They’re eyesores. They chop up birds. They don’t work when there’s no wind – or when there’s too much wind. They require billions of pounds of subsidies to build, and billions more to connect to the power grid. According to one recent campaign, they could even render waves unsurfable.
The objections to “windmills” are many – and most contain at least an element of truth. So why is current policy aimed at building many thousands more turbines by 2020? And will it really happen – or will mounting political opposition curtail the plans?
One key EU target underpins the drive for more wind farms: a legally binding goal for 15pc of the UK’s total energy consumption to come from renewable sources by 2020. That’s a huge increase from just 3pc when it was set, in 2009.
To achieve it, the Government is aiming for massive growth in renewable electricity, to 30pc of our usage, from just under 10pc now. Most of that rise is due to come from wind, as the most advanced and readily available renewable technology. The Government wants up to 13 gigawatts (GW) of onshore wind capacity by 2020, up from about 5GW installed today. It also wants as much as 18GW of offshore wind, about 10 times current operational capacity.
Wind power exponents say the technology doesn’t solely serve to meet renewable targets. “You want a diverse portfolio of energy options,” says Dr Gordon Edge, director of policy at trade body RenewableUK. “Wind is good because it’s a domestic resource – you don’t have to import anything. It’s a stable price – even if it costs more than gas, actually gas might spike. It’s like having a fixed rather than a tracker mortgage – you’re willing to pay for peace of mind.” Such reasons alone, he suggests, might justify perhaps 10pc of electricity coming from wind. But deployment on the scale the Government plans wouldn’t be happening if it weren’t for the renewables targets – because it’s just too expensive.
The electricity price needed to build offshore wind at the moment is about £140 per megawatt hour (Mwh), while onshore is nearer £90 per Mwh. But the current market price for electricity is around £45-£50 per Mwh. The difference is made up through subsidies, paid for through customer energy bills.
Analysis by the Renewable Energy Foundation, which opposes high levels of subsidies, calculates the total subsidy cost for wind power in 2011 was £818m. Subsidy levels are due to be cut slightly between now and 2017, as the costs of the technologies come down. Even so, with volumes increasing dramatically, the annual wind subsidy bill could rise to about £6bn by 2020, REF calculates.
So at a time of austerity, it’s no surprise that political pressure is mounting against wind. A lobby of 101 Tory backbenchers has argued for onshore wind subsidies to be cut far more radically, objecting not only to the cost but to its spread across the countryside. So far, despite causing a bruising battle within Government, they have not got their way.
For offshore wind, a safe distance from most voters’ back yards, cost is by far the biggest challenge. The Government has already insisted that offshore wind costs should be brought down to £100 per Mwh by 2020, in order for a full 18GW to be deployed.
The industry says it’s “challenging”, but insists it can be done. It will need significant technology advances: bigger and more efficient wind turbines, designed specifically for offshore. They will be installed in places where the wind is stronger and blows more of the time. And the wide-scale deployment will also be crucial, through economies of scale in the supply chain and operations.
This leaves the industry with a “chicken and egg” challenge, says Dr Edge. “They say you can only have 18GW if you get to £100 per Mwh. But from our point of view, to get down to £100 per Mwh, we need to have confidence you’re going to have 18GW.”
It remains to be seen how rigidly the Government will enforce this cost cut through reductions in the levels of subsidy from 2017. The 18GW ambition could be threatened if cost reduction proves even more challenging than thought.
It’s not just the costs that are uncertain. From 2017, renewable subsidies will come in the form of new long-term power price contracts, which the Government has proposed in its Electricity Market Reform (EMR) plans. But the proposals, currently in the form of draft legislation, have faced widespread criticism for design flaws. Resolving those issues soon will be crucial if the 2020 targets are to be met.
“Any project with a connection date post-2017 doesn’t yet have financial certainty,” explains Richard Smith, future transmission networks manager at National Grid. “This time next year, given the six-year lead time for offshore wind, we need to be seeing boats in the water doing seabed surveys. There’s a question over how much certainty investors need before they start spending money.”
But what about the risk that the anti-wind lobby does gain even more traction, securing even more radical subsidy cuts in favour of a new dash for gas, and effectively abandoning renewables targets altogether?
“It’s a difficult time for investors working out where the centre of gravity in government is,” Dr Edge says. While the EU target is legally binding, it’s not clear whether fines would really materialise if they were not met. However, he warns, backtracking on the renewables sector could “destroy a lot of the UK’s reputation as a dependable evidence-based place to invest”. Investor confidence across the whole energy sector would be damaged, undermining the Government’s attempts to attract £110bn investment to keep the lights on. For the moment, he says, people are giving ministers the benefit of the doubt that they remain committed to the target.
Benjamin Sykes, UK operations director for wind at DONG Energy, the biggest offshore wind developer in the world, agrees. The company has already invested £3bn in the UK. “There is a lot of talk in the Westminster village, but we are getting on with it, developing offshore wind farms and will continue to do so,” he says. “There’s some challenges ahead of us on EMR that are still to be resolved but we think that those are eminently do-able. We don’t need to see a hiatus in investment if the Government can get this right in the right time frame.”
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