Jeremy Leggett: Solar storm coming: the battle for the UK energy industry
Business Interview: Last week's Spending Review was just a skirmish in an industry 'civil war', the Solarcentury founder tells Sarah Arnott
Thursday 28 October 2010
"It is a great big battle of ideas, and we haven't won it yet," says Jeremy Leggett. The green guru and founder of Solarcentury – the solar-photovoltaic (PV) supplier that is Britain's fastest-growing energy company – is in the vanguard of the battle. And while the clean-energy industry is breathing a sigh of relief that last week's Government Spending Review did not axe the feed-in tariff (FIT) widely hailed as a cornerstone of Britain's renewable-energy revolution, Mr Leggett has no time for complacency.
"We've had a lucky escape," he says. "There were massive forces of darkness lined up against us – a whole cadre of politicians and officials trying to, at the minimum, cut back the FIT and, if they could get away with it, shut it down completely."
Such manoeuvres were seen off by the progressive elements in the Coalition only "at the 11th hour", Mr Leggett says, citing sources "who could not be more highly placed". The FIT is central to the development of Britain's clean-energy sector, and the back-room machinations over its survival are just a single skirmish in the war for the future of Britain's energy supplies.
Mr Leggett could not be more serious: "The danger is that we will be ambushed by our collective stupidity before we have enough weapons to fight back. The mobilisation of renewable-energy technologies vital to our survival might not happen fast enough to counter the threats of global warming and peak oil."
The reception area at Solarcentury's head office near London's Waterloo station is littered with awards. And Mr Leggett himself is similarly feted: a loud voice on impending climate catastrophe and the author of two books on the subject.
But his career began on a different track entirely, and it was only after more than 10 years as a geologist working for the oil industry that he was spooked by evidence of global warming and made the break to join Greenpeace. Eight years later, in 1997, he set up Solarcentury, which is now Britain's biggest solar-PV supplier. "Solar is so incredibly neat: there are no moving parts, just sits there and makes electricity," he says.
With 130 staff, its ground-breaking solar-PV roof tile manufactured by Sony in Wales, and more than 40 per cent annual revenue growth for the past six years, Solarcentury's prospects are sunny indeed. "This business is all about 'seeing is believing'," Mr Leggett says. "At first blush it just doesn't sound right, but then people see the installation and see the meter going round, and then they get it."
But without the FIT, renewables cannot move from the fringes to the mainstream. Introduced in April by the Labour government, the scheme encourages small-scale clean-energy generation – such as solar-PV panels or roof-mounted wind turbines – by obliging electricity companies to buy any excess energy produced.
The impact was immediate. Solarcentury alone saw revenues grow by 76 per cent in the first half of the year and boosted its headcount by a fifth to cope with the influx of orders. And that is just the beginning. Analysts estimate the solar-PV market could hit as much as 250 megawatts (MW) next year, from a woeful 10 MW in 2009, thanks to the FIT. The Government's wider green targets need a whopping 2.3 gigawatts of solar energy by 2020, which translates into an extra 100,000 jobs in the industry, according to Mr Leggett.
But nothing will happen without the boost from the FIT. Although the £8.6bn scheme is funded by a levy on customer bills, the Coalition Government's commitment to balance Britain's books – requiring cuts on a scale not seen for a generation – almost spelled doom for the FIT as the vested interests of major power companies weighed in against it.
"There is a civil war in the energy industry between renewables and big centralised power," Mr Leggett says. "There is real resistance to the idea that grown-ups get their energy from renewables."
In both Whitehall and the energy majors, "retrograde thinkers" are already defending the status quo "with amazing vehemence" – and the battles are only just beginning. The rhetoric in recent years has been about an energy mix generating capacity of every sort, but the old and the new can no longer co-exist, Mr Leggett believes. And once renewables really take off, the war will begin in earnest, he says, pointing to evidence from Germany that even the fraction of electricity consumption supplied by solar PV is pulling down midday-peak electricity demand, clipping prices and hurting the profits of the energy giants.
The tricky part is that the forces ranged on either side of the great debate do not fall into easy groupings. "It's not black and white, or us against them: it's a battle of ideas," Mr Leggett repeats. "There are those people that get it and those that don't, and they are spread through both the big companies and the Government departments."
There are powerful forces ranged on the side of the "progressives". Mr Leggett flies to India this week, following up on the Prime Minister's high-profile trade mission in July which took along 29 chief executives – including Mr Leggett – to reaffirm Britain's links with its former colony and to drum up business. "Credit where credit's due ," Mr Leggett says. "Trees were shaken and I'm now flying back to talk about what could be the mother of all joint ventures."
But even such progress is but baby steps compared with the scale of the challenge. "Climate change is a bigger risk than the credit crunch, but the price of undermining the future for our kids features nowhere on the global balance sheet," Mr Leggett says. "We aren't going to be able to grow our way out of the problem. We need to have debate about measuring prosperity in different ways."
The survival of the FIT is just the beginning.
* Green guru Jeremy Leggett began his career working as a geologist for the oil industry.
* Spooked by evidence of global warming, Mr Leggett joined Greenpeace as an environmental campaigner in 1989.
* In 1997 he set up Solarcentury, which is now Britain's largest solar panel company.
* A vocal campaigner for climate change, Mr Leggett also founded charity SolarAid and the the first private equity fund for renewable energy.
* Mr Leggett is also on the Industry Peak Oil Taskforce and is the author of two books on the global energy crisis – 'The Carbon War' and 'Half Gone'.
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