Friday, August 11, 2017

All aboard the robot road: Will self-driving cars be taking us to the pub or pension office?

If you read my blog posts you’ll probably be able to gather that I quite like cars (but dislike some of their impacts). I think about this when I watch my small son vroom his cars around our living room – is there something innate in the mind of small boys that attracts them to cars, or is it something that car loving fathers like me unwittingly encourage?

The fact that small boys still make “vroom vroom” sounds with their cars speaks volumes about the (lack of) progress in how cars are powered. My cars vroomed, as did my father’s and so did his father’s. Lightening McQueen, the hero of Disney’s critically derided yet widely loved ‘Cars’ franchise, is most definitely packing a big V8, even if his latest nemesis Jackson Storm has some kind of hybrid system.

I’ve previously written about electric cars, and even if my son’s first car isn’t all electric (it’s probably rolling off a production line about now) I’d wager he’ll own a few zero emission cars before he hits middle age. A bigger question though is whether he’ll want to, or even need to, get his driving licence when he hits the magic age of 17. I’m of course talking about self-driving cars.

To dream the autonomous dream

The dream of a robot car to whisk you home in your sleep has made a lot of headlines of late, often presented (along with electrification) as a technology of the near future.  Digging beneath the headlines, as ever reveals a divergence of opinion of when the dream will become reality. The wildest prediction has been made by Stanford University economist Tony Seba, who predicted that all cars sold by 2025 will be self-driving electric Uber pods.

Seba’s paper is perhaps a good example of a headline-grabbing claim being used to draw attention to some less sensational points. The first is that the supporting infrastructures for petrol and diesel cars could collapse like a pack of cards if there’s a meaningful shift to electric propulsion: the costs of fuel distribution, spare parts, etc would be split over a shrinking pool of vehicles and investment would quite simply move on.

The second is that the current ownership model probably wouldn’t work with self-driving cars, and we’d see a move to ‘vehicles as a service’ (robot taxis). Even if people still bought their own private car they’d be very tempted to let it earn money as a Johnny Cab when they weren’t using it, rather than just having it sit outside of their house.

At the other end of the spectrum sits Berkley’s Steven Shladover, who thinks it unlikely that I’ll even get a lift from a self-driving hearse to my own funeral (2075 is his prediction). Meanwhile vehicle manufactures have given their own predictions for when autonomous cars will hit the market, ranging from 2030 (Hyundai) to 2017 (Tesla, predictably).

So who’s right? Well to put an answer in context it’s worth telling the story of self-driving cars, a twin track tale of huge advancements in technology and even huger advancements in pay packets.

Eyes on the road

The modern story of self-driving cars begins 13 years ago with the DARPA Grand Challenge. As the research wing of the US Department of Defence, DARAPA has an obvious interest in getting expensive, vulnerable people out of vehicles. In 2004 they dangled a $1 million carrot for anyone who could get a robot car to complete a 150 mile course through the desert. That year the results were unimpressive, with no entrants making it further than 7 miles.

The following year the challenge resumed, with a new, tougher 132 mile course. This time round the robots were radically improved, with 5 vehicles completing the course and the winner, Stanford University’s ‘Stanley’, scooping the million dollar prize. The team behind Stanley soon went off to work for Google, who became one of the pioneers in self-driving technology.

Fast forwarding to the present day sees Google joined at the self-driving party by a host of other players. Some, such as the major vehicle manufactures, are working on complete vehicles, whilst a plethora of smaller start ups are developing technology for others to integrate into their cars (or even add on self-driving 'kits'). Ride hailing companies like Uber have also joined the party, seeing big profits in removing the driver from their cab services.

All of this work has seen the ‘eyes’ of self-driving cars well developed and falling in price. Most companies are using a combination of cameras, radar, LIDAR (laser radar) and ultrasonic detectors to allow the car to see the world around it, and combine this with detailed maps that let the car know where it is. With the hardware sorted the challenge is now to perfect the software that actually tells the car how to drive. This is the tricky bit.

Once a car is able to drive itself round a track, most companies are choosing to test their cars on public roads, albeit with a driver ready to take over if the computer makes a potentially dangerous mistake or ‘disengages’.  Google’s ‘Waymo’ division is probably the furthest advanced here, logging nearly 2 million miles on the roads near their headquarters in Southern California.

During 2016 Google reported their cars were only disengaging from computer control on average once every 5,000 miles. This is impressive, but remember that the vast majority of testing has taken place in a sunny, suburban location – plonk the cars down on a rainy day in Bristol and they may not be so successful.

