Brewing storm over Labour's dream of wind power future

Today's long-awaited renewable energy strategy is already being blown awayby industry experts, reports Ambrose Evans-Pritchard

As the British Government today prepares to embrace green energy with avengeance, it is worth remembering that all the world's major powers aretoying with the same agenda.

Wind turbines are sprouting up all over the US

The US is all of a sudden the new Mecca for wind power. Turbines toweringover 400ft are sprouting up across Texas and the lower Prairies, and GE isbetting that power generated by wind could reach 15pc of all US electricitysupply in a decade. Roughly 30pc of America's corn crop this year will beused for bio-fuels. Fat subsidies help.

China is already the world's number-two maker of solar panels. The kit isnow routinely fitted on new houses. This month's National Energy Plan showsthe country is hellbent on cutting oil imports. The latest batch of 6mstudents will have to master the new green energy doctrine to get intouniversity.

Washington and Beijing are making cold geo-political calculations. Neitherwants to be pushed around by hostile petro-powers, or fall hostage to oil at$200 a barrel. Both are going nuclear, but uranium is scarce. Both havecoal, but the technology of carbon capture has not yet been cracked.

This is the global picture as Labour releases its long-awaited RenewableEnergy Strategy today, hopefully ending years of drift, muddle, and a stringof ostrich policy papers. It is very late in the day to play catch-up.

It aims to raise the green share of Britain's energy to 15pc by 2020, fromunder 2pc today. This much we knew already. Labour agreed to the target atan EU accord last year.

From what has been trailed, it boils down to a dash for wind. Fast-trackplanning authority will allow officials to rush through approval for atleast 3,500 wind turbines on hilltops and offshore sandbanks on 11 sitesalong the coasts. An estimated £100bn will be spent on wind subsidies in oneform or another.

The Severn tidal barrage will help, perhaps producing 5pc of the country'selectricity. Pity the salmon. The rest will come from coaxing us to fitsolar heaters in our homes, and forcing us to insulate.

There will be tax breaks for electric cars, the new hope. Specialists thinklithium-ion batteries run off the mains could slash fuel demand for motorengines by half. But this is a long way off.

Strip out the frills and theentire strategy comes down to wind. It means lifting wind generation from 4gigawatts to 25GW, a 525pc leap. The UK's current capacity is 76 GW from allsources.

"This target is not feasible," said Dr John Constable, director of theRenewable Energy
Foundation. "We are talking about a phenomenal amount ofenergy. There are not enough machines or boats available to build it all."

Siemens has sold out of turbines until 2012. The world has only one shipable to place the 200-ton turbines offshore.

"The Government is being insincere. They know they won't be around in 12years when this fails," added Dr Constable.

Wind enthusiasts say the debate in Britain is stuck in a time-warp,rehearsing the cost arguments of the late 1990s when oil was cheap. Thelatest 2.5 megawatt giants are vastly more efficient that the oldmini-mills. Drawing on aerospace technology, they have rotors that dwarf thewingspan of an Airbus A380 superjumbo.

They have cut costs to $0.08 a kilowatt hour in Texas, easily undercuttinggas at today's price.

This compares to $0.065 for nuclear and $0.05 for coal( without carbon capture), according to the US Electric Power ResearchInstitute.

Costs are higher in the UK. Offshore farms are yet more expensive. A reportby the Centre for
Policy Studies said the experience of Denmark shows thatwindmills add almost no net electricity because power plants have to be keptrunning for when the wind fails to blow.

The claims infuriate the British Wind Energy Association. "This isridiculous. If it were true, why would Denmark now be raising the averagewind share of its electricity from 20pc to 27pc in five years?" said theBWEA's director, Chris Tomlinson.

The BWEA said tracking systems are now so sophisticated that they canpredict wind supply on an hourly basis, greatly reducing the need for slack.While some back-up capacity is needed, the plants can run at much lowerlevels - cutting the need for fossil fuels.

"This renewable target is a huge opportunity to use our skills from NorthSea oil and gas and create a whole new industry," he said. The Governmentestimates that the green push will create 160,000 jobs.

Scandinavian, German and Spanish companies manufacture most of the kit forwind farms, although Denmark's Vestas makes blades in the Isle of Wight.Although Britain's Renewable Energy Systems has emerged as global player.

Scottish & Southern Energy, Centrica, E.on's Powergen, and Iberdrola'sScottish Power are all betting on UK wind, despite complaints of rampantcost inflation. Shell has pulled out of the London Array project - supposedto produce a quarter of London's electricity - to pursue richer pickings inthe US.

Matthew Farrow, the CBI's energy chief, said Labour's dash for wind ismisguided and far too expensive. "This renewables target is just adistraction. We have left it dangerously late to renew our nuclear powerstations. As a nation, we really are up against a very serious deadlinehere," he said.

Mr Farrow said the Government had been "half-hearted" about clean coal. Butthat would require No 11 Downing Street to bite the bullet on heftysubsidies for carbon capture and storage. It doesn't have the money. TheBudget deficit is already in breach of EU rules.

Wulf Bernotat, head of E.on, said Labour seems to have been swept way by a"romantic" belief in the magic of green power, neglecting to deal with thecentral threat, which is that over half of the UK's power plants will soonbe obsolete.

"The UK is in a very bad situation. You cannot replace 60pc of the country'sgenerating capacity by betting on renewables. It will be decades before wereach that point, and until then Britain is going to need coal-fired units.I hope some realism comes through in energy policy," he said.

The risk for Britain is that it gets so enthused - as a late convert - bynew forms of eco-friendly energy that it forgets to deal with the meat andpotatoes of daily power supply. You can get too much of a good thing.