Extracts from the News section of Renew 120, July Aug 1999

Reactions to the new Department of Trade and Industry Consultation paper on renewables (see Renew 119) were generally favourable, although some people detected a fudge on the DTI’s target of a 10% contribution from renewables by 2010. Greenpeace uncharitably called it a "ditherers' charter" and said that ‘despite the fact that the UK can provide its electricity from renewable energy many times over, the Government is still quibbling about how to get to 10%.’

Before the much delayed publication of the report, the Independent had suggested that the 10% target was in dispute, and that ‘while John Battle, the Energy minister, is pushing for the target, other ministers and civil servants in the DETR, and the Treasury, want to water down the pledge.’

The DTI report itself however is quite forthright, concluding that ’producing 10 % of the UK’s electricity from renewables appears to be a feasible target,’ and it confirmed that the government is still ‘working towards’ that target. The report notes that ‘Some measures to stimulate the market for renewable energy may be needed to achieve this ambitious target. The support for renewables under the existing NFFO scheme will, in any event, have to be adapted to the new competitive structures of the electricity industry and this creates the opportunity for considering other forms of market stimulation. Various different options for support under any new scheme are discussed in this Paper, including the question of whether any obligation should be on the supply or distribution business.’

But, as a bit of a let-out clause, it warns that the Government‘will wish to gauge the precise level of support needed in the context of its overall climate change programme and the other measures introduced in that context, as well as the rapid market changes currently under way.’

Another issue was the fate of the green power market. The DTI seemed keen on the idea, noting that the Energy Saving Trust now had responsibility for accrediting green suppliers, via its new Renewable Energy Accreditation Scheme. But will the government stimulate this market by exempting renewables from the Climate Change Levy ?

More generally, there’s the issue of who should provide support for renewables: the DTI noted that ‘the Government believes that the additional cost of generation from renewable sources, whilst kept to a minimum, should be met directly or indirectly by electricity consumers. This would ensure that the costs of addressing environmental problems caused by electricity are met by those who create the demand.’

The consultation period on the DTI review, and also on the Levy, finished at the end of May. In its submission, the British Wind Energy Association suggested, somewhat provocatively, that the 50MW planning exemption rule be revised, so that wind farm projects (which are usually more like 20MW) could be assessed directly by the Secretary of State, rather than going through the usual local planning procedures. That would cause quite a stir in the ranks of Country Guardian, but it would also, you might think, set a bad precedent.

By contrast, the Council for the Protection of Rural England pressed for the planning controls to be revamped and regionalised to allow local people to have more, not less, influence on decisions: see Groups.

EERU, the OU based Energy and Environment Research Unit, focused on the key point raised by the DTI which had noted that ‘The longer term aims of support for renewables might be better met by a more targeted scheme which encouraged the development of new renewables with potential for the longer term; on the other hand, there are clear dangers in trying to pick winners and arguably more efficiencies will be gained by choosing the lowest cost way of meeting an obligation’.

EERU wanted a longer term emphasis, rather than near market options: the latter approach tended to limit the amount of capacity that was installed, and we now clearly wanted to speed up the process. SERA felt similarly - see Groups. So did the Green Party, who wanted a 600MW pa NFFO-styled support programme.

Energy Minister John Battle seems to have been won over by wave energy. In an interview with David Ross in Tribune (23/4/99), he said 'I am bringing in wave energy as a serious mainstream contributor’ and added ‘there will be DTI money for research and development and demonstration of wave energy. We cannot say how much yet- we are waiting too see what proposals come forward.’

The DTI review of renewables treats wave energy quite favourably and the back up ETSU report R122 includes an estimate of the generation cost by 2010, at 8% discount rate, of 3p/kWh. Three small projects are to go ahead in Scotland under SRO-3 .

‘We don't need to try too hard to reach the targets of 10% by 2010. We're already there'. So said Lord MacDonald, Labours Scottish Business and Industry Minister, in an interview just before he announced the details of the new Scottish Renewable Order.

Prof. Stephen Salter, who invented the duck wave energy system in the 1970's, has turned his hand to tidal power. His new tidal stream power system uses a vertical-axis water turbine mounted on a 50-metre diameter ring-shaped structure floating on the surface, with its blades reaching more than 20 metres into the water below.

Nicknamed the Polo, the 600-tonne design would use similar steel construction techniques to those in ships and could help to rejuvenate Scotland's shipbuilding industry. It was unveiled at the Edinburgh International Science Festival in April.

The generators would be floated into position at locations on the Scottish coast, where they could generate more than 12 MW of electricity. Salter, who is based at Edinburgh University, said that the design would not cost as much or take as long to build as a tidal barrage, so that 'although the turbine is not as efficient as tidal barrages, it's far more attractive to an accountant's mind'.

