National Grid to publish constraint payment information for all forms of energy generation

Last week, industry trade body Scottish Renewables announced that it had been in contact with the National Grid to request more balance in it’s reporting of constraint payments to wind turbine developers.

Constraint payments are payments made to energy generators at times of low demand. When there is a surplus of power in the National Grid generators are paid at a pre-agreed rate to shut down until power demand increases. Constraint payments act as compensation for revenue lost from ceasing to generate and supply power.

Scottish Renewables request to the National Grid was made following the publication of an article in the Scottish Times. The article attempted to detail the level of constraint payments which have been made to wind energy generators at times of low demand. It transpired that the article had been based upon “highly contested” projections of future wind constraint payments rather than actual data. One industry insider was quoted as describing the article as “tosh”. Indeed, the National Grid itself, whose projections the article had been based upon, described the article as highly misleading.

In the last financial year £28 million was paid out to wind energy generators in constraint payments. Whilst this apparently large sum makes for good headlines it should be placed into context. £28 million was paid out to wind energy generators whilst £138 million in constraint payments was paid out to coal, gas and other generators – almost six times as much. No breakdown of these costs has ever been published making it impossible to accurately state how much in constraint payments has been paid out to any form of energy generation technology apart from wind.

Following their contact with Scottish Renewables the National Grid has now confirmed that they have agreed to publish breakdown cost of constraint payments  for other forms of energy generation. The first publication of this information is expected before the end of February. A spokesperson for the National Grid made the point that until now it had only ever been wind energy constraint payment information that anyone had requested. This rather revealing comment  suggests that articles on constraint payments in many mainstream media publications have been motivated by an anti-wind energy sentiment rather than an urge to seriously examine the issue of constraint payments and the true cost of the various forms of energy generation which supply the National Grid.

Following discussions with Scottish Renewables a National Grid spokeswoman made the following comment:

“We have discussed this issue with Scottish Renewables and we are more than happy to meet this request in full. It’s vital that we provide clear information about how we constrain energy generation to balance the power grid.”

Niall Stuart, Chief Executive for Scottish Renewables made the following statement:

“Wind was responsible for 14% of all constraint payments in the first half of this financial year, with coal, gas and hydro accounting for the vast majority of the other 86%.

“Total constraint payments were equal to £161.2m and the cost of constraining wind was £23.3m, meaning that coal, gas and other generators received £137.9m – six times the amount paid to wind.

“Despite this, National Grid only publishes detailed figures on payments to wind, with no breakdown given for the other sectors.

“In the interests of transparency and an open debate about the costs and benefits of all forms of electricity, it is time for the grid operator to publish details of payments to other individual sectors – not just to wind.

“Constraint payments are an essential part of managing the grid, but the public deserves to know where their money is being spent, and the fact that payments to wind are significantly less than those made to coal and gas generation.”

This week, Scottish Renewables also published a report produced by consultancy group O’Herlihy and Co. The report aimed to ascertain the amount of people employed in the Scottish renewable energy industry. 540 companies were surveyed making this the most comprehensive study of its type yet produced.

The report found that 11,695 people are currently in full time employment in Scotland’s renewable energy industry. This represents a 5% increase on last year’s findings and demonstrates both the growth and employment potential of the industry. Interestingly, 5% growth represents a higher level of job creation than the Scottish economy more generally. The study also broke down employment by region and industry sector. The majority of jobs in renewable energy (54%) are located in the Central Belt. The Highlands & Islands (17%) and the North East (14%) are also renewable energy employment hubs.

Onshore wind energy was found to be the industry’s biggest employer with 39% of jobs in this sector. Offshore wind was the second biggest employer with 21% of jobs in this sector. Wave/Tidal and Bioenergy were also significant employers, both providing 9% of the renewable energy industry’s jobs. All other sectors were classed as insignificant employers (at least in terms of number of jobs compared to other sectors).

The data for employment by area and employment by sector were then cross examined. This revealed that Onshore wind and Hydro energy are the biggest renewable employers in the Highlands & Islands. Onshore wind ‘dominates’ employment in Glasgow and is also the ‘most significant employer in the South of Scotland and Lothian. Finally the North East is the country’s hub for Offshore Wind with ‘key concentration’ of jobs in this sector located in this region; taking advantage of the regions long standing experience of marine engineering.

The report also surveyed the 540 renewable energy companies to gauge their expectations for the coming year. 294 organisations (54%) felt their level of employment would increase in 2014. 229 organisations (42%) felt their level of employment would remain the same and just 9 organisations (1.6%) felt their employment level would decrease in 2014. The remaining organisations either did not know or did not respond. From this survey it can taken that Scotland’s renewable energy industry is expecting to continue to grow over the course of 2014.

Joss Blamire, Scottish Renewables Senior Policy Manager made the following statement at the publication of the report:

“These latest figures show the renewables industry has seen steady growth in the number of people being employed despite an uncertain year.

“The breadth of job opportunities for project managers, ecologists and engineers has led to a wide range of people seeing renewable energy as a sector where they can use their skills and training.”

From the news this week we can see that the Scottish renewables industry is looking ahead to a bright 2014. Growth and job creation are expected to continue, generation levels are expected to continue their upward trend and it is hoped that the quality of reporting, particularly on the wind industry, will improve. We here at Intelligent Land Investments (Renewable Energy) look forward in playing our part in moving Scotland closer to it’s renewable energy generation targets.

 

UK renewable generation soars

Last week the Department of Energy and Climate Change published the latest statistics on renewable energy generation in England, Scotland and Wales.

The statistics are available here. They demonstrate dramatic growth in renewable energy generation across all renewable generation technologies and regions of the UK.

These statistics are published quarterly and the latest figures account for the second quarter of 2013. 12.8 TWh (terawatt hours) of renewable electricity was generated over the three month period. As such renewable energy generation was responsible for 15.5% of the total electricity generation in the UK in this time period. This represents a dramstic increase from the same period of 2012 in which renewables contributed 9.7% of total electricity generation. This is proof positive of the dramatic strides that the renewable energy industry is taking in the UK.

The statistical analysis broke the increased renewable generation capacity by technology type. This revealed that wind has seen the most dramatic growth of any form of renewable generation technology with an increase in generation of 62% compared to the same quarter in 2012. Further reading also reveals that onshore wind generation increased by 70%  between the two quarters. This is the biggest increase in generation for any technology type and demonstrates not only the strides being taken by the onshore wind industry but also the suitability of the UK itself for further onshore wind generation.

Additionally, solar, wave and tidal generation saw an increase of 22% whilst hydro power saw a 29% increase in generation. It should perhaps be noted that in the case of hydro power this leap may represent a difference in weather between the two years as much as it does an increase in capacity.

DECC’s analysis also broke down the number of renewable generation sites in England, Scotland,  Wales and Northern Ireland respectively. At the end of the second quarter of 2013 England had 3,752 non-PV (photovoltaic i.e non-solar sites),Scotland had 2,648 non-PV sites, Wales had 493 non-PV sites and Northern Ireland had 203 non-PV sites. The difference between the countries was far more marked in the figures for Photovoltaic sites: England had 311,192, Scotland had 24,360, Wales had 27,173 and Northern Ireland 531. In terms of solar sites much of the difference can be explained by the more clement climate to be found in England, particularly in the South, making solar panels more  attractive to developers and consumers.

The figures also reveal that as of the end of the second quarter of 2013 England had 29% more renewable electrcity capacity than Scotland. However DECC’s own analysis attributes this to the fact that the vast majority (88%) of the UK’s total biomass capacity is to be found in England. This concentration of biomass capacity can be explained by the conversion of the Tilbury B to dedicated biomass in 2011.

The total renewable energy capacity of the United Kingdom as of the start of June 2013 stood at 19.5GW. This represents an increase of 38% compared to June 2012 indicating that the growth of the renewable energy industry  continues apace. Furthermore 48% of the total amount of renewable energy generated in the second quarter of 2013 came from wind power. An indication that the wind industry and companies such as ourselves are working hard to ensure that the UK meets its renewable energy targets.

The Deputy Chief Executive of RenewableUK, Maf Smith welcomed the news with the following comment:

“This confirms what we have been seeing for some time, which is renewables steadily becoming more important in meeting our electricity needs, and wind being responsible for the lion’s share of the progress. That this period coincided with one of the coldest Springs on record means that wind was providing this power at a crucial time.

“The fact that we have seen the record for renewables generation broken twice in the space of a few months shows for itself the progress being made in the race to decarbonise our economy and secure our future electricity supply.”

In further good news this week saw Scotland’s biomass capacity increase! Sky cut the ribbon on four new biomass boilers at its customer contact centre in Livingston. This is the latest renewable energy generation scheme to be completed by Sky following the installation of a wind turbine at the company’s headquarters in Heathrow. The company has publicly committed to reducing its carbon emissions by 25% and improving its energy efficiency by 20%.

