Watchdog Critical of Energy Deals

NAO and renewables

The National Audit Office has weighed in with criticism of £16 billion worth of renewable energy deals that have been agreed without being put out to competitive tender. It follows on from doubts voiced by watchdog Which? recently over the government’s Contract for Difference policy, saying that it could add to consumer bills rather than reduce them.

It comes as energy supplied by renewables such as wind, solar and other green options is up by 43% compared to this time last year, according to the Department of Energy and Climate Change. Despite this, the NAO have now waded in with concern that 5 wind farm and 3 biomass projects have been given the go ahead without the competition that would see consumers get a better deal.

Ministers argue that these ‘significant investments’ will contribute much to the UK reaching its 2020 energy targets. NAO experts are less sure, saying that there is no evidence that the award of fewer early contracts would have that much effect, and may in fact be counterproductive. The criticism is that the Contract for Difference policy change would give consumers more chance of a competitive market which far outweighs any reason to award contracts early.

There is also an issue with committing so much of the available renewable energy funding to projects such as those won by SSE and Dong Energy that will only achieve 5% of the 20% target for 2020. A spokesman for the Department of Energy and Climate Change commented that they were playing catch up after years of under investment in renewable energy programs and that the early contracts will represent significant benefits to bill payers.

Margaret Hodge MP, however, has also raised concerns over the awarding of the contracts, adding that “private providers must not be allowed to make excessive profits at the expense of consumers and taxpayers.”

The new Contracts for Difference subsidy regime will be introduced in Spring of 2015 but has already come under criticism from a variety of sources including opposition members and green activists. They are long term contracts that are designed to provide incentives and a stable environment for private companies to invest in green energy such as wind farms and solar power.

While many believe that they are better than the old system of renewable energy subsidies there are others who are not so sure.

According to the NAO awarding the contracts early on this occasion could boost confidence in renewable energies but that the scale of the awards may mean that consumers will have to cope with increased costs. The contracts account for 58% of the amount that will be made available for Contracts for Difference up until 2020 and have been awarded far too early according to some. The Department of Energy and Climate Changes point of view is that not awarding the contracts may well have risked these energy developments being stalled or not going ahead at all.

Do Biofuels Need a Government Lift?

Bio Fuel Image

Conservative research estimates say that second generation biofuels could meet between 10 and 25% of our energy supply needs by 2050 – potentially, all that is required is some investment from the private sector and we could be pushing new developments to meet that target.

And therein lies the problem.

Private investment is reticent. Developing biofuels comes at a sizeable cost and to take it to the next stage requires something beyond what the government and public sector finance can normally supply. There’s also a fair amount of risk involved. Biofuels are unproven in the big, wide world and finding the right, supportive private sector investment to take on that kind of risk has so far proved fruitless.

The recession hasn’t helped the lack of enthusiasm, even with the research suggesting that biofuels could contribute a large amount to our energy economy.

The key for further development is to get beyond the laboratory stage to a demonstration model production facility that can make biofuel on a large enough scale to encourage viability. According to the Carbon Trust, moving to this stage could cost as much as £100 million and while, at university level, there is a great deal of expertise this hasn’t been passed on to producing plants that can mass manufacture enough fuel for a hungry market.

There are plenty of start-up companies working in symbiosis with university academics but can they get to the next, and perhaps most vital, stage. The Carbon Trust believes that this is unlikely without long-term funding through the public purse. This is needed, in the absence of significant private investment, to take biofuel technologies from the lab, through to pilot and demonstrating that it can be produced in sufficient quantities to satisfy demand.

Not having the possibility to fund beyond the pilot stage may well put a lot of biofuel innovators off. What would be the point if there wasn’t the money to take their ideas beyond the next stage, no matter how much research and results were behind them?

According to the Carbon Trust there is a requirement to provide the funding and that can only be done by a change in policy. What is needed is enough money that provides a gateway from beginning to end. Grants, loans and risk capital could be combined to get the right biofuel products to the first production stage. The benefit of doing this is that it could bring about a sea change from future private investors and kick start the popularity of biofuels as a viable energy source.

Without it, biofuel technology could languish behind other low carbon options that have received more generous private funding. A lot depends on whether we believe that biofuels have a future. At the moment, they are produced in small quantities at relatively large expense by small businesses working with the shackles on.

The gap between working on a pipe dream and getting commercial involvement that takes the biofuel industry to the next level is, at the moment, too wide to cross.

Are Green Roofs High Maintenance?

Green Roof

According to the Guardian recently, Mexico City is trying to do something about its pollution problem by installing a number of azoteas verdes or green roofs. Hospitals, schools and offices have been the subject of a $1 million experiment to create a greener and healthier environment.

And Mexico is not the only city that is trying to go back to nature. New York has been a fan of green roofs for a while now. They are thought to have several effects apart from the aesthetic, including soaking up around 70% of the rainfall – great for a city that has long suffered from flooding due to run off water. A Columbia researcher has found that if all of New York’s roofs were turned green it would stop 10 billion gallons of water from entering the city’s sewer system.

With 944 million square feet of roofing, there’s plenty of opportunity in New York for a roof garden. It’s becoming a bug too with prices coming down and roofing businesses incorporating it into their product offers.

Green roofs aren’t a new thing. The Germans have been making them since the 1940s, as have the Norwegians. The truth is that green roofs have been around for centuries in one way or another. They have a number of benefits including insulation, reducing greenhouse gasses and purifying water, as well as having a certain visual appeal and providing additional habitat for the much lamented bee and other insects and animals.

