BT uses over half of 1% of the UK’s electricity and is the single largest purchaser of green electricity in the UK. It buys over 10% of the country’s total supply of renewable electricity. It now seeks to develop wind turbines on some of its own sites. It intends to invest in about 120 2MW turbines to produce about a quarter of its own electricity or between 0.1 and 0.2% of the UK’s total need.
This is an impressively large plan. The cost is about £250m. The financial return will depend on how much of the electricity replaces power BT would have bought from other suppliers and how much is ‘exported’. Assuming very little is used by BT itself, the return will be approximately £50m a year, yielding a return of about 20% on the initial investment. These figures assume that BT gets a yield of about 28% of the rated capacity of the turbines, which is about the UK average.
These figures depend entirely on finding sites. I think that BT may well have substantial difficulties finding as many 120 places where it can capture enough wind to average 28%. Perhaps more importantly, at many of those sites which do have enough wind, I think it will have problems getting connections to the local distribution network. Two of the three initial sites identified by BT are in the Scottish Islands. Although a typical 2MW turbine is not a huge generator to add to the local network, the islands have quite limited electricity needs. Scottish and Southern may not easily be able to add these turbines to their network.
When I asked BT whether it had approached the local distribution companies to check on this point, I was not given an affirmative answer. This raises the possibility that BT announced these plans before detailed consideration of whether its aspirations are technically feasible. So it may be a great idea to erest wind turbines, but it looks like it will be much more difficult than BT realises. Companies like Ecotricity have been developing wind turbines on industrial sites for years. Though planning permission is easier, there are still huge obstacles to overcome. BT needs Ecotricity’s expertise immediately, but it will still struggle to meet its aspirations to grow its wind power capacity.
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New book from Chris Goodall
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