Renew On Line (UK) 48
Extracts from NATTA's journal
|Welcome Archives Bulletin|
2. BETTA , RO and Carbon trading
Not BETTA ?
The proposal in the new British Electricity Trading and Transmission Arrangements, to allow electricity supply companies to charge generators extra for long distance transmission, have been seen, in a new ILEX report for Scottish Power, as likely to significantly increase the costs of the often remotely sited renewables in Scotland- possibly increasing the transmission costs for a typical wind farm in the south of Scotland from 5% of generation costs to 25%, thus making it economically unviable. But OFGEM says that BETTA should help generators by giving them access to a larger market and will cut Scottish consumers bills by, on average, £13 p.a. It estimates transmission losses from power lines as equivalent to half a million tonnes of carbon emissions each year. But in Feb. the poposal were dropped, due to lack of time to negotiate the details- but OFGEM came out in opposition to a government proposal to amend the new Energy Bill, to provide some subsidies for transmision of power from remote wind farms.
RO &CCA gains
Under the terms of the Renewables
Obligation and Renewables Obligation(
For the year to April 2003, the RO was set at 3% and the proportion of that met by the actual supply of renewables was 58.9%- 5.5 terawatt hours against a target of about 9TWh. 41% of suppliers met their obligation fully; 23% met their obligation in part, and 36% failed to meet any of their obligation target through the supply of renewables. The level for 2003-4 is 4.3%, so the pressure will be even higher on the companies to deliver- or to either buy in the necessary Renewables Obligation Certificates or pay a fine.
In parallel, the Climate Change Agreements, which give some energy intensive companies a discount of up to 80% on the Climate Change Levy, delivered three times the expected CO2 savings. The DTI recently extended eligibility for these negotiated agreements to other energy intensive firms facing international competition.
New RO target
The DTI’s expansion of the Renewables Obligation to 15% by 2015, announced last Dec., was welcomed by the renewables community. This new target will be a legal requirement on utility companies and should create a significantly bigger market for green energy, and should make individual projects much more bankable. It also partially makes good the No 10 veto of a 20%/2020 target in last years Energy White Paper. The Obligation will now increase in stages for the next five years as follows: 2011-12: 11.4%; 2012-13: 12.4%; 2013-14: 13.4%; 2014-15: 14.4%; and 2015-16: 15.4%.
The British Wind Energy Association,
commented that ‘the increased certainty provided by this higher target
will be vital in securing the necessary financing for building large-scale
wind projects, especially those proposed offshore’. Marcus Rand,
BWEA’s CEO, said: ‘Our industry can now get on with the
job of turning these percentages into real projects, delivering clean
electricity to millions of
The BWEA noted that the UK wind industry
‘already had planning consents in place for new wind farms, on and
offshore, equivalent to some two and half percent of the UK’s total
electricity needs,’ and more were expected ‘potentially equivalent
to a further 6% of supply’. It added ‘An increase in the Renewables
Obligation to 15% of total electricity supply by 2015 would require
the installation of an additional 5,000 MW of new renewables capacity.
Electricity generation from this would meet the needs of providing electricity
for a further 3 million homes in the
The RO and wind story so far...
The BWEA provided this potted account of progress so far- highlighting the role of the RO: ‘The Renewables Obligation (RO) has been described as the cornerstone in delivering the Government’s target for renewable energy. Introduced in April 2002, it has prompted an unprecedented level of interest in the renewables, and particularly wind power, sector. By way of illustration, in the first year of the Obligation, the UK wind industry effectively doubled, with consents won for a further 525 new megawatts of capacity- equal to the combined total built during the previous eleven years. This success was repeated in the first quarter of 2003 when a further 567 megawatts of capacity was granted permission, and planning consents have been steadily won throughout the year, such that the UK wind industry now has just under 650 megawatts of capacity installed, but an amazing 2,257 megawatts of consented schemes awaiting construction. Meanwhile a further 5,000 MW of onshore projects are under active consideration, while an additional 500 MW is progressing through the consenting regime under what is commonly referred to as ‘Round One’ of offshore wind development. The announcement of ‘Round Two’ of offshore development is likely to see no less than 6,000 MW of development rights awarded. Based on current activity then, wind power alone is capable of meeting the 2010 target and contributing significantly to the new 2015 target.’
Draft Carbon Trading rules
Next.. the new Energy Bill
The new Energy Bill which emerged in Dec. seeks to implement the commitments in the Energy White Paper. It lays out details of the new GB-wide British Electricity Trading and Transmission Arrangements (BETTA) which, unlike NETA, cover Scotland, and it also implements the proposal for Managing the UK’s Nuclear Legacy outlined in the White Paper- i.e. setting up the Nuclear Decomissioning Authority (with a £48bn budget). The Bill also tidies up the legislation for offshore wind zones, e.g. in terms of access and navigation rights, and interestingly, includes regulations for for eventual offshore wind farm decommissioning.