Latest wave and tide machines being tested in Scottish waters expected to become commercially viable by 2015
Severin Carrell, Scotland correspondent
guardian.co.uk, Tuesday 27 September 2011 15.43 BST
Wave and tidal power devices are close to producing electricity for mass consumption for the first time after a surge in investment, Alex Salmond has predicted.
The first minister said that the latest wave and tide machines being tested in Scottish waters were expected to become commercially viable by 2015 with several hundred megawatts of installed capacity, in a major breakthrough for the green energy industry.
Salmond's prediction came as it emerged that one developer, Aquamarine Power, which has one of the most advanced wave power machines being tested off Orkney, had won fresh investment of £7m in its latest design and pledges of another £18m by 2014.
Until now, the presumption was that wave and tidal power was still up to a decade away from full-scale production.
However, the first minister told a green energy investment conference in Edinburgh that: "In the next few years, the wave and tidal industry will move from demonstrator machines towards substantial commercial development."
Tidal and wave power was "the most exciting and powerful thing", he added as he opened the conference on Tuesday.
Salmond also announced a new £35m Scottish government fund to help up to seven companies find advanced designs for the next generation of ocean-based wind turbines for deep waters up to 20 miles offshore, with turbines three times larger than current designs.
"Scotland's potential as one of the green power houses for Europe is beyond question," he told conference delegates, who are due to be addressed on Wednesday by Al Gore. "We mustn't let transient but severe economic circumstances deter us from that goal."
Scotland, he said, had 25% of Europe's offshore wind and wave resource. Current offshore windfarms were simply "onshore wind turbines in a puddle", being sited just a mile off the coast. "We want these 20 miles offshore, where the wind really blows."
Wave and tidal energy is still expected to produce only a small fraction of the total renewable energy output. The Crown Estate and Marine Scotland have so far licensed only about 1,400mw of wave and tidal power for future development, compared with 7gw of onshore and offshore wind power already in production or development.
Scotland's current share of offshore renewable energy production is still relatively small. Salmond's strategy is based on rapidly increasing its stake and eventual overall share, to help hit his ambitious target to generate 100% of Scotland's electricity from renewable sources by 2020.
He believes Scottish wave and tidal energy firms could come to dominate the global industry. Aquamarine is also developing projects in Chilean waters, along the west coast of the US and Canada, and the west coast of Ireland.
Martin McAdam, Aquamarine's chief executive, said he believed his latest device, the 800kw Oyster wave machine, would be commercially viable by 2014. By the end of the decade, wave technology would be cheaper than offshore wind, he predicted.
"At the moment we're far too expensive [but] we will become more and more cost effective over time," he said. "As we move to 2020, we will get to a cost curve where we will be more competitive than wind."
Salmond's latest £35m offshore investment fund, the prototype offshore wind energy renewables support (Powers) fund, follows confirmation last week of a further £70m fund to develop green energy infrastructure. Industry and investment agency figures warn that up to £200bn is required by 2020 to realise the UK's full renewable energy potential.
The first minister conceded the industry overall still faces several significant barriers, including finding investors, protecting UK and Scottish government support through a levy on energy bills and making transmission charges on the National Grid much less expensive for Scottish power companies.
• This article was amended on 27 September to correct the name of Aquarmarine's chief executive, Martin McAdam. We originally called him Martin McEwan.
Wednesday, 28 September 2011
Labour warns big six energy companies their stranglehold will be broken
Shadow energy secretary Meg Hillier to tell Labour conference that soaring gas and electricity prices are 'national scandal'
Damian Carrington
guardian.co.uk, Tuesday 27 September 2011 11.14 BST
The Labour party is to put the UK's big six energy companies "on notice", pledging that the next Labour government will break up their "stranglehold" of the market in order to tackle soaring bills.
Meg Hillier, shadow secretary of state for energy and climate change, will tell the Labour party conference in Liverpool that soaring gas and electricity prices are a "great national scandal".
Labour will pledge to break up the existing market which allows the major energy companies to both generate and sell energy to households, which the party argues fails to minimise prices and prevents new companies entering the market.
"We will also insist that the [big six] make their prices and their bills crystal clear so we can all see the true cost of our energy," Hillier will say. She will signal Labour's readiness to make major interventions in the market, saying: "They may be private companies, but they should deliver a public service."
The move to break up the existing "vertically integrated" market goes far beyond the measures being taken by the government, although the Liberal Democrat energy secretary, Chris Huhne, promised last week to force more transparency in billing.
"We are going to make sure that no one is being ripped off by the energy companies and at the moment they are," said Labour MP Barry Gardiner, who sits on the energy and climate change select committee. "The government promised electricity market reform, but it is not delivering. It is tinkering at the edges."
The Labour energy policies, trailed by leader Ed Miliband on the eve of the conference, would require all energy generators to pool their power, from which any company could buy it and sell it to customers. This would reduce utility bills for 80% of users, Labour claims. At the moment, the big six both generate and sell power, meaning the true cost of generation is hidden and the lowest prices are not guaranteed by the market.
