Memorandum submitted by the Scottish Renewables
Forum
Please find enclosed our views relating to your
forthcoming inquiry into "Keeping the Lights on: Nuclear,
Renewables, and Climate Change".
Scottish Renewables is Scotland's leading renewables
trade body, representing over 150 organisations and individuals
involved in the development of renewable energy projects in Scotland.
Our membership ranges from community groups and sole traders,
up to major Scottish utilities and international plcs. Between
them they are active in the development of biomass, hydro, solar,
wave, wind and tidal energy projects. Further information about
our work and our membership can be found on our website.
The Environmental Audit Committee's inquiry
comes at a crucial time in reviewing the UK's capacity for electricity
generation, transmission and the impact on reducing carbon dioxide
emissions. Our submission provides evidence and opinion in support
of the role of renewables within this debate and aims to highlight
the implications of government policy at both UK and Scottish
levels. This submission is complementary to the evidence submitted
to the Scottish Affairs Committee inquiry into Meeting Scotland's
Future Energy Needs (HC 259-I, 23 March 2005).
The key points which Scottish Renewables will
make are:
1. Renewable energy is delivering and proving
its worth to UK energy supplies. The UK's plans to encourage further
development of renewable schemes has led to a rapid upscaling
of project development. This trend is particularly strong in Scotland
where significant resource is located. However, if this initial
work is to be realised and result in achievement of renewable
targets, then government and parliament must ensure continued
confidence in the ability of government to support delivery, by
not altering the fundamentals of the market.
2. The key issue facing UK is how to consider
the replacement of current conventional generation that will complement
the planned renewable target (20% of the UK market, and 40% of
the Scottish market by 2020); ie the issue is how to achieve the
non-renewable mix. The debate is not, therefore, about renewables
vs. conventional as both will be needed.
3. If renewable energy in the UK is to be
successful there must be co-ordination across Government departments
and with government agencies. Too often our industry must deal
with conflicting policies and regulations.
4. The costs of generating electricity in
Scotland is being disadvantaged under the creation of the UK electricity
market due to high transmissions costs, thus unfairly increasing
the costs of renewable-sourced electricity within the UK.
5. In considering a future appropriate energy
mix, the issue of non-electrical sources is often forgotten. Renewables
also has a role in helping to meet the UK's future heating and
transport energy needs.
6. Renewable energy, of all generating technologies,
contributes the least to carbon dioxide emissions and will assist
the UK in meeting its targets in emissions reduction with minimum
concern over waste disposal.
7. Renewable energy sources provide a strategic
fit with the UK Govt's aims on security of supply.
8. Increased investment in renewables development
can assist the UK's exporting potential for both electricity supply
and the manufacture of renewables technology, eg the Pelamis project
in leading the marine energy sector. In this regard, prioritisation
of renewable development will maximise future economic export
opportunities.
The following information provides detail on
each of these key points.
RENEWABLE ENERGY
WORKING ALONGSIDE
CONVENTIONAL GENERATION
The UK Government has set a target that 10%
of its electricity comes from renewable sources by 2010. Beyond
this is a 15% target for 2015 and an aspiration that the 2010
target is doubled by 2020.
Within Scotland we have higher targets. For
2010 there is an 18% target and a 40% target for 2020. These targets
reflect Scotland's substantial renewable resource and aspirations
for associated economic development, and also recognise that Scotland
will make a sizeable contribution to UK targets.
Currently approximately 14% of Scotland's electricity
comes from renewable sources. The bulk of this is hydro, but wind
and landfill gas also make contributions. There are also sufficient
wind energy projects now under construction or with a resolution
to consent from determining authorities to ensure that Scotland
meets its 18% target. Achievement of this Scottish target will
be important to ensure that Scotland can make a strong contribution
to the GB's electricity target.
