Chris Huhne comes out fighting for Renewable Energy

Chris Huhne’s speech to the RenewableUK Conference

“Our location is rather appropriate. Manchester was the thumping heart of the industrial revolution. This was the world’s first industrial city. It is home to the first industrial canal, and the world’s oldest railway station.

The foundations for our prosperity were laid here. The engines which drove Britain’s extraordinary economic growth were built here – from the spinning mule to the steam engine.

We could not have picked a better place to discuss their modern equivalents.

Revolution

Renewable energy technologies will deliver a third industrial revolution. Its impact will be every bit as profound as the first two. My argument today is a simple one: the revolution has already begun.

From the Western Isles to the Isle of Wight – across the length and breadth of Britain. New companies are creating new jobs, delivering the technologies that will power our future.

As we look to pull ourselves out of recovery and back to prosperity, renewable energy can light the way.

Today, I want to look at the contribution renewable energy is making to our economy right now. The investment it is sparking, the jobs it is delivering, the growth it is creating.

And I will look at what we can to do encourage that growth – and sustain those jobs.

But first, I want to take aim at the faultfinders and curmudgeons who hold forth on the impossibility of renewables – the unholy alliance of climate sceptics and armchair engineers who are selling Britain’s ingenuity short.

Renewables are too expensive”, they cry. “They cannot deliver energy at scale.

“They are uneconomic, unreliable and unwanted.”

It is time to retire these myths.

Money

Let us start with the most egregious: that renewables are too expensive; that they could not exist without public subsidy; that they are held up by government cash alone.

Last year, global investment in renewable energy rose by 32% to $211 billion. And $142 billion of that was new financial investment, which excludes government and corporate R&D.

Renewables are grabbing a large and growing share of new energy investment.

Yes, some of that investment is attracted by public subsidy. But globally, subsidies for fossil fuels outstrip subsidies for renewables by a factor of five.

We subsidise renewables to bring on deployment and reduce costs. And we’ve seen some remarkable successes.

Right now, support for renewable energy costs the average household less than sixpence a day. But decades of underinvestment in energy efficiency and reliance on fossil fuels costs us much, much more.

About half of the average household bill goes on wholesale gas and electricity costs. These costs are highly volatile, and as Ofgem make clear, the higher gas price is the real reason bills have been going up over the past eight years.

That is why we need a flexible energy portfolio.

And that’s where the counter-argument of the climate sceptics falls down. “Forget wind farms”, they say. “Shale gas will be our saviour. We should abandon everything else.”

I don’t believe government should pick winners. And if you do, I refer you to a Department of Trade and Industry white paper from 2004 that estimated oil would reach $23 per barrel by 2010. Even last year my own Department forecast oil at $80 per barrel. Brent crude is currently trading at $110 per barrel.

Lashing our economy to a single energy source is a risky business.

We don’t yet know the full extent of shale gas here; how economically or environmentally viable it will be to extract, or by when. At best, it is years away.

Unconventional gas has not yet lit a single room nor cooked a single roast dinner in the UK.

Yet those who clamour loudest for “realistic” energy policies would have us hitch our wagon to shale alone. Shale gas may be significant. It is exciting. But we do not yet know enough to bet the farm on it. Faced with such uncertainty we do what any rational investor does with their own pension fund – we spread our risks, we have a portfolio.

Capacity

The second fallacy is that renewables cannot deliver energy reliably or at scale.

But today, more than 10 gigawatts of our electricity capacity is renewable. That’s enough to power six million homes.

And with every passing year, renewable energy takes over another percentage point of global electricity capacity.

In 2007, 5% of the world’s electricity was renewable. In 2008, it was 6%. In 2009, 7%. And last year, 8%. And it’s still growing. More than a third of the new capacity added last year – some 60GW – was from non-hydro renewables. The message is clear: when we build new power plants, increasingly we choose renewables.

In fact, renewable energy can make our system more secure – not less. According to the International Energy Agency, renewables increase the diversity of electricity sources, making energy systems more flexible – and more resistant to shocks.

Yes, some renewable technologies are intermittent. But the Committee on Climate Change estimates that even with 65% of our energy provided by renewables in 2030, intermittency may cost just 1p per kilowatt hour.

