Shell backed out of its commitment to provide the financing for one third of the world’s largest offshore wind farm off the Kent coast. The London Array, expected to cost about £2bn, now needs to find a new investor. What about tapping the public? The project has reasonable economics, and private individuals could benefit from 40% tax relief by putting shareholdings into pension plans. Perhaps as importantly, such a move would raise understanding of renewable energy generation among the wider community.

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The UK government has announced an intention to allow offshore wind farm development around most of the UK. John Hutton suggested that about 33 GW capacity could be added by 2020. This would provide about 25% of current UK electricity demand (which is itself rising by 1 to 2% per year).

Simple calculations suggest that this change may add about 15-25% to UK electricity bills. Offshore wind is more expensive to construct and operate than onshore wind farms. The announcement may suggest that the government believes that offshore wind can be pushed through but that onshore farms are likely to be successfully opposed. The big push for offshore wind seems to mean that the government is losing faith in nuclear.

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One of the few co-operatively owned wind farms in the country has almost finished raising its funds. Investors have put up £3m to buy two existing turbines in the Fens. Locally owned wind farms should be encouraged as a cost effective means of cutting emissions.

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Biochar is exciting growing attention around the world. Charcoal’s ability to improve soils can sometimes be spectacular. But more importantly from a climate change perspective, charcoal is almost pure carbon and is strangely stable in soils. It seems to persist for centuries. Charcoal can therefore offer substantial opportunities for long-term sequestration of carbon. The valuable fuels from the biogases and liquids are also carbon-neutral since they contain CO2 previously captured during photosynthesis. As a third major benefit, soils fertilised with charcoal seem to need less artificial fertiliser, thus saving fossil fuels. Fewer applications of fertiliser would reduce the level of emissions of nitrous oxide, a particularly dangerous greenhouse gas.

Biochar manufacture represents a way of productively storing large amounts of carbon. But the carbon in the charcoal could be burnt to generate electricity instead of being stored in soil. Current emissions trading schemes, such as the European ETS, do not allow sequestered carbon to be considered as equivalent to a reduction in greenhouse warming emissions. This is a mistake that will need to be rectified. It make more sense to use agricultural land to make biochar and biogases/bioliquids than to burn the biomass in power stations. Power stations burning wood benefit from buying fewer emissions certificates and from the renewable energy subsidy, but there is no comparable benefit from storing carbon in the soil. This is an anomaly that should be removed.

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The product has the following important features:

• The electricity is derived from renewable sources. The company says that this is not the key ingredient of the tariff. Later in this note I try to explain why.
• British Gas will buy and retire Renewable Energy Certificates for 12% of the electricity it supplies. This is probably the most important aspect of the proposition.
• British Gas will ‘offset’ all of the carbon dioxide produced as a result of each household’s purchases. This is the most expensive part of the deal for British Gas.
• There will be a small donation to a green education fund for schools.

BG says that it makes no extra money from the sale of its Zero Carbon product. This looks a justifiable statement to us. The important other questions to ask are:

• Why did BG decide that 10% was the appropriate premium to its main tariff? It could have designed a less costly offering with reasonably strong green features. Do mainstream ‘concerned consumers’ regard 10% as an acceptable price increment? Did BG need to ‘gold plate’ the new product to avoid any criticism that it was a proper green tariff?
• How will the company manage to ensure that it buys high quality offsets, and not the dubious offerings sold by consumer offsetting companies?
• The product is slightly complex and difficult to explain. Can BG cut through the competing claims of other green suppliers to build a large customer base for this high quality offering?

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