Household electricity bills are being used to subsidise massive profits for wind turbine companies.
The Government has overseen a scheme which sees almost £10-a-year added to every consumer’s bill to help promote renewable energy – but despite this few companies have built new wind farms and many households are still getting their power from coal burning generators.
Northumberland wind farm campaigners last night said the expensive subsidies for energy companies were the real reason behind the dozens of turbines planned for the North-East.
More than £580m-a-year is paid out at present and this is set to rise to more than £1.3bn by 2010 as household bills rise.
The Journal revealed in April the details of the Renewables Obligation (RO) incentive scheme which sees electricity generating companies that invest in renewable energy sources paid lucrative sums by suppliers for each megawatt hour (MWh) of electricity they produce – which is covered by the extra added to family bills.
As a result the companies bidding to erect turbines are offering landowners in the North vast sums as they try to cash in.
And as the Government is now intent on sourcing at least 15% of UK energy from renewable sources, the amount paid in subsidies will rise to £3bn a year by 2020. But because wind turbines are in some areas quite profitable, some financial experts are now saying the RO targets are simply allowing some companies to make huge profits.
Peter Atherton, head utilities analyst at Citi Investment Research, said: “It’s a bonanza. Anyone who can get their nose in the trough is trying to.”
Save Our Landscape wind farm campaigner Andrew Joicey said the surge in wind farms in Northumberland was as a direct result of the RO scheme.
Mr Joicey said: “The main reason why we are under so much pressure is because these turbines generate massive profit for the companies and the suppliers need them for the certificate.
“We would never see a situation where a two-storey house is allowed to be built in these scenic areas but the renewable energy company goes to the end of the earth to get planning permission for these turbines because they know how much money they can get.
“The problem with it, and even Ofgem recognise this, is that it rewards the production of renewable energy regardless of the method. Wind turbines despite there disruption are the easiest and therefore the most profitable.”
The 51-year-old, who runs the 900-acre New Etal farm in Cornhill-on-Tweed, close to the Scottish border, first became concerned after becoming aware of an increasing number of plans for wind farms close to his family’s 15,000-acre Ford and Etal estates.
Mr Joicey added that rural areas of Northumberland are seen as an easy target for developers because they see them as having a thin population of who are not familiar with fighting seriously aggressive, intrusive and inappropriate planning applications.
Andrew Wright, managing director of markets at Ofgem, the electricity regulator, said: “The RO is a very expensive way of providing support for renewables.”
Energy companies have backed the RO scheme as the best way to encourage renewable sources to develop.
Npower, who are both generators and suppliers, said wind energy accounts for only £80m in turnover and would not be feasible without support.
Kevin McCullough, director of renewables, said: “If you did not have the RO, you would not see any wind farms being built.”
The Department for Business said: “Since the RO was established in 2002, we have increased our electricity being generated from renewable sources to 5% and we expect to increase this to 15% by 2015.”
The Journal left messages at the British Wind Energy Association but these were not returned.
MOD concern for UK radar
The Ministry of Defence has raised concerns that the Government’s wind farm ambitions may interfere with radar stations across the UK.
After last year’s inquiry into a proposed 18-turbine development at South Charlton, near Alnwick, Northumberland, the MoD has objected to four other proposals nation-wide.
Military chiefs are worried the proposed turbines will make planes impossible to spot and are a threat to RAF low-flying practice.
Yesterday it was reported that Air Chief Marshal Sir Jock Stirrup, the Chief of the Defence Staff, had told the Government that the UK’s radar capabilities must not be impaired by renewable energy schemes.
The Department for Business, Enterprise and Regulatory Reform, which is responsible for energy policy, acknowledged there were “issues” over military radar and turbine sites.
An MoD spokesman denied the military would automatically lodge objections to new plans, saying: “All wind farm applications are assessed on a site by site basis. The MoD is committed to Government targets for renewable energy and whenever possible we seek to work with wind farm developers to find a mutually acceptable solution.”
Landowners offered cash incentive
The Renewables Obligation Certificates (ROC) are a chance for big energy suppliers to prove they are committed to climate change without having to invest in renewable technology.
There are three steps in the energy chain, the producer, the supplier and the consumer and all are tied into the ROC scheme.
For each Megawatt hour of energy a wind turbine company produces the electricity regulator Ofgem gives them one ROC.
Energy companies who supply energy to our homes are under an obligation to invest in renewable sources.
Ofgem wants each supplier to have a certain amount of ROCs each year to show their commitment but many companies just buy these up without any real investment.
ROCs are typically selling for about £46, which inflates the price of wholesale electricity for generators. That gives them a huge incentive to find sites where they can erect turbines – meaning landowners can be offered £100,000 a year for housing a wind farm.
Why I’ve changed my direction – Alastair Gilmour
Last June I tramped over several miles of Northumberland moorland to get the background on proposals to build wind farms on tourist-sensitive sites.
As a head-straightening exercise, it certainly did the trick. I admit to thinking previously that there was something beautiful about these tall, white, slender structures with their sculptural, haunting quality. Observing them at work was hypnotic, poetically rhythmic and functional. We’re constantly told we need to look at alternative energy sources as a matter of some urgency and as wind technology is fairly advanced, free, and wave-power remains a far-off dream, there’s your answer. And they weren’t in my back yard. But roam a little, delve a bit, talk lots to people running businesses which are totally reliant on visitors, then argue with activists, listen to concerned campaigners and follow the trails of corporations and your opinion gradually alters.
Discover how much money is being earned by wind farm operators through ROCs and you begin to revise your opinion. Realise that corporate noses are deep in subsidy troughs with not a speck of regard for local communities and the binding spell of a slowly-turning blade begins to crack.
Before last June, I had allowed myself to be blown along by the prevailing opinion that wind power is the only answer. On appropriate sites, it is certainly one solution, but wind farms are not a fraction as efficient as some operators would have you believe and their detrimental effect on some of our most stunning landscape is a price not worth considering. I am now happy to stand up and face the wind; lining the pockets of an offshore corporation is quite another matter.
By Adrian Pearson
5 February 2008