We have been involved in renewable energy since 1991. Over the last five years we have invested over £200 million in renewable projects, mainly onshore and offshore wind schemes, and we want to double that over the next few years. We have a total renewables capacity of 653 megawatts (MW), comprising biomass, wind and hydro. We are now also evaluating tidal and wave technologies.

The Renewables Obligation

The Renewables Obligation is a Government mechanism to encourage investment in renewable energy. Electricity supply companies are encouraged to source increasing percentages of the electricity they sell (5.5% in 2005/06 rising to 15.4% by 2015/16) from renewable sources. Renewable Obligation Certificates (ROCs) are issued to suppliers by generating companies to prove that the electricity bought has come from renewable sources. Each ROC represents one megawatt hour (MWh) of electricity generated from renewable sources. Supply companies that fail to present the Office of Gas and Electricity Markets (Ofgem) with ROCs covering the full amount of their renewables obligation must make a balancing payment into a buy-out fund.

We submitted 2.6 million ROCs to Ofgem in 2004/05 - more than any other UK supplier - and we are on track to repeat this in 2005/06. This is equivalent to enough renewable energy to power every household in Birmingham and Manchester. This represented 90% of our renewables obligation, compared to 63% in the previous year. Of this, 370,000 ROCs were from our own renewable sources, representing a saving of 159,000 tonnes of carbon dioxide (CO₂).

Generation capacity from renewables by type, MW

	2001	2002	2003	2004	2005
Co-firing	23	7	217	410	410
Wind	78	134	119	194	194
Hydro	49	49	49	49	49
Total	150	190	385	653*	653

* reported as 663 MW previously

Our total dedicated renewables capacity (ie wind and hydro) is currently 243 MW, with nearly two thirds of our potential capacity provided by permitted co-firing of biomass at three of our fossil fuel-fired plants.

Wind power

We have interests in 18 onshore and two offshore wind farms, including one of the UK's first commercial offshore schemes, the 30-turbine Scroby Sands development in Norfolk. This has a capacity of 60 MW. During 2005, we submitted planning applications for a further six onshore sites with a total capacity of 225 MW. As joint venture partners in London Array Ltd with CORE Ltd, an Anglo-Danish partnership, and Shell WindEnergy Ltd, we also submitted applications to build the London Array offshore wind farm in the outer Thames Estuary 12 miles off the Kent and Essex coastlines. This 1,000 MW venture will be the biggest wind scheme in the world and could provide renewable energy for a quarter of Greater London, while achieving 10% of the Government's 2010 renewable targets.

In 2005, we acquired the wind portfolio of United Utilities, which included a share in two joint venture companies associated with the development of the Scarweather Sands and Humber Gateway offshore wind farms and the rights to develop several onshore wind farm sites. The acquisition has the potential to increase our renewables capacity by a further 500 MW if all the projects are realised.

We apply a careful and rigorous process to the selection of sites, including taking into account local opinion and concerns about the effect on the natural habitat.

There is more on this here.

Looking ahead, we will be using a pioneering new system to manage our wind farm operations on a centralised basis. Called SCADA (Supervisory Control and Data Acquisition System), this technology will allow us to monitor the performance of our sites and predict future power requirements.

Biomass

The burning of biomass (a general term for any plant-derived organic matter), is another way of generating electricity. Burning biomass is 'carbon neutral' since the CO₂ released during combustion is equal to the amount that was absorbed by the plants as they grew. During 2005 we generated 218 gigawatt hours (GWh) by this method at our Kingsnorth, Ironbridge and Ratcliffe power stations. We are also building a 44 MW wood-burning plant at Steven's Croft near Lockerbie, in Scotland. This will be the UK's largest dedicated biomass power station, generating enough electricity for around 70,000 homes.