Government divisions put wind energy investment at risk

Just last week research commissioned by Renewable UK, the trade and professional body for the UK wind and marine renewables industries, revealed that two-thirds of Britons are in favour of wind power to reduce our dependence on imported fossil fuels and cut carbon emissions. The findings also show that just under half of respondents (48%) feel wind could provide a secure source of energy and help create jobs. The survey found that the number of people who support the price of funding wind energy through their domestic energy bills (43%) far outweighed the number who didn’t (19%).

However, the same day this report was released, National Opposition to Windfarms, or NOW, was launched in Parliament. The group, sponsored by Liberal Democrat peer and former Montgomeryshire MP Lord Carlile, says it will oppose wind farms by ‘tackling policy’. The group will also be a source of ‘collective knowledge and strategic help’ for anti-wind campaigners.

The anti-wind backlash

NOW argues that windfarms hurt the environment by reducing landscape value, killing birds and compromising wildlife habitat. It argues that wind power is unreliable and cannot be stored, requiring backup from more controllable energy sources. Wind requires costly additional grid infrastructure, it claims, the expense of which would be ultimately passed onto the consumer. And the group also says there is no evidence that wind energy effectively reduces CO2 emissions or that they stimulate local industry or employment, and that the subsidies required to get wind projects off the ground are too expensive.

The anti-wind movement had been building within Parliament for some months. In February it reached a turning point when an open letter signed by over 100 MPs was written to David Cameron, opposing the government’s plans for onshore wind energy production as well as the planned £500 million a year in subsidies paid to the wind industry. ‘In these financially straightened times, we think it is unwise to make consumers pay, through taxpayer subsidy, for inefficient and intermittent energy production that typifies on-shore wind turbines,’ the letter reads.

Investment cooling off

The UK had been considered a leader in developing wind turbine technology as early as the 80s and 90s. However, the industry failed to pick up momentum until 2002 when a new scheme, whereby wind generators were rewarded for the energy they produced, helped to get wind projects developed. In 2010 a record 1.2 GW of onshore and offshore capacity was built.

The UK government had planned to build 4,500 wind turbines in the coming years to help meet its emission targets, as well as its EU commitment to meet 20% of our electricity demand through green sources. Major energy companies were planning on-shore wind projects in locations such as Kent and Hull, which were also hoped to stimulate jobs in local communities.

But the growing backlash within government means investment is suffering. Many of the companies told the Guardian recently that they are ‘reviewing their investments’ or seeking clarification and reassurances on future energy policy - effectively putting their plans on hold.

Potential investors have also expressed concerns over the UK’s ageing electricity infrastructure, which must be upgraded in order to link the new energy sources to the national grid; complexities within the planning system which can stall projects for years; and the lack of engineering skills and resources in the UK.

Mixed messages

Despite the government’s aggressive targets to reduce emissions and meet demand through green sources, the Chancellor’s tax break to the oil and gas industry in his recent budget can only add to the perceived UK ambivalence towards green energy investment. In addition, David Cameron and Nicolas Sarkozy recently agreed a plan to develop nuclear power, further confusing the UK’s position.

David Cameron is scheduled to speak at this week’s Clean Energy Ministerial, a clean energy summit hosted in London and attended by energy ministers from more than 20 countries. Investors may be hoping that he will help clarify and confirm his commitment to grow the green energy industry in the UK, and in doing so help stabilise the investment environment.