Community bribes to host nuclear are one fifth those for wind farms

Ecotricity founder Dale Vince said: “This is a further move by the Government to rig the energy market against renewables in favour of nuclear and gas". 

The Government is rigging the energy market after its announced nuclear power would pay five times less than wind energy in community benefit.

Ministers announced yesterday that communities around eight sites (Hinkley Point, Sizewell, Wylfa, Oldbury, Sellafield, Bradwell, Heysham, and Hartlepool) in England and Wales could be in line to receive benefits - otherwise known as bribes - worth up to £1000/MW over 40 years from when and if nuclear power stations sited there begin operating. 

The founder of leading renewable energy supplier Ecotricity, Dale Vince, said: “This is a further move by the Government to rig the energy market against renewables in favour of nuclear and gas. Nuclear power is already being fast-tracked through the planning system and today they’ve announced nuclear will pay a fraction of the community benefit paid by wind power.”

On July 6 the Government announced that onshore wind farms should pay £5,000/MW in community benefit – an increase of five fold. At that time Mr Vince said: “Will we see the same logic being applied to the new generation of gas plants and nuclear power stations? This is a slippery slope.”

Dr Doug Parr, Chief Scientist at Greenpeace UK, commented: “Whilst wind farms and even shale gas developers have to pay community benefits, only nuclear stations will get a fat taxpayer subsidy to fund them. 

"Our entire energy policy is now absurdly distorted by the desperation to prop up EDF’s faltering Hinkley C project, with the government piling the costs onto the taxpayer to avoid the embarrassment of admitting they backed the wrong technology. We can’t go on like this.”

Dale Vince added: “This shows the Government’s approach to energy policy. Firstly, to fast-track planning for nuclear and gas; secondly, allowing nuclear to pay community benefit that’s one fifth the cost burden of wind power; and thirdly, the new mechanism of financial support (Contracts for Difference), which it’s widely believed will be two to three times higher for nuclear when compared to onshore wind.

“When you put those three parts together it shows an energy market being rigged. The Government shouldn’t be picking winners in the energy industry, they should be providing a level playing field for competition. Are they really saying the impact of nuclear power in one fifth that of wind power?

“After 25 years, windmills are removed and the land returned to nature. The impact of nuclear power remains for hundreds of years and those sites will stay radioactive and never be safe."

The Government is clearly only thinking short term. What happens after 40 years is up and the site is radioactive?

Its motivation is the expected creation of employment, which it estimates as "up to 40,000 jobs in the sector" but crucially "at its peak", ie during the construction phase.  

Its nuclear industrial strategy sets out the basis for a long-term partnership between government and industry to exploit those opportunities.

But communities hosting nuclear sites will be left with the toxic legacy long after these benefits have been forgotten.

Energy storage: the next growth market in US and Europe

Energy storage is the currently missing link that will enable the intermittent renewable energy sources like wind and solar to play a much greater part in the future grid mix.

Now that more homes and businesses are installing photovoltaic systems, a new trend for combining these with battery backup is emerging.

Previously, battery storage systems were only thought necessary with solar PV and wind in stand-alone systems, separate from any grid connection, but as the grid supports more and more PV and wind systems, which can supply power only at certain times, the need for storage backup is becoming more apparent.

For large commercial installations this is especially attractive because, although they may have negotiated contracts with utilities that bring down their overall electricity rates, the fees that they are charged for the times when they do draw power, which can be based on their highest peak energy use during a month, have been rising as much as 10-12% per year.

According to Marcus Elsässer and other executives attending the Intersolar North America 2013 trade show held over the last three days, large commercial electricity users can reduce their peak demand and lower their demand charges by installing a storage system alongside a PV system.

Last month California set a proposed 2020 procurement target of 1.3GW of battery storage for network operators.

In Germany, grants from a scheme with a total value of €25 million are being offered to offer storage to existing solar installations.

Last month's Intersolar Europe trade show consequently saw over 200 exhibitors, including major brands, presenting their storage and smart grid solutions.

There, energy storage systems had their own dedicated section for the first time in any global energy trade fair. This particular show, the largest in the world for the solar industry, was attended by over 50,000 visitors from 47 different countries.

Energy storage plus PV was a key topic, with reference to many different types of storage, not just batteries, including flywheels, capacitors, heat storage and compressed air.

The German support scheme is managed by the state KfW Group bank, which provides a 600€/KW grant for new PV systems and 660€/KW grant for older systems. To receive support, systems must be in Germany, have a duration of at least five years, and no more than 60% of the installed power can be fed to the grid.

According to ">Ash Sharma of IMS Research, by 2017 the storage market is projected to be worth $19 billion, mainly due to the German scheme being taken up by residential system owners and operators of small systems up to 10 kWp.

As a whole, photovoltaic storage installations will, on average, he says, grow by over 100% for the next five years, up to nearly 7GW, rising to 40GW of battery systems by 2033.

Will this catch on here? The UK Department of Energy and Climate Change (DECC) is currently reviewing energy storage demonstrator proposals entered into a £17 million procurement competition.

There is a wide variety of entrants including some seemingly bizarre technologies: hybrid batteries to grid, smart energy storage, a radical proposal for using surplus energy to lift heavy aggregates that would be allowed to descend and generate energy at times of peak demand, flywheels, the use of electric vehicles for storage, liquid air, the conversion of surplus electricity into methane, cryogenic liquid nitrogen energy storage, and industrial scale lithium ion batteries.

A further potential winner under this scheme is Moixa Technology, an EU pioneer of smart direct current (DC) technologies, which has submitted a bid to install Maslow storage technology across 750 homes.

It works by shifting DC (direct current) loads from lighting, communications and electronic devices, to batteries during low tariff times, charged using local renewable sources such as solar PV, or at times of excess, wind power.

Simon Daniel, the CEO of Moixa, commented on the need for storage: “Just this week, the volatility of solar and wind resources created negative electricity prices and renewable curtailment in parts of Europe".

He says British distribution network operators face similar issues, especially at times of high sunshine, as now, or high winds. Daniel says that without using energy storage "considerable infrastructure upgrade costs, to reduce voltage issues caused by rising solar PV adoption" could result "which could otherwise lead to local blackouts or lost renewable revenue”.

He continued: “We’ve estimated that by using Maslow distributed energy storage systems with local solar PV, excess wind supply and low overnight energy prices, energy bills could be reduced by up to 30%, and keep essential consumer devices online if the grid fails”.

According to Anthony Price, director of the Electricity Storage Network, Britain should aim for an energy storage target of 2020MW (2.02GW) by 2020.

Speaking at the recent energy storage conference organised by the Institution of Mechanical Engineers, he said: “Meeting Britain’s power requirements requires energy storage as well as generating capacity. The expected shortfall in reliable generating capacity has been caused, in part, by a lack of commitment to a balanced portfolio of generation, storage and network investment.

"Adding more electricity storage into the power system will bring real long term benefits."

Sounds like a good bet for investors to me.

British Prime Minister opens world's largest wind farm

David Cameron called the London Array  "a big win for is renewable energy" because it shows that we can "have renewable energy projects at scale... right here in Britain".

Yesterday saw the launch by Prime Minister David Cameron of the world’s largest offshore wind power plant, the London Array, located in the Thames estuary, approximately 20 kilometres off the Kent and Essex coast.

Owned, developed and built by a consortium consisting of Dong Energy, E.ON and Masdar (Abu Dhabi’s state backed renewable energy company), it has a total capacity of 630 megawatts (MW) and will generate enough power to supply 500,000 British households with clean electricity.

It is estimated to reduce annual CO2 emissions by approximately 900,000 tons, equivalent to the emissions of 300,000 passenger cars. Construction involved over 75 organisations and 6,700 people.

The London Array consists of 175 wind turbines supplied by Siemens, who also made the grid connection. Dong Energy and Siemens will be responsible for the service of the wind turbines through a long-term agreement.

DECC said that companies from all over the UK had benefited, "with construction supplies ranging from cable manufacturing in Yorkshire to boats from Brightlingsea to wind towers from Scotland".

Speaking at the launch, the Prime Minister used the occasion to back wind power and overseas investment in Britain, calling it "a triple win".

“First of all it’s a huge win for Kent. This project has been built by some of the bravest seaman, some of the most talented engineers, some of the hardest workers, and it’s going to continue to bring benefits to people in Kent for many, many years to come," he said.

He added that it's certainly "a big win for is renewable energy" because it shows that we can "have renewable energy projects at scale... right here in Britain".

Thirdly, he said it proved that Britain can "do big projects", citing also "a superb Olympics", Crossrail, "the biggest construction project in Europe", London Gateway, "the biggest port construction taking place in Europe", and "here you have the biggest offshore construction anywhere in the world. I think this demonstrates Britain is a great place to invest,” he concluded.

