New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
Although the number of onshore wind projects has grown in the UK over the past year according to a new report, rising costs are having an impact, with what would have been the UK’s fourth largest onshore wind project being shelved just months after receiving planning approval.
The UK’s pipeline of onshore wind projects grew by more than 1.5 GW in the last 12 months, up from 37 GW to 38.5 GW, according to a new report from RenewableUK. The pipeline includes projects that are fully operational (14.89 GW), under construction (1.3 GW), consented (5.9 GW), in the planning system (7.8 GW) or at an early stage of development (8.5 GW).
Some 78% of the projects are in Scotland, with the report forecasting that Scotland’s contribution to the UK’s operational onshore wind capacity will increase from 60% (8.3 GW) in 2020 to 75% (20.7 GW) by the end of 2030.
Conversely, England’s share is forecast to fall from 21% in 2020 to 11% in 2030.
The report also shows that 93% of new onshore wind capacity submitted for planning approval since 2016 has been in Scotland – 11.6 GW of a total of 12.5 GW submitted UK-wide. RenewableUK says the de facto ban on onshore wind in England announced in 2015 ‘still remains largely in place’ despite the UK government’s declaration last month that it was lifting it.
Onshore wind projects are also being hit by rising development costs, with developer Community Windpower recently announcing that it was shelving the Sanquhar II project after forecast development costs nearly doubled, from around £300mn to £500mn. Construction of the onshore wind project, which would have been the UK’s fourth largest, was due to start next year, with first generation slated for 2025. Managing Director Rod Wood is reported to have said increased taxes on electricity generators under the Electricity Generation Levy are largely to blame for the cost hike. Implemented in January 2023 and running until the end of March 2028, the levy imposes a 45% tax on revenues from electricity sold above £75/MWh.
Meanwhile, Ireland’s third onshore Renewable Electricity Support Scheme (RESS) auction saw just three onshore wind projects with a combined capacity of 148.4 MW among the winners, compared with 414 MW for wind projects the previous year. This year’s winning projects include Ørsted’s 43.2 MW Farranrory onshore wind farm in Tipperary. The round also saw fewer solar projects being awarded, just 497.6 MW versus 1.5 GW of contracts the previous year. WindEnergy Ireland, said the results were ‘disappointing’ and highlighted the ‘need for urgent reform’.
Increased development and construction costs have also been impacting the offshore wind sector, with investor caution clearly seen in the UK’s latest renewables auction round, which saw no offshore and floating offshore wind projects featured. Industry observers claimed the £44/MWh price floor did not take into account the sector’s higher development costs due to inflation under current market conditions, leaving projects financially unviable.
Meanwhile, Vattenfall announced earlier this year that it was shelving the 1.4 GW Norfolk Boreas offshore wind farm after seeing project costs increasing by up to 40% due to higher inflation and capital costs.
