Memorandum 51
Submission from the Renewable Energy Association
(REA)
EXECUTIVE SUMMARY
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.
COMMENTS ON
MARINE RENEWABLES
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.
CURRENT DEPLOYMENT
OF RENEWABLE
TECHNOLOGIES
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
stations
|
|
| *Co-firing of biomass with fossil fuel |
130,604 | 31
|
| Biomass | 1,370,792
| 27 |
| Biomass and waste using ACT | 5,207
| 5 |
| Waste using an ACT | 1,659
| 2 |
| Micro hydro (including Hydro } 50kW) | 17,168
| 116 |
| Hydro 0 MW DNC | 590,143
| 171 |
| Landfill gas | 838,951
| 374 |
| Off-shore wind | 393,800
| 7 |
| On-shore wind | 1,959,572
| 452 |
| PV | 2,353
| 532 |
| Sewage gas | 79,369
| 124 |
| Wave/Tidal | 1,250
| 2 |
| TOTAL ROC-accredited | 5,390,868
| 1,843 |
| Renewable generating stations accredited under the CCL only
| | |
| Energy from Waste | 357,779
| 19 |
| Total | 4,443,565
| 951 |
|
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
| Total |
|
| Solar PV | 1,301
| 548 | 1,849
|
| Small hydro | 90
| 4 | 94
|
| Wind Turbines | 650
| 1,488 | 2,138
|
| Solar Thermal Hot Water | 78,470
| 2,098 | 80,568
|
| Ground Source Heat Pump | 546
| 271 | 817
|
| Bio-energy | 150
| 126 | 276
|
| Renewable CHP | 0
| 0 | 0
|
| Micro CHP | 990
| 0 | 990
|
| Fuel Cells | 5
| 0 | 5
|
| Total | 82,202
| 4,535 | 86,737
|
|
| 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.
SCOPE FOR
FURTHER DEPLOYMENT
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
http://www.ukerc.ac.uk/Downloads/PDF/06/0604Intermittency/0604IntermittencyReport.pdf Back
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