A turbo-charge statement for electric vehicles

This week’s Autumn Statement brought some good news for proponents of electric vehicles. With lower than expected tax receipts and a worsening economic outlook due to Brexit, the Chancellor did not have much cash to give out. The new spending that he did announce was focused on infrastructure, a long-term approach that he hoped would be rewarded by increased tax revenues in the future.

This is intended to tackle one of the fundamental weaknesses of the UK economy that the Chancellor rightly identified in his speech: Poor productivity growth. ‘Productivity’ measures how much economic value is created from a fixed period of labour. Strong productivity growth signals long-term wage rises and economic growth. Concerningly, under this crucial metric, the UK lags well behind Germany and the US by some 30 percentage points. Infrastructure investment helps to improve productivity. For instance, investment in transport can reduce workers’ journey times, freeing up space in the day for more economically productive activity.

The Autumn Statement measures

This is where electric vehicles come in. As part of the £23 billion National Productivity Investment Fund, £390 million of funding over the next four years will be spent on developing future transport technologies. This includes £80 million for electric vehicle charging infrastructure and £150 million of support for low emission buses and taxis.

In addition to this new spending, there were several tax changes to incentivise uptake of electric vehicles. Companies will be given 100% first-year capital allowances for investments in new charging infrastructure until 2019, allowing businesses to deduct the cost of new charge points from their corporate tax bill. And although the Chancellor heavily pruned back salary sacrifice schemes in his statement, the perk was retained for schemes supporting electric vehicles. There were also changes to company car tax, creating lower bands for electric vehicles.

What should come next?

Bright Blue has two further policy recommendations that would drive uptake of electric vehicles, at little additional cost to the Treasury. First, the current plans for five Clean Air Zones in Derby, Nottingham, Birmingham, Leeds, and Southampton should be expanded. Earlier this week, the Government was told by the High Court it had until April 2017 to draw up a new draft air quality plan, as the previous one took too long to bring the UK into compliance with the legal limits.

We recommend devolving more funding and powers to city councils to enable all of them to set up Clean Air Zones where pollution is a problem. As well as charging the most polluting vehicles, Clean Air Zones will give preferential access to city centres to electric vehicles, such as priority at traffic lights and designated parking spaces. Academics have found that, in Germany, where there is a national network of over 70 low emission zones, owners of older, polluting vehicles have traded them in for cleaner ones. So a network of Clean Air Zones could stimulate the electric vehicle market in the UK too.

Second, this week’s Autumn Statement extended the lifetime of the UK Guarantees Scheme until at least 2026. Under this policy, the Treasury guarantees loans to private sector investors, giving them access to capital to fund new infrastructure. Since it was launched under the Coalition Government, it has given out £1.8 billion of guarantees, supporting over £4 billion of investment. We believe these loan guarantees could also be offered to drive investment in a network of charging points for electric vehicles.

Why is this important?

Accelerating the electric vehicle revolution offers many potential benefits, in addition to improving air quality. The Government is currently drafting its Emission Reduction Plan, which will set out how the legally-binding carbon budgets will be met. Transport now has the highest carbon emissions of any sector in the economy. What’s more, these emissions have actually risen for the past two years. Electrifying the car fleet would help the government make progress in decarbonising this stubbornly high-emitting sector.

Boosting electric vehicle uptake is also likely to be a key plank of the Government’s forthcoming industrial strategy. The UK is already the largest market for electric vehicles in Europe. Nissan, for instance, has invested over £420 million in the UK to build its electric vehicle, the Leaf. In 2015, the number of electric cars on the roads globally surpassed a million, more than doubling the total in 2014. This was also the year when electric vehicles’ market share of new purchases in the UK rose above 1%. Electric vehicles are a major economic opportunity for the UK to seize.

Electric cars are still near the start of their journey. But, as a result of the Chancellor’s measures this week, they have moved a few miles further towards the destination.

Sam Hall is a researcher at Bright Blue

Intermittent renewable generation concerns get blown away

This week, a new report, Plugging the Energy Gap, was released based on research by Imperial College London. It looks at how to secure our future electricity needs at least cost and addresses common concerns regarding the intermittency and reliability of renewable energy generation like wind and solar. Such concerns have, in part, led to government blocking announcements on future auctions, which are the route-to-market for onshore wind farms and solar photovoltaic (PV) projects in the UK. Results of the report, however, show that these concerns are based on perceived, rather than actual, cost barriers and that the cheapest way to decarbonise our power system would in fact involve large volumes of variable renewable generation. This is the case even if any additional costs of creating the flexible system needed to manage intermittency are taken into account.

Good value for money for consumers

As conventional power stations close down, Britain is facing an “energy gap”.  By 2030, the UK requires the construction of new low carbon generation capacity capable of producing over 150TWh of electricity each year by 2030. That is the equivalent of around half of all current annual consumption.

This creates an unprecedented opportunity to create a secure, clean, flexible energy system fit for the twenty-first century. However, new policies are required to ensure that the capacity to plug this energy gap is delivered at least cost to consumers.

