Onshore wind could deliver £1.6 billion benefit to UK consumers

01 August 2018 Consultancy.uk

As the renewable energy industry continues to make strides in terms of efficiency and profitability, previously fossil-fuel-centred corporations are turning toward green alternatives to ensure they maintain their grip on the market. According to a new report, as they do so, and adopt more onshore wind farms in particular, British consumers could be saved multiple millions.

Forecasts show that the costs of new onshore wind projects will drop beneath the UK Government’s forecast wholesale electricity price from 2023, delivering a net benefit for UK electricity consumers. According to new analysis from renewable energy consulting firm BVG Associates, onshore wind is the cheapest form of low carbon electricity generation available to the UK, with the forecast drop new projects’ costs demonstrating net benefit for UK consumers. As a result, awarding contracts for 5 gigawatts (GW) of new onshore wind power between 2019 and 2025 could continue this trend and deliver a net payback to UK consumers of £1.6 billion.

The report, supported by German energy consultancy innogy, ScottishPower Renewables, Vattenfall, and Statkraft, has urged five new Contract for Difference (CfD) auctions to be held from 2019, and at 18 month intervals thereafter. A CfD is a long-term contract between a generator and the Low Carbon Contracts Company to incentivise investment in UK low-carbon electricity generation. Each one has a maximum capacity of 1GW, and BGV’s study believes that a clear commitment to five auctions would stimulate supply chain investment, increasing the already high proportion of UK content in projects to almost 70%. The biggest opportunities are in fabricating towers and blades, part refurbishment and the development of UK installation teams.

Net payback to consumer from the five CfD auctions

Commenting on the findings, Bruce Valpy, Managing Director at BVGA said, “It is good to get these messages into the public domain. As the onshore wind industry moves ‘subsidy free’, recognising its role in job and value creation in local neighbourhoods is important. In the UK, we need to build a sustainable electricity mix that plays to our strengths in terms of natural resources and capable workforce.”

Over the five auctions, researchers anticipate that fewer than 2% of projects would be built in England made up of small scale projects (sub 50MW) of a type typically developed by communities, while 86% of the projects by capacity would be built in Scotland, and 12% in Wales – both sites of lower than average employment. As a result, around 18,000 skilled jobs would be supported during the peak years of construction, with 8,500 people employed in long-term skilled jobs when all the wind farms are operating, with 60% of the jobs being created in Scotland, and 17% in Wales. England would still see 23% of these roles, as that is where many firms’ HQs are located.

Jobs (full-time equivalents) in England, Wales and Scotland created by the five CfD auctions

Guy Mortimer, Vattenfall’s UK head of onshore wind development, remarked, “The UK Government has identified clean growth as a Grand Challenge for the future. With political support, onshore wind, as evidence from the BVG report confirms, will rise to meet that challenge, lowering bills for British households and creating interesting and inspiring jobs for British workers.”

Tanya Davies, Head of Onshore Wind Development, innogy Renewables UK added, “The evidence is clear, not only can Onshore Wind enable the UK to meet its climate goals more cost efficiently to the benefit of consumers, it also offers huge opportunities for the wider UK economy. It’s now time to allow Onshore Wind to participate in future auctions.”


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WEF finds no progress made on greening economy

01 April 2019 Consultancy.uk

The reports of two influential bodies, in the space of a day, have warned that no progress is being made to prevent major climate change. The World Economic Forum has warned that greening of the global energy transition has stagnated over last five years, while the International Energy Agency has confirmed coal use rose again last year.

The position of the Academies of Science from 80 countries, plus a majority of scientific organisations that study climate science, is that humans are causing rapid climate change – often referred to as global warming. Roughly 95% of active climate researchers publishing climate papers endorse the consensus position that since the industrial revolution, the boom in carbon emissions from fossil fuel powered human activity has heavily impacted the planet, with rising levels of CO2 and other greenhouse gases trapping heat from the sun causing global temperatures to rise – something which will have catastrophic results in the near future.

Despite the steadfast consensus among the scientific community on the matter, however, there has been little to no meaningful action to avert disaster. In fact, while the signing of the Paris Accord was met with great excitement, since it came into force, global carbon dioxide emissions have continued to rise. Today, they sit at their highest levels yet, after a strong economy and extreme weather stoked a surge in energy demand last year.WEF finds no progress made on greening economyAccording to the world’s energy watchdog, the Paris-based International Energy Agency (IEA), energy spiked by 2.3% in 2018 – the biggest leap since 2010 – with that demand largely being met with fossil fuels. As a result, global emissions of carbon dioxide hit the record high of 33 billion tonnes in 2018, a rise of 1.7% on 2017’s figures. Commenting on the findings, IEA chief Fatih Birol said the rise in energy demand was “exceptional” and a “surprise for many.”

Birol added, “We have seen an extraordinary increase in global energy demand in 2018, growing at its fastest pace this decade. Looking at the global economy in 2019, it will be rather a surprise to see the same level of growth as 2018.”

The suggestion from Birol that 2018 is likely to be an anomaly which will not be seen again is strange, considering the added strain which the boom in emissions will place on the environment. To suggest that heightened energy demand was driven by extreme weather – which is increasingly difficult to claim is unrelated to man-made climate change – and then to suggest that such a thing is unlikely to occur any time soon in spite of emissions having increased seems contradictory.

Regardless of this, the bad news was further compounded within hours of the IEA’s release. A report from the World Economic Forum released on the same day concluded that the world's energy systems have not become any greener in the last five years. Despite the agreement of global climate targets, falling green power costs, and mounting public and business concern over the catastrophic impacts runaway climate change could wreak, the WEF’s damning assessment warned that little to no progress has been made on making energy systems more environmentally sustainable since 2014.

Coal is the largest hindrance of change on this front, according to the report. Recent years have seen improvements in energy access and security, but far too many nations remain dependent on coal power for the new energy systems to have made any environmental gains. At the same time, major economies have failed to decrease or even slow the amount of energy they use per unit of GDP, leaving smaller actors who have made changes micturating into a gale. Change on the part of the world’s largest economies is therefore crucial to driving the development of a greener, more efficient global economy, the WEF concluded.

Commenting on the findings, Roberto Bocca, leader of the WEF's future of energy and materials division, said urgent action is now needed to move toward decarbonisation. He added, "We need a future where energy is affordable, sustainable and accessible to all. Solid progress in bringing energy within the reach of more and more people is not enough to mask wider failures, which are already having an impact on our climate and on our societies."

The news comes even as sustainability continues to be talked about as a ‘top agenda item’ at the majority of the world’s largest corporations. While 85% say that it will be more important still in another five years, it is clear that the majority of the world’s most powerful businesses are failing to walk the talk on the matter, regardless of what governments do.