Britain’s wind energy industry increased its call for state aid yesterday, after new figures showed that investment in the sector has collapsed by nearly 80 per cent.
The amount invested in British renewable energy schemes, including wind, solar and wave power, fell from £377 million during the first three months of last year to £79 million during the same period this year, according to figures from New Energy Finance, a research group that monitors industry trends. The figures have raised fresh questions over the Government’s ability to fulfil its pledge to slash Britain’s carbon emissions and produce more than one third of the country’s electricity from green energy by 2020.
Adam Bruce, the chairman of the British Wind Energy Association, (BWEA), said that the figures reflected the need for the Chancellor to introduce new measures to support the industry, which is struggling to secure finance because of the credit crunch. It is also suffering from the weak pound, which has driven up the cost of turbines and other equipment — most of which is produced outside Britain — and the falling price of coal, oil and gas.
There were signs yesterday that the Government was considering the inclusion of measures in the April 22 Budget to prevent the cancellation of large projects such as the London Array, a £3 billion scheme to build the world’s largest offshore wind farm in the Thames Estuary, which Gordon Brown has backed.
Its developers are already seeking a bailout from the European Investment Bank to allow the scheme to proceed. Its 341 turbines would produce enough electricity for 750,000 homes.
Paul Golby, chief executive of E.ON UK, one of Britain’s “big six” energy companies and one of the project’s backers, told The Times he now thought that it would be impossible for the country to meet its target of generating 15 per cent of total energy from renewable sources by 2020, which amounts to 35 per cent of its electricity. The target is a key part of Britain’s promise to cut its carbon emissions by 80 per cent by 2050.
Lord Smith of Finsbury, chairman of the Environment Agency, said that it was crucial to Britain’s future in the renewables sector that more funding, including public funding, was made available. “We’ve already seen some companies pull out. We will see more of these things happening if we don’t improve the funding,” he said. “Over the past 10-15 years we have tended to come too late to the table, as a country, when it comes to the development of renewable energy.”
Although investment in renewable energy has been falling everywhere in the recession, the British decline was unusually steep. Globally, investment fell by 53 per cent to £9.1 billion in the first three months of this year, compared with £19.3 billion at the start of last year, according to New Energy Finance. Delays securing planning consent and access to the national grid have compounded the problems.
The news comes as the Institute of Public Policy Research (IPPR) prepares to publish a report next week that will warn that Britain must act now if it is to take the opportunity to build a thriving offshore wind energy industry that could employ as many as 70,000 people. The institute said that only 700 people were employed in the sector at present.
The BWEA is calling on Alistair Darling, the Chancellor, to introduce incentives and grants to support the industry in the Budget. It also urged the Government to accelerate planning decisions and reduce the cost to developers of hooking up schemes to the national grid.
Some companies, such as BP and Shell, have already left the wind industry, while others, such as Iberdrola Renovables, the world’s largest wind-farm operator, have cut their investment programmes.
The Department of Energy and Climate Change said that Mike O’Brien, the Energy Minister, was exploring options to help the industry.
Source - The Times
Showing posts with label credit crunch. Show all posts
Showing posts with label credit crunch. Show all posts
Sunday, 12 April 2009
Wednesday, 1 April 2009
BP axes 620 jobs from solar business
BP is to axe 620 jobs from its solar power business – more than a quarter of that workforce – in a move it said was part of the long-term strategy to "reduce the cost of solar power to that of conventional electricity."
Two cell manufacture and module assembly plants near Madrid, will be shut with the loss of 480 posts while module assembly will also be phased out at its Frederick facility in Maryland, US, with a further 140 redundancies.
BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.
"We deeply regret the impact of this business decision on our employees and the local communities," said Reyad Fezzani, chief executive of BP Solar. "We have a long history at both the Madrid and Frederick sites. Competitive hi-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid."
He said solar markets had been "unsettled by the impact of the global economic environment", adding that the market had been over-supplied as competition increased and prices had fallen.
Fezzani said the cuts would lead to lower prices for solar power: "The decision is part of the long term strategy to reduce the cost of solar power to that of conventional electricity."
The decision by a cash-rich oil group to reduce its direct manufacturing capacity and cut 620 out of 2,200 jobs will raise further questions about whether BP is retreating back to its core hydrocarbon business despite marketing promises to go "beyond petroleum." The London-based company said last year it was going to concentrate its alternative energy business on wind and solar in the US, while rival Shell has also been cutting back.
