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7. Policy Issues and lobbying
RPA wants more
The Renewable Power Association has claimed that current government
policies for renewables are self-limiting and will fall far short of
the goal for a low-carbon future. Philip Wolfe RPA CEO, commented “The
present strategy is to cherry pick: maximize onshore wind, add a bit
of cheap co-firing, steamroller through some large offshore wind projects,
and hope to hit the 10% target whatever the cost to the wider objectives”.
He added that in addition,“we need biomass, wave, solar, micro-hydro
and tidal power to share the load if the government’s aspiration of
20% renewables by 2020 is to become a reality”.
* The Governments Pre-budget report in December included commitments
to new reviews of energy efficiency and biofuels. Details and analysis
in Renew 154
‘Double the Climate Change Levy’
The Climate Change Levy will have to double in the next five
years to have any impact on pollution, according to a report from
he Institute for Public Policy Research (IPPR), entitled ‘The
Burning Question’. It recommends an annual increase in the Levy
to double the current rate in the next five years. The levy has not
risen since its introduction in 2001 and the IPPR says that at current
levels it equates to about £37 per tonne of carbon emissions, while
the Treasury estimates the social cost of the emissions at £70 per
tonne. The tax raises £800m a year, and is offset by a 0.3% cut in
employers’ National Insurance contributions. Any rise would also
be matched by a cut in NI Contributions and extra funding for business
energy efficiency programmes through the Carbon Trust.
The proposal came as the UK submitted a proposal for a reduced UK emission
cap under the EU Emission Trading Scheme, an adjustment which many saw
as due to industrial lobbying. Tony Grayling, associate director of
the IPPR told the Observer: ‘It is clear that the government has
caved in to business’.
For its part, the CBI was not happy with the IPPR proposal,
or even with the UK’s reduced EU-ETS requirement. ‘This is a bizarre
time to suggest an increase in the levy. The manufacturing recovery
is under threat. Raw material costs are spiralling. Energy prices are
going through the roof. Oil has risen 70% in price in a year. As if
that is not enough, the government has just announced tougher targets
for British business under the emissions trading scheme.’
He added: ‘Business is busting a gut to keep up and these people
seem completely oblivious to the whole thing’. (Observer Nov.7).
And for good measure, the CBI subsequently argued that, to cut emissions,
the UK needed to build six new nuclear power plants over the next
decade. But this was rebuffed by Trade and Industry Secretary Patricia
Hewitt, who said there was no chance of a new nuclear programme within
that timescale if at all. “There isn’t a single company coming to
me and asking to build a new nuclear station in the next 10 years
or after that”. Oliver Letwin said a Tory government would allow the
market to decide whether new nuclear stations were necessary, while
Vince Cable, the Liberal Democrats’ Treasury spokesman, argued that
if private industry had to pay the clean-up costs, and for decommissioning,
it would never be an economic proposition. (Independent, 10 Nov.)
RO costs more than REFIT
With the Renewables Obligation being reviewed by the DTI,
views are emerging on whether it should be drastically revamped or
basically left alone. Although it has its faults, the DTI and many
people in the wind industry seem to want to leave it be, to provide
continuity and confidence, and the government is keen on the RO since
it is a competitive market approach, replete with a ROC trading element-
which keeps costs down. Others however point to the REFIT
guaranteed Renewables Feed-in Tariff system, which has been used so
successfully at supporting the installation of 14GW of wind capacity
and pushing PV solar ahead in Germany, and which had now also been
adopted by France.
REFITs detractors however argues that it costs more. In which case
it is interesting that, in a forthcoming paper, Dave Toke from the University
of Birmingham has claimed that, despite its competitive nature, the
RO is not necessarily better at keeping the cost of wind power down
than REFIT. He has calculated that, given the higher wind speeds in
the UK, the subsidy per kW of capacity installed provided by the RO
may be 30% higher than that delivered by REFIT in Germany. The bulk
of this difference is accounted for by different tax regimes, because
in Germany capital investments can be offset against tax, making wind
power investment attractive for high income groups in Germany with high
(50% +) marginal tax rates.
However, given that the UK has good wind speeds, Toke says that the
corollary is that, in theory, small community projects here might
actually be better off with the RO than with REFIT- a reversal of
the usual assumption that they only succeed in countries with REFIT.
That assumption has seemed reasonable, since it is what has happened
so far (especially in Denmark and also Germany), but Toke argues that
this may just be due to differing cultural traditions among the wind
industry and energy activists- something he thinks can and should
be changed, as he argues in the Features section of Renew 153. Also
see the Groups section in Renew 153.
Grid Power Balances
Last November National Grid released its first annual interim
‘Seven Year Statement’ (SYS) 2004 for Great Britain (GB), outlining
future demand, generation and power transfer patterns for the next seven
years- and it seems to indicate that there should be no shortages:
* GB system peak demand is expected to rise from 62.7GW in 2004/05
to 68.6GW by 2010/11, an average increase of 1.5%/year (i.e. rising
from over 20% to almost 30%)
* over the same time, installed GB generation capacity is expected
to increase by 11.7GW from 75.5GW to 87.2GW, based on existing transmission
arrangements.
Moreover, 6GW of the 11.7GW of contracted future generation relates
to onshore and offshore wind farm capacity, and the bulk of this capacity
will be located in the north.
However, that presents some problems since there are currently constraints
on new grid links there. Richard Ford from the BWEA noted
that :
* Contracted generation in the North of Scotland must wait for completion
of the Beauly Denny Upgrade.