He told the Scottish Evening News (04/07/99) 'Every time the Government looks at tidal barrages they say if only it was built 20 years ago it would be producing the cheapest electricity on the grid but then they say now isn't the time to build it. You don't get thousands of megawatts from this turbine, but you do get tens and you get it quite quickly. With a tidal barrage you spend billions of pounds before you get any generation at all.'

In addition, unlike barrages, which disrupt tidal flows and can destroy mud flats used by wading birds, the turbines are likely to have little or no environmental impact. And there would be little visual impact: most of the turbine would be under water. The system would also be virtually silent.

The prime sites for power generation would be in the Pentland Firth in north-east Scotland and the Mull of Galloway in the South- West. However, they could also be used in areas where tidal currents are weaker. The only problem is that the Department of Trade and Industry seem to have given up on tidal stream power- it’s relegated to the 'very long term' category in the DTI's new review of renewables.

Salter is nevertheless optimistic- he notes that the ETSU’s new R122 report (see later) estimates that such devices could generate power at as little as 1.5p/kWh. He says a working prototype could be three years away, and puts the final cost of a full scale turbine at around £5m. "It is all about risk. If you built this and you were disappointed it would only cost £ 5m, not £5bn. That's less than the PR budget for most electricity supply companies and a manageable risk."

Friends of the Earth Scotland welcomed Salter's latest invention. ‘Any progress and innovation on tidal electricity generation is certainly good and Scotland is the breeding ground of innovation into renewable energy. We wish him the best success. Tidal barrages are problematic: you have to take into account the environment and social impacts. Anything that minimises that is welcome.’

The energy resources and technologies exist to allow the UK to attain the '10% by 2010' electricity target contribution, and this could be attained for around 3.5p/kWh - that's the basic conclusion of the report by ETSU, the Energy Technology Support Unit, in its supporting analysis 'New and Renewable Energy: prospects in the UK for the 21st Century', produced for the governments new review of renewables. ETSU see wind power and energy crops as providing the majority of the UK's renewable energy inputs by 2010 and still see them dominating by 2025.

By 2010 onshore wind, along with waste incineration and landfill gas, dominate in all scenario's, but with offshore wind also edging in on some scenarios and small hydro continuing to make a small contribution. By 2025, offshore wind, along with energy crops and wave energy, also begin to make significant contributions - and PV solar may also make an entrance. ETSU notes that 'the solutions derived from the modelling exercise show that the key technology in achieving high market penetration from renewables by 2010 is onshore wind.'

However they are aware that there could be planning constraints on the deployment of the 125 or so 25MW windfarms that they estimate would be necessary to achieve the overall target of a 10% contribution from renewables by 2010. ETSU has therefore developed a 'constrained wind' scenario, which assumes that the slack is taken up by the more rapid development of energy crops, with the on-land wind contribution falling from 21% of the renewable total, as in the existing 'trends continued' scenario, to 13% but with energy crops increasing from 5% to 16% -all by 2010. For comparison waste combustion and landfill gas both contribute 16% to the total in the 'trends continued' scenario, increasing to 17% in the 'constrained wind' scenario.

ETSU also provide a 'high wind' scenario in which the on-land wind contribution expands to 26% of the renewable total and offshore wind contributes 18%, with energy crops then only supplying 3%.

Certainly the wind resource is there. Based on a new analysis ETSU now estimate the total UK on-land wind accessible resource (leaving aside AONB etc) as 109, 679MW (much larger than before) which could supply 317,8554 GWh/pa, although it accepts that the practically available resource (given planning, network and construction rate limitations) would be much smaller. Their final figure comes out at only 2,700 MW. But, as they say, in terms of obtaining planning permission 'the factors bearing on each case are so specific that no general arguments can be made'.

Similarly ETSU admit that plant design and the crop growing infrastructure would have to develop rapidly if energy crops were to achieve a 16% contribution. That would require the establishment of around 200,000 hectares of energy crop plantation by 2010.

ETSU also note that there could also be non -technical constraints on energy crop development, for example in relation to getting planning permission for combustion plants due to the increased local truck traffic they would generate.

Overall, ETSU seem confident that the results outlined above, with wind and energy crops plus landfill gas and waste combustion providing the bulk of the 10% contribution from renewables by 2010, are fairly robust and that, within that range of options, there 'are different ways in which a high level of renewable penetration into the UK electricity system could be achieved, using different technology mixes'

That seems reasonable, although it would seem sensible to ensure that the newer energy options are also developed as rapidly as possible, at the very least, in order to provide insurance in case there are constraints on the development of offshore wind and energy crops- and given the continued constraints on waste combustion due to local opposition.

