RENEWABLE ENERGY POLICY
RENEWABLE ENERGY POLICY
Renewables Savaged
"We consider that it is very doubtful that the relatively modest increases in new electricity generation justify the large sums spent".
So said the all-party House of Commons Public Accounts Committee in its report on the UK Renewable Energy Research, Development and Demonstration (RD&D) programme, on which £340m has been spent so far.
The Committee were clearly unimpressed by the prospects for renewables - despite the Department of Trade and Industries stalwart defence. The DTI pointed out that given the support of the NFFO subsidy new renewables should provide 1,500 megawatts of capacity by 2000, this, on top of existing renewable capacity, amounts to a 5% contribution to UK electricity supply. That, in turn, would mean a saving of 3 million tonnes of carbon emission - useful in the fight against global warming. And by the year 2025 the contribution could rise to 20% of UK electricity; renewables thereby continuing to play their part in meeting the UK's committment to climate protection, as well as providing a valuable element of diversity of supply.
The Public Accounts Committee was, however, unmoved: its main concern was the cost and short term 'value for money'. Following very much the same line as in the earlier National Audit Office report (see Renew 89), they were sharply critical of the fact that £54 million had been spent on wind power, but with the bulk of this being focussed on one large 3MW machine, and one vertical axis prototype, neither of which were now seen as relevant, since smaller conventional machines had proved to be the most commercially popular. Worse still, 84% of the machines now in operation in the UK were imported - and were getting subsidies, via the NFFO, from consumers.
Similarly the Committee was unhappy that £40m was spent on a, now abandoned, hot dry rock geothermal test well.
The Committee clearly had it in for renewables: they seemed convinced that they were irrelevant and seized on every problem as further proof. Thus the fact that around half of the projects so far supported by the NFFO had been delayed or halted by planning objections was seen as very significant - even though the DTI's Godfrey Bevan managed to point out during the hearings that the 200MW or so of capacity lost due to the withdrawal of projects supported by NFFO-1 and 2 would be 'offered again during future rounds of the NFFO' so that 'it is not a permanent impediment to the development of 1,500 megawatts'.
The DTI is more usually involved in defending its renewable programme from those of us who would like to see much more being done. Facing the Public Accounts Committee it was, however, forced to almost play it down. Thus on wave power the DTI representative, Sir Peter Gregson, depicted it as now only 'a very modest programme' looking at shore line options, which was in any case being wound up, at a cost of only £0.21 million; with just the 'quite small' Islay device being involved.
The DTI was hamstrung in its defence of renewables primarily because it couldn't argue the case for expansion effectively. As we have pointed out relentlessly (most recently in Renew 90), the real problem with the UK's programme so far was that it was too small and short term to develop all the options properly. The DTI has increasingly adopted a short term approach, focussing on the near-market options, i.e. those that could be commercially viable without the NFFO by 2005 (which seems to be the new target), at the expense of the generally larger scale longer term big resource (e.g. offshore wind). So inevitably the programme looks marginal.
All the DTI would say, rather apologetically, was that the RD & D investment so far allocated ought to pay off in the future, but that it was cutting back on RD & D in future. Not a very robust defence .... But given the hostile tone of the Public Accounts Committee you can see why Energy Paper 62 had announced a 20% RD & D cut back and was desperately trying to shift everything onto a commercial basis, with just the NFFO, and hopefully European money, to keep it going.
What is perhaps a little strange is that the Public Accounts Committee is an all-party Committee. One might expect hostility to renewables from Tory backbenchers concerned about 'wasted millions', but surely the opposition party members could have introduced more vision into the review.
All we got was negative short termism, coupled with just a slight dig at the comparative level of nuclear spending, and at the location of ETSU within the Atomic Energy Authority, plus some resentment at the UK's failure to attract sufficient EC funds. The absence of any longer term strategic thinking does not bode very well for the future, if and when a Labour administration comes to power...
The Renewable Energy Research, Development and Demonstration Programme', Committee of Public Accounts. Session 1993-94 Forty-Second Report (11 July) is available from HMSO for £8.95.
