Renewables - clearing the air

Published as a podcast at www.susbiz.biz on Friday 22nd April

The Sustainable Best Practice Exchange took place last week. To keep exchanging best practice I'm setting up the Sustainable Best Practice mastermind group and a number of conference delegates have already expressed interest. There’s a couple of places left, so if you want to join a select group of business leaders and public officials, call me today on 07803 616877 or send a mail to mail@anthony-day.com for an invitation to the Orientation and Selection Day. It’s on 7th July.

Headlines

The oil price is up - and down. What of the future? Bernie Sanders wants to phase out most fossil fuels by 2050 but his opposition to nuclear power is causing debate. Elsewhere in the US children are taking the Federal Government to court over climate change. A meeting of the European Geosciences Union counted the cost of natural disasters and the Pakistan government was criticised for not doing more. 

Did green taxes drive Tata Steel out of the UK? Surprisingly, the opposite seems to be true.

 In Washington, scientists are conjuring electricity out of the air, but here in the UK you may soon be able generate electricity by spending a £1 and then spending a penny.

And why is Lord Nelson wearing a face mask?

Oil Price

First the oil price. It rose this week in advance of an OPEC meeting when everyone hoped that production would be cut. Then it fell when there was no agreement. Given that Iran doesn’t talk to Saudi Arabia it’s surprising that anyone expected success. The price is now somewhere between $40 and $43 per barrel. Well below the $140 peak, but significantly better than January’s $29. Predictions of $80 by June now seem unlikely. Every day a million or so barrels are put into stock unsold, so there’s a considerable and growing buffer which will surely dampen any sudden price movements.

Across the Pond

Manda Scott, yes you know, the famous one, draws my attention to an article in grist.org “Bernie Sanders wants to phase out nuclear power plants. Is that a good idea?”

Bernie, still in the race for the Democratic nomination but unlikely to win, makes his support for clean energy clear on his website.

“Right now, we have an energy policy that is rigged to boost the profits of big oil companies like Exxon, BP, and Shell at the expense of average Americans. CEO’s are raking in record profits while climate change ravages our planet and our people — all because the wealthiest industry in the history of our planet has bribed politicians into complacency in the face of climate change. Enough is enough. It’s time for a political revolution that takes on the fossil fuel billionaires, accelerates our transition to clean energy, and finally puts people before the profits of polluters.”

He goes on: “Climate change is the single greatest threat facing our planet. The debate is over, and the scientific jury is in: global climate change is real, it is caused mainly by emissions released from burning fossil fuels and it poses a catastrophic threat to the long-term longevity of our planet.”

He doesn’t pull any punches: “97 percent of scientists agree about the urgent need to act and the vocal minority who don’t are bought and paid for by the fossil fuel industry.”

“In the 60’s, President Kennedy set a goal that many said was impossible – but by the end of that decade, Neil Armstrong had successfully taken his giant leap for humanity. Our government needs to think that big today and commit to prioritizing the transition to an economy powered by more than 80 percent clean energy sources by 2050.”

Clean energy for Bernie includes phasing out nuclear power as well as fossil fuels. “But nuclear is clean,” cry his critics. True, it’s clean in operation providing you ignore thermal pollution at some sites. Cooling water can be returned to rivers or the sea at up to 18 degrees warmer than when it was extracted, which is not without environmental consequences. Of course, constructing a new nuclear plant has a massive carbon footprint. “But if you close down nuclear power stations generators will just burn more coal and gas. They’re doing that already in Japan and Germany.” But Bernie’s going to tax oil and gas and he’s going to phase out nuclear by tightening the requirements for re-licensing existing plants. Nuclear power stations in the US must be re-licensed every 20 years and some will need extensive investment if they are to be brought up modern standards. Including the one in northern California which is sited on a seismic fault which was not known at the time it was built.

Even as president, Sanders would have a hard time turning his policies into law. But at least he’s ignited a fierce debate. His spokesman commented:

“Sen. Sanders knows there are lots of reasons why nuclear power is a bad idea. Whether it’s the exceptional destructiveness of uranium mining, the fact that there’s no good way to store nuclear waste or the lingering risk of a tragedy like Fukushima or Chernobyl in the U.S., the truth is: nuclear power is a cure worse than the disease. Safer, cleaner energy sources like wind and solar will help us meet America’s energy needs while protecting the health of our people and combatting the threat of climate change.”

Kids take the US to court

Bernie’s not alone.  Imran Jiwa spotted an article in Forbes Energy (http://www.forbes.com/sites/jamesconca/2016/04/10/federal-court-rules-on-climate-change-in-favor-of-todays-children/#7844c1156219 ) by James Conca

He reports that in the first lawsuit to involve a planet, Judge Thomas Coffin of the United States Federal District Court in Eugene, Oregon, ruled in favor of twenty-one plaintiffs, ages 8 to 19, on behalf of future generations of Americans in a landmark constitutional climate change case brought against the Federal Government and the Fossil Fuel Industry.

