1. All Change !

NETA, NFFO & the Climate Change Levy

The debate on the Climate Change Levy proposed for the business use of energy has been a bitter one, with industrial interests becoming increasingly hostile- claiming that it would seriously undermine the profitability of key energy intensive industries such as aluminium smelting, and steel, paper and glass making. Worse still, all this would produce very few carbon savings, compared with a proper carbon tax, or a flexible emission trading system. As the Confederation for British Industry submission put it, ‘the proposed details of the climate change levy, in their current form, simultaneously pose a real threat to the competitiveness of many UK firms and risk falling well short of achieving its environmental goals at least cost.’

The Government had replied by proposing various exemptions and rebates, but for many critics this just further weakened a basically flawed proposal. That’s not to say everyone was against the proposals. Given that they would at least introduce some form of energy taxation, most environmental groups were still in favour (see WWF’s response - below). And of course, if renewables were to be exempted from the Climate Change levy, then they could benefit significantly. Interestingly, the CBI backed that idea in its submission, and also called for an ‘early upwards review of the amount of revenue being channelled into promoting energy efficiency and renewable energy, and into developing and applying low carbon technologies’. There was also strong support from industry groups for Combined Heat and Power to be exempted.

In parallel the Government pressed ahead with NETA, its ‘new electricity trading arrangements’, proposing that the complex competitive ‘pool’ arrangement, which had involved a half hourly ‘spot price’ power market, be replaced by an even more complex 4-hourly ‘power balancing’ contract mechanism, penalising any ‘spillage’ or ‘top up’ requirements. The details have yet to be thrashed out, and, as the Utility Bill goes through parliament, there may be a chance to improve the situation, but so far this scheme has done little to assuage concern that small intermitant renewable suppliers would suffer under NETA.

In its response to the House of Lords European Communities Select Committee report on ‘Electricity form Renewables’, the Government noted that NETA meant that ‘continuing with the NFFO... in its current form is not an option’ so that the success of the Governments overall renewable programme would depend on ‘maintaining the integrity of the existing contracts through the reform process’. Putting a bold face on it, the government reply continued that this simply provided ‘an opportunity to put in place the mechanisms needed to underpin the Governments Manifesto commitment to a new and strong drive to develop renewable energy’ and added that ‘an announcement of the Governments policy, which will have to be formed in the context of a number of broader environmental, energy and economic policies, will follow as soon as possible.’ A White Paper on renewables is expected any day now.

Public Reactions

One of the wider environmental issues will of course be the public acceptability or otherwise of the various renewables. The House of Lords Select Committee on the European Communities report (see Reviews) speaks of ‘widespread difficulties for renewable energy installations in obtaining planning permission’ but in its reply the government played down the problem, although they might look at ways to improve the planning system, particularly in relation to regionally developed plans and targets.

So far 56% of NFFO-3 projects had, it said, either obtained planning permission or did not require it, and only 11% had been refused permission; and 46% of the NFFO-4 projects had not yet submitted applications and, of the rest, 37% had either been successful or did not need approval. Only 6% had, it said, been refused planning permission, and some of these were subject to appeal. There were however plans to try to improve public perceptions of renewables, e.g via information campaigns ; the government felt that the expansion of the green power market might also help since more people would be involved with renewable energy .

Announcing the details of the revised proposals for Climate Change Levy, which is to be introduced on the business use of energy from April 2001, Chancellor Gordon Brown. said: ‘We have consulted widely on the design of the levy and listened closely to the views of industry, environmental groups and other interested parties.’ The changes would he said ‘increase the environmental effectiveness of the levy’.

However there were some retreats. The automatic annual petrol and diesel tax escalator was evidently abandoned as a concession to car and truck interests. And in the Levy revamp he condoned some large concessions to the big energy users- who will get exemptions of up to 80% of the Levy, albeit subject to agreeing emission reduction targets with the government. The result of this concession will be to reduce levy income from £1.75 billion to £1 billion in 2001-02, while the rates of the levy are expected to be 0.15 p/kWh for gas and coal, and 0.43 p/kWh for electricity, compared to the illustrative rates given in the March 1999 Budget of 0.21 p/kWh for gas and coal, and 0.60 p/kWh for electricity.

Even so, the big plus is that the government has decided to exempt ‘new’ renewables (i.e not including existing large hydro) and Combined Heat and Power from the levy.

It has also decided to treble the amount of money that will be made available from the levy for energy efficiency measures, from £50 million to £150 million in 2001-02, so as to allow for ‘the introduction of a system of 100 % first year capital allowances for energy saving instruments’. And it seems renewables can also share in the £150m.

As a result of these decisions, the levy package is expected to save at least 2 million tonnes of carbon - compared to 1.5mtC in the previous proposal. And the Treasury say that the negotiated agreements with energy intensive sectors could save as much again.

Overall then it’s a big breakthrough for sustainable energy. Business users will be looking increasingly to renewables since they will soon be cheaper than many other sources, so we can expect the green power market to boom. The only thing missing is the generation capacity to meet the demand!

