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2 May 2019

UK promises zero emissions by 2050, Australians may follow

Here at Rethink Energy we do not see our mission as protecting the planet from climate change. Our mission is instead to promote and forecast renewable energy. But in order to correctly assess the conditions around renewable energy, we do need to witness the political climate that renewable energy sits in. It is for this reason we have an editorial policy of writing at least once piece each week about politics, usually with a sub head of “A week is a long time in renewables.”

This week there was a political instance every day, mostly covering the UK and Australia, but with reverberations to the USA, China and Europe. The key political issue in the UK was that a group calling itself Extinction Rebellion called for the UK to declare a climate emergency, and despite protests and disruption it caused across London, it was largely ignored until baby-faced climate activist Sweden’s 16 year old precocious Greta Thunberg, who famously led a series of school strikes in her native country, visited the UK. Thunberg vocally supported Extinction Rebellion and managed to get herself into government meetings and interviewed on the media, on their behalf.

This has led to a scrabble to get the approval ratings associated with her high profile, and the rising tide of climate change activism associated with each of the political parties. The UK actually has a Green party, but Labour, one of the two main UK parties, through its leader Jeremy Corbyn, said publicly this week it would declare a climate emergency if won its way into power and will lead a government debate today, to achieve this even though it is not currently in power. That debate turned out to be irresistible and since every parted wanted a piece of the action, they all voted for it, with the result being that the UK government has promised to achieve net-zero emissions before 2050 and a zero waste economy.

The spin-doctors of each party just needed to get some of the approval rating each. Governments like to take the credit for everything that goes right, and avoid the blame for all that goes wrong, and the ruling conservative party was quick to cover the damage, professing large scale agreement with Thunberg, with some minor “timescale” variations, to deflect blame from its current strategy.

The UK Government has a cross party committee that gives it advice on climate change made up of mostly “clear minded” academics, on the Climate Change Committee who are funded by research associations, none of whom have oil or coal money floating about, but we suspect they all moderate their recommendations based on what is economically reasonable, rather than what is technically feasible. For instance under no public pressure their first recommendation in 2008 was to reduce emissions by 80% by 2050. Today that would be a miss under the terms of the Paris Climate agreement.

As a result the Committee’s own interim target of eliminating 34% of emissions by 2020, is likely to be missed. However it put out a statement saying that it feels that 100% by 2050 is now possible. Extinction Rebellion was calling for a target of 2025. Interestingly all conferences we have attended with energy companies, both renewable and fossil fuel, suggest that with the right legislation – specifically to affect the free resale and use of Distributed Energy (home solar) and the early introduction of gas free heat being installed in all new build homes, and an earlier policy on all cars being electric, that this can be achieved by around 2038. You see political will is a big issue here.

The Committee’s targets have however got progressively tougher, and it is slowly coming, through social pressure, into line with the Paris accord. In other words it is accelerating aims as it goes along. Although this committee is not political, in that it does not report to any one party, the government of the day can say, “Our tame experts tell us to do this and we have done it,” and essentially wash their hands of any need for further action. It is the British way.

The type of recommendation has all been to apply pressure on Ofgem and other government departments, sorting out the need for electricity reform, which has been responsible for things like the Renewables Obligation, which has progressively applied subsidies and pressure to electricity generators to use more and more renewable energy each year. It is sort of working, and the latest leap into the public consciousness is likely to accelerate that and bring more benefits to renewables. Its remit does not extend to bans on fracking or a phased shift to Green Hydrogen in our gas mains, but by ensuring that renewables are embraced, as least behind the meter, it invites investors to come on board.

But despite this, Feed-In Tariffs (whereby individual households can sell spare solar panel electricity to their local supplier) have just ended in the UK, with the government saying it plans to do something about this, but only in a year or so. We can assume that policy will emerge to support the continued subsidy of renewable energy, but when and with what government in charge?

If Labour gets elected we can assume that fracking will be banned, that coal will be phased out, that natural gas will be phased out faster – 2050 was its original timeline – and that it will spend money on fixing the home and industrial heating problems which seem tied to natural gas. That could either spawn an entirely new renewable industry – green hydrogen processing, or heat exchanger replacements for home gas boilers.

One of the concerns is the current government’s policy which includes burning gas for some time to come, but taking the carbon out of it through an as yet undeveloped Carbon Capture technology. In March the UK government through the Energy and Clean Growth Minister Claire Perry pledged £557 million ($733 million) to subsidize Wind contracts and train staff, and to pursue an energy strategy of 30% of electricity from offshore wind, 30% from nuclear and 30% from gas power stations fitted with this mysterious carbon capture technology.

