Renew On Line (UK) 52

8. Policy Developments

New Renewables Planning Guide

The debate over wind will be further heated up by the publication in August of the final version of the Planning Policy Statement 22 (PPS22): Renewable Energy, setting out the Government’s planning policies in respect of the development of renewable energy resources in England. Despite the objections received to the draft, it takes a quite hard line, instructing planning authorities to “promote and encourage” rather than restrict the development of renewable energy sources.   It says regions cannot not rule out or restrain renewable energy technologies “without sufficient justification” and that decisions are subject to government intervention. Planners must also give “significant weight” to the environmental and economic benefits of renewable energy projects and cannot make assumptions about the technical and commercial feasibility of proposed developments. The statement also allows planning authorities the option of requiring a percentage of energy used in new buildings to come from on-site renewable energy developments.

Minister for Planning Keith Hill said: “The increased development of renewable energy resources is vital to ensure the delivery of the Government’s commitments to reduce CO2 emissions and combat climate change as set out in the Energy White Paper. Our communities will only be truly sustainable if their energy needs are met from renewable sources. That is why we have included new policies within PPS22 to allow local planning authorities to set requirements for renewable energy in new buildings, as well as policies on the encouragement of small scale renewable resources in existing development- in both urban and rural areas.”

In particular, PPS22 makes clear:

Hill added: “Although wind energy is expected to make a significant contribution to meeting our 10% renewable energy target by 2010, these policies will apply equally to all other renewable energy technologies, such as energy from solar resources, biomass, wave and tidal technologies and energy crops. The development of a broad range of renewable energy resources is vital in our fight against global warming and climate change.”

He concluded “PPS22 ensures continued protection for our most valued landscapes, such as national parks and Areas of Outstanding Natural Beauty. But we must also recognise that some small-scale renewable energy developments will be capable of being accommodated in such areas- such as solar panels on buildings- without serious environmental impact.”

Long Winded planning

Upping the stakes, the BWEA claimed, on the basis of a survey of projects so far, that the UK is in danger of missing the 2010 renewable energy target unless the time taken for planning decisions to be made on new wind farm proposals is speeded up. Chris Tomlinson, BWEA Head of Onshore Wind, commented: “Some wind projects are taking two to three years to determine. This is not an issue about whether a project is approved or refused, but instead is about ensuring we have a planning system that is able to deliver timely, robust decisions which address all the issues. The current delays are not good for anyone involved in the process. We only need 2000 more wind turbines to meet the onshore portion of the targets, but we simply must get quicker decisions to measure progress and assess future need to meet the targets. This new research shows that the length of time in planning for wind energy projects is increasing to unacceptable levels when compared with other developments.”

The BWEA notes that in order to achieve the 2010 target, an additional 2,168 MW of consented onshore wind is needed. The majority of planning consents must be in place by 2007 to deliver the projects on time; 1,927MW must therefore be consented within the next 3 years.

Reactions

The Campaign to Protect Rural England said PPS22 would result in intense pressure for large-scale wind farms. “The government seems to think the point of consulting people is simply to get them to say ‘yes’. But that just wo’t do when cherished local landscapes could be harmed.” But the British Wind Energy Association said PPS22 was “a vital stepping stone in the renewables revolution” and paved the way for more consistent planning policies and decisions.

What next?

Ministers will shortly announce renewable energy targets for each region. The companion guide to the PPS, which will include the technology annexes as well as a range of good practice guidance, will  also be published soon. It will contain chapters on regional and local planning policy issues, development control and renewable energy in the built environment. It will also set out factors that make a “good” renewable energy application, how best to assess cumulative, landscape and visual effects, deal with community involvement, include examples of good practice where appropriate and technical annexes for each renewable.

RO Review

Plans have emerged for the review of the Renewables Obligation due to start later this year.  Stephen Timms, then Minister for Energy, before his replacement  in a cabinet reshuffle by Mike O’Brien, saw  the RO as ‘the central part of our policy for stimulating the expansion of renewables’ in which confidence must be maintained, so major changes are unlikely. The main focus will be on the RO beyond 2015/16, the potential impact of the EU Emissions Trading Scheme, and the issue of energy from mixed wastes. But in the interim the DTI has announced some adjustments to the current RO, which they say are designed to encourage further investment in renewables. The new proposals- published in Sept. in the consultation document “Renewables Obligation Order 2005”- include measures to:

The Renewables Obligation, which began in 2002, sets out targets for energy suppliers to source an increasing amount of their energy from renewable resources. Certificates, or ROCs, are awarded to suppliers using renewable sources, allowing them to demonstrate their compliance with the targets. ROCs can be traded between suppliers to make up any shortfall. The new measures will secure the Obligation and further improve its operation. The level of the RO was 3% when it was introduced in 2002-03, rising to 4.3% for 2003-04 and 4.9% for 2004-05. As the RO is currently framed it will increase each year to reach 10.4% in 2010-11 and then increase each year in 1% stages to 15.4% by 2015-16.  The Northern Ireland Renewables Obligation is expected to be introduced from 1 April 2005 and the Energy Act 2004 provides for the full recognition of the new ‘NIROC’ certificates and for trading with GB ROCs.

The new proposals on the RO buy out fund give effect to new powers acquired through the Energy Act 2004 so that the government can mitigate the impact of any further shortfalls in the renewables buy-out fund. The shortfall in 2003, following the failure of TXU, amounted to a reduction of some £23m in the expected buy-out fund (or nearly 20%) and caused a temporary loss of confidence in the renewables market.  Stephen Timms added that the  new mutualisation power in the Energy Act 2004. ‘allows us, in the event of a shortfall in the buy-out fund, to require suppliers to make payments to Ofgem in order to recover that shortfall’.

The DTI is also exploring ways in which the currently separate buy-out funds for England and Wales and  Scotland can be integrated and linked to the new Northern Ireland fund and how the recycling mechanism should be handled on a UK-wide basis.

Finally the DTI is trying to introduce flexibility in the RO  in order to help smaller generators.  Initially the ruling was that generators must produce a minimum of 0.5MWh in any one month to qualify for 1 ROC. But the Renewables Obligation (Amendment) Order 2004 provided for small generating stations (up to 50kW DNC) to accumulate output and be awarded ROCs on the basis of their annual output. However, for some small generators, annual claims were less attractive than monthly claims, so the proposal is to adjust the ruling to allow for both.

Lords want more than wind

‘While wind offers the greatest scope for development in the short term, we believe that in the medium and long term a more diverse portfolio of renewable energy sources will be needed’.  So said the House of Lords Select Committee on Science and Technology in its recent report on ‘the practicalities’ of renewables.  It therefore recommended that the DTI ‘review the level of Government funding for energy research, and, in discussion with Research Councils UK, push forward the establishment of the UK Energy Research Centre as a matter of urgency. It is essential that a focus be established rapidly for the UK energy research effort and that it is properly funded.’

In terms of technologies, the Committee backed the recent Royal Commission report on Biomass but was unconvinced that ‘the Government’s extension of the eligibility of co-firing (with fossil fuel) under the RO will provide the wished-for fillip to the energy crops industry. It may already be too late for farmers to be ready to supply energy crops in large quantities by 2009. Given the Government’s insistence that it is for the market to choose where it sources biomass fuel, there is a serious danger, in the words of the RCEP, that “generators will co-fire for as long as they are unrestricted in their use of biomass (and can use imports) and then will stop as soon as the energy crop requirement is introduced in 2009”.’

They therefore urged the Government to introduce more specific, targeted measures ‘to encourage energy crop development, including transitional support for farmers while crops reach maturity, and a requirement on generators to offer long-term contracts to farmers as a condition of RO eligibility’ and with the transport implications in mind they recommend that ‘the Government focus their efforts on establishing a regulatory regime that favours small-scale biomass development using locally sourced  fuel’.’

They were concerned that the Government ‘appear to have dismissed large-scale tidal power’. In particular they urged the Government either ‘to publish the report they have commissioned on tidal lagoons, or a summary of that report, with a view to promoting greater public debate on the advantages and disadvantages of such schemes’.

In terms of providing support for new renewables like this they noted that the Renewables Obligation in practice tended to act as a cap on renewable output, not a target and suggested that it should be set at a significantly higher level and provide more long term certainty.  ‘If the Government are to stimulate investment in renewables, they need to take steps to produce greater long-term predictability in renewable electricity prices. We therefore recommend that the Government consider ways to supplement the existing RO, such as an undertaking to set rolling targets, ten years ahead, or the guarantee of a minimum price (below the level of the buy-out price) for the duration of the Obligation, in order to facilitate the release of capital to developers.’

 In addition, they recommend that there should be ‘a co-ordinated programme of capital grants to encourage the establishment of pre-commercial wave and tidal power demonstration projects. This should be supplemented by targeted, time-limited measures within the RO, to enhance the income streams and commercial viability of emerging technologies.’ They add that the RO ‘will not encourage the development of community-based, small-scale projects, and we believe that this is a serious gap in the Government’s policy framework in support of renewables’.