The UK government's proposed Climate Change levy (CCL) on the business use of energy will not harm and might actually benefit companies employing 93% of the UK workforce and creating 90% of GDP, according to a consultancy study commissioned by WWF, the World Wide Fund for Nature. This conclusion contrasted with the view of many large energy using industries who insist that the climate change levy would increase costs and could do considerable damage to some economic sectors.

According to the WWF study (which of course was based on the earlier version of the CCL), the health and education sectors would gain most from the government's plan to recycle proceeds of the tax through cuts in employers' worker health charges and increased support for energy efficiency measures, while the food industry would be the heaviest loser.

Ute Collier, head of WWF UK's climate change programme said: "The climate change levy will not only help to reduce CO2 emissions but will encourage innovation, enhance competitiveness and deliver new employment opportunities".

A new report produced by the Forum for the Future suggests that the various policies on energy being developed by the government can, if integrated together and developed fully, be successful in reducing carbon dioxide emissions by 20% from 1990's level by 2010, and can do so at a very moderate economic cost.

The study is the first to explore, in an integrated way, the effects of combining five major sets of policies for carbon reduction:

• an increase in the proportion of electricity generated from renewable energy sources to 15% by 2010;
• an increase in the capacity of combined heat and power (CHP) to 10GWs by 2010;
• a major programme of investment in domestic energy efficiency;
• a carbon tax on the business use of energy similar in size to the proposed Climate Change Levy;
• and a continuation to 2010 in the annual increase in road fuel duty.

As can be seen, some of the policies have been revised and expanded - for example the Forum assume that a carbon tax is introduced, rather than just the energy tax approach currently proposed for the Climate Change Levy, and they adopt a 15% target for renewables instead of the current 10% target. These policies were analysed using one of the UK's leading economic models (MDM-E3, managed by Cambridge Econometrics).

The conclusion is that the overall policy package would not only achieve the Government's target of carbon dioxide reduction, but would also reduce sulphur emissions (a major cause of environmental acidification) by an eighth, and would save the lives of thousands of people who would otherwise have died through not being able to keep warm. It would also create a dynamic UK renewable energy industry, an economic sector which many forecasters believe will be among the fastest growing in the new century.

What about the cost? The study finds that the policy package will only reduce average UK economic growth from 2.56% to 2.54% per annum over 2000-2010, leading to a reduction in UK GDP (economic output) by 2010 of 0.3%. This means that, with the carbon reduction policies, the economy will not reach until mid-February 2011 the size which it would otherwise have attained at the end of 2010. The cost therefore amounts to a delay in six weeks in experiencing the enjoyments that derive from 0.3% of UK output.

The Director of the study was Dr. Paul Ekins, Programme Director of Forum for the Future, and Reader in Environmental Policy at Keele University. He said of the results: "The Government has said that climate change is one of the greatest environmental threats facing the world today. This study shows that the Government can make a substantial reduction in the UK's contribution to that threat at very modest cost, in a way that will also save the lives of thousands of poor people, that could deliver a world-class ‘Renewables’ industry and that will bring other environmental benefits. The policy programme we have modelled provides a classic example of sustainable development - improving the lives of less well off people and the environment in the present, while investing in prosperity and environmental sustainability in the future. We very much hope that this study will strengthen the Government's commitment to its 20% carbon dioxide reduction target, and that it will soon start to put in place the extra policies that are required to achieve it."

By the end of 1999, 25% of US consumers will have access to a local direct purchase green power tariff scheme and in the UK around 10,000 consumers will have signed up with green power schemes, according to the 'Green Power' issue of the EWEA's journal Wind Directions (Vol. XIX No.1). However, in his editorial Crispin Aubrey notes that 'there needs to be some rationalisation of the various accreditation schemes currently being promoted across Europe and the United States' .

One of the key issues is whether the green power market will create sufficient capital to allow investment in new renewable energy projects. In Germany Wind Directions noted that with 50 new green power companies trading at the middle of last year, 'some new capacity is being built to supply the green power market, but it is tiny compared with what the Electricity Feed law is creating' . However its not insignificant, with about 27,000 German households having signed up. The large utility RWE has around 15,000 customers taking a mixture of green and brown power, and the company has been investing in new plant including 26 PV arrays, three wind power plants and two hydro plants. So has Bayernwerk, which has 19 solar, and 12 biogas plants. Naturstrom ('Natural Power') is another of the new green power traders - and it only uses new generation plants, built to supply their customers. So far it has two biomass units, two photovoltaic arrays and two wind turbines, supplying around 1,200 households.

In the USA, around 100,000 customers have selected green power schemes in California. while 200,000 are thought to have signed up in Pennsylvania, but nearly all of these are being supplied with power from existing renewable plants. The main exception, as we've noted before, if Green Mountain, who are pushing ahead with 19MW of new wind generation capacity, funded from their green power scheme.

