Memorandum from The World Wide Fund For
WWF-UK ENERGY POLICY
General paragraphClimate Change global
priority for WWFimportance of addressing energy use within
Energy is used in three main ways: as electricity,
as heat and in transport. WWF-UK's focus is on the production
and use of electricity as it is here that there is the most scope
for adopting lower carbon technologies.
In the heat market the predominate fuel is natural
gas and there are very few, if any, viable alternatives to switch
to other fuels. There are measures that can be taken to reduce
the amount of heating (and therefore gas) that is used which are
explored in the section on energy efficiency. It should also be
noted that the emissions per unit of energy are much lower for
gas than they are for electricityemissions of CO2
from gas are approximately 0.2 kg/kWh compared to around 0.6 kg/kWh
This paper looks at the UK's emissions of carbon
dioxide, the contribution that energy makes to these emissions
and the options available to reduce these emissions.
UK GREENHOUSE GAS
EMISSIONS & ENERGY
Current (2000) UK emissions of carbon dioxide
(CO2) are around 155 MtC. Under a business as usual
scenario these are expected to be something like 110 MtC in 2050.
It has been suggested, specifically by the Royal Commission on
Environmental Pollution (RCEP),
that the UK should be aiming to cut emissions of CO2
by 60 per cent by 2050. This would mean that by 2050 the UK's
emissions of CO2 should be no higher than 60 MtC.
This means that the UK is going to have to take actions that reduce
emissions of CO2 by some 50 MtC (and probably by more)
in addition to those already expected to occur. To put this in
context the current UK Climate Change Programme is projected to
result in CO2 reductions of around 30 MtC by 2010.
gives a sectoral breakdown of the UK's emissions of carbon dioxide
in 1990 and 2000 and out to 2020. It shows that power stations
are a major source of CO2 emissions indicating that
action must be taken in the power sector (electricity generation)
if serious emission reductions are to be made.
||Carbon Dioxide Emissions MtC
|Land use change||8.7
|Total without land use change||159.3
|Total with land use change||168.0
Table 2 shows
aggregated energy demand by fuel out to 2020 from three sectorsdomestic,
service and industrial (demand for each sector is shown in Appendix
|% change||Energy demand (Mtoe)
|Total Energy demand||98
Table 2 clearly shows that energy demand, particularly for
electricity, is expected to continue to grow even with existing
measures in place and that reductions in energy demand will have
to be an essential part of future actions to reduce emissions.
The graphs below (Page 32 EP 68) show the mix of fuels used
to generate electricity in 1990 and 1999. These graphs raise two
particularly important issues for the future of electricity generation
in the UK.
Firstly, they show the rapid reduction in the use of coal
from 68 per cent in 1990 to 29 per cent in 1999 coupled with a
huge rise in the amount of gas used from zero in 1990 to 37 per
cent in 1999. This ``dash-for-gas'' as it became known is the
main reason for the reduction in CO2 emissions shown
in Table 1 and is largely responsible for the UK being on track
to meet it's Kyoto emission reduction commitments. This dash for
gas was a one-off and won't be able to be repeated in the future
which means that if the UK is to make the emission reductions
outlined above other lower carbon technologies are going to have
to be introduced.
Secondly, they highlight the major role played by nuclear
power in the generation of electricity. This is important as much
of the UK's nuclear power stations are coming to the end of their
lives and it is expected that by 2023 all bar one of them will
be closed. This has implications for the UK's capacity to meet
it's electricity generation needs and the ability to meet it's
emission reduction targets. It is estimated that if the electricity
generated by nuclear power stations in 2000-01 had been generated
by the current mix of fossil fuels, then the UK's emissions of
CO2 would have increased by 50 million tonnes of CO2.
(change to MtC)
Decisions need to be made soon as to how this generation
capacity will be replaced. WWF believes that this ``capacity''
gap can be met through a programme of energy efficiency and renewable
energy development without the need to develop new (or refurbish
existing) nuclear power plants.
The options for doing this are discussed further below.
As has been shown above if the UK is to make dramatic reductions
in CO2 emissions in the future action must be taken
in the energy sector to reduce demand and move to lower or zero
carbon electricity generation technologies. In the UK there are
a number of options available to achieve these goalsincreased
uptake of energy efficiency technologies, increased penetration
of renewable generation technologies, increased use of CHP, refurbishment
and expansion of existing nuclear capacity and use of carbon capture
and sequestration. Table 3
gives an indication of how cost effective each technology is at
reducing carbon and the following sections look at the potential
for each of these technologies in more detail.
|Carbon abatement cost|
|Domestic energy efficiency||-300
|Service sector energy efficiency||-260
|Industrial energy efficiency||-80
|Other marine (wave & tidal)||70
Table 4 shows
the economic potential for energy efficiency across the economy.
