The Energy Bill - The Biggest Energy Reform in 20 Years

On Tuesday the government announced the draft energy bill detailing the biggest energy reforms the UK’s seen in the last 20 years. The bill was immediately greeted with concern over the possibility of higher energy bills and a stifling of the renewable energy market, the latter due to the complexity of the bill possibly favouring large corporations.  I therefore will be taking a brief overview of the bill and will try to make sense of what has been drafted. As engineer’s the direction the country takes will have an effect on the opportunities available to us, the success of the energy bill could mean a boom for UK engineering, though if it fails to boost the industry it could have quite the opposite effect.

Electricity Market Reform (EMR)

To start with the leading star of the bill, EMR, which is lauded as a bill to attract £110b of investment to replace our ageing electricity generation capability, upgrade the national grid, and ensure that we can cope with rising electricity demands. Now straight away the idea that by 2020 we will have developed and implemented a smart grid capable of serving our energy needs and able to cope with the transition to low-carbon energy generation is, in my opinion, optimistic to say the least.  What’s worrying is that the bill claims to be a one stop fix for every ill that the energy industry faces.

If we break down the EMR it details six provisions:

·         Contracts for Difference (CfD).

The showpiece of the EMR touted as instruments to provide long-term stable and predictable incentives for investment in low carbon generation. These contracts give energy companies fixed guaranteed prices, which should be above the standard, for each unit of low-carbon energy generated; this guaranteed price will be known as the strike price. Now the aim of the CfD is to negate the risks that may otherwise deter investors; low-carbon energy generation is commercially expensive and the payback without incentives would be lengthy.

OK to try and explain thinks lets think if someone asks a farmer to grow some organic veg, the farmer may so no as the cost to set this up are high. But then if someone was to say to this farmer, I will pay you ten times the going rate of normal veg for your organic veg. This would give the farmer the assurance that he will get his money back and then make healthy profit, CfDs work in the same manner.

Now the CfD will apply to all methods of low-carbon energy generation; not just renewables but nuclear too, which could hugely benefit a stumbling UK nuclear renaissance. This is a two-fold point of contention, firstly it could stifle renewable development, especially smaller firms, in favour for nuclear, and secondly that government had previously pledged that there would be no subsidies for nuclear power.

I believe that the CfD doesn’t go far enough in promoting growth in the renewables sector, and especially in relation to developing technology, it may encourage certain areas but these may not be best placed. For example if an energy company, say Windalot, want to develop low yield wind farms in non-ideal locations the CfD could possibly make this feasible, if the strike price is high, which would not be the best use of resource. The same would be if it encouraged further misplaced resource in installing low efficiency solar panels in a country which receives minimal sunshine...

The other issue of a government u-turn on nuclear subsidies is only really a shock if you have never looked into the nuclear industry before. Factors involved with nuclear development, which includes the complex construction, management of nuclear waste, and most costly safety, means that the sums don’t balance without some sort of incentive. The government has always supported nuclear in one way or another despite ever increasing costs; the idea of that support not being there for the future was always farcical.

The CfD may help boost an uncertain renewable industry though the benefits should be well managed to ensure that the most appropriate technologies profit. They will also be a help to the floundering nuclear industry, which has faced ever more uncertainty over the past year. It also may help to keep the lights on if it boots energy development. However as the strike price will not be set until 2013 and implementation started in 2014, uncertainty may again deter the correct level of investment the industry desperately needs.

·         Final Investment Decisions (FID) or Investment Instruments.

These tools are there to plug the gap until the CfD come into force, with the hope that they will bring forward investment. The scheme aims at providing significant support to key low carbon projects that could be delivered over the next two years, however this is at the secretary of state's discretion. More detail on how this will work is still needed and RenewableUK has urged developers to enquire if their renewable projects may be eligible. So FIDs while being lauded as an early incentive to encourage development, their applicability is yet to be known causing further unease with developers, which may nullify any potential benefit before CfDs.

·         Capacity Market.

The capacity market works on the premise that the government set out a prediction on the demands for electricity over a period of time and the capacity needed to ensure consistent supply. Providers old and new will be invited to bid for contracts to supply capacity, which will take place 4-5 years before the capacity is required. Upon winning the bid providers will enter a capacity contract, which will pay the costs to cover their capacity in the delivery years, if they cannot provide capacity they will face penalty fines.