Green Power in the UK

In the UK there has not yet to be much sign of new capacity related to the green power market, although REC, the Renewable Energy Company has contracted for power from a non-NFFO landfill project, and has links with Next Generations 1.5 MW windturbine at Swaffam. Wind Directions carries an interview with Dale Vince from REC, who, despite not having won EST approval under the Future Energy accreditation scheme, seems to be doing quite well. So far they are only trading in the business sector but one of their latest recruits in the Co-op Bank. REC are now thinking in terms of a scheme entitled 'Merchant Wind Power' with wind turbines dedicated to supplying particular businesses. Next they intend to move in to the domestic consumer market and are considering offering an opportunity for large groups of people, several thousand say, to commit to buying from a particular machine- a consumer co-op in effect. ‘It will make an explicit link between the wind turbine on the hill and a persons own consumption', says Vince. He was unrepentant about using power from waste incineration, which, although not the greenest of sources, he argued balanced out the intermittancy of supplies like wind.

Vince rounded off by saying that the people at REC were 'environmentalists doing business, not businessmen doing the environment.' and Windpower Monthly lent its support saying that EST's decision to deny REC accreditation 'because it also deals in some fossil supply' was 'unfair since all the larger regional electricity companies which offer green tariffs also market fossil fuel under a different banner'.

Meanwhile the Germany company WRE, has been busily developing renewable projects around Europe and a green power tariff scheme called Unit(e), evidently meant to signal both 'Unity' and 'Unit energy'. As you will have seen, last year it targeted the UK market with its rather quixotic Unit(e) 'Creation Day 8' adverts. WindDirections put us out of our misery and explained that this message was meant to be that on the eighth day we should tidy up the mess we've made of the planet since creation. Julia Davenport, from WRE's UK Unit(e) offshoot, which is linked to ESD the Energy for Sustainable Development consultancy company in Wiltshire, (see below) says that they are aiming for 40,000 customers over the next year or so. We wish them luck!

Unit(e), the latest addition to the list of UK green power retail companies (see left) says that a typical consumer will pay about £3 per month more for their power under their green power scheme- which according to our calculations works out at a quite hefty premium of around 17%. They make much of their ‘independent’ status ( i.e they are not linked to a utility) and are proud of their 100% green power, and of their EST accreditation - a benefit denied REC, the other independent in the UK market.

Their continental offshoot, Unit Energy Europe, is planning a large 100MW rated offshore windfarm consisting of 64 windturbines - involving an investment of about 300 m DM. They will be set on concrete pillars in 20 metres of water in the Bay of Lübeck, about 15 km east of Dahme and 12 to 15km south of Staberhuk on the southern tip of the isle of Fehmarn. According to Unit(e), this wind farm will be located further out in the sea than the 1.2 GW plant put forward by another energy producer (see Renew 122) and will therefore be "virtually invisible and inaudible from the shore".

It is expected that the wind park, called SKY 2000, will become a tourist attraction with shops, cafés, a sun terrace and an ecological information centre.

Apparently talks have already taken place with the regional government in Kiel, and a cabinet decision for the initiation of a regional planning procedure exists. This process will take approx. two years so that power from the first turbines could be on line- by 2002.

As we've seen, Green power schemes now exists in many countries and consumer uptake is gradually growing. Retail companies in the UK, where the market was opened in stages from Sept 1998, are still a bit cagey about revealing figures, although it has been reported that Yorkshire Electricity has signed up around 1000 green power domestic consumers so far. But the potential market is very large. A recent MORI survey ('Options in Domestic Energy') found that 25% of those asked expressed interest in 'green electricity' tariffs, and more encouragingly still, according to a study done by the Energy Saving Trust (see Windpower Monthly Sept 1999), 71% of all householders might be interested in buying power from renewables, 45% might be prepared to pay more for it, and nearly 20% would pay a premium of £5 a quarter. But the level of the premium is important. A report by Datamonitor on ‘Global Green Energy Marketing’ published by Reuters Business Insight found that, although 65% of those asked were ‘likely or very likely’ to switch to a green power scheme, that was only if the price were right. 90% said they would switch if it meant no extra cost was involved, but 54% said they would be unwilling to pay more than a 4% premium.

While studies of potential markets may be interesting, the real need is to convert general support for the idea into actual customers- and that is happening. For example, as we’ve reported before, in the USA, which opened up its markets six months before the UK, although the market is still a little uncertain (see report later), around 70,000 consumers have already switched to green tariff schemes of various sorts. And in Australia, which opened up its markets even earlier, by Sept. 1998, over 28,500 domestic customers and around 50 corporate customers had signed up, with the contracts amounting to perhaps 100GWh pa from around 30MW of renewable energy capacity - over a quarter of the total renewable capacity in existence so far in Australia. And by now these figures should have doubled.

Of course it has to be remembered that, rather surprisingly, Australia has only developed renewables very slowly - most of what exists at present is traditional large hydro (which supplies about 10% of Australia's power): compared to the USA or Europe, the development of the new renewable sources such as wind and solar is still in its infancy, - and this in a country drenched with sunshine. But the rate of growth of the green power market has been quite significant- illustrating that the Australian public is far more enthusiastic about renewables than the government. The Federal Governments Mandatory Target for the Uptake of Renewable Energy in Power Supplies requires electricity retailers and major users to get an additional 2% of their electricity from renewable sources by 2010- compared to the 10% target in the UK and the even larger targets set by the EU.

