4 Overcoming the challenges to delivering
the 2010 target
18. The Department designed the Renewables Obligation
to facilitate the rapid expansion of renewable generation required
by the 2010 target. It decided that the Obligation should provide
a single level of public support to all technologies, independent
of their costs or maturity. The scheme therefore encourages generators
to develop the most economic sites first. These sites tend to
utilise the mature renewable technologies where risks are better
understood and costs have already been reduced.[33]
19. By 2010, the mature renewable technologies are
unlikely to account for more than 5% of electricity supplied in
Great Britain and thus, on their own, will not deliver the 10%
target. The Department has therefore introduced capital grants
programmes to help industry develop offshore wind and biomass
sites as these are generally not commercially viable under the
single level of support provided by the Renewables Obligation.
The grants are intended to help developers gain experience and
confidence of these technologies, and thus help them reduce generation
costs for future projects. The first rounds of grants, for which
£170 million has been made available by the Department and
the National Lottery fund, have so far had mixed success. These
grants have helped the completion of two fully operational offshore
wind sites, with 10 others at varying stages of development, but
they have produced no significant increase in energy production
from biomass.[34]
20. Since the 1990s the development of some renewables
sites, in particular, onshore wind sites, has been delayed or
halted due to difficulties in getting planning permission. The
success rate of applications for onshore wind sites has varied
substantially between English regions (Figure 4). The Department
has, therefore, worked with the Office of the Deputy Prime Minister
to reduce the barriers faced by renewable generators in getting
planning permission and, in 2004, a new planning statement was
issued. The statement seeks to get a more consistent approach
to planning and thus increase the proportion of applications for
renewable sites which are approved by requiring local planning
authorities to take account of national interests and regional
targets for increasing renewable generation, as well as local
environmental, economic and social impacts. Consequently some
applications which would previously have been refused are now
likely to be passed.[35]
The statement increases the chances of hitting the 2010 target,
but only by reducing local communities' influence on the planning
process. Figure
4: Rate of planning approval for onshore wind farms in each of
the English Regions from 1999 to 2003
Note: West Midlands has been excluded as no applications
were made in the period
Source: British Wind Energy Association
21. The Department has worked with Ofgem to provide
incentives for the owners of the electricity grid to upgrade it
so that it can transmit and distribute renewable electricity from
where it is produced, often at remote sites, to where it is consumed.
The total cost of projects to upgrade the grid, which typically
require planning approval, is uncertain. The Department estimated
in 2003 that the costs of improving the transmission network,
so that the 2010 target could be achieved, could be between £1.1
billion to £1.3 billion, with a further £400 million
to £600 million needed for the distribution network.[36]
These costs will be passed on to consumers through higher prices
and are in addition to the costs of the Renewables Obligation.[37]
33 Q 83 Back
34
C&AG's Report, paras 2.29-2.31; Q 99 Back
35
Qq 39-40 Back
36
Renewables Innovation Review, Department for Trade and
Industry, February 2004 Back
37
C&AG's Report, para 3.2 Back
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