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Do Renewables “work for Britain”? - Conservative Party Conference 2016

Posted By Chief Executive Hugh McNeal, 11 October 2016

As a former civil servant, this year’s Conservative Party Conference was the first I have ever attended. I wasn’t quite sure what to expect. Soon after arriving in Birmingham it became clear to me that conference is a strange, condensed version of the hubbub of Westminster – journalists, MPs, Ministers, activists and protesters corralled into the centre of Birmingham rushing between speeches, events and hurried meetings, all the while tweeting non-stop.

Beyond the baptism of a Party Conference, I really wanted to learn more about our new Ministerial team in BEIS (the Department for Business, Energy and Industrial Strategy) and where their thinking is now, after this extraordinary summer, as well as taking the opportunity to meet with other MPs and stakeholders.

 

What I heard from the BEIS Ministers was encouraging for renewable energy companies. Far from downgrading the ambition for low carbon, I heard Ministers who were genuinely excited about the industrial opportunities, innovation, consumer benefits and employment coming from our renewable energy businesses.

 

After speaking on a panel with Baroness Neville-Rolfe, it’s clear we have an Energy Minister who knows her brief and – from her background in business – understands the importance of innovation, entrepreneurship and disruptive technologies. As the Baroness said, there’s no lack of innovation in the energy market and the challenge for Government is, to an extent, making sure the market encourages and rewards those successful technologies. I shared with the Minister the experience of some of entrepreneurial RenewableUK member companies who have grown from start-ups to world-beaters or diversified into renewables and haven’t looked back.

 

There was endless recycling of the formula of the Conference slogan ‘a country that works for everyone’ – some were more humorous than others. It was clear, however, that for our Energy Minister ‘an energy market that works for everyone’ will be more than just a slogan. Cost is and will always be central to energy policy. The Minister is clear that subsidy should be time limited and degressive. Any interventions into the energy market that add to bills require very clear justification. All in all, I would say there were three elements that I kept hearing about – affordability, industrial contribution and innovation. I think we are well placed to make arguments on all three.

 

Affordability

The technologies I represent will be sustainable in the long term only if we help consumers manage costs. We’re seeing incredible falls in the cost of offshore wind and onshore wind has gone even further and is now the cheapest option for new electricity in the UK. But we know that onshore wind has often been contentious. There were communities where some people felt they weren’t being listened to and developments were being imposed on them.  That local anger translated into a successful campaign by backbench Conservative MPs which ultimately closed the subsidy regime to onshore wind and has given local communities control over planning for new wind developments.

 

Subsidies are not coming back for onshore wind. And the industry is not asking for them.

 

The challenge we have now is figuring out what market signals and mechanisms we have that will allow onshore to compete and consumers benefit from the cheapest source of new power. Others at Conference were talking about this too. The Taxpayers’ Alliance and Citizens Advice debated this issue and flagged the need to prioritise cost to the consumer. As I’ve argued previously the lowest cost projects where the wind resource is strongest are unlikely to be in England and that remains the case.

 

Industrial contribution

I am so proud to represent member companies that employ over a quarter of a million people. Given the right policy environment we can continue to see that grow - a point I made across many of the meetings I had. It was great to see our new Business and Energy Secretary Greg Clark listing clean energy as one of the UK’s industrial strengths, and we need to continue to demonstrate the role our technologies can play in contributing to the UK. Whether it is in offshore wind, where I was proud to talk about the export contracts companies as diverse as 3Sun and Hutchinson are winning contracts or the potential in our world leading wave and tidal industries. It was also reassuring to see Dr Clark talk about how different regions have different needs, given the contribution we can make to spreading development across the UK.

