Drax pulling out of their Whiterose clean coal technology project is another sign that the UK government's energy policy, or lack of one, is crashing around their ears.
Drax operations director Pete Emery said: “The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first.”
Analysts said the decision to opt out of the project is “not a great surprise” given the regulatory uncertainty faced by companies reliant on green subsidies. Citigroup analysts said: “It doesn't come as a surprise that the company seems to be losing faith in the government's commitment to renewable targets.”
Former SSE CEO Ian Marchant added to the critics of government policy at a British Institute of Energy Economics event saying it is “institutionally incapable” of delivering policy which can support the UK’s security of energy supply. He said: “The question is: do we have an energy policy? And the answer is no. We’re defining policy by the word ‘no’. I haven’t heard any vision of what ‘yes’ might look like.”
Marchant’s criticism echoes others and follows months of government intervention in renewable energy support through cuts planned for both large and small scale renewables projects.
Scottish Renewables have also said that the early end to the Renewables Obligation puts 2GW of projects at risk: “These are projects that could bring around £3bn of investment and provide enough generation to meet the equivalent electricity demand of 1.2 million Scottish homes.”
Former Liberal energy minister Ed Davey has also questioned government claims that the levy control framework (LCF) has been overspent, branding the claims “misleading”. Davey said the Treasury department viewed the Department of Energy and Climate Change as a group of “provincial hippies who don’t know anything. We were able to win arguments using evidence – but the difference now is that he doesn’t need to debate his decisions.”
The Drax decision on the face of it might be seen as less competition for the Shell led Peterhead CCT project. However, successive governments have messed about with CCT for more than eight years, so the prospects for completion are not good. The factors influencing Drax, might also influence Shell and SSE, even if the UK government gets its act together.
Investor concerns also highlights another weakness in government energy policy – the reliance on the market. The security of our energy supply is too important to be left to market sentiment.
The prize for best campaign acronym must surely go to the SNP anti-fracking pressure group SMAUG.
The new group, SNP Members Against Unconventional Oil and Gas (SMAUG), has been set up with a view to persuading the party leadership to take a tougher stance on the issue. It is calling for Underground Coal Gasification [UCG], a technique which sees coal set alight under the sea bed, to be included in a Scottish Government moratorium before May's Holyrood election and said its longer term aim was securing an outright ban on all unconventional fuel extraction methods, which it believes are incompatible with tackling climate change.
Today's Herald reports that the SNP Government has blocked the full release of an account of a meeting between Nicola Sturgeon and Ineos chief Jim Ratcliffe, which took place while ministers called a temporary halt to fracking. In a lengthy submission to parliament on January 28 to announce the moratorium, the SNP energy minister Fergus Ewing made no mention that Ms Sturgeon was meeting with Scotland's leading champion of fracking at the same time. Mr Ratcliffe has since said he has received private assurances that the Scottish Government is not against fracking, despite the SNP presenting itself as opposed to the technique during the general election campaign.
A UK task force, funded by the fracking industry, has concluded that fracking for shale gas in the UK should be pursued as an alternative to the use of coal, in order to provide a bridge to a low-carbon future.
It also says shale gas should not receive public subsidy or tax breaks, and the tax revenues arising from its exploitation should be redeployed to develop renewable energy and other low-carbon innovations. Lord Smith, chair of the taskforce said:
“I can’t see any reason why the shale industry needs tax breaks. If the gas is there and is recoverable – and that’s still a big ‘if’ – the industry can derive revenue from extracting it. Shale gas is not the answer to climate change. That is a mixture of renewables, nuclear and energy efficiency and other low-carbon sources of energy. But we can’t simply wave a magic wand and say that will happen tomorrow. Shale gas provides a bridge.”
Lord Smith was also critical of the delays in developing CCS, “The government must get a move on, I don’t think the reason for the slowness lies in problems with the technology. It is a lack of political will”.
The taskforce view is contested by environmental groups. Tony Bosworth, at Friends of the Earth, said:
“Three-quarters of known fossil fuel reserves need to stay in the ground if we are to avoid catastrophic climate change. Fracking in the UK would just add to this unburnable carbon, while also bringing risks for the environment and health of local communities. The taskforce doesn’t say if or how we will get others to produce less gas if we start fracking.”