In 1997, the New South Wales Sustainable Energy Development Authority (SEDA) launched a voluntary accreditation scheme and there are now more than a dozen green power schemes in existence. There are plans for a SEDA-type accreditation scheme to be available nationwide. As elsewhere, there are two basic types of Green power schemes on offer to electricity customers - schemes involving a donation on top of the usual bill to support a trust of fund for renewable project development, and supply schemes to support the purchase of renewable power, also usually involving a premium price. So far take-up rates for supply-based schemes have varied between 0.35% and 1.2%; and for donation-based schemes from 0.01% to 1.4%.

All the standard renewable sources are accepted under the accreditation system, except combustion of mixed municipal wastes. So they seem to have avoided the confusions in the USA over mixed sources and the resentments in the UK about the inclusion of power from waste incineration. Australia seems to be taking something of a lead in this field: the NSW Government won the U.S. Government's1998 International Climate Protection Award for its efforts on green power. Given that at Kyoto Australia was allowed to actually increase its overall greenhouse gas emissions by 8%, that may seem a little odd, but credit where its due.

For more details of the Australian programme see 'Green Power in Australia' and for an excellent overview see 'Energy Green Power in Context: a discussion paper', both produced by Carrie L Sonneborn, Murdoch University and Dr Stewart Russell, University of Wollongong, with information from Colin Crawford-Smith, Greenpower Services, for the Australian CRC for Renewable Energy, published in Feb. and April 1999 respectively. See:

www.phys.murdoch.edu.au:80/acre/textonly/publications/occasional/index.html

Also see SEDA website: http://www.seda.nsw.gov.au/   follow the link to Renewable Energy, then go to Green Power

A recent US study finds that the green power market "still in an early stage of development," with no clear indication as yet what its ultimate size will be. The study, "Green Power Marketing in Retail Competition: An Early Assessment," was authored by Ryan Wiser of Lawrence Berkeley National Laboratory (LBL) and Jeff Fang, Kevin Porter, and Ashley Houston of the National Renewable Energy Laboratory (NREL). It examines experience to date with green marketing programs, both in early "pilot" programs established by utilities in a few states prior to full retail competition and in the states where the utility market has been opened to competition.

Among the study's findings:

• There are distinct limits to what can be learned from pilot programmes: "Pilots are typically small, of limited duration, and are sometimes restricted to customer classes . . . [Also,] many of the pilots have not been designed to mimic full retail competition, and therefore offer an artificial environment in which to test market response." Customer interest in green products was fairly strong in New Hampshire and Massachusetts pilot programs, but relatively few customers actually switched to green suppliers.
• Green power markets have developed in all four states, California, Massachusetts, Pennsylvania, and Rhode Island, which are currently open to full retail competition: "Green power marketing is occurring in each market . . . and a total of 20 green power products have been launched. All of these products have been differentiated, based on their renewables content, and 60% of the products include commitments to incorporate some new renewables over time. While concerns remain over the environmental and resource content of some products, overall quality is superior to that seen in the pilot programs."
• The success of green power products is likely to be strongly influenced by the specific rules that govern competition in a given state. In particular, the default price for service that consumers receive if they make no choice of suppliers is important.
• Disclosure is important: "Research shows that consumers often do not link their electricity use with environmental harm, generally have inaccurate ideas about the resources used to generate their electricity, and wonder if they will get what they pay for if they buy green power. Consumers also have difficulty evaluating the barrage of advertising and marketing material associated with customer choice."
• Given these factors, disclosure of information on the resource mix used in each product and its environmental impacts can play an essential role.
• Evaluating ultimate green market demand is difficult. While fairly large numbers of those who switch suppliers are picking green products, the overall percentage of switchers is still quite low.

The study notes that, "experience in other markets suggests that it may take 10 years or more for green power to make significant inroads into the market, if ever. In fact, even the green marketers do not anticipate immediate results, but rather expect to garner 0.5%-2% of the residential market within one year after retail competition is allowed, and 4%-10% after five years."

For further information, contact Wiser by phone at (510)

486-5474 or by e-mail at rwiser@socrates.berkeley.edu

Recycled from the American Wind Energy Association’s WIND ENERGY WEEKLY, as is the info in the bottom two news items on the left. WIND ENERGY WEEKLY is published, 50 times per year. Subscription rate: $595 per year. @Copyright American Wind Energy Association. Individual articles may be retransmitted electronically or reprinted with attribution to the AWEA. All other rights reserved. ISSN 0747-5500. windmail@awea.org   or contact AWEA, 122 C Street, 4th Floor, Washington, DC 20001.

The fifth meeting of the Conference of Parties was held in Bonn in late Oct-early November. The aim of COP -5 was to make as much progress as possible towards resolving technical issues so as to lay the foundations for COP-6 which will hopefully take final decisions on the Kyoto mechanisms, such as the clean development mechanism and emission trading, and on a tough compliance regime. Clearly compliance really is a key issue for the whole exercise- its no good having targets or permits if emission levels are not monitored and emission trading infringements penalised.

John Prescott said"We are in the middle of complex technical negotiations. The key priorities at this stage are to develop workable and environmentally sound rules for the Kyoto mechanisms in order to allow all Parties to fulfill their commitments to cut green house gas emissions".

But opposition to agreement still remains strong. especially in the USA, where President Clinton complained that Congress was jeopardising U.S. efforts to fight global warming by opposing spending on Climate Change related projects and policies.

For its part the UK has continued to stress the urgency of the issue- with the publication by the DETR of a new report by Met Office Hadley Centre. It predicted that, by the 2080s, global temperatures will rise by about 3°C and claims that failure to act now could mean the Amazon rainforest is devastated; large sections of the global community go short of food and water; many heavily populated low-lying coastal areas are flooded and deadly insect-borne diseases such as malaria spread across the world.

However, if atmospheric carbon dioxide was stabilised at 550ppm (still twice pre-industrial levels) the worst impacts of climate change can be avoided or delayed by up to 100 years. This would provide‘valuable time for our society and the environment to adapt’. Environment Minister Michael Meacher said 'if we don't act now, many parts of the world will suffer severely within the lifetime of people alive today".

Nevertheless progress at COP-5 was slow. The German Chancellor, opening the conference, had called for a 2002 deadline for the full adoption of the Kyoto protocol- this date co-inciding with the UN’s Rio+10 World Environment Conference, but as the COP-5 sessions got going it was clear that some countries preferred stalling to action, with, according to CAN, the Climate Action Network, the Saudi‘s being particularly obstructive.

See CAN’s excellent daily coverage in ECO, archived at http://www.igc.apc.org/climate/Eco.html

The Kyoto Protocol to the UN Framework Convention on Climate Change was agreed in Dec. 1997. So far it has been signed by 84 countries and ratified by 12. The Protocol will enter into force after it has been ratified by at least 55 Parties, including developed countries accounting for at least 55% of the total 1990 carbon dioxide emissions from the industrialised group. The main provisions of the Kyoto Protocol are:

- Developed countries committed to reduce their combined greenhouse gas emissions by an average of just over 5% compared to 1990 levels by the period 2008-2012.

- The EU agreed to reduce by 8%. The EU subsequently agree to share the target internally- the UK agreed to reduce by 12.5 %.

- three "Kyoto mechanisms" were proposed - international emissions trading, joint implementation and the clean development mechanism - to allow countries to meet part of their emissions reduction targets through actions to reduce emissions abroad.

The UK Government lists its achievement since Kyoto as follows: our comments are in brackets

• a review of renewables has set a target to provide 10% of UK electricity from renewables ‘as soon as possible’ but hopefully by 2010 (5/10, still no details)
• a commitment to set a new and higher target for CHP, likely to be 10GWe by 2010 (8/10, could be more!)
• the Utility Reform Bill will include powers for Government to set energy efficiency standards of performance, requiring the gas and electricity companies to encourage and assist customers to use less energy. Meanwhile, it is hoped that the energy regulator, using the powers under the existing legislation, will continue the successful electricity EESOP scheme and extend it to help gas consumers (OK, but efficiency is still the poor relation)
• the Integrated Transport Policy is a framework for a whole range of measures which will deliver a better quality transport system with lower CO2 emissions ( not much progress yet )
• changes announced to transport taxation will cut emissions - the fuel duty escalator was increased in 1997 to 6%; a new vehicle excise duty system benefits those driving smaller, more efficient cars; as well as changes to the company car tax system to remove incentives for people to drive more and encourage people to buy more fuel efficient cars (lots of backlash from Truckers!)
• a radically improved fuel poverty programme should ensure that old people, the disabled, children and people with health difficulties have properly insulated and heated homes and will have the additional benefit of also saving carbon emissions (good)
• a new climate change levy will encourage businesses to use energy more efficiently. At the same time, the Government has recognised the legitimate concerns of energy intensive industries and offered the prospect of a significantly lower rate of levy to those sectors which enter into agreements to improve energy efficiency and reduce emissions (OK , but why not a carbon levy?)
• the Government is working with business to develop a domestic emissions trading scheme in advance of the launch of the international system to allow business to reduce carbon emissions more cost-effectively. It will give UK firms valuable experience in trading before the international system goes live, and it will give the City of London an opportunity to become a global centre for carbon trading. (where there’s muck....)

Wind energy could provide 10 % of the world's electricity requirements by 2020, create 1.7 million jobs and reduce global carbon dioxide emissions by more than 10 billion tonnes, according to the findings of a new report commissioned by Greenpeace, the European Wind Energy Association and the Forum for Energy and Development.

The report, Wind Force 10: A Blueprint To Achieve 10% of the World's Electricity from Wind Power by 2020, demonstrates that a total of 1.2 million Megawatts of wind power can be installed worldwide by 2020, producing more than the total electricity consumption in Europe today. One fifth of this total capacity would be installed in Europe, creating 250,000 jobs. 1.2 million MW represents one fifth of 1998 world wide electricity consumption.

