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Chapter Five - page 1

ENERGY MAKES THE WORLD GO ROUND

The provision of an adequate supply of energy from local resources is fundamental to greater self-reliance. Fortunately, most communities are able to develop such supplies.

Just as the human body adapts itself to the regular intake of hard drugs, its systems coming to depend on them to such an extent that the user goes through a period of acute distress if they are suddenly withdrawn, so the use of hard, fossil, energy alters the economic metabolism and is so highly addictive that in a crisis situation, a user-community or nation will be prepared to export almost any proportion of its annual output to buy its regular fix. Even in normal conditions, a community in an industrialised country can devote a fifth of its external income to buying energy1, an expense which not only constitutes a serious drain on its resources but locks the community into the unpredictable gyrations of the world trading system. Consequently, any community which wishes to be more self-reliant has, at some stage, to turn its attention to the slow process of reducing the extent to which it depends on whatever fuels, renewable or fossil, it brings in from elsewhere.

Stable, sustainable communities cannot be based on imported energy for three reasons. One is that fossil fuel use on any substantial scale - and most energy imports are of the fossil variety - is not itself sustainable because it cannot continue for thousands of years without consuming its resource base and producing harmful environmental side-effects. The best estimates are that if world fossil energy consumption continues at its present rate - an optimistic assumption since human numbers might well double over the next fifty years and the average amount of fuel used by each person is likely to increase - the world's currently-proven reserves of oil will be exhausted at present rates of extraction in 43 years, those of gas in 65 and of coal in 232 2. Although it is reasonable to expect that large additional sources of fossil energy will be discovered, extraction rates may well go up and, in any case, it is impossible to believe that adequate supplies of these three fuels will be available for millennia, which is what any reasonable definition of sustainability requires. Moreover, even if fossil fuel supplies were limitless, the capacity of land plants and the oceans to absorb the carbon dioxide released when they are burned is not and fuel consumption cannot continue at anything like its present level without bringing about highly-damaging and potentially catastrophic changes in the world's climatic regime.

The second reason to aim for community energy self-reliance is that imported fuel supplies are unreliable. British North Sea oil output has been declining since 1987 and at present rates of extraction proven reserves will be exhausted by 2004 and imports will have to start again in 1996 or 1997. As a result, life in the UK will come to depend again on stability in the Middle East which holds over 65% of the world's known oil reserves. Since 1950 there have been five serious disruptions to oil supplies from the area: the Suez Crisis (1956), the Yom Kippur War (1973), the Iranian revolution (1979), the Iran/Iraq war (1980-8) and the Iraqi invasion of Kuwait and the subsequent Gulf War (1990-1). Gas supplies are even less secure than those of oil although the enthusiasm British and Irish electricity producers have recently shown for switching to it to generate electricity might lead one to think otherwise. British gas reserves are expected to be exhausted by 2002 if 1992 extraction rates are maintained. Click for 2003 update. Consequently, if the government forecast that UK gas consumption will double over the next 25 years and 60% of electricity will be generated from gas by 2020 proves correct, massive imports will be required. These imports will be piped in from Russia and the Middle East as transporting liquefied gas by sea is very expensive. As a result, Britain will be exposed to the risk of its supplies being cut by civil unrest, local military conflicts and international disputes in any of the territories along the pipelines' route.

Ireland's position is no better. Kinsale Head, its only known major gas field3 (and, indeed, its only significant domestic fossil fuel source apart from peat) will be exhausted around the year 2000 and the country is already importing gas from Britain through an undersea pipeline opened in 1995. "We would envisage imported gas supplying almost all our requirements" a Bord Gáis spokesperson told me.Click for 2003 update.

The third reason for phasing out fuel imports is that energy prices are very erratic. The graph below shows just how much oil prices have changed since the fuel started being put into widespread use in the last century. Swings since the early 1970s have been particularly wide and violent. Each substantial change affected the prices of all other fuels, even those which cannot easily be moved from place to place, because of the ease with which oil can often be substituted for them. In New England, for example, the price and supply of local firewood is entirely determined by the price of imported oil because people switch to burning oil to warm their houses in winter whenever it is cheaper.

