One of my memorable experiences in preparing for this job was visiting an offshore wind farm run by the Swedish energy company Vattenfall, memorable both because of the scale of the site, off the coast of Kent, but also because of the three metre waves we sailed through to visit it!
The point behind the visit was the scale of UK/Swedish co-operation on renewable energy. The UK today announced new commitments to support the growth of this sector, which could lead to large new opportunities for investment, including foreign investment.
Renewable energy generation is a vital low carbon technology with a central role to play in helping us reach our carbon emission reduction goals. It is also essential to our economic growth and energy security.
It reduces our reliance on imported fossil fuels, helps keep the lights on and our energy bills down. We have some of the best renewable resources anywhere in the world. We are one of the best places to invest in renewables. We have also legally committed to ensure that 15 per cent of our energy will come from renewable sources by 2020.
Today the Energy and Climate department is publishing the Government’s decision on the levels of financial support that will be available through the so-called Renewables Obligation (RO) for large-scale renewable electricity generators from 2013-17.
Since 2002, the RO has helped to bring about a five-fold increase in renewable electricity generation, from 1.8 per cent of total electricity generation in 2002 to 9.7 per cent by the end of 2011.
By the end of the first quarter of this year, renewable electricity capacity totalled 13GW, which is a 36 per cent increase on the same time last year.
Since April 2011 alone, industry has announced over £11.3bn of investment in the renewables sector, potentially supporting around 22,000 jobs up and down the country.
The Government’s decision today should help unlock new investments worth around £20-25 billion in today’s prices in the period 2013-17, and should deliver the kind of sustainable, long term growth and green jobs that we need to get the economy moving again.
It is not the Government’s policy to support renewables at any price. Our ultimate aim is for renewables to become competitive without the need for subsidy. Today’s package sends a strong signal to industry that we expect this to happen over time. To get this moving in the right direction, we are reducing support where it can be done while bringing on the deployment that we need from key technologies, such as offshore and onshore wind, to achieve our aims. The UK has some of the best offshore wind resources in the world and these will be key to the UK meeting its low carbon objectives. The new support levels will ensure that the UK remains the leading location in the world for offshore wind deployment.
Today’s decisions keep us on track to meet our legally binding 2020 renewable target. The detailed changes are on DECC’s website (www.decc.gov.uk).