A worrying area of the policy however is the section where wind power is labelled inconsistent and nuclear generation less flexible, a very sweeping statement indeed, and the fact that it also points to gas compounds my worries. Properly located wind farms have proven to be very predictable in their generation output and nuclear power stations are designed to provide constant base loads. The policy points to fossil fuels as the answer to peak load capacity needs, when we should be developing other methods, along with a smart grid, to cope with these peak loads. The move away from fossil fuels needs to be undertaken at some point so why not start developing the technology to deal with this now.

·         Conflicts of Interest and Contingency Arrangements.  

These arrangements are in place as the government will entrust the operation of the EMR to a private company: the National Grid. The bill will outline powers that allow the government to intervene were there ever a conflict of interest between parties. So if the National Grid tried to implement the EMR in a manner that favoured themselves but not the interest of the country, or in line with the objectives of the EMR, then the government has the power to intervene. Whether the government would intervene is another matter as historically they have favoured business over the well being of the country; we only have to look at a failed car industry to notice that. So think of the government as Judge Dredd... they are the law... they have the power to put a stop to anything...if they see fit.

·         Renewables Transitional.

This sets out how the transition from the current system of Renewable Obligation (RO) will transfer to the new CfD. Existing operators will be able to choose between the CfD and the RO; and for all new operators, as of 2017, only CfD will be available. So effectively giving existing operators the choice of what they see as more of a profitable option going forward. The government also hope this will negate any negative impact to investment while the CfD is implemented. Those operators that choose to go down the RO route will receive the full 20 years’ support as promised when taking out the RO. The 2017 date may also be flexible if projects are delayed for reasons of force majeure.

·         Emission Performance Standard (EPS).

The EPS is in place to prevent the construction of high emission power plants, with the hope of putting an end to polluting fossil fuel fired plants that do not conform to the emission standards, particularly coal fired power plants. It still allows the construction of fossil fuel fired plants that conform to the standard so still leaves the door open for plants that use the, currently fictional, Carbon Capture and Storage (CCS) technology and low emission gas fired plants. Here I’d say the EPS does not go far enough and should push more towards zero emissions from power generation and not leave the door ajar for fossil fuels...but it’s a start we’ve all waited for for a long time and for that we can be a little grateful.

The Rest of the Bill

 Along with the EMR the Energy bill is also made up of the following sections that further detail the reforms:

·         Strategy and Policy Statement (SPS)

o   The SPS will try to ensure that the regulator, Ofgem, and the Government are both heading in the same direction. It’s hoped that it will further clarify the roles of the regulator and the government to ensure that the regulatory changes and development of the energy sector are prioritised correctly. A sort of instruction manual for the energy bill to ensure that is operated correctly... let’s just hope that it’s easier to follow than your average instruction manual!

·         Nuclear Regulation

o   The government has introduced Nuclear Regulation, which gives the currently-interim Office for Nuclear Regulation (ONR) statutory footing.  As the civil regulator for the nuclear industry in the UK, and an agency of the Health and Safety Executive (HSE), the ONR is responsible for the safety and security of civil nuclear activities and administers nuclear licenses on the HSEs behalf – a role previously undertaken by the HSE Nuclear Directorate and Department of Transport’s Radioactive Materials Transport Team.

·         Government Pipe-Line and Storage System (GPSS)

o   The GPSS was created to provide a secure oil distribution network for the UK at the start of World War Two in 1939. As the years have gone one the network has extended and developed to now cover approximately 2500km of pipe-lines and numerous storage depots, pumping stations and associated sites. The GPSS provides links around the country supporting major airports and Ministry of Defence (MoD) sites and is currently managed on behalf of the government by the Oil & Pipelines Agency, which is a public corporation sponsored by the MoD. The Energy Bill outlines the plan to sell off the GPSS to private investors as it is that government ownership is not necessary to ensure the requirements of the MoD. The same old argument will surely arise however that if you sell a commodity to a private firm then there focus will be to make money so the impact on the MoD and civil airports etc. may be significant, though the government is keen to play any potential impact down. The fact that we own very little of our own infrastructure does not seem to concern the government...

