Download UK Renewable Energy Policy

UK Renewable Energy Policy
Ted Hayden
Strategy & Policy Advisor, Office For Renewable Energy Deployment
6 June 2013
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Agenda
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Department of Energy & Climate Change
Our carbon and renewables targets
UK Renewable Energy Policy
Office for Renewable Energy Deployment (ORED)
Priority activities
Support measures
Progress & Benefits
Emerging issues and opportunities
DECC Responsibilities
The Department of Energy & Climate Change (DECC) works
to make sure the UK has secure, clean, affordable energy
supplies and promote international action to mitigate climate
change.
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Energy security
Action on climate change
Renewable energy
Affordability
Protect the most vulnerable and fuel poor households
Ensure competitiveness for energy intensive industries
Supporting growth
The legal framework
Ambitious binding targets
•The Climate Change Act set a target to reduce emissions by at
least 80% by 2050 relative to 1990 levels and by at least 34% by
2020
•The EU Renewable Energy Directive requires the UK to meet
15% of energy demand from renewable sources by 2020 (from
3.8% in 2011)
Accountability
•Publish policies and proposals on how we will meet our carbon
budgets and report annually on progress
•Set up the independent Committee on Climate Change (CCC)
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Making it happen
Using less energy
• Green Deal / ECO
• Industrial policies e.g. CRC
Greener and more
efficient heating
• Renewable Heat Incentive
Low carbon large-scale
electricity generation
• Renewables Obligation
• Electricity Market Reform
Decentralised electricity
generation
• Feed-in Tariffs Scheme
Greener transport
• Renewable Transport Fuels Obligation
• Electric vehicles
UK Renewable Energy
• The UK has some of the best wind, wave and tidal resources in
Europe .
• All major renewable energy technologies are supported and are seen
as a key component of the future low-carbon mix.
The Public are Supportive
• 8 in 10 people support the use of renewable energy to generate
electricity
• Solar power had the highest backing (82%), followed by offshore wind
(72%) and wave and tidal (71%). Onshore wind was opposed by 13%
of respondents.
Office for Renewable Energy
Deployment (ORED)
• Renewable Energy Targets
• In 2009 The Government published its Renewable Energy
Strategy and set up the Office for Renewable Energy
Deployment (ORED) to drive forward renewable energy in
the UK.
• ORED addresses deployment issues by working alongside
central Government Departments, local and regional
authorities, stakeholders and other NGOs.
• Every year the government publishes the UK Renewable
Energy Roadmap.
Office for Renewable Energy
Deployment
Enabling cost effective delivery of
renewable energy as a core part of
the UK’s low carbon energy future
Increasing
deployment of
renewable energy to
2020
Ensuring renewable
energy is embedded
as part of the
Government's energy
strategy up to 2050
Driving down the
cost of renewable
energy and ensuring
value for money for
consumers
Ensuring public
understanding and
acceptance of
renewable energy
deployment
Delivering jobs and
investment within the
UK from renewable
energy projects
We have a 15% renewable energy target as set
by the European Union.
The UK must secure a factor of ten increase in renewable energy up to 2020, compared
with an average factor of two increase across Europe – all while increasing demand.
Sources: ORED (2013)
There are many renewable technologies, with very
different costs and potential. Only a subset are ‘critical’
for meeting a target of 15% renewable energy by 2020
The EU defines ‘renewables’ widely, as “energy from renewable non-fossil sources.
We can use any of these to meet a target of 15% of energy use in 2020, equal to 220 – 230 TWh of
generation. But the following eight technologies will be most important.
1. Offshore Wind
In 2020: 33–58TWh/yr
2. Biomass Heat
In 2020: 36–50TWh/yr
3. Biomass Electricity
In 2020: 32–50TWh/yr
4. Onshore Wind
In 2020: 24–32TWh/yr
Very large deployment
potential - but deeper /
further out sites are
expensive. Working to
reduce cost by 2020
Heat from wood,
waste, sewage etc.
mainly for industrial
and commercial use.
Contributes around
40% of total renewable
electricity
Can be widely
deployed, but issues
with their placement
and public desirability
5. Heatpumps
In 2020: 16 -22TWh/yr
6. Solar PV
In 2020: 6–18TWh/yr
7. Marine Energy
In 2020: 1TWh/yr
8. Renewable Transport
In 2020: < 44TWh/yr
Uses electricity to pull
heat from air or ground
(‘reverse refrigerator’).
Classic panels on roofs
to generate electricity
from sunlight. Small to
industrial scale
Small contribution to
2020, but potential to
provide much more in
future.
Much theoretical
potential but must
ensure sustainability.