The credibility of any taskforce funded by the fracking industry is always going to be questionable, as an experienced politician like Chris Smith should realise. The bridging argument is perhaps the best argument yet deployed to justify fracking, but it is unlikely to convince the communities impacted by drilling. And certainly not those urging stronger action to tackle climate change.
Jeremy Corbyn’s energy policy proposals have caused some excitement in the sector, even if those reacting haven’t always read it properly.
The headlines scream that Jeremy Corbyn is in favour of the “big six” energy firms being taken into public ownership. They usually miss the caveat “in some form”.
He explained: “You can do it by majority shareholding; you can do it by increased share sales, which are then bought by the government in order to give a controlling interest“. This would eventually lead to nationalising the six companies: British Gas, SSE, Eon, Npower, Scottish Power and EDF Energy, and also the national grid. Or as Corbyn put it, “I would want the public ownership of the gas and the National Grid . . .I would personally wish that the big six were under public control, or public ownership in some form.“
His energy policy proposals are much wider than just public ownership. These are his Ten Energy Pledges
1) My over-arching commitment will be for Britain to take the lead in developing the clean Energy Economy of the future.
2) As leader I would establish an Energy Commission to draft a fundamental shift in UK energy thinking.
3) The Commission will be tasked to produce a route-map into tomorrow’s ‘smart energy’ systems that will:
• Deliver more, but consume less
• Use clean energy before dirty
• Put energy saving before more consumption
• Use smart technologies to run localised storage, balancing and distribution mechanisms
• Shift the costs of grid access and grid balancing from clean energy to dirty
• Be open, democratic, sustainable and accountable (in ways that today’s market is not).
4) The Commission will be charged with bringing new partners into energy policy making. These will include local authorities, communities, energy co-operatives, and ‘smart’ technology companies that are already working on tomorrow’s ‘virtual’ power systems and new energy thinking.
5) As leader I will conduct a root and branch review of energy market subsidies; moving away from the notion of everlasting hand-outs; instead, using public support as ‘transition funding’ that transforms Britain’s energy infrastructure.
6) I will expect the energy industry, not the public, to meet the costs of their own clean-up.
7) I will look to re-define of the roles of Ofgem, National Grid and the Competition and Markets Authority, to promote a more genuinely open, competitive and sustainable energy market; one in which there are more players and more clean energy choices than we have today.
8) I will examine ways to allow communities to be owners of local energy systems, with the right (as in other parts of Europe) to have first use of the energy they generate themselves.
9) We must socialise our energy supply and move toward breaking-up the failing energy cartel. Instead, I want to look at the role of the state as guarantor of last resort; with more direct responsibility for the nation’s back-up generation, high voltage grid and interconnectors; directly ensuring that Britain’s ‘lights never go out’.
10) I would commit Britain to binding international climate change commitments; making national targets, local ones too, and devolving both the necessary powers and duties to meet these obligations.
We can see from these pledges that far from being a Morrisonian model, he is talking about a much more decentralised energy system, engaging communities and local authorities.
Stephen Hall writing in The Conversation, gives us a sympathetic view of the proposals.
He argues that this is, “no aggressive nationalisation plan. What it is, is a manifesto for a more decentralised and democratically accountable system, inspired more by present-day Germany than 1980s Britain.”
Hall gives us four reasons to suspect his plan is more revolution than 1980’s throwback.
Introducing genuine competition. “Competition” in the UK energy market has left consumers bamboozled. His plan would encourage consumers to buy energy from municipal utilities or co-operatives. Some new consumer options are being seen in the UK. For example Nottingham City Council has set up its own energy company with a name that sends a clear message: Robin Hood Energy.
Help for smaller energy startups. The current grid setup creates barriers to innovation and is holding back new technologies. There is no technical reason why you shouldn’t be able to choose to buy energy from local sources. By creating local energy markets, smaller but still viable businesses can flourish.
