23 Mar 2017
“I wouldn’t want to be the MP in Parliament who voted to oppose Hinkley C”.
With a very concerned look mixed with fear, this quote comes from an insider in the Halls of Power of the Energy Industry. Yet he works for a company that has chosen to put at the heart of its strategy the preparation and facilitation of the transition to a distributed network. This, in essence, is a bet on the proliferation of local renewable energy generation, and a move away from the inefficiency of centralised power stations. A distributed network is needed when there are lots of energy generators installed on rooftops, in the hills, in the sea and under the streets of our cities, towns and villages.
BHESCo estimates that there is almost 50GW worth of applications for battery storage facilities wanting to connect with the 8 Distribution Network Operators and the National Grid. This is about 10 times the power generation capacity of Hinkley C and Moorside combined, at a fraction of the price to the taxpayer and to future taxpayers. Granted, this is an emerging technology, as yet without a track record, however in the 10 years it will take for these nuclear power plants to be operational, battery storage will have become mainstream. As Steven Holliday, former CEO of the National Grid, announced in 2015, “base load power is obsolete.” Base load nuclear power is wasteful, where at present 60% of the electricity produced is lost in conversion, transmission and distribution.
Despite pleas from over 160 organisations, this year’s national budget includes a ‘Solar Tax’ collected in the form of business rates. If you own a solar array less than 50kW, the value of your property for business rates will be increased by the nominal value of the solar array on your roof. This will have enormous implications on small businesses that have become solar generators because the tax is most likely to approximate or exceed any benefit that they receive for the free electricity from the sun. Because any investment in energy generation requires a certain return in order for investors to commit their hard earned cash, a business rates tax on solar arrays eliminates any incentive to accelerate our transition from fossil fuels by investing in generating your own electricity. The ‘solar tax’ is an intentional assault on free power from the sun as, for example, gas combined heat and power systems have been exempt from business rates since 2001.
Now consider the subsidies for investors in shale gas exploration, or ‘fracking’. This subsidy comes in the form of tax breaks called Enhanced Capital Allowances that permit firms that are investing in shale gas exploration to deduct the cost of the equipment directly against their taxable income, in many cases virtually eliminating any tax due. For companies like Centrica, who are a large investor in Cuadrilla, these tax breaks run into the millions  . Other similar tax breaks will be enjoyed by Ineos, who intend to invest £168 million in shale gas exploration (which at 40% tax relief, amount to £68 million) or IGas who invested £16 million in equipment in 2015. Nuclear power on the other hand costs the taxpayer billions each year for transport, storage and decommissioning of existing power plants alone, before we even being to count the cost of constructing new ones such as Hinkley C and Moorside, as each of these proposed plants are being constructed using unproven technologies. Simply put, the “solar tax” is an assault on the little guy, just another addition to the unfair tax policies that protect the 10% and burden the 90%, in this case, small businesses.
For anyone who believes that we must take responsibility for our energy supply now for the sake of our climate and our energy security, we wonder: what is the difference in tax receipts for the Treasury if the money comes from the clean energy industry or from dirty fossil fuels or nuclear? Or do we really want to spend our money as taxpayers supporting a government that is afraid to make the decisions that we need to ensure that we have clean, affordable energy in the future? Wouldn’t we rather ensure that our schools have sufficient funds to properly educate our children, or that the NHS continues to thrive as an accessible customer service focused health care system?
Join the fight today by writing to your MP, signing an anti-fracking or anti-nuclear petition, or becoming an investor in Community Energy. Make sure that important decisions about our future are made from a position of courage, not fear. Mostly make sure that you are informed, as such short sighted changes to tax legislation will have long term impacts on our quality of life.
 www.greentechmedia.com energydesk.greenpeace.org
On Saturday, The Independent’s Environment Editor, Tom Bawden, weighed the evidence on Fracking, without mentioning the Shale Gas Report undertaken by the researchers at the Tyndall Centre, commissioned by the Co-operative Bank.
