Sunday, 18 June 2017

This Parliament is almost a perfect storm that favours Labour

As political scenarios go, the new Parliamentary position is just about as good as it gets for an Opposition. The Government is facing an almost impossible task (securing 'good' Brexit terms), is much too weak to push through much the Opposition doesn't really want, and has seriously lost its political momentum. Crucially, the historical precedents are heavily stacked against the Government surviving anything like its full Parliamentary term.

Let's put it this way. The current Tory Parliamentary position of being just a few seats short of a majority of 322 (that is with Sinn Fein votes subtracted, and they will never turn up) is almost identical to that of the Callaghan Government in March 1979. And that was the moment when they lost their famous vote of confidence! The Labour Government had become a minority one in 1977, having lost its majority of 3 (won in October 1974) in by-elections.

You will search in vain for a Government in the last century that has lasted for much more than 2 years without a single party majority. The 'best' example was the the 1929-1931 Labour Government that was sustained by the Liberals. But then that only seemed to last as long as it did because the then PM, Ramsay Macdonald was offering a real prospect of electoral reform to the Liberals. But the Government collapsed in 1931 in the midst of a national crisis. Remind of you of anything (that's coming)?

The Liberals survived longer after an inconclusive 1910 General election, but only because they had Irish Nationalist support to put through Home Rule legislation (which was ultimately short-circuited by the First World War). The few baubles of things like aviation taxes, infrastructure projects and an indemnity law for soldiers that the current Government can offer to the DUP do not constitute anything that compares anywhere near to that prize. Indeed, this time the complications of Northern Irish Government point in a negative direction!  Once the political tit-bits are passed, the key incentive to support the Government disappears.

Although it is true that on technical grounds the Government can limp on so long as the all the DUP MPs back it in confidence votes until such time as the Government loses several by-elections (4 years?), the arithmetic looks too thin to imagine that Conservative backbenchers can withstand this sort of pummelling for quite that long. The DUP, who don't as a rule, much favour the Tories fiscal priorities anyway, are hardly likely to want to sacrifice themselves for the little that they will be able gain after the first couple of years at most. Because, short of a definite upswing in the UK economy, once the Government have put whatever mainly financial incentives in place for Norther Ireland, and Labour have indicated that they will not disturb them, the DUP will have no incentive to carry on supporting what may become a rather unpopular government.

Perhaps if the DUP agrees a pact to last a defined period, say 18 months as was the Lib-Lab pact of 1977-1978, we shall know when the next General Election will be (ie more or less directly after the end of the pact). A pact of more than 2 years covering 'supply and confidence' , even if it is signed on paper, may lack credibility and deliverability. I am writing this before we know how long the pact with the DUP will last, but I must say the announcement that there will be no Queen's speech after the imminent one until 2019 might be regarded as a giveaway. Another General Election in 2 years? That is, if they last that long......

Meanwhile the Labour Party can ambush the Government at times of their own choosing. They can draw in even DUP MPs to support them on many issues, and leave the Government with the ownership of  an exit deal with the EU involving the UK paying a compensation bill of tens of billions of pounds. No doubt it will be a deal that satisfies nobody very much. Personally, I'd like a referendum on whether it is worth leaving the EU to have to pay that particular bill.
If a political party had to choose a time when it had to be in opposition, this is the perfect time for Labour!

Thursday, 15 June 2017

France to tilt EU energy market towards nuclear power

The French Government's announcement that it will legislate for a carbon floor price of 30 euros per MWh marks a dramatic turn in EU energy markets which will now be shifted to favour nuclear power above renewables. This is because just over half of nuclear power generated in the EU come from reactors in France, whereas less than 10 per cent of EU renewable energy production comes from France. The fact that nuclear power is being given special privileges undermines the policy credibility of the Green Energy Minister Nichals Hulot who has just been appointed by President Macron.

Given that three-quarters of electricity in France comes from nuclear power, and very little from fossil fuels, this measure is a thinly disguised extra incentive for nuclear power, an incentive that the large bulk of renewable generation in the EU will not be able to receive. Only the UK has a carbon floor price, which is around 17 per cent lower than the proposed French one.

