Low carbon investment to 2025: it’s a really, really big sum

Yes, it’s between £200 and £300 billion. That’s the received wisdom now about the investment necessary to sort out our energy supply, networks, capacity etc. by 2025. I was put in mind of this when, during a seminar I attended this week, sure enough, up popped the figure during a talk by a Green Investment Bank Advisor.  Ministers now reel it off routinely as fact during debates: it’s installed as a paradigm: or perhaps shorthand for ‘ its an awful lot of money so we shouldn’t do things that will put it in danger.’  It is also there for contrarians to take pot shots at, being such an unfeasibly large sum.  A recent Economic Policy Centre paper, (pdf) for example argues roughly that there’s no way we’re going to be able to invest that much, so let’s settle for a far smaller programme of – say –  £70 billion which seems rather to miss the (low carbon) point of the higher figure.

So where does the sacred sum come from? It seems to have emerged from two sources, possibly connected: Ofgem’s ‘Project Discovery,’ in 2009, which modelled a number of scenarios for low carbon investment needs and came up with the  £200  billion figure for the most ambitious of their scenarios ‘green transition’. This assumed  rapid economic recovery, global agreement on climate change measures, and new nuclear and carbon capture measure operational by 2020, among other things.  Other scenarios modelled produced a much lower level of investment requirement. Ernst and Young, at the same time, produced  an estimate of £235 billion up to 2025 in their ‘Securing the UK’s energy future.’   This assumed among other things a huge increase in installed capacity  (about 122GW) well beyond even the (I think) inflated capacity projections of the Government National Planning documents and a corresponding hike in peak demand of about 15%, also belied by DECCs projections.  Both documents, incidentally assume a large amount of new nuclear online between 2020 and 2025, (Ernst and Young almost 13Gw up and running by 2023) which we know now  almost certainly won’t happen.

So as with all big numbers they are often not quite plucked out of the air, but rely on some occasionally heroic assumptions, which can be eroded fairly rapidly by the passage of time.  the assumptions  here are certainly  beginning to look rather rusty, and yet just as they do so, they seem to become more embedded in the narrative. I suppose that’s what happens when things go rusty: doors start to seize up and stick.

I don’t think for a moment that we will need to spend ‘between £200 and £300 billion on plant and infrastructure by 2025, even if we did have that sort of money lying about to invest: what I do know is that the investment requirement will be very substantial  – probably well above £100 billion, for example – and will need hard work to achieve. I’m not sure that this task is best served by hanging paradigms  marked ‘at least £200 billion’ over the entrance to the workplace. Time for some updated, and perhaps more guarded projections to be put on the table, I think.

4 thoughts on “Low carbon investment to 2025: it’s a really, really big sum

  1. Re: ‘ . . hanging paradigms marked ‘at least £200 billion’ . . ‘ What do you think a ‘paradigm’ is?

    The nearest I can find in OED is: ‘ . . 4. A conceptual or methodological model underlying the theories and practices of a science or discipline at a particular time; (hence) a generally accepted world view.

    1962 T. S. Kuhn Struct. Sci. Revol. ii. 10 ‘Normal science’ means research firmly based upon one or more past scientific achievements‥that some particular scientific community acknowledges‥as supplying the foundation for its further practice.‥ I‥refer to [these achievements] as ‘paradigms’ . . ‘

    I think the mot juste here is ‘notice’ or perhaps ‘label’.

  2. Hi Alan,

    Great blog, and subject to blog on!

    I was the Secretary of the University Labour Club and a member of Portswood Ward Labour Party in the mid ’90s, and still have a keen interest in energy and climate change.

    What are your views on advanced nuclear and molten salt reactors in particular, such as the Liquid Fluoride Thorium Reactor (LFTR [1]) promoted by Baroness Worthington [2] or simpler Uranium fueled molten salt reactors such as the denatured molten salt reactor [3] ?

    Bryony Worthington recently launched the Weinberg Foundation [4], based at Somerset House, to promote this technology and has asked questions about LFTRs in the House of Lords.

    Molten Salt Reactors (MSRs) have several advantages over conventional PWRs. MSRs have excellent passive safety features, can run on nuclear waste from the current generation of nuclear power stations, can achieve near 100% burn up of their nuclear fuel and create far fewer long lived radioisotopes making their waste much more manageable.

    Thorium MSRs also have a high level of proliferation resistance and offer a market for tailings from rare earth mines which, outside of China, are very expensive to dispose of. This technology can help break the Chinese monopoly on rare earths.

    Heat from MSRs can be used to desalinate water and create ammonia, a zero carbon fuel to power internal combustion engines, aircraft and gas turbine peaking plant.

    This technology looks to have a good chance of solving most of the problems of energy and global warming. Can a serious MSR project be started in the UK?

    Andrew Waite.

    [1] http://www.youtube.com/watch?v=P9M__yYbsZ4&feature=player_embedded
    [2] http://www.guardian.co.uk/environment/2011/jul/04/thorium-nuclear-power
    [4] http://www.the-weinberg-foundation.org/

  3. Hi Alan,

    As of yesterday, there is now an All-Party Parliamentary Group on Throium !

    Westminster, London – 01 March 2012 – The Weinberg Foundation, a not-for-profit advocacy group for thorium energy, announces the formation of a new All-Parliamentary Group (APPG) on Thorium Energy, which held a lively inaugural meeting in parliament yesterday.

    Attracting cross-party support from MPs and Peers, the forum will generate critical debate on the potential of thorium as a viable new energy source and examine reactor technology and new fuel designs in planning for the adoption of a viable cleaner, safer and abundant global energy solution. As 10,000 times the energy density of coal, thorium is a convincing nuclear fuel option to tackle fossil-fuel reliance.

    Labour Peer Baroness Worthington, who is the patron of the Weinberg Foundation and Chair of the APPG, comments:

    “Whilst public opinion is moving towards the acceptance of nuclear power to combat environmentally damaging fossil-fuelled energy sources, Fukushima clearly demonstrated the dangers of traditional solid-fuel uranium reactor designs. If there is a safer ‘green nuclear’ alternative, which also effectively tackles waste, proliferation and energy security, we have a responsibility to future generations to examine it.”

    Vice-Chair of the group Dr Julian Huppert MP said:

    “As a scientist I am delighted to help establish this platform for evidence based discussion and debate on this most important issue. Nuclear power has always had great potential and the UK was once a world leader in nuclear science research. We intend to explore whether energy from thorium can make a significant contribution to delivering a low carbon economy and help to reinstate the UK’s leadership position.”

    The Department for Energy and Climate Change in its recent response to a highly critical House of Lords Science and Technology Committee report into nuclear R&D recently announced its intention to consult on a long term strategy for nuclear power in the UK.

    Many of the APPG members have backgrounds in science, climate policy and the energy industry and are well placed to examine the need for the UK to take a considered position on Thorium. Energy-hungry nations like China, Japan, India and others currently look to be leading the march on exploiting the benefits offered by Thorium-fuelled reactors.

    The Weinberg Foundation is providing the secretariat to support the APPG.

    Notes to the Editor
    The list of founding members of the APPG is as follows:

    Chair: Baroness Worthington (Lab)
    Vice-Chair: Dr Julian Huppert MP (Lib Dem)
    Treasurer: Lord Lucas of Crudwell (Con)

    Lord Clark of Windermere
    Mike Crockart MP, Lib Dem
    Tony Cunningham MP, Labour
    Lord Deben, Conservative
    Barry Gardiner MP, Labour
    Lord Grantchester, Labour
    Viscount Stephen Hanworth, Labour
    John Hemming, Lib Dem
    Lord Jay, Cross bench
    The Rt Reverend Bishop of Hereford, Antony Priddis
    Lord O’Neill of Clackmannan, Labour
    Lord Oxburgh, Cross bench
    Lord Stoddart, Independent Labour
    Lord Taverne, Lib Dem
    Lord Teverson, Lib Dem
    James Wharton MP, Conservative
    Heather Wheeler MP, Conservative
    Lord Whitty, Labour
    Simon Wright MP, Lib Dem
    Tim Yeo MP, Conservative

    For further information contact:
    Sophia Henri
    Communications, Weinberg Foundation
    Secretariat to the APPG on Thorium Energy
    Tel: +44 (0) 7793 555403
    Email: Sophia.henri@the-weinberg-foundation.org

    David Martin
    APPG co-ordinator
    Tel: 07903 434399


  4. Definitely time for some new research, costings and projections. Another crucial question is whether EMR is already out of date. Perhaps the committee could ask the question?

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