26 April 2012
The Prime Minister David Cameron made the case for clean energy in the UK and globally today as he addressed delegates at the Clean Energy Ministerial being held in Central London.
Speaking to energy ministers from 23 leading economies, and alongside a series of government and commercial announcements, the Prime Minister said:
“There are huge challenges facing governments across the world today, and one of the most important of all is how we meet our growing energy demands in a way that protects our planet for our children and grandchildren.
“With global demand forecast to increase by more than 40 per cent in the next two decades, we urgently need a more diverse, cleaner mix of energy sources that will give us energy security without causing irreparable damage to the planet.
“Renewables are now the fastest growing energy source on the planet. And I am proud that Britain has played a leading role at the forefront of this green energy revolution.
“Britain has gone from virtually no capacity for renewables, to seeing them provide almost 10 per cent of our total electricity needs last year. And we’ve added more capacity for renewables in the last two years than at any time in the last decade.
“Our commitment and investment in renewable energy has helped to make renewable energy possible. Now we have a different challenge. We need to make it financially sustainable.”
Dedicating much of his remarks to how renewable energy can move from its strong position today to become a truly global industry, the Prime Minister spoke about collaboration between government and business to drive down costs, the need to develop a global carbon price and the importance of enhanced international trading.
Announced alongside the Prime Minister’s speech:
The Prime Minister highlighted the scale of renewable investment in the UK over the past year. Between April 2011 and February 2012, announcements to the value of £4.7 billion and supporting 15,000 jobs have been made in UK renewable projects across a wide range of sectors, including onshore and offshore wind, bioenergy and marine, and throughout their supply chains.
He welcomed further industry announcements today, including a major new contract let by E.ON for its Humber Gateway offshore wind farm, creation of a new joint venture to develop a large offshore wind project off the Isle of Wight, investment by JDR Cables in a significant expansion of its facility in Hartlepool, and the progression of three biomass and onshore wind projects in the UK representing over £350m of investment and as many as 800 jobs at the peak of construction (see Notes for Editors for details).
New industry partnership shaping a second energy revolution for the North Sea
The Prime Minister announced a new industry partnership bringing together key players with an interest in making the most of the North Sea’s renewable energy resource. More than twenty firms based in several different countries have signed up to a shared vision to create a major new renewable energy power centre in the North Sea and to maximise the significant opportunities that come with it. Early signatories include major offshore wind developers, manufacturers, as well as a wide range of supply chain companies (see Notes for Editors for full list of signatories).
Under the provisional name of “Norstec” - which takes inspiration from the “Desertec” solar initiative - this brings together key players who recognise the enormous opportunity offered by the North Sea. This network will come together around the time of the June RenewableUK conference on global offshore wind to discuss in more detail how the new partnership will operate.
Offshore wind cost reduction
The Prime Minister also welcomed continuing efforts to reduce technology costs. In the offshore wind sector, the Crown Estate and the industry through the Cost Reduction Task Force, is taking a detailed look at how we can reduce the cost of offshore wind to £100/MWh by 2020, for example, considering the impact of technology, finance and supply chain developments.
Two announcements aimed at reducing the costs of offshore wind were made today. A second round of offshore innovation funding - of up to £5m - targeted straight at technologies that can cut costs, is set to open for bids in May. Existing projects are already leading to jobs and investment - for example David Brown is using a £1.2m government grant to support the development of a lower weight, lower cost gear system for the next generation of offshore wind.
And the Government is working to make the absolute most of the resource - the Crown Estate today announced it will soon be exploring whether test sites can be set up in even deeper water, opening up the energy potential of a new swathe of the North Sea.
DECC today published a Call for Evidence to identify the potential for and better understand the potential benefits and risks to the UK of renewables trading and inform how we may choose to move forward.
Recent analysis demonstrates that the UK has the capacity to deliver its ambition of 15% of energy from renewable sources by 2020 through domestic action, and the Government remains fully committed to that approach. At the same time, as recognised in the UK Renewable Energy Roadmap published last summer, there is the potential for the UK to work with our European partners on renewable energy deployment. This would allow the UK a commercial opportunity to export energy if there is a surplus of domestic generation, or to import renewable energy if required.
