15,000 jobs at risk as official support for offshore wind wavers

The launch of the London Array last week saw David Cameron praising offshore wind: but will it deliver British jobs?

Britain is not making the most of its opportunity to become the ‘Saudi Arabia of offshore wind’, according to a new report from the think tank IPPR, putting up to 15,000 jobs at risk.

The report, entitled Pump Up The Volume, says the British Isles have ideal building conditions for offshore wind, with large areas of sovereign seabed in shallow waters and close to shore.

However, it warns that the Government is not making sufficient effort to bring down costs and secure British jobs.

Offshore wind is currently more expensive than unabated gas, onshore wind or nuclear. By 2020, the cost is expected to have fallen rapidly, but it will still be more expensive than those three technologies.

Only a small proportion of offshore wind farm components are built in the UK, varying from 10% for London Array Offshore wind farm, opened last week by David Cameron, 20% for Thanet Offshore wind farm, 48% for E.ON’s Scroby Sands development, 50% for Vattenfall’s Ormonde project and 32% for E.ON’s Robin Rigg development.

These figures do not include operational and maintenance costs, which are inherently local in nature and accumulate over the lifetime of a wind farm.

IPPR argues that the levels of British workers' contributions to offshore wind will need to increase in order to realise the economic benefits of the sector in terms of jobs and growth and to maintain political commitment.

Vince Cable's business department consulted earlier this year on the feasibility of achieving the Offshore Wind Developers Forum’s vision of 50% local content.

Observing that the Government has backtracked on its ambition to secure 18GW offshore wind by 2020 and expects instead just 4.4GW to come online between 2020 and 2030, the report points out that up to 15,000 jobs could consequently be lost that would otherwise have been created.

“The UK's current policy trajectory could see it achieving a ‘worst of all worlds’ outcome: low volume, low jobs, and high costs," said Will Straw, Associate Director at IPPR, launching the report.

Pointing out that there are cost reductions to be obtained from working at scale, he added: "Unless Britain 'pumps up the volume' there is little prospect of either bringing down the costs of offshore wind or creating domestic jobs. An alternative pathway is possible, if the Government can bring together an industrial strategy for the sector predicated on a combination of ‘carrots and sticks’".

He also reiterated the need for a 2030 decarbonisation target, which would give the industry "the long-term clarity that it needs, and which has been provided in other countries".

Instead, he said, "developers must be expected to drive down costs with a subsidy regime that reduces the strike price over time".

He also added that "developers and suppliers should do more to provide apprenticeships and sponsor university and FE courses” to meet the skills gap.

The report recommends that in order to build a strong domestic offshore wind supply chain, the Government needs to attract at least two turbine manufacturers, preferably more, to build factories. This "would be a major boost, as these companies are able to attract a cluster of other companies further down the supply chain (as is the case in Denmark)".

It must also, the report argues, continue to support and build upon the country's existing strengths in the supply chain, building on its expertise in both the onshore wind and the North Sea oil and gas industry, and should support export opportunities for British firms. A new EU renewables target would help create export markets to 2030.

On the issue of reduced ambition for offshore wind, DECC clearly stated in the 2011 UK Renewable Energy Roadmap that "up to 18GW of offshore wind could be deployed by 2020 ... with over 40GW possible by 2030".

In June of this year, however, they appeared to change their ambition by announcing that the subsidy regime would allow for just 8–16GW by 2020.

DECC’s ‘central scenario’, published last October, sets out a much less ambitious path, leading to just 11.5GW by 2020 and 16GW by 2030.

The government's watchdog, the Committee on Climate Change, believes that this latter scenario "would imply unacceptable costs and risks of achieving the 2050 [decarbonisation] target".

Both developers and suppliers are concerned. The industry argues that several ports need to be upgraded to provide construction and assembly facilities for the supply chain, but the port owners will not do so unless they are given government reassurances.

Meanwhile, in relation to the grid, the lack of a costing of risk allocation between the developers and the transmission operators could result in offshore wind being more expensive than it needs to be.

DECC has not yet responded to the report.

Japanese consortium to invest £962 million in offshore wind power

 This new wind turbine design could soon be seen off the coast of Japan. It is up to 3 times more efficient than conventional designs.

As Japan abandons nuclear power, Toshiba, Hitachi and other partners have set up a consortium to invest £962 million in offshore wind power.

Toshiba Corp, Hitachi Zosen Corp, JFE Steel Corp, Sumitomo Electric Industries Ltd, Toa Corp and Toyo Construction Co. Ltd. together plan to invest 120 billion yen (£962 million) over ten years.

Japan faces a bill of at least 50 trillion yen (£401 billion) to install sufficient renewable energy infrastructure by 2030 if it decides to completely phase out nuclear power, the Japanese government estimated on Tuesday.

Potential sites for the wind farms are off the coast of the Kyushu region in southern Japan, where they could generate around 300 MW.

Pilot installations with a capacity of 7.5 MW will be constructed first, by 2016. The rest will be erected over the remaining six years.

The firms will raise the investment funds by setting up a special-purpose company and project financing.

Japan hopes to begin building commercial offshore wind farms, copying countries in Europe, especially Britain, following the post-Fukushima government decision to reduce reliance on nuclear power in favour of natural gas and renewable energy.

Its environment ministry has estimated the country can eventually build 1,600 gigawatts of offshore wind power capacity.

Currently, Japanese utilities are obliged to buy solar and wind powered electricity from generators at an especially generous feed-in tariff: 23.1 yen per kilowatt-hour for 20 years, almost double the market rate for industrial users.

New design

Japan's geography doesn't lend itself to onshore wind farms.

There is speculation that the new wind farms may use exciting new wind turbine designs, such as the one illustrated above, which has been undergoing field tests at Kyushu University.

Its designers estimate that it could generate two or even three times more energy than existing turbines. They call it a ‘wind lens’, and it aims to solve two problems faced by existing wind turbines: noise and inefficiency.

Their design includes an inward curving green around the perimeter of the turbine blafes, which increases by a factor of up to three the speed of the air blowing through the blade zones. It also serves as a safety improvement and reduces noise levels.

The team at the University has also designed a hexagonal-shaped base for the turbines, that is comparatively cheap but still strong enough to endure marine conditions. This design makes it easier to link turbines together and enlarge the wind farm.

Currently, wind power accounts for less than 1% of all energy produced in Japan.

Wind power myths blown away by new report

The London Array offshore windfarm under construction

Wind energy avoided at least 5.5 million tonnes of CO2 emissions in the UK last year and is making a meaningful contribution to cutting the country’s greenhouse gas output, according to a new report that counters claims by objectors that wind turbines are costly and inefficient.

The report, Beyond the Bluster, , from the think tank IPPRor Institute of Public Policy Research , concludes "unequivocally that wind power can significantly reduce carbon emissions, is reliable, poses no threat to energy security, and is technically capable of providing a significant proportion of the UK’s electricity supply with minimal impact on the existing operation of the grid".

Unfounded claims about wind power were recently made in a letter to the Prime Minister by a group of more than 100 MPs, who described the technology as inefficient and less reliable than other types of energy production.

It adds that while "it is right that the costs of government support for wind power and other low-carbon technologies are scrutinised, it is important to recognise that recent increases in energy bills are far less the result of subsidies for renewable power than they are due to rises in the wholesale cost of gas".

It notes that from 2004 to 2010, government support for renewables added £30 to the average energy bill, while rises in the wholesale cost of gas added £290.

Amongst the conclusions are that "it is inaccurate to describe the output from wind power as ‘unpredictable’," because “in the short term, wind power output is remarkably stable and increases and decreases only very slowly".

It also says that the risks associated with ‘long, cold, calm spells’ have been overstated. It will be possible to ‘keep the lights on’ given the level of wind power projected in this country by 2020.

The addition of a certain amount of wind power does not mean expensive upgrade to the edge electricity distribution system, either, contrary to some reports. National Grid has reported that up to 30GW of wind power can be accommodated even if no changes are made to the way that the electricity system functions.

And in the longer term, there are numerous technological options to facilitate much greater amounts of wind power, such as improved interconnection with other countries and intelligent management of supply and demand through a ‘smart grid’.

