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Onshore Wind Shaped by European and International Policy

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Onshore Wind Shaped by European and International Policy RENEWABLE ENERGY VIEW 2016 ENERGY RENEWABLE RENEWABLE ENERGY VIEW 2016 ENERGY RENEWABLE Renewable Energy VIEW 2016 ENERGY RENEWABLE Why wouldn’t you? Clean, green, renewable, low carbon energy makes both economic and environmental sense. What’s not to like? Work with us as we champion the production and use of renewable energy in the UK. www.r-e-a.net Growing the renewable energy economy 70215 Renewable Energy Cover NEW.indd 1 25/05/2016 12:13 RENEWABLE ENERGY VIEW 2016 Contents 4 Foreword 38 Solar Thermal (Heat) 6 Executive Summary 40 REA Focus Feature: Exciting Times for 9 Policy Overview Energy Storage in the UK? 10 REA Focus Feature: Moving on from the We take a look at the current UK market position Bon re of the Policies and how it could develop in the coming year. The second half of 2015 was the most challenging 42 REA Focus Feature: Electric Vehicles are time the nascent renewable energy industry has on the Move ever faced. The REA recently added electric vehicles (EVs) to the 13 Policy Changes Impacting Renewable Energy portfolio of products and services it represents. 14 REA Focus Feature: UK - EU Energy Union 44 O shore Wind Despite appearances, the UK energy market is not an (Power) island, but connected to neighbouring countries and 46 Onshore Wind shaped by European and international policy. (Power) 16 Anaerobic Digestion (Biogas) 48 Wave and Tidal (Power, Transport, Biomethane Injection, CHP) (Power) 18 REA Focus Feature: Biomethane-to-Grid 50 Investment Feature: Renewable Energy is Heating Up Investments: a year of transition The Biomethane-to-grid sector had a signi cant This KPMG report reviews the key developments in expansion in Europe over the past few years, 2015/16 impacting the investment landscape for reaching 282 plants across Europe with a total UK renewables. annual production of 1.3bn m3 of renewable gas in 2013, according to the latest report published by the European Biogas Association. 20 Liquid Biofuels 59 REA Focus Feature: All Party Parliamentary (Transport) Groups bring together Parliamentarians, 22 Biomass Boilers businesses, NGOs and industry experts (Heat) 60 Taking a look at 2014/15 Numbers: 24 Biomass Power Employment, Companies and Turnover (Power) 61 Renewable Energy: Made in Britain 26 Biomass CHP (Heat & Power) 27 Deep Geothermal (Heat & Power) 28 Heat Pumps 62 REA Focus Feature: #FoodWasteCounts (Air, Water and Ground-Source Heat) Current UK recycling rates are stalled at 45% with the 50% target for 2020 seeming more distant than 30 Hydropower ever, so the REA is pushing for mandatory biowaste (Power) (including food waste) collection in the UK. 32 Mixed Energy from Waste 64 REA Focus Feature: Ten years of the (Combustion, Pyrolysis, Gasi cation, Land ll Gas - Renewable Energy Consumer Code (RECC) CHP, Heat & Power) 68 Methodology 34 REA Focus Feature: To be centralised or DECENTRALised: ‘that is the question…’ Renewable Energy Association (For a cost e ective, low carbon future energy 25 Eccleston Place, Victoria market!) London, SW1W 9NF Tel: +44 (0)20 7925 3570 Fax: +44 (0)20 7925 2715 Email: [email protected] 36 Solar Photovoltaics www.r-e-a.net (Power) www.r-e-a.net REview Renewable Energy View 2016 3 RENEWABLE ENERGY VIEW 2016 Foreword Dr Nina Skorupska CBE Chief Executive, REA Forging a new energy future and the important role for renewables Renewable energy continues to grow coalition government had laid a path for to be a major player in the energy renewable energy deployment with the sector here in the UK. Despite last year’s Electricity Market Reform (EMR) seeing political uncertainty both leading up to its first set of auctions for both Contracts the 2015 General Election and following, for Difference (CfDs) and the Capacity it remains a business opportunity for the Market. The anticipated uncertainty UK. Clean energy is one of the fastest around having a new government growing industries in the world, and revisit the UK energy strategy, was significant work is needed to upgrade prolonged until the end of 2015 our energy infrastructure for the following the Government’s revelations challenges of the 21st century. in its emergency budget that the Levy The 2016 Renewable Energy View Control Framework (LCF) was at risk of (REview) builds on our 2015 report. In being over spent and that this must be order to cover all the important aspects addressed immediately. After restating when describing an economy, we have the importance of having to balance the teamed up with Innovas to produce now famous trilemma, the Government robust employment data, broken down tipped the balance in favour of keeping by technology and region. We’ve also consumer energy bills low and tackling collated official deployment figures energy security. This