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United Kingdom

British development rush under way -- Renewables Obligation bites

The number of applications to site renewable energy projects in Britain has accelerated sharply since the UK's Renewables Obligation was introduced a year ago. From a steady rise in applications for planning consent since the mid-1990s, the rate of applications has dramatically shot up, from around 1400 MW of capacity to over 2500 MW in 2003 for all renewables, reports the Renewable Power Association (RPA) in its 2002 yearbook.

Wind power is leading the rush. Two recently granted planning consents for a total of 35 MW (page 14) bring the volume of wind farm capacity awaiting construction in the UK to 1360 MW. According to the British Wind Energy Association (BWEA), 591 MW has been consented in the first quarter of this year -- more than in the whole of 2002, while only 23 MW was refused.

The level of planning activity for projects with contracts under the UK's previous support system -- the non-fossil fuel obligation (NFFO) -- has fallen off with each successive order, according to the RPA. Only around 20% of projects under NFFO-5, the final round of contracts, applied for consent compared with around 75% of NFFO-3 projects.

It is too soon, however, to see whether the increase in applications under the Renewables Obligation is reflected in a similar increase in the level of approvals. But the rate of success for renewable applications has improved in recent years, according to the RPA, with favourable results for 82% of decisions in England and Wales under the latest NFFO and 87% in Scotland under the government's 3rd Renewables Order, the SRO-3.

Despite the increase in planning activity, RPA remains pessimistic that if present trends persist, the Renewables Obligation target for electricity retailers to source 10% of their electricity from renewables by 2010 will not be met. It points out that the government estimates that 1250 MW of new capacity is needed each year to meet the target. Yet only 565 MW of renewable capacity will be built in the year ending March 2004, estimates the RPA, bringing renewables' share of UK electricity to 4.8%. With large hydro and some other renewables plants not qualifying for Renewables Obligation Certificates (ROCs), the amount of ROCs available to retailers to meet their renewables obligations represents just 2.5% of UK generation -- a substantial shortfall from the 4.3% quota for 2004.

Renewables routemap

RPA is calling on government to amend the Renewables Obligation and introduce a 30% renewables target by 2027 when the RO ends. In a "Renewables Routemap" to enable the country to achieve its environmental targets, the RPA's Philip Wolfe says the government set out a bold vision in its Energy White Paper (Windpower Monthly, April 2003), but was too timid on targets for renewables. "And its policies are too thin and weak to deliver the result," he adds. "This route map shows how the vision can be turned into reality."

Arguing the case for a 30% target, the RPA says the government's aim for 20% of UK electricity from renewables by 2020 is too modest to achieve its longer term goal of a 60% reduction in carbon dioxide emissions by 2050. And existing policies should be supplemented with a more comprehensive policy program to deliver the growth needed, it says.

RPA, which represents all renewable technologies, is concerned that the RO is stimulating only those technologies closest to the market, such as wind. The UK's two other support measures -- capital and R&D grants -- are only proving partially effective, so some renewable technologies are not developing fast enough to meet the targets.

The RPA recommends that Renewables Obligation targets should increase beyond 10% by 2010, and that levels should be set for ten years ahead. "Increasing quotas until April 2013 should be established now, 2014 next year and so on," says RPA. More controversially, it wants to see the RO include energy from waste, which some environmentalists claim should not be regarded as a renewable technology, coal mine methane and increased capacity of any size through refurbishment of hydro (at present it is limited to small-scale increases). The RPA believes the government's review of the Renewables Obligation planned for 2005-6, should be brought forward, otherwise any changes to the market framework will not have enough time to achieve the 2010 target, it says.

The route map also proposes additional support for promising and emerging technologies, limiting barriers such as grid and the planning process, and a change to the remit of energy market regulator Ofgem so that sustainability is part of its primary objective.

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