Posted on 14/03/2019 by Nick Sharpe
There's no bigger challenge for any industry than securing future growth.
But for ours, building on strong foundations and developing sustainable projects which meet the demands of future generations isn't just about profit margins.
Climate change is a challenge we’re tackling head on, so it's right that every session of Scottish Renewables Annual Conference in Edinburgh this week recognised the global context in which the energy industry operates.
And in a week where Brexit has dominated headlines more comprehensively than ever that, too, became a second common thread running through our 2019 gathering.
Opening the event with a keynote address on Tuesday, Energy Minister Paul Wheelhouse reflected on Brexit and described "a (conference) programme filled with such important themes”.
Launching the Scottish Government’s Networks Vision, he told how his Government will hold a major networks summit in 2019 to address the challenges of getting low-carbon electricity and heat to the places where it's needed.
That’s particularly important when Ofgem Chair Professor Martin Cave later noted (alongside National Grid SO analyst Marcus Stewart) that “the way we balance our electricity is becoming as important as generating sufficient supply".
Mr Wheelhouse also touched on a topic echoed by the Scottish Government’s Deputy Director – Consumers and Low Carbon Division, Sue Kearns, on day two of the event: making the most of the UK Government’s Feed-in Tariff replacement, the Smart Export Guarantee.
Mr Wheelhouse told how it was likely solar PV deployment would grow under the new scheme, and wants to look closely at how Scotland can best capitalise on that increase, saying:
“What can we do to maximise the work we get in Scotland from solar, as we have done with the Renewable Heat Incentive?”
Also from the Scottish Government, Neal Rafferty, Head of the Utilities, Markets and Network Policy Unit, focused on the realities of subsidy free renewable energy, saying:
“It is clear that the changes in support mechanisms here and across Europe have us on a trajectory to zero subsidy, but that does not mean no support or intervention whatsoever.
"The concept of subsidy-free has well and truly arrived, but the definition of that concept is something we still need to debate.”
The challenges of financing renewable energy projects – and particularly innovative technologies – is one faced by all green power developers.
Chris Milne, Chief Financial Officer of tidal energy developer Orbital Marine Power, spoke passionately on the benefits of supporting innovation, citing the example of Denmark, which backed the development of wind power in the 1980s and has gone on to reap multi-billion euro rewards year-on-year.
On the economic challenges faced by his sector he said:
“Subsidy [for marine energy technologies] should not be seen as just a cost: it is a national investment.
"The UK public gets marine energy and wants it but does not understand why we have not managed to commercially generate marine energy to date.
“We are so close now, it would be a huge shame to lose all that potential. This is going to be the next big offshore market, and the UK can own it – but to do so you have to invest in it."
One route which has been explored by the Marine Energy Council, working with Scottish Renewables and RenewableUK, is that of the power purchase agreement, or PPA.
These funding models are already widespread in the US.
Graham Meeks, Head of Policy at the Green Investment Group, spoke in the first session of day two - titled ‘The price of green: beyond subsidy’.
But warning corporate PPAs are not a panacea to all industry ills, Graham said:
"We need to understand what is driving the PPA market if we want it to be a successful part of the future."
Events like Annual Conference provide an opportunity for delegates to step back and try to understand some of the wider themes affecting the growth of their industry.
Our ‘Breaking point: making sense of Brexit’ session heard from two people with inside information on the topic.
“It is important that the sector as a whole, broad as it may be, has clear messages for government and works with policy makers and politicians to make them heard.”
Ayesha Hazarika MBE, a former Special Advisor to Prime Minister Gordon Brown, riffed on Brexit themes in the same session, saying:
“Ever since the EU referendum was called at the end of 2016 there has been real paralysis across government.
“It has been very difficult to get the business of government through – Brexit really has been dominating the bubble that is Westminster, and it’s been difficult to get engagement on any big issues.”
She advised industry to “push for a Royal Commission on energy” – and to use youth anger on climate issues:
“Young people are absolutely passionate about renewables and climate change.
“You can help make politicians understand that there is an agenda that is ragingly popular out there - politicians are transactional, so you as an industry should engage with youth groups as they are a massive influencer.”
Chris Stark, Chief Executive of the Committee on Climate Change, had previously addressed the conference, providing an eponymous warning on the dangers of delaying on climate action.
Describing the great steps towards decarbonisation made by the UK, he counselled:
"It is easy to call [climate change] a crisis, but it is really a choice – to invest now, or to wait and spend much more in adapting to the impacts which will come.”
EY’s Anthony Legg provided a note of optimism in the same session, describing how previously untapped geographies were beginning to adopt renewable energy solutions.
He cited Ethiopia, which has just launched a new 800MW solar tender; Algeria, where similar moves are afoot, and the Middle East, where Saudi Arabia is “talking a big game” about enormous investment in PV on a globally-significant scale.
A session on how technology can help achieve our low-carbon ambitions heard from Phil Steele, Product Manager at Octopus Energy, which is providing technology solutions to enable consumers to actively control their use, years ahead of the curve.
Massachusetts Institute of Technology Professor Ian Hunter had travelled from the US to address the Scottish Renewables event on new tech in transport, which could see cars powered simply by solar panels on their roofs, as well as transferring charge between each other on the move.
In the conference’s final session, ‘Planning for Scotland’s low-carbon, sustainable economy’, Highland Council Director of Development and Infrastructure Stuart Black described recognition at the authority that “renewables are essential for addressing the biggest challenge that we face, and that is climate change”.
Stuart told how Highland Council was expanding its own portfolio of green tech, with biomass boilers and solar PV schemes.
He also highlighted the area’s strengths in green energy, telling how the Highlands region hosts 20% of Scotland’s installed renewable energy capacity, including 23% of its onshore wind capacity and around half of the country’s hydropower generation.
Finally, one speaker alone drew together Brexit and climate change – and the economic impacts of both.
Some highlights of Fraser of Allander Institute Director Professor Graeme Roy’s chat with Scottish Renewables Chief Executive Claire Mack:
"It is difficult to think about a situation (like Brexit) where you have such a structural shift in your economy in such a short period.
"Yes, think about Brexit and the planning you need to do, but also think about what you can do to capitalise when the world's economy begins to evolve and look frankly quite different to today."
(On how industry proves its worth):
"One of the challenges that renewables have is that it is a new sector and it doesn't fit into the standard definitions, so it's hard to show the socio-economic benefits in a traditional way.
"[The renewable energy industry has] won the argument on energy over the long term, but the crucial bit is about where are the jobs, where is the investment, how can you use this as a driver of economic and inclusive growth? That's where, if I were the government, I'd be most interested."
(And on one of renewables’ less obvious benefits):
"We have record employment in Scotland, but one of the big challenges we face is the quality of those jobs in terms of wages, diversity, regional inclusivity. Those areas are probably ones in which renewables has an advantage."
Scottish Renewables Annual Conference, alongside our Scottish Green Energy Awards, make it so obvious why renewable energy is, as Energy Minister Paul Wheelhouse said:
“The driving force of the change we want to make.”
With Brexit looming, and the imperative to act on climate change rightly gaining ground, there are many challenges ahead.
But the range of knowledge and breadth of opinion over two days in Edinburgh showed that our industry deserves to succeed.
Director of Communications