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Government Heeds Concerns on Solar FiT, But Fails #COP21 Leadership Challenge

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New measures to deal with the projected over-allocation of renewable energy subsidies have been announced today, following recent consultations.

Renewable energy subsidies are paid for via energy bills through a number of schemes including the Feed-in Tariff scheme and Renewable Obligation scheme. Government decided on a set amount that would be paid to renewables by 2020 and earlier this year, the Office for Budget Responsibility projected that the amount would be exceeded, meaning bill payers would have to pay more. Government has since taken action to reduce this overspend which includes the announcements being made today.

The Impact Assessment that the Government itself has now estimated that between 9,700 and 18,700 solar jobs could be lost as a result of today’s changes to the Feed-in Tariff for solar.

 

2016 Feed-in Tariff levels for homeowners and small businesses increased significantly on proposals

The Government has heeded the evidence and unprecedented support for solar power and cut domestic tariffs by 64% to 4.39p/kWh instead of the original proposal of cuts of up to 87% to 1.63p/kWh. This is compared to a rate of 12p/kWh today.

The new tariffs will come into force from 8 February, and the deadline for projects to receive the current higher tariffs is now 15 January.

The decision comes after a prolonged campaign by the Solar Trade Association and many supporting organisations from the Church of England to the CBI.

For a modest commercial rooftop scheme the size of a school or small commercial building, the Feed-in Tariff rate will be 4.59p/kWh.

As well as the tariff rates, the STA has been very concerned by the ‘cost control’ mechanism that could lead to damaging stop-starts in the market. The Government has put maximum caps on the total amount of solar it wants to see installed in every quarter. This could be very damaging, although they do appear to have taken on board requests for unused capacity to be recycled from one quarter to another and a queuing system for projects that don’t get in on time.

The Solar Trade Association has welcomed the fact that the Government has not increased energy efficiency requirements to be eligible for the solar feed-in tariff, and has not made any changes to how the tariffs are indexed over time or to the export tariff when electricity is sold back to the grid.

Paul Barwell, CEO of the Solar Trade Association commented: “The new tariff levels are challenging, but solar power will still remain a great investment for forward-thinking home owners who want to protect themselves from volatile energy prices and do their bit to reduce global carbon emissions.”

“Our initial analysis shows solar is still worth considering if you consider the wider benefits such as the increased value to your home. Homeowners can also benefit by changing the way they use their generated electricity through higher day-time usage or via storage which is now a rapidly developing market.”

Recent research by Barclays Mortgages shows that solar power is considered the most desirable technology with homebuyers willing to pay an extra £2,000 more for homes equipped with solar panels. Although installation companies are not allowed to sell on this basis, if investors in solar are willing to consider the potential to attract a higher sale price for their home in future, then it still makes economic sense to invest in solar all over the country with an improved payback.

Solar power is also a ‘no brainer’ investment for anyone replacing their roof, where attractive integrated solar can replace traditional roofing materials and provide a good return on investment.

In addition there is potential for a number of complementary technologies to become cheaper over the next few years and change the economics of solar. Battery storage will allow people to use the electricity they generate during the day later in the evening. Electric immersion hot water heating, electric vehicles, smart timers for appliances and innovative heat storage can all allow people to use as much of their solar electricity as possible, bringing down their bills. The STA will soon publish a briefing on how to make solar pay better under the new FiT levels.

Commercial rooftops and community solar

The commercial rooftop market in the UK can potentially deliver large volumes of clean power cost-effectively. The STA believes that the new tariff rates will be challenging for commercial sector investment but hopes that increasing corporate commitment to acting on climate change will help to drive the market forward. Returns may be sufficient for investors with particularly low hurdle rate to investment, such as crowd-funders, local authorities and pension funds.

The STA has welcomed the fact that pre-accreditation has been re-introduced for all solar above 50kW in size – roughly the size of a school – which will give businesses and other bigger rooftops more certainty when investing in solar.

However for rooftop and ground-mount projects above 1MW in size there will no in effect be no support at all, with a tariff of just 0.87p/kWh.

The STA is disappointed to see there is no dedicated support for community solar or solar on social housing. Community energy will however benefit from changes to ISAs next year, with the potential for tax-free investment in local solar projects.

Paul Barwell continued: “Commercial rooftop solar has been a small but growing part of the solar rooftop market. However, even with these lower tariffs, the nature of high electricity self-consumption and a maturing commercial market should ensure solar is still a good choice for many power-hungry businesses across the UK looking to reduce their bills and use the empty space on their roofs.”

“The global solar revolution has only just begun. Whilst today’s news will be disappointing to many solar businesses, our solar technology is an unstoppable force, and while the British industry might contract, we will be doing all we can to catch up with the booming international market. If we can bring installation costs down, and encourage homeowners, businesses and investors to accept lower returns, I’m confident the UK solar sector will weather this.”

The STA will be working with Government departments to look at further measures to improve the opportunities for solar power and a level playing field. Particular emphasis will be on removing red tape, and the regular reviews of the cost control mechanism. Measures should be taken to improve project economics, as well as pushing to remove EU import tariffs and price controls on Chinese solar PV and making sure solar retains its low rate of VAT.

The STA would also like to see more regulatory incentives for solar on new build homes and businesses. The Scottish Government and the Greater London Authority are already leading the way on low carbon new buildings, showing that it can be done. Expenditure on clean power will rise by £3.3bn by the end of this Parliament, today’s announcements mean than only around 1% of this will be spent on new solar power projects under FITs from next year.

REA Head of Policy and External Affairs, James Court: “The government have taken on board many of the common-sense suggestions from the REA and wider industry, such as bringing back pre-accreditation for long lead schemes, reallocating budgets from under deployed technologies and increasing deployment caps for solar.

“The tariffs are still very challenging and whilst the changes will help save some in the industry it remains that many will be exiting. But this is an improvement, and may still provide the base to get to post-subsidy.

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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