UK Renewable Energy: Wind & Marine

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1 UK Renewable Energy: Wind & Marine

2 The UK is on the cusp of a revolution in renewable energy which will pave the way to a low carbon economy. The UK is the windiest place in Europe and has the best tidal and wave resources in the world, offering unrivalled opportunities to harness these natural power resources. Huge steps have already been taken to exploit wind, waves and tides to generate electricity but the achievements so far are a fraction of what can be expected over the next two decades and beyond.

3 UK Energy 01 Contents 02 Introduction 04 Wind 10 Marine: Wave and Tidal 14 Transmission & Distribution (T&D) 18 Research & Development (R&D) 24 Technology Transfer 28 Knowledge Transfer 30 The UK Policy Framework 32 UK Energy

4 UK Energy 02 As part of a European-wide effort to combat the threat of climate change, the UK has signed up to a pledge to ensure at least 15 per cent of its energy comes from renewable sources by The UK has committed under the Climate Change Act to reduce its greenhouse emissions by at least 34 per cent on 1990 levels.

5 UK Energy 03 Introduction Renewable energy has attracted 15 billion in investment for projects and company development in the UK over the last decade but this will be dwarfed over the next ten years. At least 100 billion and some estimates go much higher - is expected to be invested by companies and entrepreneurs in the UK by 2020 as the country reduces its reliance on traditional fossil fuels and instead takes up low-carbon sources of energy. There are already well over 1,000 businesses working in the sector and the number is rising all the time as the sector expands to meet the dual challenge of government targets and climate change. Renewable energy is a key element in the UK s shift towards low carbon technology and the expertise and skills it has gained provides it with a world class workforce. The challenge presented by climate change has provided the impetus for UK businesses, researchers and inventors to exercise their tremendous innovation and adaptability in identifying and developing sustainable energy solutions. They have been strongly backed by the UK Government which has been quick both to recognise the potential challenges posed by climate change and to provide resources and the business environment needed for action to be taken. The UK was the first in the world to pass national laws which created legally binding targets for reducing the quantity of carbon dioxide (CO2) and other greenhouse gases, such as methane, being released into the atmosphere. Renewable energy, particularly wind energy, has been identified as crucial if the UK is to meet its 2020 obligations. As part of a European-wide effort to combat the threat of climate change, the UK has signed up to a pledge to ensure at least 15 per cent of its energy comes from renewable sources by The UK has committed under the Climate Change Act to reduce its greenhouse emissions by at least 34 per cent on 1990 levels. The European target means more than 30 per cent of the nation s electricity will have to come from renewable sources within a decade - up from 5.5 per cent in but great progress has already been made. The UK s onshore wind farms now supply electricity to more than two million homes and the offshore sector is expanding rapidly with plans in place to build enough wind farms to have a total capacity of 39 gigawatts of electricity and generate 8 billion in annual revenue. Beyond 2020 there are further tough targets to be met, notably the EU s aim of reducing greenhouse gas emissions by 80 per cent by The UK s businesses and workforce are already well on the way to tackling them. By 2020 marine energy technology is expected to have sufficiently developed to contribute significantly to mainstream electricity generation. In this area the UK already has seized a strong lead with 23 per cent of all global wave developments and 27 per cent of all global tidal developments being located in the country. This lead has meant that the UK wave and tidal firms have been able to export their skills and ideas across the world. Switching to a low carbon economy is not just a matter of tackling climate change, it is also a matter managing the cost of electricity to the consumer. In little more than a decade oil prices have quadrupled while coal and gas prices have more than doubled. Moreover, over the next ten to fifteen years a third of the nation s existing generating capacity will be closed down as it reaches the end of its designed lifespan. During this period, renewable energy generators will be required to assist in the replacement of the lost capacity at a time when demand for electricity is expected to rise significantly. Increasing reliance on renewable friendly energy to our environment also offers improvements in security of supply and less dependency on imported energy. The speed with which renewable energy generating capacity is growing, the support offered by the UK Government, the imperative to hit environmental targets, the need to provide security of supply and to replace conventional and nuclear power plants that are reaching the end of their lifespan mean businesses and investors have an unparalleled opportunity to make the UK their renewable energy success story.

6 UK Energy 04 Large overseas businesses and investors have increasingly recognised the advantages of working in Britain. Siemens, General Electric, Mitsubishi and Clipper Windpower are just some of the big names that have announced multimillion pound investment plans to establish new research facilities and manufacturing bases in the UK.

7 UK Energy 05 Wind In 1991 the UK s first wind farm was built onshore at Delabole in Cornwall. It consisted of ten turbines, each with a 0.4 megawatt (MW) capacity, giving the wind farm a total capacity of 4MW. But this was only the start. Today there are well over 250 wind farms in the UK, made up of more than 2,700 turbines, most of which have an individual capacity of 2MW to 3MW up to seven times bigger than the originals at Delabole. In 2007 the wind industry overtook hydro power as the leading form of renewable energy generation in the country and the rate of expansion shows no sign of slowing down. Indeed, with offshore wind now coming into its own the rate of growth is likely to increase for several years yet. The strength and consistency of the winds sweeping across the UK and the surrounding waters make it the best place in Europe for offshore wind turbines to operate and the UK s geographical advantage has put it at the forefront of the expansion of the wind industry. Globally the wind industry is calculated to have expanded on average at a rate of more than 20 per cent annually for the last two decades and Britain has been one of the prime reasons for its growth. In the last three years the industry has grown to 30 per cent annually, with the UK s businesses increasingly leading the way and building up an enviable record for the skills and experience of their workforces. The speed with which the market has expanded, supported by both political and financial backing from the Government, has created investment opportunities that have been the envy of the world culminating in 2010 with the Crown Estate Round 3 announcements. The onshore sector has dominated the wind industry in the UK for the last 20 years. Up to half of the UK jobs in wind energy are in construction, maintenance, operations and support services - its businesses and workforce have established themselves as world leaders in turbine design, wind farm development and operation, the manufacture of specialist components, and a host of other fields within the industry. Large overseas businesses and investors have increasingly recognised the advantages of working in Britain. Siemens, General Electric, Mitsubishi and Clipper Windpower are just some of the big names that have announced multimillion pound investment plans to establish new research facilities and manufacturing bases in the UK. The next few years will see offshore wind generation overtake the onshore sector as the dominant force in the UK s renewable energy. So good are the UK s offshore wind resources that it has been calculated that wind farms covering an area just the size of London could provide enough electricity to supply 10 per cent of the entire nation s needs. Moreover, the UK represents the world s biggest market opportunity for offshore wind. In October 2008 with the operational opening of Centrica s Lynn and Inner Dowsing 195MW wind farms off Skegness, Lincolnshire, the UK overtook Denmark to become the world s biggest offshore wind energy generator. Continuing expansion meant that in April 2010 Britain s offshore wind sector became the first in the world to reach the milestone capacity of 1GW. The landmark was reached with the installation of the Robin Rigg wind farm operated by E.ON and the Gunfleet Sands wind farm operated by Dong Energy.

