Renew On Line 35

Extracts f rom the news section of NATTA's journal Renew,
issue 135, Jan – Feb 2002

The full 32 (plus) page journal can be obtained on subscription ( details below). The extracts here only represent about 25% of it.

This material can be freely used as long as it is not for commercial purposes and full credit is given to its source.

The views expressed should not be taken to necessarily reflect the views of all NATTA members, EERU or the Open University.

Contents

• 1. PIU - so far, so good
• 2. Overview of PIU report
• 3. UK still low on EU League Table
• 4. RO Delayed
• 5. Wind Works for Farmers: NIMBY Glen
• 6. New Wave Project
• 7. NETA v’s Renewables and CHP
• 8. Green Juice ?
• 9. Foresight on Energy
• 10. World Renewables round up
• 11. Renewables could save US $ 50bn
• 12. China cuts CO2
• 13. COP 7 tries to deliver
• 14.Nuclear Roundup
• 15. In the Rest of Renew 135
• 16. Renew ands NATTA subscription details

They are much less enthusiastic about nuclear. They suggest current designs might have generation costs of 5-6.5p/kWh, athough future designs might reduce this to 3-4.5p by 2020. Overall one early draft concluded that, ‘with continued support and development, renewables may provide the most cost effective options’ in terms of carbon emissions reduction, and they note that ‘in addition, they have less environmental risks in other ways’. But to achieve significant carbon savings, it said there would also have to major changes in others sectors, such as transport.

‘Even with a major shift to renewables this alone would not be able to plug the coming energy gap’. So said the Minister of State for Scotland, George Foulkes, who is on the PIU Advisory Committee. In a speech last August he argued that, in addition to applying best practices in energy efficiency and clean fuel technology and continuing with technological innovation, with fuel cells and hydrogen being particularly important new technologies, we also had to ‘consider carefully the role of the nuclear industry - including possible new build. Government policy is that existing stations should continue to operate so long as it is economic, safe and environmentally acceptable for them to do so. In the longer term, new build could represent a carbon free source of baseload electricity, but the issues of public acceptability and regulatory risk need to be resolved as well as the economics of new build. Crucial to both is the question of long-term waste management’.

In its PIU submission, the Royal Academy of Engineering, warned that Britain would have to import between 50-90% of its gas by 2020 and could be over-reliant on oil and gas imports from volatile former Soviet states and the Middle East. It called for increased government intervention- via increased subsidies, regulation and legislation to encourage the development of methane gas from coal seams and nuclear and renewable power generation. "Government policy must ensure that long-term security of a sustainable supply takes precedence, if necessary, over shareholder interests."

The Sunday Herald (Nov 4) was probably nearer the mark. It reported that the PIU was edging towards non nuclear conclusions, but ‘there was still everything to play for’.

• - £25m for offshore wind
• - £15m to help farmers and foresters establish energy crops
• - £10m dedicated to innovative PV schemes
• - £10m for PV and other technologies that can be utilised directly on homes, businesses and community buildings.
• - £10m for fundamental research on the next generation of renewable energy technologies.

Backing the proposals, the Prime Minister said: "I am determined that we will reach our target of meeting 10% of our electricity requirements from renewable sources by 2010. This money will help us reach that target by encouraging the delivery of capacity on the ground. And I also welcome the funding for solar, wave and tidal technologies, and on blue skies research, which have such a vital role to play in helping us meet our medium and long term renewable energy needs".

According to the Cabinet Office, ‘the PIU team has made detailed spending recommendations in order to maximise the gains from the extra money and where possible, funds will be injected into existing schemes to minimise additional complexity and bureaucracy, getting money directly and quickly to businesses and the community’.

On the £25m for offshore wind, it noted that ‘the UK has huge offshore resources and wind energy is now poised for the move offshore. But the 'first movers' will need carefully targeted support to take them through the challenging early stages’.

On the £20m allocated for solar, and ‘other technologies that can be utilised directly on homes and businesses’, it noted that ‘£10 m will go to increased support for innovative PV installations and £10m to support solar, biomass heat and other renewable community projects’. The £15.5m to help farmers and foresters establish energy crops, will it says ‘help develop heat and electricity markets and build up the necessary infrastructure for energy crops and forest wood fuel’. In parallel, there was £18m for development and demonstration of advanced energy crop technologies for the production of heat and electricity, e.g. CHP.

The £5m for demonstration and testing of wave and tidal technologies, was for an area ‘where UK research leads the world, but where more experience is needed of full-scale projects in the open seas’. And looking further ahead, there was ‘£10 million for fundamental research on the next generation of renewable technologies, and for associated technologies such as energy storage’, plus £4 million ‘for advanced metering and control technologies so that electricity grids can best harvest PV and other small-scale technologies’.

Finally there would be £2.5 million ‘to provide information and support to planners and local decision-makers, and land use planning purposes generally’.

In its report, ‘Building for the Future of the Environment’, the PIU say that its aim was to provide ‘an extra boost to renewables by helping to get offshore wind off the ground; developing heat and electricity markets for energy crops, demonstrating new technologies, and building up the necessary infrastructure; doubling the support available under the Government’s intended major demonstration of innovative solar photovoltaics; encouraging and promoting smaller scale domestic/community based renewable energy; and facilitating the connection of renewable sources to the UK’s electricity network’.

In addition it would ‘take forward the development of wave and tidal stream technologies, and almost double the budget for fundamental research that will develop the next generation of renewables’.

The £10m Blue Skies research programme is to be welcomed - as the PIU say, the money will be spent on ‘fundamental research into a range of technologies which could include innovative approaches to solar PV, wave and tidal power, storage and the capture, storage and transmission of hydrogen’.

The PIU add ‘Criteria for allocation of this funding will be drawn up by DTI in collaboration with the EPSRC and other Research Councils, but will recognise the uncertainties associated with "blue skies" research, and not be overly prescriptive. At the same time, research programmes will be co-ordinated as closely as possible to maximise potential synergies and to avoid duplication of effort’.

PIU: OXERA Scenarios

In order to provide a context for deciding about the allocations, the PIU commissioned OXERA to carry out an analysis of the likely entry of renewable generation between 2002 and 2020 in response to the Renewables Obligations. OXERA based their work on a model designed to show the potential market penetration of a number of technologies following the introduction of ROCs- the Renewable Obligation Certificates given to companies who meet the obligation and traded between those who had excess and those who could not meet the Obligation.

The OXERA work suggests that achieving the 10% 2010 target is, in principle, possible without any additional financial support, although, the PIU notes, there could be problems, most obviously due to NETA, but also due to planning delays. The PIU comments that ‘the build rate for all renewable technologies- especially onshore and offshore wind, which are likely to be the main contributors to 2010- will need to increase by about two orders of magnitude’. However, although ‘additional capital grants will help to deliver an improvement’, the PIU fears that ‘unless further action is taken to make renewable energy schemes more acceptable to local communities, and to facilitate the process of obtaining planning permission (in particular for onshore wind) and connection to distribution networks, the required build-rates are unlikely to be achieved’.

In particular the PIU note that ‘The larger wind farms (above 1MW) awarded contracts under NFFO have encountered the most severe problems in gaining planning permission and only 41% of projects that have applied for planning permission under the later rounds of NFFO (orders 3 - 5) have been successful. Biomass projects have also encountered a number of difficulties gaining planning permission’.

It mentions the various revisions underway to the planning system, but notes that, in the end it comes down to public attitudes. ‘Public opinion surveys show that the majority of the UK’s population support the development of renewable energy. Moreover, there is considerable evidence that local populations tend to become more favourably disposed towards local renewable energy power plants once they are built. This, however, does not translate into a "cultural" perception that Britain is supportive of renewables, as would be perceived in (for example) Denmark, Spain or Germany. And this support for renewables at a very generalised level has not prevented opposition to individual projects at the local level.’

The PIU also sees some potential economic problems ahead, if for example, the price of ROCs turn out to be lower than expected, due perhaps to the import of cheap green power through the inter-connector, or through links being made to wider emissions trading schemes or to a European-wide ROC trading scheme.

Looking further ahead, to 2020, they say that the value of ROCs could become even more of a problem unless the overall RO capacity target was expanded. Fortunately it thinks that a target of 20% by 2020 is credible. In particular, in addition to a major continuing contribution from offshore wind, it suggests that energy crops could make a contribution over the short to medium term- up to 2600MW by 2020, in one scenario. However, it adds ‘for this to occur, considerable cost reductions will need to have been achieved and the necessary planting schemes put in place over the period to 2010. If these requirements are to be delivered, Government subsidy and facilitation of contracts between growers and energy companies is likely to be required’.

The PIU also point out that ‘penetration levels of much above 20% from intermittent generation sources (i.e. wind and solar) and to a lesser degree hydro (which has a higher level of prediction capability) could start to create additional issues for management of the overall electricity system- initially additional costs. Though of limited concern at present, this suggests that in the longer term, effort should be devoted to technologies that maximise the value of intermittent sources- in particular advanced network (and demand) management systems, and energy storage’.

