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

Memorandum 51

Submission from the Renewable Energy Association (REA)


  Renewable energy currently accounts for about 2% of UK energy (one of the lowest penetrations in Europe). The EU has now agreed a target of 20% contribution to total energy from renewables by 2020. If this is adopted at the national level, it will require a ten-fold increase in deployment over the next 13 years (it has increased about two-fold in the last 13). It will also, on present trends, make renewables a larger contributor to UK energy than coal or nuclear.

  There are several important implications for a change of this scale:

    —  A substantial growth will be required in renewable heat and transport fuels. Historically almost all of the UK focus has been on renewable electricity generation.

    —  Renewable energy is particularly well suited to decentralised generation, which also provides other benefits in energy efficiency. This has impacts on networks and other infrastructure.

    —  Renewable energy offers many options for on-site energy production. This will lead to new requirements and opportunities for interfaces with the user in many areas including metering and performance displays.

    —  Therefore research and development needs also to consider a wide range of interface technologies, in addition to the generation technologies themselves.

State of UK research and development in renewable technologies

  1.  In general the level of support, which the UK has provided for renewable energy, both for deployment and for technology, has been substantially below that available in the leading nations. If we are interested in establishing a world-leading position, we must be prepared to make available significantly increased funding.

  2.  In the majority of renewable technologies (particularly photovoltaics, biomass boilers, ground and air source heat pumps), technology development and manufacture has mostly taken place outside the UK. A major exception is wave and tidal energy, discussed in detail from paragraph 7 onwards. For many years the UK has had a prominent position in the development of small-scale wind turbines, and substantial support should be made available to this sector as it moves towards volume deployment.

  3.  More support for R&D funding into biomass CHP (including cooling) at scales of 100kWth—2MWth would be particularly helpful, along with approaches to reducing the emissions from modern biomass systems to assist in dispelling some of the misconceptions surrounding the implications of an increase in urban biomass deployment.

  4.  Photovoltaics (PV) is a solid-state semiconductor technology being developed on a global basis. The UK is not a leader on developing and manufacturing traditional PV cells, though there are several centres of expertise in our academic institutions, and some R&D work on emerging solar cell technologies. In addition there is acknowledged UK leadership in the field of producing feedstock for silicon solar cells and the related equipment. The UK has, however, been prominent in developing PV products for building-integrated system, and in a wide range of related architectural issues.

  5.  It is important that we incorporate within the strategic programme those associated technologies required to enable deployment of renewable energy. In addition to intelligent electricity grids, similar consideration should be given to heat networks. Associated technologies such as metering and performance displays should also be reviewed as these can make a substantial contribution to accelerating deployment of renewable energy systems.

  6.  Government should be ready to support any such areas, where the UK has an existing or potential world-class position. We propose there would be value in a strategic assessment of all of the technologies mentioned above to identify areas, where particular potential exists for UK industry. This should lead to a national research, development and deployment programme to raise the capabilities of UK industry in the sector.


  This sector is worth commenting on in more detail for the following reasons:

  7.  Marine energy is an emerging technology with potential for an installed capacity of 1.0-2.5 GW each of wave and tidal energy across Europe by 2020.[205] The UK has around 35% of Europe's wave resource and 50% of its tidal resource, and is the current world leader in device development. We have focused on this sector as it should exemplify best practice when it comes to R&D, and if there are shortcomings in our management of R&D in this sector, they are likely to also occur in other sectors.

  8.  Academic research in the area of marine renewable energy is burgeoning, with many universities, such as Southampton and Lancaster, setting up their own "Centres for Marine Energy". The research programme at Edinburgh University, funded by the Engineering and Physical Science Research Council's Supergen initiative, provides useful data on issues of generic interest to the marine renewables sector.

  9.  However, many of these universities are also developing their own marine generating devices, such as the Manchester "Bobber" and Southampton University's tidal turbine. This creates a tension between academia and commercial developers, since the latter are reluctant to divulge their intellectual property to a university with the expertise to assist with their technical development, but who may also be a potential competitor. There is a need for unbiased test centres and independent expertise—particularly for early-stage devices—to take forward the ideas of commercial developers (which may of course result, in some cases, in demonstrating that the ideas are not viable).