It is good to see that, as we reported in Renew 119, the DTI has rethought its approach to wave energy. The ETSU report provides the background, although it is interesting that, of the three wave projects now being supported under the Scottish Renewable Order, only the LIMPET shoreline device is mentioned as an option in the ETSU paper- the two inshore devices are not covered.

ETSU suggests that onshore and nearshore wave might supply up to 2.5 TWh pa, while the practical offshore potential is put at 50 TWh pa. However, the theoretical resource is put at 100-140 TWh for nearshore and 600-700 TWh pa for offshore and, overall, ETSU sees wavepower making a significant showing on the cost-resource curves by 2025, with there being a resource of between 30-35Twh pa at 3p/kWh.

By contrast, ETSU relegates most of the other technologies to the longer term, including tidal stream technology. This is a little surprising in that the potential is similar to wave power. If fully developed, the UK's tidal stream sites could deliver up to 19% of UK electricity, according to an earlier ETSU study. The technology is only slightly less developed. ETSU mentions IT Power's 300 kW project and the 30 MW Blue Energy scheme in the Philippines, but strangely, ignores the DTI supported Engineering Business Advanced Water Column project, and the Gorlov Helical turbine project in the USA. It doesn't link Salters name to the latest idea, the vertical axis variable pitch turbine (see earlier), but it suggests that this could generate power in some sites (notably the Pentland Firth in Scotland) at prices down to 1.5p/kWh. But otherwise the resource is seen as ‘limited’.

In its consultation paper the DTI singled out tidal stream as an unknown long shot , while ETSU stresses the 'high cost'. The use of speculative estimates of ultimate costs was one reason why the development of wave power has been delayed for so long. It would be sad to repeat that mistake in the case of tidal streams. Certainly to suggest, as the ETSU does, that the UK might only obtain 0.7 TWh from tidal streams by 2010, from 322 MW of installed capacity, seems unduly pessimistic, especially given that ETSU estimates the potential resource at 36 TWh pa. There really does seem to be an anti- tidal stream bias operating. For example, ETSU say that the power output for a typical tidal rotor is bound to be less than for a windturbine of similar size because the average waterspeeds are much lower than wind speeds. Fair enough, but that ignores the fact that sea water is more than 800 times more dense that air, so that tidal rotors usually come out better overall.

Another surprise is the low ranking given to the use of hydrogen as a new energy vector in the DTI/ETSU analysis. Whereas fuel cells are seen as likely to be important by 2010, the hydrogen option is relegated to the very long term. There has been increasing interest shown in the idea of moving towards a hydrogen economy, with hydrogen being generated via electrolysis using electricity from renewable sources, transmitted via gas grids and used locally to power fuel cells in houses and vehicles. Quite apart from the role of hydrogen in powering fuel cells, the fact that the hydrogen storage option also offers a way to compensate for the intermittency of some renewable sources, suggests that it is likely to become increasingly important area of technological activity.

As we note later, BP have indicated that they plan to put an increasing emphasis on hydrogen. However, in its consultation paper, the DTI put the hydrogen option in the 'after 2025' category and the hydrogen option merits only four lines in the ETSU paper. It’s followed by an equally brief discussion of energy storage: strange, when you would think that this, and the whole question of system integration, will become increasingly important in the years ahead, given the move towards smaller scale localised generation. Evidently ETSU haven't read Walt Pattersons new book!

Geothermal Hot Dry Rocks and Tidal Barrages do a bit better -with one and two and a half pages respectively, but these are clearly nowadays seen as 'beyond the pale'.

Pushing wind and energy crops as the front runners is understandable but not without risks. It's understandable because, waste combustion and landfill gas apart, wind is now the cheapest of the 'new' (i.e. not conventional hydro) renewable sources, and the resource looks very large - as does the energy crop resource.

However, as ETSU recognise, the scale of opposition to on land wind, and possibly even offshore wind, could constrain UK windpower developments significantly, and the energy crop option is still in its infancy, with few farmers yet being willing to contract to supply wood chips. The energy crop options commercial success depends to a large extent on what emerges from the current round of negotiations on the EU's Common Agricultural Policy. As ETSU notes, in a nice understatement, 'a systematic analysis of farmers' decision making when presented with a range of different land use opportunities is not possible.'

And then there is the planning issue. It has been hard enough to find sites for windfarms. Will it be possible to win acceptance for '52% of surplus land' to be used for short rotation coppicing by 2010-and 88% by 2020? Lets hope there are no problems, but lets make sure the other renewable options are pushed hard as well- as back up.