The new biomass boilers are expected to provide enough heat and hot water for the sites 2500 staff. Fuel is to be sourced from local forestry offcuts ensuring that carbon emissions as a result of transporting fuel to the site are kept to a minimum. The boilers are expected to reduce the Livingston sites carbon output by approximately 500 tonnes per year.

The publication of these DECC statistics reveals that the UK’s renewable energy industry is continuing to grow; creating jobs and increasing energy security all across the country.

Wind, wave and tidal employment soars in the UK

A report published last week by the industry trade body RenewableUK has revealed that the number of people employed in the United Kingdom’s wind, wave and tidal sectors has soared over the last three years.

The report, entitled ‘Working for a Green Britain and Northern Ireland’, is an update of a report previously produced in 2010. It was produced, jointly,  by RenewableUK and Energy & Utility Skills, and compiled by Cambridge Econometrics in partnership with IFF Research and the Warwick Institute for Employment Research.

The report has revealed a 74% increase in the number of people employed, both directly and indirectly, by the UK’s wind, wave and tidal sectors. The figure now stands at over 34,300. Directly the  three sectors employ 18,365 full time staff. 15,908 people are also in full time employment due indirectly to these sectors. Many of these staff work, for example, providing goods and services to the UK’s renewable industry in fields such as gearbox component manufacture. It is worth noting that 91% of the 34,300+ people employed due to the UK’s renewable industry are UK citizens. This demonstrates the importance of the renewables sector to creating jobs within the UK and belies many newspaper articles presenting the opinion that the use of renewable energy in the UK is only creating jobs abroad.

It is also worth making the point that many of these jobs have been created in areas of the UK which suffer from high unemployment. For instance the onshore wind sector is creating large amounts of jobs in the Scottish Highlands and Islands; areas of the UK in which unemployment of the UK has remained stubbornly high for many years but also contain some of the best renewable energy resources in Europe.

The geographic spread of the UK renewable energy industry’s job creation can also be seen in the growth of the offshore wind sector. The offshore wind sector has seen the highest level of job creation of any part of the energy industry. In three years the sector has doubled; from 3,151 full time employees to 6,830 full time employees.

Renewables are also helping to bring more women into the energy industry. Women make up 20% of full time employees in the renewable energy sector. This is proportionately higher than the UK’s energy industry as a whole. Renewables, therefore, can be seen to be bringing women into one of the country’s most important industries.

Another interesting point that the report raises is the number of small and medium enterprises which are involved in the UK’s renewable sector. More than 80% of the full time staff in the wind, wave and tidal sectors work for companies which have less than 250 employees. Furthermore 56% of these companies have less than 25 employees. Small and medium enterprises are at the heart of the UK’s renewable energy industry and have been a major factor in its growth. The renewable energy industry is a functioning example of the rhetoric deployed across the political spectrum; of an economy largely made and driven by flexible, dynamic small and medium companies.

Announcing the publication of the report RenewableUK’s Chief Executive Maria McCaffrey made the following statement:

“Today’s report clearly demonstrates how the wind, wave and tidal industries are creating jobs and growth for the economy. There are tens of thousands of people employed in skilled jobs the length and breadth of the country building a world-leading industry in the UK and providing clean, reliable energy.

“Industry and Government need to work side by side to back this workforce and the growth they generate. If the UK gets this right, our wind, wave and tidal industries could employ more than 70,000 people over the next decade. The offshore wind sector alone could be employing nearly 45,000 workers in the 2020s. As an industry we are truly creating jobs out of fresh air.

“The scale of the opportunity is massive, but success is not guaranteed. To really harness the economic benefits of our technologies we must ensure that there is certainty for industry. Certainty on future levels of deployment of wind, wave and tidal energy over the next decade will enable firms to invest in the right people and the right skills, and ensure we maximise the number of green collar jobs we create as we transform our electricity system. We want to ensure offshore wind is given the same opportunity to prosper as the North Sea oil and gas industries had in their heyday”.

It was also announced today that the World Energy Council considers the UK to have one of the sustainable national energy systems in the world.  The Council was announcing the establishment of a new ranking system for national energy systems. The UK was one of only five countries to obtain a triple-A rating; the other countries were Denmark, Spain, Switzerland and Sweden. The rankings are obtained by assessing the manner in which a country balances the three key issues involved in energy systems; energy security, environmental sustainability and energy equity.

The UK scored particularly highly in the environmental sustainability of its national energy system. The World Energy Council praised particularly the UK’s drive for wind energy, which is serving to create security of supply and to shield the UK from price fluctuation on the international gas markets. However the Council did note that perhaps more could be done to ensure closer partnerships between the public and private sectors.

