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All-Energy 2008 Conference

Malcolm Wicks MP,  Minister of State for Energy
Aberdeen,  21 May 2008

Fifty years ago, the British landscape was peppered with coal mines, on which our parents or grandparents relied very heavily for their energy – for heating their homes and for providing their electricity; even if they used gas, it came from coal.

The 1950s and 60s brought the first nuclear power plants, so we have grown up with that low-carbon but frequently controversial source of electricity – and the “dash” for North Sea gas in the 1980s brought a new energy source to a new generation, and brought about a rapid decline in the British coal industry.

Now another energy revolution is underway, driven by new technologies and the science of climate change. Our children and grandchildren will see renewable energy the way our parents and grandparents saw coal: as the most obvious and most visible source of energy. Renewables - wind, water, sun and biomass – are already providing clean electricity to the UK in significant amounts – and we are making rapid further progress.

Energy Policy Framework

We face two major energy challenges: energy security – that is keeping our lights on, our homes heated and our economy powered, with reliable, clean and affordable energy. Equally important is tackling climate change, primarily by reducing greenhouse gas emissions from energy-related sources.

We need to change the way we produce and use energy so that the UK, and the world, transform into successful low-carbon economies. This will not be cost free, but as Sir Nicholas Stern’s economic analysis showed, it would be far more expensive to do nothing now and to have to act later.

The need for energy security when traditional generating resources are becoming more scarce means we must avoid over-dependence on any one region of the world for our energy supplies, or for that matter any one technology. Meanwhile, the challenge of climate change requires the mix of technologies to be increasingly low-carbon.

In last year’s Energy White Paper, we set out a range of policies to meet these challenges, including a key role for renewable energy alongside energy efficiency and other low-carbon technologies such as carbon capture and storage, or CCS, and nuclear, within an overall market framework.

Since then the Government has set out further details of policy on CCS and on the nuclear elements of our overall strategy.

Over the summer we will consult on the details of our renewable policy, above and beyond the measures set out in the Energy White Paper.

Commitment to renewables

Global energy demand continues to soar and shows no signs of slowing down. We need to reduce the energy we use where possible, and then to produce the energy that we do need more cleanly.

We are committed to renewable generation and fully support the European Commission’s target to source 20% of Europe’s energy from renewable sources by 2020. It is a vital first step towards the long term goal for the EU to become a low-carbon economy.

These targets are extremely challenging: electricity generation from renewables will have to increase as much as 30-35%, perhaps higher. This raises a number of network related issues such as the expansion of grid offshore, and the timely delivery of onshore reinforcements and necessary investment.

Grid Access

We are working closely with Ofgem to deliver the final conclusions of the Transmission Access Review and set out measures that could make a real difference to renewable generators wanting to connect to the grid.

There are two key challenges: first, building what could be very significant new transmission infrastructure. We will be looking to the network companies and industry to move quickly to identify what work is needed and to start the essential preparation so that investment is delivered on time to support our 2020 targets.

The other challenge is to make sure that the commercial framework is right. We want generators to be able to connect to the grid when their projects are ready. Reforms that could deliver this outcome are already being considered by industry working groups. I am sure industry will engage constructively in this process. Significant change is inevitable if we are going connect large amounts of wind and other renewables in an efficient way.

We are also working with Ofgem to deliver the new offshore transmission regime to grid connect the existing Round 1 and Round 2 offshore wind farms that are already, and the further offshore renewable generation projects that will be needed to meet our 2020 targets.

Planning

I am sure many of you share the Government’s concerns about the planning system. The Planning Bill, which is currently progressing through the House of Commons, targets those concerns. In particular, the Bill aims to streamline the system for granting development consents for nationally significant infrastructure projects. This includes onshore electricity generating stations with a capacity greater than 50MW. The reforms will ensure that a proper debate on the national need for such infrastructure takes place up front rather than during the inquiry phase of applications, as has so often been the case in the past, where it can detract from the proper consideration of local impacts.

To facilitate this, Government will draw up National Policy Statements, setting out the need for nationally significant infrastructure. Decisions on individual projects will be taken by an independent Infrastructure Planning Commission. And developers will have to meet defined standards of pre-application consultation. We hope to see Royal Assent for the Bill during the Autumn of this year, with the Infrastructure Planning Commission established during 2010. My Department has already started development work on the suite of energy National Policy Statements and public consultation on draft statements are expected in 2009.

Strategy process

As briefly mentioned earlier, this summer we are also launching a public consultation into what more we should do to increase renewable energy use and to meet our share of the EU target.

The consultation will cover a broad range of issues, and will involve collaborative efforts across Government and with business, consumers and the wider community. It is no secret that 20% renewable energy by 2020 is ambitious and a major challenge. This does not apply solely to the UK but to the EU as a whole. Delivering it will require a major economic and social effort.

It will also provide real opportunities for UK business to benefit from the expansion of renewables both within the UK and around the rest of Europe.

As the Prime Minister explained in November last year, we want a serious national debate about how we in the UK are to achieve our share of the target. I sincerely hope you will all take the time to contribute to this debate.

We will be publishing the Renewable Energy Strategy in spring 2009, once agreement has been reached on the new EU Renewables Directive and it is clear what the UK has to achieve by 2020.

The strategy will not only focus on measures needed to meet the 2020 target, but will also consider our longer term renewable and carbon targets. It will build on existing measures, and we will be pressing ahead with those measures in the meantime, including the reform of the Renewables Obligation.

Renewables Obligation (RO)

As you all will know, in the UK, our key mechanism for encouraging new renewable capacity is the Renewables Obligation. It has been successful in driving renewable generation nearly tripling generation since its introduction in 2002.

The most economic renewable technologies, such as onshore wind and landfill gas have done well under the RO, and there continues to be a lot of potential there that we want to tap into.

We plan to raise the level of obligation up to 20% and target different levels of support to different technologies, so that by 2015, renewable electricity generation will grow to around 15%.

These changes are significant and combined with further action on speeding up the planning process and on grid connections, will give a strong boost to renewable resources.

There is a lot of good work going on both within Government and industry. I urge you to continue to press ahead to make renewables an even greater contributor to the UK’s energy mix.

Finally, I would like to congratulate Scottish and Southern Energy and their partners Fluor International on last week’s announcement of the impending commencement of construction of the 500MW Greater Gabbard offshore wind farm, off the coast of Norfolk. Developments such as this are enabling the UK to shortly become the leading country in the world in terms of offshore wind and will benefit not only the environment but also the UK economy.