Peter Madden looks at how our current houses will become the eco-homes of the future
The home of the future is unlikely to be the curvy white pod of science fiction. On the outside, most houses in the UK will still look 19th century – partly because the public are profoundly conservative in their architectural tastes, but largely because the vast majority of houses that will be standing by 2050 have already been built.

It’s on the inside that they will be different – with everything from floor to ceiling retrofitted to inject some intelligence, efficiency and adaptability into the old shell.

Intelligence will come from an array of sensors which automatically switch lights and taps on and off, order your groceries and even monitor your health. A central control system will manage the home for maximum efficiency, and show when the fridge needs defrosting, or if the micro-generator isn’t running at full efficiency. Houses will be interactive and fully wireless, allowing us to access data from any point.

A drive for extensive resource efficiency could see water harvested and recycled within each home. Integrated solar panels and microgen combined with ultra-thin insulation films will allow some houses to come off the grid. Food will be grown in gardens, roofs and balconies, tended by the increasing number of home workers, and fed by composted domestic waste.

The interior of houses will be more modular, changing to suit needs during the course of the day and over your lifetime. Walls on rollers will allow you to reconfigure your space from office, to lounge, to bedroom. And instead of paint we’ll have floor-to-ceiling screens, where you can join a work conference or watch a movie, change the colour to suit your moods, or just switch to the latest fashion in wallpaper.

There are trends pushing us towards these outcomes. Demand for housing is rising due to both population growth and more one person households. But new homes are not being built at anything like a matching rate. So we will have to make smarter use of what we have, and rethink the space and resources we need day-to-day. We should look, too, at where the innovation is coming from: much of the housebuilding industry – with some notable exceptions – is stuck in traditional bricks and mortar. The IT and consumer goods companies, on the other hand, see the home of the future as a commercial battleground, where they are investing huge resources to win.

And we can already pick up weak signals as to what tomorrow’s homes will be like: solar PV is booming, smart meters are being rolled out, and everyone from Sony to Panasonic to GE to Microsoft has a showcase house of the future.

This will probably be a good thing for sustainability. Although there are limits to how efficient we can make old houses, they do contain a lot of embedded carbon, and making better use of what we have should be a key sustainability principle. Indeed, the way we think about our housing – the fact we are happy to buy second hand and that we repair, make do and mend – should be a model for our wider consumption habits. And because these designs will not come from massive centrally planned schemes, but from consumer facing companies engaging millions of people in small changes to their daily lives, they should make sustainable living more popular and desirable.

Peter Madden is Chief Executive, Forum for the Future.

Commenting on today’s 2050 Low Carbon roadmap published by the European Commission, Energy and Climate Change Secretary Chris Huhne said:

“The 2050 Low Carbon Roadmap must be a first step towards Europe setting a clear, cost-effective and ambitious plan to decarbonise its economy.

“We need a pathway that stimulates jobs and growth as well as reduces Europe’s dependence on fossil fuels from other countries.

“The roadmap shows that Europe’s current 20% target for 2020 isn’t enough or cost effective and shows that Europe’s already got the policies and the tools to cut emissions by 25% at home. This makes the case for going to 30% stronger and more urgent.”

Details about the EU’s Commission Roadmap can be found on the Commission’s website:
 

08 March 2011
DECC Press Release: 2011/020

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A cross-Government action plan on climate change backed by the Prime Minister and Deputy Prime Minister is launched today setting strict actions and deadlines for Whitehall.

The new Carbon Plan sets out what has to happen and by when if the Government is to live up to its green ambitions, meet tough domestic carbon targets and encourage greater action internationally. It is focused on the jobs and economic opportunities of the low carbon economy and on policies that will help insulate Britain from future energy price shocks.

The Carbon Plan is published in draft today with the Government inviting the public and organisations to give their views on the contents. A final version will be published in the Autumn and then updated annually.

In a foreword to the document, the Prime Minister, Deputy Prime Minister and Energy and Climate Change Secretary Chris Huhne write:

“This Carbon Plan sets out a vision of a changed Britain, powered by cleaner energy used more efficiently in our homes and businesses, with more secure energy supplies and more stable energy prices, and benefiting from the jobs and growth that a low carbon economy will bring.

But it does more than that. It shows exactly how we will deliver that vision and play our part in the global effort to tackle climate change and build a green economy through specific, practical action across government, month by month and department by department.’’

The draft Plan highlights three key changes that will be required across the UK economy, including:

• in the way electricity is generated, where a dramatic shift away from fossil fuels and towards low carbon alternatives is needed – including renewable energy, new nuclear power and fossil fuel power stations fitted with carbon capture and storage
• in the way homes and businesses are heated, where a step change is needed in how well homes are insulated and away from gas boilers to low carbon alternatives, such as heat pumps
• in the way people travel. This means more use of public transport and substituting the need for some journeys, but the greatest change will be in road transport – reducing emissions from petrol and diesel engines and moving towards alternative technologies such as electric vehicles.
   

Internationally, the plan sets out how the UK will work within the European Union and with other countries to promote ambitious action on climate change; support developing countries to limit emissions and adapt to climate change; and seek further progress towards a global climate change agreement.

The document details a range of deadlines and actions that a number of Government departments will have to meet. These include:

• HMT legislating to create a floor in the carbon price by April 2011
• DECC to award the contract for the first UK Carbon Capture and Storage demonstration by end of this year and identify further demonstration projects by May 2012
• The Department for Business to get the Green Investment Bank operational by September 2012 with the first annual data released on the funds in and size of investments made by the Bank by May 2013
• By June 2011, DFT to develop a nationwide strategy to promote the installation of electric vehicle infrastructure
• DECC to lead in reducing central government’s emissions by 10% in twelve months with the deadline of May 2011
• By June 2012 Defra to launch a pilot project to develop and trial methods for delivering integrated environmental advice for farmers, including on reducing greenhouse gas emissions.