  10.  We would also note that the procedures for independent assessment of R&D proposals have been progressively watered down in recent years. For wave and tidal technology, this is now a mere box-ticking exercise at the preliminary stage, with no face-to-face meeting of assessors. We are concerned that this may lead to poor decisions on funding allocation (either funding of non-viable projects or rejection of good ideas), since much valuable information was exchanged at the past assessment meetings. This means not only that there is less oversight for the spending of Government money, but also that projects may not get as much benefit from awareness of existing technology and work on related areas.

  11.  It is not realistic to expect early stage marine renewables projects to proceed without funding for contingency. R&D money is also split between too many devices. This could be helped if government provided a small fund for inventers of new concepts, prior to the Technology Programme (TP) main stream. This should not involve the stringent requirements of commercial partnership or use the TP financial model, which in any case is not appropriate for small businesses. Devices could be taken through a rapid, cost-effective and independent evaluation procedure, to identify the best ideas and mechanisms for further development. This would reduce the wastage of public and private funds on concepts that are not viable. Furthermore, the inventors would have independently acquired data with which to approach potential commercial partners for a TP-funded programme.


Deployment of power projects

  12.  The current deployment of renewable technologies in the UK is given in the table below. The data on power plant is sourced from Ofgem and is accurate to early December 2007. The total hydro capacity in the UK is 1355 MW, the majority of which was built some decades ago, and is therefore not all accounted for in the table below.[206]

Generating stations accredited under the Renewables Obligation
Installed capacity (kW)
Number of

*Co-firing of biomass with fossil fuel
Biomass and waste using ACT
Waste using an ACT
Micro hydro (including Hydro } 50kW)
Hydro 0 MW DNC
Landfill gas
Off-shore wind
On-shore wind
Sewage gas
TOTAL ROC-accredited
Renewable generating stations accredited under the CCL only
Energy from Waste

  13.  This above data does not do justice to emerging technologies, or very small scale projects, as these may be too small to seek accreditation under the Renewables Obligation. Also, heat-only projects are not covered at all. We therefore expand on these in more detail below.

Deployment of small scale and heat-only installations

  14.  The data on larger heat generating technologies is not available, and small scale projects is only documented through grant programmes. Data for the low Carbon Buildings Programme, is presented below.

Number of installations
as of March 2006
Number installations grant
funded under LCBP since
March 2006

Solar PV
Small hydro
Wind Turbines
Solar Thermal Hot Water
Ground Source Heat Pump
Renewable CHP
Micro CHP
Fuel Cells

Source: Microgeneration Strategy (to March 2006), Answer to written PQ Martin Horwood, April 07.

  15.  In capacity terms, 13.63MWp of PV had been installed by 2006 according to the EU Photovoltaic Barometer of April 07, although we believe the actual figure may be nearer 16MWp.

Deployment of Emerging technologies

  16.  A small number of UK marine energy developers are well-advanced with their R&D. Marine Current Turbines (MCT) of Bristol has conducted a staged development programme consisting of small scale tests off a raft in Loch Linnhe during the early 1990s, progressing to installation of a 350 kW demonstrator in the Bristol Channel in 2003 and culminating in construction of a grid-connected 1.2 MW generator to be deployed in Strangford Lough, Northern Ireland. The company plans to install a "farm" of tidal stream generators, comprising 10s of MW, within five years.

  17.  A second 250 kW tidal stream generator, designed by Open Hydro (Dublin), is currently being tested in the ocean at the European Marine Energy Centre (EMEC) in Orkney.

  18.  Pelamis Wave Power Limited (formerly Ocean Power Delivery) of Edinburgh is a world leader in wave energy generation. Its 750 kW "Pelamis" machine has also been tested at EMEC and three machines are now being constructed for deployment off the coast of Portugal, where they will provide sufficient electricity to power 1,500 households.

  19.  Wavegen's Limpet plant on the island of Islay is the only grid-connected wave generator operating under commercial conditions. The company has now signed an agreement with npower renewables, which may lead to the development of a 3MW wave energy plant in the Isle of Lewis.

  20.  The four companies mentioned above have produced the only devices in the UK to demonstrate energy generation in a real marine environment at a scale greater than a few kWs. The time and cost of associated R&D should not be underestimated and there is a wealth of ideas, particularly from retired engineers—who seem to be drawn to this field, which remain undeveloped through lack of financial support.


  21.  Of the technologies listed in the two tables above, the scope for further deployment varies greatly. Those with the most potential for expansion are biomass, including energy from waste; wind energy (on and offshore); PV and marine renebwales energy, along with all of the heat producing technologies (ie solar thermal, biomass and heat pumps). There is, of course, scope for tidal barrages, and the Government has commissioned a feasibility study on the Severn Barrage, in response to the SDC's report of last year.

  22.  Most landfill gas and sewage gas capacity is already utilised. However there is massive scope for expansion in anaerobic digestion of biodegradable wastes, crops and animal manure, perhaps on the scale of Germany where in excess of 3,000 plants are operating.

  23.  It is traditionally assumed that there is virtually no scope for further expansion of large-scale hydro, due to conservation-based environmental concerns. However the REA believes that with climate change continuing to rise up the agenda, this may not always be the case. This also applies to tidal barrages.

  24.  Wind energy and wave and tidal are clearly anticipated to provide the major growth in power generation technology deployment. Wind energy is well-documented elsewhere, and therefore we focus mostly on the prospects for wave and tidal energy.

  25.  The UK is well placed to take forward marine renewable energy projects, benefiting from existing expertise in the offshore oil and gas industries. At the same time, first movers in the field, such as MCT, have been hindered by competition from the offshore industry for scarce and expensive resources, such as the jack-up rigs needed for installation. Contractors will understandably choose to work for an established industry, where the risks are understood, rather than for a risky, new venture.

  26.  Even with this existing marine expertise, there are new challenges to be overcome for offshore "wet" renewables, particularly the problems of working (for deployment and maintenance operations) in a high wave and/or tidal stream environment. Survivability of generators in this environment is another issue and devices have to be engineered for longevity, which increases their costs.

  27.  The cost of environmental monitoring—a requirement for the licensing process—is overwhelming. The budget for MCT's Seagen project in Strangford Lough was £8 million, of which £2 million was for the environmental impact assessment (EIA) and subsequent monitoring. The industry will not attract outside investment, when such a high percentage of project costs is seen to be consumed by conservation issues.

  28.  The EIA and licensing process presents a further disincentive to outside investment. The offshore wind industry has spent considerable upfront sums on an EIA for a particular site, only to have the consent denied and we believe that similar situations may arise for wave and tidal projects. This is an area where government could assist, by providing baseline EIAs for locations of high wave and tidal stream energy.

  29.  Despite these drawbacks, the marine energy industry is moving forward. The publicly-funded Wavehub project in Cornwall expected to be operational next summer will provide grid-connected berths for up to four wave energy converters, all of which are now booked. The European Marine Energy Centre in Orkney reports that all its berths (both wave and tidal) are currently under negotiation and if these go to plan, it will be full by 2009.

  30.  On the commercial front, E.ON and Lunar energy have issued a joint statement saying that they plan to build tidal power generators off the west coast of England with a total capacity of 8 MW. This is scheduled to go online by 2010.

  31.  Alderney Renewable Energy, a consortium that has five year rights to develop wave and tidal energy in the island's territorial waters, plans to install three tidal power turbines on the seabed, supplied by Open Hydro. It estimates that up to 3GW could be tapped from the site.

International collaboration

  32.  Renewable energy encompasses a wide range of technologies, many of which are being developed on a global basis. Clearly this leads to opportunities for international collaboration. While there are clear benefits in the ability to relate to world-class R&D, there are also several drawbacks. The issues associated with this are probably not specific to renewables.

  33.  For smaller companies in particular the costs associated with international collaboration can easily outweigh the benefits.

  34.  Intellectual property issues can provide a barrier to international cooperation, and again add to the cost.

  35.  There would be a case for targeted government financial support to SME's in making such collaboration more affordable.

