'We need to produce as much home-grown energy as possible'

October 12, 2010 | 00:00

'We need to produce as much home-grown energy as possible'

Humankind can rise to the challenge of mitigating climate change, but businesses will need to play a major role if we are to succeed. The EU is right to set over-arching targets for emissions reductions but should resist the temptation to meddle in the details of member states’ national policies. And UK energy policy under the new coalition government is likely to continue moving along the tracks that were laid by Labour.These are some of the views of Malcolm Wicks, former Minister for Energy (twice) and Science Minister and currently Labour MP in the UK. As ‘special representative on global energy issues’ for former prime minister Gordon Brown, the highly experienced Wicks wrote a report concluding that Europe is underestimating the risks of energy insecurity and needs to produce ‘as much home-grown energy as possible’. EER-correspondent Alex Forbes caught up with him at the recent World Energy Congress in Montreal and had a fascinating exchange of views with him about global, European and UK energy issues.

We’re here at the World Energy Congress, one of the largest regular gatherings of the energy industry. What messages will you be taking away from this event?

A lot of speakers have talked about the way in which the world is becoming more of an urban and less of a rural society. That’s obviously associated with increasing affluence, more money in people’s pockets, and the rise therefore of the consumer society. We take that for granted in Europe and North America but it is now happening world-wide - not least in China and India - and that is leading to growing demand for energy. When the world comes out of recession we will go back onto the trajectory of huge global demand for energy. The International Energy Agency (IEA) presents various estimates: if we don’t get on top of energy efficiency issues it could be as much as a 40% increase by 2030.

The other thing has been the growing importance of electricity. Yes, we’re talking about energy usage of different kinds, but in terms of that rise of consumption, the digital economy, the growth of new forms of transportation, electric cars etcetera, the rise of electricity has been remorseless.

In my own presentation I tried to emphasise that while climate change is the predominant challenge facing us, not only in energy but globally, we need to relate that to other issues. No politician, no minister can simply focus on climate change because democracy is not always scientifically based. We have to focus on issues around affordability, both for business and for voters. There’s a range of issues that we need to grasp.

You say climate change is the biggest political challenge facing the planet. Following the disappointments of last December’s climate change talks in Copenhagen, how hopeful are you that something concrete can come out of the next round of talks in December in Cancun?We’re potentially in a pessimistic place because while all roads – scientific roads, public opinion roads, political roads – led to Copenhagen, instead of seeing a clear pathway to the future, we found it was a cul-de-sac. That’s depressed many people. You then had a renewed onslaught from the climate sceptics, aided sadly by one or two mistakes in the scientific community.

Added to that has been the economic crisis, the banking crisis, which inevitably has concentrated some important minds elsewhere. When your banks are about to go under, that becomes the big priority, rather than climate change. So it’s going to be a real test of judgement and political will, and public opinion, as to how we now move forward.

I don’t know that I’m optimistic [about Cancun] but we’ve got to seize that opportunity. At the heart of this are a number of problems. One is the lack of dialogue and mutual understanding between the so-

‘No politician, no minister can simply focus on climate change because democracy is not always scientifically based’
called developed world and the so-called developing world. Broadly speaking, up to now it’s us in the western world who have been responsible for global warming. That’s clear when you look at those maps of the world that show where the lights are on and where they are not. But the second thing that’s clear is that going forward it’s mainly going to be the developing world that’s responsible for carbon emissions.

That was a key stumbling block in Copenhagen, and that issue hasn’t gone away. How do you break through that? Is that not just a totally intractable situation?

It is difficult. One of the answers is that the West has to walk the walk on this. The UK putting into statute really tough climate change targets – an 80% reduction of CO2 by 2050, with five-yearly steps – is the most ambitious thing a UK parliament, maybe any parliament, has ever done. Other nations must follow that. The EU’s not in a bad place, with the 20:20:20 targets, but we’re seeing political problems in the US, we’ve seen a prime minister fall in Australia, and some nations are not as enthusiastic as others. Unless the developing world can see some real action and not just rhetoric from the West, we’re in some difficulty.

We also have to work harder at the argument, and the evidence, that you can grow successful economies which are essentially low-carbon economies. If in Asia and Africa you could see the emergence of [such] economies, so that people realise that tackling climate change is not a restraint on growth, that could aid the right kind of growth. The presentation yesterday from the representative from China was potentially very exciting. Yes, there’s a heavy dependence on coal, but they’re interested in clean-coal technology, in distributed energy systems, in energy efficiency.

