I’m taking a break from this blog over July and August, but will be back in September.
In this, my last post until September, I take a quick look at the IEA’s latest renewables projections. The IEA has just produced its World Energy Outlook Special Report on Energy and Climate Change, which is intended to describe how the energy sector can transition to being part of a lower carbon world. It includes a new Bridge Scenario which emphasises what can be done over the next decade or two. There is much that is good in the report, including its mention of the potential to reduce methane emissions from the energy sector, a subject which I’ll return to in a future post. However its renewables projections are less satisfactory.
I previously noted how the IEA has vastly underestimated renewables growth in the past (see here), and that their current projections show future rates of deployment of renewables slowing substantially from present levels (see here). I had hoped that, especially given its topic, this latest report would include a more realistic outlook for renewables. However even the Bridge Scenario projections continue to look much too pessimistic.
The table below shows a comparison of the IEA’s wind and solar PV projections for the 2020s with actual installations for last year and expected rates for this year. It shows that the IEA projects installation rates for the 2020s at about last year’s level and below levels expected for this year, implying a stagnation or contraction of the industry rather than continued growth, even as measures to reduce emissions are increased.
Annual average installation rates for wind and solar PV (GW)
|2020s IEA Bridge scenarios (annual average)||2014(Actual)||2015 (estimated by Bloomberg)|
Notes: Historic data is taken from Bloomberg, BP, and the Global Wind Energy Council (GWEC). Data for wind installation in 2014 is similar at 49 GW, 52GW, and 51 GW respectively according to each source. Different data sources give somewhat different values for the amount of solar PV installation in 2015. BP shows solar PV at around 40GW, Bloomberg around 45GW. I have taken the mid-point of these two values. There are various possible explanations for the difference, for example different estimates of which projects were completed by the end of the year. Previous years’ estimates for the amount of solar PV installed are very similar between the two sources (within a GW or so).
The chart below (an update from my previous post) shows this data graphically, and compares it with history and the IEA’s 2014 World Energy Outlook New Policies Scenario. It shows welcome but limited increases in the rate of installation of both wind and solar PV projected by the IEA. There is still a clear trend break between history and the projections.
Note: IEA projections are for 2012 or 2013-2020 and for each 5 years thereafter, and are shown at the mid-point of each interval.
The IEA seems to continue to be concerned about the costs of renewables, leading them to be very cautious in their projections. But with costs falling, pressure for action to reduce emissions increasing, and penetration of both wind and solar PV globally remaining well below saturation levels, continued growth in the rate of deployment seems much more likely than stagnation or decline.
The IEA’s work is widely respected and quoted. This makes it all the more important that their renewables scenarios become more realistic. Currently they serve mainly to distort the public debate on pathways to decarbonisation, and detract from the other good work in this area that the IEA does. The time for the IEA to improve its projections for renewables seems long overdue.
Adam Whitmore – 27th June 2015
Environmental protection forms part of the mainstream of the Anglo-American conservative political tradition. Policy debate on climate change should recognise this.
Climate change is often seen as a politically divisive issue, with those on the left more active and concerned than conservatives. And indeed there is much evidence that those with different values perceive the issue differently[i]. However, concern about climate change can be placed firmly in the mainstream of the conservative tradition[ii].
