Please note that some of the information on this page is out of date. It will be re-written shortly to include recent developments in the wind space.
Wind energy involves harnessing the energy generated from winds via turbine mechanisms to generate electricity. For grid purposes, large wind turbines are generally grouped to form wind farms as single turbines do not produce significant amounts of energy. Depending on factors such as average wind speed, frequency and grid accessibility, wind farms can be developed either on or offshore. Wind turbines can also be used as microgenerators, producing electricity for residential households.
According to the British Wind Energy Association (BWEA), the UK is one of the most ideally suited locations for exploiting wind energy globally, with 40% of Europe’s potential capacity for wind energy generation located within the UK. Research undertaken by Oxford University’s Environmental Change Institute found that in the UK there is more wind in the winter, when electricity consumption is generally higher and during periods of high demand, potentially resulting in lower reliance of electricity sourced from fossil fuels.
Investing in Wind Energy
The wind energy sector has grown at a staggering rate of in excess of 30% annually over the last five years, with $51.8 billion directed towards wind energy developments in 2008. According to the United Nations Environment Programme and New Energy Finance, in 2008 renewable energy investments overtook fossil fuel investments for the fist time, with wind the principal investment target.
The recent financial crisis, however, has impacted on the wind energy sector’s rapid expansion. Obtaining reasonably priced finance, the main mechanism by which the wind energy sector has been so successful, is currently proving more difficult as banks undertake more conservative lending practices. The European Investment Bank has maintained its investment into renewables, and wind in particular, in line with EU policies.
Finance, however, is not impossible to obtain - money is simply now more expensive than it used to be. Crucially, experts predict that the sector will only be affected in the short to medium term and that investors in wind energy continue to look to long term prospects.
According to the BWEA, the UK wind energy industry will see massive expansion in the next decade resulting in up to £50 billion being invested into the industry. UK Trade and Investment also forecasts that the wind energy industry in the UK will be worth £20 billion by 2015. The UK government’s strong support for the industry further demonstrates its encouraging future. The chairman of the Government’s Committee on Climate Change, Lord Turner of Ecchinswell, recently stated that there is a need to heavily invest in wind energy in an attempt to decarbonise the UK’s economy.
The wind energy sector benefits from several key drivers within the UK, all of which have contributed to tremendous recent market growth. Most predominantly, the drive towards increasing the sources of renewable energy and reducing carbon emissions continues.
Regulatory drivers within the UK are at the heart of the industry’s recent success and lead the way for future growth. One of the most significant pieces of legislation is the Climate Change Act. Recently enacted, the Act requires the UK to reduce national CO2 emissions by 26% by 2020. The Act also calls for an 80% reduction in greenhouse gases by 2050 through measures undertaken abroad and within the UK. Renewable energies such as wind energy will be central to achieving this ambitious target. Other regulatory drivers which support the wind energy industry include:
- Renewables Obligation (RO): The RO requires electricity providers to provide increasing proportions of electricity from renewable sources. As of 2009, wind energy technologies will receive favourable treatment with wind energy installations due to receive 1 to 1.5 tradable Renewables Obligation Certificates (ROCs) for every MW of energy produced.
- Carbon Emissions Reduction Target: This target recently came into force via the Electricity and Gas (Carbon Emissions Reduction) Order 2008. The target requires energy providers to invest in emissions reductions via installation of processes that will aid in increasing the energy efficiency in households. Incentives are given for the use of micro renewables (eg. domestic wind turbines) in order to increase their attractiveness.
- Code for Sustainable Homes: This Code lays out the requirements for achieving homes that emit zero carbon. As all homes must be zero carbon by 2016, domestic wind instalments are likely to be in demand.
Additionally, the new Planning Act which was recently enacted aims to relieve the backlog of current planning applications for on and offshore wind farms by speeding up the planning process. On top of this, Ofgem have recently announced a £1 billion investment to speed-up the process by which new renewables are installed into the grid.
Government Support and Strategies
In 2007, the UK government announced support for increasing the UK’s wind power capacity by launching an enquiry into suitable potential sites for offshore wind farms. In addition, the Climate Change Planning Policy Statement published in 2007 requires climate change mitigation strategies to be considered within local developments, with specific reference being given to consideration of renewable and low carbon energies such as wind energy within new developments. The Micro-generation Strategy compliments the Climate Change Planning Policy Statement by removing barriers for using micro-renewables such as the requirement for planning consent for installations on residential premises. Governmental support such as this is ensuring that the wind energy industry will continue to grow in the future.
In July 2009 the Crown Estate announced that it was offering early adopters of offshore wind the opportunity to apply for extensions to their operations. This is to facilitate a more rapid expansion of offshore wind, increasing generating capacity without the lengthy planning processes normally required. There are also discussions in place to link the UK and Norway through a sub-sea cable which would create a network of offshore windfarms connected to both countries.
The Environmental Transformation Fund allocates £1.2 billion to environmental initiatives involving a range of issues both nationally and internationally from 2008 to 2011. Specifically £47.4 million has been allocated for 2008/2009 to aid in commercialisation of technologies such as offshore wind developments.
A recent study by BERR shows that 80% of people support the use of wind-generated electricity whilst 64% of individuals would be willing to live within 3 miles of a wind farm. This is likely to accelerate the planning consent process.