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Sustainability Group backs plan for Affordable Energy

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Sustainability Group backs plan for Affordable Energy



 

The Isle of Man is in urgent need of affordable energy, which is both sustainable and provides long-term security.

 That was the clear message that came out of a specially convened meeting of the IOM Chamber of Commerce Business Sustainability Group, once again sponsored by Conister Bank.

 The event held on 14th July at the iMuseum, attended by a broad cross-section of the Island’s business community, agreed that a clear strategy should now be put forward to the main Chamber of Commerce Board, to help shape the Government’s future energy policy.

 Recognising that it would be necessary to carry out a proper energy audit to help influence future decision-making, IOM Business Sustainability Chair Ralph Peake said:

“We can’t do anything without data, but what we can do today is realise that we all need affordable, sustainable energy – then start educating our staff, our businesses and the public accordingly.”

 An entirely different landscape

The meeting centred on a panel discussion featuring Andrew Langan-Newton, Leader of the Isle of Man Green Party; Julie Erskine of 3CO whose company assists the construction industry with procedures around energy-efficient homes on the Isle of Man; and Simon Sheath, KPMG’s ESG Consultant for the Crown Dependencies.

Subjects covered everything from the need to provide better energy-focussed education, how to succeed with renewable energy planning applications and price comparisons between renewable energy and fossil fuels. 

With the emphasis on affordability and energy efficiency, Ralph stressed the importance of the business community speaking with a united voice to the public and Government.  

Forecasting that the Island would be witnessing “an entirely different landscape” regarding renewable energy over the next six months, he declared that despite previous false starts, the Government had given the green light to looking at a new feasibility model involving natural resources, like wind and solar. This latest study would be completed by October 2022 for Government to consider.  

 “I know that the modelling is correct to provide the outcomes we want. Once we have the model, then we can look at the details about whether it is onshore, offshore etc,” said Ralph, adding there that needed to be more consistent affordable energy for businesses and consumers, which people would support.   

In cost terms, he said the current price of offshore wind was 3.7p/kWh a kwh and 4.7p/kWh for onshore wind. This compared favourably with the current cost of between 5.0-5.5p to generate the same amount of energy via gas. “It is clear that it is a lot cheaper to generate power from renewable energy sources than from gas,” he said.

A great opportunity

He said the best piece of business the IOM Government had done for many years was securing a 12-mile exclusion around the Island.

He said BP currently paid £231m a year for an adjacent area of water off Anglesey which represented 20% of their seabed. “The area we currently have licence for would generate £80m a year,” he said. 

The UK currently annually paid energy providers £37.85 per MW for offshore wind, £46 per MW for onshore and £178 per MW for tidal.  “This is a great opportunity we have,” he said.  

Building on the theme that the Government should be encouraging energy companies to relocate to the Island, delegates said that the Isle of Man had “abundant” natural resources to generate our own electricity, which weren’t reliant on the Grid, thereby taking pressure off Government.  

To prepare for a future that embraced renewable energy, it was agreed that the UCM and other institutions would need to play a big part in accommodating higher levels of training.

As Andrew Langan Newton explained: “It would be good to have institutions that cross pollinate expertise with businesses. There are opportunities with UCM and other places on the Isle of Man. These should be prioritised.”

He warned that whilst the abundance of natural energy on the Island offered great lifestyle opportunities, the Island wasn’t keeping pace with other countries. “The sky’s the limit and we are missing out,” he said.

He revealed that, if the Island was to become sustainable through renewables, about 70% of energy would need to be wind-based and around 30% solar. “We know what we need to do, but we are playing catch up.”  He admitted that embarking on a clean energy policy would take GDP out of business, but this would still be beneficial because prices went down once fixed costs were covered, making renewable energy deflationary. “Energy intensive businesses have a real opportunity to really lower their costs. We are hedging against future price volatility. We should have started years ago.  But that doesn’t mean we shouldn’t start. Let’s pick up a shovel and start digging,” he ventured.

