Renew On Line 36Extracts from the news
section of NATTA's journal Renew,
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ROL 36 Contents |
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1. PIU says ‘go for green’, but keeps the nuclear option open
2. Scotland leads the way ....but Wales may catch up
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12. US Green Power weak but could grow
13. Nuclear Waste Decision Delayed
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1. PIU says ‘go for green’but keeps the nuclear option openThe Cabinet Offices Performance and Innovation Unit published the result of its long awaited review on energy policy in February. There had been a lot of speculation about what it would say - some predicted that it might sanction the construction of 10 new nuclear plants. However, setting the scene, Brian Wilson, the energy minister, who chaired the PIU reviews advisory group, cautioned the nuclear industry not to expect too much from the PIU review. In Dec., he told a conference sponsored by the British Nuclear Industry Forum and the British Nuclear Energy Society that the government could only "create the context" for the industry to propose new plants. He added that, even supposing ‘the PIU recommended acceptance of the nuclear industry's entire shopping list, it would not guarantee the building of a single new nuclear station’. In the event, the PIU simply left the option open for nuclear companies to come forward with funding proposals if they so wished. It was not moved by the argument that more than three-quarters of nuclear capacity, 9GW, is due to close by 2020. ‘The electricity industry has had to cope with this scale of replacement and can do so again. A wide range of technologies is available: gas-fired stations; renewable power; CHP; coal-fired stations; energy from waste resources; coal mine methane’. The PIU said ‘there is no current case for public support for the existing generation of nuclear technology’ but added ‘there are, however, good grounds for taking a positive stance to keeping the nuclear option open.’ Following this last line up, the PIU suggested that new nuclear projects should be allowed to benefit from the new market based ‘carbon credit’ type systems. However, they didn’t, as some had expected, suggest exemption from the Climate Change Levy, possibly since this would only yield 0.43p/kWh, whereas, in its submission to the PIU, British Energy had asked for a 1p/kWh subsidy. BE has estimated that CCL exemption would only be worth £2 m a year, and said that it would require other public subsidies and financial changes before it would invest in a new nuclear plant. The nuclear industry had made clear that it regarded the review as make-or-break time. "It is no exaggeration to say that British Nuclear Fuels and nuclear power are at the cross- roads", said BNFL’s chairman, Hugh Collum, last year. "Ahead of us lies either a long managed decline or a period of renewed growth." So the review does not sound too good news for them, certainly not in the short term, with the PIU talking about new cheaper reactors not being ready for15-20 years. It is however very good news for renewables. The FT (13/12/01), commenting on the leaked draft, complained that the PIU was "timid in failing to put nuclear on a par with renewable energy", but the PIU certainly were not timid about pushing renewables to the fore. The headline commitment is the proposal that the UK aim to obtain 20% of its electricity from renewables by 2020. Strong commitments are also made to Combined Heat and Power and to energy efficiency, with targets for the latter being a 20% cut in demand by 2010 and a further 20% by 2020. Some critics have been nervous about the high expectations for what renewables might be able to do, with for example Malcolm Grimston from the Royal Institute of International Affairs telling New Scientist that it was important not to repeat the ‘overselling’ mistake made by the nuclear industry 30 years ago. But set against that, over in Brussels, in Dec., the vice-president of the European Wind Energy Association, told an offshore wind energy conference in Brussels, that up to two-thirds of Europe’s electricity needs could come from this technology by 2020. He dubbed the development of major offshore wind energy parks as "the biggest energy revolution since the internal combustion engine". What was perhaps more of a problem was the PIU’s conviction that the UK didn’t need to worry about an over-dependence on gas, since there was plenty of it, and security of supply was not an issue for the foreseeable future. Gas pipe lines are vulnerable things- even without terrorists. For example, a drunk with a rifle evidently recently disabled the Trans Alaska Pipeline! What the PIU saysThe Independent on Sunday (Dec 16th) claimed that the leaked draft ‘appears to have been heavily modified by officials in its final stages, to soften its approach on nuclear power and to make its emphasis less green’. Certainly some of the more colourful language seems to have disappeared. For example, the leaked (Dec.10th) version depicted nuclear as a technology with "an uncertain role", since "concerns about radioactive waste, accidents, terrorism and proliferation may limit or preclude its use". However, although it leaves the door open to nuclear, and argued that it was not wise for the UK to unilaterally commit to the target of a 60% cut in carbon emissions, as had been proposed by the Royal Commission on Environmental Pollution, the final published version still feels quite radical. It calls for rapid expansion of renewables, suggesting that the offshore wind potential was 100TWh, the PV solar potential 200TWh and wave and tidal a massive 700MW (if that’s not a typing error for 70TWh, it’s twice total current UK electricity consumption!). It quotes prices for on land wind of 1.5-2.5p/kWh, offshore wind 2-3p/kWh and wave and tidal 4-8p/kWh, and suggests that the extra cost of dealing with intermittent sources would be only 0.1p/kWh up to a 10% national contribution and 0.2p for 20%. Even with a 45% national contribution from intermittent sources, the extra cost would only be around 0.3p/kWh. The PIU suggest a target of obtaining 20% of UK electricity from renewables by 2020, adding another 39TWh to what should have been installed under the Renewables Obligation by 2010. Indeed, if the proposal for reducing energy demand by 20% by 2010 and a further 20% by 2020 were successful, it suggested that the renewable contribution might be much more than 20% by 2020. It accepted that the renewable target would be challenging, involving the installation of 1-2GW p.a. after 2010, but noted that Germany had installed 1.5GW of windplant in 1999 and 1.6GW in 2000 and looked like surpassing that in 2001. In terms of implementation support, the PIU suggested that, when the Renewables Obligation was reviewed, as planned, in 2006/7, consideration should be given to further support for renewables to help achieve this target. The RO might add £12 p.a. to the cost of electricity, while the new 20% target might add £15 p.a. after 2010 (5-6%), but that could, in effect, be wiped out by the £20 p.a. saving that would result from the energy efficiency programme - led by DEFRA. Meanwhile, it backed the recommendation from the Chief Scientific Advisor, who submitted a parallel report (see later) that R&D on renewables be increased to be in-line with the nearest EU rival country. In terms of which technical options to focus on, it argued rather tortuously that ‘maximizing deployment of cheaper technologies could contribute more to short term carbon emission reductions, but at the expense of having fewer options for the longer term. Opening up a wider range of options, including some deployment for each of them, suggests higher costs for present generation. It also means- given limits to acceptable total programme cost- less short term contributions to carbon emission reductions. In practice, neither extreme (cautious or highly ambitious) seems desirable; by 2020 policy needs to aim both for significant deployment of the cheaper renewables, but should not neglect the development of a wider range of future alternatives.’ Keeping options open and flexible is certainly a key concept in the PIU report. Thus a key principle is ‘the promotion of technological innovation to create and keep open options to meet future challenges; and to maintain flexibility in the face of uncertainty; and the need to avoid locking prematurely into options that may prove costly in future’. That’s evidently the main reason they are fairly cautious about nuclear power- with its long lead in times. They did not want to lock in to a large nuclear programme, certainly not at present. Instead, they want to keep this open as an option, in case renewables, energy conservation and CHP do not deliver sufficiently in the future. They note that the proposals put to them by the nuclear industry were for a large 10GW programme of new build, but argue that ‘the desire for flexibility points to a preference for supporting a range of possibilities, rather than a large and relatively inflexible programme of investment such as is being proposed by the nuclear industry.’ Replying directly to the nuclear lobby’s call to ‘replace nuclear with nuclear’ the PIU say that ‘there is no requirement, in system terms, to replace any particular generation technology with the same type of generation’. They were also clear that nuclear remained an expensive option, with the projected cost by 2020 being quoted as 2.5-4p/kWh (industry / PIU analysis) or 3-4p/kWh (PIU estimate). However, it might improve with new technology, although they saw that as 10-15 years away. Then there was the problem of public acceptability. This, they said, in slightly patronising terms, ‘can’t be taken for granted’. It ‘may or may not constitute a serious problem’ but ‘may improve if there is a more obvious need for the technology’. Given this sort of comment it is hardly surprising that some of the responses from the environmental lobby were less than flattering. Groups like Friends of the Earth had already indicated a commitment to fight any hint of backsliding on nuclear by the Labour government- which after all does have a policy of ‘diminishing reliance’ on nuclear. Greenpeace chastised the PIU for not shutting the door to nuclear, and were clearly unhappy with the role played by the Energy Minister, Brian Wilson, who is well known to to be pro-nuclear. Wilson commented ‘The report is not about renewable versus nuclear, it is about balance and promoting innovation in new technologies. It stresses the potential for renewables and energy efficiency but also argues that the options of new investment in nuclear power and cleaner coal should be kept open’. SERA, Labours own green lobby group, said they were ‘disappointed that the Energy Minister will not put the final nail in the nuclear industry coffin, despite clear analysis from the Cabinet Office Energy Review that a combination of energy efficiency, CHP and renewables can address Britain’s energy security problems and deliver the major reductions in greenhouse gas emissions’. They added ‘We are very concerned that all mention of the risks of reactor accidents and nuclear proliferation seem to have been deleted from the report at a late stage’. So the battle lines are drawn on this issue- as well as some others. For example, SERA also argued that ‘the target of 20% renewable electricity by 2020 is overly