An alternative, rather intriguing approach, is being used by the electric car manufacture Tesla. They’re building all of their production cars with the sensors necessary for self-driving operation. The primary use for these is their ‘Autopilot’ system, which gives the car limited self-driving abilities (under supervision) along motorways and major roads. However, these sensors also constantly send data back to the Tesla mothership, giving them a huge amount of data on how their cars ‘see’ the road. This can then be used to train their self-driving software, and improve the Autopilot system via over the air updates.

A googleplex of cash

So the technology is impressive, and so it should be with the amount of money being thrown at it. For once the main beneficiaries of this largess are not management and bankers, but humble engineers. The limited pool of people with experience of the technology has pushed their salaries up to banker like levels: average salaries are nearly $300,000 a year, with some star players receiving multi-million dollar bonuses.

Ironically rather than keeping them loyal these huge pay packets have given many top engineers the financial security they need to strike out on their own in pursuit of even bigger paydays. Rather than develop their own self-driving technology many established companies are choosing to buy it in, with enormous sums being paid for small start-up companies.

The poster child for this trend is Otto, founded in January 2016 by Anthony Levandowski and purchased later that year by Uber for $680 million. Levandowski had formerly been a key player with Google, leaving after receiving an unbelievable $120 million bonus.

Taking stock(cars)

With the enormous amount of hype and money surrounding the technology it’s very hard to assess when it will actually start entering the marketplace in a meaningful way.

Engineers are obviously keen to keep the gravy train running, and the companies that employ them talk up progress as they don’t want to appear inferior to their rivals. Even staid, old school car companies are pouring money into self-driving technology and firing out optimistic statements, as they simply cannot risk being shoved aside by new entrants if the technology takes off.

Any meaningful assessment though seems to suggest that the technology can drive a car in 'most' driving conditions, as in it the leading players could field a car that would drive itself in (say) 95% of driving situations. The trouble is that a car that only works 95% of the time won’t make much of a taxi, and the last 5% is very hard. This is the realm of bad weather, knackered roads and stupid humans who don’t play by a robot's rules.

Take my commute home from work. First off, if I’m driving it’s usually raining - I bike it otherwise. Exiting my workplace brings you to a roundabout clogged with traffic joining from the right. Getting out therefore involves gently pushing into the traffic and hoping some kind soul will wave you in. After this it’s 5 miles of nice wide stop-start roads, followed by half a mile where the road is made single file by parked cars – again there’s lots of flashing and waving with other drivers to proceed.

I’ve no doubt that technology such as Google’s could drive the vast majority of that journey better than I could, if it’s not raining. At the very least a machine is always fresh, whilst I’m tired after work. However, the small sections that involve pushing, flashing and waving will present more problems. A flash of the headlights can mean anything from ‘go on mate’ to ‘I’m very angry with you’, with interpretation depending on context, culture and, above all, experience of being a human.

I should also say that parking in front of my house involves leaving one wheel on double yellow lines (the wardens don’t seem to mind). I seriously doubt a self-driving car would be happy jutting out onto yellow lines, at least not without the owner signing a legal waiver. Rules are similarly bent in many UK urban parking situations.

Assuming this final 5% continues to be a problem then there’s a few possible solutions. The first is simply to keep a driver in the car who can take over if autonomous driving runs into a problem. This is what’s known as ‘level 3’ in the 5 levels of autonomous driving, and unfortunately one of the most problematic. Testing has found drivers simply switch off if the car is driving itself, meaning that if they need to take over in an emergency they may not be able to react in time and even make the situation worse. Requiring a licenced driver to be present in the car also destroys many of the benefits of a self-driving car.

Another option is for the car to ‘phone home’ when it encounters a problem, allowing a human to take control of the car and resolve the problem. Earlier this year the Japanese car company Nissan advocated this type of solution. This removes the need for a driver in the car, but has some fairly obvious shortcomings. The remote driver wouldn’t be able to connect and react in time to handle any safety related issue. It would rely on the availability of high-speed mobile broadband, which in the UK at least has far from universal coverage.  Finally, human drivers would need to be content to sit behind a stranded vehicle whilst it phoned home and sat-in a call queue.

The final option is to remake the roads for robots. Road markings and signs would be replaced with machine friendly versions. Traffic police, workmen and any remaining human drivers would be given equipment to allow them to communicate with self-driving cars. Cyclists, horse riders and pedestrians would be barred to segregated paths. This would provide a controlled environment for self-driving cars to operate, but you have to questions whether such a huge makeover of public space is either feasible or desirable.