·         Miscellaneous

o   The aptly titled misc. section, which actually refers to a section on Offshore Transmission. This bit of legislation will allow developers to transmit electricity form an offshore source to the onshore grid without the need for a licence. Currently  the Electricity Act 1989 prohibits this, which is a significant barrier to an offshore power grid and development of offshore power generation as some electricity transmission is seen as necessary before commissioning equipment. Again, a step in the right direction but bizarrely hidden in the footnotes.

So that is the Energy Bill summarised, well to a certain degree anyway, although there is still a lot of uncertainty surrounding it which may impact on the effectiveness of the bill.  After its unveiling it received widespread condemnation for not going far enough in providing assurance and direction for the energy sector. The biggest worry was the promotion of gas fired power plants as their inclusion in the bill could lead to development in the wrong direction, towards a fossil fuel future. I agree that to meet emissions targets and to continue to power the country we need a mixture of nuclear, renewables and, if it can work, CCS, but we should not direct investment towards a continuing reliance on a depleting resource that is damaging to the atmosphere and largely dependent on foreign import. I know some people will say shale gas can provide a viable and reliable supply but extraction methods are questionable to say the least and the associated emissions may be more harmful than coal fired plants, not to mention our resource of shale gas is small at the very best.

The Energy Bill may be a good start, though may be fatally flawed by one sentence in Annex D that could render the Energy Bill potentially useless in its promotion of low carbon energy, “Exceptions: power to make exceptions to maintain energy security”. This exception could be used to override the bill and enable the construction of the dirtiest of power plants if they can be deemed necessary to maintain energy security; a get out of jail free card for the greenest government ever.

The full two part entry has been published at the developingengineers blog.

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Low Carbon Subsidies for All!

Through the queens speech the coalition government announced a series of energy market reforms, in the form of the energy bill, that they hope will provide an adrenaline boost to the flagging industry, mainly in the form of complex subsidies. However, as has been apparent with most announcements regarding the energy industry from the government, there are still large areas of policy shrouded in mystery.

The system the government is trying to implement works around low-carbon electricity (from renewable or nuclear sources) can sign long-term contracts to supply at a preferential rate, so effectively legislating against carbon emissions. While this on the face of things looks like a step in the right direction the head of climate change at WWF-UK had some harsh criticism of the legislation, while saying it was a step in the right direction he indicated that it did not nearly go far enough.

One significant implication of the legislation is that it will effectively subsidise the Nuclear Industry as it is a low carbon source of electricity, which is at odds with the coalition agreement, that there would be no state subsidies for nuclear power. Incentives have been shared across, what the government has been to classify as, low-carbon industries; though surely a worry is that the renewable industry will be stifled in the UK, compared against more established technologies.

If we take a look at the German Company Strabag’s development of serialised wind turbine installations, and the speed of that development, we can see what can be achieved focus is placed on renewable energy. This goes to highlight that while the renewable industry is growing in this country at a very healthy rate more can be achieved with greater support.

The Nuclear industry by its very nature is a slow developing beast with small evolutionary design changes targeted towards safety rather than taking revolutionary design steps. This approach being taken to ensure that we have the safest plants possible, as we are dealing with radiation sources after all. If we take a look at the development on the EPR plant at Flamenville in France we can see how slow Nuclear can progress.

The government is worried, and so should we all, about the impending likelihood of black outs and, with the nuclear renaissance faltering, needed to promote growth within the energy sector. With the energy bill they hope to achieve that, unfortunately as the bill seems to be lacking in detail in some areas and over complex in others, the likelihood of success is uncertain.

The future energy balance in the UK must be made up from a mixture of renewable and nuclear in order to be anywhere near the targets set for 2050 on reducing carbon emissions and we must develop a smart grid in order to deliver electricity to where it is needed. That is why clear direction is needed from the government on such issues and while the UK may not ever be a major contributor to global nuclear technology we still have the opportunity to be world leading in renewable/clean technology.

Also posted @ the Developing Engineers Blog!

CCS a Panacea for Climate Change...

This week the UK government announced a new initiative to promote the development of Carbon Capture & Storage (CCS) technology, after the total flop of the last scheme. The CCS roadmap can be split into three distinct parts: the first provides research and development funding, the second grants for the construction of plants and the third funds the running costs, which makes this an attractive scheme for industries looking to develop CCS.

