Concerns expressed over UK Renewables structure

Delegates attending this year’s All Energy conference session, organised by the IET Energy Sector, on Distributed Generation (DG) identified the prevailing structure within the UK renewables market as being the biggest impediment to future success and called on the Government to lead and facilitate the creation of an integrated, national renewable energy strategy for the rest of the 21st century.

Whilst there were plenty of positives emerging from the UK renewables sector, the unanimous view of the conference was that progress would be so much greater and quicker if there were an over-arching framework and plan, backed by Government, connecting the whole of the UK.

There were calls to evoke the spirit of the 2012 London Olympic Games to help solve the UK renewables puzzle, creating an equivalent of the Olympics Delivery Authority (ODA) to co-ordinate the creation of a national renewables strategy.

At the present time, development was being thwarted by lack of investment, lack of clarity, lack of certainty and the time being taken to make decisions.

Investment decisions continued to represent a huge dilemma for the Distribution Network Operators (DNOs), reconciling short-term, reactive requirements with a more proactive approach for long-term returns. Making such choices continued to be a challenge. If anything, what was needed was collaboration not competition between DNOs, particularly where investment unlocked potential across territorial boundaries.

DNOs needed to operate not just as network operators but as systems operators too, with the capability to improve infrastructure in advance of demand from the market.

“The session certainly highlighted the challenge for the UK renewables market,” said Gordon Graham, Head of the IET’s Energy Sector. “The industry continues to perform well but we could be doing so much better. People feel that they’ve gone as far as they can down the line of working on a ‘lowest- cost- first- basis’. Some challenges cannot be solved by a market solution alone. The industry would like to work with the Government to overcome these immediate challenges and create a more coherent, strategic framework for the future.”

IET Energy Policy Panel Member and Parsons Brinckerhoff, Business Innovation & Growth Director, Duncan Botting opened proceedings with an excellent keynote. Highlighting a number of shifting dynamics within the energy sector, he charted renewable energy’s increasing contribution to the overall mixture of UK electricity generation.

Renewables provided 11% of overall supply in 2012, according to figures from DECC, and had enjoyed steady growth over the last five years (2008: 5%).  Interestingly, figures for other energy sources underlined a shifting market, notably gas (from 46%: 2008 to 27% :2012) and coal (31%: 2008 to 39%: 2012).  
Independent Management Consultant, Doug Everard presented examples of small-scale, community hydro and larger, offshore wind demonstrator projects from a developer’s perspective. Community-based schemes such as those delivered at New Mills and Otterspool, Stockport benefited hugely from engagement with local people and were relatively easy to deliver with few grid issues.

Money, as always, remained a challenge yet probably the biggest inhibitor was lack of technical expertise within the local groups themselves. It was hoped that organisations such as Ofgem could do more to encourage and support community initiatives.

By way of contrast an 11-turbine project in fairly shallow water at Aberdeen Bay and a scaled-up wind farm NAREC in deeper water at Blyth would see investment in excess of £500m for offshore demonstration, but these schemes had yet to be built. The industry needed to collaborate, lead and take risks. It was hoped Government would do its bit by enabling innovation, providing low cost debt and creating the conditions where schemes can be delivered cheaply, efficiently and made to last.

John Toner Chairman and Joint Managing Director of Northern Ireland’s largest Environmental Engineering Company, Williams Industrial Services Ltd, presented the case for more energy generation from waste, specifically anaerobic digestion (AD) systems.

“Waste is only waste, if you throw it away”. At the present time, Northern Ireland imported close to a £1billion of fossil fuels per annum and buried a £1billion worth of organic energy in landfill sites. The UK had a long way to go to catch up with many of its European counterparts in terms of the number of AD systems and the energy produced.

There were 109 AE systems in the UK (2013) compared to 7,800 in Germany. UK electricity production from these AE systems provided some 319 Gigawatt hours compared to 29,500 GWh in Germany. The development of AE systems in both Germany and Denmark over the last 15 years provided ample inspiration for what could be achieved in the UK. The support of Government, local authority planners, the public, the banks and DNOs was vital.

Siemens Energy Director of Business Development, Matthew Knight gave an update on large commercial scale offshore wind. The UK is the world leader in this field with 1,000 turbines operating with a capacity of over 3,300 MegaWatts and a further 900 MW under construction. London Array, the world’s largest operational offshore wind farm, saw 175 turbines installed at the rate of one and half per day and is now generating over 500 MW of energy for UK homes and businesses.

Despite this success, the industry is facing an uncertain future and is presently trapped within, what is referred to as, ‘a circle of hesitancy’. It should be the case that project sponsors, confident of Government intent, bring forward schemes and are able to make commitments to a supply chain, which is able to invest in jobs and cost reduction, which results in delivery, increased confidence and further investment. Confidence about future intent is low and there’s a real danger that the industry, just as it has begun to succeed, has already started to stall.

Steve Halsey, Distributed Generation Development Manager for UK Power Networks presented the case for renewables from the perspective of the one of the UK’s seven DNO Distributed Generation Operators.

There were big challenges facing DNOs facilitating the move towards low carbon energy and doing so in a cost effective way. Significant adaptation of networks would be required to accommodate local renewable generation, heat pumps and electric vehicles. DNOs also needed to embrace new technologies in order to move from passive to active management of their networks.

UK Power Networks had witnessed a 1,500% increase in DG inquiries in the last five years. However, barely 10% of schemes proceeded to the delivery stage. The DNO was trialling Flexible Plug and Play using smart technologies to connect DG to its network.

A 45-minute ‘Question and Answer’ followed the presentations and concluded with a series of straw polls on key issues arising from the session.

There were calls for DNOs to standardise the presentation of information required by DG applicants. There were huge variations in information available, at present, placing massive resource and time demands on DG operators completing G59 Application Forms. In particular, investment to create a national GIS map was needed and would save time and money for all concerned.

There were calls to engage the public to promote a greater level of understanding about the need for a low carbon economy, the development of renewable energy technologies and the behavioural gear-change required. More public information and communication was needed.

There were some concerns about the incentives being provided. It was felt that, in some cases, these were actually working against one another.

The session concluded with three polls regarding market structure, collaboration and contracts. Of these, the question of market structure elicited by far and away the most striking response from conference delegates with the proposition that the market was no longer ‘fit for purpose’ scoring a unanimous ‘Yes’ vote.

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Presentations from All Energy

Community Energy from Waste

John Toner


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Keynote presentation

Duncan Botting


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Offshore wind energy

Matthew Knight


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Community Level Micro Hydro

Doug Everard


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Q and A and panel discussion

Chair: Duncan Botting


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