Tag Archives: Efficiency

Scottish Government publishes Electricity Generation Policy Statement

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This week the Scottish Government launched the latest draft of its Electricity Generation Policy Statement which aims to outline how the ambitious 100% renewable energy target for 2020 will be achieved. The document contains a large amount of information including a projected breakdown of Scotland’s future energy mix, outlined aims for the countries energy network in 2020, carbon reduction targets, energy efficiency measures, planned grid connections with other countries, and the expected economic benefits in terms of investment levels and job creation. The complete document can be found here. Scottish Energy Minister, Fergus Ewing stated:

“This report shows that the Scottish Government’s target to generate the equivalent of 100 per cent of our electricity needs from renewables, as well as more from other sources, is achievable.

“We know there is doubt and scepticism about our 100 per cent renewables target, and the financial and engineering challenges required to meet it.

“But we will meet these challenges. I want to debate, engage and co-operate with every knowledgeable, interested and concerned party to ensure we achieve our goals.

“We know our target is technically achievable. Scotland already leads the world in renewable energy, and we have the natural resources and the expertise to achieve so much more.

“The prize at stake for the people of Scotland is huge, in terms of jobs, economic opportunities and lower electricity bills for all.”

The Electricity Generation Policy Statement initially outlines what the government hopes to achieve, long term, with the countries energy network.

It states that Scotland’s generation mix should deliver; a secure electricity supply, at an affordable cost to consumers, which can achieve large scale de-carbonisation by 2030, and brings the greatest possible economic benefit to Scotland.

A number of individual targets have been set with these aims in mind. For example, total Scottish energy consumption should be lowered by 12% by 2020. Energy efficiency is internationally regarded as one of the most affordable ways in which energy demand and carbon emissions can be reduced and controlled. Steps are already being taken to meet this target; there was a 7.4% drop in year on year energy demand from 2008 to 2009.

No new nuclear power plants are to be constructed in Scotland although extending the lifespan of the countries two existing nuclear plants for  a further 5 years is being considered. Such a move would serve to ease the transition to a grid more heavily reliant upon renewables.

Carbon Capture and Storage technology is expected to play an important role. Allowing baseload power to be maintained whilst still reducing carbon emissions. A minimum of 2.5 GW of thermal generation fitted with CCS technology is expected to be operational by 2020. CCS technology, if successfully demonstrated at commercial scale, could create up to 5,000 jobs and be worth £3.5 billion to the Scottish economy.

14-16 Gigawatts of renewable capacity will be required to achieve the 100% renewable target by 2020. Currently there are 12 Gigawatts of renewable capacity in various stages of planning, development and deployment. This figure includes 3 Gigawatts of mainly onshore wind projects currently consented or in construction. Whilst it should be remembered that not all of the 12 Gigawatts worth of projects will make it to construction it demonstrates the interest the Scottish renewables sector is already attracting from investors.

To achieve the 2020 target installed renewable generation capacity will have to almost double over the next ten years.Wind (both onshore and offshore) will play a major part in this expansion. 13 Gigawatts of wind energy is expected to be installed by 2020. This will mean that wind power will be providing around 55% of Scotland’s electricity output by this time. The Policy Statement identifies this target as a “major challenge” but argues that it is “consistent” with the projections made in a variety of different reports. Given Scotland’s huge potential for wind energy, strong backing from both the UK and Scottish Goverment’s, and the falling costs of both onshore and offshore wind it seems an achievable, if ambitious, target.

The Scottish Government has outlined a number of economic benefits that a strong and committed drive for increased renewable generation can bring. Firstly, it will serve to insulate consumers from the rising international prices of fossil fuels. The Policy Statement states that from 2013 increased renewable energy capacity will begin to halt the ever increasing cost to consumers from their energy bills.