The obvious holes in this strategy is nuclear is clearly going to miss its 30% target, because 2 nuclear projects have been cancelled due to their contractors being unable make money on them, and existing nuclear plants may also financially struggle, and it is hard to bring forward carbon capture technology by a decade if it hasn’t been invented (or at least agreed upon) yet. And where is solar, the most promising technology, lowering in cost the most rapidly, in this equation? Our guess is that a revised Conservative strategy will involve elevating solar to cover the shortfall of nuclear and the dumping of the biomass strategy at some point which brought in the last few percentage points of its strategy.

Meanwhile the two major parties, who have both managed to fail to get the UK out of the European Union after two years of negotiations, much to the disgust of the electorate, are seen as bankrupt of ideas, and unable to compromise. But somehow they have managed to edge the Green party out of the media during a week when the Green agenda was front and center.

But the Conservatives have at least held the line on their policy around fracking, which is to say it is fine, as long as earth tremors of a certain intensity mean the operator has to stop. This week that has led to the “fracking Czar” Natascha Engel resigning, saying fracking “is being throttled by rules preventing mini earthquakes,” using rhetoric about the death of a new and exciting industry. The only people excited about that industry in the UK are those in love with fossil fuel dividends, and even they are laying low in a week full of “climate emergency” discussions. Instead a cross party group of MPs have called for an immediate moratorium on fracking.

Those who defend fracking will be appalled to know that some people think it poisons water supplies, that vast amounts of fugitive methane is lost in the process, and the resulting fossil fuel is still only about 50% better than coal in terms of CO2 production per GW, than coal. The truth is that throughout the European Union, if fracking takes hold, it would put back the case for renewables by ten years, and for climate change activists, that is ten years too late.

Meanwhile Ed Miliband, brother of David who once led the UK Labour party,

took the Extinction Rebellion moment to get himself back in the news. This is a man that many Labour voters could see as the next Prime Minister if only Jeremy Corbyn would vacate the seat at the top of the party.

He also urged the current government to put climate change on a war footing, and wants the UK to adopt the moral high ground and a leadership vision in renewables, so that it can bring both the US and China to the table. He shared a platform with the head of the Green party, calling for a change in the way

that Parliament tackles the issue of climate change with an ambitious plan and rigorous reform – but made the mistake that so many climate reformers make of putting climate policy and economic and social injustice into the same presentation. In both China, the US, (as well as the UK), it is the tie in with social injustices that marginalizes climate policy. It’s not a position the US Republicans could even adopt, as they want both rich and poor people in the US. Fix the climate first, and getting renewables flying, then worry about social justice – they are not inextricably linked, as many believe they should be.

We shall see how far everyone is prepared to go when Corbyn creates a debate in the House this week? But the feeling is running so high that there is a chance of more financial and policy concessions which promote renewables. It is also rumored that the all party advisory Committee will once again bring zero emissions timeline back to 2040, from 2050. What a surprise.

Meanwhile the Australian election on mid-May will give political leaders around the world a sense of whether voters really give a damn about climate change, as Australia has just had its worst year of extreme weather – floods, bushfires, cyclones and a severe drought as the summer was the nation’s hottest on record.

The local Labor party has committed to massive carbon emissions cuts shooting for 50% renewables by 2030, ahead even of the UK aims and one step includes 50% of all new cars being Electric Vehicles by that same date. Of course once again social justice is aligned with climate change, so if one wins, it takes the other with it.  And in the last day or so it has said it will offer A$1 billion to put solar panels on the roofs of 4,000 Australian schools, with battery storage.

The current Coalition government has tried hard to avoid all mentions of climate policy to date and has now come back with a reactive policy based on fewer cuts and no specific renewable targets, but some cash to pay polluters to cut back pollution, a debased strategy that has never worked. Polling over voters ahead of the election says that 42% prefer the Labor policy against 25% with the coalition – but given the 50,000 coal workers in Australia and a further 120,000 in the related workforce, killing off that industry may still be left off the agenda. At present Australia sells most of its coal to places like China, rather than using it at home.

The upshot of all that political hot air this week is that Renewables is likely to be a better investment than it already is, and it is already rather hot. As new policies come into play in either of those locations, other nations will sit up and take notice, and money will continue to chase renewable projects, but very likely it will chase harder in the coming two to three years than it has in the past.