FiTs cuts endangering manufacturing

This week the UK Government has been accused of putting British manufacturing at risk and putting more pressure on the British farming industry by slashing feed-in tariff payments for small and medium scale wind turbine developments by 20%.

The 20% reduction to the popular and successful feed-in tariff scheme is due to come into effect on the 1st of April this year. This deadline has created a rush within the renewable energy industry to complete the installations of wind turbines, solar panels and anaerobic digestion plants before the end of March.

Prominent members of the UK’s solar panel industry have voiced confidence that the industry is well placed to cope with the 3.5% cut being introduced to the feed-in tariff payments for  domestically generated solar energy. However the far more severe cuts being introduced to the UK’s small and medium scale onshore wind industry are set to be far more problematic.

Many within the onshore wind industry and the wider renewable energy industry have voiced concerns that the severity of the soon to be implemented cuts will create a number of issues. Firstly, the cut runs of risk of provoking capital flight as investment in onshore wind energy is driven overseas. Secondly the cuts will create a barrier to smaller investors who are far more likely to invest their money in smaller scale wind energy developments. Lastly the cut threatens to negatively impact upon British manufacturing at a time when all the rhetoric is about encouraging, supporting and enabling the country’s manufacturing base.

It should be noted that it is not just the cut to the feed-in tariff itself which has raised concerns. The banding which determines what level of feed-in tariff a development receives (based upon the developments capacity) is also being changed. Up until last year, turbines of a scale up to 15kW received higher feed-in tariff payments than developments of a larger capacity. This fact helped to make small scale wind turbines an attractive investment to community groups, farmers and public concerns such as schools who are looking to reduce energy costs.

However under the new rules sub 15kW developments will now be placed in the same band as developments with a capacity of up to 100kW. This represents a significant leap. Some have suggested that this will encourage investment in the larger schemes which the government may now find more favourable however it comes at the cost to deterring smaller investors and community groups. This was point made by Gaia Wind’s Chief Executive Johnnie Andringa:

“There are a lot of small companies working in this area and the feed-in tariff helps make the product more affordable but now smaller turbines are at a disadvantage because they are in the same band as turbines ten times their size.

“It will be more difficult for small farmers or crofters to put up a small turbine and generate their own electricity”.

Keith Parslow, Chief Executive of Leicester-based small turbine manufacturer Evance made a similar point:

“You have to put in 20 of our 5kW machines for every one of the 100kW machines installed, so it really is unfair for the smaller user, it’s driven people to make do this as more of an investment… and it means our typical prospective customers are now unsure whether they can justify the investment, unless they live in an area of really high wind speeds.”

Evance is now known to be focusing its attention on the export markets to mainland Europe and the Far East.

The impact of the feed-in tariff cuts on the small and medium scale wind market is particularly unfortunate given that the majority of wind turbines manufactured within the UK fall into this scale. It is far more common for developers of  larger scale projects to import their turbines from foreign markets than it is for developers who are working on a smaller scale. At a time when so much political emphasis is placed upon supporting the British manufacturing sector it is regrettable that a government policy would work against the interests of British manufacturers. A point underlined by turbine manufacturer Ampair’s Managing Director David Sharman:

“It’s certainly going to decrease the market for small wind, which is why we now sell around two-thirds of our products overseas. We just don’t trust the British government.

“It’s a wonderful own goal by the British government to cut the tariff and damage the industry. We told them that it would harm manufacturing and they just didn’t care.”

Industry trade group RenewableUK also flagged up the potential dangers to the UK Government. Deputy Chief-Executive Maf Smith commenting:

“The UK’s world-leading small wind sector has already seen reductions of domestic installations due to the removal of the different tariff brackets for all turbines under 100kW. Small wind is a UK manufacturing success story now under huge pressure, and the thousands of farmers and small businesses up and down the country who want to generate their own power face disappointment if these changes go ahead.”

The UK Government has attempted to calm the situation. A DECC spokeswoman emphasised the feeling that the UK’ small and medium scale wind market is well placed to overcome any hurdles presented by the reduction to the feed-in tariff.

“The changes reflect the need to drive cost reductions in the sector, following significant deployment. The FITs scheme continues to support the deployment of small scale wind turbines. The number of degression bands was minimised when the degression mechanism was implemented to reduce distortions within sectors.

“Onshore wind is a major success story for the UK which brings economic benefit to our shores, supports thousands of skilled jobs and is an important contributor to our energy mix.

“As costs come down for more established technologies like solar and onshore wind, it is right that the level of public support is reduced to protect consumers.

“In line with new EU guidelines on competition and to deliver best value for money to the taxpayer, the government is considering introducing competition between more established large-scale low carbon technologies and will make a decision on this in 2014.”

We at Intelligent Land Investments (Renewable Energy) would stress that we feel well paced to handle the feed-in tariff reduction. Many of our tubine developments are already installed. Many more have secured the higher feed-in tariff rate as developments were pre-accredited with the regulators to ensure that there would be no mad rush to complete developments over the next two months.

 

 

 

 

 

 

 

 

 

 

 

 

 

A Good 2013

2013 was a good year for Intelligent Land Investments (Renewable Energy).