"The signing of the Kyoto Protocol signalled to the energy industry the beginning of the phaseout of fossil fuels," said Greenpeaces Renewable Energy Campaigner, Corin Millais at the launch of the report at the FT’s Conference on Renewables. "Governments must now act to establish the regulatory framework and set legally binding targets for renewables. There's no excuse for inaction because wind power is an affordable, feasible, mainstream global energy force that is able to substitute for conventional fuels".

Last year wind power was the fastest growing energy source in the world, with an average 40.2% growth worldwide between 1994-1998 and 10,000 MW of installed capacity in more than 50 countries led by Denmark, Germany, Spain. Despite supplying nearly 10 per cent of Denmark's electricity needs, wind power's contribution worldwide remains small at 0.15%. "In some countries wind energy growth rates exceed the expansion of the mobile phone market" said Klaus Rave, EWEA President. "With the political will to create the right regulatory framework the wind industry can become a mainstream power source creating investment, jobs and providing a cost effective solution to the climate change problem"

"Today we are already approaching 10 % of wind power in Denmark and the official target for wind in Denmark is 50 % of the electricity consumption by 2030 including pioneering the development of offshore wind," Danish Forum for Energy and Development Chairman, Hans Bjerregard, said. "This report proves that we can replicate the success of the Danish model if governments will step up the promotion of renewable energies."

The windy northeastern Quebec is now producing renewable electricity for the province. Considered the largest wind facility in Canada, the Nordais Wind Farm, on Gaspe Peninsula on the Gulf of St. Lawrence has 133 turbines operating, able to produce 100 megawatts.

Installations of new wind projects and repowering of old ones should total more than 1,000 MW in the U.S. over the next year according to the American Wind Energy Association, amounting to investment of more than $1 bn.

That will outdo the heady days of the wind rush in California in the 1980's, which at its peak saw some 400 MW installed in 1985 prior to the expiration of the federal energy investment tax credit for wind.

As noted in Renew 122, the new wind rush is driven in part by the impending expiration of the wind production tax credit, but also by growing consumer demand for green power and wind energy's steadily improving economics.

The new surge in installed capacity reflects growing acceptance of wind across the country. In 1985, nearly all of the turbines installed went to a single state, California, but 12 states in the Midwest and West are seeing new wind plants this year.

5. Wave Power:

Greenpeace has been pushing wave energy strongly recently, and organised a one day meeting in Edinburgh to launch an independent ‘Commission for Wave Power in Scotland’ with members ranging from Members of the Scottish Parliament (MSP’s), electricity suppliers and wave energy experts, to the Scottish TUC. The Commission will work with industry and put pressure on the new Scottish Parliament and the Scottish Executive.

As Greenpeace put it ‘Scotland can seize the industrial opportunities offered by wave power. For many years Scottish academics and entrepreneurs have led the world in wavepower, but other countries that have given wave power greater backing are now on the verge of overtaking. Scotland's wave resource is second to none, offering vast amounts of power; furthermore, the country's heavy industrial strengths, including offshore oil and shipbuilding, are exactly what are needed to build wave power machines. The question is, how Scotland can achieve first-mover advantage in an industry forecast to be worth £500 billion?’

The event was hosted by George Lyon, MSP whose constituency includes the island of Islay where the UK's first commercial-scale wave machine is currently being installed. Speaking in support of the Commission, Tracey White from the Scottish Trades Union Congress, commented that "Wave power requires just the skills and manufacturing facilities that Scotland's offshore, shipbuilding and heavy engineering industries possess in abundance. If the Commission for Wave Power can get things started now, Scotland stands a chance of achieving first-mover advantage in the wave power market just as Denmark did in the 1980's with the now-burgeoning wind power market." She is its first chair.

Allan Thomson, Managing Director of Wavegen whose 'Limpet' machine is being installed on Islay, commented, "Wavegen will soon be producing hundreds of machines a year. Over the next 20 years, the British wave power market alone will be worth £20 billion. At the moment we're world leaders in wave power. But the Danes, Americans, Japanese and French are all starting to pile in. If we don't move swiftly, we'll be overtaken. As with wind energy, we'll be importing the technology and exporting jobs."

Also involved is Richard Yemm, Director of Ocean Power Delivery whose 'Pelamis' (Swimming Snake) will be installed off Islay in 2002- after tests on prototype in 2001.

Greenpeace has been assisting in the installation of the two new Islay wave machines and collaborating with Scottish wave power companies to build political support for Scotland's potential to be a world leader in the technology. The new "sea snake" animation on Greenpeace Digital http://www.greenpeace.org.uk provides an interactive introduction to what wave power means for the world and to Scotland.

The amount of biodegradable material sent to municipal landfill sites could be cut by a third if new proposal from the DETR are accepted. The idea comes in a DETR consultation paper, and is in line with the EC’s Landfill Directive. The consultation paper actually goes even further and offers the option of banning biodegradable material entirely from land fill sites. Landfill is unpopular given the increasing shortage of sites and the problems with toxic leachates, occasional fires and methane emissions.

But the proposed new policy seems a little problematic. True, landfill sites can emit methane as the biomass decays, and that’s a powerful greenhouse gas. But at least some of this can be collected as a valuable fuel- there are many landfill gas projects supported under the NFFO.

