Memorandum 20
Submission from Association of Electricity
Producers
1. The Association of Electricity Producers
represents electricity generators in the UK. Its membership comprises
a wide range of companies using fossil, nuclear and renewable
sources of energy to generate electricity. Members have interests
and experience in a range of innovative renewable energy technologies
including offshore wind, wave, bioenergy and advanced conversion
technologies. We are not able to provide evidence relating to
photovoltaics, ground source heat pumps, hydrogen and fuel cell
technologies, intelligent grid management or energy storage as
our members do not have significant interests in these technologies.
2. We welcome the opportunity to submit
evidence into this inquiry.
THE CURRENT
STATE OF
RESEARCH AND
DEVELOPMENT IN
AND DEPLOYMENT
OF RENEWABLE
ENERGY GENERATION
TECHNOLOGIES
3. A significant proportion of research
and development is undertaken informally by companies during the
testing and installation of devices and during the day to day
operation of the plant. It is not necessarily carried out in dedicated
research facilities. Calculating the amount of money spent on
such research is very difficult.
OFFSHORE WIND
4. Research undertaken by the offshore wind
sector has included work to increase the capacity and performance
of wind turbines and enabling turbines to be located in deeper
waters. There has also been research undertaken to overcome some
of the operational difficulties facing the offshore wind industry,
notably health and safety and maintenance access issues. Conditions
offshore can prevent even minor repairs from being undertaken
during winter months. The loss of revenue caused by a turbine
being out of operation creates a strong commercial incentive to
overcome such problems.
5. Recent experience with the development
of offshore wind has found that the cost of development is higher
than was originally estimated. Similarly the scope for economies
of scale has not proved as great as had been estimated. It had
been estimated that the cost of offshore wind might fall to as
low as £25/MWh.i Such significant cost reductions are now
looking unrealistic in the short and medium term. A recent report
for the DTIii found that the cost of offshore wind could fall
to between £76-94/MWh by 2020.
MARINE POWER
6. In the field of wave energy there is
a significant amount of research being undertaken on a number
of different wave energy devices. At present there is only one
device, Pelamis, developed by Ocean Power Delivery, which can
be deployed on a commercial scale. Two projects are planned using
this technology; Scottish Power's 3MW project off Leith and EON
and Ocean Prospect's 5.25MW project off the north Cornwall coast.
Both projects will be connected to the grid at sub-sea connections
dedicated to marine energy devices. The two sub sea connections
are the European Marine Test Centre in Orkney Orkney Test Centre
and the Wave Hub off the north Cornwall coast. The use of these
sub sea hubs demonstrates the importance of dedicated infrastructure
to support the development and testing of new marine renewable
energy generating technologies.
7. In addition to Pelamis there are approximately
seven other technologies being developed to exploit marine renewable
energy. It is unlikely that all of these technologies will reach
full commercialization. However, it is important that innovative
designs and technologies have sufficient opportunity to be tested.
Without such opportunity the few technologies which prove successful
would not be developed.
BIOENERGY
8. Significant research and testing of bioenergy,
in particular the use of different biomasses for the generation
of electricity is being undertaken within the industry. In many
cases testing is undertaken informally, for example by trialing
new biomass fuels and overcoming difficulties with their use and
handling etc. Such informal research is vital to the increased
use of such fuels. However, due to its ad hoc nature it
can be overlooked in assessments of more formal research and development.
THE FEASIBILITY,
COST, TIMESCALES
AND PROGRESS
IN COMMERCIALIZING
RENEWABLE TECHNOLOGIES
AS WELL
AS THEIR
RELIABILITY AND
ASSOCIATED CARBON
FOOTPRINTS
9. The cost of carbon emissions is likely
to have an increasingly significant impact on the price of electricity
in years to come. Increased electricity prices, as would result
from increased value of carbon emissions, would help the economic
feasibility of offshore wind and other emerging technologies.
In the long term this could reduce the amount of support these
technologies need from mechanisms such as the Renewables Obligation.
However, for offshore wind to be commercially viable without any
additional support the price of carbon would have to increase
electricity prices considerably.
CARBON FOOTPRINTS
10. There have been a number of studies
of the carbon footprints or carbon balance of renewable energy
technologies. The most recent and perhaps most relevant is that
by Themba Technology,iii commissioned by the Department for Trade
and Industry as part of its proposals on reforming the Renewables
Obligation. The study found that for almost all uses of biomass
for electricity generation there was a net positive carbon balance
(ie that the emissions associated with the production, transportation
and use of the biomass were lower than the associated carbon savings
from the generation of electricity). The carbon balance remained
positive for imported as well as indigenous sources of biomass.
The net carbon balance was most largely positive for waste biomasses
as the report included in its calculation the carbon (in the form
of methane) that would have been released into the atmosphere
had the material been sent to landfill. Whilst this would not
necessary be the case for all waste biomasses, it demonstrates
the wide range of factors which need to be considered when calculating
a carbon balance for any biomass.
11. For non-fuel based technologies such
as offshore wind, wave and tidal technologies the carbon balance
of the technologies is far clearer and simpler to calculate. The
production of zero carbon rated electricity from non-fuel based
renewable energy technologies would more than compensate for the
emissions associated with the production and installation of the
turbine equipment. For onshore wind it has been calculated that
the energy used in the manufacturing of the equipment would have
been produced by the turbine within three to ten months of operation.
This means that during its lifetimeiv each wind turbine would
produce between 30 and 100 times the energy used in its construction
and manufacture.
THE UK GOVERNMENT'S
ROLE IN
FUNDING RESEARCH
AND DEVELOPMENT
FOR RENEWABLE
ENERGY GENERATION
TECHNOLOGIES AND
PROVIDING INCENTIVES
FOR TECHNOLOGY
TRANSFER AND
INDUSTRIAL RESEARCH
AND DEVELOPMENT
12. There is a clear role for the UK Government
in the funding of blue sky research and development for renewable
energy technologies. Without Government support the market is
unlikely to invest optimally in such early stage research and
development. To date Government funding for research and development
of technologies has provided the industry with a solid basis of
support. Many renewable energy technologies which are currently
at the research and development phase could offer significant
potential to the market. They could also make a valuable contribution
towards the Government's targets for renewable energy and carbon
emissions reductions.
13. There has been a move in recent years
to attempt to fund renewable energy generation technologies through
market based mechanisms at earlier stages of their development.
Two examples of this are the development of the Marine Supply
Obligation in Scotland and the UK Government's proposal to band
the Renewables Obligation to give increase support to emerging
technologies. The proposal to band the RO will provide enhanced
levels of support for emerging technologies. This will help progress
towards commercial viability post demonstration technologies where
the basic technology is proven. However, there will continue to
be a need for direct Government support for technologies at the
pre-demonstration stage. If the Government attempted to support
technologies at earlier stages of development in this way it could
have a highly damaging effect on the development of new technologies.
OTHER POSSIBLE
TECHNOLOGIES FOR
RENEWABLE ENERGY
GENERATION
14. The Association is not aware of any
specific new technologies which are likely to come forward as
it deals primarily with those technologies which are past the
research and development stage. New renewable energy technologies
will, however, undoubtedly come forward in future.
15. The Association would be pleased to
discuss further any of the comments made in this evidence.
REFERENCES
(i) PIU Report, 2002.
(ii) Impact of banding the Renewables
Obligation—Costs of electricity production, April 2007,
Ernst and Young.
(iii) Themba Technology, September 2006.
(iv) Lifetime of a turbine assumed to be
25 years.
July 2007
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