Should off-shore wind turbines be an important part of British energy policy or are they a waste of...

8/3/2019 Should off-shore wind turbines be an important part of British energy policy or are they a waste of money?

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Ralph Collings Engineer in Society Report 23 November 2011

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Should off-shore wind turbines be an important part of British

energy policy or are they a waste of money?

Ralph Collings, University of Bristol

[email protected]

23 November 2011
mailto:[email protected]:[email protected]:[email protected]


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Contents1 Introduction ..................................................................................................................................... 3

2 Why not keep using Fossil Fuel Power? ......................................................................................... 3

2.1 Climate Change ....................................................................................................................... 3

2.2 Sustainability ........................................................................................................................... 4

2.3 Self-sufficiency ....................................................................................................................... 4

3 Government Policy on Future Energy Generation and Planned Projects ........................................ 5

3.1 Renewables Obligation ............................................................................................................ 6

3.2 Offshore Wind Policy .............................................................................................................. 7

4 Comparing Energy Costs ................................................................................................................. 8

5 Additional Considerations when Comparing Power Sources .......................................................... 9

5.1 Energy Resource...................................................................................................................... 95.2 Economic Factors .................................................................................................................. 10

5.3 Public Opinion ....................................................................................................................... 11

6 Conclusion ..................................................................................................................................... 11

7 Works Cited ................................................................................................................................... 13


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1 IntroductionIn recent decades wind power has grown from a fledgling industry into a significant part of the

modern energy generation market. Fossil fuelled electricity offers a number of drawbacks which are

likely to see it gradually phased out of use in years to come. In particular, high emissions of

greenhouse gases, dwindling quantities of available fuel and the United Kingdoms reliance on fuel

imports from unstable countries make it an unappealing choice for future electricity production.

Driven by legally binding targets to increase renewable energy use and reduce carbon dioxide

emissions, the government proposes to vastly increase the capacity of offshore wind generation by

2020 and beyond. However, this strategy requires tens of billions of pounds of investment in wind

energy development and the existing electricity infrastructure.

This paper aims to explain the positive and negative attributes of offshore wind generation, the drivers

of renewable energy policy, and the strategy implemented by the government. Due to the scale of the

topic, information is presented as an overview. Further details are available from the sources listed in

the bibliography.

2 Why not keep using Fossil Fuel Power?In the United Kingdom, electricity has primarily been generated through the burning of fossil fuels

since the late 19th

century. Oil, coal, and more recently natural gas have been the foundations of our

national power supply. However, there are increasing concerns about such sources due to their impacts

on climate change, lack of sustainability and reliance on imported fuel.

2.1 Climate ChangeIt is now accepted by the wide majority of scientists that the temperature of the Earth is increasing. In

July 2005 a collaboration of 11 national science academies, including those of the United Kingdom,

USA, Germany, France, Japan, India and China, released a joint statement (Joint science academies,2005) declaring:

There is now strong evidence that significant global warming is occurring... It is likely that

most of the warming in recent decades can be attributed to human activities.

Preliminary results from the ongoing Berkeley Earth (Berkeley Earth, 2011) project to quantify global

temperature have drawn a startling conclusion that the average temperature on Earth has risen by

approximately 1C in just 40 years from 1970 onwards.


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Figure 2-1 The Decadal Land-Surface Average Temperature (Berkeley Earth, 2011)

The significance of the increasing temperature only becomes apparent when the impact on our planet

is considered. Whilst the current temperature is not causing great damage, further increase has the

potential to cause havoc. Estimates given by Nicholas Stern (Stern, 2006) suggest that an increase of

2-3C could cause: crops to fail in developing regions, water shortages for one billion people by the

2080s, possible collapse of the Amazonian rainforest, extinction of 20-50% of species, onset of

irreversible melting of the Greenland ice sheet, reduced ability of natural carbon absorption, and the

risk of large, abrupt shifts in the climate systemthe climate becomes more unstable.

In order to prevent the possibility of a rise of above 2C, swift action must be taken to reduce the

levels of greenhouse gases in the atmosphere. A further statement by 13 joint science academies in

2009 (G8+5 Academies, 2009) recommends rapidly increased adoption of, and investment in,

renewable energy technologies such as wind, geothermal, solar energy, biofuels and wave power.

Increasing the use of renewable energy generation sources, such as offshore wind, is one of the ways

in which we can reduce our emissions of greenhouse gases.

