The Rise of the Gigafactory. An Investment Opportunity Already Gone Begging?

 Edie reports that to achieve the UK's EV ambitions there will need to be some 50M sq ft of Gigafactories. The investment required is substantial but with the push of legislation could this be a good place for some of my spare cash? Ethical investing is becoming a hot topic and this could just be a decent niche to tap into.

Wind Powered Mobile Masts - Interesting Idea

 Vodafone are to trial mobile 'phone masts with inbuild wind generators. It's an interesting idea. Coupling these generators with battery storage should help to solve the problem of remote mobile coverage where grid connection is not possible at economic rates. 

Oil and Gas Majors are a Bad as Electricity Utilities

 Following on from yesterday's report from Edie on how electricity utilities and car manufacturers are way behind the curve to achieve just 1.5C warming now comes another analysis to show the, sadly unsurprising, conclusion that oil and gas majors are similar laggards. I've reposted this report, too.

Eight in ten oil and gas majors on track to breach Paris Agreement, despite increase in net-zero pledges

24 November 2021, source edie newsroom

An analysis of the emissions and climate plans of 58 oil and gas giants has found that most are failing to decarbonise in line with climate science, with Saudi Aramco, ExxonMobil and Chevron among the worst offenders.

In terms of market capitalisation, ExxonMobil was one of the top three offenders named in the report

Published today (24 November), the analysis from the Transition Pathway Initiative (TPI) is the first to confirm that multiple oil and gas firms are now operating in line with the Paris Agreement’s 1.5C pathway, namely Eni, TotalEnergies and Occidental. Additionally, Imperial Oil and Tatneft were deemed to be aligned with the Paris Agreements’ 2C pathway.

This means that, ultimately, 48 of the 53 companies are set to generate emissions higher than their carbon budget in a Paris-aligned world. This cohort includes some notable firms which claim their net-zero frameworks are robust, including BP and Royal Dutch Shell.

A particular weakness was found to be the disclosure of Scope 3 (indirect) emissions and credible targets for reducing them. For oil and gas majors, customers using sold products will typically account for vastly more emissions than their direct operations.

The TPI assessed companies’ current levels of emissions as well as the strength of their emissions reduction plans through to 2030 and 2050 – and the likelihood of them achieving them under current company governance and investment approaches. The 1.5C net-zero pathway used by the analysts is that detailed by the International Energy Agency (IEA).  

More than 110 investors with more than $39trn in assets under management collectively have pledged to support the TPI, so the findings could push those investing in the energy sector to increase engagement with many of the named firms. 

“Concerningly, for investors there remains a significant distance between net-zero rhetoric and net-zero reality in the case of most fossil fuel majors,” said the TPI’s chairperson Adam Matthews.

Mining and utilities

The TPI also looked at the decarbonisation progress and pledges of 76 electric utilities and six diversified mining firms with coal mining operations. Across this whole cohort of 140 businesses, most (66%) were not aligned with either of the Paris Agreement’s pathways.

The only companies aligned with 1.5C, other than the three oil and gas majors mentioned above, are E.ON, RWE, Orsted, Public Service Enterprise Group, EDP, Eversource Energy, Con Edison, CMS Energy, AES, Meridian Energy and Enbw Energie. The TPI has said that, while electric utilities deserve credit for setting credible net-zero targets, progress remains too slow overall.

“While the pace of transition efforts in energy supply sectors has increased, it has not yet reached the level which is necessary to prevent the worst consequences of climate change,” said co-author Nikolaus Hastreiter.

“One-third of the assessed electricity utilities have published encouraging net-zero targets, even though particular attention must be paid to their timelines. To keep global warming to 1.5C, the sector must reach net-zero already by 2040 on a global level. The sector plays a crucial role as a first mover in the zero-carbon transition, given that the decarbonisation plans of other sectors anticipate the use of carbon-neutral electricity in the future." 

