Next week the onshore wind industry descends on Glasgow for Onshore Wind Energy 2019. Glasgow is in the race to become the UK's first net zero city and, in just over a year, will take to the global stage as hosts of COP26. It is also home to #RUKOnshore19 Event Partners, ScottishPower Renewables. In this blog, Kate Turner, Policy & Regulation Director at SPR, explores the benefits of onshore wind and why it's central to meeting net zero targets.
With all the excitement about the offshore wind auction results recently, it’s easy to forget that onshore wind is our single biggest source of clean electricity with over 13GW of installed capacity – more than any other renewable energy technology. In fact, onshore wind is the backbone of a modern, clean, renewable energy system and ScottishPower Renewables has nearly 2GW within its business. For years now, onshore wind has led the way in ramping up renewables to power over 8 million UK homes with clean electricity, revolutionising our energy system and helping the UK reduce emissions. And the UK public like onshore wind; a huge number of public polls have found that onshore wind is supported by all demographics, across rural and urban areas, up and down our country. Perhaps the success of onshore wind development has led in some way to it being taken for granted, so it’s right that we recognise just how big a contribution onshore wind makes to tackling climate change and sustaining rural economies up and down the UK and how critical onshore wind is to delivering on Government’s commitments to meet net-zero.
The clue to tackling the climate emergency is in the name – emergencies need rapid and pragmatic solutions. With respect to onshore wind, solutions already exist and greater deployment of onshore wind can also offer new opportunities – to change how and where we invest and create new jobs across the UK. Onshore wind is vital on both of these fronts however it is not fully meeting its potential at the moment due to the Government’s lack of support for the sector and so with the adoption of the net zero target, it is hard to see how this current status quo will stand.
The Government’s independent Committee on Climate Change (CCC) is clear that the UK will have to quadruple low carbon electricity supply by 2050 in order to meet net zero. This means that we’ll need at least 35GW of onshore wind by 2035. In the world of large corporates, companies are increasingly realising the benefits that cheap onshore wind can bring to their businesses. But what about bill payers? Shouldn’t everyone have a right to low-cost, renewable power? The CCC 2019 Progress Report has though made it clear that renewables without a Government backed contract (so called ‘merchant’ renewables) are not expected to be deployed at sufficient scale to meet the generation gap in 2030. This means that whilst some projects are now managing to come forward on a merchant basis, we won’t see the capacity we need to get anywhere near the deployment levels needed to achieve net-zero emissions.
To decarbonise our economy at the lowest cost to consumers, and meet expectations of rapid action on climate change, the UK will need more onshore wind and deployment at the level of pace and scale necessary required Government support through access to competitive Contracts for Difference (CfD) auctions. The UK could easily realise the industrial benefits of onshore wind and ensure cheap power for all consumers by running a CfD auction that includes onshore wind.
And as well as being good for the climate, more onshore wind makes economic sense; research undertaken by Vivid Economics for RenewableUK shows that deploying 35GW of onshore wind could cut consumer bills by £50 per household per year and create 31,000 jobs. The case for letting the sector back into CfD auctions is therefore very strong. With a predictable revenue stream, developers’ exposure to price volatility can be avoided allowing investment to come forward at a lower cost of capital which in turn results in lower energy bills for consumers. Research by Arup shows that revenue stabilisation via a CfD for onshore wind could result in a £6-£12 reduction in the cost of electricity compared to a project relying on merchant revenues alone – locking in low cost power for the 15 year duration of the contract. The CfD also has a consumer pay back function – when wholesale prices are above strike prices, consumers are paid back the difference.
As the UK moves towards exiting the EU, it will be important to grasp the global investment opportunities that Brexit affords us. The CfD framework is well understood by international investors who value the certainty that it provides, and this therefore creates significant additional opportunities for inward investment in the UK.
New onshore wind is also an opportunity for local economies across the UK. The most recent study on economic impacts shows that all investment in new onshore wind farms results in 66% UK content – that is spending retained in the national, regional and local economies. This is higher than other large-scale energy technologies and higher than in the automotive sector. And we know that from the areas where new onshore wind projects are likely to be located, the biggest employment and productivity benefits will be felt in areas of the country that have higher unemployment and lower productivity rates than the national average.
On a clear day, you can look out from our Glasgow HQ and see Whitelee, the UK’s biggest onshore wind farm in its 10th year of operation. Scotland is the wind powerhouse of the UK and ScottishPower Renewables are proud that our home city of Glasgow will host the UN’s global Climate Conference next year. ScottishPower has transformed as a utility in response to climate change - closed all of its coal plants, and with the sale of the remaining gas and hydro stations in 2018, the company – through ScottishPower Renewables - now generates 100% of its electricity from wind power. ScottishPower Renewables is leading the way in renewables in the UK and is proud to be a leading developer in the first major economy to legislate for net-zero. The UK renewables industry will have a powerful role to play in convincing other countries to upscale their climate ambition, and a proven track record of domestic action will be important in making this case. When we look at what’s been achieved and how far we still have to go, it’s clear that a path to net zero isn’t credible without new onshore wind in the UK. As we get ready to welcome the world to Glasgow in 2020 and showcase our global leadership on climate, it’s time we put onshore wind back at the heart of UK decarbonisation.