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United Kingdom

United Kingdom

Contracts spread across many players, This time no one company can be accused of scooping the pool of NFFO-4 contracts, but the much criticised concentration of lange projects in just a few areas cont

The clearer picture emerging from Britain's latest competition for wind energy power purchase contracts reveals a more even spread among developers than ever before. The 65 premium priced wind power contracts for 790 MW installed capacity awarded under the fourth round of the Non-Fossil Fuel Obligation (NFFO-4) were shared among 25 developers. Nonetheless, the clear winner is Renewable Energy Systems Ltd (RES) from St Albans which scooped 13 contracts for a total of 160 MW.

RES, a member of the Sir Robert McAlpine Group, has potential wind farm sites spanning the country -- in Cumbria, Northumberland, Lancashire, West Yorkshire, East Riding, Wales and even in Norfolk in East Anglia. The company also has one contract in the small band for projects of less than 0.768 MW DNC (1.79 MW installed capacity). This is for the prototype of its new 1 MW wind turbine to be sited adjacent to RES's earlier development at Coal Clough, Lancashire.

British wind turbine manufacturer Wind Energy Group (WEG) also did well from NFFO-4, securing six contracts for a total of 105 MW. WEG -- a subsidiary of construction company Taylor Woodrow -- intends to develop all its sites with its new 600 kW three-bladed MS-4 wind turbine.

However, the company points out that the stiffest struggle lies ahead -- gaining planning consent. "We are very pleased to have secured this number of contracts but there are no champagne corks popping here; it is all now down to planning," says WEG's David Leivesley. He reflects the industry's concern. After negotiating the bureaucratic NFFO process itself, gaining planning permission is the major obstacle for British wind projects. Electricity Regulator Stephen Littlechild assumes only a 50% completion rate for wind power projects. Moreover, according to figures from the British Wind Energy Association (BWEA) last September, a hefty 77% of all wind farm applications were rejected since January 1995.

Some surprises

Six contracts went to DJ Construction, a Welsh firm of building contractors which has been involved in building some of Wales' largest wind farms. With its 60 MW of NFFO contracts in Wales, DJ Construction is now moving into the development side of the business under the name of Windjen Power. Huw Smallwood, contracts director of DJ Construction, also won two separate contracts for his family run company Tegni Ltd.

A new entrant to the British wind energy development scene is the Renewable Development Company -- a small firm based in Mold, Clwyd that usually operates under the name of West Coast Energy. It consists largely of ex-employees of electricity distributor Manweb who left when the utility disbanded its generation development team after ScottishPower's takeover of the utility. Geraint Jewson from the Renewable Development Company explains that so far his company has been specialising in wind farm connection consultancy and energy efficiency. Its move into developing wind farms has been boosted by winning three large contracts totalling 126 MW. One is in Ceredigion, Wales and two are in Cumbria -- both wedged between the Lake District and Yorkshire Dales National Parks.

One of the surprises of the current order is that National Wind Power gained no more than three contracts. Under NFFO-3 the company walked away with 12 of its own and was joint developer with at least eight other schemes. The largest of its NFFO-4 contracts is for 16.5 MW at Redburn Common in Durham. This forms part of its massive 55 MW Rookhope project that it hopes to develop using 1.5 MW turbines. For its two Cumbrian sites NWP based its bids on 600 kW machines -- in common with the majority of NFFO-4 contract holders.

Offshore

A notable inclusion in the list of wind contracts are two North Sea wind projects. These will be Britain's first truly offshore schemes. Hexham based Border Wind managed to secure a small wind band contract for two 850 kW WindMaster turbines one kilometre outside Blyth in Northumberland, near its existing wind farm on the harbour wall. The project -- a collaboration with the Port of Blyth and JW Colpitz -- will be part funded by the EC's Thermie programme. According to Bill Grainger from Border Wind, the scheme has all the necessary planning consents. With just a small amount of design work remaining to be done, he expects it to be operational in summer 1998.

The other offshore project is WindMaster's own -- a proposal for 30 MW within sight of the seaside resort of Clacton in Essex. Several developers confessed to surprise at seeing an offshore scheme competing successfully in the large project band against the low prices of onshore projects. With the five year window on all NFFO contracts that allows for development, the industry could have a long wait before finding out whether WindMaster will actually be able to deliver at NFFO-4's keen prices. Moreover, the scheme's inclusion in the current order has raised fears that it ends all hopes for a separate band for offshore projects under the next round of renewables support -- NFFO-5.