Earlier this week, a separate analysis of 50 large electric utility firms found that almost all (98%) companies were operating in a manner inconsistent with the Paris Agreement’s 1.5C temperature pathway. That analysis was conducted by the World Benchmarking Alliance (WBA), CDP and ADEME.

Sarah George

Another Depressing Report on the Road to 1.5C

 This is a repost from Edie and makes for depressing reading. Electric utilities and car manufacturers form two of the industrial sectors most in the limelight in terms of CO2 emissions. If they are failing to operate in ways consistent with the 1.5C target what hope is there for the rest of industry? A "hockey stick" of concerted activity is required!

Almost all electric utilities and carmakers failing to decarbonise in line with 1.5C, says damning report

24 November 2021, source edie newsroom

Just 7% of large carmakers and 2% of large electric utility firms are decarbonising at the pace required to avert the worst impacts of the climate crisis, according to a major new analysis of 80 corporates out today (24 November).

35 of the 50 electric utilities assessed will likely see emissions increasing in the short-term

The study, conducted by the World Benchmarking Alliance (WBA), CDP and ADEME, assessed the climate commitments of 50 large electricity firms and 30 major automotive firms, as well as their progress on decarbonising operations and products and services to date.

In the electric utilities space, almost all (98%) companies were operating in a manner inconsistent with the Paris Agreement’s 1.5C temperature pathway. Only Orsted was found to be on track for keeping within its 1.5C carbon budget through to 2035.

Globally, the sector is on track to produce 57% more carbon within the next 15 years than it would need to to keep 1.5C alive. Firms in Asia and the US were generally weaker on decarbonisation than those in Europe. The report warns that things will likely get worse before they get better, with 35 of the 50 firms forecast to increase fossil fuel use and emissions.

In the automotive sector, only two of the 30 companies – Tesla and Renault – are operating in line with 1.5C and have credible plans to stay within their carbon budget through to 2035.

The report also raises concerns over slow progress on low-carbon vehicle manufacturing. In 2020, just 7% of the vehicles sold across the 30 companies assessed were low-carbon. While this is a notable increase from 2% in 2015, the proportion will need to reach 64% by 2030 in a 1.5C pathway, the report states,

Particular laggards include Honda, Mahindra & Mahindra, Mazda, Subaru, Suzuki, Ford and Toyota, which all saw low-carbon vehicles accounting for less than 1% of sales in 2020. The report additionally calls on VM, GM, Stellantis and SAIC Motor to accelerate progress, as they are the largest firms included in the report.

The report’s authors have described the findings as “red flags” that “could undermine the legacy” of COP26.

Just transition planning

Using the WBA’s research, the reports also assess the extent to which the 80 businesses are planning for a “just” low-carbon transition, in which worker and community rights and wellbeing are safeguarded and improved.

Automakers, in general, fared worse than the electric utilities. The average score for a carmaker in the WBA’s just transition assessment, out of a possible 16, was just 2.9.

The report concludes that the electric utilities sector has improved ambitions and actions and is now performing “well” overall. European firms were the best performers, with names including Orsted, SSE, E.ON, Vattenfall and EDF energy at the top of the benchmark.

SSE has notably already published a just transition plan to net-zero, ahead of the implementation of a UK Government mandate for large, high-emitting corporates to make this move. This will come into effect in 2023, it was confirmed at COP26.

The organisations behind today’s report are now calling on other nations to follow suit – and for other parts of the value chain to put pressure on high-emitting sectors.

“While policymakers are wondering if, when and how to address the question of companies’ transition plans alignment with 1.5C, these updated benchmarks prove once again that the world can’t only rely on private sector’s commitments to reach planetary carbon neutrality,” said ADEME’s coordinator for the ACT Initiative, Romain Poivet.

WBA’s decarbonisation and energy transformation lead Vicky Sins added: "With companies in these sectors lagging behind on both transition planning and in reducing net emissions, we need investors, governments, civil society and other actors to engage with these keystone businesses and hold them accountable for the gaps between ambition & performance right now, and not in the future.”