A good year for us and a good year for others. For the landowners and farmers across Scotland that we are gaining planning approval for, allowing them access to alternative revenue streams with the potential to secure their businesses. For the community groups and charities which we are supporting across Scotland, helping them to continue the much needed good work which they do. A good year for Scotland’s energy ambitions. The country took a step closer to the ambitious renewable energy targets which are to be met by the end of the decade. We at ILI (RE) were delighted to play our part in helping the nation to achieving these ambitions and look forward to contributing further.

At present ILI (RE) has gained over seventy seperate planning permissions for small and medium scale wind turbine developments in Local Authority Areas across the country. Many more planning applications are currently live and being considered by planning departments. The numerous small scale developments in which we are engaged allow far more people to benefit from renewable energy than the larger scale wind farms that only large scale developers and landowners allow. The revenue created by even a small scale 225wK can mean all the difference for a farmer or landowner. Having spoke to many within Scotland’s farming industry and the farmers and landowners in which we enter into partnership we at ILI (RE) understand the pressures which Scottish farming is facing. For many the revenue from a turbine means being able to reinvest in their businesses; carrying out much needed maintenance work, purchasing new equipment, hiring more staff, keeping pace with ever rising costs, improving yields and efficiency, even simply keeping a traditional family business within a family.

Additionally given the scale and spread of our developments ILI (RE) has been able to offer people innovative solutions to grid issues which had previously ruled out the possibility of development. Whether it be the use of off-grid storage or demand, the creation of new grid links  or the linking together of geographically close developments we at ILI (RE) have been able to spread the benefits of renewable energy generation and government feed-in tariffs far wider than would have been possible from the development of large scale wind farms.

It should be remembered that all of ILI (RE)’s completed developments offer a community benefit to the area in which it is located. A portion of the revenue generated from all of our turbines will be allocated to either a Local Authority Area’s Community Benefit Fund or to a designated local charity. Not all Local Authority Areas in Scotland require a Community Benefit as part of a renewable energy development application. Despite this such a benefit is a part of all of our applications regardless of their location. In areas such as South Lanarkshire, where the council has established a Community Benefit Fund, we contribute to the pot; allowing Local Authorities to target funding where needed. In areas such as East Renfrewshire, which does not have a central fund, we have established a partnership with a local charity working within the community. In this case we have entered in partnership with East Renfrewshire Good Causes.

East Renfrewshire Good Causes (ERGC) was established in 2007. From that time the charity has helped over 1000 people within the East Renfrewshire area; working to improve their quality of life. Whether it be by providing educational support, procuring medical equipment or organising days out ERGC has provided vital support to many vulnerable people. It is point of pride that ILI (RE) has been able to support, not just the vital work done by ERGC, charities and community groups across Scotland. The community benefit funding from 70 planning approvals alone represents potentially almost £2 million worth of charity funding over the 20 year life span of our turbines. We would stress that this figure will increase as more of our potential developments gain planning approval.

Scotland and the UK moved a step closer to achieving their renewable energy generation targets in 2013. We at ILI (RE) were proud that our developments helped contribute to this progress. Just we will be proud to help move us closer still to these targets in 2014. More electricity being generated from renewable sources such as onshore wind means; importing less fossil fuels, less exposure to volatile markets, cheaper energy bills, reduced carbon emissions and the creation of more jobs. Renewable energy was one the UK’s fastest growing industries in 2013.

The potential of onshore wind is beginning to be seen. As has been discussed in this blog previously new UK wind generation records are being set with increasing regularity. But this month it was Denmark that fully demonstrated the potential of wind energy to the world. The month of December saw several new and startling wind generation records being set in Denmark. Firstly, 54.8% of electricity demand for the month of December was met by wind energy. Over half of the entire country’s electricity usage for the entire month! In December 2012 33.5% of electricity demand was met by wind energy. Secondly, on the 21st of December 102% of electricity demand was met by wind power. A surplus of energy even when every other single electricity source is discounted. Lastly, over the course of the entire year 33.2% of electricity demand was met by wind power.This in a year noted by network operator Energinet.dk as being not particularly windy. From all these new records then we can see the role which wind energy can play in meeting a nations electricity needs. A statement from an Energinet.dk spokesman noted that:

“The records do not only apply to Denmark. They are also world records. Because no other countries have as large a wind power capacity in proportion to the size of the electricity consumption, as we do in Denmark.”

It is our hope that the good news continues to come in, not just for ourselves but for all of our landowners.

 

Survey reveals farming industry’s hunger for renewables

This week industry trade body RenewableUK held a lunch event in partnership with the River Cottage food business and the online community Energyshare. The lunch was held on the Devon/Cornwall border. The Great British Wind Meal was used as an opportunity to publicize several recent items of research in regards the relationship between British farming and renewable energy.

Several of the speakers at the event suggested that a greater uptake of renewable energy generation by British farmers would help the United Kingdom to meet both it’s food and energy needs. One speaker suggested that as well as helping the UK to meet it’s renewable energy targets farmers stand to benefit from on-site generation by it allowing them to reduce the costs involved in producing food and also ensuring that their businesses are in a better position to navigate through at troubled economic climate for the farming industry.

Speaking at the event, Forum for the Future’s principal sustainability adviser Nicky Conway remarked:

“There are about 300,000 farms in the UK so if you are going to have renewable energy generation at any level of scale, farmers have the land and the capacity to install those renewable energy schemes.

“Therefore they should be a target audience because they have the land and the resources to produce the energy”.

