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SSE price freeze: good news for energy customers but it comes with a price

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Energy company SSE’s price freeze announcement on Wednesday morning is good news for consumers but comes with a price.

SSE makes its move 24 hours before Ofgem, the energy regulator, is expected to announce a full competition inquiry into the UK energy market.

While this can be seen as a pre-emptive strike, seeking to maintain a degree of control in an energy sector which is creeping towards state control, the short-term benefits are very welcome for households struggling with spiralling energy costs.

SSE says it will freeze domestic gas and electricity prices at current levels until 2016 but expects lower profits from the move. That means the company will be “streamlining and simplifying” its business to cover the shortfall, cutting 500 jobs and abandoning three planned offshore wind farm developments. SSE hopes to save around £100m a year in operational costs.

The BBC’s industry correspondent, John Moylan, advises that SSE’s announcement echoes Labour’s flagship energy 20-month price freeze policy, a proposal heavily criticised by many in the energy sector – and it shows that energy policy remains top of the political agenda as we gear up for the general election.

SSE chief executive Alistair Phillips-Davies told the BBC that the energy company’s goal of “delivering the lowest possible energy prices” to customers was “central to everything we do“. Interestingly, the company’s share price rose after the announcement, despite the implicit profit warning.

Phillips-Davies also advised the government to take energy taxes out of bills and retrieve them through general taxation instead. He said that the move would make sure tax “is paid for fairly in a way that is proportionate to people’s income and protects the vulnerable”.

But of course, this move would further weaken the energy-saving promotions embodied in the Energy Companies Obligation (ECO), which instructs power companies to install energy-saving measures. This has already been reduced but has been responsible for much of the energy efficiencies achieved by households.

As the BBC reports, 58,000 homes in Scotland have benefited from ECO deals in the past year, helping to tackle fuel poverty and lower carbon emissions across the country.

SSE’s move will be a short-term benefit for consumers but has an impact on government renewable energy strategy, disjointed as that is. SSE’s decision to shelve three wind farm plans is in stark contrast to the announcement by German group Siemens to build a wind turbine blade factory in Hull.

The plant will create 1,000 UK jobs through a joint £310m investment by Siemens and Associated British Ports (ABP), building the country’s first purpose-built factory dedicated to the manufacture of offshore wind turbine blades.

On Tuesday, energy and climate change secretary Ed Davey said he believed a long-promised renewable energy revolution in the North Sea had finally taken off and that the UK had too many rather than too few projects. At least SSE has helped him out there.

But the important point here is that Britain’s growing fleet of offshore wind farms are a vital part of the country’s national security, reducing reliance on energy imports, like gas, at a time when the political map of the European continent is being aggressively redrawn.

Underlying the many and varied political pressures around the energy sector, the fact is that the era of cheap energy is over. The costs of energy production will continue to rise while the strain on energy capacity increases. Whether the source is wind farms, other renewables, shale gas or nuclear power, the unit cost of energy will be very high over the coming decades.

Households, businesses and organisations have already made moves to reduce energy and water consumption in the past few years but so much more needs to be achieved. We’ve seen ourselves how companies and consumers can really take control of their energy and water use through just a few simple steps.

Our goal is to help people reduce their energy and water consumption substantially and sustainably, whether at work or at home. And we’ve ample evidence to show that our solutions deliver immediate, ongoing benefits cutting energy and water use, cutting bills and cutting carbon footprint by between 50-90%.

Mark Sait is managing director of SaveMoneyCutCarbon.com.

Further reading:

SSE announces price freeze until 2016

Why energy saving, cutting bills and reducing carbon footprint will stay centre stage

Ed Miliband’s pledge to freeze energy costs spark intense debate

Energy bills are going up – and it is mostly our lack of responsibility to blame

Energy customers switching suppliers at three-year high, says trade body

Mark Sait is managing director of SaveMoneyCutCarbon, a uniquely positioned full-service efficiency partner to organisations and homes that want to reduce energy, water and carbon to improve sustainability. Clients include major hospitality groups, property ownership groups, distribution centres, theme parks and corporate offices as well as SMEs and private residences.

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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