Looking at Scotland's 2020 target it should
be noted that all renewable technologies will need to play their
part here. We would envisage that this target will be met as follows:
— ¼ emerging technologies (ie
10%) = biomass, tidal and wave energy
These targets are not to be interpreted as ceilings
on each energy source. It is worth noting that there is currently
a substantial amount of wind energy in the Scottish planning system
now. We would not expect all of these projects to come to fruition
either because of planning or grid constraints. There have been
calls on the Scottish Executive to develop a National Strategic
Plan for wind or even to impose a moratorium on project proposals.
We would caution against this.
The Scottish Executive's Forum for Renewable
Energy Development in Scotland (FREDS) has recently provided guidance
for communities, planners and developers in Scotland[365].
However, the Scottish Executive still needs to provide better
guidance on "cumulative impact"[366]
to assist planning authorities with multiple applications for
development in a particular locality. Hopefully, the Environmental
Advisory Forum on Renewable Energy set up the Deputy Scottish
Minister for Enterprise, will meet this need.
To ensure that other renewable technologies
can play their part in meeting future energy needs the UK Government—in
partnership with the devolved administrations—needs to ensure
the following:
(a) Marine energy is given a positive financial
and planning framework to develop in. This will provide incentive
to technology and project developers to move forwards in developing
first generation projects.
(b) Appropriate support mechanisms for biomass
energy are developed, including development of a heating target
(see later). It should be noted here that previous UK Government
support on biomass has not been usable in Scotland because it
has focused on energy crop support instead of support for forestry
diversification. This discrepancy has now been resolved.
(c) Encouragement of micro-generation—including
ensuring support in planning and building regulations and providing
incentives to electricity supply companies to facilitate cost
effective connection and allow the sale of electricity from household
or small business sources. The current system frustrates connection
of micro-generation through being costly and bureaucratic. We
are hopeful that the Department of Trade and Industry's recent
consultation on microgeneration will assist in resolving some
of these matters.
It is also worth noting that there is much discussion
about the need for grid upgrades and new infrastructure as a result
of new renewable energy proposals. New generation of any kind
does need new infrastructure. However, much of the upgrade plans
for new infrastructure is to modernise old infrastructure up to
50 years old and the costs shared with those wishing to utilise
it for generation. Infrastructure upgrades are essential for both
security of supply to growing cities (such as Inverness) and to
enable new generating sources to supply the National Grid.
Another issue also needing to be considered
is the issue of intermittency and the effect that a high penetration
of renewables will have on the whole electricity system. Wind
and wave energy generate variable levels of power dependent on
weather conditions. Tidal energy is a predictable but not constant
source and varies across the day and seasonally.
However, at the levels of penetration of these
technologies expected by industry experts express confidence that
"intermittency" can easily be managed. Indeed, such
a problem is an insignificant one when compared to the daily challenge
of managing the constant rise and fall of electricity demand.
The GB System Operator National Grid Transco has stated that:
based on recent analysis of the incidence and
variation of wind speed we have found that the expected intermittency
of wind does not pose such a major problem for stability and we
are confident that this can be adequately managed . . . [367]
Furthermore, the Carbon Trust in its "Renewable
Network Impacts Study" of 2004 stated that:
At the current target levels, intermittency is
not a significant issue affecting the development of renewable
generation[368].
REPLACING AGEING
CONVENTIONAL GENERATION
A key question facing the UK Government is how
it plans to replace existing conventional generation with new
generation. With renewables set a target of increasing its contribution
from 10% to 20% some of this will be replaced. However, there
will still need to be some new conventional plant.
There has been much play in the media about
the choice between renewables and nuclear and how they can help
to meet UK climate change obligations. However, it is the Scottish
Renewables' view that there is no policy choice here, and choosing
renewables does not necessarily mean rejecting nuclear. We would
reject this argument because renewable energy is worthwhile on
its own terms as a viable energy source. Similarly the case against
nuclear does not stand or fall because of the strength or weakness
of the renewables argument.
The wider challenge for the UK is therefore
how to replace existing conventional generation. Put simply there
needs to be a debate on what a future 80% of conventional generation
will look like and what further contributions renewables can make.
