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The UK Offshore Wind Industry

January 5, 2015

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 

 

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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

 

image

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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
10 Comments
  1. A C Osborn permalink
    January 5, 2015 6:30 pm

    Let’s hope Chris Booker picks up on your thread and publishes the data so that the wider public can also see the sheer madness and the lies about “more UK Jobs”.
    As you say most of the work will be done abroad and most of the profits will go the same way while the Tax payers get screwed.

    • A C Osborn permalink
      January 5, 2015 6:31 pm

      Of course every one of the damned things will require back up from conventional energy generation.

      • Mr_Twister permalink
        January 5, 2015 9:28 pm

        At least nuclear got a hat tip by 60 odd eminent biologists today, the voice of reason IS Out there… it’s just whispering at the moment!

  2. John F. Hultquist permalink
    January 6, 2015 3:01 am

    There is a children’s song and activity called “We All Fall Down”.
    The next to last part [The activity is spinning in place.] goes like this:

    Let’s twirl!
    Twirl around the circle.
    Twirl around the circle.
    Twirling twirling.
    We all fall down.

    When the towers fall down, who pays?

  3. Paul2 permalink
    January 6, 2015 12:24 pm

    Paul is gridwatch, http://www.gridwatch.templar.co.uk/ , out of date in terms of the wind capacity? I read somewhere that there is roughly twelve gig of wind power capacity.

    • January 6, 2015 12:48 pm

      Seems to be.

      The latest DECC Q3 figures show 8.0 GW for onshore and 4.4 GW for off.

    • biniput permalink
      January 16, 2015 5:22 pm

      How can it be out of date as the info comes from the grid itself. On the gridwatch website it will tell you that about one third (an extra 50%) of wind power is not monitored by the grid as it comes from sources less than 100MW in size. That may account for the difference.

  4. john kelly permalink
    January 14, 2015 11:12 pm

    With this amount of wind power connected to the grid, the next problem will be system instability and loss of the synchronous lockstep. Result will be disconnections as has already happened in Germany.

  5. biniput permalink
    January 16, 2015 5:27 pm

    What would the cost of the fossil fuel power stations be, with fuel of course, that would be needed to replace such wind output? I feel we can only judge how expensive things would be with a relative comparison.

    • January 16, 2015 5:45 pm

      But we need these fossil fuel plants anyway as back up.

      The wholesale market price of electricity is less than £50/MWh, which more than covers the cost of power from gas and coal.
      But the contract price for offshore is currently £155/MWH

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