And providing back-up for intermittent renewables is just not that expensive. We already swing from a low of demand of 40GW to a high of 80GW every day. Peaking plant has long been part of our mix. Without such backup the nation’s kettles would be cold in the Coronation St ad breaks.

Every year, renewable energy is attracting more investment and delivering more capacity. It is also gathering more support. One hundred and nineteen countries have renewable energy targets or policies – up from an estimated 55 just six years ago.

Attractiveness

That brings me to the third great misconception about renewable energy: that it is unwanted.

Earlier this year, Ipsos MORI polled a thousand UK adults on which energy source they preferred. By a clear margin, people favoured renewables.

Eighty-eight per cent of those polled viewed solar power favourably; 82% for wind, 76% for hydroelectric, 57% for biomass.

The highest placed traditional energy source for electricity was gas, at 56%.

Seventy-three per cent of people would support a new wind farm in their area, as opposed to just 21% for a new coal plant.

When you get behind the headlines, you find that support for renewable energy is strong – and growing.

And so is its contribution to our economy.

Economy

Across the United Kingdom, renewables are providing jobs, investment and growth.

And the numbers are really starting to add up.

Over the last financial year, nearly 4,500 new jobs were created in the low-carbon sector, which grew by 4.3%.

Fifty-one thousand and six hundred companies in Britain provide low-carbon and environmental goods and services. Exports are now £11.3 billion, up 3.9%.

By Christmas we will have 3GW of biomass installed, and by Easter 5GW of onshore wind. In the past seven months alone, plans for £1.69 billion of investment and 9,500 jobs have been announced.

Here in the North West, more than 950 jobs: 340 at the Siemens Renewable Energy Engineering Centre, just a few miles down the road; up to 600 over the next decade at Cammell Laird; three new Farmgen developments planned in Cumbria, with hundreds of jobs.

This is the sharp reality of green growth. At a time when closures and cuts dominate the news cycle, next-generation industries are providing jobs just as in the recovery after the last deep depression in 1929 to 1931. It is new and innovative industries that grow fastest.

Renewable energy is surging out across the United Kingdom, blazing a trail of start-ups and jobs.

Across the Pennines, in Yorkshire, 2,250 jobs – £130 million in Real Ventures’ biomass plant, employing up to 285 people.

And in the North East, more than 1,400 jobs – TAG Energy Solutions, delivering up to 400 jobs in the Billingham turbine factory.

North of the border, one of the jewels in our renewable energy crown – £160 million of new investment and more than 420 Scottish jobs.

Across the Irish Sea, 450 jobs in Belfast Harbour thanks to DONG Energy’s Duddon Sands offshore wind farm; 1,400 jobs in Wales.

In the heart of England, 100 jobs in the East Midlands – and 50 in the West; 120 in East Anglia.

Two thousand and two hundred jobs in the South East, supported by £172m – from Vestas, the Green Home Company, and more. And at Tilbury, the first UK coal plant to convert completely to biomass, safeguarding livelihoods.

Across Britain, from the industrial heartlands to the northernmost extremities, new energy technologies are delivering jobs and growth just when we need them most.

Capitalising on our geographical, physical and human advantages; Scotland’s research and natural resources. The Solent’s marine expertise. Manufacturing in the North East. Technology development in the M4 corridor.

Renewable energy doesn’t just have the potential to bring Britain’s economy back to life – it has already started.

Our job now is to allow it to really flourish. How? By setting clear and coherent objectives. And using regulation and closely targeted support to hit them.

Targets

By the end of this decade, we must cut our carbon emissions by 34% on 1990 levels. By the end of the next decade, they must be halved.

To hit our EU renewable energy target, we must generate 30% of our electricity from renewables by 2020. That means a fourfold increase in deployment – turning our back on an inheritance that ranked us as the dunce in class, 25th out of 27 EU countries for renewables.

Growth on that kind of scale will not be easy. It will require tough decisions, clear thinking, and tightly focused support.

And everyone has a part to play.

Industry must carry on making the case for renewables. Engaging with communities – and answering its critics by delivering renewable schemes that save money and save carbon.

Government must break through the barriers that are stopping new schemes being built, overcoming the financial, planning and delivery hurdles that can hold up progress on renewables.

And together we must do a better job of communicating. That means engaging with the communities who stand to benefit, and the investors who don’t yet see the promise that renewable energy holds.

We must ensure the silent majority aren’t drowned out by the vocal minority – those opposed to renewable energy in all its forms.

That means making sure communities that host renewables benefit more directly. That’s what our proposals on business rate retention are for. And that’s why we were pleased to endorse Renewable UK’s Protocol on Community Benefits.

My challenge to you today is this: keep it up. Continue to develop and publicise new ways of rewarding those communities most affected by development.

Opportunities

Because, as the report you are publishing today shows, the opportunities are simply too great to ignore.

Globally, around half a trillion dollars has been earmarked for green stimulus spending. We will need to spend a hundred times that by 2050 to hit our climate targets.

We must be realistic. The pressure on the public finances means we cannot support everything at the level we otherwise would.

So we must ensure we send clear market signals: deploying public finance intelligently, and breaking through barriers to growth.

Our starting point is simple. We have a responsibility to the taxpayer to get the most carbon and cost-effective electricity generation online…

In total, our low-carbon and energy-saving policies will reduce household enegy bills compared with a ‘do nothing policy’.

Markets

Our approach to renewable energy must encourage investment and deliver value for money for consumers.

We are doing three things to help.

First, we are using policy to create new markets that will stimulate new investment – like the Green Deal, our unprecedented energy efficiency programme. It will bring jobs, growth and opportunities right across the country.

Or the world’s first Renewable Heat Incentive. It will create a whole new market in renewable heat. Not just big industrial and commercial installations, but also homes and businesses, too.

We expect green capital investment in heat to rise by £7.5 billion by 2020, supporting 150,000 manufacturing, supply chain and installer jobs.

So the first thing we’re doing is to create new markets; the second is to make existing markets work better.

This is why we published in the summer our plans for the reform of the electricity market, which will deliver secure, low-carbon and affordable electricity.

We’ve listened to the renewables industry in drawing up the reforms. That’s why we support a contract for difference model tailored to renewables and not auctioning in the near future…

By offering certainty and clarity, we can secure the scale of investment we need. And by attracting in new investors, we will also increase competition in the UK energy market.

Benefits

Our third priority is to capture the benefits of the low-carbon revolution. That means ensuring more clean technologies are designed and manufactured here.

We have a blossoming low-carbon goods and services sector, which seems to be thriving even in tough times.

But China leads the world in solar photovoltaic panel production; Germany on energy efficient housing design.

We’re missing a trick unless we start supporting low-carbon manufacturing here in Britain – and grow the green supply chain: locking in profits and expertise, and creating the exports that will keep Britain competitive.

Yes, climate change is a manmade disaster. Yes, the UK is only 2% of global carbon emissions. But if we grasp the opportunity now our businesses and economy can be much more than 2% of the solution.

We are not going to save our economy by turning our back on renewable energy.

This has been at the heart of Liberal Democrat policy for decades and it is something the Deputy Prime Minister, the Business Secretary, and the Chief Secretary to the Treasury instinctively understand.

But this goes beyond any one party. I know the Prime Minister agrees, which is why he is putting so much effort in to securing offshore wind manufacturing in the UK. And it is something I know my predecessor Ed Miliband understands.

It is this three-party consensus that makes the UK such a good place to invest.

It wasn’t always like that. It is nothing short of a national disgrace that in the 1980s the UK lost our leading wind research position to Denmark, because government refused to support the industry.

It is a mistake I am determined that this Coalition Government will not make again.

So I can today assure you that this Government has resolved that we will be the largest market in Europe for offshore wind.

We already have more installed offshore wind than anywhere else in the world and we are determined to remain at the forefront.

That’s why we set aside £200 million for the development of low-carbon technologies, including £60m for supporting major new manufacturing projects on the English coast.

We will be the best place to invest in marine power, and we will be the fastest growing country in the EU when it comes to renewable deployment.

That’s why the Green Investment Bank has been capitalised with three billion pounds, to help unlock private sector investment at scale. For the first time ever, Britain will join every other leading developed economy in having a public development bank focused on key economic goals…

Non-financial

So from the structure of the electricity market to research funding, we’re breaking through the economic barriers. But we’re also focusing on non-financial obstacles.

We’re reforming the planning system, to ensure it’s no longer a brake on sustainable development.

The energy National Policy Statements set out the national need for new renewable energy infrastructure. We have introduced a fast-track process for consents. And we will close the Infrastructure Planning Commission and return decisions on major energy infrastructure to democratically elected ministers.

Over 1,000 pages of local planning policy for England are being replaced by clearer and more streamlined National Planning Policy Framework. And the Government will consult on measures for a ‘planning guarantee’.

We’re also working to improve grid connections. The connect and manage regime is now up and running. Network companies are now looking much further ahead in their planning and engaging more effectively with stakeholders. Together, this will help the network acts as a facilitator rather than an obstacle to renewable generation.

And a few months ago, we published the Renewables Roadmap – setting out for the first time how we will overcome barriers to deployment.

It’s a comprehensive action plan to accelerate the UK’s deployment and use of renewable energy.

Conclusion

In many ways, Britain can lay claim to be the home of renewable energy.

It is thought that the oldest tidal mill in the world once stood across the river Fleet, in London. The white cliffs of Dover looked over a tide mill that was recorded in the Domesday Book.

And 130 years ago, we connected the world’s first public electricity supply, in Godalming, Surrey.

It did not burn coal, or gas.

No, the power plant in question was a Siemens generator driven by 100% clean, renewable power: a watermill on the River Wey.

When Britain began its journey towards electrification, renewable energy was the future.

But we ended up choosing another path. This time, things will be different.

We will not heed the naysayers or the green economy deniers.

With over £200 billion worth of energy infrastructure needed by the end of the decade, this is our golden chance to deliver a greener future.”

Denmark Increases Renewables Targets

Denmark has long been at the forefront of the Wind Energy Industry.

Not only is the worlds leading turbine manufacturer (Vestas) Danish but it has the highest installed wind capacity of any country in the world. Despite this Denmark has also become the poster-child of the anti-wind lobby; who hold it up as a country that made a mistake in its energy policy, one which it had come to regret. It may come as a surprise then to find out that the newly elected Danish Government has just announced some new, increased targets for wind power.

With an installed capacity of 3.75 GW, wind energy is already generating over a quarter of Denmark’s total electricity demand. The new government has announced that by 2020 wind power is to generate 50% of the country’s energy demand. A hugely impressive figure and an 8% increase from the previous governments target. In addition to this the country is aiming for a 40% decrease in carbon emissions from their 1990 levels. Again an impressive target and a 10% increase on the previous administration’s pledge. The country had already signed an European Union mandate to provide 30% of the country’s electricity from renewables by 2020; a figure that Denmark is already well on its way to surpassing. Perhaps the most ambitious aim is for the country to be entirely fossil fuel free by 2050. The Danish Wind Industry Association responded to these announcements by observing that: “The ambitious targets place Denmark in pole position on renewables among the developed countries.”

The new Prime Minsiter Helle Thorning-Schmidt unveiled his governments aims with the following speech:

“A green and more sustainable world does not evolve by itself. Setting this clear and long-term target is a crucial precondition for action… Because long term targets tell our power plants that they can safely focus on green energy. Because long-term targets tell the director of a wind turbine company that it is safe to invest in new markets. And because long-term targets tell families that it is worth their while to buy energy-saving windows or an electric car.”

It is expected that in order to achieve the 50% wind energy generation target that efforts will be focused upon the offshore sector. Denmark has been a pioneer in wind energy since the 1970s and as a result of this onshore wind already has a very high penetration, with the vast majority of the best and most suitable sites already being utilised. New generation capacity will then have to be placed offshore, a fact acknowledged by the chief executive of Dong Energy Anders Eldrup: “In order to make [this target] happen, there must be a very fast build-out of wind, and for Denmark that will be mainly offshore wind.” Dong Energy is Denmark’s leading energy company and is 75% state owned. It is already involved in a number of offshore wind farms across Europe including two operational farms in British waters (Barrow and Burbo Bank).

Denmark is the home of the worlds original offshore wind farms as well as the worlds second and third biggest operational sites. Dong expects to meet with the Danish Government in the very near future to discuss where the necessary new wind farms will be placed. Anders Eldrup commented:

“there are lots of discussions that the next Danish project should be Kriegars Flak, which would be around 600MW. And there is talk that maybe there should be a Horns Rev 3 in the North Sea- I think that’s up for political discussion in the coming weeks.

“Maybe in the end there will be both of them. There are several opportunities there, but ultimately it’s a political decision to decide which comes first and how many there should be.”

The Danish Coast of the North Sea looks set to be a hive of activity in the coming years. This will be a blow to those who have sought to portray Denmark as a failed renewable state. Rather the country is seeking to continue to be a renewable leader.

Scottish Businesses missing out on Feed-in-Tariff

A survey recently carried out by Scottish Renewables has revealed that the nation’s businesses are missing out on much needed revenue and profits because of a lack of investment in renewable energy technologies and a lack of understanding of the Feed-in-Tariff.

Scottish Renewables compiled a record of all the registrations made for Feed-in-Tariffs over the last year. They found that 95% of all registrations were made by homeowners. In comparison just 3.6% of registrations were made by businesses.

A further breakdown of the figures revealed that on average there were 326 domestic Feed-in-Tariff registrations per month as opposed to just 3 registrations a month for commercial and industrial installations. The specific breakdown for wind turbines were slightly more evenly balanced; 27 domestic turbine registrations a month and 8 a month for industrial and commercial purposes. This would suggest that the benefits of a wind turbine is more apparent to those businesses that have the opportunity (in terms of available land etc) than other forms of renewable generation.

Feed-in-tariffs work as follows.

The owner of a renewable energy generator is paid for every unit of electricity that they are producing. There are two seperate tariffs; the Generation Tariff is a set rate which is paid for every unit of electricity generated, even if the owner uses it to power their own home or business, the Export tariff is a set rate which is paid for every unit that is exported into the National Grid. Feed-in-tariffs are set at a fixed rate from the time at which a generator is operational and connected to the National Grid for a period of twenty years.

Daniel Borieswitz, Policy Manager at Scottish Renewables released the following statement:

“Scottish businesses are missing out on a huge opportunity to not only to produce their own electricity but also receive up to 8% return on their investment by installing renewable technologies.

“It is clear that the public are already very much on board with the Feed-in-Tariff with domestic installations accounting for 17MW of installed capacity in the last year, but we need to encourage companies to take full advantage of these payments offered by the government especially if they are to meet their own carbon and environmental targets.

“With the Renewable Heat Incentive expected soon this is an ideal time for businesses to think seriously about how they can harness the natural resources on their doorsteps to power their companies.”

It is very much true that the Feed-in-Tariff offers a unique opportunity in these economically uncertain times for businesses to access a steady revenue stream and a substantial return on their investments. Businesses such as golf clubs, supermarkets, industrial estates and all manner of rural companies are being presented with a huge opportunity. A company such as ours with experience of both the planning process and working with such businesses can help to capitalize on this situation.

Aviation Biofuels: A Future Necessity

Aviation is an industry which is coming under increasing pressure from the ever rising costs of fossil fuels and the politics of carbon emission reduction and taxation. Given that the aviation industry is currently completely dependent on fossil fuels and that solutions to land based transport problems such as electricity and hydrogen cannot apply there is an increasing interest in the development of new forms of biofuel.

At 2:25pm on the 6th of October more than 230 passengers departed from Birmingham Airport with Lanzarote as their destination. This flight was notable as it was part-powered by biofuel. One of the planes engines was running on a newly developed aviation biofuel – a 50/50 mix of standard Jet A1 fuel and “Hydroprocessed Esters and Fatty Acids” (produced using cooking oil). No modification to the engine was required to allow it to run on the biofuel. This biofuel was supplied to TUI Travel UK and Ireland by the Dutch company SkyNRG. This new biofuel has been approved as sustainable by both the WWF (Worldwide Wildlife Fund) and the Roundtable on Sustainable ‘Biofuels (an international monitoring group for alternative fuels). However the problems lingering on the horizon for aviation have not yet dispersed. This biofuel is significantly more expensive than standard aviation fuel and it is difficult to see how cooking oil could ever be produced in enough quantities to supply worldwide air travel. This is without even broaching the subject of the damage increased biofuel production could inflict on world markets and the price of food.