cautious given our rich resources of wind, wave and tidal power. Indeed the analysis in the Review itself could easily back up a 30% renewables target if there was sufficient political will’. Perhaps predictably, Tony Blair saw it all in international terms "It is striking that both security of supply and climate change issues are truly international. The UK cannot therefore only act through domestic policies, but must address these issues via international policies and agreement, particularly through EU market liberalisation and the Kyoto agreements". Ah well, maybe it will all be sorted by the new Sustainable Energy Policy Unit the PIU says should be set up. We will look at the Scenarios the PIU used in Renew 137. Meanwhile you can read the report in PDF at www.piu.gov.uk/2002/energy/report/index.htm The Feature in Renew 136 looks at SERA’s submission to the PIU and we also look David Milborrows submission comparing the cost of nuclear power and renewables in the Technology section. PIU: What next?Now we have the PIU report, what happens next? It was a report to the government, and there is to be a period of public consultation followed by a White paper in response from the government in Oct. Meanwhile, the Commons Environmental Audit Select Committee, which began an inquiry on Renewables at the start of 2001 and published written evidence received in May 2001, may carry the ball a bit further forward. The Committee is now taking further evidence, ‘in the light of the PIU review’ and is focussing on the impact of recent developments in energy policy such as the New Electricity Trading Arrangements and the Renewables Obligation; current policies to support renewables (including R&D and capital grants) and the likelihood of meeting Government targets in this area; the extent to which current developments reflect joined-up working between the parties involved (Government departments, Ofgem etc.). The House of Commons Select Committee on Trade and Industry has also looked at energy security and has some interesting ideas, and the DTI has yet to confirm the details of the Renewables Obligation, although, a draft legislative ‘order’ has been produced. Some might see all this as just stalling for time and it certainly is frustrating. But at least it does keep pushing the renewables up the political agenda, and there is clearly value in having a wide ranging public debate over the PIU’s proposals. However, the real issue is what happens when big decisions finally have to be made? Or will the PIU report be just another tome buried under bureaucracy and trapped in a consultative dead end? DTI on R&DAs we noted in Renew 135, the Department of Trade and Industry added its own last minute element to the PIU review with a contribution (added as an appendix) by the Chief Scientific Advisor looking at the overall allocations for Research, Development and Demonstration for energy - drawing on comments from, amongst others, the Carbon Trust, Imperial College, EST and OU EERU. The government currently allocates around £50m to RD&D on energy. The DTI review indicated that this should be expanded further and outlined what it saw as the key RD&D options within that programme - wave and tidal current systems, PV solar (especially polymers) and hydrogen storage related technology, plus energy efficiency and sequestration techniques. But they also wanted more work on nuclear waste and containment materials for fusion. More Wave & Tidal SupportBacking this recommendation up, the DTI has allocated £1.1m to help develop the Stingray tidal current device, and is also supporting Wavegens work on a series of shore-line wave devices in the Western Isles. More in Renew 137.
..and funds for PV PlantThe Oxford based INTERSOLAR GROUP has been given government backing to build Europe’s largest Solar Photovoltaic factory - the Department of Trade and Industry has awarded them nearly £500,00. Intersolar hopes to develop a factory that will be able to produce solar cells at a cost of about 70p per watt, but the project will take two years of research and will cost an initial £1.2m. Philip Wolfe, chairman of Intersolar, told the Times: "Solar has been an expensive alternative to traditional energy sources, but Europe has a commitment to the expansion of renewable energy sources. By producing thin film cells at higher volume, Intersolar Group will significantly change the solar proposition.’ Intersolar already has a production plant in Bridgend, S. Wales, but the location of the new site has not yet been disclosed. See the Technology sectionof Renew 136 for more on PV. ...and BiomassThe DTI is giving a £2.9m grant to support a £7.3m project involving Alstom Power UK Ltd and First Renewables Ltd. aiming to develop advanced combustion technology for the generation of electricity from energy crops and other fuels from farming and forestry. It is seen as a follow up the ARBRE wood-chip gasification project. Energy crops are hoped to provide fuel for up to 1GW of new plant by 2010 but the high-efficiency gasification and turbine technology needs more development work. plus Help for fuel poorThe UK will spend £15 m on pilot power and renewable energy schemes to help low-income households heat their homes better in winter. As part of the government's fuel poverty strategy to cut heating costs and ensure all poor households can afford to keep their homes sufficiently warm by 2010, the government will spend £10m on an energy-efficient combined heat and power project involving 6,000 households and £6ms on a scheme to use renewable energy to heat homes not linked to the gas grid. Other proposals include investigating the expansion of the gas network to rural areas and training more people to become gas fitters to install central heating systems. Source: Hansard, 29/11/01 2. Scotland leads the wayEnergy from wind, waves and tides could provide up to 10 times more power than Scotland needs, according to a new study by energy consultants Garrad Hassan in Glasgow, produced for the Scottish Executive. The study concludes that the potential renewable energy resource in Scotland at under 7p/Kwh is nearly 60GW by 2010, mainly from onshore and offshore wind and marine energy. As well as being 10 times the nation’s peak demand for power on the coldest day in winter, this is equivalent to three-quarters of the generating capacity of the entire UK. A summary of the report has been passed on to the PIU review group. The Scottish Sunday Herald (Dec.9th) was in triumphant mood.‘The study paves the way for a historic sea-change in energy policy that should give Scotland a chance to lead the world in developing the technologies for tapping the awesome power of nature’. Simon Pepper, director of the World Wildlife Fund Scotland, said: ‘At last here it is in black and white: a renewable energy future for Scotland, confirming for all that the potential is there if we choose to make something of it. One of the greatest opportunities this highlights is the potential for job creation and investment in manufacturing and engineering. It could be an economic treasure chest for the people of Scotland.’ The report takes account of the environmental, planning and technical constraints, and works out the total resources that will be available in 2010 for less than 7p/kWh of electricity. The simplest and cheapest option is onshore wind power, which could provide 11.5 gigawatts of electricity for less than 3p/kWh. This is nearly twice Scotland's peak demand and is 11 times more than the power needed to meet the Executive’s target of 18% of electricity from renewable sources by 2010. The report concludes that this wind resource ‘is all available within the 30% of Scotland’s land area which is not environmentally designated in one way or another, and in fact would only occupy around 2% of that area. This means that Scotland should be able to meet, largely, but not exclusively from onshore wind, the Executive’s objective that, by 2010, increased renewable generation should account for 18% of electricity supplied in Scotland; this will require around 1GW of new renewable capacity’. The Sunday Herald noted that, if it was assumed that none would be built on the 70% of land that is protected because of its scenic beauty or its wildlife and natural habitats, that would rule out the site initially earmarked for one of the world’s largest wind farms on Lewis (see earlier). The 600MW development being considered by British Energy and AMEC could damage an environmentally important peat bog. Another potential problem identified in the study was Ministry of Defence opposition to wind turbines in areas used by low-flying military jets. The new study says that up to 25 gigawatts of electricity could be produced by 8000 or more wind turbines stationed on platforms out at sea, and the potential contribution from wave power is put at 14 GW. Although it is at an earlier stage and is more expensive than wind power, there are at least three different wave power machines under development. Turbines installed underwater could extract up to 7.5 GW. Surprisingly, biomass (energy crops/ farm wastes) only puts up to 0.6GW and hydro only 0.3 GW. See: www.scotland.gov.uk/who/elld/energy/ener_uker_supsub.asp Some other large windfarms have recently been proposed in Scotland, including a 70 turbine £60m project by Scottish and Southern Energy near Girvan in South Ayrshire. Meanwhile a second report released by the Executive shows that the 18% renewables target can be achieved using the existing power grid, but it would need a £195m upgrade. Plan for a 600MW wind farmThe Hebridean island of Lewis could become the site for the world’s largest onshore wind farm, if a plan to install 300 2MW wind turbines near Stornoway gets planning permission. The electricity generated could be "exported" via the proposed 350-mile undersea cable, with links through to Merseyside or North Wales, an idea which, (see later), is subject to a separate DTI supported study. The £600 million Lewis project is being developed jointly by Amec and British Energy. Amec are undertaking a year long detailed feasibility study into cost, location and environmental impact as the first stage of the project. Brian Wilson, Minister for Energy said: ‘This project has the potential to provide around one per cent of the UK’s electricity needs. I am delighted that a project of such significance has emerged and that it would not only contribute to our energy needs but also create manufacturing employment on Lewis. This wind farm could be a wonderful long term investment for the local community and there is a clear link between economic benefit and community ownership of the land involved. It is particularly gratifying that the companies’ plans are based on the reopening of the former oil fabrication yard at Arnish Point, as a turbine and tower manufacturing plant. This emphasises the fact that manufacturing for renewables can become a very substantial sector of our economy. Initially 150 jobs will be created for turbine and tower manufacture but more will follow in operation and maintenance of the windfarm’. The land chosen is owned by the Stornoway Trust, a publicly owned charity, and the income from the turbines is expected to benefit the local community, which votes on the makeup of the trust, by at least £3m a year. The prospects for local economic renewal clearly went down well in this area of high unemployment and low wages. "This would be the largest ever single investment in the Western Isles," said local MP Calum MacDonald. "It