The lawsuit alleges that the Federal Government is violating the Plaintiffs’ constitutional and public trust rights by promoting the use of fossil fuels.

The judge recognised a need for the courts to evaluate the constitutional parameters of the action or inaction taken by the government. 

Or as Conca put it: “This is legalese for “global warming may eventually hurt all of us, but it will hurt our children and grandchildren the most, so they have the right to sue.”

Most importantly, the judge unequivocally rejected all arguments raised by the Federal Government and the Fossil Fuel Industry in their Motions to Dismiss.

The next step in this case is a review of Judge Coffin’s decision by Judge Ann Aiken, another judge in the same Federal Court.

Dr. James Hansen, famed climatologist and also a plaintiff in this case, said, “Judge Coffin in effect declares that the voice of children and future generations, supported by the relevant science, must be heard.” 

 Unsurprisingly, the three fossil fuel industry trade associations, representing nearly all of the world’s largest fossil fuel companies, called the case “a direct, substantial threat to our businesses.”

16-year-old plaintiff Victoria Barrett said, “The future of our generation is at stake. People label our generation as dreamers, but hope is not the only tool we have. I am a teenager. I want to do what I love and live a life full of opportunities. I want the generation that follows to have the same chance.”

Unfortunately she’s not old enough to vote for Bernie Sanders, but look out for her in 2020.

Natural disasters

In a paper presented to the recent European Geosciences Union meeting it was reported that losses due to natural disasters since 2000 amounted to around $200 billion, equating to around 0.25% of Global GDP.

Over 40% of this was due to flood and rainfall, 26% to earthquakes - which we can’t do a lot about, 19% due to storm effects and 12% due to drought. A case in point is Pakistan’s Thar Desert, southeast of the port city of Karachi.  Pakistan Press TV reports that some 2 million people have been affected by drought for the last three years. They have no water, they have no food; they rely on handouts. Since March alone at least 130 children have died due to famine. Now a report by a fact finding mission says the tragedy could have been prevented had authorities acted in a timely manner. Authorities across the world need to wake up to new responsibilities as the climate changes. Even in York in prosperous England, where the floods back in December were trivial by comparison with most national disasters, the authorities admitted that they had no contingency plans for the events that occurred.

As I said, there’s not much we can do about earthquakes. Our thoughts are with the people in Japan and Ecuador, whose communities were ripped apart by earthquakes last week.

Eco-tax and TATA Steel

Did green taxes drive TATA Steel out of the UK? No, in fact, they made them money - an estimated £700m according to the Guardian. The tax involved is EU ETS, the EU Emissions Trading Scheme.  The way it works is that businesses that emit greenhouse gases have to pay a tax on every tonne, by buying credits. This helps to make it more economically attractive to build a newer, cleaner plant than continuing to run an old and dirty plant with a high level of expensive emissions. It is recognised that this surcharge on emissions can make some heavy users of energy uncompetitive, even if they are efficient. They are therefore awarded a number of credits free of charge to offset this. What happened was that TATA Steel were awarded far more credits than they needed. They were entitled to sell them on to other, dirtier, businesses which were short of credits. And they did. And they made £700 million. Unintended consequences?

Wireless power

Wireless power makes me think of Tesla. Tesla probably makes you think of Elon Musk, electric cars and super batteries. The link is Nikola Tesla, a Serbian-American electrical engineer, physicist and inventor from the late 19th century. Among other things he built a transmission tower designed to send messages to ships at sea long before Marconi started his work. There were also plans to distribute electricity wirelessly. At this point his financial backers withdrew and the tower was demolished. Conspiracy theorists say that his backers had interests in cables and withdrew because wireless transmission would have destroyed their market. Who knows?

This week however, comes news that scientists at the University of Washington have developed a wireless electricity transmission system. Well, more of a harvesting system. This doesn’t involve building any big towers and it won’t power your washing machine or electric car. It comes out of the development of the internet of things. The internet of things, or IOT, is the move towards putting a chip in almost everything and connecting it to the internet. Smoke alarms, security cameras and all sorts of sensors are gradually building our connected world. The problem is that every one of these units needs a battery and every battery needs to be recharged or replaced. Researchers have come up with a battery that can be recharged from energy in the signals from mobile phone masts, wifi routers and TV transmitters that are all around us all the time. This energy is minute, but the requirements of these sensors is minute as well. Presumably, since these batteries will effectively be on charge all the time, they only need to be small. Costs as low as $1 have been quoted.

In for a penny in for 1p.

