Wednesday 13 July 2016

Brexit: and energy: nuclear, renewables and climate change

The future of the energy sector looks pretty uncertain after the referendum:
Futures Forum: Brexit: and energy

Immediately after the event, doubts were already being voiced about climate change targets:
Britain's Exit from the E.U. Could Put Climate Commitment in Doubt - Scientific American

There are very different perspectives as to the future of the energy sector:

Higher fuel bills, less renewables, an end to nuclear power: Brexit's energy shakeout

Chris Goodall 28th June 2016 

The economic impacts of the Brexit vote will very soon make themselves felt to British consumers, writes Chris Goodall - kicking off with higher fuel bills and pump prices. The good news is that nuclear power is now looking increasingly unaffordable. But renewables and green energy research are also likely to suffer, especially if under a right-wing Brexit government.

The large devaluation of the last few days will have significant effects on UK energy, from electricity to motor fuels. Other changes are also likely to slow decarbonisation of the economy.

Hinkley Point C is even less likely to be built. As at the point of writing, the pound is down about 16% against both the dollar and the Euro compared to twelve months ago. That means that all the components for the power station purchased outside the UK will be 16% more expensive.

More generally, of course, any new Conservative government will be profoundly sceptical about climate change. The part of the human brain that determines whether one is a denialist or a climate alarmist is the same as that which provided the opinion on the EU. So renewable and low-carbon energies of all types will be under threat as a result of the likely rightward shift of the government.

For example, the Vote Leave campaign literature railed about wickedness of the Large Combustion Plant Directive, the EU's coordinated plan for reducing air pollution by forcing older coal-fired power stations to close. The LCPD was actually one of the undoubted successes of the EU energy and environment policy.

The implication is that the Leave people will be happy to see coal back as a major contributor to power supplies even though they also threw about the accusation that the EU had "tied our hands on decarbonisation". That last complaint is about as far from the truth as is possible to get.

The primary conclusion I take from the events since the referendum is that energy is going to become more expensive in relation to household incomes, at least for a few years, and that the low-carbon transition in the UK will be slowed - partly by the impact of devaluation and loss of funding but also because of the rise in uncertainty over the future direction of energy policy.

Higher fuel bills, less renewables, an end to nuclear power: Brexit's energy shakeout - The Ecologist
The impact of the referendum decision on energy | Carbon Commentary

Britain's Hinkley nuclear project not affected by Brexit - minister

UK | Wed Jun 29, 2016 NINA CHESTNEY

A project to build two new nuclear reactors at EDF Energy's Hinkley Point site in Britain will not be influenced by the outcome of the country's vote last week to leave the European Union, energy minister Andrea Leadsom told lawmakers on Wednesday.

"I don't believe the Austrian challenge to Hinkley has any merit ... and I do not believe (the project) will be influenced by the results of the referendum," Leadsom told an energy and climate change committee hearing.

Austria launched legal action against the European Commission last year over its backing of British plans to build the Hinkley Point C nuclear power plant, saying it went against the EU's aim to support renewable energy.

A final investment decision on Hinkley Point has been delayed as France's EDF tries to secure partners and financing. Concerns have been raised that Britain's decision to leave the EU could put the project even further behind.

Leadsom, who was in favour of leaving the EU, also said she did not believe anything would change for British energy policy following last week's vote and that nothing should change for interconnectors with the EU, which are run by companies that have commercial agreements.

Britain's Hinkley nuclear project not affected by Brexit - minister | Reuters
How the skulduggers succeeded in bringing an end to Andrea Leadsom's campaign to be prime minister

Brexit doubt weighs on green energy groups

EU’s largest renewables producers downplay concerns over changes to UK policy

JULY 3, 2016 by: Pilita Clark, Environment Correspondent

The financial uncertainty triggered by the UK’s vote to leave the EU has sent shudders through virtually every industry, but Europe’s renewable energy sector faces even greater insecurity.

The successful Leave campaign was led by several political figures opposed to tackling climate change by replacing fossil fuel power stations with wind farms and other sources of renewable energy.

The campaign’s strategy committee included Lord [Nigel] Lawson, founder of the Global Warming Policy Foundation think-tank which says the science of climate change is “not yet settled”.

Brexit figurehead Boris Johnson, the former mayor of London, once questioned global warming during a snowy winter and likened wind farms to a “hideous Venusian invasion” that is “crucifying our landscape”.

None of the contenders to replace David Cameron as prime minister are vigorous renewable energy advocates and one, Michael Gove, was once accused of trying to downgrade climate change in the national schools curriculum.

With the UK political landscape in a historic state of disarray, it is unclear how the future government will behave. But the Leave victory raises questions about whether years of cross-party consensus on the need to combat global warming may fray.

The EU’s largest green energy companies have so far been careful to downplay concerns about the sector in the UK, which last year had a market value of £16bn and employed close to 117,000 people, according to the Renewable Energy Association.

The energy secretary, Amber Rudd, a prominent Remain campaigner, told a climate change conference last week that the existing government was still committed to all such policies, even if the Brexit vote made it “harder” for the UK to tackle global warming.

She pointed to the cross-party consensus vote in favour of the UK’s 2008 Climate Change Act, which commits the UK to an 80 per cent cut in greenhouse gas emissions by 2050, adding that “leading Leave campaigners have made it clear they remain committed to it”.

Plans for some of the UK’s biggest wind farms have been scaled back or ditched after companies hit hurdles stemming from the EU’s birds and habitats directives. Such cases underline the “over-regulation” of the wind farm industry as a result of EU rules, says Jennifer Ballantyne, a planning specialist at the Pinsent Masons law firm.

But the fate of these rules, like all others based on EU policies, is now very far from clear.

Brexit doubt weighs on green energy groups — FT.com

Meanwhile, the National Audit Office has today published a report questioning the viability of nuclear:
Nuclear power in the UK – National Audit Office

Hinkley Point C may cost £30bn in 'top-up payments', warns watchdog

National Audit Office says renewables may be cheaper option as falling costs of energy undermines competitiveness of nuclear plant

The NAO fears Hinkley Point could also require taxpayers to cover some of the costs of fuel disposal. Photograph: PA

Terry Macalister Energy editor Wednesday 13 July 2016 

A government spending watchdog has launched a devastating critique of Hinkley Point C, warning that the nuclear project could cost energy consumers £30bn in “top-up payments” due to falling wholesale power prices.

The National Audit Office (NAO) also expressed fears that taxpayers could end up with a range of other payments under debt guarantees agreed by the government with EDF, the French energy group wanting to develop Hinkley.

There could also be potential liabilities for disposing of spent fuel and meeting claims in the event of a nuclear accident, argues the NAO, which says renewables may be a cheaper option.

“Supporting early new nuclear projects could lead to higher costs in the short term than continuing to support wind and solar. The cost competitiveness of nuclear power is weakening as wind and solar become more established,” according to the report, titled Nuclear Power in the UK.

“The decision to proceed with support for nuclear power therefore relies more on strategic than financial grounds: nuclear power is needed in the supply mix to complement the intermittent nature of wind and solar,” it added.

The damaging review comes less than a week after an Infrastructure and Projects Authority (IPA) assessment published by the Department of Energy and Climate Change (Decc) put the potential cost of Hinkley at £37bn.

John Sauven, director of Greenpeace UK, said Theresa May should kill off Hinkley as soon as possible. “The government’s line that Hinkley is a good deal for billpayers is falling apart. Today’s damaging report from the NAO should kill this myth once and for all. It makes the government’s slash and burn approach towards help for homegrown renewable energy companies look completely out of step with reality. Unlike nuclear the cost of renewables is falling every year.

“Nuclear is not just a nice-to-have. It is an essential part of our plan for a 21st century energy system that will power homes and businesses with reliable, low carbon electricity,” the Decc said. “Hinkley will generate enough low carbon electricity to power 6m homes and around £10 from consumer bills will pay for it once it is up and running.”

The potential costs of waste mentioned by the NAO should be balanced against the fact that this would be the first nuclear plant built in this country where the cost of the clean-up is essentially born by the developer.

EDF dismissed the NAO’s gloomy assessment on Hinkley. “Short-term changes in today’s wholesale energy prices do not change the long-term case for Hinkley Point C,” it said.

“It will produce electricity in the 2020s and beyond, helping the UK replace older polluting plants with reliable low carbon electricity available even when the wind doesn’t blow or the sun doesn’t shine. Its cost will be competitive with other forms of low carbon generation and consumers won’t pay a penny until the plant begins operating.”

Meanwhile a French parliamentary report concluded that despite the risks of the project, Hinkley was a manageable risk and cost to EDF. The French company has promised to take a final investment decision in September.

Hinkley Point C may cost £30bn in 'top-up payments', warns watchdog | UK news | The Guardian
Hinkley C: top-up payments could add £30 bn to the bill | East Devon Watch

And, finally, a piece from today's Telegraph points to how the UK government is nevertheless committed to renewables:

UK plans new green petrol to hit EU renewable targets despite Brexit

A new green petrol with a higher share of biofuels is likely to be introduced CREDIT: PA

Emily Gosden, energy editor 13 JULY 2016 • 7:32PM

The UK is pressing ahead with plans to hit EU renewable energy targets despite Brexit, ministers have confirmed, including the likely introduction of a new 'green' petrol adding 1p/litre to prices at the pump.

Lord Bourne, the energy minister, told MPs that his department and the wider Government were still working to hit the targets, which require the UK to generate 15pc of its energy from renewable sources by 2020.

Andrew Jones, the transport minister, said it was "very likely" that Britain would introduce a new kind of petrol called E10, which contains a higher proportion of biofuels than current petrol, in order to meet a sub-target requiring 10pc of transport energy to be renewable.

Appearing alongside the ministers before the energy select committee, Rob Wakely, head of low carbon fuels at the Department for Transport, also confirmed that this was expected to add 1p/litre to prices at the pump.

Last year Government sources insisted the UK was trying to avoid introducing the fuel, telling this newspaper that doing so would "shaft" drivers and was part of the EU's "war on the British motorist".

However, experts have said that doing so will be the only viable way of meeting the transport target, which will be a struggle even then.

Mr Jones told MPs that E10 fuel was "a very likely part of our biofuel future" and described it as an "opportunity".

He insisted it was up to fuel manufacturers - who could already deploy the fuel if they wished - to do so. However, petrol retailers are only likely to introduce it if the Government signals its backing.

Mr Jones said a forthcoming consultation on biofuels would provide "some certainty into the marketplace for E10".

Questioned over why the targets still applied, Lord Bourne raised the prospect that while leaving the EU, Britain could still remain in the energy union. Experts have pointed out that this could entail retaining renewable energy targets, as Norway does.

"Until we know precisely how Brexit plays out, in terms of the energy union - because there are countries that are part of the energy union that are not part of EU - it’s difficult to say exactly how this plays out," Lord Bourne said.

"At the moment we are certainly working on the basis that these remain 
relevant and binding for the UK."
UK plans new green petrol to hit EU renewable targets despite Brexit

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