Renew On Line (UK) 47

Extracts from NATTA's journal
Renew
, issue 147 Jan-Feb 2004

   Welcome   Archives   Bulletin         
 
Contents

1. More Offshore wind

2. UK still at bottom of the EU league

3.New Planning Rules for Renewables

4. Regional Renewables: NE plans

5.More PV Solar

6. REGO

7. Better Building Summit

8. Doubts over funding for offshore wind

9. Coal Mine Methane exempted from levy

10. Party Pieces

11. Clear Skies:  More local projects

12. Marine Renewables

13. World Developments

14. Nuclear News

8. Doubts over funding for offshore wind

The UK’s plans to build a new generation of offshore wind farms are failing to attract sufficient financial backers because of concerns over the reliability of continued government support, according to a survey of potential investors in a study, commissioned by the British Wind Energy Association (BWEA). A major increase in offshore wind farm developments, was announced by Patricia Hewitt, Trade and Industry secretary in July last year (see Renew 145), but this would require private investments totalling £6bn.

Power prices are at their lowest as a result of the New Electricity Trading Arrangements, and so investor confidence in new projects of any kind is low. Offshore windfarms seem to be especially risky given the current support arrangements. Under the Renewables Obligation, electricity suppliers are required to buy at least 10% of their power from renewable energy producers by 2010. However, banks, which typically lend for up to 15 years, were concerned that there was no commitment to increase the RO target beyond 2010. They were also worried that the upcoming introduction of carbon trading to satisfy European Union requirements, could undermine the value of existing incentives. In this context, bankers were  concerned that the government review of the renewable obligation certificates system will not be until 2005-06.

The BWEA proposed that the government underwrite long-term power purchase agreements e.g. by establishing a minimum and maximum price for green energy. It was also suggested that the RO certificates should take account of the higher investment cost of early offshore schemes by requiring suppliers to buy a set proportion of their energy requirements from plant installed before a certain date. 

Subsequently, the DTI came up with  new target for the RO of 15% by 2015 and that was welcomed by the BWEA, as being likely to build investor confidence in the industry.

 Shell also not so sure

Shell is to take a more cautious approach to the development  of renewables like solar, waiting for the technology to mature more before it invested heavily. Speaking after launching a new solar energy cell production facility, Shell Renewables chief executive Karen de Segundo commented “The attraction for Shell is the rate at which the market is growing. But the solar business will have to become cash neutral before we make any more investment .”

She also warned that construction of windfarms in the UK, particularly offshore, still faced significant hurdles- and that  there was a need for more government help, if the national targets were to be met. “Support for offshore will require an additional injection, at least in the early stages.”

At another meeting, in Scotland, she claimed that the Scottish Executive’s plan to generate 40% of the country’s electricity from renewable sources by 2020 was a “rather ambitious aim”.  But she was not totally dismissive.  “I suspect Scotland will need to look at a wide range of renewables options and develop a mix of these options, ensuring they are appropriate to the needs of local communities. These will probably range from wave power, hydro and biomass as well as wind and even solar for certain niche applications.”

Shell has been a leader in renewable energy development, committing $1 bn between 2001-2005.

Sources: The Telegraph 11th Oct, the Scotsman 10 Oct

BT to go for self-gen?

BT, the telecoms group, is considering plans to build wind turbines on its own land and invest in other renewable energy schemes in an attempt to meet its own targets for reducing greenhouse gas emissions.  The company’s satellite station at Goonhilly on the Lizard Peninsula, Cornwall- the largest of its kind in the world - is a potential site. Its plans are a response to the difficulty it has experienced in trying to buy in green power from outside.  According to a report  commissioned by BT from Forum for the Future, the sustainable development charity, BT’s difficulties sourcing green energy are not unique. The report, ‘Powering Ahead’, claims that several other large-scale corporate users are in a similar situation.


NATTA/Renew Subscription Details

Renew is the bi-monthly 30 plus page newsletter of NATTA, the Network for Alternative Technology and Technology Assessment. NATTA members gets Renew free. NATTA membership cost £18 pa (waged) £12pa (unwaged), £6 pa airmail supplement (Please make cheques payable to 'The Open University', NOT to 'NATTA')

Details from NATTA , c/o EERU,
The Open University,
Milton Keynes, MK7 6AA
Tel: 01908 65 4638 (24 hrs)
E-mail: S.J.Dougan@open.ac.uk

The full 32 (plus) page journal can be obtained on subscription
The extracts here only represent about 25% of it.

This material can be freely used as long as it is not for commercial purposes and full credit is given to its source.

The views expressed should not be taken to necessarily reflect the views of all NATTA members, EERU or the Open University.