It says that these issues will be addressed in more detail in the PIU review of energy policy.

Looking to the longer-term, to 2050, the PIU note that OXERA’s quantitative scenario methodology is no longer viable and instead OXERA made use of a ‘learning curves’ approach coupled with general engineering assessments, as developed by the PIU and by Imperial College. Within this context, it says that ‘the hierarchy of technologies is wave and tidal stream, followed by offshore wind, then energy crops and PV’.

Essentially what they are saying is that, as far as the potential for learning and technological development is concerned wave/tidal and PV offer the greatest opportunities. As a relatively mature technology, onshore wind offers the lowest opportunities for further learning. This assessment must however be modified by an judgement of the potential for the technology to be used in the UK. This, the PIU says, tends to work against PV, and in favour of wave/tidal and offshore wind, where the UK’s potential resource is huge. In addition note has to be taken of the likelihood of eventual commercial viability. The risk of economic failure is seen as greatest for wave/tidal, which is the least developed of the technologies. However, the PIU conclude ‘the strong possibilities for learning and for use in the UK mean that wave and tidal remains at the top of the OXERA hierarchy’.

Although the OXERA analysis does not provide assessments of the export potential of the various technologies, the PIU say that ‘what it does suggest is that, even if the total UK market for a particular renewable energy source appears to be limited, there may be merit in developing a UK-based industry if world markets are likely to be large. The technology for which this argument is most relevant would appear to be PV’.

PIU: Rationale for Funding Plan

Offshore wind is seen as a key technology, but the PIU notes that the economics are still subject to many uncertainties. ‘Although it could become commercially viable by 2010 under the RO, this will be dependent on projects getting off the ground early in the decade’ .

In particular, the PIU feel that winning investor confidence will be difficult due to uncertainties relating to, for example, the NETA imbalance charges, the value of ROCs; and planning process and public perceptions. This, the PIU says, means there is a strong case for additional capital grant support. ‘If one assumes that the 18 developments (of a maximum 30 turbines) which pre-qualified in the Crown Estates licensing round use the currently available 2MW turbines, this would represent 1080MW of capacity. Existing funding should be able to support at least 300MW (at the maximum rate of approximately 0.6p/kW). Up to an additional £25m is made available to fund offshore wind installations. This should cover at least another 150MW, meaning that approaching half of the licensed capacity (or about 0.5% of electricity (or 5% of the Governments target) could be guaranteed early progress’.

The PIU feel that ‘support for a minimum of 450MW will be enough to reduce the risk element of developing offshore wind, and to generate sufficient early momentum for offshore wind to play its full part in meeting the 2010 target’. But this should be ‘kept under review’.

Energy Crops

The other main component in the mix is energy crops, which the PIU say could also become a significant renewable resource over the next few years, although, as noted earlier, it also sees major barriers related to the establishment of infrastructure and to the contractual relationships linking the growers to the energy providers. On the generation side, the PIU note that some existing funding is available for electricity generation from energy crops through the New Opportunities Fund, which the additional funding from the £100M are designed to complement.

It goes on ‘One area for funding will be near-commercial electricity schemes, particularly those classified as CHP. Up to approximately £10m will be allocated to support near commercial energy crop and forestry woodfuel schemes. A further criterion is that preference should be given to schemes which can be classified as good-quality Combined Heat and Power (CHP). This should allow the development of around 10 MW of steam combustion plant or (0.2% of the 10% target). It is expected that these schemes will be a range of sizes, and no prescription should be given for this aspect. This support for the nearer term technologies will help to establish the growing of energy crops in the UK’.

Although it says that good-quality CHP has the benefit of much greater efficiency (70% or more) than electricity generators using energy crops (30-35%), the PIU recognises that ‘there may be times when CHP is inappropriate (e.g. when no use for a heat-load can be found), and projects in these circumstances should not be ineligible’.

This funding will be administered by DTI, with input from DEFRA and the devolved administrations. The PIU suggest that ‘one possibility for maximising the value of the funding would be to make the establishment of contractual relationships with growers a pre-requisite for receiving support’.

Clearly, the PIU see the development of infrastructure that links growers and energy providers as vital. Although it recognises that DEFRA is making available funding for planting grants, to sit alongside other funding for energy crop generators,‘a potential gap relates to the infrastructure required to harvest, store and supply the energy crops once they have been grown’. In order to meet this gap,‘up to £3.5m will be made available specifically to help fund market or physical (harvesting, storage and supply) infrastructure. This fund may be available for producer groups, in particular those non-SRC schemes not covered by the existing DEFRA Energy Crops Scheme. The funding should be administered by DEFRA directly alongside this scheme, in order to ensure effective allocation. However, the amount available for infrastructure should be ring-fenced’.

Finally, the PIU note that ‘another aspect to energy crops not currently funded is the use of energy crops for industrial heat applications. In the same way as early introduction of energy crop CHP could help establish the energy crops industry in the UK, industrial heat from energy crops would seem to provide the potential for an easy win. This is already supported in part through £3m from the NOF but receives no other direct support, and is not covered by the Renewables Obligation. On this basis, and in view of the wider benefits, up to £2m will be made available for industrial heat from energy crops, to be administered directly alongside the existing NOF money.’

This funding complements the community and household fund (see below), and could, the PIU suggest, ‘support a further 10 MW of heat-equivalent at a maximum 50% subsidy, in units of 500kW or more. This is only equivalent to less than 1% of the 10% target but is intended to pave the way for a much more substantial contribution between 2010 and 2020’.

Community Projects

The PIU recognises that it is vital to find ways to try to overcome the barriers imposed by local attitudes, and planning processes. It argues that ‘there is some concern that the majority of renewable energy projects are seen as relatively large-scale and/or promoted by remote large companies and somewhat inaccessible to households and individuals’ and claims that ‘initiatives on the planning front will not help get renewable energy off the ground unless the public extends its general support for renewable energy to support for renewable energy in local situations. This makes community engagement crucial, so that more people are either individually involved in renewable energy schemes or able to see them’.

It goes on, ‘One means of overcoming these concerns will be to make funding available specifically for renewable energy schemes that engage local communities or individual households’. It adds, somewhat surprisingly, that ‘we have made good progress in developing community schemes in the UK and currently there is a small amount of funding available through both the Countryside Agency’s Community Renewables Scheme and the New Opportunities Fund Green Spaces and Sustainable Communities Scheme’ .

Well maybe, but not yet much to show for it compared say to Denmark. Certainly, as the PIU go on, ‘more funding will have a beneficial impact in this area’. To that end ‘up to £10m will therefore be allocated to a programme spread over three years, for which bids are invited on behalf of schemes with a strong local community or household interest. The scheme will be administered by DTI, working closely with the devolved administrations’.

Again, perhaps a little tendatiously, given the low level of deployment so far, it adds ‘Community schemes have proved very successful in allowing local residents to directly gain from local developments and feel they have some ownership of them. They have an important role in familiarising individuals with renewable energy technologies and it is expected that these schemes will then allow a number of larger schemes an easier path to gaining planning permission’. Lets hope AAT (see Groups) will benefit. They just had their bid to the DTI for funding turned down!

The PIU conclude ‘no restrictions will be placed on the types of technology employed, but eligibility would be restricted to renewables deployed at the level of households, or buildings/land owned by non-profit making organisations. Care would need to be taken to ensure that this scheme does not duplicate existing programmes’.

An example might be a "solar street", involving the fitting of solar panels to the roof of every house in a street; incorporating solar water heating into the design of new civic buildings; installing a wind turbine to provide electricity to a school or hospital; biomass heat projects for schools or farms.

On the planning side, it is recommended that up to £2.5m be allocated to the administration of a series of regional road-shows, to which regional and local authorities would be invited, alongside those expecting to make planning applications. Other facilitation-type-schemes could also seek funding through this fund. The purpose of these seminars ‘would be to share information and best practice with respect to the treatment of renewable energy schemes’ The PIU say the DTI should administer this scheme.

Better network connection was also seen as vital, to aid local schemes. The PIU say a useful approach will be ‘to demonstrate the new technologies that can help make renewables more attractive’. Up to £4m will therefore be placed into a fund, for which bids will be invited from suppliers, brokers and Distribution Network Operators. The purpose of this fund ‘will be to facilitate the demonstration of new control, storage and metering technologies, with a view towards active management of distribution networks’.

PIU: Longer term options

The PIU argue that ‘even as we take action to deploy renewable technologies and deliver on our commitments, it is essential that we prepare for the longer-term by bringing on technologies currently some way from commercial viability, and by undertaking research into new technologies’.

It notes that ‘many of these issues will be picked up in other work currently under way, such as the PIU review of energy policy and the DTI-led review of energy R&D. However, it is possible to identify now some areas where support will be important in developing renewable energy sources for the longer-term’.

It goes on ‘There would seem to be three key technologies that are currently some way from commercial viability, even under the RO, yet have the potential to play a very significant role in the long-term in the UK or elsewhere. These are new energy crop technologies such as gasification and pyrolysis; photovoltaics (PV); and wave or tidal power.’

New Energy Crops

The PIU say that, although energy crop technologies are probably nearest to commercial viability in the UK, ‘there is very limited experience of these technologies in practical application in the UK or elsewhere. Without this practical application, it is difficult to see how costs will fall over time. With other mechanisms in place to set up the supporting infrastructure and contractual relationships for the energy crops industry, up to £18m will be made available to prepare the UK for the next stage of energy crop technologies. This fund will be administered by DTI, working closely with DEFRA and the devolved administrations and taking account of the administration of the NOF money already available for energy crop technologies. It will also be applied in close conjunction with any EU-wide funding programmes, in order to extract maximum benefit’.

Wave and Tidal Power

Wave and tidal power, the PIU say,‘offer perhaps the greatest long-term scope for the UK. The UK has a large potential wave and tidal resource and a long history of pioneering R&D in these areas’.

However ‘The technology is still in its infancy, with many competing designs, and considerable uncertainty about whether and when commercially viable technologies will be delivered. This presents both a threat and an opportunity. Without support, the technologies may not develop at all, and their long-term potential may not be realised. But because they are little developed, the UK has an opportunity to exploit a world-leading expertise at relatively low cost’.

It goes on ‘The UK is still one of the world leaders in marine technology. Several new companies have spun out of UK universities and some have been successful in attracting commercial backing. However many analysts suggest that, with more generous support available in other countries, the UK may already be losing place in the marine technology industry. With more proactive political support and considerably more resources (at present) going into wave technology in Denmark, the parallel with the early development of wind power is not difficult to draw’.

It adds ‘Some of the more promising technologies are now moving beyond the laboratory and very early prototype phases, and an increasing number of demonstration devices are going into the sea in several countries. A few of these have secured power purchase agreements, including support through the SRO in the UK, and are effectively in pre-commercial demonstration. However there is a clear need for further substantive field trials’.

The PIU note that the DTI "Technology Route-maps" for both wave and tidal technologies focus on support for long term trials of prototypes, alongside ongoing R&D into less advanced devices. And that the DTI provide for up to 10 years of prototype field-testing. But, the PIU say, ‘should any of the technologies prove reliable and viable they would be able to move into what might be termed the ‘early pre-commercial phase’ - fully operational grid connected projects - much sooner.

It is not reasonable to expect such schemes to be commercially viable under the RO, and additional support is necessary to enable such schemes to be deployed on a modest scale. Up to £5 million will be made available for grid-connected early pre-commercial wave and tidal stream projects. The intention is to create a small niche market that would bridge a potential "valley of death" for marine renewables’.

The PIU say that this money should be administered alongside the existing DTI programme. ‘A competition for funds, timed to provide a clear next step for those technologies emerging from the DTI field trials (or elsewhere), will be the best way to facilitate steady progression in wave technology. The competition will run in 2 to 3 years time, but should be announced as soon as it is practicable, to provide guidance and a competitive incentive for the emerging industry. There may also be a case for using some of the budget to provide for accompanying measures- such as contributing to the marine test station mooted by the industry’.

Finally it says ‘It is important that this support is viewed only as a step on the road to commercialisation. The success of wave and tidal technologies should be reviewed again towards the end of this funding programme, with a view to additional support in future’.

Solar PV

The PIU sees PV as having ‘considerable scope- in the UK and abroad’ so that additional support is justified.‘Solar PV technology in buildings is a long way from commercial viability in the UK. However, the costs of PV have fallen substantially over the last 25 years, and are widely expected to continue to do so as global markets expand. PIU analysis using ‘learning curves’ and market growth data reinforces the view that PV could become an important and cost effective UK option for decentralised power generation in the long term, probably around 2020. Some niche markets could emerge much sooner, such as the use of PV as a prestigious and "green" building cladding material for companies wishing to demonstrate their environmental credentials. PV is already competitive in niche markets in sunnier latitudes, in particular off-grid applications, and large important global markets will emerge in the near future’.

In the "Opportunity for All" White Paper published in Feb 2001, the Government announced a major PV demonstration programme with industry and others, in line with those in Japan and Germany (70,000 and 100,000 roofs respectively). However, the PIU note, ‘even a 100,000 roofs programme would not make a significant contribution to the 10% renewables target by 2010 or to the CO2 reduction targets. The rationale for such a support programme would be to encourage a strong industry to develop in the UK over the medium-term, which would be competitive in the potentially large export markets. The medium-long-term role of PV alongside other renewable technologies will be considered fully in the review of energy policy. The appropriate role of any long-term target in encouraging the promotion of PV will also be considered. Other issues for consideration include the role of PV as a niche urban technology alongside micro-CHP and micro wind turbines, and its role alongside these technologies in breaking down barriers to domestic generation’.

The PIU add ‘A key UK strength is in architecture and building design. Innovative PV applications in buildings have been pioneered by UK architects and building engineering companies. We therefore propose that the UK PV programme should focus on these strengths. The UK also has strengths in the development of new PV materials and concepts, and these will be eligible for additional support for ‘blue skies’ research’, (see below).

To this end, ‘up to £10m will be made available to add to the DTI’s existing £10m PV demonstration programme. The detailed criteria for DTI’s existing scheme are currently being finalised and a key criteria for this scheme is likely to be that the scheme will run as a competition into which bids would be invited for innovative applications of PV technologies. This would be open to households, companies, builders and architects, and would focus on new and exciting applications of existing PV technologies’.

Blue Skies Research

Finally there’s "Blue skies" research, which the PIU see as preparing us for the longer-term, opening up new options for renewables. ‘Over a 50 year time period, it is highly likely that new technologies not currently anticipated could come to play a significant role. New renewable energy devices may emerge, but in addition, facilitating technologies, such as inter-seasonal storage or compact energy storage for vehicles, could enhance the prospects for renewable energy, especially intermittent renewables. As an important step in expanding the knowledge base on which we depend to realise the potential of renewable energy, up to an extra £10m will be given to the Research Councils over the next three years. This will almost double current levels of spending.’ And not before time!

3. UK still low on EU League Table

The European Parliament has now formally accepted the new Renewables Directive (see Renew 134), which sets voluntary targets (see chart) for each EU country. Note these figures exclude large hydro, which reduces the difference between the figures for the UK and for countries like Austria and Sweden, which obtain much of their electricity from hydro. Some of the national targets have also been slightly reduced from the draft version (see Renew 128), but the overall goal is still to obtain 12.5% of the EU"s electricity from renewables by 2010.

EU Directive 2010 Targets

• Electricity from Renewables (%) (exluding large hydro)
• Denmark 29.0
• Finland 21.7
• Portugal 21.5
• Austria 21.1
• Spain 17.5
• Sweden15.7
• Greece 14.5
• Italy 14.9
• Netherlands 12.0
• Ireland 11.7
• Germany 10.3
• UK 9.3
• France 8.9
• Belgium 5.8
• Luxembourg 5.7
• EU 15 12.5 %

But even with the changes, the UK still remains near the bottom of the league, with only Belgium and Luxembourg having lower targets, although they are now joined by France. After a long battle between free marketeers and those keen on REFIT type subsidy systems, variations in national financial support systems will be allowed to continue for at least four years, but then the EC will aim for ‘harmonisation’ in order to reduce barriers between national markets.

4. RO Delayed

Once again the start date for Renewables Obligation (RO), which was hoped to be Jan.,has been put back - possibly to April. When it’s finally in place, the RO will require electricity companies to work toward sourcing 3% of their power from renewables by 2003 and 10.4% by 2011. But it’s taken time to sort the details.

Last Aug. the Government published its Statutory Consultation and, according to Energy Minister, Brian Wilson, ‘received responses both commending the Government’s proposals to exclude energy from the incineration of mixed wastes from the Renewables Obligation, and advocating that it should be included’. Hopefully they won’t budge on this issue.

Meanwhile, Wilson has still to deal with the problems caused by the New Electricity Trading Arrangements, NETA, which could be a major block to generators trying to meet the demand created by the RO. Ofgem’s report last year on NETA’s impact on smaller generators, found that there was widespread concern that aggregation (‘consolidation’) services have yet to become fully operational. Responding to a Parliamentary question last Oct, Wilson said that ‘the government believe that effective aggregation services, which would group smaller generators into portfolios of predictable and less predictable generation, are one of the keys to addressing issues faced by smaller generators under NETA.’ He added ‘the Government will imminently be issuing proposals specifically aimed at addressing the concerns of the smaller generators community, including wind generation. These will include proposals on aggregation services under NETA and will set out the Government’s views on aggregation services in detail’.

See our reports on the impact of NETA later.

RO Shortfall?

