Month: November 2012

Government confirms commitment to Renewable Energy

Government confirms commitment to Renewable Energy

Last week the UK Government underlined it’s commitment to renewable energy by announcing a funding commitment for future years. In total £7.6 billion pounds will be made available to the renewables industry between the years 2015-2020. This sum will be generated from small subsidies taken from individuals energy bills. The slight increases this funding will cause in energy bills is fully expected to be more than offset by savings made from having to import a reduced amount of gas from abroad. The £7.6 billion pounds is also expected to stimulate a further £40 billion worth of investment in the renewables industry – which has been one of the the few growth industries in the UK – and create thousands of jobs.

The funding commitment is expected to increase renewable electricity generation from it’s current level of 11% of electricity used to 30% by 2020. This will see the UK achieve it’s EU agreed target for renewable generation

The announcement was made in the build up the Coalition’s Energy Bill being presented in parliament. It is encouraging that the Coalition Government has presented such a united front on this issue following media speculation about disagreements over future energy policy.

At the announcement of the spending commitment for 2015-2020 the Secretary of State for Energy and Climate Change Ed Davey gave the following statement:

“This is a durable agreement across the Coalition against which companies can invest and support jobs and our economic recovery.

“The decisions we’ve reached are true to the Coalition Agreement, they mean we can introduce the Energy Bill next week and have essential electricity market reforms up and running by 2014 as planned.

“They will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”

The news was generally greeted favourably by the industry. Maria McCaffrey, the Chief Executive of the trade body RenewableUK, released the following statement:

“This is a crucial announcement for the renewable energy sector. The news that there is rock solid support across Government for renewable energy, and clear evidence that Treasury and the Department of Energy and Climate Change are in step, provide the industry with exactly the kind of assurances we’ve been calling for. This blows the last few months of political infighting completely out of the water.

“This is proof that the Treasury really does get it – the renewable energy industry offers one of our best hopes for economic recovery. This will stimulate billions of pounds worth of investment in renewables, creating more than 88,000 jobs in wind, wave and tidal energy alone by 2021. It will enable us to hit our 2020 renewable energy targets, and make sure renewables can play their part in protecting UK consumers from unstable international power markets – we’ve seen over the last few years that the cost of imported gas has caused the bulk of energy bill price rises, and developing our own resources helps counter that dependence and vulnerability.

“The UK Government is sending a clear message that 30% of our electricity will be from renewable sources by 2020. The lion’s share will come from wind energy, with 31 gigawatts to be installed by the end of the decade.

“The Government also clearly understands that there’s likely to need to be a decarbonisation target for 2030. That’s great news, which will retain investor confidence in the long term. Those investors put £2.5 billion into the industry this year – this will now increase exponentially. Now it’s full steam ahead, so let’s get on with it”.

Jenny Hogan , Director of Policy for Scottish Renewables broadly agreed:

“There is still a great deal of detail on Electricity Market Reform to be revealed, but today’s announcement confirms that the Government remains committed to the growth of renewable energy and to our 2020 energy targets.

“This provides some much needed and long awaited certainty to the industry, which will allow us to really start planning for the future and investing in technologies such as offshore wind and marine energy. In turn we will see a massive reduction in carbon emissions from our power sector over the next decade.

“This is a particularly important announcement for Scotland, given that uncertainty over EMR has been the biggest threat to the development of offshore wind manufacturing and supply chain which could bring many thousands of jobs across the country.

“The UK Government needs Scotland to achieve our 100% renewable electricity target if the UK is to meet its re-stated renewable energy targets.”

John Cridland, director general of the CBI (Confederation of British Industry) welcomed the announcement but did also stress that it is of critical importance that the interests of other British Industries were remembered:

“This package will send a strong signal to investors that the government is serious about providing firms with the certainty they need to invest in affordable, secure, low-carbon energy. The government should ensure that those households and businesses most vulnerable to increased energy prices are protected.”

It is hoped that the industry can move on from speculative and potentially damaging headlines to helping the UK achieve its renewable energy targets.

