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Energy Market Reform for Renewables

By Michael Grubb, on 18 November 2015

distribution_electricity_concept_view (c) UCLThe UK’s Energy Market Reform was introduced for two main reasons: concern that inadequate private investment under the liberalized system was eroding the UK’s security of supply, and growing recognition that the existing system of Renewables Obligation Certificates (ROC) support was an inefficient way to support capital-intensive, low carbon investments like renewable energy. The EMR was intended to address these concerns. Contracts-for-Difference (CfDs), providing a long term fixed-price contract, were introduced to enhance investor confidence and thus reduce financing costs; CfDs were seen not only as a preferable way to support renewable energy, but also one applicable to nuclear energy. The Capacity Mechanism introduced fixed payments to all plants guaranteeing power available when needed. Read the rest of this entry »

Is Amber Rudd’s energy policy ‘reset’ innovation-friendly?

By Will A S McDowall, on 4 November 2015

windturbineschematic-©-istockby Will McDowall and Andrew ZP Smith

Innovation is one of those uncontroversially good things that politicians love to champion. For those worried about the economy, innovation is agreed to be a fundamental driver of long-term economic growth. For everyone worried about the environment, innovation is crucial for decoupling that growth from environmental damages, and achieving the deep reductions in emissions that are necessary.

So far, so much agreement. But academics, policy analysts and commentators have often disagreed about the detail of how best to drive innovation, particularly in clean technologies. There are some economists who argue that, beyond some support for basic R&D, government should be involved as little as possible. They argue that innovation is too uncertain for governments to engage in: it’s private actors that should take on the risks and rewards of developing the technologies and systems of tomorrow. After all, who other than businesses can really know what consumers will demand? Read the rest of this entry »

RE-SETTING UK ENERGY POLICY: What role for Economic Instruments?

By Paul Ekins, on 4 November 2015

energy saving (c) istockphoto iznogoodThere is growing bewilderment practically everywhere about what the still relatively new UK Government is doing is respect of energy policy. The mantra since the election is that energy policy is to be re-set to achieve decarbonisation targets, to which the government says that it is still committed, in a more cost-effective way that will benefit the ‘hard-working families’ to which the government says that it is also committed. Unfortunately it is quite impossible to recognise this laudable objective in the policies that have so far been implemented, especially those which use those policies called economic instruments – basically taxes, charges and subsidies – which are the subject of this blog. Read the rest of this entry »

UK residential energy efficiency policy: taking stock

By Ian G Hamilton, on 19 October 2015

By Peter Mallaburn and Ian Hamilton, UCL Energy Institute

Over the past 25 years, the UK residential sector’s energy efficiency policy has primarily been directed through a combination of: programmes requiring energy suppliers to retrofit efficiency improvements; building regulations; appliance efficiency standards; and more recently a short-lived market-based approach, the ‘Green Deal’.  These programmes have had multiple aims: to reduce general consumer exposure to rising energy prices (sometimes with other benefits eg. warmer and/or quieter homes from double-glazing); to reduce national energy dependence and environmental impacts; and to protect vulnerable customers.

With energy policy once again in a state of flux, it is worth now briefly reviewing some of what has happened within the residential energy policy landscape over the past 25 years, and offer some insights for future policy. Read the rest of this entry »

UK energy policy: rationalisation or politicisation?

By Michael Grubb, on 30 September 2015

A James size A3The conservative government inherited a problem in energy policy. So did the coalition government before it. As so often, the coalition’s solution to the problems inherited from the 2000s have fed the concerns of its successor, and the new government has set about changes with zeal: the first hundred days saw the end of subsidies to onshore wind and changing planning laws, requiring renewables to pay the climate change levy, initiating drastic cuts to feed-in tariffs, scrapping the ‘Green Deal’ and zero carbon homes policies, and deferring this year’s auctions for new renewable energy capacity. Read the rest of this entry »

Are oil sands incompatible with action on climate change?

By Christophe E McGlade, on 16 April 2015

Oil sands Alberta, Canada. Source: istockphotoby Dr Christophe McGlade and Prof Paul Ekins, UCL Institute for Sustainable Resources

Shortly after our study on unused fossil fuels was published in Nature[1], Andrew Leach, an acknowledged expert in Canadian oil sands, wrote a piece scrutinising some of our conclusions. We were grateful for Andrew’s comments, which he said could be summarised as ‘plenty of good, a lot of bad, and some ugly’. Read the rest of this entry »

LEAVING FOSSIL FUELS IN THE GROUND: HOW MUCH, WHERE AND OVER WHAT TIME FRAME?

By Christophe E McGlade, on 12 March 2015

shale gas extraction © istockphoto

by Dr Christophe McGlade and Prof Paul Ekins, UCL Institute for Sustainable Resources

We have known for some time that to limit global warming, some of the world’s fossil fuel reserves are going to have to stay in the ground. All of the carbon dioxide that would result from burning current fossil fuel reserves is around three times the amount that gives us a decent chance of staying below the 2oC threshold (the temperature rise accepted by the international community as associated with the possible onset of dangerous climate change).

Until recently people therefore frequently reported that two thirds of fossil fuels globally were ‘unburnable’. While it’s possible to get lots of interesting insights from this simple finding, this treats all the fossil fuels as the same. This is too simplistic. Read the rest of this entry »