With the election looming, it’s time to nail your colours to the mast. Ain’t no purdah round here, so here’s my contribution…
If I were Secretary of State for Energy and Climate Change, my mission would be to put us firmly on the path to zero carbon heat and electricity. Only by doing this will we meet our legally binding promise to decarbonise the UK economy and mitigate the worst effects of climate change.
As you’ll see, I also wouldn’t get too hung up on where my remit officially stopped.
To get back on the path, we’ll need to radically improve energy efficiency, develop our ability to shift electricity demand, enable renewables to meet the bulk of our electricity requirements, and rapidly develop our district heating market.
First: ramp up energy efficiency
Reducing carbon emissions by 80% or more can only be achieved on back of deep energy efficiency improvements. It’s also the best way to reduce household energy costs and it greatly improves health outcomes. Despite this, the current UK Government has systematically gutted our main energy efficiency programmes, ignorantly referring to them as “green crap.”
In addition, Green Deal has crashed and burned. The loans are too expensive and the interventions are just too much hassle.
I would make energy efficiency a national infrastructure priority, taking a locally-focused approach and requiring results to be measurable and verifiable. I would bring back a supplier obligation, channelling the funds to local authorities to deploy using their knowledge of local needs.
I would sweep aside Green Deal and replace it with both sticks and carrots. Council tax would be banded according to the efficiency rating of homes, with charges decreasing the better the rating. At the same time, I would bring in zero interest loans for improvement measures, with emphasis on quantifiable results.
Second: genuine market reform
The Electricity Markets Reform has been a massive exercise in changing almost nothing. The recent capacity auction was a case in point, where most of the £1Bn spent was promised to old coal-fired plant and existing generators that would have been available anyway. Demand side response (DSR), estimated to be worth at least £5.6Bn to 2020, was left out in the cold.
I would shake up the Capacity Mechanism to focus on demand side response (DSR) and only the capacity needed to enable high penetration of renewable energy generation. In support of this, and to help fund other measures, I would put a stop to subsidies for fossil fuels (around 0.5% of UK GDP or £15Bn per year).
Whatever level of support for renewables I ended up putting in place, I would stick to a transparent long term plan for degression to provide investor certainty – not create boom and bust with an ever shifting subsidy policy.
The value of generating electricity where people need it has long been ignored. As a small generator, if you want to provide electricity to a neighbouring site, you pay the same charges as if you’d brought the power from a far-off power station. I would sideline the perennial foot-dragging exercise that is License Lite and bring in “short-haul” distribution tariff to allow local generators to get paid a fair share for the benefits they provide.
Third: move the heat market to the next level
Heat networks are essential to meeting our carbon reduction commitments, but in the UK we don’t yet do district heat well enough.
I would make heat a regulated market, covered by OFGEM, with enforced transparency on pricing and network performance. Rather than using planning as our only lever for driving expansion of heat networks, I would enable local authority owned networks to link up new and existing heat schemes. This would provide a backbone distribution network that would allow us to separate generation, distribution and supply and create a genuinely competitive heat market.
Having pulled all this off in my first year in the role, I’d then go on the lecture circuit, patronising colleagues in the US and Europe about how easy this all is, if only we take bold action.
What would you do?
#iIwSoSfEaCC
carbon limited 
Good ideas!
I’d probably make VERY good friends with the Chancellor of the Exchequer, and explain how a more rational energy policy would help solve the current and looming crises caused by all these buggers using less gas and electricity, driving more efficient cars shorter distances, drinking less, smoking less, and bloody well living longer. 😉
The style is flippant but it’s no joke: even more important than the details are how you bake energy efficiency/low carbon energy into the fabric of capitalism and the tax system.
In the event that didn’t get me unceremoniously booted out I’d also try to tackle the real elephant in the room: population. You could discourage bearing children into poverty. (tax breaks rather than direct subsidies) You could discourage bearing children full stop. (Chinese style) You could be selective on migration. You could indeed say no too. Encouraging suicide would no be necessary: people die of natural causes plenty early enough for the planet not to be too bothered.
Exceedingly controversial, but absolutely necessary if you don’t want all the benefits of energy efficiency/low carbon energy to be consumed in the form of an ever greater population. When you’re in a hole, first stop digging!
