The UK Offshore Wind Industry

By Paul Homewood  

 

 

A year ago, I published an analysis of the state of the Offshore Wind industry in the UK here. This is an update of the situation, based on Renewable UK’s latest report, Offshore Wind Project Timelines.

 

 

Capacity 

 

http://www.renewableuk.com/en/publications/reports.cfm/Offshore-Wind-Project-Timelines

 

This is what Renewable UK’s report shows. Ignoring the “In Development” category, most of which, even if it comes to fruition, will not come on stream until the late 2020’s, we are left with 20.3GW, nearly all of which should be operational by 2022.

Based on current capacity utilisation of 35%, 20.3GW of capacity would generate about 62TWh a year, about 18% of the UK’s total generation.

Not all of this, of course, will necessarily come to fruition, and, as the report mentions, other large projects such as the Atlantic Array, London Array 2 and the Argyll Array have been dropped in the past year.

 

 

Subsidy

 

https://www.gov.uk/government/news/record-investments-of-40-billion-in-renewable-electricity-to-bring-green-jobs-and-growth-to-the-uk

 

The new system of strike prices, introduced under last year’s Energy Bill, came into effect for wind farms commissioned since April 2014.

Wind farms already in operation remain on the existing system of support under the Renewables Obligation. According to DECC,

These prices [CfD’s] are broadly comparable to the support levels available under the Renewables Obligation, with a number of adjustments to account for the benefits of CfD

If, on a conservative basis, we take the £140/MWh as being representative, and a wholesale price of electricity of £50/MWh, at today’s prices we are looking at a subsidy of about £97/MWh.

With output of 62TWh pa, this gives an annual subsidy of £6.0 billion by the time all the capacity is in place around 2022. And all guaranteed for 15 years.

This figure, of course, is only part of the extra costs being loaded onto our electricity bills. Nevertheless, apart from tidal/wave power, offshore wind is the most expensive renewable option.

 

Ownership

 

The full list of wind farms is in the Appendix, but the table below summarises ownership of all projects either operational, under construction, with planning permission or in the planning process.

Where there is joint ownership, I have assumed equal shares.

 

OPERATOR	COUNTRY	MWH	%
CENTRICA	UK	509	2.5
DONG	DENMARK	2955	14.6
EDF	FRANCE	547	2.7
EDPR	USA	875	4.3
ENECO	NETHERLANDS	485	2.4
EON	GERMANY	1320	6.5
MAINSTREAM	IRELAND	850	4.2
RWE	GERMANY	1964	9.7
SCOT POWER	SPAIN	794	3.9
SIEMENS	GERMANY	592	2.9
SSE	UK	2995	14.8
STATOIL	NORWAY	1560	7.7
STAATKRAFT	NORWAY	1560	7.7
STADTWERKE	GERMANY	192	1.0
VATTENFALL	SWEDEN	1190	5.9
MARUBENI	JAPAN	86	0.4
REPSOL	SPAIN	875	4.3
MASDAR	ABU DHABI	157	0.8
LA CAISSE	CANADA	158	0.8
FLUOR	USA	525	2.6

 

 

The share of UK companies, Centrica and SSE, only amounts to 17.3%, meaning that the vast bulk of the subsidy will be sent abroad. In addition to the subsidy, of course, is the actual market price for power supplied.

Does any of this matter? Should we be chauvinistic?

In my view, the UK simply cannot afford what will be close to £10 billion a year being sucked out of the domestic economy in this fashion. We already know that the wind industry creates very little added value and very few jobs, while Siemens and Vestas dominate the manufacture of turbines.

 

Ed Davey likes to talk about how much “investment” his policies have attracted. The reality is that we will be paying for this investment many times over. To make matters worse, this “investment” only serves to replace perfectly good generating capacity.

This is economics of the madhouse for which the country will be paying dearly for many years to come.

 

 

APPENDIX 

 

		MW
OPERATIONAL
BLYTH	EON	4
NORTH HOYLE	RWE	60
SCROBY	EON	60
KENTISH FLATS 1	VATTENFALL	90
BARROW	DONG/CENTRICA	90
BURBO	DONG	90
LYNN	CENTRICA	194
RHYL	RWE	90
GUNFLEET 1 & 2	DONG/MARUBENI	173
ROBIN RIGG	EON	180
THANET	VATTENFALL	300
WALNEY 1 & 2	DONG/SSE	367
ORMONDE	VATTENFALL	150
GABBARD	SSE/RWE	504
SHERINGHAM	STATKRAAFT/STATOIL	317
LONDON ARRAY	EON/DONG/MASDAR/LA CAISSE	630
TEESIDE	EDF	62
LINCS	CENTRICA	270
		3631
UNDER CONSTRUCTION
GWYNT	RWE/SIEMENS/STADTWERKE	576
HUMBER	EON	219
WESTERMOST	DONG	210
DUDDON	DONG/SCOT POWER	389
		1394
CONSENTED
DUDGEON	STATKRAAFT/STATOIL	402
RACE BANK	DONG	580
KENTISH FLATS EXT	VATTENFALL	50
GALLOPER	SSE/RWE	340
MORAY	EDPR/REPSOL	1000
BEATRICE	SSE	664
		3036
IN PLANNING
NEART	MAINSTREAM	450
BURBO EXT	DONG	258
EAST ANGLIA	SCOT POWER/VATTTENFALL	1200
RAMPION	EON	700
WALNEY EXT	DONG	750
INCH CAPE	EDPR/REPSOL	750
DOGGER BANK	SSE/RWE/STATOIL/STATKRAAFT	4800
HORNSEA	SIEMENS/MAINSTREAM/DONG	1200
NAVITUS	ENECO/EDF	970
FIRTH OF FORTH	SSE/FLUOR	1050
		12128