All things being equal, most environmentalists would prefer the emphasis in waste management systems to be on source reduction and recycling.

However, composting apart, most of these activities don’t involve biomass, but are more concerned with reducing packaging or retrieving materials. And although attempts are being made to increase the amounts of material recycled and composted, there will still be major flows of waste to deal with. In which case, all the new landfill policy will achieve is the reduction in the productivity of landfill gas plants and an expansion of waste incineration activities. That too can produce useful energy, but there are also emissions risk, for example due to the combustion of plastics. If we have to ban items from waste flows, it ought to be plastics from incineration plants- if plastics can’t be reclaimed and have to go somewhere, they should be required to go to landfill!

Shell Solar, the renewable energy wing of Shell International, has supplied a total of 10, 000 solar panels for a large solar scheme developed by the Dutch energy distribution company Remu in the area of Amersfoort. It consists of 69 houses, two primary schools, a sports centre and a number of weirs controlling water levels.

with solar PV panels mounted on the roof of each house- providing a saving of nearly one quarter on electricity and hot water needs. In the Netherlands, electricity meters can run in both direction allowing any surplus electricity to be exported back to the grid. The houses are particularly energy efficient with optimal insulation and a heat recovery ventilation system. The Head of Shell Solar, Willem-Jan van Wijk, described the scheme as "the most exciting development in the application of solar power in residential properties in northern Europe". "It is a visible demonstration," he continued "of how solar power can be used to meet energy needs across a wide range of buildings." Shell International http://www.shell.com   0171 934 1234.

A major study by Cogen Europe and ETSU for the EU Commission compares the situation in the UK, Denmark and France, and finds that despite the environmental, economic and technical advantages Combined Heat and Power (CHP) ‘co-generation’ systems are still systematically discriminated against by a wide range of rules within the UK electricity market. The report, Obstacles to the Development of Decentralised Cogeneration notes that in the UK:

• prices offered to CHP plant for the electricity they supply to the wholesale market are low; yet prices CHP operators are forced to pay for back-up supplies are very high;
• charges for use of the distribution system imposed on CHP operators do not reflect the actual cost incurred and are often over-stated - hence restricting the ability of a CHP user to economically supply energy to its other sites and facilities;
• CHP faces inconsistent costing and procedures for connections to electricity and gas networks, ranging from 10 – 15% of total project costs;
• there is minimal recognition of the benefits of embedded generation for system security and network operation.

The report notes that Cogeneration is typically of ‘decentralised’ energy production, and is cost-effective and climate-friendly.

It adds ‘In order to achieve optimum environmental savings, cogeneration units must be sized according to the heat demand. This usually leads to the production of surplus electricity that must be exported to the grid.

The European Parliament has renewed long-standing calls for the EU to provide more money for energy efficiency and renewable energy support via the Save II energy efficiency programme, and the Altener renewable energy programme, each running from 1998-2002. Increases were sought in the budget of 68.4m euros for Save II, and 81.1m euros for Altener. Meanwhile the old Joule and Thermie energy research and demonstration project support programmes have been combined into a new Energie programme - part of the EU's overall Fifth Framework Programme (FP5) covering research, technology, development and demonstration. It includes support for cleaner energy systems, including renewables (Budget 479 million euros) and for the economic and efficient use of energy for a cleaner Europe (Budget 547 million euros).

Meanwhile though, there seem to be problems with the new version of the Directive on Renewable Energy. The European Commission had withdrawn an earlier version, which had raised hackles by appearing to back the idea that all EU members renewable support schemes should converge on the competitive model (like the NFFO rather than the REFIT subsidy approach adopted in Germany), but it had at least won some support by proposing to include a commitment to require EU countries to generate at least 5% of their electricity from renewable sources by 2005. But it now seems that the revised version will simply require member states to set national targets for the share of renewable electricity without specifying what these should be. The World Wide Fund for Nature (WWF) and Climate Network Europe have come out against the revision which they say ‘would severely undermine the environmental effectiveness of the draft directive’.

10. Nuclear News

The reprocessing of used nuclear fuel rods creates a large amount of low and intermediate level nuclear waste- all in order to extract the small amount of plutonium that is contained in the ‘spent’ uranium fuel. It’s a messy and expensive business, only conceivably justified if there is some use for the plutonium. However, with the Fast Breeder Reactor off the agenda and our stocks of nuclear weapons being surplus to requirements, there is now a growing stash of plutonium with nowhere to go. As a last ditch, British Nuclear Fuels Ltd is trying to sell it off mixed in with uranium oxide as ‘Mixed Oxide’ fuel (MOX). The trouble is, not many people want it. There is plenty of conventional uranium fuel for the worlds diminishing band of nuclear reactors, and MOX is much more expensive. And the prospects for finding customers for MOX were not improved by the revelation last year that BNFL operatives at Sellafield have been falsifying records on quality control checks for MOX being readied for shipment to its showcase customer, Japan. Finally quite apart from the economic problems, MOX is also dangerous stuff to ship around, not least since, evidently, it could be used to make weapons.