Sarah George

Charging Points - A Good Move - But Is This Levelling Up?

 Boris Johnson has confirmed that from 2022 it will be mandatory for new homes to have EV charging points. This is an important small step but let's be clear - these will be private points accessible only to the home owner (or owners where a site is multi-occupancy). Much more important is access generally to rapid charging infrastructure. We are still "watching this space".

More Flying Hypocracy

 What is the matter with this government? First we had the ridiculous cutting back on air passenger duty on domestic flights and now we have subsidies announced for a couple of those routes. And I have to take a very large pinch of salt to get anywhere near believing the statement that this is temporary while other forms of connectivity are improved. Joined-up thinking this is not.

"If you aren't serious about public transport then you aren't serious about net-zero"

 My headline is a quote from Colm Britchfield and says it all about HM Treasury in particular and the UK Government in general. The Rail Plan is yet another missed opportunity. The trouble is that planning in Government seems to mirror Boris Johnsons' style - all spur of the moment, glib sound-bites. Any rounded, whole-picture strategising just doesn't happen. This is a repost from Edie:

Integrated Rail Plan: £96bn rail extension and electrification scheme draws lukewarm reaction from UK's green economy

18 November 2021, source edie newsroom

The UK Government has published its highly anticipated £96bn Integrated Rail Plan, stating that it will assist in delivering levelling up and net-zero agendas - but the reaction has been lukewarm at best.

Image: HS2

The Plan was published by the Department for Transport (DfT) this afternoon (18 November) and is the first comprehensive update of this scale to Government’s rail approach in more than a decade.

Without a change in approach, the DfT has admitted, it would have taken until the 2040s and up to £185bn to deliver promised improvements to high-speed tail. The Plan had originally been promised around 12 months ago.

Outlined today are plans for three new high-speed lines across and between the North of England and the Midlands, as well as a string of electrification projects which – once completed – will mean that 75% of England’s main lines will be electric.

On high-speed rail, the Plan scraps proposals to extend HS2’s eastern leg to Leeds, prioritising investment in the eastern leg between Birmingham and Sheffield and in the western leg between Birmingham and Manchester. Understandably, many in Leeds have voiced disappointment at this decision.

The Plan also provides an update on the Northern Powerhouse Rail project, claiming its approach will cut journey times between Leeds and Manchester from 55 minutes to 33. However, some have pointed out that the detailed upgrades to the existing TransPennine line were already promised under previous Transport Secretary Chris Grayling.

The DfT has its this approach will result in quicker journey times for many and that it will enable a doubling or trebling of journey capacity on key routes.

It has also stated that “under earlier plans, smaller towns on existing main lines such as Doncaster, Grantham, Huddersfield, Wakefield, and Leicester would have seen little improvement, and in some cases, even their services cut back”. The Plans are slated as an improvement in this respect.

There are, additionally, plans to integrate the new high-speed rail projects with existing transport systems in the towns and cities served and to improve intra-city transport for these locations.

The West Yorkshire Combined Authority will receive £200m to begin the delivery of a new urban transit system. The DfT has stated that it is “righting the wrong that Leeds is the largest city in Western Europe without one”.  Options have also been proposed for completing the Midlands Rail Hub, which will increase local rail services across the region.

It’s electrifying

On electrification, the Plan outlines a commitment to electrify more than 180 miles of route, including the TransPennine Main Line between Manchester, Leeds and York, and the Midland Main Line from London to Nottingham, Derby and Sheffield.

These steps build on a commitment to remove all diesel-only trains from the English rail network by 2040, as outlined in the Transport Decarbonisation Plan. Transport is notably the UK’s most-emitting sector, so needs to be a key focus area in the transition to net-zero by 2050.

