Britain’s vast national gamble on wind power may yet pay off. Wind power has few friends on the political Right. No other industry elicits such protest from the conservative press, Tory backbenchers, and free market economists. The vehemence is odd since wind generates home-made energy and could be considered a ‘patriotic choice’. It dates back to the 1990s and early 2000s when the national wind venture seemed a bottomless pit for taxpayer subsidies. The UK is already world leader in offshore wind. The strategic choice now is whether to go for broke… My own view is that the gamble is worth taking. Pre-modern turbines captured trivial amounts of energy. The electrical control systems and gearboxes broke down. Repair costs were prohibitive. Yet as so often with infant industries, early mishaps tell us little. Costs are coming down faster than almost anybody thought possible. As the technology comes of age – akin to gains in US shale fracking – the calculus is starting to vindicate Britain’s vast investment in wind power. The UK is already world leader in offshore wind. The strategic choice now is whether to go for broke, tripling offshore capacity to 15 gigawatts (GW) by 2030. The decision is doubly-hard because there is no point dabbling in offshore wind. Scale is the crucial factor in slashing costs, so either we do it with conviction or we do not do it all. My own view is that the gamble is worth taking.This source used to be twice as expensive – with subsidies to match – but the gap is narrowing fast. Dong Energy has just signed an offshore deal in the Netherlands at less than £63 per megawatt hour (MWh), with sweetners from the Dutch state. “This reflects what the industry is now capable of delivering in general,” said Samuel Leupold, Dong’s executive vice-president. The Government’s next three offshore auctions will see a staggered fall in strike prices to a maximum of £85 per MWh by 2020, and they will arguably keep falling step by step thereafter until market forces prevail.
Telegraph 14th Aug 2016 read more »