The entire public sector is working together to deliver the low carbon economy and local government in particular has a vital role to play in harnessing the enthusiasm that exists at the local level for tackling climate change.

To enable local councils the opportunity to take the lead in reducing emissions Chris Huhne will be signing a Memorandum of Understanding with the Vice-Chair of the Local Government Association, Richard Kemp this week, which will set out how DECC and the Local Government Group will work together to help and encourage all councils to take firm action to:

• reduce the carbon emissions from their own estate and operations
• reduce carbon emissions from homes, businesses and transport infrastructure, creating more, appropriate renewable energy generation, using council influence and powers; and
• participate in national carbon reduction initiatives at the local level, particularly the roll out of the Green Deal, smart metering and renewable energy deployment.

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Notes to Editors

1. The Carbon Plan is available on DECC’s website
2. Quarterly updates on progress will be available on the No 10 website.
3. Since the publication of the November Business Plan, the Secretary of State for Energy and Climate Change has announced (on 7 February 2011) that the first review of the Feed in Tariffs (FITs) scheme for small scale low carbon electricity generation in advance would begin in advance of the dates shown in the Carbon Plan, and would be completed by April 2012. The review will also include fast-track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008 and a short study into the take-up of FITs for farm based Anaerobic Digestion plants. Broad terms of reference for the review are available from www.decc.gov.uk/FITs. 
 

Prominent solar displays are all the rage, but do they reflect policy or are they just for show?
President Obama has announced plans to install up to 75 photovoltaic panels on the roof of the White House in 2011, producing some 20,000 kWh of electricity annually. And he’s not alone. Several world leaders have set out plans to install PV systems on government buildings – but whether these are merely token gestures, or part of a concerted policy, is up for discussion.

Solar power in the US currently counts for less than 1% of installed capacity, but recent policy provides for significant new investment. A total of $3.1 billion in funding for the solar industry is expected as part of the economic stimulus package, alongside other financial incentives such as loan guarantees, feed-in tariffs and the extension of tax credits. The ‘payments-in-lieu-of-credits’ initiative has already supported 200MW of new PV installation. Meanwhile, in California, loan guarantees are helping to build a manufacturing facility, which could produce enough panels to increase capacity by 230MW a year.

Obama may have basked in the solar-powered limelight, but President Nasheed of the Maldives has beaten him to it, with 48 panels installed on the roof of the Mulee Aage, his official residence in Male. The 11.5kW system will produce around 15,000 kWh of electricity annually. It’s a gesture in line with the country’s pledge to be ‘zero-carbon’ by 2020.

The Maldives has yet to calculate its renewable energy potential, but with $30 million of international donor funding promised to help it achieve its goal, putting up a few panels is perhaps the least Nasheed could do…

Another tiny step – but not a token one – is India’s plan to install an 80kW PV system on Sansad Bhavan, the parliament building, which will both be used on site as back-up, and fed into the grid. Compared to the national goal of a total installed capacity of 20GW by 2020, this is perhaps insignificant. But it highlights a real commitment to renewables on India’s part. Many financial and policy incentives are already in place, including feed in tariffs, and solar-powered equipment is also being made mandatory in hospitals, schools, and government buildings, with an extra $86.3 million recently allocated to this initiative alone.

Interestingly, none of the global leaders in solar PV capacity (Germany, Spain or Japan) have taken to high-profile PV installations. When asked if they should, Bill McKibben, founder of the campaign group 350.org (which advocates reducing CO2 emissions to 350ppm), simply said: “When First Lady Michelle Obama planted an organic garden on the lawn outside the White House, organic seed sales went up 30%.” – James Belgrave

Significant investment in wave and tidal could unleash a lucrative new force

Around the shores of Britain, a massive energy generator is ceaselessly turning over, day and night. It’s inexhaustible, and it never fails. In theory, the sea – as it’s better known – could give us all the electricity we need and more… If only we could work out how to harness it. Since 2004, grants worth a total of £42 million on offer from DECC’s Marine Renewables Deployment Fund have been sitting around untapped, because no one could get any new technology to the stage where it would qualify. The Commons Select Committee on Energy and Climate Change talked of “five years lost” and called it “extremely disappointing”.

The condition that companies failed to meet was three months’ continuous, full-scale operation in the sea. It wasn’t so much that this bar was set too high as that there was little financial assistance available to help anyone to clear it – and ‘proving’ devices in the sea is notoriously difficult and costly. Then, in 2009, as part of its huge fiscal stimulus package, the last Government came looking for things that would respond to a short, sharp shot in the arm. They knew that the green power market was certain to grow, and they judged that wave and tidal were a good bet.

And so they launched the Marine Renewables Proving Fund, administered by the Carbon Trust, with £22.5 million to disburse. The aim was to get the most mature projects to the point where they could qualify for a grant from the Deployment Fund. And the plan was to reduce the risk for private investors, by putting in up to 45% of whatever it would take to get there.

It was that rare thing: the right money aimed at the right target by some very astute civil servants, and it really got things moving. Despite the recession, it brought in some £40 million, mostly British, from utilities, private investors and venture-capital funds. That’s really impressive, because this technology represents a considerable risk. Even if it works reliably (and survives everything nature throws at it), it may still prove not to be cost-competitive – and there is no way that it’s going to compete with offshore wind (let alone coal and gas), straight out of the box.