 

The MP for Wells James Heappey made an interesting argument that the heat and noise of the recent review of the Hinkley Point deal had actually helped to move the national conversation about energy onto new ground. While some of that debate was not always constructive, there is truth in Mr Heappey’s insight. For the first time I can remember, the press and the public engaged in a national conversation about the difficult choices Government have to keep the lights on for the next 5, 10, 20 and even 50 years. That conversation on the difficult choices continued in Birmingham. My counterpart at EnergyUK, Lawrence Slade, summed up the transformation of the power sector and the opportunities that are opening up when he said “with energy, we’re seeing the digitisation of the one of the last analogue industries”.

 

Innovation

From the development of small wind, to the recent tidal energy development by Meygen, RenewableUK’s members have often led the way in technological advances. It was good to see this celebrated in the Tidal Lagoon Power fringe which also talked about the huge industrial potential from this project.

 

Innovation was also the watchword when it came to storage, a topic which came up across several fringes. It’s clear just how exciting an opportunity this is, and how interested Government is in it. It has been very welcome to me to see what strides my membership is making in this area.

 

Overall, my first visit to Conservative Party Conference was reassuring. RenewableUK’s member companies and technologies embody many of the values discussed at the Conference – entrepreneurship, risk-taking, disrupting the market for the better. Our members are delivering innovative solutions for a rapidly changing Britain and creating employment; achievements which should be at the heart of a new industrial strategy. These companies and technologies are redefining the conversation on energy and industry. From my time in Birmingham, it’s clear to me that Government is open to that new conversation.

 

(This blog first appeared in BusinessGreen)

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The steel and renewable energy industries are natural partners

Posted By Maf Smith, 15 July 2016

Very early one bank holiday Monday, back in 2002, I left my home in Glasgow and drove the three hours to Machrihanish in Campbeltown. I was new into my job running Scottish Renewables, and the purpose of my trip was to be a guest at the opening of the Vestas Celtic wind tower factory.

Opened with much celebration, it was seen as a major achievement and a step change in our ability to increase UK content and economic benefit in onshore wind. In truth I remember the trip most for the 6 hour drive home and a 15 mile tail back around Loch Lomond because of a broken traffic light in Dumbarton.

Last week, some 14 years later, I had the privilege to again drive from Glasgow to Campbeltown, an area I have come to know well since 2002, to attend the CS Wind UK inauguration on the same site. And despite those memories back from 2002, this event really did feel like the real deal. And some of my fellow guests had been there in 2002 and were happy to talk about the ups and downs since that time and how important this new beginning was. One person even remembered that long drive back into Glasgow.

Since 2002, the plant has struggled and gone through multiple owners since Vestas pulled out. With lack of follow through investment and periodic downturns in the market we’ve struggled in the UK to hold onto a quality tower manufacturer. Now though we have CS Wind, the world’s largest tower manufacturer investing in this existing plant and making it fit for purpose.

Their ambitious plan will see them invest £27m and increase employment from 150 to 250. They are making improvements to the current onshore tower manufacturer operation and also investing in offshore tower production. Deals with Siemens and Vattenfall, and interest from other developers and manufacturers, will help underpin this significant investment. CS Wind are already accredited to manufacture Siemens towers so there is hope they will be able to kit out a new facility to a high enough standard, and break into this important offshore market.

As an inauguration it was note perfect. Visiting dignitaries? Check. A local school brass band playing the UK and South Korean anthems? Check. Spades and hard hats? Check.  All in all the event signalled the importance of this inward investment not just to Scotland and the UK, but most importantly the local community where the factory is the single biggest employer. CS Wind’s pride in their company and their choice of Machrihanish was evident with their Group Chairman and CEO both in attendance, alongside the UK’s ambassador to the Republic of Korea, and Scottish Energy Minister Paul Wheelhouse.

What I most enjoyed about my 2016 trip to Campbeltown was the clear sense of local pride in the plant, and the confidence in their future. I talked to staff and managers who could talk positively about how the investment and know how was already making a difference. Inside, the canteen walls were decked with drawings from local schoolchildren of colourful wind turbines. Outside were Siemens towers ready for delivery to the SSE Clyde Wind Farm extension, with more orders for the plant now in place and a future secure.