Traditional conservatism has long emphasised the need for people to safeguard for future generations that which they have inherited. Edmund Burke, widely regarded as the founder of modern conservatism, put this case in the context of the French revolution, arguing that people:
“should not think it among their rights to cut off the entail or commit waste on the inheritance by destroying at their pleasure the whole original fabric of their society, hazarding to leave to those who come after them a ruin instead of an habitation.”[iii]
Environmental damage was far from being a hot political issue in Burke’s time, but it is a small step to apply this idea of safeguarding an inheritance to environmental conservation. Republican US President Ronald Reagan again did exactly this when he said:
“What is a conservative after all but one who conserves, one who is committed to protecting and holding close the things by which we live … And we want to protect and conserve the land on which we live — our countryside, our rivers and mountains, our plains and meadows and forests. This is our patrimony. This is what we leave to our children. And our great moral responsibility is to leave it to them either as we found it or better than we found it.”[iv]
Another Republican US president, Richard Nixon stressed the need to safeguard the natural environment, and that freedom does not include the right to impose costs on others:
“Restoring nature to its natural state is a cause beyond party and beyond factions … Clean air, clean water, open spaces—these should once again be the birthright of every American. We can no longer afford to consider air and water common property, free to be abused by anyone without regard to the consequences. Instead, we should begin now to treat them as scarce resources, which we are no more free to contaminate than we are free to throw garbage into our neighbor’s yard.”[v]
Such sentiments have in the past been translated into action by conservative politicians. The 1956 Clean Air Act was passed by a Conservative government in the UK, and the US Environmental Protection Agency was founded in 1970 during the Nixon presidency.
The UK Climate Change Act was passed in 2008 with cross party support, with only five Members of Parliament (less than 1%) voting against. Going further back, the UNFCCC was signed by British Conservative Prime Minister John Major and by Republican US President George Bush, along with the representatives of over 160 other governments. The Hadley Centre, one of the world’s leading climate research centres, was established in 1990 under a Conservative government led by Margaret Thatcher, who opened the centre herself.
Indeed Margaret Thatcher was among the first senior politicians to talk about the need to reduce greenhouse gas emissions and spoke eloquently about the consistency between environmental protection and conservative values. In 1988, the same year the Intergovernmental Panel on Climate Change was established and four years before the UNFCCC was signed, she said to the Conservative Party conference, talking about a range of environmental problems including climate change:
It’s we Conservatives who are not merely friends of the Earth—we are its guardians and trustees for generations to come. The core of Tory philosophy and the case for protecting the environment are the same. No generation has a freehold on this earth. All we have is a life tenancy—with a full repairing lease. This Government intends to meet the terms of that lease in full.[vi]
This metaphor of the earth as our home of which we are guardians, and which it is our duty to protect, is common among those who otherwise hold widely differing points of view. The Dalai Lama has said that:
“The earth is our only home … If we do not look after this home, what else are we charged to do on this earth?” [vii]
There is, and should be, much debate about the specific details of climate change policy. But there should be no debate about the necessity and value of the objective of safeguarding the earth. When Margaret Thatcher and the Dalai Lama can express almost the same idea in almost the same terms, people can surely develop a sense of common purpose about preventing severe climate change. This has never been more necessary.
Adam Whitmore – 11th June 2015
[ii] I talk in this post about traditional conservatism. A discussion of the more difficult case of libertarianism and climate change will need to await another post, but even there I think common ground can be found. I also recognise that the actions of the Republican Party in the USA at the moment often diverge from traditional conservatism. There is also a strand of thinking on the left which has in the past neglected environmental issues, but this is less prominent than it was.
[iii] Edmund Burke, Reflections on the Revolution in France, 1790
[iv] Remarks at dedication of National Geographic Society new headquarters building, June 19, 1984 http://www.reagan.utexas.edu/archives/speeches/1984/61984a.htm (A good selection of Reagan’s other remarks on environmental protection can be found athttp://blog.republicen.org/our-top-9-ronald-wilson-reagan-quotes-on-the-environment.)
The next passage of the same speech, less often quoted, emphasises the validity of exploiting natural resources for human ends, in a responsible way, making explicit reference to a religious rationale:
“But we also know that we must do this with a fine balance. We want, as men on Earth, to use our resources for the reason God gave them to us — for the betterment of man. And our challenge is how to use the environment without abusing it, how to take from it riches and yet leave it rich.”
This view is taken further by some in their advocacy of man’s right to exploit nature, often justified in terms of a passage in the Bible that refers to man’s dominion over nature, Genesis 1:26-28:
26 And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth. 27 So God created man in his own image, in the image of God created he him; male and female created he them. 28 And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.
