Tag: energy policy

How to build a business model for negative emissions

10 May 2021

Carbon capture
Watching a biomass train as it prepares to enter Drax Power Station's rail unloading building 2 (RUB2)

In brief

  • Policy intervention is needed to enable enough BECCS in power to make a net zero UK economy possible by 2050

  • Early investment in BECCS can insure against the risk and cost of delaying significant abatement efforts into the 2030s and 2040s

  • A two-part business model for BECCS of carbon payment and power CfD offers a clear path to technology neutral and subsidy free GGRs

The UK’s electricity system is based on a market of buying and selling power and other services. For this to work electricity must be affordable to consumers, but the parties providing power must be able to cover the costs of generating electricity, emitting carbon dioxide (CO2) and getting electricity to where it needs to be.

This process has thrived and proved adaptable enough to rapidly decarbonise the electricity system in the space of a decade.

With a 58% reduction in the carbon intensity of power generation, the UK’s electricity has decarbonised twice as fast as that of other major economies. As the UK pushes towards its goal of achieving net zero emissions by 2050, new technologies are needed, and the market must extend to enable innovation.

Bioenergy with carbon capture and storage (BECCS) is one of the key technologies needed at scale for the UK to reach net zero. Yet there is no market for the negative emissions BECCS can deliver, in contrast to other energy system services.

BECCS has been repeatedly flagged as vital for the UK to reach its climate goals, owing to its ability to deliver negative emissions. The Climate Change Committee has demonstrated that negative emissions – also known as greenhouse gas removals (GGRs) or carbon removals – will be needed at scale to achieve net zero, to offset residual emissions from hard to decarbonise sectors such as aviation and agriculture. But there is no economic mechanism to reward negative emissions in the energy market.

For decarbonisation technologies like BECCS in power to develop to the scale and within the timeframe needed, the Government must implement the necessary policies to incentivise investment, and allow them to thrive as part of the energy and carbon markets.

BECCS is essential to bringing the whole economy to net zero

The primary benefit of BECCS in power is its ability to deliver negative emissions by removing CO2 from the atmosphere through responsibly managed forests, energy crops or agricultural residues, then storing the same amount of CO2 underground, while producing reliable, renewable electricity.

Looking down above units one through five within Drax Power Station

Looking down above units one through five within Drax Power Station

A new report by Frontier Economics for Drax highlights BECCS as a necessary cornerstone of UK decarbonisation and its wider impacts on a net zero economy. Developing a first-of-a-kind BECCS power plant would have ‘positive spillover’ effects that contribute to wider decarbonisation, green growth and the UK’s ability to meet its legally-binding climate commitments by 2050.

Drax has a unique opportunity to fit carbon capture and storage (CCS) equipment to its existing biomass generation units, to turn its North Yorkshire site into what could be the world’s first carbon negative power station.

Plans are underway to build a CO2 pipeline in the Yorkshire and Humber region, which would move carbon captured from at Drax out to a safe, long-term storage site deep below the North Sea. This infrastructure would be shared with other CCS projects in the Zero Carbon Humber partnership, enabling the UK’s most carbon-intensive region to become the world’s first net zero industrial cluster.

Developing BECCS can also have spillover benefits for other emerging industries. Lessons that come from developing and operating the first BECCS power stations, as well as transport and storage infrastructure, will reduce the cost of subsequent BECCS, negative emissions and other CCS projects.

Hydrogen production, for example, is regarded as a key to providing low, zero or carbon negative alternatives to natural gas in power, industry, transport and heating. Learnings from increased bioenergy usage in BECCS can help develop biomass gasification as a means of hydrogen production, as well as applying CCS to other production methods.

The economic value of these positive spillovers from BECCS can be far reaching, but they will not be felt unless BECCS can achieve a robust business model in the immediate future.

With a 58% reduction in the carbon intensity of power generation, the UK’s electricity has decarbonised twice as fast as that of other major economies. As the UK pushes towards its goal of achieving net zero emissions by 2050, new technologies are needed, and the market must extend to enable innovation.

Designing a BECCS business model

The Department for Business Energy and Industrial Strategy (BEIS) outlined several key factors to consider in assessing how to make carbon capture, usage and storage (CCUS) economically viable. These are also valid for BECCS development.

Engineers working within the turbine hall, Drax Power Station

Engineers working within the turbine hall, Drax Power Station

One of the primary needs for a BECCS business model is to instil confidence in investors – by creating a policy framework that encourages investors to back innovative new technologies, reduces risk and inspires new entrants into the space. The cost of developing a BECCS project should also be fairly distributed among contributing parties ensuring that costs to consumers/taxpayers are minimised.

Building from these principles there are three potential business models that can enable BECCS to be developed at the scale and in the timeframe needed to bring the UK to net zero emissions in 2050.