Heralded by the government and fossil fuel companies as a panacea for CO₂ reduction; they say it’ll enable polluting fossil fuel plants to run with ‘zero’ carbon emissions (an 80-90% reduction), a view many will question. Now I will try and answer some key questions: what are the merits of CSS, will it actually work on an industrial scale and what part does it have to play in reducing global warming and aiding theUK in meeting its 2020 and 2050 targets?

As you may know, the idea behind CCS technology in power generation is to enable the stripping of CO₂ from the emissions from fossil fuel fired power plants (pre or post combustion) and to then store it , normally very deep underground or under the sea. The technology behind CCS is largely unproven on an industrial scale and the storage component is an unknown element. The injection of CO₂, and essentially the storage of CO₂, has been used to prolong the life of oil wells in enhanced oil recovery but if this method of storage is stable is unknown.

What has to be remembered is that with CCS we are still producing vast quantities of CO² by burning non-renewable fossil fuels, it doesn’t reduce emissions we’re just storing them away. We do not know how reliable the storage of CO₂ is, and whether or not it will escape or dissipate and rise to the surface adding to global warming in the future. Also, it’s virtually impossible to measure the success of the storage solution and/or any CO₂ escape from deep sea storage. This is also not to mention the problems that may be caused to the pH level of the sea and the effects that it may have on sub-sea ecosystems.

Ok, so if there are so many uncertainties surrounding CCS, and potential pitfalls, what place should it have as one possible solution to reach our 2020 and 2050 emission targets? Well while I do not under any circumstance see this as a long term solution to reducing emissions, especially as we will run out of fossil fuels before long, I do think in the short term it does have a key part to play if we want to have any hope of achieving the targets set for 2020 and 2050 as we are woefully behind with our development of low carbon and renewable energy.

While this new scheme will be welcomed by investors and will aid in meeting the UK’s targets in reducing CO₂ emissions we all have to remember that it still involves burning a fast depleting finite resource where security of supply is a significant concern. CCS isn’t the solution to climate change, or the energy gap, but it may have a supporting role.

Onshore Wind Farms, a Brief Debate

Sorry for the long delay since my last post; a lot of things have changed including my Job and location but I'm back now blogging on my view of the renewable future, I'm also mirroring some of my posts on the developing engineers blog... take a look.

I have chosen to take a look at an issue that has featured in the news recently and seems to be always a point of contention for many people, onshore wind farms.

This weekend it was reported by The Telegraph that 101 conservative MPs have demanded that annual subsidies for onshore wind farms should be ‘dramatically cut’. This is also paired with a concern regarding the National Policy Planning Framework (NPPF), which they say hinders any effective opposition to onshore wind farms.

I will focus mainly on the issue subsidies and the wider issue of funding. Firstly without subsidies it is hard to see how anyone could justify, economically, the merits of commissioning onshore wind farms if subsidies did not exist; if anything subsidies do not go far enough in encouraging growth in an emerging market and there review and subsequent scale back will only help us further fall short of 2020 emissions targets.

Firstly I am not in full agreement with the construction of onshore wind farms as the sums often don’t add up; with the amount of electricity actually produced not that great. However at this current point in time we don’t have many viable alternatives, I certainly would rather they remove solar subsidies in this country which were only ever a cursory nod towards the direction of the renewable energy sector, than halt the construction or subsidies for onshore wind farms.

Maybe we should look at the reason why we need such subsidies especially as the opportunity for the UK to be a renewable industry hub is banded about so much by the current government. The infrastructure to support the wind industry in this country is currently not there and the waiting list for wind turbines is a lengthy one, with these and other factors leading to high costs. In August 2009 Vestas moved operations from the Isle of Wight due to uncertainty regarding the industry and of lack of assurance from the government that it will back wind energy; only now are we seeing proposals again for wind turbine manufacturing in the UK, which could always fall down if support is not there for renewable development.

If the government, or more correctly the conservative side of, continues to attack the industry then the costs of renewable energy will continue to rise and become less attractive to potential investors; though maybe this is a preferred option as if renewable energy costs rise it will only give more substance to the Nuclear argument.