Energy Secretary Ed Davey called it “a bulk generator of power feeding into the diverse mix on our grid. It’s attracted billions of inward investment into our economy".

He added that the reforms outlined in the Energy Bill are intended to make sure that more projects like this come about.

Other massive projects (a total of 15 GW) are already in the pipeline, such as Teesside, Gwynt y Mor off the coast of North Wales and West Of Duddon Sands off the north west coast of England.

At Gunfleet Sands, off the Essex coast, the next generation of even more powerful offshore turbines is being tested in the water for the first time anywhere in the world.

At the end of March, the 75th and final turbine was installed at Lincolnshire's windfarm off the coast of Skegness, which has the capacity to power more than 200,000 homes.

Speaking at the opening, RenewableUK’s Chief Executive, Maria McCaffery, said: “The Prime Minister’s ringing endorsement of Britain’s offshore wind industry is a real boost for the entire renewable energy sector, which is a key growth area for the British economy.

“We’re about to witness a massive expansion in the number of people we employ in the wind industry onshore and offshore, from about 12,000 now to 76,000 by the dawn of the next decade, as long as Government remains supportive – today Mr Cameron has assured us that it will”.

The UK is expecting that offshore wind farms will help it reach its legally-binding targets to cut carbon emissions, with an aim of developing 18 gigawatts by 2020.

New trial will determine if the future of rail is wind powered

X-Wind's 6kW vertical axis wind turbine, the model for the one which could be seen alongside rail tracks throughout the country.

Britain's electrified railways could be up to 70% powered by wind turbines placed alongside the tracks, if a trial getting underway is successful.

A new project, part-funded by the Department for Energy and Climate Change, aims at reducing the carbon footprint of electrified railways using a specially designed wind turbine developed by British manufacturer X-Wind Power.

The product is billed as the world's most advanced vertical axis wind turbine. Called the XW-80, it has been designed for extreme reliability and exceptional performance on sites with restricted access and limited space.

The XW-80 can be installed at a density of 1MW per kilometre on long linear sites such as sea defences, road and rail corridors, or in small numbers to suit communities or businesses.

The technology, with its exceptional efficiency, low cost of energy, and near-silent operation, has been described as "potentially game changing" by major wind player Dong Energy.

Vertical axis wind turbines are not bothered by turbulent changes in direction of the wind, or blustery weather. They are therefore more suited to urban situations. Most wind turbines using windfarms have a horizontal axis.

In May, DECC awarded a total of £16 million in the first phase of its £35 million Energy Entrepreneurs Fund (EEF), part of which went to X-Wind Power. The programme has been set up to develop low carbon technologies for buildings and power generation and energy storage.

X-Wind’s EFP project will now take advantage of Network Rail’s unique land ownership to validate its vertical axis wind turbine technology in terms of performance, economics and safety, specifically when operating in narrow corridors and in proximity to trains.

The two-year trial consists of the design and development of an 80kW wind turbine based on X-Wind recently validated 6kW small scale generator (pictured above).

It will lead to several regional tests along Network Rail’s tracks before moving to a comprehensive rollout and the potential generation of 2,200 GWh of carbon-free electricity annually.

Michael Blaize, CEO at X-Wind Power, said: “We have made exceptional progress over the last two years, from an innovative concept to a demonstration project with the UK’s largest energy user.

"The support we have received from funding bodies such as the Technology Strategy Board and The Department of Energy and Climate Change is a clear endorsement of our technology and business strategies.”

The company believes that a distributed energy system coupled with storage technology is the only long-term energy solution for the future and that its technology could play a leading role in the supply of energy solutions globally.

Its market research has highlighted strong growth potential for the medium scale wind market. X-Wind intends to combine innovative design with robust manufacturing processes from automotive and large-scale wind industries to offer efficient and reliable products.

Wind power myths blown away by new report

The London Array offshore windfarm under construction

Wind energy avoided at least 5.5 million tonnes of CO2 emissions in the UK last year and is making a meaningful contribution to cutting the country’s greenhouse gas output, according to a new report that counters claims by objectors that wind turbines are costly and inefficient.

The report, Beyond the Bluster, , from the think tank IPPRor Institute of Public Policy Research , concludes "unequivocally that wind power can significantly reduce carbon emissions, is reliable, poses no threat to energy security, and is technically capable of providing a significant proportion of the UK’s electricity supply with minimal impact on the existing operation of the grid".

Unfounded claims about wind power were recently made in a letter to the Prime Minister by a group of more than 100 MPs, who described the technology as inefficient and less reliable than other types of energy production.

It adds that while "it is right that the costs of government support for wind power and other low-carbon technologies are scrutinised, it is important to recognise that recent increases in energy bills are far less the result of subsidies for renewable power than they are due to rises in the wholesale cost of gas".

It notes that from 2004 to 2010, government support for renewables added £30 to the average energy bill, while rises in the wholesale cost of gas added £290.

Amongst the conclusions are that "it is inaccurate to describe the output from wind power as ‘unpredictable’," because “in the short term, wind power output is remarkably stable and increases and decreases only very slowly".

It also says that the risks associated with ‘long, cold, calm spells’ have been overstated. It will be possible to ‘keep the lights on’ given the level of wind power projected in this country by 2020.

The addition of a certain amount of wind power does not mean expensive upgrade to the edge electricity distribution system, either, contrary to some reports. National Grid has reported that up to 30GW of wind power can be accommodated even if no changes are made to the way that the electricity system functions.

And in the longer term, there are numerous technological options to facilitate much greater amounts of wind power, such as improved interconnection with other countries and intelligent management of supply and demand through a ‘smart grid’.

The IPPR model demonstrates that every megawatt-hour (MWh) of electricity produced by wind power in Great Britain results in a minimum CO2 saving of around 350kg. On this basis, carbon dioxide emission savings from wind energy were at least 5.5 million tonnes in Great Britain in 2011, or around 2.5% of the emissions the UK is legally obliged to save annually from 2008 to 2012, as required by the Climate Change Act 2008.

The report's authors describe the government's recent approach to wind power as “worrying", because it is causing lack of certainty amongst investors and developers.

On intermittency, it says that, despite a prolonged period where wind production averaged less than 15% of wind capacity over a period of 14 days, from around 9–23 February 2010, in this case in Ireland, where there is far greater wind generation as a proportion of total generation than the current UK system, this did not impair the ability of the electricity system to provide secure and reliable energy supplies.

However, although the UK grid currently has sufficient fossil-fuel generation in reserve to meet this requirement during a cold, calm spell, should 20% of all grid electricity be supplied from wind, as expected in 2020, additional conventional reserves will need to be in place then, unless interconnection capacity with other countries and/or electrical storage technology improves.

To produce the report, IPPR worked with GL Garrad Hassan, a renewable energy consultancy, and the findings were reviewed by "a leading academic”.

Pension funds - and Lego owners - go safely offshore – into wind farms

Carsten Krogsgaard Thomsen, Acting CEO of DONG Energy

Pension companies and industrial investors are increasingly finding that investment in renewable energy, particularly wind power, is providing a better rate of return, one guaranteed over a longer period, than elsewhere.

DONG Energy, which is a co-builder of several offshore UK wind farms including the London Array, has secured investment from Danish pension providers PensionDanmark and PKA, Dutch pension group PGGM, the owners of Lego, and Japanese trading house Marubeni, amongst others.

Leaving aside the intriguing idea of Lego building wind farms, Torben Möger Pedersen, managing director of PensionDanmark, which has £13.4 billion in assets, said "I think this will...develop into a standard investment case for many pension funds because the alternative of investing in government bonds provides such bad returns that you are obliged to identify alternative investments".

The company's total investment in DONG's wind projects is £475 million, and Pedersen plans to invest more in the future, as PensionDanmark increases the proportion of its portfolio allocated to energy and infrastructure from 6% to 10%.

"In five years we will have £19 billion under management. So our total budget for these kind of investments will be £1-1.5 billion over the next 10 years," he said.

Yesterday, DONG announced that it is using some of this finance to acquire 100% ownership of three offshore wind development projects in Germany in the North Sea.

These are Gode Wind 1, 2, and 3, previously owned by PNE Wind AG, with a total capacity of up to 900 MW. The first two projects already have permission to construct and operate while the third is still in the application stage, although this is expected to be granted in 2013.

Carsten Krogsgaard Thomsen, Acting CEO of DONG Energy, which is owned by the Danish state, said: “The Gode Wind projects in Germany are very interesting for us. If a positive investment decision is taken, we expect that construction of parts of the projects could begin by 2015, subject to the available grid connection confirmations."

