Memorandum submitted by the Renewable
Power Association (U41)
What new policies might be needed to keep the
United Kingdom on track in reducing all greenhouse gas emissions?
Renewable energy is a vital component of policies
needed to reduce greenhouse gas emissions. There are many other
actions that can and should be taken to reduce greenhouse gas
emissions and, in comparison to many other policy areas, renewable
electricity generation is very well served. Although this is very
welcome, it does have some downsides. Being almost the only tangible
support measure featured in the Government's Energy White Paper,
results in disproportionate expectations of what the Renewables
Obligation can deliver.
In terms of expectations, Sustainable energy
tends to be distilled down to meaning renewables, and renewables
tends to be distilled to wind power. Wind energy is the renewable
in the firing line[8],
and is carrying the expectations of delivering a sustainable energy
future.
Although being fortunate in having a policy
to deliver the renewable electricity target the RPA believes that
there are a number of measures that need to be taken to improve
it, and to help those technologies that are currently not able
to benefit from the RO move towards participating in that market.
These recommendations are covered below, under the heading boosting
renewable electricity generation.
However, renewable energy is more than just
electricity production. Other measures should be taken to boost
the contribution of renewables to the heat and transport sectors.
The RPA puts forward proposals for these sectors under the headings
renewable heat and renewable transport.
To put all this in context, the first section
of this evidence quantifies the emissions savings benefits of
renewable energy.
EMISSIONS SAVINGS
FROM RENEWABLE
Savings from renewable electricity generation
Every unit of electricity that is generated
from a renewable energy source results in a direct saving of greenhouse
gases that would have been produced had that unit of electricity
been generated by non-renewable plant.
Quantifying emissions savings can be undertaken
at differing levels of detail and the answers are somewhat dependent
on the question being asked or scenario being investigated. There
is also a time dimension, as the balance of different types of
generation changes, improvements in efficiency occur made or the
operational regimes change.
In a marginal, real-time scenario, renewable
generation can be assumed to be displacing emissions from coal
fired plant, as it is coal fired plant that typically provides
load-following capability. In other words if renewable output
is ramped up, then coal fired plant output is ramped down (and
visa versa). Nuclear tends to stay on baseload whenever it is
generating, and therefore is not used to respond to different
levels of supply and demand on the electricity network. The economics
of gas-fired plant tend to dictate that this plant either operates
at full load (eg closed circuit gas turbines—higher capital
costs, lower gas prices) or for peaking (eg open cycle gas turbines—lower
capital costs, higher gas prices). This pattern can clearly be
seen in the NGT Seven Year Statements[9].
In this scenario, every MWh of renewable generation saves almost
one tonne of carbon dioxide emission, 12 kilos of oxides of nitrogen
(NOx) and four kilos of oxides of sulphur (SOx).
If a longer term view is taken, then renewables
could be either be regarded as leading to the premature closure
of existing capacity, in which case the above emissions savings
figures are relevant. Alternatively renewables could be regarded
as avoiding the need to build new capacity from other generation
sources, and therefore avoiding the associated emissions that
would have been produced if that capacity, rather than the renewables
had been generating. In this context gas fired capacity is the
most likely new plant to be built. Therefore in this comparison,
renewables can be regarded as saving 440 kilos of CO2
and 0.5kg of NOx per MWh.
When there is no specific scenario being investigated,
the average emissions from the whole of UK electricity generation
are often used. This is often referred to as the average plant
mix. Here renewables save just over half a tonne of CO2/MWh.
These figures are summarised in the table below.
|
| Type | CO2
| NOx | SOx
| Most appropriate context
|
|
| Coal | 952
| 11.8 | 4.3
| Marginal, real-time emissions savings, or longer term view if based on premature closure of coal-fired plant
|
| Gas | 446 |
0.5 | —
| Longer term view, based on avoided new gas capacity
|
| Average | 514
| 1.2 | 2.4
| General, non-specific scenario |
| Sources: | |
| | |
CO2 data from page 26, Energy Trends March 2004, special feature on Carbon dioxide emissions and energy consumption in the UK.
NOx and SOx averages derived from Chapter 12 Complete Energy Sector Indicators "Energy and the environment[10]".
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There is often confusion about emissions savings from biomass,
as CO2 is produced when biomass is burned and therefore
people find it difficult to distinguish it from fossil fuel combustion.
However, electricity generated from biomass is carbon-neutral,
and so the savings described above apply. This is because the
carbon that is emitted when biomass is combusted is absorbed by
other forms of biomass at the same rate. For example with a biomass
power station that uses energy crops as fuel, a stock of energy
crops is grown and the rate of absorption of CO2 in
the growing crop, is the same as the rate of CO2 being
emitted by the power station.