The kind of questions we should be asking then are: what kind of level of change and disruption on the roads are we willing to put up with in order to roll out self-driving technology, and who will pay for any infrastructure changes deemed necessary for these cars to operate (the public or the tech companies)? And how will we handle the inevitable media backlash when a self-driving car kills its occupants or runs someone over?

These kind of questions seem to be lost in the current media hype, with the most frequently raised issues being moral judgements such as should a robot should run over a group of nuns or drive into a wall and kill its occupants if there were no other options.

So can I have my robot car now?

Given these shortcomings then is the autonomous car destined for the dustbin of over hyped ideas? In a word, no.

Although they’re unlikely to be able to handle every driving situation in the near future, even autonomous vehicles that only operate in certain conditions or environments (‘Level 4’ vehicles) are very useful. Such systems are already here offering driver assistance, for example parking the car or driving from a parking space to your front door to pick you up. More is to come, and the economic impacts could be huge.

Motorways - where driving conditions are predictable and pedestrians and cyclists excluded - are perhaps the most obvious place that such technology could be deployed soon. For the car driver the benefits are obvious – drive onto the motorway in Birmingham, select autodrive, put your seat back and wake up in Scotland.

For larger vehicles the impact could be even more profound: lorry and coach drivers would only be needed for a journey’s local legs, jumping out of the cab of outbound vehicles at the edge of town to take over inbound vehicles for the last mile. Such a scenario is bad news for lorry drivers, but could reduce costs and, by making freight distribution a 2-step process, help remove big, dirty vehicles from our city centers.

Ironically by making long distance car travel easier, faster and more relaxing self-driving cars may be more of a threat to train drivers than taxi drivers. This wouldn’t go down well with my son, as his love of cars is second only to Thomas the Tank Engine. What he has no love for though is long motorway journeys, but I dare say that by the time he has children of his own families will be chatting, playing and sleeping their way down the M1 rather than keeping all eyes on the road.

Thursday, July 27, 2017

Electric Cars Spark Into Life, But Can We Really Swap Pump for Plug by 2040?

Did you hear about the man who ran over his neighbour with an electric car? He was convicted of assault with battery.

Expect to hear more terrible jokes like this, as the UK Government yesterday pledged to ban the sale of petrol and diesel cars by 2040. The UK joins the French Government, who have the same deadline to bring an end to cars powered by the venerable suck-squeeze-bang-blow.

This pledge is nothing new: it just builds on a similar plan outlined in 2011, with the language firmed up from an ‘ambition to end the sale’ to ‘will end the sale’. The big question has to be whether this policy is realistic. Luckily for us 2017 has seen quite a few opinions on this subject.

In the furthest reaches of blue corner sits Stanford University economist Tony Seba, who thinks that all cars sold by 2025 will be self-driving electric Uber pods. On similar (but less extreme) lines sits the car manufacture Volvo, who say that all of their cars will be electric by 2019 (although this includes hybrids that run only partially on electricity). From this perspective the Government’s announcement is a little bit like John Major’s Government of the 1990s pledging to ban typewriters by 2020, i.e.  simply stating an inevitable technological shift.

In the brown corner, predictably, sits Big Oil, with Saudi Aramco and Royal Dutch Shell both suggesting that we’ll be needing their products for many years to come. Car pundits are also skeptical that a 2040 deadline is feasible. Watching this debate are bodies such as the UK National Grid, who have recently predicted steep rises in electricity demand with even a modest rise in electric car rollout.

So who’s right, and will the Government be able to hit their 2040 deadline without the country grinding to a halt?

The first, and perhaps most obvious, consideration is whether the Government’s plans include hybrid cars: those using conventional petrol or diesel engines alongside electric motors. The document released today remained quiet on this point, merely stating that the Government would ‘end the sale of all conventional petrol and diesel cars by 2040’. Media views seemed to differ, perhaps confirming that the Government hasn’t clarified that point.

There are two reasons why the hybrid point is so important. The first is that they cover a very wide range of technologies; from electric motors that just provide a bit more grunt to assist the petrol engine, to so called ‘plug in’ hybrids that have a short all-electric range and can be charged from the mains. Hybrid cars have been on sale for nearly 20 years now, and scaling up production (with notice) would presumably be reasonably easy.

