Finally – energy efficiency regulations emerge un-pickled

Finally, stumbling over the line six weeks or so before pre-election purdah puts everything into mothballs, the regulations requiring landlords, by 2018,  to ensure their rented properties exceed a very basic test of energy-worthiness before they can be rented out have been laid before Parliament. Now lest that first sentence sound a bit churlish, let’s be clear: hooray. The regulations themselves are sound. OK it’s only energy efficiency band ‘E’  (the bands go from G – meaning your house, energy efficiency-wise, is more like a gazebo than a property, to A – which envisages homes that are so efficient they don’t use much energy at all to heat and power, and may anyway create their own energy to do so) so it’s not that far up the scale. But since private rented homes are among the least energy efficient properties as a group it represents a real step forward for tenants warmth and property efficiency across the country. And the penalties for non-compliance are proportionate to the cost of actually doing something – i.e. more than it is likely to cost landlords to do up their homes to conform (which as the Association for the Conservation of Energy and others have shown is, in most cases, a pretty modest sum – perhaps £1500 or so).

The regulations don’t of course cover a large part of the private rented scene, which is where parts of properties in which people are living jointly are let out on individual tenancies: Houses in Multiple Occupation or HMOs. This remains a real gap in provision, since it means that thousands of properties in most large towns and cities will simply be exempt. This raises the not entirely fanciful prospect of some landlords straying into letting properties out as HMOs and not single tenancies over the next few years so that they do not have to improve their properties to let them.  I shall certainly continue to pursue this gap in the regulations, which surely, a future government more interested in energy efficiency across the piece will have to fill…which brings me to the slightly more churlish bit of the piece.

The Energy Act 2011, from which these regulations derive, received its Royal Assent on 10th November 2011. That’s a piece of legislation passed by Parliament, supported generally all-round, although there were moves during its passage to move the qualifying date for landlords to comply forward to 2016. No, we were told, 2018 is a better forward date, because after the regulations are in, that gives five to six years to move towards compliance, instead of about three if the date is met at 2016.

So, a mere three years and three months later, regulations (which were probably written and ready to go by early 2012) finally emerge, giving landlords, yes, about three years to move to compliance.  So why the inordinate and otherwise inexplicable delay?

Introducing the measure yesterday, Ed Davey gave it away, although when he was in undifferentiated mode as Secretary of State, he played a straight bat when I enquired, repeatedly about the non-appearance of the regulations. ‘Well’ he said, ‘’I wish the regulations had been brought in earlier.’  Battles within the coalition had apparently delayed them. ‘Not everyone in this government wants more regulation. But in energy efficiency regulation plays a crucial role’. Quite so Ed.

So who might it be that the battles were with? Not the Ministry of Defence obviously – the finger very rapidly and accurately points at our not very green at all friend in DCLG, Mr Pickles. Quite scandalously, in fact, that a modest follow on measure from an Act agreed by Parliament which would make a big difference on housing fitness and tenant welfare at small cost, and even endorsed by the National Landlords Association, has been blocked. Blocked by the head of the department that is supposed to be all about housing and standards therein, and only eventually unstitched because, I understand No. 10 very belatedly told them to stop messing around.  In another system someone ought to be accountable for that kind of attempted extended sabotage on a measure agreed by Parliament. Not in this one though.

Ed Davey makes his mark – but not in a good way

Here’s what Secretary of State Ed Davey told us on Friday (at midnight, naturally) on what he has plumped for on the future of gas-fired power stations.  He has decided that:

  • The level of the Emissions Performance Standard, designed to limit the emissions from individual plant, will be enshrined in primary legislation. Power stations consented under the 450g/kWh-based level would then be subject to that level until 2045, a process called ‘grandfathering’ which provides long-term certainty to gas investors.
  • The Capacity Market will be designed to bring forward sufficient investment in new reliable capacity, including gas, in order to ensure security of electricity supply. This will help to ensure that there is sufficient capacity in place to cope with peaks and troughs in demand.

Sounds OK? No it isn’t. In my humble opinion it ranks as one of the stupidest and most thoughtless pieces of decision-making in government for some time.  It rugby-tackles and negates all the (apparently now pious) agreements the Government has entered into on climate change targets, such as adopting the fourth climate change budget just recently.

Those are by any reckoning very serious charges. So how do I justify them?  I see, incidentally that everyone present at the most recent DECC questions (me included) was accused by a sketch writer of speaking a peculiar corruption of the English tongue called ‘energese,’ so I will attempt to explain it all in English, if possible. Certainly the Davey announcement is fluent ‘energese’, so it needs to be translated in the process.

What the announcement means is that only new power plants that emit carbon dioxide at less than 450 grammes per kilowatt hour of energy produced will in future get consent. Anything above that level will not, which of course includes new coal fired power stations. But new gas power stations will ALL come in at under 450gms – they will emit about 400. So it says that we will be able to plan for and build as many new power stations of this type as we like in future years.

Then it says that all these new plants will be ‘grandfathered’. What that means is that anyone who has built a plant emitting – say 400gms per kilowatt hour – will have guarantees issued that they will not be disturbed in their emissions until 2045 – the likely lifetime of plants being built in the near future.

It finally says that the capacity market (by which he means the introduction of ‘capacity payments’ in the near future, designed to reward ‘availability’ of plant so that the government knows it can deliver, if required the power that is remanded at any particular time) will help ‘bring forward sufficient investment.’  Too right it will. Already there is a glut of gas fired plants in construction, or in the planning or worked up proposal stage. Even the National Energy Planning statement admitted to 8gw under construction and 9gw in the planning stage. Now there’s much more.

