Towards a new York

York Business Conference took place this week. That’s York in Yorkshire, the original one! 

What’s that got to do with sustainability? It’s about the city of the future and the way we’ll all live. Some groundwork to do first, of course.

First of all, there was a power cut which threatened to derail the whole event. Nothing to do with the scare stories in the press; apparently it was a substation fault, but it did black out some 26,000 properties across the city. It just shows how dependent we are on electricity.  Fortunately power was restored after less than an hour and we all filed in to the auditorium to talk about economic prospects for York. It's a vibrant place with a long history which everybody knows about and a lot of scientific and academic resources that very few people seem to know about. We have FERA, the Food and Environment Research Agency, a research lab with a global reputation. We have a tremendous amount of research going on in our York universities, but speakers complained that there was far too little contact between universities and business and indeed between schools and business. A number of speakers said that the the media constantly give business a bad press. In drama it’s always the businessman who is the villain, and Lord Rose said that Lord Sugar’s Apprentice was a total misrepresentation of what business was truly about. 

We had a presentation from York Core, an organisation which brings ultra high speed data connectivity to homes and businesses throughout the city. York Core is provided by City Fibre - see cityfibre.com  - spreading high-speed data networks across the UK from key centres  in York,  Aberdeen, Peterborough and Coventry. The UK pays the penalty of leading the industrial revolution in that it has a legacy infrastructure. The copper telecommunications network which was revolutionary in its time is no longer fit for purpose, yet there is no UK fibre strategy. In terms of connectivity we are way behind Sweden, Lithuania and Latvia. 

We had a range of speakers telling us about the potential of York and the industrial expansion which could and should be achieved. They talked about devolution and decentralisation although nobody came to any conclusion as to what we should be doing about it. One point that was made most forcibly is that we should dual the outer ring road without delay. At the moment the delays on the ring road are unacceptable. I say unacceptable, but clearly many people do accept them because if they weren't sitting in traffic jams on the ring road there would not be any traffic jams on the ring road. If we are going to dual the ring road and increase its capacity - and this applies not just to York but to all the bypasses and road improvements around the country - we are assuming that as the future develops we are going to need to move more goods and more people. Is that true? One solution which could be implemented much more quickly than by building a new carriageway, would be to impose a toll on part of the ring road. I got a very negative reaction to this: “What? I'm going to have to pay to drive home?” If you had to pay in order to be able drive home at least you would find the road reasonably empty. And if the predicted growth of goods and people doesn't actually happen we won't have wasted the investment on a new carriageway.

The principal speaker at the conference was Lord Stuart Rose, formerly of Marks & Spencer. He was interviewed by Martin Vander Weyer of the Spectator magazine. I was particularly interested in Lord Rose’s views on sustainability and so submitted a question in advance. Unfortunately the interviewer decided to paraphrase it rather inelegantly and present it as one of his own. This is what I actually wrote: “You are the architect of Plan A, the M&S policy of environmental responsibility and carbon reduction. With former Environment Minister Owen Paterson saying we should suspend the Climate Change Act because the dangers of global warming are exaggerated, with George Osborne incentivising fracking to produce more fossil fuels and with David Cameron rejecting environmental concerns as green crap, isn't that now a lost cause?” I intended it to be controversial and Lord Rose rose to the bait. He said that companies had a huge responsibility and he was disappointed with the government’s attitude. Sustainable business is good business. Sustainability demands innovation and there will be serious problems if we don’t act now. The solutions are not always obvious or simple. For example, the carbon footprint of flying in vegetables from Africa could be lower than growing them in heated poly-tunnels in the UK. At the same time we need to remember our responsibilities. If we source supplies from Africa, in many cases we are building a community totally dependent on our business.

Later on Lord Rose went on to say that the high-speed rail projects HS2 and HS3, and a third runway at Heathrow were all essential if the UK wanted to compete in the 21st century. If we’d asked him he’d probably have said that we should dual the ring-road as well. Not sure how this fits in with sustainability. Are we really going to travel more and more and commute longer and longer distances? Apart from anything else, is travel what life’s all about? We’ve seen that York Core is bringing gigabit data speeds to York and to cities all over the country. Do we need to move ourselves and our goods as well? 

