With the worldwide boom in renewable energy we consider why, compared with other countries, the UK has failed to give it the priority it deserves.
The mood was upbeat. Brian Wilson, the Energy Minister announced planning permission for the first major offshore wind project in the UK, a total of £74 million is now available to help offshore wind development, and there was evidence of 'deals' being discussed in the corridors. Was the UK's Cinderella renewables industry about to get to the ball?

The packed British Wind Energy Association (BWEA) conference on offshore wind was a sign that the UK is at last waking up to the need to meet its 10% renewable electricity target. On the back of an Energy Review report by the Government's Performance and Innovation Unit (PIU) recommending a significant increase in renewable energy targets and additional policy support, things seem to be on the up for the UK renewables industry.

Despite having the best renewable energy resources in Europe however, the UK is still a laggard in renewable energy development across Europe. While countries like Germany, Spain and Denmark have brought wind, biomass and solar into the mainstream and are already providing up to 10% of power from renewable resources, the UK has managed a paltry 1000 MW(e) of new renewables capacity. Renewables still provide less than 3% of power supply, and that includes Scottish hydro plant built in the 1950s and 60s. With the climate change threat forcing changes to energy systems and renewable energy now booming worldwide, why has the UK been so slow to catch this energy wave and are there good prospects for change over the next few years?

Renewable energy covers that wide collection of fuels and technologies which use natural energy flows and the organic material from plants. Wind, solar, hydro, tidal, wave and biomass energy. Each has been researched and demonstrated all over the world. Some such as wind power and solar photovoltaics (pvs) are now major markets growing at 25-35% a year. The resource is enormous. According to the PIU Energy Review: "Taken together the leading options have the potential to meet a substantial proportion of the UK's energy needs".

Wind is now a global €5 billion a year industry, and has installed more than 26 000 MW(e) of capacity worldwide. If anything like the current growth rates continue throughout this decade, it could provide 15-20% of Europe's electricity within 20 years. If you think that's a pipedream, Denmark is already at that level after two decades.

Spain is likely to have more than 8000 MW(e) of wind power installed by 2004, while Germany has now well over 10 000 MW(e) of wind capacity, stimulated by attractive feed-in rates for wind electricity. Many local communities have invested in local wind companies. As one German wind developer quipped to me at a conference last year: "those wind turbines sure look attractive when every turn means a few more pfennigs in your bank account".

The UK meanwhile is a minnow, with barely 500 MW of wind capacity. The main problems in the UK have been local planning delays, and a hiatus in policy support over the past four years. Tom Pedersen works for global wind manufacturing leader Vestas which, like two of the other top ten wind companies, is based in Denmark. Now running the company's new Scottish manufacturing facility, he describes the three key issues needed to make the wind industry viable. "First you need the wind technology and the resource", says Pedersen, "then you need the financial means, and finally you need a regulatory environment that's positive".

The technology has certainly performed well. Average turbine size and efficiencies have climbed and most manufacturers offer performance guarantees to clients. The UK also has the resource, with two-thirds of Europe's cost-effective resource. However, the policy in relation to local planning as well as the financial framework for investment has been poor. Local planners were turning down 90% of applications for a period last year.

Though this has improved, getting wind projects through local planning inquiries is slow and expensive. Brian Wilson and Environment Minister Michael Meacher have made sympathetic noises, but action in terms of clear Planning Guidance Notes and streamlining the planning system has been limited. Hence the move to offshore where such delays should be less.

With 1600 MW of potential projects, the next few years should see a big increase in UK wind capacity. The Renewables Obligation system linked to capital grants should allow more viable projects, but it's taken the best part of four years to consult, agree and introduce the new policy.

Bright future
'The stuff of dreams'. It's an apt description of the other renewable energy source in the news recently. It describes an energy source where you point a slice of silicon at the sky, and generate electricity silently and with no moving parts. With sustained 35% per annum growth, massive markets in Germany and Japan, and a huge potential in developing countries, the solar electric business is looking good. Global turnover for the solar pv is expected to grow from $1.2 billion per annum today to more than $8-10 billion in ten years.

Gordon Edge, editor of the Platts Energy Renewable Energy Report, says: "It's no wonder that some people think that photovoltaic technology will be to the twenty first century what information technology was to the latter part of the twentieth".

With the Government pledging £20 million over three years for a big step up in UK activity, things look brighter. Jeremy Leggett, boss of Solar Century, which is a major pv installer in the UK, described the programme as going "some way to translating ministerial rhetoric into reality" but adds that: "we have a long, long way to go to move into the premier solar league".

