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					Renewable Energy

Offshore Wind

The first offshore wind turbines were installed at Vindeby off the
Danish island of Lolland in 1991. The first ten years of the
industry saw small projects being built in very shallow water near
shore locations. These ‘demonstration’ projects have paved the
way for the more recent projects that are of a much larger size.

The biggest offshore wind farm yet installed is the 165 MW
Nysted development off Denmark which was completed in 2003.
There are 22 operational offshore wind farms in the world today.
The 388 installed turbines in these projects provide a total of 800

                                     The UK currently has the
                                     second largest amount of
                                     offshore     wind     capacity
                                     installed and will overtake
                                                                     Figure 1 - Scroby Sands offshore
                                     Denmark in 2007 to become
                                     the world leader. Future prospects for the UK are excellent
                                     and government support strong. Other countries set for
                                     major growth include Germany and the US.

                                            The East of England is home to the second of the UK’s
                                            large offshore wind farms, Scroby Sands, installed off the
                                            Great Yarmouth coast in 2004. The region is ideally
                                            positioned to take advantage of this growing market being
                                            located between two of the three UK development areas,
                                            the Greater Wash and the Thames Estuary. On the Scroby
                                            Sands project, contracts to the value of £38.8m (48%)
                                            were sourced from UK companies, with £12.8m (16%)
Figure 2 - 'Gulliver' - SLP Energy turbine,
                                            originating from within the East of England.
Ness Point, Lowestoft
                                   Offshore wind faces challenges to establish its full
potential, the most immediate of which is cost, with major savings needed to ensure future
projects are able to be built. The opportunity for innovation in the industry is high with
tremendous potential for oil and gas experience to be transferred.

The large-scale deployment of offshore wind will take place when the next generation of wind
turbines are commercially available. Currently 3 MW turbines are being installed but within 5
years most projects will be using turbines of 4-6 MW in size allowing substantially larger
projects to be built.

Onshore Wind

Onshore wind power provides an increasingly economic source of energy, with significant
worldwide growth for the last ten years. The industry has been made viable through economic
subsidies which have enabled development to take place. For some countries, onshore wind
power is both a key energy source and a major industry in its own right.

The onshore wind industry has seen year-on-year growth for the past 15 years – there are
very few industries where such a growth rate has been seen to be sustained for so long. In
2005 a record-breaking 11.7 GW was installed which represents a growth of 35% compared
to 2004. Installed capacity for 2006 is on track to reach 15 GW.

Some early leaders are now beginning to slow such as Germany; likewise Denmark has
installed very little onshore capacity in recent years. To balance this, activity is still strong in
the massive Spanish market and significant new markets such as the UK are emerging.
Together with rapid growth in Asia, prospects for continued high growth remain strong.

The UK now has over 1,500 MW of onshore wind capacity installed, much of which is in
Scotland where growth has been extremely rapid. The East of England currently has 16
onshore turbines across 5 individual projects with a 12 turbine project currently under

Technology continues to evolve with turbine capacities and efficiencies increasing. Project
sizes of 50 MW and above are now becoming common and in the US the largest projects are
regularly several hundred megawatts in size.

Wave & Tidal Current Stream

The wave and tidal current stream energy sectors are high potential future markets. Little
operational capacity is currently installed, with the majority of technologies still in the
development stage. Despite still being a very much embryonic industry, successful prototype
installations are taking place and future market leaders are already emerging in both sectors.
Grid connected prototypes are helping prove the concept of individual technologies and
establish the first power purchase agreements from wave and tidal technology.

Unlike the offshore wind industry where the turbines are now all fairly standard, the different
technologies in the wave and tidal sectors are at present very different in principle. Tidal
current turbines are the most standard in design, in essence being an underwater wind
turbine, but even in this sub-sector there are differences in design.

Ultimately a range of technologies will emerge as commercial scale competitors, but only the
strongest of these will survive in the long term as the market place becomes more
competitive. A greater similarity in design can be expected in each sub-sector over the period
covered by this report. There is such a large number of concept devices that only those with
the highest potential will move forward because of the limited funding and financing available
to them.

The first commercial ‘wave farm’ was installed in the summer of 2006 off Portugal. The 2.25
MW development uses three of Ocean Power Delivery’s Pelamis wave energy converters.

Coupled with one of the best natural resources in the world, the UK has an excellent base of
technology developers including many of the market leaders for both wave and tidal current
stream including, Marine Current Turbines, Ocean Power Delivery, Wavegen, The
Engineering Business etc. Government support to developers has been encouraging to date,
but other European countries such as Portugal have market incentives that are attracting UK


The East of England region is particularly well placed to exploit the natural resource
endowment inherent in its landscape with a varied agricultural industry base producing a wide
range of bio-energy resources.

