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