However many interpreters of the Christian tradition argue for the stewardship that is implied by dominion, for example citing Genesis 2:15:
15 And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it.
Pope Francis, among others, appears much more inclined to adopt the perspective of a Christian duty to safeguard God’s creation.
[v] State of the Union Address, January 22, 1970
[vi] Speech to Conservative Party Conference, 1988 Oct 14 Fr. For other examples of her views on climate change and environmental issue see: Speech to the Royal Society (1988 Sep 27), Speech to Conservative Party Conference (1989 Oct 13), Speech to United Nations General Assembly, Global Environment (1989 Nov 8) and Speech at 2nd World Climate Conference (1990 Nov 6). See http://www.margaretthatcher.org/ for the full text of each speech. In her later writings she expressed scepticism about the motives of some advocating action on climate change, but that should not detract from her well-informed concern and advocacy of action while in office.
[vii] The universe in Single Atom, Dalai Lama (2005), Chapter Nine. This statement was in the context of the need to respect the Earth’s biological heritage.
Carbon pricing is spreading rapidly around the world [i]. However prices almost everywhere are far too low at the moment to price emissions efficiently. The chart below summarises carbon prices in those jurisdictions with pricing. The horizontal axis shows volumes, the vertical axis shows prices, as in a conventional commodity supply curve. The vast majority of priced emissions – about 90% of the total – are priced below $14/tCO2. Higher carbon prices are invariably for small volumes, and are found only in Europe and British Columbia. They include prices under the French carbon tax, which covers sectors outside the EUETS, the UK carbon price floor, where the EUA price is topped up, and longstanding carbon taxes in Scandinavia.
The chart also shows the social cost of carbon – which represents the cost of the environmental damage caused by emissions – as estimated the US EPA. This is almost certainly an underestimate[ii] of the true cost, and the concept has other limitations that imply it is no more than a lower bound to what it is worth paying to avoid emissions. Carbon prices are thus too low even compared with a likely underestimate of the cost of emissions. Taxes are too low and caps are too loose to price carbon adequately. Consequently efficient abatement is not happening[iii].
Prices and volumes of carbon pricing around the world
Price data is from May 2015. I have excluded the Mexican carbon tax on the grounds that it does not apply to natural gas and so does not fully tax carbon. The Chilean carbon tax is included although it does not come into force until 2018. The South African carbon tax is scheduled to be introduced next year, but may be postponed, or may not be introduced at all. The EUETS price would be somewhat higher but for the weakness of the Euro against the dollar at the moment. The Social Cost of Carbon is the US EPA estimate at a 3% discount rate and converted to $2015 – see reference 2.
Prices may increase in future. However this process looks likely to be too slow in most cases. For example, under the California and Quebec scheme prices are currently at the floor set by the auction reserve. This escalates at 5% p.a. real terms. However at the present rate this will take until around 2050 to catch up even with the EPA’s estimate of the social cost of carbon[iv], which also shows increases in real terms over time. Prices elsewhere in North America are mostly lower still. In the EU there is little evidence from forward markets that allowances will reach significantly closer to the social cost of carbon over the next few years, and it seems unlikely that China will seek to price emissions at much above levels that prevail in the EU and North America. It therefore seems likely on present trends to be a long time before prices in major jurisdictions reach levels that reflect the cost of damage from climate change, or are sufficient to limit temperature rises to two degrees.
This implies that further action is needed to make higher prices more politically acceptable. Doing this will be a huge challenge, but two strands of any solution appear clear. Ensuring that industry that is genuinely vulnerable to carbon leakage is appropriately safeguarded from competitive distortions will help mitigate political obstacles to higher pricing. And efficient carbon pricing may further be helped by more explicit recycling of revenue to citizens, including ideas such as cap-and-dividend, in which the proceeds of sale of allowances under a cap-and-trade scheme are returned directly to citizens. This in effect defines citizens as owners of the right to emit and so gives everyone a stake in higher prices (more on this in a future post). Elements of such an approach are evident in British Columbia and were part of the former Australian scheme.
