Wind farms only work with permanent public subsidy. Subsidy comes in various guises. The most obvious is contractual where the operator receives a guaranteed rate for electricity generated or a guaranteed top-up on what he sells his electricity for.
Such subsidy is inherently neither problematic nor exceptional. Nuclear power is also heavily subsidised.
Wind power is problematic because of its nature. Because they depend on wind, wind farms generate electricity that is unpredictable, intermittent and unreliable. This is unlike nuclear power stations which produce a constant stream of electricity (baseload energy) or gas plants, whose output can be varied on demand (dispatchable energy).
Wind’s intermittency would matter less if electricity could be stored at scale. But batteries only store comparatively small amounts, and there is no prospect of affordable batteries for grid-scale storage in the foreseeable future.
Electricity can be stored as potential hydro-electric power by pumping water uphill into reservoirs for release when required, like the Cruachan dam which operates as an adjunct to the Hunterston nuclear power station. However, Scotland lacks enough suitable topography, as well as the political will and money, to turn glens into hydro-electric power reservoirs for wind farms.
With storage not an option, the only way to control wind’s vagaries is to accommodate it within the wider electricity system, using primarily gas and nuclear generators to provide dispatchable and baseload power when wind can’t.
Balancing it in the wider electricity system constitutes a further subsidy, for it requires upgrades and extensions to the grid as well as keeping gas plants running on stand-by (“back-up”). But using the grid and other generators to make up for wind’s shortfalls becomes more challenging and expensive, the more wind generation enters the energy mix.
Increasingly, the grid is unable to take electricity from wind farms during windy periods. Wind farms are then “constrained off”, the energy effectively wasted and their operators compensated – last year to the tune of £125 million.
While the precise causes of the August 9 blackouts in England, in which Hornsea offshore wind farm is implicated, remain unclear, they testify to the increasing fragility of a national electricity system struggling to meet the challenges of increasing renewable generation.
Like other European countries, the UK has reformed its subsidy regime in response to galloping wind farm development, exploding subsidy costs and ever-rising consumer bills. Abolishing the Renewables Obligation in April 2016 sounded the death knell for new onshore wind farms.
The focus shifted to offshore wind farms, and the new Contracts for Difference scheme for their subsidy. A kind of reverse auction, it encouraged operators to put in unfeasibly low bids for the prices at which offshore wind farms would generate. While many have heralded the apparently huge drop in offshore costs, no wind farms have actually begun operating at this rate. Industry experts doubt they ever will, suspecting the low offers were a ruse to lock out competition and then blackmail the government on pain of bankruptcy if the price is not raised.
The days where developers saw a prospective wind farm as a licence to print money while policymakers extolled wind energy as clean, green and free are long gone. In the end there is no escaping the laws of physics and engineering, or economics.
In coming years, a great deal of money and attention will have to be spent on improving the resilience of an electricity system undermined by too many remote and intermittent wind farms, and on finding ways to pay the still escalating costs of their subsidy contracts. There will be little appetite for a second wind bonanza whoever is in power.
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