8 UK Energy 06 The UK has become the world leader in less than a decade since it completed its first offshore wind farm venture, the Blyth wind farm which had two 2MW turbines generating electricity in the North Sea off the Northumberland coast. The UK has become the world leader in less than a decade since it completed its first offshore wind farm venture, the Blyth wind farm which had two 2MW turbines generating electricity in the North Sea off the Northumberland coast. The foundations for growth have been laid by three rounds of planning and tendering for the rights to build wind farms in the waters around the UK. The process is overseen by the Crown Estate and Rounds 1 and 2 are expected to result in wind farm projects with a total capacity of 7GW being built and going into operation. Round 3 is on an altogether larger scale. In late 2007 the Government announced its intention to identify offshore zones suitable for wind farms that could supply another 25GW of capacity - enough electricity to supply 25 million homes and a few months later the Crown Estate unveiled the Round 3 proposals. The successful bidders were announced in January 2010 and the projects represent an enormous long-term investment opportunity that will deliver a quarter of the nation s electricity by Nine separate zones were identified in the waters around the UK that are suitable for offshore wind farms. Though they will be in deeper water than Rounds 1 and 2, the comparatively shallow depth of the sea around much of the country makes them a feasible proposition. Moreover, the UK s businesses are ideally equipped both in terms of skills and capabilities to work in such an environment because of their experience in the oil and gas sector. The Round 3 agreements were one of the strongest signals yet that Britain is locked irreversibly into shifting into a low carbon economy with security of supply for energy. The 32GW of generation capacity from Rounds 1, 2 and 3 will be supplemented by a further 6.5GW of projects within Scottish territorial waters. Another 2GW is expected to be provided from extensions and updates to projects from the first two Rounds, and to help ensure investors can be sure of the long term security of such schemes the Crown Estate announced in 2009 that the leases can be extended to a maximum of 50 years, compared with the previous limits of 22 and 40 years. There are further prizes to be won from the expansion of wind generating capacity. Just as Aberdeen became a world class hub for the North Sea oil and gas industry, so one or more ports are being lined up to become centres of excellence for the offshore wind sector. These would offer a pool of highly skilled and specialised labour and provide the base for many of the supply and service companies that keep the turbines turning. Small wind systems the type that can be used in and around homes and offices - are also playing an important and growing role. Five of the world s top ten small wind companies are based in Britain and industry analysis forecasts that by 2020 Britain will boast a 1.3GW capacity from small wind, generating annual revenue of 750 million. By 2040 capacity could be as high as 9GW, with the country having unrivalled expertise in the sector. UK companies export almost half of their small wind systems to the rest of the world and developments in the UK on Feed in Tariffs and planning restrictions will enable the UK to expand its home market and its influence overseas for on- and offgrid small wind systems alike. The rapid and continued growth of wind power onshore and offshore as turbines are erected and declared operational brings huge environmental benefits because of their impact on reducing the quantities of greenhouse gases being released by mankind into the atmosphere. The reductions are crucial if the UK is to meet its target of reducing them by at least 34 per cent by 2020 and, in line with the rest of the European Union, by 80 per cent by the middle of the century. Wind power has never been so vibrant and the strength of the investment opportunities in the UK and business growth over the coming decades means the country will become an international centre for the technology, with a world class workforce and companies that can compete across the globe as renewables move from playing a minor supporting role to being at the heart of energy supply.

9 UK Energy 07

10 UK Energy 088 Five of the world s top ten small wind companies are based in Britain and industry analysis forecasts that by 2020 Britain will boast a 1.3GW capacity from small wind, generating annual revenue of 750 million. By 2040 capacity could be as high as 9GW, with the country having unrivalled expertise in the sector.

11 UK Energy 09 WHITELEE Whitelee wind farm was hailed as the biggest in Europe when it opened in 2009 after a 300 million investment and there are already plans to extend it. It was declared fully operational in 2009 with 140 turbines with a capacity of 322MW spread over a 21 square mile (55km2) area but two extension schemes will give it another 75 turbines and increase capacity to 593MW. The wind farm is a ScottishPower Renewables project and the first phase of the development on Eaglesham Moor, close to Glasgow, created 500 jobs during construction and earned praise as a project keeping Britain at the cutting edge of green energy. Scores more jobs have been created in the area to ensure the wind farm keeps generating electricity at optimum levels, and for maintaining the roads and tracks that have been built on the site, which will increase to 31 square miles (80km2) once the extensions are complete in A 2 million visitor centre has even been created. To overcome concerns about the sensitivity of the site a 56 mile (90km) network of floating roads were created to protect the peat bogs which form part of the moorland and forest landscape of the area, an important habitat for black grouse and other species of wildlife. The Visitors Centre at Whitelee attracts local and international visitors alike and has a key role in persuading UK and international citizens of the benefits of clean energy generation for communities everywhere. LONDON ARRAY The London Array wind farm is forecast to be the biggest in the world when it is completed and will be the first with a generating capacity of 1GW or more. It is to be built in the outer Thames estuary more than 12 miles off the coasts of Kent and Essex and the first phase is the result of a 1.9 billion investment by a consortium of three international energy companies - Dong Energy, E.ON and Masdar. Up to 341 turbines could be erected over a 90 square miles area of sea as part of the project which will provide enough electricity for 750,000 homes equivalent to every home in Kent and East Sussex combined. Phase one construction is expected to start in 2011 and should be completed in 2012 when the last of 175 turbines begins generating electricity. The overall capacity from the first phase of development will be 630MW and electricity will begin to be generated in The wind farm is expected to be extended by 370MW to bring the capacity up to 1GW and reduce the UK s carbon dioxide emissions by almost two million tonnes each year. In the initial phase the turbines are expected to be 3MW models but larger versions of up to 7MW are likely to be used for the second phase as they become available. The second phase, which is unlikely to start construction before 2015, is likely to represent a further 1 billion investment.

