Memorandum by the Environmental Research
Institute
1. RENEWABLES
WITHIN UK OVERALL
ENERGY POLICY
The UK has very considerable potential wind,
wave and tidal power renewable energy resources. The installed
electricity generating capacity is around 83GW yet despite the
very large potential renewable resources, less than 8% of that
capacity is in renewable power and around 2/3 of that is from
hydro-electric power (BERR, 2007). This is much less than the
EU average and even the 2010 target appears very limited.
Given the recent rises in oil and gas prices
and the increasing demand from China and India the UK is well
placed to make much greater use of renewable energy which not
only would ensure much more stability of generation costs but
would also provide better energy security.
2. BARRIERS TO
GREATER DEPLOYMENT
The intermittency of supply presents problems
if renewable power becomes a significant percentage of total generation.
This is particularly true of wind and, to a lesser extent, wave
power, while tidal flow (as opposed to tidal barriers) although
predictable, may provide peak output at periods of low demand.
There are potential approaches that can overcome the intermittency
problem which are addressed later in this response.
Another barrier to greater deployment is the
limitations of the transmission grid. Average wind power capacity
factor (actual output as a percentage of output if operated continuously)
for the UK is just over 28% yet in parts of the Highlands and
Islands the capacity factor exceeds 40% and in the case of Shetland
is well over 50%. There is a proposal for a 600 MW wind farm in
Shetland but there is no grid connection to the mainland. In addition,
the Transmission network use of service (TNUoS) cost will be high
adding to the price of electricity (one estimate puts it at £42/kW
per annum as compared to £12/kW per annum in the south of
Scotland). Offshore wind power off the coast of northern Scotland,
which would have similarly high capacity factors again suffers
from the lack of suitable grid connection.
In addition, there is insufficient applied research
funding to help universities and research institutes address these
problems. Research Councils offer funding for "blue skies"
research but what is needed is more targeted applied research
funding which should be allocated to universities and research
institutes who are collaborating with industry and other organisations
with an interest in renewable energy development. Industry and
other organisations may have limited funds to undertake initial
applied research but may be able to offer support "in-kind".
It is also important to look at the mechanism
for support for renewable energy. The evidence from Germany strongly
suggests a feed-in tariff encourages much greater deployment of
renewable energy than the Renewables Obligation Certificate approach
adopted in the UK.
3. TECHNOLOGICAL
ADVANCES
While there is always the potential for technological
advances that do not require government support, other countries
are supporting research and development of renewable energy either
directly or via the use of variable feed-in tariffs to help encourage
development. This is particularly important to provide sufficient
incentive for nascent technologies eg wave and tidal.
The great danger of not providing government
support is that UK industry will be disadvantaged as compared
to their European, North American and even Asian competitors.
The UK has the largest potential renewable energy resources in
Europe and the Government should support industry to become world
leaders in wave and tidal energy. The failure to provide sufficient
support to the development of wind power has meant that already
the leading companies are based outside the UK and failure to
support research, development and deployment of wave and tidal
power will mean that UK industry is again likely to be out-competed
by industry outside the UK.
This reinforces the need for additional applied
research support to enable universities and research institutes
to work with industry and other stakeholders.
4. HAS GOVERNMENT
SUPPORT BEEN
EFFECTIVE?
The fact that the UK has one of the lowest proportions
of renewable energy in Europe strongly suggests that Government
support has not been effective.
The most cost-effective support appears to be
the feed-in tariff approach adopted by Germany but given that
the UK is already lagging behind much of Europe, as noted in Section
2, additional funds are needed to support applied research in
universities and research institutes collaborating with industry
and other key stakeholders.
The feed-in tariff mechanism provides one approach
to providing more effective support to certain types of renewable
energy and the way it has operated is to recognise the stage of
development and manufacturing costs of different types of renewable
energy. However, it is also important to provide support for development
of energy carriers such as hydrogen and for fuel cells which can
use hydrogen as a fuel.
