Tag: Gregory Barker

Below is the text of the speech made by Greg Barker, a Minister of State at the Department for Energy and Climate Change, at the Royal Bank of Canada Capital Market’s UK Renewables day in London on 22nd May 2014.

Introduction

Thank you to RBC and to John Musk for convening this important and timely conference.

I am delighted to kick off and would like to provide my personal view on the renewable sector in 2014 and its role in the wider economy.

And that is where I would like to start. Growth has returned to the UK. We are beginning to see the positive impact of our policies as confidence returns. Our Long Term Economic Plan is working.

Our Long Term Economic Plan is delivering for millions of families…

…for British business…

…and for investors for near and far, who are sharing in our hard-earned growth.

…Growth in an economy that is now the fastest-growing in the G7.

And the energy sector is at the heart of that long-term plan.

In energy, nothing demonstrates this renewed confidence more clearly than the health of the new secondary market which so many in this room have been instrumental in creating.

In little over a year, seven new listed investment companies have mobilised £1.4bn of new money entering the renewables landscape – much of it for the first time.

Your funds, built on reliable, proven technologies like wind and solar, and supported by our long term incentives, means that many institutional investors are increasingly considering renewables in a new light.

A safe, low-risk, transparent asset class worthy of investment consideration.

I am pleased to see several representatives from the insurance sector, pension sector and mutual funds in the audience.

For those seeking long-term, stable returns, this sector offers enormous potential.

The Savoy is famous for hosting parties and celebrations – or indeed just marking important events. I hope today you will leave this memorable old hotel, reassured that the British renewables industry has genuinely come of age!

Today I’d like to stress three key points:

Britain is committed to a long-term renewables agenda

We have the policy framework – and the funding – in place to give certainty to investors

We have become the world-leaders in offshore wind, and intend to both safeguard that position and strengthen our expertise in the supply chain and in other renewables

The renewables agenda

Given that many of you are not renewables specialists, it is worth reflecting on some key points that are often lost in the political noise.

The latest UK Energy Statistics show that renewable generation grew by 28% in 2013, with its share of electricity generation up to a record 17.6% in the fourth quarter of 2013.

That is all the more remarkable, given the wider picture across Europe.

According to Bloomberg New Energy Finance, year-on-year investment in renewables has dropped back since 2011, falling by 50% across the EU.

Yet in the UK the investment picture is dramatically different to the rest of Europe, growing by 20% to a total of £8bn in 2013 – outperforming even that stalwart of the renewables revolution, Germany – and a new record high.

But it was also gratifying to see in their conference last month in New York that Bloomberg now anticipates a sharp rise in clean energy investment globally in the coming two years.

We should remember too that despite the political noise, there remains a strong cross-party consensus on renewables.

At the passing of the Energy Bill in November, Conservatives and Lib Dems were joined in the division by the official opposition, giving the Energy Act one of the largest majorities of this parliament.

And the public backs renewables too! Our own polling shows overall renewable support at 77%. With support for technologies such as Solar PV even higher at 85%.

Policy framework

I also wanted to update you on our Electricity Market Reform programme – a radical new market design which retains a liberal approach while addressing market failures.

After two years of in-depth design, consultations, parliamentary scrutiny and legislation, our Energy Act which I just mentioned – reforming the electricity market – was signed into law in December 2013.

Our reform will ensure that the UK remains a leading destination for investment in low carbon electricity right across the technology landscape, not just renewables.

This will be a massive boost to our economy, generating skills, expertise and hundreds of thousands of jobs in this sector.

After several years of planning, we are bang on track for EMR implementation this year.

The two main components of EMR are the Contracts for Difference (CfD) to support low carbon generation, and the Capacity Market to ensure security of supply.

It’s the first of these which matters most to the renewables sector.

Contracts for Difference are in effect a type of guaranteed feed-in tariff, designed to provide stable and predictable incentives for companies to invest in low-carbon electricity generation. It removes wholesale electricity price risk.

We looked at our experience here with ROCs. We looked abroad, especially to Germany at their experience with a Feed in Tariff. And we think CfDs represent the best of both.

And it is not just the policy architecture that we have so carefully put in place. Through our Levy Control Framework, we also have the guaranteed funding in place.

Funding to support new projects right up to 2021

The Framework sets the Government’s spending envelope for low carbon and renewable electricity incentives, ultimately paid for through consumers’ energy bills.

So it helps control the costs of energy. It holds the Government to account. And it provides certainty to investors.

No other country in Europe – not Spain, France, or even Germany – can guarantee investors and developers alike such funding certainty.

And if we are to realise our huge ambitions for renewables and offshore wind especially, we are going to need that certainty.

Wind

But this isn’t just an opportunity created by the British genius for financial innovation. The physical underlying natural resource is phenomenal. I’d like to focus on just one example: wind.

The UK has the largest offshore wind market on the planet.

And according to E&Y, we continue to be the most attractive destination in the world for offshore wind investment.

Right now, we have the two largest wind farms – London Array and Greater Gabbard.

But by 2020 we could see 8 to 15GW of installed offshore wind capacity which could support up to 35,000 jobs

A contribution of £7billion to the UK’s economy

The Green Investment Bank – conceived by Conservatives in opposition, developed hand-in-hand with the investment community and delivered in Government – has not only addressed market failure…

…but also been instrumental in ensuring the spin cycle of capital is increased and enhanced…

…Releasing development capital sooner to build out faster.

In fact the Bank has just signed two landmark offshore wind deals, Westermost Rough and Gwynt y Mor.

This has allowed the current owner-developers, DONG and RWE, to recycle their capital into new projects.

I will let Ed speak on the detail, but I would point out that the former deal sees GIB taking construction risk for the first time in offshore wind, a significant step forward.

The bank has now invested well over £600m in five offshore wind farms and a total of £1.3bn has been mobilised – a record of which I am extremely proud. But that is just for starters.

This type of investment is also ensuring that the supply chain is developed here in the UK not overseas.

In March, Siemens and Associated British Ports announced plans to invest £310 million building two offshore wind turbine and blade factories in Hull.

Construction will start later this year and will finish in 2016. Once again – the sector is delivering renewed confidence and growth.

