Category: Low Carbon Energy

What the frack! – A guide to fracking and its legal implications

Posted on by janet.crompton

The recent UKELA South West region seminar hosted by the Cabot Institute provided an ideal opportunity for a rational discussion of both the technical aspects of fracking (courtesy of Professor Mike Kendall) and its legal implications in the UK (courtesy of James Taylor of Simmons and Simmons).

With CO2 emissions from gas combustion around 50% lower than that of coal the move to gas as a transition fuel evidently holds appeal. US shale gas production has been praised for its contribution to the fall in US CO2 levels which have reduced back to those seen in 1990. However as was highlighted during the talk, the current availability and low cost of coal presents a problem in incentivising this move. More importantly however, it presents a potentially significant problem for global emission levels. If the UK replaces its coal supply with gas and displaces this coal onto the global market, total emissions will increase with the existing coal and a new gas supply both being burnt.

The appeal of shale gas is not solely confined to its potential in reducing UK emissions however. Energy security is proving to be a driving factor with the Bowland shale basin alone (in Northern England) thought to contain at least 40-60 years worth of the UK’s gas supply. Although unlikely to lower gas prices in the UK, this could significantly reduce our dependency on foreign gas suppliers.

Gas well.  Image credit: Jerry Dincher

When considering the technique of fracking itself Prof. Kendall emphasised the importance of well design and integrity in ensuring water contamination risks are reduced. With wells connecting the shale gas layer, found at depths of around 2500km, to the surface this casing and its integrity are crucial. In addition monitoring of fractures to date has shown that they remain at levels far below those of aquifers and as such are unlikely to prove a problem in relation to water contamination, particularly as the technology exists to monitor the height and direction of these fractures. The treatment and disposal of wastewater was however highlighted as an area which will need to see innovation and clearer regulation as to how such fluids can be disposed of or re-used if a shale gas industry is to develop here in the UK.

James Taylor confirmed that whilst regulations governing conventional oil and gas extraction (that do not use hydraulic fracturing) are applicable to shale gas and fracking there are a number of problems at present. The absence of a single point of control was emphasised, with Department of Energy and Climate Change, Environment Agency, Health and Safety Executive and Local Councils all playing a regulatory role. Other issues with the current system were highlighted through the absence of a compulsory Environmental Impact Assessment for shale gas operations (sites usually falling short of the 1 hectare threshold) and through the absence of a compulsory groundwater or flaring permit (both being assessed on a site by site basis.)

In addition the heavy influence of economic factors in both the planning guidance applicable to onshore oil and gas as well as within the National Planning Policy Framework were highlighted. The increased impact of such considerations should s58 of the Draft Deregulation Bill come into effect with its duty to promote economic growth when exercising regulatory functions was also raised. With local councils’ set to retain 100% of business rates from shale gas sites in their area the impact of economics on decisions was further brought into question.

Image credit: Libdemvoice

With shale gas promising a potentially valuable transition fuel it was clear from the talks that there is a need to ensure that the technique of fracking is carefully conducted in order to reduce the risk of damage and that this needs to be done under a robust and clear regulatory system. The need for transparent and upfront regulators who consider the arguments and concerns relating to both sides of the shale gas debate was also emphasised. This is of particular importance in light of the current shale gas promotion in the UK. Regulatory reforms such as the proposed removal of subsurface trespass (bypassing issues of obtaining landowner consent) in the next Infrastructure Bill evidences the presumption that at present shale gas is good for the UK and should be facilitated.

One of the key themes that emerged from both talks was that although the debate on fracking is often defined in technical terms the key factors proving influential at present are those of geopolitics and public perceptions. Emphasis was placed on the need for early public engagement and the need to tackle the continued  polarization of what is an already controversial issue. It is clear that fracking and onshore oil and gas extraction is a complex topic, technically, politically and socially. Although complex, it is crucial that the issues associated with fracking are discussed. Talks such as this UKELA event are central to doing so and for allowing rational and informed debate on an important topic.

This blog post is by Joanne Hawkins.
A PhD Researcher looking at the challenge of hydraulic fracturing: energy resilience, the environment and effective regulation at the University of Bristol Law School.

 
Joanne Hawkins,
University of Bristol

2nd Generation biofuels: a transdisciplinary dialogue

Posted on by janet.crompton
“Globally, there are politically important evidence gaps, but nationally, those evidence gaps are just not important enough for policy-makers to take account of them”.  
 
