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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

UK renewable generation soars

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

World’s first wave energy farm to be constructed in Scotland

Last week, at the AllEnergy Conference it was announced that the Scottish Government had granted consent for a 40MW wave farm to be constructed off of the North-West coast of the Isle of Lewis. This will be one of the first developments of this type and scale seen anywhere in the world.

It is intended that the wave farm will be connected to an onshore hydroelectric power plant on Lewis which was granted planning consent by the Western Isles Council last year. It is intended that the Oyster wave power machines will be installed over the course of the next few years once the necessary upgrades to the area’s grid infrastructure are completed.

Between 40 and 50 of the Oyster machines will be deployed at depths between 10 and 15 metres of water and will have enough capacity to power around 30,000 homes. Fergus Ewing announced the Scottish Government’s decision with enthusiasm:

“I am delighted to announce that Scottish Ministers have granted a Licence to Aquamarine Power to develop the largest commercial wave array in the world…

“The development of up to 50 Oyster wave devices off of the North-West coast of Lewis, when  operational,  will have the power to produce 40 MW of renewable electricity.

“This is another significant milestone for Scotland’s wave sector. With 10 per cent of Europe’s wave power potential and 25 per cent of it’s offshore wave and tidal power, the opportunities for Scotland are enormous.”

Reactions to the Scottish Government’s decision were almost universally positive. Niall Ferguson, Chief Executive of Scottish Renewables made the following statement:

“This is a fantastic milestone for the Scottish renewables industry and this project will make a significant contribution to our energy mix once it begins generating.

“It’s further proof that we have become home to a world leading marine energy industry that is delivering jobs and investment to communities across Scotland.

“However, we can’t forget that this is the kind of prize that could be lost unless costs for projects on the islands are set at a competitive level.”

RenewableUK‘s Chief Executive Maria McCaffrey observed:

“This is a big step forward for the marine energy sector in the UK and especially in the Scottish Islands, which have a first-rate marine energy resource. Just last week we were told by a Government report that more needed to be done to reap the benefits that could be generated by marine energy projects in the Scottish Islands. Today’s announcement shows the interest industry has in the area, and we hope Government and industry can work together to overcome challenges and take forward renewables in the Islands.”

David Krohn, RenewableUK’s Wave and Tidal Development Manager commented:

“The Scottish Government’s announcement provides a substantial boost for the wave energy sector, in which the UK leads the world. This […] will help to accelerate growth and generate further private investment in a technology which has enormous potential, as 50% of the total European wave energy resource is in UK and Irish waters. By kickstarting a further expansion of the wave sector, we can ensure that costs come down as quickly as possible, so that we can capitalise on our global pre-eminence.”

Lang Banks, Director of WWF Scotland stated:

“This announcement is a fantastic boost to Scotland’s marine renewables sector and will put Lewis firmly on the world map when it comes to wave energy. However, if Scotland is to rule the waves when it comes to marine renewables then it’s vital we quickly resolve the issues of grid connection and transmission costs to the Scottish islands.

“Alongside energy saving measures, wave power and other renewables have a critical role to play in helping Scotland reduce climate emissions, create jobs and generate export opportunities. With careful planning we can harness the waves and tides while safeguarding the nations’s tremendous marine environment.”

The granting of planning consent for the wave farm is good news for the Scottish renewables industry. It demonstrates synergy between government and industry and the potential of generating further electricity from Scotland’s water resources.. Scottish Renewables have the power to create jobs across the country and we at Intelligent Land Investments (Renewable Energy) are proud to be contributing to this with recently received     planning consent for the first of our own hydro-power developments.