Government backs UK wind power

Energy secretary Chris Huhne has pointed to an increase in UK wind farms ahead of a key policy announcement this week.

Huhne’s backing of onshore and offshore wind power as a way to safeguard Britain’s energy supplies comes as a new report highlights a £10bn funding gap in the wind sector that could prevent the country from meeting its legal renewable energy targets.

‘Offshore wind, I think partly as a result of fewer planning issues, is likely to be an important part of our energy independence going forward,’ he told The Sunday Telegraph, in advance of a Commons policy statement scheduled for Tuesday.

‘We have a tremendous natural resource in the Dogger Bank, which is an enormous shallow area of the North Sea, the same size as Wales.

‘It’s relatively cheap to put wind turbines in that shallow area. It’s beautifully windy so it does actually produce a lot of electricity – that is a really important natural resource for us.’

He also said that onshore wind turbines were ‘incredibly competitive’ but ‘not always as popular in the area where [they are] proposed as you might hope’.

Offshore wind is targeted with delivering around half of the additional 27GW worth of power needed to meet the UK’s legally binding target of generating 30 per cent of electricity from renewable sources by 2020, according to a report released today by PricewaterhouseCoopers.

Last year, the UK increased its offshore wind generating capacity by less than half the 1.1GW needed to reach the 2020 target. By 2015, developers will need additional annual funding of up to £10bn to achieve this roll-out rate, assuming limited project finance is available during construction.

Michael Hurley, PWC’s global energy and utilities advisory leader, said: ‘The required roll-out rate to achieve the 2020 targets is being hampered by the scarcity of pre-construction finance.

‘If the construction and technology risks could be underwritten or transferred, this would open up offshore wind to pension and life company investors.’

Huhne said it was vital that Britain became more energy independent and that total self-sufficiency would be an ‘extraordinary prize’.

When asked if this was a feasible goal, he said: ‘It implies quite a stretch as it suggests we would be building an awful lot of turbines around our coasts. But the technology is changing. It is becoming substantially cheaper to generate from these renewable sources.’

Huhne stressed that there was ‘no money’ for state subsidies for new nuclear power plants, but added: ‘I suspect that new nuclear will go ahead. Investors are telling me very strongly that they expect to be able to go ahead given the framework we can put in place.’

Earlier this month, the Department of Energy and Climate Change announced £10m worth of grants for developing offshore wind technology. But like most government departments, the ministry faces budget cuts of between 25 and 40 per cent.