5. INVESTMENT
IN UK TRANSMISSION
NETWORK
As noted in Section 2, the current transmission
network places considerable barriers to development of renewable
energy in many of the areas of the UK with the greatest potential
renewable energy resources.
Investment is needed to develop the network
and to keep TNUoS costs low rather than penalising the generation
from remote areas (it was noted in Section 2 that the TNUoS for
Shetland may be set at a level of 3.5 times that in the South
of Scotland).
With regard to the question of intermittency,
one approach that could be adopted would be to generate hydrogen
locally (or close to landfall in the case of offshore generation)
at times of low demand for electricity and to provide power at
times of peak demand. The hydrogen could be used as a fuel in
transport, for space heating but importantly it could also be
used in gas turbine power plants either directly or mixed with
natural gas.
As gas fired power stations can respond quickly
to increases in demand their use in conjunction with intermittent
renewable power which is also used to generate hydrogen, could
help overcome some of the problems of intermittency.
There will be still be issues for the peak demand
on the transmission network but the use of hydrogen may alleviate
the problem. In addition, the generation of hydrogen could help
maximise the income stream for renewable power and enhance the
energy security of the UK.
6. EXTERNAL COSTS
As noted in the question, wind farms have the
potential to spoil areas of natural beauty. It is possible to
site wind turbines to reduce such visual impact but developers
clearly wish to maximise returns which generally means that turbines
are sited on high ground increasing their visual impact. One of
the issues is that although the capacity factors in upland areas
may be higher than the UK average, the TNUoS charges may also
be higher reducing profitability. This reduces the opportunity
to reduce visual impact by careful choice of (possibly sub-optimal)
locations for turbines.
It is difficult to make direct comparisons with
nuclear or fossil fuel generation as wind farms by their very
nature are likely to cover a much wider area for the same electrical
output. However wind turbines often have little impact on land
use (sheep appear happy to graze under turbines) while nuclear
or fossil plants sited in open land have a major impact on the
land use as a result of the structures and roads they require.
A more tangible external cost is the total CO2
emission associated with each development. Full-life-cycle analysis
of carbon budget is necessary for each technology and individual
developments. While renewables and nuclear do not produce CO2
as a direct bi-product of energy generation there are carbon costs
for any technology and these should be counted carefully (including
the carbon cost of extracting and processing nuclear fuel).
A particular concern is land management and
potential disturbance of large terrestrial reservoirs of carbon.
UK peatlands are a major reservoir of carbon and loss of these
could result in massive release of CO2. Since peat is common in
the windy uplands that are otherwise favourable to wind farm developments,
this is a crucial issue for the full appraisal of onshore wind,
while accurate and complete evidence of the scale of soil and
hydrological disturbance is lacking.
There may be a case for the planning system
to be revised to allow early discussion of the best design of
wind farms to ensure an appropriate balance is struck between
development and impacts.
In the case of wave and tidal power the concern
is more likely to be with their impact on navigation and on the
aquatic environment (flora and fauna and also on sediment movement).
Again a number of these issues could be addressed
by offering more support for applied research in universities
and research institutes to collaborate with industry and other
stakeholders.
7. COSTS OF
GENERATION
Generation costs of renewable power are currently
high. The rapid rise in oil and gas prices is reducing that differential
but until full costing of future greenhouse gas impacts are included
in the case of fossil fuels, renewable power is likely to remain
more expensive.
In the case of nuclear power, construction,
operational and full decommissioning costs may mean nuclear power
cost is similar to onshore wind in parts of the country with high
capacity factors. The issue is whether a full accounting is made
of the decommissioning costs and whether the cost of storage and
security of long term storage of nuclear waste is included in
the overall cost of nuclear power. Given the long half-life of
some of the wastes the on-going costs could be substantial and
must be properly accounted for in assessing the true cost of nuclear
power.
