SC(3) CR-E2

Sustainability Committee

Inquiry into Carbon Reduction in Wales: Electricity Generation (including renewable energy)

Response from the Countryside Council for Wales

13 March 2008

Summary:

At present approximately one-third of carbon dioxide emissions in Wales arise from power stations.  Across the UK as a whole, emissions from power stations have fallen by 15.6% since 1990.  However, during the same period emissions in Wales have risen by almost 25% (Ref 1). Overall carbon dioxide emissions in Wales have fallen less than 4% since 1990.  Welsh emissions are therefore 16% above the level required to meet the target of reducing CO₂ by 20% from the 1990 baseline.  To get back on the required emission reduction trajectory carbon dioxide emissions have to be reduced by 4.8% per year from 2006-2010 (Ref 2).

There are 6 major fossil fuel power stations in Wales emitting approximately 14MT of carbon dioxide per year.  However, very high-energy prices are generating an unprecedented drive for new power station development in Wales.  There are plans, at various stages of approval, to build an additional 5 new power stations and to increase production at Aberthaw.  This latter facility alone will release 11MT of CO₂ per year.  The increased CO₂ emissions from Aberthaw, in combination with releases from the other developments, could add 22MT of carbon dioxide per year to the Welsh total.  This would increase Wales’ total CO₂ emissions from 41.3MT (2005) to 63.7MT per year, representing a 35% increase in emissions from the 1990 baseline year.  This increase far outstrips any gains that could be made by the introduction of demand reduction measures and the proposed expansion of renewables.  In her Ministerial foreword to the Renewable Energy Route Map for Wales, Jane Davidson stated that "Wales is exceptionally well placed to lead the transition to low carbon economies: in which energy is used efficiently, is produced as near to the consumer as possible and emits the minimum of carbon dioxide and other greenhouse gas emissions”.  In light of the ongoing expansion of fossil fuelled power station development in Wales it will be difficult to make progress towards meeting the WAG  3% target for reduction in CO₂ emissions.

CCW wishes to provide responses to the 9 questions set out in the fourth topic inquiry consultation document.

1. Is the proposed 3 per cent annual reduction target by 2011 'in areas of devolved competence' sufficient to enable Wales to make its full contribution to meeting UK-wide targets? If not, what targets should be put in place?

Response: This general question has been responded to in detail in our previous submission relating to Industry and Public bodies and we refer you to this (also attached in an appendix to this response).

2. Should the emission reduction target be based on Welsh consumption, or production, or both (ie should it take into consideration the carbon dioxide generated in Wales (production), or the carbon dioxide emissions that Wales' residents are responsible for, regardless of their source (consumption))?

Response: This general question has been responded to in detail in our previous submission relating to Industry and Public bodies and we refer you to this (also attached in an appendix to this response).

3. What particular challenges does Wales face in reducing carbon dioxide emissions from energy production, and how can these challenges be overcome?

Response:  A major misconception still exists regarding the provision of electricity, particularly in South Wales. Many applicants for new power stations cite the issue that South Wales is energy deficient and new development is required to make good this perceived shortfall.  For a number of years, Wales has actually been a net exporter of electricity (approximately 10%) because of new power station developments.  This is reflected in the 25% increase in CO₂ emissions from Welsh power stations since 1990, while emissions have fallen across the rest of the UK (Ref 1).  This misconception regarding perceived energy deficiency in Wales needs to be corrected.

A major issue for Wales is that permission to build new power stations lies outside our devolved competence, with Section 36 authorisation (Electricity Act) determined by BERR.  Carbon dioxide is not listed as a pollutant in the UK Air Quality Strategy and is not treated as a specific pollutant in the Environment Agencies PPC authorisation process.  Control of CO₂ emissions from power stations is considered under the EUETS.  This so far has proved ineffective in tackling emissions at any power station, both with respect to individual development proposals and consideration of the cumulative impact of proposals.  CCW has promoted a more holistic view in its responses to various power station developments regarding carbon dioxide.  The various competent authorities deal with the parts of the application within their direct competence while the wider issues relating to UK and WAG commitments to reduce CO₂ go unadressed.  Each application is also treated in complete isolation from others and therefore no assessment of cumulative impact is undertaken.

CCW advises that an independent "Energy Overseer” should be appointed to assess individual power station applications within a wider sustainability and climate change strategic framework set out by the Assembly Government.  An independent assessor could determine the relative merits between options, such as expanding Aberthaw (which produces over 4 times as much carbon dioxide per unit of electricity generated as a gas station) or supporting a new cleaner CCGT that RWE Innogy is also proposing.

4. Do the current energy policies of The Welsh Assembly Government give sufficient emphasis to carbon reduction through low carbon energy generation.

Response: The measures set out in the Renewable Energy Route Map make a challenging and positive move to increase power generation from renewables.  CCW is keen to work with the Assembly Government to facilitate this and to secure the right technology in the right place. However, as witnessed by the number of traditional power station developments being undertaken in Wales, greater effort is required to address emissions from conventional power generation.

As well as promoting energy demand, the proposed overarching Wales energy strategy provides an opportunity to promote and develop demand management and energy efficiency measures.  Significant effort and change of emphasis will be necessary in order to deliver the CO₂ reductions required.

5. To what extent has the Welsh Assembly Government been successful in utilizing the powers available to it in order to reduce carbon dioxide emissions from energy production?

Response:  WAG has very limited powers within the energy sector given that the majority of emissions are regulated by the EU ETS.  The Phase 2 of ETS is projected to deliver a decrease in carbon dioxide emissions (on the basis of the allocations) of 3.5 % across the UK during the 5 years of the phase, but within Wales this is expected to be far less at around 1%.  In terms of devolved competence, there needs to be more focus on managing energy demand rather than the trading scheme. There is no evidence that WAG has had any success in reducing emissions from conventional energy production.  The expansion of renewables will play a role, but only if demand growth (approx 1-2% per year) is halted through energy efficiency and demand reduction measures.

The Welsh Assembly Government recently supported the proposal to build the World’s biggest biomass plant in Port Talbot.  CCW expressed its concerns about certain aspects of the development.  We accept that this proposal could make a significant contribution to meeting our target for renewables, but simply meeting the target as an objective in its own right means that many other benefits have been missed. The new power station will itself release over 1 million tones of carbon dioxide a year from the timber it will burn. The plant has an efficiency of only 23%, which is less than the coal stations built over 40 years ago. Denmark has for example just opened a new CHP power station with over 93% efficiency (Ref 3).

6. Could alternative targeting of Welsh Assembly Government financial resources lead to greater emissions reduction from energy production than is currently being achieved? If so where could additional resources lead to greatest impact?

Response:  Leaving aside energy efficiency measures, which will be the most cost effective means of lowering emissions, and dealing with energy production alone, we would support the measures set out in the Micro Generation Action Plan (Ref 4) and also support R&D funding for emerging renewables technologies, such as wave power.

7. What examples from other administrations, where other means have been used to achieve reductions in carbon dioxide emissions from energy production, could be adopted in Wales under current powers?

Response:  CCW is aware of a number of global and regional initiatives to achieve this within Europe and beyond.  We understand your Committee is shortly to visit Germany to examine such schemes.  This is an area of rapid development and we feel it is appropriate for a comprehensive review to be undertaken.  This will allow us to determine examples of best practice and consider which approaches are best suited to be adopted or adapted for use in Wales.

8. In the context of the Government of Wales  Act 2006, which further means of reducing carbon dioxide emissions from energy production could only be achieved with the introduction of further legislative competence for the National Assembly for Wales?

Response:  The exceptions listed under Field 4 (Economic Development) Schedule 7, Section 108 of the Government of Wales Act 2006 - Acts of the Assembly, indicate that currently the following are outside the Assembly Government’s areas of devolved competence: generation, transmission and supply of electricity (apart from pollution) and energy conservation (apart from the encouragement of energy efficiency otherwise than by prohibition or regulation).