Now I cannot say that onshore wind farms are the solution to the energy balance or the best option in renewable energy but green subsidies are a vital component in encouraging growth the renewable energy sector that without them will surely stagnate. Would you rather have a coal or nuclear power plant on your doorstep?

To end on a positive note Nick Clegg has come out in defence of wind power subsidies and renewable energy as a whole, so at least someone is fighting for renewable energy just a pity they have little sway in government...

Also go take a look at the developing engineers website! www.developingengineers.com

Radical Reforms in UK Energy Policy

With all the news focused on NoW, Rupert Murdoch and the corruption associated you will have been forgiven if you failed to fully take notice of the huge energy reforms announced last week by Chris Huhne.

Given only a cursory glance by many of the major news avenues in the UK media Chris Huhne’s announcement shows a welcome commitment by the government to reduce emissions and ensure greater energy security; not to mention the inevitable brown and black outs the country faces if significant investment is not made, in Chris Huhnes own words, "We have to stop dithering, you can have blackouts or you can have investment. Which do you want?".

 

This reform indicates an end to the liberalised electricity market implemented by the Thatcher government, in by which the private sector would provide competition and keep prices low. This did work in the short term when the electricity market was essentially oversupplied however it made no plans for long term and has part resulted in the sad state of affairs we are now; facing significant global warming and with little to no long term energy security.

The UK needs significant investment in low-carbon energy, mainly renewables, nuclear and possibly carbon-capture (though the merits of this technology are in doubt both in capture and storage); if it is to avoid falling foul of the European Union’s and its own emissions targets and the threat of brown and black outs. To try and achieve this aim Chris Huhne and the government’s white paper outlined a strategy to guide private investment; this includes a minimum carbon price, contracts with energy suppliers for low-carbon energy, a regulation setting maximum emissions levels, a set of payments to ensure sufficient capacity and a new energy efficiency obligation.

While this is definitely welcome news the worry is that these reforms will not go far enough. Firstly Chris Huhne also used this announcement to usher in a new “dash for gas”, now as I have stated previously in this blog a push for natural gas will only result in the UK being depenedant on greenhouse emitting fossil fuels for the foreseeable future and will risk significantly stifling investment in the renewable industry, which is still in its infancy in this country. The IEA’s own executive director Nobuo Tanaka, stated in a press conference in London, "While natural gas is the cleanest fossil fuel, it is still a fossil fuel. Its increased use could muscle out low-carbon fuels such as renewables and nuclear, particularly in the wake of Fukushima. An expansion of gas use alone is no panacea for climate change." So the last thing that the UK needs is a new “dash for gas”, to do so would end any hope of the UK ushering in a green revolution and would inevitably put us on the back foot compared to the rest of Europe.

Secondly over the coming years 9 of the UK’s oil and coal fired power stations are due to be decommissioned along with the last remaining Magnox and two AGR nuclear reactors; this will result in a significant energy gap, with brownouts a certainty and blackouts predicted by 2016. Unless miraculously the UK can construct and commission its planned nuclear power plants and invest significantly in renewable energy there is no avoiding this and that will take unprecedented investment in low-carbon energy. Though this investment could lead the UK to becoming a clean-tech hub for Europe, revitalising the manufacturing industry, creating new jobs and leading to greater economic stability.

In conclusion the energy reforms announced by Chris Huhne are essentially a good thing however unless they are backed up by significant investment and action from the government in the direction of low-carbon energy, and associated infrastructure, (and not a new “dash for gas”) then the UK have no chance of keeping the lights on let alone reaching its emissions targets.

UK Government’s Unfaltering Nuclear Support

It was reported in the guardian on the 30^th of June that the UK government exchanged correspondence with the Nuclear Industry shortly after the Fukushima incident in an attempt to reduce the potential negative outcome. This information was made available under the Freedom of Information Act and highlights the strong ties the government have with the Nuclear Industry. If we take a look at this objectively it’s no big surprise that the nuclear industry and the government department responsible for nuclear energy would be in contact with each other immediately after the incident, as they would naturally want to protect their investments.

However do these emails suggest just that or does it point to the idea that the UK government has decided blindly on nuclear energy as a complete solution to fuel the future, a view taken by many anti-nuclear groups.

