Back in the UK?7 December 2018
In 2015, David Cameron effectively called time on onshore wind by cutting subsidies for new projects. However, ministers have recently said they see onshore wind in the future energy mix. So which way is the wind blowing for new onshore wind farms? Heidi Vella talks to Energy UK policy manager Joshua Atkins to find out more.
“Enough is enough,” said David Cameron – then UK Prime Minister – about onshore wind in 2014, citing poor public opinion of the technology and a lack of need for new projects. As soon as he was re-elected a year later, new projects were shut out of the Renewables Obligation scheme, which is effectively a subsidy.
However, energy ministers Richard Harrington and Claire Perry said in October 2017 that the government was “looking carefully” at new onshore wind projects, with Perry exclaiming that she saw the renewable energy format as “absolutely part of the future”.
This change of attitude comes amid growing evidence that onshore wind is significantly cheaper to run than other forms of energy, and not as unpopular as originally thought.
Falling costs of onshore
Last year, a record number of onshore wind turbines were installed as developers rushed to meet the government deadline for securing subsidies. A generating capacity of 2.6GW was installed, compared with the previous record in 2013 of 1.3GW.
Yet there are fears that these figures could plummet if policy doesn’t change. “As we have seen, by denying these technologies a route to market, investment has fallen, with the development pipeline and supply chain correspondingly faltering,” says Energy UK policy manager Joshua Atkins.
“A free, fair market would level the playing field for all technologies in the contract for difference (CFD) and capacity market to allow all least-cost technologies to be deployed in even greater volumes than already seen,” he adds.
Many hope the government will take note of the changing economics for onshore wind, which is now extremely cheap. It now qualifies as a ‘leastcost technology’ as it is cheaper on a £/MWh basis than many other sources, as evidenced by recent CFD auctions.
Furthermore, a 2017 report by Arup, carried out for ScottishPower Renewables, shows that a CFD strike price cap in the region of £50/MWh– £55/MWh would enable delivery of onshore wind to the consumer at a similar price to that of a new gas power station.
Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, agrees, saying, “It’s cheaper to build an onshore wind farm than a gas-fired power station because prices have fallen so much over the last few years. It is a global industry, the technology is getting better, more efficient and, as such, the financing is falling because there is less risk.”
Changes in public opinion
In 2017, the government announced onshore wind could compete for subsidies if built on remote islands, such as off the coast of Scotland. But cheap or not, does the public want more?
Cameron previously said that the people were “frankly, fed up with so many wind farms being built”. Fast forward to 2018 and that no longer seems the case – if it ever was.
In the latest Department for Business, Energy and Industrial Strategy Climate and Energy Change public attitude tracker, 76% of respondents supported onshore wind.
The initial Conservative campaign against onshore wind was led by Chris Heaton-Harris, who organised a letter to the prime minister signed by more than 100 MPs, calling for drastic cuts in onshore wind farm subsidies due to the unpopularity of new projects.
Although this seemed to be at odds with actual public attitudes around the same time, a Department of Energy and Climate Change (now the Department for Business, Energy and Industrial Strategy) public-survey tracker report found 59% were actually in favour of onshore wind technology.
Furthermore, Atkins says that robust planning regimes mean that developments only occur where there is local public support.
On the Isle of Lewis in Scotland, for example, according to reports, there has been some pushback on EDF’s proposal to build a wind farm that it says will use wind turbines taller than those used on existing onshore farms (187–200m). However, the main issue seems to be that some residents would prefer the turbines to be owned by the community.
Impact on UK energy mix
More onshore wind could even reduce bills for customers, according to Atkins.
“We believe it could,” he says, “Evidence, including a recent report from BVG Associates and our member ScottishPower, suggests that onshore wind could in fact be the cheapest form of generation in the UK because our unique geography and the diversity of our electricity market are huge enablers for the technology.”
If allowed, Atkins says he is confident that onshore wind could provide a net-benefit to the taxpayer and consumer alike.
Marshall agrees, “If the ban on onshore wind was lifted it is very likely fixed price contracts would be at or below the wholesale price of power; it’s the cheapest way of generating electricity, so the more of it we have the more bills will come down.”
For this to happen, subsidies are needed because, although extremely cheap to run, wind farms require a lot of up-front investment. If the government softened its position towards onshore wind and lifted the subsidies ban, capacity could increase exponentially.
Energy UK says that many of its members have projects that are “shovel-ready” with planning permission in place, but a contract – whether CFD or capacity market – is essential for derisking them due to the up-front capital expenditure. “The appetite for investing in UK onshore wind, or any other technology for that matter, will always exist where there is a robust, reliable and secure investment regime,” adds Atkins.
Future potential for onshore wind
Apart from new projects, there is huge potential for upgrades of new onshore wind projects. For example, Energy UK points out that, approaching the 2020s, there will be many wind farms coming to the end of their service life. They will be looking to repower and refurbish existing turbines that are often located in the best, windiest spots.
“It is essential there is a regime in place to deliver this, otherwise we run the risk of seeing onshore wind farms coming offline and not being replaced, potentially leading to a reduction in our renewable capacity,” says Atkins.
The winds have certainly changed for the cost of onshore turbines: they are now cheaper or comparable with competing energy sources. The only question is if the government will take heed and blow the other way on new onshore energy projects.
A CFD is a private law contract between a low-carbon electricity generator and the Low Carbon Contracts Company, a governmentowned company, introduced as part of the now-implemented Electricity Market Reform programme. A generator party to a CFD is paid the difference between the ‘strike price’ – a price for electricity reflecting the cost of investing in a particular low-carbon technology – and the ‘reference price’ – a measure of the average market price for electricity in the GB market. It gives greater certainty and stability of revenues to electricity generators by reducing their exposure to volatile wholesale prices, while also protecting consumers from paying for higher support costs when electricity prices are high.
The public perception of wind power
Public attitudes trackers consists of one annual survey every March and three shorter surveys, typically in June, September and December, which repeat a subset of questions where attitudes might shift with greater regularity or be influenced by seasonal factors.
For the 25th edition, data was collected between 28 March and 6 April 2018, using face-to-face, in-home interviews with a representative sample of 2,102 households in the UK. Support for the use of renewable energy reached a peak of 85% at wave 25, an increase from 79% at wave 24 and the same stage last year (wave 21). Opposition to renewable energy remained very low, at 3%, with only 1% strongly opposed. Support for renewables was particularly high for people in social grade AB (93%), those with household incomes of over £35,000 (93% for household incomes between 35,000 and £49,999, and 90% for those over £50,000), and males (90%). Support for solar energy and offshore wind were also at their highest recorded levels since the tracker began (87 and 83%, respectively).
Support for other renewable energy developments remained high: 81% said they supported wave and tidal energy, 76% supported onshore wind and 69% support biomass.