Viewpoints: Do we have to choose between cheap or clean energy?

 
Composite photo: Some power plants, a gas stove, solar energy panels, and some wind turbines

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A BBC Radio 5 live survey has suggested that people in the UK support clean energy and think that the government is not green enough. But in times of economic difficulty, people say cheap energy is more important than reducing emissions. Do we have to choose between the two?

The survey, carried out by ComRes, showed broad support for clean, "green" energy sources.

More than 60% of people thought that the government was "not green enough when it comes to energy policy", while only 36% stated that they are not bothered by where their energy comes from.

However, in times of economic difficulty, 60% said that it is more important to provide power as cheaply as possible than to reduce carbon emissions.

Do we have to choose between cheap or clean energy? Or are the two compatible?

Several experts give their opinions below.

Prof Steve Thomas, energy policy expert at University of Greenwich

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Steve Thomas

Renewable or nuclear sources [are expected to] be significantly more expensive than using gas and coal”

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The aims of energy policy are easy to state: energy supplies should be reliable, affordable and clean. Achieving them in the face of rapidly rising prices, the need to phase out fossil fuels to meet climate change goals and the desire to replace monopolies with competitive markets has never been harder.

Prices have increased rapidly in the past decade with electricity prices doubling and gas prices increasing by even more. These increases are accounted for almost entirely by increases in world market energy prices, not the introduction of cleaner sources.

There is little expectation that renewable or nuclear sources will be anything but significantly more expensive than using gas and coal so if we want cleaner energy, there will be additional costs.

Unless a really effective energy efficiency programme can be introduced, the number of households suffering from "fuel poverty" - about 25% at present - will increase further leading to serious health and welfare problems as the most vulnerable households face difficult choices of whether to eat or keep warm.

In a competitive market, reliability is achieved if just enough power stations are profitable to keep the lights on. The companies can be given no responsibility for security of supply and if a power station loses money, it will be closed even if the lights will go out as a result. Since 1990, this unlikely equation has never been tested because the power companies have been so profitable.

Prof Steve Thomas

  • Professor of energy policy at University of Greenwich
  • Director of research at Public Services International Research Unit (PSIRU)

However, as the utilisation of their gas-fired stations gets reduced by clean sources with priority over them, their profitability is reduced and unless they are given additional payments outside the market just to be there - so-called capacity payments - they will be retired and security of supply will be in doubt.

The government is currently wrestling with this problem through the Energy Bill currently making its way through Parliament, trying to find a solution that ensures security of supply, but which can still be presented to the public as being a competitive market.

Prof Nick Pidgeon, environmental psychologist at Cardiff University

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Nick Pidgeon

The lowest cost is not necessarily what people are asking for. 'Affordability' is a slightly different idea”

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Using the words "at a time of economic difficulty" is situating the question very much in the present, which we all know is very difficult for many people.

That is different to the more generic question of where our energy should go in the future.

And that's exactly what we found in our research. Currently, in terms of people's views on policy priorities, affordable power was ranked first above dealing with climate change.

But in the long term, people were fully aware that compromises might have to be made in the short term. They understand you have to be pragmatic and you can't deliver a green energy system overnight.

I don't think holding those two positions is entirely contradictory.

What we do know is that since the economic recession, in the US and the UK, concerns about the environment have become less salient for people.

The economy and finance has shot up [in importance to people] since 2008, and the environment went down.

So the economic recession has suppressed temporarily people's concerns about the environment. But concerns about the environment ebb and flow over time, so there's absolutely no reason to suggest it won't come back again.

The "economic difficulty" question is being asked in a time when the environment is out of sight and out of mind.

Prof Nick Pidgeon

  • Member of the UK Department for Energy and Climate Change's Science Advisory Group (SAG)
  • Professor of environmental psychology and director of the understanding Risk Research Group at Cardiff University School of Psychology

A colleague talks about a "finite pool of worry", there's only so much we can worry about. So if we're in dire straits to get the next pay check, and many people are, then it's much more difficult to focus on other things.

What was clear in our research is that the lowest cost is not necessarily what people are asking for. "Affordability" is a slightly different idea.

