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Breaking the Link between Growth and Impact: The Challenge of this Decade Peter Young Strategy Director SKM Enviros & Chairman, Aldersgate Group IEMA Conference.

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Presentation on theme: "Breaking the Link between Growth and Impact: The Challenge of this Decade Peter Young Strategy Director SKM Enviros & Chairman, Aldersgate Group IEMA Conference."— Presentation transcript:

1 Breaking the Link between Growth and Impact: The Challenge of this Decade Peter Young Strategy Director SKM Enviros & Chairman, Aldersgate Group IEMA Conference Tuesday 15 th November 2011

2 achieve outstanding client success The next 25 minutes we will: Remind ourselves where we are heading, its getting really urgent. Introduce the three key components to give us economic prosperity whilst changing course for a sustainable future 1.Electricity 2.Energy efficiency 3.Resource efficiency Ask what are the UKs Policy Priorities? Hear my top 4 actions Keep up, breaking the link between growth and impact is a big ask!

3 Where are we heading? Global Population in Billions.... What do you think we can cope with re: Carbon Dioxide? Water? Food? 3

4 .....Observed Global Temperatures and Carbon Dioxide +... 4

5 .... Future Carbon Dioxide Emissions to 2100 5 +2 o C? +6 o C?

6 DE-COUPLING GROWTH AND IMPACT: A CALL TO ACTION UK GHG emissions since 1990: Production down by c15% but Consumption up by c20%

7 achieve outstanding client success Cities: Design for eg Carbon Intensity

8 achieve outstanding client success Food Supply and Security Food now 23% of global ecological footprint with 2.5bn more to feed in next 30 years Eg in UK we need 5.2gha, when 1.7gha is available capacity/capita Water use, sustainable nutrients and food supply chain must all be reformed Taxation, regulation, procurement and consumer behaviour change are all required - urgently

9 achieve outstanding client success Carbon - The UKs statutory targets 34% cut in emissions on 1990 levels by 2020 – Energy/resource efficiency is the quickest gain GHG reduction: illustrative contribution from different sectors

10 By 2050 UK carbon targets require transformation of whole economy – and transformation means electrification Not only de- carbonising electricity generation But also to facilitate savings in other energy use emissions categories Most sectors rely on more electricity and efficiency


12 achieve outstanding client success Around 25GW will need to be replaced in next 10 years – but...

13 achieve outstanding client success...Changing Demand means we need more Demand doubles by 2030 –Peak in 2010 = ~45GW –Peak in 2030 = ~85GW New loads heat pumps / plug in vehicles Better storage vital Potential cost £110 billion over decade: –£75bn on generation –£35bn on distribution (>double last 10 years) Figure taken from Energy White Paper

14 achieve outstanding client success UK renewables – lots to do

15 achieve outstanding client success Incentives for renewables Feed in Tariffs - most successful financial incentive for renewable electricity - real growth in capacity But regular revisions in quickly changing market (though changes not dramatic enough to destabilise the market) Need to be economically sustainable Need clear long term targets

16 Policies: Feed-in tariffs: a track record of driving investment FiTs supported: 75% of global PV capacity and 45% of global wind capacity through 2008 Feed-in tariffs (FiTs) are in place in ~28 countries; designs and impact vary widely

17 achieve outstanding client success 2009 EU new Capacity 26 GW

18 achieve outstanding client success PV - European success story Source: EPIA Global Market outlook for PV until 2015

19 achieve outstanding client success EU – installed PV as at 2010 Source: EPIA Global Market outlook for PV until 2015 Success Reflects FiTs not Sunshine!


