New mega offshore windfarms could supply 2% of UK energy

Licences have been awarded to develop nine massive new offshore wind farms which could - if fully exploited - deliver as much as two per cent of the UK's present day energy requirements.

Developers have been encouraged to move ahead with expensive offshore wind projects by the government's promise to double the Renewables Obligation Certificate (ROC) quota for offshore wind projects agreed by 2015. Under the ROC scheme a windfarm operator makes a lot of extra money on top of revenue gained by selling electricity, and the cost of this is added to consumer bills.

Wind-industry spokesmen welcomed the licence issues, but said that still more government incentives and assistance would be required if any of the work of building the possible turbine farms was to come to Britain.

The Crown Estate, the arm of government which owns British seabed rights (and many other things) announced the licence awards on Friday.

"The Crown Estate will continue to play an active role working closely with our new partners to deliver their offer of 32 gigawatts - which equates to a quarter of the UK's electricity needs," said Roger Bright, Crown Estate chief.

"The offshore wind industry is at the heart of the UK economy's shift to low carbon and could... support up to 70,000 jobs by 2020," added Prime Minister Gordon Brown. "This announcement will make a significant and practical contribution to reducing our CO2 emissions."

According to the CIA, annual British electricity consumption stands at 345,800 gigawatt-hours. Should the full 32 gigawatts of windfarm capacity appear, they could be expected to run at an average load factor of 0.3 or a little better, putting out 84,100 gigawatt-hours over time: as Mr Bright says, about a quarter of present-day electricity consumption.

However, just nine per cent of British energy is today supplied in the form of electricity - the rest is used mainly as fossil fuels such as gas, petrol, oil etc - so the new wind farms would in fact supply about two per cent of our national energy requirements assuming full development and no growth in consumption between now and completion of the projects. Emissions cuts would be of similar magnitude.

Investors believe that the windfarms can pay their way, as the government has stated that any offshore project agreed by the end of 2014 will be issued two ROCs for every megawatt-hour it produces, rather than 1.5 as is normal for offshore farms or just one for onshore facilities. Anyone supplying electricity in the UK must get hold of ROCs equal to 9.1 per cent of the juice supplied at present or pay a "buy out" fine, and this percentage will climb to 15.4 as of 2015.

The end effect of this is to make all electricity more expensive, so covering the greater cost of producing some of it in windfarms.

British wind farmed by British workers... or not

The ROC scheme, however, does nothing to ensure that turbines will be made in Blighty or even erected/maintained by British workers. The UK's only wind-turbine factory was shut down by its owners last year in favour of investments in China and the US, and current offshore wind projects - as is normal in much of maritime industry - are already making use of cheap foreign labour.

The British wind-biz industry body says that more government help over and above the ROC scheme would be necessary if the hoped-for green jobs bonanza is to appear.

"Upgrades to the UK's electricity grid will be required," said the British Wind Energy Association in a statement on Friday. "Government commitments are needed to ensure that upgrades and extensions are built to carry the renewable energy power produced in windy and offshore areas to customers through the UK."

The windbiz spokespersons continue:

BWEA argues that the Government needs to lead on upgrades to UK ports to provide state-of-the-art quayside facilities and create coastal manufacturing and research hubs for manufacturers... With new turbine assembly plants in UK ports, domestic manufacturers would be able to enter the component supply market for gearboxes, bearings and castings.

The BWEA didn't make clear how the government should fund the necessary moves.

Different energy analysts have also warned that a large proportion of erratic wind electricity supply will also increase the cost of the remaining "thermal" generators. As this would be on top of ROC-driven price increases, a need to upgrade the national grid, and unspecified subsidies or levies to make sure the offshore industry doesn't go offshore, the final pricetag for the new wind farms and their two per cent CO2 cut looks like being a big one.

Last week's licences, however, are no guarantee that the full 32 gigawatts of capacity will ever appear, or indeed that any of it will. Most of the licencees gave no date for a firm decision, but the government's extension of double ROCs to 2014 offers investors some breathing space. The go/no-go call on the Dogger Bank project, largest of them all at nine gigs, is expected - funnily enough - in "late 2014".

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