Waving Farewell to Coal: a Case for Renewable Tech Investment

By Dr Gareth Stockman, Chief Executive Officer, Marine Power Systems (MPS)

Towards the end of last month I heard the news that the UK National Grid had provided Britain with its first 24 hours of coal-free energy since the Industrial Revolution. News of a brief but momentous break from this carbon-based energy source was delivered, rather coincidentally, on the eve of World Environment Day and rightly hailed by environmental leaders as a ‘watershed’ moment. For MPS – based in Swansea; a city that was once a major exporter of coal in Wales – we feel the shift between past and future energy systems all the more keenly.

As with many other towns and cities in the UK, coal was a gateway to enterprise and economic prosperity. For Swansea, it was a critical component of the copper smelting industry that established itself here. However, I would argue it was actually Swansea’s access to the ocean that truly enabled it to flourish. Swansea Bay, offering safe anchorage and one of the highest tidal ranges in the world, became a bustling port. The bay and Bristol Channel provided quick access to the South West of the UK as well as further afield. By the end of the 19th century, the city was forced to expand its docks to cope with traffic and size of ships reaching the harbour, delivering copper ore and exporting coal.

Over 200 years on and Swansea Bay is still a gateway to innovation. The very same tidal ranges are breathing life into new forms of energy generation such as the government backed Swansea Bay Tidal Lagoon, while the recent Swansea Bay City Region Deal has pledged to mobilise £1.3bn in a host of low carbon and sustainable initiatives along the south Wales coast.

In countries across the world the renewables revolution is, it seems, in full swing. On 6th April, a report from the UN Environment Programme (UNEP) and Bloomberg New Energy Finance (BNEF) showed that an extra 138.5GW of renewable energy capacity was installed in 2016, up 8% on 2015 figures. This is equivalent to 55% of all the generating capacity added globally in the same year.

Casting my mind back to the UK’s first 24 hours of coal-free power (and the demise of coal as an energy source), it was interesting to read in this UNEP report that investment in new renewables was roughly double that of fossil fuel generation in 2016 for the fifth successive year, with added generating capacity roughly equal to that of the world’s 16 largest power producing facilities combined.

It hasn’t been plain sailing but perhaps we’re beginning to see years of early investment in renewable energy pay off. Certainly the solar and wind sectors have witnessed advances which only two decades ago would by many have been thought of (at best) highly unlikely or (at worst) impossible. Only last month, Danish offshore wind energy developer Dong announced it would be building the first offshore wind-farm in Germany entirely subsidy free. As I mentioned in my April blog, the Danish invested heavily in their wind industry and are now a leader in the sector which is actually matching conventional forms of energy on price. David Hostert, lead wind energy analyst at Bloomberg New Energy Finance described this extraordinary event as a ‘moon-landing moment.’

So are these dramatic drops in the LCOE driven by increased investment? The UNEP report states that despite the overall rise in renewable generating capacity in 2016, total global investment in renewables fell by 23%. Attributed partly to a slowdown in investment in countries like China and Japan, the report noted that due to an overall reduction in costs, ‘the average dollar capital expenditure per MW (was) down by more than 10% for solar PV, on and offshore wind, thereby improving the competitiveness of these technologies.’

But investment wasn’t down everywhere. Overall, Europe enjoyed a 3% increase in investment in renewables year on year (to $59.8 billion). The UK is leading the EU’s investment total on $24 billion in 2016, followed by Germany on $13.2 billion. As the team at Edie state, the UK’s drive towards a low-carbon economy is increasingly being reflected on the international stage as record levels of renewables were installed last year.

The UK are certainly enjoying the benefits from the growth in this sector. New stats from the Office of National Statistics (ONS) reveals that an estimated 234,000 full-time employees now work directly in the renewables industry in the UK – nearly a quarter of a million people. It generated £43.1 billion in turnover in 2016. Within the marine energy sector, major growth is forecast for 2017 providing the right market and development incentives are provided.

We stand on the brink of an energy based revolution. News stories – be they about coal-free power or record-breaking renewable energy prices – show us that progress has been made. But it must continue.

To maintain this upward trend, investment from both government and private sources needs to be directed towards innovation. With investment comes innovation. With innovation comes jobs. New areas of renewable energy generation such as wave power can follow in the footsteps of more mature renewable technologies like solar and wind. Guaranteed to add to the economic and environmental benefits, the growth of the renewable tech industry is only to be encouraged and supported. Only this way will coal be consigned to the pages of history; replaced instead by clean, reliable and affordable renewable energy from the sun, wind and waves across the globe.