Denmark is a pioneer in wind energy, and is now reaping the dividend of its experience. 25% of Danish electricity comes from wind power, contradicting claims by sceptics in the UK that a national grid cannot handle that proportion of wind power.

Some investors see wind power as an uncertain bet because they are expensive to build and maintain, regulation is uncertain, and the plants can face logistical and technological problems. However, other pension funds and investors clearly think differently; taking a longer view, they realise that such investments will provide a steady cash flow over 20 to 30 years, once the projects are up and running.

Last year, the OECD encouraged institutional investors such as pension funds to take more interest in financing the low carbon revolution. There are plenty of benefits, which offset the risks. Compared to unstable financial markets, the OECD points out that there is a clear advantage for those who team up with reliable partners like DONG.

Amongst the early movers in this field, with over £1 billion of investment in renewable energy, predominantly new wind farms in Germany and France, is Allianz of Germany. David Jones, CEO of Allianz Specialized Investment, observes that returns on wind and solar projects are now around 7%.

“This is much higher than many other asset classes,” he says. Moreover, the returns are "totally decoupled from the ups and downs of the financial markets", and far better than government bonds. 10 year UK government bonds are currently yielding a mere 1.5%, almost half the rate of inflation.

Pedersen says that PensionDanmark expects "a return with a spread of between 300 and 500 basis points above a government bond," that is “very much less risky than listed equities".

Walney wind farm in the Irish Sea near Cumbria, is co-funded with direct investment by Dutch pension group PGGM, which has allocated 15-20% of its infrastructure portfolio to renewable energy. Henk Huizing, its head of infrastructure investment, agreed with the OECD assessment: "If you have a good partner, then the risk for joining in the development phase can be acceptable, and you get a premium for going in earlier".

"I hope this will be a model that catches on," says Morten Buchgreitz, DONG Energy's acting deputy CEO for wind power, "because, just looking at the northern European offshore market, we expect that the capacity will have to go from 4 gigawatts now to 37 by 2020".

That is a factor of 10 increase, which will require about £80 billion. Although this sounds a lot, it is less than 1000th (0.08%) of the £18 trillion assets held by pension funds worldwide.

Some of the funding may come from the consortium of 80 of the world’s largest pension funds, that has signalled its readiness to provide funding for infrastructure projects under the Government’s £40 billion infrastructure guarantee initiative. More will come from the Green Investment Bank, when it is finally allowed to borrow.

Progress far too slow on cutting emissions, says watchdog

Actual (blue) and needed greenhouse gas emissions for the UK. The Committee says they only began declining again in the last year by coincidence. Click for larger version.

The Government must quadruple its efforts to reduce greenhouse gas emissions if it is to meet future carbon budgets warns the watchdog Committee on Climate Change in its new annual report.

It says that despite greenhouse gas emissions falling by 7% last year, only 0.8% of this fall was due to Government policy. The rest happened because of coincidental factors which cannot be relied upon to meet targets.

“Much of last year’s fall in emissions was due to a combination of mild weather, rising fuel prices, falling incomes and transitory factors in power generation," said David Kennedy, Chief Executive of the CCC. "But as the economy recovers it will be difficult to keep the country on track to meet carbon budgets. We need to tackle major challenges to drive emissions down across the economy – and to do this as a matter of urgency.”

Yesterday, Energy Minister Charles Hendry was celebrating apparent progress in decarbonising the UK grid, as his department issued its quarterly energy statistics. He said they showed "a clear increase on the first quarter of last year across all renewables, with rises in wind, hydro, solar and bioenergy generation.

“Alongside a 36% increase in renewables capacity in the last 12 months, this shows that the UK is powering forward on clean and secure energy and is clearly a very attractive place to invest,” he said.

The latest energy statistics do record progress, with onshore wind generation increasing by 51% and offshore by 51% in the first quarter of 2012, and the high amount of rainfall helped to boost hydroelectric generation by 43%. In 2011, renewable heat sources increased by 5% but still only accounted for around 2.2% of total heat demand.

This is good news but not good enough for the Committee.

In reducing emissions, decarbonising the power sector is only part of the picture. Nevertheless, the report complains that investment in wind generation in 2011 was just one third of the rate required annually to achieve the target by the end of the decade.

It says that a total of £8 billion is required to support low carbon generation by 2020-21, which would satisfy a shopping list of one new nuclear reactor, four CCS demonstration projects, 15GW of onshore and 12GW of offshore wind, plus a mix of other renewables.

The important figure for the statistics comes in terms of measuring progress towards the 2020 target of deriving 15% of all energy from renewable sources, as specified under the 2009 Renewable Energy Directive. The provisional figures show that during 2011, just 3.8% of final energy consumption was from renewable sources. This is an increase from the revised 2010 figure of 3.2%, and 3.0% in 2009.

Although there is plenty of potential new wind generation in the pipeline, the Committee says that “delivering investments will require resolution of current policy uncertainties, and that financing barriers are addressed".

Most urgently it wants to see support levels confirmed under the Renewables Obligation. Then there must be a major role for the Green Investment Bank in mobilising project finance for offshore wind investment. The Government also needs to work with its EU partners to strengthen the carbon price within the EU emissions trading scheme.

The Committee is furthermore concerned at the lack of progress on carbon capture and storage (CCS). It warns that projects must be selected and funding awarded this year, with construction starting by 2014.

It recommends further incentives: to increase uptake particularly of cavity wall and loft insulation in the Green Deal and the Energy Company Obligation, to support renewable heat in the residential sector, and to address market barriers such as households not having confidence in or enough information about renewable heat technologies.

It advises retaining the Carbon Reduction Commitment, but with a reduced administrative burden and a redesigned league table to strengthen reputational incentives.

There should be a Green Deal for the non-residential sector in place by the end of the year and ambitious standards for private rented regulation in the non-residential sector by the end of 2013.

It also wants to see, in the forthcoming industry strategy, approaches set out to increase the use of sustainable bioenergy in large industry.

Transport

Renewable biofuels for transport actually fell by 7% (to 1,127 ktoe), comprising just 3.5% by volume of road transport fuels in 2011.

In this sector, the Committee wants to see more incentives to encourage the reduction of emissions from new vans, an increase in the electric vehicle market, and a reversal of the decision on company car tax relief for electric vehicles which George Osborne made in the last budget.

In the Budget 2012 George Osborne announced that company car tax exemption for electric vehicles would be withdrawn from 2015/16. This decision, the Committee says, will not raise significant revenue, given the low sales of electric vehicles, but it will undermine incentives for purchase of electric company cars, a market niche where there is a potentially high share of early adopters.

Interestingly, the Committee proposes that driving tests should include standards for driving fuel-efficiently, and wants to see the current motorway speed limit enforced properly, code for saying do not increase the speed limit.

Agriculture must play its part, the Committee says, and there needs to be a robust framework in place for monitoring changes in farming practice that influence emissions, and by the end of the year a strategy for going beyond the current voluntary approach in the sector to cutting emissions.

The Committee wants to see the electricity market reforms set a clear objective of achieving carbon intensity in power generation of the order of 50gCO2/kWh in 2030. This would "provide investor confidence that there will be a market for low carbon technologies that are built to schedule and cost and that there will not be a second dash for gas".

In conclusion, the Committee issues a stark warning: "when we first highlighted the need for a step change in investment there was a lead-time of several years, but this has now elapsed. Therefore the step change is needed urgently if we are to remain on track to meeting future carbon budgets".

Energy bosses slam Government's energy reforms

Keith Anderson of ScottishPower, Ian Marchant of SSE and E.ON's Sara Vaughan telling MPs the Government is bungling energy policy.

The bosses of the Big Six energy companies have slammed the complexity and pace of energy reforms being proposed by the Government for slowing the rate of investment in new plant which the country so desperately needs.

You thought that it was the Big Six energy bosses who, following extensive lobbying, were getting the proposals for reform they wanted in the new Energy Bill. It turns out that instead, they think that there has been too much ideological and political interference, and far too much delay.

The bosses were speaking to MPs in the Energy and Climate Change Committee during its first evidence session on the Draft Energy Bill, which contains the Government's proposals for electricity market reform and Contracts for Difference (CFDs). MPs want to know if these financial tools are effective particularly in supporting renewable energy and carbon capture and storage (CCS).

Keith Anderson, CEO of ScottishPower, told MPs that “this country used to be a fantastic place to invest in for energy because everyone had faith and trust that it was done in an evidence-based way". But this is no longer the case, and it is causing uncertainty and a hiatus in investment.

He spoke of the “massive amount of work" that was done in providing evidence during the lengthy consultation on the banding review for the Renewables Obligation last year, that came up with a lot of recommendations for the future.

