Scotland eyes 50% renewable energy by 2030 in shift away from North Sea oil

The Scottish government has taken the first steps to heavily cutting the country’s reliance on North Sea oil and gas after calling for 50% of Scotland’s entire energy needs to come from renewables.

In a subtle but significant shift of emphasis for the Scottish National party after decades championing North Sea production, ministers unveiled a new energy strategy intended to push motorists, homeowners and businesses into using low- or zero-carbon green energy sources for half their energy needs by 2030.

Currently, 47% of Scotland’s total energy use comes from petroleum products largely extracted from Scotland’s North Sea oil platforms, and 27% from domestic and imported natural gas needed for home heating.

With opposition parties and environment groups expressing scepticism about a lack of detail in the new strategy, Scottish ministers privately admit cutting oil use is their biggest challenge in hitting far tougher targets unveiled last week to reduce Scotland’s total greenhouse gas emissions by 66% by 2032.

While North Sea oil and gas production is in decline as reserves run dry, the new strategy implies Scotland will need to accelerate its transition to a low-carbon economy faster than reserves run out to hit both targets.

Paul Wheelhouse, the Scottish energy minister, told MSPs on Tuesday that the new energy target was intended to directly support that climate target. Scottish renewables already supplied nearly 60% of Scotland’s domestic electricity use, Scottish islands were pioneering energy self-sufficiency, and community-owned renewable schemes now had an installed capacity of 595mw, he said.

Wheelhouse said: “We can all take pride in such successes, however, it is clear that more progress will be required – particularly in the supply of low-carbon heat and transport – if we are to remain on track to meet our ambitious climate change goals.”

It would put pressure on onshore windfarm operators to make their wind energy so cheap that it would not require a subsidy. Bus companies would be asked to invest in hydrogen-powered buses, and motorists expected to shift to electric cars.

Renewables industry sources say hitting that much higher target could be slower and harder than Wheelhouse admitted because the Scottish government is expected to miss its target of supplying 100% of Scotland’s domestic electricity needs from this source by 2020.

Industry analysts believe 87% will be renewable by 2020, in part because offshore wind power projects have been slower than expected. Wheelhouse pointed out, however, that the cost of offshore wind had fallen faster than expected, by 32% since 2012.

The draft energy strategy, released for public consultation on Tuesday, failed to deal with substantial questions about the costs of meeting the new target, sidestepped Scotland’s continuing use of nuclear energy and also the exact mix and quantity of green energy schemes now needed by 2030.

The paper also again sidestepped a decision on the future of fracking of Scotland’s large shale oil and gas reserves, with ministers are at odds over allowing it or banning it on climate and environmental grounds.


An oil platform in the North Sea.

An oil platform in the North Sea. Nearly half of the country’s energy comes from the area Photograph: StatoilHydro / Oyvind Hagen / HO/EPA

Environmentalists, opposition parties and SNP activists are putting the Scottish government under heavy pressure to convert an existing moratorium on fracking into a permanent ban.

Wheelhouse said ministers were taking an “evidence-based and measured approach” and would soon launch a new public consultation on whether to allow fracking.

And despite standing for election on strong anti-nuclear platforms, Scottish ministers have admitted they are content to see the life of Scotland’s two nuclear power stations at Hunterston and Torness to be extended further, beyond their current contracts that run until 2023 and 2030 respectively.

Nuclear power provided 35% of Scotland’s electricity in 2015. EDF, the French-owned utility that operates the two stations, is building up a technical case to win support from the UK’s nuclear regulator to extend both stations’ operating lives by several years each.

That strategy is supported by Scottish ministers. Wheelhouse’s energy paper had very little detail on what power sources would provide the remaining 50% of Scotland’s energy needs but it said “thermal energy” – power provided by conventional nuclear or gas-fired stations – would be a significant part of that.

While all opposition parties welcomed Wheelhouse’s overall 50% target, they were immensely critical about the lack of detail in the paper, particularly on the costs and funding of the strategy.

Jackie Baillie, Scottish Labour’s energy spokeswoman, said the SNP often set targets it failed to meet. “Scotland has previously been required to import energy from elsewhere in the UK, particularly baseload power from England,” she said. “Yet the SNP’s energy strategy provides little detail about how to keep the lights on.”

Mark Ruskell, a Scottish Green party MSP, said it remained unclear how the target for 80% of homes to use low-carbon heat by 2032 would be delivered, since the 2025 target was just 18% and current funding levels were inadequate.

“Warming our homes affordably and with low-carbon power is a priority but the Scottish government’s targets don’t make sense,” he said. “There’s too much trust in a technological miracle in the future and not enough action on fuel poverty today.”

