Problems Threaten To Blow UK Wind Energy Off Course
UK: November 10, 2008
LONDON - The British government insists it is on track to hit ambitious
renewable energy targets, but the industry says a swathe of problems in
developing wind farms threaten to blow the plans off course.
Executives say difficulties in building farms and connecting them to the
national power grid, unwillingness by investors to fund them and a shortage
of turbines could stop Britain hitting its target of generating 15 percent
of its electricity from renewable sources by 2020.
Ministers say the UK generates enough electricity from wind energy to power
more than 1.5 million homes and they are studying plans to produce enough
for every British home. "Expansion of offshore wind remains on course,"
energy minister Mike O'Brien told a conference in London last month.
Yet at the current rate which wind farms are being built, the UK will
generate only about 5 to 7 percent of its energy from renewables by 2020,
Scottish & Southern Energy Plc's (SSE) chief executive Ian Marchant said
earlier this year.
SSE, which is involved in developing the 1.3 billion pounds 504 megawatt
Greater Gabbard farm in the North Sea off the coast of East Anglia, said
Britain will need about four schemes the size of Gabbard per year if it is
to achieve the 2020 target.
"We've made significant progress with a number of key projects in the last
six months, but there's still much more to do to hit the 2020 target," an
SSE spokesman told Reuters.
Keith Anderson, director of the renewables unit of Scottish Power, part of
Iberdrola SA, said the UK urgently needs to modernise its grid to handle the
extra wind farms needed.
One proposed upgrade in Scotland, which would enable onshore and offshore
wind farms in the region to be linked to the grid, was likely to take 10 to
12 years, he said.
"We can't afford for that process to keep taking 12 years," Anderson said.
"It needs to happen now."
Adam Bruce, chairman of the British Wind Energy Association (BWEA), said
ministers needed to overhaul the regulatory regime to encourage grid
operators to build connections to farms.
NO CONNECTION
"I think grid (connections) for onshore and offshore remain the big
imponderable," Bruce told Reuters in an interview.
"We need to find a way of incentivising the grid companies to go out and
build them ... at the moment, even if you get consent for a wind farm,
there's no certainty you're going to get a connection."
Investors say cash sweeteners to develop offshore wind are also inadequate
-- one reason BP has followed Shell in abandoning involvement in British
wind farms.
BP, which had planned to build a small onshore farm in southeast England, as
well as farms in other parts of the world, said it would focus on the United
States instead.
"The UK is a relatively crowded country with fewer opportunities, whereas
the United States has a lot of space and the right regulatory frameworks," a
BP spokesman said.
Companies such as Shell are becoming increasingly willing to abandon
offshore wind projects if their economics did not stack up, according to a
study by consultants Arthur D. Little.
Turbine production bottlenecks and a relative lack of suppliers were also a
problem, the report said.
There are 149 offshore turbines in UK waters, compared with an extra 3,000
needed to hit the 2020 target, representing "an enormous challenge to the
industry", the report said.
With just two major offshore turbine manufacturers, Siemens AG and Vestas
Wind Systems A/S, supply constraints are unlikely to ease in the short term,
it said.
Limited turbine availability may start affecting offshore wind capacity
growth, probably between 2013 and 2015, Rabobank said in a report.
Environmental lobby group Greenpeace has urged the government to introduce a
"Green New Deal" for renewable energy to help UK offshore wind turbine
makers, while engineering group Umeco Plc, which supplies products used to
make blades for wind turbines, said the UK had few turbine blade makers and
needed to boost manufacturing.
"They've somewhat missed the boat in this country, so I suspect (Britain)
will be importing the blades," Umeco's Chief Executive Clive Snowdon told
Reuters."
Andrew Cox, global head of utilities for the transaction services branch of
consultancy KPMG, said the 2020 target would be challenging and rapid
solutions were needed.
"It's going to be about getting over these issues quickly, because there's
not that much time left," he said.
(Editing by David Holmes)
Story by Philip Waller
REUTERS NEWS SERVICE
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