Wind farms, climate change threats to property prices

So rumours are flying about that a DEFRA commissioned report is going to show that wind farms reduce house prices in rural areas. It’s getting reported in the papers because DECC are rumoured to be holding up publication.

First up, I am willing to recognise that wind farms may reduce house prices. I’ve certainly heard plenty of anecdotal evidence to that effect. But as always it is crucial to remember why we have wind farms. Reason number one: Climate change. We are burning too many long dead organisms to provide for our energy needs and in doing so we are modifying our atmosphere and modifying our climate. In order to continue to have energy without the burning of the long dead organisms, we need to turn to low carbon sources: wind, solar, nuclear, biomass, fossil fuels with CCS… Sometimes these will have local amenity impacts, personally I am in the wind farms are an aesthetically pleasing addition to our landscape and a symbol of human ingenuity and forward progress camp, but equally I’m not the sort of person to want to live in rural Britain, at least, not yet. I don’t really see why a lovely view with wind turbines isn’t actually lovlier than one without.

Wind farm seen from the National Wallace Monument, Stirling, Scotland. Credit: Aaron Bradley (via Flickr)

Let us accept then, as the premise for an argument that wind farms reduce local house prices. So will climate change. Principally through enhancing flood risk. Having taken a look around, the consensus seems to be around a 4% reduction in house prices as the penalty for being in an area of high flood risk. The Climate Change Risk Assessment report on flooding suggested that properties at risk of flooding will increase from 560,000 now to 1.2 million in the 2050s (median scenario). The additional cost of this amounts to £1.7 billion.

So wind farms reduce house prices in the short term but not addressing climate change lowers house prices and causes wider economic damage too in the longer term. Maybe what we should have is the solution Tim Yeo proposed last year; ‘bribe’ communities to accept wind farms. It will work out cheaper in the long run.

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Researchers demand more research!

The UK government’s former chief scientist, David King, a man who back in 2004 correctly identified climate change as a more serious threat than global terrorism has co-authored an article in today’s FT. In it, he argues that we need an Apollo/Manhattan style project to bring the cost of solar electricity below that of any fossil fuel by 2025. Now, solar power has been experiencing a hilariously steep cost reduction, halving in the past two years alone, a continuation of a long trend of exponential decrease in solar prices. Those of you who watch Parks and Rec may be as delighted as I was to learn that this history follows Swanson’s Law. Those of you who don’t watch Parks and Recreation, go watch some P&R.

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So solar costs are falling. They’ve now fallen low enough that in sunnier parts of the world, solar PV already is cheaper than grid electricity. The graph above (adapted from Bloomberg New Energy Foundation) shows how the falling cost of solar will lead to more and more countries reaching this situation (anywhere above the line has solar cheaper than grid electricity). That’s not something David King is disputing, what he wants is for additional progress on electricity storage and distribution technology to match this and bring the cost of round-the-clock solar power (including storage and distribution) down below that of grid electricity. I presume, although it was not stated that this is also expected to provide 24-hour power year round. The ‘ambition’ was to have 1 GW of commercial, unsubsidised, round-the-clock solar in cities in Europe, Asia and America by 2025. I’d hardly call this ambitious. Every time anyone has set solar a target it has been steamrollered, absolutely smashed into tiny pieces.

In this particular case, the opportunity for a second emerging clean technology trend to make this a reality has been ignored; electric vehicles. What is an electric car if not a battery on wheels? There is good evidence from the US where electric vehicles have been making relatively good progress to show that the demographics of people who have been (relatively) early adopters of residential PV in states like California and Colorado are the same as those of people who will get in early on electric cars. They are, put simply, nerds like me (only richer). They tend to be highly educated, quite technical and to have both an understanding of the harm human consumption of fossil fuels is doing to our global environment and the financial resources to do something about it.

There are problems with electric cars as storage and perhaps the largest and most obvious is that cars will get unplugged and driven about. This is a problem because there is a rush hour. A large proportion of the electric cars on the grid will be removed at the same time and leading up to this time, the cars will have to be charged adequately to meet their expected daily requirements and a little more. Similarly, there is a fear that synchronised behaviour will also cause problems in the evening with the assumption that people will plug their EV in when they get home, causing a massive spike in power demand. I actually don’t buy this one, the technology to defer charging until electricity demand is lower overnight is basically good to go. The short story of what I’m trying to say is that the existing pattern of electricity use is informed by our activities but also by how our electricity is supplied. With ever evolving uses of ICT, we can help smooth the shift that will be required as we change where our electricity comes from to reflect the fact that new renewable energy sources don’t offer the same flexibility to deliver electricity when it’s needed as traditional fossil fuelled generation.

I seem to have digressed a little into electric vehicles as distributed storage, the point I wanted to make was this:

Solar electricity without storage or overnight capability is already cheaper than grid electricity in some places and is becoming so in more places. The way to make solar with storage for 24 hour operation cheaper than fossil fuels is not to spend more money, time and effort on primary research but to continue to ramp up installations. As scale increases, costs come down and as the market gets bigger the case for R&D within the industry becomes increasingly attractive.

The sky is falling in! No worries…

Last week our lovely media decided to unceremoniusly dump any nuance or uncertainty and declare the British summer a thing of the past. At least for another decade. The Met Office held a meeting discussing the recent run of wet summers where it was reported that there are some indications that this may be linked to medium-term (decades) variations in the behaviour of the Atlantic Ocean.

So I was brought into an email conversation by the company I work with who had been contacted by a major newspaper to ask how this might affect solar power in the UK. Could we say with any confidence that it would make no difference? Did last year suck? If so, how badly did last year suck, can we put any numbers on it?

The piece for the newspaper doesn’t have anything about solar power in the end. Maybe it wasn’t as interesting as rising sales of wellies or a need for us to all start taking vitamin D supplements (caution: suspected total bunk). Anyhow, I spent all of half an hour looking at the historical numbers I happen to have lying around and playing the game of “If there are 10 wet summers…” even though it’s far from assured and personally I think it’s a crap way to report science (note, it’s in the paper under ‘weather’, not ‘climate’). So here’s my analysis:

1. If solar has a bad year because of a dull, rainy summer then the chances are that the other big renewable technologies, wind and hydro will have bumper years. The negative correlation between them is very handy.

2. The overall climate trend is a warmer world and that’s because we’re burning all the dead things we’ve dug and sucked out the ground. Solar power helps deal with this.

3. Last year was pretty crap for solar power in the UK. Looking at Met Office data for nine sites, solar radiation was on average 3% below the 2000-2012 mean (figures are on the horizontal, it’s almost never measured on a slope making the lives of solar researchers like me worth living/much trickier). In three of the nine sites, last year had the lowest radiation in that same time period. The worst case year was on average 6% below the mean year and in only one case was it below 90% (just).

4. Solar costs are falling hard and fast and will continue to do so for several years to come, Bloomberg New Energy Finance predict that the installed cost of solar power will fall over 40% between now and 2020. With those numbers, a 6% or even a 10% drop in the amount of solar radiation would still only make a small dent in the falling cost of solar electricity.

I’m actually delving a little deeper into what’s been happening with solar radiation and with the various services which compile this data for use by the PV industry and should have some more interesting results (and pretty charts!) soon.

Some one is wrong on the Internet!

This was the end of an email I got about the story that as far as peer-reviewed journals are concerned, nobody’s arguing about climate change.

This was my response which I’d like to share…

The sad thing is, in some sense, they’re not wrong (the people arguing against climate change).
If you accept that climate change is caused by burning (very old) dead things, and that the risks posed by it are severe enough to do something about (i.e. you can follow the analysis stemming from highly calibrated global climate models), there can be no effective solution without strong government intervention.
So either, you are wrong about climate change, or you are wrong to believe that government is inefficient, all taxation is immoral and if we just had less pesky government everything would be better. It turns out when faced with a heavy duty body of peer reviewed science the implications of which are that your world view is untenable, it can be easier to go after the science rather than give up your long held beliefs (incidentally, the time we’ve had to wait between AR4 and AR5 is the longest since the IPCC started doing reports for the UN which, presumably has to be because they are bending over backwards to make it totally bulletproof).