Cheap access to green investment. The proposals commit to pursue energy investment through a National Investment Bank. While this model has seen success in Germany, what is less well understood is how important citizen banks (that we don’t have in the UK) have been in deploying this investment. Hall argues that it will be important to deliver this investment through the right institutions at the right level so citizen investment can complement state finance.
Democratising the energy sector. Essentially more citizen influence over the energy system – and not just through supposed consumer “choice”. There are good Danish and North American examples of this.
“It is clear from the manifesto that the energy policies of the Corbyn camp are anything but a throwback to monolithic state utilities. There is potential for more competition through more diverse energy business models, a clear willingness to make space for smart energy innovation, a call for different approaches to energy system finance, and a platform for more plural approaches to energy governance. Whether or not the reader agrees with these proposals, it should be clear that they are not “old solutions to old problems”, but provocative responses to increasingly urgent challenges.”
A more critical analysis comes from former the shadow energy minister, Tom Greatrex, in Utility Week.
He highlights some apparent inconsistencies in the proposals, but concludes that this is a calculated political strategy, he said; “Jeremy Corbyn’s statements about re-opening pits in South Wales might seem inconsistent with the document his campaign produced, but appealing simultaneously to Greenpeace members and former mining communities is a calculated move. As crude and simplistic as it might be, it also helps Corbyn justify his longstanding opposition to nuclear power and dismiss its low carbon baseload merits.”
However, even Tom accepts that the idea of nationalising utilities is popular with the public, he said: “This isn’t a surprise to energy companies, well aware that part of the recent legacy of rising bills, confusing tariffs and poor customer service is a nostalgia for public ownership.”
He also points out that the wider proposals are working with the grain of progressive energy policy. Widening ownership, more suppliers, a more competitive market, re-cast regulation, community energy, localised storage and demand management, local authorities and consortiums developing smart power systems – is a combination of previous Labour policy, an acceleration of what is happening as technology has advanced and the challenges large utilities face already.
As with much of the hysterical media reaction to Jeremy Corbyn’s campaign, his energy proposals are certainly not a throwback to the 1980’s. Yes, they are radical, but they are intended to offer practical, modern solutions to long standing problems. I might not agree with everything in the proposals, but it is refreshing to find a politician who is prepared to promote radical, and popular, solutions that rattle the vested commercial interests.
The UK Government may be about to add a further blow to renewables by threatening to scrap Feed in Tariffs.
The government aims to rein its spending following the revelation it overspent on the £7.6 billion levy control framework (LCF) by £1.5 billion. Decc has suggested it would close the FiT to new applicants by January 2016 if cost control measures are not implemented or prove to be ineffective. These cost control measures include introducing new tariffs based on “fresh evidence” about the costs and rates of returns on solar, wind and hydropower technologies.
This could see support for solar scaled back by up to 86 per cent, and some subsidies for onshore wind removed completely. The Solar Trade Association’s head of policy Mike Landy said: “This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.”
Renewable UK’s Maf Smith said; “it looks as if the long term vision has been lost” and that they are “damaging changes which undermine investment”.
Scottish Renewables Joss Blamire said the proposals are “quite simply terrible news” and that reducing support “so far, and so quickly, could be hugely damaging”.
Decc stated it is still considering removing FiT pre-acreditation to limit the impact on bill payers of deployment surges in smaller scale renewable technologies. The consultation says: “We are proposing measures to place policy costs on bills on a sustainable footing, improve bill payer value for money, and limit the effects on consumers who ultimately pay for renewable energy subsidies.”
New figures published by the International Monetary Fund (IMF) show that the UK Government may not be looking in the right place if it wants to cut energy subsidies. The IMF’s latest analysis estimates that the UK will spend about £26 billion, equivalent to 1.37% of its GDP, on subsidies for fossil fuels this year.
There will be some relief at the news that plans for Scotland’s first Underground Coal Gasification (UGC) project have been put on hold.
The developers, Cluff Natural Resources cited the uncertainty over the outcome of the Scottish Government’s energy commission, which reports in September, as well as a motion at the SNP conference for UGC to be included the moratorium on fracking as reasons for the decision to postpone the project. The company’s interim statement says: “We have deemed it prudent to await clarity on these matters before committing fully to, in particular, the expense of an Environmental Impact Study. As a result, work on a planning application will likely be postponed until after such time as the political situation is more certain. Preparatory work including site selection studies, modelling and design work are however well underway.”
