Zerocarbonista

Offshore wind - The façade begins to crumble?

Filed under: Energy Sector, Renewables — dale May 2, 2008 @ 10:42 am

Big news yesterday. Shell have pulled out of the London Array – the world’s largest offshore windfarm proposal. Bit of a shock to the well-spun world of offshore wind. As is the reason - that it doesn’t stack up financially. Shell, bless em, with record first quarter profits of £3.9 billion - you’d think they could afford a few windmills. Actually what they’re saying is they can’t make enough money out of it. Profit before planet of course.

Offshore wind is a bad idea for a number of reasons – the cost to build being twice that of onshore wind is a big one. But even the supposed efficiency benefits of offshore wind have failed to materialise as recent government statistics show offshore performs no better than onshore - in some cases worse.

Shell have acted for purely selfish reasons but their withdrawal will do some good. The offshore bandwagon needed a reality check.

The government will have to stump up vastly more money or face the probability that offshore dreams will remain only that. Or, dare I say it, just tweak the planning system for onshore wind and stand back and watch the UK’s wind capacity soar.

13 Comments »

  1. Most Excellent news.

    Offshore has been the quick fix solution for NIMBY’s for too long.

    Comment by Sam — May 2, 2008 @ 10:49 am

  2. Shell for profit before planet? Never………

    Interesting points about offshore not being all its cracked up to be. Now if we can just get people to grow up and accept onshore, we are cooking on wind!

    Comment by Paul — May 2, 2008 @ 10:54 am

  3. I agree offshore is at best ‘iffy’. However I don’t think you can blame Shell for pulling out. As a global corporation they should be taking a pragmatic line on the investment outcome.

    The fact they don’t think it stacks up is the real issue here. Financially wind is at the margin - taking some subsidy to make it profitable for investors. On land possibly very profitable. Offshore - aren’t Shell saying exactly what you say - too expensive?

    I also take issue with planning regs being the issue. They may be a pain and Ecotricity is feeling that pain - but if you look at BWEA’s figures - the annual build v consented ratio is nearly 10:1. That is there is more than sufficient consented wind (even without the Thames Array) to be getting on with. Its just that the majors are not translating permissions into build. Why?

    Comment by Stuart — May 3, 2008 @ 8:51 pm

  4. Hmm.. I am not sure about that ratio being OK you know Stuart - according to this old tool - we will need to have approx 9255 wind turbines operating by 2020 to meet the predicted demand. This would negate the need to build new nuclear or fossil fuel or importing any energy or changing our consumption (although the grid might need a refresh). Granted - that is a very simplified tool, but as a rule of thumb (and if my late night maths hold up!) - that means we need to be erecting around 2 turbines a day to come anywhere near that magic number in the next 12 years.

    We definitely need to be asking why the ‘big boys’ (who could make that kind of investment) aren’t even putting in the applications… and also, why the planning permission is not given to more applications, especially considering the amount of care that goes into selecting a site and making the application..

    Comment by nommo — May 4, 2008 @ 1:07 am

  5. Nommo,

    The consented unbuilt turbine stock is over 5GW (http://bwea.com/ukwed/consented.asp). The build is about 500MW/annum. That means it could take 10 years to build the already consented.

    My point is that the problem is the build rate rather than the consent rate. Granted ecotricity as an ethusiast has a problem here - but the majors do not.

    We should not give them the excuse that its local government councillors who are stopping Eon et al from delivering wind energy.

    Granted if they built at the rate we really need then 5GW wouls soon disappear and we need to get to grips with nimbyism. Its just a second order problem right now.

    Re nuclear energy - It looks like Germany’s impressive wind build won’t do much more than replace retiring nuclear plant. No effect at all on fossil powered generation. Nuclear waste may be bad but I think we need to think whether CO2 waste is even worse.

    Here hew fossil build is just ridiculous when we have all this unbuilt wind consents (more than twice the Kingsdown proposal).

    Comment by Stuart — May 4, 2008 @ 9:12 am

  6. Some good points made. Although planning & localised objections are no doubt some of the reason wind farms are stalled, I suspect it’s also our fault as consumers.

    If more people picked the ethical choice instead of just the cheapest, the ‘big boys’ would be forced to observe these consumer trends and adapt. Most of these companies don’t give a hoot about our protests, or green issues. But they DO care about profit!

    We can’t always afford the most ethical choice, but in this case there’s something more important than making your own house carbon zero. It’s about contributing to the ‘green movement’!!
    Pass this site on to your friends..
    http://www.whichgreen.co.uk

    And if Powergen ever overtakes Ecotricity for green investment (per customer), no offence Dale.. but I’m off ;) !

    Comment by Chris — May 4, 2008 @ 11:00 am

  7. Are Shell investigating any alternative means of offshore power generation such as water turbines? If not, why not? If so, where?

    Comment by Hamy — May 6, 2008 @ 10:01 am

  8. How long does it take to develop a sub-50MV farm (including feasibility studies, planning application and building time)on average?

    and is the planning application process for 50MW+ wind farms (at national governmental level) quicker?

    Comment by andre — May 7, 2008 @ 6:08 pm

  9. another last question: does the “Good Energy” company’s philosophy of “building renewable energy demand for the future acturally work”??

    … i’m just wondering, whether their business model really facilitates renewable capacity expansion in the UK … or if it’s just another way to market a so called “green business” … opinions anyone?

    Comment by andre — May 7, 2008 @ 6:21 pm

  10. andre - Good Energy’s philosophy involves more than just ‘building demand’ as they actively seek out renewable producers. They have a 5 year purchase agreement for 60% of the output of the newly finished Westmill Co-op wind farm. That security of income helped pursuade me to become an investor. They have also provided support for microgeneration by their customers.

    Comment by Tom — May 8, 2008 @ 12:13 pm

  11. @ Hamy

    Shell have this info on their site. Not a lot going on in the UK…

    Funnily enough - if you do a google search for “Shell Renewables” and click the top result, or follow a link on their site on this page - it says ‘page not found’

    Comment by paul — May 8, 2008 @ 1:30 pm

  12. Andre asks on May 7th ”How long does it take to develop a sub-50MV farm (including feasibility studies, planning application and building time)on average?

    and is the planning application process for 50MW+ wind farms (at national governmental level) quicker?”.
    Dale would be more knowledgeable but in my limited experience as a renewable energy campaigner the answer to the first question and the second is it varies.
    Sub 50mw–npr’s lindhurst scheme in Nottinghamshire(10-12mw) has taken 6 years total~awaiting turbines~next summer2002-2008.
    but Ecotricity hope to build the B&Q Turbine at Worksop before then,Ecotricity appear to be far faster at turn around than any of the majors i have seen (bicker fen wind farm,windprospect was approved 2002 and still no turbines!)

    Over 50mw ,Lewis wind farm has waited 6 years in Planning for its refusal decision at the scottish executive plus feasibility studies and the average two year wait to get hold a turbine,etc,etc if it had won.
    Keadby and tween bridge wind farms went to public inquiry in 2003 and only recently were approved(5 years at dti/dberr).
    With local refusal rates at 33% and getting worse and nimbys getting worse turning to voilence,intimidation,arson and vandalism,met masts chopped down etc,-marshland st james etc)huge planning delays (4 yeas is becoming the norm) and M.O.D playing political games for more funding by objecting at the last minute,the planning system is massively holding the industry up and not giving the certainty to developers to invest in new plant production,resulting in the mess we have now.
    And now we have the very real possibility of a tory party return (cameron etal have been totally against onshore wind) the future is not very bright at all.
    As Dale say’s the only way we can change this is to actively support your local renewable energy scheme as much as possible,get active!.
    hamy on the 6th may,Shell is very unlikely to invest in water turbines(wave/tidal) as they are still early prototypes and far more expensive than Wind,Dberr calc’s put them at 4-6 times more expensive than offshore wind!.
    Npower renewables,wind prospect and Eon have a few small schemes but it will be many years before they are cost effective comparable to wind or Fossil fuels.
    They may have a chance where it is difficult to build offshore wind (deep water~scotland) but so far the economics of large scale do not add up.
    Wind farms rock!
    looking forward to the Embrace weekend 14th and 15th June!.
    Sorry for being so negative!.

    Comment by Bryan Norris — May 9, 2008 @ 8:11 pm

  13. @ Stuart – I was taking a swipe at Shell because in three months this year they made £3.9 Billion and their one third share of the London Array probably needs around £50 Million of government support it make it work better. They earn that much money in just over a day! It’s no excuse these days to say but we’re capitalists – we’ve just one planet to live on. Regarding your planning statistics though, very interesting, I thought they deserved a whole new post…

    @ Andre – Under 50 MW I’d say it can be anything from 2/3 to 5 years to go from concept to having planning permission. Then you have to discharge conditions and order the long lead items, such as grid equipment and turbines – that can mean several more years before you build.

    Over 50 MW projects are decided by the government, in a process that’s not exactly fast but is faster and much fairer in its application of policy and its outcome. There’s a new version of this coming next year which the government says will deliver decisions in 9 months flat. Good news but only for very big wind farms, which over 50 MW is.

    But the bulk of our potential wind energy (onshore) is in smaller projects. A 50 MW wind farm is pretty big and pretty rare –especially in England.

    With regards the Good Energy, again – I thought this and Tom’s comment deserved a new post to try and clarify things… (coming shortly)

    Comment by dale — May 12, 2008 @ 3:56 pm

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