Policy Centre Jersey

The Policy Centre held a discussion meeting on energy policy on the morning of 26 September 2024. 45 people participated - members of the Centre’s Advisory Council, representatives of business and government and people interested in the subject.

The discussion followed the publication of the Centre’s Policy Brief Energy policy.

The meeting was chaired by Simon Soar, Director of the Centre. Opening comments were made by

Sir Mark Boleat, the Centre’s Senior Adviser, summarised the Policy Brief.
Ali Cambray, Advisory Director, PwC, summarised global developments.
Mark Leybourne, Dyna Energy, commented on the relevance of the potential wind farm to Jersey’s energy policy.
Chris Ambler, Chief Executive of Jersey Electricity, gave his company’s perspective.

There was then an open discussion. Alan Merry, Policy Centre Chair, summarised the discussion.

Comments by Sir Mark Boleat

Energy policy has to reconcile sustainability, security and affordability.
There are three main sources of energy - fossil fuels, nuclear power and renewables.
Of energy consumed in Jersey, 57% is provided by oil, 39% by electricity and 4% by gas.
Domestic users account for 39% of energy use, industry and government for 27%, road transport for 25% and air and marine for 8%.
Jersey has no agreed energy policy or strategy. The carbon neutral roadmap (CNR) is the best articulation, and the possibility of wind farm is influencing policy development.
A CNR commitment is at a minimum, reduce emissions by 68% compared to the 1990 baseline by 2030. This requires a rate of reduction of emissions of 6% a year compared with 1.5% in past 20 years.
2030 targets include 67% of all vehicles decarbonised (currently 2%) and 16,000 domestic and 1,700 of commercial fossil-fuelled boilers decarbonised (currently fewer than 500 domestic boilers).
CNR said energy policy would be published in 2023. An FoI in February 2024 said that a decision on offshore wind “would transform our energy strategy”.
Four big issues –
- How to reduce use of fossil fuels for transport and heating, essential if the CNR targets are to be seriously pursued.
- How will the increased demand for electricity be met.
- Whether the Government will require JE to work on the assumption that it will buy its electricity from the wind farm should it go ahead.
- Whether there is scope for Jersey and Guernsey to work together on energy strategy.

Comments by Ali Cambray

Jersey is not alone in tackling the energy trilemma balancing decarbonisation, resilience and equity in the context of the transition to net zero and geopolitical developments. In general, compared with other jurisdictions, Britain and Europe score well in tackling the trilemma.
The definitions are changing. Security is about resilience as well as sovereignty, affordability is linked to the just transition to net zero and decarbonisation needs to be seen in the context of wider environmental harm.
On decarbonisation, key trends are increased emphasis on electrification, more use of renewables, and a concentration on realism and practicability with the recognition that some critical sectors, for example heavy manufacturing and large vehicles, are difficult to decarbonise and are the focus of innovation through green hydrogen and other technologies.
On resilience, countries are seeking to reduce dependence on other countries and developments in battery technology are making storage more feasible, but improvements have short term costs.
On equity, there is a general move away from uniform pricing, and a focus on demand management. Those who can afford to pay are being encouraged to take the appropriate action, for example with time-based electricity tariffs, and at the same time the least able to pay and the vulnerable must be protected.
Policy on energy can conflict with other economic policy objectives as the issue with data centres in Ireland has recently demonstrated.
Implementation of energy transition policy measures is sometimes seen as simply being a cost but it can also be regarded as an investment. There is evidence that a place-based approach can be more effective in reducing costs and with substantial wider benefits.
Private funding has a significant role to play in implementation of energy policy and financing the transition. The UK needs more than £1 trillion additional investment to decarbonise heat and transport to achieve net zero by 2050. This is far beyond the limits of public funding. The focus is on how to mobilise green investment from the private sector – an estimated £500bn investment opportunity.
There are several innovative place-based, public-private financing and delivery partnerships in different cities and regions in the UK and beyond. Scaling these models further at local level needs to address the lack of project development capacity in local. government, limited investor engagement with the sector, and an uncertain funding and policy environment.
Jersey arguably has all the ingredients to tackle successfully the energy trilemma.

Comments by Mark Leybourne

Wind energy has had a difficult few years but is now recovering.
There is 75GW of offshore wind capacity now operating globally, China accounting for half. The UK has 15GW of capacity meeting 17% of electricity needs; the government target is 50GW of capacity by 2030. This will be difficult to achieve.
France is planning a massive increase in offshore wind energy from 1GW now to 45GW by 2050. This would need the equivalent of 80 more wind farms the size of the St Brieuc wind farm.
The map shows current and possible future plans for the CI region.

A Jersey wind farm could have a capacity of at least 1GW and generate six times the electricity Jersey currently consumes in a year.
Guernsey is further advanced in some ways (e.g. energy plan, legislation) than Jersey and has more available seabed.
If France develops the areas west of Jersey this would adversely affect the possible Jersey wind farm.
Offshore wind could usefully supplement Jersey’s electricity supply with possible benefits in respect of affordability and sustainability.
A wind farm in Jersey waters would also have wide economic benefits including taxing the profits of the operator, royalty payments and local employment.

