In an economy driven by natural resources, balancing necessity with the issues of climate change and need for alternative energy sources is a constant source of tension. In order to curb harmful fossil fuel emissions, a number of initiatives have been implemented and debated, including carbon-pricing, technological innovations for environmental damage-limitation and investments in clean energy.
A group led by Gernot Wagner, senior economist at the Environmental Defense Fund, has backed proposals to open up access to power grids for renewable energy sources like solar and wind, and subsidising key technologies in particular ones which focus on storage.
The problem they’ve identified is that renewables are still too expensive. Wagner says it’s a catch-22. “Policymakers are more likely to price carbon appropriately if it is cheaper to move onto a low-carbon path. But reducing the cost of renewable energies requires investment, and thus a carbon price.”
Less than ten days after his article was published and following announcements of subsidy cuts to the green sector, a group of influential investors co-ordinated by the UK Sustainable Investment and Finance Association put the Chancellor under pressure to demonstrate more support for renewable energy in the country. A letter signed by the group of 13 organisations including the Trillion Fund and Triodos Bank highlights concerns about the apparent unsupportive approach the Government is currently taking, following announcements of cuts to existing subsidies.
It states, “Recent announcements in relation to renewable power have raised questions about the financial security of past UK energy investment. By threatening previously secure cash-flows several of these announcements have a quasi-retrospective element which will raise concerns particularly for low-cost capital and risk compromising further UK energy investment.”
In a matter of weeks the Prime Minister will join 40,000 delegates from 200 countries at the Paris COP21 conference when new measures will be agreed to tackle global climate change. Green eyes will be on him and hope their pressure on pricing will be considered.
But there may be another avenue that comes into play – carbon capturing. This is where emissions are transported deep down into the ground rather than released into the air. Britain has already approved two projects with a £1bn grant – one in Scotland where the CO2 will be trapped in deep rock formations under the North Sea, and another in Yorkshire.
Shell is running the Peterhead plant and the executive in charge Bill Spence says while renewables had a head start there will now be a “race down the cost-curve” and is confident that, “costs will be significantly less than offshore wind.”
This process has long been seen as a pipe dream but with improving technologies some are confident it will become a reality. It’s being embraced by the fossil fuel industry as its survival depends on it. SaskPower built the first one in the world at a coal-fired plant in Boundary Dam and retrofitted it. The project lead Mike Monea said they didn’t deliberately set out to make it the world’s first but “everybody else quit.”
Additionally carbon capture is a seen by some as a win-win. CO2 in the right place is itself valuable. It can create a situation where there is Enhanced Oil Recovery as injecting it into depleted fields can help extract more oil and gas. There are already nine EOR operations in North America. Prof Jon Gibbins from Edinburgh University says, “We could keep North Sea production going for another 100 years.” That would please a lot of people.