Some people said that you might have a system of the lowest cost but if it fluctuates a lot over time, then it will become unaffordable for some people. So they were concerned that there shouldn't be a system which price people out.

Tony Lodge, research fellow at the Centre for Policy Studies

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Tony Lodge

Green energy technology has delivered higher bills and increased fuel poverty amongst the most vulnerable in society”

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So-called green energy technology has delivered higher bills (due to its need to be subsidised) and has consequently increased fuel poverty amongst the most vulnerable in society as well as increasing industry's costs. Wind turbines do not turn on a windless freezing day in mid-winter when energy demand spikes; it is coal, gas and nuclear power which has delivered electricity when it is most needed.

The UK has decided to base the future of its electricity generating industry around the burning of gas. Last year the government unveiled its Gas Generation Strategy which is designed to replace older coal and nuclear plants.

The problem with burning more gas is that it will still be taxed by the new rising carbon price floor and Britain will become more and more dependent on imports. Consequently the UK must develop underground coal gasification technology which can better utilise the UK's vast untapped coal reserves and also support shale gas exploration and extraction.

Tony Lodge

  • Political and energy analyst at the Centre for Policy Studies
  • Former editor of the European Journal

Relying on weather-dependent renewables such as wind and solar is not viable, as these technologies cannot provide what is known as baseload electricity supply, which is a steady flow of power regardless of total power demand by the grid. Britain relied on coal last year to generate a significant 39% of electricity; this capacity will slowly be replaced by gas.

UK energy policy is slowly undergoing a reality check as politicians realise they need to deliver new baseload generating capacity to meet growing electricity demand as the UK emerges from recession.

The unveiling of the Gas Generation Strategy in itself illustrates the failure of so-called green energy.

Leila Deen, energy campaigner at Greenpeace UK

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Leila Dean

The best way to limit [price rises] is through increased renewable energy”

End Quote

There's been a lot of misinformation about renewables putting up our energy bills. The truth is that between March 2011 and March 2012 bills rose by around £150, and £100 of that was due to the increased wholesale cost of gas. Whilst offshore wind is expected to get cheaper as the industry grows, the cost of gas is set to increase due to a combination of rising fuel and carbon prices.

Our bills are likely to go up in all future energy scenarios, but the government's own advisers say the best way to limit that rise is through increased renewable energy.

So why is the government set on building 40 new gas power stations? Their excuse is "the shale gas revolution". But the consumer benefits from shale gas claimed by David Cameron are "baseless", according to Lord Stern, as the price of UK gas is set on the European market.

OfGem, Energy UK, and even Cuadrilla agree that any impact on bills will be insignificant, while DECC says that with the right policies, offshore wind may fall to the same cost as gas by 2020.

There are technologies which can hugely reduce your energy bills and protect you from the volatile fossil fuel markets - energy efficiency and domestic renewables can cut your energy costs so far that the electricity companies start to pay you.

Not everyone is in a position to install solar panels or a micro turbine, but everyone can benefit from the most cost effective energy technology there is: insulation.

Angela Knight, chief executive of Energy UK

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Angela Knight

You can't say 'do you want wind or gas?' - you need wind and gas”

End Quote

There needs to be a sensible, balanced energy mix, in which you've got renewables such as wind [but] indeed for some time there will still be carbon or coal.

I don't think it's an either/or because if you've got a lot of renewables then you can't be entirely sure what their output is going to be, as they're weather dependent.

The bottom line is that the more renewables you build, the more you've also got to build in the way of backup, which is predominantly gas-fired generation.

The way the renewable energy is now going to be financed is through a levy on today's bill for tomorrow's plant. The actual capital cost of renewables can be high, [but] its running costs can be quite low.

At some point - maybe about 2020 - onshore wind may become cost competitive. But there is no absolute in the answer.

What we think is absolutely essential is that there is a clear public debate. Too often the public are told part of the story but not all of the story.

The public were led to believe that you could actually replace existing fossil fuel generations with a few wind turbines - not that you needed both.

