A key feature of any nation’s energy policy is to play the long game, with long term planning, based on sound scientific advice. However this has been precisely what has been lacking in the UK, which has gone through six energy ministers in a decade. When Amber Rudd took over as energy minster she likely inherited a well thumbed copy of a book on her desk from her predecessors labelled “the half-arsed approach to energy policy”.
And Drax, the UK’s largest power station is a prime example of everything that is wrong with the UK’s energy policy. The plant was built in the 1970’s as part of a centrally planned energy policy centred on large coal fired stations using UK produced coal. However, this policy ignored the issue of climate change, which even in the 70’s was something that scientists were expressing concerns about.
Consequently one could argue Drax was obsolete before it even generated its first ever megawatt. The so-called “dash for gas” and a decision to move away from coal mining (not for climate change reasons, but entirely ideological reasons as the then Tory government sought to destroy the powerful mining unions) left the plant out of sync with the times.
As concerns related to climate change grew, Drax and its vast cooling towers became a totem for the urgent need for action. The plant would therefore find itself repeatedly besieged by climate protestors and environmental action camps. Meanwhile the government came under increasing pressure to legislate against plants like Drax.
Eventually, seeing the writing on the wall the owners of the now privatised Drax decided to do something. They announced that they planned to turn over at least half the plant to be co-fired on biomass. Most observers, myself included, chuckled at this, assuming it to be a ploy merely intended to get the Greenpeace brigade off their backs. However, the company is now following through on this and conversion of 3 of Drax’s 6 generators to biomass is more or less complete.
When the previous new-labour government published its strategy to promote greater use of renewables, including biomass, they probably envisaged a few small plants operating in the tens of megawatts. They certainly did not imagine someone trying to generate electricity using biomass on the scale of several GW’s! This conversion of Drax has drastically altered the energy landscape of the UK. So large is its demand for biomass fuel, the UK now imports large quantities of wood and wood wastes from the US. 82% of the UK’s imports and 60% of all of America’s wood fuel exports now goes to powering Drax.
Given this dependence on imports some have questioned how “carbon neutral” Drax can claim to be. I would note that while yes, importing wood from such a distance will almost certainly produce some substantial carbon emissions, however we have to compare that to the alternatives, such as importing coal from the US or Australia or Shale gas from the US. Its quite probable that the UK could source substantially more biomass from within the country, possibly enough to meet much of the plant’s requirements. But this would require a very different energy policy to what we’ve got.
The problem with the Thatcher era policy of privatisation is that it placed the decisions as to what to do in the hands of private industry. This produced two problems. Firstly private industry has no need to invest in surplus. Hence why the UK’s spare capacity in power generating capacity is down to just 1.2% this winter. Secondly, inevitably a free-market based solution will produce some strange results. Initially at the start of privatisation there was a dash for gas. And plants like Drax stopped burning British coal and instead using imported stuff. There was a strong push for wind energy on the renewables front (as wind has a more consistent cost and is a useful hedge against high gas prices), while both labour and Tories little sweetheart nuclear, was left to wither and die. Energy prices have also soared.
Of course a more centrally planned energy policy, such as that operated by France, does offer greater government control. Although this comes at the expense that the state must also put up all the cash. Such a policy can also become somewhat bloated and unwieldy over time. Many in France now acknowledge that the country is overly dependant on nuclear and that more renewables should be added. But few politicians will say that in public for fear of the reaction from the union’s representing powerplant workers.
So in short its hardly fair to blame the management of Drax for pursuing the course that they have, as this was the inevitable consequences of a privatised energy policy. Free markets are always going to produce strange results when left to their own devices, just look at the build up to the recent financial crisis.
However the government’s reaction has been to essentially punish Drax (and the wind and solar industry) for their successes by withdrawing all subsidies to renewables and throwing money at Fracking and nuclear energy (to the tune of 68% of the cost per MWh of electricity generated). They’ve also rather alarmingly cut back on energy efficiency programs. All as part of an effort to prod and poke the energy industry to get the result they want.
Of course, the likely consequences of this are that while a couple of pet projects of the government (Hinkley C for example) will probably go ahead, this has had a chilling effect on both renewables and the wider energy industry. The normally Tory friendly CBI has now warned that this reneging of past promises will likely lead to a slow down in future investment in the energy industry (if not a full stop). After all, is it really sensible to halt construction of renewables at a time when they are the only source of energy capacity that is growing in the country? The UK has now fallen into the bottom ten of countries in which to invest in green energy, which is at odds with the chancellor’s “open for business” mantra.
When confronted by this, supporters of the government will mumble something about how they want a balanced energy mix, a bit of this, a bit of that. However that, as noted, isn’t possible with a free market energy policy. If the government truly wants what it claims, then they need to adopt a more centrally planned and financed approach. This would of course mean abandoning much of the Chancellors tight spending limits. And for what should be obvious ideologically reasons that is extremely unlikely to happen….except of course for nuclear, where a blank check is essentially being written.
There are solutions, Germany and some of the Scandinavian and Baltic nations have shown how a hybrid of well informed energy policy from the state can be coupled with private industry to produce a workable, low carbon energy policy. However, the key inherent feature in these nation’s energy policies has been long term planning that has carried over between changes in government.
For example, the conservative government in Germany has not undone or reneged on the commitments made by the previous Green-left administration (they’ve obviously tweaked the policy here and there, but its not been fundamentally altered). Why? Because Merkel knows that this would be the political equivalent of vandalism. She’d be as well off going around Berlin with a baseball bat smashing street lights, as it would send investors and industry scrambling for the hills.
By contrast in the space of just a few months the Tories have undone nearly three decades worth of UK energy policy, purely for idealogical reasons, most of which are driven by short term concerns and ill-informed NIMBYism. I mean the changes in vehicle excise duty brought in by Osborne means that a Porsche can be taxed for the same amount as a Prius! And this is despite a UK supreme court ruling ordering the government to do something about vehicle tailpipe emissions. And if cutting wind energy subsidies wasn’t bad enough, there’s talk of a carbon tax on green energy…..which is carbon neutral! Its no wonder Al Gore is getting worried.
Inevitably, the UK now has an energy policy that is doomed to failure. It is now likely that the UK will fudge the issue at the climate talks in Paris, and will fight tooth and nail to avoid getting tied into any binding carbon cuts. Investors have taken fright and while I suspect there will be some investment (in as noted a few pet projects), its going to be nothing close to the expected demand of £110 billion in new infrastructure needed by 2020 just to keep the lights on. And of course, the problem is that if and when the inevitable happens (i.e. rolling black outs), there are no quick fixes, no easy answers.
I’ve heard some socialist compare the Tories to leeches or cockroaches. This is grossly unfair, cockroaches have strong survival instincts. They also have a hive mind and get smarter the more of them there are in the group. Tories seem to have a hive stupidity, they get dumber the more of them there are in a group!