Energy World Magazine submitted 5th May 2006

International consensus is now clear that climate change, driven by manmade greenhouse emissions, is an inevitable reality, and that the most important challenge is how quickly we can halt the rise in global temperatures across the next twenty to fifty years.

Meanwhile, the impacts of Climate Change are all around us – a 0.7ºC rise in global temperatures over the last 100 years, and with a further 1.4 - 5.8ºC rise expected this century, leading to a 9 – 88cm rises in sea levels, experts forecast more severe and frequent impacts unpredictable weather.

Rapid economic growth in the developing world is giving rise to exceptional growth in energy demand. China, for example, will build more coal-fired generation in one year than today’s entire UK’s generating capacity. In fact, world policy is taking us in the wrong direction – according to the International Energy Agency, current policies will lead to a 60% increase in emissions by 2050.

This is a monumental problem. Tony Blair himself acknowledged during his Presidency of the G8 that Climate Change is the most serious issue facing mankind – bigger than global trade issues, bigger than terrorism, bigger than China’s economic growth, bigger even than the size of the Bush administration’s denial. The Prime Minister is right of course, but promoting these messages on the world stage is only effective and credible if one’s own house is in order. In this respect, the Prime Minister faces some considerable challenges back home.

Energy Minister Malcolm Wicks therefore certainly has his work cut out in preparing his report to the Prime Minister on the outcome of his Energy Review. We are told that this is more than an electricity review, and to expect some wise thoughts on how we meet the combined challenges of stubborn growth in energy demand, continued expansion of the transport sector, increased dependency on imported gas and the anticipated closure of almost all the country’s nuclear (and several other) power stations over the next twenty years. The government is not short of advice on how to proceed - with over 2000 responses to the Energy Review consultation now submitted, a small but exceptionally busy team of Civil Servants in the DTI certainly have their work cut out.

Certain parameters do appear to be fixed – the government is clear in its consultation that it proposes to remain committed to the public policy goals set out in its Energy White Paper of 2003, - reducing 1990 CO2 levels by 60% by 2050, ensuring reliable supplies, making sure that every home is adequately and affordably heated and maintaining UK competitiveness. At the same time, Malcolm Wicks has already stated several times that the review is not “Renewables neutral” and that no-one should expect any silver, or uranium bullets. This may be the case, but the temptation to place disproportionate emphasis on “big” solutions is a strong one for any government, because they can exercise such control. With a few big projects, subject to weighing up a few political risks along the way for each, the deed is done, at least for two or three decades. Unfortunately, this approach alone doesn’t work any more. The urgency of tackling climate change no longer allows us to construct buildings that leak large quantities of heat, or even power stations that convert a third of the fuel’s energy into a useable form, and nuclear is (and always will be) highly controversial. The need to accelerate the uptake of much higher usage of low, zero, and even negative carbon solutions, is therefore more urgent than ever before.

But today’s energy policy challenges call for a much more difficult solution to become a substantial part of the solution to meeting these challenges over the next decade or two – reconnecting consumers with their use of energy. Cheap energy for half a century has caused us all to sleepwalk into daily lives that are completely disengaged from our use of energy. People use a tumble dryer on a sunny day instead of hanging the washing out, leave appliances on standby, drive to the post box that’s a five minute walk away, leave lights switched on, open windows for temperature control whilst the heating is on, the list goes on…Such is our apathy that we don’t even bother to take simple steps to improve our homes such as cavity wall insulation that usually pay for themselves within two years.

The ideal approach is to tackle both of these at once – combining the supply side urgent need for low and zero carbon solutions with the demand side need to re-engage consumers with their daily use of energy – two hits in one.

Micropower technologies do precisely this.

Micropower, in its various forms, is the production of energy on the smallest of scales, for individual buildings or communities. Solar powered technologies are perhaps amongst the most well recognised form of micropower options, either in the form of solar thermal systems, to provide hot-water and sometimes space heating, or photovoltaic (PV) systems that produce electricity. Micro turbines, either powered by the wind or naturally flowing water, provide electricity and the latest developments of roof-mounted wind turbines are now entering urban areas. Heat Pumps use energy stored within air, water or more commonly the ground, to provide space heating or cooling and micro-Combined Heat and Power (micro-CHP), that look and operate similar to gas boilers, generate electricity as well as heat. Hydrogen powered fuel cell technology to provide heat and electricity is currently under development and expected to emerge in the next few years.

