Report finds renewables key to keeping energy bills down

A report published this week has found that Britain could more than half the effects of fossil fuel price rises on energy bills by the middle of the century by continuing to de-carbonise the economy and increasing the amount of installed renewable energy capacity.

The report was commissioned by the Department of Energy and Climate Change and produced by the economic forecasting consultancy Oxford Economics. The report examines the path set out in the Government’s Draft Energy Bill (published this week) for the country’s future energy mix. The Draft Bill advocates pursuing a mixture of renewable energy technologies, new nuclear plants, carbon capture and storage for fossil fuel power plants, as well as increased energy efficiency and the introduction of a carbon tax.

The report begins by explaining that “high and volatile energy prices have a negative effect on the economy of a fossil-fuel importing country such as the UK: they dampen economic activity and they lead to an increase in the price level and potentially an increase in the inflation rate.” It continues: “One way of reducing the UK economy’s exposure to developments in energy markets is to reduce its dependence on fossil fuels either by reducing the energy intensity of output or by increasing the use of renewable energy in both energy production and energy use by households.”

According to the report the proposed carbon tax would have a significant role in determining the impact of a shock rise in fossil fuel prices; “without any carbon tax, a 50% shock to all fossil fuel prices (assuming no change in the energy mix) would feed through to a 50% rise in domestic energy prices [also serving to underline the importance of expanding the country’s installed renewable capacity]; but with a carbon tax set at 100% of domestic energy prices, the 50% shock to fossil fuel prices would result in a 25% rise in domestic energy prices; and with the carbon tax set at a level of 200%, the 50% shock to fossil fuel prices results in a 17% rise in domestic energy prices. This shows that raising the level of carbon tax will result in declining marginal benefits in terms of reducing the sensitivity of domestic energy prices to an energy price shock.”

As well as impacting upon household energy bills, fossil fuel price shocks would also have a significant impact upon the country’s GDP; “a 50% commodity price shock results in a GDP decline of almost 0.8% in 2020 without carbon taxes, compared to a 0.7% fall in the LC [low carbon] scenario. In 2050, the same shock results in a GDP decline of 0.5% without carbon taxes, compared to 0.3% in the LC scenario.”

The report concludes by noting that there is a “legal and moral imperative for the UK to cut significantly our carbon emissions and to be a world leader in the climate change challenge. So we must de-carbonise Britain’s electricity generation.” As seen by the contents of this weeks Draft Energy Bill, renewables will be a key part of this process.

The publication of the report was welcomed by both government and business groups. Secretary of State for Energy and Climate Change, Ed Davey made the following statement:

“Every step the UK takes towards building a low-carbon economy reduces our dependency on fossil fuels, and on volatile global energy prices.

“Only last year, the impact of the Arab Spring on wholesale gas rices, pushed up UK household bills by 20%.

“The more we can shift to alternative fuels, and use energy efficiently, the more we can ensure that our economy does not become hostage to far-flung events and to the volatility of market forces.

“Of course, there are costs to building more low-carbon plant, but the gains are so much greater, and crucially they are lasting.

“This is about building a more resilient economy and providing more stable energy prices for the generations that follow us.”

Niall Stuart, chief executive of Scottish Renewables commented:

“This independent report by one of the world’s leading forecasting and research consultancies goes to show that not only is the renewable energy sector providing jobs and investment in the economy now but that this investment is also helping to insulate the UK from fossil fuel price shocks in the future..

“We know that energy bills are rising faster than people’s income, and this is being driven mainly by increases in the wholesale price of gas. This report shows that if we invest now in a low carbon future, with renewable energy at the heart of it, we can help reduce consumer’s dependency on a volatile energy source that is driving up their bills.

“The renewable industry in Scotland is already supporting over 11,000 jobs and providing around 35% of Scotland’s electricity demand so we already know full well the benefits that renewable energy can bring to the economy but people don’t always realise the benefits it can bring to energy security as well.

Jennifer Webber, Director of External Affairs for RenewableUK remarked:

“We’ve seen energy bills soar over the last eight years – increasing five times faster than household income. This increase has been driven by the rising cost of fossil fuel. It’s clear that we need to find a way of cutting our dependence on gas, oil and coal – not just to combat climate change, but to limit these unpredictable rises.

“This report demonstrates that renewables can play that role, eventually helping to cut the impact of future price hikes by up to half by 2050. The Government’s Energy Bill must ensure that the expansion of renewable energy is at the heart of our energy strategy. We already know that by 2020 renewables can deliver tens of thousands of jobs and billions of pounds of investment – today’s report reaffirms they’re the best option for cash-strapped households too.”

As the report indicates both the security and affordability of energy supply is heavily dependent on the further roll-out of renewable energy technologies.

 

Onshore Wind brings substantial economic benefits

A new report, produced jointly, by the Department of Energy and Climate Change (DECC) and the industry trade body RenewableUK has studied in-depth the impact of onshore wind upon both local economies and the national economy.

The report examined 18 wind farm sites of different sizes from across the UK. The contribution made by wind farm development, construction, operation and maintenance to the British economy was observed at local, regional and national level.

It was found that the total onshore wind market was worth  £548 million to the UK economy in the year 2011 alone. Additionally, over 9,000 jobs were supported by the industry. Perhaps even more interestingly, it was found that for every megawatt of onshore wind capacity installed in the UK £700,000 was added to GDP. Over £100,000 of which remains within the Local Authority area that the development is located.

