The wind in its sales: UK set to be first turbine superpower
With offshore costs plummeting, the country will rival Saudi Arabia soon, says Ambrose Evans-Pritchard
The economic argument over wind power has been settled. Britain’s national gamble on offshore wind arrays in the North Sea and the Irish Sea has been vindicated in spectacular style. This should be proclaimed, assiduously nurtured, and expanded where compatible with marine ecosystems. If you are looking for a turbo-charged venture to lift British fortunes after Brexit, offshore wind is as good as it gets.
The prospects are suddenly so enticing that we could in theory be an aeolian superpower by the 2030s, trading places with Saudi Arabia to become the energy sheikhdom of the northern seas. The question is not whether we can do it, but whether we should compromise the integrity of the North Sea in such a fashion.
Industry insiders are not surprised by the strike price of £57.50 per megawatt hour unveiled this week for two giant wind projects, half the levels struck in contracts two years ago. They already knew the technology was advancing by leaps and bounds. But it seems to have stunned everybody else.
The UK is the world leader by far in offshore wind with 10 gigawatts (GW) of installed capacity planned by the late 2020s, as is fitting given the near perfect mix of shallow waters and optimal wind speeds through the North Sea. The depth at Dogger Bank off Yorkshire is 50 feet in places – it was once a Paleolithic hunting ground, with woolly rhinos. Economies of scale are kicking in with a vengeance. Dong Energy was able to slash its tender for the 1.4GW Hornsea Two project – the world’s biggest offshore array – because it already operates Hornsea One nearby. The infrastructure is there. The two will share the same hub in Grimsby.
Think what this is doing for that once-blighted seaport, home to the world’s biggest fishing fleet before the “Cod Wars” and the Common Fisheries Policy reduced it – famously – to the “worst place to live in England”.
Across the river, Siemens has opened a 700-strong factory for wind turbines in Hull. “The Humber is becoming the ‘energy estuary’. We’re seeing a regeneration of coastal towns along the North East,” says Matthew Wright, head of Dong’s operations in the UK. What began as a foreign push by Danish and German companies has become a British venture over time, tapping into the specialist skills of the North Sea oil and gas industry. UK local content was 43pc two years ago: it will cross 50pc with the latest projects.
JDR Cables in Hartlepool has become a supplier of undersea power lines to Europe, China, Africa, and the Middle East. The town’s Victoria Dock is humming again. “The UK has become a global leader in the supply chain,” says Mr Wright. “It is a fantastic success story.”
The Hornsea Two strike price is so far below the nuclear contract for Hinkley Point – index-linked and already £102 per MWh – that it entirely changes the nature of Britain’s energy debate. Patently, no such nuclear deal could ever be struck again in the new circumstances. A new contract would have to justify itself against “big wind”.
The UK has locked itself into a £50bn subsidy for France’s EDF lasting 35 years. We will have to live with this since the legal and diplomatic costs of walking away are too high. But if we replace our nuclear plants in the future, they will have to be leaner animals – such as molten-salt reactors that can use up our stockpiles of plutonium waste rather than making more of it.
You can make the same cost-critique of the early wind contracts, of course, but those were start-up subsidies to achieve critical scale. They worked Wind farms across Britain, such as the Burbo Bank one in the mouth of the River Mersey, above, could turn Britain into a powerhouse like a charm. The new £57.50 MWh tenders for projects coming on stream from 2022-2023 are roughly level with natural gas plants in the UK even at today’s low price of global gas.
The wind saga is by now well-known, The latest turbines have aerodynamic “smart blades” made of carbon composite with wireless sensors that can pitch in and out of the wind as air flows shift. Cameras relay data through cloud computing. Drones inspect offshore arrays instead of men on ropes. The turbines have grown into 8MW monsters towering 200 metres, (656ft) raising “capacity factor” to the once unthinkable level of 50pc in new projects. The ceiling was 30pc a decade ago. By the mid-2020s, the turbines will be approaching 15MW, and by then cost projections will be dropping towards £45 per MWh.
At such levels the discussion will no longer be about subsidy but about how much revenue is being generated for the Exchequer. The UK will be sitting on a lucrative low-carbon resource, doubly valuable once global CO2 pricing takes hold and ratchets above $50 a ton. So should Britain go for broke and turn the North Sea into a giant wind hub, propelling the country into the top rank of global energy exporters? Should it strive to become the first big industrial economy to achieve zero net emissions and radically reshape the narrative of Brexit (falsely linked with “Trumpism” in the global mind today)?
Such an ambition is no longer science-fiction. A consortium of Dutch, Danish, and German transmission operators signed an accord this year with EU backing to develop the “North Sea Wind Power Hub” – a colossal nexus of 70 to 100GW, equal to a hundred nuclear reactors. It talks of artificial islands as mid-sea operating stations to service arrays and to convert AC into DC power for longrange cables. These plans are a long way off. Britain could either join in, or develop its own parallel project and leapfrog ahead on a much faster scale. The UK’s territorial zone covers the lion’s share of the Dogger Bank and the best shallow waters in the South. “The potential is absolutely huge,” says Giles Dickson from the pan-EU federation Wind Europe.
The group published a report in June that Britain could theoretically produce up to 595GW at competitive cost, more than our entire power needs, even at peak times in the dead of winter (53GW). Even a fraction of this would require a revolutionary step-change for British industry, a mobilisation akin to rearming for war. Yet it is in principle “doable”.
Some excess power could be sold to Europe through interconnectors, reversing the pattern of flows and generating export income. Much could be turned into ultra-green hydrogen through electrolysis and either exported worldwide or kept as a reserve source of baseload power.
This technology too is moving fast. The US National Renewable Energy Laboratory is working on a “wind-tohydrogen” venture in Colorado. The EU’s Don Quichote project has a pilot scheme in Belgium. Leeds aims to convert its whole grid to hydrogen with its H21 Citygate plan.
Seventeen global companies launched the Hydrogen Council in Davos this year to accelerate the shift. This body expects the cost curve to mimic the dramatic falls seen in wind and solar over the last 15 years.
Hydrogen has its problems. It is highly flammable. It needs “expert management”. Yet it can be mixed with natural gas for combustion. Siemens is developing an H-Class of gas plants that allows a hydrogen mix of 60pc.
Ultimately, new designs will be required to burn it in pure form at ultra-high temperatures but that is just a matter of time. In short, solar and wind will soon be generating their own reserve baseload power at viable cost. The curse of “intermittency” is being conquered. It will cease to be a serious barrier in the 2020s.
The question for Britain is how far it should push this extraordinary opportunity. What is our ecological duty to the North Sea? What would sweeping expansion do to the marine life and foraging birds of the Dogger Bank? Could migratory species survive such a forest of turbines, even if the new variants were to be vibrating “bladeless vortex” poles?
These are moral issues that demand debate. “Big wind” is a powerful lobby these days. Its interests are aligned with those of the British nation but they are not identical.
What has become clear this week is that the long-standing cost objections to offshore wind have been blown to smithereens. Britain is sitting on cheap and almost limitless green energy. It has won the zero-emission lottery.