factorfiction3 People power: A realistic solution to Britains energy crisis?

The Claim
“We will scrap Labour’s target of [getting] 1.6% [of the UK's electricity from decentralised sources] by 2020 and significantly raise the level of ambition for decentralised energy in the UK by 2020 and beyond.” 
Conservative party policy document, seen by Channel 4 News FactCheck

Cathy Newman checks it out
“Decentralised” energy is the rather nerdy term for power that comes from the people. That is, green energy – rooftop windmills and water turbines, solar panels and boilers fuelled by wood chips – that’s produced by individuals and communities rather than traditional utility companies. Senior Conservatives tell me they’d like to see around 15 per cent of the UK’s energy come from such sources by 2020. That’s a massive figure, when you think the government currently reckons only 1.6 per cent of our electricity will come from decentralised sources in the same time scale. So how on earth could the Tories do it?

Background
Britain faces a serious energy problem. Our island nation is a long way from reliable power supplies, North Sea reserves are running out and our nuclear power stations are old. Add to this the threat of climate change, and you can see why there is political consensus that the looming energy crisis needs to be tackled – and fast.

But as with so many thorny problems, the parties differ on how this can be done.

Decentralised energy
The Conservative solution, set out in a confidential policy document seen by Channel 4 News Factcheck, is small and local. They want windmills on top of your house, solar panels on your roof, boilers which heat your home as well as providing electricity – so-called combined heat and power – and biomass boilers which are fuelled by renewable products like wood chips.

Buy into the Tory scheme, and not only will you be doing your bit for the environment, but you’ll stop receiving electricity bills (because you’ll be producing your own power). You’ll even be able to make money by selling your energy back to the National Grid.
 
Fifteen per cent in a decade?
But is it too good to be true? The Tories reckon Britain could – with a fair wind – get 15 per cent of its energy from decentralised sources by 2020, if financial incentives introduced by the government are applied more widely.

From April householders will get cash rewards for generating their own electricity from low-carbon sources. They’ll get additional money if they sell any surplus back to the National Grid. But the Tories want to increase the range of energy sources which qualify for the incentives.

Biogas for example – gas produced from farm and food waste – isn’t covered by the government scheme, but would be under the Tories. Bigger electricity installations (generating up to 10 megawatts, double the 5MW limit proposed by the government) would also be included to entice whole communities to band together to produce their own fuel.

Expensive solution
“Individual householders becoming little generation plants and selling power back into the system is a wonderfully attractive and seductive idea,” says Professor Dieter Helm, an energy policy expert at Oxford University, who also advises the government. “We would all like to be our own power stations and make money.”
 
But Professor Helm fears this is an idealistic solution. This method of producing energy is extremely expensive because it’s unreliable, so it would need to be backed up by more conventional power sources.

Fueling inequality?
“There is no free lunch when it comes to the energy sector,” explains Professor Helm. “When you generate your own electricity, someone else has to buy it. In the end, other customers pay. Decentralisation is not cost-effective.”

“Consumers selling electricity back to the grid is one of the most costly things you could think of to reduce carbon emissions.”

He also fears the Conservative proposals will fuel inequality. The rich would invest in the fancy kit for their homes, and the poor would end up buying the power they generate.

“Essentially it’s going to be the middle classes that sell the electricity because they can afford the installation. Poorer customers will pick up the bill,” says Professor Helm.

Democratisation of power
Ben Warren, head of renewable energy at Ernst & Young, believes micro-generation should be encouraged. “The democratisation of power,” as he puts it, “where we control and own our own energy generation is something that is feasible.”
 
He believes there are two problems with the Conservative plan. First, the scheme depends on people wanting to take part. Public enthusiasm is not guaranteed. And second, Britain lacks the infrastructure to enable individuals to feed power back into the Grid.

But Warren believes the Tories should be commended for their ambition: “We are talking about technology that needs to be commercialised and made available to the public. So the Tory plans are ambitious but not necessarily unachievable.”
 
Nuclear option
According to Professor Helm, though, nuclear power remains a more realistic solution to Britain’s energy problem.”A few nuclear power stations make a great deal of difference,” he says.

“Decentralised energy produces lots of little bits of power, but on a scale that is intermittent and therefore needs backing up. You cannot say if the Tory target of 15 per cent is credible until you know the details. Crucially, it depends on which energy sources are included in it, and that remains to be seen”.

Cathy Newman’s verdict
The Tories had been planning to make the 15 per cent figure a manifesto promise. The policy document we’ve seen suggests they won’t nail their green colours to the mast quite so explicitly. That’s probably just as well, because to get so much energy from such small sources within just a decade would quite literally be tilting at windmills. Decentralised energy is too unreliable and too expensive, so the Tories would be fighting a losing battle. But that’s no reason to surrender. Lofty ambitions put the first man on the moon, so full marks for the quixotic vision, but with just weeks until a general election, a dose of more prosaic reality would be healthy.

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