Wednesday, 29 June 2016

ANALYSIS: Brexit spells uncertainty just when it's not needed, By Andrew Lee, Recharge News, June 24 2016

West of Duddon Sands

The UK's offshore wind sector has led the world in deployment

The 52%-48% ‘Brexit’ vote – overturning the predictions of most commentators – has already claimed the job of UK Prime Minister David Cameron, who led the ‘Remain’ campaign, and now takes the country and the EU into uncharted territory as the bloc sees one of its biggest economies walking away.
Energy policy, let alone renewables, was a sideshow in a campaign dominated by debates over the economy, national sovereignty and – above all – immigration.
But as the UK faces an exit process from the EU lasting two years or more, several major issues touching clean-energy policy and renewables will confront whoever succeeds Cameron as Britain’s Prime Minister.
The outgoing Prime Minister’s Conservative government has already taken the axe to large swathes of the UK support mechanism for onshore wind and PV, and he will be remembered as the leader whose promise to lead Britain's "greenest government ever" ended up ringing hollow.
But all eyes will be on the country’s world-leading offshore wind sector.
The UK already has more than 5GW installed and is set to double that by the end of the decade thanks to major investment decisions already set in stone and underpinned by government contracts – projects such as Dong’s 1.2GW Hornsea 1 and Iberdrola’s 714MW East Anglia 1.
But into the next decade, continuing growth will depend on the UK’s domestic clean-energy targets – soon to be disentangled from those of the EU – and the trajectory of government support for low-carbon sources, not to mention wider economic factors.
The offshore sector seemed to regain some certainty in the last six months, when UK energy secretary Amber Rudd and finance minister George Osborne signalled a commitment to new contract-for-difference auctions and a general ambition for up to 10GW of new offshore wind in the 2020s.
But Rudd and Osborne were both supporters of remaining in the EU, and their political futures under whoever replaces Cameron are far from clear. The triumphant right-wing of the Conservative Party, which may well supply the next UK leader, has a record of lukewarm support at best for renewables, tipping into outright climate-scepticism in some quarters.
Another less immediate source of uncertainty for UK renewables investors could emerge with fresh calls for an independence referendum by Scotland – the UK’s onshore wind heartland that is also seeking to build a significant offshore sector – where the majority voted to stay in the EU.
With such forces coming into play the UK energy sector faces more uncertainty at a time when it can least afford it – the period when critical investment decisions need to be made for offshore wind deployments in the next decade.
A spokesman for Vattenfall, one of the key investors in UK offshore, said: “Vattenfall is in the UK for the long term to grow its sustainable energy business thanks to a generally supportive energy policy framework, legally binding climate targets and strong market fundamentals.
"We still want to grow in the UK, particularly in wind power, but clearly a significant change like an exit from the EU introduces more risk to the sector for an unforeseen period of time. We aim to understand and assess that risk on an ongoing basis, as we would with any policy or treaty change.”
Dong Energy, the sector leader both in the UK and globally, said: "Like many other businesses, we will await clarity over the implications of the vote to leave the European Union.
"However, we don’t believe that UK energy policy is dependent on EU membership and we are confident that Dong Energy will continue to make an important contribution towards providing UK homes with a low carbon electricity supply in future."
The country’s clean energy industry will hope that in the long-run, the UK’s domestic climate goals, commitments under the Paris Agreement and the overriding global trend towards decarbonisation will ensure a sound investment base.
But as in so many other areas, the next few years will be a bumpy ride for renewables in Britain.

Renewables sector braced for Brexit impact as UK votes 'Out', By Andrew Lee, Recharge News, June 24 2016

