Energy Handbook 2011 - GBR

P o w e r S u m m i t - T h e E n e r g y H a n d b o o k 2 0 1 1
C o u n t r y P r o f i l e : U n i t e d K i n g d o m
in the last two years, according to Jim
Mather, Scotland’s Minister for Enterprise,
Energy and Tourism. “We reckon that the
increase could be at least up to 130,00
now, which would be approximately
5 percent of the Scottish workforce,”
Mather says.
Since Scotland began to address the
climate change agenda, a totally new
employment sector has emerged. Charlie
Silverton, CEO of Edinburgh’s Renewable
Devices – the engineering, design
and consultancy company behind the
Swift wind turbine – explains how the
renewables sector has opened up job
prospects for graduates. Ten years ago,
engineering graduates had the choice
of working in military technology, for
companies such as BAE Systems, or in
the oil and gas industry, according to
Silverton; now graduates have a wealth
of options in the renewables sector.
In April 2005 the UK Energy Research
Centre (UKERC) Marine Energy Network
was launched at the University of Edinburgh
to research into marine renewable energy
and increase collaboration between
academics and the private sector.
In 2010 Carnegie College in Dunfermline
opened the UK’s first Modern
Apprenticeship for the renewables
industry. Carnegie’s Wind Turbine
Technician Modern Apprenticeship
is currently training apprentices from
Siemens, REpower and Weir Group.
Employment opportunities are opening up
across the board as the country rebuilds
its ports, infrastructure and supply chains
in an effort to stimulate further foreign
investment in the energy sector.
Scotland’s Ducks in a Row
Mather. “There’s also another dimension:
do we want to write a big cheque to
France or some other country for nuclear
technology, or do we want to see that
money invested in Scotland – in Scottish
technology, Scottish skills, Scottish
intellectual property, Scottish-generated
energy – that we can sell on to other
markets?”
To maximise Scotland’s potential as
a green energy generator the Scottish
Government has created an Energy
Advisory Board, the members of which
represent leading energy companies and
academic institutions.
The Energy Advisory Board liaises with a
similar Oil and Gas Advisory Board and
a Thermal and Carbon Capture Advisory
Board, reporting directly to the First
Minister. “We’re really beginning to
redefine energy in Scotland as being this
new totality,” Mather says. “We’re lining
up all our ducks in a row: the renewable
resources, government policy, planning
policy, grid strategy, our engineering
capability, our North Sea oil capability,
our academic capability, our Scottish-
European Energy Centre up in Aberdeen,
the European Green Energy Centre up
in Orkney that can ‘plug-and-play’ to
test wave and tidal devices, and our
connections to the UK Government and
the European government.” Many of
Scotland’s most successful renewables
companies have received additional
support from Scottish Enterprise,
Scotland’s economic development
agency set up in 1991 from similar preexisting
organisations. “Essentially we’re
looking at the commercialisation of good
ideas,” says Andy McDonald, Director
of Renewable Energy & Low Carbon
Technologies with Scottish Enterprise.
“That could be a fresh-start business out
of a university or a spin-out, a division of
a technology company with a new idea,
or an existing business.”
The grants provided by Scottish
Enterprise – ranging from hundreds of
thousands of pounds to £10m – come in
the form of co-investments with privatesector
investment funds. “It’s the private
sector that does the decision-making,”
says Andy McDonald. In this way, while
Scottish Enterprise shares the investment
risk, the organisation can be assured of
the commercial potential of a technology
through private-sector due diligence.
In addition to promoting the development
of Scottish companies, both domestically
and overseas, Scottish Enterprise has
been instrumental in bringing foreign
investment into the country. Much of
its recent focus has been on developing
the local infrastructure and supply chains
to improve efficiency and entice foreign
companies by reducing the costs of
operating in Scotland.
The Government in the
Marketplace
“Historically, we’ve had a very open
market approach in the UK. It has served
us well over 30 years,” says Charles
Hendry. But on the back of UK energy
regulator Ofgem’s Project Discovery, an
examination of the options for secure and
sustainable energy supplies over the next
10–15 years, this situation is soon to
change.
“We’ll be seeing much more intervention.
We’re now in a very different situation – we
have to appeal to international companies,
we’re looking at global opportunities, we
are dependent on imported sources of
gas and oil, we’re becoming increasingly
dependent – therefore, we’ve got to make
a much stronger pitch for why people
should invest here,” Hendry says.
their CO2 emissions. They are obliged to
return an amount of emission allowances
to the government equivalent to their
CO2 emissions for that year. EU ETS
put a price on carbon emissions that is
supposed to increase gradually, creating
an incentive to invest in low-carbon
energy and penalising pollution.
“We were very pleased when the scheme
was set up,” says David Porter, CEO of
the Association of Electricity Producers.
“We thought it was a neat mechanism
that would enable the industry to remain
liberalised and competitive. It got off to a
good start; it’s remarkable that you can
bring together 27 countries with different
interests, and it works.”
EU ETS might have worked in the
administrative sense but in the wider
sense, of reducing emissions, it was less
effective. “The scheme only works to the
extent that politicians want it to,” says
Porter. “If they don’t push the limit down
hard enough, you have a situation we
have today where the price of emitting
carbon is very low. So the scheme is there
and it works, but the economic signal it
is sending is: you’re doing everything fine
now, you don’t need to change.”
The 2009 EU Renewables Directive cast
further doubt on the effectiveness of EU
ETS. Instead of placing the emphasis on
low-carbon technology as EU ETS had
done, the Renewables Directive laid down
mandatory targets for the percentage of
energy obtained from renewable sources,
country by country. In the case of the UK,
the target is for 15 percent of all energy
to come from renewables by 2020.
Electricity producers will take on much of
this responsibility; the 15 percent target
equates to 30 percent of electricity being
produced from renewables.
An abundance of natural resources
combined with a growing feeling that
Long before Project Discovery was
Scotland can become a global exemplar
commissioned, the emergence of a global “This immediately cut across the way that
and technology leader in renewables has
climate change agenda meant that both the EU ETS would work,” says Porter.
led the Scottish Government to exclude
European and British legislation was “You were supposed to have carbon
nuclear energy from its future generation Particularly valuable for emerging
already heavily vested in the market. emission limits that would come down,
mix – in contrast to UK Government technology companies is Scottish
One of the most enduring pieces of and you were supposed to make your
policy. “We’ve got real misgivings about Enterprise’s “proof-of-concept” funding.
EU regulation on climate change is own judgements about which technology
nuclear from the standpoint of the cost This puts money forward to enable
the European Union Emissions Trading to use to achieve those targets. The
of decommissioning, and of waste, and companies with promising technology to
Scheme (EU ETS). Under the EU ETS, Renewables Directive says: don’t think
the fact that the taxpayer historically has move from bench to commercial scale
large emitters of carbon dioxide within about that, just build renewable energy
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picked up the tab on that,” explains Jim and prepare for the marketplace.
the EU must monitor and annually report – which may or may not be the answer.”
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