Biomass energy from organic materials such as wood, crops and waste can be used to
generate electricity and/or heat or in the production of liquid transportation fuels such as
bioethanol or biodiesel.

Biofuels are the only short-term option to reduce reliance on transportation oil. The market is
expanding rapidly, from a current £10 billion to reach about £24 billion in 2010. Major oil
companies are developing their interests in the sector and private investment into companies
active in biofuels has surged in the last year. The UK should see tremendous growth in the
short-term as the EU directive on biofuels has set a target of 5.75% in 2010, an ambitious
target as the EU missed its 2% in 2005
Combustion of biomass for power generation alone accounts for around 0.9% of world
electricity production, primarily in Northern America and Western Europe. Main producers
worldwide are the US, Brazil and Finland. Current global installed capacity growth is over
10% per annum. The main applications are medium-scale CHP plants where energy
production is optimised through district heating and manageable quantities of supplies at
short-distance from the power plant. Co-firing with coal is also taking-off. The market for
power generation from biomass should reach around £1.6 billion in 2010 from £1.1 billion

Biomass energy is heavily reliant on low cost sources of biomass – good infrastructure and
short-distances are a prerequisite. Long term commitments are needed, both to the biofuel
tax rebate and renewable transport fuel obligation, as well as sensible regulation and planning
rules that encourage renewable developments. Also needed are effective grant schemes
throughout the supply chain and a sustainable return to farmers. The government’s use of
obligations has helped biomass for electricity and transport fuels, but has not offered the
same incentives for biomass for heat. Further support to the ROC to lower the break-even
period would enable the development of a small-scale wood-CHP fuel supply chain.

The East of England has very strong
potential with much agricultural and
forestry land for which biomass offers
an opportunity for improved rural
income.      Three      biomass     plants
currently operate in the region: Ely,
which at 38 MW is the largest straw
burning power station in the world; the
12.7 MW Eye power station which
was the first poultry litter fuelled plant
in the world; and the 38.5 MW
Thetford power station which is the
largest poultry litter fuelled plant in the
world. All three plants are operated by
Energy Power Resources.                       Figure 4 – Energy Power Resources – Thetford facility


Microgeneration incorporates a range of technologies (many of which are renewable) which
can provide a building with a proportion of its electricity and/or heating. Excess electricity can
be sold to the National Grid.

There is currently little installed capacity in the UK. The potential, however, is considerable,
with the latest DTI microgeneration review considering that micro-CHP alone could displace
around a third of the total UK electricity consumption by 2030.

Following increasing gas and electricity prices, interest in micro-generation is growing despite
their initially high capital cost. Microgeneration technologies are located at load-point, hence
are far more efficient as a distributed generation source than traditional large-scale, central
generation technology.

Micro-generation technologies can be deployed virtually anywhere and are easily
displaceable or removable. As ‘white-goods’, microgeneration technologies are potentially
mass-market products and selling strategies are emerging to reflect this with high street
stores beginning to stock some units.

Micro-generation offers high employment creation particularly through commissioning and
maintenance activities. Substantial numbers of personnel with plumbing, heating and
electrical skills will be required if the sector is to fully develop.
The major technologies in the microgeneration sector include:
   Solar thermal – the most commonly installed type in the UK, solar thermal systems
    are usually installed on domestic properties to provide water heating. They are one of
    the most efficient and cost effective microgeneration technologies.
   Solar Photovoltaic (PV) – Solar PV systems convert solar energy into electricity
    through the use of roof-mounted solar panels. PV is not as cost efficient as solar
    thermal systems.
   Small-scale wind – Units are typically in the 1-2kW range and will usually provide a
    saving of 1/3 on electricity bills. Payback period for the system is approximately 5-7
    years for a 1kW system. Excess electricity can be resold to the National Grid.
   Ground source heat pumps (GSHP) – GSHP transfer heat from the ground into a
    building to provide space heating and can be used for pre-heating domestic hot
    water. A typical 8kW system costs £6,400-£9,600.
   Micro-CHP – Micro Combined Heat and Power is a ‘super boiler’ which partly
    recycles the energy consumed for heating to generate electricity. The concept
    delivers huge benefits by reducing the amount of energy wasted. Combined thermal
    and electrical efficiency of a micro-CHP unit is over 90%. Micro-CHP is a high
    efficiency solution; it is not a renewable source of energy unless primary fuel is strictly
    made from renewable sources such as biomass.

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