2011 will be a year of mixed fortunes across the various renewable energy technologies with major growth expected for some, steady progress for others and even potential decline in some areas.
The reasons for these trends are varied and many factors could change in the coming year with the Electricity Market Reform paper due for publication, a fresh announcement on the government's support mechanisms expected, as well as progress in global economic recovery uncertain. However, as it stands, the outlook across the renewable energy sector looks positive particularly in the context of the wider economic challenges.
Solar - a rising star
The big story in 2011 will be the birth and rapid growth of the UK Solar sector. There are already 18 German-based solar companies who have set up their operations in the UK, capitalizing on the Feed-In-Tariff introduced in April last year. This is set to grow further as skills, experience and technology are brought in from a maturing German solar market with Milton Keynes shaping up to be a solar 'centre of excellence'.
In terms of employment figures, estimates vary wildly according to different sources but I believe anything from 20,000 to 100,000 jobs will be created by the solar sector in the next 10 years. 2011 will see a surge in demand for experienced solar engineers, installers, project developers and business developers.
Employment booming in Offshore wind
According to RenewableUK's recent report ‘Working for a Green Britain', growth in the Offshore Wind sector grew by 91 per cent between 2008 and 2010 as new projects were commissioned, construction phases began and development started on Round 2.5 and 3 projects across UK waters.
These projects will see the UK further establish itself as a global leader in offshore wind, as well as continue to attract overseas companies looking for our research and development capabilities at EMEC for their multi megawatt offshore wind turbines. Already Siemens, Gamesa, Mitsubishi and others have intentions to set up significant bases in the UK and as a result there will be huge demand for experienced, professional engineers to engage in the conceptual design, prototyping and testing of large scale offshore machines. In total, we expect over 500 jobs to be created in the next 12 months for these R&D roles. Whether or not this will ultimately lead to 'mass manufacturing' of turbine parts in the UK is still a point of debate, particularly with the Far East now being considered as a manufacturing hub. But it's the start the government were aiming for and we now need to grasp the opportunity and switch our best minds to the task through cross skilling and specialist training.
Small scale for onshore wind
In recent times, onshore wind has been somewhat left out of the lime light in favour of offshore operations, but this leaves the door open for smaller developers to capitalise on the gap left in the market. Growth in jobs in this part of the sector will not progress at the pace it has for the last five years; however, we predict the market will grow for smaller schemes as farmers, landowners and communities capitalise on the feed in tariff and the absence of the larger utility developers. In onshore wind there will be marginal growth but, potentially, a fair bit of movement as smaller developers set up and grow and the focus shifts from large scale onshore schemes to localized, collaborative projects.
Marine & biomass
The marine sector will also see some growth in 2011, mainly via the development of Scottish projects licensed in 2010 by The Crown Estate. Manufacturing in the marine sector however is unlikely to make significant gains. Uncertainty remains over how the marine sector will be supported financially, either through ROCs or a new form of Feed-in Tariff, and this uncertainty will make investors cautious.
Biomass appears to be stuck in a state of stagnation and may see a contraction in job numbers. There are various high profile projects that have been set back, such as the Dundee Harbour Biomass plan where further air quality testing is required, and there are others awaiting decisions. Also, where government policy and initiatives have seen growth in onshore and offshore wind, marine and now solar industries, they seem reluctant to provide the same support for the development of the biomass market. Without intervention this sector will continue to struggle in 2011, particularly as it competes with other highly incentivised sectors.
Smart grids lead the Niche sectors
Finally there are various niche areas of the renewable sector that I expect to see some employment growth such as the fuel cell sector, but these will be limited in numbers while funding and finance in global markets continues to be hard to come by. The most exciting of these niche sectors and the one most likely to attract financial impetus is 'smart grids', an area where the UK is showing leadership and strong technological development. However, there is stiff competition emerging from other countries, particularly Western Europe and the Far East, which the UK needs to counter via further investment in research and development projects as well as recruitment and training schemes.
A word of warning
For the renewable industry's largest sector, wind, and its upcoming prodige, solar, much of the forecasted growth depends on the outcome of the government's upcoming FIT review, announced this week by the UK's Energy and Climate Change Secretary Chris Hulne.
The review has sent a shock wave through the solar and wind sectors, with investors now uncertain if the industry will deliver the returns that were originally promised. For example, any solar array over 50kw will now be under scrutiny, so it seems the concerns are directed towards larger scale operations in this sector.
The new coalition government, who say they have 'inherited the problem' even though they were part of the voting in process, are concerned that FITs, originally designed for domestic renewable generation, are going to be absorbed by large scale renewable projects such as solar farms, or large scale onshore wind operations. I have always found this argument a bit difficult to swallow. Why create a feed-in tariff rate for systems up to 5MW unless you're expecting large scale ground-mounted arrays? With regards to solar, my belief is they are attacking 'large scale' because they believe it is too expensive.
These changes also apply to the medium scale wind sector, whose admittedly rather archaic FIT scheme is also under review - both investment and jobs are now under threat as the sector holds its breath. I really think the FIT planning structure demonstrates a lack of joined up thinking. The FIT's were launched in April 2010 with a planned review in 2013. This left just three years development time for projects to benefit from FITs before the review. For smaller scale solar and wind projects that can be up and running in six months this is fine. However, medium scale wind developments with the associated feasibility studies, planning headaches and grid connection challenges, let alone the construction phase, take three years of more to complete, meaning the FIT window was never really 'fit' for purpose.
My view is the FIT review should have been scheduled for at least six years after the launch date to give medium scale wind projects the chance to secure investment and get off the ground. Thankfully the government has decided to call the review earlier than the original 2013 date so we should know more by the end of 2011.
Tom Hopkinson is the managing director at green recruitment specialist Taylor Hopkinson Associates
