There have been two interesting pieces of news about energy this week. The first is that the European Commission has formally confirmed that it will hold an investigation into the legality of state subsidies for the proposed Hinkley C nuclear power station.
Hinkley Point C nuclear subsidy plan queried by European Commission
Officials promise to investigate, saying they doubt claims of market failure and fear UK will start a "subsidy race".
This shouldn't come as a surprise, as Le Monde had flagged up the story a few weeks ago, which was then picked up by the Telegraph, as I mentioned in this post. In fact, Le Monde reported it as an open-and-shut case of illegal state aid, so the outcome is probably not in any real doubt. The Guardian's article has all but confirmed this, quoting Günther Oettinger, the European Union's Energy Commissioner, saying that he thought the huge subsidy was "Soviet" in style; and Joaquín Almunia, Vice-president for Competition Policy, describing the aid package as a complex measure of an unprecedented nature and scale, and warning that it risked setting off a "subsidy race" between member states.
Ed Davey was putting a brave face on it in this Ministerial Statement, but it is hard to see how the UK government can defend itself, and some sort of financial sanction is almost certain to be imposed on the UK government as a result, which is the usual way the European Commission would enforce a judgment. The real question is how big this will be. In the face of some £17bn of state subsidy, it would need to be very substantial; for if it isn't, the UK government might well just decide to add it onto the bill that taxpayers have to pay. After all, what's another few billion?
Of course there is also a political dimension in that EDF is state-owned, so the French Government is obviously not going to object to UK taxpayers putting large, or even larger, amounts of money into French pockets. But on the other hand, Germany is hardly going to want to see nuclear power proliferation spread across the continent. Nor will it want to see the financial framework of the EU single market distorted out of all recognition by state subsidies and protectionism, especially as Germany effectively underwrites the EU's finances. So a great deal is at stake.
At the very least, this investigation should serve to put the UK Government's plans for more new nuclear power stations back a few steps, which is very good news for those of us who oppose building a new nuclear power station in Wales.
To add to that good news, the Department of Energy and Climate Change has just published the latest set of energy statistics, available on this page.
It's good news in this sense. Scotland produced 40.3% of the electricity it consumes from renewables in 2012, up from 36.3% in 2011 and 24.1% in 2010. This is from the Scotsman:
Two-fifths of electricity in 2012 from renewables
Statistics from the UK Government’s Department of Energy and Climate Change (DECC) showed 40.3 per cent of energy consumption in 2012 was met by the sector – up from 36.3 per cent the previous year and 24.1 per cent in 2010.
The Scottish Government believes it is on course for half of electricity to come from renewable sources by 2015, an interim target ahead of the goal of having the sector generate the equivalent of 100 per cent of electricity needs by 2020.
Scotland continues to produce more energy than it uses, with 26 per cent of electricity generated last year being exported. Nuclear power provided 34.4 per cent of electricity generated in Scotland in 2012, while 29.8 per cent came from renewables, 24.9 per cent came from coal, 8 per cent from gas and 2.8 per cent from oil and other sources. While 29.8 per cent of electricity generated north of the Border was from renewables, in England the sector only produced 8.2 per cent of electricity, while in Wales and Northern Ireland renewables accounted for 8.7 per cent and 15.9 per cent.
Energy Minister Fergus Ewing said: “These figures show renewable electricity in Scotland is going from strength to strength, confirming that 2012 was a record year for generation in Scotland and that 2013 looks set to be even better. We can already see from the first nine months of 2013 that generation is 4 per cent higher compared to the same period in 2012. These figures show that renewable generation in Scotland was at a record high last year, meeting around 40 per cent of our electricity demand at a time when Ofgem [the energy regulator] are warning of the ever-tightening gap between peak electricity demand and supply.”
Director of environmental charity WWF Scotland, Lang Banks said: “It’s great news that Scotland’s renewable energy capacity and output both continue to grow, and this year looks like being another record breaker. However, in order to remain on target Scotland will need to deploy significant amounts of offshore wind in the near future. It’s therefore vital that the UK Government gives a stronger signal of its ambition on the growth of offshore wind in Scotland’s seas.”
He added: “While the rest of the UK has become distracted by gas fracking and new nuclear power, Scotland has quietly got on with the business of deploying renewables at scale. By combining Scotland’s superb renewable energy resource with greater energy efficiency and investment in the grid, Scotland can continue to avoid the need for polluting forms of energy.”
This shows the huge difference in attitude between the Scottish Government and the UK Government. Although energy is not technically devolved to Scotland, the Scottish Government is able to use its planning powers and the ability to set different tariffs for ROCs to effectively control its own energy policy ... at least in terms of how it develops. The Six Counties can also do this.
As a result, 29.8% of the electricity generated in Scotland was from renewables (the difference between 40.3% and 29.8% is because Scotland exports so much electricity to England and Ireland) as was 15.9% of the electricity generated in the Six Counties.
Wales has renewable resources that are almost equal to those of Scotland on a head-for-head basis (less in wind resources, but much more in tidal resources) and better than those of the Six Counties. Yet we lag behind on 8.7% from renewables, only marginally ahead of England's 8.2%. The problem is therefore one of policy. Wales cannot decide its own energy policy using the tools that are available to Scotland and the Six Counties, and therefore is forced to accept England's energy policy, based on England's priorities.
Because of projects already in the pipeline, it is almost certain that Scotland will reach the target of producing half of the electricity it consumes from renewables by 2015. And if it continues with these policies there is no reason at all why it shouldn't reach 100% by 2020. Scotland is showing us what can be done.
We in Wales could easily do the same if we were able to concentrate our efforts on developing the renewable resources we have in abundance, rather than being forced off course by the UK Government's obsession with fracking for gas and new nuclear power stations.