is the equivalent of oil coming without the problems." As noted in Renew 135, the Western Isles Council has already set up an "energy innovation zone" and recently gave planning consent for a smaller wind turbine project. "I think renewable energy is very positive for the Western Isles," Finlay Morrison, a Lewis councillor, told the Guardian. "But I think there will be quite a discussion if it is that size of development. If there's a windmill on every hill then I'm not sure that the local population will accept that, but if it is sensibly handled then they might be more open to the idea." Scottish Friends of the Earth, said "This is the type of development we would welcome. But we need to see the planning applications and community response. There will be concern about the visual impact and the preferred site is a European-protected peat bog." That also worries Scottish National Hertitage and the RSPB. So there could be serious planning problems ahead. But at least the undersea link could remove one of the technical hurdles. The Western Isles have some of the best conditions in the world for wind, tidal and wave power but developers have always had the problem of how to connect to the national grid. The proposed cable running directly to England or Wales is seen as the answer, avoiding having to strengthen hundreds of miles of power lines in Scotland and Northern England where the national grid is most fragile. It is hoped the cable would encourage other renewable energy companies from around the world to set up on Lewis. A second stage could include an offshore wind farm, together with wave and tidal power projects. According to the Guardian, the developer said that, overall, there was ‘a potential to generate more than 2,000 MW of electricity’. Calum MacDonald commented "The plan is to use the initial onshore wind farm to generate the cash to finance the cable. The second stage will be to develop offshore wind and tidal power and, looking far ahead, to position the Hebrides as an ideal sight for the nirvana of energy- hydrogen power. This project could unlock the whole potential of renewables to give Britain sustainable, clean energy." Sources: DTI/ Guardian Nov 26 / Sunday Herald 2 Dec ....but Wales may catch upAs we noted in Renew 134, Wales is in danger of becoming a no-wind zone, given the level of opposition to new wind projects. But the tide may have turned, following the recent launch by Brian Wilson, the Minister for Energy, of a new windfarm at Parc Cynog and the consent given to another, to be built at Cefn Croes. The combined power will be enough to supply over 40,000 homes. The £3.5 million project built in Parc Cynog has five 720 kW turbines and will produce enough power to supply over 4000 houses. This is the first windfarm to be built in Wales for two years. The £35 m development at Cefn Croes, at 58.5 MW, will be the single largest windfarm in the UK. It will result in savings of 150,000 tonnes of carbon dioxide. Speaking at Parc Cynog, Brian Wilson said: "The launch of these windfarms should mark the start of a new period of expansion for wind energy in this country. Wales is blessed with some of the finest energy rich natural sources in the world. I am confident that Government, investors and the local community will work together to ensure that these assets are utilised to help reduce the effects of climate change." Speaking about the newly opened windfarm in Parc Cynog, the Minister said: "British engineering had a huge part to play in the development of this windfarm. The 44 metre high turbines were manufactured in Wales and 17 other UK companies were involved in the project. Potential for manufacturing is an important part of the case in favour of developing our renewables industry." Speaking about the newly approved windfarm in Cefn Croes Mr Wilson said: "This development is equivalent to one third of the wind turbine capacity currently operating in Wales. Once built, it will supply nearly 50% of the electricity needs of Ceredigion and one percent of the needs of Wales. This development will put Wales right at the forefront of the renewables expansion which I am anxious to promote throughout the UK." Brian Wilson also announced he will shortly be introducing new rules which had been proposed earlier for the relocation of renewable energy projects which have been proposed under the non fossil fuel obligation but have failed to obtain planning permission. "These new rules will unlock around 100 renewable energy projects, currently blocked by planning constraints, to drive forward a significant expansion in the production of green energy. Many of the projects will be wind based." New marine cable to link UK renewablesThe Department of Trade and Industry has launched a new study into the idea of building an offshore electricity transmission grid along the West coast of Britain, linking it directly to the mainland national grid. The DTI notes that ‘the West coast of Britain has large undeveloped renewable resources. If these are to be fully exploited, there will be a need to upgrade the existing electricity infrastructure. One possibility would be the development of an underwater cable to connect parts of the Western seaboard of Scotland, North West of England, Northern Ireland, Western Wales and possibly, the South West of England, directly to the national grid’. An initial study, funded by the Government’s renewable research and development programme, is being carried out by PB Power Ltd, who will look into the feasibility of such an interconnector. The results should emerge soon. The study will look at a number of issues, including: cost, geographic location, and the extent to which renewable energy resources can be served by an interconnector. Interestingly, as we noted in Renew 128 (p.29), in 1999 ETSU published the results of an earlier study by PB Power on a similar idea- installing a 2GW high voltage DC link between Scotland and N. Wales, to transmit Scottish wind generated electricity south- and so avoid the environmental objections that have already emerged in relation to the plan to expand the land based interconnect between Scotland and England. The ETSU report (W/33/00529/REP) estimated the cost of various links, and decided that the cheapest was one that ran between the nuclear site at Chapel Cross in South West Scotland and the nuclear plant at Wyfa in Wales, which would add 0.5p/kWh to the cost of electricity. If the new study confirms that an offshore interconnector is economically and technically viable, a second study will follow to examine, in more detail, cable routings and points of connection with the electricity transmission network. Brian Wilson, Minister for Energy said: ‘The UK has huge untapped renewable resources, but much of this potential can not be fully utilised at present because of weak or non existent electricity infrastructure in some places. The proposed interconnector is a possible means of capturing this powerflow and transmitting it around the UK, without encountering many of the inevitable environmental concerns which land based transmission systems would attract’. He added ‘The Western Seaboard, from the Hebrides down to the West country, could contribute far more of the country’s energy needs if this infrastructure deficiency can be overcome. The economic implications of these proposals are enormous’. During an interview with Radio Scotland (12/11/01), Wilson said that it was expected to cost around £400m and might go as far south as the South West of England at a costs of around £1m per mile to install. But not everyone liked the idea. In a session of the Trade and Industry Select Committee session, its chair, Martin O'Niell, commented that the history of British energy is ‘littered with ideas from the the bright ideas box that come out prematurely and raise expectations and cost money and very often never actually produce the goods at the end of the day’. Wilson, replied that it was ‘better to light one candle than to forever curse the darkness’, to which O’Niel responded. ‘This is a question which maybe should have been asked before the match was even taken out of the box to light the candle’. Similarly negative views came from OFGEM's Callum McCarhly, who expressed concern about the wisdom of trying to install, and then transmit power from, generators in remote areas. 3. The battle for RenewableRPA begins to BiteThe newly launched Renewable Power Association has been making waves. ‘Renewable generators are facing bankruptcy, or seriously curtailed activity, because of the new electricity trading arrangements and the further delay in the introduction of the Renewables Obligation.’ Meanwhile, they noted, the government has undertaken to write off the nuclear industry’s £42bn historic waste disposal and decommissioning liabilities Clearly the RPA does not intend to let the government have an easy time. Piling on the pressure, it organised a well attended seminar, in January, on NETA, the New Electricity Trading Arrangements, at which it was clear that many people in the renewable energy community felt that tinkering at the margins would be no use- instead what was needed was a political initiative to give renewables and CHP a chance to compete. See later for a report on the NETA crisis MOD blocks offshore windThe Ministry of Defence has objected to four of the UK’s proposed 18 new offshore wind power sites because of fears of interference with air defence radar systems. ‘Where we are testing planes we need to minimise the risk to aircraft and personnel,’ a spokesman told Reuters. The MOD wants to block offshore sites in the Irish Sea at Southport, where a scheme has been put forward by German wind energy developer Energie Kontor, and at Shell Flat which is home to three schemes. The developers at Shell Flat include Danish energy company Elsam, Royal Dutch/Shell and CeltPower, a joint venture between Scottish Power and Japanese trading consortium Tomen Corp. "These sites are near Warton where British Aerospace undertakes aircraft training for the RAF", said the MOD spokesman. In addition, according to Reuters, the MOD is in talks with London Electricity and Germany’s Enertrag as it is unhappy about their plans for a wind power site off Cromer in Norfolk. Shell says it has carried out studies of the effect on radar and believes any impact can be managed by existing systems. ‘The wind farm is not in the line of approach of any runway. Blackpool airport which is closer to the farm than Warton has not anticipated any problem,’ adding the company was in talks with the MOD on the issue. The DTI has set up a working group on the radar issue which includes officials from British Wind Energy Association (BWEA), and from the military. "The idea is to get some movement in the current impasse. We need to bring some clarity to the issue," said Chris Shears, BWEA board member responsible for radar issues. The group has commissioned three reports and hopes to issue guidelines on the radar problem within a year, he said. The MOD is also trying to block the huge 80 MW onshore Kielder wind farm in northern England on radar grounds. The project’s developer, Ecogen, said it was asking the courts to review the Department of Trade and Industry’s decision to stop the scheme, taken on MOD advice. Source: REUTERS Oops: one of the windturbines off the coast from Blyth Harbour in Northumbria lost a blade in the recent storms. It may have been hit by lightning. PV and Net MeteringEnergy Minister Brian Wilson recently commented, in response to a Parliamentary Question about the sale price of photovoltaic energy for national grid, that, although this was a matter for the market, ‘the best price recently mentioned to the Department has been 6.5p kWh paid by a company offering a ‘net’ metering" deal, that is a deal in which the supplier buys PV energy from generators at the same price that they would charge them for electricity purchases’. He added ‘some European countries have taken steps to encourage net metering, and some, notably Germany and Spain, have gone further by legislating for the utilities to pay renewable generators a premium price for all the electricity they wish to export to the network. In the case of PV, this is about 33p/kWh per kilowatt hour in Germany and 25p/kWh per kilowatt hour in Spain.’ He noted that ‘the Government are encouraging the uptake of PV in the UK through both domestic and large-scale field trials, soon to be followed by a major PV demonstration programme to rival the German and Japanese PV roofs programme. It is also working to overcome infrastructural barriers through simplified grid connection, fairer tariffs and more positive planning guidance’. Not before time, you might say. For more on PV see Technology in Renew 136 . Source: HANSARD, 14 November 2001: Column: 760W Energy Crops still stalledThe problems facing biomass/energy crops in the UK were reflected by the recent, hopefully temporary, suspension of publication of ‘Biomass Farmer & User’, the newsletter produced by biomass pioneer George Macpherson. He comments that ‘biomass energy has not taken off yet in the UK. It should have done, two years ago, but successive governments have hindered developments by offering incentives and then making them too difficult and time-consuming to obtain.’ He adds ‘I for one have about 12 acres that would be ideal for short rotation coppice willow, but there is no way I can afford to plant it’. The Country Land and Business Association evidently feel similarly, commenting recently that red-tape and planning restrictions were impeding efforts to grow green-energy crops- as well as wind farm projects. The association said targets to lower greenhouse gas emission would not be met unless the government changed its planning guidance to allow more schemes to overcome local objections. It complained after a government planning inspector upheld North Wiltshire council’s decision to refuse planning permission for a power station to burn locally produced willow. Rupert Burr, an association member, who had planted 85 acres of willows for the project, said: "This is classic proof that there is no such thing as joined-up government. It is small businesses and farmers like me who are trying to get projects up and running. I believe that energy crops are now dead in the water until the government sorts out the planning problems." Source: FT 4. Green Power in LondonLast year, London Electricity launched a combined green energy fund/tariff scheme with a massive advertising campaign around London, including on the Tubes. It has been so successful that the company may consider developing other renewable energy schemes. "The success has encouraged us to be inventive in this area and put our minds on where else we can meet customers' desires to ‘do their bit’ for the environment". However, Derek Lickorish, managing director of London Electricity, told Reuters that it was too early to speculate on the possible form of future products, saying the new scheme, which will invest in small-scale community renewable power projects, needs time to bed in. London Electricity, which is controlled by state-owned Electricite de France, which also controls SWE in the West country, launched its green energy tariff and fund last Sept. The fund is aimed at installing renewable energy, such as solar PV, in local communities projects and schools. Lickorish said London Electricity will match pound for pound the 0.4p/kWh premium price that green tariff customers have to pay. "We have had several thousand enquiries already and believe the fund will amount to about £350,000 in the first year". The company was kick-starting the fund with £64,000. He said the scheme’s main purpose was to create new renewable energy capacity. "We have deliberately gone for additionality- we want it to build new plant". So customers will be paying for capacity extra to and outside of that which the company will claim for its Renewable Obligation Certificates under the Renewables Obligation scheme. London Electricity say that, although fund customers will pay a premium towards the fund, customers are not expected to be worse off financially. "Our product was designed to be financially neutral at worst for customers and we expect it to be positive for many". The extra 25p per week the average customer will pay on the green tariff could, they say, be offset by tailored energy efficiency advice and two energy saving lightbulbs each customer receives on sign-up. The company added that, while the initial response to the green fund was encouraging, this interest had to be translated into firm business. Most of the enquiries had come from existing customers in the company’s core London and west country markets. Source: Reuters 5. Power to the People : IPPR reportThe Government must reject new nuclear power stations and reduce dependence on fossil fuels and instead encourage small scale energy production to cut emissions and tackle climate change according to a new report published by the Institute for Public Policy Research (IPPR), the leading UK think tank on the centre-left. The report, Power to the People, calls for an overhaul of energy policy to encourage a more decentralised system to provide heat and electricity much more efficiently. It says that household fuel production, combined with the rapidly improving economics of renewable energy like wind and solar, will mean that the UK can provide its energy needs in a secure way, whilst reducing dependence on fossil fuels and phasing out nuclear power. But to follow this path, IPPR says that Government will have to create the right market framework:
The reports author, Chris Hewett, IPPR Senior Research Fellow in environment policy, said: "The 20th century energy system was all about building massive power stations to make cheap electricity. The next generation of energy technologies is able to generate power and heat more cost effectively in the homes and offices where we need it. Such a system is far more secure, flexible and clean than returning to the nuclear age or limping on with fossil fuels. The Government must design policy for this century, rather than pandering to the industries of the last". The report says that the world’s energy industry is at a crossroads. ‘The combination of liberalisation, technological change and environmental pressures point towards the possibility of a decentralised energy model with a major contribution from renewables, more sophisticated demand side management and micropower technologies generating heat and electricity in the home’. This combination ‘could create an innovative, flexible low carbon, energy economy, allowing us to radically cut greenhouse gas emissions whilst maintaining high standards of living and protecting low income groups’. Patricia Hewit, Secretary of State for Trade and Industry, made her first speech on energy at IPPR’s Low Carbon conference last Nov. She said that ‘the ultimate competitive, low carbon market is one where everyone can generate their own power, for example through micro CHP and photovoltaics’, and the DTI was supporting a micro-CHP pilot involving up to 6,000 households, and PV in 32 projects, involving over 500 homes. And then there was the new PV demonstration programme, which should install PV ‘on around 3,000 homes over the next 2 to 3 years’. Power to the People (£10.00) is available from Central Books, tel. 0845 4589911. Also see the Groups section in Renew 136.. Renewable EducationIn answer to a Parliamentary Question on what plans she had to promote increased access to training in renewable energy-related disciplines in higher education, the Secretary of State for Education and Skills, Margaret Hodge commented ‘Higher education institutions are autonomous organisations which design and determine their own courses, in response to market forces. A substantial number of higher education institutions are offering a range of courses in renewable energy-related disciplines in the current academic year. The Government are keen to promote an interest in science and technology generally. Science Year (September 2001 to August 2002) will raise the profile of science and increase pupil engagement with science, particularly in the 10-19 age range. It aims to boost the take-up of science subjects post-16.’ See ‘Groups’ in Renew 136 for some new renewable energy courses at tertiary level, including T206, the new OU course ‘Energy for a Sustainable Future’, which starts in Jan 2003. 6. After the RO ... what next for Future Energy?With the Renewables Obligation soon to be in force, the green power retail market should begin to settle down. In particular the fate of the so called ‘voluntary’ schemes accredited under the Energy Saving Trusts ‘Future Energy’ scheme, which was first launched in July 1999, has become a little clearer. Last Sept., with the statutory consultations into the Renewable Obligation (RO in England and Wales, ROS in Scotland) underway, the Energy Saving Trust (EST) carried out its own consultation on, and review of, the remaining Future Energy schemes. In its review it noted that ‘the guiding aim of Future Energy is to lead to the development of additional renewable electricity generation’ and it reported that ‘during the first 21 months of operation, (i.e. to 1st April 2001), a total of 16 offerings from 13 different suppliers were accredited. These covered a range of non-domestic and domestic supply offerings and funds, with over 20,000 customers signed up. Electricity sales for accredited domestic offerings were 50 GWh in 2000/01 and for non-domestic offerings were 72 GWh, with corresponding CO2 savings of 13,000 tC/a. In addition, over £150,000 had been raised through the funds offerings (which included monies contributed by the supply companies themselves)’. Following the introduction of the Climate Change Levy last April, EST had decided that it would no longer accredit non-domestic supply green power schemes, since, in effect, that was being taken over by OFGEM and Customs and Excise. That reduced the number of EST accredited offerings to 12. Other factors contributed to further reductions in the number of accredited offerings- one company merged two of its separate offerings; another newly- merged supplier with two offerings no longer wished to be accredited; As a result, there are now 8 offerings accredited under Future Energy, from 7 different supply groups. Despite the reduced number of offerings, the EST noted that the number of customers on accredited offerings is still over 20,000. Indeed, it says that ‘customer numbers for currently accredited offerings have grown by over 60% in the last 12 months, indicating that these offerings continue to attract new subscribers’. However, the Renewables Obligation meant that there would have to be changes. Under the RO, all licensed electricity suppliers are required to source a growing percentage of their total sales from eligible renewable sources with verification achieved by means of Renewable Obligation Certificates (ROCs), issued for each MWh of