The moves will also send further shock waves through the wider renewable energy sector which is reeling from a retreat by the banks from higher risk investments such as green power schemes.
Andrew Mill, who sits on the UK government's Renewables Advisory Board, told the Guardian 10 days ago that the renewables sector was heading for crisis and British ministers' climate change targets would not be met. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The UK is a relatively small solar market and will rely largely on wind to meet its goal of producing 15% of its energy from renewables by 2020.
Source - The guardian
Two cell manufacture and module assembly plants near Madrid, will be shut with the loss of 480 posts while module assembly will also be phased out at its Frederick facility in Maryland, US, with a further 140 redundancies.
BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.
"We deeply regret the impact of this business decision on our employees and the local communities," said Reyad Fezzani, chief executive of BP Solar. "We have a long history at both the Madrid and Frederick sites. Competitive hi-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid."
He said solar markets had been "unsettled by the impact of the global economic environment", adding that the market had been over-supplied as competition increased and prices had fallen.
Fezzani said the cuts would lead to lower prices for solar power: "The decision is part of the long term strategy to reduce the cost of solar power to that of conventional electricity."
The decision by a cash-rich oil group to reduce its direct manufacturing capacity and cut 620 out of 2,200 jobs will raise further questions about whether BP is retreating back to its core hydrocarbon business despite marketing promises to go "beyond petroleum." The London-based company said last year it was going to concentrate its alternative energy business on wind and solar in the US, while rival Shell has also been cutting back.
The moves will also send further shock waves through the wider renewable energy sector which is reeling from a retreat by the banks from higher risk investments such as green power schemes.
Andrew Mill, who sits on the UK government's Renewables Advisory Board, told the Guardian 10 days ago that the renewables sector was heading for crisis and British ministers' climate change targets would not be met. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The UK is a relatively small solar market and will rely largely on wind to meet its goal of producing 15% of its energy from renewables by 2020.
Source - The guardian
Sunday, 22 March 2009
Warning over renewables as economic crisis leaves funding gap
Scant aid, too much hype and unrealistic targets threaten climate-change pledges by Terry Macalister and David Adam.
Green power companies are heading for "crisis" and Britain should no longer rely on them to meet its energy security and climate change obligations, some industry experts are warning.
The difficulties - triggered by the credit crunch, recession and a collapse in the carbon price - have led to new demands this weekend to ministers from companies warning that their renewables schemes are at risk without more financial aid.
Over the past week alone, the previously fast-growing renewable energy sector has seen Shell decide to stop building wind and solar schemes worldwide, the wave company Pelamis hit by technical and financial troubles, and EDF Energy warn that UK renewables targets would not be realised and should be scaled back to achievable levels.
In addition, a group of more than 40 businesses has taken the unique step of writing collectively to Joan Ruddock, the energy and climate change minister, warning her of the threats to a host of projects unless something is done.
"I think it's heading towards a crisis," said Andrew Mill, who sits on the government's Renewables Advisory Board. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The situation could be worse because green industry figures often suggest that everything is fine, argues Mill. "A lot of the [renewable companies] can't afford to talk about it as they need to be seen as a good investment. If they don't give out a good story then they can't raise money."
The problems stretch across the industry, he said, from small marine energy companies to large-scale investments in offshore wind farms that are expected to form the cornerstone of ambitious plans to generate 15% of Britain's energy from renewable sources by 2020. "The big utilities are struggling to raise project finance for inshore wind farms, and they were supposed to be the easy projects."
"There is a serious problem," agrees John Constable, head of policy at the Renewable Energy Foundation (REF). "I warned a year ago that the industry was being set up for a fall and now it has happened. There has been too much hype and the government was always far too unrealistic about what could be achieved."
David MacKay, a Cambridge University professor and author of a new book, Sustainable Energy - Without the Hot Air, also agrees. "It may well be that renewables has been overhyped and there is a backlash against it ... There is a big, big problem compared with a year ago. I know a number of people who are unable to get investment for the kind of new technology we need for a low-carbon future."
Leading companies such as BT, Marks & Spencer and United Utilities have told Ruddock that they are "concerned over the current barriers to renewable energy investment and generation by the corporate sector".
The British Wind Energy Association, which usually paints an unfailingly upbeat picture and which has just wrung a series of new subsidy concessions from ministers, will demand in a budget submission to be unveiled in two weeks' time more help for an industry hit by a shortage of bank finance, the plunging value of the pound and mounting equipment costs.
The London Array, potentially the biggest offshore wind farm in the world, is already known to be under threat because of the changed economic conditions. Shell pulled out last year and Centrica and E.ON have both voiced major concerns about the prospects for big wind schemes, which are essential if the UK is to meet its targets for renewable power.
The Carbon Capture & Storage Association has also written to the chancellor, Alistair Darling, saying government hopes of meeting carbon-reduction targets using CCS are doomed "without a serious and urgent commitment to funding from the UK government".
The REF says that some of the £1bn annual subsidy that already goes into green schemes through the Renewable Obligations Certificates should be used to bolster the "utterly disgraceful" low levels of research and development funding.
Constable also believes that Britain could be left having to use more gas or even coal plants to keep the lights on, accepting that even the "super-critical new efficient coal plants like the one E.ON wants to construct at Kingsnorth would leave us breaching our carbon-emission targets".
Source - The guardian
Green power companies are heading for "crisis" and Britain should no longer rely on them to meet its energy security and climate change obligations, some industry experts are warning.
The difficulties - triggered by the credit crunch, recession and a collapse in the carbon price - have led to new demands this weekend to ministers from companies warning that their renewables schemes are at risk without more financial aid.
Over the past week alone, the previously fast-growing renewable energy sector has seen Shell decide to stop building wind and solar schemes worldwide, the wave company Pelamis hit by technical and financial troubles, and EDF Energy warn that UK renewables targets would not be realised and should be scaled back to achievable levels.
In addition, a group of more than 40 businesses has taken the unique step of writing collectively to Joan Ruddock, the energy and climate change minister, warning her of the threats to a host of projects unless something is done.
"I think it's heading towards a crisis," said Andrew Mill, who sits on the government's Renewables Advisory Board. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The situation could be worse because green industry figures often suggest that everything is fine, argues Mill. "A lot of the [renewable companies] can't afford to talk about it as they need to be seen as a good investment. If they don't give out a good story then they can't raise money."
The problems stretch across the industry, he said, from small marine energy companies to large-scale investments in offshore wind farms that are expected to form the cornerstone of ambitious plans to generate 15% of Britain's energy from renewable sources by 2020. "The big utilities are struggling to raise project finance for inshore wind farms, and they were supposed to be the easy projects."
"There is a serious problem," agrees John Constable, head of policy at the Renewable Energy Foundation (REF). "I warned a year ago that the industry was being set up for a fall and now it has happened. There has been too much hype and the government was always far too unrealistic about what could be achieved."
David MacKay, a Cambridge University professor and author of a new book, Sustainable Energy - Without the Hot Air, also agrees. "It may well be that renewables has been overhyped and there is a backlash against it ... There is a big, big problem compared with a year ago. I know a number of people who are unable to get investment for the kind of new technology we need for a low-carbon future."
Leading companies such as BT, Marks & Spencer and United Utilities have told Ruddock that they are "concerned over the current barriers to renewable energy investment and generation by the corporate sector".
The British Wind Energy Association, which usually paints an unfailingly upbeat picture and which has just wrung a series of new subsidy concessions from ministers, will demand in a budget submission to be unveiled in two weeks' time more help for an industry hit by a shortage of bank finance, the plunging value of the pound and mounting equipment costs.
The London Array, potentially the biggest offshore wind farm in the world, is already known to be under threat because of the changed economic conditions. Shell pulled out last year and Centrica and E.ON have both voiced major concerns about the prospects for big wind schemes, which are essential if the UK is to meet its targets for renewable power.
The Carbon Capture & Storage Association has also written to the chancellor, Alistair Darling, saying government hopes of meeting carbon-reduction targets using CCS are doomed "without a serious and urgent commitment to funding from the UK government".
The REF says that some of the £1bn annual subsidy that already goes into green schemes through the Renewable Obligations Certificates should be used to bolster the "utterly disgraceful" low levels of research and development funding.
Constable also believes that Britain could be left having to use more gas or even coal plants to keep the lights on, accepting that even the "super-critical new efficient coal plants like the one E.ON wants to construct at Kingsnorth would leave us breaching our carbon-emission targets".
Source - The guardian
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