Leading academic analysts have speculated that failure by the Johnson administration to free up onshore wind parks could add as much as £125 to the average household bill by 2035, on top of other likely factors such as gas shortages pushing power prices higher.
The Energy and Climate Intelligence Unit makes the calculation, assuming a second crisis in world gas supply forces a late 2020s repeat of today’s current upheaval.
Britain’s current 14 GW of onshore wind already built is due to be supplemented by a further 6 GW under construction or otherwise approved.
Reports leaked to favoured media in advance of this month’s energy security review, hinted that 20 GW onshore could be more than doubled to 45GW by 2035, with an interim target of 30GW by this decade’s end.
Such hopes were dashed however, when the strategy as published set no new targets for land-based wind. Instead it left in place planning restrictions on English sites which had been tightened by the Cameron government in 2016.
The strategy gives assurances that “rural communities will be consulted” on new parks, and may be offered discounted tariffs in return for accepting erection of turbines.
Renewed eligibility for some Contracts for Difference is the most powerful driver behind the current pipeline. But the subsidy cannot be guaranteed, leading the ECIU to muse on bill hikes if Britain’s onshore turbines don’t advance beyond 20GW.
It concludes the onshore sector’s failure to reach the mooted 45GW will end in UK households paying much higher bills.
If today’s gas crisis were to be repeated later this decade, and if onshore wind stayed at 20GW, the 10GW shortfall would effectively cost £4bn each year, equivalent to £50 per household, says the ECIU.
If a second repeat in 2035 of today’s gas crisis coincided with a shortfall then of 25GW of onshore wind, Britons would be having to shell out £10bn more each year, equating to £125 per household, the ECIU team calculated.
The forecast assumes all new onshore wind farms will receive CfDs with strike prices of £48 per MWh, similar to expected values for Allocation Round 4. It set day-ahead wholesale power prices of £200/MWh as seen during the current gas crisis; and a load factor across the nation’s onshore parks of 30%. In reality, the latter could be higher if Scotland continues its predominance among UK onshore wind.
“Hopefully gas will be less dominant”
Total savings under CfDs for an extra 10GW by 2030 would be £4bn, and for an extra 25GW in 2035 would be £10bn, the study confirmed.
Dr Simon Cran-McGreehin, the ECIU’s head of analysis, said “It’s difficult to predict exactly what the power system of the future might look like, and hopefully gas will be less dominant over wholesale prices”.
“But these figures show the cost of not investing in onshore wind is high”.
The researcher cited the government’s own November 2021 research, which found onshore wind is one of Britain’s most popular forms of generation. Four-fifths of rural residents supported onshore park, rising to 87% where locals close to turbines received a bill discount.
“If the build-out of onshore wind is slowed again, in the event of another gas crisis those MPs falsely claiming turbines are unpopular could have to explain to their constituents why they are paying an additional £125 on their bills”, said Cran McGreehin.
The ECIU is funded through £1 million each year from philanthropic funds the European Climate Foundation and the Quadrature Climate Foundation. Its advisory board includes Adair Turner, the former Climate Change Committee chair, and academics Profs Catherine Mitchell, Joanna Haigh, Michael Grubb and Dr Emily Shuckburgh.