Secondly, over the next ten years the renewable energy industry alone could be providing up to 40,000 jobs and £30 billion worth of investments into the Scottish economy. This is not including the economic benefits of CCS and increased usage of energy storage technologies. Additionally, the Scottish Government has targeted that 500MW should be owned by local communities by 2020. This level of communal ownership would see up £2.4 billion in Feed in-Tariff revenues over the next 20 years being held by local communities.

Thirdly, the necessary investment in and upgrading of Scotland’s electricity grid would pump £7 billion into the country’s economy and create 1,500 new jobs. The benefits of such investment are already being seen with both ScottishPower and Scottish and Southern Energy (SSE) announcing the creation of new training and apprenticeship schemes.

Reactions to the publication of the Electricity Generation Policy Statement have been largely positive.

Ian Marchant, Chief Executive of SSE commented:

“SSE welcomes the Scottish Government’s electricity generation policy statement. With energy supply now a global issue, it is vital that the policy objectives adopted at Scottish, UK and EU level are consistent. With its focus on energy security, affordability and de-carbonisation, this policy statement underlines the extent to which policy objectives are consistent, and it is very encouraging that this should be the case.”

Keith Anderson, ScottishPower’s Chief Corporate Officer and CEO of ScottishPower Renewables remarked:

“ScottishPower supports the commitment to increase low carbon electricity generation in Scotland and we welcome the clarity outlined in the Scottish Government’s policy statement. We are making significant investments in large scale renewable energy projects including new wind, wave and tidal power. This investment is critical in order to help Scotland achieve its renewable energy targets and will be a catalyst for economic growth and job creation.”

Alison Kay, Commercial Director for National Grid observed:

“Scotland already has the highest proportion of clean power generation across Great Britain, which plays a vital role in keeping the lights on and meeting demand. The future energy mix is uncertain and this statement sets out a clear vision for the future of energy in Scotland. It will further enable National Grid and other industry participants to effectively plan the networks of the future.”

The 2020 target is described in the Policy Statement as “both a statement of intent and a rallying call”. It has been demonstrated to be both feasible and achievable, with wind energy playing a massive part. It is hoped that the outlining of a long term plan to help achieve the 100% aim will provide investors with confidence.

 

Government Launches Green Deal

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The Government’s new Green Deal has been launched this week.

The scheme aims to reduce fuel poverty by making energy efficiency measures such as insulation more affordable to householders. This will be achieved by allowing people to take out loans of up to £10,000 to make their homes more energy efficient. The loans will be paid back over a 25 year period through ‘small additions’ to household energy bills. These loan repayments are intended to be lower than the amount of money that has been saved on energy; this has been referred to as the Green Deal‘s ‘golden rule’. The Green Deal is intended to be taken up by up to 14 million homes. The government estimates that the Green Deal could lead to the creation of 65,000 jobs.The Green Deal may also offer households that take up the scheme £150 cash-back. Estimates place savings on energy bills at around £94 annually by 2020. It was also announced that Energy companies must contribute £1.4 billion to the scheme annually until 2020.

At the launch of the Green Deal Chris Huhne stated:

“The Green Deal is about putting energy consumers back in control of their bills and banishing Britain’s draughty homes to the history books. By stimulating billions of pounds of private sector investment, the Green Deal will revolutionise the way that we keep our homes warm, making them cosier, more efficient – and all at no upfront cost.

“The Green Deal is also a massive business opportunity for firms up and down Britain, helping to power the economy and creating jobs. From one-man bands and local authorities, to the big supermarket and DIY stores, we want as many providers getting involved as possible because that’s what will give consumers the best deal.

“I want to insulate Britain’s homes not just from the cold weather, but also from the chill winds of global fossil fuel prices. It’s these that are pushing up consumer energy prices, and it’s why our balanced package of policies aimed at achieving energy savings and shifting to more home grown alternatives is the right one for the economy and all of us who pay energy bills.

“There are certainly costs to replacing our ageing energy infrastructure with modern clean power stations, and we take very seriously any impact of our policies on what consumers and businesses pay. we’ve repeatedly taken steps to reduce this – by removing some planned levies on bills and making others more cost effective and within budget.