21 Global Energy Demand

22 achieve outstanding client success..... Global Energy Inefficiency.... 22 7


24 achieve outstanding client success The True Cost of Wastage Waste Bill Energy Bill Raw Materials Labour Handling & Storage Transportation Maintenance Productivity Other Utilities Water Bill Visible costs 10%Direct use 10% Hidden costs 90%!Indirect use 90%! Defra: £27bn/year

25 achieve outstanding client success Waste Prevention Eliminate Avoid wastage of materials and utilities at source Reduce Minimise wastage of materials and utilities Re-use Use materials/waste/utilities as many times as possible Recycle Recycle (waste/utilities) only after you have minimised wastage Recover Value R ecover the energy from any remaining waste/effluent/emissions Dispose Dispose of waste/effluent/emissions in a responsible way Waste Management

26 Prevention vs Recycling Multiplier (CO 2 e)

27 achieve outstanding client success One Case Study: Process Efficiency Toiletries manufacturer £16m turnover £20k waste bill, but.... 3% mixing and filling losses 5% product never sold! ProcessOpportunity Estimated Cost Saving Estimated Environmental Saving (Product Waste) Expected Investment Mixing80% cut in residue losses£125K62,600 litres of material/effluent£20K? Filling80% cut in cleaning losses£200K100,000 litres of material/effluent£10K? 50% cut in overfill losses£525K262,500 litres of material resources£100K? Labour efficiencies in capping operation £200K£150K? TOTAL£1,050,000425 m³£280,000

28 WHAT ARE THE UK POLICY PRIORITIES? 1)Build on a great platform, UK has led in long term policies – Climate Change Act, Statutory Carbon Budgets 2)Deliver on promising new initiatives of Green Investment Bank, Green Deal, Natural Environment White Paper (Natural Capital Accounts) and Electricity Market Reform 3)Remove uncertainty; and clarify and simplify wherever possible 4)Build credibility to encourage bold international decisions at Durban, Rio +20 5)Demonstrate that green growth and sustainability is at the core of all future UK economic policy and support

29 achieve outstanding client success Example - Decarbonisation of Energy Supply and Use.... Clear enough yet? Decarbonise Electricity Supplies Decarbonise Heat Supplies Energy Efficiency Utility Energy Supplies Industrial Energy Users Commercial Energy Users Electricity Market Reform EUETS RHI CCAs CRC FITS Renewable Obligation EUETS CCL Exemption for CHP Building Regulations Green Deal Domestic Energy Users

30 achieve outstanding client success Electricity Market Reform - Timeline YEAR11121314151617181920 Legislation FITS with CfD Capacity Mechanism CFP EPS Transition to CFD Primary Leg. Secondary Leg. *First CfD signed *possible first payments *Capacity procured as required *CFP rising incrementally (£16 to £30) *EPS in force RO open to new gen. Choice RO or CfD. RO vintaged FiTs - Feed in Tariffs; CfD - Contracts for Difference; CFP- Carbon Floor Price; EPS - Emissions Performance Standard; RO - Renewable Obligation

31 achieve outstanding client success Electricity Market Reform – dont forget energy efficiency 1.DECC to have new office to drive a step change in national energy efficiency in autumn of 2011 2.DECC will work with leading industrial experts to drive further carbon abatement across the economy 3.DECC focus – heating and cooling 4.Incentives for Energy Efficiency will be assessed by Government over coming year

32 achieve outstanding client success Aldersgate Groups Growth Statement 1)Streamline climate change & energy policy to raise ambition; reduce complexity; drive more investment in energy efficiency. 2)Clear rationale and objectives to meet the commitment to increase the proportion of tax revenue from environmental taxes. 3)Ensure the sectoral growth reviews and enterprise zones are driving forces for a green economy. 4)Put the Green Investment Bank at the forefront of the growth strategy by ensuring it can borrow on inception and pass legislation by 2012. 5)Following publication of Skills for a Green Economy, work with business to develop a comprehensive action plan to address green skills gaps. 6)Enhance public procurement role and increase support for research, development and demonstration (RD&D) to drive innovation.

33 achieve outstanding client success 1.Recognition that sustainable growth is the only growth that is..err... sustainable 2.Clear long term policies and frameworks that tell investors there will be no U turns – evolution not revolution 3.Relentless pricing of the environment and taxing bads (carbon, pollution) not goods (jobs, income) so the greener businesses will thrive and drive growth 4.Me and you! Individual responsibility and behaviour change In Conclusion: My top 4 actions to De-Couple Growth and Impact:

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