Tuesday, 20 October 2015

Punishing the success?

Renewable energy capacity in the UK has grown in the last few years. The statistics of this show its importance in the energy mix. For example, in the first quarter of 2015 the share of electricity generation reached by renewables was 22.3%. That’s almost a quarter for that annual quarter! Or put another way, renewable energy (RE) generated 21.2 billion kWh[i] – that is equivalent to providing electricity to 21.2 million average UK households for that quarter. That is 80% of all households in the UK[ii]. Impressive! Important? Indeed! Of course, to keep it in context, most of the electricity generated by renewables feeds the national grid and is therefore not only used for households. But, as an illustration, if it was: almost all UK households would be powered by RE in Q1 of 2015! But, oh, the current government seems to think RE is not worth subsidising, that there is enough RE now - that its better to woo the Chinese to invest in nuclear and to support fracking. Nuclear, with its dubious long-term business plan (how do you plan for waste disposal costs that stretch way into the future), and fracking with its dubious short-term business case (wells don’t last very long)….

That first quarter of this year the RE generation was an increase on the same period in 2014 and this was largely due to an increase in RE capacity. Which was an increase on the year before. Imagine if we could keep that up – we’d soar past a quarter of all electricity generated being very low or no carbon! We’d power the equivalent of more than all the houses in the UK. Surely, when a new industry has risen so spectacularly to the challenge, it should be promoted and lauded? Allowed to sprint ahead? Instead its legs are being cut off at the knees. That is what the radical and sudden slashing of feed-in-tariffs (FiTs) is doing. Did you know that 148,000kW of capacity was installed under the FiT in Q1 of 2015. That brought the total up to 3.6 million kW of RE installed, thanks to the support it was getting! You could switch on about 1.5 million electric kettles all at once with a capacity like that!

In fact all RE increased – onshore wind from 6.7TWh for Q1 in 2014 to 7TWh for Q1 in 2015, offshore wind increased by 22%, hydro by 9.5% and PV by 3.6%. In Scotland the stats are really impressive: in 2014 half of all the electricity used came from renewables! In the first quarter of 2015 wind power produced the equivalent of the needs of nearly 4 million Scottish homes for that quarter[iii]. In June wind supplied a third of all Scotland’s electricity needs. This was an increase of 120% over the year before[iv]. Then, as if that wasn’t amazing enough, in July wind broke its own record supplying 36% of all electricity needs (or 72% of all Scottish homes): a whopping 660 million kWh. On eight days of that windy month 100% of Scottish homes were supplied by wind power[v]! A significant player in the energy mix? Yes!

But. I wonder if we will be able to say the same in Q1 of 2016. With the proposed almost 90% cut in FiT for solar PV and the halting of onshore wind, it is likely that very little, if any, new capacity will be added in early 2016. It’s confusing, seeing that the stats are so impressive. You’d think it would be further supported, that the politicians would blow their trumpets. They’d pat each other on the back and continue with the program that has been so successful and produced so many jobs and powered a significant portion of Britain’s electricity needs – all with near zero carbon emissions. How isn’t that a success story?

In the meantime, globally RE electricity has just become the second largest source of electricity at 22% of the total[vi]. Over the last 25 years global solar PV has averaged increase of early 45% a year, while wind increased at just over 27%. Indeed, it is a success story! 

Let’s be clear. RE subsidies do need to be slowly phased out. But this should be done at a rate to allow the industry to mature, to gain grid parity and in consultation with the industry. Let’s be even more clear – its not as if fossil technologies are NOT getting subsidies and support. They are! So then these should be phased out too – maybe more rapidly seeing they are larger and been applied for longer. The International Monetary Fund states that the UK fossil fuel sector is receiving subsidies of more than £26 billion this year – that is more than 7 times that of renewable energy[vii]. Renewable Energy World published that in the OECD states there are 800 ways taxpayer money supports fossil fuel industries and at about $167 billion - far exceeds the value of subsidies for renewables. An example is that the oil industry is able to write off most drilling costs in full and immediately, rather than at normal business depreciation costs[viii]. This is NOT a level playing field! And yet RE is considered “too expensive” compared to fossil fuels….?

As the Renewable Energy Association puts it, the “bonfire of renewable policies” continues. If I was an outside bystander I’d be interested to see how the UK government is going to respond to high-level criticism of their new lack of support for this important industry, for creating investor non-confidence, for costing jobs. But none of us are bystanders. We are all affected by the UK government’s lack of vision, as the rest of the world seems to be supporting renewable energy.

