Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 21

Memorandum by Brightstar Environmental

  Brightstar Environmental (Brightstar) is a subsidiary of Energy Developments Limited (EDL), an Australian listed company, and one of the world's largest dedicated renewable power generators.

  The Company has developed a new technology known as SWERFTM (Solid Waste Energy and Recycling Facility) to process municipal solid waste (MSW) into energy. The SWERFTM process qualifies within the Renewables Obligation Draft Order as a renewable energy technology eligible for support. As a recent entrant into the UK renewables market, and as owner and operator of an emerging technology, Brightstar is well placed to comment on the Government's strategy for diverse and secure sources of energy supply.

1.  INTRODUCTION

  1.1  Brightstar Environmental (Brightstar) is a subsidiary of Energy Developments Limited (EDL), an Australian listed company, and one of the world's largest dedicated renewable power generators. EDL has been operational in the UK since 1996 developing projects under the Non Fossil Fuel Obligation (NFFO) regime.

  1.2  Brightstar has developed a new technology known as SWERFTM (Solid Waste Energy and Recycling Facility) to process municipal solid waste (MSW) into energy, SWERFTM integrates recycling with the use of proprietary pyrolysis and gasification technologies to convert the residual organic fraction of MSW into a clean fuel gas for direct use in spark ignition engines. The SWERFTM process is included within the Renewables Obligation Draft Order as a renewable energy technology eligible for support.

  1.3  As a recent entrant into the UK renewables market, and as owner and operator of an emerging, non-incineration, energy from waste (EfW) technology, Brightstar is well placed to comment on the Government's strategy for diverse and secure sources of energy supply.

2.  SUMMARY OF SUBMISSION

  2.1  Brightstar wishes to comment on the contribution that renewable energy (RE) can make toward the Government's objective for diverse and secure sources of energy supply, and whether current policies are sufficient to allow this potential to be delivered upon.

  2.2  We consider that only through a unified and sustained approach to renewable energy generation will the Government be able to foster the creation of a diverse and commercially viable renewable energy sector. While the recently announced Renewables Obligation provides a positive step toward this, the existing fragmentation of policy responsibilities across Government departments may hinder the full potential of the RE sector from developing.

  2.3  The division of responsibility between the DETR and DTI for waste and renewable energy policies is causing confusion in the market place. The formation of a Sustainable Energy Agency will assist the Government in achieving the needed unified approach, and facilitate it to deliver fully its targets for sustainable development and environmental improvement.

3.  PROMOTING THE DEVELOPMENT OF RENEWABLES

  3.1  The Government has stated its intention to derive a minimum of 10 per cent electricity production from certified renewable sources by 2010. Additionally, it has set itself five key aims for its renewable energy policy. We would draw attention to two in particular, "to help provide secure, diverse, sustainable and competitive energy supplies," and, "to stimulate the development of new technologies necessary to provide the basis for continuing growth of the contribution from renewables in the longer term."

  3.2  Given the present level of development in the sector, the Government's 10 per cent renewable electricity generation target will be met only with the inclusion of energy from waste projects in its calculations. While Government is undoubtedly correct to focus greater effort and its research and development spending on neglected sources of renewable energy generation, such as wind power, wave power, energy crops—in doing so it should not lose sight of the energy from waste sector in its totality. Emerging technologies in this area can, with the correct support, play a major role in delivering its renewable energy objectives.

4.  THE ROLE OF ENERGY FROM WASTE IN RENEWABLE ENERGY GENERATION

  4.1  The attraction of energy from waste is its ability to contribute toward multiple and diverse environmental improvement targets. EfW diverts waste away from landfill, eliminates methane emissions from landfill waste, and generates electricity without the climate change implications of fossil fuels.

  4.2  Energy from waste has been the principal beneficiary of the Non Fossil Fuel Obligation (NFFO), a regime that has done much to encourage private sector take-up of first generation EfW technology—mass burn incineration.

  4.3  NFFO provided small renewable generators with a secure outlet for their power through a long-term contract at a fixed power price. The RO does not provide this same long-term security, but does create market demand for renewable power at a more attractive price to offset some of this financial risk. The RO is also intended to stimulate the development of new technologies.

  4.5  Whilst the Preliminary Consultation on the RO made no distinction between types of EfW process, and consequently excluded all EfW from support, Brightstar is pleased to note the amendments now contained in the Renewables Obligation Draft Order.

  4.6  In its modified form, Advanced Thermal Conversion (ATC) technologies, including pyrolysis and gasification, are included as eligible for support under the RO. Brightstar considers this to be a recognition of the environmental advantages of ATC over traditional mass burn incineration EfW. Further it is a clear statement of the Government's intent to promote alternative technologies and secure diversity in RE generation.

5.  THE NEED FOR JOINED-UP THINKING

  5.1  The RO Draft Order aside, Brightstar remains concerned by the sometimes disjointed nature of the Government's approach to renewable energy. While we do not doubt Government's enthusiasm for the promotion of RE technology, the division of policy responsibilities across several departments perhaps works against the efficient delivery of its objectives for the sector. The issue of Combined Heat and Power is a particularly stark illustration of this.

  5.2  Equally, the place of RE within the Government's overall energy strategy is at times ill-defined. The recent OFGEM report on NETA's impact on small generators highlighted a tendency to discriminate against RE sources, an outcome contrary to the Government's objectives. While we welcome the Minister for Energy's announcement to consult on this issue, and acknowledge the Government's endeavours to address problems as they arise, it is suspected that the NETA effect might be attributed to a weakness in the understanding of RE specific issues. It is hoped that this Inquiry, and the study under way within the Performance and Innovation Unit, will make recommendations to address this.

  5.3  While in its response to the House of Lords report on Electricity from Renewables (HL 78-1, 29 June 1999), the Government rejected the formation of a Sustainable Energy Agency, the evident difficulties in establishing a viable and vibrant renewables sector highlights the validity of its recommendation.

  5.4  Brightstar therefore supports the House of Lords in its view that only with the creation of such an agency will the necessary joined-up thinking on sustainable development, and the contribution of renewable energy, be truly realised.

6.  CONCLUSION

  6.1  Brightstar wishes to see a strong and dynamic renewables sector from the belief that this kind of environment is the best way of delivering on the promise that renewable energy generation offers. If ultimately all forms of renewable energy must demonstrate their economic viability independently in the mass electricity generation market, the role of Government now is to put in place the foundations on which the private sector can deliver.

  6.2  The Renewables Obligation is a key means by which it proposes to do so, and its revised formulation does now encourage increased competition within the various sectors of RE generation. This is very much to be welcomed, but doubts remain about the Government's overall vision for renewable energy and coherence of its policy. A dedicated Sustainable Energy Agency is perhaps a means of addressing this, and it is to be hoped that the creation of such an entity will be an outcome of the current reviews.

31 October 2001


 
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