Graph 5.1 Although fluctuations in oil prices since the early 1970s have been wild compared with their previous stability, they have been even more extreme for people outside the US who, because oil is priced in dollars, have had exchange-rate instabilities to cope with too. Communities depending on fuel from the outside are therefore running great but unquantifiable risks.

Whenever energy prices change significantly, the whole structure of price relationships in the economy changes as well. This is because each product requires a different amount of energy for its production and distribution and so needs to be raised or lowered in price by a different amount. Energy price movements therefore make some goods and services relatively cheaper and people begin to use more of them in place of the more costly ones, thus affecting the entire make-up of an economy's output, encouraging expansion in some areas and contraction in others. This can be wasteful if machinery is scrapped and factories demolished before the end of their useful lives. New energy price levels make new ways of manufacture commercially viable as well. For example, if the price of fuel falls, transport costs drop in comparison with other prices because the sector is relatively more energy-intensive. This makes it profitable to produce on a larger scale and to use additional energy in a transport fleet distributing the extra output over a wider area. Small, local manufacturers are driven out of business, and since it would be a long time before they re-emerged if energy prices rose again, we can see why higher levels of energy use are so addictive: a one-way rachet effect is in action and it is very hard for an economy to revert to using less energy whatever prices do.

No stable, sustainable community can therefore exist without a secure. sustainable supply of energy at a stable price and the only way that both security and price stability can be guaranteed is by having energy sources within community boundaries and under community control. But is energy self-sufficiency technically feasible for most communities? And, if so, does it carry a heavy cost penalty? After all, if it did, this would seem to impede a community's efforts to produce a much wider range of goods and services for itself at prices which matched those from outside, the strategy we considered in Chapter Two. In fact, however, moderately higher local energy prices are unlikely to create a competitiveness problem because the production techniques used in a community economy will generally require much less energy than those in the industrial system. Moreover, electricity, the price of which will receive most attention in this chapter, is too high quality power to be used except in special circumstances for anything but very limited range of applications including lighting, microwave ovens, electronic equipment, motors, and methods of applying heat to limited areas such as welding. If local electricity is priced a few pence more per unit more than that from outside it will make little difference to a community's overall cost levels provided its use is confined to these applications. Certainly, no-one supplying electricity to a distribution grid or taking it from one should ever use it for warming rooms or heating water, applications which a US energy expert, Amory Lovins, once referred to as equivalent to using a chainsaw to cut butter because of the waste of energy involved in generating electricity from fossil fuels.

In any case, what do we mean by the cost of an activity within a community? One aspect is obviously the amount of external currency which has to be earned to enable it to continue. When electricity is supplied through the national grid, apart from the wages of electricity workers living in the area plus any rents, dividends and supply invoices the power companies pay locally, 100% of whatever the consumers are charged leaves the area. With locally-generated power from a renewable source, however, the only inescapable national currency cost once the equipment has been installed is that of any spares too complex to be made within the community area. Interest payments - a substantial part of the cost of power from most renewable sources - rents and wages could and should all go to local people. The external currency cost of locally-generated renewable power can therefore be very small. This does not necessarily mean that the price of power to the consumer would be low because local costs might be heavy but there is no need for these costs to be paid in national currency. A wind-farm, for example, could adopt Robert Swann's idea and issue its own currency notes expressed in kilowatt hours to pay its staff and to cover the interest due to locals who had invested their national-currency savings to enable it to be built. If it then accepted these notes back in payment for its power, everyone in the community would be happy to use them as money, either settling their own electricity bills with them or spending them in shops.

The only real way in which locally-produced energy can cost more than that from outside is in terms of what economists refer to as its opportunity cost, the cash value of the opportunities the community has to give up to bring its own power sources about. For example, it could be that the capital used to build a windfarm would have brought a higher financial return if it had been invested in something else, or that the farmers growing willow to burn would have earned more cultivating another crop. Communities will rarely find these circumstances arise, however, because energy projects should be give as good a return on capital as any other scheme to serve the community's needs and because more profitable uses for a community's labour can only arise when it has achieved full employment. Even if community members compare returns with those on investment opportunities in the outside economy, local energy projects should be an attractive place for their savings because of the low rate of interest mainstream banks, pension funds and building societies generally pay the small saver. Moreover, they will be aware that funds placed with institutions operating in the international economy are at risk if that economy breaks down whereas an investment in a local power supply is about as safe as they can get. Nevertheless, if circumstances do arise in which there are substantial opportunity costs, people are going to have to decide what their priorities are: is a higher income stream from the external economy in the short term preferable to long-term community energy security?

