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Carbon Commentary has visited two sites to look at the costs of building houses under the new rules (not yet mandatory) established by the Code for Sustainable Homes (CSH). By 2016, all new UK homes will have to have no net carbon emissions (‘Level 6’) and the implications for construction techniques are profound. Today, most homes are built to about Level 1, or possibly 2. To get to Level 6 will require huge changes in how houses are built, heated, and ventilated. And they will need expensive renewable energy technologies built into the home as well.

At Wimpey’s 145-home development in Milton Keynes, construction costs of houses at Level 3 are running at ‘100-110%’ more than standard. The self-build company Potton is offering a Level 6 design (one of the first in the UK) for an even more expensive £180 a square foot, up from about £75 for a standard Level 3 model. This takes the construction cost of a standard 1,000 sq ft (92 sq metre) home up from £75,000 to £180,000. Much of the increment comes from the need to install large amounts of renewable electricity generation. Some of the cost premium over today’s badly insulated homes will eventually erode as builders get better at building air-tight houses. But we shouldn’t be in any doubt about the huge implications of the CSH for builders, landowners, and buyers.

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Will next-generation biofuels have a less destructive effect on agriculture? A study just published by US government scientists suggests that so-called ‘cellulosic’ ethanol has much better energy balance than today’s biofuels.[1] By energy balance, we mean the energy used to make the fuel compared to its energy value when burnt in a car’s engine. News summaries of the paper’s contents focused on one estimate that suggested that to make cellulosic biofuels might only need 6% of the energy value contained in the fuel. Depending on which crop is used, where it is grown, and how it is refined, most of today’s biofuels have only a weakly positive energy balance. So the paper gives hope that we might expect considerable progress towards carbon-neutral transport fuels when we can start refining all vegetable matter, not just foodstuffs, into fuels.

Cellulosic biofuels may well become important sources of motor fuels. There is certainly huge amounts of money flowing into the field. Unfortunately none of the news articles covering the US research pointed out the technology for turning cellulose into fuel is still a long way from commercial viability. Yes, we can turn grass into ethanol, but at prices which will double the price of petrol. And the greenhouse gas savings will almost certainly not be as attractive as the paper suggests, not least because the authors did not include the serious impact of nitrous oxide emissions from fertilised fields.

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E.ON’s plan to install supercritical coal-burning technology on its Kingsnorth site in Kent was (unsurprisingly) supported by the planning authority. A more interesting question is why E.ON persisted with the application in the first place. Even carbon efficient power stations emit far more carbon than gas plants. A high price of carbon would make the Kingsnorth coal plant uneconomic. The answer to the question must be that E.ON is confident that supercritical coal plants can be economically retrofitted with carbon capture technology (CCS). So even if the carbon price increases dramatically, coal will still be competitive.

E.ON’s US operation is closely aligned with the co-operative FutureGen venture, which plans to build a coal gasification plant in the US within five years. This power station will then capture CO2 and store it in sandstone. FutureGen gasification carbon capture technology is ‘pre-combustion’, unlike the ‘post-combustion’ focus in Europe. US electric utilities are now assuming that coal plants without CCS will not be allowed. But in both the US and Europe there seems to be a prevailing assumption that a $30 per tonne CO2 price is sufficient to cover the cost of CCS technology, meaning coal will eventually be back in the power station mix.

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The McKinsey analysis appears to show that getting the UK on track will need carbon prices in excess of €90 by 2020, though this number will then fall.

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