Cluff’s statement also gives a clear indication of their concern over local planning pressures and their hope that the Scottish Government might be more sympathetic, it says: “Assuming that with all due respect to our opponents, common sense prevails and political support is forthcoming for the unconventional resources business, it is in the planning context that Government can, and I argue, must, help. In short, planning for approvals for energy related projects should be vested in the control of Central Government.”
Friends of the Earth Scotland, welcomed the news saying; “Cluff is clearly running scared at the strength of feeling within both the community and the SNP grassroots membership, who have put out a powerful call to get Underground Coal Gasification included in the current moratorium on unconventional gas. Cluff has now revised its plans twice regarding the Kincardine UCG project, clearly because it is aware of how unwanted the development is by communities living around the Forth. Underground Coal Gasification is a highly risky technology that has caused widespread environmental damage in test projects around the world. The SNP conference is clearly heading for a very lively debate.”
The political concerns are reflected by John McNally, the MP for Falkirk, who said his SNP colleagues at Westminster viewed unconventional oil and gas with “trepidation” and called for clarity over what is covered by the moratorium.
The SNP’s trade union group has also submitted a resolution to the party’s annual conference in October calling for a total ban on unconventional gas extraction.
John Wilson, the MSP who quit the SNP last September is still waiting for clarification from Fergus Ewing. He said: “I find the Scottish Government is being disingenuous. It would be useful if they came clean sooner rather than later on whether they intend to allow fracking and UCG. It would be interesting to find out if the First Minister and Energy Minister have been pulling the wool over the eyes of not only the electorate but a large number of party members during the Westminster campaign who wore anti-fracking badges with the SNP logo on them.”
There may also be wider economic concerns behind the Cluff decision. The most dramatic change for the energy sector has been a fall in natural gas prices. From a peak of 73p per therm (a unit of heat from gas) in December 2013, the price halved last summer, and now sits at 41p. At this price it is doubtful if any fracking sites in the UK will be profitable. In the US, shale projects are operating at a loss and capital markets are pulling out of the technology they have been so aggressively funding.
We had final confirmation today that Longannet coal-fired power station is to close by the end of March 2016. Not unexpected given Scottish Power’s announcement earlier this year when it wasn’t selected by National Grid for the voltage capacity contract, but a big blow to workers at the plant and the wider Fife economy.
Longannet, which opened in 1972, is one of the biggest coal-fired power stations in Europe. In fact, it has several power units under the same roof, providing flexible generating capacity that Scotland is now desperately short of. The power station employs more than 230 staff, but Scottish Power said it hoped to avoid compulsory redundancies.
Scottish Power, said the high cost of connecting to the grid was to blame. It is certainly the case that discriminatory transmission charges have played a significant role in the closure. Ofgem’s long delayed Project TransmiT has made only small changes to the extra charges that fall on Scottish and North of England generators.
In March, I set out two other reasons for closure. One is company indifference, with only limited investment, partly caused by the parent company’s capital funding pressures. The other is UK and Scottish government energy policy. The reliance on intermittent wind power means that we are having to import energy from England for part of one day in five. The closure of Longannet will undoubtably increase that reliance.
National Grid accepts in their Future Energy Scenarios that the UK faces a tighter energy crunch than last year, with more contingency measures needed to ensure the lights stay on. The gap between total electricity generating capacity and peak demand would fall to just 1.2% without measures in place such as paying moth-balled power plants, like Peterhead in Scotland, to be ready to come online and paying factories to be prepared to power down if needed. These are tight margins and it would have been prudent to keep Longannet going until new capacity kicks in from 2018.
Scottish Power has also confirmed that it is abandoning plans to build a new gas-fired power station at Cockenzie in East Lothian. Again not unexpected, given the economics of gas plants and discriminatory transmission charges. However, that would have provided dispatchable power to balance the system in Scotland.
