| Climate change affects each and
everyone of us. Tackling climate change is an important driver of the
Government’s renewables policy. One of the biggest challenges in the South
East is encouraging more renewables development. And it is not just
Government but business and local communities who can play a role in this.
If we are to achieve our objectives on renewables,
it is clear that we will need the support of local and regional activists
working on the ground.
The work of such activists is critical, both to
win hearts and minds. We must make the most of opportunities from the
development of renewables for local economies and communities.
Local Councils, Regional Development Agencies and
other local and regional partners have a critical role to play in the
delivery of national energy objectives.
The 2003 White Paper called upon all regions to
develop a strategic approach to energy issues, including renewables. This
meant developing regional objectives and action plans based upon their own
specific opportunities and circumstances.
Exciting times lie ahead for renewable energy in
the UK. Currently, 2.7% of UK electricity is supplied from renewable
sources.
The Government target of increasing this to 10% by
2010 with an aspiration to double this by 2020 demands substantial capital
investment.
The challenge is for UK companies to win as much
as it can of the business that will be generated over this period.
It is estimated that there are 8000 people
employed in renewables in the UK, supporting a market of around £290m per
annum.
By 2020 it is predicted that up to 35,000 people
could be employed by the industry.
UK companies will have to adapt to the
requirements of the Renewables market.
For example, Offshore Wind Farms create demand for
companies on project management, installation, operation and maintenance.
There have been some early success stories such as ODE and Isleburn Mackay
winning work on Scroby Sands.
Government wants to work in partnership with
industry to help it achieve maximum benefit and recognises the potential
for UK companies to successfully diversify into this market.
The South East, with its recently published
strategy for Energy Efficiency and Renewable Energy, has gone a long way
in developing its own approach to energy.
This conference is continuing evidence of the
region’s commitment to renewables.
The region has its fair share of local success.
The excellent work of Thames Valley Energy, the
achievements of Woking Borough council and the innovation promised by the
redevelopment of Bracknell town centre are good examples.
Recently Bracknell Forest Borough Council
succeeded in its bid for a £1.8m from the Community Energy grant scheme
for a new community-heating network serving 200 homes plus a library and
other buildings.
And what of the role of Government?
Our key mechanism for encouraging investment and
developing renewables is the Renewables Obligation.
I am pleased to announce today the publication of
the final terms of reference for the 2005 Review of the Obligation.
With two years of the Obligation under our belt we
are now well placed to consider what changes could enhance effectiveness
up to the 2010 target and beyond and encourage investor confidence
further.
One thing we don’t need the Review to tell us is
that, for the moment, the renewable sector that will provide the most
growth will be wind – both onshore and offshore.
Other potential sources, like wave and tidal,
solar or biomass require a lot of investment and testing before we will
see mass deployment and price reduction. They will not have the capacity
before 2010. Without onshore and offshore wind – forget 2010 target of
10%.
But we are not relying solely on one technology –
bioenergy for example provides a contribution through landfill gas,
co-firing and dedicated plant - but it is clear that for the next few
years wind is key.
So, how has the market responded so far to wind?
Since the introduction of the RO we have seen a
step change in the amount of new capacity built and proposed.
Last year, the wind sector saw about 100 MW of new
capacity built, which should more than triple this year.
We also saw the opening of the first large scale
windfarm at North Hoyle and all the turbines at Scroby Sands off the
Norfolk coast have started to generate electricity.
There is opposition to wind farms and a lot of
that opposition is highly vocal.
Some of it is based on misconceptions.
I want the debate on wind farms to be based on
fact.
And this underlines the importance of getting the
facts out there rather than relying on scare stories.
Over the medium term and beyond we want a diverse
range of renewable energy technologies and expect biomass, solar, and
marine energy to begin to make a significant impact.
Government has announced more than half a billion
pounds of support, since 2002, for research & development and
demonstration projects for longer term renewables and low carbon energy
generation technologies.
It is also important to look to the long-term, to
begin to coordinate a vision of where we ultimately want our energy policy
to lead.
Science holds the answer to finding a solution to
climate change and developing tangible, reliable technologies.
This summer, the UK published its 10-year
framework for investment in science and innovation, which aims to make the
UK one of the most innovative countries in the world.
Our Science Budget has risen by over 10% per annum
in recent years and will stand at over £3bn by 2007.
There are number of technologies with great
potential to change the way we produce and utilise energy.
Within the area of renewables, solar PV offers
significant potential.
Some predict that this could become
cost-competitive with fossil fuel generation, even within the UK climate,
in the next 20-30 years.
This Summer I announced that schools, houses and
commercial buildings will benefit from £8.5million extra new funding to
encourage more energy production from solar panels and small-scale
renewables.
This brings the Government’s commitment to solar
PV to £31 million since 2002.
It also increases support for small-scale
renewables in households and communities through the £12.5m million Clear
Skies programme.
I want to see this funding used to encourage more
of the excellent examples of solar projects.
For example, Infinity Foods, in Brighton and The
Environment Agency Thames Region HQ here in Reading who are among 17
organisations receiving £1.4m in the most recent round of Government
funding for solar projects.
There is tremendous scope for the development of
small scale renewables in this country.
One of strengths of renewables is that individuals
and their families can play a role in reducing greenhouse gas emissions -
it is not something dealt with exclusively by big business.
We are currently looking in depth at the detail of
a strategy on microgeneration, liaising closely with the industry and the
trade association.
We plan to issue a draft strategy for consultation
next year - probably over the summer.
One issue is relaxing the rules in the Renewables
Obligation so that small generators, such as PV installations on houses,
can qualify for Renewables Obligation Certificates – and we will examine
additional flexibility on that as part of our wider consultation.
Although the financial benefit may be modest, I
hope this has already sent a clear signal to small generators that they
are very much part of the renewables family and an integral part of the
effort to increase renewables in the UK.
I urge you to keep up the good work.
The importance of local and regional activity in
delivering the growth of renewables can only grow over time, as the number
and type of installations grow.
Technologies like biomass offer increasing
opportunities for local and regional economies.
Our aim will be to strengthen and deepen our
partnership with you as your role increases.
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