With this in mind, it seems evident that low carbon procurement decisions should be underpinned by value for money. On the 9th November 2016, the Government announced its second round of auctions for less established renewables. It did not, however, provide a clear cost justification on why budget had not been allocated to lowest cost, mature technologies. This was despite a very clear recommendation made by the Competition and Markets Authority in June this year following their investigation of the energy market, to provide evidence that these procurement decisions did indeed deliver value for money.

The lack of justification is even more troubling because on the same day the Government also published an update of the cost of electricity from new power stations. This clearly highlights that mature renewables like onshore wind and solar PV are by far the cheapest form of low carbon generation in the UK. In fact, it predicts that, in just a few years, mature renewable projects are expected to be the cheapest form of generation in the UK - and that includes gas. The renewables industry believes that onshore wind and solar PV are already cheaper than gas, but a new auction round is required to prove this.

The cost of intermittency

Understanding the real cost of variable renewables is not simple. Renewables, like solar and wind, are infamous for being intermittent. Even though wind and sunshine are free, there is a hidden cost to keeping the lights on when the sun isn’t shining and the wind isn’t blowing.

In a report on costs, the Department for Business, Energy and Industrial Strategy has said that they are working on understanding this topic in more detail. There is, however, already a growing body of evidence to inform this question and Imperial College London has been working on this issue. Their findings, reported in Plugging the Energy Gap, conclude that “the cheapest way to decarbonise the power system involves large volumes of variable renewable generation even when taking system integration costs into account.”

The analysis shows that it would be possible to more than double the levels of variable renewables without adding significant integration costs to consumers from current levels. So, contrary to general perception, system integration costs do not change the fact that mature renewable technologies are the cheapest form of low carbon generation. Given a chance to participate in future auctions, evidence suggests that mature renewable technologies will prove beyond doubt that they are cheaper today even than gas.

With the looming “energy gap”, the UK will need to build new generating capacity to deliver at least 150TWh more electricity per year by 2030.  This is an unprecedented opportunity to create a modern, secure, clean and flexible energy system.  Mature renewable technologies are still the cheapest form of new low carbon generation, even taking into account the costs of dealing with their intermittency. The Government will need to provide a clear trajectory for the deployment of all low carbon generation that is consistent with delivering on its long-term carbon budgets at least cost. At the same time, it can continue to grow regional supply chains as part of its industrial strategy. Plans to fill the energy gap and, at the same time, deliver on carbon budgets should strive to maximise the advantages for both consumers and the economy.

Alex Coulton is a senior policy analyst at RES

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

We’ll always have Paris

This week, delegates from almost 200 countries are gathering in Marrakech for the next round of UN climate talks. There are many reasons for climate diplomats to be cheerful. Last year’s Paris Climate Agreement, signed by all those countries, has come into legal force over a year earlier than planned. All the major emitters, including the US, China, India, and the EU, have now completed domestic ratification of the treaty. The global economy seems firmly set on a trajectory towards net zero emissions by the end of this century.

But despite these successes, there are several major challenges facing attendees in Marrakesh: how to increase individual emission pledges, how to raise sufficient climate finance, and how to respond to President-elect Trump.

Ratcheting up the ambition

Signatories to the Paris Agreement pledged to limit average global temperature rises to well below two degrees and to aim for a rise of just 1.5 degrees. Yet the Intended Nationally Defined Contributions (INDCs), voluntary pledges by individual countries of how much they would cut their emissions, are not sufficient to achieve these high-level goals.

Ahead of the summit in Marrakesh, the United Nation’s Environment Programme released a report on the ‘emission gap’, which is the deficit between the INDCs and the long-term goals. They find that current pledges will lead to an average warming of around 3.2 degrees above pre-industrial levels. They also calculate that, under current INDCs, both the 1.5 and 2 degrees ‘carbon budget’, the total amount of carbon that can be emitted before temperatures rise above a certain level, would be easily exceeded by 2030.

In the text of the agreement, there is a resolution to begin a dialogue in 2018 on progress towards the 1.5 and 2 degree targets. Another key feature of the Paris deal is that signatories must reassess and increase their individual contributions every five years to help ensure the high-level goals are met. The first occasion this will happen is in 2020. So there are mechanisms for scaling up pledges, but urgent progress is required.

Securing climate finance

The support of developing countries for the Paris Agreement was contingent on securing sufficient funding to help them mitigate and adapt to climate change. A total of $100 billion per annum by 2020 must be raised by developed countries. The UK Government this week released a statement showing that funding currently stands at $62 billion per annum, up from $53 billion in 2013. The UK’s own contribution is set to rise to £1.76 billion by 2020.

Donald Trump has said he will cancel the United States’ payments to this fund. President Obama had pledged to give a total of $3 billion by 2020. Assuming Trump follows through with this election pledge, replacement finance will now be required, as well as the outstanding amount.

Managing President-elect Donald Trump

During his election campaign, Donald Trump pledged to withdraw the US from the Paris Agreement. But as the ratification process was so swift, he is unable to cancel the treaty altogether. In fact, reports have suggested the possibility of Trump as President helped instil the urgency to bring the treaty into force. In theory, the US would have to wait four years before it could leave, but in reality, there is little to stop him disregarding the emission reduction pledges made by President Obama. In addition, Trump has promised to “end the war on coal”, and review the current regulations helping to drive coal off the system.

