To cut carbon, or not to cut carbon? That is the global question. Whether it is nobler in the mind to suffer the temperature rises of runaway emissions, or to act cohesively against a world of trouble. As 2013 begins, we seem to be running out of time and choices. Jon Herbert explains why.

 

Anyone marking the world’s 2012 sustainable scorecard might award a B-minus — must try harder. Optimistic talk of curbing global warming seems to have been largely hot air.

Despite high-minded political pledges, global coal consumption soared during 2012 across the planet, including in Europe, for reasons of very practical economic survival.

Meanwhile, at the political end of the scale, exceedingly complicated post-Kyoto negotiations held in Doha — a visionary Middle Eastern city not, unfortunately, constructed with sea level rises in mind — struggled on towards an uninspiring plan to save the world. Everyone thinks it is a great idea if someone else carries the burden.

As a disturbing backdrop to both, a series of authoritative research reports have also warned that soon it will be too late to avoid global warming of up to 6°C by 2100. Average Ice Age temperatures were only 6°C lower than those we are used to today!

Even in the UK, pragmatic compromises have been made. The long-awaited Energy Bill is designed to achieve a delicate balance between holding down consumer energy prices, devising an acceptable formula to raise some £7.6 billion from charge-payers for renewables development and keeping carbon emission cuts within existing legal targets.

However, the Chancellor has also decided that the only option the Government has to guarantee uninterrupted power supplies in the future is the building of some 20 new gas-fired power stations. It is estimated this would be enough for the UK to meet its present CO₂ reduction promises. A “Plan B” with more gas-fired stations could meet higher carbon targets, but carbon cutting will not now be allowed to jeopardise economic recovery.

The dual attraction of gas power stations is, firstly, that they will be quicker and easier to build than a new generation of non-carbon nuclear power plants and, secondly, the possibility of low world gas prices in the 2030s.

Considerable uncertainty was cast during 2012 over UK plans to build some eight new nuclear plants — needed within the decade to compensate for scheduled coal and oil power station closures — by rapid changes in the specialist construction consortia large enough to bid for the massive contracts entailed. Demanding government approval requirements is also a hurdle.

However, plans for a new Hinkley Point C reactor in Somerset have now been approved as safe and environmentally sound. The European Pressurised Reactor has been designed by French firms EDF and Areva. Operating licences for Hinkley Point B and Hunterston in North Ayrshire are both to be extended by seven years until 2023.

Meanwhile, a report from the Nuclear Industry Association (NIA) says British companies must invest in the skills and infrastructure needed for the UK to win contracts to build Sizewell C in Suffolk. Not everyone shares The Treasury’s faith that plentiful supplies of secure gas will be available in a turbulent and changing world leading up to the 2030s.

Enter fracking

An essential element in the Government’s new energy policy is the exploitation of natural gas trapped in non-porous rock layers that can be opened up by hydraulic fracturing (known as “fracking”). The Government has decided that under strict operational conditions, fracking development in the UK can continue.

The USA now has some 10,000 fracking wells in operation, leaving it almost independent of natural gas imports. The irony is that this depresses US coal prices, making coal a very attractive import into Europe.

Surprisingly, Germany is now seen as a major coal culprit. Having committed itself to closing its 17 nuclear stations by 2022 in response to the Japanese Fukushima disaster, Germany now needs to make up an energy deficit. It explains away a possible rise in coal dependence with the argument that the burning of dirty brown local lignite coal deposits will be replaced with lower-carbon, high-quality reserves. Germany says it will generate 35% of its power from renewables by 2020 but is currently 42% dependent on coal burning, a figure which could rise to 50%.

Still king of the hill

Old King Coal was the power behind the original industrial revolution. It is the most carbon-intense and dirtiest of the fossil fuels. It is also plentiful, easy to mine, easy to use and easy to transport.

A short-term drive to burn more coal in Europe could end with the introduction of the EU Large Combustion Plant Directive, which will soon come into force. Ironically, the Directive is not designed to cut carbon but to reduce local air pollution. However, it will force the closure of inefficient EU coal plants.

Nevertheless, Asian and Chinese coal demand is set to keep on rising, even though China is developing one of the world’s largest renewable sectors. World 2011 coal production was 6% higher than in 2010 — twice the rate of gas growth and more than four times that of oil. Coal now accounts for some 40% of global carbon emissions from fuel.

To put the US fracking revolution into context, almost half of US power generation still comes from coal. Coal also emits 80% more carbon per energy unit than natural gas and one third more than oil. Some 40% of the world’s energy comes from coal; circa 70% of world steel is made with coal. The International Energy Agency estimates coal to be the base-load fuel for Europe.

A surfeit of CO₂ emission permits has depressed the price of carbon and with it the cost of coal production. The rising cost of non-shale natural gas is also making coal more and more attractive.

Raising the carbon price is now a priority but a growing population with middle class aspirations is fuelling coal demand, particularly in developing nations such as China. An additional irony is that coal, in contrast to oil and natural gas, is mined in countries that are by and large politically stable. Like many countries, China is urgently experimenting with innovative carbon capture and storage (CCS) technology but commercial viability could be a decade away.

Stratospheric highs

The World Meteorological Organization (WMO) recently reported that greenhouse gases reached new high concentrations in 2011. CO₂ is now responsible for 85% of the “radiative forcing” that causes global temperature rises, it says. Methane is also at record levels.

Over the last 10 years, CO₂ levels have risen on average by two parts per million annually; in 2011 the total was 40% above level at the start of the industrial revolution, reaching 391 parts per million.

The WMO estimates that since 1750, 375 billion tonnes of carbon have been released into the atmosphere, where half will remain for centuries. Until now, oceans have acted as a giant carbon sink. This pattern may be changing.

Last warning

PricewaterhouseCoopers has released another report, “Low Carbon Economy Index 2012”, in which it concludes that governments the world over are being highly unrealistic in thinking that they can control global temperature rises at no more than 2°C by the century’s end.

Carbon intensity did fall in 2010 by 0.8%, followed in 2011 by a further 0.7% drop, the report says, but to avoid runaway temperature rises that could reach as high as 6°C by 2100, the world collectively will have to cut carbon intensity by 5.1% every year up to 2050.

Another study by the UN’s environmental programme, “Emission Gap Report 2012”, finds that global emissions are 14% higher than they should be to have any chance of meeting the 2°C target. It warns that, while technically still achievable, without urgent action the race will be lost decisively. It estimates that mankind is now releasing 14 giga-tonnes too much CO₂every year.

 

Gas dependence

As part of a practical UK mixed-energy strategy, Chancellor George Osborne has given the go-ahead for new gas-fired power stations that could give the UK 26 gigawatts (GW) of new generating capacity by 2030, an increase of 5GW. Announcing the move, Energy Secretary Ed Davey said the policy was consistent with reducing power-related emissions in line with the Government’s legally-binding carbon budgets.

He commented: “Gas will provide a cleaner source of energy than coal and will ensure we can keep the lights on as increasing amounts of wind and nuclear come online through the 2020s.”

The Government hopes to attract investment for new gas infrastructure by introducing a Capacity Market, with capacity auctions from 2014 to ensure peak demand energy supply. It says it is also simplifying the planning regime. If needed, it will intervene in the market to improve liquidity and competition. New gas storage capacity is also to be encouraged. There will be an Office for Unconventional Gas and Oil. Shale gas will have new exploration incentives. There will also be further support for CCS technology.

Mr Davey stressed that shale gas development would not be allowed to weaken the UK’s carbon reduction goals. “Is it not better that we produce gas in this country than gas shipped half way across the world?” he argued, pointing out that existing “stringent” UK oil and gas legislation would protect against impacts to water and local air pollution.

However, the Government has been warned by industry and its advisors on the Committee on Climate Change (CCC) not to expect a financial bonanza from shale gas. They point out that Europe has a shared gas grid on which gas is traded to the highest bidder. The CCC estimates that while, under the Energy Bill, household bills could rise by £100 by 2020 to fund renewables development, reliance on gas could add an extra £600 by 2050.

Responding to plans to excuse energy-intensive industries from sharing the cost of the UK’s transition to a low-carbon economy, Mr Davey added: “Decarbonisation should not mean de-industrialisation. Energy-intensive industries are an important part of the UK economy. There would be no advantage — both for the UK economy and for global emissions reductions — in simply forcing UK businesses to relocate to other countries.”

A British Chambers of Commerce survey has found that 40% of businesses questioned think rising energy prices have stunted their growth.

The overall conclusion has to be that devising an effective energy strategy is fiendishly difficult. This is particularly true for those trying to negotiate a meaningful successor to the Kyoto Protocol in Doha at the 18th Conference of the Parties (COP18), with the aim of a comprehensive world deal by December 2015.

In a surprising decision, the fraught summit did, however, agree that rich nations may be obliged in future to compensate poorer developing nations for irreparable damage caused by their role in climate change.

No one has even dared to name a price that would add even more to today’s soaring energy bills.

Last updated on 15/01/2013

 

First published by Croner-i on 15 January 2013