The Bioenergy strategy, published today, sets out an important framework for ensuring that biomass powering our homes, businesses and transport delivers benefits to businesses and consumers while also maximising the environmental benefits. It shows that by the middle of the century, sustainable bioenergy could contribute around 12% to the UK’s total primary energy demand across heat, transport and electricity. This deployment will offer economic opportunities, which we cannot afford to miss.
Today a new report by the UK’s National Centre for Biorenewable Energy, Fuels and Materials was also published. This set out that an increase in energy sourced from biomass resources for electricity and heat could support around 35,000 to 50,000 jobs by 2020.
Today also saw the announcement from Aberystwyth University Institute of Biological, Environmental and Rural Sciences that it has secured funding from the UK Government to work in collaboration with industry to develop an integrated Miscanthus breeding platform. This industry-led research project will generate new plant varieties which enable the production of new feedstocks for commercialization.
Other UK announcements made during the Clean Energy Ministerial this week include:
Landmark green investment decision
Announcement yesterday by Vince Cable of the first landmark green infrastructure investment decision. A total of £80 million has been committed to two specialist fund managers - who will make and manage investments in the small scale waste infrastructure sector - by a specialist team within the Department for Business, Innovation and Skills. All BIS investments made by the fund managers will be match-funded, leveraging in at least £80 million more to the projects. The Government is investing directly, on fully commercial terms, ahead of obtaining state aid approval for the UK Green Investment Bank. The fund managers will be responsible for generating and managing investments in areas such as waste recycling and reprocessing facilities, pre-treatment projects and energy-from-waste projects.
Bilateral international agreements to collaborate on energy issues
Signing this week of two new collaborative agreements:
UK/US Memorandum of Understanding: There has been a series of MOUs between the UK and US energy departments dating back to the mid 1980s, the most recent of which expired last year. A renewed MOU has been signed by Ed Davey and Steven Chu encompassing potential collaboration across the energy spectrum and extends to government agencies, universities, science and research centres and the private sector. Initial collaboration will focus on the development of floating wind technology.
In addition the UK and the Republic of Korea are signing an enhanced Memorandum of Understanding extending existing collaboration in science, technology and innovation into the field of energy.
Support for eco innovators
Announcement yesterday of an Energy Entrepreneurs Fund with a budget of up to £35 million over the next 3 years. This will provide financial support for SMEs to develop and demonstrate their ideas. DECC will also shortly launch a £3 million competition to assess the performance of advanced heat storage technologies suitable for integration with domestic heating systems. A new low carbon funding landscape navigator has also gone live today at www.lowcarbonfunding.org.uk.
Support for CCS in developing markets
Allocation yesterday of UK funding to support the development of new partnerships and capacity building activities around carbon capture and storage in emerging markets. The £60 million contribution is drawn from funding already announced in the Spending Review, and is a contribution to a wider fund of $200 million international fund.
Results-Based Financing Facility
DfID announcement that the UK will help support innovative private companies to bring sustainable energy to some of the poorest countries in Africa and Asia. Under a new fund, a company could receive a top-up for every clean cookstove sold or new customer connected to a local energy grid powered by renewables. It will help accelerate market growth and increase the local provision of clean energy, which can then be offered at a discount to consumers. DFID is expected to help 2.5 million poor people have access to clean energy.
Scaling-Up Renewable Energy Programme
The Deputy Prime Minister and DFID announced increased investment for the Scaling-Up Renewable Energy Programme, which will encourage financial support from the private sector, banks and other governments for low carbon energy projects in poor countries. The UK is already helping 2 million people in some of the world’s poorest countries access clean and reliable energy. Partnering public finance with private investment can help boost economic growth and tackle the global threat of climate change.
