GLASGOW, Scotland—As Scotland gears for an ambitious target of 100-percent renewable-energy use by 2020, private firms continue to increase investments in green-energy system as the government puts in incentives, such as feed-in tariffs, to counter the high capital cost of infrastructure.

Across Britain, particularly in Scotland, there is an outpouring of interest on green-energy system from wind turbines, hot and cold refrigeration and tidal energy market since the British government introduced the feed-in tariff incentive in April 2010.

The feed-in tariff is a policy mechanism to encourage the adoption of renewable-energy sources and to help accelerate the move toward grid parity (the point at which alternative means of generating electricity is at least as cheap as grid power).

The feed-in-tariff provisions include guaranteed grid access, long-term contracts for the electricity produced, and purchase prices that are based on the cost of renewable-energy generation and move toward grid parity.

Under a feed-in tariff, the government pays a premium price to eligible renewable-electricity generators—which can include homeowners and businesses—for any equivalent renewable electricity they produce. Typically regional or national electric grid utilities are obligated to take the electricity and pay them.

Scotland is rich in natural resources, thus, there are high stakes for renewable-energy investments.

The Philippines is also encouraging investments in green energy with the passage of the renewable-energy law. With its geographical position and rich agricultural base, the renewable-energy potential of the Philippines can reach over 150 gigawatts (GW).

The Department of Energy (DOE) in the Philippines estimates a huge potential to exploit a blend of wind, geothermal, hydro, biomass and solar energy resources. It said the wind energy potential in the Philippines could even reach 76 GW.

Dave Pearson, director for innovation of Glasgow based-Star Refrigeration, said companies should recognize at the beginning of their investments that they “need to have a mindset of 20 years.”

“If we are just thinking about tomorrow, we should invest on things that are going to last until tomorrow. But investments in renewable-energy system reduces energy costs and companies will be profitable in the long run.”

He said companies, particularly in the manufacturing business, should prioritize stable source of energy to sustain their operations. They should also consider the depletion of fossil fuel sources due to climate change and security instability in the Middle East due to Arab spring and international sanctions on Iran.

“Majority of the companies are not thinking of long-term [solutions]. It’s getting that message across,” he said.

Star refrigeration caters to both heating and cooling needs of companies and to an increasing interest in district heating in countries experiencing longer period of cold weather, such as Norway and Switzerland.

At least 80 percent of the companies being catered by Star refrigeration are involved in food processing like yoghurt and chocolate firms in United Kingdom and France. The refrigeration equipment seeks to capture energy used in heating the products and transform the energy for cooling them in the final process.

Pearson said Arab countries from the Gulf Cooperation Council (GCC) consume at least 60 percent supply of the fossil fuel due to their heavy reliance on cooling energy systems. The Middle East countries also reject a large quantity of energy which is 240 percent times larger than its energy output (from fossil fuels).

He said massive energy from heat being wasted in Arab countries could be used to make water through thermal desalination as water is very scarce in the region.

Cities in Switzerland and Norway that continue to experience extreme winter cold weather are now turning into renewable energy for their district heating system, he said.

“We need to take advantage of the opportunity for society to focus on using all energy and not throw these energy away,” said Pearson, adding, “there are no standard solutions but we just need to work with end users to find out their needs.”

Pearson believes that renewable-energy companies can take advantage of the government’s feed-in-tariffs incentives, but in the long run, they need to be self sufficient as there is a definite increase in demands for green-energy infrastructure.

A refrigeration unit costs an average of 150,000 sterling pounds and a lifeline of 20 to 25 years. But it lowers the company’s energy consumption costs from £220,000 to £140,000, which gives £80,000 savings per year. This allows the company to get their money back in six months and continue to increase revenues through energy savings.

Meanwhile, Scotland is advocating the use of tidal-wave energy as a stable source of electricity for industries and communities.

Cameron Johnstone, chief executive officer of Nautricity Ltd., said global tidal-wave market is estimated to bring in £60 billion per year and countries with rich water resources like the Philippines should invest on it.

He said tidal wave is one of the most predictable and reliable renewable source of energy even to a typhoon-frequented country, such as the Philippines, as it is dependent on the gravitational attraction of the sun and moon.

As tidal wave energy is more cost effective than wind energy, Scotland is very aggressive in establishing marine renewable energy systems, said Johnstone.

He said Scotland has set up a one-stop shop for planning and licensing and will develop a site for testing in two years to meet its target of sourcing 60 GW of renewable-energy needs from marine sources.

Across UK, there are now 11 units of tidal-wave energy sources with eight of them in Scotland.

Scotland also introduced an additional incentive of Renewable Obligation Certificate (ROC) where the government give stakeholders specific amount of counterpart fund assistance for every equivalent of energy produced from tidal wave energy.

Wind turbines

MEANWHILE, wind turbine producer Gaia, said small farms and business firms in rural areas across UK are fast becoming interested in sourcing electricity from wind turbines.

Johnnie Andringa, chief executive officer of Gaia-Wind, said due to high labor cost in Denmark, Gaia-Wind has moved to Glasgow in 2007 and started producing wind turbines for UK as well as US and Italy.

Wind turbines have a lifespan of 20 years and ideal for use to generate electricity for farms and small business for rural areas.

“UK is very good for wind turbines especially in Scotland and the government also gives good incentives for farmers using them,” said Andringa.

He said the sale of wind turbines increased after the UK government announced the feed-in-tariff incentives for use of renewable-energy systems in April 2010.

But since the UK government announced a review in feed-in tariff in April 2012, many customers wanted to get a wind turbine before April 1 this year.

He said Gaia-Wind sold 60 units of wind turbines in the last quarter of 2011. Early this year, at least 90 wind turbines have been ordered.

Andringa said the revision in the UK feed-in tariffs in April will be the first and expected to be reduced from 5 percent to 6 percent.

Government incentives—such as feed-in tariffs, ROCs and fund assistance in infrastructure—may entice investors to engage in renewable energy. Green energy investors believe that sustainability requires marketability of their respective technologies and not state funds.

The deepening cold weather creeping across Europe requires long-term solutions, such as central-heating facilities not just for business and residences but for the community.

Such increasing demand for energy will put more pressure on the need to seek greener solutions as these governments are mostly tied to their global commitments to lower carbon consumption in the next few years.

In the case of the Philippines, Scottish green investors believe that as an archipelago, the country has rich potential for renewable energy because of its rich natural resources. It’s a situation for the Philippine government to seize opportunities to encourage more green energy investments.