Andrew Davison, head of the Muckle LLP Energy Group, takes a look at the North East's renewables market and calls on the Government to clarify its energy policy to ensure future investment and technological advances.

WITH rising energy demand outstripping domestic supply, and increasing energy usage set to continue against a background of a restricted energy infrastructure, there is no doubt that the country needs to take control and maximise the use of its energy sources.

In coming years, we will need to address our growing reliance on imported energy (over 20% , 2008 figures) for financial, as well as security, reasons.

The Kyoto protocol sets worldwide targets for the reduction of CO² emissions up until 2012. The EU Renewables Directive sets legally binding targets for renewable energy use within each member state; as a result, the UK will have to generate 15% of all energy from renewables by 2020. This implies that we will need to produce more than 30% of all the electricity we use from renewable sources by 2020 (7.3%, provisional 2010 figures). This is clearly a long way to go – both in managing consumption and in increasing the use of renewable sources of generation.

But it’s not just about legal obligations - the new and renewable energy industry has the potential to generate billions of pounds for the North East economy over the next 20 years. It could truly transform our region.

The energy regulator, Ofgem, is talking about some £200bn investment being required to meet the requirements for renewable energy generation in the UK. On a visit to the region earlier this year, the Energy Minister Charles Hendry urged North East businesses to seize the opportunity. To put this £200bn figure into perspective, the total value of contracts for the Olympics is only about £8bn. So the renewables industry represents an opportunity for potentially huge prosperity for our region but we need to step up and earn our right to it.

The North East is ideally placed to take advantage of this revolution. It already has world-class businesses and universities undertaking groundbreaking projects and research in a range of relevant technologies including offshore and inshore wind power, biofuels and biomass, gasification, hydrogen fuel cells, CO² capture and tidal power.

We are perfectly placed to provide the fabrication, installation and servicing of the proposed massive offshore wind farm at Dogger Bank and have all of the necessary skills in the region as a result of our engineering and ship building heritage. The Port of Tyne already boasts Europe’s largest dedicated biomass handling facility, feeding Drax power station and there has been talk of the building of new biomass power stations in our region.

With anaerobic digestion and gasification technologies, it is becoming increasingly viable to turn our waste into electricity and heat, potentially transforming our concept of waste far beyond simple recycling.

We have two centres of excellence leading the way on testing and process technologies. The National Renewable Energy Centre (Narec) offers world-class testing facilities for a range of projects in wind and tidal power, as well as involvement in university research on advanced solar PV technology. The Centre for Process Innovation at Wilton in the Tees Valley undertakes cutting edge R&D projects in biofuels, anaerobic digesters and fuel cells.