Alastair Gets

Director of Engineering

[i] Electricity consumption 94.9TWh in Q1 of 2015 [gov.uk]
[ii] The average unadjusted electricity consumption per household in 2014 was 4,001 kilowatt hours (kWh), [DECC, ECUK Tables 3.07] and there are about 26.5 million households in the UK
[iii] Calculated from figures from renews (online) article 25/6/15
[iv] Figures from renews (online) article 6/7/15
[v] Figures from renews (online) article 4/8/15
[vi] International Energy Agency as cited by Alex Kirby of Climate News Network, August 19, 2015
[vii] Calculated from renews (online) article 4/8/15
[viii] Article by Kraemer, S. Renewable Energy World, June 10, 2015

Saturday, 28 February 2015

Community energy shines

TRESOC is poised to launch the Shine Project! This is an extensive social housing roof-top solar project in the South Hams. It is worth noting that in 2014, according to the Department of Energy and Climate Change (DECC), more than 125,000 homes in the UK installed roof-top solar photovoltaic (PV) systems. The Shine Project alone will add over 70 homes to the 2015 tally. The installations will benefit from the feed-in tariff (FiT) offered by Ofgem, which gives a set income for each unit of electricity generated for the next 20 years. At the same time the tenants of the homes benefit from reduced electricity costs. Looking more broadly, the Solar Trade Association stated that 700MW of PV FiT projects were completed in 2014 in the UK. That is equivalent to about 58 million low-energy light bulbs! Ofgem reports that overall in the UK the FiT scheme has passed 3GW of installations. That is equivalent to an impressive 250 million low energy lights bulbs or 1.2 million electric kettles! The 3GW is made up of over half a million projects of which 99% are PV projects. By the way, the SW comes about tops with 16% of all FiT projects (London and the SE comes in second with 14%).

The scale of FiT installations is twice the number forecast by DECC. Clearly when these schemes are introduced there is good uptake. This reduces the need for building additional power stations - large infrastructure projects taking years to complete and at increasingly huge budgets. The 3GW FiT ‘power station’ was completed in 4 years. How’s that for keeping the lights burning! I have just returned from South Africa where the lights are not always burning due to a lack of capacity. Load shedding is happening and South Africans are subjected to electricity cuts for 2 hours a day on a rotational basis – and this is expected to go on for 2 to 3 years at huge cost to business and inconvenience residents. You may think, “Ah, but that is a developing country”. Well, the UK is getting dangerously close to the same situation – in winter 2011 there was a 17% reserve margin, this winter it is at only 4%. Generally a reserve margin of 15% is accepted as robust and able to handle any unforeseen power station failures – 4% seems quite a bit below this! In addition to helping with capacity, the uptake of FiT clean energy projects would also contribute to climate change mitigation. The UK Climate Change Act of 2008 sets out to reduce carbon emissions by 80% from the 1990 baseline by 2050. Any electricity generated by clean energy would help reach this target.

Decentralised locally owned power generation creates a more stable network and better power security. For this reason, and those above, it should be encouraged, right? So why then is the FiT programme being scaled back? The residential roof top solar FiT will fall for the first time since 2012 after April this year - that may well reduce the uptake. While it is widely thought that solar will become the cheapest form of energy there is a transition period where schemes such as the FiT will encourage the installation by community groups or individuals and clean energy will be fed into the national grid.

Despite the regression of FiT the growth of community energy continues to increase. Recently Albion Community Power in Scotland received a £50million loan from the UK Green Investment Bank and a further £10million from the Strathclyde Pension Fund. Albion is looking for £100million to invest in various renewable energy projects such as run-of-river hydro projects - that is flow through a hydro turbine and back into the river without major damming, similar to the proposed hydro plant at the River Dart weir in Totnes. The first Albion project is a 2MW hydro scheme in Chaorach north of Loch Lomond. The project pipeline also extends to onshore wind on previously used, and often contaminated, sites as well as projects of biogas from organic waste.

Business Secretary Vice Cable said in relation to Albion’s plans: “Renewable energy is the future”. Indeed, a Mintel study stated that 77% of people in the UK want more renewable energy and that 78% support PV on new houses. The survey stated that if we have to have an electricity generating plant in our backyard, then the most desirable is a solar farm while a large portion said that nuclear was the least desirable. It seems the sun is indeed shining on community and renewable energy!

Thanks to reNEWS (renews.biz) for much of the information regurgitated here –a newsletter appears daily in my inbox!

Alastair Gets
Project Officer