  1. Power Contract for Difference (CfD):
    By protecting consumers from price spikes, and BECCS generators and investors from market volatility or big drops in the wholesale price of power, this approach offers security to invest in new technology. The strike price could also be adjusted to take into account negative emissions delivered and spillover benefits, as well as the cost of power generation.
  2. Carbon payment:
    Another approach is contractual fixed carbon payments that would offer a BECCS power station a set payment per tonne of negative emissions which would cover the operational and capital costs of installing carbon capture technology on the power station. This would be a new form of support, and unfamiliar to investors who are already versed in CfDs. The advantage of introducing a policy such as fixed carbon payment is its flexibility, and it could be used to support other methods of GGR or CCS. The same scheme could be adjusted to reward, for example, CO2 captured through CCS in industry or direct air carbon capture and storage (DACCS). It could even be used to remunerate measurable spillover benefits from front-running BECCS projects.
  3. Carbon payment + power CfD:
    This option combines the two above. The Frontier report says it would be the most effective business model for supporting a BECCS in power project. Carbon payments would act as an incentive for negative emissions and spillovers, while CfDs would then cover the costs of power generation.
Cost and revenue profiles of alternative support options

Cost and revenue profiles of alternative support options based on assuming a constant level of output over time.

 Way to go, hybrid!

Why does the hybrid business model of power CfD with carbon payment come out on top? Frontier considered how easy or difficult it would be to transition each of the options to a technology neutral business model for future projects, and then to a subsidy free business model.

By looking ahead to tech neutrality, the business model would not unduly favour negative emissions technologies – such as BECCS at Drax – that are available to deploy at scale in the 2020s, over those that might come online later.

Plus, the whole point of subsidies is to help to get essential, fledgling technologies and business models off to a flying start until the point they can stand on their own two feet.

The report concluded:

  • Ease of transition to technology neutrality: all three options are unlikely to have any technology neutral elements in the short-term, although they could transition to a mid-term regime which could be technology neutral; and
  • Ease of transition to subsidy free: while all of the options can transition to a subsidy free system, the power CfD does not create any policy learnings around treatment of negative emissions that contribute to this transition. The other two options do create learnings around a carbon payment for negative emissions that can eventually be broadened to other GGRs and then captured within an efficient CO2 market.

‘Overall, we conclude that the two-part business model performs best on this criterion. The other two options perform less well, with the power CfD performing worst as it does not deliver learnings around remunerating negative emissions.’

Assessment of business model options

Assessment of business model options. Green indicates that the criteria is largely met, yellow indicates that it is partially met, and red indicates that it is not met.

Transition to a net zero future

Engineer inspects carbon capture pilot plant at Drax Power Station

Engineer inspects carbon capture pilot plant at Drax Power Station

Crucial to the implementation of BECCS is the feasibility of these business models, in terms of their practicality in being understood by investors, how quickly they can be put into action and how they will evolve or be replaced in the long-term as technologies mature and costs go down. This can be improved by using models that are comparable with existing policies.

These business models can only deliver BECCS in power (as well as other negative emissions technologies) at scale and enable the UK to reach its 2050 net zero target, if they are implemented now.

Every year of stalling delays the impact positive spillovers and negative emissions can have on global CO2 levels. The UK Government must provide the private sector with the confidence to deliver BECCS and other net zero technologies in the time frame needed.

Go deeper

Explore the Frontier Economics report for Drax, ‘Supporting the deployment of Bioenergy Carbon Capture and Storage (BECCS) in the UK: business model options.’

Standing together
against climate
change

Will Gardiner, Chief Executive Officer, Drax Group

27 January 2021

Opinion
Global leadership illustration

Tackling climate change requires global collaboration. As a UK-US sustainable energy company, with communities on both sides of the Atlantic, we at Drax are keenly aware of the need for thinking that transcends countries and borders.

Joe Biden has become the 46th President of my native country at a crucial time to ensure there is global leadership and collaboration on climate change. Starting with re-joining the Paris Agreement, I am confident that the new administration can make a significant difference to this once-in-a-lifetime challenge.

This is why Drax and our partners are mobilising a transatlantic coalition of negative emissions producers. This can foster collaboration and shared learning between the different technologies and techniques for carbon removal that are essential to decarbonise the global economy.

Biomass storage domes at Drax Power Station in North Yorkshire at sunset

Biomass storage domes at Drax Power Station in North Yorkshire

Whilst political and technical challenges lie ahead, clear long-term policies that spur collaboration, drive innovation and enable technologies at scale are essential in achieving the UK and US’ aligned targets of reaching net zero carbon emissions by 2050.

Collaboration between countries and industries

What makes climate change so difficult to tackle is that it requires collaboration from many different parties on a scale like few other projects. This is why the Paris Agreement and this year’s COP26 conference in Glasgow are so vital.

Sustainable biomass wood pellets being safely loaded at the Port of Greater Baton Rouge onto a vessel destined for Drax Power Station

Our effort towards delivering negative emissions using bioenergy with carbon capture and storage (BECCS) is another example of ambitious decarbonisation that is most impactful as part of an integrated, collaborative energy system. The technology depends upon sustainable forest management in regions, such as the US South where our American communities operate. Carbon capture using sustainable bioenergy will help Drax to be carbon negative by 2030 – an ambition I announced at COP25, just over a year ago in Madrid.

Will Gardiner at Powering Past Coal Alliance event in the UK Pavilion at COP25 in Madrid

Will Gardiner announcing Drax’s carbon negative ambition at COP25 in Madrid (December 2019).

Experts on both sides of the Atlantic consider BECCS essential for net zero. The UK’s Climate Change Committee says it will play a major role in tackling carbon dioxide (CO2) emissions that will remain in the UK economy after 2050, from industries such as aviation and agriculture that will be difficult to fully decarbonise. Meanwhile, a report published last year by New York’s Columbia University revealed that rapid development of BECCS is needed within the next 10 years in order to curb climate change.

A variety of negative emissions technologies are required to capture between 10% and 20% of the 35 billion metric tonnes of carbon produced annually that the International Energy Agency says is needed to prevent the worst effects of climate change.

We believe that sharing our experience and expertise in areas such as forestry, bioenergy, and carbon capture will be crucial in helping more countries, industries and businesses deploy a range of technologies.

A formal coalition of negative emissions producers that brings together approaches including land management, afforestation and reforestation, as well as technical solutions like direct air capture (DAC), as well as BECCS, would offer an avenue to ensure knowledge is shared globally.

Direct air capture (DAC) facility

Direct air capture (DAC) facility

It would also offer flexibility in countries’ paths to net zero emissions. If one approach under-delivers, other technologies can work together to compensate and meet CO2 removal targets.

As with renewable energy, working in partnership with governments is essential to develop these innovations into the cost-effective, large scale solutions needed to meet climate targets in the mid-century.

A shared economic opportunity

I agree whole heartedly that a nation’s economy and environment are intrinsically linked – something many leaders are now saying, including President Biden. The recently approved US economic stimulus bill, supported by both Republicans and Democrats in Congress and which allocates $35 billion for new clean energy initiatives, is a positive step for climate technology and job creation.

Globally as many as 65 million well-paid jobs could be created through investment in clean energy systems. In the UK, BECCS and negative emissions are not just essential in preventing the impact of climate change, but are also a vital economic force as the world begins to recover from the effects of COVID-19.

Engineer inside the turbine hall of Drax Power Station

Government and private investments in clean energy technologies can create thousands of well-paid jobs, new careers, education opportunities and upskill workforces. Developing BECCS at Drax Power Station, for example, would support around 17,000 jobs during the peak of construction in 2028, including roles in construction, local supply chains and the wider economy.

Additional jobs would be supported and created throughout our international supply chain. This includes the rail, shipping and forestry industries that are integral to rural communities in the US South.

We are also partnered with 11 other organisations in the UK’s Humber region to develop a carbon capture, usage and storage (CCUS) and hydrogen industrial cluster with the potential to spearhead creating and supporting more than 200,000 jobs around the UK in 2039.

The expertise and equipment needed for such a project can be shared, traded and exported to other industrial clusters around the world, allowing us to help reach global climate goals and drive global standards for CCUS and biomass sustainability.

Clear, long-term policies are essential here, not just to help develop technology but to mitigate risk and encourage investment. These are the next crucial steps needed to deploy negative emissions at the scale required to impact CO2 emissions and lives of people.

Engineer at BECCS pilot project within Drax Power Station

At Drax we directly employ almost 3,000 people in the US and UK, and indirectly support thousands of families through our supply chains on both sides of the Atlantic. Drax Power Station is the most advanced BECCS project in the world and we stand ready to invest in this cutting-edge carbon capture and removal technology. We can then share our expertise with the United States and the rest of the world – a world where major economies are committing to a net zero future and benefiting from a green economic recovery.

Committing to a net zero power system as part of COP26

30 November 2020

Carbon capture

Dear Prime Minister, Chancellor, COP26 President and Minister for Energy and Clean Growth,

We are a group of energy companies investing tens of billions in the coming decade, deploying the low carbon infrastructure the UK will need to get to net zero and drive a green recovery to the COVID-19 crisis.

We welcome the leadership shown on the Ten Point Plan for a Green Industrial Revolution, and the detailed work going on across government to deliver a net zero economy by 2050. We are writing to you to call on the Government to signal what this will mean for UK electricity decarbonisation by committing to a date for a net zero power system.

Head of BECCS inspects pilot plant within Drax Power Station's CCUS Incubation Unit

Head of BECCS Carl Clayton inspects pipes at the CCUS Incubation Area, Drax Power Station

The electricity sector will be the backbone of our net zero economy, and there will be ever increasing periods where Great Britain is powered by only zero carbon generation. To support this, the Electricity System Operator is putting in place the systems, products and services to enable periods of zero emissions electricity system operation by 2025.

Achieving a net zero power system will require government to continue its efforts in key policy areas such as carbon pricing, which has been central in delivering UK leadership in the move away from coal and has led to UK electricity emissions falling by over 63% between 2012 and 2019 alone.

It is thanks to successive governments’ commitment to robust carbon pricing that the UK is now using levels of coal in power generation last seen 250 years ago – before the birth of the steam locomotive. A consistent, robust carbon price has also unlocked long term investment low-carbon power generation such that power generated by renewables overtook fossil fuel power generation for the first time in British history in the first quarter of 2020.

Yet, even with the demise of coal and the progress in offshore wind, more needs to be done to drive the remaining emissions from electricity as its use is extended across the economy.

In the near-term, in combination with other policies, continued robust carbon pricing on electricity will incentivise the continued deployment of low carbon generation, market dispatch of upcoming gas-fired generation with Carbon Capture and Storage (CCS) projects and the blending of low carbon hydrogen with gas-fired generation. Further forward, a robust carbon price can incentivise 100% hydrogen use in gas-fired generation, and importantly drive negative emissions to facilitate the delivery of a net zero economy.

Next year, the world’s attention will focus on Glasgow and negotiations crucial to achieving our climate change targets, with important commitments already made by China, the EU, Japan and South Korea amongst others. An ambitious 2030 target from the UK will help kickstart the Sprint to Glasgow ahead of the UK-UN Climate Summit on 12 December.

Electricity cables and pylon snaking around a mountain near Cruachan Power Station in the Highlands

Electricity cables and pylon snaking around a mountain near Cruachan Power Station, Drax’s flexible pumped storage facility in the Highlands

2030 ambition is clearly needed, but to deliver on net zero, deep decarbonisation will be required. Previous commitments from the UK on its coal phase out and being the first major economy to adopt a net zero target continue to encourage similar international actions. To build on these and continue UK leadership on electricity sector decarbonisation, we call on the UK to commit to a date for a net zero power system ahead of COP26, to match the commitment of the US President-elect’s Clean Energy Plan. To ensure the maximum benefit at lowest cost, the chosen date should be informed by analysis and consider broad stakeholder input.

Alongside near-term stability as the UK’s carbon pricing future is determined, to meet this commitment Government should launch a consultation on a date for a net zero power system by the Budget next year, with a target date to be confirmed in the UK’s upcoming Net Zero Strategy. This commitment would send a signal to the rest of the world that the UK intends to maintain its leadership position on climate and to build a greener, more resilient economy.

To:

  • Rt Hon Boris Johnson MP, Prime Minister of the United Kingdom
  • Rt Hon Rishi Sunak MP, Chancellor of the Exchequer
  • Rt Hon Alok Sharma MP, Secretary of State for Business, Energy and Industrial Strategy and UNFCCC COP26 President
  • Rt Hon Kwasi Kwarteng MP, Minister for Business, Energy and Clean Growth

Signatories:

BP, Drax, National Grid ESO, Sembcorp, Shell and SSE

View/download letter in PDF format

 

COP26: Will countries with the boldest climate policies reach their targets?

30 October 2020

Carbon capture

To tackle the climate crisis, global unity and collaboration are needed. This was in part the thinking behind the Paris Agreement. It set a clear, collective target negotiated at the 2015 United Nations Climate Change Conference and signed the following year: to keep the increase in global average temperatures to well below 2 degrees Celsius above pre-industrial levels.

In November 2021, COP26 will see many of the countries who first signed the Paris Agreement come together in Glasgow for the first ‘global stocktake’ of their environmental progress since its creation.

COP26 will take place at the SEC in Glasgow

Already delayed for a year as a result of the pandemic, COVID-19 and its effects on emissions is likely to be a key talking point. So too will progress towards not just the Paris Agreement goals but those of individual countries. Known as ‘National Determined Contributions’ (NDCs), these sit under the umbrella of the Paris Agreement goals and set out individual targets for individual countries.

With many countries still reeling from the effects of COVID-19, the question is: which countries are actually on track to meet them?

What are the goals?

The NDCs of each country represent its efforts and goals to reduce national emissions and adapt to the impacts of climate change. These incorporate various targets, from decarbonisation and forestry to coastal preservation and financial aims.

While all countries need to reduce emissions to meet the Paris Agreement targets, not all have an equally sized task. The principle of differentiated responsibility acknowledges that countries have varying levels of emissions, capabilities and economic conditions.

The Universal Ecological Fund outlined the emissions breakdown of the top four emitters, showing that combined, they account for 56% of global greenhouse gas emissions. China is the largest emitter, responsible for 26.8%, followed by the US which contributes 13.1%. The European Union and its 28 member states account for nine per cent, while India is responsible for seven per cent of all emissions.

These nations have ambitious emissions goals, but are they on track to meet them?

China

Traffic jams in the rush hour in Shanghai Downtown, contribute to high emissions in China.

By 2030, China pledged to reach peak carbon dioxide (CO2), increase its non-fossil fuel share of energy supply to 20% and reduce the carbon intensity – the ratio between emissions of CO2 to the output of the economy – by 60% to 65% below 2005 levels.

COVID-19 has increased the uncertainty of the course of China’s emissions. Some projections show that emissions are likely to grow in the short term, before peaking and levelling out sometime between 2021 and 2025. However, according to the Climate Action Tracker it is also possible that China’s emissions have already peaked – specifically in 2019. China is expected to meet its non-fossil energy supply and carbon intensity pledges.

United States

The forecast for the second largest emitter, the US, has also been affected by the pandemic. Economic firm Rhodium Group has predicted that the US could see its emissions drop between 20% and 27% by 2025, meeting its target of reducing emissions by 26% to 28% below 2005 levels.

However, President Trump’s rolling back of Obama-era climate policies and regulations, his support of fossil fuels and withdrawal from the Paris Agreement (effective from as early as 4 November 2020), suggest any achievement may not be long-lasting.

The United States’ Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, does not include any direct support to clean energy development – something that could also change in 2021.

European Union

CCUS Incubation Unit, Drax Power Station

Carl Clayton, Head of BECCS at Drax, inspects pipework in the CCUS area of Drax Power Station

The European Union and its member states, then including the UK, pledged to reduce emissions by at least 40% below 1990 levels by 2030 – a target the Climate Action Tracker estimates will be achieved. In fact, the EU is on track to cut emissions by 58% by 2030.

This progress is in part a result of a large package of measures adopted in 2018. These accelerated the emissions reductions, including national coal phase-out plans, increasing renewable energy and energy efficiency. The package also introduced legally binding annual emission limits for each member state within which they can set individual targets to meet the common goal.

The UK has not yet released an updated, independent NDC. However, it has announced a £350 million package designed to cut emissions in heavy industry and drive economic recovery from COVID-19. This includes £139 million earmarked to scale up hydrogen production, as well as carbon capture and storage (CCS) technology, such as bioenergy with carbon capture (BECCS) – essential technologies in achieving net zero emissions by 2050 and protecting industrial regions.

India

India, the fourth largest global emitter, is set to meet its pledge to reduce its emissions intensity by 33% to 35% below 2005 levels and increase the non-fossil share of power generation to 40% by 2030. What’s more, the Central Electricity Agency has reported that 64% of India’s power could come from non-fossil fuel sources by 2030.

Wind turbines in Jaisalmer, Rajasthan, India

Along with increasingly renewable generation, the implementation of India’s National Smart Grid Mission aims to modernise and improve the efficiency of the country’s energy system.

It is promising that the world’s four largest emitters have plans in place and are making progress towards their decarbonisation goals. However, tackling climate change requires action from around the entire globe. In addition to NDCs, many countries have committed to, or have submitted statements of intent, to achieve net zero carbon emissions in the coming years.

Net zero target

CountryTarget Date Status
Bhutan 🇧🇹Currently carbon negative (and aiming for carbon neutrality as it develops; pledged towards the Paris Agreement)
Suriname 🇸🇷Currently carbon negative
Denmark 🇩🇰2050In law
France 🇫🇷2050In law
Germany 🇩🇪2050In law
Hungary 🇭🇺2050In law
New Zealand 🇳🇿2050In law
Scotland 🏴󠁧󠁢󠁳󠁣󠁴󠁿2045In law
Sweden 🇸🇪2045In law
United Kingdom 🇬🇧2050In law
Bulgaria 🇧🇬2050Policy Position
Canada 🇨🇦2050Policy Position
Chile 🇨🇱2050In policy
China 🇨🇳2060Statement of intent
Costa Rica 🇨🇷2050Submitted to the UN
EU 🇪🇺2050Submitted to the UN
Fiji 🇫🇯2050Submitted to the UN
Finland 🇫🇮2035Coalition agreement
Iceland 🇮🇸2040Policy Position
Ireland 🇮🇪2050Coalition Agreement
Japan 🇯🇵2050Policy Position
Marshall Islands 🇲🇭2050Pledged towards the Paris Agreement
Netherlands 🇳🇱2050Policy Position
Norway 🇳🇴2050 in law, 2030 signal of intent
Portugal 🇵🇹2050Policy Position
Singapore 🇸🇬As soon as viable in the second half of the centurySubmitted to the UN
Slovakia 🇸🇰2050Policy Position
South Africa 🇿🇦2050Policy Position
South Korea 🇰🇷2050Policy Position
Spain 🇪🇸2050Draft Law
Switzerland 🇨🇭2050Policy Position
Uruguay 🇺🇾2030Contribution to the Paris Agreement

While the COVID-19 pandemic has disrupted short-term plans, many see it as an opportunity to rejuvenate economies with sustainability in mind. COP26, as well as the global climate summit planned for December of this year, will likely see many countries lay out decarbonisation goals that benefit both people’s lives and the planet.

How to count carbon emissions

Iain Staffell, Imperial College London

31 August 2020

Opinion

Reduced demand, boosted renewables, and the near-total abandonment of coal pushed last quarter’s carbon emissions from electricity generation below 10 million tonnes.

Emissions are at their lowest in modern times, having fallen by three-quarters compared to the same period ten years ago.  The average carbon emissions fell to a new low of 153 grams per kWh of electricity consumed over the quarter.

The carbon intensity also plummeted to a new low of just 18 g/kWh in the middle of the Spring Bank Holiday.  Clear skies with a strong breeze meant wind and solar power dominated the generation mix.

Together, nuclear and renewables produced 90% of Britain’s electricity, leaving just 2.8 GW to come from fossil fuels.

The generation mix over the Spring Bank Holiday weekend, highlighting the mix on the Sunday afternoon with the lowest carbon intensity on record

National Grid and other grid-monitoring websites reported the carbon intensity as being 46 g/kWh at that time.  That was still a record low, but very different from the Electric Insights numbers.  So why the discrepancy?

These sites report the carbon intensity of electricity generation, as opposed to consumption.  Not all the electricity we consume is generated in Britain, and not all the electricity generated in Britain is consumed here.

Should the emissions from power stations in the Netherlands ‘count’ towards our carbon footprint, if they are generating power consumed in our homes?  Earth’s atmosphere would say yes, as unlike air pollutants which affect our cities, CO2 has the same effect on global warming regardless of where it is produced.

On that Bank Holiday afternoon, Britain was importing 2 GW of electricity from France and Belgium, which are mostly powered by low-carbon nuclear.  We were exporting three-quarters of this (1.5 GW) to the Netherlands and Ireland.  While they do have sizeable shares of renewables, they also rely on coal power.

Britain’s exports prevented more fossil fuels from being burnt, whereas the imports did not as they came predominantly from clean sources.  So, the average unit of electricity we were consuming at that point in time was cleaner than the proportion of it that was generated within our borders.  We estimate that 1190 tonnes of CO2 were produced here, 165 were emitted in producing our imports, and 730 avoided through our exports.

In the long-term it does not particularly matter which of these measures gets used, as the mix of imports and exports gets averaged out.  Over the whole quarter, carbon emissions would be 153g/kWh with our measure, or 151 g/kWh with production-based accounting.  But, it does matter on the hourly timescale, consumption based accounting swings more widely.

Imports and exports helped make the electricity we consume lower carbon on the 24th, but the very next day they increased our carbon intensity from 176 to 196 g/kWh.

When renewable output is high in Britain we typically export the excess to our neighbours as they are willing to pay more for it, and this helps to clean their power systems.  When renewables are low, Britain will import if power from Ireland and the continent is lower cost, but it may well be higher carbon.

Two measures for the carbon intensity of British electricity over the Bank Holiday weekend and surrounding days

This speaks to the wider question of decarbonising the whole economy.

Should we use production or consumption based accounting?  With production (by far the most common measure), the UK is doing very well, and overall emissions are down 32% so far this century.  With consumption-based accounting it’s a very different story, and they’re only down 13%*.

This is because we import more from abroad, everything from manufactured goods to food, to data when streaming music and films online.

Either option would allow us to claim we are zero carbon through accounting conventions.  On the one hand (production-based accounting), Britain could be producing 100% clean power, but relying on dirty imports to meet its entire demand – that should not be classed as zero carbon as it’s pushing the problem elsewhere.  On the other hand (consumption-based accounting), it would be possible to get to zero carbon emissions from electricity consumed even with unabated gas power stations running.  If we got to 96% low carbon (1300 MW of gas running), we would be down at 25 g/kWh.  Then if we imported fully from France and sent it to the Netherlands and Ireland, we’d get down to 0 g/kWh.

Regardless of how you measure carbon intensity, it is important to recognise that Britain’s electricity is cleaner than ever.

The hard task ahead is to make these times the norm rather than the exception, by continuing to expand renewable generation, preparing the grid for their integration, and introducing negative emissions technologies such as BECCS (bioenergy with carbon capture and storage).

Read full Report (PDF)   |  Read full Report   |   Read press release

Front cover of Drax Electric Insights Q2 2020 report

Electric Insights Q2 2020 report [click to view/download]

Climate change is the biggest challenge of our time

Will Gardiner, Chief Executive Officer, Drax Group

28 July 2019

Opinion
Drax Group CEO Will Gardiner

Climate change is the biggest challenge of our time and Drax has a crucial role in tackling it.

All countries around the world need to reduce carbon emissions while at the same time growing their economies. Creating enough clean, secure energy for industry, transport and people’s daily lives has never been more important.

Drax is at the heart of the UK energy system. Recently the UK government committed to delivering a net-zero carbon emissions by 2050 and Drax is equally committed to helping make that possible.

We’ve recently had some questions about what we’re doing and I’d like to set the record straight.

How is Drax helping the UK reach its climate goals?

At Drax we’re committed to a zero-carbon, lower-cost energy future.

And we’ve accelerated our efforts to help the UK get off coal by converting our power station to using sustainable biomass. And now we’re the largest decarbonisation project in Europe.

We’re exploring how Drax Power Station can become the anchor to enable revolutionary technologies to capture carbon in the North of England.

And we’re creating more energy stability, so that more wind and solar power can come onto the grid.

And finally, we’re helping our customers take control of their energy – so they can use it more efficiently and spend less.

Is Drax the largest carbon polluter in the UK?

No. Since 2012 we’ve reduced our CO2 emissions by 84%. In that time, we moved from being western Europe’s largest polluter to being the home of the largest decarbonisation project in Europe.

And we want to do more.

We’ve expanded our operations to include hydro power, storage and natural gas and we’ve continued to bring coal off the system.

By the mid 2020s, our ambition is to create a power station that both generates electricity and removes carbon from the atmosphere at the same time.

Does building gas power stations mean the UK will be tied into fossil fuels for decades to come?

Our energy system is changing rapidly as we move to use more wind and solar power.

At the same time, we need new technologies that can operate when the wind is not blowing and the sun is not shining.

A new, more efficient gas plant can fill that gap and help make it possible for the UK to come off coal before the government’s deadline of 2025.

Importantly, if we put new gas in place we need to make sure that there’s a route through for making that zero-carbon over time by being able to capture the CO2 or by converting those power plants into hydrogen.

Are forests destroyed when Drax uses biomass and is biomass power a major source of carbon emissions?

No.

Sustainable biomass from healthy managed forests is helping decarbonise the UK’s energy system as well as helping to promote healthy forest growth.

Biomass has been a critical element in the UK’s decarbonisation journey. Helping us get off coal much faster than anyone thought possible.

The biomass that we use comes from sustainably managed forests that supply industries like construction. We use residues, like sawdust and waste wood, that other parts of industry don’t use.

We support healthy forests and biodiversity. The biomass that we use is renewable because the forests are growing and continue to capture more carbon than we emit from the power station.

What’s exciting is that this technology enables us to do more. We are piloting carbon capture with bioenergy at the power station. Which could enable us to become the first carbon-negative power station in the world and also the anchor for new zero-carbon cluster across the Humber and the North.

How do you justify working at Drax?

I took this job because Drax has already done a tremendous amount to help fight climate change in the UK. But I also believe passionately that there is more that we can do.

I want to use all of our capabilities to continue fighting climate change.

I also want to make sure that we listen to what everyone else has to say to ensure that we continue to do the right thing.

How quickly will these countries reach their climate targets?

28 June 2017

Power generation

It was no surprise when President Donald Trump echoed his election campaign stance and announced his intention to renegotiate – or failing that withdraw the US – from the Paris Agreement on Climate Change. It raised the question, would other countries back away from their own climate change targets?

In fact, many reaffirmed their commitment to the pact and continue their progress towards becoming low carbon economies. For those in the European Union, this means meeting the 2030 climate and energy framework, which sets three key targets for member states: cut greenhouse gas (GHG) emissions by at least 40% from 1990 levels, produce at least 27% of their energy through renewable sources, and improve energy efficiency by at least 27%.

Many countries across Europe, however, have set climate objectives that go beyond these. Whether they can meet those goals is another matter.

Portugal

What are its climate targets?

The Portuguese government has pressed the EU to go further than its 2030 targets and is aiming for 40% of total energy consumption to come from renewables by 2030. This target is part of its Green Growth Commitment 2030, which also sets out to create more green – or low carbon economy – jobs and improve overall energy efficiency across the country.

How is it achieving this?

Portugal has rapidly increased its renewable energy production by investing in wind (mainly onshore) and hydro power, although it is rapidly developing its solar capabilities. It is also looking at small scale renewable energy generation through wave, thermal and biomass power.

Portugal has two operational coal plants that together are responsible for 16% of the country’s carbon emissions. However, the government is seeking to phase these out prior to 2025.

How is it doing so far?

The growth in renewable energy within the power industry specifically has been a big success story for Portugal. In 2005, renewables accounted for only 16% of total electricity production – by 2015 they produced an average of 52%.

The country made headlines in May 2016 for running on 100% renewable electricity for four days in a row. Unsurprisingly, this means the government is confident of achieving a target of 31% renewables in gross final energy consumption by 2020, which would mean 57.4% renewable electricity generation.

Germany

What are its climate targets?

Germany set its current climate targets as far back as 2007. It subsequently agreed to the Paris Agreement and the EU’s 2014 climate and energy framework.