Nevertheless, strong economic forces, as much as political will, are now helping to drive decarbonisation. The rapidly-falling costs of low-carbon technologies have made renewables as cheap as, if not cheaper than, traditional fossil fuels. The International Energy Agency (IEA) reported that costs of onshore wind have fallen by 30% between 2010 and 2015, and those of solar by two-thirds. Independent analysis for the UK Government this week show that onshore wind and solar will both outcompete gas on price by 2025. This may help keep the US, and indeed the rest of the world, on a low-carbon trajectory in the absence of presidential leadership.

Conclusion

Even before the election of Donald Trump, the challenges of matching action with ambition and raising sufficient climate finance were significant. When President Obama hands over to President Trump, an important galvanising force for international climate action will be lost. But other major climate leaders are now emerging. China actually castigated candidate Trump in November 2016 for his intention to withdraw from the Paris Agreement.

Countries like India and China are clear that they are pursuing their own self-interest by championing climate action. Decarbonising helps India to cut its air pollution, with pollution in parts of New Delhi currently five times the level considered safe by the US’s Environment Protection Agency. Similarly, China sees a major economic opportunity both from increased low-carbon infrastructure spending and from becoming a leading exporter of low-carbon technologies.

Post-Paris there is both a political framework for scaling up ambition and an economic imperative to be at the forefront of the low-carbon transition. Despite Trump, the delegates in Marrakech can be optimistic.

Sam Hall is a researcher at Bright Blue

It’s time to innovate to strengthen energy security

This winter, the UK is expecting high demand for electricity supply and an increase in costs. Renewable power sources are starting to fill the gap left behind by closing coal power stations, but they generate more when the sun shines or the wind blows and are not necessarily available when people turn on their televisions in the evenings.

National Grid pays gas and coal plants and diesel farms to turn up or down their supply whenever there’s an increase or decrease in demand for electricity. This winter alone, keeping power plants going for peak demand is forecast to cost consumers £122 million, while an estimated £800 million in subsidies may  be awarded to diesel projects under the Government’s Capacity Market. This is expensive, slow and not very green. Energy prices and security of supply are top political priorities, but when it takes four years and a lot of money to build a power station, there needs to be a more efficient solution.

The good news is that Great Britain has a thriving energy technology sector with a vast portfolio of innovations that can step up to this immediate challenge. Open Energi, a dynamic UK tech firm, uses technology to link together more than 3,000 machines - like air conditioners in your local supermarket or the pumps moving our water - and switches these machines on or off during the day to make power available when it’s needed by consumers, or to store electricity after a big gust of wind. This technology is already installed at over 350 industrial and commercial sites across the UK including Sainsbury’s, Tarmac, Aggregate Industries, United Utilities and University of East Anglia. Developed right here in Britain, this is powerful technology. On cold winter evenings, it can function just like an entire nuclear plant. Demand flexibility is the first line of defence in an energy security crisis, which is characterised by successive power plant failures rather than a lack of supply.

But this ‘demand-side’ energy tech faces major barriers in UK energy markets. Companies like Open Energi cannot prequalify for the government Capacity Market and cannot compete directly against gas plants in the balancing mechanism. The fast, flexible power they provide is instead only accessible via monthly tenders and procurements. Faced with a national energy security crunch on one hand and with the tech needed to solve it bound only by markets that aren’t fit for purpose, there is an immediate opportunity to unleash competition. Unlike other energy projects, demand flexibility requires no state subsidy at all. All that we ask at Open Energi is that the regulations are updated to ensure ‘demand side’ (when we turn demand up and down) is given the same treatment as ‘supply side’ (when new power is generated) in the existing energy markets.

Deploying demand flexibility and storage at speed to solve an energy crunch at scale is a proven path. In 2015, Californian policymakers were faced with a shutdown at the state’s biggest gas storage facility, threatening peak shortages and blackouts. To solve this immediate challenge with an immediately available solution, policy-makers fast-tracked 64.5MW of electricity storage and approved $11.5 million for demand response and dynamic pricing. Energy storage projects were constructed in less than four months, compared to a previous average of three and a half years.

Applying the same market mechanisms in the UK could dramatically change the game for energy security on the GB grid as early as next winter. With over 1GW of energy storage prequalified for National Grid’s recent Enhanced Frequency Response tender, of which only 200MW was purchased, it’s clear we have the appetite from investors to bring innovation to market. The challenge now rests with policy makers to make regulation fit for purpose in a modern age of energy technology innovation.

Lucy Symons is the Director of Public Policy for @openenergi and recently travelled to California as part of a delegation of female founders leading some of the UK’s fastest growing tech firms. 

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

Going round in circles: the benefits of cycling

It’s seemingly rare for a political speech to be made in Westminster nowadays without a joke about Boris Johnson’s new cycle superhighways in London. George Osborne at this week’s Spectator Parliamentarian of the Year ceremony was the latest example. But sometimes, instead of light-hearted cynicism, cycling receives outright opposition. The Daily Mail recently launched a campaign to halt the spread of cycle lanes in the UK, claiming they are underused, polluting, and add to congestion.