Meanwhile, at the University of Bath, Queen Mary University of London and the Bristol Bioenergy Centre in the UK, research continues into a unique form of renewable energy. Scientists have developed a microbial fuel cell which generates electricity from urine. This latest version is smaller and more powerful than previous units - and it’s cheaper. https://www.theengineer.co.uk/issues/march-2015-online/urine-powered-fuel-cells-are-set-to-light-up-refugee-camps/  The Engineer magazine reports that the universities are working with Oxfam to put arrays of these cells to light up toilet cubicles in refugee camps in developing nations. Of course they can be used to light anywhere where there is no power supply and could probably charge up phones and small electronic devices. And they don’t need sunshine. At a cost per cell estimated at around £1 they are a realistic solution for poorer countries, but there’s no reason why they shouldn’t be used everywhere else. However, comments on the Engineer article do say that solar panels are a much cheaper solution, and they criticise research into a problem which they say has already been solved. However, if there's a source of energy that we normally just flush away, surely we shouldn't just write off methods of making use of it.

And finally, why is Lord Nelson  wearing a face mask? 

Here is a message from Greenpeace:

“Lord Nelson famously said that desperate affairs require desperate measures. 40,000 lives are cut short by air pollution every year. This is a national health emergency and people need to know about it. That’s why activists scaled Nelson’s column and 14 other iconic statues.”

There’s a petition to the prime minister about air quality on the Greenpeace website. And Queen Victoria’s wearing a face mask as well.

That’s it for another week. I’m off to check my beehives to see if they’ve started making any honey yet. Before I go…

SBPMg, that’s the Sustainable Best Practice Mastermind group, holds its inaugural Orientation and Selection Day on 7th July. If you want to be part of a small and select group focussing on business and organisational excellence contact me now by phone or email and I’ll tell you more. Once we’ve established the group I won’t tell you anything about it, because Chatham House rules - what’s discussed in the group will stay in the group. Of course, if you become a member, you’ll know.

Well that is it. Thanks to all who have written in with comments and ideas. Please keep them coming. It’s really useful to know what you’d like to hear about and the stories that you’ve found.

Until next week, this is Anthony Day! 

And that was the Sustainable Futures Report.

Who’s driving?

Published as a podcast on Friday 8th April at susbiz.biz

Hello, yes, it’s Anthony Day, it’s Friday 8th April 2016, there’s less than a week to go to the Sustainable Best Practice Exchange and this is the Sustainable Futures Report.

PEAK CAR

A while ago we were talking about Peak Stuff. Now people are talking about Peak Car. What are we going to drive, or are we all going to stop driving? And how will that change where we live? This week I'm talking about the new Tesla - 300,000 people want one -  about self driving cars, and about where we get the power from to run them. That could be a problem in the UK where we are closing power stations, but an opportunity in Saudi Arabia where Jeremy Leggett reports a major project to exploit solar energy. Must be good news for air quality. I'll talk about that as well. While some see the UK as a basket case in terms of energy and carbon reductions policies, the committee on climate change soldiers on with a new report out this week. And I expect we’ll slip in something about Hinkley C.

Yes, somebody has suggested that we’re approaching Peak Car, and from here on fewer and fewer people will own their own cars and fewer will drive. For the moment people are still wedded to cars, but they’re looking for something new. Elon Musk, inventor of PayPal and CEO of Spacex the rocket company, has just announced the launch of Tesla Model 3, his third electric car. Electric cars are already very sophisticated. If you’ve looked at the BMW i3 or the Nissan Leaf the comfort and specification is extremely high. The problem, though, is range anxiety. People are afraid that they will run out of charge, and they know that it takes at least 30 minutes to partially recharge and that’s only possible if there’s a handy charge point. The typical range of current models is 80 miles. More than enough for the average commute, but not enough for that unexpected journey or diversion. Tesla has addressed that problem. The original Model S has a range of over 300 miles. The new compact Model 3 has a range of over 200 miles. OK, that’s significantly less than the Model S, but the Model 3 costs $35,000 instead of $120,000. Nearly 300,000 people have already placed pre-orders for the new car, and to do that they have had to put down $1,000 or £1,000. Good news for Tesla’s cash flow.

If you go to the Tesla website it features Autopilot, a system of automatic steering, braking, lane changing and parking. Most of the technology for self-driving cars is therefore already available. It’s no secret that Google are trialling self-driving cars and Apple are strongly rumoured to be developing an electric car to rival Tesla. Apple should be well placed to turn it into a self-driving car. (Self-driving car: that’s a bit of a clumsy phrase. Time for a new name. Suggestions on an email please. The winner will receive a valuable prize.)

This week Highways England announced that it would spend £150m on trials of wirelessly connected vehicles and driverless cars on UK roads. These vehicles will be on motorways by the end of 2017. You can find out more from the Innovation strategy report which is available from https://www.gov.uk/government/publications/highways-englands-innovation-technology-and-research-strategy 

What will driverless cars mean for the way we live?

Prof Andry Rakotonirainy of The Queensland University of Technology (QUT) in Australia believes that a road network full of self-driving cars will be far safer than today’s human-directed traffic, but what has him concerned is how to make the transition.