Some of these technologies are more accessible than others but all can deliver on at least two of the previously mentioned four Energy White Paper policy objectives. For example, a micro-CHP unit will deliver the same comfort levels as a modern boiler, whilst reducing the emissions of a typical house by 1.5 tonnes (around 25%) of CO2 per year. This can help relieve fuel poverty, supply 1 - 5kW of peak electricity generating capacity - and provide the major utilities with some competition. Other forms, such as micro-wind turbines and solar panels, can cut energy bills by up to £100 per year or be integrated in conjunction with other types of microgenerators to offer genuine zero carbon residences. Moreover if just one quarter of all gas boilers that will be replaced between now and 2020 are replaced with ones that can generate power, the capacity this will bring is the equivalent to just under half of that provided by today’s nuclear power stations.

Micropower also brings wider benefits such as high efficiency, competitiveness and even catalysing cultural changes in behaviour. CO2 reductions are achieved as most micropower generators emit no carbon at all, whilst others make the best possible use of the limited fossil fuel resources we have. Micropower avoids the 10% energy wasted in the transmission and distribution losses of centralised power production and efficient fossil fuel applications uses at least 90% of the fuel productively compared to power stations that waste over a third of fuel in heat loss. These efficiency benefits also translate into cost savings as micropower energy avoids the usual grid-based costs, and numerous studies have indicated that it not only performs well in unit cost terms, but is also competitive against large-scale power stations.

Once installed, micropower technologies are effectively a permanent or semi-permanent home improvement that act to continually reduce a householder’s energy bill and are therefore particularly well suited to those hard to heat homes where conventional insulation measures are either impractical or prohibitively expensive. And, of course, many micropower installations are ideally suited for those properties off the grid or gas network where alternate options are oil, solid fuel or infrastructure investment.

Returning to the context of the Energy Review, a recent study conducted by the Energy Saving Trust on behalf of the DTI indicated that microgeneration could contribute an astonishing 30 – 40% of electricity demand by 2050, cutting annual greenhouse gas emissions from the household sector by 15%. Moreover, a recent study by the Sustainable Consumption Roundtable gives tangible evidence that micropower acts as a catalyst for cultural changes in consumer attitude, and provides evidence of the important impact it has on attitudinal and behavioural shifts towards energy use, re-engaging consumers with their use of energy.

The government appears to be listening to the arguments – as well as some personal buy-in (The Energy Minister is in the process of installing a wind turbine on his own house), the government recently published its “Microgeneration Strategy”, setting out a number of steps the UK government intends to take to make life easier for customers wishing to install a range of micropower technologies in a number of ways, as well as providing some immediate financial incentives to encourage people to buy them. It also contains policy measures aimed at providing investors with some confidence to invest in the sector and a number of initiatives designed to scale up the industry quickly. However, political and policy based support for the micropower industry does not stop there, as the “Climate Change and Sustainable Energy Bill” has been navigated by back-bench MP Mark Lazarowicz through some rocky Parliamentary waters and the chances of it becoming law currently look very promising. In fact, the government is positively supporting this bill and some aspects of the Microgeneration Strategy even depend on the bill becoming law.

If this does happen then the combined effect of the Bill and the Microgeneration Strategy will move the industry forward substantially. The government will initiate consumer-based market research to inform a decision on setting targets for the uptake of microgeneration, a statutory purpose to facilitate microgeneration will be given to a review of the system of permitted development rights for property developments. A scheme will be introduced to reward customers for exported electricity, and customers will be able to access “green benefits” much more easily than is currently the case. Microgeneration will start to become semi-mandatory in new homes that are publicly funded, and primary legislation changes have been proposed by the government which pave the way for microgeneration eventually to become a requirement of the building regulations. Local Authorities will be given a duty to consider what role microgeneration can play when they are executing their other policy responsibilities, and the necessary primary legislation changes are being made to change the current Energy Efficiency Commitment into a Carbon Reduction Commitment, and allow Suppliers to meet their obligations using all forms of microgeneration. £80m of funding has also been allocated over the next three years to the grants scheme to support microgeneration (the “Low Carbon Buildings Programme”), with £30m of this being spent under a similar structure to the previous funding schemes, and the remaining £50m being used to encourage the scaling up of the microgeneration industry through bulk orders by public bodies and businesses. The grants scheme now also covers all forms of microgeneration technology.

So it would appear that the government is now taking action to knock over the hurdles once thought to be insurmountable, and introducing policies that should provide the necessary confidence to boost the investment so urgently needed to allow automated production, the scaling up of installation capability and the critical price reductions that will result from these. Once this happened, micropower technologies become a compelling economic proposition, as well as the latest aspirational gadget.

With proper implementation of the Microgeneration Strategy, and micropower given the right priority in the Energy Review, alongside energy efficiency, a step change in the efficiency with which energy is produced from fossil fuels and continued take-up and encouragement of renewables, we could start a genuine cultural shift amongst the general population that starts to win hearts and minds, change people’s behaviour and make future energy reviews so much easier. If this happens, the UK can then lead with dignity and authority in encouraging the international community to play its part as well.