Except when it carries dust from the Sahara, wind is relatively clean. It has the additional advantage of being free at the point of contact with whatever stands in its way, but it still suffers from three fundamental drawbacks as a source of energy. When it fails to blow it provides no energy at all. When it blows too hard wind turbines have to be switched off because the grid cannot handle the power they produce. Even when it blows at the right strength the power that it delivers via the best turbines money can buy is still too expensive.
For more than a decade Britain has sought to overcome these obstacles with subsidies in the form of guaranteed prices for wind power generators. These subsidies have encouraged a boom in wind-turbine construction, onshore and off, but they have not succeeded in bringing down unit costs to the point where wind power is competitive in financial terms with gas.
An arbitrary cap on the number of wind farms on British land and in British waters, as proposed by some Conservative backbenchers, is the wrong response. The right course is to honour guarantees already made to investors and then end wind power subsidies. This need not mean the end of wind power. On the contrary, it could set wind power on a new path to a cost-effective future.
When Britain’s wind power subsidies were enshrined in law under the EU renewables directive in 2009, it was on the twin assumptions that fossil fuel prices would rise steadily as economies of scale brought down the cost of turbines and their operation. Neither assumption has proved valid.
Instead, a fracking revolution led by the United States has exerted steady downward pressure on world gas prices while wind power prices have stayed stubbornly high. Onshore wind currently commands a guaranteed “strike price” of £90 per megawatt-hour while offshore earns generators £155 per Mw-h, compared with £50-60 per Mw-h for fossil fuel generation.
Since 2002 wind power subsidies worth £12 billion have been passed on to British consumers. More than 4,000 onshore turbines are in operation, meeting on average 5 per cent of the country’s demand for electricity. Planning permission has been granted for 3,000 more, while roughly 1,000 much larger offshore turbines have pushed wind power’s total contribution to British electricity use to nearly 9 per cent.
Britain has pledged to produce 30 per cent of its electricity from renewable sources by 2020. Assuming this target is met and all commitments to wind turbine operators are honoured by this and future governments, the cumulative cost to British consumers could reach a staggering £160 billion by 2040.
Already wind power subsidies have proved so generous that the construction of new capacity has far outpaced the building of connections to link it to the grid. In Scotland, wind farms stand idle for long periods waiting for the £1 billion Western Link to be completed. As they wait, their operators have been paid up to £9 million a month to generate precisely nothing.
The wind power boom has attracted investment and created jobs. The industry claims to employ 19,000 people, and new offshore farms in the North Sea will boost local East Coast economies. This defence would carry more weight, however, if the price to consumers were not so high and the investment had produced a genuinely British wind power industry. In fact the vast majority of turbines assembled here are manufactured in Denmark, Germany or the United States.
Wind power is the most practical form of renewable energy available, but subsidies have allowed the industry to delay technological advances to bring down costs. Wind has a place in the energy supply of any economy in search of a sustainable future, but not on these unsustainable terms.
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