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Welcome once again to the Sustainable Futures Report. I'm Anthony Day and it's Friday, 30th June.
This week we return once again to energy; sustainable energy, clean energy and renewable energy. We also look at incredibly expensive energy and very unlikely energy. Community Energy Fortnight, running from 24th June to 9th July has kept me quite busy this last week. More in a moment. There’s news from the Amazon, news from Hinkley and news from the Mexican border.
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The Sunny South
Let’s start with news of a major renewables project from the United States. One of President Trump’s high-profile campaign promises was a wall along the Mexican border.
Officials from the Homeland Security Department, which is overseeing bids for the wall, have said repeatedly they don't know yet the length of the wall the administration will ultimately want to build or how much it will cost. Estimates of at least $20 billion have been mentioned. Mexican officials have flatly rejected paying for the wall and U.S. lawmakers haven't been enthusiastic about paying for it either. Not much has been done.
But now Donald Trump has come up with a new idea. He insists it’s his idea, although the signs are that somebody else came up with it first. He’s going to cover the wall with solar panels and use the electricity generated to cover the costs of construction and maintenance.
"This way,” he says, “Mexico will have to pay much less money,"
His wall will be 40 feet to 50 feet high (up to about 15 metres) and covered with solar panels so they’d be “beautiful structures.”
It’s suggested that this could be a brilliant political solution, creating an alliance of environmentalists who love solar energy with hardliners who don’t like immigrants. Maybe not. Many environmentalists see the wall as an ecological disaster. Brett Hartl of the Center for Biodiversity tweeted: “An ecological disaster with solar panels on top is still an ecological disaster. With solar panels on top.”
In order to maximise efficiency solar panels should face south. That means that the most expensive parts of the wall will be on the Mexican side. Will American personnel be allowed to cross the border for maintenance purposes? Or to stop people throwing stones at the panels?
Hinkley C. Again.
So that’s the unlikely energy. The extremely expensive energy will come from the new nuclear power station at Hinkley C. You’ll remember that Mrs May put the project on hold shortly after she became prime minister, and then gave it her support about two weeks later. Now the National Audit Office has reported on it. Presenting the report, Amyas Morse, head of the National Audit Office, says “The Department for Business, Energy and Industrial Strategy has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace. Time will tell whether the deal represents value for money, but we cannot say the Department has maximised the chances that it will be.”
EDF, the French-government-owned company that is building the plant says that the UK consumer will pay nothing until the plant is in production. However, the British government has guaranteed a price for electricity from the station at £92.50 per megawatt hour, index-linked for the next 30 years. That compares with the current price for electricity of about £45 MWh.
There is a political risk in that this major part of UK infrastructure will be built and financed by the French and the Chinese respectively. There’s also a technical risk. The Hinkley C power station will use a new and unproven design. Similar plants are under construction in Finland and France: both way over budget and years behind schedule. The plant at Flamanville in France has been under review by the French nuclear inspectorate (ASN) for over a year. The problem is that they suspect that the castings of the reactor vessel are made of steel which contains too much carbon. This could make the steel brittle and unsafe. They have now completed their report and have passed the station as fit for service, but with caveats. The reactor vessel is approved for its 60-year design life. However, they say that they were unable to carry out all the tests that they required on the reactor cover because it is built into the building and inaccessible. According to Reuters, ASN require this cover to be replaced not long after operations commence, around 2025. This will be expensive, will require the reactor to be shut down for some time and will involve demolition and reconstruction of part of the reactor building.
Areva NP's Creusot Forge foundry, which made the base and cover, is currently closed following the discovery of manufacturing flaws and falsification of documentation and is awaiting ASN approval to restart. According to the New York Times the new cover will be made not by Creusot but by a manufacturer in Japan. The Japanese supplied the castings for the plant in Finland and will presumably also be making the castings for Hinkley C.
While the government is relying on Hinkley C to provide 7-8% of the nation’s electricity, eventually, Centrica, the generating company, is to sell its Langage and South Humber Bank gas-fired power stations. These are some of the latest, cleanest and most versatile stations, but nonetheless the Centrica press release says:
“The transaction is consistent with Centrica’s strategy to shift investment towards its customer facing businesses and to seek opportunities in flexible peaking units, energy storage and distributed generation whilst reducing focus on large scale central power generation.”
Maybe I’m not the only one to see Hinkley C as an expensive white elephant.
