On threshold of greatness despite financial crash

Wind and marine energy continues to set new milestones, but investors and business leaders want clear support from government, writes Mike Scott

The UK’s wind and marine energy industries stand on the threshold of great things. We lead the world in offshore wind and, although at a much earlier stage of development, the UK is a world-beater in wave and tidal energy.

Meanwhile, onshore there is a healthy pipeline of projects on top of the more than 5 gigawatts already installed. Furthermore, the industry enjoys widespread public support; polls consistently show that around seven out of ten people are in favour of the technology, despite hostility from some in the media who, on this issue, appear to have misjudged the public mood.

Like any comparatively young industry, there are inevitably bumps along the road. It is unfortunate for a sector that needs so much of its funding up front that its path is strewn with the fallout from the worst financial crisis in living memory, which has made it difficult for some project developers to raise the money to install wind farms.

Despite this the sector continues to develop at a great pace. We are starting to see the emergence of clusters of marine and engineering excellence, such as in the Humber region where ports are being upgraded so they can service the turbines that are set to be installed in the North Sea over the next few years.

Yet, as Siemens’ decision to delay its £60-million investment in a turbine manufacturing plant in Hull illustrates, investors remain uncertain about the government’s commitment to the renewable energy sector.

The industry is hopeful that the Energy Bill will provide the certainty investors need to commit funds to UK projects and infrastructure

This is reflected in an energy policy that is in a state of flux as the government grapples with the complexities of its Electricity Market Reform and it is clear that not everyone within the coalition is entirely convinced of the need for more renewable power; while, at local level, some onshore wind projects remain mired for far too long in the planning system. The industry is hopeful that the long-awaited publication of the Energy Bill will provide the certainty investors need to commit funds to UK projects and infrastructure.

But Prime Minister David Cameron’s intervention on household energy bills, which caught out even his own civil servants, and the disclosure that Chancellor George Osborne refers to those in favour of green measures as the “environmental Taliban” has prompted widespread comment in the media.

New planning rules should help to ease the onshore log jam, while the approval of the Green Investment Bank should help the offshore sector.

Marine energy remains several years away from making a meaningful contribution to the nation’s power supply, but we can be more confident than ever that in time it will do so. There is still a lot to learn, but the technology has proven itself to the satisfaction of some of the world’s largest engineering firms, which have bought into the industry in force over the last 18 months.

This is not just a massive shot in the arm in terms of the credibility of marine energy, it is also exactly what the sector needs for it to fulfil its potential. Siemens, ABB, Alstom and the like have the resources and the expertise to deliver on the promise of wave and tidal power, and they have the patience to go through the necessary testing phase that is needed to bring the technology to commercialisation and widespread deployment.

What is needed, as Mark Kenber, chief executive of The Climate Group, explains is “investment-grade policy: a low carbon and clean energy package that adds up for investors – straightforward, robust and designed for the long term, backed by supportive planning regulations, among other elements, and where the details matter”.