The second is that, as they can use conventional filling stations, hybrids don’t require a huge infrastructure rollout before they’re a represent a practical proposition for the masses. Hitting the 2040 deadline with, say, plug-in hybrids doesn’t seem out of the realms of fantasy. The downside is the added weight, space and cost of packing in two sources of propulsion, although in the UK’s best selling plug-in hybrid –the Mitsubishi Outlander 4x4 – this is less of a problem due to its hulking size and weight.

So what about all-electric cars, could we skip hybrids and move entirely to batteries by 2040? 5 years ago I’d have said the biggest road-block was the availability of attractive, competitively priced cars. Back then the choice was really between the dorky ‘n dangerous G-Wiz and the more attractive but short ranged Nissan Leaf.

Things have now changed. Electric car buyers now can choose from a far wider range of vehicles, from the cheap(ish) and cheerful VW e-Up! to the cool, technology packed Tesla Model S. New, cheaper, long range cars continue to hit the market, and prices are dropping as the cost of producing the most expensive component – the battery – fall. Some forecasts have electric cars becoming cheaper than conventional vehicles in the early 2020s.

With attractive cars now available the key factor is whether you’ll actually buy one. If the mass market hasn’t embraced the electric car by the 2030s it’ll be a brave Government who actually goes ahead and bans the sale of conventional vehicles. And here’s where this article jumps from stating the facts to a bit of crystal ball gazing.

My view is that, beyond the committed petrol heads, most people don’t give two hoots as to what powers their car. With a few carrots and sticks they’d probably make the jump from pump to plug, if (and this is a big if) electric propulsion isn’t seen as an inferior choice. At the moment though for many people they are inferior, for one big reason.

The simple fact is that, whilst range on a single charge is improving, electric cars take a long time to charge up. Even with one of Tesla’s whizzy superchargers, at best a recharge takes 30mins. Fast chargers may improve, but the shorter the charging time the greater the demand they place on the local electricity grid. 10 cars being ‘supercharged’ by Tesla, for example, draw the same amount of power as 60,000 household lightbulbs. Clearly electric cars are not going to use a ‘filling station’ model unless charging times come down and the grid is hugely beefed up to take the enormous localised loads this would entail.

The alternative is charging at home coupled with a ‘top up when you can’ model. Essentially, whenever you stopped you’d plug in to charge. This model is far more realistic, but needs an enormous roll out of charging points. Pretty much everywhere you see a car parked now would need a charging point, which in the tight streets of urban Britain would be a big ask. Without this we’d have a two-tiered future: suburbanites could easily charge on their driveways, whilst city dwellers would be permanently on the hunt for somewhere to plug in their cars.

Of course a roll out of electric cars doesn’t have to slavishly follow the same pattern with which we buy and use cars now – we could do things very differently. This could be time for the UK to switch to a  ‘vehicles as a service’ model, essentially an umbrella term for long and short-term car hire (car clubs), Uber taxis and, possibly one day, autonomous cars. Under this model rather than own a car you just pay for one when you needed it.

Freed up from the ‘one car to do it all’ restriction things like range and recharging time become much less of an issue. You could order a small electric car for short city journeys, and a bigger, long range car for that trip to Granny’s in Yorkshire. Some people see this shift starting to happen now: to date the Millennial generation are less likely to own a car or even have a driving licence than their parents at the same time of life.  The big question is whether they will keep these habits when they become older and wealthier (and have children), or plump for the convenience of  a personal car ready and waiting on their driveway.

To sum up the current situation then, the vehicle technology for a big shift to electric cars is here right now, but the supporting systems and ingrained expectations of drivers still represent huge barriers to a fully electric future.

Note that I haven’t even touched some of the other big issues surrounding electric car deployment. Where would all of the electricity to charge these cars come from? Can battery supply chains be scaled up to meet the demand? How would the Treasury manage the transition from heavily taxed petrol and diesel to very lightly taxed electricity? These are all huge issues that would need to be ironed out soon to hit the 2040 cut off date – it’s not just a case of swapping cars in the showrooms.

Ultimately though predicting future development in technology is a mugs game, as anyone who watched ‘Tomorrow’s World’ as a child will attest.  It may be that electric car technology improves to the point where the market shifts completely to electricity well before the Government’s 2040 deadline. We may also find that the policy urgency to cut carbon emissions ratchets up, and electric cars are forced through whether or not the public are behind them. Or maybe some new, currently unknown transportation technology will come zooming out of the left field and revolutionise the market (Mr. Fusion anyone?).