The investment by CS Wind is a huge shot in the arm for UK renewables, and shows global confidence in the UK. Of course it’s great to see that we have investment in offshore tower manufacturing, but we must also work hard to maintain a strong UK onshore market. Congratulations must go not just to CS Wind, but to Scottish and Southern Energy, Highlands and Islands Enterprise and UKTI for all their work supporting the plant and clinching the deal.

At the same time, Liberty House Group announced last month that it is restarting production at two Scottish steel plants to make onshore and offshore wind turbine towers. The company will also open a new British manufacturing centre to supply the UK’s leading offshore wind market and in the emerging tidal lagoon power industry.

This recent spate of good news are the first buds in what could become a flowering partnership between wind and steel. We in the renewables industry need our colleagues in heavy industry to be strong and successful, as they are vital suppliers to us and we are their customers. Like them, we are big employers, with more than 100,000 jobs sustained by the renewable energy industry right across Britain. With renewables generating a quarter if the UK’s electricity, we are powering heavy industry using secure, home grown sources. We will continue to drive down our own costs because we understand that offering best value for money is a key issue.         

The steel industry and the renewable energy industry are natural partners. That’s not something you hear very often, but it’s true. An average onshore wind turbine uses around 140 tonnes of steel. Many existing wind farms also contain steel sourced within the UK – the Clyde extension supplied out of Machrihanish is just one example.

RenewableUK also estimates that British offshore wind farms being built up to 2020 will need 1.89 million tonnes of steel. This represents a significant opportunity for steelmaking in this country. The renewables industry is keen to work closely with manufacturers to ensure we maximise the amount of locally sourced steel used in clean energy projects. And we have seen some encouraging signs of progress in the past month.

 

This blog first appeared in BusinessGreen

 

 

 

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Now is the moment for onshore wind

Posted By Hugh McNeal, 01 July 2016
In the light of the referendum result, it’s certainly tempting in these unprecedented times, in the period of uncertainty and of market volatility since the vote, to focus only on the challenges ahead, on the difficulties we know we will face over the coming weeks and months. 

Energy companies, National Grid and energy policy experts are starting to give voice to what’s at stake in terms of investment, jobs and consumer bills, if we lose access to the European Energy Market. In public and private the fears are very real, the stakes very high.

But it is precisely now, at this moment which is so unpredictable and uncertain, that we should reflect both on what we can still offer Britain in the future; cheap, home grown, low-carbon sources of electricity, and large scale capital investment at a time when we know we will really need it.

We are not expensive - we are cheap.  We are not inefficient subsidy junkies but innovators, market disruptors, the risk takers on which a dynamic economy depends, investing in energy storage, developing new business models, driving change, creating jobs. We are not alone, out of step with the rest of the world, but part of a global investment story which now dominates from China to the United States and from Africa to Europe.

As I have argued recently, onshore wind is now the cheapest form of large scale, new electricity generation available in Britain. A remarkable position given how so many of our critics attack us on the grounds of cost.  It’s crucial this is known more widely, and equally vital that politics doesn’t get in the way of consumers benefiting from this plentiful, good value resource, and the cost reduction the industry has achieved in recent years. Give us a chance to compete and let us show what we can do.

The Chancellor George Osborne has set out three challenges we all share, whatever our view of last week’s referendum result. First to deliver immediate financial stability, second to resolve our relationship with the EU and third to reassert the values of our country.

How can we, in the renewables sector, contribute to this stability? There remains in Scotland, Wales and Northern Ireland a pipeline of onshore wind plants that are ready to build now, ready to be deployed, ready to be financed, projects which can generate economic activity and capital investment, projects it makes sense to build given the benefits they will bring and the challenges we now face. This represents hundreds of millions of pounds in capital investment for our economies over the next few years, helping companies all over Britain just at a time when we most need it most.

Surely now is the time to all work together and get building. To achieve this, it is vital that onshore wind retains an ability to compete and to build a route to market, as part of the nations’ balanced and secure energy mix. We need to build on the transformation we have witnessed over recent years, attracting investment and creating jobs to help support Britain. 

The offer is there.  We now need to work to build a broad coalition, one that reaches out across the energy sector, across industry, across all political parties, all parts of Britain and Northern Ireland, to help deliver it.

This blog first appeared in BusinessGreen

Tags:  onshore wind 

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Speech by RenewableUK CEO Hugh McNeal at RenewableUK's Global Offshore Wind conference

Posted By Mark Davies, 21 June 2016

Good afternoon everyone.  Can I add my thanks to all of our sponsors too without whose support we would not be able to put on an event like this, and to all of you for joining us over these 2 days.

What a fantastic morning we have had. It has been great to walk the floor of the exhibition meeting so many of you, to see the standing room only Share Fair event, to see businesses doing business.  It is one of the great pleasures - of many - of this role.

I am of course conscious that many of you are nervous of what may happen this week, and the implication of the judgement of the British people on your businesses, on your plans, and on your futures.  But I hope in the next 10 or 15 minutes to remind you of how much you have achieved and most important of the great future I am convinced our industry will enjoy regardless of the result of the vote in 2 days’ time. To remind you of what we offer.

Since starting as your CEO just under 3 months ago, I have been making the case that renewables are now part of a new energy mainstream here in Britain and around the world; securing investment that is delivering transformative and revolutionary change and driving a revitalisation of our energy infrastructure.

As I am sure we will hear from Michael Leibreich when he speaks tomorrow, more than half of global energy investment last year was in renewables, a third of that investment in China - especially relevant for us today as we warmly welcome the largest ever Chinese offshore wind delegation to Britain and to this conference and exhibition. For the first time last year, we witnessed more renewable than non-renewable capacity deployed across the globe; and for our offshore wind industry a market worth a record $23bn, from its origins here in Britain, then in Denmark and Germany and Europe to a truly global industry. China with a quarter of global investment, in the United States, with auctions planned for 9 commercial leases across the country, and in seas around the world.  This growth is remarkable both in its speed and its reach.

Here in Britain, renewables delivered a quarter of our electricity in 2015 - more than coal and more than nuclear.  Wind alone providing 12%.  The members of our Association, those who choose to be members of RenewableUK - and if you are not a member please join while you are here and become part of what we are all achieving together - employ over a quarter of a million people across Britain and Northern Ireland.

My point is this: whatever stage you are at, however you are contributing, large global company, small start-up or anything in-between, you are part of something big and important.  Together, your companies are investing billions of pounds.  Offshore wind is bringing well over £20 billion investment to Britain alone this decade.  DONG alone £6bn to the Humber between 2013 and 2019, an area with some of the highest levels of unemployment in the country.  Alongside this investment, we are seeing cost reduction and scale innovation which you might associate more readily with consumer electronics, with TVs and telephones, than with multibillion pound infrastructure projects.  Whichever way you cut it, the figures are large, the delivery impressive.  This is no start up industry.

All of which begs the question: why do so few people appear to know the scale of what is being achieved and what are we - everyone in this room - going to do about it?

I am not a conspiracy theorist.  I don't believe that people are deliberately hiding or downplaying what we are delivering.  I just do not think that we have been telling our story loud or often enough.

We need to show what we offer.  We need to tell the story of our business success.  We need to create a picture of the future we are building.  That is why both in private and in public I have been stressing the need for us to move away from asks, from saying what we need, and to move instead to a different conversation with Government and with the public, showing and explaining clearly what we offer, what we offer Britain and what we will increasingly offer around the world.

It is appropriate that we are in Manchester to set out this offer.  We are in a city at the heart of the industrial revolution, a city which played such a key role in infrastructure development, from the Bridgewater Canal and the waterways which connected this part of the world to Liverpool and the open seas 240 years ago to the world's first inter-city passenger railway just over 50 years later.

