Independent Review of Underground Coal Gasification - Report

9. Energy Policy

9.0 Placing all energy policy in context is assisted by reading MacKay (2009). Also, "clean coal" in future energy mixes is addressed there. The phrase itself challenges some in the energy policy community.

9.1 The then Minister for Enterprise and Energy, Fergus Ewing said in a statement to Parliament on 15 March 2016,

"Three things must be achieved. First, there must be a stable, managed energy transition. We must ensure that Scotland has secure and affordable energy supplies in future decades as we address the need to decarbonise our energy system in line with this Parliament's Climate Change (Scotland) Act 2009. The Scottish Government must also continue to support innovation and expertise from our oil and gas industry, the deployment of renewable energy technologies and the development of more innovative and low-cost ways of producing, storing and transmitting energy.

9.2 "Secondly, we must take a whole-system view of the challenge. By that, I mean that there must be consideration of Scotland's energy supply and energy consumption as equal priorities; we must also build a genuinely integrated approach to power, transport and heat. Our success rests on continuing our good work to make our homes, workplaces and vehicles more energy efficient and more affordable to run.

9.3 "Thirdly, we must embrace a truly local vision of energy provision by promoting local energy solutions, planned with community involvement and offering community ownership of energy generation, and by delivering a lasting economic asset to communities in every part of Scotland."

9.4 Renewables continue to develop, albeit now at a slower rate potentially, after UK policy changes. It also has to be acknowledged that in the last two years alone the overall context has changed as a result of the closure of Longannet, the extension of nuclear station operational lives at Hunterston and Torness and the termination of the CCS competition process for Scotland generally and for Peterhead specifically. Nonetheless, there is a continuing need for baseload and fully capable and flexible supply inputs that currently are made up of gas, nuclear and other UK and interconnector supply components. As a transition fuel, gas has a significant place, in addition to its relevance for the chemicals and connected sectors. How long that is or will be the case, is unclear but dependent at least to some extent on decisions that arguably have to be addressed now. These would include the renewables sector but also potential UGE and UCG specifically.

9.5 It is not the purpose of this report to provide a deep critique of EU, UK or Scottish energy policy dimensions but it is relevant, in the context of the gas fraction, and for the future of UCG to consider where its contribution would fit and what frames this.

9.6 The overall position for the UK is set out in DECC (2015) and that for Scotland is set out in further detail in SG (2016), where energy use and developments for the previous and current year and overall are presented alongside an overview of the policy position.

9.7 This states that,

"The Scottish Government has identified three core themes, drawing on the emerging consensus concerning the future of energy systems worldwide, building on our current strengths, and the intention to develop an integrated approach to energy in Scotland:

1) Decarbonisation of the energy system by 2050, in line with our long-term climate change targets - producing advice on optimal pathways to maximise economic and social return to Scotland.

2) A whole system view; and a comprehensive policy prescription. Considering energy supply and end use, e.g. energy demand reduction, a balanced generation mix, storage technologies, energy efficiency and the requirements of the low carbon transition in transport and heat use.

3) A localised approach to energy provision - driving the aggregation of supply and demand at local level, especially in Scotland's cities. Bringing the supply of low carbon energy closer to people. Driving new models of provision that permit greater community stakes and innovation in the energy system."

9.8 Discussions with both RSPB and FoE provided amplification of the issues relating to UCG. In partnership, RSPB, FoE and WWF produced a number of reports on energy policy. The RSPB's 2050 energy vision - meeting the UK's climate targets in harmony with nature, sets the scene. (see Annex 2 for links provided by FoE and RSPB).

9.9 'There is growing acceptance that we need an energy system that delivers affordable energy, ensures security of supply and reduces emissions - the so-called "energy trilemma". In other words, environmental sustainability, energy security and affordability.' (Roddis et al, 2016)

9.10 There are also strong connections in this work with the evidenced plea for honesty, openness and alignment of rhetoric, tool and actions set out by Parkhill et al (2013) in the extensive UK Energy Research Council research package. This relates to social needs as well as to issues of supply and demand. It urges public understanding of sources of energy, not least as, which MacKay also stresses, there is seemingly so little understanding generally of how we currently light and heat our homes and drive our private, industry and business lives.

9.11 To lead and be led, we need a fuller understanding of the energy mix and the criteria which need to be met, especially when economics is so quickly overlaid over current assumed demand, the supply realities and the politics and infrastructure of the policy framework. Grid charges, gas and electricity supply networks and costs, pipeline infrastructure and the ways we heat our homes, cook our food, travel and work, all connect. Several aspects of these are not under the policy and financial control of the Scottish Government. Nonetheless, gas is now and needs to be for some time a key part of our lives in Scotland and across the UK. It is not yet in short supply globally. It is largely simply a matter of price and impact. Renewable heat and then renewable cooking and travel are 'works in progress' and, in the climate context, these clearly need to progress quickly.

9.12 The volumes, costs and quality of the gas we use matter in relation to how it can and will be used. Coal is a high carbon fuel by definition. Gas from coal has lesser but potentially still large negative impacts. But decisions made now to use a source or develop infrastructure and contracts for that resource will have consequences for the infrastructure, markets, demand, culture and impacts of the future. 'Lock in' is a risk. Equally a commitment to the hydrogen economy and/or full scale CCS would change markedly the parameters of the debate and the nature of what we should actively support.

9.13 SEPA has set out its policy stance and regulatory powers and interests on energy matters in SEPA (2010). This highlights, among other aspects, the potential role that regulation plays in GHG abatement and the potential value to carbon dioxide mitigation of CCS. It urges and offers,

"considering the potential environmental impacts of energy decisions, and it is within its remit to reduce these impacts. Raising awareness of environmental problems and solutions is the first step to promoting respect for the environment. SEPA has an important role to play in educating and encouraging behavioural changes in Scotland's response to climate change."

9.14 The Royal Society of Edinburgh ( RSE) also set out a specific set of options for Scotland's Gas Future ( RSE, 2015). They observed that,

"Scotland is heavily reliant on gas in both the residential and commercial sectors for heating. Natural gas also plays a significant role in electricity generation. Even in the event of an unprecedented decrease in UK gas consumption, a significant quantity would still be required for not only heat, but also as a chemical feedstock for the petrochemical industry.

"The UK is currently reliant on imports for over 50% of its gas consumption. To meet its future gas needs and increase energy security, local production could be increased either onshore or offshore. Action to reduce demand is also an option, but would need to occur in addition to one or several other options.

"Scotland is committed to meeting statutory climate change targets and any course of action to address Scotland's future need for gas must be consistent with these goals as well as addressing energy security, cost to the consumer and public acceptance. " RSE (2015)

9.15 BGS also acknowledges the nature of the geologic resource in its energy section, including the potential role of UCG, CBM, shale gas and less controversial, renewable energy sources such as geothermal energy. ( http://www.bgs.ac.uk/research/energy/home.html?src=topNav ; http://www.bgs.ac.uk/research/energy/UCG.html )

9.16 Use of gas and generation of new gas, whether the methane or hydrogen components or other components of use, are perfectly possible. New UCG gas could provide inputs to current systems and help develop new ones, under certain circumstances. Expert opinion suggests use of North Sea sources and imports could continue and "deal with" the market price imperatives. Where UCG gas fits is not a given therefore and would depend on energy policy support, market pricing, supplying to chemical and/or energy markets and its longevity, quality and costs of supply. Use in the chemical sector and specific processes, requires careful consideration of reliability, continuity and quality of gas supplied as well as its life cycle use and emissions profile. But if Scotland is serious about a decarbonisation trajectory and the current and future planned targets in the climate change context, serious pause is needed before permitting and supporting the development of UCG for energy or other markets.

9.17 Summary

Key aspects of energy policy and the constraints and support offered by the current financial models are set at UK level, with issues such as grid access charges, overall supply management, renewables and other subsidies, etc. set essentially outside the Scottish context. Arguments abound that gas is a necessary intermediate fuel for our electricity and gas markets although it is not clear that UCG has a direct role here. A fuller analysis specifically to address this could be justified, and would need to look closely at likely conversion values, GHG intensity and GHG releases from use in the energy mix at a variety of realistic scales of use. At this point, in the context of earlier climate arguments as well as other issues around community views and the range of hazards, the evidence is not available that UCG energy inputs are necessary, sufficient or compelling to the Scottish energy market.

References

DECC (2013). The Future of Heating: Meeting the challenge.
https://www.gov.uk/government/publications/the-future-of-heating-meeting-the-challenge ;
https://www.gov.uk/government/uploads/system/uploads/attachment_data/le/190149/16_04-DECC-The_Future_of_Heating_Accessible-10.pdf

DECC (2015). Energy Consumption in the UK (2015).
https://www.gov.uk/government/collections/energy-consumption-in-the-uk ;
https://www.gov.uk/government/uploads/system/uploads/attachment_data/ le/449104/ECUK_ Chapter_2_-_Transport_factsheet.pdf

Jones, NS, Holloway, S Creedy D P, Garner, K, Smith NJP, and Durucan, S. (2004) UK Coal Resource for NEW Exploitation Technologies. Final Report. British Geological Survey ( BGS ) Commissioned Report CR/04/015N. NERC

MacKay DJC (2009) Sustainable Energy - without the hot air. UIT Cambridge

Parkhill, K A, Demski C, Butler, C, Spence, A and Pidgeon, N (2013) Transforming the UK Energy System: Public Values, Attitudes and Acceptability - Synthesis Report ( UKERC, London)

Roddis P, Gove B, Morrison A, Campbell C, Beresford AE, Teuten E, Dutton A, & Williams LJ (2016). The RSPB's 2050 energy vision: Meeting the UK's climate targets in harmony with nature. Technical Report. Sandy, Bedfordshire, UK: RSPB. rspb.org.uk/energyfutures
https://www.rspb.org.uk/Images/energy_vision_summary_report_tcm9-419580.pdf

RSE (Royal Society of Edinburgh) (2015) Options for Scotland's Gas Future. Advice Paper ( BP 15-01) June 2015
https://www.royalsoced.org.uk/cms/files/BriefingPaper15-01.pdf

Scottish Government (2016) Energy in Scotland
http://www.gov.scot/Resource/0050/00501041.pdf

SEPA (2010) SEPA's Energy Position Statement
http://www.sepa.org.uk/media/59374/sepa_energy_position_statement.pdf

Steward T (2014). Demand and Decarbonisation in 2050: Themes from Scenarios. EPG Working Paper 1401.
http://projects.exeter.ac.uk/igov/working-paper-demand-and-decarbonisation-in-2050-themes-from-scenarios/ ;
http://projects.exeter.ac.uk/igov/wp-content/uploads/2014/02/WP-6-Demand-and-Decarbonisation-in-2050.pdf