Taking the heat

For many years, experts have pointed to what they claimed were incompatible targets within UK energy policy: for example, how could the UK meet its commitment to reduce carbon dioxide emissions without building new nuclear power stations?

Under the Kyoto summit protocol, the UK is legally bound to cut greenhouse gas emissions by 12.5% below 1990 levels by 2008 2012. The Government has also set itself a target of cutting CO2 emissions by 20% by 2010.

Critics became more vociferous when the Government acted to protect coal with a moratorium on further consents for gas generation a move seen as further limiting the scope for reducing carbon dioxide emissions.

Last autumn, with publication of the consultation paper on climate change, the Government attempted to answer the critics by presenting its strategy for meeting emissions targets. It pinned its hopes on a big increase in combined heat and power (CHP) stations, more reliance on renewable energy sources, and greater energy efficiency with the possibility of an energy tax along the lines proposed by Lord Marshall.

Transport responsible for 23% of carbon emissions also has a part to play, in the shape of an integrated transport strategy aimed at reducing car use, the Government said.

On CHP, Environment minister Michael Meacher wants to see UK capacity at least double in the next 10 years, from its present level of 40MW. The climate change consultation paper proposed a target for renewables of 10% of UK generation capacity by 2010, compared with just over 3% now.

With CHP, heat that would normally be wasted is used in industry, or district heating schemes for offices or homes. ‘Good quality’ gas-fired combined heat and power stations are exempt from the general moratorium on further gas generation consents. ‘Good-quality’, as defined by Meacher and John Battle at the Department of Trade and Industry, means efficiency in excess of 70% under normal operating conditions, with on-site or nearby heat uses clearly identified. Schemes will not qualify simply by bolting minimal heat recovery facilities on to a conventional generator.

Meacher has stressed the climate change paper’s estimate that CHP could account for at least half of the seven million tonnes of carbon savings the Government believes industry can make. A study by the Energy Technology Support Unit puts the economic potential of CHP in industry at between 10,000 19,000MW. Meacher promised to set an official target for CHP capacity this year.

David Green, director of the Combined Heat and Power Association, believes the UK ‘is likely to achieve its Kyoto target with moderate, though not insignificant, effort’. However, Ian Fells, professor of energy conversion at the University of Newcastle, is more cautious. ‘The prospect of doubling [CHP] capacity in a decade seems optimistic,’ he says.

Fells points out that CHP is more suited to providing industrial process heat, because in district heating there is a problem of what to do with the recovered heat in summer. For similar reasons, CHP schemes with a large generating capacity may have difficulty finding local use for the heat produced.

Fells says: ‘CHP schemes should be sized according to the demand for heat, with electricity seen as just a by-product. Once you get it the other way round, the economics fall flat.’

On renewable energy wind, solar, hydro-electric power and biomass (power from burning landfill gas and the like) Fells sees the Government’s targets as even more optimistic. He especially questions the idea that carbon-intensive and zero-carbon energy sources could be developed to compensate for a planned decline in nuclear energy. Nuclear power now accounts for almost 30% of UK needs. By 2025 only Sizewell B will be left. Renewables, by comparison, represent just 2% of generating capacity (of which 15% comes from large hydro-electric schemes, 82% from biomass and 3.4% from wind/solar power).

The Government sees its latest renewables orders, calling for bids for the next wave of renewable generation capacity, as the first step in a drive to develop renewable sources. But it admits that to meet the 10% target, newer technologies, such as offshore wind power, will have to be introduced, and further research into developing photovoltaic technologies will be needed.

Fells believes the only way to meet the renewables target would be by ‘a grand gesture’ such as building the Severn barrage to generate electricity from tidal power. ‘It would not stretch existing technology. The cost would be about the same as the Channel Tunnel, but it would last 100 years and produce 6 7% of UK electricity requirements.’ However, this option is not even mentioned in the consultation paper.

When it comes to energy efficiency in business, Fells points out that ‘companies aren’t interested while prices are low’ and the Office of Electricity Regulation expects the underlying trend for UK energy prices to continue downwards. Hence the Government is likely to opt for a measure of compulsion, in the form of Lord Marshall’s proposal for an energy tax.

The Marshall report calls for ‘changes in the rates of tax to be made in a gradual and predictable way’ to maximise the incentive to invest in improved energy. It also suggests that the revenues should be ‘recycled in full to business’ for example through schemes aimed at promoting energy efficiency to avoid putting UK industry at a competitive disadvantage. There would need to be special treatment for energy intensive industries, and the tax should be designed so it does not put CHP at a disadvantage, and to encourage renewables.

Dr Tim Jenkins, a senior research officer with Friends of the Earth’s sustainable development unit, says that following the Marshall report, the Government is in a position to argue that the case for a tax has already been made. The Chancellor’s next move would then be to get industry on board in designing the tax to work efficiently. ‘I think he’s got a golden opportunity to do that,’ says Jenkins. ‘I’m hopeful he’ll commit himself.’