“We know that in over 90% of cases, crashes are due to human error,” he says,  “But we face a transition period of a mixture of automated cars, human driven cars and other road users like pedestrians and cyclists who are not automated.”

However, once cars are fully automated it opens a whole range of new possibilities. For example, when vehicles are able to continue driving, by themselves, after dropping their passengers at a destination, they can carry on to meet the needs of other commuters rather than taking up space in a car park. Car parks can be smaller as well. At present, car parks have to be designed so that every car always has a route to the exit. If cars are shared you just take the one nearest the door.

Jonathan Roberts, professor of robotics at QUT, foresees companies preferring to offer their cars as a taxi-style service rather than selling them directly to motorists. This is servicisation (horrible word) which we’ve discussed several times recently. It’s promoted by the Ellen MacArthur Foundation as one of the routes to the circular economy.

Regardless of whether such an arrangement becomes the transport norm, Roberts believes it is likely to be how driverless cars start out: Uber is investing heavily in robotics technology with dreams of an efficient fleet of self-driving vehicles.

“Uber hired dozens, if not hundreds, of robotics researchers,” Roberts says. “They are clearly serious and aren’t thinking 20 or 30 years ahead, but autonomous taxis in the next 10 years.” Bad news for Uber drivers!

Gilles Vesco is the politician responsible for sustainable transport in Lyon.

He has a vision of cities in which residents no longer rely on their cars but on public transport, shared cars and bikes and, above all, on real-time data on their smartphones. He anticipates a revolution which will transform not just transport but the cities themselves. “The goal is to rebalance the public space and create a city for people,” he says. “There will be less pollution, less noise, less stress; it will be a more walkable city.”

Vesco, played a leading role in introducing the city’s Vélo’v bike-sharing scheme a decade ago. Now he is convinced that digital technology has changed the rules of the game, and will make possible the move away from cars that was unimaginable when Vélo’v launched in May 2005. “Digital information is the fuel of mobility,” he says. “Some transport sociologists say that information about mobility is 50% of mobility. The car will become an accessory to the smartphone.”

The Vélo’v scheme is being extended, car clubs that use electric vehicles are being encouraged, and what Vesco calls a “collaborative platform” has been built to encourage ride-sharing by matching drivers with people seeking lifts. There is, he says, no longer any need for residents of Lyon to own a car. And he practises what he preaches – he doesn’t own one himself.”

Birmingham, which vies with Manchester for the title of England’s second city, (strange, when I lived in Manchester everyone there  thought the second city was London.) Anyway, Birmingham has been following the experience of Lyon and other European cities closely, and is now embarking on its own 20-year plan called Birmingham Connected, to reduce dependence on cars. For a city so associated in the public mind with car manufacturing, this is quite a step. The initiative is being driven by the veteran leader of Birmingham city council, Sir Albert Bore, who talks airily about imposing a three-dimensional transport plan on the two-dimensional geography of the city: “French and German cities all have an infrastructure which has a far better understanding of how you need to map the city with layers of travel.”

“Multi-modal” and “interconnectivity” are now the words on every urban planner’s lips. In Munich, says Bore, planners told him that the city dwellers of the future would no longer need cars. Bikes and more efficient public transport would be the norm; for occasional trips out of the city, they could hire a car or join a car club that facilitated inter-city travel. The statistic everyone trots out is that your car sits outside, idle and depreciating, for 96% of its life. There has to be a more efficient way to provide for the average of seven hours a week when you want it.

Bikes are great. Except when it rains.

Car clubs offer a second statistic. Whereas a personally owned car caters for an individual or a family, a car-club car can service 60 people.

London, which has pioneered congestion charging and has a well-integrated system of public transport, has led the move away from cars over the past decade, during which time 9% of car commuters have switched to other forms of transport. “People in London have a lot of options and there’s been huge growth across all modes,” says Isabel Dedring, the deputy mayor for transport in the capital. “There’s been a massive increase in investment in public transport.”

I think that’s well known. Not everyone is happy that the investment per head in London is 10 or 20 times the investment per head in other parts of the UK.

Dedring says the past decade has seen a 30% reduction in traffic in central London.

“Traffic levels have gone down massively, partly because of the congestion charge, but also because we are taking away space from private vehicles and giving it to buses through bus lanes and to people through public realm [developments].” And now to cyclists, too, with the planned “cycle superhighways” and cycle-friendly neighbourhoods being trialled in three London boroughs.

Many city developments are now predicated on there being no car spaces for residents. Developers worried about this initially, but have come to realise it doesn’t pose a problem for the young professionals likely to be buying their flats, so have accepted the demands of council planning departments. 