Notes for Editors
- More than twenty firms have confirmed so far that they will participate in Norstec: Alstom, Areva, Balfour Beatty Utility Solutions, David Brown Gear Systems Ltd., Dong Energy, E.On, EDPR, Fluor Ltd., Gamesa, Harland and Wolff, JDR Cables, Mainstream, Modus Seabed Intervention Ltd., National Grid, Parsons Brinckerhoff, PMT Industries Ltd., Prysmian Group, Renewable UK, REpower, Repsol, Scottish Power, Scottish & Southern Electric, Siemens, Statkraft, Statoil, TAG Energy Solutions, Vattenfall, Vestas.
- **E.ON **will announce a major new cable installation contract for its £736m Humber Gateway offshore wind farm awarded to British company Balfour Beatty. Over 30km of wholly UK-manufactured cable will be installed to connect the windfarm.
- **Eneco **and **EDF **energy are expected to announce formation of a joint venture to develop the Navitus Bay Offshore Wind Project, west of the Isle of Wight. The proposed development has the potential to supply power to over 600,000 homes, and will prevent more than a million tonnes of CO2 from being produced each year. The companies will now work together to carry out a programme of onshore and offshore consultation with the local community.
JDR Cables, a leading provider of specialist high performance subsea cables and umbilical systems for the offshore oil, gas and renewables market, is announcing that it has completed investment of £30 million in its Hartlepool plant, bringing the company into a new phase of growth.
Helius Energy expected to announce that it is working with a club of banks to project finance its 100MW Avonmouth dedicated biomass project at the Port of Bristol. The project will cost around £300m to construct and will create approximately 450 full time jobs during the construction phase and 40 new full-time long-term operations jobs. Further jobs will be created in relation to the maintenance and supply of the plant.
ECO2 (Lincs) are expected to announce that construction will begin on the Sleaford Renewable Energy Plant within the next fortnight. Up to 250 people will be working on the site during construction of the 38MW straw fuelled biomass combined heat and power plant which is expected to employ up to 80 people when operational in 2014.
Banks Renewables is expected to announce a £21.9m funding agreement with The Co-operative Bank to fund the construction of the 20.4 MW Penny Hill wind farm near Rotherham. The scheme will create 30 jobs during construction and a number of contracts will be awarded to local firms to supply material and conduct sub-contract works. Towers for the turbines will be manufactured by British engineering firm, Mabey Bridge, at their purpose-built factory near Chepstow.
- The call for evidence on renewables trading is launched today and will be accepting responses from Monday 30 April. It will run for six weeks, to Monday 11th June. The document is available on the DECC website.
- The Bioenergy Strategy and report on jobs by the National Centre for Biorenewable Energy, Fuels and Materials are available on the Bioenergy Strategy page of the DECC website.
- The Spending Review of November 2010 announced funding of over £200m for low carbon technologies over four financial years, from April 2011. This includes up to £60m for the development of offshore wind manufacturing at port sites. The remaining capital funding will support innovation in low carbon technologies and systems. This includes:
*DECC announced up to £30million for offshore wind innovation projects in July 2011, with £15million for the Offshore Wind Components Technologies Demonstration and Development Scheme. The first Call for proposals under this scheme was launched on 21 November 2011. This is the second call under this scheme.
*up to £35m for the Energy Entrepreneurs Fund
*up to £3m for heat storage innovation
Further details available on the Funding and Support section of the DECC website.
- The UK is hosting the thirdClean Energy Ministerial (CEM3) at Lancaster House in London on 25-26 April 2012. CEM3 is an international conference aimed at accelerating the transition to clean energy technologies.
- The talks are being co-chaired by UK Energy Secretary Edward Davey and US Energy Secretary Steven Chu.
- The 11 main themes covered at the CEM3 will include: energy efficiency, appliances, buildings/industry, electric vehicles, bioenergy, carbon capture and storage, hydropower, solar, wind, energy access and smart grids. There is a special emphasis on clean energy entrepreneurs and encouraging women to enter the sector.
- Energy Ministers from 23 countries will attend: Australia, Brazil, Canada, China, Denmark, European Commission, Finland, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Norway, Russia, South Africa, Spain, Sweden, United Arab Emirates, United Kingdom, United States.
- View and embed new UK clean energy video on the UKTI Youtube Channel