Scotland needs a balanced energy generation policy. Today’s announcements means the balance will be coming from elsewhere in the UK. It also remains to be seen if there is enough capacity in the system to keep the lights on if we have a cold winter.
The long awaited report by the Competition and Markets Authority (CMA) into the market dominance of the Big 6 energy companies, turned out to be the damp squid most in the industry thought it would be.
They found that households paid £8.5bn too much for their power between 2009 and 2013, but blamed customers because they do not switch supplier enough. They claim millions of householders could each save up to £160 a year by switching to a new breed of lower-cost provider.
The CMA resisted calls for a breakup of the Big Six energy companies and instead recommended a price cap on high-cost tariffs and a price comparison website set up and run by the energy regulator, Ofgem.
Roger Witcomb, a CMA non-executive and chairman of the energy market investigation, declined to criticise the big six – British Gas, RWE Npower, SSE, EDF, Scottish Power and E.On – and insisted they had just “behaved in a very commercial way”. Instead he attacked a series of initiatives by Ofgem and the Department of Energy and Climate Change, which he argued had failed to bring benefits to consumers.
Richard Lloyd, executive director of consumer group Which?, said: “This is a damning indictment of how the energy market is failing consumers, with the biggest suppliers taking advantage of millions of households who have also been hit with the costs of government energy policy.”
Others argued for a more radical approach. Fuel Poverty Action campaign group spokeswoman Laura Hill criticised the CMA for “a piecemeal approach to reform,” adding: “They believe confusing and inaccessible ‘competition’ that we have had for nearly 20 years will eventually prevail and reduce bills, which — as we have seen — is definitely not going to happen. Essentially, the only thing that will deliver lower bills is having a completely new energy system which is public, renewable, democratic and owned by the people instead of being driven the Big Six.”
David Harvey identifies many of the reasons consumers don't switch. They have been bewildered by complicated pricing and paralysed by the belief that changing supplier involves too much hassle and carries the risk of ending up worse off in the long run. The elderly and those without Internet access are particularly vulnerable.
He argues that even consumers with the same energy usage can be different because of where they are and when they use electricity. He concludes that data from smart meters, combined with greater trust in the information provided by comparison websites, will be key to consumers becoming more engaged in understanding their own energy usage and encouraging them to switch suppliers on a regular basis.
The Big Six will have breathed a big sigh of relief over the CMA report. It is also the case that customer service, including the use of overseas call centres, is often poor in low price new entrants. This explains why unions have not supported the break up of the Big Six.
However, the CMA report is a toothless waste of paper that simply churns out the same old competition ideology that has dismally failed the consumer. More radical solutions are needed.
Planning the UK’s energy future is a difficult task and getting more challenging. A secure, sustainable and affordable energy supply should be a priority for any government.
National Grid has today published their Future Energy Scenarios 2015 and I was at the launch event. They have developed four scenarios that reflect different political, economic, social, technological and environmental factors:
- Gone Green is a world where green ambition is not restrained by financial limitations. New technologies are introduced and embraced by society, enabling all carbon and renewable targets to be met on time.
- Slow Progression is a world where slower economic growth restricts market conditions. Money that is available is spent focusing on low cost long-term solutions to achieve decarbonisation, albeit it later than the target dates.
- No Progression is a world focused on achieving security of supply at the lowest possible cost. With low economic growth, traditional sources of gas and electricity dominate and there is limited innovation changing how we use energy.
- Consumer Power is a world of relative wealth, fast paced research and development and spending. Innovation is focused on meeting the needs of consumers, who focus on improving their quality of life.
Probably the most important theme to come out of these scenarios is that Gone Green is the only scenario to achieve all renewable and carbon targets on time. It is also probably the most challenging scenario. Under this scenario, LED lights will be the only viable light bulb option by 2030, renewable power output will be comparable to that of conventional power plants by 2026, and sales of air source heat pumps will top 300k by 2030. Maybe, but you might be a touch sceptical.
In all the scenarios National Grid believe that there will be sufficient gas supplies, although the sources remain uncertain. This big issue is of course shale gas. If large scale planning permissions are not forthcoming, it will be replaced by imported gas.