It shows quite clearly the massive potential for improving energy
efficiency by as much as 30 per cent, with much of this potential
in the domestic sector. Other studies have identified the potential
to reduce energy demand by up to 50 per cent. There are varying
views as to exactly how much of the identified potentials are
cost effective but there is consensus that much of it is.
|Sector||Potential energy saving (Mtoe)
It is difficult to say precisely the quantity of emission
reduction that will be delivered by energy efficiency but recent
analysis has indicated that implementing the 30 per cent efficiency
improvement could deliver some 20 MtC above what will currently
be delivered through existing programmes.
Action on energy efficiency should focus on the domestic
sector. This is the sector with most potential to save energy
and where there are few existing measures except those aimed at
the fuel poor. It is also sector which has to date been the most
difficult to address. Energy prices are only a small proportionabout
3 per centof average household expenditure giving very
little incentive for consumers to focus on reducing their energy
use. Whilst some kind of taxation on domestic energy would help
to incentivise the uptake of energy efficiency measures it would
have to be levied at a very high level to make any real difference
to energy consumption. Rising prices on their own will not be
enough to harness the energy efficiency potential in the domestic
sector other policies and measures will also be required. WWF
believes the following measure should be introduced:
Better information to consumers on the life cycle
energy costs of electrical appliances at the point of sale.
Tighter building regulations. Current building
regulations are still way below those of other European countries
and technologies exist now to build houses that have near zero
requirements for space heating and are zero emission. It should
be indicated to the construction industry that they will be expected
to meet these standards by the end of the decade.
Fiscal incentives should be introduced to favour
the most efficient appliances and houses (through the reduction
of VAT, reduction of stamp duty and preferential mortgages).
The current ``28 day'' regulations that are a
barrier to the establishment of energy services should be removed.
Whilst the focus of energy efficiency measures should be
on the domestic sector action there will need to be continued
action in other sectors of the economy. WWF believes these should
Annual increase in the Climate Change Levy.
Re-negotiation of the Climate Change Levy agreements
at the 2003 review to ensure they deliver truly additional efficiency
measures in return for the 80 per cent discounts.
Targeted information to SMEs to allow them to
respond to increased energy prices as a result of the climate
Numerous studies have looked at the potential for renewable
energy to be used as an electricity generating technology and
the results of these studies show that the UK could generate a
large proportion of it's electricity from renewable energy. The
most recent analysis was undertaken as part of the PIU Energy
Review the results of which are shown in Table 5. To put the figures
into context it is expected that by 2010 around 390 TWh of electricity
will be supplied.
| ||Electricity generated (TWh/yr)
||3 p/kWh||5 p/kWh
|Agriculture and Forestry residues||1
|Municipal solid waste||3
These figures show that renewable energy could, by 2025,
provide anything up to 70 per cent of the UK's electricity, although
this would incur a cost of around 7p/kWh compared to a current
electricity price of around 2.5 p/kWh. However the figures do
show that even at lower prices a substantial quantity of electricity
could be produced from renewables highlighting the unambitious
nature of current government targets.
The government currently has a target that by 2010 10 per
cent of electricity supplied be generated by renewable technologies.
The cost of meeting this target will be passed on to consumers
and to ensure that the costs to consumers are not excessive the
price at which this target can be met has been capped at around
5.5 p/kWh (this is
expected to increase prices to consumers by about 4.5 per cent).
If it is achieved the 10 per cent target will result in around
39 TWh of renewable electricity being supplied.
The PIU Energy Review recommended that the renewables target
be extended beyond 2010 by an additional 39 TWh to 2020, estimated
to be equivalent to a further 10 per cent increase ie. that renewables
provide some 78 TWh (around 20 per cent) of electricity by 2020.
It is expected that achieving such a target would raise prices
to consumers by around 5-6 per cent.
The above analysis shows that the current UK government targets
for renewable energy are way below the identified cost-effective
potential. Long term targets must be set that reflect this identified
potential. WWF believes that the aim should be for at least 200
TWh of the UK's electricity to come from renewables by 2050. What
proportion of total electricity supplied this will be is uncertain
and depends largely on the success of an energy efficiency programme
but could be as much as 70 per cent. As with energy efficiency
quantifying the carbon reduction of achieving such a target is
difficult but it has been indicated that 40 per cent renewables
would deliver about 13 MtC in CO2 reductions.
Achieving this target is clearly feasible but will also require
additional action to remove the current barriers to the development
of renewable energy. These include:
Relieving the problems caused by the New Electricity
Trading Arrangements (NETA). There are a number of measures that
can be taken to ease the difficulties facing renewables including
reducing gate closure, reducing the gap between the penalties
levied for over or under supply; incentivising consolidation.
Relieving some of the planning constraints. WWF
does not believe that the planning system itself is wrong but
that there are actions can be taken to smooth the passage of renewables
through the system. These include setting regional renewable energy
targets, greater public understanding of the issues surrounding
energy choices and the links between energy and climate change.
Improving the network access conditions particularly
for small scale generation.
Which Renewable Technologies?