This was one comment summing up the discussion I had at a workshop on the development of 2nd generation, or cellulosic, biofuels (biofuels produced from crops or waste, that is not otherwise used as food).  The workshop’s aim was to produce ‘A transdisciplinary dialogue on the opportunities and challenges of cellulosic ethanol in the UK’, and was run by Dr. Kate Millar, the Director of the Centre for Applied Bioethics.  It was part of a number of events convened for the EU Framework 7 project, “Integrated EST-Framework” (EST-Frame).  Bringing together 12 scientists, engineers, environmental scientists and social scientists is not an easy feat, but the 24 hours’ of the workshop produced some extremely interesting discussions.
My own research considers endeavours to overcome some of the sustainability problems commonly associated with 1st generation biofuels (e.g. sugarcane and wheat), and so I was particularly interested in how the development of 2nd generation biofuels might change the sustainability landscape. Would many of the problems associated with biofuels in general – increased greenhouse gas (GHG) emissions when compared with fossil fuels, land grabbing, food insecurity and biodiversity loss – disappear if we were to start producing 2nd generation biofuels? 

Policy problems 

Oilseed rape grown for  1st
generation biofuel has limitations.
Image credit: Richard Webb
Much of the first day of the workshop was spent discussing ‘policy problems’ that would need to be overcome for the successful production of cellulosic biofuel for consumption in the UK. 2nd generation biofuels have not been viably commercialised to date largely because of the cost of production.  But this is not the only policy problem to be overcome.  2nd generation biofuel will not only come from ‘waste’, but also from crops, such as miscanthus, which are specifically grown as biofuel feedstock.  But policies to encourage the use of crop residues for biofuels, depend, first, upon the categorisation of the cellulose left behind in the farming of particular crops as ‘waste’ and, second, upon a decision that the ‘best’ use of that waste is its conversion to energy.  This decision may, in turn, depend upon an assumption relating to national energy security.
 
When discussing the problems that would need to be overcome for the production of 2nd generation biofuel, it soon became clear that our own understanding of the problems depended upon the frames through which they were envisioned, and/or the assumptions that might be made in even categorising them as problems in the first place. Such frames and assumptions need to be unpicked when making policy decisions relating to, for example, the ‘best’ use of land, the ‘best’ conversion processes, displacement effects resulting from the adoption of those policies, and the valuations made in assessing ‘costs’ resulting from the production of such biofuels.
 

Indirect land use change (ILUC)

 
One thorny issue relating to biofuels production has been that of ILUC.  ILUC has been a huge spoke in the wheel of policy-makers’ development of policy in relation to the development of biofuels, not only in the UK, but in the EU, and further afield.  Endeavouring to tackle this issue involves identifying potential knock-on effects resulting from direct land use change to biofuels feedstocks (whether 1st or 2nd generation). These might include increased GHG emissions, erosion, biodiversity loss, or increased insecurity in relation to land rights or food supply of local people.  
 
While the focus of policy-makers’ concerns in relation to ILUC has to date been GHG emissions, views in relation to all of these issues also depend upon one’s assumptions/framing.  Furthermore, such issues are by their very definition uncertain (because they involve future potential scenarios) and, in tackling each of them, require policy-makers to give value (either positive or negative value) to those potential scenarios.  Some of the values endowed by policy-makers in assessing indirect or direct land use change may be quantifiable.  Others, such as the values given by local people to their landscape before it is transformed for biofuel feedstocks, may not be.  Moreover, land use change resulting from policies made in the UK, may be taking place in countries as far afield as Africa or South East Asia, for example.  
While some participants thought that this demonstrated that even endeavouring to tackle an issue such as ILUC was purely altruistic, and therefore usually not important enough for national policy-makers to be swayed by, others argued that it was not altruism that demanded its recognition, but an appreciation of the integrated nature of our world, its people and environment, and markets for feedstocks.  Without actively sympathising with policy-makers, many participants recognised that there are no right answers when it comes to ILUC.
 

Need for a holistic approach in policy-making

 
Image by Steve Jurvetson
When discussion moved on to consider the types of evidence required for policy-makers to tackle the policy problems, we soon realised that different forms of ‘evidence’ were often integrated.  Moreover, it was not lack of evidence that was the problem for policy-makers, or even ambiguity and uncertainty in the evidence, but the appraisal of that evidence.  This requires political decisions to be taken, something that policy-makers seem, ironically, to be distinctly uncomfortable with in relation to this area.
 
