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.

 

Wind, wave and tidal employment soars in the UK

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.