UK offshore wind suffering from cost inflation

The beginning of the annual meeting of the British Wind Energy Association (BWEA) has seen some significant developments in the fight to get offshore wind projects up and running amid serious concerns that these actions still may not be enough to help the UK meet its 2020 renewables targets.

The Crown Estate, which controls much of Britain's marine coastline, has promised to pay half of all pre-construction development costs for a third round of wind farms that companies are bidding to construct on its offshore estates by 2015.

And the Carbon Trust has announced that it has reached an agreement with five major energy companies that will see £30m invested in finding ways to reduce the cost of offshore wind by at least 10 per cent.

"We have identified a range of opportunities to reduce costs, increase performance and improve the economic viability of offshore wind farms," said Mark Williamson, director of innovations at the Carbon Trust.

Offshore wind has huge potential to cut the UK’s carbon emissions, generate thousands of new jobs and help us meet our 2020 renewable targets. But high costs and risks have been seriously holding back deployment.

The companies involved in the Carbon Trust initiative are DONG Energy (Denmark), Airtricity Developments (UK), RWE Innogy (Germany), ScottishPower Renewables (UK) and StatoilHydro (Norway).

All are concerned that a number of problems need to be solved before they can invest heavily in offshore wind – currently conditions do not present a good enough business case.

The Carbon Trust warned last week that the price of offshore projects has risen 50 per cent in the past three years, and may increase further – particularly as current government regulations mean a third round of farms must be built 70 miles offshore.

High demand around the world for turbines, a lack of ships with the capability to install deep sea arrays, a long wait for connection to the grid, and uncertain planning laws for vital land-based pylons are all contributing to companies eyeing up more lucrative markets overseas – particularly China and the US, which both have ambitious wind plans.

"Advances are still required to accelerate the cost competiveness of constructing offshore [in this country]," said Paddy O’Kane, general manager of technical services at Airtricity.

Britain is legally committed to generating 15 per cent of all energy from renewables by 2020. This means that wind power, which presently contributes about four per cent of UK electricity, must expand to generate 36 per cent within 12 years.

"Reducing the cost of offshore wind, especially in the current economic circumstances, is vital, and as the industry expands into deeper waters conditions will inevitably be more challenging. A major and rapid expansion of offshore wind is essential to meet the EU 2020 target," said Kevin McCullough, chief operating officer at RWE Innogy.

A BWEA report from earlier in the year estimated that over 7,000MW of wind farm capacity was stuck in the planning system, and while 70 per cent of major planning applications were processed within 16 weeks only five per cent of wind farm applications were approved in the same time period.

A planning reform bill that will allow wind farms to be given a quicker consent process is currently tabled, but will not be passed until late next year.

The government announced this morning that now work has finished on Centrica's Lynn and Inner Dowsing wind farms near Skegness, the UK has overtaken Denmark to become the world leader for wind farms built offshore, with 597MW fully constructed.

But a lack of progress on other renewables means wind is all the more important and the UK must do more if it wants to hit 2020 targets, said Nick Rau, Friends of the Earth’s renewable energy campaigner.

“It’s great news that the UK is now leading the world in off-shore wind power – but we’re still near the bottom of the European league table for harnessing renewable energy," he said.

"The Government must stop trying to wriggle out of European green energy targets and put a massive effort into making renewable power the number one source of energy in the UK."