Welcome to my Blog

I was the Head of Policy and Public Affairs at UNISON Scotland until my retirement in September 2018. I now work on several policy development projects, so all views are very definitely my own. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Wednesday, 17 October 2018

Communities or regions?

Boundary change in local government is usually shunted into the 'too difficult' box, for good reasons. Local identity can get everyone excited. I painfully recall spending three days at Boundary Commission hearings while local historians made submissions on why the boundary was wrong and the proposed name even worse! In the current financial environment, boundary changes also invite a 'deckchairs on the Titanic' response.

The Scottish Government's current Local Governance Review is therefore understandably cautious. The first stage is looking at the less controversial issues of engagement, which will no doubt highlight the ways councils could do this better. The second stage is supposed to look at structures and powers, albeit in a voluntary encouragement manner, with the backstop of legislation in 2020.

There has been some interest in doing things differently. For example, Borders Council has suggested a merger with the health board, even if the council appears keener than the health board. They are at least largely coterminous, but placing acute services within the council has its challenges. Some years ago the island councils looked favorably on the idea of all-purpose authorities, but the idea was quietly dropped and never made it into the recent legislation. The Royal College of GPs has suggested shifting social care in the other direction, into health boards.

The Scottish Government is keen on the idea of regions, using Ayrshire has an example of a voluntary merger. While the three councils in my home county have undertaken some limited shared services, there are few signs that they want to go the whole hog. The government is rightly sensitive to the charge that they are centralising services, with regional education collaboratives just one recent example of this. While health board reorganisation has been parked for now, the language is increasingly about regional plans. COSLA, on the other hand, has consistently made the case for devolution to go further than Holyrood.

Where politicians fear to tread, academics can sometimes charge in. A recent example of this comes from two academics at the University of Sheffield. They argue that rationalising the number of councils is happening elsewhere in Europe, driven by economies of scale. The problem with this argument is that Scotland already has the most centralised local government in Europe.

They have redrawn the boundaries based on travel to work areas, calculated by using an algorithm - after all, it works for Amazon! This gives us 17 councils rather than the current 32.

This is all very entertaining, but as with any computer model, it depends on the assumptions. In particular, why are travel to work areas a sound basis for organising local services? I live in Troon and work in Glasgow. I cannot think of a single person in my town who thinks local services should be run from Glasgow. Co-operating on some strategic services like the railways perhaps, but libraries, bins etc. - I think not. I accept that there may be a stronger argument in relation to the leafy suburbs of our cities - but even I am not that brave!

The Labour MP for Wigan, Lisa Nandy, has made a strong case for towns to be the building block for local government. She is the founder of the Centre for Towns and sets out why the city region concept doesn't work for her community. She also makes some important links with austerity and disenchantment with the political process.

James Flynn draws on Labour's latest pitch for towns as another argument against city regions. He argues that devolution may be working for cities, but not for towns. He says:

"Bypassing an imposed mayor and instead boosting the power and responsibility of local councils seems more sensible. There is no logical argument to say your local council is a “distant elite” when it meets at the local town hall."
I have considerable sympathy for these views, which also apply to Scotland. In my paper for the Reid Foundation on public service reform, I outline the concept of community hubs, built around real communities, not the largely artificial council boundaries we have today.

None of this actually requires boundary changes, but it does require politicians to understand that Scotland is not our local. We may be a small country, but we have at least 100 diverse communities. That is where power needs to be devolved to, always allowing for cooperation on some strategic services. The way forward is to deliver services at the lowest practical level, in a way that best meets the needs of communities.

Tuesday, 9 October 2018

Carbon Capture and Storage

There is broad cross party support for Carbon Capture and Storage (CCS) as an important component of our climate change strategy. The problem is turning policy support into action, in our so called energy market. 

I was in London today, participating in an interesting discussion on these issues. I have spent some time, with others, over the years trying to persuade a string of energy ministers and energy companies to adopt CCS, with little success.

CCS is the process of capturing and storing carbon dioxide (CO2), typically caused by burning fossil fuels in power generation and heavy industries, before it is released into the atmosphere. It can be used post-combustion by capturing the gases, or pre-combustion, which involves converting the fuel into a mixture of hydrogen and CO2. It generally captures around 90% of emissions.

Once the CO2 has been captured, it is compressed into a liquid and then pumped underground to be stored into depleted oil and gas reservoirs or coalbeds. Something we have plenty of in Scotland and the North Sea.

The CO2 can be used to produce commercially marketable products, known as carbon capture storage and utilisation (CCSU). Some are reasonably well established like enhanced oil recovery (EOR). Others are still being researched.

CCS is the only technology that can help reduce emissions from heavy industries - essential for tackling climate change. When combined with bioenergy technologies for power generation (known as BECCS – bioenergy with carbon capture and storage), CCS has the potential to generate ‘negative emissions’, removing CO2 from the atmosphere. The potential downside is that these technologies can be expensive, at least until scaled up. 

Some environmental groups are concerned that these technologies will be used as an excuse for climate change inaction, or to allow companies to continue to burn fossil fuels. However, the IPCC report published this week is clear that we may not be able to limit warming to 1.5C without removing carbon dioxide from the atmosphere, and that means CCS. We certainly cannot afford to close it off as an option.

