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Newsletter 11th May 2007

- Government support for micro-generation - How green is Brown? - Fear of flying - Bio-fuels

Government support for micro-generation

The government talks about its ambitious targets for emissions reductions, and the role of individual householders in this. However, the incentive for people to invest in micro-generation schemes has not been very great. A miserly £12.5million was allocated last year in grants for installing wind turbines, photo-voltaic panels and the like, and the monthly allocation was regularly all used on the day it was released.

Although the budget for the scheme has now been increased by 50%, and will in principle all be available over the whole year rather than be released in monthly tranches, the individual grants for wind and solar power have now been pegged at £2,500, down from maxima of £5,000 and £10,000 respectively. At these levels, neither technology will be economic to install: they simply will not pay for their costs over their lifetime. Solar thermal systems and heat pumps will also continue to be funded, and should still prove worthwhile economic propositions.

Although this move is a blow to the renewable energy supply industry, it seems to make sense that the government funnels the grant money towards relatively efficient, low cost solutions rather than provide large subsidies for high cost technologies.

How green is Brown?

To no-one’s surprise, Tony Blair this week announced his intention to resign from leadership of the Labour party. Barring something momentous happening, Gordon Brown will be Prime Minister in seven weeks. Many people will be looking to him to demonstrate his green credentials, which have so far not been very obvious.

At a time when all three major parties have been vying for the green high ground, and when serious electioneering can only be a couple of years away, what line will PM Brown take? On the evidence so far, he is unlikely to introduce radical changes on the environmental front. Managing the budget, as he has done directly from the Treasury over the past ten years, will surely be his primary concern, and his natural caution should ensure that he does not risk damage to the economy by placing too many burdens on industry, particularly the energy and transport sectors.

If so, this will give rise to complaints from those who believe tough action on emissions is necessary. But Brown will be keeping one eye on the ballot box, and all the indications are that the British electorate is not yet ready for forced changes to their lifestyles.

Fear of flying

Although air travel accounts for only a small percentage of carbon dioxide emissions, it has come in for particular criticism from campaigners recently for two reasons. One is the view that the exhaust gases and water vapour which planes put into the upper atmosphere have a disproportionately large warming effect. The other is that air traffic is growing so fast that its overall contribution to climate change will become increasingly significant.

The growth of flying is certainly evident. It was reported this week by the flight information company OAG that the number of commercial flights will for the first time top 2.5 million in a single month in May. Overall, there is a 5% annual growth in flight numbers. Terminal 5, now nearing completion, will increase Heathrow’s capacity still further, and there is continuous expansion at Stansted and other UK airports. The situation in other countries is no different.

Ryanair and Easyjet, the two major European low-cost airlines, continue to compete strongly for business. Despite their impressive recent performance, they have more and more seats to fill as significant numbers of new planes are delivered. For the traveller, there is more choice of routes and plenty of competition on prices. Unless green groups can convince large numbers of people that flying should be curtailed for environmental reasons, there seems to be no bucking the trend.

The European Commission seems to take two rather incompatible positions. On one hand, it is pushing for stringent emissions controls. On the other, it enthusiastically welcomed the “open skies” agreement with the US, which will inevitably encourage more trans-Atlantic traffic.

It is often argued that flying is a particularly environmentally-unfriendly mode of transport, and that people should take the train if possible and simply not take longer trips unless really necessary. But people normally make their travelling decisions on the basis of convenience and cost. Travelling from London to Brussels by train is a more comfortable and convenient option than flying, in many cases. But, for passengers who do not book far enough ahead, the cost can be very high. Why pay £300 for Eurostar when much lower cost flights are available?

Domestic rail passengers face a similar dilemma. Unrestricted train tickets simply do not compete on price with low-cost domestic flights. And, in the UK, many trains are far too crowded for comfort; at least airlines provide seats for all the passengers.

Even economic incentives such as higher taxes would be unlikely to dent our enthusiasm for flying. Unless people can be convinced that air travel is socially unacceptable, we have to accept their right to travel wherever and whenever they want.

Bio-fuels

The picture discussed above may make bio-fuels for aviation an attractive option. The received wisdom until recently was that it would be all but impossible to find a suitable, high energy-density replacement for the kerosene currently used as jet fuel. But, in a good illustration of how innovative solutions can be found, Boeing are suggesting that some commercial aircraft could be powered by a 50:50 mix of kerosene and bio-diesel by early next decade.

The bio-diesel – currently conventionally produced from rape oil – has to be tweaked so that it remains fluid at the low temperatures in the upper atmosphere. It will be used in trials in collaboration with Virgin Atlantic and General Electric next year. As the EU is planning to include aviation in the Emissions Trading Scheme in 2011, the initial market is likely to be in Europe.

Longer term, Boeing sees the greatest potential to be for diesel produced from algae, which can grow in brackish water (possibly eventually in seawater) and not compete directly with food crops for land.  A major incentive lies in the greater productivity of algae. An area the size of Belgium could produce enough diesel to fuel the current world aircraft fleet, but the whole land area of continental Europe would be needed to produce an equivalent amount of rape oil.

There is some way to go yet before this becomes a commercial reality, but this new development holds out real hope for bio-diesel to become a significant long term option in our mix of transport fuel without competing with food crops for precious arable land.