The reverberations of the government’s withdrawn support for both large-and small-scale renewables projects will be “felt far and wide”, according to RenewableUK director of policy Gordon Edge.
Edge tells Utility Week an estimated 7GW of onshore wind is in danger of being lost due to changes in government policy, which includes potentially removing onshore wind from the next Contracts for Difference round. “These projects represent £9.8 billion of investment across the whole supply chain,” he says. “It’s not just renewable energy developers which will be missing out on this economic activity.”
Citizens Advice warns that plans to block subsidies for onshore wind farms, in particular, could cost energy customers at least £500 million through increased energy bills.
The UK may lose large-scale projects and the backing of institutional investors. But even low hanging fruit which may have contributed to a step-change in the UK energy market might be lost as water companies scale back their smaller-scale investment plans. As energy intensive users, water companies are well placed to reap the financial benefits of onsite generation. But this reservoir of potential may now be lost.
United Utilities has grand plans to invest £100 million in 100MW of solar capacity. However, the firm says more than half of this will be heavily affected if the subsidy cuts are as harsh as planned.
South West Water has revealed that proposed cuts to the Feed-in Tariff (FiT) will put “significant pressure” on its renewable energy investment plans. Affinity Water, too, tells Utility Week it has been forced to shelve plans to install solar for a second time because of proposed cuts. And other firms such as Sutton and East Surrey Water, Severn Trent Water and Northern Ireland Water say they’ve been forced to re-evaluate renewables plans as a result of the cuts.
United Utilities
United Utilities (UU) director of energy strategy Neil Gillespie says the company plans to roll out 100MW of solar capacity. However, only 40MW of this will be developed in time to avoid the subsidy cut, putting the remaining 60MW of its £100 million solar investment programme are under threat.
As part of its invest, UU plans to invest £3.5 million in what will be Europe’s largest floating solar power development – a 3MW project which is expected to meet a third of the energy needs of the water treatment works. The company had planned to develop a second floating solar project in Lancaster, but Gillespie says it is “doubtful” whether this will go ahead if the subsidy cuts are as harsh as planned.
South West Water
Wind, solar and hydro account for £11 million of the total £18 million investment South West Water (SWW) has planned. However, the firm has warned that the proposed closure of the FiT to new applicants by January 2016, or a cap on new FiT expenditure, would put significant pressure on its future investment plans.
SWW has so far installed solar arrays at 35 of its operational sites, totalling 2MW of capacity.
It has one 100kW wind turbine installed at its Lowermoor water treatment works in Cornwall, generating approximately 60 per cent of the site’s power needs, and is now “progressing its plans” to install a further seven small- and medium-scale turbines on or near operational sites across the region. It has also invested in developing hydro-electric schemes at Colliford Dam and Avon Dam.
Affinity Water
Affinity Water has had to abandon its solar plans for a second time because of the threat of subsidy cuts, but expects to invest in solar when “reduced capital costs negate the requirement for subsidies”.
The company says it is “keen” to invest in renewable energy to help it limit its carbon footprint where there are opportunities to do so.
“We have considered all forms of renewable energy and energy reduction opportunities across our sites,” a spokesperson for the firm tells Utility Week. “However, due to our geography, we have very limited options for hydro turbine and onshore wind turbines.”
The firm developed a project in 2011 to install 50kW solar across 10 of its pumping stations, but had to scrap plans after external funding was withdrawn due to changes in Government policy.
Severn Trent Water
Severn Trent Water (ST Water) says it is “working hard” to install ground-mounted solar at 50 of its operational sites, before subsidy cuts come into effect in April next year. The water company said it would develop its plan for further solar power when the impact of any tariff reductions on market and material costs “becomes clear”.
ST Water so far has solar panels installed on the roof of its headquarters in Coventry and its office building in Shelton, and is currently assessing site capabilities to develop more large-scale solar installations to power its treatment works.
The firm also has four wind turbines at its Derby, Newthorpe and Wanlip sewage treatment sites, producing 20,000MWh electricity per year. The power is currently exported to the National Grid, but the firm said future turbines will power its own sites. It is also in the process of installing two small turbines at Lichfield and Stoke Bardolph.
Northern Ireland Water
Over the course of this financial year, NI Water is investing approximately £800,000 in solar energy, to install approximately 600kW across 20 sites. The company says it has no future plans to invest in solar or wind at present and is “considering opportunities” to invest on an annual basis, taking into account available subsidies and capital.
NI Water has planned investment in 600kW of Hydro generation during the current Price Control 15 period (2015-2021). However, the plans are currently being developed and will “take available subsidies into account, alongside available incentives”.
Sutton and East Surrey Water
Sutton and East Surrey says its renewable investment is “opportunistic” and would amount to an additional 100-200kW of installed solar with an investment of £100,000-£200,000. However, this is now unlikely to be installed as the government has “signalled its intention” to remove the feed in tariff levy.