Select Committee on Innovation, Universities, Science and Skills Written Evidence

Memorandum 43

Submission from the British Wind Energy Association


  While progress is being made in the deployment of wind power in the UK, key barriers to progress in the planning system and access to the grid remain. Solutions to these issues are available, but they are not being implemented swiftly. The recent reform proposals for the Renewables Obligation should ensure stability in the market, but further reform will be necessary if 2020 targets are to be met. Wave and tidal stream technologies require concerted and coherent support if the industrial potential they represent is to be secured for UK business: at present, the path beyond the Marine Renewables Deployment Fund is not clear.

  1.  The British Wind Energy Association (BWEA) is the leading UK trade association in the field of renewable energy, with over 320 corporate members representing 98.9% of the wind energy business in this country. Wind energy is the fastest-growing renewable technology in this country, and will make an increasingly significant contribution to UK electricity supplies over the next decade and beyond. BWEA also represents the interests of the emerging wave and tidal stream energy sector, building on its experience in the development of offshore wind.

  2.  Currently there are 148 wind farms operating in the UK, five of which are offshore. These have a total capacity of 2,176MW, made up of 1,872MW of onshore and 304MW of offshore wind. In addition, 841MW of onshore wind capacity and 474MW of offshore capacity are currently under construction, while a further 1,604MW of onshore and 2,260MW of offshore projects have consent and await construction.[146]

  3.  Despite the good progress in building wind generation capacity—in February this year the UK became only the eighth country in the world to break the 2,000MW barrier—there is considerably more potential in the UK and BWEA members are keen to exploit this. Onshore, developers have submitted a further 8,330MW of projects to planning authorities, which if all built would generate approximately 6% of UK power demand. If only one quarter of this capacity was consented by the end of 2007, then it is still possible for the current target of 10% of the UK's power to be gained from renewable sources by 2010 to be achieved.

  4.  However, the planning system is a major barrier to achieving build-out of onshore wind in the UK. There are projects that have been held up in the system for up to four to five years, and in general the planning arrangements in the UK do not deliver timely decisions for wind projects: only 5% of all onshore wind applications are decided within the supposed statutory limit of 16 weeks, while for other large projects of all kinds (those requiring Environmental Impact Assessments), verdicts are reached on 70% within their limit of 13 weeks, according to an analysis of all such decisions in 2006.[147]

  5.  While BWEA welcomes the attempt by Government to improve this situation through its proposals in the Planning White Paper, these will have only a limited impact on the consenting of onshore wind. The new Infrastructure Planning Commission (IPC) will only decide on projects of greater than 50MW (the current Section 36 limit) in England and Wales. The number of such projects that will be coming through the system after the IPC comes into existence will be very limited, since such sites are rare in England and Wales, and most of these will have been developed before the IFC comes into operation.

  6.  For projects under 50MW that are currently within the system in England, Planning Policy Statement 22 (PPS22) is supposed to guide local authorities in making their decisions. However, BWEA members are finding that their projects are rejected for reasons which are in contravention of this guidance. Central Government, while it should be lauded for putting in place strong policy, has failed to ensure that it is followed on the ground.

  7.  As outlined in paragraph 3 above, the 2010 target is still achievable. However, because of the time taken from consent to operation, the horizon for consenting wind farms which can contribute to the target is fast approaching. Given current trends in procuring wind turbines, gaining a grid connection and discharging planning conditions, BWEA considers that only projects consented before mid-2008 can contribute to the 2010 target. This places a significant emphasis on timely delivery of positive decisions in the intervening months. BWEA would therefore suggest that DTI intervenes directly by sending the "Renewables Statement of Need",[148] contained in the 2006 Energy Report "The Energy Challenge" and reiterated in the Energy White Paper, to all planning authorities in the UK. A similar intervention occurred in April 2007 when the Head of the Planning Division of the Welsh Assembly Government wrote to Welsh planning authorities explaining what is expected of those bodies in delivering Welsh renewable energy targets.

  8.  It will only be possible to unblock the planning logjam by implementing measures like that outlined in paragraph 7, and to that end a balanced system of incentives to determine applications appropriately within set time limits, together with penalties for not doing so, should be put in place. Planning fees have been increased recently, so local authorities should have the resources they need to secure the expert advice required to accelerate the decision making process. BWEA has also been concerned about the propensity of planning inspectors to make decisions on appealed projects that are also inconsistent with PPS22. However, after recent proactive engagement on the part of BWEA with DCLG and the Planning Inspectorate, we are hopeful that this situation can be remedied.

  9.  It is also highly important that central Government acts to enforce current policy guidance, otherwise in the new situation envisaged under the proposed planning reforms, where local authorities are supposed to be guided by new National Planning Statements, onshore wind projects will still be rejected by local authorities. This will only add to the expense and time needed to determine an application, not only for the developer but also for the local authority, particularly if the former is awarded costs from any appeal procedure.

  10.  In the offshore sector, consents have been awarded for the first Round Two projects, and in general the system is comprehensible and working reasonably well. We have some concerns, however, regarding the interaction between the licencing proposals in the Marine Bill White Paper and those in the Planning White Paper. The latter proposes that the IPC has the final say for offshore generating projects of 100MW or more, while smaller projects are decided by the proposed Marine Management Organisation. While BWEA is still considering its position on this split responsibility, there is the distinct possibility of confusion, inefficiency and inconsistent decision-making if this new structure goes ahead.

  11.  The other key non-economic constraint to the deployment of wind power is access to electrical networks, both transmission and distribution. The main issue for our industry is that access to and management of the transmission network is still approached on the basis that large, dispatchable central generators are assumed to be the norm. Smaller, dispersed generators which generate when their resource is available are difficult to accommodate within this model. Changing the ground rules to expedite connection and allow more variable generation onto systems is taking a long time; BWEA's perception is that this process can be accelerated, but to do so would require a change to Ofgem's remit so that sustainable development (and in particular carbon emission reduction) is promoted to have equal status with the priority of reducing cost to the consumer. This would free up National Grid to be more creative in solving these problems. Ofgem has been more proactive recently in promoting the sustainable development agenda, which BWEA welcomes, but in our view it is still too tightly focused on consumer protection, which interferes with the UK's ability to move swiftly to a low-carbon economy.

  12.  In addition, planning and delivering the enhanced grid infrastructure required to transmit power from where the wind blows strongest (and waves and tides are best exploited) will be challenging. This is where the planning reforms that Government is proposing are likely to have the most beneficial effect in ensuring the growth of renewable generation.

  13.  The third key issue affecting deployment of wind power is the economics, and here there has been welcome progress in bringing stability to the market. The detailed proposals regarding the reform of the Renewables Obligation (RO) contained in the Energy White Paper showed clear evidence of Government taking on board the response of the renewables industry to the preliminary consultation of late 2006. BWEA believes that the current reform package is a suitable platform for growth in the short to medium term, so long as the planning and grid issues are resolved.

  14.  Welcome as this outcome is, it is becoming very clear that there will need to be further change if growth is to be sustained into the long term, and growth is required to meet new commitments. The sudden end of the RO in 2027/28 will begin to deter investment in new renewable generating capacity from about 2012 onwards, starting with the more expensive technologies, particularly offshore wind. This is because the period under the RO that investors will be able to recoup their outlay will get progressively shorter: there will come a point where the income available under the RO will not sustain the investment, and new build will stop. Government's own analysis[149] clearly shows this effect, with new capacity build peaking in about 2012-13 and dropping away to nothing in about 2020. Even with a strong carbon price signal, the abrupt end of the RO will inevitably disrupt investment.

  15.  While a solution to the 2027 issue is required to meet the current "aspiration" to have 20% of UK power from renewables in 2020, further change will be needed if the UK is to meet the likely commitments required under the EU 20% by 2020 renewable target. This target is for all energy use, and given the resources and relative development of technologies in the power, transport and heating/cooling sectors, the renewable electricity contribution to this figure will have to be much more than 20%. European Commission analysis indicates this contribution would have to be 34% for the EU as a whole, compared to the 19% likely to be delivered by 2010. While the UK is far behind in terms of renewables' contribution to current energy supply (now about 2%), this country has considerable renewable resources, and thus might be expected to deliver around the EU average. The Government's current `aspiration' to have 20% of our power from renewables in 2020 will thus be inadequate. The RO, even when reformed in line with the current reform proposals, will not deliver this. Either it will have to be extended further, or an additional system put in place to deliver the extra power. What such a system might look like would be dictated by the resources favoured to provide that power. BWEA believes that offshore wind has a significant role to play here.

