Category Archives: Climate Change

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.

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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Genuine Skepticism.

A week or so ago, the Berkeley Earth project published a preliminary report on their findings as relates to land surface temperature data.

I think it is a wonderful example of how science works. The group of scientists, led by Richard Muller, that conducted this work were suspicious about claims made about the increase in average global surface temperatures since pre-industrial times.

They were not disputing that the numbers in the records were not going up, but that the methods used to derive those numbers were perhaps subject to some systematic errors. Their first cause of suspicion was that cities are warmer than the countryside. This is an issue with the temperature record because many of the weather stations that feed into most climate datasets were established in the countryside, just outside of towns and cities which over the decades and centuries have grown to surround and envelop the surrounding countryside and its weather stations. As an example, here are two maps of London showing how much it has grown (look at the Thames for an idea of scale).


London in the 1820s (British Library)

So this growth of cities might have made it look like temperatures are going up when actually all that’s happening is that weather stations are coming under increasing influence of their host cities.

The other thing the Berkeley Earth team thought might be going on is that the records have systematic errors. Temperature measurement equipment has improved alot over the past 150 years. As weather stations upgrade their equipment, they might find that the old kit was systematically reading too low or too high. At the times where the equipment is changed over for different (hopefully better) devices, the old data has to be tweaked to make the records with the old kit line up with what those measurements would have been if the new kit had been there all along. This isn’t cheating, it’s not a dastardly trick on the part of climate scientists, it’s just something they do to give themselves a consistent dataset across time. The problem was that these tweaks to the existing climatological datasets were not applied automatically according to carefully crafted algorithms but by human researchers who could perhaps be making the data look how they want it to look, not how it really should look.

So the Berkeley Earth guys (with some of their funding from heavyweight fossil fuel bods) got enough data and enough computing power together to make a much bigger dataset that takes account of these growing cities and inconsistent records phenomena. They wanted to know if one or both of these effects were at play in the climate records to see if there wasn’t as much climate change as we keep hearing or even any at all.

What the data they produced actually showed was remarkably consistent with what the consensus view on climate change: Getting on for 1 degree C of average global surface temperature rise on pre-industrial levels, almost certainly attributable to human activity (i.e. deforestation and especially burning long dead things).

It is to their enormous credit that the scientists who conducted this work have published and publicised it. It is a fine example of how science is supposed to work. You see what others have done, you are maybe not convinced they’ve done things right and think you have a better method that could maybe lead to a different conclusion, you go away and try your method and you accept the results of your analysis.

Now if only we could get the same kind of scientific rigour out of the guys who gave them money…

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