27 May 2010
Some Transition Thoughts on the Energy Bits of the Queen’s Speech
So the Queen’s Speech has set out the policy priorities for the new government, but were the policies announced a cop-out or do they set out a wartime mobilisation scale of response to climate change and peak oil? These reflections are based on the article about the speech that appeared in yesterday’s Guardian. Plans include setting up a green investment bank, which will make loans available to households for energy efficiency measures and renewable energy installations, the ‘pay-as-you-save’ scheme initially proposed by Ed Miliband. The exact amount of the loans that will be available has not yet been stated, although the Guardian speculates that it could be as much as £15,000. This is a great development, but I wonder if it could yet be taken further? How would DECC respond, for example, if a Transition group were able to get 100 people to take out loans of £15,000 each and club it together as £1.5million in order to finance a community-owned ESCO, an energy company designed to be owned by and financially benefit the community?
The risk would therefore be born across the community (well, by those who have taken out the loans for the company), and given that it would enable much larger-scale renewables schemes, would have far greater savings in terms of carbon reduction than domestic scale installations. Likewise, although it is early days for the Transition Streets initiative we are doing here in Totnes, combining some kind of ‘street-by-street’ approach which incorporates behaviour change could have a deeper, longer lasting and further-reaching impact than merely dishing out money for conservation and technologies.
Another policy is to put more information on energy bills, “in order to empower consumers and to ensure fair access to energy supplies”. While I’m sure this is a good thing, I wonder how many people will understand such information. It is like the wealth of labelling now on many food products, which I would imagine very few people read, and even less people understand. While that is no reason to not have them, increased labelling needs to be accompanied by a wider awareness raising programme. My recent review of Jane Fearnley-Whittingstall’s book ‘The Ministry of Food’ noted how during World War 2 the government took clear leadership on energy reduction (e.g. “when you ride alone, you ride with Hitler” and so on…) and promoted frugality and conservation. Although we are starting to see this messaging from some energy companies, clearer messaging from government would be great.
There is a commitment to regulate the emissions from coal-fired power stations. It is hard to understand exactly what this means: as far as I am aware the only way to regulate emissions from coal fired power stations is either to burn less coal in them, close them down altogether, or to install carbon capture and storage technologies which, it is important to recall doesn’t actually exist yet. It is very difficult to fit carbon capture technologies onto existing coal fired power stations, which aren’t necessarily sited anywhere near sites where sequestration is possible.
Often, sequestration is used to enable the process of Enhanced Oil Recovery (EOR), driving out hard-to-reach oil from oil fields, and lengthening their productive life. Given that it leads to the production of more oil, it cannot be argued to be an especially low carbon technology. Also, from articles I have read, it appears that installing carbon capture and storage necessitates the burning of about a third more coal than would otherwise be burnt in order to power that process, and for the UK, whose indigenous coal production continues to fall, this decreases rather than increases energy security. There are also still some concerns as to whether carbon, once sequestered, stays where it is put.
The installation of a ‘Smart Grid’ is to be welcomed, although we await more information as to whether it is the kind of Smart Grid suggested in the forthcoming ‘Zero Carbon Britain 2030’ report by the Centre for Alternative Technology. The policy to make the infrastructure of the North Sea available to all companies in order to make the exploitation of smaller and more difficult oil and gas fields easier is a natural thing to want to do for a nation, like the UK, at the end of so many pipelines and, until recently, used to the bounty of cheap energy on our doorstep. However, it is clear that such an approach is needed precisely because all that remains in the North Sea is smaller and more difficult oil and gas fields. The concept of peak oil is seen here in isolation. Like the 2009 Low Carbon Transition Plan, which focused just on North Sea peak, not the wider global experience, the government appears to be doing much the same again.
Something not in the Speech that would have been a good addition would have been a tweak to the Feed in Tarriff announced last year by Ed Miliband. At present, the consumer is only paid 3p for each unit of electricity exported, thereby giving little incentive to reduce consumption at that household level. At the moment the tarriff encourages installing systems and harnessing the tarriffs, but doesn’t encourage the householder to also cut back on consumption. The policy about “reforming energy markets to deliver security of supply and ensure fair competition” is the second part that implies a lack of understanding of the peak oil issue. It assumes that ‘security of supply’ is something purely controlled and regulated by markets, rather than geological factors.
It assumes that the 2008 price spike to $147 was something that could have been controlled if different market mechanisms had been in place. This assumption is rather dangerous, because, as recent reports such as those by the UKERC, which suggests “a significant risk of a peak before 2020” and the Peak Oil Task Force which suggests a date of 2015 suggest, geological factors will increasingly come into play during the life of this government, and all of the market mechanisms in the world, with the exception perhaps of an Oil Depletion Protocol will do little to affect it.