A case in point is Germany, which generates a third of the wind power in the EU. German electricity wholesale power prices are relatively low - much lower than in the case of the UK for example, and there are fears that some windfarms will no longer be economic after their feed-in tariff contracts end after 2020. But they would be likely to stay online if they had access to the carbon floor price being set in France. There is no carbon floor price in Germany.

Macron seems, in energy at least, to be continuing 'business as usual' in letting EDF run the French state. The French Government has effectively ploughed several billions into bankrupt nuclear generators AREVA and also injected money to EDF through a 'share flotation' (EDF is 85 per cent owned by the French Government) that seems associated with building Hinkley C power station.
In addition there have been fears that the need to refurbish ageing French reactors means that they might be closed down but for extra money being paid by French electricity consumers to keep them running. The carbon floor price may go at least some way towards keeping them open.

Nicholas Hulot has been associated with a move to shift French electricity generation away from nuclear and towards renewable energy. From where I am sitting it looks like the nuclear establishment at EDF is still very much in control and Hulot will achieve very little in switching France from nuclear to renewables.


See for example:

https://www.theguardian.com/environment/2016/may/17/france-sets-carbon-price-floor?CMP=share_btn_tw

https://www.ft.com/content/9a6752cc-3bc4-11e7-ac89-b01cc67cfeec

http://www.world-nuclear.org/information-library/country-profiles/others/european-union.aspx

Monday, 12 June 2017

Why Greens should stop beating themselves up over the lacklustre general election performance

I suppose it's inevitable that any party will engage in some soul searching and point-settling when it loses votes, but we should consider that in the context of a generally greater focus on the two party contest that it is unlikely that ANY Green Party strategy would have avoided a substantial fall in votes.

The focus on the most Presidential campaign that has been framed in Britain for decades (May versus Corbyn), the relative resurgence of Labour and also the special appeal that Labour made to the youth vote all meant that Green candidates were going to be squeezed. Of course the main exception to this was Caroline Lucas herself, and that is because in her constituency she is not only a formidable reputation but also the most credible embodiment of the forces that propel what we could describe as radical Labour today.
I'm sure now that Green Party meetings will be full of debates about 'progressive alliance' and such forth. But I'm also sure that the Green Party's vote losses in the 2017 election were more caused by the single factor of Labour being perceived as matching Greens on the subject of abolishing tuition fees for students than the strategy of 'Progressive Alliance'.

But what to do?

Really Greens ought to put their efforts into building up their local base, fighting for local social and environmental causes. Indeed, at a national level, we should earnestly fight for and certainly hope for that we get a Labour Government as soon as possible, while at the same time pointing out the shortcomings of Labour's programmes. I know in energy, for example, there is much confusion about objectives (see my earlier post). We need, for example, to have a clear, separate ambitious target for renewable energy. We need bottom up campaigns for ownership of the grid, not some top-down version that benefits only the energy establishment. We need much more radical and locally centred initiatives for energy saving and also a commitment to develop a more flexible, smart, energy system that fits in with the future, not the past.

I'm not suggesting Green candidates should automatically stand aside for Labour - heaven forbid! - but the cruel fact of the political logic at the moment is that until we get a Labour Government there is going to be a strong force behind Labour squeezing Greens in many of those constituencies that Greens hope to win.

Of course, when we do have a Labour Government, things will change in the Greens favour. I am certain about that! Maybe Greens should be a bit more patient and put their energy into positive action rather than slagging each other off.

Now that Trump has pulled USA out of Paris can China take a lead in fighting climate change?

Now that Donald Trump has pulled the USA out of the Paris Agreement more attention has been focused on China's role in reducing carbon emissions (the title of a book of mine that has just been published). And it seems there is a good chance that China will be able to reduce its energy-related carbon emissions by as much as two-thirds by 2050.

Given China's apparently accelerating growth in output of carbon emissions, this does seem a strange conclusion to make. But only if we ignore recent trends and, perhaps most importantly the economic, industrial and political dynamics at play.
Recent carbon trends suggest that China is stabilising its carbon emissions earlier than projected by the Chinese Government. Independent evaluation of the carbon output in 2014, 2015 and 2016 indicate that during these years carbon dioxide emissions were stable and not increasing. There are three factors behind this turnaround.

