Copenhagen Summit: a power failure?

Expectations were high for the Copenhagen Summit, but very little was achieved. We ask the winners of last year's Rosenblatt New Energy Awards what went wrong.

Dubbed “Hopenhagen” in the official advertising campaign, the climate change summit in Denmark’s capital actually delivered very little for green campaigners and entrepreneurs committed to reducing carbon emissions.

In fact, the sheer inconclusiveness of the summit was in itself quite an achievement given that 115 world leaders were brought together to discuss climate change for the first time since the Kyoto summit in 1997. The Copenhagen accord that was eventually signed simply recognises the case for keeping temperature rises to under 2ºC, but gives no firm commitments to reduce emissions to achieve that goal.

Jeremy Leggett, a seasoned green campaigner and executive chairman of renewable energy business Solarcentury, says: ‘We’re in trouble. People talk optimistically about the next summit, but at some point the chain has to be broken. A lot of politicians said that Copenhagen was the last chance saloon and it was a major disappointment.’

For Leggett, who attended the summit, the major players in the climate change debate seemed unable to appreciate that time is of the essence: ‘The Chinese were unbelievable, obstructing progress as much as they could. In Europe, we talk a good game but don’t follow through. The EU claimed that it would reduce carbon emissions by 30 per cent [instead of the current target of 20 per cent] if progress was made in Copenhagen. It could have committed itself to 30 per cent cuts no matter what anyone else was doing, but of course it didn’t.’

The US, meanwhile, were ‘useless. They breezed in and alienated developing countries by trying to cook up deals and then claim to the outside world that it was a fait accompli.’

Not everyone would agree with Leggett’s uniformly bleak assessment. David Ballie, CEO of energy efficient components manufacturer CamSemi, says: ‘The Copenhagen summit shows that there is greater US involvement, which is fundamental in terms of global emissions. The US refused to participate in Kyoto and any deal without the US is of questionable long-term value.’

The home front

While an international deal may prove elusive, Ballie points out that a lot can still be achieved at a national and regional level: ‘The rolling black-outs in California drove companies to develop energy efficient domestic products. It set standards across the US and it influenced the EU. There is an opportunity for regional groups to show leadership.’

The UK is making progress. As of April 2010, the UK government will be introducing a set price for a fixed period on electricity generated using small-scale low carbon technologies, such as solar panels and wind turbines. This will apply to companies spending more than £1 million a year on power, thereby encouraging larger corporates to explore ways of adopting alternative sources of energy.

Matt Taylor, a partner at Foresight Group, an environmental private equity investor, believes the new tariff system ‘will unleash a wave of investment’.

For Leggett at Solarcentury, which manufactures photovoltaic technology products such as solar roof tiles, and saw sales increase by 21 per cent to £34 million in 2009, the measures need to be extended: ‘Tariffs will make an interesting market for us but they aren’t as generous as countries like France and Italy. I know that if the tariffs were 10 per cent higher, more companies would get involved and that’s when you get more innovation.’

Could do better

The feed-in tariffs are designed to complement the government’s existing policy of renewable obligations (RO), which requires utility companies to source a percentage of their electricity from alternative sources. The RO system will continue to be the main government focus for large-scale energy generation.

Martin Wright, chairman of tidal wave business Marine Current Turbines, argues that smaller companies are undermined by the existing set up: ‘Electricity suppliers are making a 40 per cent margin on the power that we are generating. The system transfers value, so the power is in the hands of the utility companies.’

Marine Current Turbines built the first commercial tidal stream generator, SeaGen, in Northern Ireland in 2008. Just before Christmas, the company clinched £3.5 million from The Carbon Trust, which takes the total amount raised from governmental and private investors to £29.4 million.

Wright thinks that the RO system is detrimental to wider innovation in renewables: ‘Off-shore wind is the flavour of the month. Even though tidal wave power is more efficient in terms of energy capture, it is being overlooked because under the current system, investors have the same benefits if they put their money into an off-shore wind farm, and it’s a proven technology. There needs to be a stronger market signal from the government for emerging technologies.’

On a broader level, the sense is that more needs to be done in the UK to back wider adoption of renewables to counterbalance the use of traditional sources of energy. For Leggett, the impetus for such a change has to come from world leaders like China and the US; the non-event of Copenhagen shows that words and actions on reducing carbon emissions remain worlds apart.

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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