UK energy suppliers are struggling to find sufficient green power to meet the soon to be imposed requirements of the Renewables Obligation - a 3% renewable element by 2003 and 10.4% by 2011. So some will have to make use of the 3p/kWh ‘buy out’ provision (essentially a fine for non compliance), and some have already been passing part of this extra costs on to customers, according to industrial and commercial energy buyers tendering in last Octobers contracting round. ‘They’ve all added a 2 % margin’ said David Thomas, chief executive of CHEEP, the Consortium of Higher Education Energy Purchasing. ‘They seem to be treating it like a tax...assuming there will be a shortfall’.

There is nothing illegal in this - the RO allows suppliers to pass extra costs to customers. But the initial hope was that market competition would limit price rises - i.e. to avoid losing customers by increasing prices, the companies would want to absorb most of the extra costs, assuming they couldn’t find cheap renewable sources. The incentive for compliance would be particularly strong since the revenue from the buy out scheme will be shared, as a reward, by companies who did manage to meet the obligation. However, Danny Clarke, energy buyer for Prudential, told Utility Week that he knew of no major supplier likely to do so and called for ‘a speeded-up planning process’ to boost renewables. Even Powergen, which has one of the industry’s largest renewable portfolios, conceded it could not guarantee it would meet the 3% target.

The newly established Renewable Power Association also felt that there were problems ahead, but saw it slightly differently. "The government is being timid with its renewables support", David Byers, RPA’s chief executive told Reuters. Byers said the government either needs to force suppliers to buy more green energy or it should increase penalties for those retailers which fail to buy green power. Possibly it needs to do both, he added. Byers noted the target in the first year for green generation was close to existing output (2.8%), creating little incentive to build more renewable generation quickly. He said targets should be much higher in the early stages to kickstart projects - thus increasing the value of the tradable Renewable Energy Certificates (ROC’s) that companies will been given when they comply with the RO. "ROC prices will be higher if demand exceeds supply," and demand for renewable electricity would then grow since suppliers without enough ROCs to match their electricity sales face financial penalties. But attempts to increase generation capacity was being stalled by NETA, which he said was ‘severely damaging the sector’.

And also, with planning delays in obtaining consents for new projects having put the UK ‘five years behind other countries, streamlining planning without steamrolling communities is a very desirable goal’.

See: www.renewablepowerassociation.org

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Green Power NFPA Auction

The Non Fossil Purchasing Agency, organises on-line auctions of green electricity from NFFO contracts. In all, 212 contracts representing some 580MW of green electricity were successfully auctioned. At 2.81p/kWh, average prices were substantially up form the first auction last Feb., when the average price was 1.89p/kWh. Maybe NETA was the cause. Average prices (Feb in brackets) were Wind 2.84 (1.85), Small Hydro 2.81 (1.84), Landfill Gas 2.84 (1.92), Biomass 2.61 (1.85), Waste 2.21 (1.59).

5. Wind Works for Farmers

WindWorks is a new National Wind Power service providing a ‘one-stop-shop’ for small wind energy projects, typically comprising one, two or three wind turbines. The service is designed in particular to help farmers and landowners to develop a low-risk income stream from the wind .

Energy Minister Brian Wilson said, "Many farmers will look with interest at the chance to create another revenue source while contributing to the drive for green energy. The Government has already put its full weight behind renewables helping to create a £1 billion market for green energy by 2010. But if wind energy is to reach its full potential then it is important that industry comes forward with innovative schemes such as this which not only help themselves but also help to reduce green house gases. I would also encourage all individuals and groups to come forward and participate in the DTI’s renewable research and development fund which is designed to stimulate growth in green energy in a community friendly way throughout the UK".

WindWorks aims to provide farmers with the financial rewards associated with ownership of a wind project whilst avoiding exposure of farmers and landowners to new financial risks at a time when great uncertainty exists in the farming industry and rural economy. It also avoids the problems that can be caused by the high cost of financing small wind energy projects.

Alan Moore, managing director for NWP explained that it, "enables farmers to benefit from a sustainable, environment-friendly income provided by wind energy projects. It is bringing to the UK a formula that has for years been successfully implemented in Denmark - the world's leaders in wind energy. If we can replicate the success that small wind projects have had in Denmark and elsewhere, it will greatly help in meeting the UK’s renewables targets. WindWorks will help unlock the potential of small wind projects in a financially attractive, cost-effective and risk-averse way".

Within the scheme, farmers will be expected to act as the "Project Champion", communicating with councillors, planners and the public as the planning application progresses. ‘Experience shows that when people are fully informed about wind energy and its considerable benefits, the vast majority will support a well sited and well designed project’.

Mr Bond, who runs a family farm in Cornwall, commented, "As a family, we have genuine concerns about the air pollution caused through generating electricity, partly because of the problems we have witnessed in the USA. WindWorks has given us the opportunity to do something positive about our concerns whilst helping us financially at a time of crisis in farming. Given our land’s abundant wind resource and the ability of wind turbines to co-exist with other farm activities, we hope WindWorks will provide an invaluable, low-risk diversification option".

The National Farmers’ Union is in favour of the use of renewables and sees wind farming as an opportunity for farmers to supplement their depleted incomes. The Country Land & Business Association also supports the development of renewables including wind, and sees them as an "opportunity for a profitable contribution to the reduction of greenhouse gases".

The Countryside Agency added that it "supports wind energy developments which are sensitive to the character of the countryside. We are pleased to learn of National Wind Power's WindWorks initiative. We see it as an important development in the wind energy industry, and welcome its potential contribution to farm diversification options".

• A new local renewable energy support scheme has also been launched by the Countryside Agency and DTI, as the Community Renewables Initiative. It aims to integrate renewable energy with other countryside activities such as diversification and regeneration, and may be able to benefit from developments supported by WindWorks.

 

How WindWorks works

NWP, which is a subsidiary of Innogy, says it will provide a comprehensive supporting role throughout the development of any WindWorks project. This will include the provision of detailed guidance on how to prepare and progress a planning application for a small wind energy project, from initial (environmental) studies, to the planning application and the planning decision. The guidance is based on experience gained by NWP - one of the most successful wind farm developers in the UK over the past decade. NWP will also provide, without charge, the assessments of environmental effects required to support the planning application. When consent has been granted, NWP will manage the arrangements for grid connection, the financing and purchasing of the turbines, the construction of the turbine foundations and the installation and commissioning of the turbines. Typically this will take about 6 months. In some cases, the construction of the wind turbines will follow a period when on-site windspeed measurements are taken. This would typically require the installation of a temporary, guyed, 40m mast for a period of about 12 months.

Throughout the life of the project, NWP will carry out operations and maintenance to ensure that the project runs reliably and safely and will make payments to the landowner (plus any other required payments e.g. rates and insurance) in accordance with the agreement between NWP and the landowner. At the end of the project’s life (about 20 years) NWP will be responsible for its decommissioning and the reinstatement of the site. If the landowner wishes to have new turbines installed this can then be negotiated and - subject to planning consent being granted for the new turbines - implemented.

For further info visit www.windworks.ltd.uk

NIMBY Glen

‘We are in danger of destroying some of the most beautiful scenery in north east Scotland, if not the whole of Britain.’ So said Scott Hodgson, one of the local objectors to the proposal by Renewable Energy Services (RES) to spend £15m siting 22 wind turbines in the Glens of Foudland, near Huntly.

Another local resident, Kirsteen Cullingworth, said: "There are no benefits to the local population that I can see, apart from the very few who will personally benefit financially from this development. We are the custodians of this landscape for future generations and as such it our duty to fight this alien intrusion. There are enough pylons and slate quarries already scarring our countryside that I believe there is no reason to proceed with this scheme and damage the landscape further."

Several other objectors had written to the council, claiming that the windfarm would pose a safety risk, distracting drivers on what is already a dangerous stretch of road.

However, the landowner, Gordon Morrison of Bognie Estates, staunchly defended the proposals in a letter to the local authority. "The choice of the Glens of Foudland is ideal. If built, it would represent the least visible windfarm site in Scotland, due to the unique nature of its site." Source: The Scotsman Aug 28, 2001

As we reported in Renew 134, Friends of the Glens of Foudland (FOGOF), were censured by the Advertising Standards Authority because of an advert they had placed in a local newspaper, which claimed the windfarm would have a detrimental effect on house prices in Huntly, destroy the local environment and that construction traffic would cause traffic chaos on the A96. The ASA upheld a complaint by RES because the objectors’ group could not provide evidence to prove any of its claims. In the event, the project was given planning permission- following a unanimous vote.

6. New Wave Project

Wavegen have announced plans for a new grid linked floating wave energy device, to be launched this summer from the new marine energy testing centre to be built in Orkney. Once operational, in a location still to be determined, it will supply enough electricity to power 1400 homes. During a visit to the Isle of Islay Energy Minister Brian Wilson committed £1.67m towards developing the new wave energy device- which will cost over £2.7 m in total.