The DfT has stated that all projects detailed under the Plan will meet the Government’s existing requirements for calculating and reducing emissions. They will also need to meet a requirement for all major public infrastructure projects to have a net-positive nature update. Papers on that requirement specifically mention HS2. Going beyond an existing commitment to no net loss in biodiversity on HS2 – a commitment many green groups believe the developers are set to break – there will be a requirement for the project to deliver a net gain. But, recognising that ancient woodland cannot be replaced, the Government has chosen to exclude it from calculations on no net loss and on net gain. 

Green economy reaction

As well as decarbonising rail lines, it is clear that the UK will need to increase public transport uptake and improve the efficiency and accessibility of systems to meet its net-zero target.

But the Plan has been widely criticised, by those campaigning for levelling up and those working on the net-zero transition alike.

Sky is reporting that communities and universities across the North East and Midlands, as well as MPs representing local regions, feel “misled”, as today’s plan does not deliver all that has been promised for years.

The director-general of train operator trade body Rail Delivery Group Andy Bagnall said that  "leaving out key pieces of the jigsaw will inevitably hold back the ability for the railways to power the levelling up agenda and the drive to net-zero” in a “fair, clean recovery” from Covid-19.

Green Party MP for Brighton Pavillion Caroline Lucas argued that the Government is not taking a joined-up approach to decarbonising transport. She Tweeted: “We need a decarbonised, affordable and fully integrated transport network across the whole country.

“Pledges on rail are broken while the Government makes domestic flights cheaper and plans a £27bn spend on roads.”

E3G's researcher for place-based transitions Colm Britchfield Tweeted: "Scrapping half of HS2 and cutting TfL to the bone (get ready for reduced tube/bus, no new cycle infrastructure and no new air pollution measures) is utterly negligent from HM Treasury. If you aren't serious about public transport then you aren't serious about net-zero, simple as that." 

Green Alliance's executive director Shaun Spiers Tweeted: "I got a lot of flak when I was at CPRE for supporting high-speed rail. For me, it was always about increasing capacity, 'redrawing the economic geography of the country' and [a case of] sustainable rail versus polluting roads and aviation. 

"But what we have now looks like the worst of all worlds: a truncated HS2, significantly reducing its benefits; a £27bn roads programme; and a Government keen to boost domestic flights and airport expansion. This makes no sense economically or socially, let alone for the environment."

Sarah George

What Does Westminster Not Like About Energy Efficiency?

 Many authors have bemoaned the short-sightedness of the UK Government's Heat and Buildings Strategy. Here is Andrew Warren's pithy take . This is a repost from EiD, itself a repost from Energy in Buildings and Industry.

Why has the Government ignored the ‘first fuel’ once again?

The UK Government’s long promised Heat and Buildings strategy finally emerged just before the Glasgow COP 26 event. Over two years in gestation, the launch focussed entirely upon the declared “confirmed ambition” to eliminate new fossil fuel boilers from the marketplace within 14 years.

The official press release for the strategy is entitled ,optimistically, “Plan to drive down the cost of clean heat.” It includes lengthy quotations of enthusiasm from the Business Secretary Kwasi Kwarteng, and from eight different business leaders anticipating growth and profits from its implementation. Plus most unusually a very upbeat statement ascribed to Prime Minister Johnson, who even followed up with a further paeon of praise in the Sun newspaper.

The established mantra of “fabric first” to improve buildings has disappeared.. The three-page press release contained absolutely no references to anything to do with the fabric- no references at all to windows,  doors, roofs, walls, lighting, appliances, even to the word “insulation”.

The focus is so much on fuels rather than building fabric that I feel the strategy is wrongly named. The conjunction needs to be substituted by a preposition.. Essentially, it is a “heat IN buildings” rather than a “heat AND buildings” strategy.

The emphasis comes down firmly in favour of electric heat pumps, subject to “expected “cost declines. The press release leads with “Government sets out plan to drive down the cost of low carbon heating technologies like heat pumps, working with industry to ensure that in future they are no more expensive to buy and run for consumers as (sic) fossil fuel boilers.”

