Energy Policy Flashcards
Summarise the elements of the UK Renewables Obligation.
● Requires electricity suppliers to obtain a specific % of their output from renewable energy sources.
● Additional cost incurred may be passed onto customers: no subsidies.
● Arrangements for the trading of Renewable Obligation Certificates (ROCs) or purchasing exemption: ROC auction price - £50 per MWh.
● Changed to help development relatively immature technologies (avoid electricity producers going for the cheapest renewable sources eg on-shore wind)
● Companies that do not meet the Renewables Obligation are required to “buy-out” at a set cost per MW. This buy-out pot pays for admin fees of the scheme and any left over is paid back to companies based on their share or ROC’s submitted.
What is a major downfall of the UK Renewables Obligation?
It brought immature technology to market. More significantly: industries who were going to invest did not have finanical certainty. Therefore incentives had to be provided to encourage investment. Fluctuations in ROCs trading prices also causes uncertainty.
Summarise the main features of the Renewable Energy Feed-In Tariff.
- Government program designed to promote the uptake of small scale renewable and low carbon electricity generation technologies to property owners. eg solar panel, turbine.
- Payment payed at a fixed price to the proerty owner, dependent on size and type of generation.
- Payments are tax exempt if most of the energy is used by the producer.
- Subsides program, which absorbs the associated costs of installation. This also accompanies a 25 year contract with the property.
List some downfalls of the REFIT scheme.
- If everyone rushes for one type of generation (e.g. CHP as it offered the highest tariff), then the government could run out of money to pay tariffs, leading to reduce tariffs or cancelling the scheme altogether.
- Does it lead to the right kind of new inffrastructure in the UK for the future?
- Black flow from generators to power stations can cause transformers to heat up, requiring extra cooling units and therefore more energy consumed overall.
Identify three principal shortcomings of the Kyoto Protocol.
Three from:
- Emissions targets not scientifically based
- Does not address emissions of black soot and greenhouse gases depleting the ozone layer
- Developing countries excluded
- Share of emissions from international air travel, shipping and importing manufactured goods not included
- Measures will cause economic burden with no measureable impact
Summarise the Electricty Market Reform and indicate the key issues it seeks to address.
EMF addresses the energy trilemma: decarbonisation, security and cost. It incentivises investors through Contracts for Difference and the Capacity Market. It replaces ROCs (from RO) with a strike price as a means to reduce risk for generators.
What is a Contract for Difference?
Contracts for Difference (CfD) provide price stabilisation to low carbon plants, allowing investment at a lower cost of capital and a lower cost to consumers. This is done by the generator being paid the difference between strike price and reference price.
What is the Capacity Market?
The Capacity Market aims to ensure adequate capacity within an electricty system that will rely increasingly on intermittent wind and inflexible nuclear generation. Provides regular retainer payment in return for capacity (supply, demand or both) being available when the system is tight.
Summarise the 2016 Paris Climate Accord and state a principal shortcoming.
- To keep global temps “well below” 2 degreesC above pre-industrial times and “endeavour to limit” them even more, to 1.5 degreesC.
- To limit the amount of GHG emissted by human activity to the same leves that trees, soil and oceans can absorb naturally, beginning at some point between 2050 and 2100.
- To review each country’s contribution to cutting emissions every 5 years so they scale up to the challenge.
- Rich countries help poorer countries by providing “climate finance” to adapt to climate change and switch to renewable energy.
Shortcoming: The national pledges by countires to cut emissions are voluntary, and arguments oer when to revisit the pledges (with the aim of taking tougher action) have been a stumbling block in the talks.
What were the NFFO and SRO and why did they fail?
The Non Fossil Fuel Obligation (NFFO) and the Scottish Renewable Obligation (SRO) were fixed-term, fixed-price contracts to developers for the purchase of electricity.
- Support was given to certain technologies; installed capacity limited
- Planning permission not guarenteed; obtained by developer in a separate process
Failure: Planning blockages; it was presumed that planning permission would be granted but this was not the case for the majorty of cases in the first few years of the obligations.
Summarise the Renewable Heat Incentive (RHI) Scheme and list a downfall.
- RHI is applicable to households, landlords, businesses, farmers, schools, hospitals, care homes etc.
- Fixed payment given for heat generated for local use via heat pumps, biomass boilers and solar thermal panels.
- Paid by the Treasury not energy users
Steps:
1. Renewable heat systems installed in property
2. Heat production measured
3. Fixed amount paid based on output, technology type and system size
Downfall: If not correctly monitored, the incentive could be vulnerable to abuse e.g what happened in NI - the government did not monitor correctly and there was no cap on payments given. People running systems 24/7 to burn fuel and receive more money.
Summarise the Green Deal.
- Homes and businesses carry out energy refurbishments (insulatino, new boiler, glazing replacements etc) funded by a loan (
What is the Green Deal ‘Golden Rule’? List any downfalls of it.
The Golden Rule: Loan repayments must not exceed the expected monetary savings as evaluated by a prescribed modelling package. Therefore savings not guarenteed - occupancy changes, product failure etc.
Downfalls: How is it calculated? Are any technical experts involved? Poor/cheaper technologies installed could cost more (maintenance etc).