So, one way or another, the justification for reprocessing is looking very weak. And that’s leaving aside the fact that the waste outputs are becoming a major headache. There is still no agreed plan for ultimate disposal. And with BNFL being part privatised, the economics of the whole exercise are being looked at anew.

Not surprisingly therefore the heretical idea of giving up on reprocessing is now at long last being taken a bit more seriously in the UK, as it already has in Germany. The alternative is simple- just dry store the fuel rods (and, longer term one might add, close down nuclear power plants so that no more spent fuel rods are produced).

Reviewing the situation, the Observer (1/8/99) concluded that BNFL nowadays only saw reprocessing as part of its operation - it will, BNFL suggested, soon be only 25% of its turnover. Instead it’s diversifying into other activities - including decommissioning, but also of course into running the elderly MAGNOX reactors.

Not a very convincing position you might think. The only other hope left to the nuclear lobby is that nuclear power will be seen as the answer to global warming. But that too is looking increasingly unlikely. As the Climate Action Network pointed out in its special briefing on Nuclear Power and Climate Change, to have a significant impact would require the construction of very large numbers on new reactor- and it quotes an Uranium Institute estimate of a nuclear capacity of 12000GW by 2050. That would involve 800-1000 new reactors, compared to the 430 or so currently in use (all of which will have shut by then). Its hard to imagine a programme on that scale, and perhaps more importantly, to be credible, the nuclear industry would have to convince policy makers that it could find answers to the problem of storing radioactive waste. Otherwise it would be seeking to deal with one environmental problem by creating arguable an even worse one for future generations.

Last years serious accident at the Tokaimura nuclear fuel fabrication plant near Tokyo, following on as it did from a series of smaller nuclear accidents in Japan, may well further destabilise the Japanese nuclear industry- which is still trying to push ahead with a fast breeder programme, despite this having been abandoned just about everywhere else in the world. Leaving aside the safety aspect, the costs looks prohibitive. Indeed it has been argued that nuclear costs are now at a level that makes offshore wind look more competitive.

As we noted in Renew 122 (Technology), the US based Institute for Energy and Environment Research (IEER) has calculated that offshore wind would be cheaper than Japan’s Mixed Oxide Fuel Programme, and that up to 12GW of offshore wind capacity could be installed around Japan, by 2010, generating around 39TWh pa- the same as hoped for from the 17 reactor MOX programme.

The IEER notes that ‘A preliminary study estimated the offshore wind energy potential for a range of scenarios 1 to 5 kilometers from the coast to be 9 to 28% of electricity generation in 1996. Wind resources up to 40 kilometers from shore are currently considered economically feasible according to studies in Denmark, with the key factor being water depth. If equivalent areas far from shore can be developed, the Japanese offshore wind resource would be far larger.’

The report notes that it would obviously be important to take environmental impacts (eg on marine life) into account, but points out that the impacts of the nuclear cycle would be much larger- certainly they would be more widespread and longer lived.

The report's analysis shows that costs of electricity from MOX in present-day commercial nuclear reactors are about 40% greater than offshore wind electricity. In the long-term, costs of electricity from a breeder reactor system are seen as ‘at least twice as expensive as offshore wind electricity, based on the present state of development of the two technologies’. Wind energy costs are expected to decline, but no such trend is evident in breeder reactor costs.

Dr. Arjun Makhijani, president of IEER, commented. "Japan has spent huge sums of money on developing plutonium as an energy source - $11 billion on the Rokassho reprocessing plant alone - in the name of energy self-sufficiency. But development of wind power is far better economically, environmentally, and for promoting non-proliferation."

Renew is the bi-monthly 30 plus page newsletter of NATTA, the Network for Alternative Technology and Technology Assessment. NATTA members gets Renew free. NATTA membership cost £18 pa (waged) £12pa (unwaged), £6 pa airmail supplement.

13. NATTA Conference

The development of wind farms in the UK has slowed to a crawl- due to local opposition, and yet wind power, and the other renewables, such as energy crops, could provide the basis for local economic renewal in many rural areas.

Community ownership whether directly by co-ops or more indirectly by local investment, is often seen as the best way forward for wind- converting opposition to support and turning a problem into a solution. And yet so far there are few locally owned schemes. Locally owned enterprises could also play a key role in producing Energy Crops to feed to local power plants.

This conference will look at the case for local ownership- which, in the case of wind, some observers like Dave Toke believe should be the only type of development now allowed. ( See his new NATTA Report 'Community Ownership: the only way ahead for UK wind?', £3 from NATTA , £2 NATTA members)

Toke will be on hand to present his views as will representatives from ECOTEC, the AAT community wind project in Wales and the Fenland wind project.

There will be workshop sessions to allow participants to discuss the changes that would be needed in terms of financial support, planning, and corporate/ co-operative structures to allow community ownership to prosper in the UK, as it has elsewhere.

There will also be opportunities to discuss the local development potential of other renewables in the urban environment.

The conference will be on Saturday April 8th 2000 at Parsifal College (OU Regional Centre) 527 Finchley Road, London NW3 10.30am -5pm.

Buses (or walk) from Swiss Cottage Tube

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