Renewable energy is clean, cheap and here – what’s stopping us?


 

Energies such as solar and wind have seen dramatic price falls. The revolution in non-grid energy should be embraced by the UK

Ashley Seager

Saturday  June 2013

guardian.co.uk

The report from the Committee on Climate Change arguing that investing in renewable energy would eventually save consumers a lot of money is spot on.

We are regularly told by conventional utility companies, many politicians and commentators that energies such as solar and wind are hopelessly expensive and reliant on enormous subsidy.

But this is simply wrong. Renewables have seen such dramatic price falls in the past few years that they are threatening to upset the world as we know it and usher in an almost unprecedented boom in the spread of cheap, clean, home-produced energy.

Solar will be the cheapest form of power in many countries within just a few years. In places such as California and Italy it has already reached so-called “grid parity“. Onshore wind, on a piece of land not constrained by years of planning delays, is already the cheapest form of energy on earth. These are not wild claims – those are figures from General ElectricCitibank and others.

Solar PV, the area in which my company operates, is a case in point. Three years ago firms like ours were paying about €3,600 per installed kilowatt of solar capacity on barn roofs in Germany. Today it can be done for just over €1,000 – a staggering 70% fall. That is seriously cheap and will just keep getting cheaper.

Thanks to a surge in global production to 60 gWp annually, (enough to supply British households – not offices or factories – with all their electricity) solar power has dropped dramatically in price. But there is more to come. Cambridge IP, a global innovation and intellectual property firm, says there is a surge of interest and R&D into two new forms of solar power which are likely to be available commercially by the end of this decade.

 

Newly built solar plants are already considerably cheaper than new nuclear plants per kilowatt hour of electricity produced and we are almost at the stage where we don’t need a guaranteed price (known as a feed-in tariff) because solar energy will compete head on with conventional energy.

True, there is an ongoing cost from the German government’s previous support for solar, but is much lower than the subsidies pumped by the western world into nuclear, coal, oil and gas over the past decades.

It is always amazing how a tax cut announced by George Osborne for North Sea oil and gas industry is greeted as somehow being good for Britain whereas any support for renewables is immediately dubbed a subsidy by the conventional energy companies wedded to their dying business model. A tax cut is a subsidy by another name. And remember the estimated £100bn plus cost to future taxpayers of disposing of Britain’s dangerous pile of nuclear waste.

And solar is starting to pay its subsidy back. Germany now has more than 30 gigaWatt peak (gWp) of solar plants installed, such that on almost all days in the spring, summer and autumn, solar energy surges into the grid at a time when demand is at is strongest (air conditioning etc is running like mad) and when spot market energy prices are at their highest.

This peak price is being forced down by solar, helping to reduce wholesale prices. The big energy companies hate this because this peak is where they make their money. Solar in Germany is almost down to wholesale prices – in sunnier countries it already is.

This brings me on to a really exciting development . Our company is starting to sell power directly from the barn roofs we have our plants on to the farmers who own the roofs and nearby towns wishing to rescue themselves from the grasp of the RWEs and E.ONs of this world.

Why? Because we can produce power at around half of what farmers are paying.

This so-called “distributed” (ie non-grid) energy is where the real revolution is taking place. Distributed energy not only saves on the huge amount of energy lost in grid distribution, but it helps lighten the load on the grid. Whole German towns are going completely renewable. The citizens get cheaper, cleaner power. If only Britain would get this.

Just to be clear – Germany (Europe’s biggest economy) now gets 25% of its electricity from renewables – a proportion that is increasing by the month. This is twice the level of the UK, although, interestingly, similar to that of Scotland on its own. Germany is also leading on figuring out how to overcome the problems of “intermittency” by storing renewable energy. I agree with the sceptical environmentalist Bjorn Lomborg that much of the world’s efforts to reduce emissions in the past couple of decades have been a waste of time. I also agree with him on the need for a surge in R&D to provide a cheap, renewable-energy-powered future. It is just that I think that future is already here, not decades away. And nuclear power is already a thing of the past.

