Industry News-Extra finance to start flowing for wind power

Up to £1 billion of loans for onshore wind farms

Up to £10 million of Government grants for offshore wind technology development

Three UK-based banks start work today with the European Investment Bank (EIB) on a programme to lend up to £1 billion to onshore wind farms over the next 3 years.

The cash, part of the additional £4 billion of EIB lending to support UK energy projects announced in the Budget, will help get building started for onshore wind projects which have been hit by the credit crunch, particularly small and mid-sized wind farms.

The banks – RBS, Lloyds and BNP Paribas Fortis – have been teamed up with the EIB by the Department of Energy and Climate Change (DECC) and HM Treasury, following the announcement in April’sBudget Statement that the Government wanted to get more EIB lending to UK renewables.

Firms can also apply for DECC cash from today to develop offshore wind technology. There will be up to £10 million in grants, part of the £120 million announced in the renewable energy strategy last week to support offshore wind. This is the second round of cash for development of offshore wind technology.

DECC is also confirming today that, subject to agreement on suitable grant offer conditions, it also intends to make an award under the first round of this programme for Vestas Technology UK Ltd’s research and development centre on the Isle of Wight. This proposed award – more than £6 million - would include over £3m of funding from the South East England Development Agency (SEEDA). We expect to make other announcements on awards under this first round of funding shortly.

Energy and Climate Change Secretary Ed Miliband said:

“Earlier this month we laid out a transition plan to a low carbon economy that included a massive expansion of green wind energy. The resources we are announcing back up our plans with clear actions to ensure we deliver.

“The European Investment Bank funds will help the building start on consented wind farms that could provide 1 gigawatt of electricity, enough to power more than half a million homes.

“The money for the development of offshore wind manufacturing will help us generate green jobs on top of our success as the leading country in the world for the generation of offshore wind.

"Alongside these proposals, we are reforming planning laws, finding new ways of working with local communities and are determined to persuade people that we need a significant increase in onshore wind as part of the UK's future energy mix.

“That is essential for the generation of renewable energy and for Britain to have an industrial future in the production of onshore wind."

Ian Pearson MP, Economic Secretary to the Treasury said:

“The £4bn of lending to the energy sector that we announced in the Budget is just part of the £10bn of lending that we hope to see coming into the UK economy from the EIB this year, nearly three times last year's total. I am pleased at the success we are having working in partnership with EIB to provide financing to this and other important sectors.”

EIB Vice President Simon Brooks said:

“The development of the UK’s wind energy capacity will support the European Union’s and national targets for renewable energy generation. As well as helping to reduce greenhouse gasses it will strengthen the security of energy supplies. This initiative underlines the EIB’s long involvement, as the EU’s financing arm, in the UK’s energy sector and reinforces efforts to reduce the impact of climate change”.

For full details on this press notice

Political News-Speculation grows around Miliband energy plans

Green Jobs, Bill Increases, Speed and Clarity are the order of the day

Speculation is growing around the details of Ed Milliband's, renewable energy package which is due to be announced on Wednesday. This will be the third time in five years that the government will attempt to make clear their proposals on cutting green house emissions and their ideas for energy generation in the UK.

The UK government is committed to cutting carbon emissions by 34 per cent by 2020. The UK is also bound by the European Union to produce 15 per cent of the country’s energy needs from renewables by the same year.

The question is how the government intend to fund the estimated £100 billion needed for development of the renewable sector and the upgrade of the national grid to a ‘smart grid’. The fear among politicians is that the costs will and can only be met by an increase in energy bills for the voter.

An increase in bills in economic tight times will do nothing but increase voters ire and is a dangerous move in an election year. Ed Miliband and his advisers will be very aware that discussing bill increases of a pound or two are fine and may go somewhat unnoticed at the end of a heatwave in the summer months. However the political repercussions will be felt in the winter months when demand for energy increases and the prices start to spike again. But if it is not the consumer that will shoulder the burden of the government meeting its renewables target then who will?

The private sector has already claimed that there is not enough available money or investment in bringing new technologies such as marine, biomass and wind to the energy mix at the speed at which is required. Investing in the smart grid, transmission points and further storage all come with a high cost which over time will dwarf the money that was pumped into the banking crisis.

Dieter Helm, an energy expert at New College Oxford was quoted in the Financial Times as saying “the enormous investment needed in renewables would have been hard to finance even when financial markets were strong, and would be even more difficult following the credit crunch” The return to investors would need to come from the public through higher energy bills.

This echoes the opinion outlined early this week by David Milborrow in his paper Managing Variability where he claims that “The UK can meet its targets of generating more than a third of its electricity from wind by 2020 without raising the risk of blackouts at an additional cost of £2 for every £100 electricity bill”.

The uncertainty over returns on investment in wind and solar power has already seen some large energy groups such as BP and Royal Dutch Shell from pulling back from the renewable sector. The government’s former chief scientific adviser, Sir David King, sites this hesitancy by the private sector to invest is a result of the government’s failure to come up with a plan and stick to it.

In the Sunday Times he is quoted as saying “you can’t keep adjusting the energy policy, businesses need a clear signal that any investments they make now in low carbon technology and infrastructure in the UK will pay off in the future”.

On the positive side Miliband is expected to announce the creation of up to 400,000 green collar jobs. These jobs are expected to focus across the renewable sector of wind, solar, marine and biomass. But there will be funding for the nuclear sector also.

Whatever, the finer details of this weeks’ announcement Miliband must make speed and clarity as being the essence for the growth of the sector and creation of green jobs. Earlier this week Dr. Keith Maclean, Head of Policy and Public Affairs, Scottish & Southern Energy in the APPCCG Westminster Debate noted that “the uncertainty that there is around small projects because of issues in relation to transmission charges.

Smaller developers need to be able to show the bank that they can make a return on their investment and for this to be done DECC will need to use their powers under the energy act very quickly to make this happen”. His fear is that unless action is taken in this area soon there will “be no investment for more small to medium generators going into the market”.

If the government are to find a solution to the two challenges of climate change and creating new jobs the time is to act now.

Political News- Energy debate must focus on renewables, smart grids,smart meters and imporve planning

Westminster All Party Climate Change Group debate on renewables

The debate around renewables is still open. While they are accepted as being a key part of the energy mix and necessary in decarbonising energy the variety of technologies used to generate power has often been cited as being a barrier to increasing their use in the UK.

As part of its legally binding EU renewable energy target (EUTS), analysts have suggested the UK may need up to source 35-40% of its electricity from renewables by 2020. A high proportion of the UK's renewable electricity is likely to come from onshore and offshore wind, whose variability needs
to be managed.

One week ahead of when the UK government is expected to publish its ‘Renewable Energy Strategy’, a new report Managing Variability, by energy analyst David Milborrow, claims that the UK’s grid could cope with the variable energy input generated from wind farms.

The UK can meet its targets of generating more than a third of its electricity from wind by 2020 without raising the risk of blackouts at an additional cost of £2 for every £100 electricity bill.

The report commissioned by WWF, RSPB, Greenpeace and Friends of the Earth looks at the options already available to manage variability on the system, identifies solutions for the future and assesses ways to minimise costs.

Yesterday evening the All Party Parliamentary Climate Change Group (APPCCG) held a Westminster debate discussing the report findings and the many opportunities that exist for delivery of UK renewable energy targets and grid development and management.

The debate was chaired by Colin Challen MP, and the panel included Dr. Keith Allott, Head of Climate Change, WWF-UK, Chris Bennett, Future Transmission Networks Manager, National Grid, Dr. Keith Maclean and Head of Policy and Public Affairs, Scottish & Southern Energy.

The overall message from the panel was that using more wind energy is ‘do-able’. Countries such as Denmark and Germany have already ‘removed the myths’and have proved that a variety of sources can be used to generate energy and supply the network.

Chris Bennett spoke confidently that the ‘changes in transmission and to the national grid could and have already been made’. Similar to other commentators he noted that more “investment will be needed” and that the focus must be put on the ‘market to ensure the right levels of generation” is reached. He said that that they had “already started work on increasing the numbers of interconnectors with Europe and it is now that market questions need to be put on the table”.

Dr. Keith Maclean called for a ‘sensible discussion to be had around renewables and a real debate around capacity demand’. He noted that the ‘real thing to note is that renewables replace fossil fuels so in essence they are reducing emmissions’.

The complexity of the energy mix and how to reach supply is one the reasons that Maclean called for caution in “going all out in support of one technology or the other”. He said that he was “pleased that the government was looking at biomass and issues around storage”. He believes that “the real challenge is in the timing, getting everything right and delivering the policy, the investment and building of new plants for biomass, thermal and wind farms at the right time”.

One key point that he did raise is “the uncertainty that there is around small projects because of issues in relation to transmission charges. Smaller developers need to be able to show the bank that they can make a return on their investment and for this to be done DECC needs to use their powers under the energy act very quickly to make this happen”. His fear is that unless action is taken in this area soon there will be no investment for more small to medium generators going into the market”.

Unfortunately it was very hard to hear anything that Dr. Keith Allot from the WWF said. But from what we did record he said “there are other renewables out there and we need to look at marine, biomass and geothermal. CCS looks like a very expensive way of producing energy but the WWF will
wait and see”.

Key points in debate:

•The WWF and members from the BWEA were pushing for wind as being the main solution members of the panel kept repeating that focus needed to be put on the mixed energy approach.

•Both Bennett and Macclean said emphasised the point that planning is an area that needed to be focused on and speed up.

•The panel agreed that both biomass and marine would have a lot to play in energy supply but to make this happen companies will need to receive more investment. In order to do this smaller companies will need to be supported in being able to demonstrate their ability to generate power and get it onto the network so banks and investors can explicitly see return on investment.

•The discussion around ‘capacity’ and ‘demand’ and what renewables such as wind, biomass, marine and geo-thermal must be clearer.

•The energy must start to focus on integration of smart grids, smart meters and smart tariff plans for customers.

To read David Milborrow

Political News - Ed Miliband gives key note speech at Fabian Society seminar 'The Road to Copenhagen'

On Saturday the 20th of June the Fabian Society hosted a day-long seminar discussing the challenges that the international community has in the build up to the United Nations COP 15 Climate Change Conference hosted by Denmark from the 7th to the 15th of December.

Ed Miliband, Secretary of State for Energy and Climate Change gave the key note speech where he outlined the challenges facing developed and developing countries to reduce carbon emissions.

In a speech that largely focused on the international challenges between developed and developing countries Miliband called for all stakeholders to get involved. Climate change as an issue is something that is not restricted to one continent or country but will affect everybody. The key to reducing global emissions will be in striking a balance where steps are taken collectively by all nations and all industries.

Text from key note address

Let me start by thanking the Fabians for organising this event.

There is no more important and no more difficult a challenge in politics at the moment than getting an ambitious agreement at Copenhagen.

I am very grateful also that we have such a wide range of organisations represented here.

But I want to argue today not just that we need a global deal at Copenhagen, but we also need to lay the ground for action not just in the next six months, but well beyond that.

Let me start with the scale of the challenge.

This week we published our UK Climate projections---they graphically lay out the risks which we know we face—here in the UK.

The most telling fact for me comes from Nick Stern—if we carry on as we are and see global warming of 5 degrees centigrade by 2100, it will mean the planet is hotter than it has been for 30 to 50 million years and humans have only been on the planet for 100,000 years.

But while it is easy to get bogged down in the science, personal experiences bring it home more vividly.

Two years ago on a Wednesday in June I saw people in my local high street in Toll Bar, Doncaster---a high street with people in canoes, plucking people out of first floor windows---raging at what had happened, bewildered and scared.

