Select Committee on Environmental Audit Memoranda


Memorandum from Greenpeace

  Wind, wave and solar power must provide an increasing proportion of our energy in the twenty first century. The UK has the best resource for renewable energy in Europe: DTI figures show that we could supply all our electricity from renewable sources. The Government has accepted that a major shift away from fossil fuels will be needed to combat the threat of climate change.

  Yet the UK is near the bottom of the European league for renewable generation. Only Belgium performs worse. Successive British governments have lacked the vision and commitment to develop anything more than a fraction of the potential. The current Government promised a "new and strong drive" to promote renewables, and has undertaken some good initiatives, but overall has failed to deliver a coherent policy to develop renewable energy. This is largely the fault of the Treasury who have been unwilling to provide funding.

  Over the past decade support for renewable energy has come from a levy on consumers' electricity bills. The present Government has stated that its policy for renewables will continue to be constrained by the desire to keep energy prices low. But consumers' bills are not the only way to raise money. Clean energy sources will have significant economic, environmental and industrial policy advantages, so should be funded out of the general Exchequer if necessary.

  Many thousands of manufacturing jobs could be created in renewable energy, jobs which would utilise skills being lost in other, declining sectors. An ambitious renewables policy could safeguard or create over twenty thousand new jobs.


  The Government's Climate Change Programme states that in order to combat climate change developed countries may need to reduce emissions by as much as 90 per cent, and that "achieving it would almost certainly require a major shift away from fossil fuels". The Royal Commission on Environmental Pollution has called for cuts of 60 per cent in greenhouse gas emissions by 2050.

  Wind power, wave power and solor power emit no carbon dioxide at the point of generation. Even taking account of emissions during manufacture, the emissions are a small fraction of emissions from fossil fuels. Waste incineration, in contrast, results in almost as much CO2 as gas-fired generation. Emissions per unit of electricity are shown in the graph.

  The fact that solar and wind emissions result from the energy used in manufacture, and not from the actual operation of the technologies, means that they are avoidable. Using renewably-generated energy in manufacture would bring these emissions down close to zero, and over their lifetime the technologies would generate many times the amount of energy needed to make them. It is not possible to avoid carbon dioxide from waste incineration or burning fossil fuels.

  Carbon dioxide is not the only environmental problem caused by energy generation. Fossil fuels and incineration also emit the sulphur dioxide and nitrogen dioxide which cause acid rain and damage human health. Waste incineration produces dioxins, heavy metals and other dangerous pollutants. Wind, wave and solar power produce none of these gases.

  Nuclear power does not produce carbon dioxide, but it is not a safe or a clean technology. Radioactive emissions and the generation of nuclear waste, for which there is no safe solution, make this an unacceptable alternative. Moreover, despite the billions of pounds of public money which has been spent on it over the past fifty years, nuclear power remains uneconomic.

  There is therefore a strong environmental rationale for developing renewable technologies far more ambitiously than has been done to date. As the table shows, the UK is lagging behind every EU member state except Belgium.

  The Energy Technology Support Unit (ETSU), the Government's offical advisers on renewable energy technologies has produced figures which show that the UK could meet 100 per cent of its electricity demand from renewable sources.[57]

  As this illustrates, the Government's 10 per cent target is relatively modest. A further problem with the target is that it uses the wrong definition of rewnewables, including incineration.


  Greenpeace supports the Renewables Obligation, which has the potential to develop into a powerful tool for promoting clean energy sources. We strongly support the proposed exclusion of incineration from the obligation.


  The ETSU analysis suggests that photovoltaic (PV) panels on buildings could supply 85 per cent of the UK's total electricity demand.

  The factor holding back widespread installation of solar panels is cost. A report by a group of industry experts chaired by BP Solar concluded in 1996 that what was needed to bring PV prices down to levels comparable with fossil fuel generation was one major PV factory (around 500 MWp) which would achieve economies of scale. The study confirmed that there were no technological barriers standing in the way of this type of scale-up.