Our work, your delivery, deserves this context.    Almost 1 pound in every 5 being spent on infrastructure in Britain is in renewables, with offshore wind leading the way.  You are driving down cost, innovating and investing in our country on a massive scale – the over £20 billion you are investing here is more than Britain is spending on flood defences, on airports, on our IT and Broadband combined over the rest of the decade.  Is there a more compelling story of infrastructure transformation and change in Britain in this decade? Of what has been achieved by two Conservative-led Governments? I can't think of one.

And we know we have more to offer.  Alongside new gas and new nuclear plant, interconnection, demand side response and all of the other technologies which can deliver a balanced future energy mix, we offer a pipeline of projects ready to be deployed and financed, and which can help Britain meet its electricity needs in the future as the majority of our nuclear plant and all of our coal plant is retired over the next decade

But while the numbers are impressive and while it is important that everyone knows we have projects which are ready to be built now, I think it is the personal stories, the stories of your businesses which resonate and show what we offer best of all.

A few weeks ago I spent an evening in Bridlington meeting 100 or so  companies working in offshore wind; companies installing winch systems and other specialist equipment, supplying boats and jack-up vessels; companies training people to work at sea; companies that analyse the sea bed; professional services firms providing legal and financial advice; companies that work in the digital economy, software providers; firms providing economic modelling; even a former Asda store manager whose father had invested in his business filming the building at the Siemens site and who now has a successful digital media business. 

These, of course, sit alongside the anchoring investments like those in Hull, where in a few months a 1000 workers will start producing the largest single mould component in the world at the Siemens / ABP site, the revitalised MHI/Vestas site on the Isle of Wight now employing 260 people and supplying not only the UK market but for export too with 11 UK supply heroes, the recent investment in Campbeltown by CS wind; the contract awarded to BiFab, the role we are playing in revitalising and securing new investment in ports along our coasts - these are all investments that have the power to transform the lives of those who benefit from them, who secure work because of them, that can help to regenerate communities and provide possibilities which might otherwise have been lost.

What strikes me more and more in this role, and as I think about these stories, your stories, is the reach - both geographic and economic - in what we are achieving.  We are not a sector - well not in any narrow sense of that word.  We touch on almost all areas of economic activity, and we increasingly reach all parts of this country.  Offshore wind is already a massive British success story.

This success is being built on international co-operation. On the relationships that are built at events like these.  On the conversations you have with the delegation of senior leaders from China I welcomed this morning. On the partnerships and investment we have been able to welcome from Europe, and from around the world and as we have built this industry in recent years.

Let me return to my evening in Bridlington.  Less than a decade ago I met a young British company setting up in offshore wind before any of the deployment that has marked our success in recent years.  Its founders saw the potential of boat services and marine operations in that market.  Last month in Bridlington, I had the pleasure of meeting up with them again, no longer a start-up but part of a global marine company worth over £100m, a leading light in the offshore wind industry and now one of the fastest growing companies anywhere in Britain.

You will all have stories like these; stories of success that deserve to be told, and to be heard.  Stories of how British leadership and international co-operation and investment is delivering economic opportunity and jobs at the most local levels; of a market born in British waters expanding across the world with all of the opportunity this expansion brings - not narrow conversations about our gigawatts or the amount of British content in our projects but British based companies working with and alongside international companies delivering successfully all over the world.  As in the 1800s, our future success will not be achieved in isolation but in partnership with international companies who recognise British skills and strengths and complement them with their own, who recognise, as William Siemens did over 170 years ago, that Britain "is the place if anything is to be done".

So whatever the British people decide on Thursday my message to you is our future is bright; the global opportunity immense.  Of course, as your CEO it is my job and my team's job to engage with Governments, with public servants, with anyone who can help provide an environment for you to invest.  And we will do so.  But now is not a time for asks.  Now more than anything it is my job, your job, our job to tell the stories of our success; to speak locally, to speak nationally, to speak globally of what we are achieving and what we offer, of the possibilities that are now opening up because of British leadership as our market becomes increasingly global.  To tell the stories that reach back to a historic past but open up a truly global future for us all. A new infrastructure revolution is being led by you.  Now is the time to show what that means and what it offers.

