| I am delighted to be here at EWEC
opening this CEO session.
Amid growing concerns over climate change and
global warming the important strategic role of your industry and its
ability to deploy zero carbon energy solutions is clear.
Today, I would like to begin by emphasising the
UK’s commitment to Renewables and emphasise that Wind is critical to
achieving our challenging targets.
Last year the Energy White Paper put us on a path
to 60% cuts in CO2 by 2050.
The paper also set out our intention of
maintaining reliability of energy supplies and to promote competitive
markets in the UK and beyond.
These are indeed exciting times for Renewables in
the UK.
Our target is for 10% of our electricity to be
supplied by renewables by 2010 – with an aspiration to double this by
2020. We expect that around 70-80% of the 2010 target will be from wind -
on and offshore.
As things stand this is a real shift change in our
energy mix. I believe we have the right balance of support in the UK for
this market.
We can look forward to a new era for Green power.
We want to see jobs and economic benefit coming to
the UK as a result of the significant capital investment required to build
projects.
The DTI is supporting Renewables in the UK with the Renewables Obligation,
by a programme of Capital Grants, Technology Development, and the work of
the Renewables Advisory Board.
This involves focused efforts in addressing the
key barriers facing the industry.
These include Planning, Grid Connection, Finance,
and “winning Hearts and Minds”.
“Winning hearts and minds” is critical and our
work will, through a series of initiatives try to inform stakeholders and
the public about the real facts about Renewables.
There has been an increase of press activity over
the last year and a growing anti-wind lobby.
Many myths surround Wind Farms.
What we need is accurate and balanced information
so that people can make up their own minds.
That is what DTI is seeking to provide through the
“It’s Only Natural” campaign which gives key decision makers reliable
information on which to base their decisions.
Developments in the next ten years will see multi
billion Capital investment and a huge commercial opportunity. The
Renewables Obligation itself provides support to the industry of £1bn/year
by 2010.
Investing in renewable energy now is fundamental
to bringing down costs over the long-term.
Fossil fuel costs will continue to rise as
reserves are depleted.
Renewable energy will become more cost-competitive, but when this occurs
is dependent on the level of investment and political will.
We want the UK to become a country of choice for
setting up manufacturing and assembly facilities as the Offshore Wind
Market flourishes over the coming years.
Clearly there are geographic and logistical
advantages for service and supply to UK projects to be in the UK. While UK
companies must compete on merit, I am sure you all recognise the value of
local content to the communities near wind farm developments and the
resultant enhancement of the industries reputation.
The UK oil and gas industry has a proven track
record of working in harsh environments and developing innovative
technology.
Many UK companies will recognise that they have
the capability to adapt to the requirements of the Renewables market.
For example, Offshore Wind Farms create demand for
company services such as project management, installation, operation and
maintenance.
There have been some early success stories such as
ODE and Isleburn Mackay winning work on Scroby Sands.
As new markets emerge for competitive goods and
services for Renewable Energy projects DTI is tracking business
opportunities for UK companies.
Earlier this year we published our own estimates
of the future UK Renewable Energy industry.
This concluded that:-
· Over 7500 jobs sustained by renewables in the UK
· Market value in the UK is approximately £280M
· By 2020 jobs could be between 17,000 and 35,000.
A lot of this business and jobs ought to be based
in the UK where the projects are being created.
But, its not easy for our companies - we
acknowledge that this is a difficult industry to break into.
As a recent example, high steel costs have led to
lower margins.
These lend a highly competitive and high risk and reward ratio in the
industry.
Astute planning and financial management will
continue to be critical factors at all levels of the supply chain. By
building on the achievements to date here in the UK it will be possible
for our industry to achieve a significant growth in both home and exports
business.
I hope developers and contractors will give
companies with the right credentials and capabilities a chance to prove
themselves in this market.
DTI is keenly promoting the development of
innovation and knowledge transfer within supply chains and there many
opportunities for partnership and alliances with UK companies.
We very much see progress being achieved through
industry and Government working in partnership to tackle the barriers and
to win.
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