So if you are a gas power station developer, what’s now not to like about the new regime? You can build what you like where you like and no-one will limit your output subject to being able to sell it in the (unreformed) energy markets. What’s more, you will get paid for simply being there, whether you sell your power or not. I somehow think a large number of new power plants will get built. Damien Carrington in the Guardian suggested this week that we will need to ‘hold the line’ at capacity payments, which he thinks, might limit the output of these new gas fired power stations. That’s not quite how I read it. Capacity Payments (in the revised form now being put forward by DECC) will reward ‘readiness to produce’. They will not limit what a power station can sell if it has a buyer. For gas fired power stations, it would be business as usual, with the added bonus of some money thrown in if they promise to make sure business really is as usual.

What then, would ‘business as usual’ mean, under these new conditions?  Currently, gas makes up 35% of our generating capacity. Some scenarios increase that proportion as other supplies dwindle, but let’s say that, under the new liberal regime gas continues to make up about 35% of capacity. That’s 35% at least of our supplies UNTIL 2045. It will be more, since last year in terms of actual power supplied (i.e. who produced what power from their respective plants); gas supplied 44% of the fuel for our electricity supply. Let’s say, 40%

So 40% of all our electricity supply until 2045 will carry with it 400 gms of CO2 emissions until 2045. You don’t need to do much maths to calculate that, even if everything else is renewable or very low carbon (say 50gms) this averages out, over the sector at 190gms per kw hour fixed until 2045.

That really is, in perpetuity, rather a long way away from what the government has signed up to in the fourth carbon budget (the Climate Change Committee says, in order to keep on track overall, the electricity generating sector will have to come in at around 70gms per kwh by 2030), or even what the Government recently said itself in ‘the low carbon strategy’ signed off by the Prime Minister, no less. ‘By the end of the fourth [carbon] budget period, our analysis suggests that emissions from electricity generation could be between 75% and 84% lower than 2009 levels’. So that’ll be between 75% and 89% lower that the approximately 450gms per kwh emitted in 2009 – between about 112 and 60gms. Well not any more it won’t after this announcement.

Put simply, because of the importance of the energy sector to carbon emissions generally, and because of preponderance of gas in our present supply, guaranteeing its continued dominance at near current levels of emissions means that the whole plan for carbon emissions reduction goes out of the window.

Well done Ed, you certainly stamped your mark on the Department of Energy very early on.  They saw you coming didn’t they?

Drax, Energy Performance and Aquinas.



St Thomas Aquinas: a big supporter of solar power

Lest any of you thought my last post on converting oil-fired power stations to renewables  was a bit fanciful, let me tell you that Britain’s biggest power station, Drax, is already doing exactly that – converting part of its power output to biomass. It is investing in a co-firing facility that will reduce its carbon footprint by about 15%. And there’s more. The company has also announced last October that it is to develop three new biomass plants, each of 300mw capacity. One of them, it is suggested, might be built on the main site itself. I met with Drax a few weeks ago and they took me through the process and their ambitions. It’s all genuine – and two cheers to them for their biomass plans.

It is, of course, though, about Drax’s survival as an independent producer in a future coal-wary power world. The 3.9gw facility is not backed by a vertically integrated energy giant, and if they don’t adapt, they’ll die. They already have adapted, with desulphurisation plant, beyond the EU Large Plant directive, but an output of 7% of the UKs electricity falling at the next hurdle could involve difficulties for future power supply, which is why it is worth having a look at the extent to which this survival might be linked to electricity market reform, and specifically to Energy Performance Standards proposals within it, presently being consulted on.  I commented previously on the rather strange levels of emissions up for consultation – either a ‘higher’ level of 600 gms per Kilowatt hour, or the lower level of 450gms.

So let’s do the maths. (We’re British here, so there is an‘s’).  Drax is a modern coal plant, refitted with efficient processing equipment. It probably comes in at about 700gms per KWh.  We can calculate the effect of its co-firing plans…..ah yes, here come the figures – 15% off 700 – gosh, just under the 600 figure at 595gms.

Ah, you say, but what about the lower alternative level, huh? What happens if that comes in? If it does, then we might turn to Thomas Aquinas. (“what?!” you may well add – bear with me.) Power stations are not quite what they seem. Each one is a collection of mini-power stations, – ‘burners’ – which operate separately. Some run only some burners some of the time (like the oil fired power stations I mentioned previously). Drax has six.  The issue of burners became important in a previous debate about emission standards and co-firing a few years ago. Co-firing was difficult because most fuel was then classed as waste, and a whole power station would have to have standards and handling in place to make it ‘Waste Incineration Directive (WID) compliant’. The Environment Agency, reasonably in my view, decided that only the burner involved in co-firing would have to be WID compliant, and a problem was solved.

Moving back to the present, then, would a ‘new biomass facility’ on the Drax site count as a new power station or as an additional burner? A question worthy of Aquinas, who famously debated how many angels could dance on a pinhead. (He didn’t actually – that was a later propaganda attack on the alleged casuistry of medieval philosophy: but he did debate whether two angels could occupy the same space. Tom’s answer was No.)

But there could be a modern debate about whether two power stations can occupy the same space. And hang on a moment – here come some more figures – 300mw you say – isn’t that about a 9% reduction in carbon if you look on it as a ‘burner? Still over 500 gms, but not far to go. Just a little more co-firing in the main plant (oops – the other burners). The Aquinians have it, and something opaque becomes clearer.