renewable electricity generated from qualifying accredited renewable generators. The Government stated in its Statutory Consultation that green tariffs should not be used to meet a supplier’s costs in fulfilling their obligation, a view shared by the EST- and also, most likely, by consumers- who would not want any premium they paid to go to helping companies meet their obligation. Instead they would presumably prefer the money to support the development and use of extra generation capacity, additional to and outside of the RO. Certainly that was the view of the Government. However, meeting this ‘additionality’ criteria would be hard, at least for domestic supply schemes- where companies promise to match consumers electricity use with green supplies. In its Autumn 2000 consultation, EST suggested that there would in fact be little, if any, extra qualifying renewable energy available for sale into the voluntary domestic market, since the Obligation targets were designed to be challenging and there was therefore unlikely to be much, if any, surplus capacity available for sale outside the Obligation. In addition, the price premium, if passed on in full to customers, would be around 3 p/kWh, since this is the amount of revenue the supplier would lose out on by not using the ROC to meet his target (or to sell to another supplier). This equates to a 50% premium on domestic electricity prices, which EST felt would be acceptable to only a very small fraction of domestic consumers. In its Sept. 2001 consultation paper, EST say that their views on this have not changed, but note that ‘at least one electricity supplier has indicated they would like to operate green tariffs in this manner’. They comment that ‘if such tariffs are indeed offered to the domestic market, the Trust believes that the only effective way of ensuring additionality would be for a supplier to redeem ROCs against green tariff sales, rather than against a supplier’s target. We believe it may be possible for a voluntary system to be established, under which participating suppliers allocate ROCs to green tariffs, rather than redeeming them against their obligations. Under such an arrangement, it would be possible for the supplier’s offering to be "branded" as being green by means of the Future Energy logo. Such branding may be important in a market where a range of tariffs is offered to householders, some with true additionality and others without’. EST are clearly not that enthusiastic about this approach, arguing that ‘while redeeming ROCs against a green tariff would ensure additionality, we believe there would be hardly any voluntary market activity if it became the only option open to suppliers. This would be in sharp contrast to the situation which exists today, and which appears to be becoming of greater importance to both suppliers and NGOs, as witnessed by recent market activity’, and they refer to the Juice tariff by npower, backed by Greenpeace; the recent endorsement of Powergen’s Greenplan offering by WWF; and Scottish and Southern’s RSPB Energy offering. Of course, it may be that some of these schemes will not lead to much extra capacity. In particular, as we noted in Renew 135, npowers new zero premium scheme, Juice, had raised some eyebrows by proposing (if we understand it right) to use the power sold to consumers for the RO, but not to claim Levy Exemption Credits for power sold to companies under the Climate Change Levy exemption arrangement. The problem then was there would not be so much of an incentive to invest in new capacity. ENDS commented, critically, that the only real outcome might be general awareness of the value of renewables. That would be something of a retreat from the earlier vision of consumers contributing to significant growth in new generation capacity. But this retreat seems to be at least partly what the government has in mind. As we noted in Renew 135, in its consultation document on the RO, it saw green power schemes as an important role in promoting and ‘raising awareness’ of renewable energy. EST then attempt to follow through the implications of this approach, arguing that ‘the question which needs to be addressed is whether green tariffs can be developed to meet DTI’s objectives of promoting and raising awareness of renewable energy while leading to additional generation over and above a supplier’s obligation’. Their Autumn 2000 consultation into Future Energy had indicated that "no premium" green tariffs were primarily a means of raising awareness, and in the new paper they add ‘such activity would not lead directly to additional capacity, but its impact would be more indirect. Suppliers could keep green tariffs customers informed of issues relating to renewable energy, including for example details of local planned or existing renewable generating plant’. However, the EST is clearly not happy with this trend. It adds ‘while such tariffs could usefully raise awareness of renewables, there is a risk of a false "feel good factor" if customers believe that signing up to a green tariff results in itself in an additional positive environmental benefit, beyond that achieved by the Obligation on suppliers. Paradoxically, the backing of environmental NGOs may reinforce the false feel good factor, as customers may be less inclined to study the detail of the green tariff, relying instead on the existence of a "reassuring" logo’. And EST then come off the fence entirely and conclude that ‘it is clear that such tariffs do not meet the DTI criteria, nor do they further the guiding aims and objectives of Future Energy, which is to lead to the development of additional renewable electricity generation. The Trust feels it cannot accredit tariffs where there is no additionality. We conclude that, unless a voluntary ROC redemption mechanism can be established, Future Energy accreditation for supply offerings cannot continue to operate in its current form once the Obligation is launched’. This leaves a separate issue as to what is an acceptable green tariff now that the Obligation has been introduced, and EST focuses on the fund schemes. It notes that ‘although uptake of funds has been lower than supply offerings to date, they may have a role to play in developing the renewable energy market by funding new capacity. The building of new renewable plant, particularly small scale or community level, can be used to promote and raise awareness of renewable energy among householders’. However, they add that, ‘as with supply offerings, it is important that renewable energy funds are not used by suppliers to help them meet the cost of the Obligation. In practice, this can only be achieved if capacity which has been financed (either fully or partially) by such funds is ineligible for ROC’s. Alternatively, funds could be used to support renewable installations which would otherwise not have gone ahead. Once commissioned, they would be eligible for ROCs’. EST say that ‘such installations can and should have an important educational role, for example among school children or within communities. Financial criteria will need to be established to determine the basis on which support can be provided. We conclude there is a possible role for Future Energy funds to support small scale renewable energy installations, as long as there is an educational/promotional element’. While that may be true, it does look rather marginal. The small scale community projects that have been supported by the £150,000 raised so far by fund schemes are all no doubt worthy, but they don’t add much generation capacity. Of course it could be that the fund schemes will grow, so that it would begin to add to capacity significantly - outside of the RO, at least initially. However,while EST seem keen to support the fund schemes, they don’t seem to see them growing very large, but rather as contributing mainly to the ‘awareness’goal. Thus they argue that ‘renewable energy funds can lead to installations going ahead which would otherwise have been uneconomic. Where such installations are small scale, at the household or community level, we believe they have the potential to play a role in raising awareness of renewables’. Overall then EST seems to want Future Energy to be much reduced in scope, and limited to the fund schemes. Indeed they even accept the idea of Future Energy being wound up entirely. After all some companies have gone ahead with supply schemes without seeking EST accreditation, so maybe it’s not that vital. However, to be fair, they do also mention some other potential roles. ‘There may be new areas where accreditation can play a role in building confidence in the market, for example in the accreditation of PV products and installers under the Government’s solar roofs programme. We believe it is very important for the long term viability of this industry for quality standards to be agreed and maintained from the very start- otherwise, irreparable damage may be caused if the perception of a "cowboy" industry were to develop.’ More generally, they talk of EST possibly playing an educational role - promoting renewables to a wider public. ‘It is important to create a positive attitude towards renewables in order to enable them to fully play their role in the UK’s move towards a sustainable future’. There’s nothing wrong with that- it’s what we try do via RENEW and NATTA. But it does seem a far cry from the original purpose of Future Energy- to lead directly to the development of additional renewable electricity generation. Responses to the new EST ConsultationMost respondents to the Sept. 2000 EST consultation evidently agreed that the original purpose of Future Energy would no longer be relevant once the Obligation commenced, but nearly all respondents felt there should be a continuation of consumer-focused renewable activities, either within the context of a revised Future Energy scheme or with a new Government-backed promotional vehicle. The most common view was for Future Energy to continue to accredit offerings, but to amend the terms of the scheme to cover a broader the range of options more in line with the new market conditions. In its reply to this feedback, EST noted that Ofgem is developing guidance on green tariffs, to coincide with the introduction of the Obligation, which will set out the types of offering which might be considered green in future (i.e. once the Obligation is in place). So EST has proposed that the next stage is to work alongside the Ofgem guidelines. At the same time, they believe there is ‘an opportunity for Future Energy to be used more widely as a vehicle to raise awareness of renewables among the general public. Indeed, some respondents commented that there had been insufficient promotion and marketing of the brand’. The reason for this, they say, is that ‘the original proposal for Future Energy envisaged most ongoing marketing to be undertaken by energy suppliers, such that Government funding was limited primarily to the initial launch. In practice, suppliers focused their marketing effort on their green tariffs, rather than Future Energy, and EST did not have the resources to co-ordinate more fully with their marketing activities. It is clear that more funding would be required to provide core marketing and promotional services’. Well maybe so. But that’s water under the bridge. For the moment, EST proposes to enter into discussion with Ofgem with a view to developing Future Energy to be compatible with Ofgem’s guidelines for green tariffs; consider the full scope of the marketing potential of Future Energy as a consumer-focused identity supported jointly by industry and Government; and, separately from the issue of green tariffs, develop criteria for the accreditation of renewable energy products and installers under the Future Energy brand. * For more, see ‘Greening Electricity’, NATTA’s compilation of reports from Renew on green power markets £2. Draft OFGEM Guidelines are now out on www.ofgem.gov.uk 7. NETA CrisisThe battle over the impact of the New Electricity Trading Arrangements (NETA) on renewables and CHP has continued. The Combined Heat and Power Association pointed out that the preliminary conclusions from the Performance and Innovation Units study were that offshore wind might be generating at 1.5-2.5p/kWh by 2020, and that CHP costs could have fallen to 1.6-2.5p by then- compared with nuclear generations costs of 3-4.5p. And yet NETA was undermining both CHP and renewables. Instead the CHPA wanted sustainable energy technologies to be taken out of NETA, and in particular for CHP to be exempt from the Climate Change levy. The battle lines had been well drawn by Andrew Robathan MP (Blaby, Leics), who is vice-president of the Combined Heat and Power Association, and vice-chairman of PRASEG, in a House of Commons debate last October. On renewables, he referred to a conversation he had with a small wind energy producer in Leicestershire. ‘The unpredictability of supply from his two 25 kW turbines meant that his contract with Powergen was cancelled in April. In other words, it is no longer cost-effective to run his wind generators, a fact that is mirrored throughout the country. Large wind farms are seeing a 27% reduction in the price of their electricity, while other renewable prices are down by 26 per cent. The renewable energy price is being artificially depressed by NETA; far from encouraging renewables, they are being discouraged.’ As another example, he cited a report from the Tyndall Centre for Climate Change Research, which ‘found that the imbalance penalties imposed by NETA outweighed the payments made for supplying energy. It suggested that a 10 MW wind farm would have had a net negative unit value of minus 0.41p per kW hour. That means that the farm makes a loss just by producing and selling electricity, not even taking into account any costs involved in setting it up. Indeed, experience shows that some wind generators are finding it easier to stop producing electricity and that turbines are being switched off’. Turning to Combined Heat and Power, he said that he had heard the CHP industry described recently as "in meltdown". ‘Power exports from CHP generators have fallen by more than 60 per cent. and British Sugar has cancelled two major 70 MW CHP schemes, which was a £100 million investment. Slough Heat and Power, a small local producer, is considering writing off £60 million of investment because of the impact of NETA; that would lead to 70,000 tonnes a year of additional landfill waste, which the company is currently turning into fuel.’ He added ‘The problems facing CHP are not due only to NETA, but relate to the fall in electricity prices as a consequence of NETA and the unprecedented rise in gas prices. Moreover, CHP labours under the need to pay climate change levy on exports of power from CHP producers. The Combined Heat and Power Association was promised exemption from the levy but achieved only partial exemption. As almost everyone, including the Government, believes that combined heat and power is an efficient use of energy and leads to the reduction of carbon emissions into the atmosphere and therefore a reduction of climate change, it seems ludicrous to impose the climate change levy on the export of CHP-produced energy.’ He went on ‘It is also currently intended that CHP should be subject to the renewables obligation, and that would cost CHP producers a further £100 million a year’. So CHP would be subsidising renewables, something he felt was perverse. It will all come out in the washThe Minister for Energy, Brian Wilson replied saying he too was concerned to resolve the problems, and there were consultations going ahead which would lead to action shortly. But he also but also tried to play down the scale of the problem. He noted that the Ofgem report, stated that actually ‘the volume of trade in renewables is slowing down only slightly. Although the same volume of renewables is sold at market, prices have dropped substantially’. He added, ‘I hope that improved future contract terms will address that problem. The renewables contracts that were traded in the first two months of NETA were negotiated before 27 March, and I expect them to contain a speculative element, but as NETA settles down and the industry gains trading experience, future contract prices may stabilise. The report stated that in NETA’s early days, sharp price hikes had occurred when trying to balance the market. That would have a greater impact on small generators. As the market has matured, the price spread has narrowed, and the balance and settlement system has been modified in the light of earlier experiences’. He went on ‘The report also showed that consolidation services, which could group smaller generators into portfolios of predictable and less predictable generation, had not yet emerged in the market. That, possibly, is a partial solution. I do not deny that the issue exists, but we can take evolutionary steps to address the problem.’ On Combined Heat and Power, he said he ‘recognised the urgency of that matter’ but pointed to the climate change levy exemption for good quality CHP used on site or sold direct to other users, noting that ‘CHP is a key option for energy-intensive industries that want to negotiate an 80% reduction in CCL’. He added ‘about £70 million has been made available this financial year for enhanced capital allowance. We have offered tax incentives to companies investing in CHP, and have exempted electricity generating plant machinery in CHP schemes from business rates. The energy efficiency fund under the climate change levy is to be administered by the carbon trust, and CHP schemes are expected to benefit from it.’ So, he concluded, ‘a lot has been done in support of CHP’, but recognised that this might not be enough. ‘If the reality is that people are now walking away from it, I have to treat that seriously.’ Overall he concluded ‘I have no interest in denying or concealing the fact that there are problems for wind energy and CHP. I am very anxious to address those problems’. Fine, but lets hope he can really resolve the problems. Source Hansard, 17 Oct 2001: Column 298WH Getting Power to the PeopleIn its new report ‘Power to the People’ (see p.4), the IPPR see NETA as a major stumbling block for renewables and CHP and offer the following potential solutions: * excluding intermittent or small scale generators from NETA, so suppliers have to use their power when it is available * compensating for the short term losses by increasing the government subsidy to the effected generators * setting up companies to aggregate intermittent generators before trading on the market. It adds that ‘in the short term, some form of priority for renewable and CHP generators could be imposed on the NETA system, either reducing the fluctuations that they are exposed to or eliminating them altogether. In the long term, other options will have to be put in place as a greater proportion of electricity comes from either CHP or intermittent renewables’. 8. Wave &Tidal Energy - slow ahead bothIn response to some Parliamentary questions about research on wave and tidal energy technology, Brian Wilson, the Energy Minister commented ‘The recent report of the Science and Technology Committee Inquiry into wave and tidal energy estimated that energy from wave and tidal currents around the UK have the theoretical potential to generate about 25% of the nation’s electricity. The same report estimated that if 0.1 % of the energy resource in the ocean could be converted to electricity it would satisfy the present world demand for energy five times over. This represents a significant new source of energy and the Department is vigorously encouraging and assisting industry to develop promising technologies. Success in this would lead to the development of new sustainable industries but it is too early in the technology development to provide reliable estimates of the size of the market and jobs.’ He noted that the DTI ‘has already supported the development of the world’s first commercial wave power device at Islay, and we recently announced that we will provide further support to the company involved, Wavegen, by increasing the level of R&D funding for their most recent project to almost £1.67m. This funding will assist with the further development of their new offshore wave energy concept and the construction and testing at sea of a prototype’ and ‘confirms the Government’s commitment to its new wave energy programme’. He added ‘The Department commissioned a study into the prospects for tidal stream technology in the UK and this has now been completed. It was positive about the prospects for tidal stream, and is being taken forward in association with the industry. There are a useful amount of tidal currents around the shores of the UK and these are already well charted. There are a number of sites where tidal stream generators could be deployed, but as yet no prototype device. Tidal stream is now covered as a technology in my Department’s Sustainable Energy Programme.’ He went on, the DTI ‘recently initiated a call for proposals under the Sustainable Energy Programme, which invites bids for funds to support the development of both wave and tidal power. The level of funding will be dependent on the number of good quality R&D proposals which are received from the industry. Both technologies will also continue to be eligible for funding for R&D into Electricity Generation from renewable and clean sources from the Engineering and Physical Sciences Research Council. This programme provides £3.5m of support per year for research into the full range of renewables technologies. To date, wave and tidal projects have received over £769,000 of support from this source. We anticipate that the introduction of the Renewables Obligation will also provide a further stimulus to these and the wider range of eligible renewables, including wave and tidal power. Both technologies may also benefit from a proportion of the £100 m announced by my right hon. Friend the Prime Minister.’ * Wilson also reported that ‘the Department has carried out general studies on the potential impact of offshore energy devices, as well as Environmental Impact Assessments for specific schemes, including one for a proposed tidal stream development. These studies indicate that, providing the schemes are deployed with some care, they should not have any significant adverse effect on the environment and simple steps can be taken to ensure that such schemes are not a navigation or environmental hazard.’ Source: Hansard 2nd Oct 2001. * The government has respond very positively to the House of Commons Select Committees very favourable report on Wave and Tidal Stream power last year (see Renew 137), and this area was the topic of a parliamentary debate on Jan10th. We’ll report in Renew 137. Meanwhile, the application process for support under the Governments £49m capital grants scheme for offshore wind projects is rolling on. The DTI says that these grants ‘will support early deployment of a number of demonstration projects and enable the industry to develop a bank of knowledge and expertise to maximise the contribution of this technology to the UK’s 10% target’. 