Following Lord Marshalls report on Economic Instruments and the Business Use of Energy (see Renew 118), in his March Budget statement, the Chancellor of the Exchequer announced that the Government was proposing a ‘climate change levy’ on business use of energy, from April 2001

As we reported in Renew 119, the Chancellor announced that he intends to recycle the revenues from the levy, in full, to business through equivalent cuts in employer NICs and schemes to promote energy efficiency, including additional support for renewable sources of energy.

So far so good, but there was still a problem in that the new levy was to be charged on all energy sources, including renewables. And there were also complications in terms of how the rate would be applied in the case of electricity: how would that reflect the full environmental impact of its production? The consultation paper comments as follows.

‘The levy will be applied as a specific rate per nominal unit of energy. Special rules will be needed in, especially in the case of electricity, to translate this into a rate per unit of energy supplied. The Government is aware of the attractions, in principle, for structuring the levy so that it reflects the carbon content of different fuels.

However, as recognised in Lord Marshall’s report, given the current structure of the electricity and distribution industries, it is only possible to determine the carbon content of electricity as a broad average. On that basis, the additional fuel switching that would be induced by such as approach is likely to be limited. Structuring the levy with regard to the energy content of different fuels has the advantage of simplicity. It would also be consistent with the 1998 Review of Energy Sources for Power Generation. This identified distortions in the generation market as a potential threat to the security and diversity of energy supplies and announced a programme of reform to ensure fair competition between fuels. In light of these considerations, the Government therefore intends to use the energy content of fuels as the basis of the levy.’

The paper notes that Electricity requires special rules. ‘This is because a considerable proportion of the energy content of fossil fuels used in electricity generation is lost in combustion, transmission and distribution. Calculating the rate for electricity based on the metered energy content of electricity supplied to the consumer would result in under taxation. Instead the rate to be applied to electricity will be set such that it is equal to the amount of the levy which would have been charged had the inputs to generation been taxed on the basis of their energy content. For the purposes of the illustrative table below, we have used a conversion factor of 2.84 based on tables 6.1 and 6.3 of the 1998 Digest of United Kingdom Energy Statistics, which allow for a ratio to be calculated between fuel inputs and electricity use. The result is that the rate of levy per kWh for electricity is higher than for other forms of energy.

Illustrative Rates for the Climate Change levy

The conversion factor of 2.84 ‘may change before the rates are published in the Finance Bill 2000. Similarly, it may vary in the future. But the timing of any changes to the relative rates to reflect this would have to balance equity with certainty for suppliers and customers.’

Renewables

Crucially, the paper notes that ‘the Government does not intend to bring within the scope of the levy, renewables used as energy sources in their own right, e.g for the production of heat. But, there will only be one rate for electricity irrespective of how it is produced. However, the Government has also concluded that a downstream levy would effectively be neutral towards renewables used to generate electricity in that there would be no tax induced reason in the short term to vary the amount of electricity generated from renewable sources.’

The key question is therefore‘whether any further incentives could be given through the proposed structure of the levy that would increase the proportion of electricity generated from renewable energy sources.’

The Government has concluded that ‘excluding electricity generated from nuclear power or large scale hydro-electric schemes from the levy, even when supplied direct to the final consumer, could not be justified as a means of developing renewables generating capacity. The output from other generators tends, under the present pool trading arrangements, not to be supplied direct to final consumers and so could not be directly excluded from the levy. Present trading arrangements are, however, under review, and this position may change allowing for the possible exemption of electricity supplied direct from these smaller scale renewable generators to final consumers. This possibility, as well as other solutions using tax reliefs or credits, would have to take account of the ECJ ruling in Outokumpu Oy which requires that imported electricity should not be treated less favourably than domestically produced electricity, even if this produces insurmountable administrative difficulties. ‘

Finally, what about Combined Heat ad Power? CHP are plants where useable heat (hot water or steam) and power (electricity) are simultaneously generated in a single process, and can represent a very efficient method of generating electricity and heat at the point of use. The paper notes that ‘treating these undertakings in the same way as other generators, ie relieving their input fuels and applying the levy to their outputs, would mean that a levy would have to be charged on the heat output, possibly at the rate applicable to the input fuel, except where the inputs were exempt renewables such as waste. This would add administrative complexity. The host would also have to account for the levy on electricity it consumed itself or sold to other business users.

