Friday, 16 December 2011

Has the Scottish Government done a deal with George Osborne?

On the face of it the Scottish Government's targets and statements about renewable energy seem impressive, but under the surface doubts are emerging about how strong this policy really is. At the end of 2010 it seemed that the Scottish Government was critical of of the Westminster Government's proposals for Electricity Market Reform (EMR) which threatens to shift subsidies away from renewable energy and towards nuclear power. However, in recent months the Scottish Government has fallen silent on this topic. 

For example, the Scottish Government appears to have accepted without challenge the 10 per cent cut in incentives for onshore wind outlined in the Department of Energy and Climate Change (DECC) review of banding of Renewable Obligation Certificates (ROCs). This is despite the centrality of onshore wind for reaching the Scottish Government's ambitious '100 per cent' renewable energy supply target for Scotland by 2020. 

Of course the reduction in incentives for onshore wind will at least go some way to satisfy the pressures coming from Tory backbenchers to cut funding for so-called 'low windspeed' sites. This is despite the fact that even so-called 'low windspeed' sites represents a cheaper source of energy than nuclear power (given that new nuclear power will require higher levels of incentives and guarantees to go ahead).

However, coincidentally, in November (the same month as the results of the renewable banding review was announced) the Government announced that the Treasury was releasing £103 million to be given to the Scottish Government. This money comes from profits made by the Government in selling electricity generated from old renewable projects set up under the renewable Non-Fossil Fuel Obligation (NFFO) scheme that operated in the 1990s. The Treasury otherwise pockets the money that comes from the sale, by the Non Fossil Purchasing Agency (NFPA which adminisiters renewable NFFO contracts), of renewable electricity through its auctions.

So, has the Scottish Government done a deal with the UK Government so that a sop can be given to English lowland Tories at the expense of onshore wind development? Certainly there seems little financial sense in this if renewable energy targets both north and south of the border are concerned, but the Scottish Government seems very pleased about the £103 million which it can use to pay for direct investments into renewables. Yet while such investment is very welcome, it is coming from Westminster, and not from Scotland. 

Moreover, the Scottish Government has been unable to clear up uncertainty over the future of renewable incentives created by the possibility that Scotland will become independent after the referendum. The financial analysts Citigroup expressed such fears in a recent report. Asked specifically about this by the BBC, Scotland's First Minister Alex Salmond seemed unable to guarantee the continuation of renewable incentives under Scottish independence. On the contrary, he implied that the English would continue to pay for offshore renewables installed in Scottish waters!

Salmond told the BBC that investors 'know that renewable power from the seas around Scotland is going to be required to fulfill England's electricity is power for export'.  See 

Salmond seems to assume that the English will have no other choice but to buy Scottish offshore renewable power to keep the lights on. However, given the direction of UK Government policy of cutting incentives for renewables, it seems increasingly likely that the UK Government would simply build more gas fired power stations before they paid extra for renewables from an independent Scotland.

Of course, the power can only be exported if somebody is willing to pay for it to be generated in the first place. It does require a bit of leap of faith to believe that another country will pay the extra incentives needed to produce offshore renewable energy from schemes located in Scottish waters. Given that the UK Government is opposing plans for Scottish independence renewable energy interests can be forgiven for being rather sceptical that the continuation of incentives for renewable energy is more-or-less guaranteed. 

The remaining confidence for continued incentives being available for renewable energy seems to reside in a belief that Scottish independence will not actually happen and that Scottish renewables will continue to be supported by English money. The fact that the Scottish Government seems all too compliant in allowing the UK Government to cut support for the most cost-effective widely available renewable energy source, onshore wind, does not encourage faith in the Scottish Government's ability or willingness to back up their bold pronouncements about renewable targets with the deeds necessary to make them happen.

Sunday, 11 December 2011

Storm causes sudden shutdown of Hunterston B nuclear power plant...again

A Scottish nuclear power station was forced to shutdown by the storm on December 8th. Attention has been focussed by anti-windfarm sources on the shutdown of windfarms in and around Scotland in what has been called the strongest winds in 25 years, but what has received hardly any attention was the storm-induced grid failure which shutdown the 480 MW Hunterston B nuclear power station in Ayrshire.