 

#India-Online campaign to save George Orwell’s birth home #ancientmonument


IANS

Fed up with assurances that have made little difference, residents of Motihari town in Bihar, birthplace of legendary British author George Orwell, have gone online seeking support for the conservation of the house the author was born in.

“In a bid to mobilise support for the conservation of the birthplace of George Orwell, we have launched a new initiative online to inform people and offer those interested a platform to know more about the ground reality,” Debapriya Mukherjee, a senior Rotarian in Motihari, told IANS on Sunday.

Mukherjee said that Rotary Motihari Lake Town has launched a website on the birthplace of George Orwell called www.birthplaceofgeorgeorwell.org.

“It is the first of its kind to help conserve George Orwell’s birthplace,” he said.

After being neglected for decades, the website may aid efforts to conserve George Orwell’s birthplace, Mr. Mukherjee said.

According to him, the ancestral house of George Orwell now lies dilapidated, and stray cattle graze in its premises.

Another local resident, Somnath Singh said that it was unfortunate that despite the Bihar Government’s declaration of the house as a protected site a few years ago, nothing had changed.

“The house is in poor shape. It may collapse if not renovated,” Mr. Singh said.

Earlier this year, the state government announced that it would prepare a blueprint to turn the crumbling single—storey house in East Champaran’s Motihari town, about 300 km from here, into a museum.

Orwell is the cult author of classics such as “Animal Farm” and “1984”, which painted a grim ‘Orwellian’ picture of a future totalitarian society where ‘big brother’ was always watching.

Successive governments have done little to capitalise on the tourism potential of house in which the author was born.

Two years ago, the state government had issued a notification declaring the building a protected site. The notification for its protection had been issued under the provisions of the Ancient Monuments (Protection) Act, 1976.

According to district officials, Orwell’s birthplace was mainly targeted by encroachers, who have been damaging it.

Orwell was born Eric Arthur Blair in 1903 at Motihari near India’s border with Nepal. His father, Richard Blair, worked as an agent of the opium department of the Indian Civil Service during British rule. The house has been lying neglected for decades, and now serves as a shelter for stray animals and vagabonds. A small portion was taken over by the State Government and a schoolteacher now lives there.

It has been reported time and again that the roof line has caved in, and a large grapefruit tree has undermined the southern wall.

Only the stone floor looks solid, though it cracked during an earthquake that almost levelled Motihari in 1934.

At present, there is nothing to tell visitors that this modest two-room house was where Orwell spent the first few months of his life, tended to by his mother, Ida, and an Indian maid.

Orwell and his mother left for Britain soon afterwards. – IANS

Thames Water – a private equity plaything that takes us for fools


When the water company was privatised we were promised a utopia of private sector efficiency

  •  Will Hutton ,  Guardian, The Observer, Nov 11, 2012
Victorian sewer, Knightbridge

Inside one of London’s Victorian sewers. Photograph: Kirsty Wigglesworth/PA

London remains the effluent capital of Europe. The Victorian network of sewers is overwhelmed, and untreated or semi-treated sewage is leaking into the Thames, leaving the tide to do the rest, just as it did when the great engineer Joseph Bazalgette built the system. It is no longer acceptable – for consumers or in terms of international water standards. For more than a decade Thames Water has known that it needs to builda huge 20-mile tunnel 70 metres under the river to conduct the sewage out to sea, a £4bn investment that would last more than a century.

The chancellor, George Osborne, has identified the scheme, now gone through interminable planning inquiries, as part of the national infrastructure plan. And it is reliably tipped to be included in December’s autumn statement as eligible for the new infrastructure guarantee. British taxpayers will essentially guarantee the £4bn of Thames Water borrowing, so that whatever happens investors will get their money back. This will allow Britain’s biggest water company to borrow hugely, as a government body in effect, at the keenest rates of interest.

Which is why even if you don’t live in London you should pay attention: you will be offering the guarantee. Enough of such guarantees and Mr Osborne will be able to pronounce the tideway tunnel one of 40 priority projects to spearhead a multibillion-pound infrastructure boost – without increasing public borrowing at all. Magic!