Somehow I don’t think either of those are an election winner, so we’ll have to leave it to the House of Lords to implement real political changes. Lord Vetinari, if he’s available?
Managing the change on a timescale that allows for managed decline of industries and managed growth of others, rather than overnight events, possibly even more difficult than making the difficult decisions in the first place. Change at a pace which allows folks to retire and not be replaced is good. Change at a pace that makes folks worry about paying the next month’s rent not so much.
Wow! I thought I was going beyond my official remit in the role, but I’m not a patch on you!
Go big.
Build alliances. 😉
The chancellor needs a win and the energy sector can provide it. Start with the business case though, then work the details later.
On the details though, I’d focus on energy security/energy independence rather than carbon to begin with. Why? These have tangible value; today. I’d also go for multi-benefit rather than focusing on energy alone. Why? The incidental benefits are worth more.
Aviation:
Kinda hard to do without hydrocarbons. Short-haul flights for pleasure and unnecessary business flights are probably the worst offenders. Duty is about all we can usefully do. Set the base air passenger duty at a level where flying out to drink money on a Greek beach is unattractive compared with a train to Italy. Set a ticket price threshold above which a penal rate of duty applies that all but eliminates transatlantic business class? I don’t really know who to tackle aviation other than don’t.
Road transport:
The current tax-incentives and emissions-exemptions that promote diesel vehicles are absurd. Level the tax per MWh (gross) and apply the same local emissions standard (Euro V petrol standard; per passenger-km, using the more repalistic US-06 and NYCC drive cycles not the EUDC) to all types of vehicle. Diesel will die as too expensive to run whilst being clean. The EU won’t let you do the latter (the French and Germans wrote the exemptions in) so instead tax the living daylights out of vehicles that haven’t been tested to your own standards by applying emissions-charging for entering cities and penal company car tax rates. Buses and commercial vehicles for use in urban areas are to be tested to the same passenger car standard, rather than being exempted as is the case currently. 1 person = 68 kg for the purpose of cargo parity. You’ll soon see series-hybrid buses running on a 2.0 turbo petrol engine adapted for CNG.
Whilst we’re at it, let’s have meaningful drive-by noise limits for commercial vehicles. This is a clean, quiet, air zone. Sorry EU, we’re allowed to do that too. Vote winner too.
Company car tax is a joke. Vital Energi for example just tweeted a picture of their new fleet of trucks. “Hey everybody, our sales reps and service technicians drive long distances in massive 1,800 kg trucks with the aerodynamics of a chamfered brick. You paid £5k each for these too, and we’ll pay almost no tax. Mwaahahaha.” (actually what they said was look how green we are, but I translated…) If Vital used these for urban parcel delivery, then might have been a sensible choice. As-is, your average sales rep in a regular old Audi A3 or 1-Series is more efficient. Company car tax should reflect the actual usage of the vehicle, and should be in £ per MWh (or kgCO2e) not £ per list price multiplied by notional carbon emissions for some nonsensical use case. (EU drive cycles) Did I also mention that we don’t test for a couple of hours on lab grade fuel that bears no resemblance to pump fuel, but for 60,000 miles on a blend of supermarket fuel. Take your short lived hyper accurate diesel injectors and shove them: we’d prefer dirtier stuff that lasts for more than 5 minutes.
I’d solve this with the commercial vehicle tracker. Every commercial vehicle, including company cars, must be tracked. The tracker must interface with the OBD port, and must log actual (or thereabouts) fuel consumption as reported by the vehicle. They’ll be limited to 62 mph too, of course, to improve fuel economy. Want choice? Buy/lease your own car and use it for business. People are, on the whole, less stupid with their own money. Keep the 40p/mile allowance to incentivise the use of efficient vehicles for tax-free profit.
That’ll knock 10x off urban particulate / NOx emissions and a good 1/3rd off company car fuel use I reckon.
Private operators would be tackled differently. In 1997 the government changed the licensing rules. Those of us who passed a test post 1997 (myself included) can’t tow a 3.5 tonne trailer or drive 7.5 tonne trucks. Quite sensible. You can still learn to drive in a Nissan Micra during summer then jump into a 3.5 tonne sprinter van with a 750 kg trailer and thump down the motorway (which you’ve never been tested on) at night in the rain though.