* Any application received, for connection in Scotland, after 31
December will also be conditional on completion of the uprating of
the interconnectors
* Further reinforcement will be required in the grid.
As a result, any applications for connection in Yorkshire or any
points north are unlikely to be connected before 2010 at the earliest.
UK Energy Research Centre
John Loughhead, former Vice-President of Technology for the
energy giant Alstom, has been appointed Executive Director of the UK
Energy Research Centre (UKERC), to help co-ordinate research in
Britain’s drive to reduce carbon dioxide emissions by 60% by 2050. He
will have overall responsibility for UKERC operation and will work closely
with the Research Director, Prof. Jim Skea, who is responsible for the
centre’s research programme.
UKERC, founded in April 2004, is a distributed centre, based on a consortium
of institutions across the UK, with an administrative hub based in South
Kensington, London, within the campus of Imperial College. It is funded
by the Research Councils with £13m allocated.
The UKERC research programme began in October and it says that its
activities ‘will ramp up during the first quarter of 2005’. It aims
to be ‘at the heart of the UK’s sustainable energy initiative,
looking at new ways of reducing our reliance on fossil fuels by introducing
an integrated whole systems approach to energy research, taking account
of environmental, social, economic and technological factors’
and it says it hopes to ‘provide leadership in energy research within
the UK, assist in giving coherence and co-ordination to the UK energy
research agenda, and provide a basis for international collaboration’.
As part of this remit it will act as the “hub” of the National Energy
Research Network, co-ordinating scientists working in the environmental,
engineering, economic and social aspects of the energy field- drawing
in all key players in this area by developing partnerships with researchers,
the government and industry. Public engagement is another part of the
remit. The UKERC will also provide opportunities for networking, training
and exploitation of new technologies covering a wide range of energy
issues, from energy demand and future energy sources through to systems
modelling and environmental sustainability. And it will work with the
government and inform energy policy, helping the UK to meet the targets
set out in the 2003 Energy White Paper, including a 60% reduction in
carbon dioxide emissions in the long-term.
John Lawton, Chief Executive of the Natural Environment Research
Council (NERC), said, “Government, industry and scientists must
provide realistic solutions to this problem. We will get them all
working together. These targets are tough but we think, with the right
team in place, we will meet them.”
The initial research priorities of UKERC are: demand reduction; future
sources of energy; energy infrastructure and supply; energy systems
and modelling; environmental sustainability; and materials for advanced
energy systems.
For more see: http://www.ukerc.ac.uk.
Regional Renewables
A special feature in the September 2004 issue of the DTI’s booklet
on ‘Energy Trends’ looks at renewable energy in Scotland, Wales,
Northern Ireland and the regions of England in 2003. The article covers
all renewables including those that are not eligible for the Renewables
Obligation. It updates a similar article in the September 2003 issue.
The main features of the latest statistics are:
* Scotland has greater renewables generating capacity than
England, but England generates more electricity from renewables than
Scotland. This is because biofuels based capacity (the most common
source in England) is used more intensively than hydro (which predominates
in Scotland). Hydro is subject to seasonal variation in precipitation
in the catchment areas and 2003 was a particularly “dry” year.
* In Wales wind generated 88% more electricity than hydro.
In 2003 Scotland generated 22% more from wind than Wales.
* In England, the region with the largest generation and capacity
is the East and this is almost entirely biofuels. The NE generates
least. In England the regions with the largest generation from wind
in 2003 were the NW, SW, Yorkshire and the Humber.
* Meanwhile, final UK energy consumption in the second quarter
of 2004 was 0.4 % higher than in the second quarter of 2003, with,
on seasonally adjusted and temperature corrected annualised rates,
between the second quarters of 2003 and 2004, oil consumption increasing
by 1.4%, Gas consumption rising by 3.9% but the consumption of coal
and other solid fuel falling by 10.4 per cent. In terms of electricity
generation, coal use during the quarter was 9.4% lower than a year
earlier, while gas use was up by 14.5% and hydro sources by 10%, but
nuclear sources were down by 12.3 %.
Total electricity supplied by all generators in second quarter of 2004
was 2.1% higher than a year earlier, while final consumption of electricity
rose by 2.8 % with domestic use up 4.2% services sector use up 2.0 %
and industrial use 2.3 % higher. For more see:
www.dti.gov.uk/energy/inform/energy_trends/index.shtml
Greening the Home Counties
First it was Woking, with its ambitious private wire/solar/
fuel cell/micro-CHP system. Now Bracknell aims to become one
of the greenest town centres in the country. As part of a £175m regeneration
programme part funded by the EU’s pioneering ‘Renaissance’ programme,
it aims to expand the use of renewables and support energy efficiency.
The Energy Saving Trust has provide an extra £1.85m to help install
a heating, cooling and power generation system using local waste wood
chippings- to service the council offices and possibly other buildings
such as the new library and the police station. There are also plans
to incorporate wind turbines, solar panels on roofs, or wood fuel
replacing oil and gas for heating. The project is due to be finished
by 2009. Bracknell Forest Borough Council has teamed up with TV Energy
and partners including Waitrose, the SE England Development Agency
and the University of Reading to work on the scheme.
Not to be outdone, HRH the Queen,who recently opened the major UK-German
conference on climate change (“Meeting The Challenge Together”), has
been greening some of her properties. There are plans to install two
new turbines, rated at 200kW, in the Thames to provide electricity for
Windsor Castle, at a cost of £900,000. And further afield, a
new 1MW run of the river hydro plant is being installed on her Balmoral
estate in Scotland, which will sell excess electricity to the national
grid.
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