The finance went to six projects: two to harness wave energy – the Pelamis floating ‘snake’ and Aquamarine’s seabed-sitting ‘oyster’ – and four that are developing similar tidal turbines: Atlantis, Hammerfest Strøm, Marine Current Turbines and Voith (see ‘New UK fund boosts wave and tidal‘). All of them are potential winners.

The fact that this funding had to be spent within 18 months really concentrated minds. None of the money was wasted on duds or digressions. That’s not to say that everything tried has been an instant success, but the problems encountered have been genuine ones, and valuable lessons – about hardcore physics, but also about the practicalities of testing machinery at sea – have been learned.

Britain is an obvious centre for marine energy. It has good exposure to the north Atlantic and an intricate coastline with lots of tidal streams – features that could make it the natural hub of the global market. There’s the potential to generate considerable sums for investors, and create thousands of jobs.

Already, most of the leading technologies are being proved in the UK. What’s needed now is a gradual shift from grant-based support to revenue. If all goes well, the first commercial-scale farms – which will generate power, save carbon and make some sort of return – are likely to be in the water by around 2015.

The new Government may not believe in Keynesian economics, but it has pledged specifically to support the development of wave and tidal power – and the private sector has shown its readiness to respond.

Richard Boud is an Associate Director at Entec UK.

Entec UK is a Forum for the Future partner.
www.entecuk.com

04 March 2011
DECC Press Release: 2011/019

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Energy Minister Charles Hendry today gave the go-ahead for RWE npower proposals to construct a new gas power plant at Willington, South Derbyshire.

Charles Hendry, who will visit the proposed site later today, said:

“The Willington plant will play an important role in providing secure electricity supplies to millions of homes, as well as bringing jobs and investment to South Derbyshire.

“Gas plants like Willington will continue to be a central part in the country’s energy mix as we make move towards a low carbon economy.

“There is a also a major opportunity in the long-term for gas power stations like this to be fitted with abatement technology. This station will be built carbon capture ready, which means that eventually CO2 emissions from the plant could be captured and transported for storage offshore.”

If built, the combined cycle gas turbine plant would take about three years to construct, and will be located on the site of the former Willington A and B power stations which closed in the 1990s.

The plans are for a new power station comprising of up to four CCGT generating units, each around 500MW in capacity, and four open cycle gas turbine (OCGT) generating units with a combined capacity of 400MW – bringing a total capacity of up to 2400 MW. This brings the total new capacity consented by the Government since May to 5456MW.

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Notes to editors

1. Further documents on the consents can be found here https://www.og.decc.gov.uk/EIP/pages/recent.htm  
2. For further information on RWE npower’s proposals for Willington, see the RWE npower website:
   http://www.rwe.com/web/cms/en/353410/rwe-npower/about-us/our-businesses/new-power-stations/willington/

3 March 2011
Check against delivery

In autumn 2000, more rain fell on England and Wales than at any time for 230 years. 10,000 homes and businesses were flooded.

In 2003, a heatwave gripped Europe. Drought and wildfires put health services and national infrastructure under huge pressure.

Thousands died. Forests were destroyed by fire, and crops by drought. Energy and transport were hit hard.

We can’t say for sure that climate change caused these extreme weather events. But the science tells us that as our climate changes, the likelihood of these events increases.

In 2004, research suggested human action had doubled the risk of a European heatwave.

And now, for the first time, scientists have been able to say what role global warming played in a major flood.

Using new methods, researchers found that human greenhouse gas emissions may have roughly doubled the chances of the autumn 2000 floods.

That is a significant step up the ladder.

We can now clearly link extreme events to the rise in man-made greenhouse gases. And we can put a number on how much more likely they are.

Costs of climate change

We can also see just how costly they will be.

The floods in 2000 cost the UK insurance industry £1.3 billion. Since then, the cost of flood damage has tripled compared with the previous decade.

In 2009, the Association of British Insurers said – and I quote – ‘our assessment of climate change convinces us that the threat is real and is with us now’.

If there’s one thing insurers know about, it’s risk. When they say it’s time to take action, we should sit up and take notice.

Global deal

Of course, the UK is responsible for fewer than 2% of the world’s carbon emissions. But this does not let us off the hook. The consequences of climate change will not respect our borders.

Food security, water shortages, environmental refugees; the potential knock-on effects are on a global scale.

That is why we must do everything we can to secure a global solution.

We are making good progress.

The UN climate change talks at Cancun were the most important since Kyoto.

For the first time, both developed and developing countries made a political commitment to cut emissions below their present path.

We made good on the bellwether issues:

• agreeing that the average global temperature increase should be kept below 2 degrees
• strengthening the reporting of emissions reductions with a genuine peer-review process
• establishing the Green Climate Fund to get resources to developing countries
• moving forward on forests and land use

The agreements at Cancun prepared the ground for a global deal on climate change. But we must be realistic: this will take time.

And after the mid-term elections in the US, Senate ratification of any climate change treaty will be difficult.

But a deal will happen.

Why am I so confident?

Because around the world, there is too much invested in tackling the problem.

It would be crazy not to prepare for a low carbon future.

In fact, in many ways it is already here.

The future is here

In 2009, the world’s biggest energy consumer poured $34 billion into its low-carbon economy.

China now leads the world in solar photovoltaic production. Six of the biggest renewable energy companies in the world are based in China.

Last year, 1 million people sat the Chinese civil service exam. The most popular job was ‘Energy Conservation and Technology Equipment Officer’. 5,000 people applied.

