NFFO and SRO

Features: -• Scope limited to grid-connected electricity

generation• Fixed-term, fixed-price contracts offered for

purchase of electricity• Support only given to the renewable technologies listed in the Order• Scale (in terms of MW capacity) for each technology restricted to figure quoted in the Order• Competitive bidding within each technology

band: lowest bids in terms of pence/kWh are offered contracts

0

500

1000

1500

2000

2500

3000

3500

1988 1990 1992 1994 1996 1998 2000

MW

cap

acit

yContracted Installed

0

50

100

150

200

250

300

350

400

1994 1995 1996 1997 1998 1999 2000

MW

cap

acit

y

Contracted Installed

NFFO and SRO

Analysis for England and Wales (upper graph) and Scotland (lower) shows that completion rates for

projects were initially very high.

But in later years, difficulties arose in the planning process, particularly for wind farms and

waste incineration plant. Completion rates then fell well

below 50% in both regions.

Present UK arrangements: the Renewables Obligation

Licensed electricity suppliers must obtain a specified percentage of their output from renewable sources (steadily rising: will be 10% by 2010)

Additional costs incurred may be passed on to customers: there will be no subsidies

Possible arrangements for trading of “Green Credits”, or purchasing exemption from the Obligation

Existing NFFO and SRO contracts to be maintained.

The future for “immature” technologies is threatened: electricity producers will inevitably go for the

cheapest renewable sources, at present on-shore wind energy, land-fill gas or waste incineration.

0

10

20

30

40

50

60

70

80

1980 1990 2000 2010 2020

en

erg

y c

on

su

mp

tio

n, m

toe

domestic industrial transport others

Recent energy demands and future projections from the UK Cabinet Office, 2002

Note the steady

increase in total energy

demand, and the very rapid rise in the transport

sector

0

20

40

60

80

100

120

140

1980 1990 2000 2010 2020

en

erg

y s

up

ply

, mto

e

coal oil gas nuclear others

Sources of supply for total UK primary energy demand, from the UK Cabinet

Office, 2002

Note the continuing decline of

coal and the rapid

expansion of gas usage.

Is this wise? – we are now a net importer

of gas.

A revival of nuclear power

is NOT anticipated!

Stabilisation of atmospheric carbon dioxide

Extracts from an article by Aitken,

Billman and Bull in

Renewable Energy World,

volume 7 number 6, 2004

Study covers total primary energy, not just electricity

Best current estimates on: -

• population growth

• GDP per person

• primary energy intensity

to predict growth in energy demand to 2100

Gaps between total energy demand and carbon fuel consumption under a range of scenarios

Possible omission – no consideration given to carbon sequestration processes from fossil fuels

Conclusion – no realistic chance of CO2 stabilisation at current levels of 350 ppm: need zero carbon emissions from about 2045!

Scenario – stabilise CO2 at 550 ppm

But how damaging is that likely to be?

Stabilisation of CO2 at 550 ppm: required growth of zero-carbon energy sources to 2030

Recent growth rates in wind

energy markets

Recent growth rates in the

photovoltaic energy market

A possible future

scenario of energy

production which would

stabilise atmospheric CO2 levels at 550 ppm by the year

2100

Roughly speaking, we need an extra 10% from renewables each decade up to 2050, withsmaller increases thereafter; 80% in total by the year 2100

Projections from the study are: -

• a rapid growth in biomass

• steady expansion of wind, solar and geothermal sources

• no significant expansion of nuclear power or hydro

• no significant contribution from marine energy