The AEA Scottish Microgeneration Index. Tracking the progress of microgeneration in Scotland

Transcription

1 The AEA Scottish Microgeneration Index Tracking the progress of microgeneration in Scotland Summary report April to March

2 Introduction Welcome to this special report, which AEA has developed in partnership with the Scottish Council for Development and Industry (SCDI). It reviews progress in the microgeneration market in Scotland over the twelve months following the introduction of the Feed-in Tariff (FIT) scheme on April, and provides information and insight into the opportunities in this new market. Scottish highlights In its first year, the FIT scheme encouraged the development of 7.7 MWe of renewable energy capacity in the UK, % of which was in Scotland. Compared with the rest of the UK, Scotland has many more wind and hydro schemes, particularly larger schemes over kwe that have been developed by community and commercial investors. In total, 7% of the UK hydro capacity is in Scotland as is % of the wind capacity. This reflects several Scottish factors: Wind and hydro resources in many local authority areas in Scotland are well suited to these technologies. There were wind and hydro projects already in development in Scotland and these were able to migrate to the FIT scheme when it was introduced. Larger schemes need planning consent and a number of Scottish local authorities have planning guidance that encourages wind developments of up to MWe. has. MWe of installed wind capacity, the highest for a local authority area in Scotland and the UK. Six wind projects, each with a single 8 kwe turbine, help it reach this top position. While the wind resource in is good, it is not as good as in some other parts of Scotland. A key difference is planning policy. has specific planning requirements for single turbine developments. In other areas, such projects would require the same level of planning documentation as a large project with many turbines. A further notable difference is that the installed capacity of solar photovoltaics (PV) is lower in Scotland than the rest of the UK. There is often a perception that solar PV is not worthy of consideration in Scotland. However, solar PV systems can generate on cloudy and cloudless days. Due to the latitude of Scotland s land mass, solar PV systems will produce less solar output compared to areas in the South of England. This means that more care is needed to find the best possible sites in Scotland (eg south facing, suitably inclined sites with minimal shading). A solar PV system in Edinburgh that faces directly south will generate almost as much electricity as the same system in London that faces South East. So, suitable sites in Scotland can give an acceptable return on investment. The area has the highest solar PV capacity in Scotland at kwe, nd highest is with kwe. Across the UK, there are almost council areas with less solar PV capacity than and. Prospects for growth The FIT scheme capacity comprises three groups:. Existing systems that transferred from the Renewables Obligation (RO).. Installations between July 9 (when the FIT scheme was announced) and April when the FIT scheme went live.. New installations since the FIT scheme went live in April. In April, groups and were already contributing. MWe to Scotland s installed capacity. Between April and March, group contributed a further. MWe. With nearly % growth in a year, this is an impressive result. However, across the UK, growth over the same period was %. This is because many thousands of solar PV systems, typically between kwe and kwe, have been installed on homes. Most of these installations do not need planning permission,

3 Summary Report and the process of site assessment and installation is quick and easy measured in weeks. Hence, the FIT scheme has driven the UK solar PV market into rapid growth. By comparison, all wind and hydro projects, which are key in Scotland, require a detailed assessment of the site energy resource, careful assessment of local environmental impacts and planning permission. Therefore, the development costs are higher and timescales are longer - measured in years. So, the UK market is growing rapidly due to ease and attractiveness of small solar PV systems, whereas the wind and hydro systems that are dominant in Scotland are increasing more slowly. Therefore, while microgeneration in Scotland will continue to grow, it will not match the growth rate in the rest of the UK. Hence, it is likely that Scotland s share of UK capacity and FIT payments will be a smaller percentage in the future. FIT reviews The UK Government has announced the following reviews of the FIT support levels:. A fast-track review, recently completed, which has confirmed a reduction in the FIT for large-scale solar PV systems (over kwe) and an increase for the FIT for farm-scale anaerobic digestion (AD).. A longer term review of all tariffs. The fast-track review is unlikely to alter the market in Scotland, where wind and hydro projects dominate, and there are few proposals for large-scale solar systems. However, the improvement in tariff for AD could help. The fast-track review does not seem to have impacted UK sales of small solar systems or the other technologies. The longer term review is a core part of the FIT process. This could reduce tariffs for wind, hydro and small-scale solar PV systems the main elements of the market in Scotland. To be successful, the review will need to maintain the market momentum already created, balancing this against the value for money needed from the FIT policy. This argues for modest levels of change. Actions to accelerate growth The FIT scheme has created two areas of growth to date: Wind and hydro projects of over kwe, mainly located in Scotland. Solar PV systems retrofitted to homes, mainly located in England. Therefore, there are two routes to accelerate growth of the FIT market in Scotland:. Do more of what is already a success wind and hydro at community and commercial scale.. Do more of what is working in the rest of the UK solar PV for homes.