“But a crucial – and too often ignored -priority of our whole strategy is to reduce the amount of energy we use in our homes.”

Initial reactions to the launch of the Green Deal have been somewhat mixed.

Brian Berry, director of external affairs at the Federation of Master Builders released the following statement:

“With rising energy prices the market for retrofit work is certainly there and is worth at least £3.5 billion every year, but consumers will need to be convinced that the Green Deal makes financial sense to them. It’s pleasing therefore to see the proposed cash back incentive in the consultation, but a reduced rate of VAT for Green Deal approved measures is needed in addition to boost demand and create much needed jobs in the building industry.”

Richard Lloyd, executive director at the consumer group Which?:

“It’s difficult to see how hard-pressed homeowners will have confidence in how the ‘green deal’ might work for them if the suggested savings are initially based on averages rather than on their personal energy use.

“The ‘golden rule’ was supposed to reassure people that green deal repayments would not exceed the savings made on energy bills. But if this is based on average figures then it could be meaningless for many.

“The government estimates that average household energy bills will be 7% lower than they would have been by 2020 because of new energy and climate policies. But this is based on the big assumption that schemes like the Green Deal will appeal to consumers. If take-up is lower than expected, energy bills will be pushed up even further.

Steps have already been taken to reassure those that have raised concerns about the Green Deal.

The treasury announced shortly after the scheme was launched that £200 million had been set aside to fund incentives to those who take up the scheme in it’s early stage. Although it has yet to be determined quite what form these incentives will take, further cash-back offers, discounts on council tax and cuts to stamp duty have all been suggested.

Chief Secretary to the Treasury Danny Alexander said:

“I can announce today that as part of the Autumn Statement we will provide £200m of funding for new and additional support to enable a special time-limited ‘introductory offer’ for the Green Deal.

“An offer that could save early adopters hundreds of pounds.

“A fund to get the Green Deal off to a flying start.

“One that will work with the Green Deal mechanism and the ECO to motivate thousands of more consumers to take up energy efficiency measures, over the next two years.”

The almost immediate announcement of this incentive fund indicates the strength of will within the government to make the Green Deal a success.

Chris Huhne comes out fighting for Renewable Energy

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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.”

ScottishPower to create 1500 jobs to modernise grid

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ScottishPower announced this week that in the next ten years they intend to invest £3 billion in modernising the National Grid. Not only will this help Scotland substantially in achieving the ambitious 100% renewable energy target for 2020 but it will create around 1500 new jobs in the sector.

The company needs the new staff for several reasons. Firstly there are a number of infrastructure overhauls that need to be carried out to improve the currently antiquated National Grid. Currently there are renewable energy projects across the country which are being constrained by the inadequate level of access the current Grid offers. To combat this ScottishPower intends to upgrade around 500 miles of overhead power lines, upgrade almost a fifth of their substation equipment and almost treble the current capacity of grid links with England to a level of 6.6 gigawatts. ScottishPower has stated that they intend to connect 11 gigawatts of renewable energy to the grid during this 10 year period; an amount four times as much as generated by Longannet Power Station.  The planned increase of link capacity to England would be a huge enabler for Scotland’s ambitious renewable energy targets. It would allow for a far larger scale of energy exportation than is currently possible. This is important not only because of the benefits to the Scottish economy that selling large amounts of electricity to England would bring but also because of the energy exchange it would allow. England has taken a different approach to the problem of energy generation, with nuclear power expected to play a big part in meeting English energy needs in the future. 6.6 gigawatts worth of grid links would allow Scotland not only to export energy at times of excess capacity but would allow for importation of nuclear power at peak times if demand were to outstrip supply.

