In part one, Renewable Energy Focus looked at how the UK was performing in its efforts to reach its EU renewable energy targets.
But as the trajectory becomes steeper each year as the end of the decade approaches, the obstacles the UK is facing to target success are becoming more apparent. The barriers are all familiar ones: access to finance, planning, the supply chain, technical problems – issues faced by many Member States.
However, for the UK, which will rely heavily on wind power to generate 15% of its energy from renewables by 2020, some of the challenges are starker than most.
Certainly, the technical challenges present some issues for the wind sector. In 2011, lower than average wind speeds in July and August meant that the UK was behind on its planned target of 10% of electricity generation by 2011, despite the growth in installed capacity. And, despite much talk from industry and politicians about the benefits of pumped hydro, interconnection with the continent, smart grids, and the need for other forms of energy storage, variability of wind is still an issue.
The knock on effect of this has been to give the vociferous anti-wind lobby the ammunition it needs to portray wind as a costly folly in the press. A recent report from Civitas, using figures from the anti-wind lobby, estimated that the need for back up could add 45% to the cost of onshore wind, and 30% to the cost of offshore wind.
Reliable or otherwise (and some industry insiders have called the Civitas report the work of "cranks"), these figures, now bandied around in the press at will, present a danger to public confidence in the sector, which is key to ensuring the support of politicians, as well as getting projects through the planning system.
But Dustin Benton, senior policy advisor at environmental think tank Green Alliance, thinks that the industry’s confidence in itself is the single biggest hurdle: “The biggest challenge is people’s belief that it can actually happen,” he says. “We’ve got momentum in the right direction and the biggest barrier is that everyone thinks momentum won’t continue.”
Key to this lack of confidence is the fact that the UK is currently facing a review of the policy framework that supports renewables. The subsequent pause in investment activity, while financiers await the outcome, highlights the other hurdle to fast renewables deployment – access to capital.
Brought about by the global economic crunch and a change of government in 2010, the overhaul of the Renewables Obligation and the feed-in tariff are still to be completed, and plans for a new electricity market, the Electricity Market Reform (EMR), are not expected to be finalised until the next session of Parliament this summer. A Bioenergy Strategy outlining the UK’s plans for “sustainable” domestic biofuels post 2014 is expected early this year.
“I’m certainly aware of a major low carbon energy company which managed to raise around £3 billion back in 2010, on the back of saying to international investors that the UK is politically ahead of everyone else, and if you invest in the UK it is a good safe bet in the clean energy and renewables that we need,” says Benton. “And the person who mentioned this said it would be much more difficult to do that now because of the way that the political tone has become much more focused on austerity and much less certain in policy terms.”
The UK’s energy minister, Charles Hendry, who recently spoke exclusively to Renewable Energy Focus, agrees that the policy framework is in need of some work, but insists that the reforms are key to the UK’s success towards the 2020 targets. “The fact that we’re going through the process of [EMR] market reform is central to this, because companies, before they make an investment decision, need to know they’re going to make money out of it,” he says. “So the structure which we’re putting in place will give them much greater certainty.”
He denies that the current hiatus will cause a delay to the UK reaching 15%, but Gaynor Hartnell, of the Renewable Energy Association, believes that the onus is on the Government to demonstrate its competence if the UK is to stand a chance of achieving its target:
“At the moment, decisions have been made and then they're going back on them,” she says. “So that undermines confidence. They [the government] have got to get the EMR, and tariffs for the Renewable Heat Incentive correct and really demonstrate the ability to manage these things well.”
See part one here: In the last days of 2011 the UK government submitted its first report to the European Union, detailing progress towards its 2020 renewables targets. So is it on the right path to achieving its legally binding targets?
In part three coming soon, the role of industry in reaching the targets, and the prospects for renewables in the UK beyond 2020.