Gina Hanrahan, the climate and energy policy officer at environmental group WWF Scotland, said the strategy “fails to put enough meat on the bones of the commitment to transform the energy efficiency of existing homes”. She added: “With 1.5m cold homes in Scotland, these proposals are too slow and underfunded.”

Renewable energy helps push value of Scotland's trade with rest of UK to £50bn

Scottish trade with the rest of the UK outweighed exports to the European Union by a factor of four to one, according to latest figures from the Scottish Government.

The latest Exports Statistics Scotland report for 2015 puts the value of goods and services sold to the rest of the UK at £49.8bn. During the same period, exports to the EU were worth £12.3bn.

Both figures were up by 4.4% on the previous year. The Government said the increase in exports to the rest of the UK was driven by utilities such as electricity, much of which came from renewables, with petroleum and chemicals driving the rise in EU exports.

The gap between the two is a battleground in the Brexit debate, with the Scottish Government pushing for continued access to EU markets.

Scottish Secretary David Mundell said the domestic market in the UK is “far and away the most important” for Scotland's businesses (Photo: Getty)

The latest figures do not take account of Scottish goods in the supply chain which are initially sold to UK customers who then export those items on into Europe as part of a larger finished product.

Figures on the value of goods re-exported are not available, though the government points out that more than half of exports to the rest of the UK are services in areas such as the financial sector, which are unlikely to be re-exported abroad.

Commenting on the figures, Scottish Secretary David Mundell said the domestic market in the UK is “far and away the most important” for Scotland's businesses.

“The Scottish Government's own figures show our trade with the rest of the UK is worth four times our exports to the EU,” he said. “Businesses in Scotland sold £37.5bn more in goods and services to their own market in the UK than they did to all 27 EU countries put together.”

The statistics also show that the total value of Scotland's international exports rose to £28.7bn in 2015, up from £27.7bn in the previous year. The US continues to be Scotland's single largest overseas market outside the EU, worth sales of £4.6bn.

Brexit sees UK drop to new low in global renewable energy league table

The UK has fallen to its lowest position on an international league table of the best countries to invest in renewable energy following Brexit and Theresa May’s decision to scrap the Energy and Climate Change Department.

Analysts EY, part of financial giant Ernst & Young Global, put Britain, normally a regular in the top 10, in 14th place on the Renewable Energy Country Attractiveness Index, just behind Morocco.

The UK energy industry has complained that numerous and sudden changes in Government policy are putting off potential investors in any kind of electricity generation, threatening what could be a “golden age” of cheap and green power.

In a report, EY said: “Uncertainty caused by Brexit, the closure of the Department of Energy & Climate Change and the approval of [nuclear power plant] Hinkley Point C all dealt a sizeable blow to the UK renewables sector.

“Some respite came when the Government approved 1.8GW Hornsea 2, which will be the world’s largest offshore wind farm if completed as planned.”

The league table was led by the US, followed by China in second, then India, Chile and Germany.

However EY suggested a Republican victory in next month’s US election could change that.

“Donald Trump has a poor record on climate change, which he has frequently dismissed as a ‘hoax’, and threatens to pick apart the Paris climate accord should he be elected,” the report said.

The rest of the top 10 were Mexico, France, Brazil, South Africa and Canada.

EY’s head of energy corporate finance Ben Warren told industry news website Renews that UK Government policies were not inspiring confidence in investors.

“Continued uncertainty around the Government’s energy policy has created a confusing picture for investors seeking a low-risk return,” he said.

“With one more big decision, this time on the future of untested tidal lagoon technologies, expected in the coming months, the Government clearly believes that easy to deploy and cost efficient technologies such as onshore wind and solar are not the answer to the UK’s energy security conundrum.”

However he added there had been a significant increase in investment in battery storage in Britain.

“No doubt there are still challenges to be overcome and questions to be answered around affordability and availability,” Mr Warren said.

“But if the market is ready and willing to innovate, battery storage, coupled with renewables, can help improve reliability and consistency of output to create a far more attractive sector.”

Fortum to operate and maintain Tees Renewable Energy plant in UK

Published 17 August 2016

Fortum has signed a 10-year deal with MGT Teesside for operation and maintenance (O&M) of 299 MW biomass-fired combined heat and power plant to be located in North-East England.

The construction of the power plant is due to start immediately and be completed by 2020.

“This significant O&M agreement is well in line with our vision to be the forerunner in clean energy. Fortum has long experience on biomass-fired combined heat and power plants. We are happy to give our customers access to our expertise by providing O&M services and that way support the increase of renewable energy production in the UK,” says Antti Malve, Head of Sales, Expertise Sales, Fortum.

“We are happy to start co-operation with Fortum in our project. Fortum can offer us a world-class operation and maintenance concept and valuable experience as an owner and operator of biomass-fired power plants,” says Ben Elsworth, CEO of MGT Teesside.

