The Observer reports that Britain is running out of renewable energy, as a surge in demand from businesses has outstripped the supply of electricity generated from ‘green’ sources. Firms’ interest in reducing their carbon footprint has far exceeded new capacity coming on-stream. This leaves companies which have pledged to become ‘carbon neutral’ with a sizeable headache. EDF is ‘prioritising’ existing customers, Npower says the amount it can supply depends on how much customers can pay, and Good Energy, a renewable-only electricity supplier, is turning away very big orders.

What some might consider a surprising popularity of renewables in the business fraternity is being led by large companies, who are obliged to pay the climate change levy on electricity from fossil fuels. The situation isn’t helped by the snail’s pace of the UK planning system, with wind energy projects which could supply one in six British homes mired in bureaucracy.

So much for the power of the market.

‘Business runs out of green energy supply’

Shares in Renewable Energy Holdings (REH.L) were up today on the news that the green technologies firm has agreed a deal to purchase the Kobylany wind farm site in Poland, which will provide 30 MW of generating capacity with an accompanying off-take infrastructure and transformer station. REH will pay €68,000 per MW of generating capacity, making a total of €2.04m. The agreement allows for an initial lease term of 25 years, with an option to extend for a further 25 years.

The annual lease payment will be €25,000 (plus VAT) with an additional annual payment of €7,000 (plus VAT) for each turbine on the site. It is expected that there will be 15 wind turbines altogether. Construction is expected to start in Spring 2008, financed by REH’s credit facility with Standard Chartered Bank. Good to see the credit squeeze doesn’t apply for renewable projects.

REH is active in wind, wave and biomass. The company owns the CETO wave energy technology, which it is developing in co-operation with Carnegie Corporation.

The Department for Communities and Local Government has indicated that the necessary legislation for a more relaxed planning regime for domestic microgeneration equipment – solar panels, heat pumps, biomass boilers and combined heat and power schemes – will be published in Spring 2008. The results of a consultation paper, on the extension of householder permitted development rights for microgeneration, were published last month.

“The Government wants to encourage the widest possible take-up of microgeneration equipment whilst ensuring the reasonable interests of neighbours, the environment and the wider community are protected.
“In the light of the responses to the consultation, the Government now intends to provide permitted development rights for the following types of microgeneration: solar panels, wind turbines, heat pumps, biomass and combined heat and power, subject to specific limits and conditions that will ensure that any adverse impact on others is not significant.
“We will be bringing forward secondary legislation to implement these changes for householder microgeneration in Spring 2008.”

84% of respondents agreed with the proposal that there should be no additional permitted development rights for hydropower
microgeneration. The government “does not intend to provide permitted development rights for this type of microgeneration”.

Permitted Development Rights for Householder Microgeneration: Government response to consultation replies

A plan to build the world’s largest power station fuelled by biomass – in this case wood chips – has been approved by the Department for Business, Enterprise and Regulatory Reform. The £400m, 350 MW plant was proposed by London-based Prenergy and will be built in Port Talbot in South Wales. It will burn some 3m tons of wood chips annually, which will be shipped in from the USA and Canada. Said Energy Secretary John Hutton:

“This will be the biggest biomass plant in the world, generating enough clean electricity to power half of the homes in Wales. It joins eight major renewables projects already given the green light in the past 12 months alone and is another important step towards the low carbon economy envisaged by the Prime Minister.”

When completed at the turn of the decade, the plant will contribute around 70% of the Welsh Assembly’s 2010 renewable electricity target. It will be able to produce continuous, base-load electricity for 24 hours a day, 365 days a year over its expected 25 year lifespan.

Government News Network press release

Prenergy non-technical summary (2.3 MB PDF)

The World Business Council for Sustainable Development (WBCSD) has published an ‘Issue Brief’ on biofuels. The document, the first output from WBSCD’s new workstream on clean energy technology, provides an overview of biofuel production and use with a special focus on the transport sector. It describes first and second generation biofuels and explores their potential as a possible substitute for fossil fuels.

The Issue Brief tries to unpack key issues and analyse the many variables involved in biofuels policy so as to open debate by business on the main challenges for this energy source. Although intended primarily for a business audience, the brief provides a general understanding that could serve to inform the general public as well.

Read the press release online

Download the Issue Brief (PDF 751 kb)

Scottish Power has announced its intention to contract farmers to produce 250,000 tonnes of energy crops to replace coal burned at Scotland’s two coal-fired power stations, Cockenzie and Longannet.

The project will use about 35,000 hectares, 12% of Scotland’s total agricultural land. Scottish Power aims to substitute 5% of its coal consumption with energy crops by 2013.

Farmers will grow a mix of crops, including cereals and short rotational crop such as willow coppice. Scottish Power says it intends to maximize the use of set-aside and minimize the effect on land used for food crops.

Frank Mitchell, Scottish Power’s Generation Director, said: “This is a significant step in our renewable energy programme ultimately displacing 300,000 tonnes of carbon emissions per year. However, it is also an excellent opportunity for farmers with Scottish Power offering support for the Scottish agricultural community”.

Scottish Power press release