These two pieces of news demonstrate that the UK’s renewable energy industry is not only creating tens of thousands of full time jobs across the country but is also gaining the country international praise for the direction in which it has taken it’s energy industry as a whole.

Europe’s largest tidal array granted planning consent

This week it was announced that the Scottish Government has granted planning consent to what will be Europe’s largest tidal array energy project.

The go ahead for the project was announced by Scottish Government Energy Minister Fergus Ewing, earlier this week, saying;  “Today we have granted consent to MeyGen Limited to develop the largest tidal turbine array in Europe and the first commercial project off these shores.”

Maygen is a joint venture between the investment bank Morgan Stanley, GDF Suez, International Power, and Atlantis Resources Corporation (a developer of tidal energy technology). A 25 year lease has already been agreed with the Crown Estate for 1.4 square miles of fast flowing water between the north-eastern tip of the Scottish mainland and the Island of Stroma. Planning consent has been granted for the development of around 86 1 MW (Megawatt) turbines. This would generate up to 86 MWs of electricity, enough to power 42,000 homes or 40% of the homes in the Highlands according to Scottish Government sources.

However, development is scheduled to occur in phases. With construction happening up until 2020. The first phase of the development is the installation of 9 of the 1 MW turbines to act as a demonstration of the successful commercialization of the technology. Each turbine stands 22.5 metres tall (73 feet), weighs 1,500 tonnes, and has a rotor diameter of 18 metres (59 feet) The site within the Pentland Firth could eventually yield up to 398 MWs of power.

Tidal and marine energy generation are considered by both the UK and Scottish Governments to have a huge role to play in the fulfillment of the countries renewable energy commitments. Improvement and refinement of the necessary technology will continue in the coming years but the development of the Pentland Firth array will act as both a milestone for the technology itself and also for Scotland’s world leading marine energy industry. The Carbon Trust has estimated that wave and tidal technology could provide 20% of the UK’s electricity demand if our resources are fully developed.

News of the granting of planning consent was met favourably by both industry and environmental bodies. A spokesperson for WWF Scotland commented:

“Scotland is well placed to lead in developing the technologies to turn this potential into a reality while create thousands of green jobs at the same time,

“However, as there is little point in generating huge amounts of marine renewable energy on Scotland’s islands if it cannot also be got to the mainland, we now need UK and Scottish Ministers to find a way forward that enables us to harness the full potential of this clean energy source.

“With careful planning we can harness Scotland’s huge wave and tidal energy to help cut our climate emissions, while safeguarding the nation’s tremendous marine environment.”

Scottish Renewables Policy Manager Michael Rieley stated:

“Scotland has just been given another reason to be proud of its burgeoning marine energy industry now that Europe’s largest tidal stream energy project will be calling Scotland home. This is by far one of the most important milestones for the tidal energy sector to meet.

“This latest announcement to come from the marine industry is further proof that all the hard work to win the global energy race is paying off. Not only will new projects like this mean a step further towards meeting our renewable energy targets, but it will also lead to further jobs being created, increased investment, and a significant contribution towards tackling climate change.”

In regards to onshore wind generation, UK Energy Secretary Ed Davey announced this week that onshore wind developments on the Scottish Islands are to be incentivised through the use of “strike prices”; higher subsidy payments than such developments would receive on the mainland. It was stated that the new price of £115 MW/h (megawatt hour) has been set to reflect the unique circumstances and potential of carrying out such renewable energy developments. The “strike price” does not apply for any other form of power generation than onshore wind. Often suitable sites on the Isles are subject to higher wind speeds than would be encountered on the mainland. However, costs can be far higher due to the potential difficulties and extra costs associated with connecting into the electricity grid. This is the first time that the UK Government has set a higher strike price for a specific region of the UK.

Mr Davey commented:

“This is good news for the future of renewables in Scotland and this unique solution will pave the way for more investment in green energy.

“An independent report showed that the specific circumstances of the Scottish islands required a different approach that breaks the mould of the wider UK strike price mechanism, and we are delivering that.

“This was possible because of a strong partnership between Westminster, Holyrood and the island councils.

“Thanks to consumers across the whole of the United Kingdom, we can offer this special higher strike price, so Britain gets more green energy, so consumers’ bills in Scotland are kept affordable and so the green economy of the islands grows.”

From the news announced this week we can see the central role that Scotland, and in particular the Scottish Islands, have to play in not only increasing the UK’s energy security, meeting renewable energy generation targets, and reducing carbon emissions but also in the development of a world class industry capitalising on the natural resources of the country.