“But then, since October, what we've seen is an awful lot of noise from politicians and in the media, and speculation about arguments between government departments that there will be political influence over the outcome of that consultation that it is not evidence-based, and this damages investor confidence."

Anderson called for more clarity, speed and confidence to be given by the Government. “There's a huge opportunity now for the UK to go out and grab a huge proportion of investment for renewable energy. Given the slowdown in our economy and in other countries I think right now is the time for the UK to put in place a very clear, long-term and robust framework," which should be “used to regenerate the economy".

However, he said that there is still a lot more detail required in the Bill, particularly on Contracts for Difference, and this was prolonging uncertainty amongst investors.

John McElroy, director of policy and public affairs at RWE Npower, agreed that as it stands, the Bill will not provide the confidence that investors need and requires a lot more work. "At the very least investors need to know how the capacity mechanism will work and when it will be triggered," he said.

“What we really want to see is the timetable moving forward and the government getting on with it," added Sara Vaughan, Director of Regulation and Energy Policy at E.ON. "There is already some slippage because we expected the bill to be introduced in May and it is now not going to be introduced till probably the end of the year," which will delay the secondary legislation as well “and that causes concern".

Carbon capture and storage

On CCS, Ian Marchant, CEO of SSE, said, frankly: “We do not know that this technology will work" and so developers "crucially need capital support at this stage to move beyond the demonstration phase".

He said that Government energy policy is predicated on assuming that it will work, but this is currently unknown.

Support for wind power

Anderson said finding investment for wind farms was more difficult in the UK than abroad because planning permission takes longer, land rental is more expensive and development costs are higher than elsewhere.

On the level of support for onshore wind, Marchant agreed that this should come down as costs reduce, and said that he doesn't get involved in bilateral discussions about the level of support. He said that he didn't like the way that discussions on nuclear and renewables were being conflated. “I do not believe that the returns being made on renewables are excessive" he added.

Call for more evidence

The Energy and Climate Change Committee, which today is on a fact-finding mission to the London Array and Gunfleet Sands Windfarms, has issued a call for evidence from the public on the economics of wind power, to be submitted by 27 June; there is to be a hearing on 10 July.

Tim Yeo MP, Chair of the Committee, said: “Government policy on wind power should be based on sound economics and engineering, not political pressure from a small vocal minority – whether that be green campaigners or anti-wind protestors.

“In this session we want to cut through all the hot air talked about wind power and examine whether the economics really add up. Wind farms are over forty times less polluting than gas burning power stations - per unit of energy produced - but there are concerns about the costs to consumers.”

Contracts for Difference

All the energy bosses agreed that they were in favour of Contracts for Difference because, unlike the Renewables Obligation, although it had many advantages, they will be able to support the massive increase in investment in renewable energy that is required in the coming years.

John McElroy agreed the Electricity Market Reform was too complex, and was taking too long to understand and finalise.

Sarwjit Sambhi, Director, Finance and Strategy at Centrica, owners of British Gas, said that the capacity payment was good for gas-fired generation, which was required in the medium-term.

Government “dishonest” on nuclear power

Marchant criticised the Government for trying to disguise their support for nuclear power, in doing so coming up against state aid rules, and called for “an honest and open discussion about whether the country needs it and what is the cheapest way of doing it as opposed to disguising it in a very complex set of proposals, so it actually doesn't have negative connotations."

Marchant described investment in wind power as much more manageable than in nuclear power, and preferable because it has a period of clean construction of two or three years. “Nuclear is a completely different animal. You have billions of pounds of investment and a build time of seven to ten years."

The MPs were also questioning whether there was enough provision for reducing demand for electricity in the Bill and the level of and exemptions to the proposed Emissions Performance Standard.

The new Energy Bill should abandon support for nuclear newbuild

The draft Energy Bill expected this week should face the reality: it makes more sense to give 100% support to renewable electricity and energy efficiency than to continue trying to attract interest in expensive nuclear newbuild.

Last summer's Electricity Market Review White Paper assumed that the UK would soon have 16 GW of new nuclear capacity, with the first new nuclear reactor scheduled to become operational in 2018. Less than a year later, this now seems laughable.

The truth is that the ongoing fiscal crisis in the Eurozone means that the cost of capital is only going to rise. It is the high initial cost of new nuclear power stations and their long payback period that is the reason why nuclear operators are already pulling out. The coming fiscal firestorm will be the final nail in the coffin.

With the Government due to publish its new Energy Bill, now is the time for it to recognise this reality and stop trying to flog a dead horse. Otherwise, its pro-nuclear policy risks spending far more public money than it already has on feed-in tariffs for solar photovoltaics. It will make that amount of cash look like a drop in the ocean.

It's right for the Cabinet to worry, as it is doing, about whether the Green Deal will work. But it would be even more sensible to re-examine its policy on nuclear power - or it will start to look like the white elephant in the room.

EDF is the only nuclear operator with a modicum of credibility still in the running for newbuild, although Charles Hendry and the Financial Times would have you believe some Chinese operators are interested in Horizon. But with the advent of François Hollande, known to be lukewarm on nuclear power, to the French presidency, the enthusiasm of this 85%-French state-owned company for the construction of the most likely new plant at Hinckley point in Somerset is likely to cool.

EDF has already postponed the groundwork preparations for the site until next year while it waits to see what happens. The agreement which David Cameron signed on nuclear power with Nicolas Sarkozy in February is now not worth the paper on which it is written. It didn’t even represent much at the time.

Energy Minister Charles Hendry continues to talk up nuclear power, but he might as well be asking banks to invest in Spain. Two weeks ago he told the Nuclear Institute that RWE and E.ON’s decision to withdraw from Horizon's plans to build new power stations at Wylfa and Oldbury was “very disappointing", but he still hoped that the Energy Bill's proposed Contracts for Difference and other electricity market reforms would give investors the certainty they need to invest in new nuclear power.

You can understand why he wants to keep the Government’s options open. But it's a wise gambler who knows when to fold. The Government should instead put its limited resources in the service of solutions that have a much higher probability of working.

These resources include £13 million of DECC's budget currently spent on promoting nuclear power.

But, you say, what of the need to keep the lights on? There's more than one way to fit a lightbulb. Last year's White Paper's impact assessment argued that wind power, being easier to start up, would be turned off by system operators, in periods when it could generate and when demand is low, in preference to nuclear, because the latter is much more expensive to start up after shutdown.

This automatically penalises wind power and favours nuclear. Nuclear is seen as baseload, whereas wind, because of its intermittency, is not.

In the intervening time since the publication of the White Paper, more gas-powered generation has been consented. Because it can both supply baseload and is easy to start up and turn off, this gas-fired capacity negates the need for new nuclear power.

It also means that offshore wind power, tidal power (Peter Hain's new version of the Severn barrage that will be financed by private investment and produce as much as for nuclear power stations), as well as sustainable biomass, which includes anaerobic digestion, can be favoured over gas by system operators at times of low demand.

It also turns out that it is cheaper to strengthen the UK’s electricity grid connections with Europe (and this is being done anyway), widening the range of renewable sources of power, and to expand the facilities for balancing supplies with demand, than it is to build new nuclear plant. This will ensure that the lights stay on even if there is a flat calm over the UK for some time during the winter.

The Government can therefore support the provision of the maximum amount of renewable energy while maintaining a strategic reserve of gas-fired plants, together with a strategic reserve of fuels to power them.

And with the abandonment of nuclear newbuild, more capital and investment will be available for renewable energy, which will in many cases be quicker to build.

Cheaper electricity

A change in policy would also make future electricity costs lower for consumers.

This is because the Feed-In Tariff Contract for Difference policy is currently designed to benefit nuclear power the most, at a cost to consumers: the reduction in the cost of capital using this mechanism is, according to the EMR White Paper, 1.5% for nuclear, compared to 0.5%-0.8% for offshore wind; 0.5% for biomass; 0.4% for coal with CCS; and 0%-0.3% for onshore wind.

The proposed carbon price floor also benefits nuclear power far more than other technologies. The Treasury Secretary, Justine Greening MP, has admitted that the benefits to the existing nuclear sector are likely to be "an average of £50 million per annum to 2030 due to higher wholesale electricity prices".

WWF and Greenpeace together have calculated that the benefit could be much higher: up to £3.43 billion between 2013 and 2026, i.e., £264 million per year.

Therefore, if both of these policies were modified or abandoned in the new Energy Bill, electricity prices in the future would be lower.

Next week’s Bill will contain these policies, but it is only a draft. It doesn’t have to remain this way.

