Weekend press: SSE rules out new onshore wind farms in England and Wales

In this weekend’s papers, the boss of SSE rules out building new onshore wind farms in England and Wales, saying the company is focusing on offshore wind despite the relaxation of planning rules and the absence of the latter from last week’s CfD auctions. There is also continued reaction to the “disastrous” auctions and a survey finds more than half of voters will be influenced by the government’s handling of sewage spills at the next election.

Britain’s largest wind farm developer rules out onshore farms

The UK’s largest wind farm developer has ruled out building new onshore wind farms in England and Wales in a blow to the Government’s net zero plans.

Alistair Phillips-Davies, chief executive of SSE, said his company was “unlikely to build a single wind farm” in England or Wales despite the Government’s recent relaxation of planning rules.

Mr Phillips-Davies said there was too little space, too many protests and not enough wind. He added that England and Wales were “particularly awkward places to try to do business.”

He also warned that future onshore projects in Scotland were likely to be limited.

The statements are a blow to the Government’s ambitions to boost onshore wind development in England. Levelling Up Secretary Michael Gove and Net Zero Secretary Claire Coutinho last week relaxed planning rules to make it easier to build onshore wind farms.

Ms Coutinho said onshore wind farms had “a key role to play” in “help[ing] us provide a cleaner, cheaper and more secure energy system for the UK.”

Mr Phillips-Davies said the future of England’s wind industry lay offshore, where developers could build on a far greater scale with far fewer protests.

His faith in offshore wind is despite Friday’s disastrous renewables allocation round where the Government set the price for offshore wind so low that no developers came forward with new projects. It means the UK is increasingly likely to miss its target of building 50 gigawatts (GW) of offshore wind by 2030.

The Government had set the price at £60 per megawatt hour in today’s money. Mr Phillips-Davies contrasted this with the £74 on offer from the Irish government in its recent offshore wind allocation and called on the UK government to consider offering similar sums.

He said: “Net zero and renewables will take money but it’s better than buying oil and gas from ever decreasing sources in the Middle East, the Far East or anywhere else for that matter. The capital costs may be high but once it’s built the wind is free.”

Offshore developments are largely free of the controversy, conflicts and planning rules afflicting onshore wind farms.

Until last week, onshore developments could effectively be blocked by just one objection. The system had become highly politicised, with backbench Conservative MPs and the Labour party successfully campaigning for their removal.

Despite last week’s rule change to make it easier for developers, Mr Phillips-Davies said the industry itself was losing interest in onshore developments because they were inherently small-scale.

“I think onshore wind has a role to play in the UK but going forward it just does not have the scale of offshore wind,” he said. “The UK is a relatively small landmass with a high population. In Scotland there are also issues about protecting wild lands, and there are also many wind farms out there already.”

Building in Wales had been particularly difficult because of backlashes from local communities, he said.

“There’s no point going to war with people, which is what it’s felt like in Wales. The ones I’ve been involved with in Wales, it was pretty full on trying to persuade people.

“Basically onshore is for smaller stuff but it’s offshore that has the scale. Scotland alone has got 25GW offshore capacity … whereas I would not expect SSE to be able to build 4GW more onshore in the UK. From where we are today, we might do 1GW.”

The Telegraph

UK’s net zero ambitions at risk after ‘disastrous’ offshore wind auction

Fears are growing that existing offshore wind projects could be shelved, after industry insiders warned that “disastrous” handling by the government had created a big shortfall in future renewable energy.

Ministers revealed last week that no additional offshore windfarms will go ahead in the UK after the latest government auction. No bids were made in the auction, after the government ignored warnings that offshore schemes were no longer economically viable under the current system.

The Observer revealed the problems last month, as the price for energy offered to developers had not taken account of rampant inflation in their costs. However, industry insiders said that inflationary pressures may even jeopardise the viability of schemes approved in last year’s auction. One such project, the multibillion-pound Norfolk Boreas windfarm designed to power the equivalent of 1.5m British homes, has already been paused.

The failure of this year’s auction has been fuelled by the government setting a maximum price of £44 per megawatt hour based on 2012 prices. It is similar to the price offered in the previous auction, which took place before many inflationary pressures had hit the industry and its supply chain.

There are now frantic demands from some of the leading players for ministers to make a quick announcement that the maximum price for next year’s auction will be increased. Some also want help to ensure that schemes already agreed can go ahead.

Industry figures had been making direct pleas to ministers since January, the Observer understands. Companies have been frustrated because increasing the price would still have left offshore wind as one of the cheapest energy sources and improved the UK’s energy security.

The problems that have emerged around offshore wind are a blow to the UK’s carbon reduction pledges as the industry forms the backbone of those plans. The UK is committed to decarbonising the electricity system by 2035 and achieving net zero by 2050. It is banking on a near-quadrupling of offshore wind from about 14 gigawatts to 50 gigawatts by 2030.

Industry figures said there was now a 24GW gap “between what we think we can procure in auctions for offshore v 50GW target for offshore”.

It comes amid a warning from trade unions that the UK risks losing hundreds of thousands more manufacturing jobs if it refuses to follow Joe Biden and make a significant investment in green industry. Before the start of its congress on Sunday, the TUC said that Britain’s industrial heartlands would be further hit unless the government “pulls every lever” to deliver net zero and create the right jobs to do it.

