Energy crisis points way ahead for renewables: Daily Telegraph

Posted on November 15, 2010 · Posted in Daily Telegraph

Fossil fuel dependence is a vice that we have to be rid of.  And the United Kingdom should be well positioned to be at the forefront of the energy revolution.  After all, we have a natural environment readily suited to the generation of renewable energy. 

 

Wind, wave, tidal and hydro resources are plentiful.  There are also excellent opportunities to increase the provision of solar, geothermal and biomass based energy systems.  Yet the UK generates a mere 3% of its energy from renewable sources – a long way short of the Government’s target of 15% by 2020.

 

For that to be achieved we must experience a vast increase in investment in the provision of renewable energy capacity.  That is gradually becoming visible across the countryside, with new wind turbines popping up on the hill tops and offshore, as well as a few new wave and tidal power schemes being developed around the coast.

 

In a letter this month to new environment secretary Chris Huhne, the chairman of the Committee on Climate Change, Lord Turner, stressed not only the need for the UK to up its game, but also the benefits of doing so. Lord Turner wrote: “Investment now in a broad range of renewable technologies, but predominantly onshore and offshore wind, will directly contribute to required decarbonisation….  It could also provide economic opportunities for UK-based firms.” 

 

Alina Bakhareva, research manager for renewable energy at analysts Frost & Sullivan, is confident that this change is coming.  “Overall, the UK hasn’t been doing that great, compared with other European countries,” she says.  “It looks like the Government is determined to catch up, putting effort and money into renewable energy development.”

 

Bakhareva quotes research indicating that while wind, tidal and wave are all expected to provide a growing share of electricity generation, it is offshore wind farms that have the best prospects.  “Europe is a global leader [in offshore wind], but the UK has been quite slow,” she explains.  “We are seeing industry step out of its cradle and a lot of independent projects developers are showing interest. 

 

“Project finance was not available, except from a limited number of investors.  Utilities were able to finance this from their balance sheets.  Now we are seeing banks and other investors interested in financing offshore wind projects.  We are expecting a lot more projects will be able to secure finance.  That will translate into more projects being constructed.”

 

The company that has led the way in recent years in the UK is Scottish and Southern Energy (SSE), which is the largest player in the renewable energy market.  It is also – in a joint venture with RWE npower renewable – responsible for the biggest single new renewable energy project currently under construction in the UK: the Greater Gabbard offshore wind farm, situated off the Suffolk coast.  By the time it begins operations in 2012, this will comprise 140 wind turbines.  When all schemes currently under development are completed, SSE will have 15,000 MW of renewable energy capacity from hydro electric, biomass and waste-to-energy projects, as well as wind farms. 

 

A spokeswoman for the company explains: “SSE’s core purpose is to provide the energy people need in a reliable and sustainable way. In 2008, following SSE’s acquisition of the renewables company Airtricity, we made a statement outlining our plans in the renewables sector and confirming a massive investment in this area.”  By the time it is completed, that investment programme will see the group spend £2.5bn on renewable projects in the UK and Ireland. 

 

Tidal and wave power electricity generating schemes are also causing a lot of interest.  Studies have shown that sites off the Orkney islands and Pentland Firth in Scotland are the most promising.  A site in Strangford Lough in Northern Ireland has been trialling an experimental tidal powered electricity generator, which has been performing well.  The Crown Estate is about to give approval for new schemes for large scale commercial development of marine energy off the north coasts of Scotland and Northern Ireland.

 

Smaller scale renewable schemes have just been given a boost by Chris Huhne’s decision to permit local authorities to sell surplus electricity generated by renewables to the grid.  The Local Government Association predicts this will create a £100m trade that will subsidise council taxes and will see wind turbines and solar panels sprout on town halls and leisure centres, and even on council houses. 

 

While Huhne has stressed his commitment to renewables, the Government’s position on nuclear power is less clear.  Prior to the election, Huhne’s party, the Liberal Democrats, stated they would oppose new nuclear power plants.  But the programme agreed between the two parties committed both to allowing new nuclear stations to be built, providing there was no financial subsidy.  Yet, without that subsidy the viability of the sector is in doubt. 

 

At present, renewables look a more attractive investment option – and schemes are smaller and therefore both more manageable and more affordable than with nuclear.  Frost & Sullivan’s Alina Bakhareva believes that investors will increasingly include major supermarket chains keen both to reduce overheads and improve their images.

 

Yet despite all the advances, the move away from fossil fuels will be neither easy nor quick.  The interim technology of carbon capture and storage (CCS) will therefore be a very important stepping stone on the journey.  CCS has the potential, believes the Department of Energy and Climate Change, to reduce carbon emissions from fossil fuel power stations by about 90% – making a very important contribution to carbon reduction targets.

 

The UK can be criticized for having been slow to commit itself to the scale of energy transformation that is needed.  But it looks as if this will change quickly and radically in the coming years.