Many people think that green roofs are high maintenance, that they cause structural problems to the building underneath and even leakage. Most well designed roof gardens should have a protective layer to stop roots breaking through and it is a myth that they cause more damage and are high maintenance. There’s even a suggestion that a green roof might protect you from damage and some experts say they can double the lifespan of a normal roof.

There could also be considerable energy saving benefits of having a green roof. Having an extra layer of insulation on your roof can decrease the amount of heat lost in winter and keep down energy bills as well as providing a cooler environment in the depth of summer.

Building a Green Roof

It’s not simply a case of throwing some soil on your roof and planting a bunch of nice azaleas. A garden roof will probably need a good deal of thought and access to some expertise. You need to be sure, first and foremost, that your roof can take the additional weight and that it is otherwise suitable for such a construction. You will also need a weather proof membrane, a root protection layer and a drainage layer before you even get round to your growing medium.

While you may have the technological and building know how to build your own roof, most of us will need to hire someone who knows what they are doing.

There’s no doubt that green roofs are becoming more and more popular across the world as we try to find new and innovative ways of making our world a nicer an eco-friendly place to live. Expect to see brighter and lusher city centres as people turn their spaces into something more aesthetically pleasing than tar and tiles.

Solar Roadways? – Are We Bold Enough on the Green Agenda?

Solar Road

Renewable energy went viral recently with a couple of Americans crowdsourcing funds for a plan to turn roads into energy sources. Their plan? To replace asphalt roads with strengthened LEDs and solar panels that could feed the electricity needs of the country.

In other words, they want to turn our millions of miles of road into a power source.

Scott and Julie Brusaw believe these roads could be lit at night, perhaps power the grid and used to illuminate signs. Their Indiegogo campaign has attracted 46,000 funders and raised over $2 million with an additional 16 million hits on YouTube. Some have called it a scam or, at best, an unworkable idea, but the couple have been toiling over it for years now and the idea is beginning to gain traction.

Detractors claim that turning our roads into solar panels will be disastrous, costly and, frankly, ridiculous. Could thousands of cars passing over solar panel, even if they are made of specially reinforced glass, really leave them unbroken or undamaged? What would be the cost of transforming our roads in this way? How would it be maintained and how many millions would that cost? And would it pay for itself as a cheap source of electricity for the surrounding neighbourhood?

The claim is that they can also be used on walkways and will cut greenhouse gases by 75% though how anyone reached that figure is not clear. The inference though is that, if they can be used on roads, they can be used anywhere to change the way we generate our power.

It’s an interesting idea and it has caught the attention of many people around the world but the more important question may be this: Are we being bold enough when we think of new and greener solutions for our energy needs?

Isn’t the kind of thinking out of the box that Scott and Julie have done the sort of solution we should be looking for?

The truth is that many researchers and inventers are already doing it.

Scientists are looking at ways to use wasted body heat to create electricity. The US have invested $44 million in developing the process of making fuel from algae and a Canadian scientist is working on his Atmospheric Vortex Engine which he hopes will harness the power of manufactured tornadoes.

Subways in Japan have begun using the current producing properties of crystals to power ticket machines and lights and Nokia are working on technology to charge phones from ambient radio waves.

While a number of renewable energy technologies look to replace our reliance on oil, other researchers are looking to develop new ways of creating it including from bugs that consume waste and excrete oil.

What is the true cost of the low carbon agenda?

While Ofgem recently warned the big six energy companies they weren’t passing on lower fuel costs, consumer champion Which? has questioned the cost effectiveness of the government’s low carbon agenda.

Carbon Co2

Energy secretary Ed Davey has proposed new subsidy schemes to encourage less cost effective methods of energy production such as wind farms that might not realistically deliver on value. Which? is concerned that the government hasn’t got the balance right and that too much leverage is being given to expensive projects over cheaper ones, for example off shore farms as opposed to those on land.

The price of energy is one of the major and toxic concerns for consumers and the problem is that some green alternatives may, in the long run, be adding costs that could see us paying more for our bills. The Contracts for Difference (CfD) subsidy reforms, argue Which?, don’t allow for full competition and therefore there is the risk of investments being made that do not profit the consumer.

If more expensive energy generation projects are given more priority than cheaper alternatives and there is no competition, developers will be shielded from cost pressures. And it’s not just a simple case of cost. There is huge concern and pressure from Conservative backbenchers and local communities over land based wind farms, for instance, which has led to more development of higher cost projects such as offshore wind farms.

While it is true that the offshore wind farm initiative provides a large number of jobs and feeds a great deal of money back into the UK economy, Which? complains that the “cost information is hard to come by” for such projects and “allocating subsidy competitively is the best way of revealing this information”.

The problem is that long term sustainable energy concerns may be undervalued under the current system, and that there needs to be more competition between different kinds of technologies. The Department for Energy and Climate change however say that CfDs are the most cost effective way to develop the low carbon agenda and will protect consumers in the long run from volatile wholesale prices and ensure we are not held to ransom by the major energy suppliers.

Offshore wind farms are still considered one of the most expensive green technologies (50% more expensive than nuclear) while onshore is much cheaper to develop. The expectation is that the cost of electricity produced by offshore wind farms will come down, as they did for onshore, although it is estimated that this could take as much as 18 years.

A whole host of problems come into effect with building offshore wind farms starting with the difficulty in construction, the restriction on locations, the need to take into account fishing and boat navigation and marine conservation concerns. All these constraints have an effect on the time it and money it takes to construct an offshore wind farm and the amount of time it takes to pay back on the investment.

Which? says it is fully behind the green agenda and the development of better low carbon sources of energy but that we need to be concerned if we are only encouraging the building of higher cost projects that will, in the end, have a detrimental effect on the consumer.