Secondly, research carried out by ScottishPower indicates that 4 out of 5 energy industry employees are due to retire over the next 15 years. As a result of this a new generation of employees; a large number of apprentices and graduates are needed in the industry. The first wave will be recruited over the next three or four years as 200 graduate and apprentice positions are expected to become available.

Investment in the gird is expected to save the Scottish taxpayer a significant amount of money over the next twenty years. Constraint payments (payments made to electricity generators who turn off at times of excess supply as compensation) would increasingly become an issue if large amounts of electricity generation capacity were added to the current grid system, indeed without investment it is estimated that constraint payments would increase to £16 billion by 2030. Savings to the taxpayer are estimated as a result of increased capacity is estimated at £1.6 billion by 2021 and £11 billion by 2030.

ScottishPower chief executive Frank Mitchell released the following statement:

“Massive investment is required to ensure that Scotland’s electricity network is fit for the 21st century.

“It is important that we have a modern and robust network to support our renewable energy ambitions and to provide reliability for those who generate electricity and the homes and businesses that rely on it.

“It is no secret that our industry has an ageing workforce, and we need to encourage new blood in to the fold.”

Scottish First Minister Alex Salmond commented on the news:

“ScottishPower’s plans to upgrade transmission will ensure the grid is capable of carrying increasing supplies of clean green energy generated to domestic and European markets

“With plans to harness up to 10 gigawatts of offshore capacity in Scottish waters by 2020, alongside other renewable sources, it will be essential that generators can distribute power to where it is needed.

“These plans will create hundreds of new jobs and underline the company’s commitment to Scotland, as we work together to pursue a low carbon future for these islands and Europe.”

Other industry figures also released their reactions to the news, with some more overwhelmingly positive than others. Neil Stuart, chief executive officer of Scottish Renewables: “This announcement from ScottishPower is not only good news in terms of creating jobs and investment but is also a clear sign that barriers faced by some developers in connecting to the grid will be lifted.”

Norman Kerr, director of Energy Action Scotland: “There  are already a number of hidden charges on energy users’ bills and if any further collection of monies to fund this type of work is required, it must be made very transparent.

“This kind of investment has surely been paid by consumers already through the profits made by the fuel companies over the last few years.”

The announcement of these plans, following as it does in quick succession the launch of the Scottish Government’s Renewable Roadmap 2020 and the forthcoming Agri-Renewables Strategy sends a clear sign to investors and developers that Scotland is committed to the development of renewable energy and that industry, government and business are pulling in the same direction. Welcome and encouraging news for sure.

Unsustainable Biofuels

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The ongoing famine in the Horn of Africa has raised a number of questions for the international community on issues such as aid dependence, population growth, neo-colonialism and, perhaps most relevant to us, the increasingly unsustainable nature of biofuels. As discussed previously on this blog biofuels have been partly responsible for the ever increasing price of food worldwide. Indeed the World Bank identified biofuels as one of the causes in food price rises in a recent report as more and more arable land, in both the developed and developing world, is turned over to the production of biofuels: “Another factor that adds to the potential upward pressure on the price of maize is the diversion into production of biofuels.”

America is currently the world’s largest single producer of corn. But an increasing amount of this corn is not entering the food markets but being diverted to domestic ethanol production. Indeed current projections estimate American corn ethanol production at 14billion gallons (53 billion litres) for the year. More corn is being grown, US Department of Agriculture figures show that 92 million acres of corn have been planted this year, an increase of 4 million acres from last year, but this increased production is not being felt in the food markets.

Many farmers are now selling the majority of their corn harvests to ethanol production plants. 58% of the corn grown in Iowa (the biggest corn producing state in the US) this year is expected to be used to produce ethanol. Some farmers, such as Arlyn Schipper who owns a 1,619 hectare farm, expect to sell as much as 70% of their crop to these plants.

As a result of this ethanol boom there is less of crops such as soy-beans and wheat being grown as more and more farmers decide to cash in on the high price of corn, adding further pressures to global food markets. Marie Brill, an analyst at ActionAid remarked that”Farmers are tearing up any little bit of land they have and going to corn.”