The vote has already claimed the job of Prime Minister David Cameron

The vote has already claimed the job of Prime Minister David Cameron
The European clean-energy sector was this morning digesting the impact of the UK’s historic vote to leave the EU, a decision that has already seen UK Prime Minister David Cameron announce he will step down.
The 52% versus 48% decision “raises serious questions for investor certainty, energy security and much needed investment in the UK energy infrastructure” said UK industry body The Renewable Energy Association, which was among the first to react to the result.
It added: “The vast majority of our members had fears of Brexit, and we will be consulting with them and government in the coming weeks to set out a plan for continued low carbon energy investment, deployment and assurance of the 117,000 jobs in this sector.”
German industrial giant Siemens, which was vocal in the run-up to the vote with its fears over the impact of an exit on its new £310m ($349m), 1,000-employee offshore wind hub in Hull, northeast England, today said "this was a decision for the British people and their view must be respected", adding that it "remains committed" to its business in the UK.
Siemens said in a statement sent to Recharge: "As a global business with significant, long-term investments in the UK and high local value creation, Siemens is not so much exposed to negative effects that we might see.
"Nevertheless, the government must now move swiftly to unify and agree the nature of the UK’s relationship with the EU and other trading partners, creating clear roadmaps to encourage future investment."
The CEO of industry group RenewableUK, Hugh McNeal, earlier this week attempted tocalm nerves ahead of the vote claiming the offshore wind sector has a bright future regardless of the outcome.
Today McNeal said: “As a trade association, RenewableUK has a wide range of member companies with differing views on the result of the EU referendum.
"Our focus will continue to be on delivering power to the UK at the lowest cost. Our future is bright; the European and global opportunities remain immense for the industries I’m proud to represent.”
UK-based utility SSE, a major onshore wind operator which recently took a final investment decision to build the 588MW Beatrice offshore project, told its investors this morning: "It is not yet clear how this matter will now progress, but SSE believes that the UK government should be mindful of the importance that the harmonisation of the GB energy market with the countries in Europe can have on efforts to deliver clean, secure and affordable energy."
Germany's E.ON, another key investor in UK renewables, said: “The UK EU referendum was always a matter solely for the voters and they have now spoken. It is expected there will now be a period of negotiation led by the UK government."
Tony Ward, head of power and utilities at business services group EY, said the leave vote will "likely make its impact felt by creating an immediate heightened level of policy and regulatory uncertainty.
"Whatever government emerges in the aftermath of the leave vote it will need to clarify its policies with respect to climate change, renewable energy, technology preferences, State Aid and many other matters of direct relevance to the utility industry, and to its investors."
Ward added: “In many respects, the UK has taken a lead in Europe when it comes to renewable and low carbon policies – the question as to whether support for low carbon technologies will be withdrawn, and whether other industries will be favoured, is a fundamental one.
"How UK governments from now use their freedom from EU policy constraints will be watched closely.”
An early casualty of the verdict was Cameron, who campaigned to keep the UK inside the EU but this morning said he plans to step down by October. The UK now faces a two-year process to extract itself from the 28-nation bloc.
A so-called Brexit will have profound implications for UK clean-energy goals – currently enmeshed in EU targets – and its world-leading offshore wind sector, which is largely driven by investments from European power majors.
The run-up to yesterday’s referendum saw warnings that the UK’s interests would be best-served by remaining inside the bloc.
Former UK energy secretary Ed Davey told Recharge: "It's difficult to see how British renewables would prosper more outside of the EU."
An early indication of the uncertainty set to dog UK energy policy in relation to the rest of Europe came earlier this month, when the country declined to immediately sign an MoU with other nations over offshore wind and grid co-operation.

Siemens changes Hull plans to include wind blade plant, By Andrew Lee, Recharge News November 17 2014

The revised Hull plans including the blade plant

The revised Hull plans including the blade plant


Siemens has altered plans for its new offshore wind turbine hub in northeast England to bring blade production onto a single site in Hull – a move it said will boost output by one-third.
The German group will submit new proposals to locate its blade factory on the same site at Hull’s Alexander Dock as the 6MW turbine assembly and service facilities already planned for the site.
Siemens said the move will allow the blade plant – originally earmarked for a separate site at Paull, a few kilometres away – to increase annual output from 450 to 600 “in order to export blades beyond UK waters”.
The overall project commitment to invest £310m ($484m) and create 1,000 direct jobs is unchanged, said the German group.
A single site was its preferred first option, said Siemens, “but before a recent redesign there was just not quite enough space.
“However by developing the production concept, the blade factory footprint has been reduced, whilst increasing production output.”
Siemens project director, Finbarr Dowling, said: “By deploying the latest manufacturing technologies and adopting LEAN principles from the outset we have been able to design our new blade plant to have 20% higher output in a plant which is 15% smaller than the original design.
“It is exactly this type of continuous improvement that will enable us to industrialise the manufacturing of offshore wind turbines. This will lead to a reduction in the cost base of offshore wind and ensure that the industry, and in particular our new world class plant in Hull will be competitive into the future.”
The Hull plant – due to be operating at full capacity in 2017 – was hailed as a landmark for the UK offshore wind industry when Siemens confirmed its plans for the Alexandra Dock site in March this year.
The offshore wind hub will serve major projects off the UK’s east coast and is the first major mass-production fruit of the country’s world-leading offshore wind build-out.
Hull City Council has already approved original plans for the Siemens plant as part of the Green Port Hull project being developed by Associated British Ports.
Fierce rival Vestas last week said it may begin blade production for it V164 8MW turbine on the Isle of Wight in southern England.

Monday, 27 June 2016

Brexit 'should spell end' of Hinkley Point nuclear plan, By Bernd Radowitz, Recharge News in Berlin Monday, June 27 2016

A rendering of Hinkley Point

A rendering of Hinkley Point
After its decision to leave the European Union, the UK also needs to exit the European Atomic Energy Community (Euratom) – which would have negative consequences for its plan to build the Hinkley Point C nuclear power station, former German Green Party MP Hans-Josef Fell claims.
Although legally distinct from the EU, Euratom has the same membership, is governed by the EU's institutions, and provides a mechanism for loans to finance nuclear projects of EU member states.
"Great Britain can't fall back upon support from Euratom for the planned new nuclear power station Hinkley Point," Fell – a Recharge Thought Leader – says.
"With that, the new nuclear plant project in England should be finally dead and existing British nuclear plants will also come under considerable economic pressure," he claims.
The loss of the 3.2GW nuclear project – hugely controversial in the UK and across Europe – would create a gap in Britain’s energy supply that its critics say renewables would be best-placed to fill.
French utility EDF in partnership with China Nuclear Power Group plans to build three nuclear power plants in the UK at Hinkley Point, Sizewell and Bradwell.
The probably most expensive power project in the world can count on pledges for levels of support by the UK government that exceed those for offshore wind by far, and have been criticised by environmentalists and EU member states such as Austria.
EDF, which is owned by the French state, several times has postponed a final investment decision for Hinkley Point, which according to French media is a sign that the company fears for its own financial stability if it goes ahead with the massively expensive project.
EDF has said since Friday’s referendum vote that the ‘Brexit' vote should not change its plans in the UK.