climatespace

The advantages of renewable energy are clear; it’s sustainable, clean, emits no carbon and doesn’t impact negatively on food security or delicate ecosystems. Environmentally speaking, some sources are a lot better than others, but that’s another discussion, for another time.

Two pressing issues; climate change and energy security are the two obvious drivers behind the rapid uptake of renewable energy.

The message of the most recent synthesis report of the Intergovernmental Panel on Climate Change released in Valencia on the 17^th of November 2007 was clear. Climate change is happening now, and we are accelerating towards atmospheric concentrations of greenhouse gases, specifically CO₂, which could lead to irreversible climate change with catastrophic implications for humanity and the natural environment. We are running out of time, and some estimates imply 100 months may be all we have to turn around the year-on-year rise in greenhouse gases and stabilise atmospheric concentrations of carbon dioxide - this is scary stuff!

Second, we are rapidly losing our energy independence or ‘security’. Between 2004 and 2006, the UK’s energy dependence on other countries rose four-fold. The imminent threat of peak oil ^a and the need to maintain a secure reliable energy supply, means political action here is just as urgent as that taken to prop-up the UK banking system in September 2007.

However, our progress in increasing renewable resources in our energy mix is nothing short of embarrassing. In particular, in August 2007, an internal Department for Business, Enterprise and Regulatory Reform document revealed the great lengths to which senior UK government officials were prepared to go to evade the EU target of 20% renewable energy by 2020. Statistics on the UK’s current energy mix shows why officials many have sought to wriggle out of the UK’s commitments. ^b Currently only 2% of our overall energy comes from renewable resources (the figure is four % for electricity), with 8% from nuclear and the remaining 90% from fossil fuels. We are, it seems, still overwhelmingly hooked on carbon. So, how do we break the fossil fuel habit?

One solution is Feed-in tariffs.

A feed-in tariff is a legal obligation on energy suppliers to buy electricity from renewable energy installations - and at a fixed price, usually over a fixed period (i.e. 20 years). These legal guarantees ensure investment security, and the support of all viable renewable energy technologies. The costs of the scheme would be shared among all end-users, so that no one is overly burdened. Feed-in tariffs have considerable support from a number of organisations, for example, the Town and Country Planning Association; World Future Council and by the Environment, Food and Rural Affairs Select Committee. Even Ofgem has shown some mild support for the policy.

Those who support the feed-in model argue that, if implemented effectively around the world, they would greatly assist the green energy; through the reduction of CO₂, market creation and development, job creation and improved energy security. Even the Stern Review recommended feed-in tariffs as the best policy tool for the fastest, lowest-cost deployment of renewables. These feed-in tariffs have been used extensively in Germany and Spain and have resulted in supporting a substantial growth in the amount of capacity installed.

In Germany, feed-in tariffs have been politically supported since 1990. In addition to becoming world leaders in the renewable energy market as result Germany can boast the following achievements:

• They now have 200 times as much solar energy as Britain,
• They generate 12% of their electricity from various renewables, compared with 4.6% in Britain,
• The booming renewable industry has created a quarter of a million jobs in renewables - a number that is growing fast. Britain has only 25,000, the number of jobs created in the industry in Germany in the past year alone.
• They have avoided 97 million tonnes of CO₂ emissions in 2006 alone through renewable energy

All this, and at a cost of around €1.50 per month per household.

Some countries - like the UK - have opted for other instruments, such as government grants schemes for microgeneration (domestic scale wind and solar), funded by the taxpayer. In the UK and elsewhere, these grant schemes have been massively oversubscribed and have done comparatively little to stimulate the introduction of renewable energy at the domestic level.

So, why has the UK failed to uptake something that has had such astonishing results, opting for a far less effective policy?

Many point to the preference of the UK government for market-based solutions; they believe feed-in tariffs are too interventionist. This is because the current market still fails to effectively include the environmental damage that the burning of fossil fuels creates - externalities in economic speak - and and so is unable to deliver the outstanding results that feed-in tariffs can provide.

This is just a brief introduction into a rather complex area. If you would like to read more, a simple internet search will yield some up-to-date information.

The World Future Council has an excellent resource which can be found here.

Miguel Mendonça, also from the World Future Council has also written a book called Feed-in Tariffs - Accelerating the Deployment of Renewable Energy, and is available from Earthscan Books.

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Endnotes

^a Peak oil, or the Hubbert Peak theory is an influential theory concerning the long-term rate of conventional oil and other fossil fuels extraction and depletion. It predicts that future world oil production will soon reach a peak and then rapidly decline. The actual peak year will only be known after it has passed.

^b Gordon Brown’s first environment speech as Prime Minister (which I was lucky enough to attend), did however provide some confidence that the UK will stay committed to its EU renewable targets.