Memorandum by the Environmental Services
1. A secure and diverse renewable infrastructure
is necessary to form the future basis of sustainable energy supply
for the United Kingdom. The Government needs to place heavy emphasis
on accelerating the development of the large available resource
capacity of renewable energy.
2. The Government needs to guard against
placing the UK at a competitive disadvantage.
3. The Government should introduce further
generic support mechanisms for technologies that derive little
or no benefit from the RO in order to encourage the development
of the maximum possible capacity of diverse and secure renewable
energy supply for the future.
4. The Environmental Services Association
("ESA") welcomes the opportunity to comment on the above
titled inquiry as the sectoral trade association representing
the United Kingdom's waste and secondary resource management industry,
a sector which usually contributes £5.0 billion to the UK
economy (about 0.5 per cent of GDP). Our Members provide integrated
solutions to waste across the full spectrum of thermal, biological,
mechanical and physico-chemical treatment and processing options,
and are consistently achieving more sustainable waste management
practices. The UK has over 500MW of electricity generating capacity
from non hazardous waste. These facilities are operated to the
highest EU-based legislative standards and are tightly regulated
by the Environment Agency, Scottish Environmental Protection Agency
or Northern Ireland Environment and Heritage Service, as appropriate.
5. We welcome the Committee's forward looking
approach at UK energy policy over the next 50 years and its recognition
of the need to diversify energy supplies. Current over-reliance
on fossil fuels is unsustainable in terms of the depletion of
irreplaceable natural resources and the growing evidence of negative
environmental impacts. Recent developments have emphasised the
importance of security of supply and have demonstrated the urgent
need for developing alternative arrangements.
6. In its study on energy and the environment
the Royal Commission on Environmental Pollution warned of catastrophic
consequences if the UK did not adopt a strategy to reduce carbon
dioxide emissions by 60 per cent from present levels by 2050.
Achieving this would require both a zero carbon electricity system
and substantial improvements in efficiency. ESA therefore believes
that the development of new and renewable energy sources has an
important role to play in securing energy supply for the future
and mitigating global warming.
7. The increasing use of renewable technologies
to replace electricity generated by conventional fossil fuel fired
power stations has an ever-important role to play in mitigating
the effects of climate change. The progress made to date by the
renewables industry should be welcomed. However, in order to accelerate
the rate of progress and avoid losing momentum, it is imperative
that maximum support and encouragement for the continued contribution
by, and future development of, all proven and evolving renewable
technologies be provided, rather than discriminating between sources
and seeming to pick winners.
How can the UK maintain a secure energy supply
and what mix of fuels would maximise security?
8. ESA believes that in order to maintain
a secure energy supply within the UK, cognisance needs to be taken
of the following:
a clear framework, with financial
and legislative support, needs to be developed to allow maximum
supply from indigenous energy sources;
the long-term and high risk nature
of investment in new and emerging technologies necessary to achieve
sustainable internal supplies needs to be recognised;
maximum support and encouragement
for the continued contribution by and future development of all
proven and evolving renewable technologies needs to be provided;
the fair and efficient functioning
of markets for all energy generators needs to be ensured to stimulate
wider supplies at competitive prices and in particular, the problems
relating to the effects of the New Electricity Trading Arrangements
(NETA) on smaller generators need to be resolved;
network issues including embedded
generation and grid accessibility need to be addressed;
serious positive consideration will
have to be given to the negotiation of long-term gas contracts
with overseas suppliers; and
it must be recognised that energy
policy can no longer be considered independently of other sectors
and the entire energy system needs to be scrutinised.
9. It is likely that gas will dominate in
the medium to long term, particularly if coal reserves, once mined,
are gasified and used in existing hydrocarbon infrastructure.
This will require long-term contracts, a diversity of gas supplies
and an increase in storage facilities. Although there is a current
move towards reducing nuclear power capacity, increase in gas
dependence is likely to be alleviated in the medium-term by nuclear
power. It is likely that oil products will continue to dominate
the transport sector for some time.
10. However, the potential resource capacity
of renewable energy in the UK is very large and ESA believes that
in order to maximise security of energy supply, heavy emphasis
needs to be placed on the accelerated development of both zero
and low carbon renewable technologies. A secure and widespread
renewable infrastructure is necessary to form the basis of a sustainable
energy future for the UK.