Life cycle emissions from renewables
The emissions involved in manufacturing the renewable generating
station and in transporting fuel (if relevant) can be taken into
account. Generally these considerations have relatively little
impact on the overall figures[11].
A recent World Energy Council report[12]
quantified these figures, and they are summarised in the table
below. For the sake of comparison, the WEC figures for coal, nuclear
and gas are also given.
|
| Estimate of life cycle CO2 emissions
| Lifecycle gCO2/kWh
|
|
| Nuclear | 3-40
|
| Hydro | 4-120
|
| Onshore wind | 6.9-14.5
|
| Offshore wind | 22
|
| PV | 12.5-104
|
| Gas | 398-499
|
| Coal | 800 to 1,372
|
|
The Biomass section of the DTI innovation review also contains
some estimates of carbon dioxide emissions from fuel production[13].
|
| Fuel | gCO2/kWh
|
|
| Straw | 23-38
|
| Miscanthus | 18-30
|
| Willow | 38-48
|
| CCGT | 387
|
|
Emissions savings from renewable heat production
Solar thermal used for domestic water heating usually displaces
either electricity or gas, and on this basis, quantifying emissions
is very straightforward. Natural gas, when used for heat production
emits 224g CO2/KWhth. If a house with a solar thermal
panel otherwise heats water by electric immersion heater, then
greater savings are achieved. It would be most appropriate to
use the average plant mix, in this context, thus savings are 514g
CO2/kWhth.
Similar savings are achieved from heat production from biomass,
again depending the form of heating that is being displaced. The
table below can be used, to show savings.
|
| Heating source displaced by biomass |
Emission saving, g/kWhth or Kg/MWth
|
|
| Natural Gas | 224.4
|
| Kerosene | 287
|
| Diesel Oil | 296
|
| LPG | 252 |
| Coal | 432
|
| Indicative off-grid mix | 321
|
|
Emissions savings from the use of renewable transport fuels
Although more efficient use of renewables may be achieved
through direct use as electricity rather than road fuels applications,
it is a complex issue, and readers are referred to the Concawe
report[14].
Boosting renewable electricity production
Government support for renewable electricity production comprises
three tiers:
— The Renewables Obligation for "mature"
technologies, supported by:
— capital grants for "near-term" technologies;
and
— RD&D funding for early-stage and emergent
technologies.
The Renewables Obligation (RO) is a "market-based"
mechanism. It doesn't select technologies—the cheapest is
expected to come to the fore. This should keep the overall costs
down. The RO is a unique policy measure, and is being watched
with interest by other European member states. It is also seen
by other sectors of the sustainable energy industry as "the
only show in town" and many would like to see such a measure
adopted for their sector. We feel that the lessons that are being
learned from the RO are therefore important and of a wide interest.
We have been very actively involved in working with DTI on
various amendments that have been made to the RO, and the Government
has recently finished taking evidence from a consultation on Terms
of Reference for a statutory review of the RO to be conducted
next year. The submissions made by the RPA to various consultations
on the RO are available on our website[15],
and we do not propose to go into detail here. We summarise the
key themes below.
KEY RECOMMENDATIONS
FOR RO
Investor confidence is paramount.
Avoid political tinkering, particularly in questions over
eligibility for ROCs. Government must not adversely affect the
balance between supply and demand of ROCs. If it increases what
is eligible under the RO, it must increase the Quota to match.
Keep the quotas rising. The RPA lobbied hard about the damaging
impact on investment of the quotas reaching a plateau at 10.4%
y 2010, and Government's swift action to increase in the quotas
to 15.4% by 2015 was very welcome. The RPA believes the quotas
will always need to be rising, ideally at least 15 years into
the future in order that investors can have confidence that ROCs
will hold their value.
Improvements to the ROC market are required. Improvements
to the efficacy of the ROC market boost investor confidence as
well as improving the prospects for meeting renewables targets.
The RPA has made a number of suggestions in this area.
The RO quota and the renewable electricity target are not
the same thing.
The quota acts as a ceiling on the level of renewables deployment;
therefore it is essential that the quota is set higher than the
target to be achieved.
Barriers to deployment still need to be addressed
Gaining planning consent remains a major hurdle to achieving
renewables targets.
SUPPORT FOR
TRANSITIONAL TECHNOLOGIES
The DTI accepts that the market-based RO does not respond
to the different levels of maturity of different renewables technologies.
Additional interim measures are needed to assist those less mature
resources to make the transition into the RO.
The existing programme of capital grants, which is intended
to support this group of renewable resources, is only partly effective.
For example of the £63 million announced in April for
the support of 11 bio-energy electricity generation projects 2003
to totalling 160MW, one is under construction, three are looking
hopeful and the remainder look either unlikely to proceed or need
additional assistance.