In the immediate, less uncertain future though expect to see more electric cars on the road, as for certain uses they’re starting to make a lot of sense. One example is 2nd cars – at the time of the last census 32% of UK households had two or more cars. If you’ve already got one car capable of making longer journeys then a fun, cheap to run electric car for local use is a good option. As new, attractive models hit the market we can expect electric sales into these niches to blossom.

Tuesday, June 27, 2017

Opportunity and Uncertainty: Exploring the Transition to a Low Carbon World

“EUREKA!”, I cried, jumping from the bath. No, I hadn’t re-discovered the theory of displacement, but I had come up with an innovative solution to the climate crisis.

From my bathroom window I could see a huge flock of seagulls squawking, swooping and beating their wings. Tens of thousands more live in the English coastal city of Brighton that I call home, attracted by fast-food munching tourists and our less than wonderful refuse service. Experimental high altitude kites are now generating renewable electricity – surely, we could do something similar here and power the world with 100% renewable seagull energy!

The shortcomings of my idea soon become clear. Aside from the obvious practical and ethical issues, the fact remains that, whilst common in Brighton, seagulls are comparatively rare in the UK. Indeed, they’re ‘red listed’ with their numbers in decline. The dream of a seagull powered world, or even UK, was not to be.

This bird-brained idea highlights a more serious challenge for decarbonising the global economy. Technologies that work well in one country or region of the world may not necessarily work so well in others. Some of these issues are obvious – solar power is much more effective in Spain than in Scotland – but others are more complex. Government structures, infrastructure, finance and even cultural norms can all help or hinder adoption of low carbon technologies.

TRANSrisk Logo
TRANSrisk is an EU Horizon 2020 funded project that aims to improve understanding of how transitions to low carbon economies could occur across diverse regions of the world. At the project’s heart are 14 country case studies, each focusing on a particular country and specific technologies or sectors. Each case study is working with relevant stakeholders to explore the potential, risks and uncertainties of the technology systems under the microscope.

Some case studies focus on big, high-tech solutions. The UK case study, for example, focuses on the potential for nuclear energy. On the face of things, the UK is a good fit for nuclear. In 1956 the UK became the first county in the world to open a civil nuclear power station, and now operates a fleet of 15 nuclear stations. The UK Government wants to build up to 8 new reactors, and centralised control over the planning system gives them many of the tools needed to deliver on the policy.

Torness Power Station (UK)
Yet even as the bulldozers roll for the first new power station at Hinkley Point in Somerset, nuclear expansion is under fierce scrutiny. One of the chief concerns is the huge cost: construction of Hinkley Point alone is forecasted to cost £18 billion. The power purchase deal agreed with the consortium building is expected to add an average of £10 to every annual electricity bill. Is this the best use of money, and will it ‘crowd out’ other low carbon options? The TRANSrisk UK case study will attempt to answer these questions and more.

In contrast to multi-billion pound infrastructure solutions, TRANSrisk’s Indonesia case study focuses on the lower-tech area of bioenergy. One of the technologies under investigation is biogas. This may seem like an easy win for rural Indonesia: the basic feedstock is animal manure and the resulting gas is in many ways superior to the wood fuels frequently used for cooking in these areas. The technology, whilst often imported, is simple enough to be serviced on site by the farmers themselves.

A better understanding of the country though reveals the challenge of rolling out biogas at scale. Indonesia’s complex governance system, coupled with the vast size of this archipelago nation, hugely complicate policy implementation.  Indonesia is divided in 34 provinces, which are sub-divided into 491 autonomous regions; these autonomous regions are further split into 6,694 sub districts comprised of roughly 69,500 villages. Pushing policies from the top is clearly fraught with difficulty.

Even with a clear policy direction, biogas implementation remains difficult. Supporting and training farmers to operate biogas plant is complicated by the nation’s huge scale – put simply, if anything goes wrong it is not likely to be fixed by a call to the support centre and next day delivery of a replacement component.

Even gender plays a role in support for biogas. Men normally make investment decisions in farming communities, but may not experience the full benefit of biogas investment – the time consuming collection of wood fuel is a task predominantly assigned to women.

Photos taken with permission during TRANSrisk's visit to different biogas installations in Jembrana Regency, Bali, Indonesia (click for larger version)
These two examples illustrate how the rollout of low carbon technologies can be far more complicated than first thought, regardless of ‘high’ or ‘low’ tech status. These complexities need to be understood before technologies can reach their full potential to cut carbon emissions. TRANSrisk’s work will give policy makers the evidence and tools to not only assess what technology works best and where, but also to consider the opportunities, risks and uncertainties of the options under consideration.

