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

7. Time for Industrial Action

The UK renewables market could be worth £2b by 2010, but British based banks could lose out on significant investment opportunities unless they are prepared to show more enthusiasm for financing renewables projects, Minister for Energy, Brian Wilson, warned the City. Speaking to a conference of the major banks and financial institutions on ‘The New Electric Economy’, Brian Wilson said: "There are enormous rewards to be shared from the successful development of renewables in this country. By 2010, we expect to have a market worth more than £1bn, as electricity suppliers will need to provide, through the Renewables Obligation, 10% of their supplies from renewable resources. The Obligation will provide support to the renewables industry for 25 years."

He went on "Many renewables companies tell me that financial institutions have been slow in recognising the potential opportunities that the green energy revolution in Britain could provide them. Maybe part of the problem is that we have not been as effective as we might in getting our message across about what we have done to promote renewables and our long term commitment to the industry. Adding in the value off the electricity itself and that outside the scope of the Obligation, as well as the value of the climate change levy, means that the total value of the market for green energy could be up to £2b by the end of the decade. The Government has now put in place policy and financial frameworks to bring renewables into the energy mainstream. We have acted to stimulate investment in both new generating capacity and the supply chain, and provided support for those technologies close to full commercialisation but which are not quite there yet."

Clearly he thought it was now time for the city to respond. "This approach provides a strong framework within which the industry and investors can operate and a clear sense of direction against which companies and investors can make decisions. The Renewables Obligation means that demand for renewables electricity is virtually guaranteed. We have made the financing of renewables projects much less risky."

Wilson highlighted the creation of the Aeolus energy consortium, which includes the Bank of Scotland and NIB Capital Bank as a good example of how to bring together banking, legal, insurance and technical expertise to finance renewables projects. The consortium is working with developers and investors on the development and investors on the developing and financing of offshore windfarms.

Wilson also praised British renewables firms: "Many of our UK companies are small in national and international terms but many of them have already grown substantially since they were set up. The fact that they are often SME’s is a positive asset because they are hugely innovative and have a tremendous competitive and pioneering spirit. There are also excellent opportunities for manufacturing companies to diversify into renewables. By developing our expertise and products we can also open up export opportunities. I want to see a world class UK renewables supply chain established, bringing significant numbers of jobs to the UK, which I why I recently set up Renewables UK, a new unit within the DTI."

• Currently there is a reasonably healthy green power generation and retailing industry in the UK- but no major manufacturing activities. Most of the equipment is imported. The high flyers in terms of the operations and retail are Scottish and Southern, which claims to have half the UK’s renewable capacity (although of course much of it is old hydro), and the less well known United Utilities which has major operations in the NW and elsewhere. Scottish Power are another big player, with a lot of windpower plant, and a major expansion programme underway.
• Some of the other electricity supply companies also have significant stakes in green generation as well as green tariff schemes, like TXU Eastern. Much larger and heavily involved in generation of all sorts including renewables (but not nuclear), are Powergen and National Power- or npower, as it became, with a part ending up as Innogy. National Wind Power is another of its offshoots. Powergen is also now involved with offshore wind. These two companies are the direct descendents of the old nationalised CEGB. But they are both now foreign owned (by German companies), as is London Electricity and its SWE offshoot (by EdF). In terms of smaller renewable energy generators, there are companies like Fibrogen who deal with biomass and a host of smaller operating companies for waste/biomass combustion, landfill gas, sewage gas and wind farms- the McAlpines offshoot Renewable Energy Systems being one of the largest for wind. In terms of the newer renewables, like PV solar, the giants are of course BP and Shell, both of whom are also involved with other renewables, including in the case of Shell, offshore wind. As for wave and tidal, there are half a dozen small companies and groups just getting going with around £5m in grants from the government.

DTI Renewables Funding

Department of Trade and Industry funding for

R&D via its Sustainable Energy Programme:

Source: Brain Wilson in answer to a Parliamentary Question 10 June 2002.

He also noted that the DTI supports research and development on sustainable energy technologies through the Research Councils and that ‘provision for research and development through the Sustainable Energy Programme increases to £19 million for 2002–03, and through the Research Councils to £5.6 million. Additionally, the DTI has been assigned a further £5 million over three years for wave and tidal demonstration projects’. He went on ‘Including R+D and capital grants, the Government have set up programmes totalling £260 million to bring forward new renewable energy technologies’.

72% prefer renewables

72% of those asked, in a new MORI poll commissioned by Greenpeace, ‘if the costs of supplying the UK’s energy needs were the same by either nuclear power or renewable energy sources, which, if either, would you prefer?’ chose renewables. 6% chose nuclear.