Scottish Renewables would therefore urge the
Inquiry to help move the debate forward: it should not be about
the 20% vs 80% but how best to provide for a future 80% of UK's
electricity needs. New build and replacement will be needed here.
As with renewables, we see that conventional generation works
best when there is a mix, because this means that the strengths
and weaknesses of each technology can be balanced.
As for the interplay between conventional and
renewable and generation and demand we would note the importance
of a mixture to ensure that stability of supply is maintained.
Key here is having future thermal plant that can be turned up
or down to reflect (a) changes in demand, and (b) changes in contribution
from more intermittent sources. Clean coal and gas are best placed
to provide such thermal plant, but both pump storage of hydro
and biomass can also play a role.
Nuclear energy provides baseload power but cannot
be turned up or down easily. However, this fact can be balanced
by the continued use of pump storage and demand side management
tools such as use of white-goods metering.
CO -ORDINATING
POLICY AND
REGULATION
It is noteworthy that a continued frustration
of ours is how regulation of the electricity market can often
work against achievement of policy objectives in electricity.
While there are different roles for policy and regulation, there
would seem to be scope for a degree of rationalisation.
Our key concern is the implementation of the
British Electricity Trading & Transmission Arrangements that
has seen the Scottish electricity market and the English-Welsh
market merge. While this provides a larger market for generation,
the current system will retain a number of regulatory differences.
For example, transmission is classified differently in Scotland,
so more renewable generators will be exposed to transmission charges
than in England and Wales. Also the level of charges in Scotland
is substantially higher.
We estimate that of the total £290 million
charging bill payable by generators, £140 million will be
met by Scottish generation, despite making up only 13% of total
GB generation. This means that the average Scottish charge is
six times higher than the average English-Welsh charge. Such a
result penalises all forms of generation and ignores the fact
that the development opportunity is often greater (primarily due
to better resources or more site locations).
CONSIDERING ENERGY—NOT
JUST ELECTRICITY
Electricity use makes up approximately 20% of
our total energy use. Heating makes up approximately 40% and transport
fuel approximately 40%. Given concerns about future costs of gas
as we become more dependent on imports, alongside concerns about
oil price rises, it would therefore make sense to consider likely
impacts of these changes on the cost of future heating and transport
needs, and whether there will be an economic impact to the UK
because of this.
Renewable energy can provide energy for heating
and transport. For example biomass and solar energy can help provide
heating energy (biomass works best in combined heat and power
applications where heat and electricity are generated). Biofuels
and wastes can be used to make bio-ethanol and bio-diesel to mix
with or replace petrol or diesel. Longer term renewable electricity
projects could be used to aid hydrogen production for use in fuel
cells.
Thus while most of the policy debate is focussed
on electricity needs, we are fast approaching the time when long-term
changes will be required in how we meet heating needs. Consideration
of meeting energy for future transport needs is not too far behind
this. We would therefore urge your Inquiry to consider in more
detail how these issues should be be considered and resolved by
the UK Government.
I hope that the above information is of assistance
to you in your inquiry. If you would like further information,
or would wish us to present our views to the Inquiry itself, we
would welcome the chance to assist you further.
21 September 2005
364 While hydro currently provides approx 11% of Scottish
electricity needs, we would expect this contribution to fall as
rising electricity demand will not be offset by new generation.
Thus while the level of hydro generation will increase over time,
its percentage contribution may fall. We have estimated this at
10% for simplicity. Back
365
FREDS Future Generation Sub Group (June 2005) Scotland's Renewable
Energy Potential: Realising the 2020 Target. Back
366
Cumulative impact primarily affects wind energy proposals but
can be applied to a mix of technologies or development types in
a particular locality. Back
367
National Grid UK, 2004. Seven Year Statement. www.nationalgrid.com/uk/ Back
368
Carbon Trust, 2004, The Carbon Trust and DTI Renewables Network
Study. Back
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