Entec Bulletin
The Winds of Change:
Renewable Energy in the 21st Century
If you visit the Department of Trade and Industry's renewable
energy web site or read any of the proposed policy documents, you will be left
with no doubt over the Government's commitment to renewable energy. But strong
rhetoric alone will achieve nothing and the Government has planned a range of
legislative and commercial incentives that intend to provide a powerful surge
towards attaining the target of 10% of electricity supplies being generated
from renewable sources by 2010.
Patricia Hewitt, Secretary of State for Trade and Industry, has set her stall
out: "Whilst our target is ambitious, it is not an end in itself. I do
not want to see renewables stop at 10%. I want to see a strong, world-beating
industry develop in the UK and make an increasing contribution to energy supply
beyond 2010".
The scale of the challenge can only be appreciated when we look at the base from which we start. At the beginning of 2000 it was estimated that only 2.8% of energy supply was from renewable sources. The majority of this (2%) was from large-scale hydro schemes. On the face of it, the targets represent a quadrupling of renewable energy in a 10-year period. However, in reality a magnitude leap is required as the potential for large-scale hydro schemes has been mostly exploited. It has been estimated that £1 billion a year will need to be invested to achieve this. So is the Government setting itself up for a fall, or is its boldness an indication of considerable and imminent activity in this area?
What is Renewable Energy?
Renewable energy is the term used to describe those energy flows that occur naturally and repeatedly in the environment, for example from the sun, the wind, the oceans, from plants and the fall of water. Some other technologies are commonly grouped with these renewables such as energy from wastes and the emerging clean technology of fuel cells. From landfill gas to tidal energy, the range of renewable sources is broad, which is just as well given the targets and the timescales involved.
The Government has staked much of its policy on a Renewable Obligation (RO) placed upon electricity suppliers to increase their use of renewable sources of energy. The proposed obligation on suppliers will rise from 3% of sales in the first obligation period (ending 31 March 2003) to 10.4% of sales in the year ending 31 March 2011. Those suppliers meeting their obligation will be rewarded with a Renewable Obligation Certificate (ROC). But this is more than a pat on the back - it has a financial value that may prove a powerful incentive. Entec Director Jim Kersey explains: "Those not meeting their obligation will have to pay a 'buyout' price, set initially at £30/MWh, and the income generated from this will then be distributed proportionally amongst those suppliers who possess ROCs. So suppliers not meeting the requirements of their obligations may end up supplementing the income of their competitors."
This is not the sole support for those involved in renewable energy. A package of direct financial Government support worth over £260 million over the next few years has also been announced. Companies can also benefit from renewable energy being exempt from the climate change levy that came into force in April 2001.
The creation of commercial advantages in implementing an environmentally positive strategy is seen as innovative but there are barriers that still need to be overcome if the desired impact is to be achieved. The difficulty is that no amount of private or government funding will, on its own, overcome these obstacles.
Planning issues have been a stumbling block for many renewable energy projects. While some large wind farm projects have been met by resistance from local communities, this is not always the case. However, there are powerful interest groups who, unlike Don Quixote, are tilting their lances at these windmills out of a real concern for their impact on the character of our countryside. This must be weighed against the overall reductions in the emissions associated with fossil fuel generated energy, such as acidification and climate change. The Government is urging for 'constructive dialogue' between all parties involved and to identify sites with 'sensitivity and care'. And this is achievable. Entec's planning and environmental assessment team has been working on such projects that have concerned all stakeholders - including working with the RSPB to minimise the effects of wind farms on local bird life. The skills of public consultation and engagement are of equal importance to technical planning expertise.
Support for research and development into technology has also been forthcoming from the Government with a budget of £55 million over the next 3 years. Utility companies have also been investing heavily in this area. A particularly innovative solution involved Entec's engineers working on a gasification project at Northumbrian Water's regional sludge treatment centre, which was designed to produce a fuel from sewage sludge.
The Government's intentions are clear: the development of renewable energy is a vital part of the wider sustainability agenda and plays a critical role in the Government's Climate Change programme. Consultation over the detail of its New and Renewable Energy policy has been extensive and it hopes to get approval for its Renewable Obligation by the end of this year with the Order coming into effect from January 2002.
How all the stakeholders involved in this policy (electricity suppliers, local authorities, public and communities) respond to these proposed measures is uncertain. What is definite is that the commercial and environmental opportunities that renewable energy represents will provide the greatest return to those who act earliest with a considered and sensitive approach.
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