And playing its part in the extraordinary renaissance of British manufacturing and the rebalancing of the economy more widely.

Allowing us to compete with growing confidence in the global race.

Remaining issues

Before I conclude, I thought I’d quickly pre-empt a couple of questions you might have.

First, on exactly how competition for CfDs will work.

Earlier this month, we confirmed the two main technology groupings we will use when allocating contracts:

One group of less established technologies, such as offshore wind and wave and tidal

And a separate group of established technologies such as onshore wind and large-scale solar PV which will move to competition from the start of the CfD regime later this year

And we are consulting on some other details regarding biomass and Scottish wind projects.

We are doing this as we believe the UK’s renewable industry is delivering a strong pipeline of new projects and that moving to competition now will enable us to reduce the cost that consumers face.

Second, the current plans for changes to Renewables Obligations for large-scale solar.

Our hugely ambitious Solar Strategy, published last month, spelt out in detail what I have been saying for several years…

…namely, it is the solar rooftop market and onsite generation for commerce and industry that is our focus for growth…

…not remote field solar.

There is still a place for solar arrays as the sector continues to grow.

But it is the onsite generation market that is our first priority.

Our proposals, which would take effect next year, focus our incentives and further clarify our intent.

But I want to reassure you that we’ve done so in a calm and measured way.

We have provided a year of notice. Changes would only come into law from April next year.

Our proposals also include grace periods to protect significant investments.

Conclusion

So to conclude, let me just recap what is Government doing in this space:

A stable, transparent, predictable long-term approach

Government proactively acting to de-risk and open up new opportunities for investors, consistent with both our 2050 climate change targets and our long-term economic plan

Government as a genuine partner in growth, in a clean energy sector that is affordable, scalable and sustainable

Thank you for your time and I look forward to the questions.

Below is the text of the speech made by Gregory Barker, the Climate Change Minister, at the Royal College of Surgeons in London on 27th February 2014.

It’s great to be here with you today and a fantastic opportunity to hear from the energy from waste sector.

The Conservative Manifesto in 2010 pledged that government would work towards a ‘zero waste’ economy recognising that waste is a valuable resource, not least as an important source of energy, is key to that vision.

Discussions at the conference so far have been very topical.

There’s been a strong focus on getting projects off the ground.

Which brings me to the three points I want to make today:

We want waste projects to continue to make a major contribution to delivering affordable, low carbon energy as part of the UK’s long-term economic plan.

But in order to take full advance of the potential we need to move to proper resource efficiency – re-engineering more waste, and move towards a more closed loop economy and recognise that effective use of waste as a valuable resource, will be a key part of creating a sustainable, competitive, innovative economy that can compete and win in the global race.

Although there are several excellent energy from waste systems I could highlight, I want to address our commitment to driving one in particular – heat networks.

To my first point, energy from waste has an important role to play in driving the UK’s long-term economic plan.

Indeed, by choosing the right location, the right technology and the right processing, energy from waste can help to deliver much needed long-term affordable, low carbon and secure energy for hardworking families.

The latest energy statistics show that, including landfill gas, energy from waste has exceeded 2TWh electricity generation. Enough to power around 470,000 homes.

The current incentive framework, the Renewables Obligation and Feed in Tariff has supported a substantial rise in energy from waste projects.

The Renewables Roadmap reported 1.8GW of operational energy from waste plants.

With a further 1.6GW in the pipeline.

This includes the operation of the first-commercial scale gasification plants such as New Earth’s plant which is now operational in Avonmouth which is capable of generating 6MW electricity, with a further 6MW under construction.

A substantial increase in Anaerobic Digestion with key partnerships such as Tamar Energy and Sainsburys making great progress.

And the recent £22m funding commitment won by Biogen will allow them to roll 10 plants before 2017.

In addition to the 10 they currently operate and the 5 under construction.

In addition, as part of the Government’s current energy market reforms – the biggest overhaul of the UK sector since privatisation – we recently set out our approach to Contracts for Difference allocation.

This proposes a system of auctions for the more established technologies from the start of the CfD regime including landfill gas, sewage gas and Energy from Waste CHP.

For the less established technologies such as advanced conversion technologies there will be no requirement to allocate CfDs competitively from the beginning but our aim is that these will deploy at levels which enable continued cost reduction to ultimately support cheaper bills and cleaner energy in the long-term.

Those energy from waste technologies which are not eligible for CfDs may apply under the capacity market which we intend in 2014, for delivery of capacity in winter 2018-2019 (subject to state aid approval).

Yet despite the great progress that has been made around 20M tonnes of waste is still going into landfill.

Indeed, the 2012 Bioenergy Strategy showed a potential biomass waste availability in the region of 77 TWh to 2050.

DECC analysis also suggests that new technologies such as gasification could reduce their capital and operating costs by a third to 2050.

This brings me to my second point that in order to take full advance of the potential of energy from waste we need to move to proper models resource efficiency. Creating far less waste in the first place and then ensuring the waste we can’t avoid is used carefully and thoughtfully.

It has been estimated that moving to a more so-called ‘circular UK economy’ could increase the UK’s net exports by more than £20b and reduce business costs by over £50b per year.

Last year, there were an estimated 25M tonnes of Household waste of which 22 per cent went to energy recovery and 15M tonnes of food waste of which 20 per cent (c3M tonnes) was used for Anaerobic Digestion.

Imagine a world where all renewable waste was considered to be a useful resource which delivered local heat through the gas grid or district heating systems, reducing our reliance on fossil fuels and biorefinaries which replace oil to produce ultra-low carbon jet fuel; and renewable materials as well as heat and power.

Already, DECC is playing its part in helping to make this vision a reality by ensuring that innovative projects can lead to commercial success:

The DECC innovation programme has committed £6M to the Bioenergy Sustaining the Future (“BESTF”) competition.

One UK project selected for funding will receive up to €2.5m in grant funding from the scheme.

This project can use a variety of feedstocks including waste to produce renewable gas ready for grid injection helping to use local resources to decarbonise the gas grid.

Government part-funded the Energy Technology Institute £13M waste to gasification demonstration project.