Wavegen has already successfully developed the 500kW LIMPET, the first grid connected shoreline wave energy generator on Islay. They are now looking to the much larger offshore resource.

Wilson commented, "Wavepower has a huge part to play in our drive for renewable energy and Wavegen is at the frontline of the technology. Wavegen's commitment to this project is commendable and I hope other companies will follow their example. Our oceans are a major potential energy source and can lead to a new industry for the UK in which I am determined that we should be world leaders. A green revolution is taking place in the UK. The market place is now ripe for industry to invest in these exciting technologies and I commit the Government to doing all we can to encourage this process. This development means wave power will be able to contribute to the Government’s target of producing 10% of electricity from renewable energy by 2010’.

* According to the FT (17/9/01) BC Hydro in western Canada recently closed a bidding round for 4MW of wave energy from commercial providers - with the possibility that 100MW of capacity might eventually be installed. The FT also quoted Tom Thorp from AEA Technology as estimating that the current generation of wave devices had a worldwide commercial market of about £ 200bn, and that this could rise to £500bn in the next couple of decades.

7. NETA v’s Renewables

‘NETA is working well with wholesale prices falling by 20-25%’. That was the main conclusion of the OFGEM review of the first few months of the New Electricity Trading Arrangements (NETA). Smaller generators reported only a 17% drop below prices achieved the previous year under the Pool, but power output from smaller generators had plummeted 44%, with wind power producers in particuar being penalised for unreliability.

Ofgem’s Chief Executive, Callum McCarthy, said: "Under NETA we are seeing significantly lower wholesale prices than under the Pool which is good news for customers. Clearly this makes life harder for all generators. With lower prices for all generators, including those producing ‘green energy’, there is a need for the Government to review whether its targets for renewables can be met within the levels of subsidy now proposed by the Government. In particular, if for wider environmental reasons the Government wishes to encourage forms of renewable generation whose output is less predictable or less reliable, there is a need for the Government to consider additional support for these types of generators".

The Department of Trade and Industry said it would "consult urgently on action necessary" to lessen smaller generators’ problems. But renewable and CHP producers immediately called for changes in Ofgem’s running of NETA as much as for any extra subsidy. In particular, they called for Ofgem to make it easier for small generators to "consolidate" output and lessen variations in it. NETA requires power producers to forecast output four hours in advance, and to buy any shortfall at premium prices. However, OFGEM have pointed out that while ‘some changes to NETA rules have been, and can be made, which have the effect of limiting the impact on less predictable plant... it is not within the scope of NETA rules to change the principles and to do so would put at serious risk the benefits to customers’

In its new Environmental Action Plan, OFGEM noted that, while it was required to take environmental issues into consideration, ‘the Government has made clear that decisions on major environmental and social issues should be for Ministers, and will be implemented by legislation when, as often occurs, this involves major costs for industry or consumers. We welcome that principle.’

Even so, in the Environmental Action Plan OFGEM did say that it would review the treatment of embedded generation, whereby power plants supplying primarily one site can sell excess generation to the grid, although it noted that it needed to ensure that the system costs to be met by embedded generators were appropriate and that the power system integrity would be maintained if there were to be a substantial increase in embedded generation.

See www.ofgem.gov.uk/projects/eap_index.htm

For the NETA report see: www.ofgem.gov.uk/public/pub2001.htm#smallgen

* NETA was also seen as one of the main stumbling blocks for a rational energy future in the new report ‘Power to the People’ produced by Chris Hewett, Senior Research Fellow at the Institute for Public Policy Research, which looks in particular at the benefits of ‘green’ micro generation. We’ll be reviewing it soon. Meanwhile see: www.ippr.org/sustainability

NETA also hits CHP

It’s not just renewable energy projects which are being hit by NETA, Combined Heat and Power projects are also suffering- both existing and proposed projects. For example, the CHP Association has reported that British Sugar, which has seven CHP plants connected to its factories, recently postponed plans to raise capacity from 10MW to 70MW at factories in York and Cantley in Norfolk.

The CHPA says that proposals to raise capacity at other plants are similarly threatened. WS Atkins, which has CHP plants in Halifax and Wrexham, says power export prices have fallen from £24 to £17 a megawatt hour, making new projects uneconomic.

Dalkia Utilities Services, owned by French utilities Vivendi and Electricite de France, operates 16 CHP plants with a combined capacity of more than 100MW. It says plans for up to nine new plants have been shelved in the past 18 months.

CHPA director David Green said: "Currently only 6% of the country’s electricity is supplied by CHP plants. The government wants to double this by 2010 - representing a quarter of its target to reduce carbon emissions by 20% by this date. There is no chance of making this target unless early action is taken to boost the CHP market by changing the Neta rules, exempting all CHP sales from the climate change levy and providing help through capital allowances and business rates."

8. Green Juice ?

Although it doesn’t involve a surcharge, which ought to be welcome, not everyone is happy with npowers new ‘Juice’ green power retailing scheme- which Greenpeace is backing. For example, END’s Report 319 was rather uncomplimentary, suggesting that, since npower was evidently still going to claim the power passed on to Juice customers against its Renewables Obligation requirement, ‘it will be free to reduce the level of renewable electricity under its conventional tariffs by a corresponding amount’ and still meet the RO conditions. Consequently ‘Juice will do nothing to force npower to surpass its statutory targets under the renewables obligation’. So there wouldn’t be any impetus to support the development of new renewable generation capacity.

However, npower will, it seems, not claim the Levy Exemption Certificates it could get, for companies using Juice, under the Climate Change Levy arrangements. So if it wants to replace these missed LEC’s, it will have to buy and sell more green power- which could lead to more capacity being ordered. ENDs however saw this as unlikely- unless the scale of uptake for the Juice scheme was larger than its RO target.

Leaving aside the pros and cons of the scheme, the wider implication seems to be that, given the structure of the RO and the CCL, Juice, and possible green power schemes in general, are not going to be a major way to stimulate green power generation. In its consultation paper on the Renewables Obligation, the government argued that ‘green tariffs should not be used to meet a supplier’s costs in fulfilling their obligation but rather the intention is that any green tariff should lead to additional generation over and above a suppliers obligation’.

Some green power retailers, like SWEB, have dutifully ringfenced their tariffs, and are, we hear, not too happy about npowers approach. Given that Juice does not have a surcharge, customers may however not feel they have been short-changed, although, END’s argues, the upshot is that Juice customers will not actually be supporting new capacity- like the offshore wind farm that will be used to supply juice- financially. Ironically, we also hear that existing npower customers trying to make the change are told by npower that they can’t sign up with Juice- so something odd is happening there!

For their part, Greenpeace defend the scheme as basically providing a way for people to demonstrate their commitment to green energy, and thus put pressure on government to provide more funding for renewables generally and offshore wind in particular. Their message seems to be that tariff schemes themselves couldn’t do that much to support new the development capacity. And unfortunately, with only around 20,000 subscribers to green power schemes so far in the UK, that’s seems to be the case.

Greenpeace told END’s ‘we have to think of green electricity as support for the political process rather than an alternative to it’. Even so, it does sees a shame that green power can’t provide a way for consumers to make a real difference. What that would require of course is for a lot more consumers to sign up to schemes that led to more capacity. Sadly though, the DTI seems to be cooling to the idea. The RO consultation paper comments that ‘it is unclear whether and to what extent, green tariffs will continue after the introduction of the obligation’, although it promises to discuss this issue with the industry.

Meanwhile WWF has backed Powergens Green Plan scheme, which has a 3.5% premium. WWF will get £5 for every customer who switches over and a further £5 for every WWF member who sign up. However this scheme is not be counted against the RO, although END’s says that details of exactly how green consumers will be ringfenced are not yet available. In parallel, London Electricity have launched a green fund/tariff scheme, involving a 0.4p/kWh surcharge, with the fund ringfenced for supporting additional new capacity.

Blooming in Holland

Despite being stalled in the UK, greenpower is booming elsewhere - 250,000 German customers signed up last year, and more than 400,000 customers signed up to new Dutch green power schemes in the first two weeks after the market was opened. See NATTA’s new report ‘Greening Electricity’ for more on developments in the green power market

9. Foresight on Energy

The Foresight process continues with the Energy and Natural Environment Panel having published a new Foresight Energy Futures Task Force report ‘Energy for Tomorrow - Powering the 21st Century’. Looking ahead to 2040, this study focuses on ‘what needs to be done to develop a mix of energy sources and infrastructure that will ensure a competitive and sustainable future for the UK’.

It makes use of four radically differing socio- economic scenarios to provide the context. As outlined in an earlier Foresight report, they range from one in which global markets dominate to one which is based on localised ‘green’ economies, which, you may remember, we labelled ‘hobbit socialism’ (see Renew 131).

These scenarios seem to have taken root in official thinking- they were used in the Cabinet Offices PIU review. The new Foresight report makes use of these scenarios to look at the technological requirements and constraints ahead. What emerges, however, is actually a consensus view on technological developments that would be important to some degree regardless which specific future is considered as likely or desirable.