 

Chop off the tail?

The cost of installing a PV system has fallen dramatically since the introduction of the Feed-in Tariff for the UK three years ago. With some very serious wobbles, the FIT rates are now low but crucially relatively predictable and still high enough to give a good rate of return.

Still, with the FIT rate for a domestic (<4kW) system now down to 13.9 p/kWh (effectively 16.2 p/kWh including the 4.64 p/kWh export payment on 50% of generated electricity) the annual FIT payment is no longer such a head-turning amount for what is quite an intrusive installation. If you were to install a 3 kW system now, you would get back on the order of £500 per year for 20 years.

Given that you might be dead in 20 years (let’s hope not) or more likely you’ve moved house, you really don’t care about the money in the last 5 years. Economists call the time-value of money the discount rate,  basically ‘a bird in the hand…’ which for most people shakes out at around 10% per year. So what if we change the game? Let’s still give you the same amount of money (net present value or NPV – everything in the future is translated back into ‘today money’) but let’s do it over a shorter period so you get a bigger annual payment.

As an aside, The Stern Review on the Economics of Climate Change was a ground breaking work and argues that the rationale for higher discount rates is the expectation that things can only get better. If you take climate science as a given (for the purposes of the review, Stern took the prevailing scientific view, mostly from the IPCC at face value), this presumption may not hold and so a much smaller discount rate is necessary. Of course, the effect of this is to raise the significance of long-term elements in your economic model so that, for example a climate-induced London flood in the 2050-2060 period actually has does some economic damage instead of being discounted away to almost nothing. Besides ‘Climate change is a scienco-communist hoax perpetrated on the world’, this is one of the main criticisms of Stern from the laissez-faire types at the GWPF etc.

So anyhow, the reason for this front loading of the FIT scheme idea is to make it more attractive to consumers and drive uptake. All well and good, more solar, lovely stuff but playing devil’s advocate for a moment let’s look at it from the point of view of the Treasury or the Daily Mail. Here’s where things get trickier.

Germany has started to get into quite large problems with the scale of the payments they are making over the odds for the electricity delivered through their FIT which got underway just over ten years ago. By some estimates, the cost of FIT electricity is around 20 billion euros where wholesale electricity would have been down around the 3 billion euro level. This is causing quite a lot of carping about paying over the odds for energy, having some of the highest prices in Europe etc etc. What this doesn’t acknowledge is that once the FITs expire and systems are still running (PV will certainly outlast the FIT in many cases) the cost of this electricity will drop to almost zero giving Germany a tremendous competitive advantage over rival countries still doing the burning old dead things game.

Now what we want is to have similar levels of renewable power to the Germans, but for less money. Well, we will get it for less money automatically because we’ve delayed for around a decade during which prices fell sharply, allowing us to introduce FITs at lower levels of support from the outset. Using a 10% discount rate and a few other assumptions – 3% inflation, a fixed 15p/kWh for grid electricity and a 30% annual reduction in PV costs (reflected in falling FIT rates), the peak in the total annual cost of a PV FIT scheme comes in around year 5-6. after that it starts to fall away with a reasonably long tail until the year zero systems reach the end of their payment period when there is a second, sharper drop off in FIT payments. Looking at this keeping the NPV steady and changing from 25 years (the original scheme length in the UK) to 15 years, the peak in the total costs for a single year increased by around 25% which, given 2 GW of installed PV per year would mean that every household would be paying £45 instead of £33 per year for PV electricity. I played around with these figures in an Excel spreadsheet, trying to find a way to make my idea of bringing forward the payments into a shorter window work, both for the consumer and for the scheme as a whole. Needless to say, this was a futile venture, no matter how you cut it, front loading the tariffs is always a winner for the consumer and a loser (in terms of peak payments) for society.