Labour also argues that new generators, such as those selling renewable energy, have to sell their power to the big six, who supply 99% of the UK's homes. But new entrants struggle, Gardiner says, because they are paid less than the big six pay their own generating divisions. "They can't make a profit so they can't compete," said Gardiner.
Labour will also attack the way the big six bill for their services. "The energy companies are doing a fantastic job of confusion marketing," said Gardiner. "The only way to fix this is to stop the amazing multiplicity of tariffs."
Labour is not specifying a maximum number of tariffs, but Gardiner said: "Why any company should need more than, say, 10 to 12, tariffs is beyond me unless you want to confuse your customer."
Hillier will take the opportunity to attack Huhne, saying: "There's a winter fuel crisis coming down the track, and ministers seem helpless to prevent it. This government hasn't moved on since Edwina Currie told cold, poor people to put on an extra woolly jumper."
An energy industry source told the Guardian that such a major reform as introducing a pool would be a mistake at a time when the big energy companies were dealing with the uncertainty of the government's reforms to the energy market. He said the big six were being used as a "political football" at the moment but that the investment cycle was much longer than the electoral cycle and, while it was unwelcome, the companies would ride it out. He added that increased transparency in billing would also reveal the proportion of bills that went to green taxes, suggesting this would make consumers less willing to pay those taxes.
The government's proposed reforms to the UK's energy market will introduce a system of guaranteed payments for low carbon energy, a tax on carbon dioxide pollution and a limit to the greenhouse gas emissions that can be pumped out of power stations. These market interventions are the first significant moves since the UK's energy market was entirely liberalised in the 1980s and 1990s.
The UK has had one of the most free energy markets in the world, which supporters say kept prices low but critics say starved the industry of investment. Most observers now agree hundreds of billions of pounds in investment will be needed in coming decades to deliver an energy market which provides reliable low-carbon energy at least cost.
Damian Carrington
guardian.co.uk, Tuesday 27 September 2011 11.14 BST
The Labour party is to put the UK's big six energy companies "on notice", pledging that the next Labour government will break up their "stranglehold" of the market in order to tackle soaring bills.
Meg Hillier, shadow secretary of state for energy and climate change, will tell the Labour party conference in Liverpool that soaring gas and electricity prices are a "great national scandal".
Labour will pledge to break up the existing market which allows the major energy companies to both generate and sell energy to households, which the party argues fails to minimise prices and prevents new companies entering the market.
"We will also insist that the [big six] make their prices and their bills crystal clear so we can all see the true cost of our energy," Hillier will say. She will signal Labour's readiness to make major interventions in the market, saying: "They may be private companies, but they should deliver a public service."
The move to break up the existing "vertically integrated" market goes far beyond the measures being taken by the government, although the Liberal Democrat energy secretary, Chris Huhne, promised last week to force more transparency in billing.
"We are going to make sure that no one is being ripped off by the energy companies and at the moment they are," said Labour MP Barry Gardiner, who sits on the energy and climate change select committee. "The government promised electricity market reform, but it is not delivering. It is tinkering at the edges."
The Labour energy policies, trailed by leader Ed Miliband on the eve of the conference, would require all energy generators to pool their power, from which any company could buy it and sell it to customers. This would reduce utility bills for 80% of users, Labour claims. At the moment, the big six both generate and sell power, meaning the true cost of generation is hidden and the lowest prices are not guaranteed by the market.
Labour also argues that new generators, such as those selling renewable energy, have to sell their power to the big six, who supply 99% of the UK's homes. But new entrants struggle, Gardiner says, because they are paid less than the big six pay their own generating divisions. "They can't make a profit so they can't compete," said Gardiner.
Labour will also attack the way the big six bill for their services. "The energy companies are doing a fantastic job of confusion marketing," said Gardiner. "The only way to fix this is to stop the amazing multiplicity of tariffs."
Labour is not specifying a maximum number of tariffs, but Gardiner said: "Why any company should need more than, say, 10 to 12, tariffs is beyond me unless you want to confuse your customer."
Hillier will take the opportunity to attack Huhne, saying: "There's a winter fuel crisis coming down the track, and ministers seem helpless to prevent it. This government hasn't moved on since Edwina Currie told cold, poor people to put on an extra woolly jumper."
An energy industry source told the Guardian that such a major reform as introducing a pool would be a mistake at a time when the big energy companies were dealing with the uncertainty of the government's reforms to the energy market. He said the big six were being used as a "political football" at the moment but that the investment cycle was much longer than the electoral cycle and, while it was unwelcome, the companies would ride it out. He added that increased transparency in billing would also reveal the proportion of bills that went to green taxes, suggesting this would make consumers less willing to pay those taxes.