What could be more environmentally friendly than hydropower? Well, the Brazilian government is supporting the construction of hundreds of dams and hydropower stations along the Amazon but environmentalists are ringing urgent alarm bells.
It’s a classic dilemma. There’s no doubt that making electricity available will stimulate economic activity, raise standards of living and reduce poverty. Once a hydro power station is built there’s no fuel cost, there are no GHG emissions and it will typically run for decades. Enter the law of unintended consequences. According to National Geographic magazine, scientists worry that dams will harm the Amazon’s legendary biodiversity by blocking fish-spawning runs, reducing the flow of vital soil nutrients, and clearing forests. Reservoirs behind the dams also could displace indigenous people whose livelihood depends on the rivers.
Greenpeace wrote an extensive report last year: “Damning the Amazon” and strongly criticised the government of President Dilma Rousseff as obsessed with economic development at any cost, pushing a further massive expansion of hydropower in the Amazon. Brazilian politics are riddled with allegations of corruption and last summer President Rousseff was impeached and removed from office. Her vice-president Michel Temer took over, but is now himself facing prosecution for illegal campaign funding. The Brazilian government is far from strong and stable. Meanwhile illegal logging goes on around the dam sites, new mines and cattle ranches are established and there is little or no regulation or control.
By the time that the Greenpeace report was published, over 750,000 km2 of forest had already been cleared. And it continues. Once rain forest has been cleared it cannot be recreated. The whole of the Amazon Basin has global significance, not only for its biodiversity but for its role as a carbon sink. The millions of trees absorb and lock up carbon as they grow - more than any other area in the world. The fate of the Amazon is therefore important to all of us, not just to the Brazilians. Brazil is a sovereign nation, but the Amazon is an international resource. The global community surely must intervene, before it’s too late. And it’s very late already.
Community Energy Fortnight
We’re in the middle of Community Energy Fortnight. What is community energy? The idea is that members of a local community get together to set up an installation to generate renewable energy. This can be with a wind turbine, solar panels or a hydropower installation. The group typically sets itself up as a community benefit organisation and raises a share issue for the cost of the equipment. Taking a solar installation for example, the group would look to pay a peppercorn rent for the rights to install the panels on a roof and they would sell the electricity produced to the building’s occupier at a lower price than they would pay to an energy company. A feed-in tariff payment is made by the government for each unit generated and it is usually also possible to sell any surplus to the grid. These revenues pay for the cost of the equipment, they pay a dividend of around 5% to the shareholders and a surplus remains for investment in community projects.
Last week I travelled with a group from York Community Energy to visit the Edinburgh Community Solar Co-operative in Scotland. It’s the largest community-owned solar project in the UK, with an installed capacity of 1.4 MW which is roughly equivalent to the solar panels you might get on 300 separate houses. These panels are installed on 24 council owned buildings across the city. We were able to visit two sites. The installation is just a year old and working well. The electricity will be sold to the council for the life of the project at a fixed price without indexation.
Community Energy Conference
On Saturday I was at the national Community Energy Conference at Manchester University. There were delegates from all parts of the UK. Among them was Gower Regeneration with a solar farm in South Wales, producing sufficient electricity to power 300 homes. Built with a £1m loan from the Welsh government, there is a share offer open for investors to pay off the loan and take ownership. They are promised a 5% return and there is a forecast surplus of over £500k to support other social enterprises in the local area. This is a typical example of a community energy project, but please be aware that other share offers are available and you should take appropriate financial advice before investing.
The Community Energy Conference was co-hosted by Co-op Energy, an energy supplier and a purchaser of renewable energy and Community Energy England, a not for profit organisation set up to provide a voice for the community energy sector and help create the conditions within which community energy can flourish.
As well as stands showcasing projects there were organisations to help with funding, organisations which can handle the legal aspects of projects and others which can handle all the back-office administration of a project once it’s up and running.
There was an atmosphere of optimism in the face of considerable challenges. The government has effectively blocked all new onshore wind and its short term changes to the FITS tariffs have driven many installers out of business. Emma Bridge, CEO of Community Energy England told us that while there were 44 projects stalled for various reasons there were 63 organisations with plans for solar PV installations or renewable heat networks. In her words, bloodymindedness would ensure success.