AIEP Response
The Public Accounts Committee report received quite a lot of press coverage and in a press release produced in response, the Association of Independent Electricity Producers (AIEP) saw the report as 'confusing and misinterpreted' in that it focussed on Government R & D spending from 1975 to 1993, but took less account of what had happened since. In the earlier phase, evidently seen as the 'bad old days' by the AIEP, publicly funded R & D dominated, and although a risk of failure was inevitable and to be expected for all R & D, the AIEP felt that 'Governments are not good at picking winners'. So the Committee was 'absolutely right to question the way that money was spent in the past'.
However according to the AIEP things have now changed, and a more commercial approach had been adopted with a small part of the NFFO levy being used to subsidise projects 'which not only work, but are the product of billions of pounds of private investment'. True some projects had not gone ahead. But that was mainly due to planning problems and the fact that the NFFO arrangements were 'complicated and had at times been unpredictable'. Nevertheless, overall privatisation had been beneficial and competition was now identifying viable projects and forcing prices down. So, as far as the AIEP is concerned, the DTI had now got it right ...
But if further R & D was to be supported the AIEP felt that its members should advise the DTI on how 'to focus the use of its resources'.
The AIEP put the same line on the horrors of direct Government subsidies versus the merits of market enablement strategies, in its evidence to the Governments Nuclear Review.
It said it ' regards a process of support which eneables projects to be developed and operated in a demonstration market environment as offering better value for money than direct Government funding of research and devlopemnt of particular technologies.'
This seems a little shorsighted. Surely the AIEP will want to make use of more advanced renewable systems in future- and it seems unlikely that the private sector will fund the necessary R&D.
It may be, as the DTI argued in Energy Paper 62, that BIG STIG biomass fired gas turbines and the like are now just about ready for 'demonstration' , but they, and certainly the next wave of renewable technologies like wavepower and tidal stream systems, are still some way from the market.
NATTA produced its own response to the Public Accounts Committee report taking a longer term view : see Renew 92 for the full text.
Technology Foresight
As the Public Accounts Committee noted the UK Government has not so far been conspicuously successful at 'picking technological winners'. However, as we noted in Renew 87, a new attempt to improve on the process of picking winners was initiated in 1993, when the Governments Office of Science and Technology announced that it was going to introduce a new `Technology Foresight' scheme, designed to look 20 years ahead in selected fields, so as to provide guidance on future R & D priorities. Fifteen Sector Panels were set up bringing together a wide range of expertise from the civil service, industry and academia.
In addition to Godfrey Bevan from the DTI, the Energy panel includes several people known for their support of renewables such as Dr Mary Archer from the National Energy Foundation and the Solar Energy Association, Prof Bob Hill from Northumbria Universities Photovoltic Solar Centre, and Dr Gordon McKerron from the Science Policy Research Unit at the University of Sussex.
The next stage in the process is the production preliminary conclusions, for discussion, early next year.
DTI cuts Renewables
by 73%
The Department of Trade and Industry has announced some significant changes in the way official figures for energy resources and usage are to be presented in future, e.g. in the annual 'Energy Trends' and statistical digest booklets. The result is that the renewable contribution will be significantly undervalued.
These statistical charges may sound trivial at first glance: following a consultation exercise the UK will now use 'million tonnes of oil equivalent' (mtoe) in line with much European practice, instead of 'kilowatt hours' (kWh) or 'gigajoules' or therms. That's a little annoying since 'kWh's are more familiar to most people - being the unit electricity (and now gas) is sold by. But from now on its 'toe's' (=11,630kWh) and its multiples.
Much more significantly however, electricity use figures will be presented in 'energy supplied' terms, rather than in 'substitution' terms.
Under the UK's old substitution approach, the figures for electricity supplied, whatever the fuel actually used, were converted to the equivalent fossil fuel energy imput,in reality mostly coal, that would be required to generate it, via a conventional thermal plant.
That gave a useful picture of the 'primary' input fuel use - reminding us that thermal conversion systems had huge losses, up to 70% or more,
The familiar unit was 'million tonnes of coal equivalent'. Even though nearly 70% of our electricity still comes from coal it is understandable politically why the DTI has shifted to 'million tonnes of oil equivalent'. But the shift to presenting it on a energy supplied basis, i.e. in terms of the energy content of the electricity produced, rather than primary energy input on a substitution basis, has major repercussions.