Angela Knight

  • Chief executive at the British Bankers Association for five years
  • Honoured with a CBE for services to the financial services industry in 2007
  • Economic secretary to the Treasury from 1995-1997, while a Conservative MP for Erewash

You can't say "do you want wind or gas?" - you need wind and gas.

There's a perfectly correct, reasoned and right argument that we need to be careful with our resources, careful with our climate, careful with our planet - and that says that where we can we need to use renewables, and we also need to use our fossil fuels advisedly.

At the moment we're in a transition and that needs to be part of the proper discussion and it should not be either hijacked by a pressure group, compartmentalised, nor should the facts be distorted to make a point.

Prof Dr Claudia Kemfert, energy and environment expert at Berlin's Institute for Economic Research

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Claudia Kemfert

Electricity prices are increasing at the moment but it will not continue to increase because renewable energy is becoming cheaper”

End Quote

I think that [the idea of a trade-off] is a misunderstanding because right now renewable energy has already declined, even though they are still a little bit more expensive than other [energy sources].

Electricity prices are increasing at the moment but it will not continue to increase because renewable energy is becoming cheaper - and if the system is more flexible it will be cheaper for consumers.

We have to see that the wholesale stock exchange price for electricity is the lowest we've ever had. This is a fact that energy companies benefit from. [But] they do not pass this [price] declining effect through to the consumer, they increase the price with the excuse that renewable energy is more expensive - but that's not the whole story.

Prof Dr Claudia Kemfert

  • Head of department of energy, transportation and environment at the German Institute for Economic Research in Berlin (DIW Berlin)
  • Professor of energy and sustainability at the Hertie School of Governance, Berlin

If the government takes care of this, there could be a stable electricity price right now, while in the future we have to invest in renewable energy. This would increase one part of the electricity price but on the other hand there will be more done to save energy and electricity, so the total cost should be the same.

Germany intends to increase the share of renewable energy to 80% of the electricity production by 2050. But it also plans to increase the share of gas-fired power plants [so] we have a flexibility to produce electricity when there are volatilities - the wind is not blowing all the time, the sun is not shining all the time.

It's a feasible long-term solution. It will be cheaper for the consumer at the end of the day, especially if we now also improve energy efficiency, as this reduces the cost.

Economically speaking we are on the right track; on the other hand we need, in the meantime, gas-fired power plants. We need a system which has different components, and this does not necessarily mean that it's more expensive - if you do it in an efficient way. You could have both.

 

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  • rate this
    +1

    Comment number 493.

    There are many separate lines of evidence that support the increasing certainty (now over 95%) that the 50% increase in CO2 since 1800 due to our activities is warming the planet: each decade has been warmer than the previous decades; arctic ice is thinning & reducing in extent; most glaciers are in retreat; wildlife is migrating outside its normal ranges. Cherry picking data doesn't change that.

  • rate this
    0

    Comment number 492.

    I support free markets but clearly the energy market has failed. Far too many non core staff (lawyers, traders, analyists, researchers etc etc) in far too many companies. Each generating company's bid is the highest this distorted market will bear for its shareholder's returns. Subsidies & compensation for renewables, £18m/day for contingency reserve. Who pays these massive costs ? The consumer.

  • rate this
    0

    Comment number 491.

    Everything we do depends upon energy.
    Our reliance upon the motor car in UK is an unsustainable obsession which is a pillar of the economy. You can see where things are headed and there really is no solution because the less energy used, the more it costs.

    Interestingly, it is my hunch that household costs, adjusted for inflation, are decreasing. Incomes are also. We are simply poorer.

  • rate this
    +1

    Comment number 490.

    481. Morey Bund ...Hi,

    So you are OK with shale gas. well that`s good.
    But your post of 452 exposes you as mis-informed at best, or gullible for the eco-marxist- fascists` clap-trap inability to do arithmetic.
    Don`t end up like them, please.

    http://topher.com.au/50-to-1-video-project/

  • rate this
    +1

    Comment number 489.

    So loads of people have had to reduce their energy consumption because they cannot afford their bills otherwise but at the same time, even more people are saying they are happy for fuel costs to increase if it means its production is greener.

    So how's that going to work out?

 

Comments 5 of 493

 

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