Scotland announces new renewables target

Scotland announces new renewables target

This week the Scottish First Minister Alex Salmond appeared at the RenewableUK conference in Glasgow. The First Minister announced that a new interim renewable generation target of 50% of Scotland’s electricity demand has been set for 2015. This new target was set based upon the fact that the interim target for 2011 was exceeded; 35% of demand from renewables as opposed to the target 31%. Additionally a new target for greenhouse gas emission reduction was also set – a reduction of 42% of 1990 CO2 emissions to be achieved by 2020.

Mr Salmond gave the following speech at the launch of the target:

“When I became First Minister in 2007, I inherited a target for 50 per cent of Scotland’s electricity to be produced by renewable sources by 2020. We now know that we can achieve much more than that, more quickly -having already exceeded our 2011 target.

“Last year, we published a Routemap for Renewable Energy for Scotland, outlining how we would meet the equivalent of 100 per cent of Scotland’s electricity demand from renewable sources  by 2020. Today, we are publishing an update to that Routemap. It shows clearly the progress that has been made in the last year.

“In the light of that progress, I can announce that we have set a new interim target – by 2015 the equivalent of 50 per cent of Scotland’s electricity demand will be met by renewable sources. This target is ambitious, but also achievable. It is based on current data about capacity, which is operational, under construction, or has been consented.

“I believe creating more clean energy is essential for Scotland and this target provides three benefits in particular – energy security; environmental sustainability; and employment opportunities.

“Expanding our renewable electricity capacity in Scotland will help deliver security of supply, not just in Scotland but at UK level. Ofgem predicted earlier this month that by 2015 the UK’s electricity generation might exceed peak demand by only 4 per cent. That’s a steep decline from today’s 14 per cent, and even that 4 per cent margin is only achieved by ending electricity exports to Ireland.

“The position for Scotland is very different. By 2015 our generation capacity could exceed peak demand by approximately 35 per cent. This underlines that renewables, alongside our other generation sources, is crucial to energy security in Scotland. It’s also crucial to the UK. That second challenge of environmental sustainability is the next key benefit of renewable energy. In Scotland we are proud of the fact that the Scottish Parliamenthas unanimously passed the world’s toughest climate change legislation – requiring us to reduce greenhouse gas emissions by 42 per cent by 2020.

“Already, Scotland’s renewable energy production offests our carbon emissions by 15 per cent – the equivalent of taking around 3.5 million cars off the road. The continuing expansion of renewable electricity will be essential for us to meet our 2020 target.

“As well as being an environmental and moral imperative , the development of renewable energy is also a massive economic opportunity.

“Scotland is in many respects uniquely positioned to develop offshore wind, wave and tidal power – we have immense natural resources, a world-class research base and generations of engineering expertise, particularly offshore.

“Everything that the Scottish Government does – our long-term targets and our significant financial support for developing renewables – is designed to maximise those advantages, and to encourage jobs and investment. We have listened to the renewable industry, and we have worked to make Scotland one of the best places in the world to invest.

“In total, 11,000 people are now employed in the renewable energy sector. That number will grow still further – indeed, we have estimated that offshore wind alone could support up to 28,000 direct jobs by 2020.

“The Scottish Government understands that renewable energy is essential for energy security, for environmental sustainablility and for economic prosperity. For that reason, I can guarantee that we will continue to provide leadership and support for everything that you are doing here in Scotland.”

Further good news was seen this week with the publication of new figures by Bloomsberg New Energy Finance which demonstrate that the cost of operating and maintaining an onshore wind installation has dropped 38% over the last four years. or an annual reduction of 11%. Falling costs were largely attributed to improved turbine technology and increased competition between manufacturers.

Michael Leibreich, Chief Executive of Bloomsberg New Energy Finance commented:

“Wind power has done much to improve its competitiveness against gas-fired and coal-fired generation in recent years, via lower cost, more technically advanced turbines, and more sophisticated  siting and management of wind turbines.”

It is hoped that the good news can continue to roll in for onshore wind particularly and the renewable energy industry more generally.

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