Wind News

Tuesday 16 February 2010

Datamonitor said tha the UK is unlikely to build the 32GW of Round 3 by 2020

Significant limitations in the supply chain and financial support for large wind projects will "seriously undermine" the UK's Round 3 ambitions, market analysts have claimed.

Research by business information provider Datamonitor has said that the challenge of constructing wind farms so far offshore and uncertain capital markets means that realising 32GW of offshore wind power by 2020 is "unlikely to be achieved."

Offshore wind farming is still considered a relatively immature sector compared to onshore, the research stated, and one in which not all banks have strong risk assessment credentials. The credit crunch has hit the offshore wind sector harder than most other renewable industries it said, and much harder than conventional generation industries.

Datamonitor also pin the blame on the Renewables Obligation (RO) for failing to attract investment and falling short in generating the amount of renewable power generation the UK had originally expected.

This is in sharp contrast to Germany, which the company said had managed to build six times more onshore wind power due to direct subsidy support mechanisms that provide investors with long-term visibility and constancy of returns.

The research adds that wind power in the UK cannot reduce carbon emission levels to keep pace with global coal-burn emissions and so recommended that the UK do more to promote carbon capture and storage (CCS) and nuclear.

In fact, relying on wind could bring about a new ‘dash for gas,' the company claimed. Datamonitor believes it is extremely unlikely that the current UK energy infrastructure investment policy will facilitate the overhaul of the country's aging centralised transmission and distribution grid, so the country could fall back on gas.

Building new gas capacity is also seen as method of dealing with wind's intermittency, it said.

Alex Desbarres, senior renewable analyst at Datamonitor, said: "In the run up to 2020, the current renewable ambitions could actually usher in a matching 'dash for gas' to maintain security of supply, along with the risks that this implies for greater exposure to gas imports."

He echoed the Carbon Trust's claim that around 2.5 wind turbines will need to be installed per day if the UK is to meet its 2020 targets (see this NewEnergyFocus.com story), but admitted this would be difficult to achieve.

"The UK government's current commitment to a crash program in wind power generation - from 5.5% currently to roughly 30% by 2020 - is ambitious to the point of being unattainable, will be very costly and is very unlikely to be met.

"In the longer term, the focus must be on policies and frameworks that promote the development of and investment in long term, large scale, low carbon power generation technologies and infrastructures, starting with nuclear power, transmission and distribution grids and carbon capture and storage."