The new programme should treble UK pv capacity, but this is from a miserable base of only 2 MW(e). The 6 MW(e) which may be installed by 2005 is still well behind the 114 MW in Germany, more than 80 MW in Japan and 12 MW in the Netherlands. The Germans again offer an attractive feed-in rate of 99 pf/kWh (30p/kWh) which has led to entrepreneurs actually leasing householder's roofs to make money. In Japan, a 70 000 roof programme has been supported by a 35% subsidy and price guarantee of $0.27/kWh. Total Japanese government support for pvs amounts to $312 million this year.

Energy for Sustainable Development (ESD) are currently managing 0·6 MW(e) of pv capacity in the UK. Paul Rousseveldt, an ESD director, and head of the company's pv division, points out that: "We in the UK are four to five years behind Japan and Germany and so it is better to have a controlled entry into the market rather than flooding it and losing control. This is a crucial announcement". After 2005, DTI sources say that it plans to extend the programme to a level similar to the programmes in Japan and Germany, while reducing the percentage grant contribution. According to Paul Rousseveldt, assuming a fivefold increase in funding from 2005, reduced costs and lower grant contribution levels could lead to a tenfold increase in output.

...photovoltaic technology will be to the twenty first century what information technology was to the latter part of the twentieth

Poor performer
The renewable resource that has done least well in the UK in recent years has been the biomass industry. Given that this covers a mix of technologies ranging from landfill gas to municipal waste combustion, and from specially grown willow and miscanthus grass gasified in new turbines to liquid biofuels, it is certainly a broad church. While landfill gas was one of the earliest renewable success stories in the UK, the transition from using wastes towards special energy crops has proved difficult.

UK Agriculture Minister, Larry Whitty, told the annual conference of the biomass energy industry recently: "We are now in a new era where the agriculture and energy industries can together contribute to rural economic and sustainable development". The reality is somewhat different. Many potential biomass developers cannot get viable contracts or prices to allow bank investment to flow.

Sylvain Robinson, chairman of British Biogen, the industry's trade association, told BSJ : "Straight wood and energy crops are currently at least 1p/kWh too expensive under the Renewables Obligation system, in contrast to other renewable energy technologies. We have to bridge that gap somehow". Despite a series of grants and tax incentives for the industry, Whitty admitted to BSJ that the boom time for biomass energy "may be a year or two away."

In other countries the biomass energy market is more dynamic. In Germany, several thousand megawatts of capacity are about to benefit from and come on-stream via new 'feed-in' tariffs. In Finland it is common to see the co-firing of coal and wood chips, and biomass provides around 20% of overall energy needs.

In Sweden the figure is 15% and set to grow due to a taxation system favouring biomass. Eiji Alankagas, from VTT Energy Research Centre in Finland, highlights the success of biomass energy in her country as due to "a real partnership between government and the private sector to cut fuel cycle costs through r&d, and supportive taxation policies".

In Austria, there are more than 500 district heating biomass systems, and one million efficient domestic wood chip burners used for heating. The use of biomass has doubled in 15 years and is set to grow further. Again a package of supportive policies and taxes has been critical.

Denmark has supportive tax and investment policies for biomass, as well as electricity market rules which mean that utilities have to take the power generated on a priority basis. This contrasts with the UK, where the NETA market actually penalises more intermittent renewables such as wind. Some projects have found that it was cheaper to stop generating power than sell to the market. With UK Renewables Obligation now 'live' and suppliers under obligation to secure 5% of supplies from renewables by 2003 and 10% by 2010, things may be looking up, but biomass may be bypassed as suppliers go for cheaper wind technologies.

Why has the UK so far failed to give renewables the proper priority its resource size would deserve? There may be several reasons. Firstly by having North Sea oil and gas reserves, the UK has not seen the need to develop this cleaner resource. With oil and gas output on a plateau and gas imports looming, that has all changed and renewables provide a good security of supply option.

Secondly the UK's DTI has avoided what it describes as 'picking winners' and has not set tariff rates for differing renewables at levels likely to stimulate market lift-off in the way that has happened in Germany, Denmark and the Netherlands. It has instead gone for market-based systems which are economically pure but sometimes torturous for developers to make any money in.

While DTI officials scoff at the "inefficient and expensive" German and Danish systems, the reality is that it is Germany and Denmark and not the UK who have buoyant markets and the companies who are now global players.

Is it all a conspiracy?
Those with a nose for conspiracy feel that currently the DTI is giving just enough money to say that it really tried to help renewables while this being inadequate for it to really take-off and meet the 10% target. It's not just environmental groups who see this trend. One advisor to the DTI told BSJ: "in a few years time when the renewable targets patently can't be met, you watch out for the nuclear industry to come cap in hand and offer big slugs of carbon-free power at a price".

The conspiracists have dubbed Brian Wilson the 'Nuclear Minister'. Despite this he is a strong supporter of renewable energy. He has stated that he wants the "UK to capture a good share of the worldwide renewables market" in contrast to our "throwing away a lead in the wind industry in the past".