It would therefore, seem more appropriate to treat the CHP host organisations and autogenerators as the final user of primary energy products. This would mean that their inputs would attract the levy in the usual way, but they would need to be given a refund on electricity exported direct to exempt consumers or to the pool. This would be necessary to avoid double taxation in the case of electricity exported to the pool because the energy would attract the levy when supplied by the electricity supply company. It may also be appropriate to offer a refund on heat supplied to domestic consumers’, although ‘above certain levels’ it might be appropriate to treat CHP plants as if they were generators ‘to avoid distortion of competition.’

Green power schemes could capture around 50% of the domestic electricity market in the USA by 2003 according to a report ‘Green Power: Consumer Choice and Clean Air' from Resource Data International, which claims that 'Americans care about the environment and will factor the green-ness of power into their selection of supplies' and forsees green power becoming mainstream like recycled paper'.

Market surveys in New Hampshire had found that 20% of those asked would be interested in shifting to green sources, while the figure for Massachusetts was 31%.

However the estimates may be inflated given the fact that the definition of 'green power' is rather wide- including natural gas fired Combined Heat and Power. It may also come to include energy efficiency measures and even clean coal technology. Source: Financial Times Renewable Energy Report, March 1999, Issue 1.

Green Mountain Energy, which was one of the first green power companies to enter the California electricity market when it deregulated in March last year, has come up with a revised version of its ‘100% Renewable Power‘ scheme- ‘100% Renewable Power 2.0'- which can work out cheaper for consumers than conventional power. The new scheme offers power at around 5% below California Power Exchange (PX) pricing. This means that a typical California consumer can expect a slight reduction in their electricity bill.

Green Mountain has also upgraded its ‘Wind for the Future (SM)' scheme to a 2.0 version. This consists of 100% renewable energy, 25% of which will come from newly constructed wind turbines- which the company notes will be the first in history to be built as a direct result of customer choice in a deregulated market. They add "We listened to our customers and thanks to their support during our first year in California, we are now able to offer cleaner electricity generated completely from renewable resources at a price that is affordable for everyone. Customers can now buy renewable energy at a lower price than existing dirty system power. Why wouldn't you want to save a little money and feel great about choosing 100% renewable energy?"

Wind for the Future 2.0 (SM)- 100% renewables- this blend, supports the construction of new wind turbines. As these new turbines begin operation, the first of which will be operational by mid 1999, they will produce about 25% of the energy for this power blend; the remainder will be supplied by small-scale hydro, biomass, and/or geothermal.

100% Renewable Power 2.0- this blend supports renewable resources in California and the West, including small-scale hydro, biomass, and/or geothermal. 100% of the energy generated for this blend will come from renewables, 5% of which will be new renewables (geothermal, landfill gas and/or wind).

Solar for the Future(SM) - coming soon!

In the Renewables Consultation paper, the Department of Trade and Industry commented that ‘open markets will both offer new opportunities and present difficulties in the development of renewable’ energy’. It suggested that ‘there will be many more opportunities for both generators and traders to come into the market and sell to other utilities and direct to customers in a range of markets and at a range of market prices. ‘

It added ‘such schemes may play a particularly significant role in the transition of projects from the historic financially assisted NFFO market to longer term operation in the purely commercial market; establishing market prices in the range of new market sectors will be difficult particularly for new players. Most of the new electricity generation plant will be embedded in the distribution network and there is limited knowledge of the value of electricity and costs of connection at this point; new and particularly small operators may be disadvantaged in entering the market in competition with established players. Of particular difficulty will be ensuring a sufficiently long term customer base for new projects to be financed; customers may be unaware of the opportunities available or be reluctant to purchase in an unfamiliar and unaccredited market.’

The DTI also noted that it was helping the Energy Saving Trust to set up REAS, the Renewable Energy Accreditation Scheme, with the aim of giving consumers confidence in the green electricity supplies now being offered. It noted that ‘the scheme will ensure that suppliers ‘green’ claims are supported by independent auditing and that consumers know the mix of generation used to meet the tariffs they are choosing.’

A German company, WRE, is the latest entrant into the UK green power market. It will be offering green power contracts to UK consumers using power from the Renewable Generators Consortium- which distributes power from ex- NFFO 1 and 2 projects. WRE will be trading here as Water Power and Renewable Energy , partnered by the UK’s Energy for Sustainable Development consultancy. WRE owns hydro plants in the Czech Republic and Italy and a wind farm in Portugal. It is also interested in offshore wind projects in Germany and the UK.

A coalition of European environmental groups, including Greenpeace, WWF, and Friends of the Earth, has called for the stalled EU draft directive on renewable energy to be resurrected and strengthened. The coalition (which also includes the EWEA) warned that, otherwise, Europe would fail to meet its Kyoto targets and renewables would not thrive in an increasingly liberalised electricity market.