The workshop was a valuable exercise.  To paraphrase one participant: many of the technical or economic issues relating to the development of cellulosic biofuels in the UK could be resolved by taking a very narrow view of the problem.  However, such issues do encompass wider issues.  Countering the scientists’ and engineers’ ‘problem-solving’ approaches to policy issues, with social scientists’ more critical understanding of the social issues surrounding the problems is always going to be a challenge, but one that, I believe, is crucial if those problems are really going to be solved with any success.

This blog is written by Cabot Institute member Dr Elizabeth Fortin, University of Bristol Law School.

Crisis in Ukraine: The energy implications

Posted on by janet.crompton

Energy security- a primarily theoretical concept in recent years that has been made startlingly real by the recent developments in Ukraine. But what could the possible repercussions of this crisis be on European energy policies and our fuel bills?

I had a chance to ask this question during a recent event at the House of Commons, hosted by the APPCCG and Sandbag. The answer surprised me.

According to Baroness Worthington, director of Sandbag and member of the House of Lords, two outcomes are broadly possible.

Figure 1: Map of Ukraine
The first scenario is of a stabilisation of the diplomatic situation and the emergence of a westward-leaning Ukraine. In this situation, it is likely that Ukraine might choose to exploit its own natural gas reserves, estimated to be in the region of 1.1 trillion cubic metres. Ukraine possesses the 26th largest natural gas reserve in the world, which is estimated to be more than half the size of the combined reserves of the EU.

If Ukraine `turns on the taps’, this would solve their immediate energy dependence on Russia and produce a revenue stream to support their economy. However, exploiting natural resources on the scale required would require significant investment, and Ukrainians would have to accept the change in land use and economic transformations that come with becoming a major energy exporter.

This optimistic outcome seems open to several criticisms. It’s unclear at this moment where investment would come from, and whether Russia would oppose competition in the European energy market. Moreover, can Ukraine ever completely replace Russia as an energy supplier? For instance, Russia’s natural gas reserves are around 40 times the size of Ukraine’s.

The second scenario is of a destabilised Ukraine, whose policies are influenced to a significant degree by Moscow. In this situation, European nations would need to purchase natural gas in the short-to-medium term from Russia and Ukraine, and tamely accept price rises and the uncertainty and energy insecurity that comes with dependence on a foreign nation for energy supplies.

This second possibility may also be criticised; Russia may not have further demands after the annexation of Crimea is completed. It may be the case that Russia wish to return to business as usual as quickly as possible, and may choose to offer energy supplies on favourable terms to Europe in order to encourage the resumption of trade and renewed trust.

In my view, both scenarios will result in one predominant outcome: the loss of trust. It seems unlikely that Russia can regain the trust of the West quickly; by it’s very nature, trust takes years to accrue and moments to lose. Energy security will become a much larger talking point in the next few years if relations with Russia continue to remain cool. Nations that previously were willing to base their energy supply on foreign gas purchases will choose instead to pay a price or environmental premium to source those supplies from more trusted sources.

The nations most likely to make changes to their energy mix as a result of this crisis are Germany and Poland. Germany’s choice to abandon nuclear fission after the Fukushima crisis leaves them slightly more vulnerable to a loss of fuel supplies from abroad, and they may choose to shift further towards renewables, or attempt the politically difficult U-turn of returning to nuclear power. Poland uses natural gas and coal to power much of its economy, a significant portion of which is purchased from Russia. Since the fall of the Soviet Union, Poland has been consistently suspicious of Russia, and may decide that now is the time to reduce or remove their dependence on Russian supplies.

Figure 2: DECC figure for natural gas supplies by source, 2010-2013
As for the fuel bills of UK consumers, it’s unlikely that we will see any immediate effects. If sanctions on Russia are imposed, this may raise gas prices worldwide, but the UK does not directly obtain its supplies from Russia. The most likely change to the UK’s energy mix will be one that was on the cards already- an expansion in the exploitation of shale gas. Using energy security as a primary argument, supporters of shale gas may now find it easier to convince others that fracking and onshore gas exploitation should continue or be accelerated.

Perhaps the Ukraine crisis will be the public relations coup the shale gas industry has been looking for.

This blog is written by Neeraj Oak, Cabot Institute.
Neeraj Oak

The carbon mountain: Dealing with the EU allowance surplus

Posted on by janet.crompton

It’s not news that the EU emissions trading system (EU-ETS) is in trouble. A build-up of surplus emission allowances has caused dangerous instability in the carbon market and a plunge in prices since the economic slump in 2008 began (See Figure 1, courtesy of David Hone).

