Monday, January 23, 2012

Fascinating article from Click Green on Manx gamble looking set to pay off

Click Green by Stuart Qualtrough at  http://tinyurl.com/7vag785


The Isle of Man is looking to cash in on an ambitious renewable energy programme following a remarkable decision to surrender its share of the UK's oil and gas revenues.

The Manx Government wants to harness the green potential of the island's unique position to attract a new era of clean energy generation and export 10 times as much low-carbon electricity to the UK as the entire island consumes in a year.

And a decision 20 years ago to surrender its share of UK's fossil fuel revenues in return for its territorial waters looks like a multi-million pound wager that is destined to pay off.

A gamble that may have appeared madness at the height of the scramble for oil and gas now looks a remarkable crystal-ball policy call as the independent crown dependency prepares to lease off small areas of its seabed for massive returns.

The agreement in July 1991 ended a 25-year deal that saw the Manx Exchequer receive a share of the royalties and rentals from oil and gas exploration from the whole of the UK continental shelf. The Isle of Man had previously agreed to shrink its territorial waters from 12 to three nautical miles and give up any interest it had in oil and gas exploration and production in the Morecambe Bay area.

With the reversal of the 1966 accord, the island now controls around 4,000 square kilometres of territorial waters, which the drive to low-carbon, sustainable power generation has boosted in value to an estimated £8 million per square kilometre over 25 years .

An environmental report to be completed in April may suggest the Isle of Man currently has the capacity to utilise several hundred square kilometres of seabed, which still has the potential to provide a huge return on investment.

A state-of-the-art 80MW gas turbine power plant alongside a 10MW waste-to-energy facility already enables the island to be a net exporter of electricity to the mainland.

But with shallow waters, strong currents and no shortage of wind, the island's renewable capacity appears perfect for the installation of tidal, wave and offshore wind installations.

And with zero corporation tax and a swift planning decision-making process, the island will may soon be looking to lease areas of suitable seabed to energy companies to generate and sell on to the mainland.

The infrastructure is already in place to transmit electricity to the UK and a sub-sea interconnector to the coast of Blackpool hooks directly into the National Grid.

A Strategic Environmental Assessment report is expected to be completed this spring, which will then signal the move to attract offshore wind generators as well as marine energy pioneers.

The Isle of Man has been a test-bed for many technical innovations and roll-outs. The 3G mobile network was first introduced on the island before it was rolled out across the UK.

And the world-famous TT motorbike festival is already going green following the introduction of the TT-zero event for electric-powered motorbikes – this year will likely see the landmark record of a 100mph average circuit speed achieved by an electric model.

“More than 87% of the Isle of Man territory is offshore,” said Dr Ken Milne, senior manager for energy policy at the Isle of Man Government. “We have the capacity and the capability to be generating thousands of megawatts of renewable energy to feed into the UK National Grid.

“Our territorial waters are the equivalent of Rounds 1 and 2 of the Crown Estate leasing programme for offshore wind farms – most of our water is shallow and we have perfect wind conditions.

“Our close proximity to the UK allows a more cost effective interconnection than many other new offshore wind farms around the UK coast and we have the precision manufacturing supply chain already in place on the island.

“By 2015, we aim to produce 15% of our electricity needs from renewable sources and by 2020 we may be able to supply 10 times as much low-carbon electricity to the UK as the entire island electricity consumption in a year .

“The island is well set up for the trial and research of low-carbon technology, we have manufacturing companies on the island that specialise in the aerospace industry supplying Boeing and Airbus and the optics for the Mars Explorer mission were manufactured on the Isle of Man.

“We are a signatory of the same intellectual property rights treaties as the UK and the rest of Europe, which means all royalties and revenues from IP is zero-rated for tax.”

The island is also working on developing smart grid technology and is perfectly positioned in the middle of the Irish Sea to connect Ireland, Scotland, England and Wales, which could create the blueprint of a much larger, pan-European smart grid model.

Dr Milne added: “We are investigating opportunities to become a major net exporter of renewable energy and we have the capacity, skills and infrastructure to achieve it.

“We are looking at other countries such as Scotland for offshore renewables and Singapore for smart grid technology to see how the Isle of Man can best support the role of these low-carbon technologies.

“The island's peak demand for electricity is 90MW so everything we can generate above this and our base load of 40MW can be exported straight to the UK.

“Our energy-to-waste plant already enables the island to divert 100% of domestic waste from landfill – the next big opportunity to help reduce our carbon footprint is from the renewable energy produced from our territorial waters.”

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