There’s a lot more on how cities all over the world are adapting to cars in a Guardian article by Stephen Moss entitled “End of the car age: how cities are outgrowing the automobile” Find the link in the text version of this episode at AnthonyDay.blogspot.com  

http://www.theguardian.com/cities/2015/apr/28/end-of-the-car-age-how-cities-outgrew-the-automobile 

GRANTS FOR ELECTRIC CARS

Back to Tesla’s new car launch. CNBC asks, “With reservations for Tesla's new Model 3 topping 276,000 in less than three days, one key question remains for those who want to get in line: Will they be able to get a $7,500 federal tax credit for purchasing the electric car?

The Plug-In Electric Drive Vehicle Credit was created in 2009 as an incentive to get Americans to buy electric cars. It's offered to the first 200,000 buyers of an electric vehicle in the U.S. from each automaker. After a manufacturer hits that electric vehicle sales number, the credit is phased out.

There’s a grant of up to £4,500 for new plug-in cars here in the UK, but if electric cars and plug-in hybrids become popular maybe that will be abolished too. Probably at short notice.

WHERE DOES THE ELECTRICITY COME FROM?

If electric transport is the future, where will the electricity come from? In the UK we closed two coal-fired power stations on 31st March: Ferrybridge C and Longannet, with a combined output of 4.4GW. Rugeley B (1GW) is scheduled to close in the summer. Eggborough and part of Fiddlers Ferry power stations were also to close this year, but have been retained by National Grid on standby contracts. That means we will have lost 5.4GW by the end of the summer, and a further 3.5GW when those standby contracts expire. Total 8.9GW. Hinkley C, the new nuclear power station, will have an output of 4GW, so despite being the UK’s largest generator when it opens and accounting for 7% of the nation’s electricity, it won’t nearly fill the gap. And in any case it’s not scheduled to come into production until 2025 at the earliest.

Last winter the National Grid predicted a safety margin of just over 1% between electricity supply and demand in the event of a harsh winter. Of course it was very mild so there were no problems. Can they be as lucky in 2016? I’m looking forward to the Grid’s Winter Outlook Report.

In the UK  we’ll probably fill the gap - a gap which takes no account of significant use of electric transport - by using more gas power stations and diesel generators. 

According to Chandrakant Isis, quoted in my newspaper this morning: “As opposed to what Tesla supporters believe, electricity is not harvested from unicorns. In most countries, including the US, the majority of the electricity is generated by burning coal, natural gas, and other fossil fuels.” True, but petrol and diesel cars pollute, and particularly on short runs when the engine is cold. Cars running on electricity, even from fossil fuels, can be cleaner.

But in Saudi Arabia the approach is very different.

SAUDI SOLAR

I’ve mentioned Jeremy Leggett and his book “The Winning of the Carbon War” in previous episodes. He’s a tireless campaigner for clean energy with a string of academic and business credentials. You can find more at jeremyleggett.net

Anyway, he was recently invited by Saudi Arabia’s national finance daily to write a piece for publication on Saudi Arabia’s solar opportunities. Why should the world’s biggest oil exporter need to bother about another source of energy?

Well, if it stopped using oil to generate electricity it would have more  oil to export. But more than that, the Saudi government has just announced a plan to set up a two trillion dollar investment fund for the post-oil era. Here is an oil giant preparing for the end of oil.

In his article Leggett identifies the trends and developments which are making the move away from oil and fossil fuels inevitable. The most important factor is that the cost of solar installations has fallen by 80% since 2008 and is continuing to fall. In some areas solar power plants are already cheaper than those running on natural gas, leading to new solar plants being built in Dubai and Colorado. The one in Dubai was built by a Saudi company. Within three years Leggett expects solar to be cheaper in the UK, even with its much lower levels of sunlight. The rapidity of the change has taken many by surprise; even industry insiders. Up to 2007 the International Energy Agency was forecasting an installed solar base of no more than 20GW by 2014. The actual figure for 2014 was 180GW.

Apple, apparently, will have solar-powered cars within four years. Tesla, not just a car company, is producing battery packs for home and industry so that surplus solar energy can be stored for use after dark.

Maybe Saudi Arabia can be a world leader in this new industry. Certainly many saw the UN Paris Climate Conference as the beginning of the end for fossil fuels. Time for an oil state such as Saudi to consider diversification. Fortunately it has two trillion dollars to throw at the problem.

If we all go electric, it can only improve the world’s air quality.

AIR QUALITY

At a recent lecture on atmospheric chemistry Prof Lucy Carpenter of the Wolfson Atmospheric Chemistry Laboratories at the  University of York told us that atmospheric pollution is second only to smoking as a cause of death in the UK, and way ahead of obesity. She explained that the atmosphere is far more  complex than was thought and new insights are due to advances in analytical technology. It is now possible to detect trace gases in the atmosphere when the concentration is as little as a few parts per trillion. Such gases may be unstable, so air samples cannot be shipped back to the lab for examination. They need to be analysed in the field, which could be the Cape Verde islands, the Antarctic or somewhere up in an aircraft.