Europe has been very self-consciously taking a lead on climate change, for example with the 2008 climate and energy package which set the 20:20:20 goals. But a lot of people have made the criticism that it’s all very well setting these over-arching targets, but that in fact Europe needs a much more coherent energy policy to provide a route to reaching those targets. Do you feel that’s a justified criticism?

I think it was Tony Blair who first argued the case for a more rigorous European energy strategy. He was mindful of both security of supply and climate change considerations. One can take some satisfaction from the targets that Europe has set itself. Obviously you’ve got to hit the targets. The renewables target

‘We also have to work harder at the argument, and the evidence, that you can grow successful economies which are essentially low-carbon economies’
for my own country, the UK, is very demanding: that 15% of all our energy should come from renewables by 2020. I know as a minister, grappling with the issue of trying to promote renewables, that it’s very, very difficult. I noted however on the news the other day that for a 24-hour period a few days ago 10% of our electricity was coming from renewables. We are moving in the right direction.

But, it’s up to the nation states to hit their targets. I don’t think it’s up to Europe – the European Union or the European Commission – to start to meddle in exactly how the different nations states produce their energy. That’s not realistic.

Take nuclear – very controversial. Some nations have grasped the nettle. I led the energy review for Tony Blair which said that, yes, there should be a place for civil nuclear. Germany is now grappling with that issue again. We know where France is. But some other nations are set against nuclear. That illustrates the absurdity of the EU as a whole having that kind of micro-management of energy. But, in terms of broad objectives on climate, it’s appropriate that Europe does play a role.

We’ve seen number of policy developments in the UK: the Climate Change Act of 2008, the low-carbon transition plan, numerous policy papers and consultation documents – a veritable snowstorm of documentation emerging from government and other groups. But we now have the Conservative-Liberal Democrat coalition government instead of Labour . . .

. . . I noticed that change, yes . . .

. . . does that derail the energy policy train? Or does it continue to run pretty much on the same tracks?

I hope it continues to run on the same tracks – to use that comparison – because, despite criticism, the last Labour government did push things in the right direction. [But] always in a frustratingly slow way. Take carbon capture and storage (CCS). I was always conscious when I was a minister that you couldn’t just click your fingers and see things started to be built. There was a whole range of technological barriers and planning issues, particularly on nuclear.

 'No politician can simply focus on climate change because democracy is not always scientifically based'
But where is the coalition government? It accepts climate change as a reality. Its parties voted for the Climate Change Act. As I understand it, it accepts the 20:20:20 targets. We’ll see whether they can do things more quickly than they used to criticise us for.

Where they’re in a bit of a political pickle is nuclear. It’s set out in the coalition agreement how they’re going to handle that. In other words, the Liberal Democrats can vote against nuclear. Chris Huhne, the secretary of state for energy, is a very able man. But it’s a slightly curious position for someone who represents a party so adamantly against nuclear. I know from my time as minister of state that ideally you need a secretary of state who day-by-day drives [the nuclear issues] forward. There are big issues there and unless you have that kind of political leadership in the department you’re in a slightly odd place. But the minister of state, Charles Hendry, is very committed to civil nuclear. So I’m relatively optimistic that we can keep things moving in what I would regard as the right direction.

There’s been a lot of government encouragement for new nuclear in the UK. You said yesterday that we might see the first nuclear reactor in 2018. But a lot of people are very sceptical that it will happen without public money – partly because of the previous record of nuclear in the UK, which has been pretty appalling. Is there any chance that the government may eventually support nuclear because of the urgent need for zero-carbon electricity generation?

When I was energy minister, we always made it clear that the government would not subsidise new nuclear. That remains our party’s position. But that doesn’t mean that we just stand idly by, waiting for the private sector to move in the right direction.

It’s the job of government to help facilitate this. We’re not neutral, we want it to happen. By supporting the emissions trading scheme, we have potentially a mechanism that can enable the development of

‘When I was minister I worried that in the UK and Europe we were underestimating the risks associated with what you might call the geopolitics of energy insecurity’
clean energy technologies, whether it’s renewables or carbon capture and storage (CCS) or nuclear. We initiated the generic assessment of [nuclear] technologies, which should speed things up. We don’t want a situation again where whenever someone proposes a new nuclear reactor you have to have a great debate about it – with international experts being flown in to argue for or against. We’ve had the siting assessment, which the government initiated . . . and so on.