A factor which should make the decision to invest in local energy sources rather easier is that world fossil energy prices are almost certain to rise sharply soon despite the fact that in early 1994 the price of oil was down to only $14 a barrel, much the same level in real terms as it was between 1930 and 1970. In fact, this low price was part of the problem - oil markets have been so weak for most of the period since 1982 because of the depressed state of the world economy that very little capital has been invested in developing new fields and there is now almost no capacity to accommodate even a modest increase in demand. When they come, these higher fossil energy prices will raise the amount of national currency communities need to find to develop renewable power supplies. It therefore makes sense to develop those types of renewable energy now where the technologies are already so well-established that their capital costs cannot be expected to fall much further. Windpower, small-scale hydro and some types of biomass (plant-matter derived) energy fall into this category. With other energy sources - photovoltaics, for example - huge capital cost reductions are likely within the next decade and it is better to delay their exploitation.

The table in the next panel shows estimates of the national currency and local currency costs of the various methods of energy provision which communities might have open to them calculated on the assumption that they are to be carried out on a community scale as opposed to a household or industrial one.

Click for panel from original text on balancing external costs against local ones

One column of the table shows that even if all costs are treated as being in national currency, electricity from some forms of renewable energy is already entirely competitive with that from gas, oil and coal. This is despite the fact that fossil fuels are heavily subsidised since the full cost of the environmental damage caused by their combustion is not reflected in the prices power stations pay. Anyone who is surprised by these figures was in good company until recently because it was only in 1994 that the Irish Department of Energy learned how low renewable energy costs actually were. The Department had asked companies to submit bids saying how big government grants they would need to induce them to sign contracts to supply electricity from non-fossil sources if they were guaranteed an inflation-proofed average price of 4p per unit power for 15 years. £15m. was set aside to cover the grants but in the event, not a penny was paid because more than enough proposals were submitted which were commercially viable without them. The Department, which had obviously been under a seriously false impression about the true cost of renewable power, signed contracts for 50% more capacity than it had intended.

No settlement anywhere is without some source of renewable energy it can develop - indeed, very few will find they have only one. Most will have several, like Hatherleigh, a small market town near Okehampton in Devon whose energy prospects were assessed in 1993 by two firms of consultants, Pell Frischman Water and Terence O'Rourke plc under contract to the British Government and the EU4. The consultants found that the town would have no problem meeting all its electricity and heating needs entirely from renewable sources but only if several were exploited and consumers were prepared to pay somewhat higher prices for their power. The area's most abundant renewable energy resource was the solar radiation falling on its walls and roofs. Very little of this was exploitable, however, because the installation of solar heating panels or arrays of photovoltaic cells on buildings 'would conflict with the historic character of the town' most of which is a conservation area. The fact that many buildings were listed for preservation and could not be changed also meant that there was little scope for using passive solar energy since this involves designing and constructing buildings so that the sun's rays are used in ways which reduce the need for artificial heating and lighting.

The next most abundant resource - wind energy - was also judged to be of limited potential because the area's average windspeed was below 6.5 metres/sec, the minimum currently considered commercially viable if high rates of interest have to be paid to outside investors. If local savings had been available to finance the project, however, this cut-off point could have been reduced because the interest rates would have been able to have been lower while remaining attractive to local people and the payments would have stayed in the area. "The ability of renewable energy projects to facilitate the local retention of wealth is a potentially significant indirect benefit and worthy of further research in its own right" the report says in its recommendations. Local involvement would also perhaps overcome a second problem with wind energy in Hatherleigh - a wind farm's visual impact. The town's windiest site is the Moor, a prominent ridge to its east, and objections would undoubtedly be raised if an outside company ever proposed to erect windmills there. The reaction might be different if a community company suggested the same thing but, with no sign of one emerging, the consultants decided that the only contribution the wind could make to Hatherleigh's needs was to drive small individual turbines on isolated farms to supply their electricity.