Simon Boxer from the Wind Company, whose own offshore project off the Cumbrian coast failed to get a contract, is concerned that the government will now consider any separate provision for offshore projects unnecessary. "One project having got in puts a spanner in the works for an offshore band," he says.

Low price shock waves

Surprise at the low level of NFFO-4 prices is widespread -- even among successful bidders. The lowest bids in NFFO were "ridiculously cheap," says Border Wind's Bill Grainger. "We cannot really see where the price savings are coming from that can justify them." Prices in the large wind band range from just £0.0311 to £0.038. Border Wind won two contracts in the small band -- one of them for the two offshore turbines at Blyth. Despite a "stack" of bids it narrowly missed out gaining any contracts in the large scale band, says Grainger. "We costed them as tightly as we could but still did not get any."

Also surprised at the low prices is Geraint Jewson of West Coast Energy. "I think that some people who lost out last time round have been bidding very aggressively this time," he comments. One of the rumours circulating round the wind energy community is that many of the successful bidders have backing from Britain's electricity utilities or major generators. But Mike Anderson of RES refutes this theory as far as his company is concerned. "RES has built more wind farms that anyone else and we have it down to more of a fine art," he says. "Apart from our three sites with South Western Power, we have no links with any utilities and have done no cheap deals with manufacturers." He confirms the bids in England and Wales were in line with RES's expectations.

According to the BWEA, the 790 MW of new contracts could more than treble UK installed wind power capacity from its present level of 260 MW up to 1050 MW. In the process it would meet the average electricity needs of around 700,000 homes. The BWEA adds that out of a potential £600 million of capital investment, up to £200 million could be spent in local rural economies. It expects the order to create almost 2000 new wind related jobs in manufacture, installation, servicing and maintenance. Peter Edwards, BWEA chairman, says he is thrilled by the size of the order. "It is a significant step towards our own target of 10% of all UK electricity from wind by 2025," he says.

Absentees

Almost absent from the list of winners in NFFO-4 are very small developers. Peter Edwards maintains it was not for want of trying. "There were a lot of small developers bidding into NFFO-4," he says. He regrets that a greater number did not succeed in obtaining contracts; small schemes can be more acceptable locally and generate more community support, he points out.

However, one company at least will be pursuing the community wind farm ideal. The Wind Company -- offshoot of Vindcompaniet of Sweden -- intends to develop its four new contracted wind projects along similar co-operative lines to its first British project at Harlock Hill. As the UK's first co-operatively owned wind farm, this has got off to a promising start. So far the Bay Wind Co-operative Company has raised £800,000 -- enough to buy one of the wind farm's four turbines and is three quarters of the way to buying its second, claims The Wind Company's Simon Boxer. The Wind Company plans to use Danish Wind World turbines at its larger 4.8 MW site in Cumbria, and at its three smaller schemes in the East Riding of Yorkshire on the east coast.

This area is making its debut as a location for potential wind power development with a total of six contracted projects destined for sites there. Yet apart from these and a handful of mainly small schemes in Norfolk, the geographical spread of NFFO-4 sites follows closely the pattern of previous rounds, with concentrations of prospective wind farms in Wales, the North of England and the Pennines in north central England. This concentration of projects in a few areas is widely held to be a major failing of the NFFO system of renewables support, if for no other reason than it appears frightening to residents. "I am disappointed there is not a larger geographical distribution, but because of the way the NFFO process works, it forces developers into the higher wind speed areas," complains Peter Edwards of the BWEA.

Gloucestershire based Western Windpower -- in a joint venture with East Anglian consultancy Econet -- secured a sizeable chunk of the small wind band with seven contracts. Six are in Norfolk and one in north Suffolk. It plans to build a single 1.5 MW Enercon E66 machine at each of the sites. Dale Vince from Western Windpower explains the company hopes the single turbine approach will go down well with planners. One of the joint venture projects is a collaboration with LRZ Ltd for its Ecotech environmental centre in Swaffham, Norfolk.

Western Windpower claims it calculated its NFFO-4 bid prices with an early start to development in mind. Vince describes their bids as at the upper end of the small wind band, from four-and-a-half pence upwards. "We are not messing about. They are realistic bids based on getting at least some of them in this year. I don't think many developers can say that," he says.

As well as confirming the downward trend in prices, NFFO-4 also confirms the trend towards the use of larger wind turbines in Britain. Most bids were based on 600 kW machines. But 750 kW, 850 kW, 1 MW and even 1.5 MW turbines also got a substantial look-in.

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