The draft directive had proposed requiring all EU member states to provide a minimum 5% share of energy from renewable sources by 2005 and for countries to increase the share annually by three percentage points irrespective of the level already achieved.

However, the directorate also proposed a phase-out of "non-competitive" subsidy systems, such as Germany's fixed REFIT tariffs for renewable electricity, in favour of more competition-based ones, such as the UK's NFFO. This had not gone down well with, for example, wind power interests in Germany, who had successfully pressured for the directive to be withdrawn. An EC ‘working paper’ subsequently emerged in its place.

However, there clearly remains strong support for the other aspects of the proposal, on grid access and harmonisation of efforts to develop renewables. The only sticking point was the fear that market liberalisation would jeopardise systems that had proved successful in boosting renewable energy.

The European Commissions recent internal problems have been reflected to some degree in a critique of its handling of renewable energy support. The European Court of Auditors recently reported on the various EU programmes for the support of renewable energy - Joule, Thermie and Altener. In a special report (No 17/98) the Court of Auditors found evidence for poor project assessment, management, and monitoring.

It commented that 'the project selection process of JOULE lacks clarity' and that 'many of the THERMIE demonstration projects were found to lack a major innovative element, they only had a limited European dimension and their funding did not meet the requirement of balanced participation of partners'.

It added 'Scientific and financial management and monitoring of the projects were weak in both areas' and noted that 'delegation of part of the selection process in the ALTENER programme to the member states is neither co-ordinated, guided nor monitored by the Commission.'

It went on 'the large number of parallel information networks and points of disseminating information on the audited programmes adversely affects the efficiency and effectiveness of the information policy'.

A pretty damning report you would think. The Commissions reply however was something of a classic in stonewalling. For example they pointed out that the JOULE and THERMIE programme (which have actually now been combined in one), 'emerged from differing historical backgrounds displaying a variety of management practice characteristics'. But change is likely given the general EC shake-up.

The German government is expanding funding for renewable energy by DM180m(92m euro) for 1999, adding to the existing 10.2m euro allocation. In part this is to compensate for the fact that the renewables have not been exempted from a new energy tax. As in the UK, renewable energy interests are not happy to be taxed in this way (in the UK the Climate Change levy is to be applied to all energy sources) but at least in Germany they are getting some compensation. The 102 m euro is likely to be focused on solar, small-scale hydropower, geothermal and biomass schemes, but according to ENDS Daily, wind energy is unlikely to receive much, if any, funding, due to its increasing economic viability.

President Clinton is trying to get a new US renewable budget through Congress, as part of a $4bn allocation to tackle global warming over the next year.

Some of this will be allocated to R&D. Within the Department of Energy's R&D budget, the Office of Energy Efficiency and Renewable Energy has an allocation of $325m for new energy technology, and, if Congress approves the budget, $45.6m will go on wind, a 31% increase on last year; $93.3m on PV, a 29% increase: solar thermal will get $18.9m, 11% up; biomass $39m, 24% more; but geothermal only a 4% increase, to $29m.

Germany's 100,000 PV solar roof programme has been launched, as a showpiece of the SDP-Green coalition. DM 1million will be made available to provide low interest loans over 10 years to householders interested in installing at least 1kWp of PV modules- the government thereby paying for 40% of the cost. The expectation is that within six years there should be around 300 MW of capacity installed, making Germany 'the shop window for solar exports'.

The Green Party saw the new programme as'the first showpiece of a novel future-orientated energy policy' although the SDP were a little more cautious 'solar energy will continue to contribute only a small share to our electricity for a long time to come' . However it was necessary to create a 'bridge to the solar age'.

Chris Gibson-Smith, from BP, or rather BP-Amoco as it's become, spelt out his views on the future of oil in Green Futures 15, in terms that sound almost like Greenpeace. 'In my judgement, we will leave behind this form of the hydrocarbon phase of human development, and we will be able to look back and see trillions of barrels still in the ground, in much the same way that we are exiting from coal, knowing that there is more coal in the ground than we have taken out'.

However, some of his other views may not be so welcome. "One windmill is interesting; two million windmills is pollution. One wave barrier is interesting, one thousand wave barriers is pollution. You'll get your energy, but you'll also get despoilation of the landscape, to an intolerable extent. A renewable future has massive downsides."

He added"we put our emphasis into the transition to hydrogen intensity: more gas, and then beyond gas into hydrogen itself- to machines that work on hydrogen, and into solar. And we'll also increasingly be moving into energy efficiency. I don't, at the moment, see us moving into water or wind".

