Today’s Energy Bill contains no pound signs. [1] Although it has been broadly welcomed for the changes it proposes to the electricity market, in itself it neither strengthens nor weakens the move to a lower carbon economy. However in the small truckload of documents published alongside the Bill, more financial detail is provided. Deep in that documentation is a quietly voiced suggestion of a high 200 gram per kilowatt hour decarbonisation target for electricity supply in 2030. This should worry us. Such a limit allows unabated gas to provide up to 60% of all electricity supplied. And under current rules, gas turbines operating in 2030 are permitted to carry on until at least 2045. A 200 gram rule means the pathway to the legally binding 2050 UK carbon budget is unattainable. Until recently campaigners hoped the Energy Bill would set a target for the carbon emissions of the electricity sector in 2030. The prolonged debate within government seems to have resulted in a compromise that provided sufficient support for renewables up to 2020 but has left the 2030 emissions limit to be decided in 2016.

Why is electricity decarbonisation important? As the Climate Change Committee (CCC) has repeatedly pointed out, we can more easily reduce CO2 from generating electricity than we can from any other source of emissions. If we slacken the focus on electricity how can we expect to sharply reduce CO2 from, say, cement manufacture or aircraft travel? In its 2010 recommendations (now put into law) on the emissions budget for the period 2022-27 the CCC said

To meet the indicative 2030 target, putting the UK on the path to 2050, it is essential radically to decarbonise power generation, cutting emissions intensity from today’s level of around 500 gCO2/kWh to around 50 gCO2/kWh in 2030.

No bureaucratic hedging or tentative assertions. The CCC says a 50 gram limit is ‘essential’. But here’s what today’s material from DECC says: [2]

To reflect the decision to take a power to set a decarbonisation target range (and the decision on the levy control framework) and show the wider range of costs and benefits of EMR, the Impact Assessment will be updated early in the New Year to include analysis of decarbonising the power sector to an average emissions level of 200gCO2/kWh in 2030.

To be clear, the Impact Assessment does also mention looking at a 50g limit. However, as far as I know, the repeated mentions of a possible 200g target in 2030 is the first time government has indicated the possibility of such a lax figure.

This week’s press coverage has repeatedly stated that the carbon targets for 2030 have not yet been set by the CCC. However the Committee has extensively trailed what it expects the figure to be for that year. Its indicative carbon budget for 2030 is 310 million tonnes. [3] (This is about half current levels, including non CO2 gases). The approximate composition is indicated below:

The main sources of UK greenhouse gases in 2030: indicative budget from the CCC

The figure for power generation is about 20 million tonnes a year in 2030. This assumes a power sector emissions ratio of less than 50 grams for each kilowatt hour generated, or about 10% of today’s level. A 200 gram target would raise emissions to about 80m tonnes in 2030, assuming electricity demand is roughly the same as it is today. So moving from less than 50 grams to 200 grams adds 60 million tonnes of carbon emissions and uses up almost 20% of the 2030 indicative budget.

The first question is: can the UK achieve lower levels of CO2 emissions in other sectors to compensate for this? In all probability, no. In the case of transport emissions, for example, the 2030 budget assumes 10% of all cars on the road are fully electric and 20% are hybrid. But to get to that level, the new cars sold in 2030 will have to be 60% electric and the emissions from the average conventional new car will have to be about half today’s best levels.

Alternatively, take emissions from domestic heating. A new boiler installed tomorrow may still be working in 2030. The poor quality of UK housing stock will take many decades to improve. The CCC’s 2030 existing targets are already stretching. Even looking through optimistic lenses, I cannot see how non electricity emissions can be compressed by an additional 60 million tonnes by 2030.

The second question is: what will a 200 gram target mean for the structure of electricity supply? If electricity needs remain constant, this means that gas turbines can generate about 60% of all supply in 2030, rather than 15% or less envisaged by the CCC.( A new gas plant puts out about 330 gram of CO2 for each kilowatt hour generated). In other words, we will continue to rely principally on fossil fuels. In simple terms, we will have replaced coal with gas and achieved little else.

Optimists will say that it will be more profitable to operate wind turbines or nuclear by 2030 and investors will happily finance the ten thousand offshore turbines and fifteen nukes that the government wants built. On the other hand investors may say that the possible 200 gram 2030 limit allows complete freedom to increase the rate of construction of gas plants. I’m on the side of the pessimists.

[1] This isn’t strictly true. There are 16 £ signs in the report, almost all referring to levels of fines for offences under the Act

[2] http://www.decc.gov.uk/assets/decc/11/policy-legislation/Energy%20Bill%202012/7105-contracts-for-difference-impacts-assessment-emr.pdf

[3] See http://downloads.theccc.org.uk.s3.amazonaws.com/4th%20Budget/CCC-4th-Budget-Book_plain_singles.pdf