China will build 24 nuclear power stations in the time it takes us to build one. By 2020, their nuclear capacity will have increased tenfold.

They will lay 16,000 kilometres of high-speed rail track in the time it takes us to go from London to Birmingham.

They have the highest installed hydro capacity and the most solar water heaters in the world. And they are forging ahead on wind power.

So China knows what’s coming.

And despite what the mid-term elections suggest, so does the US.

Last year, despite serious lobbying – and lots of money from special interests – the Californian public voted decisively to support the State’s ambitious climate change laws. The eighth-largest economy in the world is still committed to going green.

And the Northeastern States are leading the way on renewables, on emissions and on energy efficiency. They’re investing in renewable heat, trading carbon, and legislating for clean energy.

The US Navy will get half of its energy from non-fossil fuel sources by the end of this decade. They’ve already flown fighter planes powered by biofuels, and they’ve already launched their first hybrid power ship.

President Obama used his State of the Union speech to call for a reinvention of energy policy. He challenged the best minds in America to come up with clean energy ‘Apollo projects’. And he set a new goal: for 80% of America’s electricity to come from renewable sources by 2035.

Conventional wisdom has it that China and the US are not signed up to the green agenda.
But if you look at what they do, not what they say, a different picture emerges.

Policymakers around the world understand that climate change is real, is happening, and is worth defending ourselves against.

Low-carbon future

The best thing we can do to help adapt to climate change is to stop it happening in the first place. An ounce of prevention really is worth a pound of cure.

So although we must keep pushing for a global deal on climate change, we must also do everything we can at home. We can’t expect to convince other nations of the need for change if we can’t change ourselves.

That is why we have to move further and faster to a low-carbon economy.

This makes obvious environmental sense. Today, I will set out why it makes economic sense.

But first, let us understand our destination.

What does a low carbon economy look like?

Saving energy

First, it does not waste energy.

We have the oldest and least efficient housing stock in Europe. We use more energy heating our homes than Sweden, which is nearly 5 degrees colder on average.

Our homes may be our castles. But they shouldn’t cost a king’s ransom to run.

Across the country, boilers are firing up earlier than they need to. Burning more gas than they have to. Producing more emissions than they should do.

And all because our homes leak heat and waste carbon.

A quarter of the UK’s carbon emissions come from the home. Our housing stock is costing us the earth.

That’s why the Green Deal is our flagship programme. It’s a self-financing home improvement scheme to bring our houses into the 21st century.

Householders will pay nothing up front. Businesses will do that for them, getting their money back from the savings on energy bills not just from the present occupier but from the next tenant or owner as well. And the Green Deal will be targeted at trigger points – like when people move home and do lots of work anyway – to encourage uptake.

Right across the country, homeowners and tenants will get deep energy efficiency improvements without having to front up the cash.

From 2012 onwards, when the Green Deal begins in earnest, energy saving packages worth thousands will be installed in millions of homes.

And there will be a subsidy for hard to heat homes, and those in fuel poverty. No-one should fear winter – or winter energy bills. We are determined to tackle the root causes of fuel poverty, not just stick plasters on the symptoms.

And we are looking at how we can apply the Green Deal model to businesses, too – enabling them to cut carbon, and cut costs.

It is the most comprehensive energy saving plan in the world. There has never been anything quite like it.

Have no doubt: this can make a real difference. Heating is the second biggest driver of energy demand in Britain.

And British Gas research shows that householders who put in energy efficiency measures cut their gas consumption – and their bills – by 44%.

Better insulated buildings will do much of the work for us. But we must also look at renewable heat technology.

More electric air and ground-source heat pumps, drawing warmth from the outside world to heat the indoors. More biogas boilers, and more solar thermal.

Electric future

So the first principle of the low-carbon economy is that it saves energy.

The second is that it will be overwhelmingly electric.

A century ago, the streets of New York were served by a thousand electric taxis. Since then, cheap oil and technological change drove electric cars off the roads.

Now, the pendulum is swinging back.

Every month, new electric cars are coming to market. The shift from the petrol pump to the electric plug is already underway.

In the low-carbon economy, we will turn to the grid to heat our homes and charge our cars.

Meeting demand

That means a big increase in our demand for electricity. It could double by 2050.

And that demand must be met with secure, affordable low-carbon supply.

But our current energy system is not up to the job.

We will lose a fifth of our generating capacity over the next 10 years, as our ageing power plants shut down.

We cannot afford to replace them with more of the same.

By the end of this decade, the UK must cut our carbon emissions by 34% on 1990 levels.

We must generate 15% of our energy from renewables by 2020, up from 6.7% in 2009.

With long lead-in times and high capital costs, we must act now to secure a low-carbon supply.

Otherwise, we face an energy crunch.

Three pillars

Our plan for low-carbon electricity rests on three pillars.

The first pillar is renewable energy. Like onshore and offshore wind, biomass, energy from waste, solar, marine and micro hydro power.

The second is new nuclear – without public subsidy.

Half of my Department’s annual budget is spent cleaning up after past generations of nuclear and coal. Next year, it will reach two-thirds.

Never again. That is why we are passing the cost of nuclear liabilities on to developers, who will pay the full cost of waste disposal and decommissioning.

And the third pillar is clean coal and gas, delivered by carbon capture and storage. Giving us flexible and reliable energy – without the carbon consequences.

The portfolio approach

Together, these technologies will power Britain to 2050 and beyond.

So why haven’t we picked one or two?

Because the future is uncertain.

No-one knows what the most successful low carbon technology will be in thirty years time.
The only way to keep the lights on and the skies clean at the lowest possible cost is to build an energy portfolio.

