REF will shortly publish major new analysis by Professor Gordon Hughes, under the title Wind Power Economics: Rhetoric and Reality.
The study contains two volumes, one on the Performance of Wind Power in Denmark and the other on Wind Power Costs in the United Kingdom.
On the basis of a large and detailed statistical analysis of audited accounts and other performance data Professor Hughes shows that far from falling dramatically, capital costs for wind power have come down only slightly, and that Operation and Maintenance (O&M) costs required to maintain energy yields are actually rising sharply, throwing the medium and longer term economics of the entire enterprise into jeopardy.
The study will be published shortly with a webinar, and anyone interested in being added to the mailing list for that announcement should write to us at REF at exec@ref.org.uk
In the course of preparing this work and discussing it widely with colleagues we have become aware that the findings are surprising to many, particularly to some industry players who enjoy special circumstances unrepresentative of the overall wind sector.
An example of these special circumstances may make the point clear. Northern Ireland has several hundred small (< 250 kW) and apparently old turbines that are still making money. Some might say, and indeed REF has heard it said, that the empirical experience of these wind turbine operators should count for more than statistics, even if the statistical analysis is based on real cost data from audited accounts and authoritative records of real generation such as that behind Professor Hughes’s study.
While speciously persuasive this proves to be a good example of how dangerous it is to rely on limited, personal or anecdotal information when forming a general view. Uncle Wilfred may indeed have lived to a hundred on a diet of cigars and whiskey, but that is no recommendation for the rest of us. By the same token, closer examination of the situation in Northern Ireland shows it is no guide to the rest of the sector.
The Northern Ireland wind fleet contains 1,236 sites of 5,000 kW in capacity or less, with a total capacity of 218 MW. A significant number of these are around 250kW (798 with a total installed capacity of 214MW). As it happens, these are not old machines: 83% of these were commissioned after 2014 (661 sites with a total capacity of 151 MW).
In fact, some 449 sites (106 MW) were commissioned after the 1 January 2016, slipping under the wire before the subsidy system closed down.
The false impression of age for some of these machines results from the fact that many of them were obtained second-hand from Denmark, after over twenty years in operation. However, these decommissioned machines were reconditioned before sale, with new generators, gearboxes, and blades, as well as benefitting from new foundations and other ancillary equipment. In spite of the fact that the nacelles and the towers are reused, along with some other components, for the purpose of ageing they are new machines.
One should note also that a 250 kW turbine is small and indeed obsolete by modern standards. Such machines do not represent the modern industry. The regular modern onshore turbine since 2005 has been greater than 2 MW (2,000 kW), eight times larger in capacity, and today developers think of 3 MW, and 4 MW, and even 5 MW machines as normal. One of the findings of Professor Hughes’ analysis of performance in Denmark suggests that the early generations of wind turbines were considerably more reliable than later iterations, perhaps because of lighter engineering loads, or because the designers were under less pressure to reduce the costs and so could afford to over-engineer the devices, increasing capex but reducing longer term opex.
Furthermore, and critically, the subsidy regime was and is extremely favourable to small scale wind in Northern Ireland. The Feed-in Tariff (FiT) for small scale generators available from 2010 in the Great Britain, was not open to applicants in Northern Ireland. The original UK Government position in February 2010 was that “The [FiT] Scheme will apply across England, Scotland and Wales. Northern Ireland will need to develop their own legislation.” However, such legislation was never developed by the Northern Ireland government.
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