Filling the coal mine

Coal will go down as one of the most significant resources in the UK’s industrial, economic and social history. First mined shortly after Roman times, it powered the industrial revolution and moulded the UK into the world’s economic powerhouse through the nineteenth and into the twentieth century.

However, it is not always widely appreciated that UK coal production actually peaked in 1913 and has been in decline ever since. In 1970, coal generated about two-thirds of all electricity, but in 2015 it generated just over a fifth, and government policy is for coal-fired power stations without carbon limiting technology to close by 2025.

By contrast, civil nuclear power is at the exciting early stages of a resurgence, after many years where there was a combination of a dash for gas and lack of investment in the UK’s energy infrastructure. As the 16GW nuclear new build programme gathers pace, Energy Secretary Amber Rudd MP has said that nuclear is “central to our energy secure future”, whilst noting “unabated coal is simply not sustainable.”

Not sustainable because it is a finite, polluting resource which the developed world is turning its back on. The outcome of international climate talks in Paris last year clearly illustrated this trend and showed how countries are working together to combat the growing effects of climate change and air pollution. Nations are now searching for their perfect energy mix to maintain economic growth and security of supply, at the same time as reducing carbon emissions. 

Unfortunately there is no silver bullet for solving the energy mix question, but for many countries coal is no longer even part of the answer. With 80% of our heating coming from gas in the UK, it will continue to play a significant role alongside renewables and nuclear. Interconnectors, demand management and storage technologies will continue to develop too. It is a complex picture, but one which requires a nuanced and balanced response.

The advantages of renewables are clear but, because of their inherent intermittence and with no large scale and low-carbon industrial storage option likely in the foreseeable future, it means nuclear power remains a necessity because it generates the baseload, low-carbon power required to keep the lights on and our economy flourishing.

The drive for secure, reliable and low-carbon alternatives mean the north will also look to another one of its distinguished industries to help provide the energy for the Northern Powerhouse.

Ever since the end of the Second World War, the nuclear industry has provided the north, particularly the north-west, with high-skill, high-value careers. Sellafield, once a secretive munitions site, deliberately hidden from the Luftwaffe, is now a hive of activity with over 10,000 employees on site working to decommission the vast and complicated site. Significant progress has been made in recent years and Sellafield, once seen as a relic of the sector, is being transformed by new innovations in nuclear decommissioning. Skills and expertise, which are nurturing a specialism that is world renowned, are being exported to Japan and into other international markets.

Next to Sellafield, NuGeneration is finalising its plans to build three new reactors to help power the north. Based in Manchester, the joint venture between Toshiba and ENGIE aims to build 3.8GW of new nuclear capacity in Cumbria on its Moorside site. The project will create tens of thousands of new jobs and supply chain opportunities, not only in the north of England but across the UK. It will also generate sustainable careers when operating, and provide surrounding communities with low-carbon, secure electricity for at least 60 years.

Nuclear reactors are nothing new in the north of England. Calder Hall, Hartlepool and Heysham 1 and 2 have powered the north since 1957 and will continue to until at least 2030 when Heysham 2 is scheduled to shut down. Stations which have provided jobs for over a century and avoided the emissions of millions of tonnes of CO2. The potential of small modular reactors, currently under consideration by the Government, presents even greater manufacturing and supply chain opportunities that will benefit industry in the north of England.

While unabated coal continues to decline in its significance as an energy source, the nuclear sector represents a great opportunity for the north – both in complementing other ways of generating electricity as the distinction between electricity and energy demand is eroded, but also in providing long-term, skilled employment in construction, operation and supplying components for those power stations. Nuclear energy is not just a necessity, it is also an opportunity.

Tom Greatrex is the CEO of Nuclear Industry Association

The views expressed in this article are those of the author, not necessarily those of Bright Blue.

Electric vehicles: driving future growth

Greater uptake of electric vehicles (EVs) will be important for decarbonising Britain’s transport sector, since it will mean a reduction in the use of petrol and diesel cars. Air quality will also be improved as harmful emissions such as particulate matter and nitrogen dioxide are reduced.

In addition to these environmental and health factors, there has been a number of recent studies about the economic impact of EVs on the UK. One of the aims of Bright Blue’s Green conservatism project is to advocate green policies that enhance Britain’s prosperity. This blog will examine the potential for EVs to contribute to jobs and growth in the UK economy.

Current performance

The electric car industry is currently enjoying phenomenal growth in the UK. There are two main types of EV: a plug-in hybrid, which has both an electric motor and an internal combustion engine, and a pure EV, which just has an electric motor. According to the Society of Motor Manufacturers and Traders (SMMT), 2015 saw a 50% increase in sales for pure EVs compared to the previous year. Tesla’s new model of electric vehicle received 276,000 pre-orders in three days of launching. Last week, Nissan Europe reported record sales of EVs in 2015, an increase of 45% in the previous year. They ascribe much of this increase to businesses looking to decarbonise their vehicle fleets.

There is still a long way to go before EVs properly penetrate the automotive market, however. Large percentage gains mask the fact that EV sales are starting from a very low base. Even among new car sales, EVs make up just over 1%. They are also still very dependent upon government subsidy to compensate buyers for the greater upfront cost. In December 2015, the Government committed to spending £600 million on the plug-in car grant system over the next five years. Under the revised scheme, buyers of pure EVs receive a subsidy of £4,500, while new owners of plug-in hybrid vehicles get £2,500. The Department for Transport’s target is for 100,000 drivers to benefit from this support.

Future success

In its report on the fifth carbon budget, the Committee on Climate Change has said that EVs need to constitute 9% of new vehicle sales in the UK by 2020 and around 60% by 2030, if the most cost-effective path to carbonisation is to be achieved. This is very ambitious growth, and will require significant reductions in the upfront cost. There is evidence that this will be achievable. The CCC’s finding that EVs will become cost-effective in the mid-2020s is supported by Bloomberg New Energy Finance's recent analysis of this market. They studied particularly the costs of batteries, which are one of the main factors driving the price of EVs. Lithium-ion batteries have fallen in cost by 65% since 2010, with costs expected to fall further to around a third of their current level by 2030. Their report found that 2025 was the year the cost of EV ownership fell below that of conventional vehicles.

Green jobs

This boom in EV sales with have a major impact in the UK, both in the automotive industry and the wider economy. A study published this month by Loughborough University found that the electric vehicle industry in the UK could support 320,000 jobs and generate £51 billion of economic activity by 2030. This is contingent on further government investment in electric vehicle infrastructure and training of skilled mechanics. Cambridge Econometrics has also tried to quantify the direct economic benefits of EVs. In a report from 2013, they forecast that there would be 7,000 to 19,000 net additional jobs by 2030 under a low-carbon transport transition. This is because the UK petroleum industry is not very job-intensive. Moreover, as the UK is now a net importer of oil, the switch to powering vehicles with British-produced electricity will accrue more revenue for UK energy companies.

Because of the importance of the price of oil to the wider economy, the increased uptake of EVs in the UK will have an impact beyond the automotive sector. Last week's report by Cambridge Econometrics found that policies to tackle climate change, including the transition away from combustion engine vehicles, will reduce demand for oil across the EU and therefore lower the price compared to what it otherwise would have been. They find that this lower price will increase real incomes and enable more consumer spending on UK-produced goods and services. This model of course is predicated upon a number of assumptions, but it provides confidence that the transition will be broadly economically positive.

The UK automotive industry has enjoyed a renaissance in recent years. If this important sector, and the jobs that depend on it, is to thrive in the low-carbon economy, the UK must ensure it become a world leader in electric vehicles.

Sam Hall is a Researcher at Bright Blue