The Climate Change Levy has re-awakened interest in energy issues in the UK, turning political will into economic incentive. Energy efficiency will once again ascend the agenda on the boards of most companies. Tony Duffin, AEAT Environment, on the rise of renewables.
Reduction in energy consumption – especially needless consumption – is clearly the first and easiest route to follow. The energy intensive sectors have agreed consumption reduction targets to be met up to 2010, and if successful will gain a discount from the Levy. Companies outside these agreements can gain significant reductions in their energy bill (and Climate Levy) by “cost-effective” energy efficiency measures.
This is not, however, the end of the story. Government reviews, the Marshall Report into the use of economic instruments, and numerous NGO assessments have shown that the battle to reduce CO2 emissions and defeat climate change must be fought on all fronts – including both the supply and demand sides of energy in industry.
Political will has now been turned into economic measures – energy from renewable sources is exempt from the Climate Change Levy. The recent Government review of renewable energy sources for the UK indicates that a number of technologies are now considered viable sources of energy in their own right. The Utilities Bill expected to be laid before parliament this year sets the scene for the removal of technical and infrastructural barriers to connecting electricity generating renewables to the network. Many large companies – household names – on both the demand and supply sides are giving renewables serious consideration. Shell International Renewables is a top-level business of the Shell Oil Company, predicting 50% of world energy supplies will be from renewable sources by 2050. PowerGen, National Power and Eastern Group all have renewable energy generation plant in their portfolios. Major international banks are investing in the technologies.
The Main Options
Many renewable energy systems are technically proven. Wind, small hydro, energy from waste, landfill gas and some biomass-based technologies have matured to a level where they are real alternatives.
Wind energy is perhaps the best example of such success, and the UK has the best wind resource in Europe. World-wide there is some 10,000MW of wind power installed and annual growth rates in excess of 20% are expected.
Biomass is beginning to feature as a mainstream sustainable energy source. Conventional steam-raising is technically proven whilst gasification and pyrolysis offer longer-term economic improvements. Extracting energy can be at the large or small scale giving a wide range of options. There is also a wide range of sources of biomass with global applicability: forestry residues, willow and poplar, eucalyptus, miscanthus, rye, and straw.
Gaining energy from waste is a very well established means of processing wastes. The principal driver is to reduce the waste to a small volume of inert ash – energy production is a valuable by-product. This has proved to be very competitive with other forms of electricity generation.
Meanwhile, some 90% of household and commercial waste in the UK is currently landfilled, producing landfill gas as biodegradable material breaks down. This gas is already collected for environmental protection reasons – methane is a very potent greenhouse gas, and it is flammable. The methane provides the fuel element to generate electricity. In a large modern landfill, gas may be generated for between 15 and 25 years.
Direct use of solar energy is often viewed as a panacea for our energy needs. Three technologies are commonly found in operation: photovoltaics, hot water systems and passive solar design.
Photovoltaic panels generate electricity when light falls on them. There is a substantial global market for photovoltaics, especially in sun-belt developing countries. Here, there is no established electricity distribution system, and the high initial price of solar photovoltaics is no impediment to deployment, as they prove cheaper on a whole-life basis than diesel generators and/or building a grid system.
Solar domestic hot water is one of the more familiar renewable energy technologies and in many circumstances is very cost effective. Further pressure to reduce CO2 and fossil fuel energy use will tend to encourage this technology.
Passive solar design is more a design approach than a technology. It is a means of maximising the benefits of natural light, heat and ventilation in buildings whilst minimising the problems of overheating and glare. In the UK there are several very successful examples in use, and PSD is proving to be very effective when implemented properly.
Hydro power, capturing the energy from river or reservoir flows, was commonly used during the Industrial Revolution. Large-scale hydro power in the UK today accounts for around 2% of the total installed generating capacity and can be regarded as being fully commercial. But major dam construction and the flooding of valleys is unlikely to be supported again in this country. Numerous small-scale schemes have been built in the UK ranging from 1kW to more than 100MW. Such schemes are typically defined as being 5MW or less and are usually run-of-river with limited environmental impact. At small-scale the economics are less favourable but good sites still provide competitively priced electricity.
Wave energy has had an unsteady development history. After some 20 years of work, in 1994 the DTI put this technology aside as “long-term” and concentrated efforts on the technologies noted above. Now “Wave Power” is being considered again. There are a few systems with promise but as yet none has been proved in commercial operation. Whilst there is clearly a huge energy resource to tap into offshore, there are also tremendous forces to sustain – and this has been the downfall of earlier attempts.
Tidal energy is also available in large quantities and over 5% of the UK’s current electricity consumption could be generated by the Severn Barrage alone. However, the construction activity would be very costly and could only be profitable with considerable government support. Even then, the environmental costs would need to be weighed carefully against the benefits. A tidal barrage is a permanent structure and would irreversibly alter the ecology of the previously tidal estuary.
Renewable energy sources are surprisingly cost-effective. It can be argued that landfill gas and energy from waste are already directly competitive with conventional generation. Wind power, on the right site, has been shown to be viable with electricity selling for less than 2.5p/kWh. The Climate Change Levy assists this competitiveness and helps level the playing field – ensuring that energy from unsustainable sources is penalised. The Government target of achieving 10% of UK electricity from renewables by 2010 is challenging, but the technologies exist to enable this to be met.