Thank you very much – I am v much looking forward to meeting with many of you over the next two days and hearing more of what you are achieving and delivering, and as your Chief Executive working with you to keep building this exciting and vital industry.

 

Tags:  CEO  GOW2016 

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Offshore wind and offshore oil - a shared sea and a shared workforce

Posted By Maf Smith, 22 April 2016
Updated: 02 June 2016
We’re proud to be the world leader in offshore wind – a technology which we started installing in British waters in the early 2000s. Sharing space out at sea is the UK’s world leading oil and gas sector which has been an important part of the UK economy since the 1960s. We are two industries both delivering economic success for the country.

However, right now the UK’s oil & gas industry is facing one of the greatest crises in its history, and low international oil prices are impacting on investment and employment. Many in the industry are thinking long and hard about the industry’s long-term prospects. Hardest hit have been cities like Aberdeen but the impact has been felt in coastal communities from Shetland to Lowestoft.

There is some hope, however, for the many experienced oil industry employees who may be worried about the future. That hope comes from offshore wind.

In January, the Government announced work on a “UK Oil & Gas Workforce Plan” to examine, among other things, how it can support workers who have lost their jobs, or may be in danger of doing so. RenewableUK has taken an active role in this process, helping Government identify the scale of the opportunity presented by offshore wind for former employees in oil & gas.

Offshore wind already contributes 5% of the UK’s electricity and supports around 15,000 people in employment. By the end of this decade the UK’s offshore wind sector will double in size, and there are opportunities in construction and operation of a growing number of sites. New offshore projects in development are exponentially larger than existing wind farms in terms of size and scale. These power plants will need huge numbers of highly skilled individuals to be built. Offshore wind farms have long development programmes, a construction phase of two to three years, and an operating lifetime of 20 to 25 years. For example, ScottishPower Renewables is currently developing its East Anglia One offshore wind farm; a £2.5 billion investment requiring an estimated 3,000 skilled employees.

This is where oil & gas comes in. The UK is perfectly placed to take advantage of its 40 years of offshore expertise by easing the transition for workers from fossil fuels into renewables. We have already seen traditional developers, such as Statoil and Repsol, diversify into offshore wind as early movers in the sector, while underneath we have a large supply chain of offshore contractors with a track record of winning work in offshore wind and oil and gas.

As the industry grows so it is learning from oil and gas about how to operate safely at sea. A great example is the use of helicopters by our industry for construction and maintenance work, with helicopter firms now active in the wind market.

There is a great opportunity for establishing a clearer path to retrain workers for a life in clean energy. This means providing resources for people who may not be aware of the opportunities to make the transition. Their experience working in other parts of the offshore energy sector is highly sought after, with the aptitude, professionalism and transferable skills all valued highly in offshore wind.

The practical work of our industry to support workers in transition comes in many forms. UK companies take their supply chain responsibilities seriously and are active in supporting UK firms win contracts. As an industry we run regular supply chain events to help companies and future employees understand about how to go about winning work. We have an annual skills fare putting companies and potential employees together while also providing advice and background to those wanting to move into our industry. And we work across training providers to make sure that there is good training available which is accredited to a suitable standard. A good place for individuals to start is the careers section of our webpage which provides information on apprenticeships, qualifications needed and has a jobs board of available work.

There is a lot that individuals can do for themselves to win work in this exciting industry. The Government’s work however is a vital part of coordinating efforts to support oil & gas industry employees, and it is equally important for offshore wind. Our sector is proud to be part of the solution for hardworking energy sector workers and their families.

This blog first appeared in BusinessGreen.

Tags:  government  Offshore Wind  oil  Scotland  Scottish Renewables 

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