Hydropower was considered to offer poor prospects too: "Without significant civil works, only schemes at existing mills and weirs dating from the 19th century and earlier would offer sufficient potential energy" and even on those sites - there were six with a total capacity of 230kW - projects were "unlikely to be cost effective".

So where was Hatherleigh to get its power? From agricultural sources - the coppicing of willow trees specially grown on farms, plus the production of gas from farm slurries, sewage sludge and abattoir waste. The report states that the conversion of a tenth of the 7,944 hectares of farmland to coppice would produce almost 8,400 tonnes of dry wood chip each year, more than enough to fire a power station producing 9.6 GWh/year, the total electricity requirement of the town, as well as a considerable amount of hot water which could be used to warm workshops, greenhouses, homes and offices. The consultants estimated that if the energy in the hot water was distributed free rather than being sold, the cost of the electricity would be around 10p per unit. Electricity from the biogas digester would be more expensive - upwards of 16p per unit - unless a use could be found for the hot water and an allowance made for the fact that the digester disposed of what would otherwise be problem wastes.

The consultants stress that Hatherleigh is not unusual in the abundance of its renewable energy resources. "A not-dissimilar volume and variety of accessible resources would be found in the hinterland of many rural settlements. This conclusion applies not only to West Devon and other parts of the West Country but to other areas of the European Union such as Brittany and much of the Irish Republic". Two other findings of the Hatherleigh study would apply elsewhere too. One is that the scope for the large scale, centralised, commercial development of renewables is limited and that the available resources can best be developed on a community basis. "Options for community engagement in the development, ownership and operation of a renewable energy project in Hatherleigh should be kept under review" the report says. "With the two most promising renewable energy resources both being farm-based, the farming community and its associated business and co-operative structures are likely to form a focus for specific projects in the locality. The other finding was that renewable energy can provide an important means of rural renewal. "A higher aspiration for renewable energy production would ..... make a significant contribution to the European Union's efforts to promote sustainable development, diversify rural economies and improve the effectiveness of the Common Agricultural Policy."

At a national level, there is no doubt that the long-term potential of renewable energy is considerable. "In principle, renewables could supply all the energy needs even of advanced industrial nations assuming that there is a serious commitment to energy conservation" Dave Elliott of the Network for Alternative Technology and Technology Assessment (NATTA) at the Open University wrote in his 1993 report 'Towards a Renewable Energy Strategy for the UK'.5 "The [British] Government's Renewable Energy Advisory Group recently suggested that in theory, renewables could supply 1,100TWh/annum, two or three times the UK's electricity requirements, at a cost of less than 10p/kWh. To that must be added a heat contribution. A more ambitious scenario produced by Cambridge University's Department of Applied Economics suggests that we might expect up to 50% total energy contribution by 2040 in the UK while a scenario produced by the Stockholm [Environment] Institute for Greenpeace has renewables supplying 62% of West Europe's energy by 2030, rising to 100% by 2100"

Let us look, then, in more detail, at the forms of renewable energy most likely to be suitable for community-scale exploitation in the British Isles.

1. WATER POWER

During the past twenty years, electricity from small hydropower plants - that is, under 5MW - has become entirely price competitive with that from fossil-fuelled power stations even by conventional accounting standards. And, while several community-scale projects have recently been carried out in Britain and Ireland, there is considerable scope for many more. Over 20,000 sites in the British Isles had waterwheels at some time in the past, and very few of these are still used.