Data connectivity is a recurring theme in a number of events I’ve attended in the last couple of weeks. We’ve been talking about smart cities, the cities of the future. I’ll tell you what I’ve learnt about smart cities in a future episode.

Energy and the Bubble Economy

On 20th May the Yorkshire Chapter of CASSE, Centre for the Advancement of the Steady-State Economy, presented this event at Leeds University Business School. I expected one session but there were two separate presentations.

Energy

Tiago Domingos of the University of Lisbon took the first module: “Can energy use and economic growth be decoupled?” Green growth is possible by reducing the energy/GDP ratio, and to do that we need to decarbonise the energy system. This proved to be a technical talk; knowledge of thermodynamics a distinct advantage. Apparently energy cannot be destroyed and in any energy transfer there are always losses. This is demonstrated by our present electricity generation process, where around 60% of primary energy is wasted in generation and transmission and only 20% of what’s left (Final Energy) is Useful Energy. The rest is dissipated as heat in the appliance. He claimed that an output of 0.02kWh needs an input of 25kWh, which seems to be overstating the case a bit, but even a loss of 90% is bad enough. We pay for final energy - and all the primary energy that goes into it - and waste most of it in inefficient appliances.

We now moved on to the thermodynamics bit and started talking about exergy. I hadn’t heard of it before, but this is what Wikipedia says:   

“In thermodynamics, the exergy of a system is the maximum useful work possible during a process that brings the system into equilibrium with a heat reservoir.[1] When the surroundings are the reservoir, exergy is the potential of a system to cause a change as it achieves equilibrium with its environment. Exergy is the energy that is available to be used. After the system and surroundings reach equilibrium, the exergy is zero.”

The professor then went on to propose that we should study exergy rather than energy, and gave examples of sources of exergy: electricity, coal, gas, biomass, oil, food. (Note that electricity is a source of exergy, but of course not of energy.) He stated that the important ratio is not energy/GDP but Useful Energy/GDP. There followed an analysis of energy statistics for Portugal since 1850 when the economy was agricultural, through industrialisation from 1920 and onwards. The Final Energy/GDP ratio dropped sharply and plateau’d from 1960. Useful Work/GDP was at the same level as 1850, although primary energy consumption went up.

Domingos quoted the economist, Nicholas Kaldor, who said that in the long term the wages/interest, interest/capital, capital/GDP and Useful Work/GDP ratios were constant in most economies. There are also thermodynamic limits to the efficiencies of transforming primary to final energy and final to useful energy. The whole thing seems to lead me to the conclusion that there is very little scope for decoupling energy from economic growth. What hope for growth? Having said that, surely it all comes down to efficiencies. And while electricity generation from coal, gas, nuclear and even biomass can have losses of as much as 70%, the losses in generation from renewables are less than 1%.

I found this on the internet: http://www.theguardian.com/news/datablog/2012/jul/06/energy-green-politics#zoomed-picture 

The Bubble Economy

Our second speaker was Robert Ayres (from INSEAD in France) who will shortly publish "The Bubble Economy: Is There a Sustainable Way Forward?”. 

This was a very different presentation, and referred to Tulip Mania, the South Sea Bubble, the Trust Bust, the Dot-com Crash and the Sub-prime Disaster, among many others which litter history. Apparently there is a plausible story and investors start to pile in. Rumour builds on rumour, possibly helped along, until every man in the street sees a golden opportunity and mortgages his house to buy in. Canny investors get out at the top, confidence evaporates, prices crash and small investors lose their houses. Ayres predicts another bubble, this time involving fracking. Presumably that will happen in the US. After this week’s report from the UK Geological Survey few people in this country will surely invest!