But even the centrepiece grant scheme is pretty half hearted. Consider. There were 30,000 heat pumps installed during 2019. The fund announced for the new strategy can only provide a part payment for, yes, 30,000 heat pumps to be installed each year during the next three financial years.

Another way of expressing the “largesse” is that the £5000 per home on offer from April 2022 to install heat pumps is identical to the money available for installing heat pumps available from October 2020 to March 2021 under the Green Homes Grant scheme.

The difference is that the total budget available for the GHG scheme was due to be £1.8bn over 18 months. . Rather than the £450m over three years now being offered.  And there will be NO funds to help install any heat pumps between April 2021 and March 31 2022.

At present, the capital cost difference between condensing gas boilers- the only kind now installed, rather than the “beloved combi” boilers cited by Johnson in his Sun article – and heat pumps is at least 4:1. The official reassurance line is that all technologies reduce in price as their marketplace grows in size. Just look at off shore wind electricity.

There is one big difference. The UK was amongst the first countries in the world to adopt offshore wind power stations. In contrast, the worldwide market for heat pumps is already almost 20 million, p.a. of which just 30,000 are installed in the UK. Even if Johnson’s official target of a 20-fold increase in the size of the British marketplace , the cost of each installation will only marginally decrease in consequence.Certainly nothing to approach removing that 4:1 differential.

Since the overnight demise of the Green Homes Grant scheme last March, with 80% of its initial budget left unspent,  I have lost count of the number of independent studies that have set out blueprints of how important it is to improve the fabric  energy performance of the nation’s buildings .These point to ever widening  policy and funding  gaps   They also detail how, despite having a far more energy efficient building stock than the UK, many other European nations are injected billions into similar schemes designed to  “build back better” after Covid 19.

Tucked away in the Review, there is a detailed colourful chart explaining the breakdown of potential emissions savings from the heating of UK buildings during this decade. It makes plain that “measures to improve thermal performance” should be delivering well over twice as many savings as heat pumps.

There is no substantive fabric-related announcement easily identifiable in the 202-page document .Instead the strategy mainly reiterates pre-existing policies. There is some welcome additional funding for local authority programmes, like the home upgrade grant concentrating upon off-gas network low-income homes, and for the social housing decarbonisation fund. There is reiteration of commitments to achieve higher energy performance certificates, particularly in rental properties both residential – especially in low-income households – and commercial(the latter seeking minimum B ratings). Following consultation this spring, there is now a formal proposal to “invite” mortgage lenders to set target for mortgage spending based on EPC standards.

But these welcome individual programmes do not a strategy make. The last government strategy for demand management is nine years old. A new one is long overdue.

A few days before, the government published its electricity projections to 2035. It must be the first time in well over thirty years that any U.K. Government has issued a power system plan of such magnitude, without making any reference at all to the benefits of improving efficiency in generation or in usage. Frankly I cannot recall any other comparable Government elsewhere in the world so overtly and comprehensively ignoring the demand side of the energy marketplace.

I really had thought that the “energy efficiency first” policy mantra, adopted by the International Energy Agency,  and by the EU even whilst the UK was a member, meant that the days of considering energy policy to be exclusively about supply sources, had disappeared . Obviously I was wrong.  Neanderthals obviously still roam within the UK Business and Energy Department.

Who Watches the Watchdog

 The post-Brexit Office for Environmental Protection now legally exists although it doesn't yet have its fully intended powers. With this government's woeful history of post-Brexit legislation and action the sceptic in me wonders just what we may expect from this body. Already there are suggestions that Defra ministers will have the ability to meddle in the Office's affairs and that it cannot ever be regarded as truly independent. So - who watches the watchdogs?

Roadmap? What Roadmap?

 This post at Edie rather reflects my feeling about COP26 pledges and national plans. There are lots of fine words flying about, there's much hand-waving, but strong, coherent policies and robust measures still seem to be somewhat thin on the ground.