Green Energy: UK vs Germany  

The Guardian has a list of reasons why Britons should "see red over green power", outlining the dismal lag between UK efforts to go green and those of Germany.

You'd hope, wouldn't you, that the government department responsible for energy to heat our homes, power our cars and so on would be on top of two key issues - a switch to a low-carbon economy and the possibility that oil might run out sooner than we thought. Both these issues should concern us greatly and, indeed, there is growing discussion of them everywhere. But, the Department of Business As Usual (DBERR) doesn't seem to be on the case at all.

It spends most of its time pointlessly changing its name (from the Department for Trade and Industry, you will recall) or changing ministers so often that few have time to get their feet under the desk before they are gone.

Ed Matthew of Friends of the Earth puts it bluntly. "BERR [the department has inexplicably even dropped the D] is not fit to govern. They should all be sacked."

That may sound a bit harsh but you have to wonder whether he has a point.

First, renewable energy. The figures we uncovered last week were shocking.

BERR is set to under spend the paltry £18m in domestic grants of its low carbon buildings programme by £10m over the three years to March 2009. This in spite of strong demand for renewables among the general public.

How bad is the situation? Well, BERR handed out grants for part of the cost of fitting solar photovoltaic systems covering only 270 houses last year. The Germans fitted 130,000. We have a total installed capacity (including commercial) of 16 Megawatt peak (Mwp). They have 3,800 Mwp.

But even worse, during the year the pace of grant-giving slowed. Last May BERR simply slashed the grants and made them more difficult to get. The result, entirely predictably, was a collapse.

Throughout much of 2006, for example, it was making 30-40 grants a month for ground source heat pumps. In the last three months of 2007, no such grants were made. There is a similar decline for solar thermal (hot water) and micro wind turbines. Not a single grant was allocated for a domestic solar PV system last month while the Germans installed about 12,000 systems.

Malcolm Wicks, BERR's energy minister, recently acknowledged that Britain needed a "revolution" to have any chance of raising the share of its energy derived from renewables to 15% by 2020, as the EU demanded last month, from 2% - the lowest in the EU after Malta and Luxembourg.

It's important to remember, though, that the EU wants 20% of its energy from renewables by 2020 but allowed Britain to shave that to 15%. Thank goodness the EU has set a demanding target. So why is Wicks still trying to claim that Britain is showing "leadership" on renewables? The UK has about 40% of the EU's wind, yet only 10% of the installed wind capacity of Germany. Sorry to go on about this but it really does bear repeating.

German revolution

I am hearing, though, that many branches of government are fed up with the situation and are putting pressure on BERR to get real with its policies, particularly regarding the feed-in tariff (FIT) behind Germany's renewables revolution that has been copied in so many other countries.

This works by rewarding those who produce power from wind or solar power with an above-market payment guaranteed for 20 years. The additional cost is spread across all power users, since the saving in carbon is shared by all. It is a market-supporting mechanism since the FIT is reduced slightly each year for new projects as increasing scale reduces the cost of the equipment (a solar PV system in Germany, for example, now costs half the UK level).

A properly designed FIT rewards early adaptors, helps kick-start a new industry and creates jobs. The German PV industry added 10,000 jobs last year.

Friends of the Earth want the chancellor, Alistair Darling, to put tackling climate change at the heart of next month's budget. They want a FIT for households and businesses generating their own power and a top-up of the LCBP to £1bn a year to meet half the cost of any renewables anybody wants to fit.

The Treasury, after all, commissioned Lord Stern to write his review of the economics of climate change in 2006. He recommended spending 1% of gross domestic product each year, straight away, to combat climate change. That would be £13-14bn in the UK's case. So £1bn in the LCBP is not a lot to ask.

Another key reason to push for a dash for renewables is energy security. There is a growing fear among academics and many in the oil industry, that oil may be running out quicker than we thought. I used to write about the oil industry 15 years ago and more and back then the conventional wisdom was that "peak oil" theories had been right about US oil production but were fantasy for the world as a whole. As soon as the oil price rose, went the argument, producers would spend more on getting oil out of the ground.

Well, oil prices have been rising for about a decade. They've gone up 500% roughly. That's a lot. You might expect that, even allowing for the lags in developing new fields, supply might have responded by now. This is basic economics.

Argument

But it hasn't, not really. We are stuck at about 85m barrels a day in global production. And the output of the oil majors Exxon, Shell and BP fell last year!

I don't want to get into an argument about whether peak oil is upon us but you have to admit that it could be. After all, UK oil production peaked at 3.2m bpd in 1999 and has since halved. Dirty tar sands in Alberta could perhaps produce 3m bpd (Canadian estimates, not mine), but that's not going to be enough. Not that it ever should be dug out - it's filthy stuff that requires huge amounts of energy to produce.

The point is that you may hope BERR would have a plan for coping with oil at $200 or $300 a barrel in a few years' time, or a physical shortage (remember the fuel protests of 2000?). As my colleague George Monbiot noted last week, when asked about peak oil, BERR also quotes the International Energy Agency as saying the peak won't be till 2030. But the IEA doesn't say that any more - it has said there is a great deal of uncertainty about the issue. So you might think BERR would have a Plan A in case peak oil is upon us. But no, they don't want to work on a contingency plan in case news gets out about what they are doing and causes a panic.

That panic, though, would be nothing compared to the panic if oil starts to run short. If I were BERR I would be having a dash for renewables. They plan to subsidise nuclear power for decades to come so why not bung some money at proper green energy that won't need subsidy for very long?