4 The community and commercial wind and hydro projects require planning consent, and there is a clear link between local planning policy and greater uptake. As planning policy and guidance will have been developed before the FIT scheme was introduced, there is a need for each local authority to re-assess how well current policy facilitates the projects that the FIT scheme encourages. The success of solar PV at the UK level is due, in part, to the simple and low-cost arrangements factors that are the same in Scotland. The main difference is that solar PV installations in Scotland will tend to generate less electricity particularly if the roof is not facing directly south or is shaded. An alternative way of making solar PV a greater success in Scotland is to negotiate lower prices through volume purchases. The Birmingham Energy Savers programme aims to install solar PV on, homes. Such initiatives, led by innovative local authorities, offer a number of benefits, including lower cost of installation from volume purchase and better financial returns on the FIT income. In addition, tenants benefit from lower energy costs. Hence, Dundee City Council is screening its housing estate to identify suitable properties. Collaborative working to increase volumes across several local authorities and housing associations could offer even greater scope for cost reduction. About the AEA Scottish Microgeneration Index The UK FIT scheme was introduced in April with the purpose of incentivising smallscale (ie under MWe installed capacity), low carbon electricity generation. The FIT scheme and the forthcoming Renewable Heat Incentive (RHI) are important initiatives in helping Scotland, and the UK as a whole, achieve a low carbon economy. The low carbon technologies supported by the scheme are: Solar PV. Wind. Hydro. AD. Domestic-scale micro combined heat and power (CHP) up to and including kwe pilot for first, schemes. Under the FIT scheme, installations receive a payment for every kwh of electricity generated. Different tariff support levels are set for each of the low carbon energy technologies and are dependent on the type of technology and the scale of the system. The tariff support levels are intended to provide investors in these low carbon energy technologies with a reasonable return on investment. The design of the scheme has set these at a level that should provide a return on investment of between % and 8%. Shortly after the FIT scheme was introduced, changes were made to remove the legal restriction that prevented local authorities from selling electricity. This means that a wide range of public sector bodies can potentially earn income from the FIT. To help potential investors, this AEA Scottish Microgeneration Index analyses the growth of small-scale renewable energy generation in Scotland over the first year of the FIT scheme (from April to March ).

5 Summary Report 8%. 7%.. % %. %. % % % % The AEA Scottish Microgeneration Index report uses Ofgem data on the number and capacity of systems applying for FIT registration. The data are being updated and revised continually, so statistical reports extracted at a later date may not exactly match the totals presented here. For further details on the methods and assumptions used, please visit about Scotland overview PV.%. MWe, 8 installations Wind %.9 MWe, 78 installations In the first months of the FIT scheme Hydro.% ( April to March ), 7.,7 MWe, 9 installations separate installations in Scotland, with a total AD % installed capacity of.7 MWe of low carbon MWe, electricity generation, applied for installations registration. The breakdown of capacity by Micro technology CHP.% can. MWe be seen in Figure. This shows installations that, at %, wind installations have the largest proportion of installed capacity under the FIT scheme in Scotland. Hydro installations have.% and solar installations.%. There are only five micro CHP schemes, a negligible percentage of the total installed capacity. Scotland does not have any AD installations registered under the FIT scheme. 8 Figure : Analysis of Scottish installed 7 capacity by technology PV.%. MWe, 8 installations Wind %.9 MWe, 78 installations Hydro.% 7. MWe, 9 installations AD % MWe, installations Micro CHP.%. MWe installations While installations in Scotland comprise only.% of the UK total applying for FIT registration, they represent % of the UK s installed capacity. This is because there is a greater proportion of larger-scale wind and hydro schemes in Scotland compared with the rest of the UK. 7% of UK wind capacity and % of UK hydro capacity under the scheme are located in Scotland (see Figure ). This figure also shows that % of the UK s kwe of micro CHP is installed in Scotland, while only % of the UK s 77. MWe of solar PV is in Scotland. Figure : Percentage of UK capacity in Scotland by technology 8% 7% % % % % % % % Figure shows there has been significant growth, with capacity almost doubling during the first months of the FIT scheme. Figure : Total cumulative Scottish installed capacity 8 over the last months 7 lations MWe) 8 7 Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec 8