  16.  While the exact target that the UK will have to aim for under the EU 20% objective is not yet clear, BWEA believes that 20-25,000MW of offshore wind is both necessary for the prospective share, and possible by 2020. In order to get there, however, some key actions must be taken soon. First and foremost is that urgent steps must be taken to roll out a site award process. Given that delivery of first power from a project follows some seven years after site award, all the capacity that can possibly contribute in 2020 will have to have signed agreements to lease by about 2013. Under certain assumptions about project attrition rates, this means `rounds' of awards every year for the five year period 2009-13 of perhaps 5,000MW each. This is comparable to Round Two, which was for a maximum of 7,200MW. This is clearly challenging, but the industry, Government and Crown Estate are all taking steps to make it happen: BWEA is encouraged by commitments in the Energy White Paper to further site award, though we believe it has to happen faster than the timetable outlined there, both to ensure delivery by 2020 and to avoid a dip in delivery between Round Two and future projects, which will impact supply chain investment.

  17.  The prospects for the other technologies that BWEA champions, wave and tidal stream, are less clear. However, the magnitude of the available resource means that the UK could potentially supply 15-20% of its generation needs from this sector alone.[150] Currently only a handful of devices are approaching first commercial deployment, and these have been slower to come through than had been hoped. This has meant that the project support available under the Marine Renewables Deployment Fund has not yet been called upon. Further, the Emerging Technologies band under the reformed RO gives 2ROC/MWh, which will not provide enough revenue for post-MRDF projects to achieve commercial viability—which Government itself acknowledges. The wave and tidal sectors are consequently in a very uncertain position: it is clear that funding beyond the MRDF will be required within the period covered by the current Comprehensive Spending Review, yet Government will not commit more money while the MRDF remains unspent. This unfortunate position is further complicated by the very confusing proliferation of funding streams for new energy technologies, as discussed below. However, the Government has invested relatively heavily in wave and tidal already, creating an unrivalled infrastructure, both physical and intellectual. Were it to waver now, failing to put in place a clear path from the MRDF to the RO at 2ROC/MWh, that investment would be wasted as other countries overtake us. That is a real possibility, as evidenced by the recent vote in the US Congress to devote $200m of federal funds to wave power research.

  18.  Considering the wider landscape for renewable technology research, development and demonstration, Government will have to act quickly to resolve the current confusion and ensure that the maximum benefit to the UK economy is delivered. What is appropriate varies by technology: onshore wind is a mature technology, and future R&D will be primarily driven by manufacturers, from their own budgets, though some complementary innovation may result from European and national co-funding; for offshore wind there is more scope for Government to support UK companies in developing key technologies and techniques; in the wave and tidal sector, a sustained commitment to pull these emerging technologies into the market will bring significant industrial rewards, with UK firms becoming world leaders. Consequently, Government should be providing a coherent set of funding streams, each tailored to the needs of technologies at different stages of development.

  19.  What we have in this field is an extremely opaque set of mechanisms, with no clarity on how they interrelate, and at this stage no certainty about how much money will be available to fund which technologies. A number of different schemes are being brought forward, the most important of which appear to be the Energy Technologies Institute and the Environmental Transformation Fund. However, these are being developed with very poor engagement with some of the industries they are apparently being set up to support. BWEA fears that priorities that are set without appropriate engagement will not be suitable, opportunities will be missed, and money spent inefficiently. We believe Government must act quickly to clear up the confusion and provide transparency to these processes.

July 2007

146   Up to date statistics on the progress of wind power in the UK can be found on the BWEA website, at Back

147   DCLG statistics: Authorities-id1505050.pdf Back

148 Back

149   Reform of the Renewables Obligation: What is the likely impact of changes? Report by Oxera for DTI, May 2007. URN 07/949. Back

150   Future Marine Energy. Results of the Marine Energy Challenge: Cost competitiveness and growth of wave and tidal stream energy, Carbon Trust, January 2006. CTC601. Back

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