It was only after going away and thinking about it some more did I realise that I was thinking along the right lines but wasn’t quite there. My first postulate was that nobody cares about the final years of their FIT installation. I stand by this. My second was that by paying out the same amount of money over a shorter period to sustain higher annual payments would make the scheme more desirable. It would; if you are the one getting the payments. If you are making the payments, you might prefer not to raise the maximum outlay for a single year which this approach undoubtedly would. Which brings us back to the original postulate which I believe is correct…

Nobody cares about the last few years FIT money, it probably won’t go to them anyhow. So why not do away with them. The FIT will still drive interest, you could even put a small bump on the FIT rates though not enough to cover the loss of the money from the final years, lowering the NPV of the FIT scheme while maintaining the attractiveness of the scheme overall. It means that we can get to the nirvana of FIT-free PV faster and steal a march on the Germans who are still going through the FIT time-bomb.

We can chop off the tail. We’re apes after all, we don’t need it.

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EdF. Sticking it to anyone within beating range.

On the 29th of October last year, sixteen people managed to shut down EdF’s West Burton gas power station. They were motivated by their reading of the evidence that climate change is a serious problem and that building a fleet of new gas power stations without any way of keeping the CO2 produced from getting into the atmosphere is something that we as a society cannot allow to happen. This isn’t a silly fringe view, it’s also the view of the government’s own Committee on Climate Change as well as anyone scientifically literate that isn’t a complete idealogue/dick.

At the end of February, it was revealed that these guys (21 people plus ‘persons unknown’ i.e. anyone else they can link to the campaign) are being sued by EdF in a civil lawsuit for £5,000,000 in (non-existent) damages. This is a blatant attempt to stifle civil disobedience now and in the future and it shows a company which lacks morals, lacks courage and, quite possibly knows which side of history it is on but doesn’t much care about that because there is money to be made.

The Huffington Post has a reasonable article about how this threatens the whole civil disobedience/direct action space in the UK. The energy side of things could have been done better (by me) but it gives a good sense of how direct action is threatened by EdF’s actions.

Something I loved about this No dash for gas protest is how well organised it was, by a smallish group acting as far as I can tell without a great deal of support from the big beasts of direct action like Greenpeace. They knew that scaling the chimneys would get the station shut down and enable them to keep it shut down for a sustained period (about a week in the end). They took advice from engineers and had training in climbing to make their action as safe as possible. It reminded me in many ways of the Drax train protest a few years back where climate activists hijacked a train supplying Western Europe’s largest single source of greenhouse gases and began emptying coal onto the tracks. These guys had worked out the best place to stop the train was over a bridge where they could fix it in place with ropes etc which would damage the bridge if the driver tried to move the train and they followed emergency train stopping procedures (with red flags and the like) so it was again as safe and well planned as possible.

When I’m not thinking about energy and the environment, I like to listen to music and this morning over my breakfast I got round to watching a TED talk by excellent musician, social media phenomenon and sometime 8-ft bride Amanda Palmer who last year set a record for the biggest ever Kickstarter project getting 25,000 people to give here a combined $1,200,000 to make her new album.

I did an MSc in Environmental Technology which now has around 3,000 alumni and that’s just people from one course in one walk of life who are passionately committed to the environment and who would get why these guys from No Dash for Gas did what they did. I know there are others who care about direct action, the right to protest, the anti-competitive behaviour of the big energy companies that want to help these guys.

If EdF win this case and take them to the cleaners, what would it say if we could crowdfund their £5,000,000? I don’t want to give EdF a single penny for what Amy Winehouse once called fuckery but it doesn’t matter. The message would be that enough people care about what these guys did and about what they stand for in the history of protest movements to give free money to my own worst enemy. I’m not religious but I bet Jesus would have done that.

I am No Dash for Gas. And I’ll put my hand in my pocket if EdF win.

