Memorandum from the British Wind Energy
The British Wind Energy Association, established
in 1978, is the largest renewable energy trade association in
the UK. It has more than 175 companies in membership, including
every offshore developer and all 473.6MW of currently installed
wind energy. The Association's membership has more than tripled
during the past four years.
This note is substantially based on the Association's
submission to the Cabinet Office Performance and Innovation Unit.
Additional supporting information, covering these points in more
detail is available at www.bwea.com.
Wind energy is widely expected to become the
major renewable source developed under the renewables obligation.
This is for a number of reasons:
(1) Price. Wind projects can typically be
developed (onshore) for between 3p and 5p/kWh. This brings most
projects within the obligation price threshold;
(2) Volume. Studies vary, but indicate domestic
wind energy availability of several orders of magnitude greater
than total UK demand. The UK is the windiest country in Europe.
Wind is therefore attractive to "volume" generators
and suppliers; and
(3) Market confidence. More than 23,000MW
of wind has now been successfully installed around the world.
The early indications of the effect of the introduction
of the obligation are encouraging for the stimulation of the wind
business. The obligation is not so beneficial for other, often
more expensive technologies (including offshore wind, which is
ameliorated to some extent by capital grants) and certainly not
for those technologies specifically excluded. This tends to reinforce
the likelihood that wind will be the major element installed.
196 MW will be installed during 2002. This is
the "best ever" year for wind energy in the UK. A projected
1,600MW of offshore wind will be installed between 2003 and 2005.
A further estimated 4,500MW of (onshore) wind is entering the
An approximate calculation for the volume of
wind necessary to meet say, half of the target would be approximately
5,000MW, to be installed over the coming 9 years. This is entirely
possible (German construction in 2001 was 2,659MW (ie 7.3MW, approximately
five 1.5MW turbines every day)), but would require rapid acceleration
of deployment from current projections.
There are a number of major obstacles facing
the development of even these modest targets. These are:
Considerable progress has been made in Scotland
in the successful operation of the planning system to deliver
renewable energy targets. Quite the opposite has occurred in Wales.
In England the industry awaits the uncertain outcome of the process
begun with the regional assessments of renewable energy resources.
We do not yet understand how the resource studies
will be converted in regional plans (or as previously described,
"planning targets"), or how central Government will
work with regions and locally in promoting the appreciation and
implementation of such plans.
It is our firm view that NETA is, in its operation,
unfair to wind energy, adding an unnecessary additional cost to
generation. Although trading may be able to minimise the impact,
particularly on larger or quasi-vertically integrated companies,
there remains a risk, which adds a cost. It may be a side-effect
of the implementation of NETA that smaller (and in particular,
very small, so-called "community schemes") are made
unviable because of the additional costs, and therefore reduce
competition in the market. We are in ongoing dialogue with the
Government and with the regulator on this matter.
To quote from our formal submission to the regulator,
" . . . despite the emphasis on reliability and predictability,
perhaps . . . thermal plant presently receives favourable treatment
under NETA. We noted that reserves are primarily influenced by
the need to cover against the loss of the largest unit on the
systemnormally Sizewell B. The cost of these reserves is
not, however, charged to that station and we therefore find it
even more incongruous that the risks associated with wind on the
systemnon-existent at the momentshould be so heavily
We therefore [propose] that wind generators
be exempted from exposure to the balancing market for a limited
period of timeeither until satisfactory and fair arrangements
are made, or until the amount of wind on the system reaches the
point where measurable operational penalties are incurred. This
is not "special pleading" for wind, rather a reversal
of the present situation where wind receives unfair treatment".
Wind, like all renewables is (with only the
very largest projects the exception to the rule) small-scale and
dispersed, often in places with poor electricity distribution
and transmission infrastructure. Access to "the grid"
is an increasingly important question as connection points are
scarce and planning for connection of further, particularly large-scale
(such as offshore and further larger wind projects) requires considerable
attention, on which we are now making extensive representations.
This occurs at all levels, from local populations
wary of unfamiliar technology, to a generalised tendency to prefer
the status quo in large institutions as diverse as MoD,
NGC and OFGEM.
To help overcome this latter point, a genuinely
integrated effort between Government departments, with a supporting
"awareness of need and familiarity with the technology"
information programme would be a considerable boon to introducing
more renewables into the system. This would be helpful whether
the agenda was climate change, sustainable generation, security
of supply or any similar policy agenda.
In summary, the technology is mature, the resource
enormous and the price competitive, even with existing conventional
generation. Achieving its potential is largely only constrained
by institutional obstacles.