Across the country, ScottishPower, part of Spain’s Iberdrola, now owns 29 onshore wind farms with a total capacity of 1,500 megawatts (MW), out of about 9,000MW in the UK as a whole. It is the UK’s biggest onshore wind generator – though this is just one element in a diverse business that also encompasses offshore wind, a retail energy arm supplying more than 3m households, regulated power networks, hydroelectric storage, gas plants, and, until recently, coal plant. ScottishPower is still busy building some 500MW of onshore wind turbines that will receive subsidy, under a generous grace period. But Anderson is adamant that won’t be the end of it. “We are still developing sites,” he says. “We have got options on land, we have got met masts going up, we are doing wind studies, grid studies and development studies, because we absolutely believe we can demonstrate, for the good sites out there, you can bring to the market at a sensible cost compared to other forms of investment in generation in the UK.” Anderson freely admits that new onshore wind would require “some form of contract or floor price to cover that investment” – but then, so too does “every other form of investment in this industry”. Whatever tentative discussions may be taking place on onshore wind, there’s no doubt the far more pressing energy policy question for the Government is whether to give the go-ahead to EDF’s Hinkley Point nuclear project. Doing so, Anderson says, would not make economic sense. He welcomes Theresa May’s “brave” decision to review the project and urges her to reconsider the subsidy deal on which it hinges. “It looks like a contract that was written five years ago on a business case that was probably pulled together 10 years ago. It looks out of line with what’s going on in the market now,” he says. “In today’s environment, it doesn’t look right.” Under the proposed deal, EDF would be guaranteed a price of £92.50 for each megawatt-hour of electricity it generated for 35 years. It might have looked like a reasonable deal back in 2011 or 2012 when it was being drawn up, Anderson says, but now “looks expensive”. “An awful lot has changed in that time.” He points to the falling cost of gas and, with it, electricity. With the impact of the US shale revolution, he says most analysts see gas prices and power prices staying lower for longer. Gas plants offer “faster, easier cheaper” ways of keeping the lights on.
Telegraph 3rd Sept 2016 read more »