Memorandum 49
Updated submission from the British Wind
Energy Association
EXECUTIVE SUMMARY
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.
Further action is required on the research and skills agendas,
with clarity in the funding of the former needed. A strategy for
developing industrial infrastructure, particularly for offshore
wind, is also vital.
1. The British Wind Energy Association (BWEA)
is the leading UK trade association in the field of renewable
energy, with over 350 corporate members representing the large
majority of the wind energy business in this country. Wind energy
is the fastest-growing renewable technology in the UK, and will
make an increasingly significant contribution to our 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 160 wind farms operating
in the UK, seven of which are offshore. These have a total capacity
of 2,320MW, made up of 1,916MW of onshore and 404MW of offshore
wind. In addition, 909MW of onshore wind capacity and 457MW of
offshore capacity are currently under construction, while a further
1,992MW of onshore and 2,664MW of offshore projects have consent
and await construction.[195]
3. Despite the good progress in building
wind generation capacity—in February 2007 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, there are currently 7,555MW of
projects being considered by planning authorities at all levels,
which if all built would generate approximately 6% of UK power
demand. If only one sixth of this capacity was consented by the
second quarter of 2008, then it is still just 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.[196]
5. While BWEA welcomes the attempt by Government
to improve this situation through its proposals in the Planning
White Paper and consequent Bill, 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 IPC 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
therefore welcomes BERR's action to send the "Renewables
Statement of Need",[197]
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 is 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.
9. 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
licensing proposals in the Marine Bill White Paper and those in
the Planning Bill currently before Parliament. 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 understands that Government
appears determined on this split responsibility, there is the
distinct possibility of confusion, inefficiency and inconsistent
decision-making under this new structure.
10. 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. A key actor in this process is Ofgem. Some
argue that in order to deliver on the sustainability agenda, the
regulator's statutory remit should be changed, a case most cogently
put by the Sustainable Development Commission.[198]
Others argue that Ofgem can take the necessary action within its
current remit and thus legislating for change will divert time
and energy from the urgent work required. Whether the remit needs
to change or not, it is clear that action is necessary to speed
the connection of renewable generators, reform system operation
to better accommodate variable sources, and develop the infrastructure
in a strategic manner. Ofgem has been more proactive recently
in promoting the sustainable development agenda, but the rate
of change is still painfully slow.
11. 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. We do not believe
that the variability of wind generation should have a significant
impact on the contribution that it can make to the electricity
mix in the foreseeable future. The UK Energy Research Centre's
comprehensive report on the subject[199]
makes clear that certainly 20% of our power supply can be accommodated
with some additional investment in balancing plant, and much of
the large expansion of offshore wind that will be required to
achieve our commitments under the EU 20% target will undoubtedly
be sited along high-capacity interconnectors with mainland Europe,
which will increase our capacity to absorb the output. Continually
improving predictions of wind output 24 hours and more ahead of
time will also make the task of managing this output easier.
12. 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.
13. 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[200]
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.
14. 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%—perhaps in the range 30-40%. 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 an
increase of around the EU average. The Government's current "aspiration"
will thus be inadequate. The RO, even when reformed in line with
the current proposals as set out in the Energy Bill, 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.
15. While the exact target that the UK will
have to aim for under the EU 20% objective is not yet clear, BWEA
believes that at least 20,000MW of offshore wind is both necessary
for the prospective share, and possible by 2020.[201]
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. BWEA is thus encouraged that Government
has now published its scoping document for the necessary Strategic
Environmental Assessment, and that it projects first site awards
from this process in 2009, a year ahead of the date set out in
the Energy White Paper. The amount of capacity that will result
from this process—the scoping document posits a maximum
of 25GW—and exactly when it is awarded are key variables
yet to be determined. Given the lead time between site award and
project commissioning, all the sites that could possibly contribute
in 2020 will have to have signed agreements to lease by about
2013. We look forward to working with Government and Crown Estate
to expedite these awards, and to streamline and speed up the consenting
process so that delivery can be brought forward. The latter is
already being worked on ahead of the advent of the IPC. Together,
these activities should ensure a smooth and growing flow of projects
coming to market, thus encouraging supply chain investment.
16. 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.[202]
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.
17. 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.
18. The funding landscape in the UK for
research, development, demonstration and deployment is complex
and confusing (see Figure 1). In an ideal world this would be
rationalised, with fewer bodies and clearer boundaries. We are
also anxiously awaiting the final decisions on the priorities
and funding allocations for the Environmental Transformation Fund,
as this will be the prime funding route for the funds for demonstrating
wave and tidal stream technologies beyond the MRDF. We are, however,
encouraged now that the Energy Technologies Institute (ETI) has
completed its long gestation and is now soliciting expressions
of interest, with an early focus on offshore renewables. We are
also pleased that it is cooperating with the Carbon Trust to maximise
the value of their combined funds being devoted to offshore wind.
