UK offshore wind ‘will lower energy bills’ more than nuclear

RenewableUK chief says windfarms could offer cheaper prices than the rates government has agreed with new nuclear power stations

UK offshore wind ‘will lower energy bills’ more than nuclear
The wind turbines of the biggest offshore windfarm in the world, off the coast of north Lincolnshire, England.
Photograph: David Sillitoe for the Guardian

Powered by Guardian.co.ukThis article titled “UK offshore wind ‘will lower energy bills’ more than nuclear” was written by Adam Vaughan, for theguardian.com on Sunday 12th February 2017 13.30 UTC

New windfarms off Britain’s coast could provide cheaper power than the new wave of nuclear power stations, the leading figure in the wind industry has claimed.

Hugh McNeal, chief executive officer of trade body RenewableUK, said in an interview with the Guardian he expected offshore windfarms would secure a deal with government lower than the £92.50 per megawatt hour agreed with EDF for the £18bn Hinkley Point C.

“I wouldn’t be surprised if it [offshore wind] cleared Hinkley prices,” he said of the bidding for a £290m-a-year government subsidy pot in April. The auction is under a scheme known as contracts for difference which offer generators a guaranteed price for their electricity above the wholesale price. A 35-year deal with EDF was agreed last year.

McNeal, a career civil servant who last year joined RenewableUK from the former Department of Energy and Climate Change, was upbeat about the future of offshore wind.

“I don’t think there’s any doubt about the political commitment of any party, apart from perhaps Ukip, to offshore wind. I think it’s got an incredibly healthy future,” he said.

Offshore wind power graph

Construction of offshore and onshore windfarms in the UK was responsible for €12.7bn (£11bn) of investment in 2016, or nearly half of the year’s financial activity for new wind power in the EU.

The industry has also been buoyed by recent figures showing the price of offshore wind power had fallen to a third since 2012 to £100 per megawatt hour – a crucial milestone as government will only continue to subsidise the technology if costs fall.

But McNeal said that the decision by ministers to end onshore windfarm subsidies had been hard for the industry. The building of new turbines on land is expected to largely grind to a halt after next year.

Green energy subsidies are paid through energy bills but MPs said last week that government efforts to communicate the impact on consumers had been “shambolic.” McNeal said he found the focus solely on the cost of new low carbon power “a little bit odd”, given the other factors driving energy prices.

Three of the UK’s big six energy suppliers have announced energy price rises in the face of a variety of increasing costs, the bulk of which are higher wholesale prices. “We are perhaps a little bit overexposed to global markets over which we have no control which fluctuate over time,” said McNeal.

Government officials should do more to spell out all the costs of energy to consumers, he added. The impact of renewable energy subsidies on bills has previously been broken down but the effect on bills from subsidies to coal power stations for providing backup power, for example, are not.

However, he defended the Conservative party, arguing it was unfairly derided as anti-renewables. “We have to actually just look at what’s been achieved,” he said.

“I’m not saying to you that there isn’t a challenge around the [Conservative] onshore wind manifesto commitment, of course there is. But the record is still a pretty remarkable one.”

Renewable energy now supplied a quarter of Britain’s electricity today, he said, compared with a marginal amount before the 2010 general election when the first of three Conservative-led governments came to power.

Energy mix graph

McNeal would not be drawn on whether Labour’s energy policy – which is pro-renewables and pro-nuclear but would ban fracking for shale gas – was credible. But he said questions of energy supply should be depoliticised.

“I don’t think it’s my job to tell any party what it’s energy policy should be. Let’s just take the heat out of all this,” he said. “I just don’t think it does anyone any good to be in public fighting between different forms of technologies.”

Despite saying last year that new onshore windfarms in England were “very unlikely”, McNeal suggested the technology would come back because it was so cheap. “I don’t think onshore is done at all. I think onshore wind has a terrific future in our country.”

 

 

 

Onshore wind graph

McNeal said he was confident wind power in the UK would thrive post-Brexit, even though the industry’s growth so far has been driven in part by binding EU renewable targets for 2020.

“The idea that we need a separate European package [of support] – that would be the crucial thing that would drive our industry – we don’t need that now,” he said. The sector would win on market terms, he added.

 

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