Basically one of the the key requirements is seen as technolgies and associated infrastructure to enable and support a decentralised, locally embedded energy supply and utilisation system, using smaller scale renewable sources. Somewhat incongruously, given this commitment to small scale options, another key requirement is seen as a re-assessment of the role of nuclear power- in order to ensure security of supply and diversity, and avoid dominance by gas. A bit of coal is also allowed into the mix, with carbon sequestration, on similar grounds.

The conclusion that we naturally liked was the call for more educational provisions to ensure that there were sufficient engineers and technologists to support the expansion of renewables, and general education in relation to energy and environment, to ensure that more of the public understood the issues and requirements of, for example, energy conservation and the renewables.

Just what the OU is doing via its energy course like T265 Renewable Energy, and its soon to emerge follow up T206 Energy for a Sustainable Future and in more general courses like T172 (Technology for a Sustainable Future) and U206 / U216 Environment.

Interestingly there are similar noises concerning the need for education from the nuclear lobby- in particular they have been complaining that there are now few courses around on nuclear energy to replace the existing, but aging, nuclear scientists and technicians. Thus, in its submission to the PIU review, the Royal Academy of Engineering, noted that the industry faced a skills crisis unless fresh investment was made in the next few years because nuclear engineers reaching retirement age were not being replaced by younger candidates. It’s hard to imagine many Universities taking the risk of launching new nuclear courses- it’s hard enough attracting students to existing engineering courses and most of those that come want to study green technologies and their applications.

The Foresight report can be downloaded from: www.foresight.gov.uk/ servlet/ DocViewer/ docnoredirect=2823/

Next? A marine link for renewables

The DTI is exploring the idea of an undersea power link between Scotland and Wales to avoid extra land links - maybe a 2GW HVDC marine cable, as outlined in Renew 128. More in Renew136. There is also news of a giant new £500m 600MW windfarm proposed for the Isle of Lewis; see http://www.edie.net//news/Archive/4948.cfm

10. World round up

France has wind problems ...

French electricity bills will rise significantly since the government has set high guaranteed prices for wind-generated electricity, according to the country’s energy watchdog, the Commission de Regulation de l’Electricite (CRE). The government has confirmed that wind energy producers will be paid 55 centimes per kilowatt hour for the first five years- although it added that prices will subsequently fall to an average 48 centimes/kWh over 15 years. The State-owned Electricite de France company (EdF) will pay the fixed prices to the wind producers and then they can pass the cost to consumers.

CRE estimated that if 10,000 MW of wind power was built under this REFIT styled system, residential prices would have to rise 3% and industrial prices by 15% to pay for the wind energy - equivalent to an increase of between one and two centimes per kWh. The cost of subsidising France’s whole renewables programme, which includes solar and biomass, will come to 3-4 centimes/kWh by 2010. Reuters noted that ‘France has a target to produce 21% of its energy from renewable sources by 2010, building on the 15% currently generated by hydropower. The government is working on fixed price proposals for small hydro, solar and biomass’.

However, as far as the new wind programme was concerned, there seemed to be problems. Thierry Trouve, from CRE, told Reuters "The government has chosen a very expensive way of doing this. With the same targets, the costs could be a third lower for example by using market driven mechanisms". Trouve said wind generators’ operating costs were between 30 and 35 centimes/kWh while typical French electricity prices were around 20 centimes/kWh. Because EdF is government owned, the programme could be interpreted as state aid and the government did not seek EU approval before setting the tariffs. As we noted in Renew 133, recently the European Court of Justice ruled that generous prices paid by German utilities for renewable energy were allowed under EU law but Trouve said that case was different as the companies were privately owned.

The French government has said it chose the guaranteed price system to develop renewables as it would be quicker than using market mechanisms like green certificates. In market-based systems, as adopted in the UK, renewable generators issue green certificates which are bought by suppliers as a way to meet legal commitments to buy a certain amount of electricity from green sources. Source: Reuters

The British Disease ? Meanwhile opposition to wind projects has emerged in the Languedoc-Roussillon region where some 800 projects are envisaged. It may not be entirely co-incidental that this is an area where large numbers of British people have bought homes. James Graham, a local British wine grower, said: "We’re not against wind power as such. But what we want to avoid is turning a vast expanse of beautiful scenery into what amounts to an industrial site". Sounds familiar?

... so does Norway

Norway’s wind power development programme has been thrown into chaos by a call from two government agencies for eight out of 13 proposed projects to be blocked on environmental grounds. Though some of the projects were already approved, the government’s nature management and cultural heritage directorates said that more investigation was required. "Freedom from emissions is not enough to justify classification of a wind power facility as environmentally friendly." The directorates recommended an overhaul of planning procedures to avoid "unacceptable and unnecessary conflicts and environmental destruction".

Iceland to go green

Iceland is currently the largest user of renewables, with 99% of electricity coming via geysers and hydroelectric dams, but it has only explored about 14% of this potential and it is committed to becoming the world's first hydrogen economy- hoping to cut greenhouse emissions to zero, within 30 years. At present, it imports oil to meet 35% of its energy needs, and this makes the country one of the world’s higher per capita carbon emitters, but, on the basis of a programme being backed by DaimlerChrysler, Shell Hydrogen and Norsk Hydro, in a joint Icelandic New Energy venture, the aim is to lead the conversion into a hydrogen economy by following a six-step plan which could take 30 years to fulfill. The first phase, now running, is a £4m programme, subsidised by the EU, to run a trial on three hydrogen buses and to add a hydrogen station in a conventional petrol station. The second phase will convert the island’s buses to hydrogen, followed by all cars. The fourth and fifth phases should convert the fishing fleet. The sixth and most adventurous phase is to export hydrogen to Europe. Source: Guardian 18/7/01

Australian Green Power

The Australian government has issued its latest call for projects to receive funding under the Aus $55.6 m Renewable Energy Commercialisation Programme, while in Queensland more than $8 million in funding is to be provided to support a renewable energy program. The federal funding will support the Renewable Remote Power Generation Program Working Property Rebate Scheme. In parallel the Australian Wind Energy Association and environmental group Greenpeace have pledged to boost wind-fired power production to 5,000 megawatts a year by 2010 from 72 megawatts currently. The government ruled last year that energy retailers source an extra 9,500 gigawatt hours from renewable energy by 2010, helping to boost demand for alternatives to the main coal and gas-fired supplies. But the association argued this target was too low.

www.greenhouse.gov.au/renewable/recp/round6.html

www.affa.gov.au/ministers/truss/releases/01/0160wt.html

* Suncor, one of Canada’s largest oil producers, has abandoned plans for extracting oil shale in Australia, and are investing in 11MW wind project in Canada, with emissions being a key issue.

German Biomass boost

New rules have come into force aimed at helping Germany’s biomass energy sector replicate the runaway success of the wind power industry. The rules define which materials can be considered biomass, which technical procedures will be used and to which environmental standards producers must adhere. Operators of biomass plants in Germany are guaranteed tariff levels between 17 and 20 pfennigs (7.5 and 8.8 US cents) per kilowatt-hour

US, Canada, Mexico link

The North American Free Trade Agreement evidently isn’t all bad. Following a meeting of its Commission for Environmental Cooperation in Mexico last year, the USA, Canada and Mexico have signed an agreement to explore market opportunities for renewable energies in the three countries.

Mind you, it could simply be seen as a way for the US to meet it energy shortfalls from southern and northern sources.

11. Renewables could save US $ 50bn

A minimal use of renewable energy in the United States could help that country to reduce its energy consumption by 11 percent within a decade. The U.S. could save $50 billion a year by 2010 and $135 billion annually by 2020 if it were to implement the Kyoto Protocol, says the World Wildlife Fund. Its report, ‘The American Way to Kyoto’, rejects the claim that the treaty would hurt the US economy.

"Far from being the economically crippling burden that the Bush Administration alleges, U.S. efforts to reach a binding emissions reduction target could initiate a national technological and economic renaissance with cleaner energy, industrial processes and products in the coming decades," says Jennifer Morgan of WWF. "If the Bush Administration were to choose to seriously address Source: climate change and energy policy, the Kyoto Protocol is the way to go."

The report uses models developed by the government’s energy department to quantify the impact of minimum renewable energy production standards, co-generation, new appliance standards, a carbon emissions permit auction, tax credits, increased fuel economy of passenger vehicles and increased use of high-speed rail. It concludes that the U.S. could reduce its energy consumption by 11% by 2010 and by 30% by 2020, and it could stem the rise in carbon emissions to 2.5 % above 1990 levels by 2010. If no action is taken, carbon emissions would rise by 35% by 2010, while the Kyoto treaty would require the U.S. to reduce carbon emissions by 7% by 2012, compared with 1990 emissions.