Is there a conflict between achieving security
of supply and environmental policy? What is the role for renewables
and Combined Heat and Power schemes?
11. There is a sensitive balance that needs
to be struck between economic activity, the environment and security
of energy supply. The environmental impact of renewable technologies
is significantly lower than for nuclear power and fossil fuel
technologies. The renewables industry is not problem-free, however,
with financial and planning difficulties presenting the greatest
challenges. The Government has made some attempt to alleviate
financial difficulties through the provision of a financial support
mechanism in the form of the proposed Renewables Obligation (RO),
together with various capital grants, however ESA views these
measures as too prescriptive about technologies. The planning
regime in the UK demands urgent attention as it is an obstacle
to deployment of new renewable capacity and threatens long-term
security of supply.
12. There is an increasingly important role
for renewables and Combined Heat and Power (CHP) schemes. CHP
significantly increases the overall thermal efficiency of energy
generation schemes. ESA advises that CHP should be employed only
where there are specific requirements for heat capacity and the
infrastructure either already exists or can be installed without
prohibitive cost and difficulty.
What scope is there for further energy conservation?
13. There is enormous scope for energy conservation
through improved energy efficiency. Dramatic energy efficiency
improvements could be realised through the construction of energy
efficient buildings and homes, and the installation of efficient
electrical equipment and light bulbs. The Government must also
fully embrace the tremendous energy efficiency opportunities associated
with integrating CHP and district heating, where feasible, as
part of planned house building programmes, some of which could
utilise household waste.
14. Improvements in energy efficiency in
the transport sector would also play an important role through
the manufacture of highly efficient vehicles. Security of supply
would be enhanced by accelerated development of vehicles that
are fuelled by non-fossil sources.
What impact would any changes have on industrial
competitiveness and on efforts to tackle fuel poverty?
15. ESA is concerned that the Government's
proposals for RO (which restrict biomass, exclude incineration
of mixed wastes and are insufficient for the development of emerging
technologies) will place the UK at a competitive disadvantage
in comparison with other EU Member States. This is exacerbated
by the fact that the Renewable Energies ("RES") Directive
defines the incineration of the biogenic fraction of mixed waste
as a renewable source of energy and endorses financial support
by Member States where the waste hierarchy is not undermined.
16. Environmental taxes such as the recently
introduced Climate Change Levy (CCL) can present an effective
tool for encouraging progress towards a low carbon economy, since
they are universal and the costs can be internalised, but they
must be seen to be fair across the board. ESA is not unsympathetic
to increasing environmental taxation to achieve environmental
objectives. However, it is imperative that the overall burden
on the productive economy must not, particularly when sterling
is relatively highly valued, exceed that on the UK's competitors
both within the EU and elsewhere.
Is any change of Government policy necessary?
How could/should Government influence commercial decisions in
order to achieve a secure and diverse supply energy?
17. Financial incentives such as the RO
are helpful, however current proposals over stimulate some sectors
such as onshore wind, landfill gas and large hydro, although each
of these technologies have limited scope to provide new capacity.
We strongly believe that the RO should better stimulate other
sectors such as biomass and energy crops through an adequate buyout
price and sufficient capital grants and should also provide a
stimulus, where none is currently proposed, to the incineration
of mixed waste by conventional thermal technologies.
18. The exclusion of the incineration of
mixed waste from the RO appears to be inconsistent with the Renewable
Energies ("RES") Directive, which recognises the incineration
of the biogenic fraction of mixed waste as a renewable source
of energy and endorses financial support thereof, with certain
pre-conditions. This exclusion is also inconsistent with the Government's
own policy on the CCL of exempting energy generated from the incineration
of the biogenic fraction of mixed waste.
19. The proposals for the RO are therefore
restrictive, signal a missed opportunity to expand renewables
and are fundamentally flawed, pointing to policy failure.
20. ESA urges the Government to introduce
further support mechanisms for the technologies that derive little
or no benefit from the RO. We encourage the Government to ensure
that any new support schemes are inclusive, rather than exclusive,
thereby encouraging the development of the maximum possible capacity
of diverse and secure renewable energy supply for the future.
44 Royal Commission on Environmental Pollution. (2000).
Energy-The Changing Climate. London. The Stationery Office. Back