The parties have agreed that they will not disclose the value of the agreement.

Fortum is a significant user of biomass in its own operations in Finland, Sweden, the Baltic countries and Poland. In 2015, altogether 5.1 TWh of biomass (2.6 million m3) was used in Fortum’s power and heat plants. Biomass accounts for one fourth of Fortum’s heating fuels in the EU area.

For Fortum the Teesside agreement means continuation of a long history of O&M services in the UK. Prior to this agreement Fortum has been involved in 13 different O&M contracts in the country.

Source: Company Press Release

Future of Scotland’s renewable energy industry ‘at risk’

The future growth of Scotland’s flagship renewables industry could be choked off by swingeing subsidy cuts from Westminster, a committee of MPs has warned.

An estimated 21,000 people now work in the green energy sector north of the Border, which produces almost 30 per cent of the UK’s renewable electricity.

Environmentalists hit out when the UK government announced an end to lucrative subsidies for onshore windfarms last year.

The Scottish Affairs ­Committee has today ­published a report into the renewable energy sector in Scotland which warns that its successes could now be undermined by changes to UK ­government policy.

“We have urged the government to clarify the future ­support which will be available to the renewable sector, and set out how they will work with the Scottish Government to develop a clear, long-term plan that will allow renewable energy to remain a central part of the energy mix,” committee chairman Pete Wishart said.

But the report points to “serious concerns” among many Scottish residents about the impact of onshore wind ­turbines on the environment.

Graham Lang, chairman of anti-turbine alliance ­Scotland Against Spin, said: “It vindicates the thousands of Scots who are opposed to the unlimited expansion of onshore wind farms.’

There has been “significant growth” in renewables in ­Scotland with electricity production from sources as diverse as wind, hydro and biomass attracting significant investment, the report finds.

Mr Wishart said policy changes by the UK government have “weakened investor confidence in the renewable sector, and put at risk opportunities for future growth.”

A spokesman for the new Department for Business, Energy and Industrial Strategy said UK government support has helped the success of Scotland’s renewables.

He added; “We’ve been completely clear that our commitment to the industry will continue with the announced £730 million funding package for future renewable energy projects.”

GE to Highlight Solutions for Turning Waste to Energy at UK AD & Biogas Conference

TREVOSE, PA.-July 5, 2016-GE (NYSE: GE) will showcase its waste-to-energy technologies, products and services designed to help the food waste industry enhance recovery from its anaerobic digestion (AD) facilities at the UK AD & Biogas conference.GE will be exhibiting at stand K205 at the UK AD & Biogas conference July 6-7 at the National Exhibition Centre in Birmingham, West Midlands. The show brings together the world's leading technology and product suppliers under one roof. GE will feature the products that optimize biosolids and biowaste AD facilities from the reception floor to renewable energy.Highlights of GE's technology portfolio that will be on display at the conference include:Re:Sep* pretreatment separates packaging, contaminants and grit to generate a clean organic slurry. The Re:Sep process can receive a wide variety of waste streams and separate the organics with high efficiency into a clean organic slurry and a separate reject contamination stream resulting in the perfect feed substrate for AD.Hydrolysis Pasteurization Digestion achieves high-efficiency conversion of food waste to biogas yielding high biogas yields, stabilized digestate, shorter retention times and lower carbon footprint.AD technologyis designed to recycle biosolids and biowaste into methane and valuable byproducts. GE's Monsal* AD technologies use bacteria in the absence of oxygen to break down matter to create biogas. The biogas can be combusted or oxidized and used for heating or with a gas engine to produce electricity and heat. It also can be compressed and used as fuel for vehicles or as a fertilizer.Digestion products-From mixing systems to heat exchanges to sludge treatment, GE's digestion products work in concert to provide a holistic solution that takes anaerobic treatment to a new level. GE's digestion products achieve optimal energy balance to maximize system yield and performance.Jenbacher* gas engines achieve efficient energy conversion for converting biogas into power and heat.About GEGE (NYSE: GE) is the world's Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the 'GE Store,' through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. GE PowerGE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. We are transforming the electricity industry with the digital power plant, the world's largest and most efficient gas turbine, full balance of plant, upgrade and service solutions as well as our data-leveraging software. Our innovative technologies and digital offerings help make power more affordable, reliable, accessible and sustainable.For more information, visit the company's website at Follow GE Power and GE's water business on Twitter @GE_Power and @GE_Water and on LinkedIn at GE Power.* Trademark of General Electric Company; may be registered in one or more countries.GE - General Electric Company published this content on 05 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 05 July 2016 16:25:06 UTC.Original document

Will biomass CHP be side-lined under CfD?

Unlike many other renewables it’s a base load solution - not dependent on sun and wind - and we have a plentiful supply of waste wood in the UK which needs to be recycled in one way or another. Landfill isn’t an option.