However TUI Travel insists that biofuels derived from cooking oil are only being used as a demonstration of how biofuels can be used in aviation; with other biofuels produced from sources such as algae expected to hold more long term potential. Never the less it has been announced that daily flights using this biofuel will begin in 2012.

Reactions to this test flight were somewhat mixed. Captain Phil Copnall, who piloted the flight, commented that: “The flight landed on schedule and the reaction from our customers on the flight was overwhelmingly positive.”

Christian Cull, Communications Director of TUI UK & Ireland remarked:

“We realise that we won’t please everyone, and that at present the aviation biofuel supply chain is not perfect.

“We are sincere in our commitment and are proud to be flying with biofuel. Whilst these are early days, we are in this for the long haul because we believe it is the right thing to do.”

The company released the following official statement:

“The aviation industry fully supports the move for all modes of transport to more sustainable energy sources.

“Whilst we are in a transition phase, Thomson Airways [a subsidiary of TUI Travel] believes that sustainable liquid fuel should be prioritised for aviation as there is no near term alternative, such as electric or hydrogen for ground-based vehicles.”

Aviation Minister Theresa Villiers:

“The British government believes that sustainable biofuels have a role to play in efforts to tackle climate change, particularly in sectors where no other viable low carbon energy source has been identified – as is the case with aviation.”

The Biofuels Campaigner at Friends of the Earth UK, Kenneth Richter reacted:

Biofuels won’t make flying any greener – their production is wrecking rainforests, pushing up food prices and causing yet more climate-changing emissions.

“The government must curb future demand for flights by halting airport expansion, promoting video conferencing, and developing faster, better and affordable rail services.”

On Tuesday the 11th of October Sir Richard Branson announced that Virgin Atlantic planes will be using a newly developed “green” aviation fuel. The proposed fuel – which will be produced in partnership with the New Zealand based biofuel company Lanzatech – will be manufactured from waste gases produced during the industrial production of steel. These waste gases will be extracted, fermented and then put through a process of chemical conversion. Currently such gases are burned up during steel production and released into the atmosphere as carbon dioxide. Lanzatech indicated that they estimated that their process could be applied to 65% of the worlds steel mills and could possibly also be used in metals processing and and chemicals industries.

The necessary technology is currently being piloted in New Zealand with demo flights expected to be carried out within the next 12 to 18 months. Lanzatech chief executive Jennifer Holmgren announced that she was “confident” that commercial production would be up and running in China by 2014. Virgin Atlantic plans to initially use this form of biofuel on it’s routes from Heathrow to Delhi and Shanghai before eventually rolling it out across the rest of its fleet.

During the announcement of his plans Sir Richard Branson stated:

“We were the first commercial airline to test a biofuel flight and we continue to lead the airline industry as the pioneer of sustainable aviation.

“This partnership to produce a next generation low-carbon aviation fuel is a major step towards radically reducing our carbon footprint, and we are excited about the savings that this technology could help us achieve.

“With oil running out, it is important that new fuel solutions are sustainable and, with the steel industry alone able to deliver over 15 billion gallons of jet fuel annually, the potential is very exciting.

“This new technology is scalable, sustainable and can be commercially introduced at a cost comparable to conventional jet fuel.”

Friends of the Earth’s transport campaigner Richard Dyer released the following statement:

“On the face of it, it does look promising in that they are getting round the issues of biofuels and land use. It is a very long way from commercial use. It has got to be very safe and cheap enough for airlines to be interested in using it.”

The potential biofuels hold for the aviation industry is obvious.

As Sir Richard Branson observed on his blog biofuels could “turn aviation from a dirty industry to one of the cleanest”. However, there are numerous challenges to come. The fuel proposed by Virgin Atlantic appears to hold huge potential but at this point in time it remains just that; potential. Other more developed biofuels are problematic for the worlds food supply as they compete for the same arable land. But if such problems can be overcome then a major reduction in greenhouse gas emissions can be achieved.