Bri­tain jumps 13 places to seventh in low-car­bon elec­tric­ity league

The Daily Telegraph - Business - - Business - By

Jil­lian Am­brose THE Trea­sury’s car­bon tax has pro­pelled Bri­tain into the top 10 of a global low-car­bon elec­tric­ity league ta­ble faster than any other coun­try, ig­nit­ing calls from the clean en­ergy in­dus­try for the forth­com­ing Bud­get to keep the sup­port in place.

The fresh re­search shows that Bri­tain has climbed from a 2012 rank­ing of 20th out of 33 in­dus­tri­alised coun­tries to seventh on the low-car­bon elec­tric­ity league ta­ble.

The top three in­clude Nor­way and Swe­den, which use vast amounts of hy­dropower, and France, which re­lies mainly on nu­clear power gen­er­a­tion.

Bri­tain’s 13-place leap in just four years is the fastest as­cent of any coun­try, ac­cord­ing to Imperial Col­lege Lon­don, which pro­duced the re­port.

“Bri­tain is re­duc­ing its car­bon emis­sions from elec­tric­ity faster than any other ma­jor coun­try, and this has hap­pened be­cause the car­bon price and lower gas prices have forced coal off the sys­tem – the amount of coal-fired power gen­er­a­tion in Bri­tain has fallen 80pc be­tween 2012 and 2016,” said Dr Iain Staffell, from Imperial Col­lege.

The tax, known as the car­bon price floor, was in­tro­duced in 2013 to charge fos­sil fuel power plants for their car­bon emis­sions.

The mar­ket-based mea­sure is cur­rently set at £23 a tonne of car­bon un­til 2020, and is de­signed as a “top up” to the Euro­pean emis­sions trad­ing sys­tem, which has lan­guished at £5 a tonne on the Con­ti­nent over much of the year. The Gov­ern­ment has pledged to give fur­ther de­tails on the car­bon tax in next week’s Bud­get, but is caught be­tween calls to main­tain or lift the tax to boost Bri­tain’s green econ­omy, and fears that it may sad­dle heavy in­dus­try with a com­pet­i­tive dis­ad­van­tage as the coun­try leaves the Euro­pean Union.

UK busi­nesses al­ready have the sec­ond high­est en­ergy bills in the EU, even though Bri­tish house­holds have some of the low­est across the bloc, be­cause car­bon-cut­ting and so­cial poli­cies add 20pc to the bill. The Ma­jor En­ergy Users Coun­cil (MEUC) has warned that many will find the im­pact swell to 40pc by 2020.

But calls for the tax to con­tinue into the 2020s are strong from low-car­bon elec­tric­ity gen­er­a­tors in­clud­ing re­new­able power op­er­a­tors, nu­clear gi­ant EDF En­ergy and Drax Power, which col­lab­o­rated on the re­port.

Drax op­er­ates the largest sin­gle power gen­er­a­tion site in the UK, sup­ply­ing around 7pc of the na­tion’s elec­tric­ity. In the past the plant was fu­elled en­tirely by coal but Drax now pro­duces around 70pc of its elec­tric­ity by burn­ing re­new­able biomass pel­lets.

Andy Koss, the chief ex­ec­u­tive of Drax Power, said it is “vi­tal” that the Trea­sury main­tains the car­bon price in the Bud­get if the UK is to meet its cli­mate change tar­gets.

“With­out it we could see a re­ver­sal of the im­pres­sive re­sults achieved so far – look at what has hap­pened else­where,” he said.

While coal gen­er­a­tion has fallen in the UK, Dutch coal-fired power plants have ramped up due to the slug­gish Euro­pean car­bon price, caus­ing emis­sions in the Nether­lands to rise by 40pc be­tween 2012 and 2016. By Lucy Bur­ton ZURICH has be­come the lat­est in­sur­ance gi­ant to cut ties with coal-in­ten­sive busi­nesses, bring­ing the amount in­sur­ers have pulled from these com­pa­nies to around $20bn (£15bn) in just two years.

A grow­ing num­ber of in­sur­ers are try­ing to dis­tance them­selves from fos­sil fu­els amid cli­mate change con­cerns, with coal min­ing the big­gest sin­gle source of car­bon diox­ide emis­sions from hu­man ac­tiv­ity. Zurich has de­cided to pull money and stop of­fer­ing in­sur­ance to com­pa­nies that de­pend on coal for more than half of their turnover, an­nounc­ing a change to its poli­cies months af­ter Green­peace wrote to the world’s largest in­sur­ers urg­ing them to take ac­tion.

French in­sur­ance gi­ant Axa was the world’s first fi­nan­cial in­sti­tu­tion to di­vest from coal, re­mov­ing hun­dreds of mil­lions of euros-worth of coal in­vest­ments in 2015, with Al­lianz fol­low­ing suit some months later. Swiss Re and Lloyd’s are set to un­veil new poli­cies in the com­ing months. Fif­teen in­sur­ers with over $4 tril­lion in as­sets cov­ered by coal di­vest­ment de­ci­sions have now changed, or are plan­ning to change, their poli­cies around coal, with $20bn-worth of in­vest­ments so far pulled, ac­cord­ing to a re­port pub­lished by the Un­friend Coal cam­paign.

“Coal needs to be­come unin­sur­able,” said Peter Bosshard, Un­friend Coal co­or­di­na­tor. “If in­sur­ers cease to cover the nu­mer­ous nat­u­ral, tech­ni­cal, com­mer­cial and po­lit­i­cal risks of coal projects, new coal mines and power plants can­not be built and ex­ist­ing op­er­a­tions will have to shut down.”

He added that be­cause in­sur­ers man­aged around $31 tril­lion of as­sets they had the power to shift money away from coal and towards clean en­ergy, ac­cel­er­at­ing the change towards a low­car­bon econ­omy by block­ing the fund­ing for new coal mines.

Backed by a num­ber of or­gan­i­sa­tions in­clud­ing Green­peace, Rain­for­est Ac­tion and Clien­tEarth, the re­port also ranked the world’s big­gest in­sur­ers by their cli­mate change poli­cies.

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