In the near future even less corn could be entering world food markets from the US. A Swiss company, Syngent, has developed a genetically modified strain of corn, which is already in use in America, that is more easily and efficiently converted to ethanol. However, this comes at the cost of rendering the corn unsuitable for use in food production. A gene has been added to the strain which quickens the breakdown of corn starches to ethanol (normally a process which has to be induced in the factory) but which means that these starches can no longer be used as a thickener in food, or that corn chips can be produced. Brill commented that: “It’s going to put even more pressure on a really tight market. It will be really tempting to farmers to take on this new, more effective ethanol form of corn.” What is more worrying is that some farmers have raised the possibility of cross-contamination  of the new strain with regular strains of corn.

It could be argued, however, that the problems corn ethanol presents for world food markets may be addressed in the future. There is a growing consensus among environmentalists and development charities that biofuels such as corn ethanol are counter-productive to the shift to a more sustainable form of both agriculture and energy generation. Corn is rather impactful on the environment; it requires more pesticides and fertilisers than a crop such as soy beans and uses large amounts of water and energy whilst it is being converted to ethanol. Some groups, due to these facts, have argued that corn ethanol does not offer a meaningful or significant reduction in greenhouse gas emissions Bill Frees of the US Centre for Food Safety commented that: “The research is very clear by now. Turning corn into ethanol is not environmentally sound. It’s really an environmental disaster.” Frees also argued that corn ethanol could only replace, at most, 7% of energy supplied in the US by oil by 2020.

Corn ethanol production has been subsidised by the American Government for around 30 years. Indeed it was Jimmy Carter, in his term as President, that originally introduced the policy. Although the production of corn ethanol was slow to take off it has now developed into a boom. One that is possibly coming to an end, an opinion voiced by Jeremy Martin a member of the Union of Concerned Scientists: “I think we are at a turning point. We are full to the gills with corn ethanol.” Some campaign groups have argued that corn ethanol and its subsidies are now holding back better and more sustainable biofuels. This was an opinion voiced by Shelia Karpf, an analyst for the Environmental Working Group: “Corn ethanol continues to eat up the market and even eat up grant money that could be used to spur the development of cellulose and advanced biofuels.”

Subsidies may well be scrapped but more as a result of the US Governments current financial problems than a change of energy policy. Some expect $6 billion worth of corn ethanol subsidies to be scrapped by Congress as part of the sovereign debt negotiations. Such a move could reduce worldwide food prices slightly: “It won’t make a big difference for American farmers but it could make a huge difference for impoverished countries.” – Marie Brill

Corn ethanol has raised a number of questions about biofuels. Corn ethanol is increasingly looking like an unsustainable biofuel due to the impact it has on world food markets and it’s perhaps questionable status as a renewable source of energy. Biofuels are taking arable land away from food production at a time when the world population is expanding rapidly and more arable land and more efficient agricultural practises are needed. It is clear that biofuels can only have a limited role to play in an renewable energy market. Other forms of generation, such as wind and solar, have far less impact on the quality of life, even the viability of life, for many of the worlds population.

Electricity Market Reform White Paper – Reactions

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Secretary of State for Energy and Climate Change Chris Huhne unveiled a new white paper, titled Electricity Market Reform (EMR), this week. The paper outlined the Westminster Parliaments plans for the much delayed and even more necessary reforms and infrastructure investments in the UK Energy Grid. It outlined the technologies earmarked as being cost-effective and high in potential both now and post 2020. These technologies are onshore wind, offshore wind, marine energy, biomass electricity, biomass heat and ground and air source heat pumps. As well as this there was also a big role given to nuclear power with some declaring some of the reforms as nothing more than hidden subsidies for the industry. The white paper is also notable for its shift in rhetoric. Previously the Department of Energy and Climate Change had spoken of achieving Government targets for carbon emission reduction but with energy bills steadily rising and public disquiet on the issue increasing the talk had shifted to “keeping the lights on”.

