Transcript Feed in Tariffs in Australia, the Czech Republic and Germany

Breaking the Link between Growth and Impact:
The Challenge of this Decade
Peter Young Strategy Director SKM Enviros
& Chairman, Aldersgate Group
IEMA Conference Tuesday 15th November 2011
The next 25 minutes we will:
• Remind ourselves where we are heading, it’s getting
really urgent.
• Introduce the three key components to give us economic
prosperity whilst changing course for a sustainable future
1.
2.
3.
Electricity
Energy efficiency
Resource efficiency
• Ask what are the UK’s Policy Priorities?
• Hear my top 4 actions
Keep up, breaking the link between
growth and impact is a big ask!
achieve outstanding client success
Where are we heading? Global Population
in Billions....
What do you
think we can
cope with re:
•Carbon Dioxide?
•Water?
•Food?
3
.....Observed Global Temperatures
and Carbon Dioxide + ...
4
.... Future Carbon Dioxide Emissions to
2100
+6oC?
+2oC?
5
UK GHG emissions since 1990:
Production down by c15% but Consumption up by c20%
DE-COUPLING GROWTH
AND IMPACT:
A CALL TO ACTION
Cities: Design for eg Carbon Intensity
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Food Supply and Security
• Food now 23% of global ecological footprint with
2.5bn more to feed in next 30 years
• Eg in UK we need 5.2gha, when 1.7gha is
available capacity/capita
• Water use, sustainable nutrients and food supply
chain must all be reformed
• Taxation, regulation, procurement and consumer
behaviour change are all required - urgently
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Carbon - The UK’s statutory targets
• 34% cut in emissions on 1990 levels by 2020 –
Energy/resource efficiency is the quickest gain
GHG reduction: illustrative contribution from different sectors
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By 2050 UK carbon targets require transformation of whole
economy – and transformation means electrification
•
•
•
Not only decarbonising
electricity
generation
But also to
facilitate
savings in
other energy
use
emissions
categories
Most
sectors rely
on more
electricity
and
efficiency
DE-COUPLING GROWTH
AND IMPACT:
1. ELECTRICITY SUPPLY
Around 25GW will need to be
replaced in next 10 years – but...
100
90
80
70
GW
60
50
40
30
20
10
0
2010
2013
2016
2019
2022
2025
Nuclear
Coal
CCGT
New CCGT
OCGT & Oil
Hydro
Renew
Peak Demand
Peak Dem + 20%
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...Changing Demand
means we need more
• Demand doubles by 2030
– Peak in 2010 = ~45GW
– Peak in 2030 = ~85GW
• New loads heat pumps /
plug in vehicles
• Better storage vital
• Potential cost £110 billion
over decade:
– £75bn on generation
– £35bn on distribution
(>double last 10 years)
Figure taken from Energy White Paper
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UK renewables – lots to do
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Incentives for renewables
• Feed in Tariffs - most successful financial
incentive for renewable electricity - real growth
in capacity
• But regular revisions in quickly changing market
(though changes not dramatic enough to
destabilise the market)
• Need to be economically sustainable
• Need clear long term targets
achieve outstanding client success
Policies: Feed-in tariffs: a track record of driving
investment
Feed-in tariffs (FiTs) are in place in ~28 countries; designs and impact vary
widely
FiTs supported: 75% of global PV capacity and 45% of global wind capacity
through 2008
2009
EU new
Capacity
26 GW
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PV - European success story
Source: EPIA Global Market outlook
for PV until 2015
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EU – installed PV as at 2010
Success
Reflects
FiTs not
Sunshine!
Source: EPIA Global Market outlook
for PV until 2015
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DE-COUPLING GROWTH
AND IMPACT:
2. ENERGY EFFICIENCY
Global Energy Demand
..... Global Energy Inefficiency....
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22
7
DE-COUPLING GROWTH
AND IMPACT:
3. RESOURCE EFFICIENCY
(MATERIALS + WATER)
The True Cost of Wastage
Visible costs 10%
Defra: £27bn/year
Direct use 10%
Energy Bill
Waste Bill
Hidden costs 90%!
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Water Bill
Indirect use 90%!
