Driven by concerns about climate change and security of electricity supply, public and political commitment to renewable energy has never been stronger.
Generous financial support and market interventions have encouraged extremely rapid deployment in many European states and it is now a commonplace of the financial press that environmental business has become mainstream.
And so it should. But some are now asking whether this rapid growth, and politically-driven target setting at local and national level, is creating a secure position for environmental technologies, one grounded in the realistic perspectives of engineering and science, or, on the other hand, a mere flash in the pan caused by speculative, subsidy-hunting developments.
A wealth of data about the renewable energy experiment worldwide, and particularly in Europe, is now slowly emerging, allowing decision makers to evaluate the success of their policies. These results, as you would expect of real-world data, are mixed, and as we all get to grips with the implications, a change in the way the renewable energy sector operates is likely.
Indeed, we can already see signs of the coming sea change in the changes now proposed to the UK’s “Renewables Obligation”, a subsidy which accounts for 60 per cent of a renewable generator’s income which costs consumers around £1bn a year, running up to a total of £32bn by 2015.
Earlier this year, Ofgem, the UK’s gas and electricity regulator, called for the abolition of this system on the grounds that, firstly, its carbon dioxide savings were grotesquely expensive compared with the alternatives and, secondly, it was stifling innovation in more capital intensive but promising renewable technologies such as tidal, biomass and offshore wind power generation. At the same time it was over-rewarding the least capital intensive projects such as onshore wind. I would add that it was even encouraging windfarms in relatively windless areas or otherwise inappropriate places.
The Department for Business, Enterprise and Regulatory Reform (until recently the Department for Trade and Industry) has accepted that something in the subsidy is badly awry and is now planning to upgrade offshore wind and biomass, though whether these steps go far enough is arguable.
Perhaps the most important recognition now dawning on us is that the shift to any significant level of renewables will be a bumpy ride. All previous fuel transitions have been from a manifestly disadvantaged fuel to a manifestly superior one. However, while renewables have many commendable qualities, they often struggle to compete when compared to existing established sources of energy. These issues have to be faced and dealt with, not brushed under the carpet.
Fine-tuning our policies so that innovation is encouraged and the success of renewables improved is a real challenge. At present, it is hard to avoid the conclusion that the consequence of heavily subsidising generators has all too often been to cushion the sector from the real world pressures that alone can be the mother of invention.
On November 4, 2006, 15 million consumers across Europe lost their electricity supplies and a much more severe failure was only narrowly averted. The fragility of the system is now under the spotlight, and it is becoming painfully clear that on this occasion the contribution of renewable generation and wind in particular was not positive. We now know that similar problems and related costs are likely in the UK.
The Renewable Energy Foundation has closely studied decades of hourly wind data from the Met Office. What emerges from this study is that the UK is too small an area to produce a smooth and reliable flow of energy from wind turbines distributed around the countryside.
From our studies, it is clear that it would be more sensible to locate the UK’s wind farms offshore, where it is very much windier, and they should be distributed around the coast close to urban centres. The proposed wind farm for the the Thames Estuary, known as the London Array, has huge potential but little serious effort has been devoted to offshore wind power because of the easy subsidies available to those developing onshore sites.
Getting all this right really does matter. The UK can only hope to contribute to global climate change policy by offering an economically compelling example to other countries – we are simply too small to make a significant difference on our own. The uneconomic and poorly planned development of renewable energy – the spectacle of the UK, of Yorkshire, in a hair shirt – will not impress China. Indeed, by achieving small emissions savings at a very high cost, our “little bit”, far from helping, will actually be counterproductive.
There’s more to fixing this than just revising the way subsidies work and putting the brakes on cynical speculation in onshore wind, but by allowing major counties such as Yorkshire to play to their strengths, which often enough in rural areas will be biomass for electricity, heat and, modestly, transport fuels, we will begin to take a step in the right direction.
By John Constable
John Constable is policy and research director of the Renewable Energy Foundation which funds research into renewable and alternative energy technologies.
16 July 2007
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