While the establishment of the Infrastructure Planning Commission (IPC), proposed within the Planning Bill, has the potential to rationalise the current consenting regime for electricity generation and transmission, CCW would support the devolution of power over the consenting regime to the Welsh Assembly Government to support the aim of meeting Wales’ electricity needs entirely from low carbon sources(1).  

9. If specific carbon dioxide emissions targets are to be set for Wales, should those targets be subdivided into shares by sector? If so, what share of the total should reductions by energy generation comprise?

Response: Specific targets need to be set and at a sectoral level so that we provide a strategic framework to halt the unstructured and ill-considered cumulative impact of the many new power station developments Wales is facing.  The level of cut from energy generation needs to be the greatest as its carbon dioxide contribution is by far the highest.  It is impossible to advise on a specific reduction until a fully integrated energy strategy is in place that addresses demand reduction, small scale locally embedded CHP renewables and domestic micro production. The proposed overarching Wales Energy Strategy provides an opportunity to develop such an integrated strategy.  When such measures are evaluated it will be reasonable to see what level of reduction will be needed to ensure Wales meets its CO₂ targets.  The reductions required should be targeted towards the most inefficient and highly polluting sources.  With the large number of power station developments in Wales it is probable that the majority of required additional reduction will come from the energy sector rather than other industries that are already adopting carbon emission reductions.

References:
1. Greenhouse Gas Inventories for England Scotland, Wales and N.Ireland, 190-1995. AEA technology (AEAT/ENV/R/2500) August 2007
2. Carbon Dioxide Emissions in Wales, Members Research Service National Asembly for Wales Commission ,January 2008
3. (Fynsvaerket power station, Odense, Denmark - rated at 93.7% efficiency)
4. Microgeneration Action Plan forWales, Welsh Assembly Government March 2007

Footnote
(1) Energy Route Map for Wales: consultation on way forward to a leaner, greener and cleaner Wales (2008): http://new.wales.gov.uk/consultation/desh/2008/2003479/routemape.pdf?lang=en

Appendix:

Responses previously submitted by CCW to questions 1 and 2

1. Is the proposed 3 per cent annual reduction target by 2011 'in areas of devolved competence' sufficient to enable Wales to make its full contribution to meeting UK-wide targets? If not, what targets should be put in place?

Response:

The 2005 emissions data has recently been published and indicates a 4% fall in CO₂ emissions in Wales since 1990 and a 9% fall in total greenhouse gases over the same time period (Source: Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990 - 2005) though neither decreases are statistically significant due to inter-annual variability in emissions. However, despite this fall the 2005 emissions were 11% greater than the trajectory required to meet the UK Government targets for 2010 and beyond.

A programme of emissions reductions is clearly needed to bring Wales on track with the rest of the UK. One interpretation of WAG’s aim to contribute fully to meeting UK-wide targets would be to bring Welsh emissions 20% below 1990 levels by 2010 (Source: Carbon Dioxide Emissions in Wales, NAW, January 2008). According to the NAW’s own assessment, Wales needs to reduce emissions by 4.8 per annum between 2006and 2010 to achieve this, but this is clearly unlikely given that the 3% target will not be formally implemented by WAG until 2011 and then only in relation to areas of devolved competence.

Currently, there is an emphasis on setting out an approach to defining the 3% target and the means to achieving it. Given that it is cumulative emissions not future targets that are important in terms of tackling climate change, there is an urgent need to identify quick wins in terms of emission reductions that can be implemented rapidly within the NAW’s areas of competence. This should be a priority ahead of 2010 rather than a focus on target setting beyond that date. Effort made on curbing emissions now will pay great dividends later - the Stern Report left little doubt that there is no time for delay.

