breaking the link between growth and impact: the challenge of this decade peter young strategy...
TRANSCRIPT
Breaking the Link between Growth and Impact:The Challenge of this Decade
Peter Young Strategy Director SKM Enviros
& Chairman, Aldersgate Group
IEMA Conference Tuesday 15th November 2011
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The next 25 minutes we will:• Remind ourselves where we are heading, it’s getting really
urgent.• Introduce the three key components to give us economic
prosperity whilst changing course for a sustainable future1. Electricity
2. Energy efficiency
3. Resource efficiency
• Ask what are the UK’s Policy Priorities?• Hear my top 4 actions
Keep up, breaking the link between
growth and impact is a big ask!
Where are we heading? Global Population in Billions....
What do youthink we can cope with re:•Carbon Dioxide?•Water?•Food?
3
.....Observed Global Temperaturesand Carbon Dioxide + ...
4
.... Future Carbon Dioxide Emissions to 2100
5
+2oC?
+6oC?
DE-COUPLING GROWTH AND IMPACT: A CALL TO ACTION
UK GHG emissions since 1990: Production down by c15% but Consumption up by c20%
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Cities: Design for eg Carbon Intensity
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Food Supply and Security
• Food now 23% of global ecological footprint with 2.5bn more to feed in next 30 years
• Eg in UK we need 5.2gha, when 1.7gha is available capacity/capita
• Water use, sustainable nutrients and food supply chain must all be reformed
• Taxation, regulation, procurement and consumer behaviour change are all required - urgently
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Carbon - The UK’s statutory targets• 34% cut in emissions on 1990 levels by
2020 –
Energy/resource efficiency is the quickest gain
GHG reduction: illustrative contribution from different sectors
By 2050 UK carbon targets require transformation of whole economy – and transformation means electrification
• Not only de-carbonising electricity generation
• But also to facilitate savings in other energy use emissions categories
• Most sectors rely on more electricity and efficiency
DE-COUPLING GROWTH AND IMPACT:1. ELECTRICITY SUPPLY
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Around 25GW will need to be replaced in next 10 years – but...
0
10
20
30
40
50
60
70
80
90
100
2010 2013 2016 2019 2022 2025
GW
Nuclear Coal CCGT
New CCGT OCGT & Oil Hydro
Renew Peak Demand Peak Dem + 20%
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...Changing Demand means we need more
• Demand doubles by 2030– Peak in 2010 = ~45GW– Peak in 2030 = ~85GW
• New loads heat pumps / plug in vehicles
• Better storage vital• Potential cost £110 billion
over decade:– £75bn on generation– £35bn on distribution
(>double last 10 years)
Figure taken from Energy White Paper
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UK renewables – lots to do
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Incentives for renewables• Feed in Tariffs - most successful financial
incentive for renewable electricity - real growth in capacity
• But regular revisions in quickly changing market (though changes not dramatic enough to destabilise the market)
• Need to be economically sustainable• Need clear long term targets
Policies: Feed-in tariffs: a track record of driving investment
FiTs supported: 75% of global PV capacity and 45% of global wind capacity through 2008
Feed-in tariffs (FiTs) are in place in ~28 countries; designs and impact vary widely
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2009EU newCapacity26 GW
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PV - European success story
Source: EPIA Global Market outlookfor PV until 2015
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EU – installed PV as at 2010
Source: EPIA Global Market outlookfor PV until 2015
SuccessReflectsFiTs notSunshine!
DE-COUPLING GROWTH AND IMPACT:2. ENERGY EFFICIENCY
Global Energy Demand
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..... Global Energy Inefficiency....
227
DE-COUPLING GROWTH AND IMPACT:3. RESOURCE EFFICIENCY(MATERIALS + WATER)
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The True Cost of Wastage
Waste Bill
Energy Bill
Raw Mate
rials
Labour
Handling &
Sto
rage
Transporta
tion
Mainte
nance
Productiv
ity
Other U
tiliti
es
Water Bill
Visible costs 10% Direct use 10%
Hidden costs 90%! Indirect use 90%!
