Reactions to Digest of UK Energy Statistics 2013

Government figures were released last week which show that the amount of electricity being produced from renewable sources is continuing to soar. The annual Digest of UK Energy Statistics revealed that the amount of electricity generated from renewables increased by 19% in 2012 compared to the previous year. Indeed in 2012 renewable sources provided 11.3% of the total electricity generated in the UK in 2012.

A spokesperson for the Department of Energy and Climate Change (DECC) described the statistical data as “very encouraging” and emphasised that the UK was well on track to meet the agreed EU target of 15% of energy to be generated from renewables by 2015.The majority of the increase in renewable generation came from the wind industry: 46% more energy was generated from offshore wind in 2012 than in 2011 and 17% more from onshore wind. The huge leap in offshore wind generation can be attributed to falling development costs and long planned developments being connected to the grid. The more mature onshore sector still saw impressive growth as more and more people have sought to develop land; whether for large scale wind farms or small and medium turbine developments. That the UK’s wind industry has contributed so much to these impressive and headline making figures underlines the importance of the industry to the country and the scale of the opportunity that Europe’s largest wind resource has presented.

The data also revealed that the UK’s total energy consumption increased by 1.7% in 2012. While this information may initially raise questions about the energy efficiency programmes being pursued in the UK: a closer reading reveals that these programmes are beginning to bear fruit. The increase in energy consumption has been attributed to the cold weather experienced in 2012. When this is factored into the figures it is revealed that energy consumption was down 0.7% compared to 2011.

The publication of that data was greeted enthusiastically by the UK’s renewables industry. Maf Smith, Deputy Chief Executive at industry trade body RenewableUK released the following statement:

“These figures confirm the recent trends we have seen that show renewables, and especially wind, playing an ever-increasing role in our electricity generation. They come at the end of a busy period for wind, which has seen the largest offshore wind farm in the world opened at London Array, as well as number of major onshore sites going live. We have made some remarkable progress over recent years, and this is another shot in the arm for the renewables sector. With wind generating around half of electricity from renewables we are leading the charge in the race to decarbonise our electricity market.

“These figures also show that as a country we are becoming increasingly dependent on expensive imported fossil fuels, with a rise to over 40% in the amount we depend on fossil fuels brought in from abroad. This yet again shows the need to continue to build on the success we have seen in renewables as a way of helping us achieve energy independence.”

In other industry news the first section of Scottish and Southern Energy’s (SSE) new power line, which will run from Beauly in Invernesshire to Denny in Stirlingshire, has been energised. The long-planned line is intended to link up renewable developments in the north of the country with energy-demand centres in the central belt. This first section runs from Beauly to Fort Augustus. The entire project is scheduled to be completed in 2015 and will have capacity for 1.2 Gigawatts of renewable energy.

SSE’s Managing Director of Networks, Mark Mathieson, stated:

“This is a proud moment for SSE. Our progress is testament to the teamwork which identified the need for the line, guided it through planning and has now delivered the first section of the UK’s longest transmission line through some of its most challenging terrain.

“Over the past two years, the project has generated around £86 million in Gross Value Added (GVA) to the Scottish economy and created around 1,500 jobs. We hope to replicate the positive benefits from this project with the other grid upgrades that SHE [Scottish Hydro Electric] Transmission is progressing as part of a multi billion pound investment programme which will help increase security of supply, decarbonise electricity supplies and promote sustainable economic growth.”

Niall Stuart, Chief Executive of trade body Scottish Renewables, greeted the news with much enthusiasm:

“This newly upgraded line will help support many renewable energy projects in the north of Scotland, providing thousands of homes and businesses across the country with clean renewable electricity.

“Upgrading grid infrastructure is one of our biggest challenges in reaching the 2020 target of generating the equivalent of 100 per cent of our electricity needs from renewables and its major investment projects like the Beauly-Denny transmission line which will help us achieve this.”

These two pieces of news demonstrate the present and future success of the UK’s renewable industry. Developers, such as ourselves at Intelligent Land Invesments (Renewable Energy), are already delivering renewable energy in large quantities to UK energy consumers, counteracting rising gas prices and increasing the country’s energy security, but there is more to be achieved. Investment and projects such as the Beauly-Denny line and the Kintyre-Hunterston line (discussed in last week’s blog) will allow more renewable energy developments to progress and help ensure that UK and Scottish renewable generation targets are met. Such ambitions require progress to be made in a variety of fields; progress which is being made.