Measures other than carbon pricing are in any case necessary to bring about the required transformation of the energy sector[v]. And while carbon prices remain too low there will be an even greater need for such approaches, even if these may sometimes themselves help keep the carbon price low. Funds to subsidise deployment of low carbon technologies may come from the proceeds of carbon pricing, especially in jurisdictions such as North America where earmarking of revenues is common.
The spread of carbon pricing is a success story, but a limited one in view of the prices prevailing to date. Efforts both to strengthen the carbon price and enhance complementary policy approaches are needed if climate change is to be limited to acceptable levels.
Adam Whitmore – 2nd June 2015
[iii] The marginal price signal is at too low a level, so some economically efficient abatement is not being signalled. It is possible that an inefficient mix of abatement is being purchased, even though the level of abatement is efficient. This could be the case if, for example, there was too much expensive abatement through renewables programmes. However for a number of reasons this does not seem plausible. For example, abatement is currently insufficient to meet the agreed 2 degree target, and support for renewables globally is clearly not excessive in view of their present share of generation and the required speed of reduction (although it may well be desirable for more of the support to be in the form of a higher carbon price on fossil fuel use).
[iv] Escalating the current carbon price at 5% real terms to 2050 gives a price of about $74/tCO2, roughly in line with the EPA’s central estimate of the Social Cost of Carbon at that date of 2011$76/tCO2.
Decarbonising winter space heating in the UK will require a capital intensive heat supply chain running only for the winter months. Policy action is needed to reduce the costs of this.
A large scale challenge …
Large scale electrification of winter heating looks to be essential if the UK’s legally binding 2050 emissions reduction target is to be met, with other approaches likely playing a lesser role (see brief notes on this at the end of this post). However electrification of winter heating poses severe challenges.
Winter heating uses a lot of energy. Meeting the present heat load with electricity would add about 50% to present electricity consumption in the first quarter of the year – even allowing for the efficiency of heat pumps – and proportionately more in the coldest periods. Indeed, peak heat demand is around 300GW, equivalent to around 100 GW of electricity demand from heat pumps, which is larger than present electricity generation capacity.
With expensive electricity …
Furthermore electricity generation to meet heat demand is only required during the winter months. Consequently, capital costs of power plants need to be recovered over less than half the year, assuming no large scale seasonal storage of either heat or electricity is available (lithium ion battery storage helps a good deal with daily system management but does not look capable of helping move the very large amounts of required energy from summer to winter). The excess capacity on the system in summer, including solar, means that there will be relatively little chance of recovering capital costs from sales into wholesale power markets over that part of the year. Export opportunities also look likely be limited as most of Northern Europe has similar seasonal issues.
Most low carbon power is capital intensive, so low load factor operation increases costs a lot, making winter-only low carbon electricity expensive. Nuclear looks likely, on a rough-and-ready basis, to cost around £220/MWh for winter only operation, assuming generating plant to meet heating load runs on average for a third of the year.
The penalty for lower load factor operation is potentially much reduced if power comes from CCGT with CCS. This is less capital intensive, so the increase in cost per MWh from running at lower load factor is much less. However the cost is still likely to be perhaps £150/MWh for winter only operation, around three or four times present market prices. And no gas power plant with CCS is yet being built, so a huge amount of scale-up of the technology is required.
Offshore wind is also capital intensive and relatively inflexible, but benefits from higher output in the winter months. It is likely to be between the cost of nuclear and CCS for winter only operation, although it is unlikely to be possible to run a decarbonised heating system exclusively on offshore wind. Generation from biomass may also have a useful role to play, but again has its limitations.
And substantial costs for the rest of the chain …
The high cost for electricity is on top of the substantial capital costs of reinforcement of the distribution grid and buying and installing the heat pump itself. In many houses it will also be necessary to replace radiators or install underfloor heating. This is needed to allow the heating system to operate at lower water temperatures than is usual with gas boilers, in order to retain heat pump efficiency. Indeed in less well insulated houses heat pumps may supply only part of the load, with some top-up from natural gas still necessary.
