A micro-generation manifesto “green alliance... A micro-generation manifesto by Joanna Collins Published by Green Alliance, September 2004, £20 Artwork and print by Calverts – www.calverts.coop Printed on Revive matt – 75 per cent post-consumer waste. ISBN 0 9543813 7 8 © Copyright Green Alliance 2004 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Green Alliance. Within the UK, exceptions are allowed in respect of any fair dealing for the purposes of private research or study, or criticism or review, as permitted under the Copyright, Design and Patents Act, 1988, or in the case of reprographic reproduction in accordance with the terms of the licences issued by the Copyright Licensing Agency. This book is sold subject to condition that it shall not, by way of trade or otherwise, be lent, resold, hired out or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it was published and without a similar condition including the condition being imposed on subsequent purchaser. Front cover images, left to right: © Renewable Devices, © Solar Century, © Solar for London, © Solar for London, © Solar Century. Green Alliance 40 Buckingham Palace Road, London SW1W 0RE tel: 020 7233 7433 fax: 020 7233 9033 email: [email protected] website: www.green-alliance.org.uk Green Alliance is a registered charity number 1045395. Company Limited by guarantee, registered number 3037633 1 A micro-generation manifesto A micro-generation The micro-generation manifesto has been developed in consultation with members of the Energy Entrepreneurs Network. For more information on this network, visit www.green-alliance.org.uk Organisations supporting the manifesto include: British Wind Energy Association Combined Heat and Power Association Energy 21 Renewable Power Association Solar Century The Micropower Council The National Trust Town and Country Planning Association UK Business Council for Sustainable Energy acknowledgements Green Alliance wishes to thank the Ashden Trust for their generous support of the Energy Entrepreneurs Network, and of this report. We would also like to extend our thanks to all the organisations and individuals who were involved in the project. Particular thanks are due to Sebastian Berry, Sarah Butler-Sloss, Adrian Hewitt and Dave Sowden. Green Alliance Green Alliance is one of the UK’s foremost environmental groups. An independent charity, its mission is to promote sustainable development by ensuring that the environment is at the heart of decision-making. It works with senior people in government, parliament, business and the environmental movement to encourage new ideas, dialogue and constructive solutions. 2 contents executive summary . 3 the case for micro-generation . 4 behaviour change . 5 carbon reduction. 6 fuel poverty . 7 security of supply . 8 economic value . 8 system resistance . 9 energy markets . 9 A micro-generation manifesto A micro-generation mindsets . 11 the way forward . 12 new build . 12 local heat and power networks . 15 energy services . 16 a micro-generation strategy . 17 Climate Change Programme review. 18 consumer incentives. 19 capital grant schemes. 19 home energy ratings . 19 fiscal measures . 20 export reward . 21 distribution charges . 21 Renewables Obligation Certificates . 21 Winter Fuel Payments . 22 supplier incentives . 23 Energy Efficiency Commitment. 23 Renewables Obligation Certificates . 24 fuel poverty . 24 developer incentives. 24 procurement . 25 planning. 25 Building Regulations. 26 advice and training . 27 annex A – micro-generation technologies . 29 existing technologies . 29 ground source heat pumps. 29 micro-wind turbines . 30 solar thermal . 30 solar photovoltaics (PV) . 31 micro-hydropower turbines . 31 woodfuel boilers . 32 emerging technologies. 32 micro combined heat and power (micro-CHP). 32 stationary fuel cells. 33 annex B – relevant policy agendas by department. 33 annex C – glossary of acronyms. 34 notes . 35 executive summary 3 Over the last year Green Alliance has coordinated the Energy Entrepreneurs network, which brings together a diverse coalition of planners, architects, entrepreneurs and energy experts. We have been making the political case for micro- generation to Ministers, advisers and officials across Government.This report presents our conclusions. We have been able to do this work thanks to generous support from the Ashden Trust. Micro-generation is the generation of low-carbon heat and power by individuals, small businesses and communities to meet their own needs. Bringing energy generation closer to people in this way will forge the vital link between our concern about climate change and our energy consumption in the home. It can help to manifesto A micro-generation overcome the antagonism of a minority towards renewable energy, by bringing every householder and business closer to the solution. Homes with micro- generation are also affordable homes, with low or zero energy costs. And by curbing the rising demand for imported electricity, home energy generation can avert the need for investment in large new power stations and the ageing grid network. However, there is considerable resistance to micro-generation. Current incentives discourage energy suppliers and grid operators from bringing energy generation to the point of demand. Policy-makers are accustomed to an energy system based on big, centralised projects like nuclear or gas-fired power stations. But we now have an opportunity to start to change these mindsets and incentives, and bring micro-generation into the mainstream. The Government has made an important commitment in the Energy Act 2004 to develop a micro-generation strategy by December 2005.This manifesto sets out a broad framework of policies that Green Alliance and the Energy Entrepreneurs Network hope will be addressed in the government strategy. The Government already helps to promote micro-generation through capital grant programmes. However, more decisive policy action has been postponed on the assumption that the technologies will remain too expensive until 2020. Such assumptions are self-fulfilling. Niche products are always expensive. Costs will come down significantly when policies are introduced to increase demand, allowing manufacturers to move from ‘built-to-order’ to mass production.To enable this to happen, Green Alliance and the Energy Entrepreneurs call on the Government to: ● Integrate micro-generation into new build by setting targets in planning and procurement, particularly for the growth areas in the Sustainable Communities Plan, and for the proposed new generation of secondary school buildings. Future rises in carbon emission standards for new build should be clearly signalled to drive “ the Government investment in technological innovation. ● Encourage Local Authorities to plan for community-scale grid has made an networks that supply locally-generated heat and power to new or important existing developments, bypassing the costs and inefficiencies associated with national network use. commitment ● Introduce incentives for energy suppliers to develop energy service contracts that enable existing householders to retrofit to develop a micro-generation.These should allow the upfront costs to be paid micro-generation back through bills over a long period and to be offset by tariffs that reward exported electricity.A strong incentive would come strategy” 4 from a trading scheme in demand reduction certificates, which should be introduced at the earliest opportunity. ● Reform the fiscal framework to enable householders to see micro- generation and energy efficiency as an investment in their property value. Stamp duty rebates for low carbon homes should be introduced to coincide with new home energy ratings. ● Develop the simplest possible procedures for householders and small businesses to apply for grants and grid connection.The public’s interest in home energy generation could be fatally undermined by excessive paperwork requirements. Micro-generation offers an exciting opportunity to involve the public in tackling A micro-generation manifesto A micro-generation climate change and give householders and businesses an incentive to use energy more efficiently.The Government should embrace this opportunity and bring micro- generation into the heart of its Climate Change Programme by adopting these policies. the case for micro-generation The UK Energy White Paper, published in March 2003, established the need to tackle climate change as one of the central aims of energy policy. It set out an ambition for the UK to reduce its emissions of carbon dioxide by 60 per cent over the next fifty years, with clear milestones in the interim.The two main routes to carbon reduction foreseen are an increase in the use of renewable energy, and a step-change in energy efficiency, amounting to a doubling of the historic rate of energy efficiency improvements.These targets are certainly ambitious, and they will not be reached without sustained action by consumers. However, despite the evidence from opinion polls of widespread public support for policies to tackle climate change, the signs are that in practice the majority of consumers remain disengaged. Energy efficiency policy meets with apathy; wind farm proposals meet with antagonism from a vocal minority. Government has yet to confront head-on the challenge of engaging the public, both as citizens and