It’s not just gases that affect the quality of the air, it’s particulate matter as well, which has been identified as causing heart disease, strokes and other illnesses. Many particulates come from motor vehicles and recent revelations have shown that emissions from cars are far greater than official tests seem to indicate.

Professor Carpenter told us about CFCs, the refrigerant gases which caused the hole in the ozone layer, and how the Montreal protocol brought countries together do something about it. As a result CFCs, which can persist in the atmosphere for 100 years, are declining and the ozone layer should be back to its 1980 thickness by 2030. CFCs are greenhouse gases and it has been estimated that removing them from the atmosphere has had an effect five times the size of the effect that was expected from the Kyoto Protocol.  That was the outcome of the UN Climate Change Conference held in Kyoto, Japan, in 1997. An example of unintended consequences - this time, benign.

While CFC levels have been declining, so have levels of ethane and methane; both potent greenhouse gases. But since 2008 these two have been rising again. Climate change is causing increased emissions from wetlands, but the increase is more than expected. Professor Carpenter and her team have prepared a paper suggesting that fugitive emissions from fracking sites across the US could be responsible for this anomaly. Once it is published I hope someone in government takes time to read it.

So there we are, that’s another week. The world is going electric, our cars will drive themselves, this will change the character of our cities, we’ll get our electricity from solar power even in Britain (although obviously not under the present government) and we’ll all enjoy cleaner air.

And the Committee on Climate Change? Sorry - deadlines. I’ll look at that next week, along with floods in Karachi, Bernie Sanders’ strategy for renewable energy and any thing else sustainable which catches my eye.

For the moment this is Anthony Day, less than a week away from the Sustainable Best Practice Exchange sbpe.co.uk which looks like being an amazing event. I hope I shall see you there - you’ll be sorry you missed it!

That was the Sustainable Futures Report and yes, there will be another episode next week. I’d better start writing it now!

Looking Forward

Published as a podcast at susbiz.biz on Friday 1st April 2016

Here is the news

The government today has announced a radical redesign of its energy policy following its decision to abandon the planned nuclear power station which EDF had intended to build at Hinkley Point in Somerset.

Amber Rudd, Energy Secretary, said that construction would immediately start on the Swansea Bay tidal power project in order to make Wales self-sufficient in energy.

Feed-in tariffs for new solar panels, wind turbines and small hydro schemes will be restored to the January 2015 levels, and will apply to all installations completed since that date. To emphasise the government’s new commitment to renewable energy, the plans for the refurbishment of the Houses of Parliament will now include a 1GW wind turbine to be installed at the top of Big Ben.

The minister went on to say that the new policies would significantly reduce energy costs for hard-working families, although they, and work-shy families, should expect to spend more time in the dark.

The chancellor, in an amendment to his recent budget statement, said that in order to pay for these changes the annual winter fuel allowance for pensioners would have to be scrapped. Instead there would be a distribution each December of woolly jumpers, with bed-socks for the over-75s, knitted by the BBC.

A government spokesman said that anyone listening to these announcements after 12 noon on Friday should disregard them completely.

Welcome to the Sustainable Futures Report  for Friday 1st April, (yes 1st April),  2016

Hello this is Anthony Day. Have you booked for the Sustainable Best Practice Exchange yet? Still some places left and bookings must close on Friday 8th April. Go to sbpe.co.uk for more information and contact me for a deal you can’t refuse. 

In this latest episode of the Sustainable Futures Report; notes on fuel duty and VAT after the Chancellor’s budget. Good news from Queen Street Mill. I ask “Is sustainability killing our steel industry?” And most of our electricity still comes from coal. Do you care where the coal comes from?  I can’t avoid the fact that Hinkley C is in the news again. No, it hasn’t been cancelled.

Fuel Duty

James Spencer of Portland Analytics wrote to me this week. (That’s portland-analytics.co.uk) He says:

“Such was this year’s pre-Budget conviction that the Chancellor would increase UK fuel duty, many motoring campaign groups had already started their publicity to denounce the rises. This sentiment was also reflected in the UK fuel market, with many of the big diesel buyers frantically increasing their orders in the hope that they could “get-ahead” of the expected rise in costs. Therefore there was genuine surprise on March 16^th, when the Chancellor announced that for the 6^th consecutive year, there would be a duty freeze and that there would no fuel duty increases for another year at least.

Fuel duty in Britain was first introduced in 1908, was scrapped after the First World War but by 2010 the UK comfortably had the highest fuel duty rates in Europe. The duty freeze since 2010 has enabled some of our European neighbours to “catch-up”, and the Dutch have overtaken us.

