Renew On Line (UK) 49

1. Innovation Review- Beyond wind

Windpower is likely to be the dominant renewable technology until 2020, according the Renewables Innovation Review carried out by the DTI and the Carbon Trust in consultation with the renewables community (see Renew 148). Wind, on-and off-shore, can deliver ‘almost all of the required growth to meet the 2010 renewable energy target’ and wind is likely to be the dominant technology as far as 2020.

However the report says that wind alone will not have enough resource to achieve the estimated contribution that renewables will need to make in order to meet the Government’s 60% by 2050 carbon reduction aspiration.  It therefore called for a programme to develop the energy crops option and exploit heat markets to kick-start fuel chains, more R&D and niche market development in the stationary fuel cell sector, and ‘accelerated staged trials to discover whether a feasible cost-effective solution can be developed’ for wave and tidal building on the UK’s ‘leading position internationally in this early stage technology and substantial resource, targeting a potentially large global market’.  

It also suggests that the UK should focus on collaborative efforts on 3rd generation solar research with nations with complementary scientific skills and industrial capabilities, and develop a ‘technology blind’ capital grants programme programme to support building integrated renewables (including solar) and energy efficiency.

“We cannot afford to rest on our laurels,” Stephen Timms said “This report demonstrates the impact wind energy is set to have and confirms our view that the 2010 renewable energy target is achievable. But we must think strategically both about long-term policy and funding if we are going to exploit the full economic and environmental potential of our renewables industry.”  

Capital grants seemed to be the favoured support mechanism for filling what was seen as a ‘funding gap’ between RD&D and commercial uptake for new technologies- anything else might disrupt the workings of the competitive RO mechanism.

* On wave and tidal power it said  ‘Current leading wave/tidal projects are at, or close to demonstration, and need to be proven as technically and commercially viable’.  Funding for this technology should ‘aim to address the gap in Government funding at the demonstration to pre-commercial phase of development’,  with the options being  capital grants, fixed price power purchase type arrangements and amendments to the RO system. In the longer term, ‘a capital grants scheme, equivalent to the round 1 off-shore wind scheme, may be required to stimulate full wave/tidal market entry’.  Biomass  may be resource limited in the UK (by landuse constraints) but ‘unlike many renewables options, energy crop based biomass solutions would be difficult to import as a key aspect in deployment is the establishment of local fuel supply’.

Key Conclusions of the Review

Its main conclusion was that the 2010 renewable electricity target can still be met if barriers to winds deployment can be eliminated.  However it admitted that, currently the UK was ‘slightly behind target’. During the first year of operation of the Renewables Obligation (2002/03), the UK produced about 1.8% of its electricity from eligible renewable sources- compared with the target set in the RO of 3.0%. But it claimed that ‘wind power, both on- and off-shore, can deliver almost all the required growth in renewable energy to meet the 2010 target and is likely to continue to be the dominant renewable technology out to 2020’.

It added ‘Renewable electricity supply is forecast to reach about ~10% by 2010 given the current RO framework and institutional barriers; 8% from renewables within the RO and a further 2% from other renewables. At present wind, both on- and off-shore, is the only economically viable and scaleable technology under the current RO regime. Biomass (including landfill gas) currently accounts for the largest percentage of RO generation but several forms of biomass which are currently economic are constrained by limited resources (e.g.. landfill gas), or by regulation (e.g. the co-firing of residues in coal-fired power stations). There is sufficient UK practical wind resource to fulfill the 2010 target and 2020 aspiration, and so wind development dominates the near-term forecast of renewables growth.’

However it noted that ‘action is required to meet the 2010 target- timely incentivisation of necessary grid upgrades, addressing other institutional barriers and an appropriate financial framework will be important. The Government’s announcement in December that it intended to raise the level of the RO beyond the 10.4% already set for 2010/11 to increase year on year to 15.4% in 2015/16 has greatly improved the investment case for wind. It is now principally institutional barriers which are likely to constrain the expansion of on-shore wind: Grid upgrades are likely to be on the critical path to delivering the 2010 targets. The regulatory changes to incentivise the grid upgrades, together with technology and planning risks require close monitoring and contingency planning. Key barriers, which are most immediately relevant to wind, (planning, aviation issues, public opposition and grid/network connection distribution issues) also need to be addressed’. 

It pointed out that off-shore wind ‘is likely to be required at scale to achieve the Government’s targets. Work done for the Review by Garrad Hassan has indicated that there are only a limited number of engineering obstacles to off-shore wind development and that these can be overcome by appropriate and timely action, including maintaining a stable policy framework to encourage investment in some areas of the supply chain process and enablement of timely planning consents. Round 2 off-shore wind projects will require substantial debt financing and therefore an appropriate financial framework will be important in encouraging investment.’

Longer term, it argued ‘the UK should develop technology and market options to achieve 2020 and 2050 aspirations and generate UK benefit. Technologies other than wind are required to meet 2050 aspiration  Renewable energy is just one of a number of approaches required to achieve the Government’s 2050 carbon reduction aspiration (others include energy efficiency and reducing emissions from transport). Wind alone will not have sufficient resource to give the estimated contribution required from renewable energy to meet the UK 2050 carbon reduction aspiration and therefore other renewable energy technologies will be needed. These could either be developed in the UK, or technology commercialised abroad could be deployed here.’

It concluded that ‘all renewable energy technologies have the potential to make a material contribution to emissions reductions targets and to be competitive under the current legislative framework by 2020, although to achieve this in the case of solar PV would require very substantial reductions in costs- something which is likely to require a technological breakthrough to next generation technology.’ Adopting the Carbon Trusts ‘UK Ltd’ view (see the Feature in Renew 149 and Renew 148) it says that the ‘creation of UK benefit is the main driver for creating technologies in the UK, as opposed to importing solutions’, and suggests that, after wind, fuel cells and wave/tidal have the greatest potential to provide ‘the best balance of UK economic benefit and cost effective environmental impact’.