Figure 1, courtesy of David Hone

The discussion at the All Party Parliamentary Climate Change Group’s (APPCCG) meeting on the 28th of January centred on the causes and consequences of the EU-ETS allowance surplus. The majority of speakers at this session had a background in the discipline of economics, so inevitably the exchange of views was… frank.  The panel were in agreement that EU-ETS is in crisis; but can and should it be saved?

Emissions trading schemes, of which EU-ETS is a canonical example, are an attempt to allow market forces to correct the so-called ‘market failure’ that is carbon emission. From the point of view of a classical economist, the participants in carbon emitting industries do not naturally feel the negative effects their activities cause to the environment. Emissions trading forces carbon emitters to ‘purchase’ the right to pollute on a market. In effect, they pay to receive permits (or allowances) to emit a certain level of emissions. If they do not reach this level of emission, the excess can be sold back onto the market, allowing others to make use of it. The prices of permits are determined by market forces, so cannot be fixed by the EU. The quantity of permits is within the control of the EU, and this is where the problem lies.

In the aftermath of the 2008 slump, a surplus of allowances began to build up, leading to a crash in the price of allowances. Many commentators blame EU economic forecasting for this problem, as the recession and consequent reduction in economic activity was not factored in to the EU-ETS control mechanism. Criticism has been forthcoming for the economic models used, and some go as far as to liken the mismanagement of EU-ETS to the ‘wine-lake and butter-mountain’ days of the 1980s, where the Common Agricultural policy was allowed to consume over 70% of the EU’s budget. Perhaps the models are too simple – James Cameron, a speaker at the APPCCG event, spoke of the ‘premium on simplicity’ that exists in creating policy. Maybe that approach has extended itself into the mathematical models used to predict the performance of EU-ETS, rendering them over-simplistic?

Personally, I see things a little differently. It’s clear that economic models are often far from perfect; however, I’m not sure that’s where the problem lies. In the implementation of policy, decision makers have to draw on the implications of many separate models; for instance, they must consider the GDP growth of EU member states, their adoption rate of new energy efficiency standards and the relative industrialisation of their economies. To my mind, the greatest source of error is in the gaps and interfaces between these economic models. Policy makers must make decisions on how to interpret the way economic predictions will interact with one another, and these interpretations are always subject to value judgements. What we need is a more joined-up approach.

Climate science has long used ‘macro-models’ to incorporate a variety of physical processes into their predictions, an approach that could be adopted by economists as well. While the first economic macro-models may not achieve even a fraction of the accuracy of climate models, that is not to say they cannot be improved through collaboration and quantitative criticism. Perhaps now is the time to make a start?

This blog is written by Neeraj Oak, Cabot Institute.

 

 
Neeraj Oak

Bristol Green Doors: Measuring the impact of retrofitting

Posted on by janet.crompton

Energy has recently dominated the news, with headlines proclaiming that household costs (as well as company profits) are on the increase.  Overshadowed in this discussion are the environmental impacts:  over a quarter of the UK’s carbon emissions come from a domestic context, primarily through energy use.  Over the past decade, the field of HCI (human-computer interaction) has become increasingly concerned with issues of sustainability, and a number of researchers have chosen to focus on energy reduction strategies.  Many of these efforts have resulted in technology that aims to persuade the user to use less gas and electricity by providing them with personalised information, whether in the form of facts and figures (e.g. home energy portals) or through ambient displays like the Power Aware cord.

However, there is one method of reducing home energy use that has received little attention: retrofitting.  Installing measures such as double glazing, wall insulation, or a more efficient boiler can not only reduce carbon emissions, it can also reduce a household’s energy bills and make it more comfortable to live in.  Yet unlike the incremental behavioural changes tackled by persuasive technology, retrofitting is a one-time intervention in which the focus of energy saving shifts from an individual’s behaviour to the physical fabric of the building itself.  As a result, it sits at the curious intersection of sustainability through product consumption, requiring present expenditure for future monetary savings, and trades current disruption and inconvenience for the hope of future thermal comfort.  Retrofitting is further complicated by its very nature: there is no one-size-fits-all solution.

Enter the community initiative Bristol Green Doors.  Founded in 2010, the organisation runs an eco-homes open house event approximately every 18 months.  Householders who have already installed retrofitting measures open their opens to the public to share their experience, the pros and cons of different measures, the benefits that the retrofitting has brought, or what they wish they had done differently.  This allows those who are interested in retrofitting to see the measures in action and learn more from trusted sources: their own neighbours.

