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Energy behind the green façade

The 2020s began with the usual round of happy-clappy greenwash about so-called “green energy.”  Typical was Julia Kollewe’s New Year’s Day Guardian piece proclaiming that “Zero-carbon electricity outstrips fossil fuels in Britain across 2019:”

“Following a dramatic decline in coal-fired power and a rise in renewable and low-carbon energy, 2019 was the cleanest year for electrical energy on record for Britain, according to National Grid, which owns and operates the electricity transmission network in England and Wales, and also runs the Scottish networks…”

This is misleading, though.  As Kollewe concedes, zero-carbon electricity (which by sleight of hand she changes to “low-carbon electricity” in the article) makes up 48.3 percent of the UK’s annual electricity generation (i.e. slightly more – 51.7% – came from high-carbon sources).  Even the 48.3% figure is distorted, since it assumes that the 10 percent of UK electricity imported from the continent is low-carbon (not something that can be taken for granted given the huge amount of coal-power that Poland and Germany add into the European grid).

This is not to deny that wind turbines have not made an important contribution to Britain’s energy mix.  As Grant Wilson, Iain Staffell and Noah Godfrey in an article for The Conversation note:

“The near disappearance of coal power – the second most prevalent source in 2010 – underpinned a remarkable transformation of Britain’s electricity generation over the last decade, meaning Britain now has the cleanest electrical supply it has ever had. Second place now belongs to wind power, which supplied almost 21% of the country’s electrical demand in 2019, up from 3% in 2010. [But] As at the start of the decade, natural gas provided the largest share of Britain’s electricity in 2019 at 38%, compared with 47% in 2010.”

Given Britain’s fortuitous location in the Northeast Atlantic directly in the path of the Gulf Stream, it would have been an act of folly not to deploy large numbers of wind turbines in the years since the UK became a net importer of all fossil fuels as well as being increasingly dependent upon imported energy to bridge the gap between supply and demand.  There is, however, an even more troubling problem behind the change in energy mix which Wilson, Staffell and Godfrey allude to:

“Besides the reduction in carbon emissions, there was another remarkable shift in Britain’s electrical system during the 2010s. The amount of electricity consumed fell by nearly 15% between 2010 and 2019, with the economy using 50 terawatt hours (TWh) less electricity in 2019 than it did in 2010. That’s enough electricity to power half of Britain’s cars and taxis, if they were all electric vehicles.

“Some of this reduction can be attributed to greater energy efficiency, such as more LED lighting, and the fact that more goods were imported, rather than manufactured within Britain. With wages stagnant since 2010, it’s likely that lower economic demand also contributed.”

Actually, er… all of that stuff about LED lightbulbs is as mendacious as the claim that the retail apocalypse is the result of online shopping.  As Gerard Reid at Recharge reminds us, the Jevons Paradox has eaten the efficiency gains:

“Today, the Jevons Paradox, perhaps the most widely known paradox in environmental economics, is better known as the Rebound Effect. It demonstrates how technological progress, which increases energy efficiency, does not necessarily lead to a decrease in energy consumption; rather it actually tends to increase it and that rising consumption can offset the beneficial effects, along with some of the savings.

“One of the reasons for this is that efficiency gains are passed onto the consumer through price reductions. Consequently, consumer demand rises further. A good example of this is lighting. While today we may increasingly use low cost energy saving LED lightbulbs, the paradox is that we now have many more light bulbs in our homes and gardens than we did a decade ago.”

By far the biggest reason that Britain’s energy consumption has declined over the decade is that the cost of energy has increased dramatically even as average wages have stagnated.  As Valentina Romei at the Financial Times explains:

“The 2010s saw living standards in the UK grow at their slowest rate since the second world war, even though the economy enjoyed uninterrupted expansion and employment grew at a record rate.

“The jobs bonanza — and the economy’s performance as a whole — was undermined by weak productivity, which grew at its slowest level in 60 years… Growth in per capita output is the biggest driver of increased living standards, but in the UK over the past 10 years it averaged less than half the rate of the postwar period.

“According to calculations based on IMF estimates, UK per capita output grew at an annual average of 1.1 per cent in the last decade. This is slightly below the rate of the 2000s, when output was dragged down by the financial crisis.”

