Ewan McClymont, renewables and sustainable energy specialist at Bishop Fleming, reviews the region's green sector.

Despite the need to manage the planet’s finite resources and meet climate change targets, the renewables sector has faced major setbacks in the last year from changes in political will and rising competition from falling oil and gas prices.

The spectre of fracking also continues to haunt the sector. As Third Energy gains the right to extract shale gas in Yorkshire, one wonders how long it will be before fracking comes to the South West.

Changes in government policy

With the government’s wish to reduce the cost of household energy bills, onshore wind projects have been hit by a new Energy Act, ending new subsidies for onshore wind projects and empowering local communities to block any new developments. However, on the back of an October 2015 Bloomberg report showing that wind power is the cheapest form of electricity generation, Good Energy recently announced plans for a new wind farm in Cornwall without any subsidy.

With its change of mind about all new homes being zero carbon, the government has also massively cut the subsidy to householders installing rooftop solar panels.

Public savings from these cuts in subsidies are insignificant compared to the millions to be spent on developing the Hinkley nuclear power plant. The cuts are also at odds with the government’s recent Paris Climate deal to keep global temperature rises below 2 degrees. Gas fired and nuclear power stations appear to be the government’s answer to the UK’s long-term energy needs.

Offshore wind

One renewables area in which the government remains interested is offshore wind, which ironically is far more expensive to build and manage than its onshore equivalent. However, with other subsidies being cut, offshore project developers will want reassurances from the government before they commit.

Grid connection

Grid connection continues to be a real issue for renewable electricity generation projects in the south west. Grid capacity to connect more renewables is scarce, despite Ofgem pushing electricity distribution network operators to find new ways to link them. Without a connection, renewables are stymied.

Renewables less viable

Other casualties of the government’s less green policies are the capping of Feed-in Tariffs (FiTs) and the Renewable Heat Incentive (RHI). This may make many new renewables projects unviable.

However, marine and renewable energy infrastructure remain key to the Cornwall & Isles of Scilly LEP’s strategic economic plan. A significant proportion of the county’s European Structural Investment Fund will be focused on harnessing natural assets such as tidal, wave, and geothermal.

[This article first appeared in the Western Morning News.]

 
 
 
 
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