Huhne at the paper’s unveiling said: “The idea that somehow we’ve been massively investing in renewables is absolute nonsense. We are catching up from a very low base. We’ve had 25 years of dithering on energy investment. We’ve got to stop dithering, because decision time is coming. You can have investment or you can have blackouts.”

The EMR paper predicted at least a four-fold increase in renewable energy consumption by 2020. Huhne spoke of why this was vital: “Growth on that kind of scale will be challenging, but will be necessary if we are to make the UK more energy secure, help protect consumers from fossil fuel price fluctuations, drive investment in new jobs and businesses, and keep us on track to meet our carbon reduction objectives for the coming decades.

“It will require industry to carry on making the case for renewables and Government and the Developed Administrations to break through the barriers that are stopping new schemes being built.”

Energy Minister Charles Hendry told journalists that the government expected the technologies outlined in the EMR paper to achieve 90% of their target with other technologies, such as solar, having a “marginal role”.

Reaction to the paper was as could be expected, from the large number of different interests involved, mixed.  Scottish Renewables chief executive Niall Stuart issued the following statement: “The statement confirms that renewables are a major part of our future energy mix and the sector will be a significant driver of investment and employment over the coming decades as we replace ageing and polluting power stations with cleaner alternatives.

“Nobody should underestimate the importance of these reforms, which will make or break progress towards the UK’s and Scotland’s renewable energy and climate change targets.

“There is still a huge amount of detail to be developed, but this broad package of measures should allow us to meet the twin aims of increasing investment in renewables and minimising energy costs for consumers.

“Despite recent media reports, these reforms will actually mean reduced financial support for renewable electricity in exchange for long term certainty over revenues, with generators potentially having to pay back income if market prices reach a certain level.

“As the Secretary of State highlighted, the growth of renewables will not just clean upo our energy supply, it will also protect consumers form price rises due to the massive and growing volatility in international gas markets, meaning lower bills for consumers over the longer term.

“We will be working with DECC to ensure that the reforms are implemented in a way that supports Scotland’s ambitious 100 per cent renewable electricity target, and encourages investment in our key sectors such as our world-leading wave and tidal industry as it seeks to develop the first commercial wave and tidal farms between now and 2020.

“Scotland can lead the the UK’s efforts to cut emissions from the power sector and increase renewables, but only with the right support from Government. Massive growth in offshore wind will bring particular opportunities for Scotland’s existing offshore engineering sector and emerging offshore wind supply chain.

“But it is not just about investment in generation – ministers must also ensure that we get the necessary investment in new grid connections, onshore and offshore, to ensure that we can get power from where it is generated to where it will be going.”

5 of the ‘Big 6′ Energy Companies that dominate the UK’s Energy Market were also quick to release statements.

British Gas parent firm Centrica Energy managing director Mark Hanafin had this to say: “There remains much detail to resolve so that investors can have confidence that the tax and regulatory environment makes the UK energy sector a good place to invest.

“These measures come at a cost and it is vital that all of us – Government, regulators and the industry – are open and transparent with the public about the impact of these changes.”

David Cockshott, Director of Industrial and Commercial Markets for Npower commented: “We found many major energy users in the UK are concerned about the legislation outlined in the EMR and the impact it will have on their operations in the UK.

“While the EMR white paper provides some clarity on the future of the UK energy market, it may not provide the reassurance intensive energy users are seeking.

“Our experience with talking to industry about the EMR suggests that they will be eagerly awaiting further detail on each of the EMR proposals so they can start to make key low carbon investment decisions.”

EDF Energy chief executive Vincent de Rivaz: “It encourages investment in generation which is both low carbon and not dependent on fossil fuel prices.

“Trust is the essence of a healthy market, therefore it is important to continue to have a dialogue about energy costs.

