SO IT鈥橲 off with sandals and smocks and on with brogues and sharp suits. Renewable energy is about to become really Big Business-at least in Britain. By 2010, Tony Blair鈥檚 government wants electricity suppliers to find 10 per cent of their power from renewable sources such as windmills, water turbines and the like.
Not only will this give the nation a rich diversity of power supplies, it will create new industries and stimulate exports. The scheme will also cut 3 million tonnes of carbon from Britain鈥檚 annual emissions of about 154 million tonnes.
As you鈥檇 expect from Blair鈥檚 government, the system is thoroughly modern. Suppliers will receive 鈥済reen certificates鈥� for every renewable kilowatt-hour they produce, and if they overproduce they can sell the surplus to other suppliers. Companies can generate the power themselves or buy it from specialist outfits, but they鈥檒l want it at the cheapest rate-which will drive down production costs.
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If it sounds too good to be true, it鈥檚 because it is. The system is way off target when it comes to encouraging new renewable sources.
The emphasis on keeping down costs means that Britain will end up covered with cheap wind turbines and waste incinerators. Less developed, dearer sources such as offshore wind power, wave power and wood-burning projects will not get a look in.
These need high initial investment, and companies will not cough up the cash unless their incomes are guaranteed over ten years or so-something suppliers will be reluctant to accept. Germany and the US have wised up to this fact and changed their systems accordingly.
The good news is that the period when high investment is needed is relatively short. Experience in the field teaches companies quickly how to cut the costs of a new technology. Over the past 10 years, for example, Britain鈥檚 existing renewables schemes have pushed down the price of wind power from 8 pence a kilowatt-hour to under 3 pence. This is comparable with the price of electricity from fossil fuels.
These existing schemes, which will disappear under the new regime, are already backing wood and wave power. What are the companies pioneering these methods supposed to do pack up and go home? Developing these fledgling industries gives Britain its best chance of gaining a slice of world markets.
The government says it will find a way to support at least some of these less developed technologies. But there is a serious lack of vision here. Helping industry to develop new technologies should be at the centre of the government鈥檚 thinking, not just an afterthought.
