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United Kingdom

ADDRESSING CORE ISSUES

The value of wind on the grid, mechanisms for trading it on the power network, and industry opportunities abroad were all themes of this year's British Wind Energy Association (BWEA) conference. While not one of the most exciting conference's ever, the BWEA's 17th annual event at Warwick was one of maturity and quiet self-congratulation. Since the last conference wind energy in Britain has made giant strides towards price competitiveness. The value of wind energy emerged as an issue of particular concern with liberalisation of the UK electricity market looming. Discussion of obstacles, such as raising finance and public attitudes, were not as prominent as in previous years. Energy Minister Richard Page praised the industry on its progress, but said the British wind industry should take a greater share of the home market. He also agreed that perception of wind energy was more positive on first hand experience of it. At the conference, international potential was put at between 8000-10,000 MW, with a focus on India and China.

With many eyes in the UK wind industry firmly fixed on overseas markets, the international potential for wind development emerged as the strong theme of this year's British wind energy conference. While not one of the most exciting UK conferences ever, the pervading mood of the British Wind Energy Association's 17th annual event was one of maturity and quiet self-congratulation. With good reason. Since the last conference wind energy in Britain has made giant strides towards price competitiveness. The uncertainty that dogged last year's event at Stirling has virtually disappeared. Now, in the wake of the third round of renewables support under the Non Fossil Fuel Obligation legislation -- NFFO-3 -- Britain's wind industry has a far clearer idea of the price it needs to reach to secure a premium-priced contract under the next tranche.

The programme of the conference, held July 19-21 at the University of Warwick in sweltering temperatures, reflected the needs of a maturer industry. The emphasis had moved to opportunities abroad with UK companies being urged to take their goods and expertise into the world market. At the same time the potential of the domestic electricity market is not being neglected. The value of wind energy to a power supply system emerged as an issue of particular concern as developers attempt to focus not only on a future after NFFO, but also in the nearer term on 1998 when the UK electricity market is liberalised. Obstacles to development of early wind farms -- such as difficulties in raising finance -- had disappeared off the conference programme altogether. And although the thorny subject of public attitudes to wind energy continues to exercise developers, this too appears to have slipped further down the conference agenda. Perhaps it has become less of an issue for debate now that the BWEA has produced its Best Practice Guidelines and in the light of a number of surveys showing favourable public opinion to operational wind farms.

Setting the tone

Opening the conference Energy Minister Richard Page set the tone. In an upbeat and enthusiastic address he praised the industry on its progress in driving down the price of wind electricity and pointed to the export potential for British companies. "We have here a success story in the making," he said. He claimed the industry had responded magnificently to the challenge put to it last year to work towards convergence with the market price for electricity. "Between the second and third rounds of NFFO the industry has virtually halved its contract price to an average of 4.3 pence per unit."

Page pointed to the growing export success of British wind companies and drew attention to new markets in India and China. "I want to see British industry taking its fair share of that expanding market -- at home and abroad," he said, pointing out that there was still considerable scope for improvement on the domestic market. This is now a recurring theme by the government, sensitive to criticism over the failure of British industry to reap more benefit from the electricity consumer's subsidies to renewable energy. Only 40% of investment value in all NFFO wind projects to date was met by British suppliers of goods and services, Page said. "So there is a gap of some 60% that can be closed." He advised equipment manufacturers to look hard at the growing home market. This is likely to be worth many tens of millions of pounds annually over the next few years, with more to come after that.

In an oblique defence of the NFFO mechanism -- which if anything has hindered British companies from taking a larger share of development in the UK -- he pointed out that the NFFO market is completely open to international competition. "And this is as it should be," he maintained. "We found from experience that if you try to protect a market you just bring in inefficiency and at the end of the day you lose out." He added "If you can sell your product on the British market you can sell it on the world market."

Turning to public opinion, he claimed that wind farms are popular despite noisy objections from some quarters. People were more worried about wind farms before they were built than after. Page confessed that his own attitude to wind energy had changed after a recent visit to some Welsh wind farms. "I went there with one of those popular misconceptions in my mind. I thought, 'these are going to be noisy'. And of course they are not," he said. "I came away more converted to the cause of energy from wind than when I started. I was very impressed by what I saw." But he stressed that the industry cannot afford to take public support for granted. It must be sensitive to concerns about noise and visual intrusion. "Our planning system will not allow inappropriate development," he warned.

Many at the conference were encouraged to hear the minister's enthusiasm for wind. Yet those who had expected Page to use the opportunity to outline the size and shape of NFFO-4 had their hopes dashed. Nevertheless he did reassure them that he hoped still to be on course to publish details in Renewable Energy Bulletin No 6 in October. In an impromptu press conference afterwards he confirmed that the government would continue to support renewables through further rounds of NFFO, but emphasised that this support was finite. "We have a programme of NFFOs so they will go on for a few years, but whether they go on forever is another matter. The object is to bring renewable energies to the market at a sustainable commercial price. And at the end of the day if we can't come up with a renewable energy system that we can get to the market at a working price then we will walk away from it."

Profiling India and China markets

The first session was entirely international in flavour. David Lindley, retiring BWEA chairman, told the conference there was a realistic worldwide potential for between 8000-10,000 MW of new wind energy capacity by the turn of the century. "We are talking of a £10 billion or a $15 billion dollar business to the end of the century, which is not trivial. It is a major market to go for," he said. "This is the time when we should be going out worldwide and saying it can compete. The UK competitive process gives you some very good figures to prove your case." In some countries wind would actually be undercutting prices in the local electricity systems, he said.

In a fast moving and wide ranging presentation, Rakesh Bakshi of Vestas RRB in India spoke of the vast prospects for wind development in his home country. With its huge potential for 20,000 MW of wind generated electricity it represents the market of the future, he claimed. Fiscal and promotional incentives put in place by government have led the private sector in India to surpass the government's targets for wind. "While the government was talking about 500 MW up to 1997, the industry is now talking about 1000 MW by '97," he said. Bakshi stressed the importance of joint ventures with Indian companies and said that if renewables were to thrive a true partnership was needed between the West and developing countries already heavily in debt to the developed world. "Imported capital intensive renewable energy technologies will only accelerate this problem," he explained.

China, another major new market, is actively seeking participation from countries that have already established wind industries, said Ye Zhiquan from Shantou University's Institute of Energy and Environmental Science in China. "We do not yet have the technology to manufacture large wind turbines and to construct and operate large scale wind farms." He explained that rapid installation of small wind turbine generators remains an important plank in the Chinese government's strategy for bringing electricity to remote areas. However at the same time the government is moving larger scale wind developments onto the fast track with a target of 1000 MW installed capacity by the year 2000.

The British government's foreign aid agency -- the Overseas Development Administration (ODA) -- has its part to play in taking renewables to developing countries, the conference heard. Gareth Martin invited British companies to consider working with the ODA to help transfer renewables technology. "We are not looking at promoting renewable energy for the sake of it. It has to fit in with the aims of the programmes of particular countries," he maintained. "The obvious advantage is that it can be cost-effective. We are looking at cost effective solutions in all cases. There are also environmental benefits," he said.

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