UK Calls for Debate on Axed Renewable Targets

March 17, 2003, by Ralph Kappler

The white paper, published earlier this month to set out Britain's
energy strategy for the coming decades, calls for a robust and
joined-up international industry response.

RE Insider - March 17, 2003 - Have you ever contemplated where you will be in year
2050? Britain's visionary Prime Minister might celebrate his 97th birthday, when we will
know if the much-debated energy white paper was facing up to reality. The strategy
paper is full of admirable aspirations and shy on substance as it fails to make a
commitment to producing a fifth of Britain's electricity by 2020 with renewable sources.
It calls for a 60 percent reduction in carbon dioxide emissions by 2050, without setting
out how these reductions could be achieved. Philip Wolfe, chief executive of the
Renewable Power Association, has been instrumental in shaping Britain’s sustainable
energy industry since the late 70s. Wolfe summarizes the view of the renewable sector in
understated terms: “The White Paper contains too little substance on the measures
needed to enable industry to commit the resources to deliver the explosive growth now
required. It is very important that the framework is put there behind all the good
intentions.” If the renewable industry doesn't stand up to make their voice heard now, it
could well be that long-term targets will be dumped in the landfill of non-sustainability to
conveniently shelving investments until after another election. Britain’s ailing nuclear
industry, on the other hand, is ready to charge aggressively.

Nuclear advocates have been claiming for some time that climate targets would
supposedly be better met by "clean" nuclear power; a provocative position to incinerate
the already heated debate. International Spotlights on a Parochial Debate The UK
Treasury's insistence that the white paper should not have any reference to a 2020
renewable electricity target and that renewable technologies have to pass yet another
testing period, as if they don’t deliver already reliable energy in other countries, sends the
wrong signals and will shake investor confidence in UK renewable energy companies.
Far from demonstrating prudence, this intervention has all the hallmarks of a
protectionist coup. “Britain is looked upon for leadership by many countries, especially in
the developing world, but also here in the U.S.," said Michael Eckhart, a leading expert
and Chairman of the influential Washington-based American Council for Renewable
Energy. “In that context, I should hope that the UK will exhibit a reasonably stable
government commitment to the appropriate use of cleaner, safer, more renewable
energy supplies.” Eckhart hopes that the white paper process will show some “more
maturity of thought on this, and not more of the dashing to and fro on policy that we've
seen in past.” So far, there are few signs of maturity and international observers are
puzzled. The main German business daily, Handelsblatt, summed up the confusing
announcements with an ambiguous headline, saying that Britain is about to “detach itself
smoothly" from nuclear power generation, followed by a line right underneath claiming
that this “policy shift doesn’t mean the end of Britain’s nuclear industry as all options,
including nuclear power, are being kept open.” El Pais, the biggest Spanish daily, referred
ironically to Tony Blair’s “radical call for CO2 reductions" questioning his intensions. With
an eye at the looming Middle East conflict the British energy policy was dismissed by El
Pais as a white wash ’llavabo verde.’ While the Prime Minister is posting urgent letters to
international leaders for more drastic climate action, other industrialized nations have
already put their money where their mouth is. Jeremy Leggett, chief executive of Solar
Century, is clear about this kind of prudence: “An extra £15 million per annum over four
years to be shared by all sustainable energy technologies hardly amounts to the 'massive
step change in investment' called for by the secretary of state last October." Investor
confidence needs tangible commitment An additional £15 million yearly for the whole
British renewable sector are of little significance, compared e.g. with the US$1.2 billion
proposed by a not exactly environmentally driven American president in his latest State
of the Union Message. This amount is to be spend in the US alone on research for
hydrogen and hydrogen-powered cars.