2.2 SustainabilitySupplies of fossil fuels such as coal and oil are limited. It is expected that at some point the globalsupply of these fuels will peak that the rate of production will drop due to the exhaustion of easily

available resource. The timing of these peaks is hotly debated and estimates vary hugely. Predictions

in coal production suggest a peak any time between 2025 (Energy Watch Group, 2007) and 2150

(Hubbard, 1956). However, the timing of peak oil is much sooner with many believing that it has

already occurred. Even the most optimistic estimates suggest a peak by 2030 (UK Energy Research

Centre, 2009). Clearly if electricity demand is to be met in the distant future, sustainable, long-lasting

energy sources should be sought. Offshore wind power is one possible, sustainable alternative.

2.3 Self-sufficiencyThe production of fossil fuels within the United Kingdom is fast dwindling. Latest government figuresshow a 24.8 percent decrease in indigenous natural gas production in the second quarter of 2011 when


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compared to the same period in 2010 (DECC, 2011). To offset this loss, a large amount of all fossil

fuels are now imported. Figure 2.2 indicates that since 2004 the quantity of natural gas imported has

sharply increaseda necessity as supplies from the North Sea fall.

Figure 2-2 UK trade in natural gas from 1980 to 2010. The red line indicates net imports

(DECC, 2011)

In 2010, net imports were 413.1TWh, compared to the 1074.5TWh used (DECC, 2011). In other

words, 38% of natural gas used was imported. The same government document shows that 47% of

electricity supplied in 2010 was generated from natural gas. Such a reliance on imported fuel leavesconsumers in the UK extremely vulnerable to any failure in the supply, be it due to technical difficulty

or politics. The use of renewable power sources such as offshore wind to generate electricity in the UK

would reduce our reliance on imported fossil fuels.

3 Government Policy on Future Energy Generation and Planned ProjectsIn response to the concerns over future electricity production outlined in section 2, the UK government

and European Union (EU) member states have created a number of legally binding targets regarding

renewable energy and greenhouse gas emissions.

Renewable energyEU leaders have set targets meaning that between its member states 20%of all energy used should be from renewable sources by 2020. This includes energy used for

electricity, heating and transport. The UKs contribution towards the EU targets is to achieve

15% renewable energy by this deadline. The lead scenario proposed by the government is to

meet this through 30% of renewable electricity generation, primarily wind power, alongside

improvements in energy use for heating and transport (DECC, 2009).

Emission reductionsThe Climate Change Act of 2008 (DECC, 2008) commits the UnitedKingdom to reducing greenhouse gas emissions. Compared against 1990 emissions as a

benchmark, a reduction of 34% must be achieved by 2020, and reduction of 80% by 2050.


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In order to meet these goals, the government has created legislation to stimulate the industrial growth

of many renewable electricity sources. Table 3-1 gives a central estimate of renewable electricity

sources deployed by 2020.

Technologies Central range for 2020 (TWh)

Onshore wind 24-32

Offshore wind 33-58

Biomass electricity 32-50

Marine power (wave and tidal) 1

Other (including hydro and solar) 14*

Table 3-1 Breakdown of renewable electricity deployment in 2020 (DECC, 2011)

It can be seen that biomass generation capacity will approximately match that of offshore wind, with

onshore wind not far behind. Wave and tidal power are both in their infancy and will require

significant investment to reach the 1TWh prediction. Hydro and solar will make up the remainder of

the renewable energy mix. The UK government is therefore relying on a spread of renewable energy

sources to meet its targets, with offshore wind a significant proportion.

3.1 Renewables ObligationThe primary strategy employed by the government to promote renewable energy growth is the

Renewables Obligation. This legislation encourages electricity suppliers to source electricity by

renewable means and penalises them if they fail to meet government targets. It works as follows:

1. Each year, the UK government issues a Renewables Obligation Order. This specifies thenumber of Renewable Obligation Certificates (ROCs) that electricity suppliers must earn for

each MWh

of power generated in the upcoming 12-month period. It also details a buy-out

cost should the target not be met. These values are calculated based on the current levels of

renewable generation, and increased year on year to push growth in the area.

2. Following the next period suppliers earn ROCs for every MWh generated through low-carbon means. The number of ROCs varies depending on the source. For example, at the time

of writing onshore wind receives 1 ROC per MWh whereas wave energy gets 2 ROCs per

MWh (see Table 3-2). Offshore wind is granted 1.5 ROC per MWh, or 2 if the generation

facility is fully accredited. This allows the government to adjust the growth of each energytechnology individually.