6 The total capacity of the Scottish installations that transferred from the RO to the FIT scheme is. MWe ( installations). On March, this represented % of the total installed capacity. The installations consist predominantly of wind (%) and hydro 8 (9%). Solar PV makes up the remainder. Technology overview This section provides a breakdown of technologies installed in Scotland by their different FIT support levels. Wind power Figure : Installed wind capacity by different FIT support levels Solar photovoltaic 9 installations AD % MWe, installations % % Micro CHP.%. MWe installations % % Figure : Installed solar PV capacity by different FIT support levels..... East Dunbartonshire East Ayrshire Dundee City Clackmannanshire Angus Aberdeen City Figure shows that the majority of solar PV capacity registered under the FIT scheme in Scotland is in the Under kwe (retrofit) level (ie those that have been retrofitted to existing buildings). There have been over 7 installations at this tariff support level, with an installed capacity of around MWe. 98.8% of these installations are in the domestic market. The installed capacity for new build is negligible in comparison, with only installations and a combined capacity of kwe. Overall, there are 79 domestic, commercial, industrial and community solar PV installations in Scotland. East Dunbartonshire East Ayrshire Dundee City Clackmannanshire Angus Aberdeen City 8 7 North Ayrshire Falkirk East Renfrewshire Figure shows the installed capacity of wind technology at different scales, which is more diverse than that for solar PV. There have been only three installations in the smallest wind tariff support level (under 8. kwe), and none in the kwe to kwe or. MWe to MWe tariff support levels. wind installations, with a combined installed capacity of around. MWe, transferred into the scheme from the RO. The greatest number of new wind installations is at the. kwe to kwe tariff support level, where 8 sites, with a combined installed capacity of. MWe, have applied. 7.% of installations at this tariff support level are in the domestic sector and.% are in the commercial sector. Renfrewshire North Lanarkshire LA unknown Western Isles West Lothian West Dunbartonshire Renfrewshire North Lanarkshire North Ayrshire Falkirk East Renfrewshire West Lothian West Dunbartonshire The kwe to. MWe tariff support level has the highest installed capacity at 7. MWe spread across nine installations. This represents all of the schemes at this tariff support level in the UK. Of these, six are commercial, one is industrial and two are community schemes. 8 LA unknown Western Isles

7 Summary Report 7 Hydro Figure : Installed hydro capacity by different FIT support levels transferred from the RO ( schemes). These represent different scales of hydro installation, but the average capacity is around. kwe and the combined capacity is.7 MWe. Of these, were domestic schemes, four were community and four commercial. The largest capacity is found in the kwe to MWe tariff support level, where six commercial installations have been registered, with a combined capacity of.8 MWe. Anaerobic digestion By March, no AD projects had applied for registration under the scheme in Scotland. However, there were only three projects in the whole of the UK. Micro CHP Figure shows a breakdown of different hydro installations across the different tariff support levels. The largest number of systems installed is represented by sites that have There is only one tariff support level for micro CHP ( kwe and under). In Scotland, there are five installations, with a total installed capacity of.9 kwe.

