Renew On Line (UK) 55

Extracts from NATTA's journal
Renew, issue 155 May-June2005

6.RPA’s Green Energy Manifesto

With the election in mind, the Renewable Power Association (RPA) produced a Manifesto including a range of suggestions for supporting a broadened  renewables mix.  It notes that ‘at present, the Renewables Obligation works to focus development activity on onshore wind energy’  but felt that ‘on its own, wind cannot deliver the Government’s renewable energy targets’.

What was need were additional ‘transitional support measures for promising renewables’ such as marine, solar and biomass. It notes that ‘The Government supports these by using capital grants. But so far the results have been patchy. A new mechanism is needed to support emerging renewable sources as they move to become competitive under the RO’.  The RPA proposes ‘a system of revenue-based support for emerging technologies’ adding that ‘as this would go to only the successful projects it would therefore be more effective and less wasteful than capital grants. It could also reduce the cost to taxpayers by employing the existing fossil fuel levy surplus fund.’  Just what the DTI has now set up for wave and tidal power - see earlier.

The RPA also  looked at the technology options.  It saw biomass a ‘one of the leading non-intermittent renewables’ and says the Government should create an energy crop fuel chain which can guarantee fuel supply to generators and offtake to growers. It’s also keen  on building-integrated and micro renewables. However it notes that although the Government is scrapping the Clear Skies and solar PV grant funding mechanisms, which provided support for these options, ‘it has yet to define a new programme to support them. This is urgent in order to maintain industrial and domestic investment in the sector. The proposal is    technology-blind capital grant programme. Care needs to be taken to ensure that any follow on programme at least maintains the current momentum of developing domestic scale renewables.’  In parallel it saw improved Building Regulations as a key driver for domestic scale  renewables.

The RPA  offers  some  specific suggestions for the Labour Party Manifesto, under the heading ‘Renewable Energy Policy- Delivering the vision’. It focusses on building a more diverse programme and in particular on including heat producing renewables. ‘So far, the Government has focused on trying to increase the amount of electricity from renewables. There is now a strong case for building on this and widening the focus to incorporate heat and transport, along with micro- and building-integrated renewables. Electricity comprises around a third of total energy consumption, the other two thirds being heating and transport. Renewables, particularly biomass, can play a role in both these sectors, through heat-only boilers and substituting fossil fuels with bio-diesel and bio-ethanol.’

The RPA points out that ‘When renewables are installed directly into buildings, they offset the amount of energy the user needs to purchase- in much the same way as energy efficiency measures’.  To obtain these benefits there was a need for  policies to reward renewable heat production and to  ‘encourage new solar thermal and biomass heat projects; encourage the use of waste heat from renewable electricity generation projects and greater overall efficiency in renewable CHP projects’. This, it says, could take a similar form to the Renewable (electricity) Obligation.

Finally, the RPA argues that there is a need for better co-ordination in the way policy on sustainable energy is delivered. It says that the Renewable Obligation (RO) is ‘designed so as to let the market decide which technologies are deployed’ and believes that ‘this should lead to renewables capacity being delivered at the lowest overall cost’. 

That’s not actually as certain as you might think- see our report earlier ( section 2) of a Cambridge University study which suggest that REFIT might be more successful in this regard- as well as delivering more capacity.  But the RPA, like the BWEA, seems unwilling to push for major changes in a mechanism that at least works to some extent.  The RPA has instead pushed for improvements in the RO that build investor confidence, which it sees as ‘a key ingredient for success’.  However, it says, in terms of targets, the scheme hits a “brick wall” in 2015 where it reaches a plateau and remains there until 2027 and it claims that ‘market realities mean that investment and growth would dry up long before 2015. The solution is to keep the quota rising for the full duration of the Obligation’ pointing out that ‘because of the way the RO is structured, this proposal would not affect Government spending’.

In conclusion, it argues that ‘until today’s energy consumers pay for the full cost of energy- rather than leaving it to future generations- then other measures must be used to encourage more sustainable energy options’.  It notes that: ‘the Government intends that the EU Emissions Trading Scheme be the central plank of its future emissions reduction policies, yet the Carbon Trust has concluded that the national allocation plans across the EU are not sufficiently strong to drive significant carbon abatement activity. Other fiscal measures should also be used to give consumers pricing signals that encourage them to use renewables.’

And it offers the following fiscal measures which it says have high ‘bang for buck’ :

•Extending Enhanced Capital Allowances to all renewables •Reducing VAT on wood fuel boilers and other domestic scale renewables.

•Introducing Stamp Duty concessions for buildings with renewables

•Enhancing tax allowances for all renewable investments.

And to round things off, the RPA calls for a Cabinet level Energy Minister.  Not a bad shopping list overall.

* The RPA also called for new policies for renewable transport fuels. It noted that transport accounts for just over 30 million tonnes carbon and it claims that ‘biofuels (and in the longer term other renewables in combination with hydrogen) are the only option for de-carbonising transport.’  It says that ‘as a first step firm targets and a policy for delivery are needed in order to comply with the EU Biofuels Directive’.