  Since 1996 there has been some progress on PV, but nothing approaching the economies of scale which would enable the market to take off. Because solar panels are expensive, not many people buy them, so not many are manufactured, so they remain expensive. The Government needs to break through this impasse with a vastly more ambitious programme to install solar panels to roofs in the UK.

  A simple and cost-effective way to achieve the required scale up in solar power to bring the price down would be to amend the building regulations to require all new buildings to include a small array of solar panels. The Government should do this without delay.

  In addition, the Government should fund a programme to retrofit 100,000 roofs with solar panels over ten years. Greenpeace calculates that this would cost just over £500 million in total.

  The current cost of solar panels is roughly £5,250 per kW.[58] The aim should be to install 2kW array of solar panels per roof. This will supply around half the average requirement for the household, presuming that electricity exported to the grid at peak generating times is offset against electricity imported during hours of darkness (in other words "net metering" applies so that the national grid can be used as a giant battery) so the current cost would be £10,500 per house. Total cost of programme would therefore be £1.05 billion, or £105 million a year over a 10 year programme.

  The Danish 300 roof programme required householders to pay $3,000 themselves; around 15 per cent of the total cost. Electricity prices are higher in Denmark so the amount one might expect UK consumers to pay is less—say £1,000 or less than 10 per cent of the total cost. This would reduce the programme cost by £100 million or £10 million a year, leaving a total cost of £95 million a year.

  However, this ignores cost reductions which will come from production economies of scale as solar power becomes more widespread. KPMG suggest that once a large (500MW) plant is built, the cost of panels will fall by 75 per cent[59]. A 100,000 roof programme in the UK would not be sufficient to get such a manufacturing facility built, but combining it with a change in the building regulations to require new buildings to include solar panels would certainly provide a large enough guaranteed market. (A 500MW plan would produce enough panels to cover only 40 per cent of the roof area of new buildings in the UK).

  On an assumption that it would take six years to achieve these cost reductions, but that reductions of 25 per cent, could be achieved after two years and 50 per cent after four years, the ten year cost of a programme of 10,000 roofs a year could look like this:

£95 m
£95 m
£71.25 m
£71.25 m
£47.5 m
£47.5 m
£23.75 m
£23.75 m
£522.5 m

  The UK is losing out in an area where once we enjoyed a strong position and which will undoubtedly be big business in the future: the World Energy Council suggest that by 2010 the global solar market could be worth up to £150 billion. BP has moved its solar headquarters out of Britain, and in March 2000 Shell announced that it was ceasing its PV activities in the UK, citing "current market constraints and the lack of financial incentives to stimulate consumer demand (which) make the UK market less attractive than elsewhere". However, it made clear that this decision could be reversed if market conditions changed.

  Attracting a solar manufacturing plant to the UK would create 3,000 new jobs directly and many more indirectly.


  The potential contribution from offshore wind turbines is enormous. ETSU has stated that the practicable resource, taking account of cost, local environmental constraints, slope of the sea bed and so on, is around one third of total UK electricity demand. (The total resource, not taking account of these constraints, is approximately twenty times the UK peak power demand). Shell are on record as stating that the UK could get three times its current electricity needs from offshore wind. There are currently only two turbines in UK waters, off Blythe in Northumberland.

  Offshore wind is currently more expensive than other forms of renewable electricity. It is therefore unlikely to be developed under a renewables obligation which does not distinguish between different technologies, unless the Government provides capital grants. The amounts offered so far, £39 million from climate change levy receipts and £25 million of lottery funding, are welcome but won't trigger take-off of offshore wind power on the scale needed to tackle climate change and gain the UK a foothold in this emerging global market.

  The forthcoming announcement by Crown Estates of prospective offshore wind power sites will restrict firms to small sites of 30 turbines each. Given the likely outcome that between five and ten sites are approved, total offshore wind capacity that will be built as a result of this round will only total 300-600MW. Meanwhile, Denmark, with a much smaller offshore wind resource is aiming to develop five sites, each with 80-100 turbines. Denmark has set specific offshore and wind targets: 750MW by 2005, 2,500MW by 2015, 4,000MW by 2030. These are the sorts of targets that enable investors and developers to act.

