Hitting the European Union’s target for renewable energy will require investment in wind power of about £80bn, implying a steep rise in capital spending from today’s levels, according to industry estimates.
Centrica, the owner of British Gas, will highlight the need for this huge investment programme when it reports its full-year results today.
Industry executives are raising concerns about the scale of the challenge. Ramping up investment in wind power so steeply will worsen problems such as shortages of turbines, which are already hitting the industry.
In plans set out by the European Commission last month, the UK was set a target of sourcing 15 per cent of all its energy from renewables by 2020.
Britain is heavily dependent on gas for heating and, since it will be hard to change that, electricity generation will have to bear the brunt of the shift. About 40 per cent of the UK’s electricity is likely to have to come from renewable sources to hit the EU target, most of it wind power.
Industry estimates suggest that about 40,000MW of wind power would be needed, of which the great majority would be offshore.
A Financial Times analysis this month revealed that the rate of construction of wind power capacity in Britain dropped last year, in spite of a generous subsidy regime, because of the difficulty in securing planning permission. The British Wind Energy Association has warned that the planning reforms going through parliament will do little to ease the difficulties in securing approvals.
The average cost of £2bn to build 1,000MW of offshore wind capacity implies a total bill of up to £80bn, or about £7bn of investment a year between now and 2020.
By Ed Crooks, Energy Editor
21 February 2008
|Wind Watch relies entirely
on User Funding