Business is key to a low-carbon future, but the government must show more clarity and consistency
Earlier this week, I was invited along to the Business and a Sustainable Environment conference in London to give my views on the government's green business policy. The question was "how is government engaging with business to deliver the transition to a low-carbon economy?" My answer was: "not very well".
Innovation and entrepreneurship by the business community will be at the heart of the transition to a low carbon and sustainable economy. But if we are to create the right conditions to foster such a transition, the government must engage better with business by showing more clarity, consistency, and certainty than it is right now.
Let's start with clarity – or rather lack of it, as amply illustrated by the green deal. The government wants this to be a "framework" within which the private sector will deliver much-needed energy efficiency programmes in homes. But ministers appear to believe that a market free of government targets is more likely to succeed than government-defined programmes.
The consequence is that no one can say what the green deal is expected to deliver, either in numbers of homes treated or in CO2 emissions reduced. There is no target to meet, or to measure delivery against – and therefore no means of assessing success.
What's also deeply frustrating about the green deal is that it misses a big opportunity to maximise the potential of the green investment bank (GIB). In Germany, green deal-type loans for energy efficiency are subsidised through the government's equivalent to the GIB to bring the interest rates down to low single figures. Unless we do that here, take-up is expected to be woefully low.
Which makes you wonder: where exactly is the deal in the green deal? It seems to me that business could really do with a little more clarity and joined up thinking on how to scale up the role that energy efficiency will play in a greener economy.
The business community also needs to see consistency in government policy. All too often, what we get is the very opposite. The original carbon reduction commitment (CRC), for example, is set up in such a way that some companies or large local authorities with onsite renewable power have to report and pay for emissions that they did not emit. The reason is that the CRC only measures energy efficiency and onsite renewable power is treated as equivalent in carbon content to average grid mix electricity (produced primarily from gas, coal and nuclear). Yet under greenhouse gas reporting guidelines, organisations are permitted to report zero carbon emissions for renewables. The same is true under the EU emissions trading scheme.
That means we effectively have a scenario in which anyone switching to a less carbon intense fuel would, quite sensibly, be rewarded under the CRC with less reportable emissions, but any switch to renewables could be penalised. All of which is bad news for the renewable energy industry.
It's not just me saying this. Tesco has told trade body the Renewable Energy Association that they anticipate the CRC will have a positive impact on business cases for energy efficiency projects - but a negative impact on renewables. The water industry, likely to be the biggest single emitter under the CRC, has also raised concerns about the impact on its renewables investment.
Then we come to certainty. The government's disarray over feed-in tariffs (Fits) – reveals the degree to which uncertainty can hamper progress. Just last week the government announced a fast-track review of Fits for all solar PV above 50 kW, the size of an average school installation. This effectively pulled the rug out from under the industry, creating significant job uncertainty in one of the few industries to create thousands of new jobs in the UK in the past 10 months.
Fits have been, by the government's own admission, one of its most successful programmes to date. This review seems to have been a kneejerk reaction to concerns about super size solar and comes on top of the comprehensive spending review's cap on Fits.
Constantly changing the Fits regime breeds uncertainty, with the result that companies are put off investing in decentralised power. This is reflected in the UK's poor performance – and in weak projected performance.
Solar photovoltaics (PV) are one area which could really help us deliver on capacity under FIT, yet the UK anticipates delivering just 2.7 gigawatts (GW) of PV by 2020. Germany anticipates 40GW by the same year, Italy 26GW. Even Belgium anticipates delivering more than us.
Yet the UK boasts internationally significant companies working in PV. We have the largest cell assembly plant in Europe. We boast companies like Solarcentury and Romag. But unless the government starts delivering a consistent message on support for renewables, this massive potential may never be realised – to the detriment of our economy and our environment.
Only with greater clarity, consistency and certainty will we stand a chance of achieving a good relationship with business to deliver the dynamic, sustainable and low-carbon economy we so urgently need.
Forests sell-off U-turn
On behalf of the many hundreds of my constituents who have written in to oppose the sell-off of our public forest estate, I warmly welcome the government's decision to ditch its reckless plans . I am encouraged by the commitment given to me by the secretary of state, Caroline Spelman, that those people who led the inspirational grassroots movement against the sell-off will be included in the new panel of experts set up to consider the future of the forests. Now it will be vital to ensure that the panel itself operates in public. This major U-turn exposes the shambolic nature of the government's policy-making – and is the inevitable consequence of ministers blindly charging ahead with ideologically driven cuts.
Thursday, 17 February 2011
World Bank: Power in Rural India Should Go Local.