Dr Nina Skorupska of the Renewable Energy Association addressed the changing energy landscape. She was concerned that the government was becoming complacent about emissions because emissions from power generation are falling. Transport is now responsible for the bulk of emissions and the level is flatlining. The mention of improved infrastructure for electric vehicles in the Queen’s speech may go some way towards redressing this, although less than 3% of transport is renewable against the target of 10%. By contrast, the UK generated over 24% of its electricity from renewables in 2016. Of course this will not be solely down to community energy; it will include commercial windfarms and a significant contribution from biomass at Drax. That's a controversy in itself. Nevertheless, the renewable energy sector employs over 125,000 people, excluding volunteers, and is growing faster than any other industrial sector. Over 16,000 people are working in storage and electric vehicles.
There are inevitably clouds on the horizon after Brexit. There must be a consistent policy across Europe. The position of the UK in relation to EU ETS (Emissions Trading Scheme) post Brexit must be clarified. The National Infrastructure Commission appears to be onside. Launching its Smart Power report earlier this year, Lord Adonis said that smart power could save consumers £8 billion per year.
Jonathan Atkinson of Carbon Coop told us about the biomass energy coop with an installation running on coffee grounds. He was optimistic and hopeful that the new mayor of Manchester would lend support. He warned delegates of the danger of burnout, of the limits to technology and the need for a service focus, to concentrate on consumer expectations. On the other hand he said that community organisations inspired trust, unlike faceless multinationals. Community groups are dynamic and nimble and ideally placed to exploit innovation.
What do these organisations do with the social dividend they create? It could be used to clean up a park or refurbish a community centre, but organisations like Carbon Coop and BHESCo, the Brighton and Hove Energy Services Co-operative, concentrate on energy efficiency. 72% of UK properties are rated D or below and only 8% of homes with solid walls have insulation. Of course energy saving is a hard sell. Consumers demand a short payback period for the investment, which they wouldn’t consider if they were spending it on a new kitchen.
BHESCo softens the blow by making the efficiencies pay for themselves. They carry out a survey, prepare a report and install and monitor energy-saving measures. They say:
“Following an energy survey BHESCo funds the project planning, development and installation, and remains the owner until our hire purchase agreement is paid off. In this way, we assume the technological & financial risk instead of you having to make sure your interests are protected.
Our upfront investment is returned through a hire purchase agreement that is ultimately paid from the savings on your energy bill. Our interest rate is what we pay to our member investors of 5%.”
Sounds a bit like the government’s ill-fated Green Deal. Except this works.
Installer Joju Solar offers a similar deal with LED lighting. They instal the energy-saving lights and the cost can be met from grants, from social revenue from other schemes, from a share offer or from energy savings.
Peter Holbrook from Social Enterprise UK spoke about the future of community energy and social enterprise beyond 2017. He was quite clear that the market fails us and that markets are not functioning for communities. Even Theresa May recognised that the state needed to intervene in markets when she proposed an energy price cap - unfortunately ditched in the aftermath to the election. H was concerned that Brexit would make the news for the next 5 years and divert the government from may other issues. The whole economy, he said, needs to change when 8 billionaires own the same as the 3.6 billion poorest people and the super-rich have appropriated the bulk of the economic growth created over the last three decades. There’s good news like the Divine Chocolate Company creating income for women in Africa and Belu Water which donates all its profits to Water Aid. (It uses recyclable glass bottles as well.) And there’s the Fairphone, which we’ve mentioned before. It’s modular and customisable and repairable.
Don’t worry. Be happy.
Peter’s closing message was not to worry about who is in No 10. The social enterprise movement will succeed despite politicians.
There are many altruistic people out there who seek added value and profit for the benefit of the community, not for their personal gain. It’s encouraging to learn that there are 78,000 social enterprises in the UK, accounting for 5% of all businesses, an annual turnover of £24bn and employing 1m people.
We live in challenging times, but there are always grounds for optimism.
And that brings another Sustainable Futures Report to a close.
I'm Anthony Day and apart from rushing off to put 30 kg of honey into jars, my next task is your next Sustainable Futures Report.
Thanks for your feedback. Please keep it coming. As I said before, reports during July will be shorter and will be suspended for August. I will spend that time finalising interviews because I have a number of people who have requested to take part in the Sustainable Futures Report. Please have a look at the Patreon site, that’s patreon.com/sfr. Remember, if you sign up to support the Report for $5 a month or more you will be entitled to a unique SFR badge. Full details of other benefits are on that site.
So that's it. I'm Anthony Day. Next week I'm chairing a conference in London, not on sustainability, but come what may there will be another Sustainable Futures Report on Friday.
Have a great weekend.
Until next time.