Defra: £27bn/year
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Waste Prevention
EliminateAvoid wastage of materials and
utilities at source
ReduceMinimise wastage of materials
and utilities
Re-useUse materials/waste/utilities as
many times as possible
RecycleRecycle (waste/utilities) only after
you have minimised wastage
Recover ValueRecover the energy from any
remaining waste/effluent/emissions
DisposeDispose of
waste/effluent/emissions in a responsible way
Waste Management
Prevention vs Recycling Multiplier (CO2e)
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One Case Study: Process Efficiency • Toiletries manufacturer • £16m turnover• £20k waste bill, but ....• 3% mixing and filling losses• 5% product never sold!
Process Opportunity Estimated Cost Saving
Estimated Environmental Saving (Product Waste)
Expected Investment
Mixing 80% cut in residue losses £125K 62,600 litres of material/effluent £20K?
Filling 80% cut in cleaning losses £200K 100,000 litres of material/effluent £10K?
50% cut in overfill losses £525K 262,500 litres of material resources £100K?
Labour efficiencies in capping operation £200K £150K?
TOTAL £1,050,000 425 m³ £280,000
WHAT ARE THE UK POLICY PRIORITIES?
1) Build on a great platform, UK has led in long term policies – Climate Change Act, Statutory Carbon Budgets
2) Deliver on promising new initiatives of Green Investment Bank, Green Deal, Natural Environment White Paper (Natural Capital Accounts) and Electricity Market Reform
3) Remove uncertainty; and clarify and simplify wherever possible
4) Build credibility to encourage bold international decisions at Durban, Rio +20
5) Demonstrate that green growth and sustainability is at the core of all future UK economic policy and support
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Example - Decarbonisation of Energy Supply and Use.... Clear enough yet?
Decarbonise Electricity Supplies
Decarbonise Heat
Supplies
Energy Efficiency
Utility Energy
Supplies
Industrial Energy Users
Commercial Energy Users
Electricity Market Reform
EUETS
RHI
CCAs CRC
FITSRenewable Obligation
EUETS
CCL Exemption for CHP
Building Regulations
Green Deal
Domestic Energy Users
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Electricity Market Reform - TimelineYEAR 11 12 13 14 15 16 17 18 19 20
Legislation
FITS with CfD
Capacity Mechanism
CFP
EPS
Transition to CFD
Primary Leg.
Secondary Leg.
*First CfD signed *possible first payments
*Capacity procured as required
*CFP rising incrementally (£16 to £30)
*EPS in force
RO open to new gen. Choice RO or CfD. RO vintaged
FiTs - Feed in Tariffs; CfD - Contracts for Difference; CFP- Carbon Floor Price; EPS - Emissions Performance Standard; RO - Renewable Obligation
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Electricity Market Reform – don’t forget energy efficiency
1. DECC to have new office “to drive a step change in national energy efficiency in autumn of 2011”
2. DECC will “work with leading industrial experts to drive further carbon abatement across the economy”
3. DECC focus – heating and cooling
4. Incentives for Energy Efficiency will be assessed by Government over coming year
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Aldersgate Group’s ‘Growth Statement’
1) Streamline climate change & energy policy to raise ambition; reduce complexity; drive more investment in energy efficiency.
2) Clear rationale and objectives to meet the commitment to increase the proportion of tax revenue from environmental taxes.
3) Ensure the sectoral growth reviews and enterprise zones are driving forces for a green economy.
4) Put the Green Investment Bank at the forefront of the growth strategy by ensuring it can borrow on inception and pass legislation by 2012.
5) Following publication of Skills for a Green Economy, work with business to develop a comprehensive action plan to address green skills gaps.
6) Enhance public procurement role and increase support for research, development and demonstration (RD&D) to drive innovation.
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1. Recognition that sustainable growth is the only growth that is ..err... sustainable
2. Clear long term policies and frameworks that tell investors there will be no U turns – evolution not revolution
3. Relentless pricing of the environment and taxing ‘bads’ (carbon, pollution) not ‘goods’ (jobs, income) so the greener businesses will thrive and drive growth
4. Me and you! Individual responsibility and behaviour change
In Conclusion: My top 4 actions to De-Couple Growth and Impact: