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October 22, 2008 / Mridul

Britain Struggles To Keep Wind Energy Targets In Sight

A wind farm in Cornwall County, England

A wind farm in Cornwall County, England

As the world struggles to access the extent of damage the current economic crisis and while world banks, including those of European countries, unleash bailouts to financial institutions, Britain is trying its best to save its renewable energy targets safe for the collateral damage of the credit crunch. Although ample funding for renewable energy projects is now in doubts British lawmakers approved a highly ambitious goal of raising the emissions cut for 2050 from 60 to 80 percent. Even though Prime Minister Gordon Brown is optimistic of achieving the set goals, short and long-term, industry executives don’t seem too convinced. 

Before Prime Minister Brown had addressed the British Wind Energy Association’s annual conference the media was raising questions about the feasibility of the renewable energy goals that the government had so ambitiously embraced. 

Among the potential problems to be outlined are concerns of a severe shortage of engineers and worries companies are reviewing their commitments to wind energy because of spiralling costs.

Many experts believe it is technically feasible to meet the targets, but there is a growing conviction that the plans were rushed through so quickly by the Government that it will now take substantial new money and guarantees to work.

The fear that large wind energy projects may not be much profitable is keeping companies from investing in these projects. Shell’s pullout from the world’s largest wind farm, the London Array, is the evidence of the same. Shell sold off its stakes because the project didn’t make great economic sense. The company also said that it would rather invest in wind farms in the United States. 

Shell’s place was recently filled by the United Arab Emirates when it picked up 20 percent stake in the project. Gordon Brown happily welcomed the move saying, 

This is an excellent example of the partnership we need between oil-producing and oil-consuming countries to develop new energy sources and technologies, diversifying their economies and reducing our dependence on carbon.

Now, although the government sees it as a welcome infusion of capital in the project, one must be cautious of selling strategic stakes in the energy sector to oil producing nations. The reason for concerns is the attitude of these countries which was visible during the recent oil crisis. Even after a series of requests to the OPEC, some of them from Prime Minister Brown himself, all the OPEC members (except for Saudi Arabia) refused to increase production to help lower the price of oil. And now that the oil prices have halved from the all time highs the OPEC is considering to reduce production. The possibility that one of these countries would use these investments as a leverage in the future cannot be ruled out. 

Another concern is that the British national grid might be too out-dated to handle the large scale integration of wind farms. Keith Anderson, director of the renewables division of Scottish Power, explained that

The grid is between 30 to 40 years old and needs immediate modernisation and investment. A proposed upgrade of the main Beauly-Denny transmission line in Scotland, which would allow a significant increase in renewable energy capacity in the far north of the United Kingdom if it gets the go-ahead, was likely to take 10 to 12 years to carry out.

Britain is bound by an EU goal which says that each member nation must produce 15 percent of its total energy needs from renewable energy sources. In addition, it also has to reduce its carbon emissions by 20 percent by 2020. Britain is lobbying hard to convince the EU lawmakers to allow members to achieve the set emission reduction by investing in clean energy projects in developing countries.

It seems that the government is only concerned about achieving these targets and hasn’t given any serious thought about formulating a strong energy policy that could lead the nation to energy independence. In this time of economic turmoil it is understandable that leaders would voice concerns over expensive & ambitious plans but just as the EU leaders came together to bailout the ailing banks them must convene and work out an integrated solution to this problem as well. 

Investment in renewable energy projects must be made to look lucrative and attractive not only to large energy companies but also to the common citizens. Government must try to gather support of the public and convince them that it is essential for the country to go ahead with these projects because the environment is at stake. The government must try to integrate the general public into these projects. A plan should be formulated through which citizens could directly invest in these projects and get electricity in return as profits.

Photo credit: Ennor (Creative Commons)

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3 Comments

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  1. preplan / Oct 22 2008 9:43 pm

    This is a big fear of mine and many others, that what momentum had been gained in renewable energy will be lost due to the financial crisis. I can only speak for the U.S. since my focus has been on renewable energy there, but unless Obama is elected and the short attention span of the American people can be caught at just the right moment, it may be that the U.S. will wait for the lights to go out or prices to spike significantly before making a significant and iron-clad commitment. The Picken’s Plan has a small chance of making a difference, but at least it is a chance. I don’t agree with all of it, but compared to the alternative of doing nothing or nuclear, I’m for it. One issue with his plan is how it is funded and who receives the benefits. My hope would be for the consumer to benefit in a big way, the Picken’s plan is geared toward big business and wealthy individuals getting the greatest benefit. I’m still for his plan even if this is so, but like Britain saw with Shell pulling out of the off-shore projects, business isn’t in it for the greater good and the minute profits aren’t front and center, they head for greener pastures.

    I developed the PRE-Plan mentioned above, which, since I am an American, was targeted toward the U.S., yet it would likely fair better in Europe; especially in light of the global financial turmoil. For the most part Europe has higher energy costs than the U.S. and thus even greater incentive to move toward renewable energy. The plan allows ordinary individuals and businesses to invest relatively small amounts into large-scale renewable energy projects and to receive a share of the electricity as their return on investment. The plan reduces the cost of renewable energy since each consumer becomes the financiers, thus eliminating the interest payments which can double the cost of such capital intensive projects. Its more complicated than that, but you can find out more at Profitable Renewable Energy (see blogroll) or the book of the same name.

    The world is faced with the same problems that existed in the 1970s, concerns about oil dependance, a call for renewable energy yet without any conviction behind such calls, and a world economy in recession. The first oil crisis hit in 1973 and now 35 years later we’ve done relatively little to solve problems that were considered dire back then, although Europe is moving faster than the U.S.

    It has been easy to expect government to solve all our problems, but it seems clear that for the most part governments the world over simply lurch from one crisis to the next and can’t or won’t do whatever is needed to address the underlying problems. With the financial crisis threatening the financial stability of governments all over the world, it seems likely that renewable energy will be shoved to the back burner until energy again surfaces as a crisis of greater import than all others. The next energy crisis could very well undermine world economies worse than the current financial mess. The solution would be for individuals and businesses to directly invest in their own energy one way or another. It’s democratic and should nobody invest they’d have no one else to blame but themselves and each individual can invest in whatever types of project they wish. The fact that using this scheme actually saves consumers enormous sums is sort of a side benefit.

    If it were possible for everyone to generate their own power on their rooftops or with a wind turbine in the back yard, that would be ideal; yet that isn’t feasible nor cost effective; although some might be able to do this. The alternative would be to allow individuals and businesses to own a slice of efficient generating capacity sited where the wind blows and the sun shines.

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  1. » Britain Struggles To Keep Wind Energy Targets In Sight Credit Crunch On Credit Speak: News And Info On Credit Crunch
  2. The Pickens Plan | Chasing-Windmills.com

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