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I want to begin by saying how delighted I am
to be here, and give my first keynote speech as Minister for Energy to the
All-Energy Conference. Like this conference I am also ‘All-Energy’. I have
responsibility solely for energy and sustainability. The fact that I have
chosen the All-Energy Conference to give my first speech reflects this
Government’s continued commitment to the expansion of renewables. I want
to emphasise the importance we place on renewables and the significant
contribution it will make to addressing the key challenges we face,
including on the environment.
Indeed, the Energy White Paper put the
environment at the heart of our energy policy for the first time. It
also set out our 4 key goals of our energy policy.
The need to put ourselves on a path to cut CO2
emissions by some 60% by around 2050.
Maintaining the reliability of our energy
supplies.
The promotion of a competitive energy market.
And the need to ensure that every home is
adequately and affordably heated.
This last point, the cost to the consumer, is a
subject that I first wrote about back in 1978. Another reason why I’m glad
to be Energy Minister today. Affordability remains important as we
consider options to address the many challenges that lie before us.
Those challenges are clear. Climate change and the
decline in the UK’s indigenous energy supplies are just two examples. It
is important that we continue to have reliable energy supplies as we shift
away from being a net energy exporter, to being a net energy importer like
most other industrialised nations. Security of supply is, and will remain,
a fundamental objective of the UK’s energy policy.
However, we do not believe Government is best
equipped to decide the composition of the fuel mix. We prefer to create a
market framework, reinforced by long-term policy measures (such as the
Renewables Obligation) which will give investors, business and consumers
the right incentives to find the balance that will most effectively meet
our overall goals.
I had the great pleasure of visiting an offshore
oil rig today and what struck me, apart from the cold wind, was the
important role that fossil fuels - oil, gas and coal - have played in
shaping our social and economic history, especially here in Scotland. It
is clear that fossil fuels will still have an important contribution to
play in the foreseeable future in delivering a diverse energy mix. On
nuclear the position, as set out in the Energy White Paper, remains
unchanged on the need to keep the option open.
I want to focus now on renewables and the
excellent work of the Renewables Advisory Board. Only yesterday I was
delighted to meet them, and what impressed me was their enthusiasm and
commitment to ensuring that renewable energy had a bright future ahead of
it. I want to assure you that I share that enthusiasm and commitment.
I do not have to tell this audience of the
benefits of renewable energy. I too recognise its unique characteristics
in combating climate change and contributing towards reliability of energy
supply through increased diversity. I also want to talk about the
opportunities for business and job creation that a successful and
flourishing renewable energy sector will bring. This is not just true here
in Scotland, but even in Croydon - my own constituency. One of the first
duties of a Member of Parliament is to trumpet the achievements of ones
own constituency, and I am not going to disappoint you. In Croydon I am
delighted to say that we are also embracing renewables. We have three
combined heat and power installations at two local hospitals and a
swimming pool. And in nearby Sutton there is the UK’s largest
carbon-neutral eco-village - the Beddington Zero Energy Development. This
is an excellent example of the sort of sustainability that we are keen to
see expanded. The simultaneous enhancement of the environment, the
economy, and society within the BedZed development demonstrates an
exciting vision for the future.
I want to turn now to the Government’s 2010 target
for generating 10% of electricity from renewable sources of energy, and
our aspiration of 20% by 2020. I was interested to hear the views of the
Sustainable Development Commission, and I thought that their report was
particularly perceptive, authoritative, and well timed. The report ‘Wind
Power in the UK’ stated that the UK’s wind resources are more than enough
to meet current renewables targets.
Wind farms, both onshore and offshore, will
clearly make the most significant contribution towards our 2010 target.
But I want to make it clear that the Government is seeking to bring
forward a wider range of renewables into the longer term.
The 2010 target is ambitious, especially as we are
starting from such a low base. The challenge is therefore formidable but
the whole renewables industry is making strong progress. Last year was a
record year for new wind build with 240 MW of new generation capacity. I
know the industry expects to more than double that achievement this year.
I want to congratulate the industry on this achievement and I am happy to
re-affirm this Government’s commitment to the Renewables Obligation as our
main mechanism for delivering our renewables target.
This brings me nicely onto an announcement I want
to make today for a new windfarm at Scout Moor, near Rochdale. My decision
was taken after careful consideration of the Inspector's Report and after
a thorough public inquiry. It will allow Scout Moor Wind Farm Ltd to build
26 turbines with a capacity of 65 Mega Watts, and produce enough
electricity to power 30,000 homes.
The Government recognises that a stable framework
is key to maintaining investor confidence. I am sure we all agree that
these are exciting times for the renewables industry and I am delighted to
see the energy sector investing so heavily in it. Taking biomass as an
example, I was interested to hear that SembCorp Utilities have announced
that they are investing £60 million in a new wood burning power station in
Teesside. And in Enniskillen, construction of a new £9 million biomass CHP
plant at the Balcas timber processing facility is well underway. These are
just two excellent examples of the way industry, supported by the DTI, are
delivering jobs, security of energy supplies, and reductions in carbon
dioxide emissions.