The irony here is that productivity is a function of energy.  The more efficiently a process can utilise energy, the more productive it will be.  However, the biggest productivity gains come from simply adding ever more energy to the mix.  This is why the 1950s and 1960s resulted in massive productivity gains that, in turn, fuelled big rises in the living standards of ordinary people.  As we enter the 2020s, in contrast, Britain is increasingly dependent upon imported energy which also comes at an ever higher cost due to the global exhaustion of the cheapest and easiest energy sources.

The UK is caught in the downward spiral predicted by Gail Tverberg in which increasingly expensive energy forces workers’ wages down below the point where they can continue to afford energy at a price needed by producers to remain profitable.  This can be mitigated temporarily through government subsidies, borrowing (facilitated by ever lower interest rates) and by households switching their spending from discretionary to essential purchases (driving the retail apocalypse that the media would like to blame on Amazon and business rates).  Even this, however, cannot entirely hide another consequence of Britain’s energy decline – the growing inability to maintain the infrastructure.

One example of this can be found in the woefully inadequate energy industry response to the UK government’s pipe dream of phasing out internal combustion engine cars and light vehicles.  As Peter Campbell and Nathalie Thomas at the Financial Times report:

“Electric vehicles currently account for only about 2 per cent of sales in the UK, but a steep rise is expected during the next two years as carmakers strive to meet new stringent CO2 targets and as the country gears up to hit its target of net zero carbon emissions by 2050. Motorway service areas are preparing to increase their charging provisions to meet the jump in demand.

“But Simon Turl, chairman of operator RoadChef, said his company’s attempts to add charging services have been held up by distribution network operators (DNOs), which own local electricity grids and demand millions of pounds and waits of up to three years, to install new power lines.”

One reason for this is that the electricity supply side of the energy industry in the UK is unprofitable.  There is simply no way that the energy companies are about to invest in a massive – Campbell and Thomas estimate at least £1bn – rollout of charging infrastructure if there is no guarantee of recovering the costs. 

Nor is government likely to provide public funding for the additional infrastructure even if it is in response to government policy.  It is more likely that government will attempt to do what it has done with the building of new nuclear power stations, and add the cost to household and business bills.  The flaw in this approach, is that high electricity bills have already become a political hot potato as ever more households struggle to cover the cost.  Worse still, the industrial users which pay people’s wages are also baulking at the rising cost of energy.  Government has already been obliged to impose a cap on prices, and has been pressuring the regulator to lower bills.  And while there may be some justification in adding the cost of the generating infrastructure to bills, the same cannot be said for charging infrastructure from which only an affluent minority will benefit.

Charging infrastructure is, of course, just one example of a raft of infrastructure problems facing an energy industry which is no longer fit for purpose.  The widespread blackout on 9 August 2019 was largely the product of allowing too much renewable energy into the system without first upgrading the infrastructure to account for the well-understood issues that arise from intermittency.  Indeed, while the big outage in August made headline news, similar but localised outages have become an increasing problem as grid managers attempt cope with an electricity grid that lacks the storage capacity to mitigate the increasing volume of electricity being generated with non-renewable renewable energy-harvesting technologies.  As Jack Loughran at Engineering and Technology reported last year:

“A third of UK businesses have suffered a power cut in the last year, the British Chambers of Commerce (BCC) has said, calling into question the reliability of the nation’s power networks.

“The National Grid has been undergoing significant changes in recent years with record levels of renewables coming online alongside declining use of coal power plants.  While renewables are seen as essential for the UK to meet its carbon reduction obligations, their intermittence does create greater instability on the Grid, prompting concerns that even elongated power cuts could become more commonplace without proper backup systems.”

Thus far, the energy industry has used financial solutions to paper over the technical and engineering cracks in the system.  When demand outstrips supply, industrial and business users are paid to stop working; while when supply outstrips demand, industrial users are paid to consume more energy.  And when the power goes off, everyone gets a compensation payment.  Ultimately, though, given the rising number of household and business customers who cannot afford to pay, this financial chicanery will be unsustainable.  At which point, we will face the hard reality that in the 2020s we will be able to have “green” energy or reliable energy or cheap energy.  What we cannot have is a combination of any two of these; still less all three.

As you made it to the end…

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