Recent announcements across Europe seem to be ushering in a new era of “subsidy-free” renewables which can be deployed without government support.
Last week saw the world’s first “subsidy-free” offshore windfarm – the 750 megawatt (MW) Hollandse Kust Zuid scheme, due to be built by 2022 off the coast of the Netherlands – announced.
This follows several subsidy-free German offshore windfarms agreed last year and due to start generating slightly later than the Dutch scheme, in 2024 and 2025.
Mateusz Wronski, head of product development for energy market research firm Aurora, said the arrival in Europe of subsidy-free schemes, on a large scale, is a “revolution”.
He told an audience in Oxford last week: “I think the word ‘revolution’ is befitting, not just because of the sheer scale…but also because it is a marked departure from the old paradigm, where renewable deployment was driven by government intervention.
“This revolution brings a new paradigm, where decarbonisation can be brought about by sheer market force.”
“The last 12 months have been something of a watershed for subsidy-free scheme in Europe.”
But Keith Anderson, chief executive of Scottish Power, one of the ‘big six’ electricity firms and the company behind the £2.5 billion, 714MW East Anglia One offshore windfarm, is blunt in his disagreement. He said:
“I hate that expression ‘subsidy-free renewables’. Right now in the UK, nothing is being built without subsidy, from the network to thermal generation and nuclear.
“So why is the renewable industry running around trying to be subsidy-free?
“If you think we would build a £2.5 billion offshore windfarm at market risk then you are bonkers, completely bonkers. It’s just not going to happen.”
In contrast, however, Renewable Energy Systems (RES) has planning permission to build 200MW of onshore wind and solar capacity in the UK, which it intends to develop without government support.
And Rachel Ruffle, RES managing director, is optimistic. She said: “I was really surprised by the Aurora analysis. It seems out of touch in saying subsidy-free onshore wind will be viable in the UK by 2025. I completely disagree – it’s possible now.”
RES has 200MW of projects with planning consent in the UK – mostly onshore wind in Scotland – and projects totalling 1GW in development.
Ruffle added: “I very much hope to close at least one project this summer. This might then take up to two years to build.
“As to how much could ultimately be deployed, the sky’s the limit – I really do believe that – because [onshore] wind is the cheapest form of generation.”
29 Mar 2018