For the moment bus operators still receive a hefty 34ppl rebate as part of the Bus Service Operators Grant (BSOG), but generous treatment by the Treasury is rare indeed, such is the importance of fuel duty revenue. On current fuel consumption, duty rates generate revenue for the UK of £28bn per annum and if you add VAT (just on the duty element), a further £6bn is added. For a Government trying to balance the books, you would have thought that this kind of revenue is impossible to forgo. Moreover, it does beg the question why the Chancellor did not take the opportunity this time around, to impose a duty increase on a fully expectant population. A 1ppl tax rise would have generated an extra £0.5bn revenue per annum and for motorists now paying 30ppl less for their fuel than 18 months ago, it is difficult to see that public opposition would have been anything other than fairly muted.

My own view is that any increase would have reduced demand to some extent,  and therefore reduced carbon emissions and reduced the atmospheric pollution which kills 40,000 people in the UK each year. The extra revenue would have saved the chancellor from making some of his cuts.

Energy-saving Taxes

An article in the New Statesman of 23rd March co-authored by Lisa Nandy, shadow energy minister, recounts how the government accepted an opposition amendment to the Finance Act. http://www.newstatesman.com/politics/energy/2016/03/george-osborne-made-big-u-turn-nobody-talking-about-it The government’s original intention was to raise the VAT on solar panels and insulation materials from 5% to the standard 20%, thus adding an extra £1,000 to the cost of an average domestic  solar installation. Eurosceptic Tories and the Greens united behind Labour and the government caved in (or should that be U-turned?) and a Downing Street spokesman claimed, “It is an existing government position to reduce VAT on solar.” Apparently that came as a surprise to the solar industry and came too late for a local solar company near here which went into liquidation last month after 40 years in the energy-saving industry. 

The Energy Secretary recently conceded that her policies on solar were already expected to lead to up to 18,700 job losses and this tax raid would have caused even further damage to the industry.

As Friends of the Earth highlighted, the solar tax would also have created the perverse situation whereby people ended up paying more tax on solar panels and energy conservation than on energy from polluting sources like oil and coal who would have their low tax rates retained, which would skew the energy market away from clean energy and send Britain’s energy policy in precisely the wrong direction.

Dirty Coal

Where does the coal come from to fuel our power stations, and do we care? According to Andrea Leadsom, minister of state at DECC, in the first 9 months of 2015 (January to September) 32% of imported steam coal, which is predominately used by power stations, came from Colombia. Labour’s David Anderson (Blaydon) asked her:“Are you happy that, at a time when coalfield communities are still struggling, that your Government’s long-term economic plan is being fuelled on the back of child and slave labour?” 

According to reports from the US Department of Labor and others, some 1m children work in Colombia, often coerced by armed gangs. 5,000 of these are believed to work in mines. 

The minister’s answer concentrated on the government’s support for the managed closure of the UK’s deep mines and pointed out that imported coal was so much cheaper.

Dennis Skinner, MP for Bolsover and a former miner himself, pressed Ms Leadsom further, asking: “Are you admitting today, as it apparently seems to be, that this Government is more concerned about bringing in cheap coal from Colombia because it’s cheap even though it’s produced by child slave labour?

Ms Leadsom replied: “Well, what I can say to you is that private companies in the UK choose their suppliers. It’s not Government bringing in coal, you must understand that.”

So that’s all right then.

Heritage News

Good news from Queen Street Mill. I told you previously about this mill, the last working steam-powered textile mill in the world which was expected to close for good yesterday. Listener to the Sustainable Futures Report Richard Farr visited before Easter and found out that the mill - and four other museums also under threat, will now stay open least until September. Lancashire County Council are talking to people, as yet unidentified, about a long term solution.

The Steel Story

Bad news from Port Talbot and many other sites around the UK. The board of Tata Steel, owners of what was Corus and what was British Steel before that, decided this week to withdraw from the UK and sell all their assets. In Port Talbot alone 4,000 jobs are at risk in a plant which is said to be losing £1m per day. Unsurprisingly there’s been uproar. Labour has demanded the recall of Parliament from its Easter recess and the government has had a crisis meeting and promised urgent action but ruled out nationalisation. British-made steel is expensive and uncompetitive. Part of the expense is energy cost, with high prices because of taxes designed to reduce carbon emissions. 

Are we letting sustainability dogma kill one of our strategic industries? Writing in the i newspaper, Hamish McRae says that our high prices are driving customers to buy from China where emission controls are looser and manufacturing can be less efficient. Ironically our climate change policies could be said to be  indirectly leading to increased global emissions. It’s not just a question of price, although to be competitive prices are being depressed below the cost of production even in China. There is a global oversupply of steel. Everyone quotes China. China the major steel producer, shipping steel at way below cost. China the fastest growing economy, now growing not quite so fast and not needing all the steel it can produce. The global demand for steel - and other commodities - is also depressed by the increasingly efficient use of materials. The Report from the Office of National Statistics, which I mentioned in the episode of 11th March, recorded a clear decline in the material content of consumer goods. Why pay the cost of more material if you can do with less? Why pay the cost of distributing a heavy product if you can do with less? Maybe health, safety and strength considerations limit the amount you can reduce structural steel in buildings and infrastructure, but it’s not only possible to reduce the amount of metal in consumer products but metals have been displaced by plastics and other materials for years and the process is likely to continue. 3D printing is in its infancy, but it’s a whole new way of using materials, including metals, and only just as much material as you need - no scrap. The truth is that the world is changing, and as business journalist Russell Lynch said this week, “If I were a shareholder in Tata Steel, my one brutal question to the board would be: what took you so long?”