It released research that it said showed about 800,000 manufacturing and supply chain jobs in automotive, steel and other sectors could be at risk if the government does not implement its own Biden-style climate plan. Biden’s Inflation Reduction Act is set to pump $369bn (£296bn) into climate change issues.

The regions with the most jobs at risk are the West Midlands, the north west, and Yorkshire and the Humber, the TUC said. It said the jobs that could be affected by the offshoring that could follow a lack of investment by Britain included 112,400 in the automotive industry, 31,000 jobs in iron and steel and 88,200 jobs in rubber and plastics. It said almost 400,000 jobs in Britain’s supply chains could be affected.

“The race to net zero is also a race for industrial revival,” said Paul Nowak, the TUC general secretary. “If we move quickly we can protect and create hundreds of thousands of good jobs across the UK. But our government is stuck in first gear. While other countries are scaling up subsidies for clean technology and infrastructure, the Conservatives have yet to produce a jobs and climate-focused industrial strategy.

“The UK needs to speed up to stay in the race. If we don’t want to lose jobs to other nations, we need government to stop dithering and pull every lever it has to stop our industries haemorrhaging hundreds of thousands of jobs – and kick off a British industrial revival. We must act now to safeguard our industrial heartlands and manufacturing sector.”

Laurence Turner, GMB head of research and policy, said almost 200,000 manufacturing jobs may have been lost since 2010. “Our members in manufacturing face real uncertainty but ministers seem to be asleep at the wheel,” he said. “We urgently need a Biden-style response that links contracts to jobs if we are to break out of the cycle of low investment, low growth and low pay.”

The Observer

Click here to read Utility Week’s coverage of the auction results.

First floating wind farm in Wales delayed over funding

Plans for Wales’ first floating wind farm will be delayed by one year as UK government funding is too low, the firm behind the plans says.

Blue Gem Wind did not bid for a UK government contract, a decision which industry voices said was a “huge wake-up call” for Westminster.

It was claimed that the Erebus offshore wind farm could establish an industry that creates up to 10,000 jobs.

The UK government’s annual auction invites companies to bid to develop renewable energy projects and contracts to supply the UK grid with electricity.

The contracts offered involve a set price for the electricity generated, sometimes referred to as an energy tariff.

The scheme aims to offer contracts on a 15-year term to stabilise traditionally volatile energy prices, while allowing developers to secure the financing and private investment they need to build the projects.

But Blue Gem Wind said a huge increase in costs meant the money on offer was not enough to make it worthwhile to bid.

A Blue Gem Wind spokesperson said: “Well-known global factors that have significantly increased supply chain costs in the last 18 months, combined with deploying floating technology in a region that has not previously supported offshore wind, have created a challenging environment.”

The company said it was still hopeful that it could press ahead with the plans.

“A potential delivery strategy for Erebus is currently being developed which will have to fully consider future plans,” the firm said, adding that it would continue to work with the UK government.

The UK government said the lack of bids for new offshore wind projects was “in line with similar results in countries including Germany and Spain” and that it was a result of “the global rise in inflation and the impact on supply chains which presented challenges for projects participating in this round”.

“However, the industry remains a British success story, with the government committed to its ambition of securing 50GW of offshore wind capacity and 5GW of floating offshore wind by 2030,” the UK government spokesperson added.

The industry body RenewableUK Cymru said it was “incredibly disappointed” at the news and said the industry had warned the government that the price being offered was not good enough.

Director of RenewableUK Cymru Jess Hooper said Erebus was “critically important not only to Wales and the wider South West region, but also for the UK government’s own floating offshore wind targets”.

Erebus would be the third floating offshore wind farm in the UK, but the estimated 100 megawatts of energy which could be generated by the project is more than double the others.

BBC News

Sewage will influence most voters at the next election

More than half of the public will weigh the government’s handling of sewage spills into how they vote at next year’s election.

Polling of 6,000 adults by Survation, a research company, found that discharges into rivers and seas will affect how more than 56 per cent of people vote.

The figure rose to 66 per cent among those who voted Labour at the 2019 election, and dipped to 51 per cent among Tory voters. However, there are 31 Conservative seats, including the prime minister’s in Richmond, Yorkshire, and the chancellor’s in South West Surrey, where the figure jumps to 60 per cent or more.

The results suggest political pain over sewage pollution for the Conservatives, given the government was found by a watchdog to have weakened environmental protections by dropping river rules last month to boost housebuilding. Steve Reed, the new shadow environment secretary, has promised to be tough on river pollution, though Labour has not yet pledged to block or undo the rules change.

Siobhan Harley, campaigns director at the not-for-profit 38 Degrees, which commissioned the research, said: “This polling makes the political cost of the fouling of Britain’s rivers and seas clear.”

Nationally, 35 per cent of people said water quality had worsened in the past year, with the highest regional levels at 44 per cent in the south east of England and 38 per cent in both the south west and east. Southern Water, Anglia Water and South West Water, which cover those areas, only managed 2 out of 4 stars in official environment scorecards for last year.

The polling found that 25 per cent of people had been personally affected by sewage spills or had witnessed them over the past year.

The Times

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.