I’d split car licensing as we split motorcycles: anything less than 750 kg unladen/1,500 kg laden, with a CdA of 0.5 m^2 (equivalent to a saloon car with Cd 0.25 – easy) and an overall width of under 1.8 metres (including mirrors) is a “car” for licensing purposes. With a standard car licence that’s what you can drive. Anything outside this is a commercial vehicle and there are two tests available: rigid or articulated. Yes you can have a Range-Rover for the school run, but only if you’re actually capable of driving a lorry and passing that much stricter commercial vehicle test. You’re then able to drive 26 tonne rigids too. Anybody banned from driving has to retake their test… …and the old categories aren’t available any more. I’d employ some traffic police and issue tickets that say you’re banned for [a series of stupid decisions or demonstrations of ineptitude] in 12 months time. Plenty to retake your test if you can be bothered, and plenty to sell the old car that you know you’ll no longer be able to drive too. It’s all about road safety, see. Too many kids being hurt in crashes. Too many bad drivers etc.
This will bring the fleet average nearer to 60 mpg: it’s hard not to screw up the efficiency of the vehicle if the government sets your mass budget and aerodynamic requirements. To be honest, 60 mpg is probably good enough for now, and achievable with non-hybrid petrol engines and bent metal so cheap as chips. Tackling the fleets of 20-30 mpg vehicles is the biggest win. Those Nissan QashQais/CashCows, MPVs, 4x4s etc. Maybe I’d be kind and allow batteries to count as cargo, just like fuel does. Give 10 years notice of this change. Everybody to be banned from motorways pending a retest that shows they’re still fit to drive. About 1 in 7 will fail on eyesight alone.
Autonomous cars will make all this less bad. Give them a ZIL lane where they can drive at 120 mph on the motorway. I’ll pay £10k extra for that feature, if I had £10k. I’d certainly lease the thing, or cycle to the nearest motorway junction and wait for an autonomous Mercedes sprinter minibus to pick me up and take my folding bicycle and myself to the motorway junction nearest my destination?
You could go Japanese on parking. Register all parking spaces and if you ain’t got one you’re not allowed to own a car bigger than X. Licensing is easier though: less admin.
Vans are not treated separately. You’ll soon get compact city-vans at 750 kg unladen for deliveries, then it’ll probably jump to about 7.5 tonne trucks for bulk. No empty 3.5 tonners carting fresh air around. The disabled aren’t treated separately: 750 kg is again plenty.
Supply of road fuel: the RETAILER must carry the strategic reserve, not the REFINER. At the moment, only refiners have to keep stock of duty-paid petrol and diesel for the national strategic reserve. This is why we’re shutting local refineries and the supermarkets are importing from Rotterdam etc: they have a 1-2p/litre price advantage over indigenous refining. This is moronic, increasing cost/carbon, and sending jobs/tax revenue overseas, but so was the chancellor who introduced it a moron.
Also relax the standards for fuel quality. Nice fuel takes more refining and emits more CO2, but can improve the efficiency of engines. We over-refine in Europe to create fuel that makes the car makers look good and hides all the CO2 at the refineries. Japan and the USA did the math when setting their “regular” grade fuels, and chose 91 RON (or 87 (RON+MON)/2 in the US – about the same as the Japanese 91 RON). The EU asked BMW, who asked for 98 RON, and settled on 95 RON after howls of protest from the oil industry. We’d save about 5% overnight by refining to 91 RON.
Trucks: legalise full size (100 tonne, 50 metre) multi-articulated trucks. The tractor units can handle it and the tech exists to run them anywhere you can run a standard artic:
http://www-cvdc.eng.cam.ac.uk/photo-and-video-gallery
This saves stacks of fuel, especially on those trucks moving the lightweight bulk stuffs that make up a lot of deliveries.
Geo-fence them too. Geo-fence? There’s a compromise between emissions and efficiency. Clean vehicles use more fuel. For trucking it makes sense to run dirty on the motorway and clean on the last leg of the delivery. Write the standards this way (20% fuel saving) rather than imposing a flat limit: we has GPS now.
Bicycles: un-break the rules on electric bikes. Whoever wrote those hasn’t been to Sheffield to tried to cycle outside a housing estate. 20 mph and 2 kW please, not 15 mph and 0.25 kW. 15 mph is dangerous mixing it with traffic. 20 mph is safer.