  The Government should increase the capital grants available to offshore wind, to a total of £300 million over three years, and make much larger blocks available.

  The British Wind Energy Association has stated that this would lead to the establishment of a domestic turbine manufacturing and supply base involving perhaps 5,000 engineering jobs and some 19,000 jobs in all. A report by Border Wind suggests that a more ambitious but still realistic development of the UK's offshore wind resource, so that it supplied 10 per cent of total electricity demand, would create over 36,000 jobs.

  Government support would make offshore wind projects viable and trigger hundreds of millions of pounds of private investment. Offshore engineering firms are in pole position to win the resulting contracts.

  There are also major export opportunities. Wind power around the world is already a $3.5 billion industry, which every year for the past six years has grown by 40 per cent, a growth rate set to continue. Denmark has captured the largest share of the world onshore wind market, and is now pushing offshore.


  Greenpeace has recently been actively campaigning for wave power. In 1999 Greenpeace launched a campaign in Scotland following the announcement that Scottish Renewables Order funding was to support the building of three wave power machines. The campaign included a series of business conferences around Scotland, in Aberdeen, Glasgow, Edinburgh and Islay. The campaign also included bringing the Greenpeace flagship, Rainbow Warrior, to these locations to publicise the campaign and engage the public. In addition, Greenpeace contributed personnel, boats and equipment to carry out initial seabed surveying work on Islay to assist the progress of the wavepower companies Wavegen and Ocean Power Delivery. The response to the Greenpeace campaign was overwhelmingly enthusiastic, from a wide range of sectors, including politicians, businesses, trade unions, public sector organisations and members of the public.

  This encouraging response led to the formation of the Commission for Wavepower in Scotland to carry forward the impetus of the campaign.[60] The Commission works to the remit that it will "determine how to capitalise on the industrial opportunities offered by Scotland's position as a world leader in wave power". It has recently produced a Five-Point plan for wave power in Scotland and a report recommending the establishment of a wave power test center, both of which Greenpeace endorses.

Why is Wave Power Worth Developing?

  The vast resource was recognised as far back as 1977, when the Central Electricity Generating Board (CEGB) said of wave power that "its development potential along the UK west coast exceeds the present capacity of the CEGB". It further noted that "There are currently 120GW of wave power being dissipated on the beaches—nearly five times the average demand". More recently, ETSU put the accessible resource at double the UK electricity supply. The UK has one of the world's best wave power resources.

  But the UK is not necessarily going to win first-mover advantage in this emergent market. Yes, the UK retains some of the world's leading wave power experts and some of its most innovative companies, despite the ill-judged closure of the previous DTI wave programme in 1982. And John Battle's announcement in 1999 to restart R&D funding for wave power is a welcome step in the right direction. However, the context of this announcement was a DTI renewable strategy document that only sees wave power as having potential in the "longer term (after 2010)". This categorisation shows no appreciation of the urgency of the task required if the UK is not to lose its world lead in wave power in the same way it lost its once world-leading position in wind power. The DTI has taken the view that wave power is 10 years away, for so long that it has become a self-fulfilling prophecy.

  The tiny scale of the funding announced reflects this lack of ambition. Tom Thorpe also points out that of the 15 wave power devices deployed in the last two decades, only two have been in the UK. A warning note for the UK should be sounded by the recent decision by the oil company Woodside to buy a stake in US company Ocean Power Technologies, as their "first major investment in a renewable energy technology". The scale of their ambition is indicated by their option to purchase, by 2012, half a million tonnes of CO2 credits, which implies installation of some 5,000 of Ocean Power Technologies' wave power machines by that date. A sharp contrast with the UK is the Danish support programme which clearly means business: it has a clear structure of how initial smaller grants will lead to bigger grants as machines prove themselves. Over four years up to 2002 the programme was projected to spend DKK40 million, which is £3 million pounds, approximately triple the estimated UK expenditure on wave power over the same period, despite the fact that Denmark is one tenth the size of the UK. Denmark has successfully captured the lion's share of the $3.5 billion wind power market from a position behind the UK. The race to win the wave power market is on, and now is the time for the UK to give its runners a decisive boost.