  36.  Both the UK's leading wave and tidal device developers have international agreements for deployment of their technologies. Three 750 kW Pelamis wave generators will be installed off the coast of Portugal in 2008 and MCT has signed an agreement with Maritime Tidal Energy Corporation of Halifax, Nova Scotia, covering installations of their tidal generators in the Bay of Fundy, Canada.

  37.  The Solent Ocean Energy Centre, an initiative supported by SEEDA, the Isle of Wight Council and Marine South East, will collaborate with French partners and seek funding through the Arc Manche Interreg IV EU funding programme.

UK Government's role in providing incentives for technology transfer

  38.  A major benefit would appear to be to facilitate introductions between prospective partners both in the UK and internationally.

  39.  The government, both at national and regional level, already provides incentives for technology transfer between industry and academia. As already stated, marine renewables developers are reluctant to enter into a collaboration that involves sharing of IP or sub-contracting of research work that they are better placed to conduct themselves.

The establishment and role of the Energy Technologies Institute

  40.  The ETI is a new body which could make an important contribution in a vital area. However it is yet another entity in an area where the Technology Strategy Board, the various research councils, the UK Energy Research Centre, the Carbon Trust, ITI Energy, the Energy Saving Trust and the Energy Research Partnership (amongst others) are already engaged. It is very difficult for any but the most informed observers to understand the remit of each, where they differ and where they overlap.

  41.  For industrial companies, it is hard to know to whom a prospective proposal might be addressed.

  42.  The various entities do seem to communicate with each other to avoid excessive mismatch. However in view of the number this must in itself require a substantial (and unproductive) resource.

  43.  It must be possible—and much more efficient—to rationalise the number of such bodies involved.

  44.  The establishment of the ETI is an innovative method of leveraging public funds for R&D. For this to be successful, two important issues (or perceived issues) must first be addressed:

  45.  At the ETI briefing meeting on 13/11/07, it was stated that Universities and SMEs will conduct projects, with "close involvement" by the large companies that fund the programme. REA members have voiced concern that these large companies will "steal" their IPR. It is important that the rights to IPR are protected and clear if smaller companies are to obtain any tangible benefit from the ETI.

  46.  The complex linkages between the ETI, EPSRC and the Technology Strategy Board suggest to some that public funds are being diverted from industry into academic research. The interrelations between the number of bodies involved (see above) also gives the impression that a considerable resource is disposed to ensuring co-ordination between them, and this too diverts funds from active work.

  47.  The REA recognises that Universities have a valuable role in conducting desk and laboratory-based studies on behalf of the marine RE sector, both on generic issues for the industry as a whole and for specific devices where no conflict of interest exists. However, one of the main barriers to development of marine RE is the lack of experience with devices deployed at sea. Universities are not equipped to negotiate with City investors, in order to raise funds for this exercise, nor to contract with providers of the necessary industrial equipment such as barges, jack-ups and cranes. We therefore recommend that the current funding for industrial R&D is ring-fenced and increased.

Commercialising renewable technologies

  48.  The Government has tended to think of renewables support in three phases. R&D for emerging technologies, early phase deployment support (most often in the form of grants) for technologies that are in the process of demonstration and early commercialisation, followed by revenue-based support for the final stage.

  49.  This could work, but in general we find that the UK's management of renewables' grant programmes is often problematic. There are examples of biomass grant recipients having been required to take too many risks, in order to be sufficiently innovative, and consequently failed, eg The Arbre project. Or too many restrictions or requirements being imposed, eg to take energy crops etc. This has been a factor in many of the boienergy capital grant funded projects not materialising.

  50.  Managing grant programmes is inevitably very difficult, and the task of evaluating proposals is not something government is best placed to do. For this reason REA favours a policy which provides a bankable revenue stream as reward for successful technology development. We have suggested a feed in tariff approach for emerging technologies, as under this scenario, beyond setting the tariff, there would be no role for Government in assessing projects or deciding which should qualify for support. Technology developers therefore need to access finance, to bring their projects to fruition. The due diligence on the part of potential lenders is likely to be a superior filter of competing technologies than evaluators.

  51.  There are other potential downsides of grant programmes. A recent problem has been conflict between grant programmes and revenue-based support (ie the Renewables Obligation) resulting in developers having to chose between one and the other.