Electricity margins will continue to be very tight over the next few years until new capacity kicks in from 2018/19. National Grid believe they have that covered with their additional balancing reserve. That will be provided by Peterhead in Scotland. Interconnectors are of growing importance and Great Britain remains a net importer of electricity in three of their four scenarios.
Finally, the grid faces significant operational challenges coping with intermittent wind and solar power rather than conventional power stations.
The presentations were helpful in explaining the scenarios, but the panel discussion was a bit bland. It needed some more challenging panel members and questions.
While there is a cross party consensus on targets, the debate is how to reach them. The recent announcement of onshore wind subsidy creates the very uncertainty that investors hate. Scenarios are all well and good, but someone has to deliver the capacity.
While government still talks about all the objectives, it seems clear that they are prioritising affordability over decarbonisation. There may also be too much focus on supply side, when we should put more effort into reducing demand.
The operational challenges of distributed generation are unlikely to be resolved until we get viable electricity storage options. This is effectively turning the usual supply and demand model on its head and could lead to attempts to persuade energy users to use energy when it’s available. Anyone for windy or sunny day tariffs?
I allow myself a wry smile at events like this when civil servants are quizzed about what is in effect state planning of energy, introduced by a Tory government. This was supposed to be a temporary process, but no one is predicting it’s imminent demise. In fact governments across the world are getting more involved in energy planning. It’s simply to important to leave to the market.
What about Scotland in all this scenario planning. I’m afraid it barely gets a mention in the 200+ page book and the assumption is that imports from England and further afield will plug the gaps in our generating capacity. And gaps there will be when the wind isn’t blowing.
If you want to understand the risks and challenges of our rapidly changing energy system, this is the book for you. But like me, you may conclude that it would be simpler and cheaper to return it all to public ownership.
As the political storm over the UK government's decision to end subsidies for onshore wind power rumbles on, we take a look at wind power developments in Scotland.
Renewables now generate almost half of Scotland's energy with wind power at record levels, according to the latest data. Wind turbines produced 4,452 gigawatt-hours of electricity in the first three months of this year, up 4.3% on the previous most productive quarter. This is enough to power Scotland’s 960,000 households for a year. Renewable sources provided 49.8% of electricity used in Scotland in 2014, with installed capacity rising by 9%, or 7,383 megawatts.
The cost of wind power has come under attack from economist Tony Mackay, who has claimed that the subsidies paid to onshore wind farms in Scotland are “unnecessarily high” and have led to “supernormal” profits for businesses and landowners. He argues that the subsidies received by wind farms has on average been, “between 2.5 and 3 times what was required to expand wind farm capacity to meet Scottish Government [emissions] targets”.
The explanation for these profits are that while other countries subsidise capital investment, in the UK operating costs and revenue are subsidised. As a consequence electricity bills in Scotland are now around 10% higher than they would be without subsidies. Even with the replacement of the overly generous Renewables Obligations (RO) subsidy scheme with the more limited and competitive Contracts for Difference (CfD) subsidies, the UK will still be “stuck with the current shambles of subsidies for wind energy projects,”. Scottish Renewables responded that subsidies add around 82 pence a week (or 7%) to the average Scottish bill.
Andrew Smith argues that wind power in the UK is more expensive than it should be because of regulatory and planning uncertainty. That adds to developers costs and means that much of the supply chain is outwith the UK. Despite this the latest round of CfD bids shows that it costs about the same as solar.
He argues that government policy could give windfarm developers much greater long-term assurances of a supportive and consistent policy environment, thus lowering their risks and hence lowering costs. This will improve transparency, and reduce the cost of onshore wind further. It would give certainty to investors through decisiveness and leadership, and it would show that the government is taking a pragmatic and cost-effective approach to tackling climate change.
Frederick Dahlmann from Warwick University argues that the future for wind power is locally based wind farm cooperatives using crowd funding. He points to the experience of Denmark and Germany where local authorities are much more engaged in the process. He illustrates his point with a proposal by Yorkshire-based Edgehill, which seeks to raise £2.5m from investors chipping in as little as £50 to build ten turbines in ten different rural locations. With their risks and benefits shared between large numbers of individual investors, these projects are used to keeping locals happy, dealing with NIMBYs, and bringing them on as investors.
