Time is right for windfarm investment, says minister
THE political landscape is now right for confidence in offshore windfarm investment, according to Business Minister Michael Fallon and Humber Local Enterprise Partnership chairman Lord Haskins.
The pair shared the same stage in northern Lincolnshire last week for the launch of the £30 million Growing The Humber fund.
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HUMBER GROWTH: Minister of State at the Department for Business Innovation and Skills Michael Fallon, right, speaks to Lord Haskins of Humber LEP and Liz Redfern leader of North Lincolnshire Council at the Baths Hall, Scunthorpe, during the launch of the Humber LEP £30-million Regional Growth Fund. Picture: David Haber
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PARK PLAN: An artist's impression of Able UK's planned Marine Energy Park.
It has been well documented that this region could see thousands of jobs created in the coming years, with scores of careers already now focused on the operations and maintenance element as farms close to the Lincolnshire coast, built with imported parts, are operational.
Now as the momentum builds for the larger projects in deeper water, the desire to host manufacturing in the UK, build supply chain and ensure Britain's benefits are not just energy security, are clear.
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Siemens has been holding out for the long-term economic conditions to be favourable before anchoring itself to the north bank, and behind the "gateway" that Mr Fallon described Grimsby as, sits the Able Marine Energy Park at North Killingholme – a huge site with enterprise zone status looking to develop the last deep-water frontage of the river and take advantage of a huge landbank earmarked for economic development.
The minister said: "There hasn't been significant certainty and clarity over this country's energy policy for some time.
"We have had a long moratorium on nuclear power from governments of both parties, and they hesitated on their commitment to offshore wind and so on.
"I think we are getting that clarity now. We have seen the Energy Bill being published and that being put into Parliament.
"Potential investors are reassured now. The financial framework that underpins this, the longer-term certainty they need if they are to invest in the more expensive side of it, particularly offshore, is there.
"I accept it has taken time to get this clarity and certainty, but it is now there.
"The legislation is now there. We are engaging with very large companies, particularly those from abroad, who want to come here. Now is the time for supply chains to invest."
One third of the Growing The Humber pot – £10 million – has been ring-fenced for the south bank renewables industry supply chain, aiding infrastructure projects and other elements to make the new industry's arrival as smooth as possible.
Lord Haskins said: "There was a period last year when there was a degree of uncertainty. But in the past two or three months, in my conversations with potential investors they seem pretty reassured that energy policy is significantly robust to lead them to make very long term commitments out in the North Sea.
"We keep our fingers crossed, but that particular concern has been alleviated."
A decision on development consent is imminent for Able's proposal, with the Planning Inspectorate working to a late February deadline for a recommendation to the Secretary of State for Transport, which in turn would then have a further three months to consider.
3 Comments
by MartinJDwyer
Monday, February 18 2013, 2:43PM
“@Jasbee
so "wind is a very expensive scam"? .. let's just play with a few numbers and see if that assertion stands up to analytical scrutiny shall we?
Let's see how much it would cost to generate 1MW of electricity for 25 years using natural gas, the international wholesale price of which is about $10 (say £6) per GJ. With a conversion efficiency of 50%, then a GJ of gas-generated electricty would cost £12 (excluding the capital and running costs of the plant required).
1MW running for one year is 31,000 GJ so the cost of that much gas over 25 years is:
31,000 x 25 x £12 = £9.3 million
On-shore wind turbines of the type used locally have 2MW peak power with a capacity factor of ~30% so that the average power output is 0.6MW. These appear to cost about £2.25 million to install (which accounts for most of the cost) so that the cost per MW (average) running for its 25 year design life would be £3.75 million. This appears to compare favourably with the cost of burning gas?
Off-shore wind turbines are larger so able to take advantage of the stronger winds at higher altitude, and the wind is more consistent as sea so the capacity factor is more like 50%. However, because of the increased costs of siting wind turbines at sea (largely to avoid the unpleasant whining noise produced by Daily Mail reading NIMBYs), the cost per installed average MW appears to be about £8 million. This is slightly more than double the cost of on-shore wind but still less than the cost of gas needed to produce the same amount of energy over 25 years.
Gas-powered production, or any fossil fuel source, benefits from the falsehood that costs incurred in the future are somehow worth less than immediate costs by pretending that money can be invested to earn compound interest in order to pay for them. Moreover, not included in the costs of using fossil fuels, are the 'externalities' such as environmental damage due to CO2 emission. If using fossil fuels incurred the penalty of even a modest 'carbon tax', then renewable technologies, especially on-shore wind, would appear very favourable.
I hope I've demonstrated that the idea that wind power is somehow massively expensive is simply a falsehood? At worst it is in the same ball-park as electricty production from burning gas.”
by Jasbee
Tuesday, February 12 2013, 5:03PM
“It is abut time these idiots learned , that the time is never right for any kind of wind investment.Wind is a very expansive scam Amen”
by oxoneast
Tuesday, February 12 2013, 12:20PM
“Energy finance,What happened to Grimsby,s Cosalt Plc,that is to close with funding problems ? The Cosalt chairman David Ross is also Humberside Local Enterprise Partnership,s Vice Chairman.? HLEP as its known,has not helped at all,D Ross has been "looking for funding" for over 10 months,and this Grimsby 120 year old company is due to close,according to Cosalt BOD.Can we assume that HLEP was unaware of Cosalts financial problem,or was Cosalt refused.The Thelegraph ran a full page on the £300 Billion paid to foriegn firms,as a "subsidy" to build our windfarms.Cosalt get nothing and will close,so something is wrong on Humberside,and no wonder the region has the highest unemployment region in the UK.Cosalt closed Cosalt Wind Energy on Monday,over 50 employees,Cosalt offshore with over 250 employees mostly in Aberdeen,WorkWear based in Stockton over 70 employees up for sale(in discussion) No funding from HLEP.Plenty of headlines of millions to finance companies so what has happened.28 MP,MEP,and Lords are asking questions in Parliment in regard to Cosalts predicament.Well the employees,the unemployed,and the regions cash starved community will also be asking the same question.Whats going on in Grimsby,and on Humberside ? All talk,no action or funding.”