Three projects were selected for the feasibility stage, and we expect one to be funded to a full demonstration project.

This is expected to deliver more reliable, more efficient and more cost effective waste to gasification technology in future.

Lastly, five bioenergy projects have been supported by the Energy Entrepreneurs Fund a £35M fund aimed at helping small businesses demonstrate innovative low carbon technologies.

Over £3.5m of grants have so far been placed with UK companies for energy from waste projects.

These include a grant for Antaco UK Ltd that will enable the industrial scale demonstration of a novel biocoal production technology and support for Yorkshire Water that will demonstrate commercial scale gasification of organic waste to renewable electricity and biogas.

So this Government is not only talking the talk but also walking the walk.

However, before I finish let me make my third point. I want to highlight one technology in particular with the potential to be a game changer –

Heat networks.

I want to urge the waste industry to look to the opportunity of generating heat to supply heat networks.

Supplying heat to a number of buildings or dwellings from a central heat production facility can often be more energy efficient, result in lower energy bills for consumers and deliver greater carbon savings than other types of system.

Heat networks have the potential to transform communities, over-time revolutionising the way we heat our homes, towns and cities.

Currently, 8,000 homes and 500 non-domestic buildings are served by heat networks that are successfully using energy from waste including Sheffield, Nottingham and Shetland.

To take the example of Sheffield, a waste management contract delivers over 100 thousand megawatts of heat to the local university, local authority, hospitals, and private and public sector offices and housing.

But more needs to be done and industry and local government alike face barriers in trying make better use of the heat from energy from waste plants.

Firstly, there are often challenges with establishing heat networks – heat from an energy from waste plant is only useful if there is an actual network to distribute that heat.

Secondly, planning, delays in securing consent and lack of strategic planning to co-locate energy from waste plants with heat customers can be an issue.

Thirdly, the wider policy framework and market for waste – including the growing trend in waste exports to the continent and challenges using commercial and industrial waste in energy from waste plants can pose problems.

Yet despite these challenges, right across the Government, we are determined to press on and deliver.

Yesterday, you will have heard from Defra about the wider policy framework including confirmation that a new call for evidence on waste exports will soon be issued.

I would like to take this opportunity to encourage you to feed your thoughts and experience into this process.

I also hope you will have seen the package of reforms to the Judicial Review system announced earlier this month by the Ministry of Justice that are designed to speed up the running of the JR process.

Last year, DCLG consulted on an updated National Planning Policy on Waste, including energy from waste.

DCLG is currently considering consultation responses including the points raised on planning at the roundtables with a view to publishing the final policy later in the Spring.

For DECC’s part, you have already heard from David Wagstaff that we are making good progress in taking forward the commitments from our 2013 Heat Strategy as well as moving ahead with plans following the establishment of the new Heat Networks Delivery Unit (HNDU) – an innovative support model to help local authorities develop heat networks projects.

The support of the Unit is two-fold – It involves the direct engagement of the Unit’s engineering and commercial experts backed up by £7m funding for Local Authorities for important activities like feasibility studies, heat mapping and master planning.

Already, 2M of funding to 26 local authorities has been announced with 3 of these identifying energy from waste as a potential heat source for their future networks plans.

The Second Round bids are currently being assessed with further announcements to be made in early April.

So watch this space.

This funding support will run until March 2015 and I would encourage you take up the opportunities offered by the Delivery Unit through your Local Authority who is ideally placed to facilitate the development of heat networks by brokering agreements between heat providers, distributors and customers.

In addition, last year we published proposals to expand and improve the non-domestic Renewable Heat Incentive scheme setting out a range of new improvements designed to stimulate considerable growth in the deployment of renewable heating technologies including commercial and industrial energy from waste.

Today I am pleased to confirm that, subject to Parliamentary approval, we are on track to implement these changes from this Spring.

You will have also heard from Colin Church that DECC has published an additional chapter to the Energy from Waste guide.

The principles set out in this document are designed to help with longer term considerations to ensure that energy from waste projects are both consistent with the waste hierarchy as well as delivering our long term objectives for the energy sector.

So, in conclusion, under this historic Coalition government there is real ambition for your sector. We are seeing a rising level of investment, a healthy pipeline of projects and a supportive, cross-Whitehall framework for the energy from waste sector.

Already, the waste market is evolving to meet the longer-term challenges through the penetration of innovative new technologies in the waste market.

But if the sector is to go further we need to, scale up quicker and drive down costs faster.

To do that effectively we must take a collaborative approach.

Conferences like this one are key to that collaboration.

This government is determined to learn as much as it can from industry – we are your partners in growth. You are an integral part of our Long Term Economic Plan and as the UK economy continues to expand the need to develop new solutions to meet the increasing demand for affordable, low carbon energy will continue to grow as well.

Energy from waste has a central role to play as part of this. Let’s rise to that challenge together.

Thank you.

Below is the text of the speech made by Greg Barker to the Cleantech Conference on 13th February 2014.

Innovation is at the heart of our Long-term Economic Plan and the low carbon sector is rich in innovation.

New low carbon technologies are essential to reduce the cost of energy for hard-pressed consumers, lower overall energy consumption, and help us gain a large piece of the massive global market for LCGES.

The Coalition recognises the important role innovation will play in the long-term future of the UK economy leading to new technologies, new jobs and new opportunities.

By targeting our innovation support effectively and fulfilling our innovation goals we could save the UK over £100bn in cost reductions to 2050.

Targeted innovation in energy efficiency alone could lead to savings worth up to £2,500 for each UK household and business up to 2050.

That’s enough to build 14,000 community hospitals, over 5,000 new schools or over 130 Olympic stadiums, and generate UK-based business activity contributing tens of billions of pounds to GDP over the same period.

Recognising the huge potential, this Government has taken the decision to invest in supporting businesses and academics to undertake energy innovation, despite the challenging economic climate over the past few years.

As a result, the UK now has the sixth biggest share of the £3.4 trillion global market for low carbon goods and environmental services. And by driving innovation we are putting in place the right technologies to produce cleaner energy, at an affordable cost to the consumer.