Yet measuring the impact of such an event is difficult.  Anecdotally, there were indications that visitors would be inspired by the open weekend to contact local companies who provided retrofitting services, but no easy way of directly tracking activity back to the event.  Without this quantitative data, it is difficult for Bristol Green Doors to secure additional sponsors and become self supporting.  Dr. Chris Preist’s involvement as a Bristol Green Doors householder helped him identify that technology could play a role in bridging this gap, and a successful funding application allowed the Digital Green Doors project to proceed.

A series of brainstorming sessions were held with key stakeholders to determine what features would be most useful to both Bristol Green Doors visitors and to the organisation itself.  A number of intriguing ideas were put forward, with several chosen to be made into a smartphone application.  The Greendoors app was developed by researcher Daniel Schien around a basic mapping application that shows the location of the participating Bristol Green Doors houses.  Users can then delve further into the houses to learn what features each has installed, take notes on the individual houses, and some householders have agreed to be contacted by email after the event.  This allows visitors to get questions answered beyond the weekend itself.  Other features include being able to filter houses by measure and save houses to a shortlist, e.g. showing just the houses that the user plans to visit.

The final feature of the app is a QR code scanner, which the Digital Green Doors team has chosen to deploy in an unusual way.  QR codes are the square barcodes that have proliferated on advertisements and products.  QR typically stands for Quick Response, with a user scanning a code and their smartphone immediately linking to a website or displaying the encoded information.  However, in this case it’s a matter of “delayed response”.  A specific QR code was produced for each retrofitting measure in each Bristol Green Door house, and when scanned by the app it is saved to the user’s account.  This is then used to produce a personalised report of information about the measures the user is interested in, grouped by measure type to allow for easy comparison.  The report is in emailed to the user after the event.  In addition to providing a numeric view of each measure (i.e. the cost and the level of disruption as rated by the householder), the householders also share a few words of advice, such as this blurb about loft insulation:

“This measure is cheap yet effective.  Do spend the extra and use environmentally friendly insulation such as sheeps wool. Double up rafters to board out afterwards. We have topped this up further ourselves — very simple so long as you follow the guidelines about leaving ventilation space at the eaves.”

 

The suppliers, products, and general sites of interest contained within the report are all hyperlinked.  The purpose of this is two-fold.  First, it intends to assist the user by giving them the information they want in one place, making it easier for them to conduct research about the measures they wish to install.  It is hoped that this will help turn intention to retrofit into action.  Second, by allowing basic tracking to occur via click throughs, it allows the initial goal of the project to be fulfilled by directly measuring interest that has occurred as a result of the event.  While it cannot yet determine whether a user has gone ahead with the purchase of a retrofitting measure, it is a step towards helping Bristol Green Doors become self supporting.  For the Digital Green Doors team, it allows research to be carried out on a novel way of using QR codes, and also allows retrofitting to be introduced to within the discipline of HCI by showing how it is possible to move beyond persuasion and behaviour change.
IKEA solar panels. Image from Witchdoctor.co.nz

It is too early to report on the effect of the app and the reports, but the initial responses have been positive.  This is encouraging news as it will allow the Greendoors app to be used at other eco-homes events in the future, with the possibility of a nationwide rollout.  With IKEA selling solar panels and now an app designed around retrofitting, it is hoped that the process of retrofitting, and its associated carbon reduction, will become more mainstream.

This blog is written by Dr Elaine Massung, Department of Computer Science, Faculty of Engineering, University of Bristol.

Dr Elaine Massung

Power within the rift

Posted on by janet.crompton

Lying just under the Earth’s surface, the East African Rift is a region rich in geothermal resources. Exploitation of this clean and green energy source is steadily been gaining momentum. What is the geological mix that makes the Rift Valley ripe for geothermal power and how is it being tapped?

The East African Rift, stretching from Djibouti to Mozambique, marks the trace of a continent slowly tearing apart. At rates of about 1-2 cm per year, the African continent will one day split into two separated by a new ocean.

When continental rifting occurs, volcanism shortly follows. As the continent steadily stretches apart, the Earth’s crust thins allowing an easier path for buoyant magma to rise up. Where the magma cracks the surface, volcanoes build up. Dotting the Rift Valley are many active, dormant and extinct volcanoes. Famously active ones include Nyiragongo in the Democratic Republic of Congo, Ol Doinyo Lengai in Tanzania and the bubbling lava lake at Erta Ale volcano in Ethiopia.

How to brew a geothermal system

The presence of volcanoes in the Rift Valley indicates one important occurrence –hot rocks under the Earth’s surface. This, combined with a thinned crust due to extension, provides the first geological ingredients for a geothermal system. Active magma chambers are typically extremely warm; consequently they will heat up groundwater in fractures and pores in the surrounding rock up to temperatures of 200-300°C.