Of course, cars are very popular. More than four in five people travel by car as a driver or passenger at least once or twice a week in the UK. Car traffic increased by 1.1% last year, to the highest level on record. So it is important that measures to incentivise cycling are complementary to policies to support motorists. It should not be a zero-sum game.

What policies are driving the increase in cycle lanes?

The Government recently finished consulting on its draft Cycling and Walking Investment Strategy - intended to help deliver by 2040 their aim to “make cycling and walking the natural choice for shorter journeys, or as part of a longer journey”. There are also sub-targets to double the number of cycling journeys and reduce cycling fatalities and injuries.

The largest scheme is ‘Cycle Ambition Cities’. Launched in 2013, this gives £10 per resident to eight cities to spend on cycling (Birmingham, Bristol, Cambridge, Leeds, Manchester, Newcastle, Norwich, and Oxford). Funding will be spent on segregated cycle ways, improved lighting and parking facilities for cyclists, and better cycle links to key services.

Although the Government is investing over £300 million throughout this Parliament to support cycling, some campaigners have criticised them for not giving it sufficient funding. Cycling UK claim that funding amounts to just £1.38 per person (excluding London) – far short of the £10-20 per head that many were calling for to deliver a cultural shift in favour of cycling.

The Government’s plans to mandate five cities to establish Clean Air Zones is an important nudge to get people out of their cars and onto bikes. By charging older, polluting vehicles that enter the city centre, cycling becomes a more attractive option for local residents who may not wish to upgrade their vehicle. The High Court’s recent ruling on the Government’s air quality plan makes further Clean Air Zones more likely.  

Cycling already plays a central role in London’s transport system. The new Mayor is planning to introduce an ultra-low emission zone from 2019, which will restrict access to central London for older vehicles. The most polluting vehicles will also be made to pay a £10 emissions surcharge from 2017. These two measures should help to nudge Londoners towards taking up cycling.

Sadiq Khan is continuing his predecessor’s work to improve cycling infrastructure in the capital. In 2013, Boris Johnson launched a cycling strategy to reflect the fact cycling had tripled on London’s roads over the previous ten years. He allocated up to £400 million to invest in new cycle superhighways as part of securing the Olympic legacy for London. And of course he set up the ‘Boris bike’ hire scheme, which recently celebrated its sixth anniversary.

The benefits of cycling

Health: Promoting cycling creates significant benefits for public health by encouraging more people to exercise. There is strong medical evidence linking physical inactivity with cardiovascular disease, strokes, obesity, cancer (colon and breast), type 2 diabetes, osteoporosis and depression. For this reason, the Government made cycling a component of its recent childhood obesity strategy. Bikeability, a government-funded scheme, will provide £50 million in funding over the next four years to give free cycle training to schoolchildren.

Wealth: Cycling yields fiscal benefits, many of which come from savings to the NHS. A government study in 2014 found that the direct cost to the health service of physical inactivity is £1 billion, with an indirect cost of £8.2 billion. The cycling industry also generates significant value to the economy, estimated at £2.9 billion a year according to 2011 research by the London School of Economics. Cycling charity Sustrans also found that every pound of public investment in cycling in the UK yields a £19 return.

Cleaner air: Air pollution is significantly reduced by shifting from cars to cycling. Road traffic is responsible for around 95% of pollution hotspots in the UK. So encouraging more people to switch from cars to bikes can help reduce the number of places affected by poor air quality. Cycling can also help to reduce carbon emissions in the transport sector, which have in fact increased in both 2014 and 2015.

Less congested roads:  Increasing cycling reduces congestion on roads as more people get out of their cars. Research by British Cycling finds that cycling saves a third of road space relative to cars, because it is more space efficient. Moreover, building new cycle lanes does not preclude expansion of road capacity. The Government is in fact investing huge amounts of money into building new or upgraded roads, in tandem with its plans for cycling. In 2014, a £15 billion programme was announced out to 2021 to add new road capacity, dwarfing spending on new cycling infrastructure.

Conclusion

Despite the clear benefits of cycling and the policies which support it, levels of cycling have stayed relatively stable in recent years. Just 15% of the English population cycle at least once a month, according to government figures.

This summer saw Team GB’s cyclists enjoy incredible success at the Olympic velodrome in Rio. The Tour de Yorkshire has become a fixture in the county’s sporting calendar, providing a permanent legacy of the enthusiasm created by hosting the first stage of the Tour de France in 2014. We have the sporting heroes to inspire us to get on our bikes. Now the Government needs to ensure we have the cycling infrastructure and policies to allow that success to be rolled out to more people across the country.

Sam Hall is researcher at Bright Blue

Nuclear innovation must be part of the climate and energy solution

Nuclear is a necessary part of the UK’s energy system. It currently provides about a fifth of UK electricity. Reactors are expensive to build, cheap to operate, then expensive to decommission. So it makes sense to run them for as long as regulators say it is safe to do so. Angela Merkel’s decision to close Germany’s reactors early makes no economic sense.

However, the UK has not opened a new nuclear reactor since 1995. (Labour was, for most of its 13 years in power, anti-nuclear.) So most UK nuclear plants are reaching the end of their design life. If we are to meet the legally-binding carbon budgets of the Climate Change Act, new nuclear will be needed, alongside energy efficiency, renewables and Carbon Capture and Storage (CCS).