But before I go any further, let me tell you the 3 key points I would like to make today:

Firstly, we have worked hard since 2010 to put in place much of the foundations to unlock low carbon innovation and the development of the smarter, more integrated solutions that will be the lifeblood of a future, affordable energy system.

Secondly, the Coalition isn’t just building on the status quo. We are putting in place the first ever Low Carbon Innovation Strategic Framework, providing our vision for low carbon innovation as part of our long-term economic plan.

Thirdly, although there are many terrific technologies I could choose to expand upon today, I want to highlight our commitment to driving one in particular. One that has the potential to play a revolutionary role in our future energy system – energy storage.

Firstly, this Government is embarking upon the biggest transformation of the UK’s energy system since privatisation.

Over the next 20 to 30 years this will lead to a profound shift from highly centralised fossil fuel burning power plants to a cleaner, low carbon, more distributed, interconnected and smarter energy market.

No-one knows exactly what the future will look like but it is not too great a stretch of the imagination to picture a population transported by electric vehicles, living in remotely-controlled homes, and generating energy from waste materials which can be fed into a local grid.

Already, thanks to recent innovations, such a vision is less futuristic than one might think.

Newcastle has recently started installing 580 electric vehicle charging points across the region as part of its efforts to become the UK’s electric car capital.

The UK is leading the way in smart grid development across the EU.

And, overall, since 2012, over 150 entrepreneurial companies have been provided with grants to support the development of innovative, low carbon technologies through DECC’s £200m innovation programme.

Indeed, I am delighted to see that nine of the 40 companies presenting at this event have been awarded an innovation grant from DECC.

And over 50 companies have been supported through our broadest innovation programme – the Energy Entrepreneurs Fund.

This is a £35m fund to support the development and demonstration of novel, innovative technologies within the energy efficiency, building technologies, power generation and energy storage sectors. Since the fund launched in Autumn 2012, £25m has been awarded in EEF grants to innovative, clean technology companies – the majority being start-ups and SMEs.

They include a whole host of exciting novel technologies including projects such as:

– Kite Power Solutions’ high altitude wind generating system that uses compact, inexpensive kites to capture wind energy with the potential to transform the economics of wind power generation.

– Naked Energy and Natural Technology Developments’ hybrid solar projects which are pioneering affordable, higher performance PV-thermal panels capable of producing both electricity and heat.

– Antaco’s small-scale bio-coal from biowaste production plant which could enable commercial production of biocoal by using a cost effective engineering solution.

– And Econovate who are using low-grade waste paper and cardboard diverted from landfills to create superior construction products.

I encourage you all to see our website for details on how to apply for The Third phase of the Energy Entrepreneurs Fund which opened at end of January and offers up to £2m for projects.

Now let me talk in detail about our low carbon strategic framework.

I am clear about the need to provide long-term certainty to businesses, innovators and investors around future priorities.

For the first time, this Government is putting in place a coherent cross-Whitehall strategy spelling out our long-term energy innovation ambitions.

And today, I can tell you that David Willetts and I have published the Strategic Framework for Low Carbon Technologies.

Developed by 17 organisations comprising the Low Carbon Innovation Coordination Group, the Framework will give greater clarity on where public support for low carbon technologies will be targeted. It will identify the areas that provide the greatest opportunity for the UK to bring down the cost of energy and deliver economic benefits, laying out decision making principles and, importantly, the evidence base that sits behind this.

It will set out core low carbon innovation priorities to 2020 as well as the key technologies that will benefit from public sector innovation worth £1billion to 2015.

Technologies such as carbon capture and storage, nuclear, electricity networks and energy storage.

Heat, offshore wind, marine, buildings, hydrogen, bioenergy, and the industrial sector.

Technologies that can help to bring down energy costs to consumers and reduce our overall energy needs.

Technologies that are capable of building a cleaner, safer energy system for the UK and security of supply for generations to come.

Thirdly, I want to pick out a specific example of Government support for one area of low carbon innovation with the potential to be a real game-changer – energy storage.

Energy storage is set to play a revolutionary role in our future energy system. It has been identified as one of the UK’s current eight ‘great technologies’ with world-leading research capabilities and the potential to support UK growth.

Not only can energy storage support the deployment of renewable heat and electricity generation, especially intermittent renewables such as solar, tidal and wind, as well as electric vehicles and other low carbon technologies.

But by storing electricity generated at times of low demand for use at times of high demand, energy storage technologies can help to maintain the security of our electricity supply.

Overall, energy storage innovation has the potential to save the energy system over £4bn by 2050, and innovation could support the growth of a UK energy storage industry and contribute an estimated £11.5bn to UK GDP by 2050.

Today, I can also announce the final winning project from DECC’s Energy Storage Technology Demonstration Competition: the Viridor-Highview liquid air energy storage demonstration project.

DECC has awarded a contract of over £8m to the partnership of Viridor Waste Management Limited and UK small enterprise Highview Power Storage.

The demonstration project involves the design, construction and testing of a 5MW version of Highview’s liquid air energy storage system to demonstrate its potential to cost-effectively address grid-scale storage needs for the UK’s electricity network.

Storage systems, like the liquid air energy system in the Viridor-Highview project, can help us to make even better use of our intermittent renewable resources. They could also help to reduce energy peak demand to give us greater security of supply, reduce network costs and save money for consumers.

Storage systems could also be used by local communities in more remote areas alongside renewable generation to avoid power cuts.

This new demonstration project builds on the existing work we have already been developing through our two energy storage innovation support competitions.

Since launching in October 2012, the competitions have already awarded more than £7.5m to twenty-two storage projects, including three major technology demonstration projects spanning a wide range of technologies.

These technologies include small-scale battery storage devices for the home, redox flow batteries which could store surplus energy generated at night from wind turbines, and other technologies, including recycled electric vehicle batteries, mechanical flywheels, hydrogen storage and pumped hydro storage.

Thanks to government support, the UK is now in a leading position to provide world-class academic expertise and industrial innovation across all these areas.

So, in conclusion, this Government is delivering a clear framework to support investment for the remainder of the decade. Investment in innovations that are essential to delivering clean, affordable energy for consumers.

