A Fond Hope

Both the nuclear energy industry and the tidal energy industry are prepared to build new generating capacity but only if the taxpayer guarantees the return of their investment. This is a new kind of capitalism – one which will only take risk if every conceivable risk is covered. The risk reward ratio for these projects, if implemented with a taxpayer guarantee would be virtually 1:100,000. Continue reading

Environmental Trade Wars

The European Union and China are in dispute about photo-voltaic panels made in China and sold in the EU. The EU complains that the panels, which produce electricity during daylight, are being dumped ion the European market, being sold at prices that are significantly below cost and proposes to impose a duty of 47% on imported panels from China. China protests its innocence to the dumping charge and claims that any duty would hurt consumers. Continue reading

My Response to DECC’s Consultation on the Renewable Heat Incentive

I set out below the questions in the RHI Consultation together with my answers. I have underlined the questions.  Continue reading

A Commentary on the Renewable Heat Incentive

A few days ago the Minster of State for Climate Change, Mr Greg Barker, made an announcement on the Renewable Heat Incentive. I was going to write about it, but instead of an essay, I thought that I would add a commentary on the Minister’s statement. I have therefore set out the statement and my comments, and I hope that the Minister can find time to read them and take account of them.

“The Renewable Heat Incentive (RHI) is the first of its kind in the world and provides long term support for renewable heat technologies such as heat pumps, biomass boilers and solar thermal panels.”

The Renewable Heat Incentive may be the first of its kind but like nuclear fusion exists as a concept, when it comes to its application on residential homes, which is the major part of the of where the emissions are created and where the incentive is needed.

“On 26 March 2012 I reaffirmed Government’s commitment to growing the UK market for renewable heat technologies by announcing further support for the domestic sector under a second phase of the Renewable Heat Premium Payment Scheme (RHPP).”

Weasel words indeed. The alleged reaffirmation comprised merely of saying that the residential RHI would come into full operation now three years after this “world’s first” incentive was announced (instead of two years), on uncertain terms.

 “At the same time I set out our delivery timetable for providing longer term support for  households,”

Not quite true, Mr Barker. You did not set out the delivery timetable but extended it!

“expanding the non-domestic scheme and transparent plans for staying within our budget for this year.” 

There was no expansion of significance and the public and solar thermal industry still do not know what the actual yearly incentive will be! That is lack of clarity, not transparency.

“I am pleased to report that we are on track to meet the RHI delivery timetable and have met our first milestone.”

I do not understand what milestone has been met. Can Mr Barker explain what it is because as far as I can see he has simply pushed the milestone further down the road and then run backwards.

“In March we consulted on a mechanism for more effectively managing the RHI budget in the short term.  Today, I am pleased to publish our response which will ensure we have a stand-by budget management mechanism in place this summer, enabling the sustainability of the scheme by allowing us to keep within the budgetary limits set by the Comprehensive Spending Review (CSR).  Further, I can confirm that we are on track to consult on longer term proposals in July 2012 as planned.”

This is re-arranging the deckchairs stuff. The mechanism to ensure that the RHI will be kept within budget will be in place (a) nine months before the RHI for residential homes will take effect and (b) for the rest of the RHI at a time when there is not much take up of the RHI. Over spend is not a present worry. The lack of incentive being predictable and available now is by far the most important issue.

To ensure the supply chain can be maintained with the available funds in this spending review period, we have set an upper limit of £70m for 2012/13.  However, it is important to note that the funding amounts announced in the spending review for 2013/14 and 2014/15 are unchanged. 

The supply chain in the solar thermal industry lost faith with anything that DECC published some time ago. The supply chain has had any certainty while there is uncertainty as to what incentive the supply chain cannot plan. On a small business level, a qualified installer will have had to renew his or her MCPS qualification for two consecutive years without having any business income from that qualification.

The upper limit of £70m ensures that the 2013/14 budget of £251m would be enough to pay for existing installations and new installations, were the 2012/13 limit to be reached.  A higher limit for 2012/13 would leave insufficient funds available in the following year for new installations and therefore could be very damaging to the renewable heat industry.

