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UK needs 'huge investment' in renewable energy

The UK Government has published a Renewables Roadmap alongside its latest White Paper on the Electricity Market Reform (EMR).

By Isabella Kaminski

According to the Department for Energy and Climate Change's Renewables Roadmap, the UK can achieve its target of generating 15% of its energy from renewable sources by 2020, provided sufficient investment is made.

The roadmap outlines 8 technologies – onshore and offshore wind, marine, biomass electricity and heat, ground and air source heat pumps, and renewable transport – which it says are capable of delivering more than 90% of the UK’s renewable energy by 2020. The Government believes a total of 29 GW of operational renewable energy capacity by 2020 is feasible.

In terms of onshore wind, the roadmap stresses the need to provide long-term certainty for investors. It calls for reform of the planning system, co-funding of technical development and upgrading onshore transmission capacity.

For offshore wind, it says an industry task force will be established to reduce the costs to £100/MWh by 2020. The Government has promised to spent up to £30 million on offshore wind cost reduction over the next four years.

It has also announced the signing of a new Memorandum of Understanding between Government departments, aviation organisations and industry to mitigate the potential impacts of wind power on radar infrastructure that it is estimated could impact up to 5 GW of onshore and 7 GW of offshore wind capacity.

It will also provide up to £20m over the next four years to develop wave and tidal technology and to commission marine energy testing facilities at the National Renewable Energy Centre (Narec) early in 2012.

A bioenergy strategy will be published later in the year. The Government plans to increase the attractiveness of biomass heat and biomethane injection into the grid by introducing a Renewable Heat Incentive (RHI) and the Renewable Heat Premium Payment (RHPP) in Great Britain.

It will also introduce an RHI for non-domestic heat pump (ground and air source) installations and the RHPP for eligible domestic-scale heat pump projects.

Meanwhile, road transport biofuels, which already make up over 3% by volume of all road transport fuels, are proposed to increase to 5% by 2014.

The Renewables Obligation (RO) scheme will close to new accreditation on 31 March 2017, although existing projects will continue to be supported. It will be replaced by a feed-in-tariff with contracts for difference (CfDs) Once these new tariffs are introduced and until 31 March 2017, providers will have a one-off choice between the two systems. The paper says that its consultation showed concern about the complexity of CfDs but that their introduction was “generally accepted”.

Chris Huhne, UK Energy Secretary, says: “A new generation of power sources including renewables, new nuclear, and carbon capture and storage, along with new gas plants to provide flexibility and back-up capacity, will secure our electricity supply as well as bringing new jobs and new expertise to the UK economy.

“Growth on that kind of scale will be challenging, but will be necessary if we are to make the UK more energy secure, help protect consumers from fossil fuel price fluctuations, drive investment in new jobs and businesses, and keep us on track to meet our carbon reduction objectives for the coming decades. It will require industry to carry on making the case for renewables and government and the devolved administrations to break through the barriers that are stopping new schemes being built.”

The Government intends to legislate for parts of the Energy White Paper during the second session of the current parliament, which starts in May 2012, with legislation reaching the statute book by the end of the next session (by spring 2013).

Reactions to the white paper

Dr Paul Golby, Chief Executive of E.ON UK, welcomes the White Paper. "While the onus on the energy companies is to produce, transport and supply energy as efficiently as possible, we must also remember that this is not just about companies like E.ON and the Government, this is also about helping our customers who have a vital role to play in all of this.

"By becoming more energy fit - by insulating their homes, moderating their energy usage and by generating their own power - our customers can do their bit to reduce both their bills and also their carbon emissions, dual aims that we can all get behind."

Graham Meeks, Director of the Combined Heat and Power Association (CHPA), says the news is great news for consumers: “I am hugely encouraged that alongside the new Feed-In Tariffs for renewables and nuclear the Government is now considering similar incentives for consumers to cut their electricity use. Decarbonising our electricity consumption is an immense challenge and energy-saving ‘negawatts’ have a major role to play.”
Terry Scuoler, Chief Executive of the manufacturers’ organisation EEF, says: “Industry will welcome moves to contain the cost of supporting renewable energy. However, the transition to a low-carbon economy will not be cheap and is likely to significantly increase energy prices. A comprehensive assessment of the impact of the government’s overall approach to decarbonising our energy supply on electricity prices remains essential.

“We need a clear picture of the implications of the cumulative cost of climate and energy policy. This will be critical in reassuring manufacturers who are planning to invest in Britain that their competitiveness will not be damaged by allowing electricity prices to get out of line with their major competitors.”

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