Economy blows ill wind for renewable energy

Green energy faces setbacks as Shell, BP and others halt renewable projects

Alok Jha
guardian.co.uk, Tuesday 28 April 2009 16.17 BST

This year has not been a good one for renewable energy, despite promises by politicians all round the globe to make it the centrepoint of economic recovery.
Vestas chief executive Ditlev Engel began 2009 by warning that the economic downturn had left it with a 15% excess in global manufacturing capacity – though he was optimistic about Gordon Brown's promises to create thousands of new jobs in Britain and China's pledge to invest $70bn (£58bn) on electricity grid connections.
A year-long study for the department for energy and climate change worked out that another 5,000-7,000 wind turbines could be built off the coast of Britain by 2020, generating 25GW of energy, equivalent to 25 large coal-fired power stations. The new capacity would be on top of 8GW already being built or in planning, making a total of 33GW.
Analysts at Goldman Sachs, however, were already warning that "the most important theme in 2009 within the alternative energy space will be a move from severe under-supply to one of at least a more balanced market and potentially serious oversupply."
The first big hurdle for wind cropped up in March, with oil company Shell pulling out of wind, solar and hydro power because it felt they were not economic. It said it would concentrate instead on cleaner ways of using fossil fuels, such as carbon capture and sequestration technology.
BP cut 620 jobs at its solar division, Siemens cut 400 jobs from its wind operations in Denmark and Iberdrola, owner of ScottishPower, cut investment in renewables by almost half so far this year.
A month later, developers of the London Array, a project to build the world's largest offshore wind farm in the Thames estuary, approached the European Investment Bank for a bailout, putting the future of the project in doubt.
This week the Guardian revealed that one of the country's most efficient wind farms, at Haverigg in Cumbria, could be dismantled to make way for a new nuclear power station.