Extracts from the Nov-Dec 2002 edition of Renew
These extracts only represent about 25% of it

5. UK Energy Review: The debate gets aggressive

Many of the submissions produced in the run up to the White paper on energy, responding to the Cabinet Office PIU report, were, in effect, summarised by the report produced by the House of Commons Environmental Audit Committee ‘A Sustainable Energy Strategy? Renewables and the PIU review’. It also seemed to create an interesting, if sometimes aggressive, debate on strategy.

The Chairman of the Committee, Mr John Horam MP, commented: ‘The UK cannot claim to be sustainable, unless it puts sustainability at the heart of energy policy. But we rank thirteenth in the EU in the amount of renewable electricity supplied, and- on the present rate of progress - we are likely to fall well below even the modest targets which the Government has set.’

The committee concluded that:

* Britain has the greatest potential for renewable energy of any country in Europe. But it currently produces less than 3% of its energy from renewables- a tiny proportion which compares very unfavourably with almost all other EU countries.

* The Government has set a number of targets for renewable production. We will certainly not meet the interim target of 5% of electricity from renewables by 2003. On the basis of present trends, we are unlikely to achieve much more than half the 10% target for 2010.

* There is an urgent need for the Government to show leadership and address the difficulties in gaining planning applications, indicate tried and tested technologies which will deliver over the next decade, and address the conflicting priorities of market liberalisation and cheap electricity as against our Kyoto obligations.

It added as a matter of urgency:

* The Government must ensure that Ofgem’s review of NETA in its first full year, place primary importance on environmental impacts, including the impacts on renewable generators and on carbon emissions.

* The Department of Trade and Industry should review options for incentivising the development of renewables under NETA, so that the playing field- so far from being tilted against renewables as at present- should favour them.

* The DTI should prepare and implement legislation to amend the statutory duties of Ofgem in order to incorporate the promotion of sustainable development as a primary duty.

* The Office of the Deputy Prime Minister should revise planning guidance for renewables and incorporate a presumption in their favour.

OFGEM, the energy regulatory, replied with a denial that renewables and CHP had been compromised by NETA. Callum McCarthy, chief executive of Ofgem, said ‘annual output from small and green generators does not appear to have changed significantly’, and claimed that any problems they faced were mainly due to the fact that gas prices had fallen, but adding that ‘they do not seem to be disproportionately affected by the lower prices’.

It added ‘All that is happening is not illogical, or indeed, unexpected. Neta does not artificially bring down prices. It produces the lower prices you would expect in a competitive market.’

The Environment Audit Committee (EAC) were very sceptical and issued a bitter response, claiming that the report on the first year of NETA that had just been produced by OFGEM was ‘completely inadequate’. The EAC’s chair, John Horam commented ‘Carbon dioxide emissions from the power generation sector have increased in the last two years from 41 to 44 million tonnes of carbon, partly through the increased use of coal and ‘part-loading’..... there is not a single mention of carbon dioxide emissions throughout Ofgem's entire report- not a single place where the environmental impact of NETA and recent market changes is discussed. This vividly demonstrates the low priority Ofgem currently accords to environmental issues.’

OFGEM then came back, in its formal submission to the Energy Review, with a quite surprising proposal for root and branch change in the governments approach to supporting sustainable energy. Rather than the current "multiplicity of schemes, each with multiple objectives" (RO, CCL etc.) it recommended introduction of broader economic instruments such as a carbon tax or compulsory emissions trading to allow market forces to determine better ways of meeting targets. It felt customers and suppliers should be free to develop more innovative and cost-effective solutions, rather than ministers "deciding centrally how much resource is to be spent under each of these schemes".

Some energy companies seemed to like this idea, including British Energy. But of course when BE finances began to look precarious, it was the government that had to step in to indicate that it would protect security of supply- while OFGEM simply said in was just the reasonable workings of the market under NETA. Clearly its not just the EAC that is at loggerheads with OFGEM.

Meanwhile, the EAC’s proposals were not entirely without their critics. The Countryside Agency, commented that although it backed many of the Committees recommendations, it wanted an integrated approach to planning, rather than one which just prioritised renewables regardless of other issues. "We cannot see a solution in its recommendations on planning and on public awareness. By concentrating on the technical and economic factors, the Committee has missed two of the pivotal areas which will determine the success of renewable energy. The first of these is the need to link renewable energy to other activities. Tying in renewable energy with regeneration and diversification in cities, the urban fringe and the countryside will get more organisations and people involved in designing and developing renewables, and in sharing the benefits. Secondly, the primacy given to renewable energy by the Committee fails to recognise the range of other objectives facing decision makers. We need to raise and maintain high quality development, support rural tourism and maintain the quality of the countryside, especially where society needs wild areas and tranquillity. An integrated approach to renewables will encourage people and organisations to innovate, and help deliver renewables developments which are sensitive to their locality, whether it is a market town, open countryside, or regenerating the edge of a city. The Committee’s desire for a presumption in favour of renewables developments in the planning system will impose developments on people and their place. They will marginalise people from the development process, deny other objectives for sustainable development, and will encourage poor quality developments. This is not the way to win the battle for public opinion. Integrating the different objectives and helping people take responsibility for renewables should be at the heart of the task we all face on renewable energy."

The Countryside Agency leads the Community Renewables Initiative, co-ordinating the delivery of community based renewable projects: www.countryside.gov.uk.

With the major agencies battling it out like this, in something of a ‘turf’ war, and the nuclear issue moving centre stage given the collapse of BE, the rest of us hardly got a word in. But there were a lot of good submissions by the various trade groups (e.g. RPA, EST) and NGO’s. We will review some of them in Renew 141.