Amber Rudd promised, while Secretary of State for Energy and Climate Change, that there will be no coal generation without CCS after 2025 – but only if this is consistent with energy security. By this she presumably meant ‘only if there is enough non-coal generation capacity to keep the lights on’.  In the broader energy security sense, ‘where does the fuel come from?’, nuclear clearly is consistent: the uranium comes from friendly countries like Australia and Namibia.

The Coalition Government did well to make progress on new nuclear, which the Conservative Government has continued. Prime Minister May has now given final approval to EDF to construct Hinkley Point C. The reactor EDF will build, the European Pressurised Reactor, is a very complicated design – with additional safety features added to an old design. This complexity increases costs. EDF’s efforts to build such reactors in France and Finland have been beset with difficulties, delays and budget overruns.

Nevertheless, now the decision has been made Hinkley should be supported. So should new build proposals on Angelsey and in Cumbria. These projects will use less complex reactor designs, so will very probably be cheaper to build. But they are again not the most modern reactor designs. So the Government should also promote nuclear innovation.

Last year, the think tank I work for, Weinberg Next Nuclear, called for public investment in nuclear innovation. In his Autumn Statement, George Osborne promised £250 million for nuclear R&D. Earlier this year, the Government launched a competition to develop and demonstrate small modular reactors, which can be made in factories. They are then delivered to sites, where the modules can be combined to provide a power station as large as desired. This will almost certainly cut construction costs.

The Government should go further on nuclear innovation, as Weinberg argued in our April report Next Steps for Nuclear Innovation in the UK. Britain has an enormous legacy from past nuclear activities: spent fuel and the largest plutonium stockpile in the world. Burying it in a very deep – and very expensive – hole has been the favoured option of successive governments. A much better approach would be to use the legacy to provide clean energy. Most of the energy that was contained in the uranium remains unused in spent fuel, so the fuel should be re-used, not thrown away. Plutonium can also be used as fuel. Advanced molten salt and fast reactors could deal with the nuclear legacy as well as providing clean energy. Because safety is built into the design, they will be cheaper to construct than the Hinkley design will be.

Why can’t energy policy, including technological innovation, simply be left to the market? Because there is not a proper carbon price, so the market delivers dirty energy, not clean energy. A carbon price set in the UK alone damages competitiveness. There could in theory be an international carbon price at a respectable level (so unlike the EU Emissions Trading System). But this debate has been going on for 30 years, with little progress. We cannot afford to wait longer. As Christine Lagarde has pointed out, climate change is the greatest economic threat of the twenty-first century.

Chancellor Hammond should therefore continue Osborne’s investment in nuclear innovation. He should reverse one of his predecessor’s mistakes and re-start a UK CCS programme. And he should support innovative renewable energy technologies: tidal lagoons, floating offshore wind farms, bioenergy from seaweed. Innovation, like energy policy generally, must include a diverse portfolio.

The Conservative Party has – as the name suggests – a strong commitment to conservation. It has a proud record on climate change: Margaret Thatcher’s 1989 speech to the Royal Society helped shape the global climate agreement reached three years later in Rio. Theresa May and Greg Clark now have the opportunity to build on this record by publishing, then implementing, a clean industrial strategy.

Stephen Tindale (@STindale) is director of Weinberg Next Nuclear. He is also a consultant to Tidal Lagoon Power.

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

Why solving the global wildlife crisis could help build a stronger, healthier Britain

Data released today by WWF and the Zoological Society of London sends a shocking message about the health of our planet: global populations of fish, birds, mammals, amphibians and reptiles have declined by 58% since 1970.  The Living Planet Report shows that without urgent action to reduce humanity’s impact on species and ecosystems, vertebrate populations are projected to decline by a staggering 67% from 1970 levels by the end of this decade. 

Human activity including agriculture, pollution and hunting has eroded populations of African elephants in Tanzania, maned wolves in Brazil, leatherback turtles in the tropical Atlantic, and orcas in European waters.  We lose an area of forest equivalent to a football pitch every two seconds, we have overfished our oceans, and through over abstraction and dam building some rivers no longer reach the sea.  This is not just a faraway problem: the RSPB’s recent State of Nature report showed that almost 60% of our native species, from kingfishers to hedgehogs to turtle doves, have declined in recent decades.

We ignore the decline of other species at our peril – for they are the barometer that measures our impact on the world that sustains us.  We are entering an era where climate change, floods and health costs from pollution threaten our economic prosperity, resilience, and wellbeing. This is arguably the greatest challenge humanity has yet faced - but great challenges can be the catalyst for great progress.  By basing all future policy decisions on the understanding that a healthy natural environment is a crucial underpinning to our economy and society, Ministers could not just help save the global environment, but also markedly improve the lives of millions of people. 

Laudably, the Government says it wants this generation to be the first to leave the natural environment in an improved condition.  So as we prepare to leave the EU, Ministers must jettison any temptation to erode the environmental rules and standards their predecessors worked to shape.  Instead, they should build on these achievements.  