“Consumer bodies, the regulator, industry and Government need to work together to build understanding. Renewing Britain’s ageing energy infrastructure will have a cost. Electricity Market Reform means that cost will be kept to a minimum.”

Ian Merchant, Scottish and Southern Energy chief executive stated: ” Any changes to the electricity market arrangements have to be carefully thought through, in a way which avoids unintended consequences and is supportive of the investment that is needed now and in the next few years.

“It is on this basis that we will ultimately judge the white paper as a whole and to ensure this is achieved we will continue to work with the UK Government and other bodies.”

E. ON chief executive Dr Paul Golby: “We cannot be complacent, it’s important this is driven froward to ensure a cleaner energy future for everyone.

“And, while the onus on the energy companies is to produce, transport and supply energy as efficiently as possible, we must also remember that this is not just about companies like E. ON and the Government, this is also about helping our customers who have a vital role to play in all of this.

“By becoming more energy fit – by insulating their homes, moderating their energy usage and by generating their own power – our customers can do their bit to reduce both their bills and also their carbon emissions, dual aims that we can all get behind.”

Scottish First Minister Alex Salmond, long an advocate of renewable energy issued the following statement: “Electricity Market Reform can help realise Scotland’s huge potential for clean energy generation and ensure security of supply across these islands.

“The UK White Paper makes clear that household electricity bills will rise over the coming decades and that increases are likely to be 25% higher if the market is not reformed. Investment in low carbon energy generation that harnesses our own natural resources will reduce both our reliance on fossil fuels and exposure to volatile global prices.

“Scotland is leading the development of renewable energy generation and carbon capture and storage (CCS) technologies. EMR provides an opportunity to accelerate that, to help tackle climate change, to deliver greater energy security and to help limit rises that consumers are expected to face in the coming decades. The multi-billion pound investments required will create tens of thousands of jobs, leading to the re-industrialisation  of Scotland as we drive forwards the renewables revolution and development of CCS.

“While we support the principles underpinning EMR we have concerns about some of the detailed proposals. For example the move from the Renewable Obligation certificate regime to a Contract for Difference (CfD) mechanism must not create an investment hiatus, given the considerable progress already made and our ambitious plans up to 2020.

“We are also fundamentally opposed to the support for new nuclear plants because every pound spent subsidising this expensive and unpredictable technology of the last century is one  pound less available for investment in future growth of renewable generation. The EMR side steps the fact that the future costs of nuclear remain unquantifiable. An energy policy that relies on nuclear is an energy policy with a black hole at its heart.

“While newer renewable sources such as offshore wind have relatively high capital costs to begin with, theses will continue to reduce and be fuelled by nature indefinitely with no dirty clean up costs. Given the windfall that nuclear generators are likely to receive under the Carbon Floor Price mechanism, there should be no additional  subsidy for nuclear through the proposed CfD.

“The White Paper also pays insufficient attention to initiatives to protect consumers’ interests and I’ve stressed to (UK Secretary of State for Energy and Climate Change) Chris Huhne that this is an area that must be strengthened. EMR must support consumers by making the network smarter and more responsive, through better demand side response, storage and interconnection. A more flexible and adaptive grid can provide both energy suppliers and households with better information on energy use and cost, alongside support for energy efficiency.

“Recent investments in Scotland’s offshore renewables sector from leading companies including Mitsubishi, Gamesa, Doosan, ABB and Alstom, are testament to our great natural and human resources and supportive environment for renewable energy investment and job creation. At the same time, Longannet remains the lead candidate for the UK’s first CCS demonstration project and Scotland also has an excellent base in science and engineering to ensure that we exploit the immense potential of CCS.

“We will continue working with DECC to ensure that a coherent, effective and seamless package of reforms are delivered which will fully reflect the respective powers of the Scottish and UK Parliament. In doing so, we remain committed to maintaining Scotland’s position as ‘destination of choice’ for investment in the development, deployment and generation of clean energy.