  "The market will decide" has embedded itself deep in Government thinking ever since the politically embarrassing demise of various nationalised industries, and has resulted in statements on renewables by successive DTI Ministers along the lines that it is "not for the Government to pick winners". However understandable the desire to escape from accusations of "dirigisme", and however poignant the examples of past Governments' abilities to pick failures like the nuclear industry, the fact is that this is not an adequate Government response to embryo technologies and infant industries. A distinction should be clearly drawn between backing individual firms or inventions, and backing sectors that are rapidly approaching maturity, and for which there is a pressing environmental, commercial and societal case, of which wave power is a fine example.

  It is a well-worn British lament, based on all too many examples, that the UK fails to bring outstanding UK research to successful commercialisation. It would be wrong to lay the blame entirely at Government's door, but there is certainly a strong Government role to be played in addressing this malaise. There are, of course, world-beating British success stories, and it is heartening that one of these is ideally situated to assist wave power achieve commercial lift-off. The offshore oil and gas sector, whilst itself environmentally unsustainable, does have exactly the skills and technology required to build and install wave power machines that will survive in the hostile marine environments where wave power is highest. "Synergies between renewable and conventional marine energy industries" are one of the two main themes identified by The Marine Foresight Panel of the Office of Science and Technology. Their recent report highlights ten priority technical areas where "the vast experience of the offshore hydrocarbon industry should be extremely useful to the emerging marine renewable energy industry". The UK also has a long and proud history of shipbuilding, albeit in sad decline, and it is notable that at a recent wave power conference, Harland and Wolff stated that they "have a role and an opportunity in getting actively involved in offshore renewable energy . . . this is going to be very big business".

  So, the UK has the natural resource, the expertise in wave power technologies, and the manufacturing and industrial capacity to accomplish the tough task of putting wave machines in place. The question is: what plan should the Government adopt to harness these capacities? Greenpeace believes the following set of measures can turn the UK's technical potential into commercial reality.

  1.  Adopt a clear policy objective to establish the UK as world leader in the commercial wave power industry.

  2.  Set ambitious targets to achieve electricity from wave power. There must be a target for the next 10 year period, but targets for 2020 and 2030 should also be set because these will be a major encouragement for potential investors to commit to the UK.

  3.  Energy policy is not a devolved responsibility, but renewable energy policy is under discussion in the devolved legislatures and regions. Given Scotland's special position with wave power firms and resources, the Scottish Executive should set the ambitious but attainable objective to obtain 10 per cent of Scotland's electricity from wave power in 10 years, and Westminster should encourage and assist them in this endeavour.

  4.  Make much more grant money available for wave power. It would be quite reasonable for the UK to aim for a programme an order of magnitude larger than that of Denmark. Greenpeace has proposed a Green Fuel Fund whereby, instead of lowering taxes of fossil fuel, just 1p of that tax, £500 million per year, should be used to promote renewable energy and green fuels. £50 million per year should be spent to develop wave power.

  5.  The trajectory of granting should be big grants for small projects then smaller grants for big projects, to support companies through the disproportionately high early development costs and risks so as to achieve the subsequent economies of up-scaling and cost reductions from technology development.

  6.  The Government should develop a strategy, of which the above measures would be a major part, to make the UK wave programme sufficiently attractive to draw in "big hitters", including the large maritime engineering and oil and gas interests. There inevitably will be hitches and delays with deployment of the first round of commercial wave power machines, just as the first offshore oil and gas faced drawbacks and problems. Big company support is required to overcome such early obstacles—a challenge it has shown it can easily rise to. The development of the North Sea's fossil fuel reserves is a highly pertinent example, albeit one which has been pursued to the great detriment of the climate. Diversification of this nature would bring great benefit to the UK regions that are starting to suffer from the economic effects of decline in the UK oil and gas sector.