The decision was made by the last government to opt for nuclear power as a solution to climate change a decision based on a mixture of cost, availability and probably the influence of certain major stakeholders. Since then a large amount of investment has been used for the Generic Design Assessment of third generation nuclear plants by both the government and stakeholders and in this economic climate both parties do not want to lose out on their investment. The worry is that renewables in the UK remain largely underfunded and that with that the opportunity for the UK to become a world leader in renewable technology is slowly slipping away.

Unfortunately the view of many pro and anti nuclear activists is that there must be only one sole solution to future energy production, a view that is simply not sustainable. If we were to pick nuclear as a sole solution we would run out of Uranium and suffer from an inflexible power source which produces large quantities of toxic and nuclear waste. If we were to pick renewable as a sole solution then we cannot cope with the fluctuations in power with the current grid system and there is little infrastructure available. The energy mix needs to be considered with investment in nuclear in the short-term and significant investment in renewables in the short to long-term if the UK has any chance of reaching its emissions targets for 2020 and 2050.

Obviously the Fukushima incident was going to have an effect on the global nuclear industry and its frail public support in the UK was inevitably going be a worry for the UK government, but the question has to be asked whether these emails show an unfounded loyalty for a sole nuclear solution.

Italy Confirms Nuclear Rejection

It has been confirmed today that Italy will not be reviving nuclear power and will instead focus on renewable energy. Approximately 95% of the Italian people who voted in the referendum rejected Silvio Berlusconi's plan to revive nuclear power in Italy. This is another indication of the damage that the Fukushima incident has dealt to a fragile nuclear industry, which has spent decades trying to change its poor image after Chernobyl, and the perceived reaffirmation of public opinion against nuclear power across Europe. This could be an indication of a shift in what the public perceive as acceptable risk which could lead to wholesale changes across the nuclear industry. While it was largely expected, this has surely dealt another blow to the ‘Nuclear Renaissance’.
 
Link: BBC - Italy rejects Berlusconi's nuclear power plans

Shale Gas: A Green Critique

With shale gas and fracking (the extraction method used) in the media spotlight, with IEA comments over natural gas and the earthquakes around fracking sites in Blackpool, I thought that this would be the ideal time to take a closer look at shale gas. Shale gas has been pioneered as a ‘green’ alternative to coal and a cheaper alternative to renewable energy solutions; the European Gas Advocacy Forum (EGAF) put forward that €900 billion could be saved by pursuing shale gas over renewable energy to meet 2050 targets.

Now to give a brief introduction shale gas is simply natural gas produced from shale and is classed as an unconventional source of natural gas as shale’s ordinarily lack the sufficient permeability to allow significant flow to a well bore; therefore alternative methods have been developed to enable extraction, specifically fracking. Fracking or hydraulic fracturing is a method of propagating fractures in the shale using pressure from a fluid, therefore enabling the release of natural gas which can be then captured. With often the fluid being used a highly toxic mix of chemicals (including carcinogens) and sand or ceramics.

Now the concerns from pursuing shale gas can be brokeninto the following areas; fracking and environmental impact, emissions associated with shale gas, European energy security and the potential damage it could have on the renewable sector.

Extraction and Hydraulic Fracturing (Fracking)

If we firstly tackle extraction by fracking, there are distinct environmental concerns that result from fracking. Firstly we have the chemical concoction that is used in the process, this is usually a mixture of
water, sand and various chemicals to aid the fracturing process.

The New York State Department of Environmental Conservation listed the solution to be commonly made up of; water, acid (Hydrochloric acid), biocide (Glutaraldehyde, a strong highly toxic disinfectant), breaker (sodium chloride), corrosion inhibitor (Dimethylformahide, a carcinogen which has also been linked to birth defects), friction reducer (petroleum distillate), gel (guar gum), Iron control (citric
acid), oxygen scavenger (Ammonium bisulfite, toxic), proppant (sand) and a scale inhibitor (antifreeze, toxic); not a very nice concoction of chemicals, it has to be said. Though currently in the UK only water, acid, friction reducer and biocide are used.

