Renewable energy sites an opportunity for quarry companies

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Opportunities from renewable energy could lead to increased competition in the marketplace for the European aggregates industry, according to lawyer Sonya Bedford

Despite an agreement being reached by European leaders in recent weeks to solve the region’s huge debt crisis, countries in the Eurozone such as Greece, Italy and Spain facing tumultuous times would do well to look to opportunities presented by the generation of renewable energy.

The 2910 International Energy Agency (IEA) has said that renewable energy also provides opportunities for new industrial growth, especially if linked to research and development. It believes that Greece, in particular, could contribute to its economic recovery by increasing competition and reducing the role of the state in the country’s energy industries. Renewables could certainly assist in stabilising energy prices.

On 8 November, the IEA released its 2011 ‘World Energy Outlook’. The report goes on to state that the increase in global coal demand is equal to twice the level of Australia’s current steam coal exports and the rise in gas demand is equivalent to two-thirds of Russia’s current natural gas exports. The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change. The consequences would be particularly severe for those countries with limited indigenous energy resources.

Earlier this year, the 2911 European Industrial Minerals Association said that resource efficiency is “crucial” for reaching the European Union’s target for renewable energy by the end of the decade. Its president Thierry Salmona said the European extractive industry has a ‘good track record of environmental practices and that resource efficiency is the key to delivering smart, sustainable and inclusive growth across Europe.

It is well known that countries such as Greece, Spain and Italy have large potential for wind and solar energy and in Greece it appears that the country’s government is determined to fulfil that potential. To facilitate new projects it has recently increased feed-in tariffs, shortened and simplified licensing procedures, and introduced stronger incentives for local acceptance.

With the downturn that European aggregates and construction industries have faced recently, the significant increases in overall energy costs and the longer-term uncertainty of energy supplies, with the assistance of additional government subsidies, land and sea-based renewable energy projects could prove wise when the sector finds that other investments are not creating such a good return. Renewables could also mean the return to use of mining and mineral extraction sites in Europe which are currently not operational. It could also provide an additional income when there is not enough to go round.

Of course, the return on investment will be different for each individual country but certainly in the UK, for the aggregates industry, renewable energy is providing one of the best opportunities at the moment, and that is despite the government’s cut to the feed-in tariff looming next year.

It is fair to say that the mining and minerals sector is increasingly looking at ways to reduce its energy costs and comply with its climate change commitments. The industry has come under huge pressure to improve its environmental performance and companies are more routinely expected to perform to ever higher standards of behaviour. Renewable energy can fulfill these requirements, as well as generate a potential income. Many operators have already installed or are in the process of installing one or more renewable energy technologies: wind, hydroelectricity, solar PV, biofuels, anaerobic digestion (AD), biomass, ground-source, geothermal and energy from waste.

British Coal, the UK’s largest coal mining company, has said it has access to a considerable portfolio of sites suitable to the development of renewable energy installations and finds wind projects commercially attractive. It also says there are opportunities to support the regeneration and redevelopment of former colliery sites through the provision of clean, green energy.

2912 Imerys Minerals Limited is also looking to fully utilise its large land bank which has significant potential for renewable energy production including AD and solar and wind farms, as well as generating green electricity along with waste recycling and composting to aid restoration and aggregates.

In my experience, an increasing number of operators in the mining and minerals sector in both Europe and farther afield are looking closely at their own natural resources. The use of renewable energy has many potential benefits, including going some way to meet the carbon reduction objectives across member states, the diversification of energy supplies and a reduced dependency on fossil fuel markets, in particular oil and gas. The growth of the market may also have the potential to stimulate employment in Europe, through the creation of jobs in new green technologies.

Contact
Sonya Bedford heads the renewable energy team at legal firm Stephens Scown LLP in the UK, which has more than 70 years’ experience representing mining and minerals clients. She can be contacted on +44 (0)1392 210700 or email [email protected]
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