First, economic growth is slowing. There are good reasons to suspect that this is part of a longer term trend, and growth is likely to fall further. Developing economies can see rapid increases in carbon emissions as they develop infrastructure eg roads, railways, bridges, buildings, that forms the basis of the economy. However as time goes on there is less return from these developments and they slow down. Second, again, as people accumulate facilities that we almost take for granted in the West, such as fridges or TVs, production of this equipment rapidly increases. Certainly there are still products where ownership is still much less than is the case in the West - motor vehicles is the most important item here for energy consumption, but still it is becoming the case that for many products the early growth has subsided down to production of replacements.

In addition to this the advantages of low labour costs, low land costs and cheaply available capital are declining for China leading towards a similar loss of advantage in exports of manufacturing products than has already occurred in the case of Japan and South Korea. There we are seeing lower rates of economic growth and also a shift towards a more service based economy. Indeed the main issue is not whether this shift is occurring, but whether it can be completed without the sort of economic collapse that occurred in Japan at the end of the 1980s and which produced a zero growth economy throughout the 1990s.
Indeed many people are worried that China has simply built up too much debt and that many 'zombie' companies are being kept alive with endlessly recycled loans. China may avoid an economic crash ( I hope so because its effects on the world economy could be terrible), but a further slowdown in economic growth seems inevitable. All of this will, of course reduce energy consumption.

China's per capita carbon footprint is just above the average level for the EU; higher than the UK, less than Germany. However, given that China's urban density is higher and its average building space per person a lot lower than the EU implies that China already has the capacity for a lot of energy efficiency improvements. The Government is improving its efforts on this front. Building energy efficinecy standards have been improved, although enforcement still lags behind. Local government needs to be made more accountable in order to improve environmental standards and protection in general. . So there is good reason to believe that China can greatly reduce, never mind stabilise, its energy consumption.

Then there is the second factor, the build-up of non-fossil energy sources. China has been rapidly expanding renewable energy in recent years such that in 2015, for example, half of the world's capacity of wind turbines and a third of the capacity of solar pv panels were installed in China. Hydro and nuclear power has also been expanding. Hydro power leads generation among non-fossil fuels so far followed by wind, then nuclear and solar. China now has the biggest market for, and is the biggest producer of, electric cars.

The third factor reducing carbon emissions in China is the increased pressure on the Chinese Government to achieve environmental objectives. The build-up in non-fossil fuels is driven partly by climate change considerations, but most of all by tremendous pressures to reduce the appalling levels of air pollution in the cities. A lot of this is caused by the burning of coal in the power stations. Because of a lower than expected increase in electricity consumption and also the increase in non-fossil fuel power plant, coal fired power plant in China have been operating at low capacity factors (meaning that they have been only been generating for about half the time in 2015 and 2016).

There are problems with incorporating variable renewables into the grid, and much more renewable energy has been 'load-shedded' (wasted) compared to western countries with much higher proportions of variable renewable energy on the grid. The system still involves coal fired power plant being given priority over wind and solar in dispatch. Although there has recently been a drive to build nuclear power stations there are also strong pressures to increase safety standards - something which is likely to increase costs as in the west and slow growth in nucrear power. Various plans for nuclear power plant in the inland areas have been cancelled due to opposition. Large hydro schemes have been criticised for displacing large numbers of people and their expansion is likely to slow in coming years. However the fall in costs of wind and solar is likely to counterbalance these trends leading to large expansion of these sources.

Certainly studies done by the China Centre for Renewable Energy indicate that renewable energy on its own could generate the bulk of China's energy by 2050 -assuming of course that energy consumption can be stabilised, something that seems likely as China's economic growth rates fall and also China's population growth rate falls off. Large reductions in carbon emissions from China seem probable by 2050.

In conclusion, much needs to be done to improve China's policies and strategies, but there is more hope at present that China will lead the way towards carbon reductions than the USA. Given the authoritarian nature of China's Government this can only be regarded as a great embarrassment for democrats around the world.