saw almost every recently published by Government Supplying the UK support mechanism for renewable Departments and compared them with 22.3% of its energy revisited, reviewed, inevitably again to their 2020 projections - a key reduced or even removed - even an milestone. We look into each renewable power in 2015, exemption mechanism to reward low energy technology and also new for this carbon generation was canned that edition... the impact of energy storage 4.6% of its heat in wasn’t even in the LCF or contributing to and the potential of electric vehicles energy bills - see our article “Bonfire of (EVs). Both will impact the future of low 2014 and 3.2% of the Policies”. carbon transport and the wider energy By the end of 2015, many businesses in infrastructure. We are pleased to have its transport fuels renewables were left reeling following KPMG join us to share their insights on the Feed in Tariff review. Many are historic and projected investment trends in 2015 seriously considering their future or have - vital to giving a clue to future growth. even chosen to wind up their enterprises. We have worked with them to produce jobs and supplying the UK with 22.3% of its power in 2015, 4.6% of its heat This is at considerable cost to the UK leading reports and their insight here is economy via lost jobs and lost reputation valuable. in 2014 and 3.2% of its transport fuels in 2015. This is extraordinary progress with international investors viewing the Once again the feedback we have for renewable electricity, but there’s a UK as much less attractive to invest in received on the value of this report to the long way to go to meet the overall 2020 with so much uncertainty. industry is that it is THE most complete targets and tackle climate change. With that said there are glimmers of assessment to date of the UK renewable positive support from the Government. energy market. The necessary expansion of clean energy is both possible and affordable, as we There is finally a recognition of how So what has changed since the last have seen with the dramatic decreases important heat and transport are to report? in the cost of solar and with on-shore meeting the overall renewable energy We’ve found that the private sector has wind and biomass conversion some challenge and positive steps must be invested almost £15 billion in renewable of the cheapest forms of energy even taken. The Renewable Heat Incentive electricity, heating and transport fuels, compared to new build combined cycle (RHI) receiving further support was a growing the industry to around 117,000 gas turbines (CCGTs). The previous highlight for the start of 2016. However, 4 REview Renewable Energy View 2016 www.r-e-a.net clouds are quickly forming when the sector cannot be allowed to continue detail of what the Government favours, to stagnate. Where there has been and why, prove difficult to understand uncertainty or drastic changes in policy, when there is so much to be done. the results have been hugely damaging. Transport must be a focus for 2016. The The message remains clear: supportive, concern that this ambition falls across stable policies are vital. The stronger the so many government departments and policies, the greater the growth, and the therefore lacks any clear direction must faster the costs come down - as we’re be resolved. seeing right now with onshore wind and The real opportunity for the UK lies solar power. in acknowledging renewable energy, Several other technologies are along with smarter markets, grids, progressing too, but still need work to cities, homes, and the game changing unlock their full potential. So whilst there technologies such as energy storage and continue to be challenges ahead and demand side management, as being outstanding issues to tackle, we will face the way to deliver all three aspects of these head on with the support of REA the trilemma in a balanced way. We members. are now on the cusp of having forms of technologies such as solar and on- The opportunities outweigh the shore wind subsidy-free. We hope in challenges by far. Investment in UK 2016 the Government is open to debate renewable energy is the clearest way about how to manage the transition, to building the UK economy. This considering both the costs and the (often investment pays back in so many ways: overlooked) benefits of renewables, creates jobs, brings down costs, improves including the new jobs being created. our energy security and helps us As we say every year, these jobs are not preserve a safe environment. just a new generation of highly skilled engineers, but farmers, architects, scientists, the legal and financial service providers and the installers and construction workers across the whole of Britain. At the close of 2015 we applauded the long awaited commitments of COP21 with the hope that this will be world Dr Nina Skorupska CBE changing and a true call to action.
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