Hence, a geothermal field can be defined as a large volume of underground hot water and steam in porous and fractured hot rock. A geothermal system refers to all parts of the hydrological system involved, including the water recharge and the outflow zone of the system. The area of the geothermal field that can be exploited is known as the geothermal reservoir and the hot water typically occupies only 2 to 5% of the rock volume. Nevertheless, if the reservoir is large and hot enough, it can be a source of plentiful energy.

To keep a geothermal system brewing you need three essential components: a subsurface heat source; fluid to transport the heat; and faults, fractures or permeability within sub-surface rocks that allow the heated fluid to flow from the heat source to the surface or near surface.

East African Resources

The presence of geothermal systems in East Africa has not gone unnoticed. At present, geothermal electricity is produced in Kenya and Ethiopia with Djibouti, Eritrea, Rwanda, Zambia, Tanzania and Uganda at the preliminary exploration and test drilling stages. Kenya is steams ahead in terms of development with an installed capacity of 200 MW, but still progress has been slow over the last few decades. In comparison, Ethiopia currently has a 7.3 MW installed capacity with a proposed expansion of 70 MW.  


In Hells Gate National Park, just south of Lake Naivasha, Kenya’s geothermal energy is generated from Olkaria power station. Exploration at Olkaria started in 1955 but it wasn’t until the 1960s when 27 test wells were drilled that extensive exploration kicked off. At present, Olkaria I power station generates 45 MW, Olkaria II produces 65 MW and Olkaria III is a private plant generating 48 MW.  Olkaria IV power plant is under construction, due to be completed in 2014 and has an estimated potential of between 280 and 350 MW. By 2030, Kenya hopes to produce at least 5,000 MW of geothermal power.


Geological and financial risk


Whilst the East African Rift naturally provides the perfect geological conditions in order to meet future energy demands, the risks involved have so far prevented significant development. Geothermal exploration and development is a high-risk investment. Financially, investing in geothermal has high up-front costs followed by relatively low running-costs. If drilling encounters a dry well during exploration, then the financial loses can be substantial, at roughly $3 million of investment for each MW produced, dry wells can cause significant financial set backs, consequently detracting investors.

It’s not just financial risks, there’s geological risk too – they are volcanoes after all. In Kenya, geothermal fields comfortably sit on top of the volcanoes Olkaria, Longonot, Eburru, Paka and Menengai. The picture is similar in Ethiopia where the Alutu Langano power plant is situated within Alutu volcano. In fact, nearly every geothermal prospect site throughout East Africa is located near, or on a volcano.

Whilst many of the volcanoes have not erupted in historical times, recent satellite observations using a technique called InSAR, has revealed that these volcanoes may not be as quiescent as previously thought. Menengai, Alutu, Corbetti and Longonot have all shown periods of ground deformation, both uplift and subsidence. The precise cause of these ground movements is subject to further research with possibilities including the rise or withdrawal magma within the crust or perturbations to the geothermal system. What these observations do mean however is that perhaps accounting for geological risk could be considered in future geothermal development.

Overall, the outlook is bright for East African geothermal resources. The World Bank has a history of supporting and cultivating geothermal in East Africa, for example, since 1978, Kenya has built up its geothermal generation with $300 million in support from the World Bank. The World Bank recently announced their Global Geothermal Development Plan (GGDP), that will “scale up geothermal energy in developing countries” bringing geothermal energy “into the mainstream, and deliver power to millions” – an initiative that will greatly benefit East Africa.

 
This blog has been written by Elspeth Robertson, Earth Sciences, University of Bristol

 Read Elspeth’s other blog post ‘Geothermal workshop: Accelerating the impact of research and development in East Africa‘.

 
Elspeth Robertson

 

Geothermal workshop: accelerating the impact of research and development in East Africa

Posted on by janet.crompton

Geothermal power is a carbon free, sustainable and renewable energy source.

Throughout the East African Rift, the prospect of harnessing geothermal energy is huge, with the potential to provide 15,000 megawatts of power – larger than the present-day global geothermal production.