No wonder, city analysts are cautious. The government must show clear commitment to
renewable energy if it hopes to gain the backing of business for its white paper and the
city still attaches significant political risk to "green" projects, despite Blair giving it strong
backing. Philip Wolfe says: “The city accepted that the technology and commercial
expertise was in place. But it is still sceptical about the level of political risk that exists,
and this means they are still looking for 20 percent returns - way above the low teen
figures expected on more traditional projects." The ‘nuclear option’ causes only
additional uncertainty for the emerging renewable sector. Dale Vince, managing director
of green power supplier Ecotricity, underpins his doubts with hard figures: “The
Government has set aside £3bn for war and is still propping up the cost of old nuclear
with £200m a year – just to maintain the status quo. By comparison the renewables
industry is given an additional £15m yearly, full stop. If it fails to replace nuclear in the
mix it will be due to lack of Government commitment, in terms of funding and its failure
to address the planning system. ” Keeping these figures in mind, he rejects the very
concept of putting renewables in ‘competition’ with a massively over-funded nuclear
industry. Britain is also lacking behind in the traditional wind sector as pointed out by
investment bank Dresdner Kleinwort Wasserstein in a Guardian article this week. Britain
and Ireland are failing to keep up already, installing 100MW of wind capacity last year
compared with 3,247MW in Germany and 1,493MW in Spain. Foreign market leaders, on
the other hand, have been eying the evolving British renewable market with some
anticipation. They surely need to expand into new markets if they want to maintain their
growth rates under pressure from more mature home markets. A commercially driven
energy policy doesn’t have to stand in the way of substantial investments in renewables
as the US approach demonstrates. Our prudent chancellor might also want to
contemplate that renewables have created already more than 100 000 sustainable and
knowledge intensive new jobs in countries like Germany. Spin machine in hyper drive
After intensive press leaking, and if we believe FT and BBC reports, breathtaking
infighting between DTI, Treasury, nuclear lobbyists and other government departments,
the much talked about white paper was finally ‘published’ under tumultuous
circumstances, circumstances that were not very helpful to build investor confidence.
Almost unnoticed, yet another Government deliverable has bitten the dust. Supposedly
green-friendly New Labour used the twin events of Britain’s biggest ever Peace March
and the launch of London Congestion Charging to quietly bury bad news about its failure
to deliver on long term renewable energy targets. This bad news were by some
coincidence, while the public gaze had been focused on other matters. One week in
advance of the white paper publication the state funded BBC, who is obliged to inform
the public objectively, managed to contemplate the impact of a yet unannounced
government policy and had already ‘senior scientists’ at hand who ‘warned’ in a
pre-emptive publicity stunt that there would be supposedly an ‘energy gap’ if not more
public money would be pumped into new nuclear build - in addition, of course, to
multi-billion government bail outs for the ailing British nuclear sector. On this occasion
BBC News fell notably short to air any alternative viewpoint. The DTI, in charge of
publishing the white paper, denied vigorously that the BBC leaked reports had ‘any
substance at all’ and misled interested press members with incorrect information about
the actual timing for white paper press conference, which was then hastily rescheduled
on a late Friday afternoon for the following Monday morning. Despite these blunders the
white paper coverage was balanced as no spin was able to turn vague aspirations into
real substance. And likewise pre-emptive pro-nuclear media coverage didn’t go down so
well either. But the renewable industry would be ill advised to underestimate the strength
of established players who command over formidable PR machineries. Nuclear
advocates have been beaming through simple and consistent messages for some time
and undoubtedly managed to shape public opinion.

The renewable industry has to work harder to create their own, distinguishable,
messages to foster stronger bonds with mainstream Britain. Eric Hawkins, Managing
Director of Powertech Ltd, points in this direction: “The power of consumers to make a
change to their current way of life is the only way for this country to meet our future
energy needs.” Hawkins plays down the significance of government policy making for
his day to day business affairs. A view shared by other industry players. For Dale Vince
the white paper is a missed opportunity to tackle a big issue. He explains from practical
view point why: “At the moment 8 out of 10 wind development applications fail to gain
planning consent. The decision still lies in the hands of the local parishes – no other
significant development in the UK is dealt with at this level. If the Government leaves the
system as it stands these targets cannot be translated into action on the ground.” There
is no doubt that lack of political will does not account for all the delay. City analysts
argue that countries like Germany have raced ahead with wind turbines because there is
greater public acceptance of them. Energy editor, David Gow, provides some insight:
"Britain unfortunately seems to be still a society peopled by too many who like the idea
and then work hard to block planning permission in their own back yards. To win the
hearts and minds of ‘Middle England’ is therefore crucial." A few hurdles will have to be
mastered during the months ahead. To begin with, the renewables industry does not
have the spending power of established energy players. It is also a segmented industry
and struggles therefore to speak with a coherent voice on crucial industry affairs. As the
debate becomes more informed, industry representatives need to speak out now more
clearly instead of leaving the ‘battle ground’ for renewables to agenda driven
organisations such as Greenpeace or Friends of the Earth. And finally, the energy white
paper is just this - a paper. There is still time to effect change in the ongoing consultation
process, until the Queen’s speech in June and before the document reaches Parliament.
Energy Minister Brian Wilson is one possible addressee for enlightening industry
comment; the European Commission is another appropriate body to embrace.

About the Author: Ralph Kappler is director and founder of Halo Energy Ltd, an
international marketing communications consultancy dedicated to the emerging
renewable energy industry. Halo Energy is international committee member of the
Washington based American Council for Renewable Energy and fosters relations
between European and American renewable industries. Kappler previously directed the
European corporate communications program for British Airways where he was in
charge of commercial campaigns and crisis communication. Prior to this, he directed
the global financial services communication of business information and energy expert
firm Datamonitor Plc. He holds a master degree in social science from Leiden University
in the Netherlands. He can be reached at: rak@halo-energy.com (www.halo-energy.com)