Since 2008 we have seen pressures in the economy from climate change and the end of cheap oil, leading to inequalities and a slow recovery. In 2008 the banking system was under such extreme stress that governments had no choice but to rescue it. Household net worth collapsed and the middle classes have still not yet recovered. Oil price rises are inevitable because the rate of new discovery of oil is not keeping up with production. Saudi Arabia continues to be a major global oil producer, but its recoverable reserves remain, and have remained constant since 1988. (This is apparently justified by improving extraction techniques.) The oil price affects the global economy, but Ayres claims that it is only recently that the IMF has included the price of energy in its models. We need to decarbonise our energy and this is becoming more achievable as the average cost of onshore wind has been falling annually by 14%. The price of solar PV is falling faster; not yet to grid parity, but arguably coal generation benefits from hidden subsidies in that it does not pay the true cost of pollution. The costs of renewables and hydrocarbons are reaching a crossover point as new technologies, experience and economies of scale drive down renewable costs. Could we create a renewables bubble? Ayres told us that there are substantial reserves held by US corporates in overseas banks and doing nothing. Let’s not have a bubble, but let’s have some solid investment.

The future growth paradigm will be based on energy efficiency, not demand.

Questions

Questions came thick and fast and this a summary of what I picked up. 

Why will energy costs rise? asked a former Shell executive. Because Saudi is running out and the projected reserves in the US have been overstated and we are using it faster than we’re finding new reserves. Well, when he was at Shell they tried predicting the oil price and got it totally wrong….

Can we really substitute electricity for oil? Yes, but it is difficult and time-consuming which is why the price of oil matters…Is 30% the maximum share of energy that the UK can source from renewables? I would have thought that was pessimistic, myself.

If the future is efficiency, what about user behaviour? The rebound effect means consumers can spend the same and use more. Prices must be controlled by governments to prevent this. A green levy could keep expenditure at constant levels and raise a fund for green research and investment.

Will lower-quality reserves demand more energy? Energy in for energy out is a problem with fracking...Timescales for decarbonising the economy are a concern. There are big opportunities for improving efficiency - notably transport and home heating (cars are still very inefficient) - but if we are serious about our 2050 targets we have a serious problem. Current policies - and politicians - do not recognise the extent of the challenge.

Education is lacking in high places.

And my conclusion? As always, spread the word. Make people aware that business as usual is not an option. Make them aware that big business has generally taken all this on board, but small business and the consumer need to follow on. It’s not about a lower standard of living, it’s about doing things differently and more efficiently. It’s about not sacrificing the long term for the sake of the short term. 

Please tell any politicians you meet.

US to act on climate change?

In advance of the G8 summit, where climate change will be a prominent issue, George Bush has announced America’s commitment to action. This has been met with some cynicism, given that apart from Australia the USA was the only country to refuse to ratify the Kyoto Protocol. The view of the present US administration has always been that specific emission targets would hamper the American economy, and while China was doing nothing to cut emissions America could not afford to put itself at a disadvantage.

Kyoto did not put restrictions on China or any of the other developing nations because their per capita emissions are so much lower than those of the western world. China is accused of building coal-burning power stations – the most polluting form of energy – and opening a new one almost every week. On the other hand it still has 3 million citizens without electricity, it has very little oil or gas, it will produce clean electricity from the Three Gorges Dam and it is a leader in solar power. Every member of the Chinese cabinet is an engineer, so the consequences of climate change and energy shortages are not lost on them. Much of what China produces is destined for the American market, so it could be argued that they are making American emissions by proxy.

At the end of the day the important issue must be to cut energy use and cut emissions, not argue about who is doing what and why. George Bush is talking about a policy to be in place by the end of 2008. Even if we suspect his motives we must welcome the fact that he is talking about the issue, even if 2008 is probably too late if those who say we have only 5 years left to save the planet are correct!

Good Housekeeping

More and more organisations are adopting environmental policies and taking specific actions to implement them.