9. The Dash for Coal‘Emissions have increased for the second year running, above levels when the government first came into office (1997) and this is largely due to increased coal-burn,’ according to Colin Godfrey, of CLG Energy Consultants. The government's target of cutting emissions by 23% on 1990 levels by 2010 is partly based on the assumption electricity producers would continue to opt for clean-burning gas fired power stations. But the ‘dash for gas’ has stalled because of increased wholesale gas prices, and with electricity prices falling, electricity generators are turning to cheaper but dirtier coal. Government figures show that in the first quarter of 2001 coal consumption rose 17.4% against 3.6 % for gas. In 2000 the amount of coal burned in power stations rose 15% compared with 1999 levels. In contrast gas use rose only 0.7 %. Burning coal to produce electricity currently works out at about £12 a megawatt hour against about £12.5 when burning gas. Coal plant is also a more flexible than gas-fired generation, an attribute that has become more prized following the introduction of the NETA. But coal produces about double the amount of carbon dioxide per kWh of electricity produced compared with gas. Nevertheless, according to the FT, Powergen is bringing a 485 MW coal-fired unit back into use at its Kingsnorth power station- it had been out of operation since 1996. And it is planning to mothball a 450 MW gas-fired unit at Killingholme power station in April 2002. Innogy has brought back a 340 MW coal-fired unit at its Tilbury power station, which had been off line for three years, and, the FT says, there are rumours that International Power may mothball its 500MW gas-fired Deeside plant and rely on output from its recently acquired 1,000 MW Rugeley coal-fired station. * In its new report Cambridge Econometrics also concludes that "he achievement of the government's own 20 % reduction target looks increasingly unattainable", in part due to the gas price rises, but also since NETA has cut electricity prices and encouraged consumption, so that far from falling below their 1990 levels, CO2 emissions from households will be 19% higher in 2010. 10.Ups and downs in EuropeEurope’s PV sunriseA boom in the installation of photovoltaic (PV) solar panels has been forecast by the 47 company strong European Photovoltaic Industry Association, which met in Switzerland, last Sept., with growth targets of 3 gigawatts of installed capacity by 2010 expected to be exceeded. The installation of photovoltaic systems is growing by about 30 % a year, and up to 100,000 new jobs could be created in the industry as a result, the meeting heard. However, warnings were also sounded that the price of the technology needed to be trimmed if it is to break through to a substantially larger market share. More information: www.epia.org But Clouds ahead?Meanwhile, German solar firms are optimistic despite rumblings from the EU about the REFIT renewable feed in subsidy- and possible R&D cut backs. Germany is the EU market leader, and, globally, is number three after Japan and the U.S.A. in terms of installed capacity of photovoltaic technology. Germany’s solar sector depends on the Renewable Energy Law (EEG) that allows solar power producers to charge 99 pfennigs/(kWh for solar-generated electricity fed into the grid compared with costs for conventional electricity of 6 pf/kWh. However, according to Reuters, EU Competition Commissioner Mario Monti has repeated his opposition to the EEG as a government subsidy, while German Economics Minister Werner Mueller said last summer that he wanted a cut in the research budget for renewables. With Germany’s red-green governmental coalition shaken by disagreements over support for U.S. policy in the middle east, it is not clear which way it will go, but the renewable advocates are still optimistic that renewables will win through. For example, Hermann Scheer, president of the European solar energy association Eurosolar has argued that the high cost of PV should not deter the promotion of solar energy, which, along with other renewable energies like wind, biomass and geothermal, will, he said, eventually replace the conventional centralised supply system. "Some 80% of conventional electricity costs cover distribution, while renewable energies do not need long-distance transmission lines and will save on this huge transport cost." See our Reviews and Technology Sections in Renew 136 for more on PV. Sweden tightens upSweden’s Society for Nature’s Conservation is sharpening its criteria for green electricity from renewable energy sources, so as to boost environmental awareness and improve product standard. The group sells the label "Bra Miljoval" to companies, aiming to assure customers that products, ranging from electricity to washing powder, have been produced with methods that harm nature as little as possible. "Bra Miljoval" is, together with the U.S. label "Green-e", one of the oldest tags for renewable energy such as solar, wind, biomass and hydropower. The new restrictions focus on hydropower and stipulate that producers invest money in a fund to choose from a list of measures to protect the environment for animals and plants near hydropower stations. "The criteria for hydropower were not tough enough so there was room to make changes as part of our perpetual work to boost environment awareness", Fredrik Lindberg, spokesman at the society, told Reuters. Some of the alternatives involved regulation of the water stream at water reservoirs. Power producers would no longer be allowed to cut the water flow entirely to get the maximum price. Lindberg said "It is very harmful to nature if you cut the stream totally". Lindberg said it was still unclear how costly the new restrictions would be to companies but argued that there was leverage to increase the fees on green hydropower which is a relatively cheap energy source. "Companies make large profits from green hydropower and therefore I don’t think it's more than right that nature should gain something out of that", he said. Biomass and windpower criteria also became tougher as the agency has sought to curb harmful tree felling and forbid the construction of wind turbines in nature reserves. Major Danish CutsDenmark may now get 12% of its electricity from wind turbines, but things are looking grim for the future. On January 29, 2002, the newly elected liberal/conservative Danish government presented the draft budget for 2002 and beyond. As a result, it seems, most of the R&D programmes, financial support, committees, and government agencies that have been crucial in the development of renewables will immediately be cancelled or dissolved. Many other environmental projects and overseas aid programmes will also be cut. The government will spend the 20m euro saved on hospitals, senior citizens and a 1yr maternity leave programme. It appears from the draft budget that most of the funding of renewables has been eliminated- and the new government has the parliamentary majority to implement its plans. Needless to say, most people see this as a disaster for many Danish innovative institutes, companies, inventors, investors, and organisations involved with renewables. Fortunately, the Risø State Laboratory will still have public support in the future, and the budget of its wind energy department will be go up from 70m DKK in 2001 to 112m in 2002. But it should be noted that the Danish installation of wind energy dropped from 600 MW in 2000 to 10 MW in 2001. The government has also cancelled plans for large scale off shore wind power. The power companies are no longer obliged to continue the off-shore programme; no public funding or guaranteed tariffs are available. Why has all this happened? The Danish Folkcentre for Renewable Energy, which also lost its funding, suggest that, after having lost over 50% of their market share in power production to non- utilities (wind power, biogas, small scale CHP) in W. Denmark, ‘the central utilities have lobbied strongly to bring a stop to the successful decentralised renewable energy development. The government has followed the desires of the old energy sector that now is promising energy at low market prices’. There are also evidently indications that the new government may reintroduce plans for nuclear energy in Denmark, despite nuclear having been ruled out in 1985. * To add to the crisis, as noted in Renew 134, the Danish scheme for supporting renewable energy via the issuing of green certificates has been having problems. Now, apparently, the Danes are going to pull out of the new approach - which is of a similar type to the UK’s new Renewables Obligation. Sales in Denmark have been abysmal since the new mechanism was set up. Whilst it’s not yet clear what will be the alternative, staying with the current REFIT mechanism seems favourite, particularly given the period of remission that the ECJ gave the German REFIT. Details at www.windpower.dk/articles/onice.htm 11. Wind in JapanA growing number of wind-power projects have been built in the last few years in areas of Hokkaido and the Tohoku region. As a result, wind-power capacity has more than tripled from 38,000 kilowatts in fiscal year 1998 to 140,000 kilowatts in fiscal year 2000. The Advisory Committee for Natural Resources and Energy, an advisory panel to the minister of economy, trade and industry, recently published a report urging an increase in wind-power generation capacity to 3 million kilowatts by fiscal year 2010. However, a report by Hisashi Hattori in ASAHI suggested there may be problems, noting that ‘the liberalization of electric power is making power companies more cost-conscious about wind power, which is more expensive than other means of power generation. Winds blowing at an average speed of 23.4 kph are needed all year around to turn a windmill and generate power, experts say the target seems difficult to meet under the current circumstances. The advancement of wind-power generation has been supported by power companies that are buying wind-power at a high price to promote development of natural energy sources. But Hokkaido Electric Power Co. recently set a ceiling on the volume of wind-power it buys.’ Opposition emergesAsahi also notes that opposition has emerged to wind-power in Japan, with opponents claiming that wind turbines destroy the natural environment and create an eyesore. ‘In January, Sanriku, Iwate Prefecture, abandoned plans to build a large wind-power station in conjunction with Sumitomo Corp. According to a Sanriku official, the Iwate prefectural government told the town to conduct an 18-month environmental study because of reports that golden eagles might be nesting near the planned site.’ However, "We had to give up our plans because the survey would delay construction and cost a lot of money", the official said. But Nippon Steel Corp.’s plans to build a large wind-power station in a prefectural nature conservation park in Yamagata Prefecture were also thwarted by the prefecture, which complained that such facilities would greatly disturb the park’s scenic beauty. Fukushima Prefecture, where Electric Power Development Co. is planning the construction of a wind-power station, established an ordinance that subjects such projects to environmental assessments."We can no longer ignore the protection of nature and conservation of scenery in promoting wind-power generation", said an Electric Power Development official. Asahi concludes that ‘the Japanese government should come up with a firm policy to increase wind-power generation capacity without regard to market mechanisms. It also needs to immediately establish a proper system of environmental assessment to ensure that construction projects can be advanced without endangering the natural environment’. Source: Asahi Shimbun Science News Department, 30 July 2001. 