But we are to succeed, we must collaborate. Conferences like this one are key to that collaboration, and so I offer my thanks to Eco-Connect for arranging the event; and of course my congratulations to the Viridor-Highview liquid air energy storage demonstration project.

This Government is determined to learn as much as it can from industry and as the UK economy continues to grow the need to develop new solutions to meet the increasing demand for energy has never been more pressing.

Low carbon innovation is at the heart of this.

Below is the text of the speech made by Greg Barker to the 2013 Heat Conference on 27th November 2013.

Hello and thank you very much for inviting me to this excellent event hosted by the CHPA and the Energy Institute.

There are 3 key points I would like to make in my speech today:

Firstly, our genuine commitment to renewable heat and CHP as part of the UK’s competitive, low carbon energy mix.

Secondly, an update on our progress we have made so far on delivering the heat programme and Renewable Heat Incentive.

Thirdly, the need to go even further and raise the level of our ambition, placing the renewable heat sector at the centre of the UK’s drive towards green growth.

To begin with, I wanted to set a little bit of political context.

Since day one of coming into government, we have known that for millions of hardworking people the daily cost of living is one of the greatest worries that they face.

And I don’t need to tell you that right now delivering a better deal for energy consumers is our highest priority.

While it is right that we are looking at how to reduce the cost of energy on consumer bills…

….we all know that the best way to bring down prices is to help people to save energy, ensure fair tariffs and encourage competition.

That is exactly what this Government is doing.

We are working to deliver the Prime Minister’s pledge to ensure that consumers are on the cheapest tariff to suit their needs.

We are backing reforms to make sure that more electricity trading takes place on the open market.

We are putting in place an annual review of the state of competition in the electricity market.

And we are providing bankable certainty for new investors through our energy market reforms which are set to unlock £110 billion of low carbon investment.

To complement EMR, we also we need an explosion in consumer choice…

…and I have spoken in the past of my vision of an energy sector of the big 60,000 that rise to challenge the Big 6 energy companies.

A vision where companies, communities, public sector and third sector organisations grab the opportunity to generate their own energy…

…and start to export their excess on a competitive, commercial basis.

This is an ambition that happily unites the drive to get a better deal for hard pressed consumers with ambitions for a greener, more local energy sector.

I want to see CHP and renewable heat at the heart of this.

But to do this we also need to do even more to cut red tape and eradicate any remaining over complicated or overlapping government policy that stands in the way.

We also need a long-term approach and some of the big questions that we are looking at today give a great sense of the scope of the issue including:

What role there will be for house-by-house solutions like heat pumps, for local solutions like heat networks, or for national solutions involving low carbon gas in the existing grid?

How quickly does the transformation need to happen?

What does this means for customers and who will pay for it?

These are not all questions that we can answer today – although I am sure lots of you will have opinions and judging by the stellar list of speakers, I am sure lots of constructive discussion will take place.

Make no mistake, I am clear that we need to get on with delivering what we can deliver now.

But we must extend our horizon beyond the here and now and plan for the longer term.

And that is exactly what we have been doing in Government.

Planning – not procrastinating!

Which brings me to my second point…

…I am very keen to give you an update report so that you can judge for yourselves what progress we have made.

Let me start back in 2009 when the Conservative Party was in opposition.

We produced two documents about energy policy, entitled The Low Carbon Economy and Rebuilding Security.

In both documents we stressed how important heat is – and how neglected it had been in policy terms up until then.

The 2010 Coalition Manifesto had more pledges in the area of energy and climate change than in any other area…

…and one of the first things we did that summer…

…despite our need to find immediate cost-cutting measures to balance the books…..

…..was to commit to launching a Renewable Heat Incentive – the first scheme of its kind in the world.

In government we have made great progress –

In 2012, we published a comprehensive strategy document entitled The Future of Heating: A Strategic Framework – kicking off a consultation period in which many of you will have taken part.

Exactly twelve months later, in March this year, we published the follow up document ‘The Future of Heating: Meeting the Challenge’.

For those of you who like musical or sporting analogies, this could have been our difficult second album, or our struggling second season.

But it wasn’t.

If anything, I think it went down even better than our first document.

Not least because it has a set of specific commitments and actions – a plan for delivery.

And we are now delivering that.

Nine months on, I am delighted to say that I can now give a really positive progress report:

We have registered over 3,500 applications for the RHI so far, with the 2,700 accredited applications representing 547 MW of installed capacity and half a terawatt hour of renewable heat already paid for.

The Renewable Heat Premium Payment has also supported over 17,000 renewable heat installations, with several thousands more expected this year in private and social housing up and down the country.

On industrial heat, we are on track to deliver on our commitments to:

Work with BIS to create long-term decarbonisation ‘roadmaps’ for the six most heat-intensive industrial sectors.

Develop a bespoke policy to support new, good quality, natural gas fire CHP.

And support the development of industrial CCS.

On heat networks, we have:

– Established a £6 million Heat Network Delivery Unit and provided £1.5 million for the first tranche of funding.

– And I can also announce today that the second round is now open. The deadline for applications is the 31st January 2014.

We have committed to looking at providing extra financial incentives for renewable heat networks via the RHI, as part of the 2014 review.

And to help set the scope of the review more widely, we are about to exploit the power of the social media by launching an on-line discussion about priorities for the review.

We have worked to endorse an industry-led consumer protection scheme for heat network users.

We have consulted on options for implementing heat metering and plan to publish our response in the coming weeks.

We have started work with the Low Carbon Innovation Coordination Group.

And finally, on heat networks, I am delighted to announce that that the Green Investment Bank, encouraged by the formation of the Heat Network Delivery Unit and the flood of applications, has decided to look more actively at heat network opportunities.

The bank will be liaising closely with the Unit, and is looking for refinance and new-build projects with both the public and private sectors.

Representatives from the Green Investment Bank are here today and would be keen to hear from any organisation with heat network development plans.

On heat for buildings, we have:

– Extended the Renewable Heat Premium Payment scheme.

– Announced that we will use the 2014 RHI review to examine the case for other renewable fuels such as sustainable, heating-only bioliquids, biopropane injection, gas driven heat pumps and reversible air-to-air heat pumps.

