Renewable Energy in the UK Strategy and Opportunities  Adam Brown Sector Champion – Renewable Energy UK Trade and Investme...
UK Renewable Energy  Inward Investment Propositions Long term vision Supportive policy framework Financial and Fiscal Supp...
Topics <ul><li>Some Recent Developments </li></ul><ul><li>The RO </li></ul><ul><li>Off-Shore Wind </li></ul><ul><li>The UK...
Recent Developments <ul><li>DECC </li></ul><ul><ul><li>BERR Energy Team + DEFRA CC Team </li></ul></ul><ul><li>Office for ...
Growth in UK Renewable Energy Generation 5X increase in New RE in 10 years
<ul><li>Obligation on electricity suppliers for a growing % of their electricity from renewable energy sources </li></ul><...
ROC Values Total income = power value +ROC + other benefits = >£100/MWh = >15cents/kWh
Evolution of RO <ul><li>Current technology neutral regime very successful at stimulating low cost technologies (on-shore w...
On–shore wind <ul><li>2348 MW installed  </li></ul><ul><li>300 MW in 2007, 350MW so far in 2008 </li></ul><ul><li>Extensiv...
Offshore Wind - UK <ul><li>UK Potential >UK electricity demand! </li></ul><ul><li>Projects “awarded” by Crown Estates in b...
First Two Rounds 18 sites, 2600 MW 15 sites, 7169 MW
Off Shore Wind - Capacity <ul><li>Project Pipeline </li></ul><ul><ul><li>7 projects, 404 MW in operation </li></ul></ul><u...
Offshore – Round 3 <ul><li>25GW </li></ul><ul><li>11 zones in areas where SEA completed </li></ul><ul><li>Allocation in 20...
Zone Development Process <ul><li>Single Partner company with exclusive development rights for each Zone (individual or con...
R3 - Key Milestones <ul><li>June 2008: Market announcement and publication of PIN in EU Official Journal </li></ul><ul><li...
EU Targets <ul><li>European Spring Council (2007) agreed to: </li></ul><ul><li>Independent binding target to reduce EU’s g...
UK Renewable Energy Strategy <ul><li>UK Share of EU Target -15% of  energy  by  2020 </li></ul><ul><li>Current renewables ...
The Challenge! <ul><li>RE % UK Energy 2006 </li></ul>1.4% of UK Energy
The Challenge! <ul><li>RE % UK ENERGY 2020 </li></ul>RE % UK Energy 2006 15% of UK Energy
Possible Technology Mix
Policy Measures  Under Consideration <ul><li>Energy efficiency </li></ul><ul><li>Review RO by increasing level and extendi...
Feed-In Tariff Development <ul><li>Powers taken in Energy Bill </li></ul><ul><li>Projects up to 3MW can opt for FIT rather...
Short Term Priorities? <ul><li>Deployment </li></ul><ul><li>Off shore wind √ </li></ul><ul><li>Biomass  √ </li></ul><ul><l...
For further Information  please contact Adam Brown @ pera .com +44 7723 315441
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New Renewable Energy Strategy UK - Adam Brown

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New Renewable Energy Strategy UK - Adam Brown

  1. 1. Renewable Energy in the UK Strategy and Opportunities Adam Brown Sector Champion – Renewable Energy UK Trade and Investment Florida 20 November 2008
  2. 2. UK Renewable Energy Inward Investment Propositions Long term vision Supportive policy framework Financial and Fiscal Support Companies with developed technology, expertise or operating experience Companies developing new technology. Rapidly growing market World leading research capability Supportive collaborative research environment .