So what can we do? Probably not a lot at this late stage. If there’s a buyer out there who can afford  losses of £1m per day until the business can be turned around then the government should do everything it can to help close the deal. But is there really such a buyer? Industry experts can probably identify the likely players with sufficient resources and number them on the fingers of one hand. It shouldn’t take long to determine whether a bid is likely. Tata Steel have made no commitment as to how much longer they will keep the plants running while they wait for a buyer. It’s been suggested that they would prefer to close it all quickly rather than sell it to a company which would simply help to maintain the global oversupply and compete with Tata plants elsewhere in the world.

Is nationalisation the answer? It would keep 4,000 people in work in Wales and several thousand in other parts of the UK. It would continue to support suppliers and communities and small businesses. But it would still be a loss-making business. If steel industry professionals cannot turn it round then governments certainly cannot. Over time it would have to be slimmed down and closed down. Better for the government to let Tata take the blame for putting people out of work than bring it upon itself. One thing the government must do, and something it has failed to do successfully in the former mining areas for example, is invest to regenerate the steel-working communities. It won’t be easy and should have been planned long ago, but the government is the government of all the people and this time it must be done.

More about Hinkley C

And so to this week’s update on the planned nuclear power station at Hinkley C. http://www.theguardian.com/business/2016/mar/30/edf-hinkley-point-nuclear-power-station-on-track-engineers-reportedly-request-delay  You know, the one where there’s no actual commitment to start the project, although contractors EDF have already spent £2 billion and continue to spend £50 million per month on it. This week one of the EDF board directors has stated that he would vote against any decision to start construction at Hinkley C. Others have claimed that the reactor should be re-designed before going ahead and there should be a delay of two years to get all this sorted out before making a commitment. Ill-informed comment in the press has been saying that Hinkley C will produce 7% of the UK’s electricity, is a fundamental part of the government’s energy strategy and is due to start production in 2025. Well, partly right. The original target date for production to start was 2017. Yes, next year. EDF have said that the plant will take 10 years to build, so given that it’s not started yet that gives a completion date of 2026. That’s without taking into account delays which have affected EDF’s other similar plants, still not completed and running up to 8 years late. A fundamental part of the government’s energy strategy? It was intended to replace the worn-out power stations that we are now beginning to decommission, but it won’t be ready for 10 years at the earliest. You could argue that it’s already 9 years behind schedule. And of course it’s going to be the most expensive power station in the world and the government has guaranteed to pay nearly three times the current rate - index-linked - for the power produced. This will filter through to the energy bills of hard-working families. Hinkley C is planned to produce 7% of the nation’s electricity. A fundamental part of the strategy, but another 93% will have to come from somewhere else. Maybe fracking will be on stream by 2025, although the Royal Academy of Engineering doesn’t think so. Let’s leave that for another day.

Looking Forward

Both Hinkley C and the British steel industry show the need for long-term planning. I can’t believe that the government didn’t see the steel industry problems coming. Parts of the British steel industry, not part of Tata Steel, have developed special steels and are operating profitably. If I’m correct, the Port Talbot plant and the works at Redcar produced commodity steel - the basic steel from smelting iron ore. Commodity markets are volatile. It should not have come as a surprise to the government that these plants could cease to pay their way. I hope, but doubt, there is a Plan B. I hope, but doubt, that when Tata Steel took over Corus the government of the day imposed conditions over what should happen if they ever decided to pull out.

Strategic planning and scenario planning are very difficult. They cannot eliminate uncertainty, but anything that reduces uncertainty is worth doing insofar as it can help to avoid losses or identify opportunities. The government certainly needs urgently to create a strategic plan for the nation’s energy supplies. The risks of blackouts can only grow as our older power stations are retired between now and 2020. The government might take a moment to identify industries at risk as well, and to draw up plans to soften the blow when things go wrong.

And that’s it for another week.

Before I go, news just in: We are getting reports of the reaction of the French president to the news that Hinkley C will not now go ahead. He is believed to have said: Merde!

This is Anthony Day, that was the Sustainable Futures Report and there will be another one next week. Remember, 8th April is the deadline for booking the Sustainable Best Practice Exchange. Have a look now at sbpe.co.uk and see the great range of speakers that we’ve lined up for you.

Until next week.