Ultimately of course, if recent pieces by George Monbiot and Paul Kingsnorth are correct, home insulation and micro renewables, if pursued in the context of economic growth, will do little to reduce our carbon emissions. As Monbiot recently pointed out, figures for national carbon emissions had, until recently, failed to include emissions embodied in the manufacture and transportation of the goods we consume from other countries. When we add that, the nation’s emissions are increased by more than a half. Kingsnorth pointed out that economic growth and energy use, and by extension carbon emissions, are intimately intertwined. He mentions a study by Professor Rod Smith of Imperial College which showed that an economic growth rate of 3% would lead to a doubling of economic activity in 23 years, and that “each successive doubling period consumes as much resource as all the previous doubling periods combined”. As Monbiot summed up Smith’s findings, “if our economy grows at 3% between now and 2040, we will consume in that period economic resources equivalent to all those we have consumed since humans first stood on two legs. Then, between 2040 and 2063, we must double our total consumption again”. The policies announced in the Queen’s Speech, according to the new energy and climate change secretary, Chris Huhne, make clear that “energy security and taking real action to tackle climate change aren’t add-on extras for this new government, but are vital to our national interest”.
Unfortunately the back-to-growth-at-all-costs economic policies being consumed in other parts of the Queen’s Speech make rather a nonsense of this. Ultimately our ‘national interest’, and the national interests of generations hence, will be best served by giving up on the idea of economic growth altogether, the intentional and collective move towards a steady state economy, the rebuilding of local economies and seeing them as key drivers of the economy, a shortening of the distance between production and consumption as far as is practical, and, as MP Frank Field put it so frankly in February, “we do not know whether the rest of the world will lend us the money to maintain our debt levels, and therefore hopefully readjust to a lower standard of living, which is what this crisis actually means”.
I would argue that this government needs to broaden its focus from its promotion of localism (increased power being transferred to local bodies, Councils, schools and so on) to localisation (the rebuilding of local economic resilience, and creating local infrastructure owned and managed by local communities). There is much to cheer in the Queen’s Speech, and much that, with minor additional tweakings, could prove to be very valuable tools in the Transitioning of communities. However, pursued in the context of an overarching push for a return to growth, one has to question just how effective they will prove to be in the long run.
27 May 1:49pm
“Ultimately our ‘national interest’, and the national interests of generations hence, will be best served by giving up on the idea of economic growth altogether”
But surely you realize that’s impossible Rob?
The moment anyone really thought zero-to-neg growth *was* the future, the markets would tank. Everyone is trying like hades to find a way for growth to be the future, otherwise those Athens riots are coming to London.
There has been zero attempt to revise banking mechanisms, even to take account of mistakes up to this point, much less rejig the accounting rules of the world so forcibly whipped growth is a thing of the past! As long as interest rates are positive growth has to be as well. People who lend want their money back — no growth, no repayments; no repayments, no wealth. No wealth… depression.
Whilst all the positive signs in the QS are to be welcomed, therefore, one should recall that no government is really going to be on top of the bigger point you end with. It will take more melting down before this fact is faced, if ever.
27 May 3:14pm
Great suggestion about a group loan to finance a community owned electricity company.
I live in Peru and I’m fascinated by the idea of local scale energy generation to benefit small communities. The geography of Peru means that there is huge potential for microhydro schemes. Of course, wind and solar can be added to to have a mix. The other factor is that because rural lifestyles are much less ‘developed’ here power consumption is much less so the potential impact of small scale is greater.
The great thing about renewables is that once the initial investment has been made, running costs are relatively very low since no fuel has to be purchased.
Yesterday I discovered two books which I can’t wait to read:
1. ‘Small Is Profitable: The Hidden Economic Benefits of Making Electrical Resources the Right Size’ by Amory B. Lovins
This one looks really interesting. Unfortunately it is very expensive, but for a Transition group looking into community-based electricity generation, it loooks to be required reading and the cost could be shared amoung the group.
2. ‘Building Social Business: Capitalism That Can Serve Humanity’s Most Pressing Needs’ by Muhammad Yunus. Here’s a summary: http://bit.ly/9O2To4
The model of local renewable electricity generation lends itself perfectly to the idea of a company that just runs and runs, needing no further financial input and that serves the community, either with the lowest possible electricity price, or with an income stream to use for other things.
This is exactly what I want to do here in Peru – if a small community can harness renewable resources, generate electricity, sell it to the national grid the net revenue (after running costs) could be split: 70% to go to the community in various forms (as cash; as direct investment in things like reliable drinking water, drainage/sewage systems; rubbish treatment, etc); or to create a microcredit fund to encourage small businesses). The remaining 30% could be used to replicate the model in other places to benefit other communities.