Post-Brexit, there is no reason why the UK should not lead the world in running a successful, low-carbon economy that respects and nurtures precious wildlife and wild places, at home and abroad.  The promised 25-year environment plan, due for publication in draft form later this year, could start this process.  It should be explicitly backed by the Prime Minister, boast strong proposals for reform, and apply to every corner of government.

What should this plan contain?

It should set ambitious goals for restoration and improvement of our natural resources - including forest cover, urban green space, air, water and soil quality - and put in place a transparent monitoring system so our natural capital can be managed as prudently as our financial resources.  

It should hold all government departments and public bodies accountable for how their policies and actions will affect nature for generations to come. For example, the impact of any new housing, transport or energy infrastructure should be assessed against rigorous environmental standards – including on carbon emissions.  

Nature doesn’t recognise borders - and our actions at home can also impact wildlife on the other side of the planet.  So the plan should set out provisions to measure and manage the UK’s impact on nature in other countries, so that unsustainable supply chains, for example in food and raw materials such as wood, palm oil and soy, become a thing of the past.  Savvy businesses – many of which already take advice from WWF in order to decrease their environmental impact – would have every reason to back sensible regulation that levels the playing field and helps preserve essential resources over the long term. 

There are precedents to build on here.  The Paris agreement on climate change (which British Ministers played an active role in shaping, and which Theresa May is committed to adopting) has been ratified by over 50 nations.  The Government is a signatory to the UN’s sustainable development goals and has a proud record in fighting the illegal wildlife trade, recently backing new restrictions on the international trade in threatened species including pangolins and African grey parrots. December’s conference of the UN Convention on Biological Diversity is a vital forum for the Government to reiterate that it is serious about helping tackle the global loss of species.  And a 25-year plan that tackles our international footprint and provides inter-generational accountability would allow the UK to show international leadership.

A lot can change within just one generation.  So allow me to imagine what life could be like in only 25 years’ time. Flooding in towns and cities could be reduced with restored wetlands and rivers which, now brimming with wildlife, provide us with beautiful places to spend our free time.  Farmers will be paid a decent income to create beautiful, wildlife-rich habitats, using natural methods to improve productivity and contribute to societal benefits such as clean water and reduced flooding.  Our seas will be full of life, supporting a restored and sustainable fishing industry. Housing and infrastructure developments will be located where they will do minimal environmental damage, working with nature rather than against it. Children will be healthier both mentally and physically as they play in green space in all our cities, towns and villages, and their future will be more secure as our carbon emissions fall to almost nothing.  

And new industries – boosted by a low-carbon Industrial Strategy - will create jobs in an increasingly resource-efficient, circular economy in which materials get reused and recycled, we consume in ways that do not leave a footprint internationally, and the value of nature is incorporated into business plans and government policy.

Sensible stewardship of the natural world is not an alternative to enterprise; on the contrary, it is now a prerequisite for the economic and social health of communities and nations.  As a global green industrial revolution gets underway, the Government should not be afraid to use its power to ensure the UK leads rather than lags behind.

Mike Barrett is Director of Science and Policy at WWF-UK

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

Holding back the tide on flooding

The imminent arrival of winter means a renewed deluge of political interest in flooding. For the few days or weeks when these extreme weather events occur, they inevitably dominate the national media. But, as the waters recede, so does the political interest in the subject. As a result, it can be difficult for policy-makers to sustain the momentum required to introduce policies to tackle the problem.

The risks and potential harm from flooding are significant. As well as damaging businesses, homes and infrastructure, it can endanger human life. Take the example of last year’s floods: The Association of British Insurers estimated their members would pay out around £1.3 billion in flood-related claims. The Local Government Association estimated councils faced £250 million of damage to local infrastructure. Storm Desmond, the weather system that caused the flooding, also claimed three lives.

Nor was this a one-off: academics have found that this kind of flooding event is being made 40% more likely by climate change. A warmer climate enables the air to hold more moisture, which increases the likelihood of flooding. Flooding is already a major environmental challenge, and is going to get worse as average temperatures continue to rise.

Forecasts of the future impact of flooding are stark. In its last Climate Change Risk Assessment in 2012, the Government forecast that the average annual cost of coastal and flooding damage will rise from around £1.3 billion now to as much as £6.8 billion by 2050. In its report this summer, the Committee on Climate Change modelled a scenario where average temperatures rise by 4°C. In that case, they predict that the number of at-risk households would rise from 860,000 today to 1.9 million by the 2050s.

Land management

One strategy to reduce flooding damage is to slow water flow from the uplands where rivers form to lowlands where population centres are. These upland floodplains can in effect store excessive rain water.

There is academic evidence to suggest planting more trees further up a river’s catchment area can help to slow flow rates of water. Rewilding Britain recently called for tree planting in areas where overgrazing has denuded landscapes of natural forest cover in order to assist flood management.

Dredging of rivers is similarly important to upland catchment management. In 2013, the Environment Agency published a review of the academic literature on dredging, which found no clear evidence that lower water levels from dredging led to reduced flood risk. On the other hand, they did find good evidence that dredging increased water flow rates, increasing flood risk downstream. This evidence was disputed by some commentators in the aftermath of the Somerset floods in 2014.