Only 50% to 70% of the solution is recovered during the fracking process leaving 30% to 50% in the ground, which can potentially lead to contamination of groundwater. So if we look at the potential hazard of
contamination to water supplies, fresh and near surface, both during fracking and involved in transport, handling and storage of the chemical solution, the risk to human health is significant.

The impact to the rock shelf and potential subsidence can also lead to seismic events which has been seen in the UK during preliminary drilling operation that have lead to two small tremors since operation began, which has, at the moment, caused a stop to all operations.

Finally gas leaks into the water supply must be considered as has been seen in the USA where there has been evidence clear of gas leaks into the water basin, videos of which can be seen here.

In summary fracking leads to the injection of toxic and carcinogenic chemicals deep underground that can lead to wide scale pollution, subsidence and seismic events and seepage of gas into water supplies; all in all not a very good case for shale gas as a ‘green’ alternative to coal and a viable alternative to renewables.

Shale Gas Emissions

Next if we take a look at the emissions associated with shale gas and the oil and gas industries claims that the use of shale gas will give around a 50% reduction in carbon emissions over traditional coal. While looking at the direct combustion of shale gas compared to coal it can be seen that there is around a 50% reduction in the level of carbon emissions however this fails to take into consideration various other emissions that occur from extraction to combustion. It has been concluded that shale gas shale releases far greater levels of methane, which is a more potent greenhouse gas compared to CO₂, than conventional natural gas; as is highlighted in this EPA report. This fact is also supported by the Cornell Study which stated that the green house gas emissions from shale gas were significantly larger than that of conventional gas, 20% higher than that of coal in the short term, twice that in the 20-year horizon and comparable over 100 years.

So the argument presented by the oil and gas industry seems somewhat flawed, in fact it can be seen that they have pick and chosen the facts and figures that suit their cause and ignoring all other relevant
information. This is further highlighted by fanciful claims made in the economic analysis by EGAF, which has used open source data taken by the European Climate Foundation (ECF). Using this data the ECF came to the conclusion that Europe’s energy needs and emissions targets where best met by investing in Renewables; rather alarmingly the EGAF report interprets the data quite differently skewing the data to
conclude that gas rather than renewables is the most viable and cheap form of energy that could be used to meet the 2050 targets. Most of the conclusions coming from EGAF are questionable at best and downright lies at worse, with EGAF solely interested in propagating their own wealth and possibly existence.

It can be concluded, quite obviously perhaps, that reports and data that originate from large companies that will benefit significantly from shale gas may not be able to be trusted and that the claims that shale gas is a cleaner alternative to coal are not true when we take into consideration the entire process of extraction to combustion.

European Energy Security

If we look at the global shale gas resource map, it can be seen that China, USA, Agentina and Mexico by
far have the largest potential shale gas resource.

Source: http://www.guardian.co.uk/environment/interactive/2011/apr/26/shale-gas-hydraulic-fracking-graphic

It should also be more specifically noted that this highlights the deficiency of Europe’s shale gas resource, which should immediately lead to questions being asked about the legitimacy of shale gas as a viable replacement to coal and as an alternative to investment in Renewables. The argument presented by the Oil and Gas industry that using shale gas can lead to greater energy security in Europe is therefore immediately discredited; if anything this would just move who we are dependent on.

The Impact on Renewables

As shale gas is pushed more and more by major oil and gas stakeholders there is a real danger that the funding and development of Renewable energy, related technology and infrastructure will be stifled. This
can already be seen in the US where the promotion and push for shale gas, coupled with the economic downturn, has lead to a drop off in funding and development for Renewable energy. The view now taken in the US is that there is no need for action on climate change as they have plentiful resources of ‘green’ shale gas.

If investment and development is directed towards shale gas rather than Renewable energy then it could signify a significant policy against Renewable energy for the foreseeable future. New gas fired power
plants, while reducing emissions in the immediate, will signify a long term commitment to the use of fossil fuels that will continue to contribute to the release of greenhouse emissions. A gas fired power station will have a plant life of between 25 and 40 years, leading to the possible conclusion that Renewable technology could suffer a 40 year gap in development if there was to be a significant push towards shale gas; which also could put emission targets at risk. To satisfy emissions targets the oil and gas industry point towards Carbon Capture and Storage (CCS) technology which is largely unproven, at best a short term solution and currently partly fictitious. EGAF state that they see CCS technology becoming commercially viable in the mid-2020s however if the technology does not come to fruition, is more expensive than predicted or not viable for commercial use then this leaves us dependent on, what would be a ‘dirty’, fossil fuel and leaves Renewable technology off the pace.