Waste Prevention
Eliminate
Avoid wastage of materials
and utilities at source
Recycle
Recycle (waste/utilities) only
after you have minimised
wastage
Reduce
Minimise wastage of
materials and utilities
Use
materials/waste/utilities as
many times as possible
Recover Value
Recover the energy from any
remaining
waste/effluent/emissions
Waste Management
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Re-use
Dispose
Dispose of
waste/effluent/emissions in a
responsible way
Prevention vs Recycling Multiplier (CO2e)
One Case Study: Process Efficiency
•
•
•
•
•
Toiletries manufacturer
£16m turnover
£20k waste bill, but ....
3% mixing and filling losses
5% product never sold!
Estimated Cost
Saving
Estimated Environmental Saving
(Product Waste)
80% cut in residue losses
£125K
62,600 litres of material/effluent
£20K?
80% cut in cleaning losses
£200K
100,000 litres of material/effluent
£10K?
50% cut in overfill losses
£525K
262,500 litres of material resources
£100K?
Labour efficiencies in capping
operation
£200K
Process
Opportunity
Mixing
Filling
TOTAL
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£1,050,000
Expected
Investment
£150K?
425 m³
£280,000
WHAT ARE THE UK POLICY
PRIORITIES?
1)
2)
3)
4)
5)
Build on a great platform, UK has led in long
term policies – Climate Change Act, Statutory
Carbon Budgets
Deliver on promising new initiatives of Green
Investment Bank, Green Deal, Natural
Environment White Paper (Natural Capital
Accounts) and Electricity Market Reform
Remove uncertainty; and clarify and simplify
wherever possible
Build credibility to encourage bold
international decisions at Durban, Rio +20
Demonstrate that green growth and
sustainability is at the core of all future UK
economic policy and support
Example - Decarbonisation of Energy
Supply and Use.... Clear enough yet?
Utility
Energy
Supplies
Decarbonise
Electricity
Supplies
Industrial
Energy
Users
Commercial
Energy
Users
Renewable Obligation
Domestic
Energy
Users
FITS
Electricity Market Reform
Decarbonise
Heat
Supplies
EUETS
RHI
CCL Exemption for CHP
EUETS
Energy
Efficiency
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CCAs
CRC
Building Regulations
Green Deal
Electricity Market Reform - Timeline
YEAR
Legislation
11
12
Primary
Leg.
13
14
*First CfD signed
Capacity Mechanism
17
18
19
*possible first payments
*Capacity procured as required
*CFP rising incrementally (£16 to £30)
EPS
Transition to CFD
16
Secondary
Leg.
FITS with CfD
CFP
15
*EPS in force
RO open to new gen.
Choice RO or CfD.
RO vintaged
FiTs - Feed in Tariffs; CfD - Contracts for Difference; CFP- Carbon Floor Price;
EPS - Emissions Performance Standard; RO - Renewable Obligation
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20
Electricity Market Reform – don’t forget
energy efficiency
1. DECC to have new office “to drive a step
change in national energy efficiency in autumn
of 2011”
2. DECC will “work with leading industrial experts
to drive further carbon abatement across the
economy”
3. DECC focus – heating and cooling
4. Incentives for Energy Efficiency will be
assessed by Government over coming year
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Aldersgate Group’s ‘Growth Statement’
1) Streamline climate change & energy policy to raise ambition;
reduce complexity; drive more investment in energy efficiency.
2) Clear rationale and objectives to meet the commitment to increase
the proportion of tax revenue from environmental taxes.
3) Ensure the sectoral growth reviews and enterprise zones are
driving forces for a green economy.
4) Put the Green Investment Bank at the forefront of the growth
strategy by ensuring it can borrow on inception and pass
legislation by 2012.
5) Following publication of Skills for a Green Economy, work with
business to develop a comprehensive action plan to address
green skills gaps.
6) Enhance public procurement role and increase support for
research, development and demonstration (RD&D) to drive
innovation.
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In Conclusion: My top 4 actions to
De-Couple Growth and Impact:
1. Recognition that sustainable growth is the only growth that
is ..err... sustainable
2. Clear long term policies and frameworks that tell investors
there will be no U turns – evolution not revolution
3. Relentless pricing of the environment and taxing ‘bads’
(carbon, pollution) not ‘goods’ (jobs, income) so the greener
businesses will thrive and drive growth
4. Me and you! Individual responsibility and behaviour change
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