The Republic of Ireland, for example, once had 1,800 watermills. In the early 1980s when experts searched 2,000 six-inch maps covering the entire country looking for their locations and for other places where waterpower might be developed they found that only 85 sites of 3,500 they considered worthy of visiting were still used for power. A report published by the Department of Energy in 1985 gives the experts' assessments of the head, flow rate and power potential of the operational sites together with the best 483 unexploited ones.6 According to this study, a total of 38MW of capacity could be developed, which Fiacc O'Brolchain, the secretary of the Irish Hydro Power Association7 , thinks is about right. "I've been going around the country for some time saying that we've about 10MW of hydro power installed and there's another 30MW we could develop unless the price of electricity went much higher and made a lot more sites feasible" he says. "However, there are a lot of sites which are in the report which ought to have been left out and a lot more which ought to be in." My own experience bears this out: there were five water mills within a mile of my house, not one of which is mentioned in the report. Three of these stood together in a small valley to which water was channelled from a nearby river and, after a preliminary survey, a friend who is a waterpower engineer estimated that if the canal was re-opened and a modern high-pressure turbine was installed it could generate 250kw.

The key determinants of a good waterpower site are the volume of water, the proportion of the year it flows and the distance through which it falls: 9.8kW is generated by a cubic metre of water falling down a metre in a second, provided the turbine or waterwheel though which it passes is 100% efficient. In practice, of course, this is never the case. Also, although low head turbines such as the Kaplan in which the moving water pushes round propellers can convert as much of the water's energy into useful power as those for higher heads such as the Pelton wheel in which a high-pressure jet of water is directed into cups mounted on a spinning wheel, they are more expensive because they need to be bigger in order to cope with a much larger volume of water to give the same amount of power. They also need to be built to closer tolerances and shaped more carefully to suit the speed of the water passing through because if turbulence develops it wastes a lot of the water's energy. Obviously, one cannot decide whether to fit a high-head or low-head turbine - that depends on the site. The traditional overshot mill wheel is surprisingly efficient - it can extract 70% of the water's power - but is unsuited to generating electricity because of the slow rate at which it turns. One could, of course, fit a gearbox to speed the rotation up but this would waste energy itself, and if one tried to speed up the wheel, the water would be thrown out of the buckets by centripetal force, also leading to inefficiency.

Electricity was not generated from waterpower until the 1880s and there was almost no technological development of small-scale systems between 1930 and the oil crisis in 1973 because the market for turbine sets in industrialised countries collapsed when people who might have ordered them found it cheaper and easier to get their power from the national power grid when that reached them. Many manufacturers went out of business or began making pumps. Even before 1930, small-scale hydropower was at a serious price disadvantage in relation to larger waterpower schemes because of the cost of the control system required for a reliable AC output. According to Micro-Hydro Power8, the best book I know for anyone considering a small-scale system, in the old days the controls for a 15-20kW water turbine often cost more than all the rest of the installation and, on a 10kW system, might have consumed 10% of the output. DC control systems were cheaper and simpler but meant that the power was unsuitable for the most readily-available electrical appliances.

It is only within the past twenty years that this control problem has been overcome and electronic systems are now available at a reasonable cost for even the smallest system. Progress has also been made on standardising small, low head turbines - and most sites offer only a limited head - and presenting them in such a way that the construction work needed to house the turbine and channel the water is greatly simplified. For example, a Dublin firm of engineers has developed the Polyturbine which is suitable for sites with heads from 1.5 to five metres9. The beauty of the Polyturbine, which was thought up by a Swede, Evald Holmen, is that the contractor building the turbine house and the water channels running to and from it needs to erect very little shuttering before casting them in mass concrete. Instead, the correct shapes are made up in glassfibre at the factory, placed in position on site and concrete is poured around them to hold, strengthen and stiffen them up. This cuts sitework costs considerably. Moreover, because the channels and turbine chamber have the smooth side of the glassfibre reinforced resin lining them rather than concrete, the water moves through with very little friction.

The Polyturbine - like similar systems from several other makers - is modular: only one size of turbine is made. This is capable of handling between one and 3 cubic metres of water a second and if the amount of water available is greater than that, an identical turbine is installed alongside the first rather than a bigger model. Adjustments to suit the differing heads from site to site are made by adding extra sections to the water intake channel. As a result, the standard turbine and generator for a site with a 1.5 metre head costs 30,000 and produces 25kW from a 2.5 cubic metre flow while that for a 5 metre head site costs only £8,000 more and delivers 114kW, a much better bargain.

Page 2 of Chapter 5



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