The report encourages the adoption of Renewable Portfolio Standards to provide "strong incentives" for suppliers to design reliable renewable electricity projects at low cost, and to identify niche applications where the projects have greatest value. The study assumes a RPS that starts at 2% in 2001 and grows to 10 % by 2010 and 20 % in 2020. It excludes municipal solid waste from the category, due to concerns about toxic emissions and also excludes new large-scale hydro as a renewable energy technology, because of environmental concerns over large dams, and says that under a base case scenario, use of non-hydro renewable energy increases by less than 50% by 2010 while, under the ‘climate protection case’, it triples. If all policies are adopted, use of renewables in the U.S. would double, relative to the base case, and would account for 10 percent of total primary energy supplies in 2010.

When the electric sector RPS is combined with the strong energy efficiency policies of this study, the absolute amount of renewables does not increase substantially between 2010 and 2020 because the percentage targets in the electric sector have already been met. A more aggressive renewables policy by 2010 could be considered, and energy-related carbon emissions would be more dramatic than the reductions in energy consumption, because of the shift toward lower-carbon fuels and renewable energy. The WWF also suggests a subsidy for grid-connected solar photovoltaic panels, which would "introduce a small amount of this technology so that it can play a role in the generation mix, seeking to induce technology learning, performance improvement and scale economies, and ultimately increased fuel diversity and another zero emissions option for the longer term." The level is kept small so that costs and price impacts are minimal.

The report also examines the potential contribution from renewables if the world promotes the Clean Development Mechanisms of the Kyoto treaty, and concludes that a carbon price of $20 per tonne of carbon equivalent would induce only 3 megatonne of carbon equivalent per year of new renewable energy project activity by 2010. If the price goes to $100/tCe, renewables would jump to 18 MtCe/year.

The report concludes that "national savings in energy bills would exceed the amount spent on investments in efficient technologies and expenditures for low carbon fuels. By 2010, the average savings would exceed the additional costs of new equipment by $13 billion per year, or nearly $113 per household. When costs and savings of all policies are combined, they yield cumulative net savings of $105 bn in 2010, and $576 bn in 2020".

With the USA’s very hostile position on Kyoto in mind it concludes "There is no need for the Bush administration to reject this important effort to address global warming". See http://www.worldwildlife.org

12. China cuts CO2

Although China, with its burgeoning economy, was supposed to become the world's largest emitter of carbon dioxide (CO2), a new study from the Natural Resources Defense Council (NRDC) shows the country is cutting emissions faster than the US. By beginning to make the transition away from coal, implementing some energy efficiency and restructuring its economy, the Chinese have reduced CO2 emissions by 17% over what they would have been, in the four years since 1997, NRDC says.

Over the past decade, China’s overall CO2 emissions have grown 8.4 percent, while emissions of CO2 in the US have climbed 14 percent. NRDC reports in its study that China has reduced subsidies to the coal industry, closed inefficient coal plants and closed mines in the last five years, leading to a large decline in coal usage, while in the US coal usage has slightly risen. China is second only to the US in terms of CO2 emissions and experts had predicted it would overtake the US by 2020.

More info: www.nrdc.org

Renewables for Olympics

The city of Beijing will spend billions of dollars in the next seven years to improve its environment in preparation for the 2008 Olympic Games. The city’s bid had support from 20 non-government environmental groups which signed an ‘Action Plan for a Green Olympics’. The cities plan for ‘greenification’ include 100 square kilometer park, green belts within city limits, and the planting of millions of trees. The Olympic bid includes plans for a 760 hectare artificial forest to be erected near the games village.

The quality of air will be aided by the introduction of solar and geothermal energy, as well as natural gas. Bid documents say 90 percent of buses and 70 percent of taxis will use clean energy by 2007.

The development of new energy sources are part of the city’s tenth Five Year Plan that runs from 2001 to 2005. There currently are 158 geothermal wells in Beijing, with combined annual output of 800,000 cubic meters. The city plans to explore 104 more geothermal wells in the next five years, which will heat 3 to 5 million square meters of space. That consumption would require 90,000 to 150,000 tons of coal under current heating methods. Beijing will develop solar energy heaters, sunrooms and sun greenhouses, and will construct 100 straw gasification stations in suburban counties and develop biogas pits.

Source: www.solaraccess.com

13. COP 7 tries to deliver

COP-7, the seventh conference of parties to the UN Climate Change agreement, met in Morocco in Oct/Nov. The event was overshadowed by the grim international situation, and by the the difficulties caused by the USA’s withdrawal from negotiations over the Kyoto treaty - which they oppose.

The USA attended COP 7, but kept on the sidelines - they didn't, as some had feared, introduce a rival set of proposals. Amusingly, the nearest there was to a clear US statement was in an interview in London, when Mr Dahan, senior VP of ExxonMobil, predicted that the US government position "will not be very different from what you are hearing from us" (FT Oct 30). A case of the tail wagging the dog?

At COP-7 the US was however pressured to reconsider their opposition to the treaty. As the COP-7 co-chair Moroccan Environment Minister Mohamed El Yazghi commented "We’d wish they (the Americans) were not outside (the pact), especially after September 11. Their interest is clearly not to be isolated but they run the risk of appearing to defend only their own interests". UK environment minister Michael Meacher put it even more bluntly ‘Maybe the terrible events of September 11 will give it pause to remember its international obligations’.

Robert Watson, chairman of the IPCC (Intergovernmental Panel on Climate Change), had earlier told a Tokyo business conference "I could envision that the U.S. will, sooner or later, be part of the international debate on climate because industries in the U.S. will demand it".

Meanwhile, leaving the USA aside, COP-7 started with the agreements had been reached at COP 6.5 in Bonn earlier in the year, notably on a compromise on including carbon sinks. But there were still plenty of contentious points. In the run up to COP7, the EU set out its starting position, saying it wouldn’t haggle further over sinks In a statement aimed at the so-called Umbrella Group, including Japan, Canada, Russia and Australia, which has fought hard for their forests and farmland to be credited for offsetting carbon dioxide emissions, the EU spokesman Olivier Deleuze said that the text negotiated at the COP-6 meeting in Bonn in July took "ample" account of sinks and that the EU would not be "sidetracked by further haggling over the amounts of sink credits that parties are entitled to".

Specifics like this could easily obscure, and defeat, the key overall aim of COP 7- which was to set the scene for full ratification of the Kyoto accord by the requisite number of countries, in time for the Rio plus 10 conference in the autumn. With the USA out of it, that meant Russia and Japan, the two next largest industrial countries, were the key players. Japan, evidently still under the USA’s influence, wavered a little, and even seemed to be trying to undo some of the agreements settled at COP 6.5. Russia entered the bargaining situation in bullish mood, calling for its emission allowance to be increased from 17 to 33 million tonnes of carbon equivalent. Given that it has vast amounts of unspent carbon credits (the so called ‘hot air’ loophole) since its industrial activity and emissions had declined since the Kyoto accord reference year of 1990, asking for even more seems a little pushy. But Russia, it seems, sees the hot air not as an unfair wind fall, but as a form of foreign aid, which it desperately needs.

Australia was another key player- though less relevant since it backed the U.S. line. Also its position in future was unclear given the upcoming election - with the run up being during COP 7. While the opposition Labor party made favourable noises about Kyoto, PM John Howard (who later won) made the ruling Liberal Party’s view clear ‘we are not going to ratify the Kyoto Agreement until the full cost to Australia of that ratification is known... the only way you can have an effective international agreement on greenhouse emissions is to include the USA and also the developing countries’.

But then here was COP-7 being held in a developing country - and developing countries do seem to be taking climate change increasingly seriously. Some of course have no alternative. As the Guardian reported, ‘a group of nine islands, home to 11,000 people, is the first nation to pay the ultimate price for global warming. For many years the most interesting thing to happen to the Pacific island state of Tuvalu was the sale of its internet domain name, .tv, for $50m (£35m). But, just as Tuvalu has traded in its virtual domain, it is about to lose its real one. The authorities in Tuvalu have publicly conceded defeat to the sea rising around them. Appeals have gone out to the governments of New Zealand and Australia to help in the full-scale evacuation of Tuvalu’s population. After an apparent rebuff from Australia, the first group of evacuees is due to leave for New Zealand next year.’

Interestingly, although, unlike the industrial countries, they were not formally required to do so, the host, Morocco, voluntarily announced a proposed 8% carbon mitigation programme. Topping that, Tunisia put forward a 25% reduction proposal. And Algeria tabled an ambitious carbon sinks proposal- although it seem based on an approach that would fall foul of the rules limiting the use of sinks agreed at COP 6.5.

Even so, despite being a little speculative, you would think these powerful gestures would shame some of the reticent developed nations. But of course, not everyone saw the Kyoto accord as worth the effort, especially without the U.S. on board. Even its supporters recognised that it would only make a very small contribution to emission reductions compared with what is needed to limit climate change. Against that, it was at least a start. That was the mood that seemed on the whole to prevail in Marakesh.