The government's proposed reforms to the UK's energy market will introduce a system of guaranteed payments for low carbon energy, a tax on carbon dioxide pollution and a limit to the greenhouse gas emissions that can be pumped out of power stations. These market interventions are the first significant moves since the UK's energy market was entirely liberalised in the 1980s and 1990s.
The UK has had one of the most free energy markets in the world, which supporters say kept prices low but critics say starved the industry of investment. Most observers now agree hundreds of billions of pounds in investment will be needed in coming decades to deliver an energy market which provides reliable low-carbon energy at least cost.
Are green policies good or bad news for energy bills?
Green taxes aim to drive up the cost of fossil fuels and help fund investment in renewable alternatives - but they remain controversial
There seems to be so much confusion and controversy around at the moment about so-called green taxes. Just what is the truth? How much are they adding to our fuel bills? And what is the revenue raised being used for? Are green taxes on energy the best way to address climate change and energy insecurity in the years and decades ahead?
M Hamilton, by email
The rising cost of our energy bills is one of the UK's most heated political debates. Everyone has a view, it seems, but there indeed seems to be very little clarity about what constitutes the "truth" when it comes to correctly attributing the causes.
On the one hand, you have politicians blaming the "Big Six" energy suppliers for, if not colluding on prices, then at least having a "stranglehold" on the market. In contrast, you have other politicians blaming most of the price increases, not on rising wholesale fuel prices across the world, as some claim, but on "green taxes".
Ofgem, the UK's gas and electricity market regulator, stated in January (pdf) that "environmental costs" (described as "government programmes to save energy, reduce emissions and tackle climate change") added 4% and 10% to gas and electricity bills, respectively. But other groups have arrived at much higher percentages, attracting plenty of media coverage in doing so (even if some has since been corrected).
But what about the wider question raised by green taxes: should we as a country, via green taxes and subsidies, be investing now in technologies that help to reduce our greenhouse gas emissions and better protect us from future global energy price volatilities? Or should we only concentrate on keeping fuel bills as low as possible today when the financial pressures we face are considerable and immediate?
And if we are to invest in renewable energy for the future, which are the best-bet technologies: wind (offshore vs onshore), tidal, wave, hydro, solar, nuclear, biomass, CCS (carbon capture and storage), or energy efficiency/saving measures? And what of supposedly reduced-carbon energy sources, such as shale gas? Are the current subsidise mechanisms and revenue-raising strategies even the best way to develop such technologies?
Much to discuss, but this column is an experiment in crowd-sourcing a reader's question, so please let us know your own thoughts below (as opposed to emailing them) and, if quoting figures to support your points, please provide a link to the source. I will also be inviting various interested parties to join the debate, too.
• Please send your own environment question to ask.leo.and.lucy@guardian.co.uk.
Or, alternatively, message me on Twitter @LeoHickman
There seems to be so much confusion and controversy around at the moment about so-called green taxes. Just what is the truth? How much are they adding to our fuel bills? And what is the revenue raised being used for? Are green taxes on energy the best way to address climate change and energy insecurity in the years and decades ahead?
M Hamilton, by email
The rising cost of our energy bills is one of the UK's most heated political debates. Everyone has a view, it seems, but there indeed seems to be very little clarity about what constitutes the "truth" when it comes to correctly attributing the causes.
On the one hand, you have politicians blaming the "Big Six" energy suppliers for, if not colluding on prices, then at least having a "stranglehold" on the market. In contrast, you have other politicians blaming most of the price increases, not on rising wholesale fuel prices across the world, as some claim, but on "green taxes".
Ofgem, the UK's gas and electricity market regulator, stated in January (pdf) that "environmental costs" (described as "government programmes to save energy, reduce emissions and tackle climate change") added 4% and 10% to gas and electricity bills, respectively. But other groups have arrived at much higher percentages, attracting plenty of media coverage in doing so (even if some has since been corrected).
But what about the wider question raised by green taxes: should we as a country, via green taxes and subsidies, be investing now in technologies that help to reduce our greenhouse gas emissions and better protect us from future global energy price volatilities? Or should we only concentrate on keeping fuel bills as low as possible today when the financial pressures we face are considerable and immediate?
And if we are to invest in renewable energy for the future, which are the best-bet technologies: wind (offshore vs onshore), tidal, wave, hydro, solar, nuclear, biomass, CCS (carbon capture and storage), or energy efficiency/saving measures? And what of supposedly reduced-carbon energy sources, such as shale gas? Are the current subsidise mechanisms and revenue-raising strategies even the best way to develop such technologies?
Much to discuss, but this column is an experiment in crowd-sourcing a reader's question, so please let us know your own thoughts below (as opposed to emailing them) and, if quoting figures to support your points, please provide a link to the source. I will also be inviting various interested parties to join the debate, too.
• Please send your own environment question to ask.leo.and.lucy@guardian.co.uk.
Or, alternatively, message me on Twitter @LeoHickman
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