However, those with long memories will recall that one of the principal arguments for privatisation was that no such guarantees would ever be needed again. When Thames Water was privatised back in 1989, raising a paltry £922m for the government, we were promised a utopia of private sector efficiency in which the water industry’s new private sector owners would create a first-class water system at much lower prices than the government ever could. The industry could escape Treasury constraints and borrow freely. Regulation would be light touch. The “dead hand” of government should be got out of this industry as out of every other.

Thames is certainly a different company, proudly boasting that 99.98% of its sampled water meets quality standards and of a rolling investment programme to meet its regulatory obligations. And, God, has it borrowed freely! It is crippled with debt, which has jumped from £1.8bn to £8bn over the past decade under its foreign owners – first the German utility RWE and, since 2006, a group of private equity funds domiciled in Luxembourg, marshalled by the Australian bank Macquarie. Taking account of the debt means that its net worth has hardly risen at all.

Macquarie is the bank that makes Mitt Romney’s Bain Capital look saintly. Its every effort is organised to outflank regulators and tax authorities, and so make extra for itself – thus its nickname as the millionaire factory. But the game cannot start unless it owns a monopoly business, such as Thames Water, that reliably generates profits and cash. In a country such as Britain, whose politicians like to claim is “open for business” and where tough questions about corporate behaviour are rarely asked, it is an invitation to be looted, and so we have been. Responsible owners would steward their company with more care.

Thames Water has done what the regulator has asked but no more. It has not been concerned to make the water system more resilient, with, say, back-up reservoirs to guard against climate change – earlier this year, we witnessed restrictions on water use because of drought. Nor has it managed its affairs so that it has spare capacity for the unexpected or for a big project like the tideway tunnel.

Instead it is a vehicle whose over-riding priority is incredible shareholder enrichment. By maxing out on debt, all the astonishingly high interest payments can be offset against tax, so that in 2012 it paid no tax whatsoever even while paying £279.5m of dividends – subject, of course, to minimal Luxembourg taxation. T Martin Blaiklock, an infrastructure consultant whose work the Observer reports today, calculates that if Thames had made no dividend payments over the past 10 years and instead used the cash to build up reserves, it would have accumulated £4bn to build the tunnel with no extra borrowing, and thus no extra water charges. The private equity groups behind Thames, he reckons, would have merely seen their investment grow by about two-thirds since 2006 rather than enjoyed a tenfold increase – a much fairer deal all round.

As it is, the Treasury is going to endorse the way Thames has been managed by offering it the get-out-of-jail free card of an infrastructure guarantee. I favour using such guarantees to deliver infrastructure investment that would not otherwise take place, but it throws into sharp relief the co-dependence that exists between the public realm and the private sector – and one that is wholly unacknowledged either in law or culturally.

Thames Water is a utility providing 14 million Londoners with water. In law, and culturally, it is no more than a private equity plaything whose obligations to London are secondary to whatever wheeze will enrich its shareholders, who now include both Abu Dhabi’s and China’s sovereign wealth funds.

Most of England’s water companies are run the same way. As Blaiklock comments, sooner or later one of our overindebted water companies will collapse, requiring a more formal bailout than an infrastructure guarantee. (State-owned Scottish Water, by contrast, faces no such risk.) But it will have contributed precious little tax to the state that is bailing it out.

Four crucial reforms are required before the guarantee scheme is launched.

First, Ofwat, the regulator, should have much greater powers with regard to water companies’ balance sheet strategies: borrowing plans should only go forward with its prior approval and it should be able to launch periodic stress tests.

Second, as public service companies, all British water companies should pay corporation tax as a percentage of turnover, with proper deductions for investment and depreciation, but no allowances for any financial transaction with a tax haven.

Third, non-executive directors of utilities should be made legally responsible for ensuring that the utility’s first obligation is to discharge its purpose as a utility rather than to be financially engineered to induce high shareholder returns.

Fourth, the government should take a golden share in each company that accepts a guarantee.

What has happened to the English water industry over the past 20 years is as disgraceful as what happened to our banks. Britain badly needs new infrastructure investment; but it also needs a more responsible capitalism. Mr Osborne has the opportunity next month to ensure both. He cannot – and must not – offer indiscriminate guarantees for no wider economic and social return

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