You can read much more about this discussion buy buying a copy of the book 'China's Role in Reducing Carbon Emissions' published by Routledge. An electronic version can be purchased for £25. See https://www.routledge.com/Chinas-Role-in-Reducing-Carbon-Emissions-The-Stabilisation-of-Energy/Toke/p/book/9781138244412


Thursday, 1 June 2017

Labour pledges massive target for renewable energy

It still may require a slight touch on Douglas Adams' improbability drive to imagine that a Labour Government could emerge from this general election, but let us assume that it happens and we can talk about what this might mean for green energy prospects. Basing my analysis solely on what Labour's manifesto says, perhaps two words sum it all up: benign confusion. But within that, there's no way around it. Labour are pledging to achieve a massive target for renewable energy.

The manifesto says, in a sort of summary 'We will transform our energy systems, investing in new, state of the art low carbon gas and renewable electricity production'. That's not too bad, and there is even the implication that 'low carbon gas' could be biogas from grass, suggested by Ecotricity, Jo Abess and Keith Barnham (now what a coalition that is!). Fracking gas is to be banned. Jolly good, Makes a change from the Conservatives who to want to make compulsory for local authorities to accept planning applications for exploratory drilling.

Perhaps the biggest piece of confusion generated by the manifesto is the statement that a Labour Government would 'ensure that 60 per cent of the UK's energy comes from zero-carbon or renewable sources by 2030', not least because, as all energy nerds of whatever prejudice will tell you, there is no such thing as a zero carbon energy source. Now, yes you can have rules about  zero carbon homes (about which Labour will 'consult') since low energy usage can be balanced by energy production from, say, solar panels, but zero carbon energy source itself? No, not really - low carbon is the term to use, please.

Some have suggested that the '60 per cent of the UK's energy' 'by 2030' pledge is itself a mistake, and that they really meant 'electricity' rather than 'energy', but of course that's not what the manifesto says. 60 per cent of electricity from renewables by 2030 is a much less radical target, although this in itself is similar to the Liberal Democrat pledge and much better than the Conservatives.

BUT IT SAYS ENERGY. And we wouldn't let them forget it! It can't include nuclear power since that is not zero carbon, and zero carbon doesn't exist anyway, as already pointed out. So it must mean renewables. Entirely. Saying that this was some sort of typo will just not wash! Of course you can guess from from my tone that this means the 60 per cent of ENERGY target is actually pretty radical - not far, in fact, behind Green Party policy (and no, I didn't write that by the way, though I approve its general direction). With that policy it will be all renewable hands on deck! Full speed ahead!

Indeed, achievement of this target would mark good progress towards achieving the task, enshrined in the 2008 Climate Change Act, of delivering, by 2050. a minimum of an 80 per cent reduction in 1990 levels of greenhouse gas emissions.

There is some confusion on what Labour policy means for nuclear power. There is talk for support for future nuclear projects, but then there is no mention of specifics like Hinkley C and an impression that this just might mean decommissioning projects and a bit of international marketing. If so, that would be damage limitation. Who knows? Probably not the people who wrote this!

There are some laudable promises on energy conservation, insulating 4 million homes (that would be a start, at least), offering home owners interest free loans for energy efficiency.

There is an interesting policy on establishing publicly owned 'locally accountable' 'energy companies and cooperatives'. This could in the right form, be highly innovative in various ways, and smacks of the influence of Alan Simpson.

But how innovative this foray into creating local energy companies will be really depends on what is meant by 'locally accountable'. If there are some local popular elections to fill the executives, then great! Lots of exciting things could happen. But I have a fear that what might actually happen is that the whole thing will be run by groups of Labour councillors, which is not really very accountable. They may appoint some 'energy' trade union guys from the GMB who might spend their time and money given to them trying to get 'small modular reactors' and 'carbon capture and storage' projects going which will never actually happen anyway.

That possibility aside of course, Labour's manifesto is a lot better for green energy than the Tory manifesto whose main preoccupation seems to be to persuade the English Tory shires that they will not be bothered by more wind turbines.

But, methinks, what is the chance of all this? Well, I console myself, at least there is a bigger chance of this happening than Donald Trump forming a coalition with Syria and Nicaragua to successfully 'renegotiate' the Paris Agreement on Climate Change!

NOTE: Some, however, still think even the 60 per cent of energy by 2030 target is conservative - or at least Keith Barnham writes to me saying so, explaining that, for example, offshore wind could be supplying all of UK electricity by the early 2020s. See a piece he wrote in 'Nature': https://www.nature.com/nmat/journal/v15/n2/full/nmat4485.html