Added to this, the country has its own ambitious aims for 2050: cut GHG emissions by up to 95% compared to 1990 levels (with an interim target of 40% by 2020), increase the share of renewables in gross final energy consumption to 60%, and increase all electricity generated from renewables to 80%.

How does it plan to achieve this?

Germany’s Climate Action Programme 2020 and Climate Action Plan 2050, set out its plans for reducing GHG emissions. Much of this is based around the Energiewende (energy transition), a strategy that will see the country phase-out nuclear power and decarbonise the economy through renewable energy initiatives.

According to these plans, Germany’s energy supply must be almost completely decarbonised by 2050, with coal power slowly phased out and replaced with renewables, especially wind power. The utilisation of biomass will be limited and sourced mostly from waste. It also stresses the role of the European Union Emission Trading System to meet targets.

How is it doing so far?

Between 1990 and 2015, emissions reduced by 27%. In 2015, the share of renewable sources in German domestic power consumption amounted to 31.6%.

However, German energy-related CO₂ emissions rose almost 1% in 2016, despite a fall in coal use and the ongoing expansion of renewable energy sources. This rise is due in part to an overall increase in energy consumption and an increase in natural gas use and diesel for electricity, heat and transport.

Projections from the environment ministry in September 2016 indicated that Germany will likely miss its 2020 climate target.

UK

What are its climate targets?

Alongside its EU and Paris commitments, the UK Houses of Parliament approved the Climate Change Act in 2008, which commits to reducing GHG emissions by at least 80% of 1990 levels by 2050.

The Act requires the government to set legally-binding carbon budgets, a cap on the amount of GHG emitted in the UK over a five-year period. The first five carbon budgets have been put into legislation and will run up to 2032. These include reducing emissions 37% below 1990 levels by 2020 and 57% by 2030.

A key milestone in the UK’s decarbonisation is to entirely phase out coal by 2025, which will mean either closing or converting (as in the case of Drax Power Station) existing coal power stations.

How does it plan to achieve this?

Under its legally binding carbon budget system, every tonne of GHG emitted between now and 2050 will count. Where emissions rise in one sector of the economy (be it agriculture, heavy industry, power, transport, etc.), the UK must achieve corresponding falls in another.

The UK’s initial focus has been to transition to renewable electricity production. Wind, biomass and solar power have all grown significantly, aided by government support, and by initiatives like the carbon price floor.

How is it doing so far?

The UK’s progress towards its targets is positive, but leaves room for improvement. Renewables generated 14.9% of the UK’s electricity in 2013. In 2015 they accounted for nearly a quarter of electricity generation and by 2016, low carbon power sources contributed an average of 40% of the UK’s power, with wind generating more power than coal for the first time ever.

The Department for Business, Energy and Industrial Strategy estimates that as of 2016 GHG emissions fell 42% since 1990. Despite this, the Committee on Climate Change (CCC) has said that the government is not on track to meet its pledge of cutting emissions 80% by 2050.

However, it points out the UK is likely to meet the target of making electricity almost entirely low-carbon by early 2030s, but only if further steps are taken such as including increasing investment in more low-carbon generation (such as biomass), and developing carbon capture and storage (CCS) technologies. The UK government is due to publish an emissions reduction plan in the autumn of 2017. 

Norway

What are its climate targets?

Norway’s climate policy is based on agreements reached in the Storting (the Norwegian Parliament) in 2008 and 2012. They stipulate a commitment to reduce global GHG emissions by at least 30% by 2020 from 1990 levels. The government also approved the goal of achieving carbon neutrality by 2050.

As well as signing the Paris Agreement, Norway has aligned itself with the European Union’s climate target and intends to fulfil its commitment collectively with the EU (of which it is not a member state). This means using the EU emissions trading market, international cooperation on emissions reductions, and project-based cooperation.

How does it plan to achieve this?

Around 98% of Norway’s electricity production already comes from renewable energy sources, mostly through its more than 900 hydropower plants. The remainder is through wind and thermal power.

Norway exports hydropower to the Netherlands and exchanges renewable energy with Denmark, Sweden and Finland. There are plans for similar green exchanges with Germany and the United Kingdom via interconnectors within the next five years.

Norway is also aided by a substantial carbon sink in its forests which cover 30% of its land surface. They sequester (absorb and store) carbon from the atmosphere to such an extent that it equals approximately half of the Scandinavian country’s annual emissions.

How is it doing so far?

While Norway already has one of the world’s most carbon neutral electricity sectors, its significant domestic oil and gas sector means it still struggles to reduce its overall emissions. As such, the government is expected to rely on carbon trading with the EU or international offsets to meet its ambitious goals.

Nonetheless, earlier this year the government said that GHG emissions will fall to around 1990 levels by 2020, although it did not stipulate whether this included buying carbon credits from abroad or not.