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
The UK is already the world leader in
offshore wind power, and the amount of
energy the UK generates from wind will
continue to rise dramatically: according
to some proposals, offshore wind alone
could eventually provide up to 40 GW of
installed capacity. The speed with which
wind energy can be deployed is vital to
the UK’s chances of realising its energy
targets for 2020. “If you want to build
and commission a nuclear plant, you are
looking at 10 years,” explains Anders
Søe-Jensen, President of wind turbine
manufacturer Vestas Offshore. “You can
deploy wind energy much more quickly.”
The UK’s Crown Estate has developed
a three-round leasing strategy for UK
offshore sites with the aim of installing
25 GW of offshore wind capacity by
2020. Round 1, which catered to
demonstration-scale projects of up to 30
turbines, began in December 2000. and
show respectively the existing Rounds 1
and 2 sites and the proposals for Round
3.
David Hodkinson is UK Business
Development Manager at Swedish power
company Vattenfall, which acquired
Thanet, currently the world’s largest
offshore wind farm, in 2008. He attests to
the success of the offshore wind programs
of the UK Government and the Crown
Estate. “UK Round 3 is a cornerstone
for the development of offshore wind in
Europe and perhaps beyond,” he says. “It
is an excellent and very well conceived
program of activity by the Government
and the Crown Estate. Round 3 is already
stimulating interest and commitment
from other European countries. Vattenfall
is a European operator, and in the end
we will go where the investment returns
are the strongest. I think our involvement
in Round 3 will strengthen the offshore
wind industry.”
The default is that one ROC is issued for
each megawatt-hour (MWh) of eligible
renewable output. Some technologies get
more, some less. For instance, offshore
wind installations receive two ROCs per
MWh; onshore wind gets one ROC per
MWh, and plants fired by biogas receive
half a ROC per MWh.
Anders Søe-Jensen attests to the success
of ROCs: “Business case certainty has
been created through the ROC system.
The UK politicians have put in some
systems at a very early stage to give
you business case certainty. That’s very
important in our industry: that the guys
who put the money on the table can see
they will get richer.”
The UK’s plan to decarbonise its
economy also includes building new
nuclear power plants, yet this could be
inhibited by incentives weighted towards
the development of wind resources. New
nuclear was proposed at a time when EU
ETS was the prominent legislation and
carbon prices were expected to rise. “The
nuclear sector needs a high carbon price
in order to be profitable,” explains David
Porter.
Why then does the UK need either
traditional generation or new nuclear?
Cannot it simply dispense with these
for ever, given the huge potential wind
generating capacity around the British
Isles? Here we run into the issue of
intermittence. When consumers press a
switch they expect electricity to flow –
they pay not only for the power they use,
but also for reliability.
Because wind varies from place to place,
putting wind power plants all around the
UK increases reliability. Yet no matter
how much wind capacity we install, there
will always be times – for example on a
calm day in mid-winter – when demand
will exceed supply from wind.
“The sort of place people might
put their pensions”
Ofgem’s Project Discovery states that
the British energy infrastructure requires
a total investment of £200bn for the UK
to realise its 2020 targets.
Figure1:(top) UK electricity generation
“There’s this financing challenge because
from renewable sources from 2000
the Government has chosen to say that
to 2010, and Renewables Obligation A series of incentives under the
nuclear is possible – yet each nuclear
targets. Figure2:(above) Forecast
Renewables Obligation encourages the
power station costs £5–7bn,” explains
growth in UK renewable power up to development of green energy generation.
Ofgem CEO Alasdair Buchanan. “On top
2020 offsets a steep decline in nuclear The UK’s electricity regulator Ofgem
How will the market manage this? There of that, we would like large offshore wind
capacity. We see that wind power, incentivises renewable technology by
will have to be other modes of generation farms – London Array, for example, will
which currently accounts for about issuing Renewables Obligation Certificates
able to pick up the slack when the wind cost £2bn; and we would like clean coal
half of the renewable electricity total, (ROCs) to accredited renewable
is not blowing. Exactly how to incentivise – the Longannet scheme in Scotland is
is forecast to grow threefold by 2020 generators; companies which fail to meet
the building of generation facilities that £2–3bn.” With a conventional gas-fired
to provide around three-quarters of our the Renewables Obligation by amassing
will only be used occasionally is by no power plant costing just £300m, Buchanan
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renewable electricity.
sufficient ROCs are subject to charges.
means clear, however.
points out, “the scale is completely
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