 

Olkaria Geothermal Power Plant, Kenya.  Image by Elspeth Robertson

This week, the University of Bristol, NERC and the Cabot Institute are hosting a two-day workshop that aims to strengthen the links between researchers and the geothermal industry.UK universities have a long history of research into the volcanic and tectonic processes occurring in the East African Rift. The data being collected could help industry improve geothermal production and reduce the uncertainty and risk associated with geothermal development by understanding the interactions between magmatic and geothermal processes.
Setting up a GPS site at Corbetti volcano, Ethiopia in November 2012. Corbetti is a potential site for future geothermal power production. Image by Elspeth Robertson

Through talks and discussion groups, the workshop will address themes of ‘Improving Productivity’ and ‘Reducing Risk’ in geothermal research and development.  The workshop will wrap up with a detailed analysis of best practice and future actions in order to accelerate the relationship between academia and industry.Travelling to attend this workshop are participants from the Universities of Addis Ababa, Nairobi, Edinburgh, Oxford and Bristol. Industry representatives come from the rich geothermal regions of Iceland, Ethiopia, Kenya and Cornwall with colleagues from Schlumberger and the British Geological Survey also in attendance.Geothermal activity may be subsurface phenomena, but the impact of deep heat sources can be felt on the Earth’s surface, particularly where faults and fissures draw up geothermally heated water to form hot springs. To explore natural geothermal processes in action, workshop participants will visit England’s most famous springs in the Bristol-Bath area with a tour of the historical Roman Baths on Tuesday. The workshop rounds off on Wednesday with a day trip to Kilve in Somerset to investigate fractured reservoir rocks that are now exposed on land.

 

Keep an eye out for posts in the following weeks exploring the key themes discussed during the workshop. You can follow tweets during workshop using #CabotGeothermal  
 
This blog has been written by Elspeth Robertson, Earth Sciences, University of Bristol
Elspeth Robertson
 

Electricity Market Reform simplified

Posted on by janet.crompton

Energy policy circles have been abuzz for months over proposed changes to the way renewable energy is to be supported, and the government’s overall plan to balance the supply and demand for energy in the years to come. The Department of Energy and Climate Change have recently released details of the draft ‘strike prices’ for the Contracts for Difference(CfD) scheme, marking an important step towards a radical change in the way renewable energy producers are aided by the government.

As a mathematician working in the field of energy policy, I’m keenly aware of the sheer number of complicated schemes, financial instruments and legislative hurdles electricity producers have to face. At the same time, the health of the UK’s energy generation and distribution system is vital to every member of the population, not just the select few who understand the intricacies of these new energy policy schemes.

I strongly believe that an intuitive understanding of how energy subsidy really works must be spread beyond the corridors of Westminster and Whitehall. A wider debate will result in more informed decisions from policymakers, who currently lack a strong mandate for helpful policies and accountability for poor ones.

In this blog post, I’m going to try to explain one half of the Electricity Market Reform bill, namely the Feed-in Tariff with Contracts for Difference (FiT with CfD) scheme. I’ll do this through diagrams and a maths-free description of the way the scheme works, and the consequences for customers like you and me.

Unfortunately, I can’t avoid making enormous oversimplifications, but it should provide a basic sketch, accessible to sustainability enthusiasts from all backgrounds.

Breaking even

Before we look at how the Feed-in Tariff with Contracts for Difference (FiT with CfD) scheme works, let’s think about what would happen without it (or some other equivalent subsidy scheme).

Renewable energy producers are for the most part private-sector, for-profit organisations. They need a financial incentive in order to invest in our energy sector; at the very least, they need to avoid making a loss in order to remain operating. I’ve drawn a very simple figure to represent the profits and losses they can expect to make over the next couple of decades.

The horizontal axis in the figure represents time; we begin on the left-hand side of the diagram, and time continues as you travel to the right, with the right hand side being around 20 years from now. At the moment, the cost of producing most types of renewable energy (the blue line) exceeds the price electricity producers would get for selling it on the open market (red line).  The red shaded area represents a financial loss for the producer of the electricity, whereas the green shaded area is the profit they can expect.

As time goes on, current projections are for the cost of production to fall, and electricity prices to rise. At some point, the cost of producing renewable energy and the money producers get for selling it will be equal. This is the so-called break-even point, and is where the red and blue lines meet.

The point of break-even is extremely important to policy makers. So long as electricity producers think they are going to make a loss, they have no financial incentive to expand the UK’s renewable energy generation capacity. Once the break-even point is passed the industry should grow, as potential investors see that the industry is profitable. In order to meet the steep legislative carbon-reduction targets of the UK, the government will want to reach this break-even point as quickly as possible, as it promises a growing renewable energy sector for the years to come.

So how do we get to the break-even point more quickly? Well, that’s a question of how much money we’re willing to spend, and the mechanism through which we support renewable electricity producers.