12 UK Energy 10 RenewablesUK, the association representing the renewables industry, has carried out research showing that by 2030 the marine energy sector could be worth almost 1 billion annually. In the long term it is forecast to be able to provide as much as 20 per cent of all of the UK s electricity.

13 UK Energy 11 Marine: Wave and Tidal Wave and tidal energy resources around the UK s coastline are among the best in the world as a source of renewable energy. In places like the Pentland Firth between the west coast of Scotland and Orkney tides are funnelled through a narrow area forcing the water through at an extraordinary rate. Tides in the Severn Estuary rise and fall by a total of up to 46 feet (14 metres), the second highest in the world, and other areas of the UK have similarly extreme high and low tide marks. And there is the near constant potential as a source of energy of the rise and fall of the countless waves in the UK s waters that can be harvested as electricity. With the UK s shoreline stretching more than 19,000 miles (30,500km) the combined wave and tidal potential represents a huge resource to be accessed and innovative UK companies have seized the opportunity to lead the world in the development and installation of both wave and tidal energies. Significantly, the UK has established a big lead in marine energy technologies and is responsible for 27 per cent of tidal energy developments around the globe and 23 per cent of wave projects. Several world firsts have been notched up by UK-backed schemes including SeaGen, the first commercial-scale tidal energy system, and Pelamis, the first commercial wave farm which was exported to Portugal. Wave and tidal technology is still being developed and the sector is in its infancy estimated to be more than a decade behind the wind sector but its development facilities are world class. It has the European Marine Energy Centre, the first test centre for wave and tidal technology anywhere in the world, in the Orkneys and a Marine Renewables Business Park is to be built at Hayle, Cornwall, close to the Wave Hub, the world s first facility for demonstrating wave energy arrays. Wave technologies are c alculated to have the realisable potential of generating 50TWh of electricity, enough to supply 11 million homes, while tidal stream could generate 17TWh, enough to supply 4 million homes. More could be generated by tidal range schemes, such as the proposed Severn Barrage project which has been cited at up to 17TWh. In the years after 2020 the technology is forecast to come into its own, playing a significant role in bringing down greenhouse gas emissions and increasing the quantity of renewable energy being supplied to businesses and homes. RenewablesUK, the association representing the renewables industry, has carried out research showing that by 2030 the marine energy sector could be worth almost 1 billion annually. In the long term it is forecast to be able to provide as much as 20 per cent of all of the UK s electricity.

14 UK Energy 12 The world s first leasing round for wave and tidal projects on a commercial scale was carried out in the UK by the Crown Estate which in March 2010 announced the names of the successful bidders. The initiative is designed to ensure 1.2GW of capacity is installed, operational and generating electricity by 2020 in the Scotland s Pentland Firth and the waters around Orkney. It was originally intended that the leasing round would be for 700MW but so vibrant is the sector in the UK that it was decided the scheme could almost double in size. Agreements have been signed for ten projects with a generating capacity of 50MW, 100MW or 200MW. Six of them are for wave projects while four are for tidal energy. Enough electricity to supply 700,000 homes is likely to be generated by the ten projects, which are estimated to involve up to 4 billion in capital investment by Pentland Firth and Orkney s waters have such potential for a rich renewable energy harvest that they have been described as the Saudi Arabia of wave and tidal power. Waves of up to 50 feet high roll in off the North Atlantic and tidal currents race between islands in such quantities that up to three million tonnes can pass through every second. The Crown Estate has also announced its intention for another 200MW project to be added to the initial ten schemes. There are further plans to encourage more demonstration projects that can be developed into commercial technology in the future. An extra incentive for developers and investors is the 10 million Saltire Prize which has been offered by the Scottish Government to stimulate the development of commercially viable wave and tidal technology. Over the last decade the UK Government has invested 60 million in supporting the development of the marine energy sector and it is now ramping up its commitment to wave and tidal technologies. Among the measures it has taken is the launch of the Marine Energy Action Plan which provides a roadmap showing how wave and tidal energy can expand over the coming decades. The report concludes: The potential market size and growth opportunity should provide investors with a clear message that there is a long term future for this marine energy industry. The report anticipates continued financial backing from the Government, particularly in direct funding for developing technology and the Renewables Obligation support mechanism for more advanced projects. It foresees the development and operational installation of first generation wave and tidal projects in the lead up to The development of the second and third generations will allow large scale generation projects to be rolled out during the 2020s and beyond. By the 2040s it anticipates wave energy alone will directly employ 16,000 people, a quarter of them working on exports. As the sector grows, a supply chain will spring up in its wake, often utilising the workforce skills that have already been established by the oil and gas industry and the UK s maritime tradition. The UK Government is keen to support the wave and tidal sector financially and the number of funding initiatives has risen in recent years, with more anticipated in the coming decade. Among them is a 60 million plan announced in March 2010 to help upgrade one or more ports around the UK s coastline. While the offshore wind industry will be the primary beneficiary initially, the marine energy sector will increasingly make use of the new state-of-the-art facilities as more and bigger projects get under way.

15 UK Energy 13 PELAMIS WAVE POWER Pelamis Wave Power was the first to develop an offshore wave machine that generated electricity for the grid and went on to build the first wave farm. The company has continued to build on its success and in March 2010 it was announced that its wave energy technology is to be used in three different projects in Pentland First and Orkney Water. The development of the Pelamis device began in 1998 and the second generation machine includes many improvements on earlier models, including a new joint configuration and better energy yields. It incorporates a rapid attachment mooring device developed since 2005 that allows cost-effective maintenance and at 590 feet (180m) long will be considerably bigger than the 427 feet (130m) first generation version. Pelamis is a world-leader in wave technology. Its device was first connected to the grid in 2004 at the European Marine Energy Centre (EMEC). It created the first wave farm in 2008 after winning an export order from Portugal and it was the first wave power project to secure an order from a utility company E.ON. The three projects the Edinburgh-based company is involved in after lease agreements were awarded by the Crown Estate is a 50MW project with ScottishPower Renewables, another with E.ON UK and a third 50MW scheme it intends to plan, deploy and operate by itself. Each of the projects is designed to prove the technology can operate well enough to be deployed on a much larger commercial scale. MARINE CURRENT TURBINES SeaGen, with its rotors having a diameter of almost 55 feet (16m), is the largest and most powerful tidal energy generator in the world. Two prototype turbines have been installed in Strangford Lough in Northern Ireland and are generating electricity for the grid, making SeaGen the first commercial tidal energy generator in the world. The devices in Strangford Lough, where water streams in and out at up to 8 knots, went operational in 2008 and have a combined capacity of 1.2MW. They were assembled at the Harland and Wolff dockyard in Belfast before being put into the lough. SeaGen is the creation of Marine Current Turbines (MCT), based in Bristol, and it is one of four tidal projects to win approval for installation in Pentland Firth and Orkney Water in Britain and the world s first round of marine energy lease agreements. For the Orkney project MCT intends to deploy 66 SeaGen turbines with a combined capacity of 99MW, providing enough electricity for 100,000 homes and making the development the world s biggest array of tidal energy generators. Such has been the success of MCT, a world leader in tidal technology, that early in 2010 it was announced that Siemens had decided to back the company by buying a stake close to 10 per cent. Before developing SeaGen, MCT had created SeaFlow which in 2003 became the first tidal turbine to be installed offshore.