SSE to carry out £200 million grid upgrade in Argyll and Bute

It was announced this week that Scottish and Southern Energy (SSE) is to carry out over £200 million worth of upgrades to the electricity transmission network between Argyll & Bute and North Ayrshire. Much of the investment will be directed towards a new subsea link between Kintyre and Hunterston.

The announcement was made after SSE’s plans received approval from industry regulator Ofgem. However, spokespeople for SSE have revealed that pre-construction work on the network upgrade has already commenced. The project is estimated to be completed by 2016.

The news is significant for both the local and the renewables sector. 150 Megawatts of capacity will be devoted to renewable energy developments. Renewable energy is an industry which has long been considered to have significant potential for economic growth within Argyll & Bute. However, some renewable energy developments in the area have been constrained by a lack of available grid capacity. Whilst investment in the area’s transmission has long been mooted now both local businesses and renewable energy developers can now proceed with certainty.

The network upgrade is good news for other reasons as well. Parts of both Argyll & Bute and North Ayrshire suffered from prolonged power outages earlier this year due to extreme weather conditions. The work to be carried out by SSE will serve to increase the local grids resiliance and make such events far less likely in the future.

SSE’s Director of Transmission, David Gardner commented:

“The announcement from Ofgem signals another significant step in our plans to reinforce the transmission infrastructure throughout Scotland.

“Along with completion of key projects within our approved budget of £1.4bn, this project demonstrates that we are gaining momentum on our capital expenditure programme which will connect significant amounts of renewable energy to the grid; contributing to energy security, economic growth and decarbonisation of electricity generation.”

The work to be carried out in Kintyre is only one small part of the £5 billion investment SSE intends to make into Scotland’s energy transmission network. Such levels of investment will provide a huge boost to Scotland’s renewable energy industry. There are currently developments across the country which are being delayed by a lack of available grid capacity.

However, in some cases, smaller renewable energy projects such as the medium scale wind developments carried forward by ourselves at Intelligent Land Investments (Renewable Energy) can make use of alternative solutions to a lack of grid capacity.

Ofgem’s approval of this grid upgrade work is the first to be issued under their new Strategic Wider Works (SWW) programme. SWW was introduced to consider funding for specific major transmission projects on a case by case basis in a timely fashion. A large number of transmission network uprgade programmes are being considered. We at Intelligent Land Investments (Renewable Energy) and within the wider renewable energy industry look forward to further approvals.

New radar system could mean boon for onshore wind

Last week a new and potentially revolutionary 3D radar system was tested in Scotland. The new system is designed to eliminate interference in radar systems from wind turbines.

Current radar systems can be subject to interference from wind turbines. When spinning and generating power turbines in areas covered by aviation radar systems can potentially confuse or ‘clutter’ radar. Whilst there are some limited solutions available to turbine developers the scale at which these can be used is limited. Existing aviation radar systems can be ‘patched’  to reduce any potential for ‘clutter’ on radar screens however this must be done on an individual basis and it is generally the case that one patch can be used in a 2.5 kilometre radius. Additionally patches are not always available. These limitations have meant that many potential onshore wind developments have been unable to progress despite them meeting all other criteria for development in terms of environmental and landscape impact,grid capacity, visual impact etc. The trade body RenewableUK has estimated that approximately 6.2 GW (Gigawatts) worth of onshore wind developments have been held up due to such aviation issues. However, this figure is likely to be higher due to developments being dropped early or never progressed with due to expectations of such issues down the line.

The new 3D holographic radar system was successfully tested at Prestwick Airport last week by the systems developer Aveillant. The new 3D radar system was successful in differentiating between spinning turbine blades and flying aircraft. The turbines at Millour Wind Farm which is nearby to Prestwick Airport were used to conduct the tests. It should be noted this this windfarm is located in an area which does not cause any potential safety risks to the existing radar system at Prestwick Airport.

The new radar system has also been succesfully tested recently in the United States; at Indian Mesa Wind Farm in West Texas. In both tests the system was completely successful in pinpointing the location of all turbines and aircraft (as part of the test information about the flight-paths and altitudes of aircraft passing over and near to the turbines was not made known in advance) without any interference. Following the US tests it was announced that American civil and military surveillance requirements were successfully met. Gordon Oswald, Aveillant’s Chief Technology Officer stated:

“We don’t know exactly what was flown overhead – we’re talking about the most sophisticated government in the world here, and they will be out to test us – but we can confirm that several different types of aircraft were detected above and around the wind farm, and that our radar easily distinguished between wind farms and different types of aircraft.”

It is worth noting that the radar system was safely and successfully installed for the US test in less than a day. Developer Aveillant has announced that provided further, more detailed, tests are successful then the radar system could be in commercial operation by the end of this year.

David Crisp, chief executive at Aviellant made the following statement after the completion of the test at Prestwick:

“This is the first live demonstration of the radar [in the UK] and it has gone fantastically well.

“We have had very good feedback from wind farm developers and the Civil Aviation Authority, and will be doing more detailed risk assessments to meet the CAA’s standards.

“It’s an interesting thing to demonstrate because we are basically showing that there is nothing to see. Normal radar sweeps around once every four seconds. Holographic 3D radar is the next generation technology, going round four times per second, or 16 times faster.

“The first aim was to prove that the 3D radar can differentiate between aircraft and turbines, which was clearly demonstrated. The second aim was to show that the holographic radar can be integrated with airport radar, which happened seamlessly.

“If all those objections shown in the RenewableUK data last year were removed you could almost double the amount of wind farms in the UK. This will have a huge impact in Scotland, which is, quite rightly I think, very committed to wind power and has a very good wind climate compared to England.”

Several major players in the onshore wind industry have invested in the development of this new radar system through the Aviation Investment Fund Company Limited (AIFC).Currently AIFC has invested £500,000 in the development. Their chairman Simon Heyes was present at the test in the UK and made the following comment to the press:

“To see what we have heard so much about has been really good. It certainly takes us a step forward to our goal of getting wind farms constructed where they currently are held up by objections from airports.”

Industry body Scottish Renewables has estimated that around half of all wind turbine applications which have ran into aviation issues are in Scotland. From this then we can see the contribution the roll-out of such new radar systems could make not just to Scotland’s onshore wind industry but to our country’s targets in renewable energy generation, carbon emission reduction and to increasing our energy security.

Scottish Renewables’ senior policy manager Ross Blairmie reacted to the successful testing:

“For a number of years the industry has been working extensively to understand how wind farms interact with radars used by the aviation industry … This has resulted in major investments being made to find innovative solutions to tackle the issue.

“Scottish Renewables welcomes the new research and technology being tested by Aveillant and hopes to work with companies like them, along with the Scottish Government and the aviation industry, to find a solution to remove this significant barrier to the development of onshore wind in Scotland.”

It is worth noting that the issue of radar interference has not just affected the development of large scale wind farms but small and medium scale developments such as those carried out by ourselves at Intelligent Land Investments (Renewable Energy). Whilst much of the media attention has focused on wind farms, as is often the case, there are landowners and farmers in many areas of Scotland who have been unable to progress with their developments due to aviation concerns. The successful commercial deployment of new 3D radar systems represents an opportunity for many farmers and landowners to progress with onshore wind developments. Meaning that much needed revenue streams can be accessed in what are difficult times for many in the agricultural industry. Additionally the progression of such developments would also mean more funding for community contribution schemes such as we at ILI (RE) operate.

We eagerly await further news on this front.

 

 

South Lanarkshire wind attracting large investments

Last week,  a share issue was launched by a Scottish Wind-farm Co-operative to fund wind projects in South Lanarkshire. This share issue indicates not only the extraordinarily competitive returns that renewable energy developments can bring but also the status of South Lanarkshire as one of the best regions in the United Kingdom for onshore wind developments.

The Spirit of Lanarkshire Wind Co-operative launched it’s share issue last week, aiming to raise up to £2.7 million for two wind farm developments in the area. If the share issue is over-subscribed priority will be given to South Lanarkshire residents. Within it’s first week it has raised £132,000. According to the chairman of the co-operative a respectable annual rate of return of 8.5% is expected.

Tom Robinson, an investor in previous share issues, commented:

“It has worked out excellent. There was one year when we only got 7.6%, but then you look at an ISA paying 0.1%. One year it was 10.6%.”

Similarly, last month an Australian renewable energy firm launched a four year ‘mini bond’, offering a fixed rate of return of 7.5%, intended to finance both solar and onshore wind projects within the UK. The frequent occurrence of such share issues illustrates the profits that can be made from renewable energy development. However, it should be remembered both that these are not risk free investments nor are they the only investments which one can make in this field.

Bonds purchased in such share issues cannot be traded on the UK stock market. Nor are they covered by the Financial Services Compensation Scheme; leaving the investor open to risk in the event of such developments not proceeding as planned. Finally, in the case of the Co-operative share issue, investors will not be paid back until after 25 years i.e. the life span of a wind farm. For many people in South Lanarkshire and elsewhere (particularly land owners) smaller scale developments may prove to be more suitable.

