The Renewable Energy Strategy Consultation – A Synopsis
Friday, September 26, 2008
by
Martin Sales
The UK Renewable Energy Strategy Consultation closed on 26 September 2008. A summary of Consultation responses is due to be published by the Department for Business Enterprise and Regulatory Reform later in 2008. The UK Renewable Energy Strategy is expected to be published in Spring 2009.
Should you have any queries on the Renewable Energy Strategy Consultation or if you have a query relating to the current regime, please contact Martin Sales for an initial discussion and indication of whether fuller advice might be appropriate on (0131 226 5541 or msales@biggartbaillie.co.uk).
Scotland is estimated to have 60 gigawatts of renewable energy resources (the equivalent of three-quarters of the UK's installed electricity generating capacity) according to the Scottish Government. Given that potential resource, Scotland’s extensive experience in renewable energy development, particularly wind energy, and the potential of its technology sector to develop further renewable technologies, the UK Government’s recently opened Renewable Energy Strategy Consultation provides an opportunity for interested parties all over Scotland to contribute to the next phase of renewable energy development.
Introduction
Climate change, security and diversity of energy supply, reducing energy use, under-utilised wind and wave power and increased EU targets for renewable energy consumption have all become familiar concepts in recent years. Revised EU targets for consumption of energy from renewable sources, agreed in Spring 2007, have prompted a Renewable Energy Strategy Consultation from the UK government which runs from 26 June to 26 September 2008. The agreement reached includes an EU-wide target of 20% of energy consumption to be from renewables by 2020 and the European Commission has proposed that the UK’s share of this target be 15% of UK energy consumption from renewable energy. The Consultation document seeks views on the strategy to be adopted in respect of the three principal energy-consuming sectors: electricity, heat and transport.
Consultation responses will be of particular use in formulating means of meeting the targets formalised within the forthcoming EU Directive on Renewable Energy, expected in 2009. The final form of the Directive has not yet been decided, particularly regarding the inclusion of trading mechanisms. Consequently, the instrument(s) by which the Directive will be implemented in the UK are not yet certain.
The Strategy itself is relatively simple – to achieve a sufficient amount of energy consumption from renewable sources to meet the legislative and societal challenges referred to at the start of this Introduction. From the wording employed in the Consultation document, the Government sees its role as providing a framework to encourage and support increased energy use from renewable sources. However, it also sees the market as the principal forum for determining the proportions by which electricity, heat and transport achieve that increase and the technologies to be used.
Electricity
UK electricity from renewable sourcesis generated by a number of technologies: hydro, onshore and offshore wind farms, microgeneration, biomass/waste, wave power and landfill gas. The Consultation document envisages onshore and offshore wind power as the key growth areas arising from the renewables targets. The planning system in Scotland has become accustomed to dealing with onshore wind energy developments in recent years and a new marine planning system, expected to be put in place during 2010, will help to accommodate increased numbers of offshore developments in the right locations. Nevertheless, the anticipated, significant increase in these developments can be expected to test both the onshore and offshore planning systems to the full. These issues will include balancing the interests of stakeholders (including developers, promoters and other parties wishing to make representations); the time and expense involved in promoting or objecting to a development; consistency with other government policies and legislation (such as EU, UK and Scottish species and habitat protection) and adequate navigation for maritime traffic.
Financial Incentives
The Consultation concludes that feed-in tariffs (a guarantee of a fixed-sum per unit of electricity generated) would be an inappropriate support mechanism and instead promotes an amended Renewables Obligation (with an increased level of Obligation) in respect of large-scale electricity production.
Grid Issues
Improvements to existing grid access as well as new infrastructure (e.g. new sub-sea cables for transferring offshore electricity to shore) will be required. These can be expected to create planning, environmental, navigational and aviation/radar issues (i.e. the effect of turbines upon radar). The Department for Business, Enterprise & Regulatory Reform and Ofgem have been liaising on the regulation and licensing of offshore sites. Precisely how the “UK” and Scottish systems dovetail with one another will depend upon the outcome of ongoing discussions between Holyrood and Westminster.
Microgeneration will also be encouraged but presently suffers from technological, monetary and other barriers to development. Proposals include financial support such as a feed-in tariff, extension of permitted development rights for domestic generation and provision of a dedicated information service.
Heat
The physical properties of heat, particularly our inability to transmit it over anything other than small distances, mean that the technologies required to increase renewable heat sources are likely to derive from biomass technologies (e.g. heat from biomass waste) and microgeneration (e.g. ground source heat pumps). Measures proposed include: introducing financial incentives (e.g. a Renewable Heat Obligation) and regulatory incentives to install renewable heat technologies in new buildings (e.g. zero carbon homes and non-domestic buildings initiatives).
Transport
The draft Directive includes a binding target for Member States to achieve 10% of their transport energy consumption from renewable sources by 2020, excluding petroleum products that aren’t petrol and diesel (i.e. aviation and shipping are effectively excluded from this target). Biofuels are presently the main source of renewable transport energy and the Renewable Transport Fuel Obligation, introduced in April 2008, encourages greater use of biofuels. However, a debate has arisen around biofuels, particularly in relation to using the materials as fuel rather than food and the consequent impacts on food prices and security of food supply. Consequently, development of 2nd and 3rd generation biofuels from non-food sources and the powering of vehicles by electricity or hydrogen may become principal alternatives. Amendments to the Renewable Transport Fuel Obligation could be an instrument for encouraging such alternatives.
The information contained in this article is given for general information only, reflects the current law on the date of this article, and does not constitute legal advice on any specific matter