Owen Patersons objections to the Climate Change Act: some context
Former environment minister Owen Paterson has been in the papers over the weekend. In an article on the front page of yesterday’s Sunday Telegraph he says we won’t be able to keep the UK’s lights on unless we scrap the Climate Change Act. This is a law requiring the government to cut the UK’s greenhouse gas emissions, which he himself voted for.
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Paterson is due to give a lecture to climate sceptic thinktank the Global Warming Policy Foundation on Wednesday, where he will expand on this theme. In advance of his talk we’ve taken a look at what he has to say.
Energy experts don’t think the lights are actually going to go out
The central plank of Paterson’s argument is that implementing the decarbonisation targets contained in the Act will lead to blackouts. He says:
“There can only be one ultimate consequence of this policy: the lights will go out at some time in the future.”
While the idea of the lights going out is an attractive shorthand for journalists and commentators, it isn’t seriously expected to become reality.
Carbon Brief attended a UK energy conference earlier this year where chief executives from industry group Energy UK, grid operator National Grid and others all agreed that the lights will not actually be going out.
However, the government has long recognised the need for significant investment to replace the UK’s aging energy infrastructure. Many of the UK’s power stations are very old and are due to reach the end of their natural life over the coming decades. There are particular concerns about generating capacity over the next few winters.
That’s why the government is planning to pay firms to reduce demand at peak times, and is creating a capacity market. This will pay power companies money to ensure there is always enough capacity to cover peak demand, so that the lights will always stay on, even if we have to pay to make sure.
The Climate Change Act doesn’t tell us how to cut emissions
It appears that Paterson’s main objection to the Act is that it obstructs his vision for the UK’s future energy mix: a combination of shale gas, small nuclear, combined heat and power plants, and “rational” demand management.
Paterson says the only thing stopping policymakers rolling out his energy plan is “the 2050 target”.
But the target itself has nothing to do with energy policies, it’s only concerned with emissions. The Act is ‘technology neutral’. It requires the government to cut the UK’s emissions, but doesn’t specifically say how this should be done. It doesn’t require the building of a single windfarm, nor prevent companies exploring for shale gas.
The current government is a big fan of this technology neutral approach, with energy and climate change secretary Ed Davey earlier this year calling for it to be mirrored across Europe.
The EU has a separate 2020 target for renewable energy – but this has nothing to do with the Climate Change Act.
The UK isn’t going to be powered by submarine-style nuclear anytime soon
One of the pillars of Paterson’s alternative energy plan is a mass rollout of small nuclear reactors. This type of reactor has been developed to power submarines and some other large vessels like aircraft carriers. Paterson wants to put them on land.
But only two of these land-based power plants currently exist, and it could be a long time before they find their way to the UK’s shores. Compared with renewables, which Paterson calls “fatally flawed”, small nuclear reactors are far from mature.
The Department of Energy and Climate Change recently told a committee of MPs it could take five to seven years to get a trial project up and running. The Office for Nuclear Regulation told the same committee it could take up to six years just to approve the design of the reactors.
The power plants are also expensive. The US government recently spent $450 million to bring two demonstration plants online. DECC is still deciding whether it would give the small plants a similar subsidy to the major new power plant to be built at Hinkley Point in Somerset.
There are also questions about where to put the plants, and whether the reactors can be safely grouped together or if they should be scattered across the country.
Energy minister Matt Hancock told the House of Commons Energy and Climate Change Committee there is “undoubtedly the medium to long-term potential” for small scale nuclear but realising that potential “will be a challenge”.
Hancock said the technology was not yet cost competitive with conventional nuclear plant. He added that a feasibility study was needed, that regulatory frameworks would have to be drawn up and that support mechanisms would need to be finalised. In short, said Hancock, “it is early days”. So the UK is going to have to look elsewhere for its immediate energy needs.
A related argument applies to shale gas. Although the Department of Energy and Climate Change (DECC) is enthusiastic about shale gas development, their chief scientist says shale won’t provide meaningful supplies for at least a decade. Renewable power, which Paterson appears to dismiss, is already powering the equivalent of 11 million UK homes.
The UK isn’t going it alone on climate policy
The UK’s Climate Change Act commits us to cut emissions by 80 per cent of 1990 levels in 2050. Paterson says that the Act “should be suspended until other countries agree to take similar measures”.
But the UK isn’t really going it alone on climate change. There are 66 countries around the world with climate change legislation.
EU leaders have endorsed emissions cuts of 80-95 per cent for 2050 too. This isn’t legally binding – the EU has legal targets for 2020 and, soon, for 2030 – but several other EU countries have put similar 2050 targets into law.
For example Finland and Denmark adopted legally binding emissions targets earlier this year. Finland is aiming for a reduction of at least 80 per cent in 2050 and Denmark aims to get 100 per cent of its power from renewables by 2050. Germany has legal targets to get 80 per cent of its electricity from renewables by 2050 and to cut emissions by 40 per cent in 2020.
Energy and climate secretary Ed Davey says the UK’s goal to cut emissions in half by the late 2020s is in line with a proposed EU target to cut emissions by 40 per cent of 1990 levels in 2030.
The US and China do not have equivalent legal emissions targets. But California, for instance, also has a binding 80 per cent by 2050 goal, and both nations are introducing other measures aiming to limit coal-fired power generation and reduce emissions.
Electricity demand management can help cut energy bills
Paterson criticises the Climate Change Act for putting the UK in a position where it is bound to run out of electricity at some point.
But he also appears to back measures to manage electricity demand in order to reduce the risk of power running out.
The Telegraph’s coverage focuses on one specific kind of demand management: smart appliances. It says Paterson will suggest “homeowners should get used to temporary power cuts – cutting the electricity to appliances such as fridges for two hours at a time, for example – to conserve energy.”
Such appliance management hasn’t yet been implemented, but would be only a small part of the government’s demand-side plans, and it’s hard to see it being implemented other than in limited ways which don’t inconvenience consumers.
Much larger potential to manage demand exists in the business and industrial sector, and firms are keen to get involved if the price is right. The government already has plans to ask companies to power down their factories, warehouses or superstores when they don’t need electricity.
These business-oriented measures are popular in the US, where some power grids have cut peak demand by around 10 per cent as a result. Jon Ferris, head of risk management for energy consultancy EIC says UK firms are actually coming to him asking how they can get involved. Ferris says planned changes to the rules governing the UK’s grid will make demand side management even more attractive.
We’re going to have to pay for energy infrastructure with or without decarbonisation
Paterson says the UK’s current energy policy “will cost £1,100 billion”.
The figure appears to be drawn from a 2012 study from energy consultants Mercados. It says the UK would have to spend a minimum of £780 billion to meet its power needs out to 2050, including the cost of replacing old plants as they close. To meet emissions reduction targets, the cost rises to £960 billion with cuts coming from nuclear power and as-yet-unproven carbon capture and storage fitted to gas-fired plant.
Meeting climate targets using existing renewable technologies too would be more expensive at £1,100 billion, the Mercados study found. So taking this at face value the extra cost of meeting carbon targets – according to one study – could be up to £320 billion.
In reality it is impossible to predict the true cost of a secure energy supply in 2050 with any certainty. Predicting the future of energy is notoriously difficult. As a result, some studies say renewables will be cheaper than fossil energy in future, while others disagree.
The Climate Change Act can’t just be “scrapped”
Paterson reportedly wants the Climate Change Act to be “scrapped”. Or, at the very least, he says efforts to meet carbon budgets should be suspended. This could be done, Paterson claims, by invoking a “clause” that needs no approval from Parliament.
But there is no such clause. Instead, the Act allows government to amend the intermediate goals set to help it progress towards the Climate Change Act’s 2050 target. These are known as carbon budgets and they set a limit on how much the UK can emit every five years, gradually lowering the ceiling as 2050 gets closer.
The Act says the government can amend the budgets if “significant changes” have occurred since they were set. Presumably this is what Paterson wants the government to do, although the detail of his proposal is as yet far from clear.
What kind of significant changes would be needed to change carbon budgets? The Act lists changes in the scientific evidence on climate change, or changes in the rate at which other countries are decarbonising.
But the government might have a tough time justifying its decision if it were to change the carbon budgets. It is legally required to listen to the advice of its advisor, the Committee on Climate Change (CCC). If the CCC said there’s no reason to change the budgets, and the government did so anyway, ministers could be taken to court.
The government recently decided to leave the fourth carbon budget as it is, following the CCC’s advice that there had been no significant changes in circumstance. So the prospect that the Act could be sidelined without approval from MPs seems distant.
At first glance there seem to be some gaps in Paterson’s alternative vision for the UK’s energy though it’s hard to be sure until he makes his pitch on Wednesday. We’ll be sure to update the piece if he fills in the detail.