The Government’s National Flood Resilience Review, launched after last winter’s flooding, tested how well the UK’s infrastructure would cope with a 20-30% uplift in extreme floods across the UK, relative to last winter. As well as ordering key assets to be reinforced, the report highlighted the importance of the 25-year plan for the environment, due next year, in the context of flood risk management. The plan will enable a ‘whole river catchment’ approach to be adopted.

Other policy responses

In the aftermath of flooding events, debate often centres around levels of public spending for flood defences. Last year, there was a disagreement between the Government and the Opposition over whether there had been cuts or not. Comparing the spending envelope for the whole 2005 parliament and the 2010 parliament, there was a real-terms increase from £3.1 billion to £3.4 billion. However, the spending wasn’t evenly distributed over the parliament, with some years seeing a spending reduction relative to previous years.

The Environmental Audit Committee’s recent report criticised these big fluctuations in spending within a parliament and the often reactionary nature of those decisions. Dieter Helm has called for funding to come from a flood levy on water bills or council tax. He argues this would depoliticise the issue, facilitate a ‘whole river catchment’ approach, and create a more stable revenue stream to fund investment in flood defences.

There have also been calls to change the National Planning Policy Framework to prevent unnecessary building on flood plains. This was one of the Environment, Food and Rural Affairs select committee’s recommendations in the last parliament. Despite being in the 2010-15 Coalition Agreement, this policy was not implemented. Now, with the supply of housing so constricted, further limits on housebuilding would be politically difficult, and risk undermining one of the Government’s other key policy objectives.

Conclusion

Flooding has major economic and environmental costs, which policy-makers should seek to mitigate. But flood risk management also presents opportunities. There are potential actions that both strengthen flood defences and improve the natural environment.

It is likely following the EU referendum that the UK will withdraw from the Common Agricultural Policy. Former Environment Minister Richard Benyon MP has suggested using a portion of this funding to pay farmers to hold back water. This could involve planting trees on their land or using fields as flood plains. Such an approach is worth serious consideration, and could deliver benefits for flood mitigation and the environment simultaneously.

Sam Hall is a researcher at Bright Blue

A post-liberal approach to the natural environment

As Brexit approaches, too many public figures seem determined to stress what divides rather than what unites us; yet the great majority of people outside Westminster simply want to get on with building a country we can be proud of, with a fairer economy and healthier environment. 

Luckily, the further away from SW1 you travel, the more possible it is to imagine a politics that could make this happen.  From Brixham to Birmingham, Sutherland to Stoke, people tell us that they value relationships and the bonds within communities, as much as individual rights and freedoms.  They are sceptical about allowing the state to dominate their lives, but recognise its role in making things better.  They don’t think of people or nature as commodities; but embrace the role of businesses in building economies that flourish.

Theresa May seems instinctively to understand this politics, which has loosely been called post-liberalism. If she were to put it to work to restore Britain’s natural environment, she could begin a project of remarkable national renewal. 

Our wildlife has suffered horribly since the war; our soils are in poor health; and we are facing the impacts of climate change without the resilience we need.  The last Government showed what can be done, by securing wide-reaching reforms to European fisheries policies, and creating a magnificent over-seas network of marine nature reserves; but we need more of that ambition, if we are to turn Brexit into a moment of opportunity for the natural world.

The first step will be to re-think the role of the state in protecting and restoring our environment.

As the Government has already shown through its welcome ban on microbeads, emphatic state action is sometimes simply the right thing to do. But truly effective regulation should act as a spur to innovation, creating dividends for those able to produce cleaner, more efficient and safer products.  At its best, regulation is dynamic. Its job is specifically to render itself redundant.

A similar story can be told about public funding.  State support can help drive down the costs of new products or practices, and in doing so, become an agent for change.  Governments around the world have helped reduce the costs of solar power, for example. The trick is to taper such support in a way that works for consumers and builds markets, rather than demanding an open ended commitment to subsidy.

In an ideal world, the active state would be an environmental problem-solver, not a nanny.  But in many cases the best solutions don’t come from the centre, but from local people working to improve the places where they live.  Their ‘ask’ from Government is to be given more power to do better. 

This is certainly the case for many farmers trying to do the right thing for their businesses and for nature.  A staggering proportion of today’s farmers say they aren’t profitable without the under-pinning support of the single farm payment.  Yet many also acknowledge that this payment, and the rules that come with it, have done little to incentivise innovation; and that they feel trapped in unsustainable patterns of business that demoralise them and their families. 

The remarkable thing is that in many cases, the route to a more profitable farm is also the route to a better environment. I recently met a farm owner and his young manager in Devon who have dedicated years to developing a machine to turn sea-food waste into high-grade fertiliser. Outside Banbury, I met a young business man who is turning his farm around by matching inputs to outputs with passion and precision.  Producers of the highest quality food tell me that they could sell at prices lower than those of the supermarkets, if they could build shorter supply chains. 

The best food needn’t cost the earth – for nature or customers.  But we desperately need an agricultural policy that supports positive change, rather than underpinning the status quo – through capital grants, advice, and backing for smaller farms (the core of our rural communities and our biggest pool of innovators); rather than static payments and moribund rules.