Nevertheless, in relation to target setting, a 3.5% reduction target from the present would fail to reach the 20% reduction on 1990 levels by 2010 (managing only 12 %), but the 30% target would be reached ahead of schedule in 2018 and at a continued rate of 3% reduction, 74% reduction on 1990 levels would be attained by 2050, well above the 60% UK target set for 2050.  There is real uncertainty over the validity of the 60% 2050 target. Based on a review of the latest scientific projections of emissions increases and climate impacts, the Quality of Life Commission (Source: Don’t Give Up on 2 Degrees C, Quality of Life Commission, 2007) suggest at least an 80% cut in emissions by 2050 is the required UK target. The achievement of the 3% target would therefore fall someway short of reaching this more rigorous goal.  CCW therefore recommends that WAG adopt a steady 3.5% per annum reduction target to 2050. This could achieve 20% on 1990 by 2013, 39% by 2020 and hit 80% by 2050. WAG acting in this manner would help to turn the tables, from being the UK’s worst per capita carbon performer to being an emissions reduction world leader. Moreover, such target setting must be consider against the background of the need for a reduction in total cumulative emissions rather than the delivery of targets at various future points.

Such targets must be considered in the context of the large inter-annual variation in emissions - variation that has amounted to +/- 15% in the recent past. It is important that the 3% reduction target is integrated and monitored over 3 to 5-year carbon budgetary periods to ensure that climatic events, such as cold or mild winters and significant changes in industrial productivity do not lead to misinterpretation of progress. Such variation is likely to be even greater between emissions sectors. Only by careful integration of emissions targets for different sectors and regular updating of these targets in response to sectoral variation, can such a trajectory be approached and maintained. It will also be essential that WAG monitor and review overall Welsh emissions reduction performance not just in those areas of devolved competence as the UK Climate Change Programme and other measures along with EU policies should contribute to an overall reduction in national emissions. It will be very difficult, if not impossible to identify what proportion of emission reductions within each sector can be attributed to WAG measures. Ultimately, in tackling climate change it is Wales’ overall performance that is crucial to tackling climate change not the 3% target for areas of devolved competence.

2. Should the emission reduction target be based on Welsh consumption, or production, or both (i.e. should it take into consideration the carbon dioxide generated in Wales (production), or the carbon dioxide emissions that Wales' residents are responsible for, regardless of their source (consumption))?

Response:

The difference between consumption and production figures depends principally on import and export of energy (primarily electricity and oil refining) to and from Wales. Currently, Wales exports approximately 10% of electricity generated (Source: Wales Energy & Carbon Emissions Study BY2003, Carbon Trust Wales).

Currently, most basic analyses are based on production (e.g. Carbon Dioxide Emissions in Wales, NAW, Jan 08). Taking a national view, if accounts were based on consumption (such as the WECE initiative), the Welsh total would fall, but a similar consumption-based statistic for England would rise. From a wider perspective, as long as those with whom Wales exchanges energy adopt a similar accounting system, it makes little difference as to whether the accounts are based on consumption or production.

A consumption-based approach would help redress the imbalance in current Welsh figures, whereby our status as a net power exporter is contributing to the very poor per capita production emissions in Wales. It would not however assist in redressing the imbalance caused by a disproportionately large production of energy intensive materials in Wales, such as steel, that are exported to England and elsewhere. The accounting trail for encapsulated energy is likely to be too complex and instead CCW recommends that focus be made on end-user of energy only.

However, such a shift to consumption-based statistics should not be regarded as a real reduction or a substitute for real emissions reductions. It might also lead to less emphasis on reduction of production-based emissions that form such a large proportion of the Welsh inventory. Therefore, CCW recommends the Carbon Trust Wales WECE consumption-based approach be adopted while continuing to assess production-based emissions.

Cyngor Cefn Gwlad Cymru
Countryside Council for Wales

Cadeirydd/Chairman: John Lloyd Jones OBE
Prif Weithredwr/Chief Executive:  Roger Thomas

Anfonwch eich ateb at/Please reply to:Roger Thomas, Prif Weithredwr/Chief Executive Llinell Union/Direct Dial:  (01248) 387141;  Ffacs/Fax:  (01248) 385506 Ebost/Email: n.sanpher@ccw.gov.uk