It’s no secret there has been a lot of change in the onshore wind industry over the last year, so now seems like a good opportunity to take stock and look ahead.
SSE has over 1200MW of onshore wind capacity in operation, 440MW in construction and a further pipeline of 900MW at various stages of development in the UK and Ireland. We’ve therefore invested significantly in onshore wind, are committed to the industry, and want to see it continue to thrive.
We are positive about the future of onshore wind, for three reasons:
First, existing onshore wind sites will start to come to the end of their natural lives in the mid-2020s and 2030s. This presents an opportunity for repowering and extending existing sites to improve efficiency, make use of existing infrastructure and increase yield.
Secondly, onshore wind remains the cheapest form of low carbon electricity available today and it continues to be an important driver of investment at a local and national level. It therefore makes sense for appropriately sited onshore wind projects, whether they are new or repowered, which have the support of decision-makers and key stakeholders, including the local community, to be delivered.
Finally, we believe it should be possible to develop onshore wind without public subsidy. The industry must evolve, and start to stand on its own two feet without it. This is ultimately what the subsidy-driven deployment of recent years has been designed to achieve.
It won’t be easy, and success depends on the industry and governments working together to deliver change. In our view there are three, very achievable, things which can help the industry move into the next stage of its development.
The first is project efficiency. Developers and the supply chain must continue to strive for efficiency and best value in project development. At SSE we’re looking at where savings can be made to reduce development and construction costs and improve the efficiency of our sites.
The second is the planning framework. It has been broadly supportive over the last decade but is becoming increasingly challenging, and there is always scope for improvement. For example, in Scotland, the inclusion of a “presumption in favour of development at existing sites” in planning advice and spatial guidance would allow extensions and redevelopment at these locations unless unacceptable impacts outweigh the potential benefits gained.
The third would be the development of new, innovative routes to market. Income from selling electricity, underpinned by a strong carbon price, will continue to be an important part of the business case. At the moment design flaws within the EU ETS are preventing the carbon price from being effective, so maintaining the UK’s Carbon Price Floor into the 2020s will be necessary.
In addition new market opportunities - such as capacity market payments, ancillary services, co-location of storage, some form of market stabilisation instrument and bespoke offtake agreements - could, when ‘stacked’ together with electricity income, make a compelling business case for future onshore wind development.
There will be others, and as the market develops new opportunities will present themselves. Governments also have a role to play here, by helping to ensure the regulatory framework will allow these types of innovative approaches to work together.
All of this won’t happen overnight: there is more work to do, and governments and industry must continue to work together to innovate and explore new options. However we think the right conditions can be created and are therefore positive about the future for onshore wind.