Leading to a large total cost …
Two cases for total costs are illustrated in the chart below, which compares the cost of electric heating the cost of a new natural gas boiler for household use. To emphasise, these are rough numbers, but likely if anything to understate the problem of high cost. The high case is based on electricity from nuclear, the low case on electricity from natural gas with CCS. Additional distribution costs are assumed in both cases due to the large amounts of electricity that would need to be distributed with widespread use of heat pumps. The additional cost for an average household is around £700-1400 per year.
The additional bill for the UK’s 26 million households would amount to £18-36 billion p.a. or around 1 to 2% of GDP. That’s just to decarbonise residential space heating. In practice of course it’s unlikely to apply to all households, but other approaches seem likely to be similarly expensive.
Assumptions: Heat pump capital cost of £6,000-8,500 including installation, distribution grid reinforcement and upgrades to radiators/underfloor heating, likely to prove a favourable assumption in practice. Gas boiler capital cost of £2300 including installation. Winter low carbon power £150-220/MWh wholesale, electricity network losses 7%, additional distribution costs included in capital cost of system. Natural gas £34/MWh GCV, gas consumption 18MWh p.a.. Boiler efficiency 85% of GCV, so heat load is 15.3 MWh, heat pump CoP = 3. Required rate of return is 10% with 15 years. Reducing required rate of return for the consumer to 5% would still lead to a substantial premium (£550-1100 p.a.) for the electricity option.
There are some caveats to this. Heat pumps make much more economic sense off the gas grid (about 10% of households) where they compete with heating oil, or with electrical resistance heating. They also make more sense in very well insulated housing. This will include new-build, where there is the further advantage that the capital cost of the heat pump is more readily accommodated as part of the cost of the building. However the turnover of the UK housing stock is very slow. As a result the contribution that new-build can make is limited, even over a few decades.
With no improvement in the service for consumers …
This additional cost does not bring a better service, and indeed some are likely to find disadvantages. Heat pumps are noisier than gas boilers and run for more of the time, and the radiators to deal with the lower water temperatures are somewhat bulkier. An additional cost of £700-1400 per household every year for something with no advantages and perhaps some drawbacks is likely to be politically difficult to implement.
Implying significant new policies …
There are clear lessons from these estimates for making decarbonisation of space heating more tractable.
First, it makes sense to focus initially on new residential and commercial buildings, and properties off the grid, even if this is a limited market. Second, the benefits of additional insulation become even more compelling, again especially in new build. Third, the benefits of improving heat pump efficiency are huge.
Fourth, reducing the capital costs of low load factor low carbon electricity is also essential. In the absence of cost-effective seasonal storage his will in practice require low cost generation from gas with CCS, although biomass generation may also play a role. Proving this technology at scale and achieving capital costs well below those of other low carbon generating technologies looks to be essential if seasonal heating is to be decarbonised at acceptable cost.
Fifth, any technology for storing energy seasonally, for example as hydrogen or methane generated electrically or from fossil fuels with CCS, would be potentially transformative for decarbonising heat and much else if it could be done at very large scale with reasonable cost and energy cycle efficiency. This is currently an underdeveloped area.
Reducing the UK’s emissions from space heating by electrification looks likely to require major technological and infrastructure developments. All this is likely to take time, making the need to reduce costs urgent, even if large scale decarbonisation of the heating load is some way away. This needs to be a matter of priority.
Adam Whitmore – 18th May 2015
Notes and details of calculations
Other ways to decarbonise heat
Other approaches such as the use of biomass and heat networks may also play a significant role in decarbonising winter heating, although there is not space to cover them fully in this post. Each approach has its own challenges. Heat networks could be fed by natural gas with CCS, either producing heat only or combined heat and power. This requires new heat networks serving urban areas, as well as a CO2 transport network covering large parts of the country, which will be much more expensive than would be required if only large central generating plant were to have CCS. In some other parts of Europe there are more existing heat networks, reducing costs there, although very extensive CO2 transport networks would still be required in most cases.