  52.  Many renewables technologies (in common with some from other sectors) have experienced what the REA has called "the valley of death" in the pre-commercial phase between technology development and full market deployment. We have not been good at providing support for industry at this later stage, where grants are less relevant and revenue-based support for "early movers" would be more appropriate. For example the UK was a technology leader in wind power at the early stages, but lost most of our industry when Denmark introduced deployment incentives in the late 1980's. The marine renewables industry is now in the same position (and in danger of going the same way!).

Intermittency of supply and connection with the national grid

  53.  There has been extensive work on the integration of intermittent renewables onto the system, yet in the decades over which this has been conducted intermittent renewables penetration has not even reached 2% of UK electricity generation. The 2006 UKERC report[207] The Costs and Impacts of Intermittency quantifies the cost implication, stating "For penetrations of intermittent renewables up to 20% of electricity supply, additional system balancing reserves due to short term (hourly) fluctuations in wind generation amount to about 5-10% of installed wind capacity. Globally, most studies estimate that the associated costs are less than £5/MWh of intermittent output, in some cases substantially less. The range in UK relevant studies is £2-£3/MWh".

  54.  Whilst intermittent sources do add to the overall uncertainty in managing an electricity system, it is not a simple linear addition of the two individual uncertainties. Lack of understanding of this point often leads to the misconception that "dedicated" measures are needed to cater for the intermittent renewable sources.

  55.  More relevant to the integration of increasing volumes of renewable generation is the work programme overseen by the Electricity Networks Strategy Group. This work stream has run since 2000, and overseen much useful research, although within the last two years some of the momentum has been lost, as BERR's funding for much of this work has faltered. Nevertheless, relative to the rate of progress made with deploying renewables, it has been sufficient. Unfortunately successful developments have not been promoted sufficiently well, thus limiting the opportunities for transfer of technology developments into real solutions.

  56.  For effective commercialisation and deployment, network operators and solutions-providers need a long-term stable regulatory framework, and if this cannot be achieved they require rewards that include a premium to cover this risk. In the longer term fundamental commercial and regulatory market changes may be necessary to ensure that widespread deployment of intelligent grid management occurs. The distinct commercial and licensed roles of the network owner, operator generator and supplier maybe have to be revisited in order to fit an intelligent grid in a low carbon environment.

Government policy towards enabling existing technologies to meet targets

  57.  As described above, the scale of expansion required if we are to meet a 15 or 20% share from renewables of total energy consumption by 2020 is colossal. Fundamentally, it will require the Government to take a holistic approach to energy, and seek to increase the contribution from sectors that have hitherto been peripheral to renewable energy policy. In particular it will require new developments to integrate renewables from the outset, especially using community heating approaches to housing and industrial developments. Major retrofitting programmes for existing housing stock, plus far greater uptake of on-site renewables at commercial and industrial premises will also be essential.

  58.  To date the government's vision has been narrowly focused on renewable energy power projects, and a largely unhelpful attempt at promoting micro-generation. We say unhelpful, because it has resulted in on-site generation being assumed to be exclusively in the range of sub-50kW equipment.

Whether the UK has the skills base to underpin the development of renewable technology

  59.  We feel that UK has punched above its weight in the field of renewable technology developments largely despite, rather than as a result of, Government support. Exemplars include battery recharging-scale wind turbines (as opposed to the household mounted size) solar cell manufacturing, AD technologies, and of course wave and tidal device development (where admittedly R&D support has been relatively good).

  60.  Where Government lets the UK down is in attempts at commercialisation programmes, and with lack of support for deployment. Grant programmes, aimed at aiding commercialisation are frequently mismanaged. And the Renewables Obligation is very unhelpful at pulling technologies through the "valley of death" phase. Both of these shortcomings have been described earlier.

January 2008

205   Carbon Trust (2006): Future Marine Energy. Back

206   The RO only caters for plant built after 1990, unless it has been refurbished, which is the case for some of the large hydro. Therefore the 1355 figure and the 585 MW in the table cannot be added to give an overall total, as this would result in some double-counting. Back

207 Back

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