Wind farms must be nearer coast to meet targets, says report

• Carbon Trust urges series of measures to help sector• Investment also needed to create cheaper technology
Terry Macalister
The Guardian,
Tuesday October 14 2008

The government must allow companies to build offshore wind farms much closer to shore, as part of a series of measures to revitalise a sector that has almost stalled due to insufficient support, competitive pressures and rising costs, an authoritative report warns today.
"Without urgent action there is a risk that little additional offshore wind power will be built by 2020 beyond the eight gigawatts already planned or in operation," says the report from the Carbon Trust, an organisation established by the government to help build a greener future.
It estimates that operators could save up to £16bn if they were allowed to site turbines in shallower waters, and argues that it would be possible to take a further £14bn off the estimated £75bn investment needed if more funding were given to research and development.
The trust argues that the government's incentives mechanism, the Renewables Obligation, needs to be made more attractive, and hopes that establishing a Department of Energy and Climate Change will herald a new beginning for wind power.
Without such measures, Britain will fail to meet the climate change targets it has pledged to the European Union at a time when companies such as Shell are pulling out of offshore schemes in pursuit of cheaper onshore wind opportunities in the US, it says.
Tom Delay, the trust's chief executive, said: "We need something similar to the [1990s'] 'Dash for Gas' if offshore wind is to play the role expected of it. Industry costs have become very, very expensive, and both government and companies need to work hard to tackle this."
He stressed that wind farms nearer to shore need not be in sight of beaches, just closer than areas such as the Dogger Bank, which is 60 nautical miles away. Inshore areas have calmer weather and permit smaller, lighter structures, making them cheaper to build and operate.
The government said last night that the trust report highlighted interesting savings but was cautious about the demands for shallower waters to be opened up. Mike O'Brien, energy and climate change minister, said: "The issues of fairness and cost-effectiveness, along with impacts on the environment and on other users of the sea, will be considered carefully in the lead-up to our renewable-energy strategy to be published next spring."
In its report, the trust argues that the UK will need at least 29GW of offshore wind power by 2020 to hit the EU's renewable goals but only less than a third is in the pipeline, partly because steel and other construction materials have tripled in price since 2005.
"Currently the risk/return balance for offshore wind is not sufficiently attractive, and regulatory barriers would delay delivery well beyond 2020," says the report, put together with input from industry and government.
Delay said the 29GW target by 2020 was a "significant challenge" but realisable. Technology costs needed to fall but £600m of public money plus £1.2bn of private funding could bring breakthroughs that could cut the overall bill by £14bn.
The government introduced policies this summer that will kickstart the wider renewable sector, the trust accepts, but it says the incentive scheme needed to be expanded and extended: "The required adjustments to the Renewable Obligation will in any case bring it closer to a feed-in tariff [an above-market return for feeding green electricity to the grid]. The government should choose the option that minimises disruption for industry."
The trust also believes the government must reform regulations to make planning easier, and update National Grid transmission lines. These measures could create 70,000 jobs in Britain and £8bn of annual revenues here and abroad, it says.
Nick Rau, renewables campaigner at Friends of the Earth, expressed caution at siting turbines too near the shoreline, and said each project needed to be assessed on its merits. "But we accept there are huge costs involved in offshore wind, and they are escalating. We need some kind of government intervention if we are to overcome these hurdles; all the evidence is that a feed-in tariff would help."
John Sauven, executive director of Greenpeace, said: "We need to promote a massive redirection of investment away from the speculation that caused the bursting financial and housing bubbles and into green industries and job-creating programmes that will help us tackle climate change. Offshore wind could be a huge business opportunity for Britain."