8 8 Local authority overview This section provides an overview of the installed capacity by local authority area. Figure 7: Local authority total installed capacity by technology East Renfrewshire East Dunbartonshire East Ayrshire Dundee City Clackmannanshire Angus Aberdeen City Renfrewshire North Lanarkshire North Ayrshire Falkirk West Lothian West Dunbartonshire 8 8 LA unknown Western Isles Figure 7 shows that installed capacities for the local authority areas in Scotland vary widely. It should be noted that each region has different population densities, renewable energy resources and land area. Overall, shows the highest installed capacity, while has the largest number of installations. Figure 7 also shows that some rural areas (eg,, Argyll & Bute, and ) have significant hydro and wind power capacity. This shows potential for growth in other parts of Scotland where the rural nature and renewable energy resources are suitable. This pattern is seen across the UK. However, it is accentuated in Scotland the rural areas in Scotland have more wind and hydro than is typical in the UK, while the urban areas in Scotland have less solar PV than is typical across the UK. Hence, urban areas seem to be at a disadvantage. However, one UK city, Sheffield, is the exception. Sheffield has a high number of solar PV systems, due to a strong local supply chain and a supportive council. Large-scale roll-outs are being planned in other UK cities. So, Sheffield s success could be repeated in other urban areas. By contrast, in the areas that have a more urban nature, solar PV is the more common technology but, in overall terms, installed capacity is much lower. This is expected, as the renewable resource and space needed for larger wind and hydro schemes is a constraint in urban areas. The Ofgem data do not provide location information for several installations. Therefore, the local authority area is unknown. AEA searches out additional data to identify the location of these schemes. This has a focus on identifying the largest projects, which have the greatest impact on the regional and local data. This process reduces the number designated as LA unknown.

9 Installed capa O North North Ayrsh Falkirk East Renfrewshire East Dunbartonshire East Ayrshire Dundee City Clackmannanshire Angus Aberdeen City Figure 8: Analysis of local authority capacity by domestic, commercial, industrial and community installations Summary Report 9 East Dunbartonshire East Ayrshire Dundee City Clackmannanshire Angus Aberdeen City Falkirk East Renfrewshire Figure 8 shows the split between the different sector types (domestic, commercial, industrial and community). This shows that, in a number of local authorities (eg and ), the largest share of installed capacity is in the commercial sector. and have the highest capacity in community schemes. is the only local authority with much capacity in industrial sector schemes, albeit from a single large wind turbine. Compared with the rest of the UK, Scotland has only 7% of the domestic sector capacity, but has % of the commercial and industrial capacity and % of the community capacity. Renfrewshire North Lanarkshire North Ayrshire LA unknown Western Isles West Lothian West Dunbartonshire Microgeneration Index for Scotland Figure 9: Top-ten local authority areas in Scotland by total installed capacity Clackmannanshire Angus Aberdeen City East Dunbartonshire East Ayrshire Dundee City East Renfrewshire Falkirk 8 8 O North North Ayrsh Installed capacity (kwe) Figure 9 shows the top ten local authority areas in Scotland in terms of installed capacity. has the highest at.. MWe, representing.% of the alled capacity (MWe)..

10 ife k of 8 8 total installed capacity across Scotland. This capacity is across 9 installations, with. MWe coming from wind turbine installations, North Lanarkshire North Ayrshire predominantly from six 8 kwe turbines. has.8 MWe of installed capacity, representing 7.7% of the total installed capacity across Scotland. This comes predominantly from two large hydro schemes; one with an installed capacity of MWe and the other of. MWe. Figure : Top-ten local authority areas in Scotland by installed solar PV capacity Installed capacity (kwe) LA unknown Western Isles West Lothian West Dunbartonshire Renfrewshire Installed capacity (kwe) Figure shows that has the highest installed capacity for wind, with. MWe across 8 installations. Orkney Islands also has higher installed capacity than other top-ten authorities, with. MWe across installations. In, the number of wind installations is high compared with the installed capacity, which indicates a pattern of many smaller schemes. Figure also shows a greater variance across the top-ten local authorities for installed wind capacity compared with that shown in Figure for installed solar PV capacity - a feature of the UK and Scottish markets. Figure : Top-ten local authority areas in Scotland by installed hydro capacity tish Borders There are relatively low levels of solar PV capacity installed across Scotland. Figure shows that, followed by, has the highest number of solar PV installations in Scotland. However, installed capacity in both is still relatively low, with around kwe and kwe respectively. Figure : Top-ten local authority areas in Scotland by installed wind capacity 8 North Ayrshire Figure shows that the installed capacity of hydro installations across the top ten is also more varied than that for solar PV. The installed capacity in is notably higher than the other areas, with just over. MWe across three schemes (predominantly from two large schemes, as discussed above). Argyll & Bute also has significant installed hydro capacity, with.7 MWe across seven schemes. rclyde n 7 To explore the full AEA Microgeneration Index online or register to get the next UK issue sent direct to your inbox visit ity of

11 Summary Report About AEA AEA is one of the world s leaders in energy and environmental consultancy, and information management. The company operates in the UK, Europe and the US advising governments, the EU and major private sector organisations in energy and climate change, air and environmental quality, risk management, resource efficiency and waste management, sustainable transport and knowledge transfer. In the UK, AEA has been voted number one consultancy for climate change and renewables by industry consultants in the, 7, 8 and 9 Edie (Environmental Data Interactive Exchange) Consultancy Surveys AEA s Strategic Integrated Renewables Service This report complements AEA s Strategic Integrated Renewables Service (SIRS) a comprehensive service that gives an authoritative and independent review of the potential for organisations to deploy renewable energy technologies. SIRS provides decision makers with the critical intelligence required to make informed decisions about installing these technologies. For further information and related case studies, please visit strategic-integrated-renewables-service-sirs About SCDI The Scottish Council for Development and Industry (SCDI) is an independent membership network, which strengthens Scotland s competitiveness by influencing Government policies to encourage sustainable economic prosperity. It is a broadbased economic development organisation, with membership drawn from Scottish business, trades unions, public agencies, educational institutions, local authorities and the voluntary sector. This unique gathering of knowledge, experience and talent provides a dynamic and creative force for change. SCDI interest SCDI, the Fraser of Allander Institute and Scottish Renewables, have formed a unique partnership to track and analyse independently Scotland s performance in fulfilling low carbon energy targets and ambitions in a major annual study Scotland s Low Carbon Energy Review. The Review will incorporate a survey of Scotland s low carbon energy supply chain. Local authorities and the wider public sector can be a catalyst, partner and wealth generator in the low carbon economy and their estates offer many opportunities for low carbon energy generation, helping to deliver the targets, support services and stimulate green business growth. With the Confederation of Scottish Local Authorities (COSLA), the Scottish Local Authority Economic Development (SLAED) group and Aberdeen City Council we have organised, Empowering Scotland, Scotland s first ever conference on this subject. This special report from AEA on progress following the introduction of the Feed-In Tariff establishes benchmarks which will focus our partnership s work to empower Scotland s councils, private sector and communities.

12 To discuss the AEA Scottish Microgeneration Index and the issues it raises or to request a tailor-made report for your organisation, please contact: AEA Colin McNaught Knowledge Leader - Energy t: + () m: + () e: colin.mcnaught@aeat.co.uk Other contributors to this paper include: Erika Rankin - Specialist Consultant, Energy and Climate Change SCDI Gareth Williams Head of Policy m: + () e: Gareth.williams@scdi.org.uk Copyright AEA Technology plc //Jun Important notice AEA and SCDI make no representation or warranty, expressed or implied, and accepts no liability concerning the fairness, accuracy or completeness of the information or opinions contained within. Furthermore, AEA and SCDI accept no liability whatsoever to any party for any loss or damage arising from any interpretation, use of or reliance upon any information or view contained within the report. All opinions expressed in the report are based on information available and judgements at the date of the report and are subject to change without notice due to economic, political, or industrial factors. Any guest commentaries in the report reflect the views of the respective authors.