It is exactly the same principle as a pension fund. When we’re planning for the future, we don’t put all our eggs in one basket.

It would be equally irresponsible for us to try and play god with the country’s energy future.

Prepared for the future

So instead, we must create a policy framework that lets us discover and then use the lowest cost options.

That means thinking about a range of scenarios.

At one end may be a world where fossil fuel prices are exceptionally high. In that scenario, we could rely more on renewables and nuclear.

At the other end of the spectrum, some argue that plentiful gas from unconventional sources will cause gas prices to tumble. Then we might need an energy mix with more clean gas, with carbon capture and storage.

Open options

Our policy is about keeping our options open between technologies, but ensuring that we are on the road to the low carbon economy. We have set a direction; we will let innovation get us there.

So we will put our money on the table.

Funding innovation and research, in DECC and in the business and transport departments.
Through the Green Investment Bank – a new institution to fund the scaling up and deployment of green technology and clean energy projects.

EMR

And through our consultation on electricity market reform, which sets out how we will encourage low carbon investment, guarantee security of supply, and provide British consumers with the most affordable electricity.

Under our proposals, all low carbon technologies will benefit from support by virtue of being low carbon. That is the compensation for what Nick Stern calls the greatest market failure of all time. A guaranteed feed-in tariff for all.

There must also be a premium payment for early stage technologies. Pioneer technologies will benefit from extra support in the prices that we pay for electricity, just as they do now through the Renewable Obligation. Those furthest away from full commercialisation will get the most.

Our consultation also proposes a capacity payment, to make sure we can meet peaks in demand – like the infamous ad break in Coronation Street, when everyone gets up to put the kettle on. This will support all four ways of keeping the lights on: Water pumped up hills off peak and released on peak, interconnection with European partners which have different peaks, demand management from companies arranging short-term switch-offs of freezers or fridges, and cheap gas and coal plant – with carbon capture and storage.

We will also send out a clear signal with an emissions performance standard, to keep our power plants clean.

And the Treasury is consulting on a carbon price floor, to underpin our signal to the marketplace – and to encourage low-carbon use of existing plants.

Cost horizons

Getting those signals right will be critical.

It is difficult to overstate the scale of the investment challenge. Ofgem estimates we need £200 billion of new investment over the next decade to secure our supply as our ageing nuclear and coal power plants shut down.

We need to make sure as much of that investment is low-carbon as possible. It will be a historic missed chance if we lock in a new generation of high carbon electricity plant.
If we get the market framework right and give energy companies certainty, they will provide that low-carbon investment. But they are not the Salvation army. They will need to convince big investors – like pension funds – that the UK energy market IS not just stable, but also offers a good return.

We must be clear about this: there will be a cost to the consumer.

But it will still be cheaper than the alternatives.

And in the long term, the fundamentals of the low carbon economy are not going to be expensive.

Nick Stern estimated that the overall costs of avoiding dangerous climate change at no more than 2 per cent of GDP by 2050. So if our economy doubles in forty years, that means a 98 per cent increase instead of a 100 per cent increase. It would barely be noticeable.

Even that calculation depends on other factors.

If we relied on oil and gas, and their prices were around $80 a barrel and its equivalent for gas, then consumers would pay more under our policies – about an extra 1 per cent on their bills by 2020.

But the oil price reached $100 a barrel in January, which just happens to be the point at which our economists calculate the British consumer breaks even. And the oil price, as we see, could well be higher.

In the medium term, the US Department of Energy forecasts $108 a barrel by 2020.
If oil prices continue on this trend, and gas prices rise to meet them, then our consumers will be winning hands down.

Paying less through low carbon policies than they would pay for fossil fuel policies.

Green economy

There’s another economic advantage, one that makes a powerful case for the low-carbon revolution: insulation from oil and gas price shocks.

I asked economists at DECC to look at how a 1970s style oil price shock would play out today. They found that if the oil price doubled, as from $80 last year to $160 this year, it could lead to a cumulative loss of GDP of around £45 billion over 2 years.

This is not just far-off speculation: it is a threat here and now. And the faster we move to a low carbon economy, the more secure and stable our economy will be.

Opportunities too

This transition to the low carbon economy does not just protect against the threats. It opens up a world of opportunity.

The global low-carbon market is worth more than £3 trillion. It is projected to reach £4 trillion by 2015. The UK share of that market is currently worth more than £112 billion. It could be much larger.

At home and abroad, the opportunities are huge. For jobs, exports, and growth, the future is green.

We are already feeling the benefits.

In the Humber, where Siemens have taken the first steps towards building wind turbines on British shores, with 700 jobs.

And nationwide. Last year, British Gas announced its plan to ‘go early’ on the Green Deal, investing £30 million and creating 3,700 new jobs.

As the Green Deal kicks in, it will bring a significant economic boost, driving growth in manufacturing and supply chains across the country.

The number of people employed in insulation alone could soar; from 27,000 now, to 100,000 by 2015 – eventually rising to a peak of 250,000.

Recovery from a deep recession is not a respooling of the same old movie. The old industries do not just bounce back. It’s about new industries leading the way – just as it was in the 1930s, when manufacturing of cars and electrical goods helped us fight our way out of recession.

Britain can lead the way. Our scientific, research and engineering strengths will stand us in good stead.

Look at our record on Carbon Capture and Storage, where British scientists top the tables when it comes to research.

We can turn that laboratory lead into an economic lead.

The International Energy Agency predicts the world will need 3,400 new coal and gas plants by 2050 if we are to keep global warming below 2 degrees.