Its not just big business investing in renewables.
Interest in community ownership of wind farms is growing at local,
regional and national level. There are many such examples up and down the
country of community-based schemes. Examples like Baywind in Cumbria and
Northfield wind farm in Orkney. Community ownership could also increase
grass route support for schemes, identify new opportunities for all
technologies and develop sites that would otherwise be deemed economically
unviable for ‘commercial’ developers through innovative social enterprise
structures.
The DTI is also funding the Clear Skies initiative
aimed at giving householders and communities a chance to realise the
benefits of renewable energy by providing grants and access to sources of
advice. The DTI has recently increased the funding to £12.5 million in
order to extend the scheme until March 2006. Projects like the
installations of one wind turbine and PV modules at the Beaumont Primary
School in Suffolk are making a real difference in challenging the
perceptions of wind farms and renewables generally.
We are also keen to ensure that communities in the
UK benefit from wind power projects in their locality. We have
commissioned a study to establish a firmer evidence base about the scale
and nature of community benefits being offered in the UK, to increase
understanding of how the whole process of community engagement plays out
in the planning decision-making process, and to enable comparison with
common practices in other leading European counties.
I briefly mentioned the Renewables Obligation.
Most of you will be aware of the preliminary consultation currently taking
place on the review of the Renewables Obligation. This is a real
opportunity for everyone to have their say, and make a real contribution
to shaping the way in which the Government supports the future expansion
of the renewables industry. I would urge you to grasp this opportunity and
submit your views on possible changes to the Renewables Obligation. The
Government has made it clear that any proposed changes would be assessed
against three key criteria: the impact on investor confidence; the impact
on the Obligation’s effectiveness in meeting our renewables objectiveness;
and the cost on consumers. I want to assure you that the DTI is listening
and we really want to hear your views on how we can improve the Obligation
to the benefit of the environment, the consumer, and the investor.
The Renewables Obligation is not the only support
Government is providing to encourage the expansion of the renewables
industry. We have an extensive package of support worth £500 million to
2008. This package of financial assistance for capital grants, R&D and
demonstration projects aims to support emerging renewable and low carbon
technologies achieve commercial viability over the long-term. It is not
just about supporting what are the most cost-effective solutions now, like
onshore wind farms.
We are also supporting other forms of new
renewable technology such as solar PV, biomass and wave and tidal-stream.
I am therefore delighted to announce a grant of
£2.68 million to SMDHydrovision for the development of a 1 Mega Watt tidal
stream device, which will be tested at the European Marine Energy Centre
in Orkney.
Another recent success story in the marine area is
that of Edinburgh based company Ocean Power Delivery. This is a company
that since 1998 had received over £3m in support under the DTI’s
Technology Programme to develop their technology. I understand that last
week they secured their first commercial contract worth £5.5 million to
supply a project in Portugal. I would like to congratulate the company and
hope that the DTI’s £42 million ‘Wave and Tidal Stream Demonstration
Scheme’ will provide similar opportunities.
I was also pleased to announce recently that under
the DTI’s PV major demonstration programme, 14 new solar photovoltaic
energy projects across the UK will receive £1.35 million in funding,
bringing the total amount awarded to medium and large-scale projects since
the Government established its scheme in 2002 to £18.8 million. These
announcements demonstrate this Government’s clear and continued commitment
to alternative carbon free technologies.
It is particularly fitting we're holding this
conference in Scotland. I think we all recognise Scotland’s unique
position and ability to realise the economic and environmental benefits
from renewables. Although I also recognise that there are key barriers,
like grid connection, that need to be urgently addressed. But we are
making progress.
Firstly, Government took a power in the Energy Act
2004 to enable us to limit transmission charges for renewable generators
in a specified area of GB, if those charges would otherwise deter
renewable development in that area. In March 2005 the Government announced
its intention to exercise that power to limit transmission charges for
renewable generators on the Scottish Islands, and to consult on whether to
exercise it for renewables on the mainland of the North of Scotland.
Secondly, Ofgem has also announced approval for
£560 million of funding to upgrade the transmission system in Scotland and
North of England to accommodate new renewable generation in Scotland on
the system.
Thirdly, we are making good progress with the
Ministry of Defence in managing the tensions between its activities and
wind farm developments, not least on the Eskdalemuir seismic array where
MoD objections to more than 1GW of projects have been lifted.
As I have said, there are still significant
barriers for us to overcome, but the key messages that I would like to
leave you with is that my officials and I are listening.
Finally, let me close by saying that I want to
leave you in know doubt of my commitment to the renewables industry, and I
am looking forward to working with you to deliver a world-class, dynamic
and innovative industry.
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