Ms Conway went on to state that Forum for the Future was attempting to increase the uptake of renewable energy generation developments on UK farms:

“The specific way that we would like to do that is to try and build a common evidence-based vision, and [highlight] why can farm-based energy can play such a critical role in the UK’s energy system rather than being a niche activity.

“The other thing we want to do is unlock some of the key barriers. Things like grid connections and accessing finance, particularly for lower income farmers.”

Farm owner Robin Hanbury-Tenison argued against claims that renewable energy developments take land away from food production – giving the example of his own solar panels:

“A lot of people say that PV panels are taking up land, wasting land but far from it if it is done properly.

“My sheep prefer being under or around the panels than being in the open fields. The grass grows better, they also have lovely shelter and they lamb underneath them.”

Attendees at the lunch also heard the results of a new survey carried out in partnership between Nottingham Trent University, the Farmers Weekly and Forum for the Future. The survey was carried out this summer and asked nearly 700 UK farmers for their opinions on farm-based renewable energy. Interestingly 38% of the farmers surveyed revealed that they were already generating renewable energy on their farms with the two most popular technology types being solar PV and wind energy. The majority of those generating electricity from wind energy are feeding at least some proportion of their output into the National Grid. The average capacity of these developments was 176kW however it should be noted that larger scale developments are perfectly possible given the right site and the expertise and experience needed to navigate through the planning process. Furthermore 61% of those who are not already generating renewable energy specified that they would be likely to do so over the next five years. Despite that fact that the majority of those surveyed are already generating renewable energy 76% of respondents did not believe that the full potential of farm-based renewable energy generation was being realized.

The survey was also used to explore farmers perceptions  on what the benefits of renewable energy generation are. 76% of those surveyed (the most-widely held opinion) felt that farm-based renewable energy generation helped to reduce the costs of the other parts of a farm business. 73% felt that renewables provided a safe-means of generating non-fossil fuel energy. 72% felt farm-based renewables helped to contribute to the country’s energy security. 71% expressed the opinion that renewable energy generation provided a good return on investment compared to more traditional farming activities and 65% felt renewable generation helped to combat climate change by reducing a farms carbon footprint. Interestingly 81% of participants felt that family, neighbours and other farmers would approve of a decision to invest in renewable energy generation. These results would suggest that there is a widespread belief amongst the UK’s farming community that renewable energy generation represents a positive investment for the industry.

The farming industry’s opinion on the barriers to farm-based renewable energy generation were also explored in the survey with five problems emerging as the crucial barriers to completing a renewable energy development. 84% of those surveyed identified the major stumbling block as the high investment costs involved. 53% felt that red tape represented a major barrier to completing a development.52% felt the planning process to be cumbersome and costly. 45% felt that local opposition could be a stumbling block and 39% raised the issue of accessing a bank loan. At this point we at Intelligent Land Investments (Renewable Energy) would like to state that have the expertise and experience to address all these issues. We require no investment from the farmers we enter into partnership with, we have vast experience of dealing with the planning process at both a national and local level and all the red tape that may be involved. We always take steps to involve and liaise with local communities through programs such as our Community Contribution and we do not need bank loans to fund our developments.

It was left to broadcaster and campaigner Hugh Fearnley-Whittingstall, responsible for the Wind Meal’s menu, to give the final word on the role that British farmers have to play in renewable energy generation, emphasising that wind energy can be regarded as another crop:

“All farmers are in the business of renewable energy – that’s what food is,

“Farmers produce food, we consume that food for our energy, and for farmers to stay in business it has to be a renewable business.

“The idea of farmers diversifying into ‘pure energy’ as well as food energy makes a whole lot of sense.

“We know that wind is going to be an important part of our energy into the future.

“Who has got best access to wind in the country? Our farmers.”

We at Intelligent Land Investments are very pleased to be playing our part in bringing the benefits of renewable energy generation to as many farmers as possible.

 

 

New UK Wind Energy Record Set

Last week the National Grid announced that a record amount of clean energy was generated from wind power on the 29th of November. Over 6 gigawatts of renewable electricity was fed into the National Grid over the half hour period between 2:30 pm and 3:00 pm- generation levels are measured by the National Grid in half hour intervals hence why figures are not supplied in gigawatt-hours.

From 2:30 to 3:00 pm an average of 6,004 megawatts (or 6.004 gigawatts) was fed into the National Grid solely by wind power. This level of generation represents 13.5% of the electricity demand at that time. Furthermore 6 gigawatts of renewable energy is enough to power over 3.4 million UK homes. These figures demonstrate the sizable amount which wind power alone (other forms of renewable energy generation such as hydro-power also made large contributions) is contributing to the UK’s energy needs. 6 gigawatts of wind power also represents 6 gigawatts worth of fossil fuels that did not have to be burned and a sizable amount of carbon dioxide which was not emitted into the atmosphere.

The previous record for wind power generation was set on the 15th of September when 5,739 megawatts was generated in one half hour period. It should be noted, however, that this record was broken several times on the 29th of November – the 6,004 megawatt figure released by the National Grid merely represents the peak of generation. Indeed, over 13% of the UK’s energy demand was being met by wind power frequently throughout the day. This demonstrates the consistency of supply which can be produced by wind energy.