No ‘shareholders’ taking money out of the system. Ironically, because the model is based on truely renewable resources the perpetual growth assumption actually would apply.
The aspect that I am particularly interested in at the moment is the legal ownership structure. If anyone could recommend a good book about community ownership, the mutual model, etc. I’d be very grateful. My email is firstname.lastname@example.org
27 May 3:18pm
Very thought provoking article – thankyou for producing it.
I have some perspectives on it that may be worth sharing:
– apart from the availability and interest rate associated with credit at the moment (which may be negotiable with some environmentally-minded institutions) there’s nothing to stop a town applying for a £1.5 million bank loan. However there needs to be a clear business & implementation plan, clear commitment, and a clear governance structure behind it.
– I agree that Monbiot & Kingsnorth have valid comments, but they are translating & extrapolating economic growth at current levels of carbon intensity. That’s exactly why we need to move to a low carbon economy – if we create new manufacturing and service sectors in home insulation, that is economic growth…
– Two of the main issues with localisation are fragmentation of decision making (and consequent squabbling) and economies of scale for infrastructure that spans the country. In many cases it’s more carbon-efficient to plan at a higher level, and more financially efficient to deliver at a strategic level. However, what often happens in reality is that bureaucracy at that larger level reduces the environmental and financial efficiency…
27 May 9:58pm
Rob, in all seriousness, you seem to be in a kind of limbo state of denial. On the one hand, you see, very clearly that a steady state economy is the very minimum required for sustainability. And yet you applaud parts of the Queen’s speech simply because they address some of the issues you have highlighted over the years. However, in no way, does this Queen’s speech indicate a path to sustainability or that the pieces you applaud are anything more than an attempt to continue business as usual.
So, surely, it’s impossible to praise anything in the Queen’s speech since it is not targeted at producing a sustainable society. It’s impossible to imagine the government tweaking a few things next year to get us to sustainability. It’s growth at all costs, and the cost is the collapse of our societies (and, with them, our civilisation).
You mentioned Paul Kingsnorth and I understand that the initiative he’s involved with does recognise that collapse is inevitable. If so, perhaps that’s the start of describing our predicament faithfully, so that we don’t get fooled by bits and pieces of policy that we try to desperately find comfort from.
27 May 11:41pm
“an economic growth rate of 3% would lead to a doubling of economic activity in 23 years, and that each successive doubling period consumes as much resource as all the previous doubling periods combined”
This duplicates part of Albert Bartlett’s lecture which appears on YouTube and is must-see material to anyone who wishes to gain a better understanding of the exponential function. I’m sure you’ve all seen it but here’s the link anyway:
27 May 11:49pm
“the national interests of generations hence, will be best served by giving up on the idea of economic growth altogether”
While I have come to take this same view (in the absence of evidence or promise of decoupling) it is very hard to cross the culturally impregnated growth fetish. As such (and wishing to have our cake and eat it if possible) I’d like to refer you to a researcher called James Greyson who’s done some interesting recent work including precycling – claiming it offers to reduce resource consumption and waste simultaneously while still offering the opportunity for growth. Here’s a link to some of his work:
28 May 8:12am
It often strikes me, however, that the current definition of growth, limited to GDP per capita, is way too narrow.
Perhaps the key question is: “can growth be redefined so that it does work in a sustainable manner, and if so how?”
Would be interesting to see any comments from the New Economics Foundation on that point. We know that it cannot be underpinned on an ever-increasing usage-rate with respect to our non-renewable natural resources, so leaving that aside, could it occur, in a redefined manner, in a powerdown, relocalised, reskilled and resilient world?
The alternative is a Kingsnorth-style collapse and die-back, after which the limits to growth will for some time be rather starker and simpler than those we currently face.
On that cheerful note….
Cheers – John
28 May 9:05am
I raise my recycled glass flute of locally sourced elderflower champagne “embrace wellbeing, it’s the new GDP!!”
28 May 7:33pm
The following are my thoughts on Rob’s review that I sent out to members of a permaculture group in Durham: –
Mr.Hopkins’ suggestion of a community-owned ESCO is an interesting one, albeit private finance looks set to be the main investment into this Green bank proposed by the government. I just hope that interest-rates on the loans are not too high; as ideally an energy co-operative should be able to supply needs-based power for heating/cooking 100% free for all local people who put a stake into it (with charges levied for business or non-needs usage). I make this point because a coming oil-crisis would mean a lot of people out of work and unable to neccessarily afford privatised fuel and food bills together (which is why I have plans for de-centralised permaculture food schemes).
I agree with Mr.Hopkins’ views on the need for greater clarity and government direction in improving conservation of energy. Perhaps the Conservative “smart grid” energy plans would be better without their unreasonable nuclear and “clean coal” proposals?
Mr.Hopkins makes a very good point about the gross negative EROEI (Energy Return On Energy Invested) with respect to carbon-capture from coal. Far too much coal is used up in the process and thus constraining supply. It’s also worth noting that a German report (which I have cited in a PDF I wrote critiquing the Tory “Low-Carbon” green paper) notes a 15 year remaining supply of global coal respective to demand.
Mr.Hopkins makes a very good point about the narrow-focus of the government on North Sea oil and gas liberalization and our existing vulnerability to global fossi-fuel markets. While I welcome such increases in efficiency of extraction; it is somewhat dangerous for the government to put too much focus on this at the expense of the global elephant in the room.
Mr.Hopkins also makes a good point about the flaws of the market-based focus on energy ‘security of supply’. I understand that it’s important to define supply-security primarily in the geological context rather than the political-context of dependence on nations with ulterior interests. Supply-security is also about ensuring that needs-based (cooking, heating, food-security, ambulance/fire/police services, etc) energy systems are ring-fenced in terms of funding and allocation and are protected from high-cost and high-risk energy infrastructures.
Mr.Hopkins correctly cites that things like home insulation and micro-generation are not going to reduce carbon emissions significantly. However, I think we can all understand that our carbon-based economy (and all the emissions it brings forth with it) is going to collapse regardless. Hopkins’ citing of Prof Rod Smith’s observations on economic growth and exponential resource consumption is an important reminder of how the exponential function seems to be absent from the minds of politicians. There is a good video on Youtube titled “The Most IMPORTANT Video You’ll Ever See” which discusses this issue. Our infinite-growth based paradigm cannot continue. We do face a future of continued economic contraction. This need not be a tragedy, however, given the possible implementations of Steady-State economics (see the works of Herman Daly et al) that no longer require growth for prosperity. I am glad that Mr.Hopkins is aware of this new economic paradigm and its incorporation into permaculture-derived resource usage too.
29 May 9:59pm
“The moment anyone really thought zero-to-neg growth was the future, the markets would tank.” Bring it on.
29 May 10:55pm
Simon: ““The moment anyone really thought zero-to-neg growth was the future, the markets would tank.” Bring it on.”
Well you can say that — my point (last para) is, you’re not likely to find anyone in government saying that.
Of course big market tanks overthrow governments sometimes, and bring rather unsavory characters to power, as well as initiating depressions, so I understand the nervousness. The BNP has been slavering for their peak oil moment for years now.
1 Jun 10:42am
There are already a few communities ESCO’s/IPS’s:
OVESCo in Lewes has been running since 2007 & is seeking capital backing for its first community power project (most likely to be a PV array)! The company is an IPS set up by Transition Town Lewes members.
Water Power Enterprises (h2ope) has a couple of projects up and running as ISP’s in Settle & New Mills. The share issue has been very successful.
Low Carbon West Oxford won LCCC funding & is an IPS with a number of PV projects (homes & schools), but has yet to get its first hydro power project up & running. Again capital would help to push a community project along.
I understand Totnes has a TESCo! That has plans for a community Project. Totnes like LCWO also received LCCC funding, but also had the problem of delivering in a very short space of time, which meant PV was the easy option.
Then there are the ‘Energy For All Projects’, which have raised capital via share issues for wind farms.
All the above are relatively embryonic and there is some way to go before we see a Danish type models for Coop’s all generating renewable power. There is a need for support with project feasibly studies & start up costs and perhaps a Green Investment Bank could help here.
The ideal would be for projects to receive grant funding & low interest loans if they were community based (not for profit) with any returns recycled into the community for other projects.
OVESCo is looking at setting up a conference in Sussex to get all the potential community project partners together with government & financial support agencies. Details TBC, but contact email@example.com if this is of interest.
4 Jun 9:28am
In The Netherlands there will be elections for the new government at 9th of june.
Recently I posted some pictures of Godelieve Engbersen – TT Tilburg (south of the Netherlands) showing her while she is handing out a copy of the Dutch Transition Handbook to Job Cohen, new leader of the Party of Labour; and she also gave a book to Marianne Thieme leader of the Party of Animals.
Godelieve Engbersen: ‘There is too less attention among political leaders for sustainability.I want to give a book to all political leaders.’
5 Jun 9:36pm
Thanks very much for the link to Albert Bartlett’s lecture on YouTube. I hadn’t seen it and I think everyone should see this gifted educator at work explaining vitally important concepts with great patience and clarity. As he says, ‘the greatest shortcoming of the human race is its inability to understand the exponential function’. Once you’ve seen the video, you really do understand. Should be required viewing for all MPs.