The Government has admitted it is likely to miss its own targets for renewable power generation. Problems with incentives to energy generators, planning curbs and difficulties connecting renewable power to the national grid mean Britain will not be getting 20pc of national energy consumption from renewables by 2020.
The energy white paper yesterday restated the Government’s commitment to promoting wind and tidal power to cut Britain’s carbon emissions and increase security of supply.
But, although renewables’ contribution to total electricity generation has more than doubled since 2002, the Government admitted that alternative energy still represents only 4pc of electricity generation.
Because renewables are more viable for power generation than for transport or heating, meeting the overall energy target means an even higher proportion of electricity must be fuelled by wind, wave and solar power. The current rate of progress makes that unlikely, the Government said.
Lionel Fretz, chief executive of Carbon Capital Markets, a fund manager, said: “There’s no brave new world or big new proposition. It’s all pretty uninspiring.”
Generators are obliged to source a rising percentage of the power they sell from non-fossil fuel sources. This is due to rise from 7.9pc this year to 15.4pc by 2015. To encourage compliance, generators that fail to meet the target pay a fixed penalty, shared between those meeting the target.
The Government admitted yesterday that the system was not working well enough and proposed changes, including incentives to encourage more complex renewables such as offshore wind power, biomass and solar.
Britain is thought to have a competitive advantage in offshore wind and tidal power generation thanks to its long experience with offshore oil.
The white paper also admitted that the planning system is a constraint. According to industry statistics, it takes an average of 21 months for wind farms to secure planning consent under the Electricity Act. In the four months since the Stern report into climate change, only a third of applications for onshore wind farms were approved, compared to three quarters of all major planning applications.
Bruce Jenkyn-Jones, a director of Impax, an environmental fund manager, said: “The truth is that we are a very overcrowded island and we don’t want our country covered with wind farms.”
The third bottleneck highlighted by the white paper concerned the connection of alternative energy sources to the national grid. The Government said: “The current technical, commercial and regulatory framework for transmission access will need to change to facilitate the cost-effective integration of more diverse generation technologies into the electricity system.”
The challenging targets the Government has signed up to mean the market for renewable energy is growing fast. Globally, it has already become a multi-billion-dollar industry, attracting record investment. Research from green energy experts Frost & Sullivan put the size of the European renewable energy market at â‚¬8.9bn (£4.47bn) in 2005, rising to an estimated â‚¬14.5bn in 2010.
Although wind power is the most highly developed alternative energy source, the Department of Trade and Industry and the government-funded Carbon Trust have both funded marine energy research and development. ‘We must make sure that current market incentives for developing renewables are not inadvertently undermined ‘
By Tom Stevenson
24 May 2007
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