Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Memorandum from the Environment Agency


  1.1  The Environment Agency welcomes this opportunity to provide a submission to the Environmental Audit Committee. The Agency regulates power stations and on-shore gas production facilities and it is this interface with the energy markets, together with our interest in climate change issues, which form the basis of our close interest in energy related activities.


  2.1  It is vital that the UK develops a clear energy policy that makes transparent our objectives for the future. In addressing the environmental impacts of our current energy systems, whilst maintaining a secure energy supply, we need to have a clearly defined vision of future energy production. At the same time it is essential that we understand the consequences of a major phase-out of fossil fuels and the scope for their replacement by renewables, or other low-carbon energy technologies, and that we understand the environmental consequences of these options if we are to take an holistic and integrated view. Although the environmental reasons for developing new and renewable energy capacity are generally recognised, the imperative of providing clear direction and leadership in UK energy policy should be acknowledged. The development, within the PIU study, of a clearer understanding of what constitutes a sustainable energy scenario for the UK will help to illuminate this issue.

  2.2  Renewable energy developments will be affected by planning issues, the electricity market, public opinion, consumer behaviour, institutional changes, general changes in the energy industry and the greening of industrial and commercial activities. It is essential that the Government sets out a coherent energy policy framework that covers all these issues so that in the longer term higher levels of renewable energy supplies are achieved.

  2.3  The Environment Agency supports the Government's target to source 10 per cent of UK electricity from renewable sources by 2010 as part of its comprehensive strategy for reducing UK greenhouse gas emissions. The 10 per cent target is challenging but achievable, and will give a much needed boost to the UK renewables industry which currently makes a small contribution when compared to much of the rest of Europe even though the UK is particularly well endowed in renewable energy resources. Renewable energy is a substantial new industrial market and the Government should ensure that UK business is able to grasp this opportunity.

  2.4  For renewable energy to succeed in the longer-term it will be necessary to make changes to the UK electricity system so that it will be able to accommodate an increased contribution from embedded generation and intermittent sources. Whilst some renewable energy sources produce electricity on an intermittent basis, a substantial amount can be predicted reliably. To achieve renewables penetration beyond 10 per cent to 20 per cent, we will need to adjust our transmission and distribution networks, and utilise versatile storage technologies such as regenerative fuel cells.

  2.5  Even longer-term targets, say 50 per cent by 2030, would help to send the right directional signals to energy markets. This would place renewable energy policy within a longer-term framework for substantially reducing carbon dioxide emissions and transforming our energy system.

  2.6  Some renewable energy could become highly decentralised with individual consumers generating their own power through photovoltaics or micro-wind turbines. It is important for the financial viability of these micro-generators that they are allowed to participate in the electricity market. "Net metering", or even "premium metering", should be compulsory so that they can sell electricity back to the network when they are not in need of the power themselves. We are disappointed that there is no facility in the Utilities Act to facilitate the introduction of two-way metering of electricity. The extra cost at time of replacement is minimal and we urge the Government to rethink this option as a way of introducing an enabling technology and sending a clear signal.

  2.7  Some renewable sources are capable of generating both electricity and heat, and their overall energy efficiency is greatly enhanced by doing so. This does require a more holistic approach but is worth including in forward planning as it will have a mutual benefit in environmental and economic terms.


  3.1  The Agency is concerned by the low installation rate of renewable energy over recent years and recognises that the annual rate of installing renewables capacity will need to increase by seven fold in order to meet even the 10 per cent renewable electricity target. There is therefore an imperative to use every opportunity to remove barriers and shape policies in such a way that enable a higher rate of uptake.

  3.2  Current progress requires some analysis to understand options for the future. Official statistics show that renewable energy contributed 2.8 per cent of electricity generation in 1999. This figure includes energy from landfill gas and waste combustion. Much of the content of waste is from non-renewable sources and should not be promoted as a renewable energy source. Landfill gas should decline over time as organic matter is excluded from waste streams going to landfill. Nevertheless, whilst it is being produced its use as an energy source has a double environmental dividend. It not only converts the methane into a less harmful greenhouse gas (carbon dioxide), but also offsets the carbon dioxide emissions that would have been generated elsewhere if a fossil fuel plant had been used to generate the electricity.