Use of biomass directly for space heating may also play a role, but is unlikely to predominate in the UK, for example due to the lack of storage in most UK housing, the scale of the demand, and in some cases problems with high lifecycle emissions.
Air source heat pumps look to be the most promising technology for very widespread electrical heating, although ground and water source heat pumps and resistance heating will have a role. Reliance on resistance heating would make the problem of very large demand for expensive winter-only electricity demand much more severe.
Around 150TWh more gas is used (outside power generation) in the first quarter of the year than in the third quarter. Replacing this much gas requires around 45TWh of electricity if heat pumps are used. This adds about 50% to present electricity consumption of around 85TWh in the same period.
The calculation of additional electricity demand assumes that additional non-power sector gas demand in the first quarter compared with the third quarter is due to the heating load. Totals quoted are an average of 2013 and 2014.
For peak heat demand of 300GW see http://www.eti.co.uk/wp-content/uploads/2015/03/Smart-Systems-and-Heat-Decarbonising-Heat-for-UK-Homes-.pdf, page 11.
For estimates of the coefficient of performance for heat pumps see: https://www.academia.edu/1073992/A_review_of_domestic_heat_pump_coefficient_of_performance
Costs of electricity
I’ve assumed a 33% load factor (equivalent for running 4 months of the year, from mid-November to mid-March) for electricity to serve heat load. This assumes that capacity can run continuously at full load during these months, which is unlikely to be the case for most capacity due to variations in demand within day and across days. The assumption here is thus likely to be somewhat favourable. Diurnal storage may help achieve smoother output but will add further to costs.
Full system modelling would be required to estimate the cost of low load factor electricity accurately, but would be unlikely to change the conclusions, especially for such a large change to the current system, and if anything would be likely to raise costs assumed here somewhat.
The amount of decarbonisation also matters. Allowing some emissions from fossil plant running during the periods of highest heat demand, or allowing top-up from gas boilers, can reduce costs.
Hinkley C nuclear plant has a cost of £92.5 per MWh escalating with inflation. This price is after other support in the form of loan guarantees. Without this support the cost would be higher. 85% of the cost is capital and fixed operating costs.
Recent tenders showed prices of £114-119/MWh for offshore wind. However there is likely to be scope for further cost reduction alongside the benefits from higher winter output to offset the costs of lower load factor operation. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/407059/Contracts_for_Difference_-_Auction_Results_-_Official_Statistics.pdf
Costs of early CCS are expected to be higher than the figure quoted here, but there are ambitions to reduce this to £95/MWh by 2030 for gas with post combustion CCS. See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223940/DECC_Electricity_Generation_Costs_for_publication_-_24_07_13.pdf . However this looks likely to require substantial learning. The capital cost of £1300/kW assumed by DECC for gas plant with CCS appears to exclude transport and storage costs and to include some early stage appraisal optimism. I have therefore adopted a capital cost of £1950/kW ($3000/kW) including transport and storage, though reducing fuel costs to retain a total cost of £95/MWh in baseload. Getting the total capital cost down to this level would be a substantial achievement.
In short, most of the assumptions for the cost of electricity generation to serve heat load seem to tend towards the optimistic.
Costs of residential consumers
Heat pump and gas boiler system cost calculations are approximate only and will vary greatly with circumstances. More detailed modelling would refine them but would be unlikely to change the overall conclusions. The costs exclude the effect of any incentive payments. Annuitisation of capital costs for domestic consumers assumes a 10% rate of return required over 15 years, with a sensitivity to lower rates of return noted under the chart. Domestic consumers are likely to require higher returns than this in practice, but financing schemes may be made available to reduce their cost of capital. The change of rate of return assumption does not apply to power generation.