Industry trade body RenewableUK‘s Director of External Affairs Jennifer Webber commented on the setting of a new record:

“Wind energy is consistently setting new records and providing an ever-increasing amount of clean electricity for British homes and businesses. We’re generating from a home-grown source which gives us a secure supply of power at cost we can control, rather than leaving ourselves exposed to the global fluctuation in fossil fuel prices which have driven bills up. Wind gives us a way to make a smooth transition from old-fashioned fuels to a new low-carbon economy.

“We’re also generating tens of thousands of green-collar jobs for people now working in the fast-growing British wind energy industry”.

Of course it should be remembered that the figures released by the National Grid do not represent the full amount of wind energy being generated in the UK – neither on the day or within that specific half hour period. There are a large amount of wind turbines in the UK, particularly within the small to medium scale (the scale at which we at Intelligent Land Investments (Renewable Energy) specialise in) which do not feed power into the National Grid. Such turbines will be supplying power locally or on-site. The owners of such developments are not required to supply real time output data to the National Grid and as such will not have been included in their figures.

It should be noted that UK wind power breaking such records as this is set to become a regular occurrence in the near future as more turbines are consented, constructed and begin to supply power into the National Grid. We at Intelligent Land Investments (Renewable Energy) are looking forward to playing our part in this process as more of our developments are completed in the very near future.

In other news this week the UK Government announced that it is expecting around £40 billion of additional investment to be made in renewable energy generation projects by 2020. It is claimed that figure represents a large amount of progress to the country’s 2020 renewable energy generation targets.

Currently the UK has over 20 gigawatts of operational renewable energy generation capacity. Furthermore there are 11 gigawatts worth of onshore and offshore wind developments which have acquired planning consent and are awaiting construction. As of today there are also 16 renewable generation projects, representing a further 8 gigawatts of capacity if successfully developed, which have reached the next stage of the Final Investment Decision Enabling for Renewables (FIDeR) process. According to a statement released by the Department of Energy and Climate Change (DECC) these 16 projects would contribute “around 30% of the new renewables generation we need by 2020”. The statement went on to say that “the UK is now on track to meet that target”.

The level of importance that is being placed upon reforming the UK’s energy grid can be seen in the fact that 58% of the total infrastructure spending laid out in the Government’s National Infrastructure Plan is to be directed towards energy. Given that 10-12% of the UK’s current generation capacity is due to come offline over the next decade we can both the need for new generating capacity and the role that renewable energy generation, and particularly wind generation given the relative maturity of the technology, can play in meeting that need.

The level of investment being predicted by the UK Government is sufficient to generate enough renewable energy to power a further 10 million homes across the UK and reduce CO2 emissions by 20 million tonnes. Such amounts of renewable energy generation will also serve to increase the country’s energy security, reduce significantly our reliance upon international fossil fuel markets and, according to figures announced by DECC, support up to 200,000 jobs. We can see then the huge advantages that a committed push for renewable energy development will bring to the country as a whole.

Energy and Climate Change Secretary Greg Davies made the following statement at the release of these figures:

“This package will deliver record levels of investment in green energy by 2020. Our reforms are succeeding in attracting investors from around the world so Britain can replace our ageing power station and keep the lights on.

“Investors are queuing up to express their interest in these contracts. This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.

“With sixteen new major renewable projects progressing in our “go early” stage we are delivering ahead of schedule and are able to begin the move to the worlds first low carbon electricity market faster than expected.”

We at Intelligent Land Investments (Renewable Energy) are delighted to have played a part in setting new wind generation records. We also look forward to helping set new records with our already installed turbines and also those of our developments which will have completed construction in the near future.

 

SSE Launches £50 Million Community Fund for Highlands

Last week Scottish and Southern Energy (SSE) launched their new community benefit fund. The launch took place in Bonar Bridge in the Scottish Highlands. The launch of this fund follows on from a change to the level of community benefit provided by the company’s onshore wind developments; last year the commitment was made that £5000 per megawatt of power per year would be devoted to community benefits. The most commonly used turbine model in SSE’s onshore wind developments  has a capacity of 2.5MW (megawatt) meaning that each of their turbines could be expected to provide around £12,5000 in community benefit every year.

The new fund could potentially provide up to £50 million of support to community groups and projects in the Highlands over the next thirty years. This year will mark the first round of funding and £1 million  is available to interested groups (specifically community groups and charities) which meet the funding criteria. The funding award committee is being chaired by former Scottish First Minister Jack McConnell.

Three priority areas have been developed by SSE and several local stakeholders to receive funding Firstly, job creation and skills training: the funding of apprenticeship schemes, training programs and similar projects to increases peoples chances of entering into employment or progressing further in their careers. Secondly,community energy: the funding of schemes to increase the level of community ownership of renewable energy developments which could create environmental, economic or social benefit. Thirdly, projects which enhance the area’s natural and built environment: schemes for the benefit of the local population and schemes to bring in more visitors to the Highlands are both considered to be priority areas.

A spokesperson for SSE commented at the launch and explained that it was taking place in Bonar Bridge “because we want to feature the success of the SSE Kyle of Sutherland apprenticeship fund, which is fully supported by community benefit from the SSE Achany wind farm.

“The apprenticeship scheme fits in with the criteria of the Sustainable Development fund and we believe it is a great example of how communities  use the funds they receive – for hosting a wind farm – in a sustainable way.

“ In the last three years, seven small businesses and young people from the Ardgay, Criech and Lairg areas have been supported through the scheme.