Eclipse Internet, the ISP within Kingston Communications, has recently announced that it is carbon-neutral. The main input to an IT company is power and in calculating the organisation’s footprint Eclipse also included the emissions due to the daily commute of the workforce. This proved to be a not insignificant 23% of the total. Beyond making sure that heating and lighting in the offices is as efficient as possible there is only so far that such a company can go to reduce its carbon footprint without offsetting.

Carbon neutrality has been achieved in collaboration with the CarbonNeutral Company, by investing in projects which will either produce power without CO2 emissions or positively reduce CO2. Eclipse has invested in wind-farm technologies in India, a methane capture project in Pennsylvania and a Ugandan forestry project. All of these are designed not only to reduce carbon dioxide but also to support the local economies.

Carbon neutrality has a money cost – the cost of investing in the offsetting projects. The return is more difficult to quantify, but consumers are becoming more insistent that everything they buy should be “ethical”, “green” and “eco-friendly”. In response many big names on the High Street are making the investment. In time carbon neutrality may become the norm - or at least the aim - for every company (though not every company will be able to achieve it). Some progress towards carbon neutrality is likely to be expected of any organisation seeking public contracts.

Those who are first into this area will probably find their goals easier to reach through a wide range of offsetting projects. Later converts will have a smaller choice, but hopefully will sign up anyway.

Hopefully too, the market will be regulated so that the marginal operators who have been giving offsetting a bad name will be squeezed out.

Electric Dreams

Johan Hari has an article in today's Independent called "Big Oil's vendetta against the electric car."

You have to admit that Johan Hari writes a good conspiracy. A lot of what he says is true, but it’s only part of the story. Electric cars are clean and silent, but only because the pollution and noise are generated at the power stations. Over 50% of the energy input to a conventional power station is lost in the process and more energy is lost as it travels across the grid, making electric cars very inefficient. Of course he may claim that we should be using green energy, but we would need to double our total electricity output to meet our transport needs. With only 4% of electricity coming from renewables at present – mostly from landfill gas and waste incineration – there is a long way to go.

The capacity of the grid would have to be doubled as well; will Mr Hari accept twice as many pylons? The other problem is that many of us have to park on the street and could not plug in our cars “like a mobile phone.” However, assuming you could charge your car and drive from London to Scotland as he claims, a 300 mile range would still leave you 100 miles short of Edinburgh.

The quoted fuel economy is impressive. Mr Hari tells us that he can buy the electrical equivalent of a gallon of petrol for only 30p. Given that a gallon of petrol contains 36kWh of energy, that is equal to less than 1p per unit. Can he tell us the name of his power supplier?

2020 vision at the EU

This week European Union leaders have been debating carbon dioxide (CO2) emissions and they have a firm commitment to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990. Furthermore, they will increase energy efficiency in the EU so as to achieve the objective of saving 20% of the EU's energy consumption compared to projections for 2020,

Central to this is a binding target of a 20% share of renewable energies in overall EU energy consumption by 2020 and a 10% binding minimum target to be achieved by all Member States for the share of biofuels in overall EU transport petrol and diesel consumption by 2020.

Leaving aside the controversy generated by Channel 4’s film – whether CO2 reduction is possible or worth while – there must still be doubts about whether any of this is achievable. Elsewhere in this blog I have commented on how biofuels are much less green than people would like to think. Biofuel crops absorb CO2, but growing, harvesting and processing them takes up so much energy that the net gain is small or in some cases negative. Growing the crops puts pressure on food crops or rain forests, and to some extent we will burn green fuels while exporting the disadvantages of the fuels to third world countries where the crops are grown.

Biomass is part of the way towards reaching the EU’s 20% target. Today Drax Power, which runs the UK’s largest power station, announced plans to grow biomass on an area equivalent to one fifth of the land of Wales. This will produce sufficient fuel to provide 10% of the requirements of Drax. The station produces 8% of the UK’s electricity, so biomass will account for just 0.8%. If we took over the whole of Wales to grow biofuel crops we would still only achieve 4% of the UK’s electricity – and where would we put the Welsh? -