Civil war breaks out in Government over green policies

Latent divisions in the coalition government have broken out into a war of words, as Tories challenge the Green Deal and wind farm plans, in a bid to influence next session's legislative programme before May 9th's Queen's Speech.

Energy minister Greg Barker appeared to signal a shift in policy over the weekend by saying that Britain already has “the wind we need” either being built, developed or in planning. “It’s about being balanced and sensible,” he said.

“We inherited a policy from the last government which was unbalanced in favour of onshore wind. There have been some installations in insensitive or unsuitable locations - too close to houses, or in an area of outstanding natural beauty,” he added.

Senior Conservatives in the Coalition are plotting how to reduce support for onshore wind power, with one eye on their electoral chances in rural areas.

They have seen Chris Huhne's resignation as an opportunity to take curb green policies. "Chris Huhne’s zealous ambition is being reined back,” one top Whitehall source is reported as saying. “There’s already enough [wind farms] being built and developed."

But a Department for Energy and Climate Change spokesperson said there was ‘no U-turn on wind farms’, adding: ‘This is not a change in policy.”

Telegraph campaign

Leading Conservatives have also launched a campaign to kill the Green Deal in the Telegraph, which seems to be running a persistent campaign against the coalition government's energy policies.

The paper reports the communities secretary, Eric Pickles, the housing minister Grant Shapps, and the employment minister Chris Grayling, calling the Green Deal a stealth “conservatory tax” on householders. They claim it will add around 10% to a typical bill for home improvements, But they fail to consider the longer term benefits of reduced energy bills.

"We don't think this should extend to a 'conservatory tax' situation. The compulsion elements are over-the-top," a Government source said.

The ministers called for the entire Green Deal to be scrapped. The Sunday Telegraph quoted them as saying: "The Green Deal was Chris Huhne's baby. He has gone now and it is the right time to kill it off. Forcing people to pay thousands of pounds for unwanted extra home insulation is the last thing hard-pressed families need at the moment. It's madness."

A new Energy Bill containing the latest policies will form part of the Queen’s Speech, and is due in a few weeks' time.

DECC fights back

Deputy prime minister Nick Clegg hit back, calling reports that householders would have to pay thousands of pounds extra to do “simple things like insulating their homes”...“ludicrous scare stories”.

Chris Huhne has also responded, saying, "Top Tories should stop posturing on green plans that help hard-hit households".

And Greg Barker has called the attacks on the Green Deal "bonkers", and pointed out that the policy was in the Coalition agreement and had been developed by the Conservatives in opposition.

Nick Clegg only last week mounted a strong public defence of the Green Deal, promising customers will never be "charged more for the home improvements than we expect them to make back in cheaper bills. Plus the charge is attached to the property, rather than the person, so if you move, you stop paying. That is maximum affordability, with savings that should more than cover costs."

The facts about the coalition's green policies

It's worth restating a few salient facts around the issues of the coalition’s climate change and energy policies:

1. 463 MPs voted for the Climate Act, and only three against it.


2. Other countries are following suit, with Mexico passing a Climate Act next month, and Germany and Australia also having targets to cut emissions by 80% by 2050.


3. The clean technology sector is one of the few areas of the economy experiencing growth, and the CBI has consistently called for no further changes to energy policies to give investors confidence.


4. The impact of green policies on energy bills is minimal: according to Ofgem, the cost of nuclear decommissioning is about £266 per year for a UK household, whereas support for solar power adds £2 per year, or about 0.15% of the UK average dual fuel bill.

On the Green Deal:

1. The standard assessment procedure (SAP), used to calculate how much households will save from the Green deal measures, is as accurate as possible, as it is based on a survey of thousands of homes and is being constantly updated to take account of the latest research and experience of energy saving measures.


2. The cost of the measures will be calculated to be less than the savings achieved by the measures applied, known as the 'golden rule', and will be financed by applying a pre-agreed charge to the building's electricity bill.


3. The government says that there will still be enough cash left over for occupiers to experience reduced bills as well.


4. The length of the repayment period can be adjusted to make the golden rule work; up to 25 years in some cases.


5. Assessment can only be done by UKAS-accredited certification companies in much the same way as EPCs are presently done, i.e. by a competent person who has been trained and is certificated.


6. Assessments will not be free, but usually carried out as a loss-leader by companies who are also providing the installations. It’s therefore only fair that they will be given some of the resulting work.


7. There will be a requirement for schemes to comply with British Standard EN 45011, and for installation to be under a Publically Available Standard now under consultation (PAS 2030) which will define the skills required through National Occupational Standards (NOS).

The Green Deal will be attractive to large organisations, but the processes for subcontracting specialist installation services, in compliance with the code of conduct, still needs to be developed.

A number of local authorities are gearing up to deliver Green Deal schemes themselves, including Birmingham City Council and a cluster in the North East led by Newcastle City Council.

Councils are trusted and in a prime position to accept this responsibility. They would also be in a good position to recover the loan repayments, as they already have a property-based system in place for council tax collection.

The government is currently putting together a system of checks, guarantees and insurance schemes to try and ensure the quality of the work.

Cameron wants to pay communities to host windfarms

The Prime Minister, David Cameron, has come out in support of onshore wind farms, and promised that reform of the planning process will give more power to local communities over developments in their area, and more financial benefits to them should they agree to a windfarm being cited in their midst.

His views are expressed in a letter to Daventry MP Chris Heaton-Harris, who earlier this month coordinated an open letter to the Prime Minister, signed by up to 106 Conservative MPs, opposing onshore windfarms.

Mr Heaton-Harris boasts on his website about working with local communities "to fight both wind-farm proposals and unwanted development being foisted upon them by central government".

In his response to this letter, Mr Cameron says that he appreciates concerns from local residents about large planning applications, and “that is why we want to make the planning process more accessible to local residents, because planning works best when communities themselves have the opportunity to influence the decisions that make a difference in their lives.

"That must include local communities having their full say on onshore wind farm planning decisions."

He says that the planning reforms currently being finalised by the Coalition Government will “put local communities in the driving seat by giving new powers to neighbourhoods to write their own plans," which “will mean that the top-down regional targets will not trump local concerns in planning decisions," as it does at present.

It's significant that his wording is "regional targets" and not "national targets", for it is national targets which determine the number of onshore wind farms.

Business rates benefits

Mr Cameron goes on to say that this process should also allow local communities to “receive more local benefits as a result of development that does go ahead".

This means ensuring they “capture the full economic benefit from hosting renewable energy projects, including retention of all of the business rates they pay".

At present, only landowners and developers see a profit, which is a function of the way the Renewables Obligation was designed, unlike in several other countries where communities have long received financial benefits from wind farms sited in their locations.

Mr Heaton-Harris will take comfort from the fact that Mr Cameron says that he shares the views of the Tory MPs who signed the letter about “the need to review support for onshore wind under the Renewables Obligation".

He notes that initially the subsidy for onshore wind is being reduced by 10% because the costs of onshore wind of falling, "which will affect projects that are being built this year". This hints that the subsidy may fall further in future.

Support for low carbon sector

David Cameron then goes on to mount a defence of the role of onshore wind energy in “a balanced UK energy mix alongside gas, nuclear, cleaner coal and other forms of renewable energy".

He says that having a portfolio of different supplies “enhances energy security and prevents the UK from becoming over-reliant on gas imports".

In words that will please the low carbon sector he adds that he is “determined" to “seize the economic opportunities in renewable energy supply chains as the global race for capital in low carbon sectors intensifies", acknowledging the benefit to British companies in forging alliances with others abroad in order successfully to play their part in what is a global market.

“Around ￡4 billion of new investments in UK renewable energy projects have been announced with the potential to support up to 14,000 new jobs in this country" since April 2011, the Prime Minister writes.

He concludes by saying, in response to accusations that British renewable energy policy is a dog being wagged by the tail of policymakers in Brussels, that, “in other words, there are perfectly hardheaded reasons for allowing some onshore wind energy to be part of our mix irrespective of the EU's 2020 renewable energy target signed up to by the previous government..."

However, he adds to this sentence “...but if, and only if, local people have a proper say in planning decisions".

Heaton-Harris' response

In response, Mr Heaton-Harris says that he is “actually slightly encouraged by the letter and the noises off I am hearing", implying that he knows something we don't.

He told the Daily Mail: "I’m hopeful given what he says about planning and how that is being addressed. This is the opening of a conversation."

Nevertheless, Greenpeace spokesman Joss Garman also found reassurance in the letter: “The Prime Minister is right to make a strong intervention to cut through the myths and remind a vocal minority on his back benches that wind farms are good for the economy and good for the environment.