Firstly, for both schemes, a standard 'energy conversion' efficiency factor has to be assumed: in line with international practice 36% was selected for the new 'energy supplied' scheme (this in fact being the figure for the UK's nuclear plants) instead of 34%, the figure used in the UK's old substitution approach (this being the figure for fossil fuel plants).
The result is that the new statistics will show the nuclear contribution as 5% higher.
At the same time, and here is where it really starts to have an impact, under the new scheme, the contribution of hydro and windpower is reduced by 73% from 1.4 mtoe on a substitution basis to 0.4 mtoe on an energy supplied basis.
Other changes
at the DTI
There has also been a minor organisational reshuffle within the Department of Trade and Industry.
While Tim Eggar MP retains overall ministerial responsibility for energy, Ian Taylor MP, Parliamentary Under-Secretary of State for Trade and Technology, now has responsibility for, amongst other things, 'Environmental and Energy Technologies', including renewables. It is unclear whether this amounts to a demotion of renewables. But certainly the Treasury seems keen on cutbacks. According to the Guardian (1/8/94) it wants 'all state R&D spending on non-nuclear energy technologies, including coal, renewables and North Sea oil' axed. As far as renewables go, Energy Paper 62's 20% cut would thus just be a start.
That's not a misprint - it's 73% less. A fine example of shifting the goal posts! Basically the 73% or so of waste heat produced by fossil and nuclear plants has been cleverly disguised so that renewables look much worse by comparison, 73% worse!
Fortunately the UK statistics will also be presented in substitution terms for references, since it was argued, by objectors during the consultation process, that this conveyed valuable information about the amount of fossil fuel use replaced by nuclear, hydro and other renewables. And it's only for primary input energy - not end use or delivered energy. But the new primary 'energy supplied' figures are likely to be widely used in policy debates - thus, in effect, seriously under representing the renewable contribution. The new system will bring the UK into line with European practice, but it is rather strange that what we seem to be seeing is a shift from a measure which gives an indication of the degree of success we are having in substituting renewables for fossil and nuclear fuel, to a system which is only concerned with the saleable end product, i.e. electricity, regardless of where it came from. Market forces rule OK?
New DTI Energy Overview
Wave, Tidal and even Offshore wind are once again savaged in a new report from the Governments Department of Trade and Industry.
Hot on the heals of the DTI's Energy Paper 62 and ETSU's R82 on Renewable Energy (see Renew 90), the Department of Trade and Industry published Energy Paper 61 'Energy Technologies for the UK'.
As EP62 and R82 made clear, they were the renewable energy part of a larger study of all the UK's energy options. EP61 presents the conclusions, with much of the detail being in a back up ETSU report R83.
It's an ambitious project, looking at future prospects to 2025, environmental impacts R&D options (or rather RDD&D - Research Development Demonstration and Dissemination) all based on a range of energy supply/demand scenarios including a 'heightened environmental concern' scenario.
However EP61 notes that, since energy conservation was now the responsibility of the Department of Environment 'it would not be appropriate for the demand side to be included' in the RDD&D appraisals.
EP61 classifies the technologies under four main headings - robust, vulnerable, fragile and unpromising, depending on how well they do in the various scenarios.
Unsurprisingly, given the EP62/R82 reviews, tidal barrages, offshore wave, geothermal aquifers and hot dry rocks come under the last category, i.e. unpromising.
But, more surprisingly, so does offshore wind.
Hydrogen production by electrolysis , hydrogen use in internal combustion engines, and fuel cells for large scale generation are also dumped in this category - which also contains nuclear fusion! All of which offer 'no contribution on any scenario/discount rate' except perhaps under an environmentally constrained future.
The robust technologies, include, of course, gas cooled nuclear reactors and PWR's, combined cycle gas turbines, CHP, pumped storage and hydro - along with passive solar design! They allegedly offer a potential contribution under all scenarios, and at all discount rates.
The vulnerable technologies include wind power and municipal solid waste in the short term, hydrogen from biomass and photovoltaics in the medium term, these possibly offer a potential in three or more scenario, regardless of discount rate.
The fragile technologies, which offer contributions under only one scenario, regardless of discount rate, include landfill gas, agricultural waste as fuel and shore line wave power in the short term, energy crops in the medium term and biodiesel in the long term.