 Importance of credible data

 Nevertheless, the meeting heard that there was considerable resistance to renewable energy planning applications, especially for onshore wind.  

 Andrew said it was crucial to produce credible data to win the renewable argument. People needed to be shown economic statistics, showing how it would benefit them in very clear ways – such as cheaper end user prices, reducing pollution and overall community benefit.   

 He said the Island had the capacity to generate up to 150 MW of wind and 50MW of solar in areas between Bradda and South Barrule, towards Snaefell and Jurby in the north. The current Island-wide requirement was around 80 MW, so the capacity would be double the current requirement. But he pointed out that greater reserves would be required in future, as the economy moved towards a more sustainable energy environment.  

 “We drive past the power station at Pulrose and we just accept it.  Why not put up a 500 kw wind turbine in the north of the island and let people drive up and look at it and get used to it. That would be beneficial,” he suggested. 

 He also disclosed that there was currently provision in the IOM Electricity Act to allow private operators to enter the market. It would be more practical to become decentralised “given that you don’t need a power station when you could just put up a solar panel on the roof,” he said, adding that the introduction of a smart grid would encourage private householders to either pay for or donate energy back to the grid.

 Regulation is needed

 With an eye to the future, he said it was irresponsible to keep building houses that were currently outdated and which would need to be retrofitted to have charge points and solar panels. “Regulation is needed to ensure that we don’t keep putting up buildings that are not fit for purpose as soon as they go up,” he said.

He remarked that the current energy crisis wasn’t going away. Energy companies had high fixed costs, many of whom were in a “death spiral” where they needed to put up prices just to stand still but were losing customers because of the unremitting price hikes. 

He reiterated that the Island had a primary resource of renewable energy and the longer-term aim should be to become self-sufficient and to sell energy back to the UK – completely reversing current policy. “If you overbuild in wind and solar, you actually need a lot less storage, but the outcome is a lot cheaper for everyone. There are only 4 black swan days, every other day you are generating energy in abundance, but that doesn’t mean it’s wasted. It might help us provide our transport for free,” he offered as an example.

Meanwhile, Julie Erskine said one of the biggest on-Island challenges for the construction industry was providing the necessary support for apprenticeships. They needed to be provided with knowledge about decarbonising buildings, arming them with the skills to take construction to the next level.

Julie said that whilst public opinion was split on a renewable energy future, there should be tax incentives in areas such economic and social sustainability, to help people to afford renewable energy, adding that introducing changes through government policy would provide great employment opportunities in the sector. Government policy needed to lead by example, to provide incentives for people to improve their energy efficiency. This would almost certainly require imposing carbon taxes, she said.

Making future homes as carbon neutral as possible

She advised that there was a current housing crisis but new homes being built should be made as carbon neutral as possible, suggesting that there could well be building control changes going through Tynwald next year, dealing with this issue. “The construction industry needs to prepare, to ensure it has the necessary skills in place,” she said, warning that the Island was currently well behind the UK on this.  

 Meanwhile, Simon Sheath said that, if it was possible to source renewable energy locally, the Island’s priority should be clean energy. He said small gains were moving things in the right direction. As an example, he said that, as part of KPMG’s renewable initiatives, the business was introducing more energy efficient LED lighting throughout its offices to replace the old strip lighting and had replaced outdated gas boilers with more economic and sustainable versions.

He told delegates that readily available smart meters would help make energy use more efficient, adding that the use of micro technologies in areas such as heating and water usage had shown that homes could become more than 40% more energy efficient. The payback time on this equipment was as little as 3.5 years.  

Accepting that the public needed educating, Simon thought it was almost inevitable that the Government would need to introduce legislation to make people accept change. “To change the mindset, regulation has to be the way forward. It has to be the guiding hand,” he added.  

And one final energy saving tip from the meeting – turn off your computers at night!

 

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