– Introduced a voucher scheme and green apprenticeships for installer training, with nearly 800 existing engineers already registering.

– Launched a Consumer Guide to low carbon heating technologies.

– And plan to host major stakeholder event next week to discuss options for transforming the way we heat our homes in the coming decades.

On grids and infrastructure we:

– Are examining the strategic interaction between lower carbon electricity generation and heat production.

– Have announced the successful Phase 2 demonstration projects for its Advanced Heat Storage competition.

So on balance – as this report card shows – I am very proud of what we’ve achieved.

However, I know we can do even better.

It is vital that we get the level of support right so that the market can invest with confidence….

….cost reductions can be achieved and the market can grow sustainably.

That’s why we’ve been gathering new data on the assumptions used to set tariffs…

…and are using this in conjunction with evidence from the industry to develop a more appropriate set of tariffs for a wider range of technologies.

I’ll be confirming these new tariff levels shortly alongside some other policy improvements for the RHI…

…which I’m sure will be a boost for the renewable heating industry.

We also need to do far more across the board to integrate our new policies that help consumers produce their own renewable energy.

We need to make sure that the incentives to help people generate renewable heat work hand in glove with the range of new Green Deal energy efficiency measures – which help hardworking consumers keep their homes warmer for less and a Feed in Tariff scheme that helps make small scale renewables affordable for householders.

Expect more on this in the coming months.

So in conclusion, I hope that I have reassured you of the good progress we are making and of our ambition to go even further.

After three years of this government, new low carbon technologies are going into homes…

…landlords are installing renewable heating systems alongside energy efficiency measures….

…biomass CHP plants are being built…

…local authorities are working up detailed plans for heat networks…

….and of course we have created a dedicated new unit, the Heat Network Delivery Unit, to help make this happen.

Today I have also announced the launch of the second round for heat network bids into the Unit…

…the Green Investment Bank decision to prioritise heat network projects…

…and the use of social media to scope the 2014 RHI review.

This is all great news.

But I know there is still more to be done.

We will continue working to unleash unprecedented competition and consumer choice in a way that allows us to affordably meet our vital, legally binding climate change targets.

We can build the Big 60,000 with renewable heat and CHP at the centre.

It requires vision, ambition and a coherent strategy to deliver it.

Government must continue to be a genuine partner with industry.

The prize is growth. Green growth.

The prize is local jobs and, SMEs supply chains to help the UK to compete in the global race.

The prize is a better deal and peace of mind for worried consumers…

…and a cleaner, greener, safer environment and energy security for decades to come.

Thank you.

 

 

Below is the text of the speech made by the UK Minister for Energy and Climate Change, Gregory Barker, in Hyderabad in India on 2nd July 2013.

I am delighted to be here in Hyderabad.

I have visited India many times. Last time in February with Prime Minister Cameron…

Who came with the largest business delegation any British PM has taken overseas.

But this is my first time in Hyderabad. A beautiful city, rich culture. Have been hearing about the Nizam and the long proud history of the region…

Not to mention the fantastic cuisine, with your world-famous Hyderabadi biryani…

But I’m here to look forward, not back. You have a dynamic, fast-growing business sector. With strong UK links. I want to build on that.

Before I start, I should express my deep shock and sorrow at the devastating floods in Uttarakhand. I understand that thousands are still unaccounted for. And I express the British Government’s deepest sympathies to those who have lost loved ones in this tragedy.

In my speech today I would like to tackle head-on one myth.

Which is, put simply, the notion that low-carbon development is still just too expensive. That sustainable development is a nice-to-have but that it comes at too high a price. That resource efficiency costs too much.

That view is out of date. The fact is, the world has changed…

The economics of sustainability have moved on…

Not only can genuinely sustainable development be affordable. If approached in a business-like way, with real financial rigour, it can actually compete – and win – against the old economy alternative.

So today, I really want to develop just two key points.

First, that resource efficient low-carbon development should be the foundation of any successful globally-competitive economy.

And second, that as the world becomes more resource-constrained…

…as markets expand and successful competitive economies become more resilient, and less dependent on expensive, volatile imported fossil fuels…

…we want to deepen our partnership with India. We want to join together…

…and work together – businesses, policy-makers, scientists…

…to win together in this new global race.

The myth

Let’s first explore this myth, and start by looking at the context here in India.

By 2030 India will be the largest middle class consumer market in the world.

Demand for goods will rise across India – in cities, and in rural areas.

This rise in human prosperity is a colossal achievement.

Lifting hundreds of millions out of poverty… improving the welfare and life chances of a whole generation… it is a wonderful thing and should be celebrated.

But this deserved success comes at a price. It will put increasing pressure on scarce resources.

India already feeds 17% of the earth’s population with only 4% of the world’s arable land and 3% of the fresh water. Imagine how much more difficult this will be in 2030….

…..and as dangerous man-made climate change starts to impact monsoon patterns, water tables, temperatures and sea levels.

I totally understand and support the absolute social and political imperative of economic growth.

However, I also know that, until now, to many people, policies that tackle climate change…

…while serving a noble cause, and given the tiny emissions per head of the Indian population…

…can seem like a long-term luxury that developing economies can ill-afford.

The old last century model of economic development heavily relied on imported fossil fuels. You need electricity to power factories, shops and homes. You need fuel to freight goods and transport people around.

All of this produces carbon emissions, which cause global warming.

Thus, goes the argument, there is a direct clash between two imperatives – to allow an economy to grow, and to limit carbon emissions.

This explains why there is a deeply held myth out there.

…The myth that low-carbon means a break on economic growth, the myth that caring for the environment means leaving millions in poverty.

…The myth that resource-efficiency means a break on aspiration for hundreds of millions of young people.

…The myth that a green economy is a break on competitiveness for India as a whole.

I am here today to make the case for an alternative future.

Resource efficiency = growth

I would like to advance three arguments, based partly on our experience in Britain. Because many of the arguments you hear in India are echoed in the UK.

The first is all about being careful to use our finite and increasingly expensive resources prudently.

Given the massive growth in global population, resource constraints and resource scarcity increasingly worry large corporations the world over.

In the twenty first century, resource efficiency is not an optional extra for businesses, but an indispensable part of being globally competitive and economically resilient.

