Onshore Wind brings substantial economic benefits

Posted on May 15, 2012 by admin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

…

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

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

Scottish Government publishes Electricity Generation Policy Statement

Posted on March 9, 2012 by admin

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 reaffirms commitment to onshore wind

Posted on February 28, 2012 by admin

There have been a number of positive developments in the renewables industry this week. Firstly, David Cameron rebuffed claims made by some of his backbench MPs that onshore wind power was “inefficient” and that the subsidy rates for both onshore wind farms and single turbine developments should be cut drastically. The backbenchers had submitted a letter to the Prime Minister outlining their complaints and this week they met with Cameron and some senior cabinet ministers to discuss the issue. The result of which was a reaffirmation of the Coalition Government’s commitment to renewable energy. Cameron stated that there were “perfectly hard-headed reasons for supporting onshore wind“:

“Onshore wind plays a role in a balanced UK electricity mix, alongside gas, nuclear, cleaner coal and other forms of renewable energy. A portfolio of different supplies enhances energy security and prevents the UK from becoming over-reliant on gas imports.

“I am also determined that we seize the economic opportunities in renewable energy supply chains as the global race for capital in low-carbon sectors intensifies.”

Minister for Energy and Climate Change, Greg Barker took much the same line, stating:

“The coalition is determined to drive ambitious green growth and this is putting our money where our mouth is. This cash shows we are really shifting gear when it comes to supporting innovation and offshore wind. Making wind turbines more efficient is common sense and will help bring down the costs of making them more attractive to build and helping us increase the amount of electricity we get from clean, green sources.”

A Downing Street spokesman released the following statement on the meeting between the Prime Minister and his backbenchers:

“The Prime Minister, DECC [Department of Energy and Climate Change] Minister Charles Hendry and DCLG [Department of Communities and Local Government] Minster Greg Clark met Chris Heaton-Harris and several other MPs today. The aim of meetings like this is to give backbench MPs a chance to get a better understanding of government policy and constructively engage with ministers on issues. The PM routinely meets with backbench MPs to discuss issues of importance to them.”

Secondly, it was announced that leading industry body RenewableUK and the country’s biggest trade union Unite had signed a “memorandum of understanding” with each other.

This means that the two organisations will campaign together for increased government and investor commitment to British green growth.

RenewableUK’s chief executive Maria McCaffrey commented:

“The expansion of the wind, wave and tidal industry has the potential to generate up to 120,000 jobs over the next ten years, both directly and through the UK-based supply chain that is growing alongside the industry. Many of the new opportunities the offshore wind industry in particular will generate will be in the old industrial areas along our coastline-areas badly in need of new employment. Working with Unite the union, who will represent many of these future workers, will help us achieve this vision.”

Unite national officer for energy, Kevin Coyne remarked:

“As the largest union in the UK energy sector, with members in every form of power generation and distribution. Unite is exceptionally mindful of the massive potential for growth and employment the renewable energy sector provides. Unite is committed to support the UK wind, wave and tidal industries to ensure that they create long term skilled employment opportunites. Unite looks forward to working with RenewableUK and its member companies to the mutual benefit of the industry and the workforce.”

It is hoped that a concentrated campaign from Unite could serve to really promote the renewables industry as a creator of large amounts of jobs.

Finally, a word from our own CEO Mark Wilson, quoted in a Guardian article which can be found here. He outlines the benefits medium scale onshore wind turbines can bring to farmers and landowners across the country:

“It’s like the industrial revolution now. Everyone is now trying to get in on it. It’s evolved, and we are seeing a much fairer distribution of wealth.”

With 13GW of renewable energy expected to be installed in the UK by 2020 it is very good news that government and other relevant bodies have reaffirmed their commitment to the industry.

Government Launches Green Deal

Posted on November 25, 2011 by admin

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.

£100 million released for investment in Scottish Renewables Industry

Posted on November 15, 2011 by admin

It was announced last week that the UK Government is to commit an extra £100 million for investment in the Scottish Renewables Industry.

This sum will come from the Fossil Fuels Levy which had previously been a disputed issue between the Westminster and Holyrood parliaments. The remainder of the the current Fossil Fuel Levy (an additional £100 million) will be committed to the UK Government’s proposed Green Bank which is intended to be a vehicle for targeted investment in the renewables and low carbon industries.

At this point in time there are not yet any concrete examples of where the money will be directed towards but it is expected that Scotland’s more experimental renewable industries (such as wave and tidal) will receive the majority of the Levy due to their higher costs, need for continued research and development and high energy potential. Such renewable technologies have yet to reach the point where they could be considered to be commercialised and ready for mass scale deployment.

The news was welcomed across the political, environmental and industry spectrum. Chancellor of the Exchequer, George Osbourne announced the news in Easter Ross:

“The UK Government is making sure that it gives certainty to the renewable energy sector in Scotland by providing an additional £100 million in funding. The UK coalition government is committed to creating jobs across Scotland – particularly in the green-energy sector.

“It’s great news that we have been able to cut through the arguments and the wrangling with the Scottish government that have stopped the money being invested in the past.

“It show’s how serious the UK government is in it’s support for Scotland’s green future.”

The news is particularly welcome after the controversy created by the Citigroup report which claimed that political uncertainty was undermining investor confidence in Scottish renewables. The report has since been questioned by a number of other analysts.

Niall Stuart, chief executive at Scottish Renewables released the following statement about the news:

“Scottish Renewables has campaigned for some time on the release of this fund because it could be a game changer in terms of the increase in public sector support for renewable energy technologies.

“This fund will allow government to target major opportunities for offshore wind development, marine device development and capital intensive heat technologies among others, and help work with industry to drive down costs. It will also further private investment on a scale similar to those commitments we have already seen from major global companies such as Doosan, Gamesa, and Mitsubishi.

“This is a clear sign to the industry, to investors and to the public that the government is committed to helping Scotland build a world-leading sector, one that creates jobs and opportunities for local communities across the country, as well as helps tackle climate change and cuts carbon emissions.

“Scottish Renewables has called for the Green Investment Bank to have a presence in Scotland because close to half of all renewable energy developments in the UK are situated here. We look forward to hearing more details about how the £3 billion bank will support the Scottish Renewables Industry.”

Francis Stuart, policy officer at Friends of the Earth Scotland commented:

“The challenge now will be to ensure that it is used in the best and most appropriate ways, to support Scotland’s vast renewable potential, and help fund a transition to a low carbon economy in Scotland.

“While this funding will make a welcome contribution to progress towards meeting Scottish and UK carbon reduction targets, it is still a small part of the overall picture.”

CBI (Confederation of British Industry) Scotland policy director; Andrew Dyce remarked:

“The Chancellor is to be congratulated for releasing the fossil fuel levy monies.

“These funds will have the potential to provide a much needed boost to our innovative and world-leading renewables sector, and will help Scotland to realise its low-carbon economy ambitions.”

The release of the fossil fuel levy demonstrates that the Westminster and Holyrood parliaments are capable of cooperating to help the Scottish Renewables Industry.

Playing Politics with the Scottish Renewables Industry

Posted on November 4, 2011 by admin

A political argument between the Scottish and UK Parliaments has broke out this week over Scotland’s renewables industry.

In Prime Ministers Questions yesterday David Cameron suggested that investors were being put off investing in Scottish renewables due to uncertainty about the constitutional future of the United Kingdom. However these claims do not appear to be reflected in figures released earlier on in the week.

On the 1st of November Scottish Renewables published figures that showed that £750 million had been invested into the Scottish renewables industry over the last 12 months.Scotland’s installed renewable capacity now stands at 4,620MW, increased from 3,920MW this time last year. Of this 700MW increase in capacity, the vast majority (465MW) has been from the installation of onshore wind. This can be seen to reflect the maturity of the technology as well as the attractive investment it offers.

Neil Stuart, the chief executive of Scottish Renewables issued the following statement along with the figures:

“Renewables is a massive economic, employment and environmental opportunity for Scotland. Limited public sector investment will be necessary to harness this through resourcing planning authorities, infrastructure and skills, and we believe there is a strong case for existing and new incentives to support investment in the sector.

The claim that investors were becoming discouraged away from the Scottish renewables industry came from a single analyst from the financial services organistation Citigroup. Scotland’s First Minister countered, commenting that this individual had ‘gotten the wrong end of the stick’.:

“I think to be fair to the Citigroup analyst, and we’re talking about a market analyst, he’s caught the wrong end of the stick.

“He seems to think the investment in offshore renewables in Scotland is to service the Scottish market, it’s not, it’s to service the market down south.

“The people who are analysing and actually spending the money, these major industrial combines know two things:Firstly, in order to get anywhere near the renewable energy obligations that London is going to have, England is going to have to have Scottish renewables from the sea. Perhaps the reason why all these international companies are committing funds to Scotland is because in 10 years time, without Scottish offshore wind power, then there would be a severe danger of the lights going off in England. I don’t think anybody is going to want or allow that to happen.

“Believe me, in the modern world the ability to produce power is a great asset, not a liability.”

There is also of course the possibility of exporting energy to mainland Europe in the future via the proposed European Supergrid.

Scottish Renewables also released statements about the news:

“Recent inward investment in Scottish renewables would seem to contradict the reports conclusions, which is in any event the opinion of a single analyst and not of Citigroup as a whole. Scotland has in fact had a string of successes in pinning down investment commitments from renewables companies over the past year, including Gamesa, Mitsubishi, Doosan, Techip and Gaia Wind.”

Their chief executive Neil Stuart argued that the debate over independence was itself irrelevant to Scotland’s renewables industry:

“The debate over Scotland’s constitutional arrangements is absolutely a question for the Scottish people to decide.

“If we put the politics to one side, the facts are the Scottish renewables industry has invested more than £750 million over the last twelve months, with industry plans for the future totalling £46 billion of capital investment.

“Global and UK investors have been attracted to Scotland because of our abundant wind, wave, and tidal resources, our considerable expertise in research and development, world leading innovation and a clear commitment from both Westminster and Holyrood to support the growth of the industry…

What is also clear is that Scotland’s fantastic renewables resource is key to the UK meeting its 2020 climate change and renewable energy targets, and could also make a disproportionate contribution to Europe’s 2020 objectives.

“Scottish Renewables remains committed to working with all the main political parties and government at every level to grow the renewable energy industry in Scotland.”

In an open letter to the Press and Journal, Ray MacGregor the chairman of the Global Energy Group who recently purchased the Nigg fabrication plant with the intention of converting it into a renewables hub and creating 2,000 on-site jobs remarked:

“Investment is happening in full knowledge of the Scottish Government’s planned referendum – and renewables are being deployed in part thanks to the First Minister, who has demonstrated the vision and ambition that investors want to see.”

It is unfortunate that some very encouraging news has been lost amongst the debate. It was revealed that if renewable projects that were currently under construction and had received consent were included in Scotland’s renewable energy capacity then 58% of the country’s gross electricity consumption is being provided by renewables. Such a figure makes the 100% renewable target for 2020 seem eminently achievable.