I should end this post with a disclosure: I am currently the project manager, or administrative lead, for the TRANSrisk project. It is a huge pleasure to work with academic colleagues all around the world as they produce new insights on low carbon transitions and make progress on new tools for policy analysis and implementation. Sadly my avian energy plans (and a few other wacky ideas) have failed to impress them so far, but with the project due to run until August 2018 maybe, just maybe, there could be time for one last case study.


Image Credits:

1: TRANSrisk logo by TRANSrisk

2: Torness Nuclear Power Station by Amanda Benson, licenced under CC BY-NC-ND 2.0

3.  Biogas Instalaitions in Jembrana Regency, Bali, Indonesia, by the Stockholm Environment Institute

4. Stephen the Seagull, by Ed Dearnley

Tuesday, January 29, 2013

The Green Deal - is it any good?

The Green Deal launched this week in a blaze of publicity, unfortunately much of it negative. The scheme has been the Conservative’s flagship home energy efficiency policy since before they even came to power, so the big question is: is it any good? The short answer is that it’s good for some, but not for others.

At its heart the Green Deal is a loan scheme for energy efficiency and renewable energy measures, but rather than homeowners paying back the loan directly to the bank the repayments are made via a charge on their electricity bill. The two key innovations of the Green Deal are that the repayments should not exceed the anticipated savings on your energy bill (i.e. your bills will be lower afterwards, even with the loan repayments) and that the loan stays with the property rather than you (if you move the new owner takes over the repayments).

The Green Deal is an attempt to address one of the big problems with some energy efficiency and renewable energy measures. Upgrades such as solid wall insulation and solar panels are expensive – many people would struggle to raise the cash to pay for them and they may worry that they’ll move house before they’ve recouped the costs through lower energy bills. The Green Deal offers a solution by providing financing and a guarantee that you’ll pay less than you’ll save. For homes that need these kind of expensive measures the Green Deal looks like it could be a real success.

Recent press criticisms of the scheme have focused on the fact that only 5 people appear to have signed up for it and the high interest rates on Green Deal loans. These criticisms appear to be the result of teething problems: the tiny number of people signed up is because the scheme database isn’t ready yet rather than a lack of public interest, whilst a competitive market will presumably bring interest rates down in time.

The real problem with the Green Deal is that in their zeal to encourage high cost home energy measures the Government has lost sight of the fact that many homes still just require bread and butter measures such as loft and cavity wall insulation. The Green Deal and its sister ‘ECO’ subsidy scheme replace an obligation on energy suppliers called the Energy Efficiency Commitment, under which millions of cavity walls and lofts were insulated all over the country.

Getting insulation under the Energy Efficiency Commitment worked like this. You’d ring up your energy company who’d give you a quote for (subsidised) insulation. If you wanted to proceed a couple of men in a van would turn up at your house, assess the job and (assuming they didn’t find any problems) install the insulation. The cost would be a few hundred quid on a typical house and the outlay of your time fairly minimal. Compare that to the hoops you need to jumpthrough for the Green Deal, and the costs that will be loaded on to the job by assessors, management companies and finance providers.

The result is that anyone who can afford a few hundred quid to pay upfront for cavity wall and loft insulation would be barking mad to have it installed through the Green Deal. The real shame is that people are far less likely to do these basic insulation measures now that subsidised insulation is no longer available through the Energy Efficiency Commitment  – they’ll have to pay the full cost instead.

The other controversial element of the Green Deal is that it can be used to fund what I’d tend to call basic home maintenance measures, such as new boilers and double glazed windows. Picture a situation where you had a choice of buying or renting two identical houses, one where the owner had paid for the (modern) boiler and windows themselves and one where these were funded through the Green Deal. In that situation most people would want a discount on the price (or rent) to make up for the loan charges added onto the Green Deal home’s electricity bill. Bang goes the Green Deal advantage of the loan staying with the property.

Of course in reality you’ll rarely find two identical homes where you’ll be making a direct comparison, and in areas with busy housing markets this factor might be forgotten as buyers scrabble to secure a desirable property. But a Green Deal loan will be something you’ll need to declare when you’re selling or renting a home.

