United Kingdom

United Kingdom

Despondent as well as frustrated in Britain

Wind power in Britian is still hemmed in by barriers on all sides despite years of knocking on government doors with calls for a way out. Such was the despondent mood at the British Wind Energy Association's annual conference, which nonetheless drew a record attendance.

The theme was "wind power comes of age" and the British wind community's 21st annual get together should have been a celebration of the industry's maturity and prospects. Yet the coming of age party turned out to be premature. As delegates to the British Wind Energy Association's conference discovered, the government, the energy regulator and large established electricity players are conspiring to fashion a whole new market structure that is set to preclude the youngster from taking its rightful place in their adult world.

BWEA-21, held September 1-3 at Cambridge, attracted the highest attendance for many years as newcomers to the industry flocked to the event, expecting to discover how the wind industry is gearing itself up for the future, especially offshore. But optimism gave way to dismay, anger and frustration as they heard that the future of wind-and offshore wind in particular-is far from assured. "Depressing" was a frequently voiced verdict. "We are 21 years of age, and suddenly the allowance has been cut off," remarked one disappointed delegate.

The tone of the conference was set on the first day, which began with a predictably buoyant address by environment minister Michael Meacher, but ended with a sense that the renewables industry has been badly let down under new proposals for a shake up in the UK electricity trading arrangements and for a future support mechanism for renewable energy. Meacher stressed the need for wind energy-both onshore and offshore-in helping the UK meet its target of 10% of electricity supply from renewables by 2010. But what most present wanted to hear from the minister responsible for land use was a government action plan to help resolve the impasse on the planning permit front that is debilitating British wind power development.

A matter of attitude

From the outset Meacher stated that the real problem does not lie with planning: "Public acceptance is the real issue." Too often the attitude to power generation is "out of sight, out of mind," he said. "We need to change that mind set; to help people realise that in future the energy they use will increasingly need to come from local, sustainable resources." The government, he stressed, has no intention of introducing a presumption in favour of renewable energy. "But what we are currently doing is ensuring that planning authorities are fully aware of issues such as the policy context, so that the decision making process is fully informed," he said. In practice, this has involved reminding all local planning authorities of the role of the planning system in helping deliver national targets for renewable energy and reductions in greenhouse gases, he explained.

Meanwhile, local authorities must face up to the challenges of renewable energy-which means not leaving difficult planning decisions to central government under the appeal process. Under questioning, the minister defended the high rate of planning inquiry refusals for wind projects. Officials in the Department of Trade and Industry and the Department of Environment, Transport and the Regions have closely examined each individual inquiry decision and concluded it was justified, he said. The government, too, has to do more to get things right, accepted Meacher. It should provide better information on the benefits of renewables, and must ensure that the future support mechanism addresses environmental aspects effectively, and does not merely deliver the cheapest projects.

He believed that a crucial approach is to see wind power development in a local rather than a national context. He noted that many objections to proposed renewables projects are stimulated from outside the local area. "We are looking to develop an increasingly regional and local approach to renewable energy. The resources are local-as are the benefits and impacts," he said. "Sustainable development frameworks," which should provide for renewable energy, are to be prepared in each English region by the end of 2000. These should feed into regional planning guidance and inform the planning process, he said.

From Greenpeace, Lord Peter Melchett suggested that regional development agencies could be used to translate the government's national energy policy into local and regional action. He agreed with Meacher that it is not the planning system that should be changed, but the climate in which decisions are taken. "The fact is that all of us have been losing the argument about onshore wind." Melchett urged the industry, non-government organisations and ministers to be more forthright in promoting wind energy.

Key to achieving a real shift in political attitudes to renewables would be to capture the heart and mind of Prime Minister Tony Blair, and in particular turn his attention to wind energy, said Melchett. Blair does not see renewables as part of his project to modernise Britain's economy. "He is wrong, he is a bit old fashioned, he has got to get up to date and we have all got a job to do there."

