INTERVIEW WITH LORD HUNT - MINISTER OF STATE FOR ENERGY
Allen & York were delighted to have the opportunity to interview Lord Hunt, UK Minster of State for Energy - with reference to the recent UK government’s announcements on the Feed-in Tariff and the consequent effects on the on-shore and off-shore renewable energy industry.
We asked Lord Hunt the following questions;
Q1 - Following the government’s announcements on the Feed-in Tariff and as the UK continue to lead the world in offshore wind power generation, what is your vision for future business opportunities and the generation of jobs within the Renewables industry?
We estimate in the Renewable Energy Strategy published last July that meeting the UK renewables target could provide £100 billion worth of investment opportunities.
Up to £120 million from low carbon investment funding to significantly advance the offshore wind industry in the UK was announced in July 2009. Meeting our targets could provide up to half a million jobs in the renewable energy sector by 2020.
In 2008 alone, electricity from renewable sources grew by 10% with offshore wind generation growing by a massive 67%. Onshore wind generation grew by 29% over the same period.
The UK is well placed to take a sizeable proportion of the new jobs in this sector. We must make the most of our strengths as one of the world’s largest manufacturing economies, a world class centre of energy expertise and a leading location for inward investment.
Q2 - Where do you see the skills gaps and what are the proposed initiatives to develop and train the energy professionals of the future?
What we need to do is cultivate a supply chain for low carbon skills, both in the specific emerging ‘low carbon sectors’, such as offshore wind or low carbon homes, but also more broadly. One thing is clear: ‘low carbon’ skills are not only to be found in the way we produce renewable energy, or resource efficient industry or buildings The transition to a low carbon economy will be economy-wide and every sector will need to play its part by adopting new ways of working, which will often require a different balance of skills.
Later this year we will publish a Low Carbon Skills Strategy looking more closely at the key low carbon ‘sectors’, as well how we can embed skills across all sectors to deliver the rapid transformation we need to a low carbon economy. It will draw out the skills needs and set out the priority actions to be taken. The strategy will follow a full public consultation process which we expect to launch in the spring. My Department, DECC, and the Department for Business are leading this cross-Government effort.
Q3 - The micro-generation scheme, which is due to be launched in April 2010, is targeted at encouraging individuals, households, community groups and small business to get involved - but what is your view on the larger providers, particularly the possibility of developing a European renewable energy grid and ultimately a global supergrid?
I am clear that everyone will have a role to play: from developers to communities and householders. In order to meet our targets, we need to bring about significant and dramatic change through a range of measures including the provision of appropriate incentives and the removal of financial barriers, and the Government is working to create the right conditions for companies to invest in renewable energy projects across the country.
We are extending the Renewables Obligation, the Government’s main support for renewables generation, to 2037 for new projects in order to provide greater long-term certainty for investors. And, as you have noted, we are also introducing feed-in tariffs (FITs) from April 2010 to separately reward the generation and export of renewable electricity from technologies such as small wind turbines and solar PV (up to 5MW).
In terms of a “supergrid”, the Government supports greater interconnection between European energy markets. In December I and eight other Ministers signed a Political Declaration to start discussing the issues around the potential coordination of offshore grid infrastructure development in the North, Irish and Baltic Seas. Norway has since also joined the initiative. If linked to offshore renewable generation, this could help us meet our renewables targets and potentially bring benefit in terms of security of supply and market integration. But connecting offshore wind farms in this way will raise difficult regulatory, legal and technical issues. This is why multilateral collaboration will needed and we welcome being part of this initiative. We hope that Ministers will sign a Memorandum of Understanding later in 2010 which should set out a strategic work plan.
Q4 - We, like many companies are developing our overseas business - where do you foresee are the biggest export markets of UK renewable energy expertise?
There is nowhere in the world where the UK’s renewable energy excellence cannot make a difference - often a decisive difference. However, the most immediate export growth markets are likely to be in North America, China, India, Brazil, the Arabian Gulf and, of course, Western Europe. The opportunities for UK companies in these markets will certainly include offshore wind energy - including turbine design , specialist component supply and training; ocean wave and tidal current conversion; resource assessment; and carbon market services.
Q5 - How does DECC see the Renewables sector fitting into the long term future of energy supply in the UK?
Overall UK energy consumption from renewables has grown from 1.5% in 2006 to 2.25% in 2008.
Meeting 2020 targets for 15% of our energy to come from renewables will improve our energy security by a reduction in our use of fossil fuels by around 10% and gas imports by 20-30% by 2020.
However, it’s not just about renewables - the Government believes that both nuclear and coal (with CCS) have a role to play in the future UK generating mix alongside renewables.
Our thanks to Lord Hunt and if you are interested in taking part in an interview with Allen & York please email - Miriam Heale