By resource efficiency, I mean using fewer resources to produce more output.

That means less water, fewer raw materials, and less energy. And it has a long and proud history here in India. It is the essence of your tradition of ‘frugal development’.

Just yesterday I was being told about Gujarati cement manufacturers, who – because they lack abundant supplies of water and because traditional energy costs are rising – are some of the most resource-efficient in the world.

And I understand here in Hyderabad Dr Reddy’s Laboratories harvest and recycle water on site; have streamlined their pharmaceutical manufacturing; and reduced their own energy usage. All this while maintaining, and indeed improving, their profitability on a global turnover of over $2 billion.

In the UK we are playing catch-up on resource efficiency. But we are catching up fast.

Our construction sector is a prime example.

…Our iconic Olympics stadium used less than half the usual amount of steel, not least by using recycled content – including roof support made from old gas pipes.

…The Olympic VeloPark also used less steel by being constructed largely from sustainable timber – and has cut water consumption by over three quarters by harvesting rainwater from its dramatic sloping roof.

…Bradford University’s new student accommodation recently won a European prize for minimising its carbon footprint and energy usage, while costing twenty five percent less than a ‘normal’ building.

I don’t wish to labour this point. But I would like to quote the results of a recent study by Atkins, the construction company and supported by our High Commission here. Which said that, simply by using more sustainable urban planning practices, the savings possible here in India are huge. Sustainable urban planning can:

…Use a third less land …Require around half the funds to build; …And reduce carbon emissions by 30%

It is clear, therefore, that resource efficient practices make good business sense.

Opening up new markets

My second argument for a green model of growth is slightly different. Resource efficiency is often thought of as ‘doing existing things better’. Of just squeezing more juice out of the lemon. Well that, of course, is a good thing.

But the new sustainable economics is also about ‘doing new things’. This is the exciting, innovative side of the green economy.

By creating new models and products, companies around the world are also creating new markets. And contributing to much-needed growth.

I’ll give you a few examples from the UK.

Artemis, a small company, was created from one of the UK’s many world-beating universities. It invented a new hydraulic system for use in wind turbines.

The success of this system led to its purchase by Mitsubishi – incidentally, a good example of the importance of having an open economy which welcomes foreign investment.

Earlier this year I visited Romag, a British solar panel manufacturer. I know Andhra Pradesh has huge potential for solar power generation.

Romag is producing innovative solar panels, which self-clean so they can work in dusty desert environments like Saudi Arabia. And, I’m sure, Gujarat.

Meanwhile, another UK company Highview is developing an energy storage solution which uses excess energy to chill air, which – when warmed – drives a wind turbine.

The net result of such innovation is to open up a new market – for solar power at scale and which works with energy demand peaks – which simply did not exist before.

You might argue that this is just the job of the private sector… that Government doesn’t have a role here.

But I would argue that Government has an important role, to set the framework within which this innovation can take place, and these new markets can be created.

That’s why we have taken radical steps back in the UK:

We have launched a completely new energy efficiency market called the Green Deal…

…which allows house-owners to get energy-saving measures with no up-front cost, by paying back through expected savings in their energy bills.

We have ambitious plans to roll out smart meters to every household in the UK…

…which will spur a whole new market of appliances and technologies to take advantage of the new, ‘smart’, grid…

…and we are legislating to create a new market in electricity: to allow large energy efficiency projects to compete for the first time with new power stations, as an alternative way of meeting new demand – by reducing the need for electricity rather than just adding new sources of supply.

Winning the global race – together

But no country can – or should – do this on its own.

I’ve been hearing during this trip some excellent Indian examples of ‘green’ innovations.

NextGen, for example – which has developed a new biogas fuel system which has the potential to reduce some of the 12 billion litres of diesel and 6 million tonnes of CO2 produced by the 400,000 telecom towers across India. Not to mention saving huge costs.

This brings me to my third point. Which is that we – all of us – are in a global race, as the old paradigms of ‘developed’ and ‘developing’ start to break down.

And Britain and India are uniquely-placed to partner together on this agenda.

Not only do we have shared values, shared language, and a genius for innovation.

We also have the political will. I’ve already mentioned earlier Prime Minister David Cameron’s visit to India last February…

…I know that he is totally committed to a stronger British-Indian relationship…

… A relationship of partners and equals, a relationship which plays to our mutual strengths and delivers mutual benefits.

We can already see this happening on the business side.

Marks and Spencer, for example, has teamed up with farmers here in Andhra Pradesh to create a new ‘sustainable cotton’ initiative. This gives farmers three times the price of their cotton, and twice the yield, for 25% less cost of production. And, importantly, using less water.

This collaboration between India and Britain also extends to exciting new developments in science.

A consortium of British and Indian universities, including Imperial College and Newcastle University and IITs in Delhi and Mumbai, are producing world-leading research into new battery storage and fuel cells.

In recognition of the need to put even more effort into driving forward these developments, last year the Prime Minister gave me a further important role in government. As ‘Minister for Business Engagement with India’ – the first, and only, Minister of this sort designated to any country, in the British Government.

A reflection of the huge importance the British Government places on the business relationship with India.

But we have only just begun to scratch the surface of the potential of this relationship.

And I am determined to drive forward UK/India business cooperation…

… From examples such as the ones I’ve mentioned already…

… To new spheres of cooperation, for example between solar firms here in AP and our new National Solar Centre in Britain…

….To the urban planners in your cities in Hyderabad and our Future Cities innovation centre, just established in London

…To huge, low carbon, resource efficient, infrastructure opportunities, such as the Bangalore Mumbai Economic Corridor which we are working with the Indian government to develop, and which could be a beacon around the world to attract billions of rupees of investment into India. And a model for similar corridors elsewhere in India.

Conclusion

Ladies and gentlemen, there is no contradiction between fast growth and a green, resource-efficient model of development.

Done right, such development will not hamper inclusive economic growth. It will drive it. And it will give even more of those in India the exciting development opportunities they want and deserve.

I leave you with one thought. We have a relatively new Deputy High Commission here in Hyderabad, with a Deputy High Commissioner well plugged in to the UK system and a dynamic team.

