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A Carbon Abatement Technologies Strategy For Fossil Fuel Power

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					                                                              Association for the
                                                            Conservation of Energy

                                                                 Westgate House
                                                                2a Prebend Street
                                                                 London N1 8PT
                                                     Tel: 020 7359 8000 Fax: 020 7359 0863
                                                    Web: www.ukace.org Email: info@ukace.org




          A Carbon Abatement Technologies Strategy For
                      Fossil Fuel Power Generation

      Submission from the Association for the Conservation of Energy


Introduction

Thank you for the opportunity to respond to the Carbon Abatement Technology
Strategy Consultation.

The Association for the Conservation of Energy (ACE) was formed in 1981 by a
number of major companies active within the energy conservation industry. Our
aim is to encourage a positive national awareness of the need for and benefits of
energy conservation; to help establish sensible and consistent national policies
and programmes, and to increase investment in all appropriate energy saving
measures. Our policy research is funded independently, and is focussed on four
key themes: policies and programmes to encourage increased energy efficiency;
the environmental benefits of increased energy efficiency; the social impacts of
energy use and of investment in energy efficiency measures; and organisational
roles in the process of implementing energy efficiency policy.


Broad comments on context

We very much welcome and applaud the general aims of this consultation
process. Whilst this consultation is primarily concerned with supply side
management (SSM) issues rather than the demand side management (DSM)
issues which ACE is predominantly concerned with, we feel it is appropriate that
we respond for two reasons: firstly, we think that the ‘other side’ of the
sustainable energy debate should be represented and heard by the traditional
SSM audience in policy deliberations so that strategy outcomes better
incorporate the views of more “marginal” stakeholders; and secondly, we believe
that the traditional divisions of energy policy and practices is increasingly
counter-productive, and should develop an emphasis on seeking total policy
solutions which incorporate aspects of both conventional DSM and SSM
interests.

Our response is aligned with ACE’s professional remit and in-house expertise.
We therefore leave it to other stakeholders to comment on the more technical
aspects of CATs and CCS and instead focus on a response which is on line with
our own set of interests. For this reason our response is in the form of general
comments which we would like to add to the debate, rather than responses to the
specific questions raised in the Consultation Document.

We advocate the idea that preve ntion is generally better than cure; in many
instances it is cheaper to reduce the demand for electricity (and corresponding
CO2 emissions) than it is to reduce CO2 emissions at source. Of course, all
efforts should be made to generate electricity as efficiently and cleanly as
possible, so we view both approaches as mutually complimentary.

HM Government’s interest in the possibilities offered by CATs is well-founded. In
the light of recent low electricity prices brought about by the introduction of
NETA, CHP and decentralised generation installation has slowed nearly to a
standstill. If the shift towards a more decentralised generation format will take
longer to achieve than some optimistic commentators have suggested, it makes
sense to direct efforts towards incremental steps forward in existing, centralised
generation efficiencies. This is not to say that we think CATs are an alternative
to entirely cleaner generation formats, but we recognise that wholesale structural
changes in electricity supply industries are difficult and lengthy undertakings
and interim remedial measures such as CATs (and to a lesser extent, CCS)
developments are beneficial and welcome from a carbon-reduction perspective.

However, the process of developing of CAT technologies should be seen as just
that: interim measures. Long-term success in minimising CO2 production, from
the generation sector and also from other activities, depends upon finding a
balance of measures. CCS technology development should not be neglected, but
also should not be relied upon to deliver our CO2 emissions reduction targets.

Furthermore, technology development is notoriously expensive, and risky.
Government must weigh the potential benefits and risks of funding R, D & D
itself against the option of buying-in technology after others have already funded
development and commercialisation. In the case of fuel cells, for example, HM
Government has spent very limited amounts on technology development
compared to the US, Japan and Germany. The technological ‘edge’ (and the
costs of development) has been ceded to these countries, and the UK is now in a
position only to adopt the technologies other nations have developed. This in
itself is a justifiable, risk-averse strategy. It also leaves resources available to
spend on other initiatives in the meantime.

We argue that such resources should be directed towards demand-reduction
measures. This would benefit the drive towards carbon reduction for two main
reasons: firstly, energy efficiency measures (both technological and behavioural)
are relatively quick to implement and yield immediate results, thus setting us
along a carbon reduction path almost instantly. Secondly, demand reduction
produces unit savings of CO2 at significantly lower expenditure than end-of-pipe
technological ‘fixes’. In the context of this consultation, this effect is reinforced
by the fact that the retrofitting cost of existing generation plant with CAT would
exceed the component cost of integrated CAT in new plant. Moreover, demand
reduction is compatible with other policy goals such as resource conservation
(and concomitant operational cost savings) and security of supply.

We note that the proposed government-instigated development of CAT and CCS
technologies is at odds with the prevailing doctrine of non-intervention in energy
technology development. Since the privatisation of the UK’s electricity supply
industry the belief that ‘the market will deliver’ has been rigidly adhered to. We
would point out that in demand reduction t      echnologies, there already exists a
mature, proven and cost-competitive means of achieving substantial CO2
reductions. These demand reduction technologies also cost the Treasury very
little, given that the market for them already exists, and deployment can be
rapidly escalated through sympathetic legislation. Two questions arise: firstly,
why is the DTI now suggesting it will adopt an ‘interventionist’ role in energy
technology development, and secondly, why is the DTI proposing the
development of novel t   echnologies when cheap, proven and effective remedial
measures are readily available? Furthermore, demand reduction yields instant
carbon savings, as opposed to savings achieved at some undetermined stage in
the future. If the ultimate goal of pursuing carbon abatement technologies is the
abatement of carbon, the preferred option must surely be the one on our
doorstep.



Association for the Conservation of Energy
October 2004