There are more than twenty large scale CCS plants globally. In the UK, a £1 billion competition to develop CCS was dropped in 2015 after a long delay, losing the UK's early research advantage. The Clean Growth Strategy of October 2017, renews a commitment to the technology, with promised investments of up to £100 million. As the Permanent Secretary at the energy department put it giving evidence to MPs earlier this year:

"We think it is very likely to play an important part in the overall effort to decarbonising the economy at the lowest cost. Lots of international studies, as well as our own studies and scientific work here, show that CCUS is likely to be a key part of the overall solution."

However, he went on to say:

"This is much more about innovation. We are not, at this stage, talking about actual deployment of a live, fully functioning, fully scaled CCS project."

In other words, little actual action to create the scale we need to meet climate change targets. There is a small stick involved in energy generation - by 2025 the government will phase out coal burnt in power plants not fitted with CCS.

The Scottish government is supportive of CCS in its energy strategy, but it isn't in a position to fund a full scale project. It is to fund a feasibility study - the Acorn Project aims to create a CCS project at St Fergus in Aberdeenshire. It is also supportive of developing Hydrogen, primarily as a replacement for gas used in heat, plus some transport options. Hydrogen gas at scale will, at least initially, require natural gas (methane) as the source feedstock and as such in order to be low carbon, CCS will be a necessary system requirement. 

It seems clear to me that CCS remains an essential component of any climate change strategy. Scotland is well placed to take a lead, but this has to be on a much larger scale than is currently envisaged. A collective international effort is also needed to speed up research, development and deployment of CCS.

The U.K. Government has a key role to play, but it appears only to be interested in tinkering around the edges. The failed energy market will simply not deliver on the scale required. So, it is time for a planned energy strategy, with public ownership at its core, that can take the necessary action.

Friday, 5 October 2018

Reshaping electricity

Is the electricity sector facing major disruption due to technological innovation, including the falling costs of renewables and energy storage, along with tougher environmental policies and regulatory reform?

Antony Froggett argues in a Chatham House report that as technology and installation becomes cheaper, non-hydro renewables accounted for 61% of all the new installed power capacity across the world in 2017. While the construction of wind and solar was initially stimulated by decarbonisation policy, now it is driven by economics. As renewables continue to be deployed, they become ever cheaper to build and install. Solar is already at least as cheap as coal in Germany, Australia, the US, Spain and Italy. By 2021, it is also expected to be cheaper than coal in China.

However, integrating this new power may become costly. Centralised coal or gas power stations, can more easily be switched on and off to ensure supply meets demand. This is more challenging when renewables are involved, as the sun doesn’t always shine, and the wind doesn’t always blow.

Electricity storage systems could be a key part of the solution and the development of electric vehicles, to address climate change and localised pollution, should drive down the price of batteries. Similar batteries can be used for home storage linked to solar panels.

Digitalisation is likely to be another disruptive change. Smart meters allow energy firms to better monitor and understand their customers, which enables even more flexibility. Algorithms like those already used by Google and Amazon could result in energy supplies tailored to individual households and times of day. Blockchain technology could also enable a peer to peer energy market, allowing neighbours to sell excess power to one another.

Before we get too carried away there are a few challenges. A Westminster parliamentary group recently reported that people who have smart meters installed are expected to save an average of £11 annually on their energy bills, much less than originally hoped. As many of us warned, the piecemeal rollout has been hit by repeated delays and cost increases, with suppliers now almost certain to miss the 2020 deadline. I have a none too smart meter that doesn't work because I switched supplier - and I am not alone. 

The relentless rise of renewables is also not guaranteed. The International Energy Agency (IEA) has reported that fossil fuels increased their share of energy supply investment for the first time since 2014, to $790bn, and will play a significant role for years on current trends. Investment in coal power dropped sharply, but was offset by an increase in oil and gas spending. Fossil fuels’ share of energy investment needs to drop to 40% by 2030 to meet climate targets, but instead rose fractionally to 59% in 2017.

As the New Economics Foundation has highlighted, the number of new solar installations per month in the UK has plunged from an average of over 9,000 between 2010 and 2016, to under 1,000 at the end of 2017. The decline correlates with the Government’s slow suffocation of the Feed-in-Tariff over the last seven years. When these changes were being prepared, the UK government were made well aware of the consequences, yet stubbornly decided to proceed.

Squabbling in the renewable industry won't help to drive a coherent government strategy either. Iberdrola, who own ScottishPower, has voiced its frustration at the UK Government blocking onshore windfarms from competing for renewables subsidies and have attacked technologies like tidal lagoons as, 'Moonshot green technologies'. The company behind the proposed Swansea scheme responded by saying; “Having once bemoaned the incumbency of fossil fuels, it’s disappointing that some in the renewables sector have adopted this bad habit” - ouch!

Offshore wind clearly has significant potential and is a proven technology. Plans to lease the seabed to encourage a new generation of offshore wind farms in Scotland's waters have been published by Crown Estate Scotland. This has the advantage of putting the leasing income into the public purse, rather than big landowners.

The IEA also reported that governments are increasing investment in energy markets, either directly through state-owned firms or indirectly via investments policies and regulation. Firms like ScottishPower are often short of capital investment, which makes them reluctant to back technologies that are not proven to be economically viable. 

This is where Scottish and National Investment banks have a role to play as well as direct public finance. The public policy question is why should we use public money to 'nudge' big power companies, when a public sector operator could do the same job, within a planned energy strategy?