Once we have this foundation, we can encourage farmers to form partnerships locally to deliver more ambitious projects of environmental renewal.  This might include restoring endangered species and habitats, reducing flood risk or cutting the cost of clean drinking water.  It might even see rural communities offering new ways for children from towns and cities to spend time in the countryside – making a real difference to their development and mental health.

Let us imagine that by the end of this parliament, the Government had committed itself to making the UK a world leader in environmental recovery, with bold plans for restoring nature, reducing pollution, and rebuilding sustainable farm and fishing businesses up and down the country.  And let us imagine too, that the engines for this project were local communities and thriving businesses committed to making great places - with the support of an active but enabling state.  Who would care then, which of us (or them) had voted leave or remain?

Ruth Davis is a senior associate at E3G

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

What happens when the wind doesn’t blow?

Renewables such as wind and solar are a UK success story. Their share of total electricity generation has increased from 9% in 2011 to 25% in 2015. Over the same period, prices have fallen by 50% for solar and 43% for onshore wind. Yet, despite this rapid improvement, critics of renewable energy continue to ask two questions: First, how do you keep the lights on when the wind isn’t blowing and the sun doesn’t shine? Second, what is the cost of maintaining security of supply while increasing renewable capacity? There are convincing answers to both that should help meet such understandable concerns.

Balancing technologies

Ministers are clear that maintaining security of supply is the government’s first priority for energy policy. A large expansion of renewables must be consistent with that aim.

Renewables supplied a quarter of the UK’s electricity last year. But the lights still stayed on because government and National Grid plan ahead by commissioning back-up or balancing capacity to complement high levels of renewables. This additional capacity falls into two categories:

• Fossil fuel back-up generation. Currently, this includes gas-fired power stations, diesel generators, and coal-fired power stations. Diesel and coal cause significant environmental harm, both in term of carbon emissions and air pollution. That’s why the Government has committed itself to phasing out all coal-fired power stations by 2025 and why Defra is investigating tighter emission regulations for diesel generators. As gas emits less carbon than either coal or diesel, it can play a medium-term role in backing up intermittent renewables as the power sector decarbonises. In our report, Keeping the lights on, we called for smaller-scale, flexible gas capacity in particular to be incentivised, through technologies such as reciprocating gas engines, so the grid can better respond to variable supply from renewables.
• Flexible ‘smart power’ technologies. These include interconnection (transmitting low-carbon power from Europe to the UK through sub-sea cables), storage (saving surplus power and deploying when demand rises) and demand-side flexibility (shifting non-essential demand away from peak times). The National Infrastructure Commission recently produced a report on the potential of these technologies, finding such a system could provide an additional £8 billion of savings to consumers every year by 2030. These technologies are still developing, but interconnectors already provide over 4GW of capacity, with plans for that to increase almost three-fold by the early 2020s. Storage capacity is currently over 3GW, but with rapidly falling battery costs, this will also increase significantly in the coming years.

System costs of intermittency

So the lights can be kept on, even with lots of renewables on the grid. But how much does this cost bill-payers? In her energy policy reset speech last year, the then Energy Secretary, Amber Rudd, argued that both the social cost of carbon and the system costs of intermittency should be included within the overall costs of different forms of electricity generation.

The system costs of intermittency are defined as the external costs imposed on the electricity grid as a result of integrating variable generation, including the cost of back-up capacity and the cost of balancing services. These system costs are highly contested and rely on a number of assumptions. A couple of trends can be observed, however. First, system costs for a particular renewable technology rise as the total capacity of that technology on the grid increases. Second, the costs decrease as the total capacity of balancing technologies, such as storage, increases.

For context, at the last auction for new capacity in 2015, onshore wind projects were awarded an £81 per MWh average strike price and solar projects £64.50 per MWh. Three recent reports have sought to quantify the system costs for intermittent renewables:

• First, Imperial College London’s report for the Committee on Climate Change provides estimates for the system costs of different intermittent technologies, assuming the power sector achieves its 2030 carbon targets. In this central scenario, they find that wind and solar would have a system cost of between £6 and £9 per MWh.
• Second, Nera’s report for Drax, which owns a biomass power station, estimated the system costs of intermittency are between £12 per MWh for onshore wind, £12 per MWh for solar, and £10 per MWh for offshore wind.
• Third, a recent report by Aurora Energy Research for the Solar Trade Association found that the intermittency of the currently planned 11GW of solar on the grid will cost around £1.40 per MWh. This would rise to £6.80 per MWh if solar capacity reached 40GW by 2030. But with additional wind on the grid (a total of 45GW by 2030), the figure falls to £5.10 per MWh. In a scenario where there is 8GW of batteries on the grid by 2030, intermittent solar would actually provide a net benefit of £3.70 per MWh by optimising the use of these batteries.

Conclusion

Technologies are available to enable a high volume of renewables to be deployed on the grid while keeping the lights on. Intermittent renewables do carry a cost to the system, although it is a small proportion of the overall cost of building and operating them. Along with the cost of carbon, this can be included in the price of new generating capacity to ensure a level playing-field for mature technologies. System costs can be significantly reduced by encouraging storage, flexible gas, interconnection, and demand-response flexibility alongside renewables.

Sam Hall is a researcher at Bright Blue