  3.3  The figure of 2.8 per cent disguises the true rate of long-term expansion. The majority of the existing "renewable" electricity comes from large-scale hydropower landfill gas and refuse combustion; many of these have no further expansion potential. Those sources that have a larger contribution to make in the future, such as off-shore wind, energy crops, PV, wave and tidal power produce a minuscule fraction or nothing yet. This reinforces the challenges ahead and the need for a more proactive approach in shaping the energy future for the UK for which there is a large competitive advantage.


  4.1  We understand the Government's desire to reduce electricity prices through improvements in the efficiency of the electricity industry as this leads to economic benefits for the country. However, cutting costs for consumers should focus on reducing demand as well as lowering the price, as there are substantial economic costs associated with the inefficient use of electricity in the UK, and the decreasing price of electricity tends to perpetuate inefficient use. The environmental costs of electricity generation are not currently reflected in the price and we believe that the domestic sector should also be brought within the carbon levy in the longer term. We acknowledge government policy in this area, such as the Climate Change Levy and the energy efficiency initiatives of the Energy Saving Trust, but we feel that more effort and resources need to be allocated towards encouraging energy efficiency.

  4.2  It would be unacceptable to allow high electricity prices to have a negative impact upon low-income households. This committee has voiced its opinion on fuel poverty very clearly, which we share as it prevents us from meeting our duties in a different way. However, we feel that such fuel poverty is best alleviated by directly tackling low incomes and poor quality housing rather than lowering fuel prices for all. We recognise and commend the Government's intentions to increase their support in this area through expanding their Home Energy Efficiency Scheme and Energy Efficiency Standards of Performance programmes and would urge that it remains a priority for additional resources until the problem of fuel poverty is fully turned around.


  5.1  We urge government to encourage and enable research into how electricity networks can be modified to accommodate increasing contributions from CHP and renewable energy sources whilst maintaining quality of supply.

  5.2  The Agency believes that the Government must be bold in its support for new and renewable energy whilst acknowledging the issues that they raise. The process of enabling an energy transition from a fossil fuel based economy to a non-carbon alternative will take a very long time to engineer, whereas the threat of climate change is severe and potentially close at hand. Therefore we must act quickly to stimulate the development and expansion of renewable technologies within the UK economy. Renewable energy also represents a fast growing industry that seems set to become a key international market. The UK should act quickly to grasp this opportunity and become a major player.

  5.3  Government should implement measures that encourage the deployment of renewables at the domestic scale. For example, improved support for energy insulation materials coupled with a future levy on domestic fuel with exemptions for low-income households, would increase the financial favourability of small-scale renewables. Solar heating systems for house roofs, small wind turbines and other new technologies, such as fuel cells, have the potential to play a huge role in meeting household energy demand (and thereby indirectly reducing household primary energy demand) in the future. Two-way metering with a fair price for small scale generated electricity as a way of enabling small but vital step changes should be encouraged.


  6.1  We encourage the involvement of local and regional communities in the development of renewable energy and suggest that their participation, and acceptance of their responsibility to deliver local contribution to national targets, is vital to success

  6.2  We would also like to see a more inclusive development process, where top down renewable energy targets are cascaded to regional and local level so that local people can participate by debating and agree the best options. It is important that good progress is made across the country as a whole. This may require amendments to planning guidance or ministerial direction.

  6.3  The Agency supports the establishment of regional renewable energy targets. However, there is a long way to go in raising public acceptability of the high profile renewables, such as onshore wind, to necessary levels.

  6.4  We feel that there needs to be far greater public involvement in a proactive decision-making process regarding renewable energy developments and their environmental and economic benefits. Increasing renewable energy output will bring the generating infrastructure closer to the consumer through an increasing number of smaller, local generating units. This is in contrast to the traditional centralised electricity system which relies upon a relatively small number of large generating units dotted around the country which takes electricity production (and its environmental impacts) out of sight and out of mind for most people. The development of renewable energy will force the issue of how and where electricity is being produced and the corresponding environmental and social costs. It is for this reason that a new approach to planning and public participation is required for the successful development of renewable energy.

January 2001

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 22 July 2002