That's a bit surprising given that there was talk of their rival Shell, being interested in offshore wind (and also biomass), but for both Shell and BP, PV solar is clearly their first love as far as renewables go.

A new low cost, high efficiency solar cell has been developed by a team at the Swiss Federal Institute of Technology led by Michael Gratzel. It uses a titanium oxide base and it seems has an efficiency of 33%- amazingly high. Its so thin its transparent and should cost little more than glass.

Greenpeace submitted evidence to the House of Lords Select Committee on the European Communities, which has been looking at the proposals for harmonising European renewable programmes. Their evidence recycled most of the standard arguments on renewables as assembled already in Greenpeaces report ‘New Power for Britain’, which describes how either one of the UK's resource of offshore wind or wave power could meet UK electricity needs three times over and solar power alone could meet 2/3 of the UK's electricity requirements.

Greenpeace argue that ‘Renewable energy from wind, solar and wave should all be promoted to commercial maturity. Where mutual competition between renewable energy sources hinders this process it should be avoided’.

They note that the present system gives an unfair competitive advantage to non-renewable sources and argue that it is ‘imperative that progress towards the Directive for access of electricity from renewable energy sources to the internal market in electricity is rapidly restarted’.

Greenpeace also had clear ideas about reforming the grid system ‘The grid system in the UK has been based on a model of centralised generation. This structure represents an intrinsic barrier to adoption of renewable projects by developers. A policy of grid enhancement must be adopted as part of a process to allow fair access for renewables to the grid and to bring power from the resource to the point of consumption.

This must be backed by a determination to introduce a legal instrument if voluntary agreement is not rapidly forthcoming (although it should be noted that such an agreement has readily been achieved in Holland).’

John Battle, Minister for Energy and Industry, recently opened a new 2.7MW landfill gas plant at Whinney Hill in Accrington, Lancashire. The plant has a contract under NFFO-4.

Battle commented that "The generation of electricity from landfill gas has been a particular success story. To date, 99 schemes have been commissioned, with a total capacity of over 180 MW. Our landfill gas industry has demonstrated the ability both to bring on stream substantial new electricity generating capacity, and to consistently reduce the price of their generation in each successive Order. Some landfill gas schemes are so competitive that they have been built without support from the NFFO at all. Others, which received contracts under the first two NFFO rounds - NFFO-1 and NFFO-2 - are now competing effectively in the open market. In addition, many are contracted to supply the generation for the green electricity tariffs that have been launched over the last couple of years. I see the landfill gas industry as a whole as demonstrating the success of the NFFO policy. The industry is delivering on its commitments under NFFO, and proves that the scheme provides a real helping hand to such technologies."

Mr Battle added that "Landfill gas will be a real source of energy for the future, as the landfill tax insists that waste is turned into potential." - a point reinforced by the escalation of the landfill tax in the Budget to £10 per tonne this year, and the £1 more extra each year subsequently.

Prices for power from landfill projects have reduced from a high of 6.4p/kWh under NFFO-1 to an average contract price of 2.73p/kWh under NFFO-5. This compares to the electricity Pool price of 2.67p/kWh. Some landfill gas schemes are now sufficiently competitive to be built outside NFFO while many ex-NFFO-1 and ex-NFFO-2 projects are trading successfully in the open market since their NFFO contracts ended on 31 December 1998.

For further information on Whinney Hill, contact David Fitzherbert at Combined Landfill Projects on 0171 629 2668.

Energy and Industry Minister John Battle recently launched a new strategy for the Environmental Industries sector - the latest development in the Regional Innovation Strategy for Yorkshire and the Humber.

Mr Battle said that he was ‘a keen supporter of the Regional Innovation Strategy. Innovation is the life-blood of successful businesses and nowhere more so than in the environmental industries sector where there is a constant stream of new and exciting products and processes’

He emphasised that ‘Sustainable development is a key economic driver. Business and the environment go together and should not be set against each other.’

The launch meeting in Yorkshire was replete with displays and exhibits from environmental businesses which ranged from Arbre Energy, which is developing sustainable energy and electricity from short-rotation coppice wood, to Masterheat's low emission gas boiler system, and Gee Graphite's asbestos free gaskets for industry and water jet cutting service.

The Environmental Industries Sector (EIS) strategy involves businesses that produce clean-up technology, cleaner technology and environmental monitoring systems. For further information about the Yorkshire and Humber Regional Innovation Strategy contact Tony Haynes on Tel: 01924 423430. For further information on the Environmental Businesses Network contact Mary-Ann Ingram on Tel: 0114 222 4600.

