ANALYSIS: Brexit spells uncertainty just when it's not needed, By Andrew Lee, Recharge News, June 24 2016

The UK's offshore wind sector has led the world in deployment

Iberdrola

The UK’s decision to leave the EU raises the spectre of years of uncertainty for the direction and scale of clean energy development, both in Britain and Europe as a whole.

The 52%-48% ‘Brexit’ vote – overturning the predictions of most commentators – has already claimed the job of UK Prime Minister David Cameron, who led the ‘Remain’ campaign, and now takes the country and the EU into uncharted territory as the bloc sees one of its biggest economies walking away.

Energy policy, let alone renewables, was a sideshow in a campaign dominated by debates over the economy, national sovereignty and – above all – immigration.

But as the UK faces an exit process from the EU lasting two years or more, several major issues touching clean-energy policy and renewables will confront whoever succeeds Cameron as Britain’s Prime Minister.

The outgoing Prime Minister’s Conservative government has already taken the axe to large swathes of the UK support mechanism for onshore wind and PV, and he will be remembered as the leader whose promise to lead Britain's "greenest government ever" ended up ringing hollow.

But all eyes will be on the country’s world-leading offshore wind sector.

The UK already has more than 5GW installed and is set to double that by the end of the decade thanks to major investment decisions already set in stone and underpinned by government contracts – projects such as Dong’s 1.2GW Hornsea 1 and Iberdrola’s 714MW East Anglia 1.

But into the next decade, continuing growth will depend on the UK’s domestic clean-energy targets – soon to be disentangled from those of the EU – and the trajectory of government support for low-carbon sources, not to mention wider economic factors.

The offshore sector seemed to regain some certainty in the last six months, when UK energy secretary Amber Rudd and finance minister George Osborne signalled a commitment to new contract-for-difference auctions and a general ambition for up to 10GW of new offshore wind in the 2020s.

But Rudd and Osborne were both supporters of remaining in the EU, and their political futures under whoever replaces Cameron are far from clear. The triumphant right-wing of the Conservative Party, which may well supply the next UK leader, has a record of lukewarm support at best for renewables, tipping into outright climate-scepticism in some quarters.

Another less immediate source of uncertainty for UK renewables investors could emerge with fresh calls for an independence referendum by Scotland – the UK’s onshore wind heartland that is also seeking to build a significant offshore sector – where the majority voted to stay in the EU.

With such forces coming into play the UK energy sector faces more uncertainty at a time when it can least afford it – the period when critical investment decisions need to be made for offshore wind deployments in the next decade.

A spokesman for Vattenfall, one of the key investors in UK offshore, said: “Vattenfall is in the UK for the long term to grow its sustainable energy business thanks to a generally supportive energy policy framework, legally binding climate targets and strong market fundamentals.

"We still want to grow in the UK, particularly in wind power, but clearly a significant change like an exit from the EU introduces more risk to the sector for an unforeseen period of time. We aim to understand and assess that risk on an ongoing basis, as we would with any policy or treaty change.”

Dong Energy, the sector leader both in the UK and globally, said: "Like many other businesses, we will await clarity over the implications of the vote to leave the European Union.

"However, we don’t believe that UK energy policy is dependent on EU membership and we are confident that Dong Energy will continue to make an important contribution towards providing UK homes with a low carbon electricity supply in future."

The country’s clean energy industry will hope that in the long-run, the UK’s domestic climate goals, commitments under the Paris Agreement and the overriding global trend towards decarbonisation will ensure a sound investment base.

But as in so many other areas, the next few years will be a bumpy ride for renewables in Britain.

Renewables sector braced for Brexit impact as UK votes 'Out', By Andrew Lee, Recharge News, June 24 2016

The vote has already claimed the job of Prime Minister David Cameron

DBIS/Flickr

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The European clean-energy sector was this morning digesting the impact of the UK’s historic vote to leave the EU, a decision that has already seen UK Prime Minister David Cameron announce he will step down.

The 52% versus 48% decision “raises serious questions for investor certainty, energy security and much needed investment in the UK energy infrastructure” said UK industry body The Renewable Energy Association, which was among the first to react to the result.

It added: “The vast majority of our members had fears of Brexit, and we will be consulting with them and government in the coming weeks to set out a plan for continued low carbon energy investment, deployment and assurance of the 117,000 jobs in this sector.”

German industrial giant Siemens, which was vocal in the run-up to the vote with its fears over the impact of an exit on its new £310m ($349m), 1,000-employee offshore wind hub in Hull, northeast England, today said "this was a decision for the British people and their view must be respected", adding that it "remains committed" to its business in the UK.

Siemens said in a statement sent to Recharge: "As a global business with significant, long-term investments in the UK and high local value creation, Siemens is not so much exposed to negative effects that we might see.

"Nevertheless, the government must now move swiftly to unify and agree the nature of the UK’s relationship with the EU and other trading partners, creating clear roadmaps to encourage future investment."

The CEO of industry group RenewableUK, Hugh McNeal, earlier this week attempted tocalm nerves ahead of the vote claiming the offshore wind sector has a bright future regardless of the outcome.

Today McNeal said: “As a trade association, RenewableUK has a wide range of member companies with differing views on the result of the EU referendum.

"Our focus will continue to be on delivering power to the UK at the lowest cost. Our future is bright; the European and global opportunities remain immense for the industries I’m proud to represent.”

UK-based utility SSE, a major onshore wind operator which recently took a final investment decision to build the 588MW Beatrice offshore project, told its investors this morning: "It is not yet clear how this matter will now progress, but SSE believes that the UK government should be mindful of the importance that the harmonisation of the GB energy market with the countries in Europe can have on efforts to deliver clean, secure and affordable energy."

Germany's E.ON, another key investor in UK renewables, said: “The UK EU referendum was always a matter solely for the voters and they have now spoken. It is expected there will now be a period of negotiation led by the UK government."

Tony Ward, head of power and utilities at business services group EY, said the leave vote will "likely make its impact felt by creating an immediate heightened level of policy and regulatory uncertainty.

"Whatever government emerges in the aftermath of the leave vote it will need to clarify its policies with respect to climate change, renewable energy, technology preferences, State Aid and many other matters of direct relevance to the utility industry, and to its investors."

Ward added: “In many respects, the UK has taken a lead in Europe when it comes to renewable and low carbon policies – the question as to whether support for low carbon technologies will be withdrawn, and whether other industries will be favoured, is a fundamental one.

"How UK governments from now use their freedom from EU policy constraints will be watched closely.”

An early casualty of the verdict was Cameron, who campaigned to keep the UK inside the EU but this morning said he plans to step down by October. The UK now faces a two-year process to extract itself from the 28-nation bloc.

A so-called Brexit will have profound implications for UK clean-energy goals – currently enmeshed in EU targets – and its world-leading offshore wind sector, which is largely driven by investments from European power majors.

The run-up to yesterday’s referendum saw warnings that the UK’s interests would be best-served by remaining inside the bloc.

Former UK energy secretary Ed Davey told Recharge: "It's difficult to see how British renewables would prosper more outside of the EU."

An early indication of the uncertainty set to dog UK energy policy in relation to the rest of Europe came earlier this month, when the country declined to immediately sign an MoU with other nations over offshore wind and grid co-operation.

Siemens changes Hull plans to include wind blade plant, By Andrew Lee, Recharge News November 17 2014

The revised Hull plans including the blade plant

Siemens

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By Andrew Lee in London 

 Monday, November 17 2014

Updated: Monday, November 17 2014

Siemens has altered plans for its new offshore wind turbine hub in northeast England to bring blade production onto a single site in Hull – a move it said will boost output by one-third.

The German group will submit new proposals to locate its blade factory on the same site at Hull’s Alexander Dock as the 6MW turbine assembly and service facilities already planned for the site.

Siemens said the move will allow the blade plant – originally earmarked for a separate site at Paull, a few kilometres away – to increase annual output from 450 to 600 “in order to export blades beyond UK waters”.

The overall project commitment to invest £310m ($484m) and create 1,000 direct jobs is unchanged, said the German group.

A single site was its preferred first option, said Siemens, “but before a recent redesign there was just not quite enough space.

“However by developing the production concept, the blade factory footprint has been reduced, whilst increasing production output.”

Siemens project director, Finbarr Dowling, said: “By deploying the latest manufacturing technologies and adopting LEAN principles from the outset we have been able to design our new blade plant to have 20% higher output in a plant which is 15% smaller than the original design.

“It is exactly this type of continuous improvement that will enable us to industrialise the manufacturing of offshore wind turbines. This will lead to a reduction in the cost base of offshore wind and ensure that the industry, and in particular our new world class plant in Hull will be competitive into the future.”

The Hull plant – due to be operating at full capacity in 2017 – was hailed as a landmark for the UK offshore wind industry when Siemens confirmed its plans for the Alexandra Dock site in March this year.

The offshore wind hub will serve major projects off the UK’s east coast and is the first major mass-production fruit of the country’s world-leading offshore wind build-out.

Hull City Council has already approved original plans for the Siemens plant as part of the Green Port Hull project being developed by Associated British Ports.

Fierce rival Vestas last week said it may begin blade production for it V164 8MW turbine on the Isle of Wight in southern England.

Brexit 'should spell end' of Hinkley Point nuclear plan, By Bernd Radowitz, Recharge News in Berlin Monday, June 27 2016

A rendering of Hinkley Point

EDF Energy

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After its decision to leave the European Union, the UK also needs to exit the European Atomic Energy Community (Euratom) – which would have negative consequences for its plan to build the Hinkley Point C nuclear power station, former German Green Party MP Hans-Josef Fell claims.

Although legally distinct from the EU, Euratom has the same membership, is governed by the EU's institutions, and provides a mechanism for loans to finance nuclear projects of EU member states.

"Great Britain can't fall back upon support from Euratom for the planned new nuclear power station Hinkley Point," Fell – a Recharge Thought Leader – says.

"With that, the new nuclear plant project in England should be finally dead and existing British nuclear plants will also come under considerable economic pressure," he claims.

The loss of the 3.2GW nuclear project – hugely controversial in the UK and across Europe – would create a gap in Britain’s energy supply that its critics say renewables would be best-placed to fill.

French utility EDF in partnership with China Nuclear Power Group plans to build three nuclear power plants in the UK at Hinkley Point, Sizewell and Bradwell.

The probably most expensive power project in the world can count on pledges for levels of support by the UK government that exceed those for offshore wind by far, and have been criticised by environmentalists and EU member states such as Austria.

EDF, which is owned by the French state, several times has postponed a final investment decision for Hinkley Point, which according to French media is a sign that the company fears for its own financial stability if it goes ahead with the massively expensive project.

EDF has said since Friday’s referendum vote that the ‘Brexit' vote should not change its plans in the UK.

Liberal Greenwashing: Budget 2016-17 and Recent and Past Performances, updated, May 9, 2016

"Not everything that can be counted counts, and not everything that counts can be counted."

Albert Einstein

WEAK LINKS IN THE LIBERAL CHAINS

The text presented here offers an in-depth portrait of the Liberal greenwashing record on addressing climate change, from past Liberal governments, to the 2015 election campaign and to the period up to, and including, the Budget for the fiscal year 2016-17.  The links with past Liberal governments reflect my experiences as a former Government of Canada employee who has worked for several Ministries on sustainable development during previous Liberal reigns. 

Beginning with previous Liberal climate change action plans, emissions rose despite generous clean tech innovation programs, plus ongoing consultations with all stakeholders, because of the following weak links in the Liberal chains, 1) the absence of a backbone to stand firm with the lobbies of power and money, 2) feebleness with regard to taking action via new legislation; and 3) highly selective listening skills with stakeholders. -- Not all that different than Hillary Clinton!

These weak chain links remain very much alive today.

  

All of these weaknesses are evident with the decision of the Justin Trudeau government to accommodate Air Canada's request to undertake a legislative change - while imposing closure in the form of two days allotted for Parliamentary debate -- for the purposes of removing the Air Canada obligation to provide 2600 middle class aircraft maintenance jobs in Canada.  This is an important signal as it raises questions on how on earth could one expect the Trudeau government to be firm with the Suncor, TransCanada, the Koch brothers and the fossil fuel sector at-large?  How can one expect Trudeau to keep his promise on eliminating fossil fuel subsidies in Canada, estimated by the International Monetary Fund to be $46B USD for the year 2015?

Most disheartening, the Trudeau/Liberal corporate rule mindset explains why Budget 2016-17 affirms that the "too close to Big Oil" National Energy Board will remain the permanent authority in charge of pipeline environmental assessment processes. This is to say that the Liberals have broken their election promise on credible environmental impact evaluations and are upholding the Conservative government smoke screen for the purposes of the manipulation of public opinion.

Budget 2016-17: Low Carbon Economy Fund, reallocating fossil fuel subsidies and clean Technologies

While the Liberal government continues to promote the pipelines, it is not doing a good job on preparing Canada for the green economy.  Consider the following factors

Low Carbon Economy Fund

The Budget 2016-17 three-sentence description of the Low Carbon Economy Fund has a resemblance to the $1B Climate Fund, a fund announced by Stéphane Dion just prior to the defeat of the previous Liberal government by the Conservatives.  Under the still-born Climate Fund, the greater an entity's emissions, the more money one could get from the government to reduce one's emissions.  Put another way, that means that the largest emitters, such as the petroleum and other fossil fuel sectors, would be the largest beneficiaries of a "pay the biggest polluters the most dollars fund" -- a sharp and perverse contrast with "the biggest polluters pay more model".  While this may make the fossil fuel companies appear to be righteous, it is an inefficient and costly way to reduce emissions.

Examples of More Cost-effective  Ways for Canada to Catch up with it's Competitors on the Green Economy

There is no magic solution for achieving climate goals, rather it is like addressing poverty. One needs a combination of measures that collectively contribute to goals pursued.  With so many countries ahead of Canada, there is a wealth of examples from other countries to draw upon. These examples include:   

1) a legislative agenda with meaningful penalties for non-compliance;

2) expenditure-neutral shifting of some of the $46B/year in 2015 USD in Canadian fossil fuel subsidies to investments in a) the clean tech sectors and b) the diversification of the fossil fuel sectors, to accelerate their migration towards green economics while integrating the training of fossil fuel workers for green jobs; and c) more generally, the creation of a more diversified and less vulnerable Western Canada economy;

3) engaging the Business Development Bank of Canada and other financing arms of the federal government to establish clean technology portfolios/programs regarding the development of green sectors coupled with a meaningful green bond programs, comparable to European models (as opposed to the paltry/token green bonds fund of Budget 2016-17);

4) revamping government supported clean technology innovation activities to include a) networks of research centres on clean technologies that cultivate public-private partnerships plus b) a national clean technology integration centre that links clean energy, low carbon buildings and clean transportation -- the US National Renewable Energy Laboratory is one model, among many models, on clean tech integration nodes;

5) measures to support for clean technology product development and manufacturing including meaningful support for Quebec's electric vehicle sector to reap the opportunities associated with vehicle manufacturers increasingly turning to outside suppliers for these technologies; 

6)  initiatives comparable to that of China and California for encouraging a rapid migration to low and zero emission vehicles including a) vehicle fuel consumption legislation more stringent than that of the US federal government, with examples including California and 7 other US states; and b) policies to influence consumers on their respective choices of vehicles; and 

7) government procurement policies -- to name just a few!

Item# 2 Above: Diversification of the Fossil Fuel Sector is Both Possible and Necessary

As mentioned earlier, the International Monetary Fund estimate of fossil fuel subsidies in Canada for 2015, is $46B/year, USD.

The Liberal government had promised to reduce subsidies to the fossil fuel sectors but this has since become a broken promise, with the story line being that the economic slump in the resource sectors indicate now is not the right time to pursue the the subsidy reduction option.

Quite the contrary, now is the ideal time to re-allocate some of those fossil fuel subsidies to kick-start a major diversification of the fossil fuel sectors, the petroleum sector in particular, so that Western Canadian and Canada at-large can engage in a common effort to fully participate in the high growth, high job creation global green economy that is advancing rapidly in China Europe and the US.

Such diversification of the sector is possible, as outlined in Pipelines to Nowhere and as per Norway's Statoil 1) for which the new CEO is formerly from the Statoil renewable energy division  2) which has become a major global investor in clean technologies, including avant garde clean tech innovation including global leadership on offshore wind floating platforms; and 3) which has set up a venture capital entity to invest in clean tech start-ups.

But like a dog hanging on to it's bone, the Liberal's seem to be oblivious to the clear signs of the demise of the fossil fuel era being imminent with 
1) 90% of all new electricity generation capacity in 2015 being represented by renewables;
2) global emissions production remaining flat since 2013;
3) China's coal consumption having declined in both 2014 and 2015;
4) US coal producers representing 45% of US coal output having gone into bankruptcy ;
5) 21 countries have experienced economic growth while diminishing their respective emissions since year 2000;
6) the tipping point favouring electric vehicles being projected to occur as early as 2020 and the end of the monopoly of internal combustion engines, potentially happening as soon as 2025.;
7) further on item #6, Ford, Hyundai-Kia and Volkswagen having ambitious plans for the introduction of a wide range of electric and hybrid models by 2020 and 10% of BMW brand North American sales in April 2016 were electric vehicles;
8) the Chief Financial Officer of Suncor, Alister Cowan in April 2015 having candidly said that "The years of large, multi-billion projects are probably gone"; and 
9) The Canadian Association of Petroleum Producers indicating negative financial results for 2016 for the Canadian oil and gas industry to the tune of $30B in spending plans coupled with $17B in revenues, making it clear that these sectors will be cutting costs and avoiding big projects for several years to come.

But the Trudeau government continues to do everything possible to promote Energy East and Kinder Morgan for which the signs suggest that these pipelines may be economically redundant.  Incredibly much new information has been identified since the Pipelines to Nowhere article was first published in The Common Sense Canadian on March 7, 2016 with the result that a new Blog version of Pipelines to Nowhere  was created to incorporate a multitude of new developments.

Clean Technology Funds

The amounts of funding for clean technologies in 2016-17 are lower when compared with the funding that was available during past Liberal governments -- a period when emissions went up.  

One example is that of Sustainable Development Technology Canada (SDTC) which had an average allocation of $40M/year during past Liberal governments while Budget 2016-17 only provides for $50M over 5 years. 

Another former Liberal government sustainable development program was Technology Early Action Measures, a program complementary to that of SDTC, which had an allocation of $56M for the period 1999-2001. 

As well, past Liberal governments offered substantial funding for clean transportation innovation but Budget 2016-17 only calls for $56.9M over two years which is to be divided up to cover the development of regulations and standards, including international emission standards for the air, rail and marine sectors.  Thus this money will only cover a handful of clean transportation projects.

This has all the appearances of a money shell game.

With Canada's share of global clean tech markets at 1.3% while the green economy is advancing at a extraordinary pace along with a corresponding decline in the fossil fuel sectors -- as outlined in the preceding section -- it is clear that Trudeau and his Liberals have a poor sense of priorities that favours aligning with traditional centres of power and money.

Pipelines and the Broken Promise on Credible Environmental Impact Analyses

Perhaps most disconcerting, is the Liberal broken election promise on the creation of bonafide environment impact analyses for pipelines. 

First, the "interim plan" for National Energy Board (NEB) hearings on Energy East involving a mere 3 month prolongation and an expanded NEB mandate to take into account emissions, constitutes insufficient time to put into place research contracts on scientific studies on GHG impacts.

More disturbing, is that Budget 2016-17, as indicated in the introduction, the "too close" to the industry NEB is confirmed as the permanent authority for environment impact analyses concerning pipelines. Unfortunately, the much dismantled and formerly internationally respected Canadian Environmental Assessment Agency, as per the latest Budget, is relegated to that of an advisory body on environmental impact analyses.

A bonafide review would entail starting the Energy East and Kinder Morgan review processes over, with the right parameters from the outset, and overseen by a competent team. -- at least comparable to that of the former Canadian Environmental Assessment Agency.

Infrastructure Funds

The "all of the above", positives and negatives, cancelling one another out, modus operendi that is the Liberal trademark, is very prominent in the Liberal plan for infrastructure.  While Budget 2016-17 funding to support public transit is a strong positive, Trudeau has let it be known that the provinces and municipalities will define the projects for federal support.  In other words, urban sprawl related road and services infrastructures will also be eligible for this Santa Claus re-election fund, thereby undermining gains made on reducing GHGs attributable to public transit projects.

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LOW CREDIBILITY, THE CONTRADICTIONS AND MANIPULATION

Further on the recent/current weak links in the Liberal's climate change chains, note that: 

1.     Trudeau has said that opposition to Keystone XL and Energy East is not based on science;

2.     Trudeau had praised Alison Redford for her boasting of Canada's environmental record as a means to warm up the Obama administration on approving Keystone XL;

3.     the Energy East and Kinder Morgan pipelines, should they get approved, could cancel out any advances in the reductions of emissions attributable to the Liberal new funding for clean technologies; and

4.     the Investor State Dispute Settlement provision of the Trans Pacific Partnership would allow corporations to sue a national government in the event domestic environmental laws impedes the maximization of profits.  On this latter point,cross country Liberal consultations on the TPP have been primarily with highly restricted audiences, little advance notice and no answering of tough questions.

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CONCLUDING REMARKS

Suffice to say that there are many options for engendering cumulative impacts for transformative change of the order of magnitude of green economy actions planned, and already adopted, by China, the EU and the US.

As progressive Canadians, we must 1) rise above the hype or the charming veneer of the Trudeau government on climate, 2) recognize that the Leap Manifesto is out-of-date and needlessly inflammatory on the global green economy and 3) focus on what Canada must do to catch up with its competitors.

For more detailed analyses on the weak links in the Liberal chains, one can refer to the accompanying document regarding 1) the 2015-16 actions of Justin Trudeau; 2) the Liberal machine, past and current and 3) Budget 2016-17.  As such the accompanying document underlines the sharp contradictions between Trudeau's charm giving rise to uncritical journalism projecting Trudeau as a Messiah on the environment.

Will Dubitsky: Updated 09/05/16