When oil, coal and gas are cheap, who is going to throw their cash into the wind?

The Times
March 26, 2009
Robin Pagnamenta, Energy and Environment Editor

The latest setback to Britain’s goal of producing more than a third of its energy from renewable sources is the result of a global collapse in investment in green projects in recent months.
The credit crunch has undermined developers’ ability to borrow to fund big wind and solar power schemes, while tumbling prices for conventional fuels like oil, coal and gas have undermined the economics of the renewables industry.
Angus McCrone, of New Energy Finance, says that global investment in clean energy — including wind, solar, biomass and tidal — hit a peak of $155 billion last year, up from $148 billion in 2007. “This year we will struggle to get anywhere near those levels,” he said.
The restricted supply of finance could not have come at a worse time, amid growing concern about the need for urgent action to tackle climate change.

The funding squeeze is likely to be a key consideration at a United Nations meeting in Copenhagen in December to hammer out a successor agreement to the Kyoto Protocol.
Despite Gordon Brown’s ambitious talk of a renewables revolution, progress has been slow in Britain, which remains a relative backwater in terms of investment.
Iberdrola now operates 9 gigawatts of renewable energy worldwide. Most of its projects are in Spain and America where subsidies, ample land and lax planning systems make investing in large-scale wind projects commercially attractive. On some days Spain generates 30 per cent of its electricity from wind. In Britain financing problems have been amplified by a series of domestic troubles that have led to delays — in particular securing planning permission and access to grid connections.
The Government’s solution has been to place greater emphasis on offshore wind projects. However, these are much more expensive to build and the technology is relatively unproven on a commercial scale.
The Crown Estate, which owns Britain’s seabed, has opened up its waters to the development of huge wind projects but there are doubts about how many of these will be built without fresh subsidies.
The Government remains hesitant to pass draconian legislation that risks forcing up consumers’ energy bills. The outlay to build renewable energy schemes is far higher than dirtier coal or gas-fired power stations.
A spokesman for the Department for Energy and Climate Change said: “We take very seriously the concerns that some developers have had for some wind developments and we are looking to see if there is any further action that we could take in response.”