). Its not huge one and all but invisible on the graph below (left hand graph).
However, both the oil and gas reserves data are starting to look like a trend and that trend is the top of a peak. Of course the production fall lags a reserve fall. Peak oil theory suggests a 30 year lag at least on conventional oil. Things are more complicated than that. Unconventional oil and gas deplete much faster as we covered in our book. In addition as the east to extract oil and gas disappear we are using more primary energy to extract the less easy stuff. Again we cover this in our book. It means we are using more and more energy to stand still and reserve data is probably much more flattering than it looks (although this also depends on demand). Its however telling even with oil and gas reserves being flattered by unconventional oil and gas the reserves look like they are peaking.
Its a brave person or organization that attempts to predict future oil and gas prices. One such body is the Office for budget responsibility (OBR). Set up by the last Tory led coalition as a political wheeze, its proving quite useful criticising the current government of the UK when it feels its necessary. As its name implies it makes budget predictions and as part of these it must consider oil and gas prices and hence revenues from UK oil and gas production (mostly but no entirely in the North Sea). Until recently the tax income from this was an important source of tax revenue. No longer. Oil production hit a peak in 1999 and will never recover. This and the falling oil price have decimated revenues (see below). However, what is of interest is the OBR in their latest report do not see any quick recovery in oil or gas prices (see graph below). They also do not see any recovery in UK oil and gas production (also shown in the graphs below using OBR data).
See this graph below lifted from the OBR report below which shows long term projections for the oil price.
The lower oil and gas prices and falling production has had a calamitous effect on revenues. Between now and 2020/1-2040/1 the tax revenue from the North Sea could be as little as £2 billion or even -£5 billion. This last last figure raises an important problem. As the rigs come to the end of their life they need decommissioning. The exact cost is unknown, but very high. One estimate is as much as £32 billion. It looks like the North Sea is entering a phase of making a huge loss.
The G7 have committed to going fossil free at the latest G7 conference (in 100 years). Opinions are divided on whether the G7 is any longer a good idea and also whether the fossil free pledge is good idea. I agree with Larry Elliot that the whole idea of the G7 is outdated (have you noticed that no protests take place around it anymore). And whilst I can see the idea of the fossil free pledge sends a message, it in my view it suffers from the following rather obvious flaws;
- The fossil free time frame is too long. 100 years is a vague concept to most people and all the current political leaders are likely to be dead. This is the whole problem with climate change its too far ahead for most of us to cope with and this makes it worse
- The fossil free pledge is too vague. Do what specifically by when in the intervening period?
- The fossil free pledge is too late. By 2115 we will by fried on current rates of progress.
- By 2115 there won’t be any fossil fuels left to speak of anyway.
One positive is that the idea of going fossil free has promoted some discussion. Professor Catherine Mitchell Professor of energy policy at Exeter University on the radio identified the main problems with going fossil free that we did in our book. That is materials and transport (although we would add renewable heat too). Lets face it this fossil free pledge doesn’t add up to a row of beans and we need some serious pledges before Paris.