Sources: Definition from EU, Directive 2009/28/EC; TWh figures from DECC(2011 and 2012), Renewables Roadmap
Achieving these aims relies on five main policies for
driving renewable deployment
Three policies are paid for by energy suppliers, who pass
costs onto consumers.
Renewables Obligation (RO)
Contracts for Difference (CfDs)
Feed-in tariffs (FITs) scheme
Renewable Heat Incentive (RHI)
Supports heat generation from things like
biomass boilers or heat pumps via a tariff
paid proportionate to generation.
Renewable Transport Fuel Obligation
(RTFO)
DfT regulation requiring fuel suppliers to
include biofuel in transport fuel.
All figures are p.a. Source: DECC(2013), DECC policy and economists * figure refers to real 2012 prices. RO figures consistent with govt. response to RO Banding Review consultation, July 2012
Renewables Obligation
• Currently main policy for supporting large
scale renewable electricity deployment
• New bands from 1 April 2014
• Closes to new generation in 2017
• Contracts for Difference will take over as
our main source of support for large scale
electricity generation projects
• Between 2014 and 2017, new renewable
energy projects will be able to make a
one-off choice between the two
mechanisms
Feed-in tariffs
• Over 400,000 installations by January
2013
• Comprehensive review completed
during 2012
• Greater certainty for industry and generators and reduced
impact on consumer bills
• Over 400,000 PV tariff reductions maximum quarterly,
depending on take-up
• Details on www.ofgem.gov.uk
Electricity Market Reform
Contract for
Difference
(CfD)
Capacity
Market
Carbon
Price Floor
Early
Delivery
• Greater visibility, long term stable cashflows, indexed to inflation
• For renewables, 15 year fixed revenue contracts paid for energy
produced
• CCS and nuclear projects also eligible
• New long-term contracts for capacity, minded to let first contracts from
2014
• Gas generation eligible
• Long-term certainty of the cost of carbon in the UK
• Starts April 2013
• Not just for new nuclear
• Transitional CfDs for some renewable and CCS projects
• For projects seeking to achieve financial close or make major supply
chain commitments this year
Because of the low starting point, deployment needs to
be steep.
Renewable Energy in the UK: Historic and Projected, 2007 - 2020
Energy Generated from Renewable Sources
(TWh)
240
220
Indicative contribution: demand
needed from renewables in 2020
223-230
2020
200
Transport
10%
180
160
Electricity
30%
Heat
12%
140
154-158
2017/18
113-116
2015/16
120
100
80
60
40
41
48
54
58
63
2011/12
83-84
2013/14
Of the three sectors
making up our 2020 goal:
 Renewable electricity
has made a good start.
 Heat and transport are
have challenges
Target Range through to 2020
Electricity
Heat
Transport
31
20
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Renewable electricity generation increased from 9.4% in 2011 to 12.5% by the end of 2012.
Sources: DECC(2012), Renewables Roadmap; indicative contribution based on possible sharing of burden as set out in HMG(2009), Renewable Energy Strategy
A 250% growth in capacity since 2007
N.B. for the purpose of comparison, 10MW is roughly equal to five onshore wind turbines, or two offshore turbines
A strong forward pipeline
Sample of recent major announcements
(MW)
Under
Awaiting
PreConstruction Construction Consent
Biomass 254
2970
831
Offshore 1538
Wind
2017
7292
Onshore 2294
Wind
4456
6774
Waste
1003
175
339
Source: Pipeline data from REPD (January 2013). Investment figures from developer announcements.
 April: Britain’s largest rooftop solar
installation (>20,000 panels) fitted
onto Bentley factory in Crewe
 7th March: London Array officially
became world’s largest operational
offshore wind farm. Final completion
due later this spring
 30th Jan: new 35-turbine
‘Westermost Rough’ windfarm off
river Humber, worth ~ £860m.
Enough for annual power of >
200,000 homes
The growth in renewables is bringing other advantages.
Government has two main further goals of maximising
economic benefit while minimising cost
We have a very positive story to tell
already, with jobs created UK-wide
Since 2010 DECC has
recorded investments in
large scale renewable energy
totalling over £29 billion,
with the potential to
support around 30,000 jobs.
Job figures based on ORED analysis of developer announcements
Impact on energy prices and bills
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The next few months and years present
both challenges and opportunities
• Energy Security
• Nuclear and Unconventional Gas
• Green Deal rollout
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Onshore wind
Joint Projects?
Transition to EMR
Deal support and investor confidence
Strategic clarifications and additions
Cost reduction
Heat and transport
Bioenergy sustainability
Website:
https://www.gov.uk/government/organisations/department-of-energy-climate-change
Contact:
[email protected]
Follow:
@deccgovuk
www.youtube.com/deccgovuk
Department for Energy and Climate Change
6 June 2013