Maybe my discomfort with the Green Deal is a sign of me getting old – my first job involved dealing with Energy Efficiency Commitment funded insulation grants and energy saving lightbulbs – but my view is that the Government’s desire to get solid walls insulated and solar panels fitted has made them kill off one of the most successful energy saving schemes of recent decades. The Green Deal isn’t aiming to demolish our old solid walled housing stock and replace them with new houses; it’s trying to improve these (in many cases) lovely old buildings. It’s just a shame that the Government isn’t applying the same ‘improve the old’ logic to its successful home energy efficiency schemes.

Friday, June 22, 2012

Solar salvation for Rio climate woes?

See that shiny new smartphone in your hand - I had one of those 10 years ago.  Granted it was big, ugly, slow, buggy and furiously expensive, but at the time it was at the cutting edge of mobile technology.  Now of course smartphones are powerful, ubiquitous and above all cheap. This is largely thanks to continued technological advancement that’s made electronics cheaper and better year after year, a process known in the industry as Moore’s Law.

The reason I mention this is that the world desperately needs energy technologies that are following a similar ‘better, cheaper’ path.  The lack of any meaningful media coverage of the current Rio+20 conference is making a rather telling point -  the media and the world’s leaders are squarely focused on our economic woes. Environmental concerns are, it seems, yesterday’s news.  Against this harsh backdrop green energy will start having to pay its way in cold hard cash, rather than avoided external costs added in a cost-benefit analysis.

Into this space steps solar photovoltaic (electric) technology.  This technology’s most recent brush with the UK news has been through the Feed-in-Tariffs scheme.  This is (or was) a generous subsidy scheme to support the use of solar PV that was suddenly scaled back, much to distress of the solar industry and environmentalists alike.  The Government’s stated reasons for reducing the available subsidy was the falling cost of PV modules, which made an already generous payment over the top and unaffordable.  So what’s the real story?

Well, the internet is awash with suggestions that solar is following a Moore’s Law style path, and good sources seem to substantiate these claims.  Solar costs have been falling at an exponential rate for several years now and, assuming this trend continues, it will soon be price competitive with conventional fossil fuel power in sunnier parts of the world.  If this happens solar’s status as a green technology would become irrelevant: people will use it simply because it is cost effective to do so.

Of course solar is not a silver bullet to the world’s energy and climate woes.  Solar only produces power when and where the sun shines.  With electricity notoriously difficult to store and transport solar is only ever likely to be part of the picture, particularly in the UK where it would take an awful lot of cost reduction for solar to be competitive with fossil fuels in the north of the country.  And the cost of a solar installation doesn’t simply follow the cost of the panel – the man crawling round on your roof fitting the system would not be amused at the idea of his salary following a Moore’s Law style trajectory.

Nevertheless the solar story, and that of some other energy technologies, offers a little hope for the future in the otherwise grim environmental picture of 2012. The problem with the barrage of subsidies, taxes and economic instruments used (or not used) to prop up more expensive forms of low carbon energy is that they can be reversed. When the economic noose tightens politicians tend to focus on short term financial problems and lose sight of longer term environmental issues. The idea that green energy may become genuinely cheap might therefore offer some degree of environmental salvation in these uncertain economic times.   

Thursday, April 5, 2012

CLG Outlines How Local Authorities Might Share the Pain

‘With great power comes great responsibility’. Those of you who’ve seen Sami Rami’s 2002 Spiderman film may remember these warning words delivered by the web slinger’s uncle shortly before his unfortunate demise. The Government must have been watching, as similar sentiments are now being voiced through the Localism Act and via a follow on consultation from the Department of Communities and Local Government (CLG) entitled ‘Proposed policy statement for Part 2 of the Localism Act 2011’.

The Localism agenda brings a dramatic shift in power from central to local Government. Under the previous Government local authorities were assigned more and more mandatory responsibilities and performance indicators until they became little more than agencies for delivering central Government policies. Late in the day the Labour Government began to reverse this trend and devolve more powers to local authorities, a process accelerated under the Localism agenda of the current coalition Government.

But this devolution of power creates something of a headache for the Government. Implementation of many international, and in particular EU, responsibilities often needs measures to be actioned at a local level. Localism means that central Government can’t simply tell local authorities what to do; so how can they make sure local authorities pull their weight?

The Government’s solution to this quandary is a provision in the Localism Act that lets them pass any fines received for non-implementation of EU law onto local authorities if they are judged to be not pulling their weight. Although the UK has never been fined by the EU in this way (a process known as infraction) other counties have and the fines can be very serious. In a French fishing case the fine amounted to a €20m lump sum and an additional €58m every six months until the case was resolved.