However, some problems emerged. For example, under the rules being discussed at COP-7, the Clean Development Mechanism, which had finally been agreed in principle at COP 6.5, local people will only have 30 days to respond to proposals for projects in their area. So much for effective public participation. The Climate Action Network scurrilously renamed the CDM the Closed Development Mechanism.

There were also worries about the rules on ‘Banking’ emission credits - carrying them over beyond the official commitment period so their value increased. Certainly, with the US out of it, Russia off loading its ‘hot air’ credits, and Canada offering its vast sinks to the U.S., the value of emission credits, might initially be very low- and this might also undermine the CDM.

But when the Ministers arrived for the last three days, things settled down a little, although there was still evidently some last ditch attempts at revisions of the text going forward from COP-7 to WSSD, the World Summit on Sustainable Development, to be held in Johanesburgh in Sept. According to CAN, the USA tried to delete references to climate change, the Kyoto Protocol and the Bonn Agreement - to ensure that the US was not isolated at this gathering. But after a final late night session, agreement was reached on most issues, following an extra 17mtC concession to Russia on sinks.

Next - WSSD in Sept. Some NGO activists are planning how to get to Jo’burgh overland- so as the avoid emissions from air flights: see www.chooseclimate.org/joburghcaravan.

For full coverage of COP-7 see:www.iisd.ca/climate/cop7/index.html

14.Nuclear Roundup

UK Nuclear - maybe not

Jumping the gun a bit, and despite protestations from the DTI that there were still no plans for new nuclear plants, last year, according the the Daily Telegraph (3/9/01), BNFL ‘began negotiations with the nuclear regulator to get the green light for its latest power station, ahead of a possible lifting of the Government’s unofficial moratorium on new nuclear plants’. The Telegraph added ‘The new stations would be built on the sites of Britain’s existing nuclear plants, most of which are due to be mothballed in the next 20 years’. However it noted that ‘BNFL is keen not to fund the new stations, and would enter into joint ventures with construction companies prepared to foot the capital cost, estimated at about £1 billion per station. A firm Government commitment to nuclear energy is essential to secure funds from City institutions’.

Of course you could see this sort of press story as just reflecting the PR push by BNFL and the nuclear lobby generally, aimed at putting pressure on the government, who clearly don’t want to fund more nuclear plants.

The Scotsman. (3/9/2001) ran a parallel story, suggesting that ‘ministers could order the building of new nuclear power stations in Scotland’, adding that ‘it is thought any new nuclear station would be built on the site of existing stations at either Hunterston in Ayrshire, Torness in East Lothian, Chapelcross in Dumfriesshire, or Dounreay in Caithness. All are due to be decommissioned in 2010. The majority of ministers on the Whitehall energy review committee are said to be in favour of the plan, with even formerly anti-nuclear MP George Foulkes convinced of the need for more power’.

The constitutional situation then emerged, with the Scottish National Party complaining that Scotland had not been properly consulted and indicating that it would ‘use all means at its disposal, both in the Parliament and outside, to ensure that new nuclear power is not forced on the nation by new Labour’. It transpired that actually, as the First Minister noted, "any application for a new power station in Scotland, whether nuclear or not, must be made to Scottish Ministers; they have the power to grant consent or otherwise". So Scotland could in effect veto a Westminster decision.

Meanwhile, in its evidence to the PIU Energy Review, British Energy called on the government to ‘replace nuclear with nuclear’ and take over the £3bn in liabilities it has incurred for nuclear waste disposal so as to allow it to fund 10 new nuclear plants at a cost of £10bn. It also wanted a new ‘carbon free’ incentive of perhaps £10 per MWh, for the output from its nuclear plants, to make up the excess cost over gas generation. It looked to a future with nuclear still supplying 25% of the UK electricity, coal 15%, gas 40% and renewables 25%, arguing that nuclear could in effect ‘make space for coal’ by offsetting its carbon emissions, thus ensuring diversity of supplies.

In its submission, the GMB union felt similarly, but Prof Ian Fells saw coal and nuclear as supplying 30% while renewables could only offer 10%. SERA by contrast argued for a nuclear phase out and a major renewables commitment: we’ll cover SERA’s input in Renew 136. The Institute for Public Policy Research argued that until the issue of nuclear waste was resolved nuclear should be discounted.

Subsequently the government published its long awaited report on this issue, but only as yet another consultation document- which means that a decision will be stalled yet again, until 2006! But very surprisingly, given the heightened concerns about terrorism, the government decided to allow BNFL to run its MOX plant at Sellafield. Meanwhile, France has installed ground to air missiles at its reprocessing plant at Cap le Hague in Brittany and the US has removed its nuclear sites from official maps!

Back in the UK, the big issue next is whether the generally low priority given to nuclear in the PIU drafts will survive in its final report - out any day.

Wind better than Nuclear

Energy Consultant David Milborrow submitted evidence to the Performance and Innovation Units Energy Review examining the influence of using low discount rates and long depreciation periods on generation cost estimates for wind and nuclear technology.

He concluded that present-day onshore wind generation costs are roughly equal to "lower bound" nuclear estimates, and notes that there is firm evidence that wind costs are falling steadily, bringing them below those of nuclear. Present-day offshore wind generation costs lie within the range of nuclear cost estimates, but these, too, are likely to fall.

Overall, he says ‘wind appears to be in a very competitive position, not least on account of shorter construction times and fewer uncertainties on cost issues’. In his paper he notes that ‘the nuclear industry often argues that generating costs would be lower with lower discount rates and/or longer depreciation periods, so such costs cannot be examined in isolation. It is logical to compare them with other carbon-free technologies, which would also benefit from changed financial parameters. Of these, wind energy has the best combination of resource and cost’.

With a project test discount rate of 8% and a depreciation period of 15 years, he calculates that the nuclear generating costs lie in the range from $0.055 to $0.073c/kWh; the corresponding figure for onshore wind is also $0.055/kWh and for offshore wind $0.07c/kWh (approx 5p/kWh). And if account is taken of recent capital cost reduction in wind plant (with installed costs of around $750 being assumed), then wind actually beats nuclear hands down, with wind costs being significantly lower than those of "lower bound" nuclear costs - $0.0373/kWh for wind, compared to $0.0455/kWh for nuclear at 8% discount rate, and $0.0285/kWh, compared to 0.0354/kWh for nuclear at 4% discount rate). On this basis, offshore wind costs lie within the range of nuclear costs, falling from 6.7c/kWh at 10% tdr, to 4.3 c/kWh at 4% tdr.

The full paper, and the others mentioned here, is on the PIU Web site: www.cabinet-office.gov.uk/innovation/2001/energy/energyscope.shtml Look under ‘project links’

* Milborrow pointed out that ‘the PIU Scoping Note quotes the costs of nuclear as "around 4p/kWh". This is attributed to the 1995 review, which actually stated "it was judged to be reasonable to use a range of 3.5 to 5.75p/kWh for lifetime nuclear generation costs (1990 prices)". This corresponds to 4.7 to 7.8p/kWh at today's prices’. He also quotes the Energy Information Administration at the US Department of Energy quotes $0.07/kWh (5p/kWh) estimate of current nuclear generation costs. As we’ve noted before, some wind projects in the UK are operating at around 2p/kWh.

Japanese Micro Nuke

The Japanese Central Research Institute of Electrical Power Industry is looking at the idea of very small nuclear plants- of perhaps 200kW- suitable for providing power for small housing blocks or office complexes. They argue that it could also be used ‘in developing countries where remote regions cannot be conveniently connected to the main grid’. Dubbed the Rapid- L, the reactor uses molten lithium as a moderator and control medium, which expands and contracts to keep the reactor at a safe temperature, and liquid sodium is used as the coolant, operating at 530 degree C.

PMBR delayed

We hear that the start of work on the prototype South African Pebble Bed Modular Reactor has been delayed by up to 9 months, due to design problems.

15. In the Rest of Renew 135

In this bumper 36 page issue, the Feature looks at the controversial issue waste incineration,. Our Technology section looks at some ideas for using hydrogen as a new fuel and at the prospects of the Pebble Bed Modular Reactor, and of tidal stream energy. The prospects for hydrogen are also covered in our review of the new World watch report and we also review the Environment Agency’s new report looking at UK energy options 50 years ahead. In addition we look some more at the debate over forestation as a solution to climate change. And our extensive Groups section includes coverage of the battles faced by AAT wind coop in Wales .

16. NATTA/Renew Subscription Details

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.

Details from NATTA , c/o EERU, The Open University, Milton Keynes, MK7 6AA Tel: 01908 65 4638 (24 hrs) E-mail: S.J.Dougan@open.ac.uk

* NATTA has produced a new compilation of reports on nuclear power drawn from back issues of Renew. ‘Nuclear Power- back from the grave?’ is available from NATTA for £4, £3 to NATTA members.

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Renew-on-line posted on 12/21/01 by s.p.forrest@open.ac.uk