Renewable Growth

Renewables aren’t exactly flush with funding, but, equally, they are not doing too badly. In answer to Parliamentary questions on the state of play with renewables on Nov.13 last year, the Energy Minister, Brian Wilson, said that ‘the Government have put in place a robust policy to increase investment in the development of renewable energy’,and repeated the claim that the new Renewables Obligation (RO) should create ‘long-term support for renewables, worth over £1 billion per year, by 2010’.

The first table below, produced in response to a subsequent PQ, shows the funding pattern historically and into the future. It illustrates the gradual increase in total allocations from the various funding sources. As can be seen Government funded R&D at last begins to increase slightly. NFFO support, ultimately paid for by consumers, continues for already contacted projects, but, the DTI say ‘Non Fossil Fuel Levy spend in future years is highly dependent on the impact of the introduction of Renewables obligation and of proposed new NFFO flexibility provisions. We anticipate that the costs of the Fossil Fuel Levy following the introduction of the Renewables Obligation will decline substantially.’

* estimates

+ Direct Government funding for R&D on renewable energy through the DTI’s Sustainable Energy Programme & through the Research Councils via the Science Budget. Source: Hansard, 21 Nov 2001 : Column: 300-01W

Increasingly then, it will be the Renewables Obligation for England and Wales and the Renewables Obligation (Scotland), that will push things on, with, once again, consumers ultimately footing the bill. The DTI notes that the level of funding for the RO and ROS ‘will depend on how much renewable energy capacity comes forward at any time’. The second Table,below , shows the expected rate of growth in capacity that should result from these various funding programmes.

RO: Estimated sales by licensed suppliers

Although most of this would presumably come from new projects, under the RO but as noted above, projects initially supported under the Non-Fossil Fuel Obligation will continue to be supported, with the new ‘locational flexibility’ provisions allowing projects stalled due to local planning problems to shift to new sites-without losing their NFFO support. However, interestingly, Wilson reported that this locational flexibility arrangement would not be available to mixed waste incineration projects.

The Renewables Obligation will be also underpinned by direct Government funding for renewables worth over £260 million between 2001 and 2004- including the £100m recently allocated by the PIU (see Renew 135) This will include an extensive capital grants programme for the early development of offshore wind and energy crops, the initial stage of a major photovoltaics demonstration programme and a boost for R&D.

Wilson also pointed to the regional energy assessments (see our report below) noting that ‘the majority of these studies have been completed and have identified each region’s capacity to generate electricity from renewable sources. Once all the assessments are completed, it is expected that specific regional targets will be adopted across the UK. These targets are expected to attract investment in the resources available in these regions’.

Our Feature discusses how this idea might be extended.

UK Renewables Boom

Perhaps unsurprisingly, with the Climate Change Levy and the Renewables Obligation in force, and funding gradually increasing, commercial interest in renewables in growing. The UK energy and water company United Utilities has announced plans to invest £200m in wind farms, hydroelectric plants, biomass projects, and landfill gas production. This investment is in addition to United’s earlier pledge of £100m- see Renew 134. United chief executive John Roberts pointed out that the UK currently obtained just 2.8% from renewables, requiring a 500% growth to meet the governments 10% target within the next eight years. They are clearly trying to do their bit.

In addition, Scottish Power plans to spend a further £500m on wind farms in Scotland, while Scottish and Southern, another large power supplier, plans to spend £450m on refurbishing hydro schemes and building new wind farms.

However getting local planning permission is still a problem. 60% of recent large wind farm projects have been blocked. George Hardie, president of Zilkha Renewables, a US firm trying to create 35MW of wind farm capacity in the UK, told the Guardian (Dec.4) that while Denmark gets 15 - 20% of its power from wind ‘in Britain they have reached about one-tenth of 1%, and the planning people are crying foul’.

Meanwhile, Powergen plans to raise £1 bn to increase its renewable energy capacity ten-fold over the next eight years. The group generates just 100 megawatts of power from its wind and biomass sites in Scotland and East Anglia but it wants to generate 1GW to meet the Government’s ‘10% by 2010’ renewables target. In addition to its planned off shore wind farm at Gt Yarmouth, it is also looking at a 500MW project on the Thames estuary.

RENEWABLES UK

Hopefully also moving things on a little, the DTI has set up Renewables UK, a new unit aiming to help UK manufacturers get a share of £500 bn global renewable energy market. Energy Minister Brian Wilson commented ‘Renewables UK is about maximising the benefits of the renewable energy industries to the UK in terms of manufacturing, exporting and jobs. We have a huge opportunity. Renewables UK is about ensuring that we grasp it. There is a huge amount going on, backed by this Government, to encourage the increased use of renewable energy. This increased activity will create massive opportunities for investment and employment.’ He added ‘ The new organisation will initially have six staff, located in Aberdeen, drawing from their experience of sponsoring and supporting the oil and gas sector. Government Departments and support agencies with an interest in renewables must work closely together to bring jobs across the UK from Cornwall to Caithness.’

See www2.dti.gov.uk/renewable/main.html

Regional RE Targets

A new report produced by Oxera Environmental and Arup Economics and Planning provides an overview of the potential for renewable energy in all the UK regions. It was commissioned to help the Government plan for its target of obtaining 10% of electricity from renewable sources by 2010. The assessments were co-ordinated by the Government Offices in England and the Devolved Administrations.

According to the DTI, these assessments will eventually lead to the agreement of regional renewable targets, and will play a key role in helping developers and other stakeholders to find new potential sites in each region. The potential for renewable energy for each region was identified in the individual studies, using high and low scenarios. The capacity identified in each region has also been translated to the following percentages of the UK’s 10% target.

Total of Government’s target: 66% 100%

Energy Minister Brian Wilson said: ‘The report shows that the Government’s targets of gaining 10% of its electricity from renewable sources by 2010 is challenging but achievable. The recent Scottish Renewables Study, published after this report was compiled, suggested that Scotland alone had the potential to supply even up to 30% of the UK’s electricity supply from renewables. Also this report did not take account of larger wind farms which are further offshore than the initial 18 sites allocated by Crown Estates. We cannot, however, expect offshore wind and Scotland to deliver our targets. I hope that every region will get involved in developing our renewable energy resources’.

But he added ‘targets are no use on their own if there is no sensible understanding of our renewable potential. Everyone working together, one step at a time, with the right investment, is the right way forward to progress the UK’s green agenda’.

The Regional Renewable Assessments Overview report can be found at: http://www.dti.gov.uk/

Community Renewables

The DTI has launched a £1.6m community renewables initiative to give advice and training to local organisation wishing to set up small scale renewable energy schemes, Supported by amongst others the Countryside Agency, the initiative will set up local support teams in 10 areas covering half of England. The teams will help local people and organisations devise renewable energy schemes suited to their area. The aim is to not only create environment friendly developments but to enable community groups to directly benefit from the income generated. More on this welcome plan in Renew 138. Meanwhile see:www.countryside.gov.uk/communityrenewables