And two months ago in a village in North West in China, in Minqin, a remote part of the country, I talked to a local farmer about his battle against the pincer movement of two deserts threatening the livelihoods of 300,000 people.

For the people of Toll bar, the people of Minqin, the question is whether the politics can rise to the challenge of the science.

And what do we see?

On the one hand, we see the compelling issue of the reality of climate change and the science, and we see politicians around the world starting to rise to the challenge.

At the same time though, we can also see the compelling constraints that different governments face, from China to the United States.

China now produces more emissions than any country in the world but has 500 million people living on less than $1 a day who they want to lift out of poverty through sustained high levels of economic growth.

The United States which produces more emissions per person than any country in the world but must persuade 60 out of 100 US Senators to support legislation and 67 to support an international treaty, when the debate on climate change is less advanced than some other countries.

The 27 countries of Europe, with countries richer and poorer, all facing economic difficulties, and yet must play its part in financing a global agreement.

Every single country struggles with the gap between what is needed and what looks possible, the conflict between the demands of science and the constraints of politics.

But the task of people who want to bring about transformation in politics in this cause, as in all causes, is to find ways to overcome what seem like not just compelling but insurmountable constraints.

And that’s what I want to talk about today: how the politics we advance can live up to the science.

We need three things:

1. the right political argument,
2. the right sort of deal and
3. the right sort of campaign to make it happen.

First, the political argument.

If we leave climate change to a question of managerialism around targets, finance and technology, we will be sunk.

You cannot sustain radicalism for decades or even for months without an appeal to the deeper reservoir of people’s values.

At the core of action on climate change is a fundamental moral question about whether we care about the legacy we leave to future generations: about whether we think it is fair or just to take advantage of the planet’s resources as if there were no tomorrow.

The question we must pose is whether we break the bond of the human race over our time on this planet: that the earth is held in trust by each generation for the next.

This is an issue of equality, of fairness, of morality and we should say it.

As we seek to advance our political argument, we should not shy away from this and we should honestly ask people how they want to be remembered by history.

And yet at the same time, we know progressive movements only build broad coalitions, only sustain themselves if they can promise not just a better life for others but for people themselves.

So, alongside the appeal to values, we also need a message of prosperity not austerity—for China as well as for the UK.

Part of the reason I am optimistic not pessimistic about the prospects for a global deal, is that the debate about climate change has been transformed by the debate about the green economy.

Suddenly, people can see the argument that this is an essential part of building the post-recession economy—in developed and developing countries.

And we shouldn’t be embarrassed about appealing to economics: when I look at my constituency, there are committed activists on climate change, but there are also people for whom jobs for them and their families are top of mind.

People whose living standards have been dramatically improved over the last fifty years by economic growth.

People who are prepared to be part of action on climate change, but people who also want to know that they can continue to have a better life, and that the costs will be fairly spread.

And so the argument must be not for low growth but for low carbon growth and we must avoid a sense of subscribing to a no growth hair-shirtism

Of course, our appeal to self-interest should go beyond economics: the interests in better air quality, better public transport and in communities coming together, which the transition towns movement has done well.

So the political argument must appeal to people’s values and people’s interests.

Secondly, if we are to transform the politics, we have to make the argument for the right kind of deal.

And here we get to what might seem like the paradox:

that developed countries are responsible for the situation we find ourselves in.

Thirty percent of global emissions 1850-2000 are from the EU, 30% from the US and just 6% from china.

And Per capita emissions are still significantly higher in developed than developing countries: 10 tonnes per capita in the UK versus 5 tonnes in China.

Yet at the same time, when we look ahead, 75% of the predicted increase in global emissions over the next two decades come from developing countries, 50% from China alone.

So there is no global deal worth its name without developed and developing countries action.

The way to resolve what seems like a paradox is that developed countries need to accept their responsibility to take the lead: the lead in cuts in emissions, not just with goals for 2050, but tough and ambitious interim targets.

At the same time, developing countries have to show they can move from high carbon growth to low carbon growth, with growth in emissions tailing off and eventually put into reverse.

And the bridge to get developing countries from high to low carbon growth must be action on finance and technology in particular by developed countries.

If we are to ask developing countries to show substantial deviation from business as usual by 2020 and beyond, we need certain and stable flows of finance, including public finance.

We also need institutions that command their respect in the way they operate, in their accountability mechanisms and in their governance.

How can the UK play its part as a developed country in making this sort of deal happen?

We need to accept our responsibility to lead in our commitments to carbon emissions—as we have with 80% by 2050 and reductions of one third by 2020.

We need to show a willingness to take action on public finance and we will be saying more about this soon. In this context, we need to understand that it is not an abdication of responsibility to help build a global carbon market, but it is a way of helping ensure we have the scale of finance we need for developing countries.

And we need to be helping to drive forward the key technologies and sharing the know-how about them. This is why action on CCS and coal is so important. It’s not just about UK emissions, it is about pushing forward CCS as quickly as possible.

And we need to be persuaders for a global agreement consistent with the science.

We need to show that whatever the agreement we reach at Copenhagen it will help us prevent dangerous climate change—consistent with minimising the chances of temperature rises above 2 degrees.

So we need the right political case for Copenhagen. We need the right sort of deal. And to change the politics, we need the right sort of campaign too.

Why can’t Copenhagen simply be left to governments?

Because look at the great advances in the past:

• Against slavery
• For rights to representation in Parliament and at work
• For equal rights for gay people
• For freedom from racial discrimination

All of them took progressive action by government; but none could happen without progressive forces in society. What makes change happen is popular pressure.

And in fact, it’s not in the same category but let me add another successful campaign to that list, one which could only have succeeded with popular mobilisation, and in which many of you in this room played a role: the campaign on coal in the UK.

Campaigning by green organisations and their supporters has changed the politics and I am glad it has.

Unfortunately, the Copenhagen task is even bigger. And I’ll be honest: we don’t yet have the domestic or global campaign that we need.

Next week we will launch our Copenhagen manifesto, seeking to explain to the public the urgency of acting, the ambition we need, and the international co-operation that is required.

We will seek to give our manifesto as wider currency as possible.

But we need you too.

When I thought last December about how much mobilisation there would be now, with six months to go, I thought there would be more than there is.

The honest truth is: we’re behind. Outside of people who are prepared to give up their Saturdays for it, how many people know that this December is the make-or-break moment for our planet?

I do know that people care, and that the popular pressure is there waiting to find expression.

The time to influence this debate is not in December, it is this month, it is now, now when the Major Economies Forum of the top 20 countries is meeting every month, and now that countries are coming out with their proposals – Japan last week, Australia the month before.

And I look to a movement which shows as much determination to get a global deal to save the planet as it has done on UK coal-fired power stations, as much attention to the detail, as much creativity, as much imagination.

And just as we must appeal to the population at large not to be remembered as the people who didn’t act, when the scale of the problem was apparent, so we must avoid being people who lost sight of the bigger prize: the deal at Copenhagen.

So, today, I hope will produce concrete ideas about how to upscale the campaign, how to fix people’s minds on a simple ask, the equivalent of debt, aid and trade and how to build a broader coalition not just here but around the world.

Let me end on a note of optimism.

Nine months ago, some people told me that president Obama would never be interested in a bill on cap and trade in his first year in office. They were wrong.

Other people told me China would never want a deal, but I know having been there, they were wrong.

Other people told me a few months ago that Australia was far too timid and would never be part of an ambitious agreement, but now they have upped their offer.

Still people say Copenhagen is so complicated that we can’t possibly resolve the issues in time.

We can prove them wrong too.

We can get the framework we need if we advance the right arguments, if we seek a genuinely global deal and if we strive for the broadest-based campaign.

We can still help win a victory over climate change.

And the time, if we are to do it, is now.