3. For every MWh that an electricity supplier falls below the government target, a penalty is paidinto a national buy-out fund. Once administrative costs have been taken from this fund, the

rest is split between all electricity suppliers in proportion to the number of ROCs they

produced. Therefore the subsidy received by renewables will increase more if electricity

suppliers fail to meet their targets by a greater margin than the previous year. Hence, the

system is self regulating high-carbon power sources are penalised by an amount which

provides a financial benefit to renewable generation. The value of each ROC has risen steadily

*

This estimate includes energy from non-electrical generation sources including geothermal and domestic heat.Exact predictions for solar and hydro prediction are therefore unknown.

Where 1 MWh (Mega-Watt hour) is equivalent to 1000 units of electricity


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since the scheme was introduced in 2003, and stands at 38.69 for the period 1 April 2011 to

31 March 2012 (Ofgem, 2011).

Table 3-2 Number of ROCs awarded to common renewable energy sources (DECC, 2011)

3.2 Offshore Wind PolicyThe United Kingdom already leads the way in the offshore wind sector with an installed capacity of

1.52GW at the time of writing (Renewable UK). Based on the methods used by Renewable UK, this is

sufficient to power around 850 thousand homes when at peak operating conditions. However, in order

to meet its targets, the UK government plans to increase this capacity by almost 12 times to 18GW in

2020.

Figure 3-1 Installed offshore wind capacity, forecast to 2016. Bars show annual installed

capacity, line shows the total capacity (Renewable UK, 2011)

Offshore wind generation stations granted full accreditation or that have additional capacity recognised in theperiod 1/4/10 to 31/3/14 are awarded 2 ROCs/MWh Based on an estimated annual household energy consumption of 4.7MWhrs

Technologies ROCs / MWh

Landfill gas 0.25

Sewage gas, co-firing on non-energy crop (regular)

biomass

0.5

Onshore wind; hydro-electric; 1.0

Offshore wind; dedicated regular biomass 1.5

Wave; tidal stream; fuels made using anaerobic

digestion; dedicated biomass burning energy crops

(with or without CHP); dedicated regular biomass with

CHP; solar photovoltaic; geothermal;

2.0


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In order to facilitate this massive ramp up in offshore wind generation, the Crown Estate, which owns

the seabed up to 12 miles from the coast, has held a number of leasing rounds. In each one, companies

have been able to bid for the rights to build offshore wind turbines on any of the specified sites. The

first round was held in 2001, with 18 companies reaching agreements for leases totalling 1GW. The

second round was initiated in 2003, when approximately 6.2GW was leased. Figure 3-1 shows that

these projects, signified by light green colouring, are only now beginning to reach completion. The

Crown Estates third round of leasing offers up to 32GW of new generation capacity. The government

will be hoping a significant amount of this capacity is in operation by 2020 if they are to meet the

renewable energy targets set.

To push offshore wind energy the government has given it a high number of ROCs in comparison to

many other sources. However, this is required in part to offset the cost of installing and generating

electricity in harsh sea conditions (see 4 Comparing Energy Costs). This is one of the largest

drawbacks to offshore wind energy, and to combat the problem the government is pledging up to

30m of investment from 2011-2015 specifically to drive down costs (DECC, 2011). Additionally, up

to 60m has been promised for the development of offshore turbine manufacturing facilities at UKports.

To further improve expertise in offshore wind power, the government has announced intentions to

create and fund an Offshore Renewable Energy Technology and Innovation Centre . These facilities

would create a hub for industry companies, who could then work together and with universities to

flourish. Not only would this promote industry growth and create new jobs, but it would also cement

the United Kingdoms reputation for technical expertise in the field.

4 Comparing Energy CostsAn important factor in the consideration of renewable sources is the cost of the energy generated.Figure 4-1 estimates the present cost of electricity from a range of sources, as calculated by the

Department of Energy and Climate Change.

Figure 4-1 Estimated cost ranges for electricity technologies in 2010 (DECC, 2011)


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The figure excludes any subsidies, ROCs or feed-in tariffs. It is clear that offshore wind power is

currently a little more expensive than many alternative, green energy sources. This is not helped by a

high capital cost - the engineering required to install these large devices in rough seas adds hugely to

their expense. A 2010 report by Mott MacDonald (Mott MacDonald, 2010) estimates at present a

capital cost of approximately 124 per MWh. This compares unfavourably to 12.4 per MWh for

combined-cycle gas turbines (CCGTs) and 33.4 per MWh for advanced super critical coal plants.

Fuel costs, when taken into account push the ultimate electricity cost closer to that of offshore wind.

With all factors taken into account, Figure 4-1 shows that CCGTs provide electricity at approximately

half the price of offshore wind. Financially, there is little incentive for the UK government to invest in

non-fossil fuel plants. However, government strategy also takes into account the expected changes in

electricity cost over time. The prediction of energy costs in 2020 is given in Figure 4-2.

Figure 4-2 Estimated cost ranges for electricity technologies in 2020 (DECC, 2011)

The chart shows that the cost of electricity from less-developed, low carbon sources is predicted to

drop compared to 2010 levels. This is to be expected as the engineering behind these devices

improves, operational experience is gained and larger scale manufacture is possible. However, the

energy cost from CCGTs has actually increased due to the prospect of higher fuel costs. Nevertheless,

it remains a cheaper source of energy than offshore wind. Looking at alternative renewable sources,

onshore wind remains cheaper than offshore, biomass is comparable and anaerobic digestion (AD)

plants offer the potential for cheaper power. It can be concluded that, based purely on energy costs,offshore wind power would be poor value for money and an unwise investment.

5 Additional Considerations when Comparing Power SourcesWhen comparing different electricity generation technologies, there are a number of additional

considerations.

5.1 Energy ResourceIt is widely proclaimed that the UK potentially has the greatest offshore wind resource in the world.

Strong winds blowing in from the Atlantic Ocean reach Britain and Ireland first and weaken as they

travel over the continent. Figure 5-1 shows that in the North of the United Kingdom, mean windspeeds are in the region of 10m/s at 100m, close to the hub-height of modern offshore wind turbines.


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Nevertheless, such winds cannot be expected at all times in 2010 the average load capacity for

offshore wind was just 30.5 percent of the maximum output (DECC, 2011). One of the largest

drawbacks to wind power is the intermittent generation of power. Firstly, the National Grid faces

considerable difficulty in predicting how much electricity should be generated elsewhere to satisfy

demand. Secondly, with wind power making up a large part of our future energy mix, how will we

produce electricity on a still day? Both problems can be partly alleviated through the combination of

different renewable energy sources. For example, solar power could provide an alternative to wind on

a bright, still summer day. Additionally, a surplus of electricity from wind sources could be generated,

with the excess stored for use later. Potential forms of storage include hydrogen gas, compressed air,

pumped hydroelectric power, batteries and flywheels (Jacobson & Delucchi, 2011).

Figure 5-1 Generalised offshore wind climate across Europe (Ris National Laboratory, 1989)

5.2 Economic FactorsThe economic impact of investment in offshore wind energy is not straightforward. A rise in the

average cost of electricity is inevitable, predicted to be 18% for domestic consumers (DECC, 2010).

This will reduce consumer spending power. However, the expected growth in wind power will lead to

thousands of jobs being created. The organisation Renewable UK has published research which

estimates as many as 67,700 people may be working in the offshore wind industry and supply chain by

2021 (Renewable UK, 2011). The government has suggested that offshore wind could be a primeopportunity to re-establish manufacturing jobs, bringing the benefits of reduced unemployment and


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extra tax revenue. Further, the United Kingdom is in a brilliant position to exploit its current position

as a market leader in wind power through the export of goods and services.

Renewable UK predict spending on domestic offshore wind projects to total 80 billion overseas and

50 billion within the UK by 2022 (Renewable UK, 2011). The export of industry goods and services

will provide 25 billion in income to help offset the expense. However, the large capital expenditure

will be offset by a reduction in fossil fuel imports once wind farms are erected. When all new wind

farms have reached the end of their lifetime in 2042, the net balance to the government is estimated at

between a 12 billion loss and 2 billion gain, dependent of fossil fuel costs during the period.

5.3 Public OpinionIn a survey of 1,931 adults, MORI found that 78% support the building of offshore wind farms with

only 6% opposing their construction (Ipsos MORI, 2005). Figure 5-2 shows how this compares against

other common energy generation sources. Of those polled, no alternative power method was viewed

more favourably. Onshore wind farms received 72% support. It could be speculated that the main

reason for their lesser popularity is the greater visual impact they have on countryside. Offshore windfarms are typically located at least 12 miles from the coast at which distance they are barely visible

from shore if at all.

Figure 5-2: Support and opposition for common energy sources (Ipsos MORI, 2005)

In the same survey 83% of participants agreed that the UK should aim to be self sufficient in energy.

This helps explain the reduced support for non-renewable sources. In conclusion the results give a

clear indication that the wide majority of people would like to see an increase in offshore wind

capacity and renewable energy in general.

6 ConclusionIn summation, the combined effects of global warming and insecurities in the supply of fossil fuels in

the UK have made further generation from high-carbon fuels hard to justify. With no operational

greenhouse gas emissions or fuel requirement, offshore turbines have become a very viable generation

technology. Additionally, polls have shown that public opinion favours increasing offshore wind

capacity. This, combined with vast wind resource has driven the government to propose a strategy in

which offshore wind capacity would need to multiply by twelve times in just 9 years. To achieve this,

-40

-20

0

20

40

60

80

100

Coal (if zero

CO2 emissions)

Nuclear Gas Wind onshore Wind offshore

Levelofsupporto

ropposition(%)

Strongly Oppose

Tend to oppose

Tend to support

Strongly Support


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renewable generation costs are heavily subsidised and there is significant state investment in the

industry.

However, the fundamental cost of producing electricity from offshore wind turbines is significantly

greater than non-renewable power sources, nuclear power, onshore wind and many biomass sources.

This is exacerbated by high capital costs in the manufacture and deployment of the turbines. Further to

this, the intermittent nature of electricity generation poses the National Grid difficulties in power

management. The measures necessary to deal with varying, uncertain electricity generation may well

add further to energy costs. To help offset the expenditure in converting to a more renewable

electricity network, the government will be hoping the UK economy can achieve success in the export

of wind energy goods and services.

Following the investigation undertaken for this report, both positive and negative aspects of offshore

wind farms have been examined. With the government required to meet stringent renewable energy

targets, it is the view of the author that current policy on wind turbines is justified. Alternative

renewable technologies are currently even less cost effective than wind power or cant offer therequired generation capacity. The government is left with little choice but to support the few

technologies which could, when combined, satisfy renewable electricity demand in 2020. However, if

the only targets in place were to achieve reduced greenhouse gas emissions it would be difficult to

justify the choice of wind energy above nuclear power. Nuclear energy does not emit carbon and is

cheap, reliable, has fuel in ample supply and has a good recent safety record. Perhaps the one

drawback is significant public opposition on account of safety fears. It is the opinion of the author that

offshore wind turbines should remain an important part of British Energy Policy.


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7 Works Cited Berkeley Earth. (2011, October).Berkeley Earth Temperature Averaging Process. Retrieved

from http://berkeleyearth.org

DECC. (2008). Climate Change Act 2008.

DECC. (2011). Digest of United Kingdom Energy Statistics 2011. DECC. (2011, 11 11).Eligible Renewable Sources and Banding Levels. Retrieved from

Department of Energy & Climate Change:

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renew_obs/eligibilit

y/eligibility.aspx

DECC. (2011).Energy Trends: September 2011. DECC. (2010).Estimated impacts of energy and climate change policies on energy prices and

bills.

DECC. (2009). The UK Renewable Energy Strategy. DECC. (2011). UK Energy in Brief 2011. National Statistics. DECC. (2011). UK Renewable Energy Roadmap. Energy Watch Group. (2007). Coal: Resources and Future Production. G8+5 Academies. (2009). Climate change and the transformation of energy technologies for a

low carbon future.

Hubbard, M. K. (1956). Nuclear Energy and the Fossil Fuels.American Petroleum Institute. Ipsos MORI. (2005).Energy Issues Research. Jacobson, M. Z., & Delucchi, M. A. (2011). Providing all global energy with wind, water, and

solar power, Part II. 39.

Joint science academies. (2005). Global Response to Climate Change. Mott MacDonald. (2010). UK Electricity Generation Costs Update. Ofgem. (2011, 11 11).Renewables Obligation. Retrieved from

http://www.ofgem.gov.uk/Sustainability/Environment/RenewablObl/Pages/RenewablObl.aspx

Renewable UK. (n.d.). Offshore Wind Farms. Retrieved October 31, 2011, from RenewableUK: http://www.bwea.com/ukwed/offshore.asp

Renewable UK. (2011). Offshore Wind: Forecasts of future costs and benefits. Renewable UK. (2011). State of the Industry Report - Onshore and Offshore Wind: A

Progress Update.

Renewable UK. (2011). Working for a Green Britain: Vol 2. future Employment and Skills inthe UK Wind & Marine Industries.

Ris National Laboratory. (1989).European Wind Atlas. Roskilde. Stern, N. (2006). The Economics of Climate Change. Cambridge University Press. UK Energy Research Centre. (2009). Global Oil Depletion: An Assessment of the evidence for

a near-term peak in global oil production.

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