We can stop extreme methods like shale gas and coal bed methane extraction now. We have a choice. We don’t have to wreck the environment to maintain our standard of living. Express your choice. Please tell your MP that you are against extreme methods of fossil fuel extraction.
Shale gas and coal bed methane extraction methods now threaten communities across the UK. In the government’s drive to incentivise the fossil fuel industry, feeding our addiction to oil and gas instead of investing in a renewable energy alternative, the taxpayer continues to finance tax allowances for smaller fields like shale gas and coal bed methane. These incentives can cost hundreds of millions of pounds. The tax breaks for the gas industry make £500 million of profit exempt from tax, at 32%, this creates a toxic subsidy of £160 million. This doesn’t include the subsidy that the gas industry receives for the cost of decommissioning their drilling sites. According to HMRC, it is the UK Government’s aim to“maximise the economic production of hydrocarbon reserves” working with industry to increase its subsidy for marginal fields and projects.
In their report concluded almost two years ago, the Tyndall Centre described in detail the dangers of fracking, from its contribution to increasing harmful release of methane (a concentrated greenhouse gas contributing to climate change 20 times more effective in trapping heat than carbon) as well as the danger to the water aquifers in the areas where drilling takes place. Water is essential to life itself and cannot be tainted.
Treasury has done little to disguise its disdain for supporting the renewable industry by creating a volatile and uncertain investment climate in continuously decreasing the amount of Feed in tariff for wind and solar. The tariffs have a different effect on the taxpayer, as it is not direct tax relief, like the subsidy for oil and gas. The Feed in tariffs are actually paid by the energy suppliers, eventually passed onto the consumer in their energy tariff. It can be seen as a form of investment in our clean energy future.
According to OFGEM, from the inception of the Feed in Tariff in April 2010 to June 2012, 248,000 renewable energy systems have been installed, creating more than 1GW of clean generation capacity – enough to power about 213,000 homes. Since 99% of these systems are solar photovoltaic (PV), this means that for the next 25 years, the sun will generate 1 GW of electricity for free! Were the government to support investment in the energy infrastructure, the electricity transmission system, energy suppliers may be incentivised to invest in renewables in order to reap the benefit of increased distributed generation. Unfortunately, this has not been the case.
The burgeoning community energy movement has already started to make a real difference to our clean energy generation capacity. In the Southeast alone, about 235kW of solar electricity has been added to the grid by local community initiatives – enough to power about 50 homes. In Oxfordshire, the ambitious community group will replace the dirty Didcot power station by applying a power up and power down strategy – building renewable energy generation and transforming residential and commercial energy consumption. These strategies have been recommended by knowledgeable, reputable groups ranging from the Centre for Alternative technologies, Friends of the Earth, Greenpeace and Ecofys. Any one of these reports is an interesting depiction of our future with 100% renewable energy generation.
Communities should take power into their own hands to build an abundant local clean energy supply to secure our future energy on a national scale, claims Kayla Ente, founder of community energy service co-operative BHESCo……
Consumers have not benefitted from liberalisation of the energy markets. Instead liberalisation has created the current oligopoly of energy suppliers that control 99% of the market and play a dominant role in policymaking.
In an oligopoly, switching is only a temporary fix as all suppliers will basically offer the same price. Switching will not stop the tide of energy prices increases at 8 – 10% every year. Such increases are not sustainable, especially in a recessionary economy where our incomes on the whole have declined. Because we are dependent on energy in every aspect of our lives, energy has become a right, not a privilege.
Tapping into the shale gas reserves using extreme extraction methods has dire consequences on our water supply. Hydraulic fracturing creates millions of litres of waste water, containing hazardous levels of hydrochloric acid. This chemical contaminant must be stored in specially lined ponds. At best, fracking is a five year feed of our fossil fuel addiction before we wake up and realise that we have seriously damaged our environment, like the realisation of bad behaviour after a debauched night out. Increasing worldwide demand will still tenaciously drive prices ever upward over the long term.
Our centralised power stations lose 65% – 75% of the energy generated from unsustainable sources like fossil fuels and uranium in transmission and distribution. Although heat represents about 41% of energy consumed, most of the heat generated by the large stream engines in centralised power stations is wasted in the air.
Unfortunately, unsuspecting taxpayers end up paying for the lack of vision and sound economics in our energy policy. The new Energy Bill including Electricity Market Reform (EMR) means that subsidies will be transferred to the shareholders of large corporate power generators in the form of a guaranteed price for electricity production, regardless of whether that electricity is consumed or not.
Fracking corporations will receive larger tax breaks in the coming years. There is a real danger that the current energy policy will create a continuation of the culture of waste in our society, due to an irrational fear that the lights will go out.
There is little innovation in our nation’s energy strategy because there is painfully little movement in important areas like upgrades to distribution and transmission networks to create smart grids. Investment in energy storage pales in comparison to the money that will be invested in nuclear power and Carbon Capture and Storage technologies. Investment in a smart grid was supposed to be addressed in EMR, however, this has been conspicuously omitted, calling the National Grid “a natural monopoly”. This may have been ok when the grid was nationalised, not now.
Naturally, the current suppliers want to maintain the status quo of centralised systems where the consumer is kept enslaved to the supplier. And naturally, these powerful forces influence policy decision-making and the media. There is a light at the end of this tunnel: community energy suppliers can stimulate investment by creating micro-generation points and then investing in their own micro-grids for local energy distribution, all connected to transmission stations run by the National Grid.
In 2011, there were 19 Community energy co-operatives generating 19.6MW of renewable energy, powering approximately 16,000 homes. Shareholders in these co-operatives are making a steady return on their investment in tangible local energy generation assets. As we transition into our new sustainable way of living, during this ‘Time of the Great Turning’ (as Joanna Macy has named it), a post industrial evolutionary movement, a ‘small is beautiful principle should be applied to local energy generation. Consumption near the source minimises efficiency losses. Combining natural renewable energy sources, like sun, wind and biomass to power our needs, making our buildings more efficient by sealing the leaks coming through the fabric, becoming more conscious of how we use energy in our environment will all contribute to our long term energy security.
According to the Department of Energy and Climate Change, community groups are involved in four main activities: Reduce, Manage, Generate, Purchase. In Brighton, Brighton & Hove Energy Services Co-operative has been launched to stop the tide of rising energy prices. It is a not for profit co-operative dedicated to help people reduce their energy costs now and forever. We do it now, by organising a collective buying initiative where one price is negotiated for our members, like a large corporation would for its energy supply. We can do this by offering thousands of customers, worth about £120 in profit each, to one supplier. Energy suppliers pay millions in marketing costs to encourage the public to switch to their service. We can save these large suppliers money by reducing their marketing spend and pass that savings onto our members.
BHESCo is working with neighbourhood groups and our local council to map out neighbourhood energy plans, offering a way to implement low cost energy savings and local renewable energy programmes. We are a link between the large energy suppliers and the local consumer. Suppliers are required by the government to identify super priority customers, people living in hard to treat properties that leak massive amounts of heat through their walls, ceilings and floors. The path to these people, many of them vulnerable, is arduous as they are difficult to find, do not trust the large suppliers and do not want to enter into any loan commitment with them at a high cost.
BHESCo is launching a programme of low energy, durable lighting retrofits to small and medium sized businesses in Brighton & Hove which presents a way to quickly reduce electricity consumption as many office buildings have old fluorescent lighting that is hard on the eye and on the pocket. We can go some way to helping these businesses reduce their operating costs and lower their carbon footprint, just by upgrading their lighting to longer lasting LED (low emission diode) lights. These are mercury free, unlike other low energy lighting that is for sale in some supermarkets.
We believe in that by working together, we can continually create wins for members of our community. We invite all people who want to make a difference in their community within the Sussex area to contact us. Together we can help bring about the Great Turning.
Kayla Ente is founder of BHESCo, a community energy service co-operative. She is a qualified accountant, MBA and environmental economist. Kayla lives and works in Brighton, UK.