Whether the ETI has a role in bringing more coherence to the overall
scene is yet to be seen, but this is a vital function that must
be taken on by someone. This was a key recommendation of the Commission
on Environmental Markets and Economic Performance (CEMEP),[203]
and BWEA fully supports this conclusion.
Figure 1
THE PUBLIC FUNDING LANDSCAPE FOR ENERGY TECHNOLOGIES
IN THE UK
Source: BERR
19. In a world where the imperatives of
tackling climate change and promoting security of supply are driving
rapid expansion of the renewable energy sector, it is becoming
increasingly apparent that establishing a manufacturing base in
the UK will be essential if our ambitious objectives under the
EU's 20% by 2020 target are to be met. Government will need to
work closely with wind industry players and the wider manufacturing
community to publicise the opportunities that the UK offers, above
all in offshore wind power, and to encourage investment. This
is particularly necessary in the area of component supply—gearboxes,
bearings, transformers, etc. If UK companies enter this sector,
then the prospects for turbine manufacture in this country will
be much improved.
20. Development of an active manufacturing
supply chain will be encouraged by the establishment of a coherent
"intellectual infrastructure", made up of centres of
excellence in a number of key technology areas. The wave and tidal
sectors have shown the way here, with a solid research base in
the universities built upon by the creation of the New and Renewable
Energy Centre in Blyth and the European Marine Energy Centre in
Orkney. With the forthcoming Wave Hub off the coast of Cornwall
promising a multi-device array test bed, a coherent and complete
development process is being supported. If an industry is to be
encouraged around offshore wind, then similar structures are needed
for this technology. Some initiatives are in hand, such as the
Orbis Centre in Lowestoft, but there needs to be a clear strategy
to guide activity so that resources are used effectively. Government
must urgently partner with the research community and the wind
industry to establish such a strategy and deliver on it. If done
well, clustering will encourage an `ecology' of entrepreneurial
companies developing new technologies and building prosperity.
21. Centres of excellence in technology
can also help in building up the skills base that is vital for
delivery. Focused training with experts and opportunities in the
wider ecology around such centres will bring in the talented young
people that this sector needs. However, wind, wave and tidal stream
will need people with a wide range of skills, from development
and design, through construction and into operations. The industry
recognises that action is necessary, but we need to forge links
with bodies such as the Energy and Utility Skills Council and
the National Skills Academy in order to develop programmes that
deliver the people that are required. DIUS is well placed to coordinate
and drive such activities, and with Government now pushing a much
more dynamic agenda on renewable energy, the department should
take a proactive role.
22. Alongside the intellectual infrastructure
for delivery, physical infrastructure is essential. A good example
of this is port capacity for both construction and service of
offshore wind farms. Unless a strategy for focused development
of a few specialised ports is pursued, there is a danger that
activity will be too dispersed and larger, better-resourced ports
on mainland Europe become construction hubs for UK projects. A
strategy must be formulated to avoid this, in the first instance
by bringing together the Regional Development Agencies to agree
a way forward and focus efforts. Such activities around ports
and other key infrastructure could be a key element of the work
of BERR's Renewables Advisory Board, now that it is being chaired
by the Secretary of State with a remit to deliver on our 2020
EU commitments.
January 2008
195 Up to date statistics on the progress of wind
power in the UK can be found on the BWEA website, at www.bwea.com/ukwed/index.asp. Back
196
DCLG statistics:
www.communities.gov.uk/pub/50/DistrictCouncilsLondonBoroughsUnitaryAuthoritiesandNationalParkAuthorities_
id1505050.pdf Back
197
www.dti.gov.uk/files/file32017.pdf Back
198
Lost in Transmission: The role of Ofgem in a changing climate,
Sustainable Development Commission, September 2007. (www.sd-commission.org.uk/publications/downloads/SDC_ofgem_report%20(2).pdf) Back
199
The Costs and Impacts of Intermittency: An assessment of the
evidence on the costs and impacts of intermittent generation on
the British electricity network, UK Energy Research Centre, March
2006 (www.ukerc.ac.uk/Downloads/PDF/06/0604Intermittency/0604IntermittencyReport.pdf) Back
200
Reform of the Renewables Obligation: What is the likely impact
of changes? Report by Oxera for DTI, May 2007. URN 07/949. (www.berr.gov.uk/files/file39039.pdf) Back
201
Further analysis of the offshore wind sector's ability to deliver
up to 2020 can be found in BWEA's report UK Offshore Wind:
Moving up a gear (www.bwea.com/pdf/offshore/movingup.pdf). Back
202
Future Marine Energy. Results of the Marine Energy Challenge:
Cost competitiveness and growth of wave and tidal stream energy,
Carbon Trust, January 2006. CTC601. (Available here:
www.carbontrust.co.uk/Publications/publicationdetail.htm?productid=CTC601) Back
203
See Recommendation 12 of Commission on Environmental Markets
and Economic Performance-Report, DEFRA, November 2007. PB12671.
(www.defra.gov.uk/environment/business/commission/pdf/cemep-report.pdf) Back
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