Microgen strategy reaction pt. II and unrelated news
Looks like I’m not the only one who thinks the microgen strategy is a bit wishy-washy.
And nuclear clean-up will cost more than expected. Quel grande surprise.
Budget critique and technology innovation
There’s an interesting article in the Guardian this morning about the budget sounding better than it actually is for microgeneration and sustainable energy. The general impression is that the amounts being put forward are not enough: Jeremy Leggett from Solar Century suggests it needs to be “billions, not millions”. While this may be hyperbole, the government certainly could be doing more on climate change and this discrepancy makes the PM’s recent claims that he wants a “technological revolution” to help solve the problem sound a bit disingenuous.
If technology is the way forward, there are arguably two options. First you can do like Germany, US, and Japan have done for their PV industries and provide support to encourage the market to adopt a current technology. Market demand can encourage innovation but more importantly, this approach gives the benefit of practical experience in installing and operating these technologies (e.g. getting the regulatory framework right and so on). The second route seems to be what the UK is following, by providing £1bn for a new energy R&D institute (which some argue may be largely for the benefit of nuclear).
Which approach will yield better results? I think that the market approach is the best way forward, allowing technologies to develop and evolve alongside the needs of consumers. In contrast, designing a revolutionary technology in a lab and trying to plop it into society is very difficult. Researchers like Elizabeth Shove have noted that although “deeply flawed”, policy makers often hold the belief that technologies can simply be created and then transferred to an adoring public.1 The UK approach of combining R&D with small market incentives might work, but I think it will take much longer for any results to be seen.
1 Shove, E. (1998) “Gaps, barriers and conceptual chasms: theories of technology transfer and energy in buildings” Energy Policy 26(15): 1105-1112.
Microgeneration strategy released
The DTI has just released its microgeneration strategy. I haven’t read it cover to cover yet but there doesn’t appear to be any revolutionary initiatives. The biggest change – increasing the budget of the Low Carbon Buildings programme to £80m over three years – was announced in last week’s Budget. Positive steps include the creation of an accreditation scheme and codes of practice for all microgeneration technologies and the possibility of a field trial for smart metering and microgeneration.
Most of the measures though are just “explore” this and “investigate” that. I know it’s just a strategy but still, it would be nice to see something a bit more tangible. For example, one of the steps being taken is:
DTI will undertake further research into consumer behaviour in relation to microgeneration technologies and, in particular, what drives early-adopter purchase decisions.
Why? There’s lots of research on why people are early-adopters. Labay and Kinnear wrote about the adoption of solar energy systems in detail back in 1981.1 Rogers’ Diffusion of Innovation was first published nearly 45 years ago and the main points it raises – i.e. that successful innovations are reasonably compatible with existing systems and consumers can observe and try new technologies before adopting – are still relevant. Other work on consumer behaviour, e.g. the theory of planned behaviour, can help understand the psychological characteristics of early adopters.
But the main barrier, as the report notes, is that people don’t want to pay a large up-front cost. This is perhaps most important point because although some early adopters will justify a microgeneration purchase with a range of non-economic motives, most households will take one look at the payback period and say no thanks. My research has found that this is true even for those households who are most likely to become early-adopters, i.e. technophiles with a keen interest in the impact of their energy use. Among the general public, the situation is worse and economists have found that energy efficiency decisions often involve discount rates of 20% or more (payback periods of less than 5 years).
All of this suggests that further research on early adopters misses the point. We know enough to understand why people choose to adopt new technologies and for most households, it’s a question of money. Therefore unless wads of cash or alternative financing mechanisms (via energy service companies, microgeneration mortgages, or other measures) are offered, people won’t act.
As a side note, the government released its Climate Change Review today as well. Looks like the 20% CO2 cut by 2010 won’t happen and there are only a few additional measures proposed to get things back on track. Bit of an underwhelming day really.
1 Labay, DG, Kinnear, TC (1981) “Exploring the consumer decision process in the adoption of solar energy systems”. Journal of Consumer Research 8: 271-278.
The Budget
Gordon Brown just gave his budget speech and there will be an additional £50 million for the Low Carbon Buildings Programme (bringing the total to £80 million over three years). But there’s still some uncertainty over the exact scope of the programme and many in the industry are unhappy. Looks like despite all the warnings, the funding gap between the old and new programmes is happening. Though to be fair, there’s still 9 days (including the weekend) before the government’s April deadline…
Click here for full budget details. The microgeneration bit is in Chapter 7, page 156.
SD Commission says ‘no’ to nuclear
The Sustainable Development Commission, the government’s advisory body on sustainable development issues, released a report yesterday that says nuclear power is not the answer to the UK’s energy security and climate change problems.
I highly recommend listening to the mp3 at the bottom of the page which is an interview with the SDC’s chairman, Jonathan Porritt (direct link – warning, 10MB mp3). It presents the pros and cons of nuclear very clearly and fairly, simply saying that the disadvantages outweigh the advantages. The recommended alternative is that government work harder to implement the strategy outlined in 2003 white paper and focus on energy efficiency, renewables and microgeneration. As Mr. Porritt says, the policy record since 2003 has been mediocre at best and the danger is that:
If they [government] continues to play around with things as they are now, it is possible that an energy gap will loom at some stage in the future.
Nuclear won’t fill this gap – it doesn’t provide solutions for heat and transport, only electricity, and even then it may be 20 years until these stations are constructed and their benefits realised.
The message of the report is essentially the same as John Gummer’s talk last week. There is no easy answer to energy policy and it will take coordinated and dedicated leadership to deliver effective solutions. I wonder if government has it in them or if they’ll go for the false ‘easy’ answer?
Snow in Oxford
