Offshore wind warrants our support

Policy Exchange, a right-leaning think tank, has come out with a paper attacking the subsidies for offshore wind in the UK. Its reasoning is that offshore wind will always be too expensive and that the overseas market for British engineering is limited.

Both of these assumptions are probably wrong. One credible source sees the cost of offshore wind falling to levels competitive with gas, albeit over several decades. And foreign interest in offshore wind is growing as the best onshore sites are completed. A Chinese study estimated the potential for exploitable wind power offshore is about 750 gigawatts, perhaps ten times the UK’s likely resource. Over the next few years China plans enormous investments in sea-based turbines. Similar opportunities are available in the US.

First, a couple of points as to why should the UK want to specialise in offshore wind. The country’s territorial waters are blessed with relatively high wind speeds compared to even the best onshore sites. The UK’s resources are about 40% of the total wind power available to Europe. Installation of turbines is difficult but the UK is well placed because of its expertise in putting oil and gas platforms safely in place in deep, rough water.

Early development of offshore farms has been expensive in the UK (and elsewhere) partly because of difficult construction conditions, a shortage of fixing vessels, limited competition between offshore turbine manufacturers and low levels of historical reliability of installed equipment. The push to develop larger and larger farms, usually with increasingly large individual turbines, should reduce capital and operating costs as operators get more experience. Perhaps as importantly, a large number of turbine manufacturers are in the process of introducing new models suitable for the rough UK conditions. The scope of steep reduction in costs is certainly present, a point denied by the Policy Exchange author Simon Less.

The engineering consultants Mott MacDonald provided an estimate for the recent Committee on Climate Change report on low carbon electricity. The consultancy gives the following prospective figures for 2040. Gas with carbon capture (CCS) is probably the least costly way of generating  electricity from fossil fuels without adding significantly to CO2 concentrations.

Offshore wind – £60-£96 per MWh
Gas with CCS – £95-£104 per MWh

(Numbers on pages 7-9 and 7-10 of http://hmccc.s3.amazonaws.com/Renewables%20Review/MML%20final%20report%20for%20CCC%209%20may%202011.pdf

But you might well ask whether any technology that takes thirty years to get to cost competitiveness is worth backing to that point. The answer is that a large number of expensive wind farms will have been put in place before the experience gained reduces the cost to reasonable levels. (For information, the current wholesale price of winter electricity is about £60 per megawatt hour). Yes, it might take about £100bn to get to the Mott Macdonald 2040 figure but the issue we face is that no technology –other than onshore wind – is likely to be much better. And getting tens of thousands of onshore turbines across all the UK’s western coasts is not looking politically feasible.

The Policy Exchange recommendation seems to be that we should spent a lot more on basic research in low carbon technologies.  However the arguments why this would achieve faster and cheaper results than a hard-nosed push for cheaper offshore wind through heavy subsidy of early turbine parks are simply not made in the think tank’s paper.

The more obvious error is to assume that no other countries are particularly interested in offshore wind.  Having opened its first intertidal wind farm just three weeks ago, China says it wants 30 gigawatts of offshore wind by 2020. The exploitable resources of 750 gigawatts compares to the 30-35 that the UK has plans to develop in the next decade or so.  That’s right, China alone sees a market twenty times the size of the UK.

Recent semi-official suggestions are that the cost of the Chinese intertidal farm will run at about £80 a MWh are probably highly optimistic, but show what might be achieved elsewhere in shallow waters.

The US has a similar sense of the value of offshore wind resources, with a figure of just over 1,000 gigawatts being seen as possible at sites with wind speed of more than 7 metres a second average wind speed and in water less than 30 metres deep. Total potential resource might be four times as much, approximately enough to power the whole US at capacity factors of 30%. (It should be admitted that progress in actually building the wind farms off the US coast has been lamentably slow and dogged by controversy. An excellent site off Cape Cod has been blocked by powerful local residents for years).

In Europe, the UK leads in offshore wind but other countries continue to invest in new turbines. 235 wind turbines were installed in European waters in 2011, averaging over 3 megawatts each. Germany, Sweden, Belgium, Denmark, the Netherlands, and Finland all now have offshore wind farms. The German decision to abandon nuclear virtually obliges it to focus on Baltic wind farms as the most significant source of low carbon electricity over the next ten years. The European Environment Agency says total EU installed offshore wind will rise 17 fold by 2020.

The list of other countries beginning to develop wind grows by the month. S Korea has just announced its first major play, a 2.5 gigawatt farm off the south-western coast. Canada has recently announced firm plans for a pathbreaking development off Ontario.

The UK’s enviably rich offshore resources and its leading world position in the development of complex wind projects miles from a coast give the country a major set of potential advantages in exporting construction and engineering skills around the world. The relentless negativity about wind from an intelligent think-tank is disappointing.

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