Financing Key to UK Wind Energy Targets

The British Wind Energy Association (BWEA), the UK’s largest renewable energy body, released new research to a House of Lords Select Committee confirming that urgent action on financing is needed for wind energy to contribute fully to the government’s 10 percent target for renewables.

London, England – October 20, 2003 [SolarAccess.com] Research undertaken by BWEA over the past three months through extensive interviewing of potential financiers of large-scale wind energy projects has shown that because of the structure of the current Renewables Obligation (RO), there is a high degree of uncertainty over the value of wind generated electricity after 2010. This is making it extremely difficult for projects planned for later this decade to obtain the necessary financing. “This research presents an opportunity for the Government to act quickly to ensure that the excellent momentum of the last few years is maintained,” BWEA CEO Marcus Rand said. “Obtaining finance is critical for the wind industry; without it projects, C02 savings and new jobs won’t be realized on the scale that the Government and the British public wants.” UK energy minister Stephen Timms earlier this year confirmed Government’s expectations that wind energy would contribute the lion’s share of the renewables target, announcing that some eight Gigawatts (GW) of wind power were anticipated to be in place by 2010, representing 8 percent of UK electricity supply and some ý6 billion (US$10 Billion) worth of investment. BWEA’s research has found that the investor community is presently unwilling to provide financing on this scale unless action is taken now to provide greater certainty on the price of wind, and other renewables, beyond 2010. The research conducted for the BWEA considers a number of potential solutions, including an extension to the RO, a new target for 2020 and the introduction of the ‘vintage ROC’ concept that requires suppliers to source a certain proportion of their electricity from renewable generating stations built before certain dates. In the evidence to the House of Lords BWEA has also highlighted the need for action on other fronts, most notably grid connections, planning and aviation issues that are still acting as significant barriers to the further development of the industry. “We are committed to work with Government to enable them to take the necessary steps to retain investor confidence in the long-term future of the wind market in the UK,” Rand said. “If we can get this piece of the puzzle right then the win, win, win of economic and environmental benefits and the creation of a new industry will follow.”