Government to halve funding for renewable energy research

The Government's review of its renewable energy policy has taken a decidedly short-term approach to research and development needs over the next decade.1 The budget for the overall programme is to be halved within a few years, and only technologies near commercialisation, such as energy from crops and waste, wind and small-scale hydro, are to be promoted. Support for longer-term prospects, notably wave and tidal power, is being scrapped.

In late 1992, the Government's Renewable Energy Advisory Group (REAG) reported that as much as 20% of the UK's current electricity demand could be supplied by renewable energy by 2025, equivalent to 10,000MW declared net capacity (DNC) (ENDS Report 216, pp 19-21 ).

However, REAG recommended a target of only 1,500MW DNC of new renewables by 2000 - an increase of just 500MW on the existing target. The Government accepted the target last year (ENDS Report 218, pp 13-15 ).

The Government's full response to REAG's report was published just before Easter, along with an in-depth assessment of renewable energy technologies by the Energy Technology Support Unit (ETSU).2In 1992, renewables supplied just 2% of the UK's electricity demand. A model developed by ETSU suggests that the economic potential for renewables could rise to 5-25% of 1992 demand levels by 2005, and to 5-63% by 2025.

If the costs of conventional generation remain at current levels, ETSU concluded, "there is unlikely to be more than a modest increase in the contribution from renewable energy to future UK energy provision over the next two to three decades." But under the most favourable scenario, renewables capacity could rise to some 32,000MW DNC. This would require "heightened environmental concern", reflected in a carbon tax and a moratorium on new nuclear capacity.

The Government's response deals mainly with the future of its R&D programme and the status of the renewable technologies. The R&D budget is to be cut from £22.6 million in 1993/4 to £10 million in 2005. But even this reduced level of expenditure, the Government hopes, will stimulate "up to" £3 billion of private sector investment. However, the budget from 1994/5 onwards includes spending on advanced fuel cells - which is by no means "renewable".

The paper places the renewable technologies in three categories - "market enhancement" via the non-fossil fuel obligation (NFFO) or other means, "assessment" and "watching brief". The table below shows the categorisation, together with R&D funding to date and the maximum contribution by 2025 of each technology under any of ETSU's scenarios.

The Government's policy is to support technologies that it sees as either close to commercialisation or likely to succeed within 20 years. The main beneficiaries will be onshore wind, small-scale hydro, landfill gas, waste-to-energy and energy crops, which will receive backing under the next tranche of the NFFO, due in the autumn. The order has been massively oversubscribed, with some 670 applications for 300-400MW of available DNC (ENDS Report 230, p 8 ).

The figure below shows one possible split of total NFFO support to 2000 - though the Department of Trade and Industry (DTI) emphasises that it should not be interpreted as a precise indication of future policy.

If this projection is fulfilled, incineration of municipal and industrial waste will win the greatest support, at 415MW DNC on top of the 181MW already deployed.

Landfill gas and wind each gain a sizable chunk of NFFO support, with about 300MW DNC. Energy crops are shown with just 100MW, even though they have the greatest economic potential. Tellingly, the figure suggests that the DTI expects projects totalling only 300MW DNC to come on stream under the existing NFFO tranches, although 624MW DNC of support was offered. Many projects have failed to win planning permission, financial backing or waste disposal contracts.

The future for other technologies is bleaker. The Government has stopped funds for research into tidal, wave and geothermal hot rocks technologies - areas which have to date taken 40% of the research budget.

Tidal power has been ruled out on grounds of generating cost and continuing technical and environmental uncertainties. Tidal power enthusiasts remain undaunted. Tarmac Construction and the Mersey Barrage Company have submitted plans to the Scottish Office to build a 34MW barrage across the river Forth at Kincardine.

The DTI has scrapped R&D funding for wave energy, though it sees some potential for up to 0.16TWh/y from shoreline devices. There may be scope for some reduction in the cost of offshore devices, the DTI believes, but "substantial modification in existing designs, or radically new device concepts, would be necessary." Even if this occurs, the report says that any contribution would be so limited that further R&D funding would be "inappropriate".

The Government's approach seems to run against the grain of market developments. Applied Research and Technology plans to build a full-scale 2MW "Osprey" wave machine off the Caithness coast next year, backed by a £350,000 grant from the European Commission. An oscillating water column device developed by Queen's University in Belfast has also been offered EC support.

Finally, the DTI has ruled out any research into offshore wind, arguing that it will not become economic. However, offshore wind offers the greatest resource of any of the renewables and has lower visual and noise impacts than land-based wind farms. A consortium led by offshore engineering company Tecnomare is looking for £2-3 million to build a prototype turbine - but will not find it from the Government.

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