16 UK Energy 14 We are leading work to develop the grid of the future that will automatically manage the variability of renewable sources, save energy and reduce costs. We are investing to develop the technologies to deliver this. The Renewable Energy Strategy

17 UK Energy 15 Transmission & Distribution (T&D) The development of renewable energy has placed new demands on a grid that was designed for a different era. Where power plants used to be sited close to the towns and cities that needed the electricity they produced, renewable developments are often far away from the people and communities they serve. Equally, the nature of electricity generation is changing. Technicians at fossil fuel and nuclear power plants can be sure just how much electricity can be produced and when. But with wind farms and marine generators there are the added factors of uncertainty, unpredictability and a dependence on Nature s, not man s, timetable. A further complication facing the transmission network is that demand for electricity is forecast to grow in the UK by up to 60 per cent over the next decade, with the grid infrastructure needing to expand from 75GW to as much as 120GW. Moreover, it is estimated that 60 per cent of the existing grid infrastructure needs replacing or upgrading to enable it to cope with 21st century demands. Businesses and the Government are now stepping up to the challenge of how to vastly increase the size of the grid network and to connect all the new generators that will be built in the coming decade. In its Renewable Energy Strategy the UK Government highlighted the need to invest 4.7 billion to extend and update the land-based grid. It also highlighted the need for 15 billion in investment to create a new offshore transmission network to bring the electricity produced by wind farms, tidal and wave generators to the coast where it can be fed into the onshore grid. The drive towards renewable energy and the demands it places on the grid infrastructure is part of the reason why a transformation of the network is needed, especially with ministers intent on ensuring that by 2050 the electricity supply will be virtually free of greenhouse gas emissions. In making the transition towards a grid with a larger capacity and the ability to cope with the fluctuations in supply that are inherent in wind and marine energy, the Government will maintain the right conditions for investment in the infrastructure. While the improvements represent a big investment opportunity there is recognition that large-scale projects have a history of getting delayed or blocked by the planning system. Plans have already been laid out to streamline the planning system, including the creation of the Infrastructure Planning Commission (IPC) with the specific role of speeding up decisions for large projects. Work is also being carried out to establish how wind farms and other marine energy supplies can best be connected to the grid and measures are being drawn up to ensure connections are co-ordinated with the needs of the developers as their projects are completed. A further measure to ease the progress of expanding the grid is the drawing up of a National Policy Statement for Electricity Networks Infrastructure. Its purpose is to make it harder for big projects to be delayed or rejected if they are nationally important and in line with the Government s stated aim of expanding and modernising the grid.

18 UK Energy 16 UK innovation is being applied to improve the grid infrastructure and capabilities and has been encouraged by incentives created by Ofgem, the energy industry regulator, with schemes such as Registered Power Zones (RPZs) which are designed to find new ways to connect distributed generation. One of the main pledges the Government has made to improve the grid so that it can cope with fluctuating supplies that can occur with renewable generation is to introduce Smart technology to the network. Smart technology will be one of the most important innovations to be introduced to the grid as wind, wave and tidal farms come on stream. With old style power stations there was control over when they were turned on but with renewable schemes there is dependence on the vagaries of the wind and waves. Tidal energy is predictable but only operates at peak levels for some of the day. UK businesses and academics have been pioneers in the research and development of the technology and are well placed to lead the market expansion, especially with their strengths in low carbon electronics design including power management devices which reduce costs and increase efficiency. Among the measures being taken by the Government and outlined in its Smarter Grids The Opportunity report, is the UK Smart Demonstration Fund offering up to 6 million to accelerate development of Smart technology in Britain. Ofgem will make 500 million available for larger scale trials of innovations including Smart technology. As the Renewable Energy Strategy states: We are leading work to develop the grid of the future that will automatically manage the variability of renewable sources, save energy and reduce costs. We are investing to develop the technologies to deliver this. Investment in Smart technology is designed to overcome the uncertainties of supply. It will give renewable supplies priority when they are available and ensure other sources can be accessed when necessary. It will furnish suppliers with much more accurate information on levels of demand to help guide their responses and ensure there is neither too much electricity being produced nor too little. Smart grid development internationally is creating a rapidly growing market and is estimated to be worth 27 billion by 2015.

19 UK Energy 17 Smart grid development internationally is creating a rapidly growing market and is estimated to be worth 27 billion by BEAULY-DENNY TRANSMISSION LINE A 350 million upgrade to the Beauly-Denny transmission line is to be built to improve access to the grid for renewable energy projects. The upgrade was given approval in January 2010 and construction of the 137-mile (220km) line is expected to create up to 500 jobs. The 400kV line will be big enough to transmit 2.5GW of electricity and will provide distribution access for 1,500MW of wind farm projects that are being planned near the route. Approval for the scheme is expected to stimulate planning for similar projects and further wind farm developments. At least eight other lines in Scotland have been identified as being in need of upgrading, including the East Coast transmission route and the sub-sea cable between the mainland and Orkney. The existing 132kV Beauly-Denny line, which was installed to take electricity from hydroelectric dams, will be replaced with a 400kV high capacity line and by providing a suitable stretch of grid for renewable electricity generation projects to be connected to, it paves the way for the development of a further 1,420MW of onshore wind, 540MW of offshore wind turbines and 750MW of wave and tidal schemes. When the scheme s approval was announced the Scottish Government Energy Minister Jim Mather described it as the most significant grid infrastructure project in a generation. UK-NORWEGIAN POWER LINE Plans to lay the longest underwater power cable in the world between the UK and Norway are being explored as a means to share renewable energy. National Grid has signed an agreement with Statnett, the Norwegian transmission operator, to investigate the best route for a high voltage direct current cable between the two countries and the most appropriate regulatory system. The cable would be designed to take feeds from offshore wind farms as it crossed the North Sea and could be used to supply low carbon electricity to oil and gas platforms. It would be likely to form the backbone of the North Sea transmission and distribution network if a European supergrid is built. The project is expected to provide opportunities for a 1 billion investment and would create hundreds of jobs utilising skills such as cable laying that the UK excels at. Linking the two countries with a transmission cable would allow the optimal use of renewable energy generated by the UK and Norway. When generation levels fall at wind farms because of a drop in windspeed, the UK could be supplemented by hydro-electric power from Norway. Similarly, the UK s renewable energy sector could offer cost-effective electricity to Norway at times of high output or when the Scandanavian country was experiencing high demand. A preliminary study carried out by National Grid and Statnett concluded the cable would be technically and economically viable.

20 UK Energy 18 Universities in the UK have a global reputation for innovation and are heavily involved in researching new and improved renewable energy technology.

21 UK Energy 19 Research & Development (R&D) The UK s track record as an innovator is second to none and it is applying its invaluable inventive talents to the renewables industry. The country is the fifth biggest investor in research in the world and its confidence in innovation yields a stream of results to help the renewables sector. Research and development is carried out both by companies that will directly benefit from technological advances and by independent scientists based in universities. The combination of business and academia is a fertile combination and brings out the best in both of them. Each year thousands of inventions are created by researchers in the UK, and a significant and growing proportion of them are from or relevant to the renewables industry. To be successful in research and development the UK has fostered a culture of creativity and the willingness to try new approaches to old problems but it has done so with the financial backing of both government and businesses which recognise the economic dividends that innovations can bring. In creating the Department for Business Innovation and Skills (BIS) the government gave a clear signal of its support for innovation by bringing science and skills together. BIS has responded to the challenge by investing billions of pounds in the UK s innovation and science base. The Technology Strategy Board is among the bodies responsible for distributing government funding and specialises in investing in business-led innovation which supports wealth creation for the UK. The development of low carbon technologies, including energy generation, low carbon vehicles and low impact buildings have been highlighted as key areas in its strategy. Offshore renewables, smart grid, fuel cells, carbon capture and storage along with other low carbon technologies such as electric vehicles, are priority areas for investment. Marine renewable businesses supported through this investment include Pelamis Wave Power, Aquamarine and Tidal Generation Ltd. Where appropriate, the Technology Strategy Board works in partnership particularly with DECC, Research Councils and Regional Development Agencies to deliver joint programmes with significant added value in the low carbon sector. Co-ordination of public sector R&D investment is overseen by the Low Carbon Innovation Group (LCIG) comprising DECC, Technology Strategy Board, Carbon Trust, Energy Technologies Institute and Research Councils. The LCIG provides a mechanism to ensure that a co-ordinated and comprehensive range of support is available for low carbon technologies.

22 UK Energy 20 A host of other funding schemes and bodies have been created with the specific aim of supporting innovation for renewable energy. One is the Energy Technologies Institute (ETI) which was established in 2007 and by early 2010 had announced funding of more than 52 million, with negotiations under way for another 70 million. The ETI s objective is to speed up the development of a range of energy technologies that will help Britain meet its 2020 targets and improve energy efficiency. Funding is aimed at projects which have proved themselves in the laboratory but have yet to reach commercial scale development. Among the projects funded by the ETI is the initiative led by Insensys, the Southampton-based world leader in blade monitoring, to develop advanced systems capable of monitoring the condition and performance of wind turbine blades. The Carbon Trust, a not-for-profit company, has set up a number of funding schemes to encourage innovation. Among them is the 40 million Offshore Wind Accelerator which, to speed up the installation of turbines, is used to promote measures that can cut offshore wind farm costs by ten per cent. The Low Carbon Seed Fund is used to invest in clean energy projects that are in their early stages. The Carbon Trust has provided 1 million of the money in the fund with another 1 million coming from Imperial Innovations, a technology commercialisation company with close links to Imperial College London. For more developed technologies there has been the Clean Energy Fund, with typical investments of 250,000 to 3 million, while financial help on offer from HM Customs and Revenue includes Research and Development tax credits and relief which are intended to sustain technological innovations. Universities in the UK have a global reputation for innovation and are heavily involved in researching new and improved renewable energy technology. World class academic engineering facilities are among the many capabilities offered and academics are involved in many of the commercial wind and marine energy development projects. One of the leading initiatives involving university researchers is the Supergen project which has been engaged since 2006 on a comprehensive assessment of how wind farms can be made more efficient. Durham and Strathclyde universities lead the consortium involved in the project which brings together experts from 12 companies and 10 research institutes. A sister project looking at marine technology is led by the University of Edinburgh. Businesses in the UK are a world class act when it comes to innovation and invention and they have come up with a host of ideas that have brought great improvements to the renewables sector. Examples include Romax, in Nottingham, has been successful in developing software to improve the efficiency of gear boxes in turbines. Unique and world class experimental facilities have been built in the UK to provide unrivalled opportunities for businesses to develop their innovative devices. Chief among them is the unique European Marine Energy Centre (EMEC) in the Orkneys which is at the forefront of the development of wave and tidal energy technology. The EMEC is the first such centre to be created in the world and provides developers facilities to test prototypes in some of the best conditions for wave and tidal energy in the world. The wave test site, at Billia Croo, boasts uninterrupted Atlantic waves of up to 50 feet (15m) while the tidal stream site off the island of Eday has tidal streams flowing at up to 4m/sec (8knots), among the fastest in Europe. The facility provides invaluable data which is used to improve the machinery s performance and to guide researchers when building and installing the next generations of their wave and tidal energy generators. In the South West of the UK, off the north coast of Cornwall, is the Wave Hub which will be the first offshore facility devoted to demonstrating over a period of years the effectiveness of arrays of wave energy machinery. The 28 million Wave Hub is connected to the grid and is designed for projects that have evolved beyond the prototype stage but still need to undergo performance tests before they can be deployed commercially on a large scale.

23 UK Energy 21 The wave test site, at Billia Croo, boasts uninterrupted Atlantic waves of up to 50 feet (15m) while the tidal stream site off the island of Eday has tidal streams flowing at up to 4m/sec (8knots), among the fastest in Europe.

24 UK Energy 22 In Hayle, where the Wave Hub connects with land, the Government is providing funding for a Marine Renewables Business Park to act as a focus for wave and tidal businesses. Government funding has also been won by the University of Plymouth to help develop new wave tank testing facilities as a flagship location for researchers and entrepreneurs to work together. The National Renewable Energy Centre (Narec), located in Blyth, Northumberland, providers of R&D, consultancy, test and demonstration facilities for the renewable and electrical power sectors, dedicated to accelerating the deployment and grid integration of renewable energy and low carbon technologies, is developing the world s first offshore grid connected wind farm test site. The unique research and development project will accommodate up to 20 large scale prototype prototype turbines to test their performance and the facility will complement Narec s existing test capabilities. National Renewable Energy Centre (Narec) Narec is especially well positioned to test the new generation turbines which are expected to be bigger than any wind energy generators yet built and this influenced Clipper Windpower in its decision to open a factory in Newcastle, creating 500 jobs, to build the world s largest wind turbine. Among the capabilities being developed at Narec is a 15 million facility purpose-built to test wind turbine blades of up to 328 feet (100m) long and in 2010 it opened the UK s first open access wind turbine training tower. Clipper s Project Britannia will see the construction of a 10MW turbine and it will make use of Narec s open access test facilities to help its development. Whatever part of the wind and marine energy sector is involved, and whether companies are based in Britain or abroad, they all benefit from the world-beating creativity, innovation and sheer inspiration of the business leaders and their workers in the UK. These world leading state-of-the-art facilities, the Government and other institutions provide invaluable support and finance, and there is the unique mix of innovation and practicality which makes the UK the best location for R&D.

25 UK Energy 23 AQUAMARINE The Oyster wave energy machine is one of many innovations that has been developed in the UK and is at the cutting edge of marine technology. It was devised by Aquamarine Power, a wave technology company based in Edinburgh, which took it from the drawing board to the seas off the Orkney islands. Scientists at Queen s University Belfast worked with the company to get the machine to the point where a second generation is under development. The first generation 315KM demonstration device was connected to the grid in 2009 to begin feeding electricity into the national supply network and in March 2010 Aquamarine Oyster was announced as one of the successful projects, in partnership SSE Renewables, for the first round of marine energy developments in the Pentland Firth and Orkney Water region. The decision means Aquamarine is preparing to start deploying its first commercial wave farm in 2012 using the Oyster generators. The Government has awarded Aquamarine funding of 5.1 million from the Marine Renewables Proving Fund to assist with the development and manufacture of the second generation machines which are expected to be deployed at EMEC again for testing. Further funding has been won by the company from the private sector despite tough economic conditions. Oyster has been ingeniously designed to generate electricity from waves close to the shore in depths of 33 to 66 feet (10 to 20m). Part of its secret of success is its robustness which enables it to cope with harsh seas and is provided by having minimal moving parts and leaving all electronical components on shore. During the development stage of the first generation machine the company was assisted by 870,000 in funding from the Technology Strategy Board and 250,000 funding from the Carbon Trust. Vital testing and datagathering was carried out at facilities provided in the waters off Orkney by the European Marine Energy Centre (EMEC). SUBOCEAN A cable-laying company has cut installation time by half by pioneering a technique new to the wind industry. A DP (Dynamic Positioning) vessel was used by the Subocean group instead of a sea-going barge for an operation to lay more than 20 power cables 3.3 feet (1m) below the seabed. With the vessel able to hold its position without anchors while manoeuvring, even in conditions of up to 60 knot winds when other craft had run to port, the cables could be laid rapidly. Traditional barges would have taken two days to lay each cable but using ploughing equipment fitted to the vessel Subocean was able to install each cable in one day. It was the first time the technique had been attempted while cable-laying for the wind industry and represents a significant cut in costs and time. Subocean, whose three directors started the business after working in the oil and gas sector, pioneered the technique to lay cables in 100 feet (30m) of water for the 300MW Thanet Offshore Wind Farm off the Kent coast.

26 UK Energy 24 The UK has a strong skills base to build on; our experience in offshore oil and gas, and our existing strengths in engineering and construction, will be valuable to the growing renewable energy sector. Meeting the Low Carbon Skills Challenge Report

27 UK Energy 25 Technology Transfer A tradition of innovation and manufacturing leaves the UK well placed to provide the skills and capabilities demanded by a growing renewables sector. The UK s long experience and expertise in the oil and gas industry offers a ready-made pool of highly trained and motivated workers with world class capabilities. In many respects the oil and gas industry has strong similarities with the burgeoning renewables sector, not least the ability to work in the hostile and often hazardous environment of the seas around the UK. So similar are the requirements and such is the cross-over of skills that many companies working in oil and gas have diversified into renewables or have switched over entirely. Equally, scores of businesses set up as renewables specialists were created by entrepreneurs who spotted the opportunity while working in oil and gas. Manufacturing bases have provided another source of highly trained personnel who have been able to transfer their skills into renewables as the sector expands. Aberdeen, as the widely recognised European capital of the oil and gas industry, is well equipped with trained workers who are transferring their skills to wind and other renewables, but so too are other parts of the UK. Among them is the North East where engineering is embedded within the culture of the region. There are 62,000 people employed in the engineering sector in the region, many of them in the oil and gas sector, and the region has built up a worldwide reputation for subsea technology, platform design and maintenance. Aerospace companies and vehicle manufacturing are other areas where skills are transferable and are helping supply the renewables sector with workers. Transfer of skills is expected to accelerate as the high carbon oil and gas industry, which has passed its peak production levels, reduces the number of people it needs at a time when the low carbon wind and marine energy businesses are expanding rapidly. While there are many workers who have proven capabilities that can be taken up by the renewables industry, many more will just be coming on to the jobs market and will need to be equipped with skills. The UK Government recognises the need to create a constant supply of workers and has undertaken several measures to ensure the UK remains a world class centre for excellence for the renewables industry. Among the moves taken by the Government is the creation of the National Skills Academy for Power, which was launched formally in March Its role is to ensure the power sector workforce in the UK is the world leader. It will make sure the demand for a trained and highly-skilled workforce is met and it operates in conjunction with employers to create a network of world-class bespoke training and support.

28 UK Energy 26 Employers have spent or pledged more than 2 million in direct funding for the academy, as well as providing a further 2 million worth of help with measures such as secondments, while the Department for Business, Innovation and Skills and the Department for Energy and Climate Change are providing a further 2.9 million. The academy is run in partnership with the Department for Innovation, Universities and Skills, the UK Commission for Employment and Skills, the Skills for Business Network and the Department for Business, Innovation and Skills. It is an innovation in itself in that it is employer-led so that the design and delivery of learning for an industry has been controlled by business leaders, and is intended to give them exactly what they need. In addressing the issue of keeping skills standards high the UK Government noted in the consultation report Meeting the Low Carbon Skills Challenge that many of the capabilities that will be needed in the wind and marine energy sector are familiar to the UK workforce. Science, technology, engineering and mathematics are among the capabilities in which Britain already has a strong base. The UK s Low Carbon and Environmental Goods and Services (LCEGS) market is valued at 113 billion and is forecast to rise to an estimated 45 billion by By the middle of the next decade it is expected to employ more than a million people and the report observed: These are skilled jobs, with the average market value per employee well above the national average. Many of the skills needed are not new, although some may need to be combined in new ways. It added: The UK has a strong skills base to build on; our experience in offshore oil and gas, and our existing strengths in engineering and construction, will be valuable to the growing renewable energy sector. A further measure taken by the Government to keep the supply of trained personnel flowing is to jointly fund a scheme to create up to 2,500 modern apprenticeships for the wind sector. By keeping up a constant stream of highly trained and motivated workers, many of them specialists, and by calling on the pool of skills already established by other industries, notably oil and gas, the UK has created for itself an unbeatable human resource that has been and will remain for many years the envy of other countries. TECHNOLOGY STRATEGY BOARD The Technology Strategy Board recognised the importance of Knowledge Transfer in the area of Energy Generation and Supply and in 2009 launched a Knowledge Transfer Network (KTN) in this area. The KTN will act as the front door for industry and academia to the UK energy landscape and promote knowledge transfer, information exchange, networking and navigation of the UK s funding landscape. It will also have a remit to promote UK s interests on the international stage. The mission of the Energy Generation and Supply Knowledge Transfer Network (EG&S KTN) is to create an integrated and dynamic network of business, technology, academic and policy stakeholders delivering strategic and effective knowledge exchange to advance the UK EG&S sector. A strong network for the sector will enable us to realise our vision of: Better positioning of UK business in exploiting UK/global market opportunities in accord with the Technology Strategy Board s EG&S strategy. Improved impact and gearing of Technology Strategy Board spend in the EG&S area. To future-proof the UK s activity in the EG&S area through co-ordinated technology & innovation.

29 UK Energy 27 BEATRICE WIND FARM Skills learnt in the oil and gas industry were used to help wind farm developers position turbines in deep water off the North East coast of Scotland. By using jacket technology that has been used for years in building oil platforms the two prototype 5MW turbines were given the support they needed to remain steady against the buffetting of the North Sea. The 29 million Beatrice wind farm was also used to demonstrate that the oil and gas industry culture of building as much as possible on land before transporting infrastructure to sea and installing it was a viable and costcutting - approach for the wind turbines. The turbines were installed at a depth of 148 feet (45 metres) using jacket-type foundations to create the Beatrice Offshore Wind Demonstrator Project 14 miles (23km) out to sea in the Moray Firth. The project was a joint venture between Talisman Energy, an oil and gas company looking to expand into renewables, and Scottish and Southern Energy, the biggest generator of renewable electricity in Britain and Ireland. EAST ANGLIA East Anglia is an area few people associate with heavy industry but it has a record of technical innovation and skills that could come into their own over the coming decades. More than 8 billion is likely to be invested up to 2020 as the largest concentration of turbines in the world is constructed off the region s coastline. And ready and waiting for the challenge to install and maintain the new wind farms is a workforce that in large part was trained in the offshore gas industry, supplemented by experience gained at the Sizewell and Bradwell nuclear sites in the regions. Moreover, East Anglia boasts a supply chain network of 500 companies working in the offshore sector, supplemented by a further 18,000 engineering and manufacturing companies. The same skills that have been displayed by heavy engineering, civil engineering and construction businesses in the region are now ideal for the offshore wind sector. The East of England Development Agency, which supports businesses in the region with information, advice and funding, is looking at how best the oil and gas industry and the region s automotive base can be combined to offer a hybrid supply chain for offshore wind.

30 UK Energy 28 The pool of skills built up in the UK over many years has been fed by an enviable knowledge base that is at the heart of the nation s ability to innovate and to deliver projects to the highest standard. LOGICA International business and technology service company Logica has developed an advanced renewable energy management system for EDP Renováveis in Portugal. The system allows EDP to operate its growing portfolio of wind farms across Europe and North America, currently from a main Control Centre with a backup in Iberia expanding to a third Control Centre in North America. Advanced real-time information technology enables thousands of wind generators from a range of suppliers to be managed consistently from both an operational and commercial viewpoint. The data gathered from each turbine is also collected and analysed to provide input to the ongoing planning and operation of new wind farm sites.

31 UK Energy 29 Knowledge Transfer Knowledge is among the most priceless assets of businesses in the UK and there is, despite the complications of business confidentiality, a tradition of passing on knowledge so it can benefit the wider society. Universities are in many ways the beacon for knowledge sharing in the UK but there are many instances of experts within industry who have proved willing and able to pass on their expertise. UK consultancies are among the businesses that have recognised the value of taking the knowledge gleaned from working on one industrial sector and applying it to another. The development over the last few years of the new legal and regulatory structures for offshore generation, together with the development of contractual models for offshore projects, both provide deliverability of projects in all forms and a variety of structures to meet developers and owners requirements. This has meant that the main relevant UK consultancies, primarily specialising in law, engineering and information technology, have been at the forefront of this area. In recognition of the energy challenge ahead and of the enormous level of expertise waiting to be tapped in the UK the Technology Strategy Board has developed an initiative to promote the sharing of knowledge through the launch of a Knowledge Transfer Network (KTN) devoted to championing Energy Generation and Supply. The energy KTN is described as a front door to the industry which gives business leaders the opportunity to look around and to be directed to areas of development, fund raising, networks and other work the sector is involved in, to access the ideas they like best. It brings together networks of experts from a range of fields, notably technology, academia and policy, who are able to work together to find solutions to problems that would be much harder for an individual business to tackle effectively. The creation of such a network within the sector is designed to co-ordinate the development of technology and to make UK businesses better placed to exploit market opportunities. It provides a focus for the rapid transfer of knowledge across the sector and simply by bringing experts together it acts as a catalyst for improvement and innovation. The Technology Strategy Board also operates Knowledge Transfer Partnerships (KTPs). These are a tried and tested method of enabling companies to obtain knowledge, technology or skills which they consider to be of strategic competitive importance, from the further/ higher education sector or from a research and technology organisation. The knowledge sought is embedded into the company through a project or projects undertaken by a good quality individual recruited for the purpose to work in the company. Knowledge Transfer Partnerships enable companies to identify the most appropriate source for the knowledge or capability they are seeking from within the UK s knowledge base (universities, colleges or research organisations) and receive financial support to do this.