By Arlene Chang
High voltage electricity towers on the outskirts of New Delhi. A new World Bank report says decentralizing electricity production and distribution will increase electricity supply in rural areas.About 56% of households in rural India have no access to electricity, but generating power locally and supplying it through distribution channels which already exist in rural areas can help solve this, according to a World Bank report released Tuesday.
Generating and supplying power from local electricity grids is not new in India, but so far this has been only used in very remote areas. The report has found that this is a model that should be actively encouraged, rather than one to fall back on. It suggested it should be implemented in areas where electricity supply is poor and where dependence on diesel and kerosene high.
Based on studies conducted in Kolhapur district of India’s state of Maharashtra, the report said that the state’s unexploited renewable energy sources could harness substantial economic gains – not just for the rural population, for the state as a whole.
The study found that the most cost-effective and feasible way of doing this, is through a decentralized system - something it calls distributed generation and supply (DG&S) franchises. This model, based on consumer cooperatives, can be successful in regions with renewable resources like high solar insulation, perennial local streams, and, in the case of farming communities , surplus biomass.
Some of the greatest perks of this model, the report says, is that it could increase supply and save expenditure for the consumer, reduce losses for the utility company and help meet the government’s goal of improving availability of electricity in rural areas across the country.
For example, the report estimates that this model can decrease the cost of electricity from 11 rupees ($0.24) per kilowatt hour to 6 rupees ($0.13) per kilowatt hour. It found this model would also increase the supply of electricity per day from an average of 8-10 hours to day-long supply.
The local power generation and distribution network could also help draw private investment in these sectors in rural areas, parts of the country that otherwise rarely attract this kind of interest. By allowing rural franchises to collect revenues on the ground, this system could also bring direct economic benefits to local communities too. Rural consumers would also be guaranteed access to a minimum percentage of the power generated through this system and any surplus electricity could be redistributed to neighboring areas. All this could help limit the all-too-common power outages.
“The involvement of the local community leads to socio-economic development in the area, thereby promoting inclusive growth,” Inger Andersen, vice president at the World Bank’s Sustainable Development Network unit, said.
It remains to be seen if, and when, the Indian government will ever take up the World Bank’s recommendations.
“India has, no doubt, undertaken several policy initiatives to enhance access and extend its national grid, but much still awaits to be achieved,” said John Henry Stein, senior director of the World Bank’s Sustainable Development Network, in a note to the press.
High voltage electricity towers on the outskirts of New Delhi. A new World Bank report says decentralizing electricity production and distribution will increase electricity supply in rural areas.About 56% of households in rural India have no access to electricity, but generating power locally and supplying it through distribution channels which already exist in rural areas can help solve this, according to a World Bank report released Tuesday.
Generating and supplying power from local electricity grids is not new in India, but so far this has been only used in very remote areas. The report has found that this is a model that should be actively encouraged, rather than one to fall back on. It suggested it should be implemented in areas where electricity supply is poor and where dependence on diesel and kerosene high.
Based on studies conducted in Kolhapur district of India’s state of Maharashtra, the report said that the state’s unexploited renewable energy sources could harness substantial economic gains – not just for the rural population, for the state as a whole.
The study found that the most cost-effective and feasible way of doing this, is through a decentralized system - something it calls distributed generation and supply (DG&S) franchises. This model, based on consumer cooperatives, can be successful in regions with renewable resources like high solar insulation, perennial local streams, and, in the case of farming communities , surplus biomass.
Some of the greatest perks of this model, the report says, is that it could increase supply and save expenditure for the consumer, reduce losses for the utility company and help meet the government’s goal of improving availability of electricity in rural areas across the country.
For example, the report estimates that this model can decrease the cost of electricity from 11 rupees ($0.24) per kilowatt hour to 6 rupees ($0.13) per kilowatt hour. It found this model would also increase the supply of electricity per day from an average of 8-10 hours to day-long supply.
The local power generation and distribution network could also help draw private investment in these sectors in rural areas, parts of the country that otherwise rarely attract this kind of interest. By allowing rural franchises to collect revenues on the ground, this system could also bring direct economic benefits to local communities too. Rural consumers would also be guaranteed access to a minimum percentage of the power generated through this system and any surplus electricity could be redistributed to neighboring areas. All this could help limit the all-too-common power outages.
“The involvement of the local community leads to socio-economic development in the area, thereby promoting inclusive growth,” Inger Andersen, vice president at the World Bank’s Sustainable Development Network unit, said.
It remains to be seen if, and when, the Indian government will ever take up the World Bank’s recommendations.
“India has, no doubt, undertaken several policy initiatives to enhance access and extend its national grid, but much still awaits to be achieved,” said John Henry Stein, senior director of the World Bank’s Sustainable Development Network, in a note to the press.