Such developments, do however, confirm South Lanarkshire as one of the United Kingdom’s best regions for onshore wind developments. High wind speeds, tracts of rural land, an informed public and local authority all add up to a prime renewable region.

We at Intelligent Land Investments (Renewable Energy) offer our landowners an extremely competitive rate of return with the enhanced attractiveness that we require no monetary investment from them. All development costs are met by us. This, combined with the fact that small or medium scale turbine developments are far quicker to progress through planning than full scale wind farm development, means that  a landowner may be able to make more money more quickly from only one or two turbines than from a wind farm and not just in South Lanarkshire but across all of Scotland.

 

New Survey Reveals Farmers Enthusiasm for Renewables

A survey published last week has revealed the full extent of the enthusiasm which the British Agricultural Industry has for renewable energy. The research, ‘Farms as Power Stations’ has demonstrated the massive increase in renewable energy generation on British farmland over the last few years and indicates that this level of growth is expected to continue. The role which British Agricultural can play in renewable energy generation is something which we at Intelligent Land Investments (Renewable Energy) have long appreciated.

The research was carried out in partnership between Nottingham Trent University, Farmers Weekly and Forum For The Future. Around 700 farmers from across the UK participated in the survey. Nearly 40% of those farmers surveyed were utilising renewable energy generation on their land. This is a huge increase on the last comparable survey, carried out by DEFRA in 2010 which found that only 5% of surveyed farmers were generating renewable energy on their land. Such a large and rapid increase demonstrates the great strides the renewable energy industry, particularly onshore wind, has been making over the last few years.

Indeed of those surveyed who did not have some form of renewable energy generation on their land 61% stated that they were extremely likely to rectify this within the next five years; with a majority indicating that small or medium scale wind generation would be their preferred choice. Such keenness is reflected in the reasons given for wanting a renewable  development on their land. Whilst expected reasons such as reducing climate change or increasing national energy security were given by many; 71% gave as their primary reason the good financial returns in comparison to more traditional farm enterprises.

The results of the survey were received enthusiastically by those bodies involved in the canvassing as well the wider renewables industry. Professor Eunice Simmons, the dean of Nottingham Trent University’s School of Animal, Rural and Environmental Sciences, said:

“It’s very positive news that renewables are becoming more popular with UK farmers – and this trend looks set to continue over the coming years.

Maf Smith, Deputy Chief Executive of industry body RenewableUK commented:

“This important new research shows just how valuable renewable energy is to farmers at a tough time for crop yields. Farmers have always worked with the countryside and depend on the weather to make their living, and it’s good to see small-scale wind turbines playing their part in this. The UK’s small wind industry leads the world, and there’s a beautiful synchronicity in turbines manufactured in Loughborough turning in fields in Lincolnshire.”

“With 76% of farmers still believing the potential for renewable energy is not being met, it’s clear that there are a lot of opportunities out there for further development. A consistent rate of support for small and medium-sized wind turbines, and consistent and predictable planning decisions, to help our British industry really establish itself, could ensure that even more farmers are helped to make the most of their natural resources”.

The farmers surveyed also provided what they considered to be the top 5 barriers to on-farm renewable energy generation. The major reason given was the high investment costs. It is at this point in time that we would like to point out that we at ILI (RE) do not require our landowners to provide any capital. The next major barrier given was the amount of red tape involved. ILI (RE) handles all of this for our clients allowing them to concentrate on their core businesses. The third major barrier cited in the survey was the planning process. Whilst it is true that progressing a renewable energy development through the planning system can be a time consuming process we at ILI (RE) are vastly experienced in this process and can call on our in-house specialist staff to deal with any hurdles.  The fourth major barrier, community opposition, is also something which we have dealt with a number of times; gathering support from the community for a development and directing support towards the planners handling any application. The final hurdle, accessing capital, is again something which is not an issue for our developments.

The results of the ‘Farms as Power Stations’ survey chime with other research carried out in this area. For example, a survey carried out in May of this year found that 95% of British farmers believe that renewable energy will play a key role in the future of British Agriculture. We at Intelligent Land Investments (Renewable Energy) can only agree with this majority. Having spoken to farmers and landowners up and down the country we understand the importance of accessing the revenue which renewable energy developments can bring in modern British agriculture. Particularly in these times of poor weather and CAP reforms.