  7.  Some of the grant money should be used to set up a UK test centre for wave power. The cost of a suitable test facility is a major obstacle to the UK's wave power companies. Site and wave resource surveys, cabling to shore, grid connection and shorebase equipment, monitoring and maintenance facilities are examples of infrastructural elements that could be made use of by any and all potential wave power businesses to test and show-case their products. Without such a facility, the additional cost on top of the cost of building a prototype or pre-production device over-reaches the resources available to the most potential wave power developers. Both Ocean Power Delivery and Wavegen are seriously and urgently considering whether to go to a commercial test facility planned in Portugal, rather than test in the UK, despite their preference to stay here. The value of a place for the UK wavepower companies to showcase their technologies must not be underestimated. A test centre provides a key part of this showcase. Recent discussions with Scotland's wave power companies indicate that Orkney is emerging as the leading contender. The centre might in addition serve a similarly valuable function for tidal current power.

  8.  The other necessary part of the showcase is a domestic commercial market for wave power. For too long, for example regarding photovoltaics, the DTI has made the extraordinary assumption that UK companies can somehow win export markets without any domestic market to give them a base and shop-window to expand from. This bears no relation to commercial reality. The measures above will help ensure a domestic market for wave power, but it will also be essential to ensure that wave power electricity from the first wave power devices can compete in the renewable electricity market place. This electricity will be comparatively more expensive than what follows because it will bear development costs and include no economies of scale. Grant funding should be used to bridge the gap so that wave power becomes a competitive option for utility companies to fulfil their renewable energy obligations.

  9.  None of the points above will achieve UK offshore wave power unless seabed sites are made available. The present round of discussions between DTI, DETR, MAFF and Crown Estates regarding consenting procedures for offshore wind power ought to provide a useful basis. However, the present discussions have yet to achieve amalgamation of the nightmarish combination of departments and procedures into the desiraable one-stop-shop for potential developers. The complexities of the process mean uncertainty, delay, wasted time and resources for small companies who can't afford them. The DTI should take the lead to create a structure which delivers a one-stop-shop. The DTI is well aware of this issue for offshore wind and has just announced its intention to amalgamate consenting procedures for offshore wind developments into a one-stop-shop under DTI auspices.[61]

  10.  A further requirement is a far-reaching programme to up-grade the grid to the weak peripheral grid areas critical to connection of the wave power resource. This would also aid development of other renewable energy resources such as wind power. Utility companies now have somewhat more incentive to upgrade the grid for renewables due to the approaching renewable energy obligation, but further carrots and sticks are required to institute an up-grade programme sufficient to guarantee that deployment of wave power development can go ahead rapidly on a large scale. It is not acceptable that the cost of this task be left entirely to the developers of renewable energy themselves.

March 2001

57   ETSU, Supporting analysis for the DTI's "new and Renewable Energy: prospects in the UK for the 21st century, DTI, March 1999". Back

58   Based on recent 300 PV roof programme in Denmark, where the Danish Energy Agency bought in bulk and secured 33 per cent cost reductions as a result. This figure includes installation labour costs. Back

59   KPMG, 1999, From Perennial Promise to Competitive Alternative. Back

60   The Commission operates under the chairmanship of the Scottish Trades Union Congress, with a secretariat provided by the Scottish Council Foundation. The Commission comprises a cross-party group of Members of the Scottish Parliament who hold relevant briefs, utility company input from the Head of Generation of Scottish and Southern, the leading wave power expert Tom Thorpe, renewable energy investor Fred Olsen Production, and Community Development organisation Forward Scotland. Scottish Enterprise, Highlands and Islands Enterprise, Scottish Power, Wavegen, Ocean Power Delivery and Greenpeace offer advice to the Commission as required. Back

61   DTI press release "Hain Trims Red Tape for Offshore Windfarms" 20 February 2001. Back

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