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World governments need to get real

Robert Burns had the measure of it. "The best laid plans of mice and men often go awry," the Scottish poet wrote. That was in 1785, but the warning remains valid today. Governments proposing wind expansion should read up.

Grandiose plans are regularly drawn up, typically requiring breathtaking levels of investment, with too little space devoted to how they will be funded and how they will overcome the obstacles that will inevitably fall in their paths.

Obstacles to growth can come from anywhere. This month, we report that those old banes of the US wind sector, the US military and aviation authority, are blocking projects on a huge scale again. In other cases and other countries, the more usual problem of financing or grid access is to blame for underachievement. Nimbyism and turgid planning systems also continue to create bottlenecks. Some of those blockages are unnecessary, some illogical - but all are frustrating and real. The industry needs to plan around them, regardless of their validity.

Optimism bias

Wind firms themselves are less prone to irrational exuberance than governments. The Global Wind Energy Council notes that, in the past, the industry has made cautious projections and then surpassed them by broad margins. But, in many cases, government plans seem to assume that the classic development obstacles simply do not exist.

The UK offshore rollout is a likely victim of this optimism. Last month, energy minister Charles Hendry admitted that the country needed another £75-£100 billion ($110-$150 billion) if it is to achieve its ambition of 50GW of offshore capacity by 2020. It is worth examining those numbers - 50GW represents more than 20 times the world's entire existing offshore fleet, and there are nine-and-a-half years left to deliver it. The UK needs at least £8 billion ($12 billion) of investment a year until that point. Given that capital markets are likely to remain fairly risk averse for at least two or three years, the investment goal starts to look impossible.

Hendry himself describes the figure as difficult but not unachievable. When a politician admits a goal is difficult, the clever money is on the project coming up short. Meanwhile, a report by the Green Investment Bank Commission reveals that less than 15% of the investment needed for the UK's 2020 climate targets has been secured. It also concludes that, without government intervention, the UK will not achieve sufficient finance. Many other countries' plans look equally as unlikely to hit their targets.

But why does it matter, this Panglossian bent? Isn't optimism good, creating red-blooded, bullish public relations for a growing industry? Well, no. It is better to have modest targets and meet them than to have virtually unachievable ambitions and be lambasted for failure. More, in extremis, an overly optimistic view can create a culture in which those planning expansion fail to anticipate project pitfalls. The most important law in project management is Murphy's: if anything can go wrong, it will.

Meanwhile, the plans and prospectuses keep coming, many with scant regard for Murphy's immutable finding. These plans risk creating failures from achievements. For example, if the UK builds and connects 25GW of offshore wind by 2020, it will arguably have done reasonably well. Yet one could argue that, by its own terms, it will have failed. The next two lines of Burns' poem are less well known: "And leave us nothing but grief and pain, for promised joy." To avoid such an outcome, the world's governmental wind planners could do with a healthy dose of cynicism.

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