That’s why we must lead the way in demonstrating that CCS works on a commercial scale. It will be a major new export opportunity

Low-carbon leaders

And green growth is why we are pressing for greater EU ambition on emissions.

The carbon price set out by the EU Emissions Trading Scheme is not high enough to drive the change we need. It must be higher.

We want to see a much stronger emissions target. Instead of a 20 per cent cut in emissions by 2020, we should aim for a 30 per cent cut.

Two years ago, we had already made it to 17 per cent. Going to 30 per cent will add just 11 billion euros to the costs that were originally estimated of going to 20 per cent. In an economy the size of Europe’s, that’s small change.

This is not to send some global signal. It is not negotiating by putting a new concession on the table. It is in our own economic interest.

The faster we move, the bigger and better our low carbon industries will be, and the greater the share of that expanding world market. Clear green signals will spark more green investment.

A recent report from the Potsdam Institute for Climate Impact Research found that more demanding greenhouse gas targets could increase Europe’s GDP by more than €600 billion, creating 6 million jobs. Why? Because there is spare capacity and unemployed people. Green growth will fuel the recovery.

Growth is going ex carbon.

Conclusion

We must be realistic: rebuilding our energy infrastructure and rebalancing our economy will take time.

Because the capital investments are so huge, and the replacement cycle so long, change will sometimes seem glacial.

But it will come. And in the long term, getting off the oil hook will make our economy more independent, more secure and more stable.

Because the cost of investing in low-carbon energy and security of supply pales in comparison to the costs of dangerous climate change and energy dependency. And there are real economic opportunities up for grabs.

Already, we are making progress.

Carbon emissions are down. The international negotiations are back on track. The Green Deal is on the way. We are rebuilding our electricity market. Green growth is here to stay.
The transition to the low-carbon economy is underway.

It is up to us to see it through.

3 March 2011
DECC press notice: 2011/017
 

How would you meet our energy demands and reduce carbon emissions by 2050? 

• Build 50 new nuclear power stations?
• Build 20,000 onshore wind turbines?
• Reduce average home temperatures by 1.5 degrees celsius through smarter heating?
• Convert all cars to electric power?
• Put external wall insulation on every home?

A new online simulation going live today will give the public the chance to take the big decisions about the nation’s energy future.

Whether you want to build more nuclear power stations, move everyone to electric cars, or put solar panels on every roof, the choice is yours as long as you can hit the 2050 target to reduce carbon emissions by 80 per cent while keeping the lights on.

Launched today in London by the Department of Energy and Climate Change, My2050 is a user-friendly web application designed to help the public have a go at making the choices we face when it comes to moving to a secure, low carbon economy, and to let DECC know what they want 2050 to look like.

Energy and Climate Change Secretary Chris Huhne said:

“There’s no silver bullet solution to the UK’s energy future. This project is all about getting to grips with the hard choices and trade-offs which need to be made, choices which will affect our homes, communities and the way we travel. We can’t afford to leave it till tomorrow – so get involved today.”

In addition to launching the My2050 simulation, the Government has also updated its more technical counterpart, the 2050 Calculator, which gives a more detailed look at the UK’s energy and emissions system based on the physical and technical limits of different technologies across the supply and demand side. This launch of the updated 2050 Calculator follows extensive discussion with engineers, environmental groups, energy producers and many others to build a more accurate picture of the UK’s future energy potential.

To promote this launch, DECC is hosting a 2050 Pathways Debate on the DECC blog from 3 March, including contributions from Mark Lynas, National Grid, Energy Technologies Institute, and Friends of the Earth. This will be thrown open to public participation on Monday 7 March for a discussion aimed at getting to the heart of the difficult energy issues the UK will have to deal with over the coming years.

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Notes for Editors:

1. You can access My2050 at www.decc.gov.uk/my2050.

2. You can find the 2050 Calculator here http://2050-calculator-tool.decc.gov.uk/ and the new version will go live at 0001 Thursday 3 March.

3. You can find the updated 2050 Pathways from 0930 on Thursday 3 March at http://decc.gov.uk/2050 – the 17 new illustrative pathways set out a range of scenarios, including:

• a spread effort pathway (updated Pathway Alpha from July 2010)
• maximising demand reduction across all sectors
• maximising demand reduction for individuals only
• maximising demand reduction for business only
• electrify all possible sectors
• electrify all sectors except heating
• electrify all sectors except transport
• bioenergy used for solid fuel
• bioenergy used for liquid fuel
• bioenergy used for gaseous fuel
• strong emphasis on renewable generation
• strong emphasis on offshore renewable generation
• strong emphasis on nuclear generation
• strong emphasis on CCS generation
• strong emphasis on gas generation
• strong emphasis on microgeneration
• hedging strategy that reaches a 90% target

4. BIS (through Sciencewise-ERC) and DECC have co-funded development of My2050. Sciencewise-ERC is the UK’s national centre for public dialogue in policy making involving science and technology issues.

5. Delib is a digital democracy agency connecting people to better governance.

3 March 2011
DECC press notice: 2011/018

Energy and Climate Change Secretary Chris Huhne will set out his vision for a low carbon, secure economy in a keynote speech to CentreForum in London at 3pm today.

In ‘A blueprint for our energy future’, he will say

• why a $100+ oil price transforms the economics of low carbon and that staying addicted to fossil fuels is now the costly, high-risk option
• how climate change is already costing the UK economy, and why he believes a global climate deal WILL happen
• why the coalition puts insulating Britain’s homes so high on its agenda and how the Green Deal will end energy waste for good
• why we have to keep ALL low carbon electricity options open if we’re to meet up to twice today’s demand in 2050, and
• why we must learn from the past and come out of recession with new advanced green industries for growth and job creation.