  3. 3. Topics <ul><li>Some Recent Developments </li></ul><ul><li>The RO </li></ul><ul><li>Off-Shore Wind </li></ul><ul><li>The UK Renewable Energy Strategy </li></ul><ul><ul><li>Targets and Technology Mixes </li></ul></ul><ul><ul><li>Policy Measures Needed </li></ul></ul><ul><li>Inward Investment Opportunities </li></ul>
  4. 4. Recent Developments <ul><li>DECC </li></ul><ul><ul><li>BERR Energy Team + DEFRA CC Team </li></ul></ul><ul><li>Office for Renewable Energy Deployment </li></ul><ul><ul><li>Manufacturing Strategy </li></ul></ul><ul><ul><li>Focus for “green jobs” </li></ul></ul><ul><ul><li>Builds on RETPS </li></ul></ul><ul><li>The Climate Change Bill </li></ul><ul><ul><li>Target 80% CO 2 reduction by 2050 </li></ul></ul>
  5. 5. Growth in UK Renewable Energy Generation 5X increase in New RE in 10 years
  6. 6. <ul><li>Obligation on electricity suppliers for a growing % of their electricity from renewable energy sources </li></ul><ul><li>Level to rise to up to 20% by 2020 and Obligation runs to 2026-27 </li></ul><ul><li>Accredited Renewables Generators earn Renewable Obligation Certificates for each MWh generated, which can be traded </li></ul><ul><li>Suppliers must have the necessary number of certificates at the year end, or else pay a buy out fee (~£35.76/MWh) </li></ul><ul><li>Buy out fees are recycled to suppliers who have met their obligation, so increasing ROC value </li></ul><ul><li>Generators can secure medium term contracts for supply of power, ROC’s and other benefits </li></ul>Renewables Obligation….
  7. 7. ROC Values Total income = power value +ROC + other benefits = >£100/MWh = >15cents/kWh
  8. 8. Evolution of RO <ul><li>Current technology neutral regime very successful at stimulating low cost technologies (on-shore wind, landfill gas, …..) </li></ul><ul><li>ROC Banding to bring forward broader range of technologies </li></ul><ul><li>Multiple ROC’s from April 2009 </li></ul>Income up to £150/MWh Band Technologies ROC’s Technology ROC’s/MWh Landfill gas 0.25 Sewage gas, Biomass cofiring 0.50 Onshore wind, hydro, Cofiring energy crops, EfW with CHP 1.0 Off shore wind, biomass 1.5 Wave, tidal, Advanced biomass conversion (anaerobic digestion, pyrolysis, gasification), energy crops, biomass chp, PV, geothermal, microgeneration 2.0
  9. 9. On–shore wind <ul><li>2348 MW installed </li></ul><ul><li>300 MW in 2007, 350MW so far in 2008 </li></ul><ul><li>Extensive Pipeline of projects </li></ul><ul><ul><li>1060 MW under construction </li></ul></ul><ul><ul><li>3159 MW consented </li></ul></ul><ul><ul><li>6890 MW in planning system </li></ul></ul><ul><li>Delays in planning system and grid capacity being addressed </li></ul>
  10. 10. Offshore Wind - UK <ul><li>UK Potential >UK electricity demand! </li></ul><ul><li>Projects “awarded” by Crown Estates in bidding rounds </li></ul>
  11. 11. First Two Rounds 18 sites, 2600 MW 15 sites, 7169 MW
  12. 12. Off Shore Wind - Capacity <ul><li>Project Pipeline </li></ul><ul><ul><li>7 projects, 404 MW in operation </li></ul></ul><ul><ul><li>936 MW under construction (8 projects) </li></ul></ul><ul><ul><li>3113 MW consented </li></ul></ul><ul><li>UK world capacity leader </li></ul>Kentish Flats Project 30 3MW Turbines, commissioned 2005
  13. 13. Offshore – Round 3 <ul><li>25GW </li></ul><ul><li>11 zones in areas where SEA completed </li></ul><ul><li>Allocation in 2009 </li></ul><ul><li>Operational by 2015 </li></ul><ul><li>Crown Estates prepared to cofund development (up to 50% of development costs) </li></ul>£50Bn Investment Opportunity
