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Renewable Energy (S&T Report)

My Lords, as a former Minister of Energy in two Conservative governments, with the honour of being the first chairman of the Government’s Renewable Energy Advisory Group, I worked with a strong team of officials to launch the first major policy by a British Government to support the development of renewable energy technology; namely, the non-fossil fuel obligation. As to declaring my interests, I am a patron of the British Wind Energy Association and a director of Clipper Windpower plc—a company which, for the record, has neither developed wind farms in the UK nor sold turbines into the UK market. I am also a director of the Rowan Drilling Group of Companies. I am a long-standing supporter of government policies geared to support renewable energy and a lifelong believer in the importance of cleaner energy sources, from the expansion of natural gas in contrast   to oil and coal-fired power generation to the development of policies to promote low-cost renewable energy technology. I am also a proponent of new build nuclear plants once the issues of cost, decommissioning and safe waste disposal are satisfactorily resolved. However, let us be under no illusion. New build nuclear will at best come on stream between five and 10 years from now and new build nuclear is irrelevant to the immediate contribution renewable energy can make to our supply base. The debate between nuclear and renewable is, as the noble Lord, Lord Whitty, stated redundant in the context of our 2010 energy goals. We will, however, need both in the long-term future energy supply base. The current supply base also demands attention. It will become increasingly over-exposed, as the noble Baroness, Lady Sharp, stated, to imported natural gas, an interconnector which can and does flow in both directions; to a European meteorological pattern which, on the whole, has bitterly cold spells on either side of the Channel simultaneously; and to an historic paucity of political priority given to the Norwegian dimension of our energy needs. With no gas storage of any significance and a desperately tight market, we can only pray that the next two winters, before significant new build LNG is landed at high cost into the UK, will be bereft of prolonged cold spells which will lead to brown outs. Such is the underestimated severity of the   energy crisis we face. The immediate outlook is bleak, serious and demands high-level government preparation today. The report from the Science and Technology Committee which is being debated today is essential reading for all who share my concern that it is incumbent on government to recognise the vital importance of renewable energy to ensure security of energy supplies through diversity of supply. I congratulate the noble Lord, Lord Oxburgh, and his committee on their work—for their clarity, precision and the academic rigour of their report. The political dimension under consideration is clear and international in scope. International agreement is needed for coherent regulatory and policy frameworks to support market development, including removing barriers, the concept of internalising external costs for all energy sources and allowing fair competition. Governments must also tackle subsidies to conventional energy sources that are distorting many existing energy markets. Let me attempt to focus on a number of issues raised in the context of wind energy, rightly recognised by your Lordships as one of the principal technologies capable of providing a solution to our national renewable energy obligations—not above 10 per cent, not in low wind-speed countries such as Germany, not with 20 per cent, 22.5 per cent, 25 per cent load factors, but here in the United Kingdom. Through public awareness programmes and education, we need to dispel myths which for too long have taken their place at the high table of misinformation. One such issue which touches the morning paper nerve as I read the national press, is the much publicised question of the causes of bird fatalities. In 2002, Erickson et al wrote a study in the United States entitled Summary of anthropogenic causes of bird mortality. Out of every 10,000 premature bird fatalities, more than 5,500 die as a direct cause of the built environment—buildings and windows. Some 800 deaths are attributable to high-tension power lines, 700 to vehicles and less than one in 10,000 to wind turbines. More than 1,000 are due to the activities of the domestic cat. As strong a proponent as I am of bird life, it may be a little unwise of me to return home tonight and suggest to my children a policy advocating the removal of the family cat. While the onshore wind power market is expected to demonstrate substantial growth in the near term, my personal view is that the future for wind energy does not lie principally onshore. It is in the offshore market that the Government can and should take a global lead. It is offshore where consistent winds are found. It is offshore where the legitimate concerns of visual intrusion are minimised. The contribution of wind energy in the marine environment is far reaching. Just three 2.5 megawatt machines over a 30-year certified lifetime would generate sufficient electricity to substitute 1 million barrels of oil equivalent for power generation. Some 75   machines on the horizon would equate to a substantial oil discovery in the North Sea, with massive environmental savings. For me, what lies at the heart of the report is the joint recognition by the Government and the committee that continuing to reduce the costs of those technologies which are closest to market is of paramount importance. The challenge now, as it has been for 10 years, is technological and commercially driven. It is to drive down further the cost of energy; to design low wind-speed turbines which can operate commercially in lower wind-speed areas; to increase exponentially the geographical capture of the wind resource through a new generation of turbine. There are many who believe that scaling mechanical items in wind turbine design has reached design limits; that once you scale up from a 1.5 megawatt machine, the cost curve will increase. In recent years, there have   been few technological breakthroughs in the industry. Companies have, not unwisely, followed the alternative route and scaled up to achieve improved margins and profitability. But to tackle the offshore challenge and build turbines in the 4.5 to 7 megawatt range and higher, the industry will need to address the all-pervasive challenge of low rpm and high torque putting extreme structural stress on the gearbox and bearings. Efficiency, reliability and durability will be the hallmarks of the next generation of machines capable of reducing the cost of energy. With two thirds of the projected growth of annual European wind power deployment predicted to come from offshore over the next five or more years, the Government’s focus should be on continued co-operation with the industry—not just to marinise land-based turbines but to roll out a new generation of fit-for-purpose, low cost of energy marine wind turbines. The DTI’s technology programme reaffirms the commitment to support businesses investing in new and emerging technologies. That is welcome. Offshore wind turbines appear to fit this programme well, but were, sadly, omitted as being a priority by the Technology Strategy Board, and I would welcome the Government revisiting this omission. It is my belief that the UK is best suited to lead the offshore wind technology challenge world wide. The Government start from a position of being genuinely committed to the challenge. The senior civil servants working for Joan MacNaughton number among the most respected in the sector world wide. Our R&D support is being strengthened. We have a legacy of proven expertise in the oil and gas supply and service sector, and of supporting a high UK content in offshore wind technology. When I was Minister for Energy in 1990, a typical onshore wind turbine would generate electricity at a cost in excess of 7p per kilowatt hour, assuming a 20-year life, 7.5 metres-per-second wind speed at hub height, and a 15 per cent required rate of return. Now the sector is capable of operating at 3.5p/kWh onshore. To see that sort of technological and commercial development, Exxon would indeed be proud.