The IPPR model demonstrates that every megawatt-hour (MWh) of electricity produced by wind power in Great Britain results in a minimum CO2 saving of around 350kg. On this basis, carbon dioxide emission savings from wind energy were at least 5.5 million tonnes in Great Britain in 2011, or around 2.5% of the emissions the UK is legally obliged to save annually from 2008 to 2012, as required by the Climate Change Act 2008.

The report's authors describe the government's recent approach to wind power as “worrying", because it is causing lack of certainty amongst investors and developers.

On intermittency, it says that, despite a prolonged period where wind production averaged less than 15% of wind capacity over a period of 14 days, from around 9–23 February 2010, in this case in Ireland, where there is far greater wind generation as a proportion of total generation than the current UK system, this did not impair the ability of the electricity system to provide secure and reliable energy supplies.

However, although the UK grid currently has sufficient fossil-fuel generation in reserve to meet this requirement during a cold, calm spell, should 20% of all grid electricity be supplied from wind, as expected in 2020, additional conventional reserves will need to be in place then, unless interconnection capacity with other countries and/or electrical storage technology improves.

To produce the report, IPPR worked with GL Garrad Hassan, a renewable energy consultancy, and the findings were reviewed by "a leading academic”.

Offshore wind power's double good news

Offshore wind power not only increased by 50% in the last year, but last Thursday saw its biggest ever order for new turbines in the UK.

In a deal worth around £2.3 billion, Dong Energy has ordered 300 giant Siemens wind turbines for use off the coast of Britain. Siemens will design, manufacture, supply, install and service the turbines, while Dong will own and operate the wind farms, and sell the electricity in the UK.

Siemens expects to build many of the turbines in Hull, which means that a planned £210 million factory will probably now be constructed, with the creation of 700 jobs; the rest of the turbines will be built in Denmark.

Siemens' huge, more efficient, new generation designs have a nominal capacity of six megawatts, with rotor blades 75 metres long. Michael Suess, head of its energy division, said strong winds off the coast of the UK allowed them to generate 40% more power than onshore winds.

This increased productivity offsets the higher cost of building them, which is typically at least twice that of onshore wind farms. Seuss said “we are working to further reduce the costs for this environmentally friendly form of power generation”.

So far, Dong's biggest working turbines are Siemens 3.6 MW. But turbines won't stop growing at 6 MW: Siemens is already working on a 10 MW unit.

The total capacity of Dong's order will be 1,800 MW. Dong will install the first two 6 MW units at its Gunfleet Sands wind farm near Clacton-on-Sea, Essex, later in the year. Forty of the turbines are destined for the 240 MW Westermost Rough site, which is near the Humber estuary, and which will be operational in 2014.

Others could go in the Walney wind farm near Morecambe Bay and the planned extensions of the Burbo Bank offshore wind farm beyond the Mersey Estuary.

Siemens and Dong collaborate on several UK offshore wind farms including the one gigawatt London Array off the Thames Estuary, the world’s largest offshore wind farm.

The exact number of turbines that will be commissioned is dependent on decisions being taken in Whitehall. However, if Dong fails to buy the full number cited in the order, it must pay a penalty to Siemens.

Record breaking year for offshore wind

In other good news that signifies the strength of the sector, Europe increased its offshore wind capacity by 50% in the first half of 2012 compared to the year before.

132 new offshore wind turbines with a capacity of 523 MW were fully connected to the grid in that period, compared to 348.1 MW in the same period in 2011, according to new figures released by the European Wind Energy Association.

Moreover, the number of turbines constructed was 95% up on the same period in 2011, at 103 units in five wind farms. This brings the total of operating offshore wind capacity in Europe to 4,336 MW as of 30 June 2012, up from 3,294 MW over the year, supplying electricity equivalent to the requirements of four million homes.

In addition, 13 wind farms are under construction which, when completed, will add an extra 3,762 MW, almost doubling today's amount.

Christian Kjaer, chief executive of EWEA, called the figures a triumph in the face of economic adversity. “Offshore wind power is increasingly attracting investors, including pension funds and other institutional and corporate investors,” Kjaer said in a statement.

“But it would be good to see more activity in southern Europe where jobs, investments and growth are desperately needed."