Positive Energy: how renewable electricity can transform ... - WWF UK

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5 Higher interconnection means less or no reliance on CCS The A and B scenarios need a significant level of CCS fitted to gas generation plant to meet decarbonisation targets. Given that CCS has not yet been deployed commercially, this report explores further alternatives for decarbonising the power sector. The higher levels of interconnection in the B scenarios open up the possibility of increasing the level of renewables on the system (i.e. moving towards the C ‘stretch’ scenarios), thus leaving open the door for decarbonising the UK power sector by using more renewables if CCS turns out not to be viable. The contrast between our scenarios shows that the UK’s reliance on imported gas and associated generation, storage and transport infrastructure can be minimised through ambitious demand reduction measures and large-scale roll-out of interconnection infrastructure. 6 The renewables industry needs certainty to invest HAVING A HIGHER LEVEL OF AMBITION FOR RENEWABLES HAS MANY BENEFITS FOR THE UK The government needs to make a greater long-term commitment to renewables. Current assumptions in the government’s Electricity Market Reform consultation indicate that while a 29% renewables share will be achieved by 2020, continued deployment will virtually flatline after that, with only 35% renewables by 2030. This boom and bust approach is bad for business and is likely to undermine UK efforts to become an industrial leader in renewables. Setting out long-term ambition on renewables at 60% or more by 2030 would provide the level of certainty needed to attract large-scale investment in the UK renewables supply chain. We also need stable market arrangements which provide long-term revenue certainty to reduce risk and mobilise capital investment in renewables. Having a higher level of ambition for renewables has many benefits for the UK. It can help reduce the cost of renewable energy in the long term by accelerating the development of a UK supply chain (no longer dependent on imports of components) as well as economies of scale and technology improvements. Examples from other countries and industry projections show that renewable energy could create many jobs in the UK. Around 367,000 people are already employed in the German renewable energy industry. Harnessing UK renewables potential will also help to reduce the volatility of UK consumer bills. UK electricity prices won’t depend so much on fossil fuel price fluctuations, which have been the main cause of the 63% increase in UK domestic electricity prices between 2004 and 2009. Conclusion This report makes it clear that decarbonising the UK power sector by 2030 in an environmentally sustainable way that avoids reliance on risky nuclear technology and high levels of unabated gas is achievable without compromising the security of the UK’s electricity system. Developing a low carbon and sustainable power sector in the UK is first and foremost a question of political will. It will require long-term policy and financial support for renewable technologies, ambitious measures to reduce energy demand and improve the flexibility of demand patterns and a greater focus on improving interconnection and integration with European electricity markets. The next Energy Bill will be a unique opportunity for the UK to unleash the tremendous potential of its renewable energy resources – and make the transition to a truly energy efficient economy. WWF-UK 2011 Positive Energy page 10
10 POLICY RECOMMENDATIONS FOR THE UK POWER SECTOR This report shows that it is perfectly achievable to develop a power sector that is decarbonised, environmentally sustainable, affordable and beneficial to the UK by 2030. To sustainably and affordably decarbonise our power sector we must prioritise renewable energy growth, reducing energy demand and increasing interconnection with the rest of Europe. Making this transition needs bold policies: • The government should set a target for renewables to provide at least 60% of the UK’s electricity demand by 2030: A target will provide a signal to investors that the UK intends to continue to invest in renewables post-2020. A high level of ambition will make renewable energy manufacturers confident that the UK intends to exploit its vast renewable resources and is ‘open for business’. The 60% target is well within what GL GH believes to be technically achievable by 2030. In fact, it is substantially lower than the levels recommended by industry in other reports 4 . • The UK must adopt ambitious absolute targets for reducing electricity demand: The government must recognise the economic and environmental benefits of reducing demand for electricity long-term. Reductions can be achieved through energy efficiency measures and behavioural change in all sectors of the economy. Benefits include reducing the generation and transmission infrastructure needed to maintain system security and lower costs for consumers. Policies should promote real competition between companies which help industry and consumers cut energy use and those seeking to build new generation capacity. Introducing long-term contracts to reduce demand could be one way of generating substantial energy efficiency gains in various sectors of the economy. • The government should make the take up of energy efficiency measures happen: There are many financial and technical barriers which stop the domestic and commercial take up of energy efficiency measures. Removing these will require a range of measures, such as providing low interest rates to consumers insulating their homes under the upcoming Green Deal and other financial incentives. In particular, the government should invest an amount equivalent to a substantial share of the revenues raised by the Carbon Floor Price (and possible future related windfall taxes) into energy efficiency support measures. • The reformed electricity market must include well designed, long-term financial support mechanisms for renewable technologies: Appropriate support for renewables is needed to attract investors to the UK and drive costs down. The government reforms must deliver mechanisms that are designed to last for the long term, are as simple as possible and are specifically adapted to the needs of renewable technologies. WWF-UK 2011 Positive Energy page 11
Page 1 and 2: REPORT UK OCTOBER 2011 Climate chan
Page 3 and 4: CONTENTS Executive summary 4 10 Pol
Page 5 and 6: © National Geographic Stock / Jim
Page 7 and 8: A ‘CORE’ SCENARIO SYSTEM SECURI
Page 9: HIGH LEVELS OF INTERCONNECTION TO E
Page 13 and 14: • Clear safeguards, such as a str
Page 15 and 16: Environmental sustainability We str
Page 17 and 18: © MICHEL GUNTHER /WWF-CANON
Page 19 and 20: Methodology This report begins by e
Page 21 and 22: Figure 1: Central and ambitious ele
Page 23 and 24: Resources and generation mix Having
Page 25 and 26: In their 2050 pathways analysis 24
Page 27 and 28: © Steve Morgan / WWF-UK GL GH mode
Page 29 and 30: Scenario A2: Ambitious demand scena
Page 31 and 32: Scenario B2: Ambitious demand scena
Page 33 and 34: Stretch scenario C2: Ambitious dema
Page 35 and 36: Table 1: Breakdown of gas generatio
Page 37 and 38: Costs Cost projections in GL GH’s
Page 39 and 40: The spiralling cost of nuclear In i
Page 41 and 42: © NATUREPL.COM / WILD WONDERS OF E
Page 43 and 44: to Norway (which offers energy stor
Page 45 and 46: © WILD WONDER OF EUROPE / INAKI RE
Page 47 and 48: Renewable energy: economics and opp
Page 49 and 50: How do we drive down the cost of re
Page 51 and 52: WWF-UK 2011 Positive Energy page 51
Page 53 and 54: A green future for UK jobs • Offs
Page 55 and 56: There is considerable uncertainty a
Page 57 and 58: The scenarios show that by 2030 a l
Page 59 and 60: Electricity Market Reform - In Dece
Page 61 and 62:
20 The resource estimates in figure
Page 63 and 64:
58 UK Energy Research Centre. 2010.
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