Meantime, the government needs to act, he said. "We have got to see a new support mechanism for renewables to replace the Non Fossil Fuel Obligation (NFFO), to include a specific band for offshore wind." He reminded delegates that at last year's BWEA conference, then-energy minister John Battle launched a consultation on opening up the UK's offshore resource. "Where is the result of that consultation? Where are the targets? Where is the UK's action plan?" He feared that the consultation had been put on hold and was probably now languishing at the bottom of new energy minister Helen Liddell's in tray.

The major concern

Overshadowing the keynote speakers and even the perennial thorny issue of planning, was the vexed question of how wind energy will fare in the brave new world of the liberalised UK energy market under the proposed new electricity trading arrangements (NETA) and a new support mechanism to replace the NFFO. The industry is at a turning point, explained Peter Musgrove from National Wind Power. Under changes in electricity trading in the UK, there will be no regional electricity companies to continue to shoulder the burden of the NFFO system. And the demise of the electricity pool means there will no longer be a pool purchase price to be used as the reference price against which the cost of NFFO is calculated. Against this background, the DTI's renewables consultation had invited proposals for a new renewables support mechanism (Windpower Monthly, September 1999).

Musgrove pointed out that many respondents, including the BWEA, had called for an obligation to be place on electricity suppliers to include a fixed percentage of renewables in the supply mix, facilitated through system green certificates to recognise the green power in the system, plus a secondary mechanism-an "adapted NFFO"-to support fledgling technologies such as offshore wind. Yet, he reported, indications are that green certificates are out of favour with government and that a combination of mechanisms is seen as too complex. Added to this, rumours suggest that the Treasury prefers a simple percentage obligation on suppliers with no penalties for under-performance. "If this is what we are getting, the outcome will be disastrous for us all," he said.

Adding to the climate of uncertainty for wind are the proposed new trading arrangements revealed by energy regulator Callum McCarthy which will impose penalties on non-firm power, like wind, he said. "We need to factor into the equation the value of a wind farm under these new arrangements," says Musgrove. He warns that under NETA the value of wind energy "embedded" in the distribution network (excluding any green premium) may drop from its present level of around £0.03/kWh to £0.02/kWh or lower.

Consultation vacuum

Many in the industry are aggrieved that they had to respond to the DTI's consultation before the full implications for renewables under NETA had become apparent. "There was no way we could make a really credible response in a vacuum," said Jeremy Sainsbury from the Fred Olsen shipping line, a wind plant operator. "We now know what the results are and CREA [Confederation of Renewable Energy Associations] and other organisations are going to make some very positive responses as to what we really do want now that we know the facts."

This view was endorsed by Jonathan Johns from accountants Ernst and Young who pointed out that the industry wished it could tear up its responses to the consultation and start again. "It all undermines not only the ability to proceed with offshore wind, it undermines the ability to proceed with renewables generally." He claimed that the uncertainties for renewables under NETA puts greater emphasis on the need for a long term NFFO-type contract. The only way to get bank finance is to have some certainty over the life of the project, he pointed out.

Agreeing with this view, Musgrove stated his personal preference if only one mechanism is on the table: "I would go solidly for an adapted NFFO which would give us offshore wind in a shorter time-frame." This should, as at present, involve 15 year must-take index-linked power purchase contracts-essential for securing finance. It would work better, he added, if planning consent was a pre-condition to being allowed to bid for a contract. He claimed this could lead to a more determined government effort to resolve the planning deadlock. "If ministers have to stand up in the House [of Commons] and instead of reporting that they have signed up NFFO contracts for x-hundred MW of renewable capacity, they have to report that they signed up contracts for only single digits that might concentrate their minds significantly, and the whole planning process might get back to something more like the situation we had in the earlier days of NFFO."

Small developers pinched

Declan Pritchard from Anglesey Wind and Energy was unconvinced. Having to gain planning permission ahead of time would wipe out small developers at a stroke, he claimed. It was just one of the many problems for small renewable projects caused by NETA. Simon Roberts from the Triodos Bank, an ethical money lender, had a particular concern. He was worried about the effect of NETA on local ownership of wind plant, widely perceived by both the industry and government as being one way of improving public acceptance. Roberts claimed that even the measures suggested by the energy regulator, Callum McCarthy as ways of mitigating NETA's penalising effects-such as aggregation of renewable schemes-would be incompatible with local ownership.