Agreed but by then will there be a solar thermal industry left in the UK to damage?

In the event of having to use the stand-by mechanism, a notice period of one week would allow for a much higher trigger point for suspension of the scheme (£67.9m, 97% of the £70m limit) compared with one months’ notice (£56m, 80% of the £70m limit) and would also reduce the chances of scheme suspension being triggered unnecessarily.

Probably the least important thing about the RHI.

We recognise the need to provide comprehensive information on current and forecast scheme expenditure and make it publically available.  To do this we will provide a weekly information update on our website, tracking our committed expenditure. If required we will also provide an estimated date of suspension prior to the formal notice period, in the event of an unexpected surge in uptake such that suspension is likely to be triggered.

This will be helpful if the world’s first renewable heat incentive is ever fully implemented.

I would like to thank all those people who helped us develop these plans.  I can confirm that after careful consideration, should we need to use the stand-by mechanism, this will be done when the spend in 2012/13 is forecast to reach £67.9m with a formal notification period of one week.  Given current uptake figures, we do not currently envisage having to use this mechanism. However, we have learnt from our previous experiences and want to provide assurances to the market and the public that we are spending money on the RHI in a sustainable way.

There is no sign that they have learnt from previous errors, but are repeating them.

Government remains committed to the deployment of renewable heat and as such we are continuously looking at innovative ways of supporting it across all sectors.

I simply do not believe this.

Genersys Mexico on youtube!

Ola! 

Our subsidiary, Genersys Mexico, are launching a series of youtube videos where they explain our solar systems to the Mexican public. The first two now out there. www.youtube.com/genersyssolar   

Genersys and solar panels on YouTube

It can be hard to find out what you need to know about renewable energy. There are plenty of good web sites but they don’t always provide the level of information that you need. Sometimes they are too detailed and sometimes they are too vague. Sometimes the information is presented in a form that is hard to digest. 

To try to remedy this and in order to provide reliable information in an easy format Genersys has commissioned its subsidiary media company, Genertik Limited, to make a series of very short YouTube documentaries about solar panels and what they do. They will tell you what you need to know and I hope that you enjoy them.

The Genersys showings can be seen on www.youtube.com/GenersysSolar or else follow the link ion the right hand side on this page

What you should expect from your solar thermal system

There are still various misleading pieces of advice that you get about solar thermal systems – some of them from organisations and people who should know better. If you are laying out four or more thousand pounds for a solar thermal system – usually for water heating – what should you expect from it? I set out below what all good systems should offer.  Continue reading

Planning permission for solar – Waiting for change

On 26th June 2006 Sam Greenhill reported in the Daily Mail that the Government was thinking of making changes to the planning laws to make sure that there was no need to obtain consent to put up solar panels and wind turbines.

He quoted the Housing Minister Yvette Cooper as saying

 “it is patently absurd that you should be able to a satellite dish on your house but have to wrestle with the planning process for small scale microgeneration (sic), which is no more obtrusive and can have a real impact on tackling climate change.” 

The microgeneration industry has been agitating for this change to the planning laws for several years before 2006. I would have thought that changing planning regulations in such a small and obvious way is a very easy thing for a government to do once the Government Minister in charge of such things recognises that a change is needed to alleviate climate change.

Certainly in the case of solar panels which fit at or very slightly above the roof line, there can be no aesthetic objection. The case for small scale wind turbines has yet to be entirely made; if they are sited so that they do generate useful power then the aesthetics have to come after the carbon savings. In any event climate change alleviation is more important than contemporary taste in urban design.

Changing the planning regulations for solar panels should have been easy for Yvette Cooper. She is a clever person who has had a good education – at Oxford University, Harvard and the London School of Economics. Her job officially requires her to take “lead” responsibility for housing policy and programmes including low and zero carbon housing and eco homes. She also has responsibility for climate change. 

Her quotation that I have set out indicates that the change is so obvious so simple to her that in a matter of months we should all have been living under a planning regime where the rules for installing solar panels would be relaxed and as simple as those that relate to satellite dishes. 

