The wind of change is slow to blow through Britain's energy policy

In Europe, only Malta and Luxembourg make less use of renewables than the UK. So why do ministers still believe they can meet environmental targets? asks Mark Leftly

Sunday, 31 August 2008

In two years' time, the UK seems certain to miss one of the core environmental targets of the Blair-Brown years. The Government pledged that 10 per cent of the country's electricity would be generated from renewable sources, principally from wind farms, but also including tidal and solar power.
Press releases from the Department for Business, Enterprise and Regulatory Reform (Berr) still boast of the target, which was first promised in 2000 and enshrined three years later in the energy White Paper. And in a statement to The Independent on Sunday, a spokesman for Berr insists that all is well and that: "Estimates show there's more than enough renewables developments either up and running or in the pipeline to potentially meet the 10 per cent goal."
But the energy industry does not agree. Senior figures point out that less than 5 per cent of electricity was generated from renewable sources in 2007, up from just over 4 per cent the previous year. This is not, they argue, a sign of rapid progress from a country that that has a far less buoyant renewables industry than Germany and Denmark, although it is far windier.
Despite the impending failure, the Government is pushing for still-tougher targets. The Secretary of State at Berr, John Hutton, is currently consulting with energy companies on plans to generate 15 per cent of all energy – that is, transport fuel and heat as well as electricity – from renewables by 2020 in line with EU ambitions. Responses are due next month, and seem set to recommend that one-third of electricity should come from renewables, to make up for shortfalls in heat and transport. The cost of this is £100bn.
James Vaccaro, managing director of the renewables fund at Triodos, a pioneer in ethical banking, offers one of the gloomier predictions for 2010: that the UK will hit around 6 per cent rather than 10. He recalls a civil servant from the then Trade and Industry Department visiting Triodos's Bristol offices in 2000.
"The official said, imagine the 2010 target as being part of a pie," recounts Mr Vacarro. "He said small commercial projects were a small part of the pie, but it would be big renewables schemes that took up the major share."
Mr Vaccaro countered that there were simply not the available resources in the UK energy market to build the massive wind farms needed to provide the 10 to 15GW to generate 10 per cent of all electricity. Instead, the industry had to be built from the bottom up, with a series of small wind farms of around 10MW that would cost in the region of £12m to £14m. He added that the UK had to get used to the idea of the necessity of these smaller schemes.
It's a view he still holds. As an example, he points to a British Energy/Amec joint venture to build a 650MW scheme off the coast of Scotland on the Isle of Lewis, rejected in April on the grounds that it threatened the island's bird population.
Planning is one of the big problems for these wind farms. Although there are hopes that recent changes to the planning process, such as fast-tracking major infrastructure proposals and revamping the appeals procedure, will enable schemes to be approved faster, there is a huge backlog of wind-farm applications that councils have to go through.
Gaynor Hartnell, deputy director at the Renewable Energy Association, says there are "reams of projects" in the pipeline, perhaps as much as 14GW, mainly in Scotland. This would correlate with the Government's claims that there are "potentially" enough developments to meet the 2010 deadline. However, Ms Hartnell says that delays in granting planning permission – there is also a shortage of qualified planners working for local authorities – means that the UK will not hit the 10 per cent target until 2012.
Juliet Davenport, chief executive of Good Energy, a renewables firm that last week announced interim results showing an 18 per cent increase in turnover to £6.3m, is equally critical of the planning system. And while she remains optimistic that the Government can reach 8 per cent renewables in two years, Ms Davenport has a real planning horror story.
The Ministry of Defence (MoD) has opposed Good Energy's application to construct a 10MW wind farm, arguing that it could harm its communications ports. However, Good Energy is unable to respond, as the MoD will not provide information on its concerns. Officials say that the relevant documents are classified. "They said that they would not hand them over to us because of the threat of terrorism," sighs Ms Davenport. "You end up going round and round in circles."
It is this type of problem, she adds, that has led to the UK having the lowest renewables use as a percentage of all its energy in Europe, bar Malta and Luxembourg. "We've got the engineers to build the wind farms, but it's a difficult market because of the regulatory regime," she says.
Richard Ford is the UK grid connections manager at Renewable Energy Systems, a company that has developed wind farms for 20 years. What is delaying renewables' progress, he says, is the difficulty of linking the farms to the National Grid. Faced with a huge volume of applications, the grid will not allow power stations to connect until it has developed the extra capacity required to take the additional power.
Mr Ford would like the grid to manage demand, rather than wait until there is space, since a slot might not be available for 10 years. Planning permission lasts five years in England and Wales, and three in Scotland. As a result, a company can build a wind farm and leave it idle for five or seven years, or it can secure a slot and wait to apply for planning permission, which it might not secure.
"We and others are making applications to the grid before we are certain the developments can be built," explains Mr Ford. "We would prefer a 'connect and manage' approach."
The Association of Energy Producers believes some progress has been made. Its chief executive, David Porter, points out that just five years ago, renewables projects accounted for only 2 per cent of the UK's electricity.
Mr Porter's great worry is that this new target of 15 per cent of all energy coming from renewables by 2020, set by the UK in agreement with other EU states, is much tougher. As wind power is by far the UK's most advanced technology, with the Scottish government looking into the possibility of a £5bn off-shore grid to connect turbines, it will be the electricity providers that will have the biggest role to play in meeting this target.
He talks of the need to "minimise the cost impact on consumers", and says a radical overhaul of planning and grid connection is vital "to stand a chance of meeting 2020 targets".
Already, then, the energy industry is playing down its chances of success at this next stage. Berr can talk up its achievements all it likes, but few in the know appear to believe the department will be able to back this up when the first renewables deadline is reached it in just two years.