Average household gas consumption is from http://www.carbonindependent.org/sources_home_energy.htm Mean rather than median consumption is estimated. Ofgem use a somewhat lower figure based on median consumption. Typical gas consumption includes some hot water and often cooking use. I’ve largely ignored these factors, which complicate the story somewhat, but again do not change the nature of the central challenge.
Comparing manifestos for May’s UK general elections highlights important similarities as well as differences among the parties.
All of the manifestos published by UK-wide parties make reference to climate change policy, but to greatly differing extents. The chart below shows the number of times the various manifestos mention “climate” (in the context of climate change) and “carbon” (in the context of carbon targets or a low carbon economy). The number of references ranges from a mere 6 by UKIP to over 100 by the Green Party.
Number of references to “climate” or “carbon” in party election manifestos
The total number of references broadly matches the extent and ambition of each party’s policies for emissions reduction. UKIP’s references to climate change are in the context of their policy of abolishing the Climate Change Act. In contrast, the Conservatives continue to support the Climate Change Act with its legally binding obligation of an 80% cut in emissions by 2050. Labour go further with a specific binding target for decarbonising the power sector by 2030, and a commitment to push for a goal of net zero global emissions in the second half of this century. The Liberal Democrats seek a net zero carbon UK economy by 2050 alongside a binding power sector target for 2030. The Greens seek an even more ambitious binding target for the power sector in 2030 (25-50g/kWh vs. 50-100g/kWh preferred by the Liberal Democrats), along with a zero carbon economy by 2050, and a 90% reduction in emissions from 1990 levels by 2030.
It should be noted that some these targets will be difficult to achieve, and perhaps impractical. A net zero carbon economy, for example, is likely to require substantial deployment of negative emissions technologies such as biomass with CCS or use of international offsets. A 90% reduction in emissions from 1990 levels by 2030 requires huge and relatively rapid changes to long-lived infrastructure, and will not be made any easier by the Green Party’s commitment to phase out nuclear power within ten years.
The Liberal Democrat and Green manifestos also say much more than Labour and Conservative manifestos about the action that will be required. The Liberal Democrats are, for example, targeting 60% of renewable electricity by 2030 enabled by additional storage and smart grid technology, all non-freight vehicles to be Ultra Low Emissions by 2040, discounts on council tax for improved building insulation, and increased research and development. (The other parties do mention some of these issues. For example, the Labour Party also mentions improved home insulation, and Conservatives aim for almost all zero emission vehicles by 2050 and commit to investing £500million over the next five years towards this.)
The Greens have ambitions to reduce energy demand by half by 2030 and two thirds by 2050, including through a huge programme of building insulation. They also seek very large scale investment in renewables, and plan a system of individual carbon quotas. The fine detail of these policies is not spelt out, but one would not expect an election manifesto to set out a full and specific implementation plans.
Despite the differences, there is very welcome common ground among the parties (UKIP apart). All support at least the targets in the Climate Change Act. All support international action, including an ambitious international agreement to reduce emissions. All support adaptation to climate change. This is encouraging, in that it represents the prospect of continuing progress whoever (other than UKIP) is in power after the election. Indeed as recently as two months ago the three main party leaders signed a joint pledge on climate change, including an agreement to work across party lines on future carbon budgets.
Delivery on all these promises will of course be the crucial test. But in the meantime the amount of common ground between the parties continues to be encouraging.
Adam Whitmore – 17th April 2015
Note for non-UK readers: The Conservative Party is the largest party in the current governing coalition. The Liberal Democrats are the smaller party in the coalition, but the Secretary of State (senior minister) for Energy and Climate Change is a Liberal Democrat. The Labour Party is the main opposition party. The Green Party and UK Independence Party (UKIP) currently have very few Members of Parliament (1 and 2 respectively) but opinion polls show them each having significant support.