There is much discussion and confusion as to which technologies
should be classified as renewable and gain the benefit of Government
support. In the UK there are currently four different classifications
of renewable technologiesthe Climate Change Levy classification
that includes energy from waste but excludes large Hydro; the
classification under the Renewables Obligation that includes energy
from waste under certain conditions (only the organic fraction
and only using advanced technologies) and includes new or refurbished
large hydro; the classification under the EST's Future Energy
scheme that includes energy from waste with no conditions attached
and refurbished large Hydro; and the EU definition that includes
Energy from Waste under different criteria again (waste incineration
must not undermine policies to reduce waste and increase recycling).
It is clear that these definitions must be harmonised asap to
remove any confusion as to what classifies as a renewable technology
and to ensure that support only goes to the truly renewable technologies.
WWF classifies the following technologies as renewable: onshore
wind, offshore wind, biomass (including energy crops, forestry
and agriculture residues, wood waste), solar (photovoltaics and
thermal), hydro, wave and tidal (excluding barrages), landfill
and sewage gas (based on anaerobic digestion).
We do not consider energy from the incineration of municipal
waste to be a renewable technology.
Combined Heat and Power (CHP)
Combined Heat and Power generation where heat and electricity
are produced together dramatically increases the efficiency of
electricity and heat production and therefore has a role to play
in reducing emissions from electricity generation. The table above
shows that CHP could contribute reductions in the region of 10
MtC by 2050. Other modelling has suggested that CHP could reach
that level by 2020 if development is accelerated through specific
policy support. CHP has the potential to be used both at a large
scale on industrial sites that have a large demand for heat and
at a domestic scale where it can replace the standard household
boiler. It is in the domestic application that most potential
WWF supports the development of CHP as a means of reducing
emissions in energy generation (specifically electricity). However
CHP is currently suffering major problems in the market due to
a number of factors including the current high gas price and low
electricity price, and the impact of NETA which is resulting in
many proposed projects being put on hold or suspended altogether.
Unlike renewables which has a renewable obligation to support
itthus ensuring that suppliers will find a way of solving
many of the problems with its development CHP has no such support
mechanism and the unless the government gives additional support
to CHP the market will collapse. WWF believes the following mechanisms
should be introduced:
Full exemption from the Climate Change Levy.
Power station consents process that promotes CHP
Building regulations that require the use of CHP
Consider the introduction of a CHP Obligation.
CHP will also benefit from the changes to NETA already discussed.
The figures above indicate that nuclear energy does not provide
any economic benefits over those of other technologies. It's costs
both in terms of per unit of electricity supplied and per tonne
of carbon reduced are no lower, and in many cases are much higher,
than those of renewables, energy efficiency and CHP.
WWF believes that the use of nuclear energy can not be viewed
as a sustainable technology due to the high risks to the environment
and human health associated with it's operation. The electricity
gap created by the closure of the UK's nuclear capacity can be
more than covered by energy efficiency, renewables and CHP. WWF
believes the government should rule out the future development
of nuclear energy as an electricity generation technology and
focuses on the development of truly sustainable technologies.
Carbon Capture and Sequestration
This technology involves removing the CO2 from
fossil fuels before it is released into the atmosphere and ``locking
it up'' in deep repositories. One method of sequestration is to
use the CO2 to aid oil recovery by pumping it into
oil wells thus releasing more oil and storing the CO2.
It is being seen as a method of allowing the continued use of
fossil fuelled generation, particularly coal, whilst still reducing
emissions. The costs of the technology are high and there are
huge uncertainties surrounding its feasibility, particularly the
"safety" of the stored carbon.
WWF does not support the further development of this technology,
the risks associated with it's use are high and, as with nuclear,
energy efficiency, CHP and renewable technologies can more than
match the electricity capacity and emission reduction benefits
of using this technology.
Analysis shows that UK can move to low carbon technologies
at low cost and make dramatic reductions in CO2 emissions
without the need to rely on nuclear or ``cleaned up'' fossil fuel
technologies. If these potentials are to be realised government
needs to put its support behind the truly sustainable technologies.
This figure includes the effect of the current Climate Change
Programme, closure of most of the current nuclear capacity and
historic fuel switching in the electricity supply industry. Back
Royal Commission..... Back
The exact figure depends on the baseline selected. The RCEP implied
a baseline year of 1997 (155 MtC), but 1990 is most usually used
as a baseline (168 MtC). A limit of 60 MtC is used here as a useful
indication of the target required. Back
Adapted from Climate Change The UK Programme, DETR. Back
Adapted from Energy Paper 68 and PIU Energy Review Scoping Note Back
See "WWF-UK's Policy on Nuclear Energy" for more details. Back
Adapted from PIU Energy Review. Back
From PIU Review. Back
The "cap" is 3p/kWh above the base price of electricity
which is currently around 2.5 p/kWh. Back
Full details of WWF-UK's policy on Nuclear Energy can be found
in "WWF-UK's Policy on Nuclear Energy" available from