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What I do for money

I was asked to put together some words on what my research involves today. To make life more interesting I decided to have a go at doing it ‘up goer five’ style. This is the result:

My work tries to find out how well sun power is working.
First I looked at how much light coming from the sun reaches sun power making things. I have to work out how much light falls on something lying on the ground between places where I know how much light there is. Then I have to work out how much more light there is when you are pointing in some other direction (like if you are lying on top of a building).
Once I know this, I can find out if the sun power making thing is working well or not. This is important because the better it does, the more money I get and if I find it is doing bad, I can fix it.
Second I look at how much of the air which is making the world hot like a green house stays out of the sky because of sun power. Most people just use the same number all year round to work this out but power is made by burning a different set of things at different times so you really should change this number at different times of day and year.
If sun power is used instead of very very old dead trees, more bad stuff is not made than if you use sun power instead of air that you burn that comes out of the ground. I am using a big set of numbers about where our power came from to find out how much ground air and how many really old dead trees weren’t burned because we got some power from the sun instead.

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Predict and Provide. We’re doing it wrong.

Apparently one of The Times’s cycle safety campaign manifesto points is for 2% of the highways budget to be spent on cycling infrastructure.

Over the decades, transport policy has been characterised as “predict and provide”. How much traffic is there going to be in ten years? Do we have enough roads? No. So we build some more roads. End result, the volume of traffic expands to fill the road space available. Nature abhors a vacuum.

This philosophy has now pretty much run its course. Not many people now say “Our roads are full, let’s build more roads, that will fix the problem”. Linking that back to the 2% of the roads budget going on cycling, why stop at 2%?

There is an opportunity to go for sustainable transport in a huge way simply by repurposing the discredited notion of predict and provide. We know that for cars, if the road infrastructure gets built then the traffic volume will grow to fill it to capacity (see also airports). Maybe it wouldn’t work the same way for bikes or even railways but I just wonder if there was someone at the Department for Transport with ability to lie through their teeth about their modelling and say “Our research suggests that by the end of the decade, 30% of all journeys under 5 miles will be made by bike, we need to put the infrastructure in place to meet that demand”… If we decide with no particular evidence that the demand is there…

If we build it, will they come?

Tariff Simplification is a Red Herring.

More from the Today programme this morning on simplifying energy tariffs. Two main problems with this. Firstly it has to be based on the premise that energy isn’t complicated. Secondly it assumes that the consumer is unable to engage because their brain can’t do more than one number at once.
On the second point, to my mind it is obvious that the consumer is concerned about rising energy bills and would be willing to engage. I think the real challenge is to bring clarity to the complex ecosystem of tariffs that we have.
The main reason for the huge array of tariffs is that there are four variables interacting so you have Gas, Electricity, Meter type (prepay or credit) and payment method (direct debit at various intervals being cheapest).
Compare this with mobile phones where there are also a handful of major suppliers and this time, the interacting variables are minutes, texts, data and PAYG/Pay monthly. I for example use a fair bit of data, not so many calls and hardly any texts and I went and found a tariff that suits me. It isn’t hard to do the same sort of flowchart for energy tariffs:
– How much gas do you use? Lots/Middling/A little
– How much electricity do you use?
– How do you want to pay?
Once you know what combination of these you are, the choice of tariffs will have dropped from 400 to about 2-3 per company.
Rather than consolidating tariffs to reduce choice, rebrand them as ‘mix and match’ and make sure there are common definitions of high/medium/low consumption for gas and electric so people know what type of customer they are and hence are better able to pick a combination that is right for them.

Her Majesty’s Treasury.

This post could run and run if I let it.

The Chancellor’s recently revealed vision for the UK becoming a Gas Hub at the expense of renewable energy is awful short-termist nonsense (in that it makes no sense).

Vincent de Rivaz of EDF has indicated the strike price levels being negotiated by his company for support for new nuclear are around £140/MWh, £50/MWh more than onshore wind currently costs. Incidentally, I am not in principle against nuclear, as long as we’re honest about what its purpose shall be, how much it will cost (and who is paying)and how long it will take to build.

A 3p/litre rise on fuel duty was deferred from the start of August until the end of the calendar year. At the same time, rail prices are in line for 6%+ rises next year. So we’re helping out people who cause congestion, air pollution and climate change while making life harder for people who take public transport.

Great.