Read Chris Huhne’s speech

02 March 2011
QEII Conference Centre, London

 

Check against delivery

Introduction

I am delighted to be here to address you today and would like to thank Maria [McCaffery] for the invitation to speak to you. Many of you in this room will already be aware that I have long been a champion for the potential of wave and tidal energy.

It seems to me quite bonkers that in this island nation of ours – surrounded by seas and ocean, with our great marine heritage and genius for advance engineering coupled with the threat of climate change and dwindling traditional domestic energy resources – we haven’t done more to exploit this abundant resource. This has to change.

This morning I hosted a breakfast meeting focused on how to secure the finance required to push this sector forward (whether from the public or private sector). It was clear from the discussions that people from across the sector – technology developers, utilities, industrial organisations or financiers –there is a real will to make marine energy work for Britain and to see Britain emerge as the real global leader in this exciting new industry.

Government Commitment To Marine Energy

I want to assure you that the Coalition is absolutely committed to harnessing the complete range of benefits which a successful marine renewables industry can bring to the UK – the development of the sector is explicitly written into the fabric of the Coalition Agreement.

In May last year the Prime Minister made an emphatic and personal commitment: “we will be the Greenest Government ever”. That is the central mission and shared priority of the coalition. There is no doubt: to meet the two degree challenge, we must decarbonise our economy. We must meet future energy demand in a sustainable way. And we must tackle the largest deficit and greatest debt ever amassed by one administration outside of wartime. 

It is a challenging agenda and a difficult balance to strike. However, I am convinced that the marine energy sector has a valuable role to play on both sides of that equation.

Marine energy can certainly contribute to our renewable energy generation mix and help us meet our longer term carbon saving targets. But the benefits go beyond that to providing us with clean electricity which enhances our energy security and creating a new export industry, that has the potential to be a world leader.

Ambition and Vision

The challenge – and rewards – for us to grasp go far beyond simply generating more renewable energy or establishing a new energy technology. The Coalition government brings a new philosophy to marine energy. We can’t just look at it through the narrow prism of our 2020 renewables targets. We need to look at the whole opportunity. To work together to build a global industry in the UK which will create new jobs and growing economic opportunities both at home and globally.

Recent work by the International Energy Agency suggests that, even on a medium level scenario, around 60 gigawatts of marine energy could be deployed by 2050. Alongside our own ambitions for domestic deployment, this means there is an also attractive export prospect for the UK industry and an opportunity which is worth striving for.

The UK is well positioned to capture this international market. We have around 50% of the available European marine energy resource which means that we are already seen as a focus for early deployment. We have a strong R&D base, experience in a range of relevant industries (such  as oil and gas, offshore wind and marine operations) and a strong share of device developers (around a quarter of all developers – including most of the world leaders).

Work is already being done to support marine energy – recently the Technology Strategy Board announced £2.5 million support to some of the sector’s leading companies and the Energy Technologies Institute issued a request for proposals to model tidal energy resources around the UK. I was also pleased that, this morning, the ETI announced that tidal developers and marine engineering companies could soon benefit from its next marine energy project, which it is expected to formally launch shortly.

I was pleased to see that a delegation from the Chilean government are attending the conference to learn about the UK’s marine energy advances and how they can best exploit their own marine resources. My officials spent some of yesterday talking to them about this. This interest from Chile, from China, South Korea and others shows that the news about the UK’s expertise is spreading across the globe.

But we will only achieve our aim if we work together towards common objectives. And I want to see Whitehall approaching this challenge differently; working in a more coordinated manner. No more silo decision making!

That’s why I launched the UK Marine Energy Programme at the beginning of the year and why I want to create dynamic new clusters in the sector through the establishment of a network of Marine Energy Parks around the UK.

Marine Energy Parks

It is clear that we need to bring greater focus to our marine efforts. I recently attended a meeting at No10, chaired by the Chancellor, with Eric Schmidt of Google. What really came out of that is a sense that we can learn a lot from the growth of other sectors that have their basis in innovation, such as IT. The clustering of companies in the Silicon Valley in the US was a key driver of innovation and growth because it fostered information sharing and competition which ultimately led to a reduction in investment risk.

I think that the marine sector could benefit from a similar model and I think Marine Energy Parks which draw together R&D, manufacturing and other sector expertise could achieve that.

There are a number of locations around the UK where this is already beginning to happen and the building blocks for future Marine Energy Parks are beginning to form – for example activity in and around the Pentland Firth in Scotland, off the coast of Anglesey and in the South West of England. I want to build on that existing activity in creating the Parks. 

As I have made clear elsewhere I personally see the South West leading the way in developing marine energy. It clearly has the potential to be the first Marine Energy Park given its unique mix of renewable energy resource and home-grown academic, technical and industrial expertise in the marine energy sector. But I want the South West to host the first of several MEPs around our coast, each bringing different advantages and focus to bear on this multifaceted sector. Marine energy is something that should be rolled out right across the British Isles.

At the first meeting of the UK Marine Energy Programme Board held in Exeter in January I set a challenge to stakeholders both in the South West, and around the country, to come forward with ideas on how we can collectively create a Marine Energy Park that will be successful in attracting additional investment and help boost the UK’s offer on Marine Energy. I look forward to working with those stakeholders on their ideas.