Well, that was in June 2006. It looks like the rules will finally be created in April 2008 – nearly two years later. I cannot think of a simpler thing for such a clever person to do or one that fits more vitally into her responsibilities. There is therefore a real puzzle; why is it taking her so long?

Gordon Brown’s solar panels and David Cameron’s turbine

Hilary Benn has been quiet this week because he has been very busy saving us all from global warming in Bali, although I do not think he has any takers for his Climate Change Bill, except of course the lemmings who always vote for their party, right or wrong, at Westminster.    

It looks like Bali will end up with non- binding targets as a compromise. Binding targets are not being adhered to in any event so I don’t see that non binding targets will make any difference. Compromises are all very fine in some fields but unfortunately the laws of physics do not compromise.  

Meanwhile our leader, Gordon Brown, has solar thermal panels up on his house in Fife while David Cameron has a small wind turbine on his house in London. Some people have been trying to assess which is the greenest in the press.

It has been reported that Cameron’s wind turbine has a pay back of 60 years and Brown’s has a pay back of 100 years.  Both figures are complete nonsense and seemed to be based on a simpleton’s view of physics and a pre-school child’s view of economics.

Savings have to depend on the energy use by the household where the renewable technology is installed. Actual payback has to take account of all the financial benefits; these long wrong payback figures are based on energy prices several years ago and assume that energy prices will remain constant forever. 

If payback is important (and why do journalists imply that renewable energy installations should have payback when fossil fuel installations have none?) you have to do the figures properly. If you believe that no fossil fuel prices will increase during the next 100 years, you cannot be living in this world. 

Of course, it should be apparent even to the most ignorant that payback is nothing to do with being green. Payback is an economic concept under which you can calculate how long it takes to get your money back on an investment from savings that the investment generates. 

I will deal with Mr Cameron’s wind turbine first. It is located in a city, where there is doubtless a great deal of wind shelter and it is small; the smaller the turbine the less efficient it is. It probably produces around 20% of its rating but calculating wind energy savings is a complex and difficult task; I would expect Mr Cameron to get a payback in less than 25 years although I am not sure. 

Of course Mr Cameron will never get his money back from the utility company that will continue to supply most of his electricity, despite his wind turbine, so offering a payback is a bonus to be green, not the rationale for being green.  The real payback for Mr Cameron and for the planet will be the carbon dioxide reduction, which will last as long as the turbine lasts – probably around 15 years. 

Mr Brown seems to be unfairly dealt with; I have not visited his home but from the photographs that appeared in the newspapers some time ago I gather that he had solar thermal panels installed; the 100 year payback was probably calculated on the basis of the much more expensive photovoltaic electricity producing panels, and even then 100 years is a gross exaggeration. 

A typical householder installing a solar thermal system will usually get his or her money back in eight to twelve years, when you take into account future fuel costs, lower boiler servicing, and longer boiler life and allow for inflation and loss of use of capital. Much depends on which fossil fuel is being displaced. 

Much longer payback figures apply if you are unfortunate enough to be sold a system by a “cowboy” operator that charges double or treble the normal price, but there are very few of them around these days and Mr Brown does not seem to be the kind of chap to buy from one of these companies. 

His personal payback will be lower than that of a typical family because he rarely lives in his house in Fife, for obvious reasons. The solar system will be generating free energy that no one will use. Again the real savings will be the carbon savings – at least half a tonne a year of carbon dioxide if the system displaces gas, nearly a tonne if it displaces oil and one and a quarter tonnes if it displaces electricity. The savings will last (if Mr Brown has high quality panels) for somewhere between 20 and 40 years.

Everyone who reads my writings knows that I am not reluctant to criticise politicians, to designate them and scoundrels, rogues and incompetents when it comes to their shabby governance of the environment; but when they do something right then it is equally important to point it out in the hope that they will do the right thing more often. 

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Biomass in Lambeth – It ain’t necessarily green

I was at a short meeting organised by a leading firm of estate agents last week. I discussed the issue of renewables with some of the professionals concerned in developing new blocks of flats throughout the south east of England. I asked them what their developer clients were doing about renewables. Continue reading