“We have two apprentices and two business owners coming along to the event, including Moray Munro, owner of WM Munro plumbing in Ardgay and Calum Smart, who is in the final year of his apprenticeship with the firm.”

The closing date for applications for the first round of funding is on the 15th of February 2014.

Of course, it should be remembered that it is not only SSE that operates a community benefit fund, nor is it only full scale wind farms which generate such funding. We here at Intelligent Land Investments (Renewable Energy) have been operating such schemes for some time. Our Community Benefits pre-date both the recently published Community Benefit Guidelines and the establishment of the Community Benefit Register itself.  We, at ILI (RE) have entered into partnerships with Local Authorities and Charities across Scotland. In areas such as South Lanarkshire where the Local Authority operates its own Community Benefit program we have been contributing more than the required amount for all of our completed developments in the area. More information on the Community Benefit Scheme in South Lanarkshire and information on how to apply for funding can be found here. In areas in which there is no Local Authority led Community Benefit Scheme we have entered into partnerships with local charities such as East Renfewshire Good Causes to ensure that such essential work can continue.

In other news week a new report produced by consultancy firm GlobalData has predicted that the small scale wind market is expected to undergo a sustained period of dramatic growth. As of 2012 the global small scale wind market was worth $609 million, by the end of the decade the market is now predicted to increase in size to over $3 billion. This represents an almost five-fold increase in market size in eight year or alternatively a Compound Annual Growth Rate of 22% up to 2020.

As of the end of 2012 there was just over 728MW of installed small scale wind energy worldwide. By 2020 GlobalData is predicting that there will 4,644MW of small scale wind energy installed worldwide. This represents an even more startling Compound Annual Growth Rate of over 26%. At the end of 2012 over 80% of small scale wind power was installed in China, the USA and the UK: 266MW were installed in China, 216MW in the USA and 118MW in the UK. As one would expect given the size of the country and it’s energy needs China is expected to remain a world leader in this sector through the decade. However, it should be noted that the GlobalData report also highlights the UK as an area which can expect significant growth in small scale wind throughout the decade despite the relative maturity of the UK small scale wind sector. Indeed in 2012 the UK was ranked the world’s fastest growing small-scale wind market with over 50MW of new small scale wind developments being installed in one year.

It is our hope that the launch if SSE’s community benefit fund will help to make the public more aware of the good work that the UK’s wind industry is contributing to- on a variety of scales. And regarding the GlobalData report we would say that a bigger small and medium scale wind industry means more community benefit funding.

 

Scotland’s Renewables generating £20 million a year

New figures released this week by industry trade body Scottish Renewables have demonstrated that renewable energy generation is providing almost £20 million of annual revenue to businesses, farmers, landowners, public sector organisations and homeowners across the country.

Revenue is being produced by generating electricity on site and then feeding it into the national grid. Precisely £19.3 million was earned in this fashion over the last year.

Of course this figure is fully expected to increase in the future as more renewable energy developments are completed and more energy is fed into the grid. This upward trend can be seen in the fact that the amount of renewable energy being generated ‘on-site’ (i.e. on  business premises or farm land) has tripled over the past five years. A vast variety of renewable energy technologies are being utilised in this fashion; rooftop solar arrays, onshore wind turbines and heat pumps are just a few examples of the technologies being used.

Stephanie Clark, Policy Officer for Scottish Renewables, commented on the news:

“It’s not just big companies who are building renewable energy projects, but more and more private individuals and businesses are taking their energy needs into their own hands by looking to renewables.

“We’ve seen farmers use wind power to generate electricity to make ice-cream, universities using biomass boilers as a heat supply and minibuses powered by biodiesel. In all of these examples they are managing to do three things; lower their energy costs in the future, reduce their carbon footprint and potentially generate income.”

At Intelligent Land Investments (Renewable Energy) we have been helping farmers, landowners and public sector organisations to obtain their own renewable energy developments and realise the potential of their land for several years. With particular emphasis on small and medium scale wind developments and Scotland’s agricultural industry we have erected wind turbines for individuals across the country.

Scotland’s agricultural industry has come under increasing financial pressure over the last few years due to several factors including reforms to the European Unions Common Agricultural Policy payments but predominately due to ever rising energy costs. According to DECC (Department of Energy and Climate Change) statistics  the average annual prices for gas and electricity  for non-domestic customers have increased by 121% and 93% respectively. The use of ‘on site’ wind generation of the scale suitably appropriate for the average Scottish farm provides access to the UK Governments FiTs (Feed-in Tariffs); a significant and much needed revenue stream. In the past few years experience we have built up here at Intelligent Land Investments (Renewable Energy) we have gained an insight into how much of a difference this can make. Several of the farmers we have helped to progress and complete development  stated to us that the wind turbine we delivered was the game-changer that would allow them to continue to operate their business. It was a service we were delighted to give them

Of course, as we have discussed on this blog before, the owner of the land on which a renewable energy development sits is not the only beneficiary from the revenue it brings in. It has long been company policy here at Intelligent Land Investments (Renewable Energy) for all of our renewable energy developments to provide a community benefit to the area in which it is situated. This Community Benefit has generally taken one of two forms. In cases when the Local Authority in which a development is sited operates its own Renewable Energy Fund we turn funding over to the Local Authority to allocate as it sees fit. In many of the Local Authority Areas in which we completed developments the contribution they required was less than the standard amount we provide for our own Community Benefits. In all these cases we provided our full and usual amount. In cases in which the Local Authority has no Renewable Energy Fund (and frequently no requirement for a Community Benefit at all) we entered into partnership  with a local charity operating within the Local Authority boundaries. We have agreements with several community charities across Scotland with groups such as East Renfrewshire Good Causes; who provide expertise, support and funding for those in need within the local authority. Here at Intelligent Land Investments (Renewable Energy) our charity partnerships are very much a source of pride.

It should be emphasised that small and medium scale wind turbine developments are not just the preserve of Scotland’s farmers. For example, Stewart Tower Dairy in Stanley, Perthshire, has installed a single wind turbine which has been operational since January. It has already helped the business – which makes ice cream for Harvey Nichols and Gleneagles, among others – offset rising energy costs.

Owner Neil Butler said: “Making ice cream uses a lot of power, for fridges, freezers, compressors, and as we are on a plateau – about 300ft up with good wind speeds – a turbine seemed to make sense.

“The benefit for us is not selling power into the grid, but the offset; we are providing almost half the power we need using the turbine and that is saving us enormous amounts when power bills are rising around 10 per cent a year. When you look at that kind of price rise, on-site renewables look very attractive.”

Scotland’s renewable energy industry has achieved much in a short space of time and we at Intelligent Land Investments (Renewable Energy) have played our part in that process but there is still so much more that can be achieved.

 

UK Wind Capacity Increases 25%

A new report published this week by trade-body RenewableUK has revealed that once again the UK wind energy industry has seen another record breaking year of dizzying growth.

RenewableUK published its annual report ‘Wind Energy in the UK’ yesterday. The report examines developments within both the onshore and offshore sectors of the UK wind industry.

Firstly, the report revealed that the UK’s installed offshore wind capacity increased by a staggering 79% over the period between July 2012 and June 2013. At the start of July 2012 there was 1,858 Megawatts (MW) of operational installed offshore wind capacity in UK waters. By the end of June 2013 this figure had increased to 3,321 MW  of operational installed capacity. Interestingly, there were four major offshore wind projects which began generating electricity and feeding it into the National Grid within this time frame:Greater Gabbard (off the coast of Suffolk), Gunfleet Sands III (off the coast of Essex), Sheringham Shoal (off the coast of Norfolk) and the London Array (in the Thames Estuary) – which is the currently the worlds largest offshore wind farm with an installed capacity of 630 MW. The completion of these four major projects demonstrates the observed trend of offshore wind projects increasing in scale. This trend can be partially explained by a reduction in costs and also improvements in technology.

The UK’s more mature onshore wind industry also underwent a period of impressive growth. 1,258 MW of new onshore wind capacity was installed between July 2012 and June 2013.  This brings the total level of installed onshore capacity in the UK up to 6,389 MW by the end of July 2013 and the end of the period covered by the report. This represents an increase of 25% in total installed onshore capacity. However it should be noted that RenewableUK estimated that at the end of June 2013 there was a further 1,571 MW of onshore capacity under construction, 4,804 MW of capacity which had been approved  but construction had not yet begun on and 7,743 MW live within the planning system. This demonstrates that there is a significant amount of growth which will occur within the UK onshore wind industry in the near future.

The period July 2012 to June 2013 also marked the first time in which more offshore wind capacity was installed than onshore wind capacity (1,462 MW compared to 1,258 MW). Of course it should be remembered that the onshore wind market is more more mature than the offshore wind market. In total, across both sectors, 2,721 MW of new capacity was installed. This brought the UK’s total installed wind capacity to 9,710 MW from 6,389 MW and represents growth of 40% and enough new installed capacity to power five and a half million homes. This level of new capacity also brought in £2 billion into the UK economy; clearly demonstrating the positive economic benefits which wind energy is creating for the UK economy.

It has been noted that the size of offshore projects is increasing but it is also the case that the size of onshore projects is decreasing. Several reasons have been put forward to explain this trend. As mentioned previously in the offshore sector costs are coming down and technology is improving. In the onshore sector the decrease in project size has been attributed to, amongst other things, the success of the UK Governments feed-in tariff scheme which incentivizes the development of smaller scale projects. Additionally the sub-5 MW market developed considerably. Indeed it has accounted for two-thirds of all onshore wind planning submissions between July 2012 and June 2013. The reduced availability of sites suitable for large scale wind farm development has also been put forward to explain the reduction in onshore project size. We could also argue that this reduction in project size vindicates the approach of ourselves at Intelligent Land Investments (Renewable Energy) as our primary focus has always been on small and medium scale developments.

RenewableUK’s Chief Executive, Maria McCaffrey commented on the publication of the report:

“We’ve smashed another record in the past year with more offshore wind installed than ever before – the 79% increase in capacity within 12 months is a terrific achievement. With onshore expanding by 25%, the wind industry as a whole has proved that it has the tenacity to achieve substantial growth.

“It’s tangible proof of the dedication of thousands of Britons who are working tirelessly to generate electricity from a clean, home-grown source at a cost that we can control, increasing the UK’s energy security.

“Tens of thousands more will be joining the industry over the rest of this decade as we build out the rest of the projects in the pipeline – as long as Government policy is supportive and provides the right framework for one of this country’s greatest modern industrial and environmental success stories to reach its full potential”.

The publication of a separate study this week further vindicated the increasing focus on smaller scale onshore developments. The study, carried out by analytical firm Verdantix and commissioned by energy consultancy Utilyx, suggests that on-site renewable energy generation could save UK businesses  up to £33 billion between 2010 and 2030.  The report forecasts that the capacity of onsite waste-to-energy plants, wind turbines, anaerobic digestors, and solar panels, as well as combined heat and power and tri-generation facilities will increase 130 per cent to 17GW by 2030. The proper development of such on-site technologies could account for 14% of all UK generating capacity by 2030 and would also bring the additional benefit of reducing carbon dioxide emissions by 350 million tonnes.

The development of such technologies would be hugely beneficial to UK businesses allwoing them to no longer have to rely on volatile international gas markets and could considerably reduce costs, particularly in the long term; not just from reduced energy bills but from reduced payments of the UK ‘carbon tax’ or carbon floor-price. Mark Stokes, director at Utilyx commented:

Traditionally businesses and organisations have focused on one aspect of energy management – typically procurement or energy efficiency.

“The report reveals the need to look at the bigger picture and adopt a joined up approach including considering on-site energy generation. In a climate of volatile and rising energy prices, decentralized energy can help businesses save money, reduce carbon, and provide energy security.”

The publication of these reports reveals not only the progress made by the UK wind industry but also the huge benefits it can still bring to the UK’s economy. We at Intelligent Land Investments (Renewable Energy) will be playing our part in delivering that.

Small and medium wind sees dramatic growth in 2012

Last week industry trade body RenewableUK published a new report examining the condition of the UK’s small and medium wind industry.

The report, entitled ‘Small and Medium Wind UK Market Report 2013′ which can be found here, revealed that the industry is in a very healthy position.

Indeed the report revealed the fact that 2012 was a record year for the sector. 2012 was a record year in a number of ways. Firstly, the number of new small and medium turbine installations in 2012 represents an all time high for the industry and is a dramatic increase on the level of installations carried out in 2011. Secondly, the export market for small and turbines manufactured in the UK grew dramatically. Thirdly, job creation in the industry continued to accelerate. And fourthly a record amount of electricity was generated and fed into the national grid.

By the end of 2012 over 23,500 small (turbines of a capacity below 100 kilowatts) and medium(turbines of a capacity between 100 and 500 kWs) scale wind turbines were installed across the UK. The vast majority of these developments took place on farm land or rural properties. This is significant for a number of reasons. It demonstrates that small and medium scale wind generation is one of the most accessible forms of renewable energy generation. Small landholders and business operators are able to access the revenue which renewable energy can bring in. This is in opposition to many other forms of renewable energy generation where development costs and the need for large properties (such as those required by large scale wind farms) make development prohibitive for many. Additionally, small and medium wind generation is making a large contribution to the UK’s fragile rural economies. For instance agriculture is coming under increasing pressure on a number of fronts – spiralling  energy costs due to price increases in the international fossil fuel markets, reduced subsidies from the European Union, and poor yields due to bad weather. Small and medium wind developments (such as those undertaken by Intelligent Land Investments (Renewable Energy)) not only open up new and much needed revenue streams but can also serve to reduce energy bills particularly in energy intensive sectors such as dairy farming. This point was emphasised by several in the industry including  Gaia Wind CEO Johnnie Andringa:

“Energy Secretary Greg Barker’s ‘people energy revolution’ will in part, be built on “Local Wind Energy”. With retail electricity prices rocketing, energy generated largely for use on site, in rural homes, farms and businesses, delivers exactly what is being called for. A farm scale turbine is a world away from the wind farm: it can be the difference between a rural business being feasible or not.”

Steve Milner, Managing Director of UK company Earthmill made a similar point:

“More farmers are looking beyond traditional enterprises to survive and the financial benefits of wind turbines for farms are becoming more widely known.

“Over the last quarter, we have seen an increase in demand of over 150% for single-turbine surveys and power evaluations from working farms…It is giving farmers the motivation to look at renewables as an additional source of revenue, especially those in dairy, pig and poultry farming where large amounts of electricity are consumed.”

Exports of small and medium turbines manufactured in the UK have also dramatically increased. Indeed, more (almost 25,000) turbines of this scale were exported from the UK than were installed within the country in 2012. Growth has been so dramatic that the UK’s export market for turbines of this scale almost doubled in size in 2012 alone. Indeed the export is now worth over £100 million to the UK economy.

The growth in the manufacturing and export sector has also increased the industry’s employment levels and is building up the UK’s skill base. The small and medium scale wind sector saw the greatest increase in employment of any part of the UK’s wind and marine energy industries. A four-fold increase in jobs from 2010 to 2012. By the end of 2012 the wind and marine industries directly employed 18, 465 full-time staff. The last survey of this type was carried out in 2010 and reported 10,600 directly employed full time staff. This represents an impressive increase of 70% but the impact of this is offset by the far more dramatic growth of the small and medium wind sectors.

The level of electricity being generated from small and medium scale wind installations also saw extremely encouraging growth. 21% more capacity was installed in 2012 than in 2011. By the end of 2012 102 Megawatts of small and medium scale wind was installed across the UK.  This figure is of course outweighed by the amount of small and medium wind power which is currently progressing through planning departments across the country. Indeed the Glasgow Herald revealed last week that there are currently 500 live planning applications across the UK for small and medium scale turbines on farm land.  2012 saw an increase of 58% in electricity generation from and small and medium scale wind. The recorded generation level for the year represents 106,851 tonnes of carbon dioxide which was not emitted. An impressive figure and one which is predicted to dramatically increase year on year.