A question about the fuel mix and how that needs to develop, globally but also specifically in the UK. One thing I’ve been struck by here at the congress is that – while the arguments coming from the various energy industries are nicely wrapped up in concerns about fuel poverty, supply security and climate change – we still have the coal people saying coal is the answer, the nuclear people saying nuclear is the answer, and the hydro people saying hydro is the answer. And we also have the issue of CCS. Some people believe that there is a risk that a lot of money and effort may be thrown at CCS with perhaps not much in the way of results. Is there a danger that we’re tending to focus on specific technologies and perhaps putting too much effort into those – and ignoring more obvious ways of meeting medium-term climate change targets, if not the long-term targets? For example, increasing the use of natural gas to displace coal in electricity generation.

That’s a good question. I found when I was energy minister that at an event of this kind you meet lots of interest groups: commercial interest groups, lots of cheer-leaders for this energy source or that energy source. It’s a bit like trying to have an intelligent debate about the health of English football when everyone taking part in the debate is cheering for a particular team.

It’s the job therefore of others outside the commercial sector, and outside of some of the NGOs, because they’re cheer-leaders too, to try to look at the thing more holistically. That’s the task of the wise politician, the task of the wise academic and expert: to try to push aside the vested interests and think about what the appropriate mix should be – maybe globally that’s a big task, but certainly for their own country.

I feel for reasons of energy security that we shouldn’t put all our energy eggs in one basket. Of course what’s happening with gas is absolutely fascinating at the moment, with shale gas and so on. We’re still not sure how that new story is going to conclude. From a geopolitical point of view I support a mixed economy of energy when it comes to the UK. [But] many commercial companies in building a new energy plant are, of course, turning to gas.

Before we lost power as a party I was asked by Gordon Brown to take on a role as his special representative on global energy issues and wrote a report for him, published a year ago, on energy security. My view was that huge attention was being focused in the UK and elsewhere on climate change. No quarrel with that; that’s the right priority. But when I was minister I worried that in the UK and Europe we were underestimating the risks associated with what you might call the geopolitics of energy insecurity.

Europe, as we know, is already heavily import dependent. The UK is moving that way because of the decline of oil and gas in the North Sea. And we need to think about this issue not just in terms of technical issues around energy supply. We need to think about it as an aspect of national security, and perhaps European security, and the risks associated with an overdependence on energy from some parts of the world which, to be polite about it, are not readily associated with human rights and democracy.

How would you summarise the conclusions of your report?

I would say two things. One is that we need to produce as much home-grown energy as possible. We’re mainly importing the coal we use. Our nuclear reactors are producing smaller and smaller proportions of our electricity. And the North Sea oil and gas reserves are in decline. We have to have some major reliance on imports, but how can we avoid an over-reliance? That involves in my judgement a renaissance of civil nuclear. It involves a determination to hit our targets in terms of renewable energy. It also involves trying to exploit our coal resources in new and clean ways.

The second part is, yes, of course we will have to import a great amount of fossil fuels in the coming decades, but let’s make sure that we don’t become over-reliant on any one fuel. There’s a danger of a new dash-for-gas in my judgement. Let’s make sure we’re not over-reliant on any one region or any one country for the energy we have to import.

Interestingly, Yvo de Boer is here in his new role as KPMG’s climate change advisor rather than his previous role of mediating the IPCC climate change talks. He has said this week that whatever the disappointments of Copenhagen, one tangible thing did emerge: a global consensus on the need to limit temperature rise to 2 degrees Celsius above pre-industrial levels. What’s your personal view? Can humankind rise to that challenge? Or are we doomed to fail?

We can rise to the challenge. I suppose one was more hopeful pre-Copenhagen than post-Copenhagen. What is encouraging is the number of significant international companies – EDF, Siemens, etcetera, etcetera, etcetera – who see the business case for moving towards cleaner technologies. We need to convince a more sceptical public and the more sceptical parts of industry that there is a business and a financial case for building low-carbon economies. It’s not just about doing the right thing for the planet, from a purely green perspective. We need a bigger emphasis on the business case in future.

 

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