Small generators need to be represented in the NETA process, said David Smol from financial consultants ILEX. He urged the industry to lobby with a coherent single message demanding a fairer deal for renewable generators. "The more people who put in submissions, the more government and OFGEM [Office of Gas and Electricity Markets] will listen. And the more consistent the message that comes across, the more effective it will be."

Offshore back seat

A session on offshore wind contrasted markedly with the optimism of a year ago when former energy minister John Battle announced new plans for a specific band of offshore support. Delegates attending this year's conference in search of an update on progress towards getting offshore wind plant up and running left the session more uncertain of the near-term prospects than when they arrived.

The conference heard how the industry has prepared the way by examining consenting issues. And anxious to avoid the public acceptability problems associated with onshore wind, the BWEA has also explored the issues with a range of groups and organisations through an independently conducted stakeholder dialogue. Given a system of support, the industry is now poised to venture offshore. All that is needed is the go-ahead from government.

The question on everyone's mind was voiced by David Farrier of PowerGen-one of the first companies to announce plans for an offshore wind farm: "What might the likely program of firm support for offshore wind be? And what might we be able to do to accelerate it?" The reply was not encouraging.

The DTI's plans to create a specific band within NFFO to advance offshore wind have not progressed as quickly as had been expected within the department. Moreover, the department's recent major renewables consultation exercise (Windpower Monthly, September 1999) had not revealed much support for the continuation of a NFFO-type mechanism. A form of NFFO had been the DTI's proposed means of stimulating offshore when the specifically offshore consultation was issued at last year's conference. Within the DTI, at least some officials are not at all sure that a percentage obligation approach-favoured by the majority of respondents to the consultation-could deliver the long term contracts the industry says it needs for offshore projects.

BWEA Chairman David Still wondered if there was a serious political will to implement the 10% renewables target. "We can contribute towards reducing carbon emissions, we can contribute towards the 10% target. But if we go for 10% then we need both offshore wind and onshore wind," he maintained. "What we can't deal with is waiting yet another year before government allows us a way to go forward."

Some good news

From this low point, the tone of the conference picked up-helped by some positive and constructive presentations. Updating the results of opinion surveys around existing wind farms, National Wind Power's Steve Macken reported that attitudes towards wind remain as strongly supportive as ever despite the efforts of opposition group Country Guardian. Rod Edwards from wind consultants Dulas Ltd argued for a more constructive approach to changing public attitudes. The industry must try to persuade the silent majorityof the population in favour of wind to become more vocal in their support rather than concentrate on changing the minds of the already vocal minority implacably opposed, as it had tended to do in the past, he said.

Developers should target planning committees early on their planned wind schemes, advised Tony Brown of public relations consultants Chelgate. As a local councillor he could give an insider's account of how planning authorities work. Councillors are crucially aware of the local media, and bad press can too easily result from a councillor's off-the-cuff remark before he or she knows the facts of a planning application. Attend planning meetings, talk to the councillors and listen to them, counselled Brown. "Brief them early but make it concise, make it relevant."

Brown also urged the industry to step up efforts to get its message across to politicians. In particular, it should try to cultivate those who are known to be sympathetic to renewable energy. This advice was echoed by BWEA president and former minister for renewable energy Lord Moynihan. Talk to ministers and MPs in a constructive, non-critical way, he stressed.

And back to planning

Despite other threats to wind energy, Chris Shears from Renewable Energy Systems still maintained that planning is the greatest hindrance to development. The industry, however, needs to be offering clear solutions now, he agreed. All stakeholders must agree a sustainable policy and adopt clear measures to implement the government's 10% renewables target. Shears advocated regional targets as already used for minerals extraction and housing-a suggestion later expanded by John Ainslie of National Wind Power. "All regions must play a part. A coherent regional strategy could ... make local authorities accountable for implementing government policy," said Shears. Doing nothing is not an option, he claimed. "If nothing changes, the very real risk exists of the industry simply packing up and moving on to other things."

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