“Wind energy can play a crucial role in reducing our dependence upon the expensive gas imports that are driving up everybody’s energy bills, whilst also cutting pollution and creating new jobs.”

Wind industry hopeful

A spokesman for Renewable UK, the trade body for onshore wind, said that they welcomed the recognition by the Prime Minister of the contribution that the wind industry makes to the economy, employing thousands and, in the future, tens of thousands of people.

He said that wind developers had just responded to the Localism Bill and were not too worried that its effects would impact to an uncomfortable degree on plans for more onshore wind farms.

He said it would depend very much on the nature of a Local Plan and Neighbourhood Plan, and the degree of incentives that were offered to communities in the form of business rates etc. "It would be a question of balancing these local incentives with the national priorities."

This in turn hinges on the wording in the final draft of the National Planning Policy Framework (NPPF), which will determine how national targets are to be achieved at the local level, and which is still being written.

The latest thinking on resolving the tension that clearly exists between the NPPF and Neighbourhood and Local Plans, comes from the government's Communities and Local Government Committee.

It says on this matter: “Cllr Porter told us that once Local Plans were written, taking into account the NPPF, 'Neighbourhood Plans should be able to fit into a Local Plan so communities will be able to determine for themselves where development that is needed goes. What they will not be able to determine is the fact that they do not need any'".

The CLGC concludes by telling the government to sort out "the relationship between the NPPF, Local Plans and Neighbourhood Plans, especially when these priorities conflict. The NPPF must clarify whether the Local Plan or the Neighbourhood Plan takes precedence. It should also define what constitutes 'strategic issues'."

Planning Minister Greg Clark told the committee he hopes the words used in the final document would be unambiguous enough to not be open to misinterpretation.

The feeling is that, for wind farms, in the same way as for new housing developments (where the Government believes that the New Homes Bonus will incentivise communities to be more receptive to development), the carrot of receiving local business rates will be a sufficiently powerful persuader.

There will still be centrally set targets for onshore renewable energy. And at least 4,500 more turbines currently in the planning process will have to go somewhere.

Call for more community windfarms as Tories attack subsidies

On Tuesday 7th February, 8.30am-12.30pm, there’ll be a ‘Do-Tank’ at HOST Universal in Soho [address below], to look at how a proposed share-issue in the 5MW Westmill solar farm could help re-ignite the energy debate both nationally and locally.

The initiative comes hot on the heels of calls from 101 Tory MPs over the weekend to slash Renewables Obligation subsidies for onshore windfarms.

Part of their reasoning is that many of these windfarms are owned by foreign firms.

Historically, the Renewables Obligation has severely hindered the development of community-owned windfarms, because of the costs and timescales that have been required of the system.

If there were more of these windfarms, as in Denmark and Germany, they would undoubtedly have more popular and local support.
The Westmill project is led by organic farmer and eco-repreneur Adam Twine, who has a track record in tackling climate change at a community level having initiated and delivered a cooperative-owned 6.5MW wind farm.

It is a highly relevant, timely and facilitated session, (with 15 years experience in developing narrative across social and environmental issues including Fair Trade, Renewable Energy and Climate Change), the session will be attended by 15-18 participants representing a 360 perspective renewables.

Guests cover Climate Science, Investment, developers, community entrepreneurs, media commentators and political interest and some, like Climate Scientist, Piers Forster who’s coming down from Leeds.

It is structured to provide valuable insights into how we bring this story alive for a wider audience and add further momentum to the community owned and generated energy concept.

Community energy funds announced

Meanwhile, Ed Davey, the new Energy and Climate Change Secretary,  Davey began his work in post today by joining Deputy Prime Minister Nick Clegg on a visit to the Building Research Establishment’s Innovation Park near Watford, a testing site for energy efficient homes, where they are highlighting the value of green policies in stimulating jobs in the construction sector.
He also announced that a further 155 community energy projects are to receive a share of the ￡5.1 million of funding under Phase 2 of the Local Energy Assessment Fund (LEAF).

Mr Davey said: “These grants are designed to nurture the ideas and enthusiasm of communities up and down the country who want to cut energy use, cut emissions and save money”.



The meeting is at: House Of Sound Thinking. 6-10 Lexington St, London W1F 0LB.

Vestas lays off 10% of workforce, restructures management

The world's biggest wind turbine manufacturer, Vestas, has announced plans to lose 2,335 employees worldwide, stop production at one of its 26 plants, and has warned that further cuts are likely, in order to save €150m by the end of the year.

This is the third time the company has cut its workforce in as many years; 3,000 were sacked in 2010, and there was the closure of its Isle of Wight factory in 2009 despite massive opposition.

The Danish firm had recently issued its second profits warning in three months and its share price has fallen to its 2003 level.

Its CEO, Ditlev Engel, blamed the fall on €125m of cost overruns and €400m of lost or deferred revenues that removed €130m from the year's profits.

Ironically, it has suffered from high winds at the end of last year, which hindered the installation of turbines in the North Sea, causing €210m of the deferred revenues, although they are expected to be recouped soon, when weather permits.

Vestas does have a full order book, including an order announced at the end of 2011 for 54 MW of turbines from a UK customer.

U.S. subsidy end

Behind the redundancies lie unrealistically high expectations of demand for its products from China, and the likelihood of a loss of demand in the USA caused by the removal of the Production Tax Credit subsidy at the end of this year, which pays wind producers 2.2 cents per kilowatt-hour generated.

Vestas has told the U.S. Congress that if it fails to extend the credit, the company will have to close U.S. facilities, at a cost of 1,600 more jobs.

“2012 will become a very challenging year for the wind turbine industry due to a significantly reduced US market”, said Engel.

“In 2011 in particular, the Chinese market has not developed at a speed anticipated when the year started,” he also admitted.

The company has invested $1bn in factories in America, after President Obama said when taking office that he wanted to support the wind and solar industries to promote energy security.

More than Vestas' jobs are at stake: the American wind industry employs over 75,000 people.

The American Wind Energy Association argues that a consistent level of tax credit is essential in order to avoid the boom and bust cycles that have plagued the industry in the States in the past, and are the reason why Denmark and Germany are now world leaders in wind power, and not the U.S.

Management shake-up

Some have blamed Vestas' troubles on poor management, which, Engel admitted, has given it a "not undeserved" "credibility problem".

For example, it had severely underestimated the costs of increasing the manufacturing of its V112-3.0 MW turbine. Analysts fear that this might not be a unique error and that other cost overruns may be hidden in the balance sheets.

”I can certainly understand if employees as well as people outside Vestas consider us to be in a state of crisis,” admitted Engel in a statement.

"We have to work our way out of this situation and the only way we can do that is by proving that we with our global presence, high customer satisfaction and the industry’s best performing wind power systems will come out stronger after the elimination race which is currently taking place within the renewable energy sector,” he said.

There had been speculation that Engel could be forced of the post he has occupied for six years as president and CEO.

Management is being shaken up; however, Engel will stay.

Ander Søe-Jensen, Bjarne Ravn Sørensen, Finn Strøm Madsen and Peter Wenzel Kruse are all to leave the company.

Henrik Norremark, the former Chief Financial Oficer, is to become the new manufacturing COO, and a new deputy CEO, sales CSO and turbines CTO have all been appointed.

The company is seeking a new finance CFO and global services and solutions CSSO.

A company statement said that "Executive Management is extended to six members to allow greater functional focus on all key parts of the value chain and to drive a stronger performance management.

"And a Global Solution and Services unit will contribute to improving the performance of both existing and upcoming wind power plants and accelerate the development of the services and solution business."

The company is also being reorganised in accordance with the five main elements of its value chain, including the separation of Technology R&D into research and development.

1,600 of the redundancies are to be administrators and 735 are hourly-paid employees.

After the layoffs, Vestas will employ 20,400, a quarter of whom are in Denmark.

General crisis

The turmoil is part of a general situation in the wind and solar industries which, having grown on the back of pubic subsidies, are achieving maturity and now having these subsidies removed, perhaps more prematurely than they should be, due to the ongoing economic downturn.

Vestas does, however, have a record backlog of orders, and Engel reported this morning that "We have seen quite positive interest from some major pension funds into doing investment in this sector".

He said Vestas' treasury function, which has been relocated to Switzerland, was looking into opportunities that could be provided by such financing for wind projects.

"There are some new major funds that are interested in participating in major infrastructure project development," Engel said optimistically.

Alliance relaunches to help communities push for renewable energy

Tony Juniper, the former Friends of the Earth Executive Director is to spearhead a new campaign to drive grassroots support for renewable energy to make sure developments don't suffer due to the Government's changes to the planning regime and its apparent back-pedalling on commitments to fight climate change, as evidenced at the Conservative Party Conference this week.