If the UK was to achieve the target of 13GW of installed onshore wind capacity by 2020, set out in the Renewable Energy Roadmap, then the contribution to annual GDP would rise to £780 million and approximately 11,600 jobs would be supported. A figure which rises to 15,500 if ancillary jobs are included. These figures would then suggest that onshore wind is already making a major contribution to the British economy, particularly at a local level.

UK Energy Minister Ed Davey described onshore wind as “a cost effective and valuable part of the UK’s diverse energy mix”, at the publication of this report, going on to say further:

“Not only does wind power provide secure, low carbon power to homes and businesses, it supports jobs and brings significant investment up and down the country too.

“Our policies of increasing community involvement will also help to ensure the right balance between developers and community interests.

“With the cost of the technology coming down, there is a real opportunity to reap the economic benefits onshore wind can bring.”

Perhaps most interestingly, it was found that one of every three local jobs created by onshore wind developments is in the operation or maintenance sector.

Which is to say that these are long term jobs in the local area. This sort of job creation is of particular importance to Local Authorities and is very much a consideration in planning decisions.

The question of the supply chain is also raised in the report; specifically how much of the work required for onshore wind developments is carried out within the UK. It is found that many of the 8,000 components required to manufacture a turbine are, or could be, produced within this country, reaching the conclusion that; “many activities relating to the development of wind farms are already carried out by UK based businesses. As the sector develops, there are likely to be opportunities to increase this activity.”

The reports findings were greeted by RenewableUK’s chief executive Maria McCaffrey:

“This study explains why in rural areas 68% of people support wind, and 57% of those living in rural areas recognise that wind brings benefits in terms of jobs, 12% more than those in urban areas.

“Rather than feeling that wind has been imposed on them, real people across the UK are recognising the benefits of having wind in their backyard, and with Government’s help we’ll continue to build on the 8600 people employed across the country because of onshore wind, as promised by our members in the “Wind Energy Charter“.

“Whilst we can see that with increased deployment comes both increased value and jobs added, plus an increase in market share for the UK, if we were to only see 10GW come forward jobs will actually be lost in the development and construction phases, and there will be no increase in our market share. So it’s therefore essential for UK growth and employment to keep onshore wind progressing and revitalising communities.”

It could be argued that as the economic benefits of onshore wind become more apparent they become more difficult to refute.

 

 

Donald Trump serves to increase support for wind power

There has been much furore about Donald Trump’s appearance in front of the Scottish Government’s Economy, Energy and Tourism Committee last week. His outlandish comments about the Scottish Tourism Energy and his claims to expertise have been seized upon by anti-turbine groups. However, his bold claims do not appear to bear up to scrutiny.

A poll conducted by YouGov and commissioned by the trade body Scottish Renewables has revealed that the publicity generated by Mr Trump has served to increase support for wind power within Scotland.  The participants in the poll were asked fiver separate questions. The survey, carried out between the 12th and 17th of April this year showed that 77 per cent of the people polled felt that their views on wind power were unchanged by the media storm surrounding Mr Trump. Indeed a further 16 per cent indicated that they had become more supportive of wind power as a result of the outspoken Mr Trump’s comments. Only 4 per cent of those polled indicated that they had listened to Mr Trump and become less supportive of wind power as a result.

When asked how much weight they felt the Scottish Government should place on Mr Trump’s views on wind power 59 per cent of those polled responded with the answer ‘none’. An additional 26 per cent answered ‘not a lot’.

59 per cent strongly disagreed (37 per cent) or tended to disagree (22 per cent) with statements made by Mr Trump describing wind turbines as ‘ugly monstrosities’ and ‘horrendous machines’. 71 per cent strongly agreed (39 per cent) or tended to agree (33 per cent) with the following statement; “I support the continuing development of wind power as a part of a mix of renewables and conventional forms of electricity generation”.  The last question examined support for the Scottish Government’s 2020 100% renewable energy targets finding that 77 per cent either strongly agreed (42 per cent) or tended to agree (35 per cent) with these targets.

Niall Ferguson, chief executive of Scottish Renewables welcomed the findings of the poll:

“This poll suggests that Donald Trump’s comments on the development of wind power in Scotland have actually made some people more positive about wind power than they were before.

More than three quarters of respondents indicated their views on wind power were unchanged.

“The results also suggest that most people do not think the Scottish Government should place a huge amount of weight on Mr Trump’s views when making decisions on Scotland’s future energy policy.

“A clear majority of respondents support wind power and support our renewable energy targets.

“We think that the poll sends a clear signal to the Economy, Energy and Tourism Committee during their inquiry. A significant majority of people polled support the continued growth of wind power and other renewables, which together met 35 per cent of Scotland’s electricity needs in 2011.

“It’s not just the general public who support the growth of renewables as part of our energy mix – leading figures in our business and environmental sectors, as well as educational and civic groups, have all thrown their weight behind this industry.

“They see the mounting evidence that renewables are growing employment, improving training and further education opportunities, encouraging investment and helping us reach important targets to reduce our carbon emissions and tackle climate change.”

Dr Richard Dixon, director of WWF Scotland also welcomed the polls findings:

“The people of Scotland have not been fooled by Mr Trump’s sudden interest in the Scottish coastline, he was quite happy to trash an important bit of it to build his golf course in the first place. [The golf course has been constructed on an area of coastline previously designated as a Site of Specific Scientific Interest.] Mr Trump’s showbiz bluster shouldn’t be allowed to distract us from getting on with using the huge energy resources of wind, waves and tides that Scotland has been blessed with.”

The results of this YouGov poll indicate that support for wind power in Scotland remains strong, if it is not indeed continuing to grow.