Conclusions

Now while there is a place for gas in the future and as a short term replacement for coal it is still a fossil fuel and will continue to add to emissions of greenhouse gases. Taking into additional environmental implications shale gas has over conventional natural gas it is difficult to see shale gas as a significant contributor in reducing greenhouse emissions and as a viable option in the energy mix. Also looking at the
viability of shale gas in the UK and Europe when we have only limited resource is also highly questionable, surely other options need to be developed and as fossil fuels and even nuclear are dependent on a finite resource then we should be looking seriously at investing in Renewables.

Germany's Answer to the Nuclear Question

Germany announced this week that it will effectively cease its nuclear programme by the end of 2022 based on the recommendations of the Ethics Commission for Security Energy. This will begin with the immediate shutdown and decommission of 7 nuclear facilities, that have been offline since the Fukushima incident and the Kruemmel facility in northern Germany, and will be followed by a staged process of shutdown and decommission for the remaining 9 facilities; 6 by 2021 and three by 2022. While the Fukushima incident sparked Germany to review its nuclear renaissance, the decision will not be purely based on the scientific merit and the safety of nuclear facilities; the rising popularity of the SDP and the Greens and the cementing of anti-nuclear opinion by the German public will surely have been defining factor for this decision.

The announcement by Germany cannot be seen as a revelation as they only decided on pursuing nuclear power in 2010; under Gerhard Schröder the decision was made to make a comprehensive and irreversible move away from nuclear power by 2022, a decision reversed by Angela Mirkel in 2010, against the popular opinion of the German people. This would surely mean that Germany did have plans to accommodate this change prior to the announcement this week?

In 2010 Germany generated approximately 23% of its electricity and 11% of its energy from nuclear power, and to remove nuclear power will result in a significant shortfall and if not dealt with adequately potential blackouts and increasing energy imports. Germanys answer is a 10% reduction in electricity consumption and to double the amount of renewable energy generated to 35%, with a preference for offshore wind; both very ambitious targets to set.

How Germany will achieve these targets and if this will equate to a nil net import of energy/electricity is surely questions that need to be asked. Targets set in 2010 stated that by 2020 renewable electricity production in Germany will be at 35%, so the news today that this will also contribute in filling the gap left by nuclear is perhaps a little farcical. Would this indicate that Germany may not have been totally committed to these targets before this decision, offsetting the cheaper continued nuclear option with the more expensive renewable alternatives, or would it point to the notion that Germany may not have a contingency plan for the energy gap left by the removal of nuclear power? Whatever the answer the ambitious target of 35% will be difficult to achieve without significant improvement to the supporting electrical and renewable infrastructure, which will require unprecedented investment and support by the German government.

The 10% reduction in electricity consumption may be even more ambitious but again should not be seen as a revelation as the target set in 2010 was a 50% reduction on 2008 levels by 2050; so it should be expected that plans for the reduction should have already been in place, though any significant reduction in consumption will be costly.

If Germany cannot meet the shortfalls and have to increase energy imports from other nations (i.e. France) then there is no way to guarantee that the energy they import has not been generated by nuclear facilities, making a mockery of the announcement to move away from nuclear and possibly a case of ‘not in my back yard’. It may also lead to a greater reliance on fossil fuels and in particular Coal and even though the German government will point to carbon capture technology this is unproven and the question of what to do with the carbon that is captured and implications of storing this are still unknown and could only ever be used as a short term solution.

The impact Germany’s decision will have on the developed world and in particular Europe is yet to be seen but as the largest industrial power to have turned its back on nuclear power it would be short-sighted to say that there will be none. While several industrial developed countries, like Switzerland and Italy have seemingly decided against nuclear power, countries like France, Poland and Japan are still ploughing ahead with a nuclear future. Public opinion across Europe is again turning against nuclear power but with energy and carbon reduction targets looming it will be a balancing act of cost over popularity to whether the nuclear renaissance will continue to flourish. Once again the nuclear question is on everyone’s lips.