12. US Green Power weak but could growA report from the US Department of Energy’s National Renewable Energy Laboratory (NREL) gives green power programmes in the U.S. a mixed review. The report praises the 85 utilities in 29 states that have designed green power programs, resulting in 282 megawatts of new renewable capacity installed or planned. But the current customer participation rate of less than 1% in more than half of green power programmes points to faulty marketing, NREL says. And the report laments that only a dozen or so of those 85 utilities have developed more than two megawatts of new renewable power. Pricing of green power, NREL concludes, should be directly tied to the investment promised for new projects. Utilities should give their green power programs greater visibility in advertising and Internet-based campaigns. They should find ways to include businesses and other non-residential customers in their programs. And green power programs should also continually seek to make customer participation in the program easy and valuable, for example, by lowering the extra premiums when warranted, or protecting participants from fossil-fuel-generated rate increases. The study showed some customers will ‘go green’ even if the price is higher than conventional sources. "Market research consistently shows that consumers prefer to receive their power from clean energy sources ... giving consumers energy supply choices can be a powerful mechanism for moving renewable energy into the marketplace", said Blair Swezey, co-author of the study. And a proper green pricing programme could boost use of cleaner electricity sources by 40% by the end of the decade, regardless of whether the market is deregulated. * Non-hydro renewables provide about 2%, or 16,500 megawatts (MW), of all the electricity used in the United States. Hydropower provides about 10%. With the expansion of customer choice, the study found the market could support about 6,000 MW of additional non-hydro renewables over the next decade. The report is at: www.eren.doe.gov/greenpower/29831.pdf PV for US consumersThe energy crisis in California has led to renewed interest by consumers in generating their own power. Green Mountain Energy, which resells wind, solar, geothermal, natural gas and biomass-generated energy to consumers, has also now created three different solar photovoltaic packages for consumers to install direct - generating up to 1, 2 or 4 kilowatts of electricity- for home and small business installations. According to Green Mountain, the systems, manufactured by BP Solar and ranging in price from $7,000 - $22,000, should pay for themselves within 10 years, and can ‘help California consumers achieve smaller, even nonexistent, electricity bills’. Green Mountain has calculated that a 2 kW system will ‘easily generate 50% of the average home’s electricity needs’. The California Energy Commission has seen interest in solar systems surge over the last two years, with a 500% jump in applications for a rebate that offsets up to 50% of installation costs. 13. Nuclear Waste Decision DelayedLast year the government launched a programme of public consultation, backed up with further research, on nuclear waste disposal, which would culminate in 2005 with a series of options for public consultation and an announcement of the result in 2006. Options include burial, with or without the possibility of retrieval, or above-ground dry storage. Environment Minister Michael Meacher said that the Government was "starting from scratch" following the cancellation by the last government of plans to build an experimental disposal shaft near Sellafield, which was hotly opposed by Cumbria county council. Meacher said a decision about the disposal of 500,000 tons of nuclear waste that the industry will produce over this century, even if there are no new nuclear power stations, "must not be rushed and may take decades to implement". He added "There is no site on the radar screen at the moment. I want a national debate. I don't want people ever to wake up and find out there is to be a nuclear storage facility near them". This long consultation exercise could however make it hard for those pushing for new nuclear plants. As Meacher said in an earlier statement, issues related to waste disposal and public acceptability would ‘need to be resolved before industry put forward any proposals for approval’. Will they wait until 2006? The consultation paper ‘Managing Radioactive Waste Safely’ is available on http://www.defra.gov.uk. There’s also an online conference 'citizenspace' at: www.ukonline.gov.uk/ * The Nuclear Free Local Authorities have argued that there is no case for supporting new nuclear plants at present, given the uncertainties about nuclear waste, public opinion and the economics of as yet untried new technology. It suggests however that a stakeholder review panel be set up to keep a watching brief on developments, reporting annually to government. See www.gn.apc.org/nfzsc Tories for NuclearAt a fringe meeting organised by Trade Unionists for Safe Nuclear Energy at last years Conservative party conference, the Conservatives new trade and industry spokesman, Robert Key, said an expansion of nuclear power was unavoidable if Britain’s energy needs were to be met. He warned that the California nightmare of a blackout caused by power running out could be repeated in the UK without more nuclear power. "When the TV won’t work and when ovens won’t come on because of a shortage of energy, people tend to be sensible about nuclear power as an option. When the threat of our lights going out is staring us in the face, then have no doubt that public opinion will change." He added "Nuclear power is a viable proposition and produces clean fuel, although it does produce the problem of nuclear waste which we need a technological solution to". * But all is not well within the industry. Adopting surely the ‘last ditch’ position for the nuclear lobby, British Energy says, in effect, that if the government doesn’t take over the nuclear liabilities BE has inherited, it might shift its operations to the USA. BE also seem to have fallen out with BNFL over its reprocessing contract. Safe Nuclear?The last few months have seen attempts by the authorities around the world to tighten up security around nuclear facilities. Perhaps the most extreme position so far was adopted by German Environment Minister Juergen Trittin who commented that security would be guaranteed not by sealing aeroplane cockpits but by closing down nuclear plants, as is already currently planned - by 2030. But he also talked of the need for emergency plant closures in case of a credible threat of terrorist attack. In the U.S.A. moves were made to increase the security of nuclear plants - there was a scare in Oct. at the Three Mile Island plant and in Feb it was revealed that U.S. forces have found diagrams of American nuclear power plants in Afghanistan. In the UK the role of the UKAEA’s armed police has been revised- though so far there seem to be no plans for siting anti-aircraft missiles around Sellafield. That’s something France did rapidly at its reprocessing plant at Cap la Hague on the Brittany coast. BNFL however was evidently very affronted by an article in New Scientist claiming that the nuclear waste tanks at Sellafield were a relatively unprotected, easy, target for air attack. According to the article in New Scientist, a direct hit by a passenger jet on the Sellafield nuclear reprocessing plant would contaminate Britain with two and a half times more radioactivity than the amount that escaped during the Chernobyl disaster. Up to 2,646lb of the highly radioactive and long-lasting isotope caesium-137 would be released into the atmosphere, contaminating Britain, Ireland, continental Europe and beyond, making swathes of the country uninhabitable and causing more than two million cancers. In a strongly worded condemnation, BNFL, insisted that the article was an example of "scaremongering at its worst based on such sensational scenarios that it borders on science fiction". BNFL insisted the tanks referred to in the article were some of "the most robust buildings" within the Sellafield complex and said a large biological shield surrounded the tanks. But the Irish government were clearly not convinced and there were calls for Sellafield to be shut down, or at the very least for a no-fly zone to be established over it. There is actually an exclusion zone there - planes cannot fly below 2,200 meters or within a two-mile radius- but that may not provide sufficient protection from hijacked airliners which would take only seconds to reach their target from that distance. As it is, we are evidently just relying on interceptor jets, which take minutes to scramble and arrive. The Irish government were also incensed at the decision to allow the MOX plutonium fuel plant to go ahead at Sellafield- a response shared by many others worried about its implications for proliferation and terrorist threats. Indeed the whole issue of nuclear fuel and nuclear waste shipments resurfaced. A GLA study claimed that security measures associated with nuclear waste transport by rail through London might not be sufficient. ‘We don’t believe that adequate procedures are yet in place in terms of training exercises to deal with an emergency on one of those trains. Security measures do need to be improved’. Back in Cumbria, the local anti nuclear group CORE argued that the two ships used by BNFL to transport MOX to Japan were not, as had been suggested ‘sophisticated gun ships’, but, in reality were ‘sluggish merchantmen with a service speed of around 13 knots, easily out-manoeuvered and with pea-shooter armament which presents little defence against missiles or other high-tech attacks’. It also claimed that ‘orders shipped from MDF to Switzerland’s Beznau plant were flown from Carlisle Airport using a light aircraft with the fuel assemblies contained not in transport flasks but in simple wooden crates’. CORE also claimed that much of BNFL’s 70 tonne plutonium stockpile cannot be used in the new MOX plant at Sellafield because of its age- evidently neither Magnox derived plutonium nor plutonium from dismantled nuclear weapons can be used. STOA’s new report on risks at Sellafield and Cap de La Hague is available at www.europarl.eu.int/stoa/publi/pdf/00-17-01_en.pdf 14. In the Rest of Renew 136In another bumper 36 page issue, the Feature looks at SERA’s submissom to the PIU Energy Review, while our Technology section includes a look at David Milborows submission comparing the costs of nuclear and wind power . The Technology section also looks at PV solar and in particular at the safety aspects..The reviews section looks at the background to the PIU review, and at the options for decarbonising the UK. And our extensive Groups section includes coverage of last years Sun Day festival, and at the new OU Sustainable Energy course. NATTA/Renew Subscription DetailsRenew 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 05/03/02 by s.p.forrest@open.ac.uk