The group, called ‘Action for Renewables' (A4R), is a partnership of NGOs, trade unions, grassroots voices and industry.

Its Campaign Advisory Board consists of journalists, environmental activists and politicians from across the political spectrum.

Tony Juniper, who has been appointed Chairman, said in a statement: “The case for renewable energy is clear. The UK needs to play its part in tackling climate change, which we can achieve by harnessing our extensive natural energy resources.

"The new green industries which will achieve this will also generate tens of thousands of new jobs in some of the most deprived areas of the country.”

The group has been set up to counteract "myths and hearsay" about renewables with information, and “is about setting the record straight and encouraging people to stand up and support properly-sited renewable energy developments around the country".

“The silent majority in support of renewables needs to make its voice heard (now more than ever. Action for Renewables intends to give it the tools to achieve just that.”

The group believes that the ‘silent majority’ includes 85% of the population who ″support the use of renewable energy″, as they responded to a 2009 Department for Energy & Climate Change market research exercise called 'Renewable Energy Attitudes and Awareness'.

The same research showed that 60% strongly ″support the use of renewable energy″, and even found an increase in those aged 16 - 24 who favour wind power, with 83% in favour of its use, and the oldest age group is the one most likely to actively disagree with wind power use (but only 9%).

When asked if they would be happy to live within 5km of a wind power development, the number in support dropped to 62% - still almost two thirds.

The Labour Government ran such a survey for several years, but the Coalition Government has not, so these are the last available figures.

Renewable UK therefore thinks that the anti-wind minority has an unfair and disproportionate impact on planning decisions. At the time, in response, Renewable UK launched an earlier campaign, called Embrace Wind.

This was relaunched in 2011 to encompass all renewables, as A4R.

Adam Bell, speaking for the campaign, says that A4R already has 3000 supporters, and will be able to supply resources to campaigners to let them support a particular development in their area.

The campaign is funded by the renewables industry, particularly wind power companies, and so faces criticism that it is a front for these large companies.

In response, Bell said that the "information we provide will be as objective as possible. If it is in any way inaccurate we will soon be picked up on it, so it is in our interests to make it as authoritative as we can and to use the best available science."

Indeed, the website's blog currently contains a lively debate between pro- and anti- wind activists on the topic of noise.

Evidence shows that local people are more likely to support a wind farm development when there are direct benefits to them personally, with the developer letting them contribute to its planning and receive some kind of financial return. A better educated public will be more likely to ask a developer to involve them in this way.

The campaign intends to fight for all renewable energies, but because of its origins in Renewable UK (although the campaign is independent from it), some technologies such as solar and biomass are currently poorly represented. Bell says this will improve with time.

Bell also said that although the government's changes to the planning regime can present a threat to the development of renewables, there are "plenty of opportunities".

"The fact that the communities can propose community development orders and even that there is a provision to organise referanda on a local scale about particular issues, are positive steps for supporters of renewable energy," he said.

A4R's members include Alan Moore (ex-chair of the Renewables Advisory Board); Alan Whitehead MP; Bill Oddie; Charles Kennedy MP; Frances O’Grady (TUC Deputy General Secretary); John Sauven (Greenpeace CEO); Jonathon Porritt (former Director of the Sustainable Development Commission); Maria McCaffery (Renewable UK CEO); Peter Ainsworth (Chair of the Conservative Environmental Network); Polly Toynbee (Guardian journalist); Stan Blackley (Friends of the Earth Scotland CEO).

Tony Jupiter has recorded a video about the importance of renewable energy to support the relaunch.

Exposed: The Renewable Energy Foundation is a front for biofuel and energy-intensive industries, and anti-wind campaigners

The Renewable Energy Foundation sounds like a nice green charity that serves the cause of green energy. But it is in fact a front for the interests of biofuels companies, energy-intensive industries and even oil and gas companies.

It put out a scare story last week, claiming that Britain would lose 10,000 jobs due to the Government's current green policies and 30,000 jobs if those policies are accelerated.

Together with Civitas, the right wing think tank, REF's policy director John Constable argued that "the more green technologies are subsidised by the EU, the greater the predicted net loss for British workers".

But not just any green jobs. It found figures which led it to compare the average cost of a wind power job with the wage of a public worker (not the same thing at all) as £54,000 versus £29,000. What this fails to do is show the comparable cost of that public sector job.

But what of the financial benefit of the wind power job? The report is unable to say, instead admitting "it is not yet possible to estimate the net employment impacts of such costs" but insinuating "they seem unlikely to be positive".

There have been many criticisms of the REF over the years, particularly from the rest of the renewable energy sector, such as Renewable UK and Good Energy.

Juliet Davenport, CEO of Good Energy, has said, "The problem with the Renewable Energy Foundation is that their name is misleading. It suggests they are in favour of renewables when actually the opposite is true."

The Charity Commission even investigated and cautioned them on the grounds that they were engaging in political lobbying.

The REF doesn't see it like that; they claim that they are merely providing educational data sets. Nevertheless these sets are almost exclusively biased against wind power and in favour of biofuels.

Who are the REF?

The REF is registered as a charity at the Charity Commission, which means it can claim charitable tax status. Its website lists a chairman and three trustees, all of whom have strong links to either the biofuels and/or oil and gas industries.

Links to biofuel industries

Mike Starkie

REF's secretary is Mike Starkie, formerly Group Vice President and Chief Accounting Officer of oil company BP Plc, but now he is a Non-Executive Chairman of biofuel company Clenergy.

Clenergy, its website says, has been set up to build plants to generate "500MW/h" (sic) of electricity from imported, cultivated biofuels.

It envisages importing the fuels from countries where there are serious questions about the sustainability of the forests.

It announced this month that it aims to become nothing less than the worldwide supplier of biomass feedstock through licensing agreements and joint ventures through the cultivation of energy crop plantations throughout the developing world.

These will produce not just timber but pyrolysis oil and wood pellets.

The European Union is now under severe pressure to change its policy on biofuels and biomass after evidence has emerged that their use can actually increase carbon emissions.

ActionAid, Birdlife, ClientEarth, European Environmental Bureau, Oxfam, Transport and Environment and Wetlands International all signed a letter last week addressed to the European Commission President, José Manuel Barroso, asking for the policy to be reviewed in the light of five scientific studies on the topic including one on land use by the EU's own scientific advisors.

The Renewable Energy Foundation has published no comment on this news.

If this evidence is accepted and policy changed, then support for biomass in the Renewables Obligation Order will undoubtedly have to be removed.

This is the policy shift for which Biofuelwatch, the campaign organisation that challenges the sustainability and carbon-neutral value of biofuels, is actively campaigning: for Renewable Obligation Certificates (ROCs) to be withdrawn for both biofuels and biomass.

Yet another REF trustee, Colin Davies told the House of Lords in May this year that he does not want support for renewables but instead wants a change in the Renewable Obligation banding so that biomass, not wind power is favoured.

Under present ROC support, palm oil, imported timber and other biomass energy crops used as a source of electricity earns two ROCS per megawatt-hour (MWh) - currently worth around £90.

This has led to a large number of planning applications, many of which are approved already, for biofuel and biomass (mainly wood) power stations across the UK.

One was recently approved at Anglesey. Other companies wanting to build such plants include MGT Power, Prenergy, Helius Energy and Forth Energy.

Almost all plan to import the wood fuel from industrial plantations at the expense of tropical forests, grasslands and communities in countries such as Brazil, the Republic of Congo or Ghana, according to Biofuelwatch.

With the REF lobbying for an increase in support for biomass in the RO, and scientific evidence pulling in the other direction, there is speculation that this dilemma may be a factor in the delay in publication of the Government's review of Renewables Obligation Certificate banding.

Cambell Dunford

There is a further link to biofuels companies. REF's company address, 21 John Adam Street in London, is alongside Charing Cross Station. Also registered at the address is a limited company called REF Ventures Ltd., which sounds like it could be the trading arm of the charity.

However, this is listed as 'dormant' or 'ceasing to trade' at Companies House, where the name was registered in 2006.

REF Ventures has three listed officers. One of these is Cambell Dunford.

Dunford is a director of W4B, a company with two projects that involve burning imported palm oil to generate electricity; one in Portland, Dorset, and another in Avonmouth, Bristol - despite strong local and national opposition which questioned the sustainability of the source of the oil.

One of these plants alone, when or if operational, would double the amount of imported palm oil into this country.

Palm oil is strongly implicated in the destruction of natural rainforests in countries like Indonesia, and thus actually increasing climate change and flooding, and decreasing biodiversity.

Greenpeace Canada senior campaigner Stephanie Goodwin says four percent of global greenhouse gas emissions are estimated to come from the destruction of the Indonesian rainforests alone.