32 UK Energy 30 The UK Policy Framework The UK Government has been one of the keenest supporters of renewable energy and has been instrumental in building up the sector. It has introduced a raft of funding mechanisms and legislation to make it possible for renewable energy companies not just to survive but to thrive. Alongside the innovation and determination shown by UK businesses working in the sector have been a series of measures to ensure they have access to the financial and political support to help get the technologies established. But the UK Government s role has been more than just to kick-start the industry. It is creating the environment in which investors can be assured of long term support and stability for the sector. The Renewables Obligation Certificate (ROCs) system is the prime funding mechanism and creates an obligation on energy suppliers to derive a proportion of their electricity from renewable sources. The UK Government has created the system to provide a guaranteed market for renewable energy and, especially with the extension of the scheme until at least 2037, long term predictability for investors. Environment/RenewablObl/Pages/ RenewablObl.aspx By introducing feed-in tariffs the government is encouraging the rapid expansion of the small wind market and other micro-generation devices. The tariffs provide businesses and consumers with the financial incentive of smaller bills and payments for generating electricity for the grid. environment/fits/pages/fits.aspx With the Climate Change Act 2008 the government demonstrated its international leadership on global warming and showed an unprecedented willingness to take responsibility for greenhouse gas emissions. Signing up to 2020 and 2050 targets for renewable energy and greenhouse gas reductions has provided further strong signals of Britain s determination that the renewable energy industry is here to stay. Targets incorporated within the Climate Change Act are backed by a system of carbon budgeting overseen by ministers. ukpga_ _en_1 The Renewable Energy Strategy (RES) sets out the UK plans for transforming Britain into a low carbon, sustainable economy. Renewable energy, especially wind, is recognised as a crucial element and to encourage investment RES has provided greater financial support for the sector, improvements in planning rules, better grid connections and significant growth in the supply chain. The strategy underlines the European Emissions Trading Scheme as being a core mechanism in encouraging low carbon technology. what_we_do/uk_supply/energy_mix/ renewable/res/res.aspx Website links are provided above to provide direct access information to each of the policies noted.

33 UK Energy 31 The Planning Act 2008 created the Infrastructure Planning Commission (IPC) to help streamline the planning system. The IPC makes quick decisions on schemes in England and Wales, especially renewable projects, that are of national significance and is guided by national policy statements on the country s need for energy supplies. ukpga_ _en_1 The UK Low Carbon Transition Plan is an ambitious piece of policy that charts the path Britain needs to take to turn itself into a low carbon economy. It is the most systematic response to the threat of climate change by any major developed country yet and sets the standard for the world. The plan puts the transformation to renewable energy at the centre of the country s economic blueprint. publications/lc_trans_plan/lc_trans_plan.aspx The Energy Act 2009 tackles climate change and promotes secure, clean energy. It strengthened the Renewables Obligation and introduced new rules to improve the licensing regime for electricity transmission from offshore wind installations. energy.html For wave and tidal energy development the Marine Energy Action Plan provides a blueprint for growth. It shows how the right support will bring huge technological advances to wave and tidal energy over the next ten years. what_we_do/uk_supply/energy_mix/renewable/ explained/wave_tidal/funding/marine_action_/ marine_action_.aspx It is supported by the Marine Industries Strategic Framework which recognises the increasing importance of renewables and anticipates that the sector will be attracting 4 billion of investment every year by Website links are provided above to provide direct access information to each of the policies noted.

34 UK Energy 32 UK Energy The UK has always been a pioneer in the energy sector. The eighteenth and nineteenth centuries saw the birth of the industrial revolution powered by water and coal. In the twentieth century we developed new technologies to access the oil and gas reserves of the harsh environment of the North Sea. The twenty first century sees the UK as a world leader in wave and tidal power systems and other low carbon technologies. Today the UK energy sector has an enviable reputation around the world founded on five key principles: INNOVATION One of our most important abilities is to look at challenges and problems afresh and take a different perspective. We are known for being pioneers. QUALITY We are respected and trusted throughout the world for our quality of work and the reliability this brings. We also have a reputation for working hard to deliver to specification. We are seen as a safe pair of hands. ADAPTABILITY We are not rigid in our thinking and are considered flexible and open to ideas. The solutions we offer are diverse. Solutions right across the energy mix, solutions that are truly cross-border. SUSTAINABILITY We have a keen eye to the future and are looking for sustainable energy solutions not just for the UK but also worldwide. Whether it is the more sensible use of existing energy sources or the development of new technologies, our focus is on long-term sustainable change, not short-term gain. KNOWLEDGE Perhaps our most valuable and unique resource is our workforce who underpins our excellence in energy. Their exceptional skills and abilities are founded on a firm foundation of first class education and training. The breadth of our energy expertise means that we are trusted worldwide. UK Trade & Investment (UKTI) UK Trade & Investment (UKTI) supports UK Energy Excellence, a cross industry, cross government initiative to maximise global recognition of the UK s excellence in energy. UKTI is the government organisation that helps UK-based companies succeed in the global economy and assists overseas companies to bring their high-quality investment to the UK. To contact the UKTI Energy Sector Specialists: T +44 (0) W For more information on UK Energy visit: W W W UKTI offers expertise and contacts through a network of international specialists throughout the UK, and in British Embassies and other diplomatic posts around the world.

35 UK Energy 33 Delivering energy excellence