I want the Parks to have a focus on all the elements which will help build a vibrant UK marine energy sector.  Ultimately this includes manufacturing and fabrication but this will need to draw from and be supported by other elements. Innovation. R&D expertise. Supply chain development. Service and support industries…

Of course, the detailed design of the Parks will need to be driven by those on the ground who will build and operate them. They may be a single facility or operate with spokes feeding into a central hub which forms the physical focus for the Park.

The Technology Strategy Board are currently working up proposals on the new Technology Innovation Centres – these new bodies may have a role to play as one of the “spokes” of a Park. So could our marine energy testing centres like NaREC, EMEC or Wave Hub. New regional bodies such as the Local Enterprise Partnerships are also likely to be key players in building up a critical mass of local appetite and enthusiasm…

However, part of my challenge to you is to put the flesh on these bones and help us define just what a successful Marine Energy Park might look like. It has to be a collaborative partnership.

Measures to underpin Marine Energy Parks

I recognise that there is a lot to do to pave the way for Marine Energy Parks, which brings me back to the Marine Energy Programme.

For too long marine energy has languished as a “Cinderella industry” – never quite making it to the ball. The Coalition is determined to drive development forward and put in place the right policies which will be effective in making our vision a reality. The UK Marine Energy Programme will work with you to identify and shape those policies – and the Marine Energy Programme Board will provide the crucial link between Ministers and the sector.

The messages I got from the first Programme Board were clear – firstly that we need to focus on getting the right levels of revenue for the sector to attract investment and secondly that investment in innovation to reduce risk is absolutely necessary.

We are already consulting on whether to offer generators a choice of ROCs or a new Feed-in-Tariff mechanism between introduction of the Electricity Markets Review legislation in 2013 or 14 and 2017. This will give marine generators access to this new form of FITs from the start, providing added certainty and a more stable revenue stream.

It will take a little while before the new FITs are in place and the marine sector needs confidence that appropriate support will be in place before that to ensure that longer-term investments are made. Clearly the longer-term future of the sector is tied up with the new FITs. But we will address this immediate issue through the review of the current Renewables Obligation.

We have already significantly speeded-up the RO review which is looking at ROC levels out to 2017. This means investors will have certainty over support a full year earlier than previously planned – with a Government response this Autumn and legislation in place from April 2012.

The evidence obtained from across the marine industry will feed into the decisions made on changes to the ROC levels and will help us to make informed decisions about the rates of support.

The Programme Board provided some fascinating insight into how we can get this right, with proposals to link a higher ROC banding level with a capacity limit. This has the twin benefits of providing a more generous incentive for investment within a finite cost envelope and encouraging developers to get their devices into the water as quickly as possible, and is something we will consider.

This brings me to technology funding and innovation.

The history of the Marine Renewables Deployment Fund is well known. It has failed to spend its allocation of the Environmental Transformation Fund since it was created in 2005 and will close at the end of this Financial Year, with no funding available beyond this.

Those budgets were allocated for this current Spending Review period and the Department has yet to make any innovation budget allocations for the coming financial periods.

I am determined to put in place a more effective way of supporting the development of marine energy which will lead to the right levels of investment and which will effectively push forward the sector. Of course, in a constrained fiscal environment the needs of the marine sector will need to be considered alongside the needs of other technologies in a more holistic approach. This will allow us to ensure we provide support where it is most needed and can have the most effect.

Before deciding what support we will provide to marine and to other important technologies I want to be sure we understand what the innovation needs truly are and how the government and the private sector can best act together to address them.

With the Minister of State for Universities and Science I co-chair the Low Carbon Innovation Group that brings together the key government bodies supporting low carbon innovation so we can ensure they are acting in concert. That group has been developing Technology Innovation Needs Assessments – “TINAs” – pooling their knowledge and developing a shared analysis of the innovation needs of a range of key low carbon technology families – such as Off-shore wind, Marine energy and Bio-energy. This will give us an indication of where the market failures are. I am hoping that the Marine Energy Programme working group on finance will be able to participate in the stakeholder workshop on the marine TINA.

Over the next few months my officials will be inviting a range of stakeholders to contribute to that analysis so we can ensure it’s a strong basis for decisions. My colleagues and I will weigh that evidence when deciding what support we can provide to which technologies. Decisions will be made in light of the outcome of that work. I expect to be saying more in a few months time.

Marine Energy Programme Board and Future Action

One of the things which struck me when I hosted the first Marine Energy Programme Board meeting was the genuine enthusiasm and commitment of all those who attended to make the Marine Energy Programme a success and Marine Energy Parks a reality.

I’m delighted that many stakeholders have already volunteered to be part of the Working Groups that will drive forward the work of the Programme. The groups will initially look at how we can access the support which this sector needs to move toward commercial deployment; making sure that planning and consenting work effectively for this sector; and how we can share information through a Marine Intelligence Network.

We will be keeping the size of those groups small and focused on creating solid proposals. I would encourage all of you to talk with each other – whether technology developers, utilities, industrial organisations, financiers – to ensure that those representing your sectors on the Groups and on the Board come with a consensus view of what needs to be done and how that can be achieved practically. This is a process where we will only get results back to the extent that we are willing to contribute!

I am looking forward to hearing back from those groups in a few months at the next Programme Board.

Closing Remarks

I am genuinely fired up about the potential which marine energy has to offer the UK in both carbon saving and economic terms and I am looking forward to working with you to realise that potential. The Coalition is committed to investing real money, more time, more energy and genuine political capital in making this happen.

I hope that the sector will put its shoulder to the wheel with us put in place the foundations for success through the UK Marine Energy Programme so together we can make the Marine Energy Parks vision a reality.

The time has come to get marine out of the shadows and into the sea.