* The DETR plans to spend £18 billion over the next three years, including £4.7 bn on the railways; £4.5 bn on motorways and trunk roads; £3.4 bn to improve local transport; £4.8 bn to regenerate local communities; and £ 9 bn to improve housing. That pressumably includes the already announced £375m for domestic energy efficiency improvements- for 1 m more homes.

Now that nuclear power no longer gets a direct subsidy from the NFFO fossil fuel levy, maybe we should look back and see how much nuclear power has costs us.

It’s hard to come up with realistic figures for R&D funding since some of the early government support was presumably under MOS/MOD/AWRE weapons programmes. But basically the official R&D allocation increased up to around £200m pa in the 1980's, but, with the demise of the fast breeder reactor, it then fell off, with renewables beginning to take over. Even so the total nuclear R&D allocation just from the 1980's onwards comes to over £2 billion (see Renew 120 for detailed statistics). Extrapolating the R&D costs back to the early days (the 1950's onwards) it probably comes to at least £5 bn in all, maybe more since the early years was when all the expensive R&D had to be done.

In addition to R&D support there has been the NFFO price support, with over £7 billion in all allocated to nuclear since 1990 via the fossil fuel levy: see Renew 120 for detailed statistics.

Of course, the UK's nuclear plants were subsidised before the NFFO - its just that this was not formally acknowledged. It was simply part of the public sector pricing mechanism. Extrapolating back to the 1960's, 70's and 80's, but remembering to reduce the amount to compensate for the fact that the full capacity was built up slowly, the total subsidy to date must come to something like £20 billion.

Finally there's the nuclear plant construction programme, carried out in the public sector. Here we are talking yet more billions. Sizewell B alone cost around £2.5bn.

The earlier plants were of course smaller and cheaper, but given that in all, there has been around 11 GW of nuclear capacity installed, the total capital cost, including Sizewell B, could be around £15 billion.

And of course, in addition to the UK's 12 nuclear power plants, you'd also have to add the cost the reprocessing plants at Windscale/Sellafield, including Thorp and Dounreay (£3bn?), plus the fuel fabrication plants, waste dumps and so on. The total capital cost of construction of the complete nuclear system could therefore be something like £20 billion, maybe more. So the grand total for UK nuclear costs comes to around £45 billion

Obviously that's only a very rough estimate and it's in 'money of the day': we haven't adjusted the money for inflation, which could, over the periods considered, double or even quadruple the total, as any one out there who is a wizard at discounting will know. Also we've not mentioned decommissioning costs, which are a cost still to come. The Nuclear Free Local Authorities group recently estimated the cost facing the taxpayer as up to £28 billion.

So whats the total eventual cost of nuclear? As you can see, depending on the detailed inflation accounting, it could be at least £100 billion and probably much more. As we say this is only a very rough figure- we’d be delighted to hear from anyone who has better data.

It interesting to see that the estimates for the cost of the next nuclear programme, getting nuclear fusion to a commercial stage, are now put at around £50-100 billion (WISE News Communique 497 Sept 1998). And that's just for R&D. But sense seems to have prevailed. As we noted in Renew 118, the ambitious plan for ITER, the $10 billion International Thermonuclear Experimental Reactor, seems to be facing problems. The initial project partners- the USA, Canada, the EU, Japan and Russia - are all now facing economic crises and the US has dropped out. There have been plans for a scaled down version (500MW instead of 1500MW) but even that is no longer certain.

Belated congratulations to WISE by the way, for the 500th issue of its Communique. WISE, the World Information Service on Energy, focuses on nuclear issues, which can make it depressing reading at times, but its an invaluable service. It’s run from Amsterdam with 'relays' around the world.

There have evidently been proposals to remove legislation banning the importation of radioactive waste for storage or disposal into the Russian Federation, as a precursor to Russia taking in nuclear waste from the rest of the world. If that happened it would be most likely to end up at either Mayak in the Ural Mountains or Krasnojarsk-26 in Siberia. Greenpeace portrayed this idea as a ‘cynical attempt to allow wealthy countries to exploit Russia's economic crisis and create international trade in deadly nuclear wastes.’

The Feature looks, seasonally, at Sustainable Tourism with an report by Tam Dougan on the problems facing some of the Canary Isles ,where there are some ambitious wind and solar projects. She asks - is renewable energy is proving a fix to allow unsustainable tourism to expand?

We also look , in our Technology section, at Intelligent Housing and at the INTEGER house at the Building Research Establishment- and ask are intelligent houses really smart?

The full printed 30 page (plus) bimonthly Renew journal can be obtained from NATTA, the Network for Alternative Technology and Technology Assessment, on subscription for £12 pa for students/unwaged (including T265 students), otherwise its £18pa, payable to 'NATTA'.