EP61 then looks at the implications for RDD&D on the basis of a 'risk versus payback' assessment. It reports that the bulk (55%) of the 1992/3 RDD&D expenditure (both public and private) was in the high risk/low payback zone and comments that 'plans have already been announced to curtail some of these programmes' , quoting fast reactors, tidal and geothermal HDR as examples. These they say accounted for 75% of the high risk/low payback expenditure in 1992/93.
Offshore wave was also in the same category. As noted earlier shoreline wave just about scrapes in, and wind, passive solar, land fill gas and photovoltaics are seen as reasonable bets. But of the renewables, only hydro, agricultural wastes and energy crops get the top billing in risk/benefit terms - along strangely with active solar, although it is indicated that the likely 'limited take up' of some of the renewables meant that the scale of expenditure and hence the risk was low.
EP61 costs of £15.92 from HMSO. The back up ETSU report R83 comes in 7 volumes. Volume 1 is on fossil fuel technologies, Vol 2 on nuclear, Vol 4 on transmission, including hydrogen, Vols 5, 6 and 7 cover Energy Efficiency in (respectively) buildings, industry and transport and Vol 8 is on methodology. Vol 3 is actually R82, on renewables.
Planning Renewables
The UK's planning system is gradually adapting to renewables - the rather open ended 'Planning Policy Guideline 22' has been added to by various ministerial statememnts and adjustments, designed to help planners in the difficult process of balancing local and national/global environmental concerns. Energy Minister Tim Eggar has already indicated that holding an NFFO contract did not over-rule local planning objections.
Next, it was decided that wind farm proposals could henceforth be required to submit detailed, formal environmental impact assessment, if they feel it could have a significant effect on an Area of Outstanding Natural Beauty, National Park, SSI, Heritage Coast, or if the wind farm consisted of more than 10 turbines, or had a total capacity of more than 5 Mega watts.
In parallel, local planners are increasingly now able to draw on more detailed assessments of local and regional renewable resources.
In the past it was often difficult for planners faced with a specific proposal for a renewable project, to assess its worth in relation to other possible projects in the area. Now around 50% of local councils in England and Wales have developed or are in the process of developing renewable energy policies in their development plans, which usually include a detailed assessment of the local renewable resource.
The pioneering regional studies, like those carried out by SWEB and NORWEB, have been followed by more detailed local studies.
Lancashire County Council has been a pioneer in this respect: it has identified zones suited to wind farm deployment, covering 9% of its area, with AONB's etc. being protected.
In addition, as we noted in Renew 90, there have been planning studies for the counties of Devon and Durham and studies on Cornwall, Cumbria and Gwynedd will be published shortly.
A Regional Planning Study covering the Berks, Oxfordshire, Hampshire, Wilts, Dorset and Isle of Wight area has been initiated, along with a South Wales study looking in detail at landscape issues.
Studies by the East Midlands, South East Counties, Yorkshire and South Pennines are also planned.
The Devon study is being followed up by a detailed local study of the renewable potential of the green around Hatherleigh. Some of these developments were discussed at a one day seminar back in May, held in Newcastle upon Tyne, and organised for the Northern Branch of the Royal Town Planning Institute : local contact Angela Hull at Newcastle University.
Diversity? Renewables have it
Investments in renewable electricity supply options offers a significantly more efficient means to foster system diversity than continued support for nuclear power'. So said Andrew Stirling from SPRU in Energy Policy (March 1994).
His analysis of diversity is very timely: so far it has been used to justify a significant nuclear contribution - nuclear being seen as the main non-fossil option.
Clearly the UK's traditional fuel mix, heavily biased towards coal, is already on the way out, with gas taking a large share of electricity supply;, for example Energy Paper 59 saw gas rising to a 57% share while coal falls back to 27% by 2020 (see Renew 81). But EP59 also saw the nuclear contribution falling to 1% - i.e. essentially just Sizewell B - at least on a 'hands off' business as usual free market scenario, with renewables expanding to 3%, 4% if hydro was included.
Stirling goes further, and suggests that optimal diversity, providing a robust flexible balance of sources, would involve a much larger renewable contribution - 17-18% from firm renewables, 13-14% from intermittent renewables, with nuclear charitably, given between a 3 and 14% stake.
It's a complex analysis, we've not done justice to it in this brief account: but the implications are clear, even leaving aside issues like strategic flexibility, environmental impact and public acceptability, renewables look very good at providing a diverse range of inputs.
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