Such sudden nuclear shutdowns are in fact quite common, and, as covered in my blog on a Sizewell B failure on March 14th (scroll down to read this), these quite unexpected shutdowns of nuclear power stations are much more dangerous to grid stability and supply services to consumers than storm-induced shutdowns of windfarms. This is because storms can be predicted in advance, meaning that the National Grid System Operator can take mitigatory measures in good time on the basis of anticipated declines in windfarm production of electricity, and also because the windfarms, which will typically cut out when windspeeds reach 25 metres per second, do not all cut out at exactly the same instant.

Unfortunately when nuclear power stations cut out (and the most 'modern' ones are over 1000 MW in capacity), they do so without warning taking off large chunks of generating capacity off the grid in an instant. That is far more dangerous to the prospects of 'keeping the lights on' than the well known variability of windfarm output. This emphasises how wind power is in fact more reliable for grid stability purposes compared to nuclear power stations. See a report on the storm shutdowns (both wind and nuclear) on This is not the first time a storm has suddenly shutdown Hunterston B. See also the1998 report:

Of course, because nuclear power stations are built to run all the time they are useless in providing so-called 'back-up' to windfarm variability, but they are a major threat to grid variability compared to windfarms. So don't accept any of the nonsense about how nuclear power is better than renewable energy because it provides firm power. It needs plenty of back-up itself!

Wednesday, 7 December 2011

US to tax solar panels?

As if it was not bad enough that European states are clawing back on the solar feed-in tariff rates, the US is moving towards actually artificially increasing prices of solar panels through putting TAXES on imported solar pv panels. I will explain that even more starkly. While Europe is still subsidising solar pv panels, the US is going to tax them! The US International Trade Commission has, according to the online journal Renewable Energy World, 'unanimously determined that Chinese solar panel and cell imports are harming the American solar manufacturing industry'. This, it seems, is a precursor of  import duties being levied on solar panels imported from China. To add an ironic twist, this policy is being promoted by some US based solar companies themselves. They argue that China is 'dumping' lots of solar panels on the US market and putting them out of business.

Essentially, Chinese manufacturers are selling at cheaper prices than western ones. Partly this is a case of the Chinese having the foresight to invest in green industries, and partly this is a part of the busienss cycle that you get when periodically supply exceeds demand, as opposed to vice versa which pushes up prices.

However, for the solar industry to start arguing that, in effect, prices must be put up through protectionism is the complete opposite of what should be an ecologically driven policy to drive down global prices for renewable energy technologies. The US position is also sacrificing progress in solar technology for protectionist purposes, and this at a time when the world needs to be as internationalist as possible in its trade policies to avoid the selfish nationalism of the 1930s which brought ruin on everybody. If the allegedly idealistic renewable energy industries cannot hold the line on this, who can?

As far as I can see, the main US case seems to rest on claims that the Chinese are putting barriers in front of imports of US solar panels. It is in fact fairly debateable to argue that Chinese barriers are worse than US ones for renewable energy given, for example, the relative availability of incentives like the production tax credit for US based rather than non-US based companies. At its most charitable best the US argument is one for taking the issue to the WTO. It is certainly not an argument for taking unilateral action, such as setting import tariffs on solar panels,  which is likely to adduce retaliation of various sorts. At worst this is sheer hypocrisy as the west in general (including the US) subsidises its own industries in various implicit and often quite obvious ways (as in the case of agriculture) to allow its products to be well and truly 'dumped' on developing nations.

We often hear disparaging noises from the US (even from some solar companies) about European feed-in tariff policies. Well, parts of Europe are developing large capacities of solar pv, led by Germany, that stand in contrast to the sluggishness of progress in the USA. US policies seemed designed not only to fail to give much encouragement to expansion in solar capacity, but actually to stop it happening by increasing prices for solar power through restrictive trade tariffs and policies. What this issue does expose is the sad truth that the leadership of the renewable energy industries has increasingly little to do with the US.

See the Renewable Energy World Report on: