UK: New low-carbon priorities overshadow wind

Some members of the British government rightly laud the success of the wind industry – but don’t see as a priority the challenges facing developers and investors. That’s the view we've been left with after an event we attended with the UK’s energy minister.

Yesterday, we went to an event in London called ‘Building on COP24: Growing Momentum for Higher Ambition’, which was run by the Aldersgate Group and included a keynote speech from energy minister Claire Perry. The morning event looked at how businesses, politicians and others in the UK could promote growth in the green economy after the COP24 talks in Katowice in Poland last month.

The event also featured speakers such as Danielle Lane, UK country manager at Vattenfall and Abyd Karmali, managing director of climate finance at Bank of America Merrill Lynch. But despite the interesting array of topics up for discussion, there was little look-in for the wind industry as chat focussed on de-carbonising transport, heating and plastics.

Green Brexit

Perry started her speech by talking about the COP24 talks, and specifically the location of COP24 in Poland’s coal capital: “We assembled in a city where you could literally taste the hydrocarbons in the air,” she said. Despite that unpromising location, Perry said it was a successful event as talks had ended with an agreed rulebook about how best to implement changes to achieve the targets set in the Paris agreement in 2015.

The Aldersgate event was held the day after consultancy EnAppSys reported that renewables were set to overtake fossil fuels as the UK’s primary source of electricity by early 2020, which shows the UK is playing a leading role in the energy transition.

Perry said this commitment to renewables would continue: the UK government is set to continue favouring renewable sources over carbon capture and storage as they’re cheaper; and she sees an ongoing role for fracking rather than importing gas from Norway and Qatar, while the UK relies so heavily on gas for cooking and heating.

“Yes, [fracking] is a barnacle on our boat, but it is an infinitesimally small one,” Perry said.

She added that going low-carbon would stay a key priority for the government, even outside the European Union: “The Prime Minister is very committed to this agenda… When Brexit happens, we will not be rowing back in any way on our commitments,” she said. This will require close cooperation with the private sector and financiers.

However, there was little in her speech about wind, which we see as a good and bad thing. Good because the government has reiterated its support for UK offshore wind, and because there is no questioning the business case. But bad because it suggests that the government does not see the importance of giving policy support for onshore wind schemes in the UK, or see how the planning system is proving a hindrance.

Of course, if you’d like to tell her, go for it: “Anything we can do to unlock regulatory concerns, I just need to have that list of things to work through,” she said. So now you know!

Offshore benefits

Vattenfall’s Lane said COP24 had shown how the UK had made progress on cutting carbon, but “there is still a long way to go”. For the utility, this means focusing on how to de-carbonise transport and heating. Offshore wind has already proved its economic case.

She said: “We have seen the costs of delivering [offshore wind] plummet in the last decade, but at the same time we have gone to regions that have been in need of regeneration and we have brought high-skilled specialist jobs into those regions for the long-term. We have seen transformations of places like Grimsby and Lowestoft.”

Lane added that these economic benefits of clean energy – and 400,000 jobs created across the UK in renewables – had helped to sell offshore wind among younger people.

Our view from the session is that Perry undoubtedly backed renewables, but UK government is focusing its efforts on newer technologies. This leaves wind companies to get on and try to sort out their own problems, even those like planning that aren't within their control. Ex-prime minister David Cameron’s reported comment about 'green crap' continues to loom large, and we see little desire to support new onshore wind firms amid the UK's other eco-priorities.

We expect little to change until the government does.