“Scotland is estimated to have as much of a quarter of Europe’s wind and tidal power resource and around one tenth of it’s potential wave energy capacity, as well as a wealth of expertise in offshore engineering, which can position us as a massive exporter of clean energy. The UK Renewables Roadmap includes Scotland’s target for renewables to generate the equivalent of 100 per cent of annual electricity demand by 2020…

“The Roadmap recognises the huge contribution that Scotland can make to the achievement of UK and European green energy targets and this must be reflected in the final reforms to the electricity market which follow the consultation on today’s White Paper. At the same time, in order to fully harness Scotland’s massive renewables resource, fundamental change to the transmission charging regime is also required to end the discrimination against generation in those areas of Scotland with the greatest resource and to deliver the low carbon objectives of both the Scottish and UK Governments.”

Perhaps it is best to let Chris Huhne have the last word: “None of these challenges can be met for free. We will have to pay for secure, reliable, clean electricity generation including nuclear, renewable energy, and carbon capture and storage. Increases in wholesale costs and the carbon price are likely to lead to higher bills in the future, even without factoring in the huge investment needed in new infrastructure.

“So it is vital we put in place market arrangements that deliver the investment as cost-effectively as possible. The current electricity market is simply not up to the job.”

Energy efficiency improvements can reduce your household bills

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Do you have concerns about your energy efficiency?

People are becoming increasingly concerned with rising energy costs. As the cost of fossil fuel imports continues to rise and continues to be passed on to the consumer more people are looking to find ways in which they can increase their energy efficiency and reduce the strain on their wallets. According to research the UK wastes £6 million worth of energy a year.  For every £3 the average household spends on energy £1 is wasted. There is a wealth of hints, tips and guides online that exist to help the consumer to achieve energy efficiency and reduce their bills.

Simple ways to improve your energy efficiency.

Firstly, one of the biggest savings one can make is to simply switch energy supplier: on average people save £150 a year at a stroke simply by switching supplier and obtaining an improved deal.

Secondly there are a number of simple things that can be done to further reduce your heating bill. Turning your thermostat down by a single degree can knock 10% off of your annual heating bill. Draw your curtains at dusk to prevent heat escaping through your windows. If you go on a winter holiday, put your thermostat down to a low setting; this will mean that your home is protected from freezing at a minimum cost.  Walls and roofs in homes absorb nearly 50% of heat; look into fitting your home with loft and cavity wall insulation for significant long term savings. Additionally, putting an insulating jacket over your hot water tank can save you up to £15 a year, a small saving but they all add up. Did you know that a dripping hot tap can, over the course of a single, day fill a bath? This sort of waste is both pushing up home energy bills and very easily solved. Ensure that all taps are not leaking.

Thirdly, your electricity bill can be simply, quickly and effectively reduced by adhering to some of this simple advice. Always turn the lights off when you leave a room. Replace your bulbs with energy efficient ones. This can reduce your bill by around £25 a year. These can last up to ten times as long as ordinary bulbs and over the course of their lifetime can save you up to £45. It is also worthwhile to make sure that your appliances are turned off rather than on standby when they are not in use and to not have any laptops and mobile phones on charge unnecessarily. This will save you around £40 a year. Lastly, your kettle, only boiling the amount of water you need at the time will not only save you around £30 a year but also mean that your cup of tea is ready that bit quicker!

Fourthly, there are also savings to be made in the use of your white goods. Avoid putting hot food in your fridge and freezer as they have to work harder, using more energy, to cool them. Defrost your freezer regularly to improve energy efficiency. Washing clothes at 30 degrees can also result in large savings. Crucially, you can squeeze savings from your washing machine, tumble dryer, and dishwasher by waiting until they have a full load before using them. One full load uses less energy than two half load.

Of course, there are many more ways to improve your energy efficiency and reduce your electricity and heating bills. If you have any top tips that you wish to share then please feel free to leave a comment.