RenewableUK’s report also outlined some potential growth scenarios for the sector in the next few years. Indeed the report noted that the medium wind sector is predicted to grow dramatically in the years 2013 and 2014 even under the ‘least optimistic assumptions’. 2013 is expected to bring a four-fold growth the medium wind sectors installed capacity. The market for small and medium scale wind is expected to increase by 48.78% in 2013 and by the end of the year a cumulative capacity of 171.33MW is expected to have been installed across the country.

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

“With about 20% of our population living in rural areas, it’s vital that we find ways of powering the rural economy, and wind is doing exactly that. This technology brings over £100 million into the rural economy and in the past couple of years we have seen the market almost double in size.”

We at Intelligent Land Investments (Renewable Energy) are doing everything in our power to realise the hopes of our landowners and help the UK to achieve the level of growth that the small and medium wind industry is capable of.

Scottish renewable energy offsets C02 emissions from transport

The significant strides that the Scottish renewable energy industry is making towards addressing climate change were revealed last week in the Scottish Parliament.

Scottish Government Energy Minister Michael Fallon was asked how successful Scotland’s renewable energy developments had been in displacing carbon dioxide emissions in 2012.

His answer revealed that Scotland has managed to displace approximately 10.3 million tonnes of carbon dioxide in 2012. This represents an increase of 24% from the year 2011.  Renewable energy industry body Scottish Renewables would later announce that this level of displacement accounts for just under the total level of carbon dioxide emissions produced from Scotland’s rail and road transport networks. Given that the emission levels from these two networks has remained much unchanged between 2011 and 2012 we can then see that the 24% increase in carbon dioxide displacement can be nearly entirely attributed to the expansion of Scotland’s renewable energy generation capacity. Furthermore, given that the majority of new capacity stems from wind energy we can see that it is Scotland’s wind industry (companies such as ourselves at Intelligent Land Investments (Renewable Energy) which is driving the displacement of carbon dioxide.

Mr Fallon also provided figures for carbon dioxide displacement in England, Wales and the UK as a whole. England displaced 16 million tonnes of carbon dioxide in 2012, Wales 1.6 million tonnes ans as whole the UK displaced around 29 million tonnes. 29 million tonnes of carbon dioxide represents an increase of nearly 38% over 2011. As discussed in last weeks blog nearly all of the UK’s biomass generation is in England. Despite this Scotland accounted for more than a third of the UK’s entire carbon dioxide displacement.

The news was greeted enthusiastically by the renewable energy industry and other interested groups. Scottish Renewables Chief Executive Niall Stuart commented:

“Last week’s climate change report reinforced the need for concerted action to reduce carbon emissions if we are even to limit the impact of global warming, and these figures show that investment in renewables is already delivering results.

“Ten million tonnes is the equivalent of removing 99.1 per cent of carbon emissions generated from every car, bus, lorry and train journey in Scotland.”

“Renewables now generate the equivalent of 40 per cent of the demand for power from every home and business in the country, support thousands of jobs across Scotland and are making a massive dent in carbon emissions.

“The sector is delivering exactly what government wants – jobs, investment and lower carbon emissions from our economy.”

WWF Scotland‘s Director Lang Banks also stated:

“These figures clearly show that renewable energy is making a massive contribution to reducing Scotland’s climate change emissions. This contribution will only continue to grow as we move ever closer to securing all of our electricity from pollution-free sources.

“They certainly nail the lie by those who claim renewables, such as wind power, don’t make a difference. Renewables certainly do make a difference: cutting emissions as well as creating jobs.”

Also, this week a survey conducted by PwC (Pricewaterhouse Coopers) was published, revealing that 94% of energy companies are expecting ‘complete transformation of, or important changes to’ the power utility business model by 2030 as a result of growth in renewable energy and increases in distributed energy generation.

Distributed energy generation marks the move away from power coming solely from large scale power plants or even indeed large scale renewable energy developments. Small and medium scale renewable energy developments (such as those handled by ILI (Renewable Energy)) are becoming increasingly common up and down the country. Whilst the majority of these are providing power into the national grid others are generating power to be used locally; whether by communities or at on-site business developments. Such developments are expected to be become increasingly common in the next few years due to the existence of incentives such as the feed-in-tariff and falling technology and development costs.. PwC’s survey has already identified such developments as eating into the revenues of traditional power generation.

However, it should be noted that 82% of those surveyed view the increased use of distributed power generation to be an ‘opportunity’. Only 18% of those surveyed viewed it as a ‘threat’ to their business. It was also felt that energy-efficiency and smart grid technology could potentially have a similarly transformative effect upon the industry in the future provided barriers on the financial and technological side could be overcome.

PwC’s UK power and utility leader, Steve Jennings urged businesses within the power industry to seize the opportunities such changes present:

“Power utility companies will need to respond to these changes to not be eclipsed by technological and market change, while strategies that identify the best revenue opportunities in changed and, potentially transformed future market landscape, will be key to survival,”

These two pieces of news reveal the transformative effect renewable energy is having not only upon the power industry but this country as a whole. Great strides are being taken, by coompanies such as ourselves, to reduce carbon emissions, increase energy security and insulate the UK energy system from the volatile international fossil fuel markets.

 

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.