The government will soon publish its long-awaited Energy Bill. As we wait to see the detail, the debate around energy gets more heated. To many people the biggest concern about energy is the cost of their fuel bills, and a lot of other aspects of the energy debate can seem unclear or confusing. So it’s worth taking a step back to look at what’s so important about the Energy Bill, and exactly why WWF is working so hard to influence it.
This is the biggest shake-up the energy market will see for a generation – the most significant change to the way energy is produced and used in the UK.
Our main worry about energy is in relation to the greenhouse gas emissions from fossil fuel use and the environmental damage done by the resulting climate change. A warming planet will change weather patterns, water supplies and habitats for countless people and wildlife species – often in already-vulnerable areas. That’s something we all need to be concerned about.
Almost four years ago exactly, the UK passed the landmark Climate Change Act, with cross-party support – the first legislation of its kind in the world. Under the act, the UK is legally committed to reducing our greenhouse gas emissions by at least 80% by 2050 (compared to 1990 levels), in order to keep global warming within ‘safe’ levels – meaning a temperature rise of less than 2°C.
The 2008 act also created the independent Committee on Climate Change (CCC), whose role is to prepare carbon budgets, and advise the UK government on the level of emissions that need to be cut in each sector of the economy by a particular date.
The CCC’s most recent budget, its fourth, said that in order to hit our climate change targets, our power generation sector (which represents around 25% of UK carbon emissions today) would need to be “near-decarbonised” by 2030.
At the moment the UK power sector emits around 500g of carbon dioxide per unit of electricity produced (kilowatt hour, kWh), and the CCC argues this needs to go down to just 50g per kWh by 2030. A 90% reduction.
The CCC said this partly because the power sector represents a lot of emissions in its own right, and also because, if we’re going to cut emissions in other sectors of the economy like transport and heating (currently very reliant on oil and gas), we’ll need more of these sectors to run on electricity – electricity from low-carbon, renewable sources.
Which brings us to the upcoming Energy Bill. There’s a number of things we want to see in the bill, including a clear target for decarbonising the power sector, measures to support energy efficiency and robust, long-term support mechanisms for renewable forms of energy.
We believe it’s essential to have a decarbonisation target for the power sector – a specific target to reduce emissions to around 50g of carbon dioxide per kWh by 2030. Partly because the 2050 Climate Change Act target is still a relatively long way off, but also because businesses and investors in renewable energy need more policy certainty now. A clear, more imminent target shows that the government is committed to cleaner, greener forms of energy.
We’ve made some progress towards getting a target agreed. Labour, the Liberal Democrats and some prominent Conservatives like Tim Yeo, chair of the Energy and Climate Change Select Committee, are all backing one. Although of course the devil may be in the detail.
Energy efficiency is something that’s not currently addressed in the bill, even though a recent report by WWF and Green Alliance showed that effective measures to reduce electricity use could save the UK more than £10 billion per year by creating a ‘market’ for electricity savings. The report was widely well received, with energy minister Greg Barker commenting that it was ‘excellent’.
We also recently published a report called ‘On Picking Winners’, written by Dr Rob Gross of Imperial College London, which highlights the need for targeted policies to support different forms of renewable energy. These are forms of financial support, known by acronyms like ROCs (renewables obligations certificates) for wind power and FiTs (feed-in tariffs) for solar power, which again help boost certainty for businesses and investors and drive down the costs of renewable energy technologies.
Lastly, there’s gas. We’re concerned about what role the government sees for gas in the UK’s energy mix. When the Energy Bill is published next month the treasury will also publish a ‘gas strategy’, which seems likely to reflect the ambition of the chancellor George Osborne to turn the UK into a ‘gas hub’.
Mr Osborne maintains that “gas is cheap”, despite the fact that the wholesale price of gas has been the main factor driving up people’s bills over recent years. Although we do see a role for gas within the energy mix, importantly in providing backup for renewable sources of energy, it’s still a fossil fuel. If we have too much gas in our energy mix we’ll be at serious risk of missing our greenhouse gas reduction targets.
So there’s a lot of work to do, but supporting the move to clean, renewable sources of energy is one of our main priorities at WWF, both here in the UK and around the world.
And we’ll be needing your help to make sure it happens. So watch this space…