Onshore Wind Energy

Lord Wharton of Yarm Excerpts

Thursday 10th February 2011 Westminster Hall

[Andrea Leadsom]

I completely agree, and will come to that point.

The second challenge where national need is tugging against local need is energy security and our dwindling North sea gas reserves. We are now a net importer of gas and will increasingly rely on potentially unreliable sources for importing power, so there is a great need to rebuild our own generating capability. The third “tug” comes from our binding EU target to meet 15% of our energy needs through renewables by 2020. Again, that presses us towards urgent action that at times can appear to go against local requirements.

I therefore welcome the Government’s focus and determination to solve these problems while at the same time taking account of what local people want. What are the solutions? The former leader of the CBI, Richard Lambert, said clearly that nuclear energy was the answer. It is low carbon and has a high base load. I am pleased that we are seizing that bull by the horns and pressing for more nuclear capability. That will be key.

As the hon. Member for Ogmore (Huw Irranca-Davies) suggested, however, the big race during the last decade has been for onshore wind, not just here but in Europe. Let me set the scene. At the moment, Britain has 350 operational wind farms, 260 either under construction or awaiting construction and 250 at the planning stage. That means that there are already 3,000 turbines in the country, with another 6,500 either awaiting construction or planned. To meet the 10,000 turbines needed to ensure that we hit our 15% renewables target by 2020 would cost us dearly in terms of the impact on communities and electricity prices.

At the moment, onshore wind farms provide for about 2.1% of total energy needs in the UK and they are by far the largest renewable source, but the big question is: are they worth it? To examine that, I shall consider the case of Denmark, which has led the way on onshore wind. It now has more than 6,000 wind turbines for a population of just over 5 million people. In theory, wind turbines could provide for one fifth of Denmark’s energy needs, but its national power company—DONG Energy—has stopped supporting new onshore wind turbines, for three reasons. The first is the enormous public backlash. Communities have just had enough. Secondly, electricity prices in Denmark are the highest in Europe. Since 2005, subsidies paid by businesses and consumers to wind farm developers have totalled some £620 million.

However, the key reason why Denmark is putting a stop to onshore wind farms is effectiveness. Electricity generated in Denmark could provide for 20% of its total needs, but not much of it is used in Denmark. Why? Because the wind does not blow at peak times in Denmark, so the country sells its surplus energy to Norway, Sweden and Germany, often at a substantial loss.

Another key issue in Denmark is that the Danes have failed to close a single conventional power station. Why? Wind energy produces excesses of power at times when it is windy and when it is working, but at other times it is not useful to them, so it has not significantly reduced their carbon footprint. In addition, they have to keep their power plants ticking over because the carbon footprint from constantly ramping up power stations when the wind drops is counter-productive.

The other reason why Denmark has stopped building onshore wind farms is that subsidies have been reduced significantly by the Danish Government. Of course, that points to the fact that the big push for wind is a result of taxpayer subsidies; that is why developers want to build wind farms.

What does that mean for the UK? First, in the UK we know that wind farms are unreliable. The intermittency causes a problem for the grid. Too much wind means that the turbines have to be turned off. No wind means that they are useless. Wind cannot be stored, and in the UK the average production from wind turbines is about 30% tops. That means that the theoretical capacity of 100% is only achieved to the tune of 30% on average because of the intermittency of wind. We therefore have to keep all our power plants going to provide a back-up source and we will have to build new power plants to cope with that.

Secondly, last December, when temperatures dropped to an average of minus 0.7° and demand for heat rose by 7%, there was no wind. Wind power contributed not a jot to meeting that 7% increase in demand for heat.

Thirdly, we have to consider the costs. It is difficult to establish the relative costs because they move all the time, but roughly speaking, wind energy costs about two and a half times the price of nuclear energy and twice the cost of traditional fuel sources. However, it is not just the fuel itself. There is also the cost of building the turbines. The costs of the raw materials for that are increasing, and as the demand for wind turbines increases, so does the cost of building them.

Finally, there is the cost of upgrading the grid to deal with the enormous amount of new connectivity that will be needed by 2020 if we are to have a total of 10,000 onshore wind turbines. The cost has been put at around £5 billion.

[James Wharton (Stockton South) (Con)]

My hon. Friend makes an excellent point about the cost of wind turbines. Is it not the case that there is not only a cash cost, but that the carbon cost of manufacture detracts significantly from the environmental benefits that onshore turbines are supposedly meant to bring?

[Andrea Leadsom]

My hon. Friend makes a good point, although some would argue that the cost would be defrayed over a few months, once the turbines are built. Of course, it all boils down to how much energy the turbines produce.

Upgrades to the grid will cost about £5 billion by 2020. That alone will add 1% to every fuel bill, as it is consumers and businesses who will be paying the cost. In 2005, Paul Golby, the chief executive officer of E.ON, said:

“Without the renewable obligation certificates nobody would be building wind farms.”

In 2007, Ofgem said,

“we think there are cheaper and simpler ways of meeting these aims”—

the aims of reducing carbon emissions and promoting renewables—

“than the renewables obligation scheme which is forecast to cost business and domestic customers over £30 billion.”

In 2008, the Centre for Policy Studies predicted that meeting the 2020 renewables target would require a taxpayer subsidy of between £4 billion and £5 billion a year. That would add £3,000 to the total fuel bills of every household—that excludes the cost of infrastructure —and it takes no account of the fact that, in 2009, 4 million households were in fuel poverty. The cost of these things must be taken seriously into account.

I am delighted that the Government have announced that they intend to share the financial benefit of onshore wind farms with communities. That is important because there is no doubt that taxpayers will be paying the price; it is fair that the communities that host wind farms should share in the rewards.

Another cost of wind farms that is hard to quantify is the impact on communities. Hundreds of campaigners are fighting against having wind farms in their areas. Their concerns are wide-ranging. They include visual problems: many of the new wind turbines are bigger than Big Ben and taller than the London Eye; they are said to intimidate villages and ruin areas of outstanding natural beauty, and there is mess and disturbance while they are being built.