Roads: tax local authorities on traffic lights, speed bumps, and junctions. Why? They burn more fuel and cause more pollution. Roundabouts and proper highway design please, not emergency band-aids. End the practice of down-grading national speed limit roads with 50/40 mph limits. These were introduced to upgrade 30 mph limits to national limit, not to prevent progress.
A network of cycle lanes between towns and cities. With fibre broadband and naff-off great electricity cables underneath.
Segregated cycle lanes in cities, and more cycle/pedestrian only areas. Minimum standards for public benches and bike racks when building/planning. Bike maintenance stands. (couple of tools attached to wires so you can fix bikes at 3 am even if you only rent a flat/have no stuff or space)
Registration for bicycles. So you can leave them places and come back to them.
Reduce the fixed operating cost of cars and transfer this to the marginal cost. If it costs £1,000 to insure, MOT, and tax a car parked on my drive, then each mile is £0.20, I’ll use that a lot. If it costs £150 to insure the car parked on my drive, then each mile is £0.30, I’ll use that a lot less. Improved driving standards, limitations as to what you are required to insure against, imprisoning all the doctors sanctioning fake whiplash claims etc. (the police have access to the black-box data inside airbag ECUs but the crown prosecution service cannot be bothered to use it to prosecute the doctors and claimants for perjury)
Get the standard high enough and you might consider 3rd party liability included with the fuel cost. It’s a good excuse to start taxing the electricity used for electric vehicles – and far more preferable than tracking individual vehicles/road pricing from a consumer standpoint…
Mandate a £ indicator on dashboards? This sits next to the odometer so that you’re aware of the operating cost of the vehicle as you use it, not as you fill the tank once a month. It’s all about discouraging marginal use without removing the freedom of having a car.
Taxis: legalise shared taxis/splitting fares. This is illegal in the UK: the unions didn’t like the idea. I should be able to hail a car/bus that runs on an adaptive route. Buses on low density routes are obsolete, a taxi driving in circles is cheaper, yet they’re not allowed to operate.
I should stop. The theme though, is do nothing big. Get into bed with the chancellor then change a whole load of seemingly trivial details to halve energy use. Then start thinking about perhaps using some new technology, or doing something complicated, or doing something that might actually cost money rather than make money.
Looks like we’re not that far off either:
-DECC not abolished
-Serious minister with green credentials and a friend of the treasury assigned
-Pickles removed from DCLG and replaced with another minister with green credentials
-PM making a point of visiting Green Investment Bank
Looks like the electorate has been lied to about the green crap…
…Great! 😉
(Disclaimer: strictly personal views!)
I would basically use this parliament to come up with a medium- to long- term plan on heat to be implemented from 2020. I might appoint a minister for heating, cooling and energy efficiency to oversee those in the round (or a Head of Steam as a former colleague always like to call such jobs).
The plan would need to address issues such as the future of the gas distribution network (e.g. reduce its scale, convert to H2) and the regulations that would need to kick in next price control to manage any transition. Similarly, as you say, it would look at the roll-out of district heating and the associated regulations to support it.
In the meantime I would: continue the RHI; invest (as Government, either national or local) in the best of the projects identified in the HNDU feasibility studies; and initiate some pilot low carbon heat zones (towns or villages or cities or parts thereof) that would be empowered to experiment with ways of decarbonising their heating (including actual infrastructure not just feasibility work), a crucial element of which would be engaging their citizens in that process. This would keep a bit of momentum going and inform the development of the longer term plan.
One specific one on energy efficiency is that I would make refurbishment of housing VAT free if it met certain efficiency improvement criteria. This means every time anyone does up a house they can free up 20% of their budget to spend on efficiency improvements, and builders would be incentivised to point this out as it means more work for them.
I wouldn’t worry too much about population (sorry Marko).
Excellent stuff. Thanks, Rufus.
VAT treatment is a good one.
For private housing: everything passive house/enerphit (or similar, robust, standard – no SAP) is exempt from VAT and stamp duty. You’ve got 12 months to comply/get certified following the sale.
Everything else gets hit with VAT (even on newbuild) and stamp duty. Fail to comply in time (refurb project) and you may be selling that house to pay the tax bill.
You could also end the UK’s reliance on housing as an inflation-resistant pension, but that’d require some fiscal discipline I’m not sure governments have.