Given that NETA fundamentally remains ‘a system for very big players’, and given the limitations of the RO, they felt that there was a need for alternative form of support for small-scale embedded generators, such as allowing small generators to sell directly to local consumers. They also felt that the Government should relax the limits on the sale of electricity to domestic consumers via Private Wire Networks or the distribution network. ‘We see no reason for limiting sales to 1.0 MW or 2.5 MW respectively, or why it is in the interests of competition and the consumers to restrict such sales at all, providing that any support such networks require from the grid or from distribution networks is realistically priced’.

On intermittency and security of supply they concluded that although  ‘the electricity network can support renewable penetration of up to 10% without difficulty, penetration much beyond ten percent will become progressively more costly’ and so they recommend that the Government ‘sponsor research into other technologies or strategies that could mitigate these costs’.   They added ‘The more diversified the renewable generating capacity, geographically and technologically, the more predictable the output. While the output of individual renewable generators will never be so predictable that they can be expected to contract to supply base-load capacity, optimum diversity could achieve a significant reduction in balancing costs for the Grid operator. Given that balancing costs will increase steeply as more renewables are introduced, diversity will be key to keeping their overall cost under control.’  They also noted ‘in principle, electricity storage has the potential to mitigate many of the effects of intermittency. It is regrettable that the United Kingdom has such limited storage capacity, and it is still more disappointing that there is so little research into new storage technologies. We urge the Government to promote research and provide incentives to encourage the commercialisation of promising technologies.’

They say that the Government should ‘commission a comprehensive study of the likely outputs of renewable and other efficient electricity generators, factoring in such issues as technological maturity, life-cycle emissions and cost, with a view to establishing the optimum distribution of such technologies, in order to enhance reliability and security of supply. The results should inform the developing energy policy, including such matters as the setting of regional targets for renewable generation. The distribution of renewables should not be left to chance.’

On public involvement, they said that :

Finally, and perhaps less palatably, they  concluded that ‘the  government may have no option but to follow the lead of other countries and accept that new nuclear build might be necessary’.   

Renewables Rewiring bill

The Renewables Networks Impacts Study commissioned by the Carbon Trust and the Department of Trade and Industry on behalf of the DTI’s Renewables Advisory Group looked at the implications for the UK transmission system of meeting the 10% 2010 renewables target, the 15% by 2015 target and the 20% by 2020 aspiration. It concludes that to meet the 2010 target, major upgrades will be  required in the transmission and distribution networks in Scotland and in NW England, with investment “in the order of £1.4 billion to £2.1 billion for transmission and £782 million for distribution. An additional investment of between £900 million and £1.1 billion will be needed to meet the 2015 target.”

It commented that Intermittency was “not a significant issue affecting the development of renewable generation” although it noted that the cost of minute-by-minute grid adjustments- balancing costs- will increase as the penetration of intermittent renewables increases. It warned that balancing costs could increase substantially as the 2020 aspiration is approached.

CHP target

The Government is hoping that the EU Emissions Trading Scheme and some of the commitments made in the Energy White paper will help close the shortfall in capacity between the 8.1 GWe central projection in the new Combined Heat and Power Strategy and the original  10 GWe target.  Answering a Parliamentary Question in July, Mr. Morley said that the support measures in CHP Strategy are expected to contribute around 1.9 GWe, while the EU ETS might lead to a further 100-400MWe.

Transport policy 

According to the Commons Environmental Audit Committee  (Tenth Report, Session 2003-04 on the Budget 2004 and Energy) ‘the Government’s  Climate Change Strategy is seriously off course’; and ‘a more imaginative and radical strategy- in particular for transport and domestic energy efficiency is needed’.  It notes that ‘Politicians have failed to make the case for the environmental benefits of taxing fuel, and despite recent oil price rises, petrol is still at least 10% cheaper than four years ago in real terms’  and suggests that ‘the Government should consider recycling the proceeds of future fuel tax increases to subsidise public transport spending and alternatives to conventional fuel’.

Committee Chairman, Peter Ainsworth MP, commented: ‘As a percentage of total tax, the revenues from environmental taxes have recently been at their lowest level since 1993.  The continued growth of carbon emissions from transport remains one of the most serious problems we face.’ and he  urged the Government ‘to implement the planned rise in fuel duty at the earliest opportunity’.