A new report by the climate change body ClimateXChange claims that developers sometimes under-assess the impact of wind farm noise and appearance on residents living nearby. The study looked at how the visual, shadow flicker and noise impacts predicted by developers at the planning stage compared to reality. It concluded that in some cases what was set out in planning applications did not match the actual impact. It also found that efforts to engage with the public had not always adequately prepared residents for the visual, shadow flicker and noise impacts of a development.
There might have been wider public support against the UK government's decision to end subsidy early if wind power had delivered the hoped for wider benefits. As Brian Wilson puts it:
“I find it bitterly disappointing that so little of the manufacturing associated with wind farms in Scotland has been carried out here. That is a major failure on the part of the Scottish Government and does no credit to the biggest developers, Scottish Power and SSE, who have had the benefits of major planning consents and vast subsidies through the Renewables Obligation but failed to reciprocate by creating an industry worthy of the name.”
Brian also suggests some practical measures to mitigate the impact of the decision. Specifically support for community based schemes and the islands. As I previously argued, the UK government decision was right in principle, but wrong in terms of timing. There should be room to rescue a viable future for wind power as part of a more balanced energy policy.
The decision by Lancashire County Council to reject planning applications for shale gas is an important, but not fatal, development to the fracking industry. Certainly not in Scotland.
Lancashire councillors have rejected planning applications by Cuadrilla at Roseacre Wood (June 25) and Little Plumpton (June 29) despite the conditional approval of planning officers. The assessments provided to councillors are based on narrow planning factors and do not include the wider health impact of fracking, or the consequences for climate change.
After a Freedom of Information battle, Defra has been forced to publish the full environmental assessment on fracking. Previously omitted sections reveal that:
- House prices near fracking wells were likely to fall, and there was a potential reduction of up to 7% in property values within a mile of wells.
- Properties within a one- to five-mile radius of fracking sites may incur additional insurance costs.
- Leakage of waste fluids from fracking processes has resulted in environmental damage in the US.
- Even if contaminated surface water did not directly impact on drinking-water supplies, fracking could affect human health indirectly through consumption of contaminated wildlife, livestock or agricultural products. It concluded that the UK regulatory regime was “likely to be more robust” but the impact on water-resource availability, aquatic habitats and ecosystems, and water quality was “uncertain”.
The publication of this report was opposed by the industry amongst concerns that new ministers are too close to the sector. These concerns have been compounded when it was discovered that Tory MP Paul Maynard, a new advisor to the Energy Secretary Amber Rudd, received a £5,000 donation to his local party from a company set to benefit from the introduction of the technique. This donation doesn’t breach parliamentary or electoral rules, but the revelation comes as the debate over fracking and its impact on the environment is provoking fresh controversy.
The tentacles of the fracking industry doesn’t stop at the border. In Scotland, Labour called for a moratorium and then local referendums before developments went ahead. The industry, led by Ineos with its fracking exploration licences across the central belt, were duly outraged.
However, when SNP Energy Minister Fergus Ewing responded by announcing his own, albeit limited moratorium, the industry surprisingly welcomed it. We now know, thanks to FoI, that Nicola Sturgeon was meeting with Ineos boss Jim Ratcliffe at the very time the minister made his announcement. However, the Scottish Government is reluctant to tell us what she actually said to Ineos.
Labour MSP Lewis Macdonald, has been teasing out the detail of the moratorium that may explain why the industry is relaxed about the moratorium. It now appears that it doesn’t cover testing and preparatory drilling, or Underground Coal Gasification (UCG), a technique many consider more dangerous than fracking that is technically offshore but requires onshore infrastructure.
Last week, John Swinney called for potential profits from fracking to be devolved to Holyrood. He claimed it was merely for “policy completeness”, but opponents said it offered fresh evidence that behind the scenes, the SNP was paving the way to give fracking the go ahead.
As Daniel Sanderson put it in The Herald, “A moratorium that, five months on and with Ineos never planning be engaged in full-scale fracking for several years anyway, is yet to have been shown to be anything other than an exercise in political misdirection.”