“Enough is enough” said former UK Prime Minister David Cameron 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 Renewable Obligation scheme, which is effectively a subsidy.
However, energy ministers Richard Harrington and Claire Perry said in October last year that the government is ‘looking carefully’ at new onshore wind projects, with Perry exclaiming that she saw the renewable energy format as ‘absolutely part of the future’.
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By GlobalDataThis change of attitude comes amid growing evidence that onshore wind is significantly cheaper 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 of1.3GW.
Yet there are fears that these figures could plummet if policy doesn’t change.
“As we have seen, by denying these technologies [wind power] a route-to-market, investment has fallen with the development pipeline and supply chain both correspondingly faltering,” says Energy UK policy manager Joshua Atkins.
“A free, fair market would level the playing field for all technologies in both 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 ‘least cost 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 windfarm 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
Last year, the government announced onshore wind could compete for subsidies if built on remote islands, such as in Scotland. But cheap or not, does the public want more?
David Cameron previously said that the people were “frankly fed up with so many windfarms 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 (BEIS) 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 windfarm subsidies due to unpopularity of new projects.
Though this seems to be at odds with actual public attitudes around the same time. A Department of Energy and Climate Change (DECC), now BEIS, public survey tracker report found 59% were actually in favour of onshore wind technology.
Furthermore, Atkins says robust planning regimes mean 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 push back on EDF’s proposal to build a windfarm that it says will use wind turbines taller than those used on existing onshore farms (200m – 187m). However, the main issue seems to be that some residents would prefer the turbines to be community-owned.
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 if we have the more bills will come down.”
For this to happen, subsidies are needed because although extremely cheap to run, windfarms require a lot of upfront investment. If the government softened its position towards onshore wind and lifted the subsidies ban, capacity could increase exponentially.
Energy UK says 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 de-risking 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
Besides 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 windfarms coming to their end-of-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 windfarms 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, will the government take heed and blow the other way on new onshore energy projects?