But as we move from the Renewable Obligation Certificate (ROC) scheme with the Renewable Heat Incentive (RHI) to Contracts for Difference (CfD) it looks like biomass renewables may be getting side-lined in the bid for subsidies. That can’t be good.

So what are CFDs?

As part of the government’s electricity market reforms to increase the percentage of energy from renewable sources and to reduce carbon emissions, a new system of long term contracts in the form of CfD has been introduced to replace the earlier ROC scheme. The purpose is to incentivise investments in new low-carbon electricity generation in the UK by providing stability and predictability to future revenue streams for investors.

Under the scheme electricity generators will bid for and enter into CfDs with the Low Carbon Contracts Company (LLCC) a government-owned business which will manage the contract. This will enable a generator to stabilise its revenues at a pre-agreed level (the Strike Price) for the duration of the contract. The whole idea is to subsidise and encourage investment by reducing a generator’s exposure to volatile wholesale prices and at the same time protect consumers from overpayment.

Albeit somewhat complicated as these things tend to be, it sounds good so far, at least on paper, providing it leads to an equitable framework of support to all renewables to ensure we achieve a desirable balanced energy mix.

We are currently transitioning from ROCs, which will finally close to new projects on 31 March 2017, subject to some grace period arrangements. From that point generators will be required to bid for CfD funding in competitive auctions for millions in annual government funding, split across three pots:

  1. established technologies such as onshore wind and solar
  2. less established technologies including offshore wind and biomass CHP
  3. biomass conversion

First CfD auctions

The first CfD auction round took place earlier this year and the early signs already are that onshore wind will dominate to the exclusion of biomass CHP, smothered by a process that appears to favour big business. If solar PV fared poorly, biomass CHP was worse.

Of the 27 renewable energy contracts awarded five were waste-related. This included three advanced conversion technology (ACT) or gasification projects and two energy-from-waste projects. But the Pot 2 allocation was totally dominated by two offshore wind projects totalling 1,162MWe and it meant that no CfDs were awarded to biomass CHP projects which were effectively squeezed. It was also notable that budget wasn’t allocated for Pot 3 biomass conversion projects at this stage.

Negative signals

Already this is sending a signal to potential investors who will be unwilling to invest time, energy and capital in planning potential biomass investments if the CfD process remains unsupportive. This is despite the fact that biomass CHP utilising domestic virgin and waste wood is an excellent way of generating local electricity and heat, and one that is far more efficient than electricity generation on its own.

What’s more, UK waste wood is an abundant resource. An estimated 10 million tonnes are produced every year, including forestry residues and other sources. By contrast, a typical medium sized CHP plant can convert 6,000 to 80,000 tonnes of British waste wood (including grades A, B & C, forest thinnings, stumps and bark) and other low quality waste wood into 170,000MWhr of renewable thermal energy, each year. Currently it’s a resource we are squandering - much of it exported to the benefit of biomass projects in Northern Europe.

According to Dr Tim Rotheray, director of the Association of Decentralised Energy, “the design of the (CfD) scheme currently makes biomass CHP near-uninvestable.”

Part of the reason is that biomass CHP is dependent on its heat consumer. Under the RO scheme if a CHP plant lost its heat consumer it would continue to receive some subsidies as a renewable electricity producer. Under CfDs all support for both renewable electricity and heat drops to zero if the heat consumer moves away.

The picture may change once the next budget allocations are made and the next round of auctions takes place, but we are already seeing delays here, and therefore further uncertainty. The way funding is split into different competing pots isn’t helping.

Of course, of the 27 projects that secured contracts in the first round it’s going to be very interesting to see how many of these were realistic auction bids and whether they can in turn progress these from paper to real projects, in terms of financing at least, when the 12 month deadline to submit their Milestone Requirements Notice is up.

Even before the CfD scheme, which now forces competing technologies to bid for funding, attracting the right investment to carry projects forward was challenging. It’s not that investors aren’t hungry to invest. As a provider of both fuel handling and combustion solutions for biomass CHP we spend our time talking to almost as many interested investors as we do project owners.

They look predominantly for proven technology, certainty over fuel supply, planning consents, grid connections, heat consumers and a robust procurement method. With all these lined up projects have a good chance of proceeding, but not if government contracts are only available through an unbalanced auction system that pitches competing technologies unfavourably against each other.

So what’s to be done?

Either we continue down the route we seem to be taking and, in the process, ignore the goal of a balanced energy economy and the benefits of waste wood biomass solutions, or tweaks to the CfD are introduced to make it more open to smaller, independent generators as well as big business.

Government support to make it easier, not more difficult, is what will make a difference.

Matt Drew Saxlund MD

Matt Drew, managing director, Saxlund