Contracts for difference

A contract for difference, or CfD, is a financial instrument that’s been around for many years. Until recently, CfDs were predominantly used in commodities and stock trading. However, the last few years have seen CfDs adopted as an instrument of energy policy, used by major renewable energy producing nations like the Netherlands and Denmark http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenergy/742/74208.htm. The UK will soon be adopting a form of CfD scheme too, known officially as the Feed-in Tariff with Contracts for Difference (FiT with CfD) scheme. Let’s take a look at how it works.

In the FiT with CfD scheme, the government enters into contracts with electricity producers in an individual, case-by-case basis. They agree a ‘strike price’, at which electricity generated by the producer is to be valued for the duration of the contract. When revenues from selling electricity at market prices (red line) are below the strike price (brown line), the producer can ask the government to make up the difference (orange shaded area). This effectively takes the place of subsidy in more orthodox schemes, and brings forward the break-even point to where the blue line meets the brown line, making the industry profitable sooner and attracting new investors.

When the market price of electricity exceeds the strike price, the deal is reversed. Electricity producers must pay the government the difference, shown on the diagram as the dark green shaded area. This allows the government to recoup some of the money it spent on keeping the industry afloat earlier. Producing renewable electricity still remains profitable though, as shown by the light green shaded area.

What does this actually mean to you and me, the consumers of electricity? Well, whatever the government spends on supporting renewable energy will be added on to our tax bills, regardless of how much electricity we might individually use. On the other hand, we will reach our carbon-reduction targets quicker. It’s possible to balance the pros and cons of the scheme by changing the strike price, but it’s not an easy problem given the politics surrounding renewable energy.

As I’ve hinted before, things are much more complicated than the explanation I’ve given here, and while I’ve tried to describe the scheme as it is intended to work, we can’t be sure that it will behave as expected; we haven’t reached the break-even point yet, so there’s little evidence to go on!

What’s next for the Electricity Market Reform (EMR) bill? Well, it’s currently under review by the House of Lords and is expected to be given Royal Assent before 2014. EMR, for good or for ill, is coming soon.

This blog is written by Neeraj Oak, from the department of Complexity Sciences at the University of Bristol.
Neeraj Oak

All Party Parliamentary Climate Change Group – decarbonisation targets

Posted on by janet.crompton
This month’s All Party Parliamentary Climate Change Group (APPCCG) meeting centred on the age old problem of setting decarbonisation targets; the question being, are they useful milestones, or millstones around the necks of the energy industry.
David Kennedy, CCC
Joining the discussion at the meeting were several senior figures in the field, including David Kennedy, chief executive of the Committee on Climate Change (CCC), and until recently a frontrunner for the top civil service job at the Department of Energy and Climate Change (DECC). Mr. Kennedy’s appearance at this meeting comes on the heels of an open letter presented by his organisation to Ed Davey, the minister at DECC, urging swifter action on establishing carbon intensity targets. Mr. Kennedy explained his concern that lingering doubt over whether legislative targets will be set dissuades investors in renewable energy technologies, and ultimately hampers efforts to decarbonise the electricity market.

It’s worth noting that the UK already has binding targets for reducing carbon emissions; indeed, it was the very first country to enact such legislation. However, these targets will ultimately be assessed only in 2050, which on the political timescale is several lifetimes away. Further, the 2008 Energy Act that carries this legislation allows successive governments to exceed carbon emission budgets in the short run, so long as they reduce future budgets accordingly. Without intervening milestones between now and 2050, one can certainly see an incentive for incumbent governments to neglect decarbonisation- procrastination on a national scale.

Opposing this view was David Hone, the climate change advisor for Shell. Mr. Hone explained that UK energy policy should not be viewed as a closed system- indeed, our policy is linked directly to those of our European partners though EU-ETS, the European Union Emissions Trading Scheme. His view was that by enacting further legislation, the government would be unfairly constricting energy producers in the UK. Further, any emissions savings made in the UK could be offset by additional emissions in Europe, as the EU-ETS would simply sell emissions rights elsewhere.

Guy Newey, Policy Exchange
Another significant contribution was made by Guy Newey, Head of Environment and Energy at the think tank Policy Exchange. While Mr. Newey agreed in principle with the idea of bringing forward decisions on decarbonisation targets to 2014, he also made the point that uncertainty on this topic was a significant disincentive to investors, and that a quick and firm resolution to this question was essential; to that end, he could live with an imperfect answer.

This blog is written by Neeraj Oak, University of Bristol

Neeraj Oak
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