  14. 14. Zone Development Process <ul><li>Single Partner company with exclusive development rights for each Zone (individual or consortia) </li></ul><ul><li>The Crown Estate to provide a facilitating role </li></ul><ul><li>Partner companies to provide full development capability and resources </li></ul><ul><li>Relationship between The Crown Estate and development partners will be through contract </li></ul>
  15. 15. R3 - Key Milestones <ul><li>June 2008: Market announcement and publication of PIN in EU Official Journal </li></ul><ul><li>July 2008: Industry workshops </li></ul><ul><li>Beginning of August 2008: Invitation to submit Expressions of Interest (OJEU contract notice) </li></ul><ul><li>End of August 2008: Closing date for Expressions of Interest – (96 EOI’s) </li></ul><ul><li>Late September 2008: Release of Invitation to Negotiate (ITN) and key contracts </li></ul><ul><li>Q1 2009: Responses to ITN </li></ul><ul><li>Q2 2009: Shortlist of Partners and SEA completion </li></ul><ul><li>Q4 2009: Completion of awards to zone partners </li></ul>
  16. 16. EU Targets <ul><li>European Spring Council (2007) agreed to: </li></ul><ul><li>Independent binding target to reduce EU’s greenhouse gas emission by 20% below 1990 levels by 2020…. </li></ul><ul><li>… .and to increase this commitment to a 30% reduction as part of an international agreement </li></ul><ul><li>Increase the use of renewable energy to 20% of EU energy (electricity, heat and transport) consumption by 2020 </li></ul><ul><li>Ensure that a minimum of 10% of EU petrol and diesel consumption comes from bio fuels by 2020 </li></ul><ul><li>Promote energy efficiency by reducing overall EU energy consumption by 20% by 2020 </li></ul>
  17. 17. UK Renewable Energy Strategy <ul><li>UK Share of EU Target -15% of energy by 2020 </li></ul><ul><li>Current renewables level – 1.5% of energy </li></ul><ul><li>Challenging! </li></ul><ul><li>Consultation to discuss how to meet the target and what policies would be needed – June 2008 </li></ul><ul><li>Full strategy Spring 2009. </li></ul>
  18. 18. The Challenge! <ul><li>RE % UK Energy 2006 </li></ul>1.4% of UK Energy
  19. 19. The Challenge! <ul><li>RE % UK ENERGY 2020 </li></ul>RE % UK Energy 2006 15% of UK Energy
  20. 20. Possible Technology Mix
  21. 21. Policy Measures Under Consideration <ul><li>Energy efficiency </li></ul><ul><li>Review RO by increasing level and extending end date </li></ul><ul><li>Regional deployment targets </li></ul><ul><li>Grid access improvement </li></ul><ul><li>Incentive mechanism for heat and distributed generation technologies </li></ul><ul><li>Innovation and supply chain development </li></ul>
  22. 22. Feed-In Tariff Development <ul><li>Powers taken in Energy Bill </li></ul><ul><li>Projects up to 3MW can opt for FIT rather than RO </li></ul><ul><li>Emphasis on group/community schemes? </li></ul><ul><li>Technology specific support levels to be agreed </li></ul><ul><li>“ Not worse than RO” </li></ul><ul><li>Proposals during 2009, finalised during 2010 </li></ul>
  23. 23. Short Term Priorities? <ul><li>Deployment </li></ul><ul><li>Off shore wind √ </li></ul><ul><li>Biomass √ </li></ul><ul><li>Wastes √ </li></ul><ul><li>Building √ Integrated RE and Heat (once FIT details developed) </li></ul><ul><li>R&D,D </li></ul><ul><li>Wave and Tidal √ </li></ul><ul><li>PV √ </li></ul><ul><li>Fuel Cells/H 2 √ </li></ul><ul><li>Biofuels √ </li></ul>
  24. 24. For further Information please contact Adam Brown @ pera .com +44 7723 315441
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