Links to energy-intensive industries

REF's chairman, Guy de Selliers, has little to do with renewable energy and much to do with energy-intensive industry.

He is listed by Forbes as a Director of a Russian Food company, Wimm Bill Dann Foods, which is a leader in dairy products and children’s food of which Pepsico recently bought a 66% controlling interest.

He is a member of the board of directors of Solvay S.A., a global group of pharmaceutical and chemical companies that makes, amongst other things, plastics and cellulose acetate fibre as used in cigarette filters. It has a new energy arm, founded last year - which is involved, at least partly, in biofuels – specifically, sugar cane operations in Brazil.

He's also been a director of an energy-intensive nickel processing company.

Colin Davies

REF Trustee Colin Davies is also the President of the Aluminium Foundation. He recently complained to the House of Lords about the "the huge costs facing energy-intensive industries" like his from the "introduction of Carbon Price Support and Phase 3 of the European Union's Emissions Trading scheme".

Davies is also director of aluminium company Alcoa and in both roles frequently can be heard complaining about the risk to his company and the aluminium industry, especially the upstream, energy-intensive side of the business, of ‘carbon leakage’, and asking for Government support, and appropriate compensation, i.e., against the burden of the Emissions Trading Scheme.

Links to the oil and gas industry

Besides REF's secretary, Mike Starkie, having been Group Vice President and Chief Accounting Officer of BP, another Trustee, Dr Carol Bell, is heavily involved in the oil and gas industry.

She is a board member of Petroleum Geo-Services (PGS), which helps oil companies find oil and gas reserves offshore worldwide.

Her company profile says she has over 25 years' experience in the oil and gas sector, particularly its investment and finance and also acts as Senior Advisor on Oil & Gas to Europa Partners, a corporate finance advisory firm; non-executive director of Hardy Oil and Gas plc.; a member of the Investment Advisory Committee of Gemini Oil and Gas (a private investment fund).

None of this has anything to do with renewable energy.

Anti-windfarm activity

REF's anti-wind stance is well known. The author of the report on renewable energy and jobs, John Constable, is frequently quoted by the likes of anti-windfarm group The Countryside Alliance.

Also well known is the involvement of the DJ and TV personality Noel Edmonds. The celebrity was a founder of the REF and is listed as an officer of REF Ventures.

Edmonds is also a director of motor, helicopter and aviation companies - all of no merit in terms of sustainability, let alone renewable energy - and 38 others, none of which are anything to do with renewable energy either.

Although he resigned from the REF itself a year ago, Noel Edmonds' involvement is explained by the fact that he is a vociferous opponent of windfarms. He told the Guardian in 2004 that he helped found he REF "because of the threat near his home in Devon".

In 2008 he told Daily Mirror readers that "Politicians are promoting the wind industry as a green icon, but they are misleading the public into believing the propaganda of the wind industry. The reality is that wind power is too costly and can never meet our energy needs; but it will destroy the countryside."

Edmonds is also on record (News of the World, 14th Sept 2008) as believing that there should be a total ban on migrants coming into Britain because its energy resources are stretched.

Other donors to the charity are known anti-windfarm campaigners, including Sigrid Rausing, heiress to the Tetrapak fortune (the family is among the richest in the country and owns an estate in Sussex and another in Scotland).

The REF doesn't disclose the identities of all of its donors, but of those it does, many are clearly influential and wealthy, For the rest, we can only speculate on the interests they have in trying to discredit windpower and lobby for biofuels and the oil and gas industry.

Conclusion

All of the above represents clear evidence that the Renewable Energy Foundation has an industrial agenda aimed at skewing Government policy in favour of the industries for which it is a front.

Its pronouncements on renewable energy, jobs, and especially windpower, must therefore be taken with several pinches of salt.

World's first national electric vehicle charging network launched

Ecotricity and Welcome Break have today launched the first of a national network of free electric car charging points situated at motorway services and powered by the renewable electricity company's wind turbines.

Dubbed the Electric Highway, the network will, when completed in three months, allow EV drivers to travel from Exeter to Edinburgh via London without fear of running out of juice.

Further connections are planned for the next 18 months.

Both businesses expect to benefit from a unique synergy, where Welcome Break sees an opportunity to attract more custom to its motorway service stations, and Ecotricity is keen to find new markets in an emerging and potentially huge area.

Together, they hope to open up low-carbon transport routes to the whole of the UK - not just within cities.

Dale Vince, Ecotricity's founder, said: “Until now, charging posts have all been in city centres like London, but statistics show that it’s not in towns and cities where electric cars need to recharge, but on longer journeys between cities – and that means motorways."

The first ‘top-up zone’ is being installed this month at Welcome Break’s South Mimms services (at the Junction of the M1 and M25), and the first phase of the network spread across 12 motorway services will be completed by September.

Each post will be located outside the main entrance, with two sockets that can be accessed by registering for a free swipecard at the website ecotricity.co.uk/onthemove.

Within 18 months all 27 Welcome Break motorway services will have charging points.

The partnership claims that electric cars will be able to top-up in just 20 minutes using rapid recharge points (32A supply) or fully charge in two hours; while those using the slower (13A supply) will be able to recharge fully if staying overnight in adjoining hotels.

“We’re creating the infrastructure to get Britain’s electric car revolution moving," added Vince. "This marks the beginning of the end for the old combustion engine. With world oil prices going through the roof, you’ll now be able to get around Britain using only the power of the wind. It costs 1p a mile in an electric vehicle, compared with 10p in a petrol car (at today’s oil prices)."

A driver travelling a year’s typical 12,000 miles could save almost £2000 in petrol costs at today’s prices, and around 2500kg in CO2 emissions.

Rod McKie, CEO of Welcome Break, spoke of his excitement at the project, and affirmed that the company "wants to be at the forefront" of the coming change in motoring habits: "as hybrid and electric cars become part of everyday life, Welcome Break will have the facility to fast-charge these cars, giving electric car drivers the opportunity to travel the length and breadth of the UK".

Ecotricity has also installed a charging post at its windmill next to the M4 motorway in Reading. It is the first charging post to be powered directly from a wind turbine.

Video production: Tim Walter Associates

In November 2010, Ecotricity launched the Nemesis, a wind-powered sports car that can reach 0-100mph in 8.5 seconds and with a top speed of 170mph. The first electric "supercar" to be designed and built in Britain, the Nemesis was created by an A-team of ex-Formula 1 engineers with the brief to “blow the socks off Jeremy Clarkson” and show that electric cars can be sexy, fast and fun to drive.

It will be the first electric car to drive from Land’s End to John O’ Groats this summer.

This year, major manufacturers are launching all-electric mass-market models including the Nissan Leaf, Mitsubishi MIEV and Peugeot iOn. Ford will also launch an all-electric version of its Ford Focus, on sale in 2013.

Could wind power replace the combustion engine?

Dale Vince, long an evangelist for renewable electricity, asserts that "with 10,000 of today’s wind turbines, or just 5,000 of tomorrow’s” we could replace all of the "25 million barrels of oil" that we consume in the UK to travel "the 250 billion miles we drive every year."

His company has calculated that if all 30 million vehicles on the roads were replaced by EVs, which typically do 5,000 miles on one MWh of electricity, then the UK would need 13% - or 50TWh - more electricity to power those journeys than is currently generated.

Total UK grid demand was 378TWh in 2009, and a 13% increase in output is equal to just four years of annual demand growth, and to the output from 10,000 wind turbines (assuming their current design) - which would save 69 million tonnes of CO2 emissions annually.

However, as most EV charging is expected to happen overnight, when grid demand is traditionally lowest, this may not translate directly to a corresponding 13% increase in capacity.

But the revolution, if it is to happen, will take around a decade. There are currently only about 2,000 pure electric vehicles in the UK; on top of that there are a few hundred plug-in electric hybrids.

The 30,000 petrol hybrids on the roads that have a battery fitted cannot plug them into a socket; their charge either comes from the petrol engine or from energy stored during braking.

There are now around 400 charging points in cities around the UK, most of which - around 250 - are in London. But most charging is expected to happen overnight at home, with some to be offered at the workplace.

Dale Vince founded Ecotricity 15 years ago. A ‘not for dividend’ company with no shareholders, it now powers 50,000 homes and businesses in the UK from its fleet of 52 wind turbines, and invests more per capita in building new sources of green energy than any other UK electricity company. It is the only energy supplier supported by Oxfam and the Soil Association.

Welcome Break's 27 service areas house the firm's own brands alongside high-street names such as Burger King, KFC, WHSmith and Days Inn. Recently Waitrose and Starbucks have also been added.