The first policy area where this provision may impact is air quality. The UK’s failure to meet legally binding EU limit values for the pollutant nitrogen dioxide have been well documented. Infraction action by the European Commission may start this year and could ultimately end with large fines being levied against the UK Government.

Local authorities, through the Local Government Association, have vehemently opposed this element of the Localism Act and continue to oppose its implementation. From an external observer’s perspective though the broad thrust of the argument makes sense – local authorities don’t have to do anything, but if they do not pull their weight they’ll share the pain inflicted by the European Courts. The real concerns then lie in implementation, namely will the process by fair and practicable.

This is what CLG have tried to answer in the current consultation, which sets out the proposed process for sharing the fines. Core to the process is a policy of ‘transparency and no surprises’. This involves the Government working closely in partnership with local authorities around the establishment and implementation of EU law and, crucially, does not seek to punish local authorities for (lack of) action prior to the establishment of the Localism Act.

The process of sharing fines would begin with the European Commission issuing a ‘reasoned opinion’ against the UK, the second step in the infraction process. At this point the Government would apply for a ‘designation order’ which would detail the authorities involved, the specific infraction case and the activities (powers and services) of the local authority covered by the case.

Crucially it would only be the actions (or inactions) of the local authority after the designation order had been served that would be considered in the sharing of any fines received. Essentially the designation order tells the local authority that there’s a problem and their assistance is needed to resolve it. This process would appear then to address the first concern, that the process be fair.

The consultation document then sets out the proposed process to be followed if infraction action continues to the stage of fines being levied Here an independent panel would be set up to investigate the case and hear representations from all interested parties. The panel would advise relevant Ministers who would have the final decision on the share of the fine to be levied against each of the local authorities involved.

But is this process practicable? In complex cases such as air quality it would be very difficult to judge responsibility. The Government could, for example, suggest that a local authority should have set up Low Emission Zones to drive down pollutant emissions. However the local authority could counter that in the absence of a national Low Emissions Framework (used in countries like Germany) it would be far too complex and expensive to do so. In short the web of blame and counter blame would be extremely difficult for the independent panel to unpick.

The basic facts of the air quality case though are that measures by local authorities are essential in order to provide clean, healthy air in our towns and cities, and the current Local Air Quality Management framework has not been effective in uniformly driving action across the country. Whilst there’s a big question mark over whether passing on fines is practicable it could, potentially, shake the laggard local authorities into action. But together with this ‘stick’ we also need a ‘carrot’. Could this function be filled by the new public health powers being devolved to local authorities?

The CLG consultation runs until the 22nd April, click here to see the consultation document.

Thursday, February 23, 2012

2011 UK Energy Figures – Oil and Gas Production Plummet but Low Carbon Generation Grows

Provisional 2011 UK energy figures have been released today by the Department of Energy and Climate Change (DECC). Conventional energy gives little cause for cheer with the news that the production decline in North Sea oil and gas has accelerated. On the positive side low carbon electricity generation has climbed, whilst total energy consumption had continued on its declining trend.

The energy consumption figures probably give most hope for environmentalists. UK energy demand has been falling now for over 5 years, although the economic downturn has done much to drive this trend. DECC’s figures show 2011 total energy demand was down a whopping 7% from 2010, however much of this was thought to be due to the mild weather and on a temperature adjusted basis the figure was a more modest (but still significant) 2%.

Low carbon generation also provided some good news. Wind’s share of generation by major power producers has grown from 2.4% to 4.0% since 2010 due to greater capacity and windier weather. Hydro is also up from 0.8% to 1.5%, largely due to more rainfall in Scotland where the majority of UK hydro is installed. These figures are dwarfed though by the low carbon king - nuclear generation - which accounts for 20% of UK electricity generation.

Conventional energy gave little cause for cheer though. Petroleum production was down by 17%, whilst gas production was down by an even greater 20%. Maintenance shutdowns, as well as general production decline, was behind these worrying figures. As a result the UK is becoming more and more reliant on energy imports, with Liquefied Natural Gas (LNG) shipped in from Qatar now at similar levels to pipeline gas from Norway.

Recent announcements that huge quantities of unconventional gas are lying under the UK will be welcome news then to the Government. But developing these resources via ‘fracking’ technology has a number of technical, regulatory, and (not least) public relations hurdles to jump, and it will be several years at least before significant quantities of gas begin to flow. In the mean time the UK looks set to be increasingly reliant on imported energy.