In addition, if renewable generation is available
(given intermittency that will not always be the case) it should
be fully used. If that renewable energy can provide a substantial
proportion of overall power when operating at full capacity, a
requirement to make full use of that power could reduce the income
stream of nuclear power. It is therefore necessary to consider
income streams and not just costs.
Carbon capture and storage may provide a means
of continuing to operate fossil fuel plants while emitting little
or no greenhouse gases. However, given the volatility and recent
increase of oil and gas prices, it may be that carbon capture
and storage will only be cost effective in the case of coal fired
power stations. An expansion of coal fired power stations would
lead to an impact on the countryside if open cast mining is used
and there are other concerns if there was to be an expansion of
deep mining.
It is also important to note that the costs
of onshore wind power and of offshore wind, wave and tidal power
are likely to reduce over time due to economies of scale and rapidly
advancing technology (for wave and tidal), while the cost of fossil
fuels and even nuclear fuel is likely to rise over time. Careful
estimates of future fuel costs are therefore essential when comparing
the cost of renewable power with that of fossil and nuclear fuel.
8. COSTS AND
BENEFITS OF
RENEWABLES
As noted in Section 5, renewable energy could
be used to generate hydrogen which can be used as fuel for space
heating, transport and for electricity generation in gas turbine
generators or by fuel cells (on a small scale).
Renewable energy can be used for space heating
(for example wood fuel from sustainable sources; ground and air
source heat pumps using electricity from renewable generation)
and in transport (biodiesel and bioethanol). In the case of fuel
for transport there is an issue about the displacement of agricultural
land from growing food or fodder crops to growing crops for biofuels.
While some biofuels may have a role to play, in the longer term
electric vehicles possibly powered by hydrogen in fuel cells may
be a better solution and if hydrogen generation is developed it
can be used directly in internal combustion engines prior to the
development of fuel cell vehicles.
It is therefore perhaps more appropriate to
consider how renewable generation can be increased to allow the
generation of hydrogen which can act as a non-greenhouse gas emitting
fuel for space heating and transport.
9. MEETING THE
EU 2020 TARGET
It has already been noted (Sections 5 and 8)
that the use of renewable generation for hydrogen would provide
an opportunity to expand renewable energy in both space heating
and transport (hydrogen generated from renewable electricity can
be considered a renewable fuel). If such an approach is adopted
then electricity generation will be the largest proportion of
the UK's use of renewable fuels but there could be greater use
in other sectors (space heating and transport) that is likely
to be achieved using biofuels.
In the case of space heating, energy efficiency
can have a very substantial impact in reducing energy needs which
would reduce demand for fossil fuel for space heating.
10. COST OF
CARBON
The higher the cost of carbon is set, the more
economic it will become to invest in renewable power. The increasing
cost of oil and gas will reinforce this.
A more effective emissions trading scheme could
remove the need to support wind power but a feed-in tariff approach
is still likely to be needed to encourage the development of other
renewable power for at least a decade.
11. COST AND
BENEFITS OF
BIOFUELS
The most appropriate use of each energy crop
should be identified. In most cases this will not be through conversion
to biodiesel or bioethanol.
At present a substantial increase in the use
of current biofuels could have an adverse impact on agricultural
production of food and fodder crops. If biofuel crops can be developed
that are able to grow on land that is presently unproductive,
such crops could be useful in enabling a much greater use of biofuels.
The carbon emission impacts of any biofuel will
be related to whether it is used on its own (for example 100%
biodiesel) or mixed with other fossil fuels (methane from waste
or crops with current gas supplies or bioethanol or biodiesel
mixed with fossil hydrocarbon fuel). Biofuels mixed with fossil
hydrocarbons are simply a way of slightly reducing the overall
greenhouse gas emissions from such fuels rather than changing
the type of fuel used.
Dr John McClatchey and
Dr David Woolf
16 June 2008
REFERENCE
BERR (2007) http://www.berr.gov.uk/energy/statistics/source/renewables/page18513.html
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