Comments by Chris Ambler

Jersey’s electricity services are already strong by international standards against “energy trilemma” goals of affordability, security of supply and sustainability. Electricity is currently c33% cheaper than the UK, c28% cheaper than Guernsey and c32% cheaper than the IoM. Electricity in Jersey is also cheaper than in many other countries despite those countries having power subsidised by their governments.
Jersey has been well protected during the recent volatility in energy markets with aggregate cash cost avoidance for the Island of c£200m (or £4-5k per household) as compared with the UK since the Russian invasion of Ukraine, which drove extreme market turmoil.
The Island is three times more reliable than the UK, and the electricity supply in Jersey has already been decarbonised, with one third of its energy from certified renewables. This has driven total Island emissions down by one third in the last 20 years despite a 40% increase in electricity consumption.
The grid is well-positioned for the future; a “zero-carbon” platform that is largely future proofed and having c25% of available “headroom” at peak times and more capacity available at off-peak times and in the summer months.
Net Zero carbon by 2050 met through electrification would lead to an increase in overall peak demand by c25% with a matching c70% increase in unit sales consumption, meaning that a lot of this new demand could be met from off-peak consumption, which can keep overall prices to the consumer lower.
The grid system provides “on demand” low carbon electricity stepping in when renewables can’t. It is therefore complementary to on-island renewables as and when they become economically viable.
JE is investing c£180m over next five years in transmission, distribution and generation infrastructure; for example, JE is already working on a replacement cable for the oldest of the three submarine cables as well as additional on-island generating capacity to mitigate higher concentration risk from dependence on electricity. JE is working on new supply contract which will deliver power to Jersey commencing 2028 when the existing contract expires.
Supply: Solar and Offshore wind are the two key renewables with most immediate potential for Jersey - solar is likely to be developed much further in the next 2-7 years but offshore wind is 10 years away. There is a need to reduce the cost of both technologies if they are to become attractive when compared with existing imported power. Tidal is 20 years+ away – currently it is around 4-5 times more costly than the present supply but may have a role in the long term. In all cases these renewable energy sources are intermittent and therefore need to be backed up by the grid or thermal (fossil fuel) generation.
Demand: On the demand side, around 80% of energy and a similar percentage of the Island’s total carbon emissions relates to buildings (heat) and transport in aggregate. These are the priority areas for decarbonisation in Jersey.
There is around 60-70% wasted energy in the fossil fuel value chain from extraction to point of use. There is a significant opportunity to reduce wasted energy in respect of buildings and transport. The most cost-effective strategy is to improve energy efficiency and seek to electrify what is left (via grid or other means). The solutions already exist but there is a challenge around the installation cost of those solutions and the Island’s capacity to install new heating systems at the rate required. The pace of switching is also limited by replacement rate (the market for switches is only around 5% of the installed base equivalent to a 20-year heating system life) as not everyone is changing their heating system every year, so we need to start immediately and achieve high conversion rates (which we are not yet achieving).
Jersey is in a unique position. As a small jurisdiction with no heavy industry, a decarbonised grid and resilience, JE believes that whilst it would be immensely challenging, net zero could be delivered faster and more cost effectively than many places.
We need a mindset change - to think of net zero as an investment in the future and an opportunity and not a cost.
In order to deliver net zero and make meaningful progress, the Island needs clear policy support, it needs to prioritise and we need to have conviction. Green skills will be important to deal with the limited trade capacity in Jersey given extremely low unemployment. The grants currently in place (low carbon heating incentives and EV incentives) are a good start but we need to find ways to scale up and transform much more quickly as time is against us.
“Sustainable Jersey” can be an economic opportunity with the potential to bring in other sectors to deliver a holistic strategy that could be distinctive for Jersey on an international stage.

Points raised in discussion

Is there a willingness to have a discussion on the argument that more carbon emissions would be desirable?
The published data in the Centre’s Brief mention only solar energy from JE’s facilities. 70% of Jersey solar energy comes from 500 rooftop installations.
40 years ago there was a conference organised by the South West Energy Group which included a proposal for the first cable to France. However, there was no immediate follow up. Jersey suffers from an inertia problem.
Possible actions to reduce emissions could include seeking to remove 30% of cars from the roads, which would have other benefits, and requiring all new buildings to have solar power.
The contract that JE has with EDF is a commercial contract. When the contract expires JE can negotiate a new contract with any supplier; it is not tied to EDF.
Jersey has the skills to install heat pumps, but the work is slow partly because of bureaucracy.
Non-carbon emitting biofuels are an alternative to electricity for large vehicles.
The possibility of generating nuclear power on-Island. Currently there are no small reactors that would fit the Jersey market and there would be significant regulatory issues. (A report by Siemens for the Government of Guernsey on energy policy commented that “certain technologies and fuel sources were considered and excluded during the study and were not modelled due to either restricted availability, technical limitations, or excessively high costs”. On nuclear the reasons given were “prohibitively high cost (>£1bn) and footprint” and “small-scale reactors are not commercially available”.)

Closing comments by Alan Merry

Jersey clearly has a good starting position.
Jersey needs a strategy, which currently it does not have – long-term thinking is needed.
There needs to be investment for the future.
There should be optimum use of current technology.
As a small jurisdiction Jersey is well placed to do things quickly – but it doesn’t.
Government cannot develop policy on its own; it needs to use the expertise from those in the meeting.

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News

Note of discussion meeting on energy policy, 26 September 2024