They are extremely keen to help you find partners in the UK to develop your business further.

The UK has a lot to offer…

…world-leading manufacturers and expertise in the green economy…

…cutting-edge businesses in sustainable urban planning and renewable energy…

…the financial muscle of the City of London, with its huge associated professional services industry

…and a Government committed to supporting trade and investment flows in both directions with India.

I would encourage you – all of you – to stay in regular contact with our Deputy High Commission.

The prize, as I hope I’ve set out in today’s speech, is a big one.

A world with a burgeoning low-carbon sector…

…which helps us meet our twin goals of economic growth and environmental sustainability…

…is resilient to external price shocks and less dependent on expensive imported fossil fuels…

…a world which is more efficient, less wasteful and more competitive…

A world, in short, which we pass on with pride to future generations.

Thank you.

Below is the text of the speech made by the Energy Minister, Gregory Barker, on 4th February 2013.

It was a real pleasure to welcome the Prime Minister, the Rt. Hon. David Cameron here and to hear his ringing endorsement of the UK Energy Efficiency Mission and I share his passion and commitment.

We want the UK to be the most energy efficient economy in Europe, not because it is nice to have but because it is an essential part of how the UK is going to compete in the global race, how we are going to have competitive onshore manufacturing and rebuild our industrial base.

This is all about competition. This is all about growing efficiency, not just in the energy sector but as part of a holistic approach to the efficiency of the wider economy.

But there is a problem that the Prime Minister put his finger on, and that we hope to deal with this afternoon. The fact of the matter is that we have a host of policies; arguably we even have too many policies dealing with energy efficiency. Yet despite that, historically, energy efficiency has been ignored, relegated to second tier status by successive governments for decades. And that has to change.

I am very proud that this Coalition Government has actually recognised that fact and one of the first things that I did coming into government was to ensure that energy efficiency was actually properly recognised in the architecture of the Department of Energy & Climate Change.

It was extraordinary to me to get there and find that we had an Office for the Deployment of Renewables; that there was an Office for New Nuclear; that there is obviously a big oil and gas office there. But energy efficiency was dispersed piecemeal throughout the Department and there was nobody actually at the top table speaking up for energy efficiency alongside the other key elements of energy policy and the energy future.

Now under David Purdy we have the Energy Efficiency Deployment Office, at last recognised within DECC as a vital part of our future policy framework. Within that I have also got to pay tribute to Tracy Vegro who has been responsible for deploying the Green Deal, the most transformational, consumer-facing energy efficiency policy we have ever tried and which will, unlike other markets in the past, be bringing in not a monopoly provider or a monopoly contract but a whole host of new market entrants; opening up choice not just to people with big wallets but to people in the lowest docile of the economy; bringing choice to the fuel poor; bringing much needed competition to the sector to drive down cost.

But there is more to energy efficiency than just the Green Deal, whether that is the Green Deal for consumers or businesses. If you look at the shopping list of our policies, as you will know, we also have the CRC, we have enhanced capital allowances, there are climate change agreements, and there is – although we still need to see a much stronger price signal – an emissions trading scheme at the EU level.

I have mentioned the Green Deal, I have also mentioned the £1.3 billion of subsidy which comes from the Energy Company Obligation – ECO – a vital partner to the Green Deal. There is the Smart Meters Programme which is going to transform the customer relationship with electricity. There is Electricity Market Reform (EMR) and I am currently serving on the Committee which is taking this through Parliament.

We are absolutely determined that future energy markets will actually see energy efficiency recognised within EMR, we see energy efficiency always being the first policy call of choice when it is the cheapest option and we are proactively exploring the way which we can reflect that in the new architecture of the UK electricity market. That means not just electricity demand reduction, it also means demand response which will completely change the way that consumers will interact with their electricity provider.

We have issued strengthen guidance for local authorities under the Home Energy Conservation Act and we have of course our own commitments as a Government that is proud to be walking the walk. We met our 10% target on reducing the energy consumption of the central Government’s real estate – in fact we smashed through it and now we are on track to deliver a 25% cut by 2015 – a really big, meaningful reduction.

But exactly as the Prime Minister said, there is a recognition that the sum of the parts adds up to considerably more than the whole. And the idea for a National Energy Efficiency Mission, to pull all these strands together, to pull in all the key participants in the energy efficiency economy, was actually something that really came to me when I was having a discussion with Andrew Liveris, the global CEO of the Dow Chemical Company, at the Olympics business event.

I had been an admirer of Andrew’s for some time after reading his book, ‘Make it in America’. Where he says is that it is no coincidence that those countries which are resurgent in terms of manufacturing and are increasing their global share of manufactured goods worldwide, are also those countries with an increasing focus on energy efficiency and renewable energy. Actually, the two represent two sides of the same coin and that actually here is a pro business, pro-entrepreneurial, pro-innovation, pro-manufacturing, low carbon agenda which is a huge opportunity we simply cannot afford to miss.

I was discussing this with Andrew and in the course of our conversation, I went through that shopping list of efficiency policies which I previously mentioned and he had no idea. Not only did he not know about the Green Deal, he did not know about the Green Investment Bank, he did not know about the measures that we are putting in place to drive the ESCO market, he did not know about the priority that efficiency has in our ring-fenced science research and development programme, or the fantastic work that the TSB is doing.

There is so much to this ambitious, exciting agenda – but if we are honest, we are just not telling the story effectively. But in order to get it out there, in order to pull it together, we need that backing from the very top of Government and that is why it was absolutely essential that the Prime Minister was here, to launch that mission and articulate this ambition to make the UK the most energy efficiency economy in Europe and to make clear the absolute connection between reducing our carbon emissions and winning that global race that he so frequently refers to.

So we are unapologetic in saying that energy efficiency is a win-win agenda. There is a lot more we need to do to achieve our goals and over the course of the afternoon I hope we can explore in the working groups some new solutions of how we can pull this all together. I want to get maximum bang for British industry buck, maximum bang for the consumer, make sure that those benefits that come with energy efficiency actually cascade down, right the way through to peoples bills.

This is a bold, pro growth agenda and working together we can make it happen.