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United Kingdom

United Kingdom

Offshore to get separate support

Energy from offshore wind turbines is expected to make a "substantial" contribution to UK electricity needs under new plans for government support. Initially the government accepts that wind plant offshore will cost more than those on land, but in future it is expected that greater economies of scale will offset the higher costs offshore. "This cost difference will rapidly disappear as experience is acquired, improved techniques developed and confidence and investment in the technology grows," said energy minister John Battle when he launched a consultation document at the British Wind Energy Association (BWEA) conference in Cardiff on September 2.

Battle proposes a separate pocket of support for offshore wind under the Non-Fossil Fuel Obligation (NFFO) -- Britain's system of renewables support in which companies compete for contracts to supply power. But he is aiming to reduce costs nonetheless: "Let me be clear that all renewables are in competition with each other and I expect the rapid reductions in price achieved by onshore wind also to be achieved by offshore."

Kick-start

The consultation paper -- based largely on proposals put forward by the BWEA -- concentrates on an initial round of support to establish the technology as dependable and environmentally acceptable. "Hopefully, this approach will create a sound and competitive basis for the award of many more contracts under subsequent NFFO arrangements," says Battle. He expects the first round to result in four to eight contracts. The actual number and capacity will depend on the level of bids, but they should be at least competitive with energy crops, Battle warns. Based on the average price of biomass under the last NFFO round, bid prices would need to be £0.055/kWh or less. "If the offshore wind bids are well below this, there could be an order large enough to require more contracts to be let," he stresses.

As well as cost, environmental acceptability will also determine the size of offshore wind's eventual contribution. Battle wants to see public acceptance and support. The public must learn that being able to see a wind farm from the beach is the smallest price to pay for environmental sustainability, he says.

Pre-qualification

The Department of Trade and Industry (DTI) is keen to ensure that all contracted projects in the first round of support are completed -- and are up and running as soon as practicable. It appears anxious to avoid the problems encountered with other NFFO orders -- particularly wind -- where a high proportion of proposals fail to come to anything.

A key proposal for the offshore support is that all bidders for contracts must first "pre-qualify" with the Crown Estate, which owns nearly all the seabed in UK waters. They will have to satisfy Crown Estate that they have the competence and enough substance to build the wind farm; this includes offering financial guarantees. Crown Estate will then grant an "agreement for lease" offering developers exclusive rights to a site and allowing them to install an anemometer mast. If they gain the necessary development consents and a NFFO contract, the Crown Estate will convert the agreement into a 23 year lease.

Developers may be either a single company or consortium; the DTI is inviting both UK and foreign companies to bid. They will be limited to only one project each in this first round -- the pre-qualification process will weed out any applicants who try to get round the limit. The DTI proposes a range of project sizes and an adequate distance offshore so that initial wind farms are typical of future developments. It suggests between 30 MW and 100 MW installed capacity at a minimum distance of three to five kilometres offshore.

OPEN BID

Final details of the order will not be announced until after the DTI completes its review of renewable energy -- expected later this year. By that time, the DTI, Office of Electricity Regulation (OFFER) and the Crown Estate should have finalised their procedures in the light of the BWEA's comments on the consultation paper, says Battle. Meanwhile, the DTI is shortly to issue guidance covering the range of consents and planning approvals that offshore developers will need.

Fears that a big push for offshore wind may sound the death knell for land based wind farms are quickly dispelled by the minister. "I don't want to in any way undermine the contribution of onshore wind," says Battle. "To achieve a 10% target [for renewables' contribution to electricity supplies by 2010] will need a further sizeable contribution from the UK's huge onshore wind resource, at least as much again as has already been contracted under NFFO to date."

Only four years ago, prospects for offshore wind in the UK looked bleak. It was dismissed by the government as being too expensive and unlikely to contribute significantly by 2025. All further R&D funding into the technology was halted. Yet today, the present government hails offshore wind as one of the four main renewables -- alongside onshore wind, energy from waste and energy crops -- to the extent that it will rely on offshore wind plant to meet the bulk of its 10% renewables target.

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