The message from the Scottish Renewables Onshore Wind Conference

On 11 June 2019, Scottish Renewables held its annual Onshore Wind Conference in Glasgow.  Many leading industry figures were in attendance, and Paul Wheelhouse MSP gave the keynote address. 

The message from the conference was one of cautious optimism. Onshore wind remains the cheapest form of new energy generation and is more popular than ever amongst the public, according to both industry and UK Government polls. As such, going forward it should still be considered a key element of any strategy to avert the recently declared “climate emergency”.

Accepting that a further market stabilisation mechanism, or re-entry into the CfD (Contract for Difference) regime, for onshore wind is unlikely, the conference discussed alternative approaches to reducing projects’ LCOE (levelised cost of energy), thereby increasing their economic viability and enhancing the prospects of more projects being successfully delivered. 

Taller wind turbines and larger rotors are the technological advances which would most cost-effectively increase sites’ yield. However, the current planning system needs to be amended so that it is more facilitative, rather than restrictive. The conference argued that there should be a presumption in favour of project life extension and repowering of sites. Furthermore, the various authorities, agencies and departments – such as SEPA (Scottish Environment Protection Agency) and SNH (Scottish Natural Heritage) – across the Scottish Government should also be more aligned, in order to deliver consistent decisions more efficiently. Paul Wheelhouse MSP confirmed that, in principle, the Scottish Government supports larger turbines and the repowering of sites, but was keen to stress that a balance must be struck between such action and its “visual impact”, and its impact on the local environment.

As well as taller turbines and a more supportive planning system, developers would also like to see reductions to planning fees and business rates in order to bring down the costs of development, so that more projects can be developed on a merchant basis. 

In terms of alternative routes to market and wind power projects’ revenues, there was some anxiety about the potential outcomes of Ofgem’s Targeted Charging Review and Strategic Charging Review. The consensus was that the outcomes of these reviews would most likely adversely affect generators’ revenues, which could potentially amount to as much as a negative £5 per MWhr swing in revenue.  Interestingly, with regard to the merits of corporate PPAs (power purchase agreements), some speakers felt that whilst corporate PPAs can be helpful for some projects in establishing a route to market, they are not a “silver bullet” in all cases. Some corporates demand a discount on the price which they pay for their power, however developers do find corporate PPAs helpful because they secure a long term revenue streams for the project.

In summary, the collective mood at the conference was positive, and there was a sense that the industry has a range of approaches and potential solutions which can be deployed to increase the installed capacity of onshore wind in Scotland. However, there was also a recognition of the challenges involved, and that it will require a coordinated and collaborative approach between the public and private sector to continue to maximise Scotland’s significant wind resources and to address the “climate emergency” that we all face.

MacRoberts advises on all aspects of renewable energy projects, including wind, hydro, solar and energy from waste. To find out more, please contact a member of our team.

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