The manifestos can be found at:
For a report on the joint pledge by the three main party leaders signed in February 2015 see:
- to seek a fair, strong, legally binding, global climate deal which limits temperature rises to below 2C
- to work together, across party lines, to agree carbon budgets in accordance with the Climate Change Act
- to accelerate the transition to a competitive, energy efficient low carbon economy and to end the use of unabated coal for power generation
Simple extrapolation of present trends implies around 1800 GW of installed solar PV capacity by 2030, with even faster growth looking possible. Low carbon technologies getting to scale like this, and reducing costs in the process, will help lower the political barriers to increased decarbonisation.
Following my last post looking at the large downward trend break implied by the IEA’s solar and wind projections it seems appropriate to look at what a simple extrapolation of trends for solar would imply.
The trend towards more rapid deployment of solar globally has been remarkably linear over the last few years, despite large fluctuations in individual jurisdictions. The rate of deployment has been growing at about 6.6 GW p.a. based on historical data (6.9GW p.a. if expected totals for this year and next year are taken into account).
Global annual installations of solar PV (in GW) have grown linearly in recent years …
Note: Data is from BP Statistical Review of World Energy and Bloomberg. The last two points are short term projections from Bloomberg. Removing these and relying entirely on historic data makes little difference to the results: the gradient falls from 6.9 to 6.6 GW p.a. and the r –squared value falls to 0.97 . The parameters used in the subsequent analysis are taken from the historical data only, and exclude the short term forecasts.
On this trend, cumulative capacity grows with time to the power of two. This model fits extremely closely with actual deployment to date. The lines are effectively on top of each other, and differences are well within the uncertainties in the data and sources of random variation in deployment in any year.
So a very simple model gives a very close fit with history …
Note: Model is Cumulative capacity = C0 + 0.5*6.55*(t-t0)2 C0= Capacity in 2006 = 7.0 GW. t0 = 2006.5 
Projecting this model out gives total installed capacity of 1814GW by 2030. Solar PV would then account for about 8% of world generation in TWh , with an annual installation rate of around 150GW. Both of these totals remain below saturation levels, so there don’t appear to be any fundamental obstacles to reaching these levels, and indeed continuing to grow.
Estimates from this simple model are very close to projections produced by Bloomberg last year, which are based on a more bottom up approach. They are between the levels implied by Shell’s Mountains and Oceans scenarios for 2030, though somewhat closer to the lower of these , and above the 2020 totals.
Extrapolation to 2030 shows cumulative capacity reaching 1814GW by then …
This is similar to forecasts by Bloomberg and between Shell’s scenarios for 2030 …
There are many reasons why deployment may deviate from this trend. Many of the drivers I referred to in my previous post – falling costs, increased pressure to decarbonise, increasing availability and reducing costs of storage – may lead to faster growth. Conversely if costs do not fall as expected capacity may be below these levels. On balance it seems to me that the odds favour more rapid growth, perhaps closer to the Shell Oceans scenario.
Falling costs and increasing deployment of solar coincide with progress on other low carbon technologies, especially those leading to increased energy efficiency. This sort of progress, with new technologies deployed at scale, helps lower the political barriers to policy action. This is likely to lead to more rapid policy development to reduce emissions than has hitherto been evident.
Adam Whitmore – 25th March 2015
 The regressions have not been tested for validity of the OLS regression model (e.g. whether residual are iid), so should be regarded as simply a convenient way of obtaining a gradient.
 The model used may give you a bit of a flashback to school physics classes: the model is identical to constant acceleration from rest (or increase in rate of installation) = a, so speed (rate of installation) = a.t, and distance travelled (cumulative capacity) = (1/2).a.t2
 1814 GW in 2030 is approximately 2540 TWh, or about 8% of global power generation, assuming this is about 10% below the IEA’s central case of 34000TWh. The load factor assumed is fairly conservative at 16%. Higher load factors would clearly increase the proportion of generation accounted for by solar.
 Shell’s scenarios show energy rather than capacity estimates. I have converted them to capacity assuming a 16% load factor. Their scenarios are for total solar generation, but I have not adjusted these for concentrated solar thermal power generation, which looks likely to be a small proportion of the total.