Britain Bets Big on Offshore Wind

Faced with an already-crowded countryside and a fast-approaching EU deadline to generate 30 percent of its electricity from renewables by 2020, Britain is turning to increasingly large and untested offshore wind facilities—a strategy not everyone thinks makes sense.

The British government hopes that by 2020 a third of the country’s electricity will be generated by over 6,000 offshore turbines.

The push is attracting the world’s biggest wind power players: Mitsubishi Corp. and General Electric Co. will be investing in turbine development and manufacturing facilities in the U.K.

Initial projects will be sited a few miles offshore in relatively shallow waters. More controversial are the Round 3 projects, which will be in deep water nearly 200 miles offshore. Not only will initial construction be costly, they’ll have to be built to withstand 60 mph winds and 30-foot waves.

Despite the challenges, investors were attracted to these endeavors by generous subsidies from the government. Normally, each megawatt-hour produced by renewable sources earns its producer a “Renewables Obligation Certificate.” ROCs are sold to utilities trying to meet government renewable energy targets—with those utilities passing the bulk of that cost on to customers. These offshore projects earn 1.5 ROCs per megawatt-hour—a number that may increase to 2 by the end of the year.

Unanticipated setbacks have arisen for investors all the same. In some places, turbines appear to be migrating slightly or sinking into their foundations—requiring even more money to fix. Other projects have had to change turbines’ locations or hold off on construction so as not to impact marine wildlife or naval operations. The weather, too, has not always been cooperative.

Add to these a rising cost for steel, a shortage of turbines, and even waiting lists for the enormous ships needed to deliver and install the giant equipment.

These hurdles—in particular the high cost of construction and the unknown long-term viability of the projects themselves—have caused some to question the government’s green energy strategy. Converting coal facilities over to natural gas or making improvements in efficiency would be better ways to reach proposed EU targets, say some. Others would rather see the targets abandoned altogether.

The estimated price tag for Britain’s wind ambitions is $150 billion.

Return to May 2010 Western Energy News

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