In general the RPA believes that revenue based support measures
are generally more effective than capital grants. Lack of success
with respect to grant programmes can be attributed to:
— The somewhat arbitrary nature of the selection
process, requiring Government to "pick winners".
— The fact that grants do not reward successful
project completion.
— The financial community's perception of capital
grants as a form of quasi-equity, rather than revenue support,
which can also leverage project finance.
— The fact that for some technologies the primary
requirement is for ongoing support for the duration of the project,
rather than for the initial capital cost. This applies particularly
for biomass, where assistance is required for the cost of the
fuel.
The RPA believes that an improved system to support transitional
technologies could be implemented. The main element would be a
long term Power Purchase Agreement with a secure counter-party.
This would offer the triple benefits of rewarding output, enhancing
"bankability" to bring in additional funding, and preparing
the generators for the output-based income stream they will experience
under the RO. The RPA proposal for supporting transitional technologies
can be found on our website[16].
SUPPORT FOR
EARLY STAGE
TECHNOLOGIES
The RPA supports the Government's approach of providing support
for research, development and demonstration of emerging technologies
and believe, for example, that the recent R&D spending on
wave and tidal technology has been effective.
RENEWABLE HEAT
Energy for heat makes up approximately a third of the UK's
demand for energy. The Government recognises the contribution
of renewable heating systems to the UK's climate change programme,
but has not introduced a dedicated policy to support this low
cost and proven carbon abatement option.
The RPA believes there is a case for extending the concept
of the renewable obligation to create a separate obligation for
renewable heat, creating a similar incentive for the heat industry
to that operating within the electricity industry. This idea was
similarly conveyed in the Royal Commission on Environmental Pollution's
report on biomass as a renewable energy source[17],
and strongly recommended in a research study produced for Defra[18].
The RPA has been working with other organisations on a proposal
for such an obligation. This can be found on the RPA website[19].
RENEWABLE TRANSPORT
Renewables can also make a contribution towards reducing
emissions from the transport sector. Biodiesel and bioethanol
can be used in blends of up to 5% in any vehicle without the need
for engine or other vehicle modification.
In its report of July 2004 to the European Commission on
the Biofuels Directive the government stated that it is "seriously
considering the possibility of introducing a renewable transport
fuel obligation (RTFO) for the road fuel sector, drawing on the
experience of the Renewables Obligation that applies to licensed
electricity suppliers".
Work remains to determine exactly how such an obligation
might work and whether it is the most effective mechanism, and
Defra has undertaken a consultation. In light of its knowledge
of the Renewables Obligation, and the Association's strong views
on the measures required to increase its efficacy, the RPA is
looking forward to contributing to the debate as it evolves.
13 October 2004
8
See Philip Wolfe, keynote speech at RPA annual conference,
www.r-p-a.org.uk/content/images/articles/Wolfe%20Speech.pdf Back
9
See Demand Profiles (Figs 5.3a-d) which give indication
how generation was actually used to meet demand (in typical days).
Page 151 of Seven Year Statement. www.nationalgrid.com/uk/library/documents/sys_04/pdfdownloads/wholesys.pdf Back
10
www.dti.gov.uk/energy/inform/energy_indicators/ind12_2004.pdf Back
11
For example, see slide 18, E4TECH Biomass for Heat and Power
in the UK,www.dti.gov.uk/energy/renewables/policy/e4techbiomass.pdf Back
12
"Comparison of Energy Systems using Life Cycle Assessment"
World Energy Council, London, 2004, as reported by www.geni.org/globalenergy/library/media-coverage/RefocusWeekly/lifecycle-assessment-shows-favourable-impact-of-renewables/index.shtml Back
13
As above. Back
14
Well-To-Wheels Analysis Of Future Automotive Fuels And Powertrains
In The European Context. January 2004. Available from http://ies.jrc.cec.eu.int/Download/eh. Back
15
RPA responds to DTI consultation on Terms of Reference for the
Renewables Obligation Review www.r-p-a.org.uk/article_default_view.fcm?articleid=1032
RPA response to Renewables Obligation Amendment Order.
www.r-p-a.org.uk/article_default_view.fcm?articleid=732.
Response to pre-consultation enquiry from DTI Back
16
RPA's proposed support mechanism to enable emerging renewable
energy sources to enter the Renewables Obligation. www.r-p-a.org.uk/article_default_view.fcm?section=1&articleid=860 Back
17
Biomass as a Renewable Energy Source, RCEP, May 2004.
http://www.rcep.org.uk/biomass/Biomass%20Report.pdf Back
18
Possible support mechanisms for biomass-generated heat. Ilex
Energy Consulting, Dec 2003.
http://www.defra.gov.uk/farm/acu/research/reports/biomass-heat.pdf Back
19
Proposal for a Renewable Heat Obligation. http://www.r-p-a.org.uk/article_default_view.fcm?section=1&articleid=946 Back
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